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Stock Code : 3677
(A joint stock company incorporated in the People’s Republic of China with limited liability)
江蘇正力新能電池技術股份有限公司
Jiangsu Zenergy Battery Technologies Group Co., Ltd.
GLOBAL OFFERING
Joint Sponsors, Joint Representatives, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers


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IMPORTANT: If you are in any doubt about any of the contents of this Prospectus, you should seek independent professional advice.
Jiangsu Zenergy Battery Technologies Group Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 121,523,700 H Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 12,152,400 H Shares (subject to
reallocation)
Number of International Offer Shares : 109,371,300 H Shares (subject to
reallocation and the Over-allotment
Option)
Offer Price : HK$8.27 per H Share, plus brokerage of
1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading
fee of 0.00565% (payable in full on
application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 3677
Joint Sponsors, Joint Representatives, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and
Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this Prospectus, make no
representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Prospectus.
A copy of this Prospectus, having attached thereto the documents specified in the section headed “Documents Delivered to the Registrar of Companies i n Hong Kong and Available on Display” in Appendix V to this
Prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous P rovisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this Prospec tus or any other documents referred to above.
The Offer Price will be HK$8.27 per Offer Share. Applicants for Hong Kong Offer Shares are required to pay, on application, the Offer Price of HK$8.27 fo r each Hong Kong Offer Share together with brokerage fee
of 1%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%.
The Joint Representatives, on behalf of the Underwriters, may, where considered appropriate and with the Company’s consent, reduce the number of Hon g Kong Offer Shares being offered under the Global Offering and/or
the Offer Price stated in this Prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offeri ng. In such case, an announcement will be published on the website
of our Company at www.zenergy.cn and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the offer will be canceled and relaunched at the revised number of Offer Shares and/or the revised
Offer Price and the requirements under Rule 11.13 of the Listing Rules (which include the issue of a supplemental or a new prospectus (as appropriate)) , as soon as practicable following the decision to make such reduction,
and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. Further details are set forth in the sections headed “Structure of the Global
Offering” and “How to Apply for Hong Kong Offer Shares” in this Prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Joint Representatives (fo r themselves and on behalf of the Underwriters) if certain events
occur prior to 8:00 a.m. on the Listing Date. Please refer to the section headed “Underwriting” in this Prospectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this Prospectus, includin g the risk factors set out in the section headed “Risk Factors.”
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be of fered, sold, pledged or transferred within the United States
or to, or for the account or benefit of U.S. persons (as defined in Regulation S), except in transactions exempt from, or not subject to, the registratio n requirements of the U.S. Securities Act. The Offer Shares may be
offered, sold or delivered outside the United States to non-U.S. persons in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this Prospectus to the p ublic in relation to the Hong Kong Public Offering.
This Prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the Company’s website at www.zenergy.cn . If you require a printed copy of this Prospectus, you may download
and print from the website addresses above.
IMPORTANT
April 3, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide printed copies of this prospectus or printed copies of any
application forms to the public in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”
section, and our website www.zenergy.cn. 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:
(a) apply online through the White Form eIPO service at www.eipo.com.hk ;o r
(b) 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 document as registered with the Registrar of Companies in Hong Kong
pursuant to Section 342C of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in this
prospectus for further details of the procedures through which you can apply for the Hong
Kong Offer Shares electronically.
Your application through the White Form eIPO service or the HKSCC EIPO channel
service must be for a minimum of 300 Hong Kong Offer Shares and in one of the numbers set
out in the table.
If you are applying through the White Form eIPO service, you may refer to the table
below for the amount payable for the number of Shares you have selected. You must pay the
respective amount payable on application in full upon application for Hong Kong Offer Shares.
IMPORTANT
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If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
Jiangsu Zenergy Battery Technologies Group Co., Ltd.
(HK$8.27 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED FOR
AND PAYMENTS
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
300 2,506.02 9,000 75,180.63 90,000 751,806.27 1,500,000 12,530,104.43
600 5,012.04 12,000 100,240.84 105,000 877,107.31 1,800,000 15,036,125.31
900 7,518.06 15,000 125,301.05 120,000 1,002,408.35 2,100,000 17,542,146.20
1,200 10,024.08 18,000 150,361.25 135,000 1,127,709.39 2,700,000 22,554,187.96
1,500 12,530.10 21,000 175,421.46 150,000 1,253,010.44 3,300,000 27,566,229.74
1,800 15,036.12 24,000 200,481.67 300,000 2,506,020.89 3,900,000 32,578,271.50
2,100 17,542.15 27,000 225,541.88 450,000 3,759,031.32 4,500,000 37,590,313.28
2,400 20,048.17 30,000 250,602.09 600,000 5,012,041.76 5,400,000 45,108,375.94
2,700 22,554.18 45,000 375,903.14 750,000 6,265,052.21 6,076,200
(1) 50,756,947.00
3,000 25,060.21 60,000 501,204.18 900,000 7,518,062.65
6,000 50,120.41 75,000 626,505.22 1,200,000 10,024,083.55
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) This is 50% of the Hong Kong Offer Shares initially offered, and 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 H
Share Registrar (for applications made through the application channel of the H Share Registrar) 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 the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published on the websites
of the Stock Exchange at www.hkexnews.hk and our Company at www.zenergy.cn .
Hong Kong Public Offering commences ..................... .9:00 a.m. on Thursday,
April 3, 2025
Latest time for completing electronic applications under
the White Form eIPO service through the designated
website www.eipo.com.hk (2) ........................... 1 1:30 a.m. on Wednesday,
April 9, 2025
Application lists of the Hong Kong Public Offering open (3) ..... 1 1:45 a.m. on Wednesday,
April 9, 2025
Latest time for (a) completing payment for White Form eIPO
applications by effecting internet banking transfer(s)
or PPS payment transfer(s) and (b) giving electronic
application instructions to HKSCC
(4) .................. .12:00 noon on Wednesday,
April 9, 2025
If you are 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 through the HKSCC EIPO channel, you are advised to contact
your broker or custodian for the earliest and latest time for giving such instructions which may
be different from the latest time as stated above, as this may vary by broker or custodian.
Application lists of the Hong Kong Public Offering close
(3) . . . .12:00 noon on Wednesday,
April 9, 2025
Announcement of the level of indications of
interest in the International Offering, the level of
applications in the Hong Kong Public Offering and
the basis of allocation of the Hong Kong Offer Shares
to be published on the websites of the Stock Exchange
at www.hkexnews.hk and our Company at www.zenergy.cn
no later than (5) ......................................... 1 1:00 p.m. on Friday,
April 11, 2025
EXPECTED TIMETABLE (1)
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Announcement of results of allocations in the Hong Kong Public Offering (including
successful applicants’ identification document numbers, where appropriate) to be available
through a variety of channels including:
 the announcement to be posted on websites of
the Stock Exchange at www.hkexnews.hk and our
Company’s website at www.zenergy.cn (5) no later than .........1 1:00 p.m. on
Friday, April 11, 2025
 from the designated results of allocations
for the Hong Kong Public Offering will be
available at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function ................. from 11:00 p.m. on Friday,
April 11, 2025 to
Thursday, April 17, 2025
 from the allocation results telephone
enquiry by calling +852 2862 8555
between 9:00 a.m. and 6:00 p.m .......................... from Monday,
April 14, 2025 to
Thursday, April 17, 2025
Dispatch of H Share certificates or deposit of H Share certificates
into CCASS in respect of wholly or partially successful
applications pursuant to the Hong Kong Public Offering
on or before
(6) ........................................ .Friday, April 11, 2025
White Form e-Refund payment instructions/refund cheques in
respect of wholly or partially successful applications or
wholly or partially unsuccessful applications to be
dispatched/collected on or before
(7)(8) ..................... .Monday, April 14, 2025
Dealings in the H Shares on the Stock Exchange
expected to commence at 9:00 a.m. on .................... .Monday, April 14, 2025
Notes:
(1) All dates and times refer to Hong Kong dates and times.
(2) You will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment
of application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
EXPECTED TIMETABLE (1)
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(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 Wednesday,
April 9, 2025, the application lists will not open and will close on that day. For further details, please see the
section headed “How to Apply for Hong Kong Offer Shares—E. Severe Weather Arrangements” in this
Prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to the section headed “How to Apply for Hong Kong Offer Shares—A.
Application for Hong Kong Offer Shares—2. Application Channels” in this Prospectus.
(5) None of the website or any of the information contained on the website forms part of this Prospectus.
(6) H Share certificates will only become valid 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—Hong Kong Public Offering—Grounds for Termination” has not been exercised. Investors who
trade Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or
prior to the H Share certificates becoming valid evidence of title do so entirely at their own risk.
(7) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong
identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may
be printed on the refund check, if any. Such data would also be transferred to a third party for refund purposes.
Banks may require verification of an applicant’s Hong Kong identity card number or passport number before
encashment of the refund check. Inaccurate completion of an applicant’s Hong Kong identity card number or
passport number may invalidate or delay encashment of the refund check.
(8) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed “How to Apply for Hong Kong Offer Shares—D. Despatch/Collection of H Share Certificates
and Refund of Application Monies” in this Prospectus for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of
White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through multiple bank accounts may have refund monies (if any)
dispatched to the address as specified in their application instructions in the form of refund checks by ordinary
post at their own risk.
Further information is set out in the section headed “How to Apply for 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 the sections headed “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.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
This Prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this Prospectus pursuant to the Hong Kong Public Offering. This Prospectus may not
be used for the purpose of making, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstances. No action has been taken to permit a
public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong
and no action has been taken to permit the distribution of this Prospectus in any
jurisdiction other than Hong Kong. The distribution of this Prospectus for purposes of a
public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this Prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this Prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this Prospectus. Any information or representation not contained nor made
in this Prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Joint Representatives, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Capital Market Intermediaries, any of the
Underwriters, any of our or their respective directors, officers, employees, agents, or
representatives of any of them or any other parties involved in the Global Offering.
Page
EXPECTED TIMETABLE ............................................ i v
CONTENTS ....................................................... v i i
SUMMARY ....................................................... 1
DEFINITIONS ..................................................... 3 6
GLOSSARY OF TECHNICAL TERMS ................................. 5 1
FORW ARD-LOOKING STATEMENTS ................................. 6 1
RISK FACTORS ................................................... 6 3
W AIVERS......................................................... 1 1 1
CONTENTS
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INFORMATION ABOUT THIS PROSPECTUS AND THE
GLOBAL OFFERING ............................................. 1 2 2
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE
GLOBAL OFFERING ............................................. 1 2 9
CORPORATE INFORMATION ....................................... 1 4 0
INDUSTRY OVERVIEW ............................................. 1 4 2
REGULATORY OVERVIEW ......................................... 1 6 6
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE .......... 2 0 4
BUSINESS ........................................................ 2 3 1
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT .............. 3 7 3
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS .......... 3 8 9
SUBSTANTIAL SHAREHOLDERS ..................................... 3 9 5
SHARE CAPITAL .................................................. 3 9 9
FINANCIAL INFORMATION ......................................... 4 0 3
FUTURE PLANS AND USE OF PROCEEDS ............................. 4 6 1
CORNERSTONE INVESTORS ........................................ 4 6 8
UNDERWRITING .................................................. 4 7 5
STRUCTURE OF THE GLOBAL OFFERING ............................ 4 9 0
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 5 0 1
APPENDIX I ACCOUNTANTS’ REPORT ........................ I - 1
APPENDIX II UNAUDITED PRO FORMA FINANCIAL
INFORMATION ................................ II-1
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION ........ III-1
APPENDIX IV STATUTORY AND GENERAL INFORMATION ........ I V - 1
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON
DISPLAY ..................................... V - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this
Prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read this Prospectus, including our financial statements and
the accompanying notes, in its entirety before you decide to invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in investing
in the Offer Shares are set out in the section headed “Risk Factors” in this Prospectus.
You should read that section carefully in full before you decide to invest in the Offer
Shares.
OVERVIEW
Who We Are
We are a lithium-ion battery manufacturer in China, committed to developing a diverse
portfolio of market-driven and technology-fueled battery products. We primarily focus on the
R&D, production and sales of EV battery products and ESS battery products. We provide
integrated battery solutions, encompassing battery cells, modules, packs, racks, and battery
management systems dedicated to large-scale applications of electrochemical products.
We are founded upon experience in the auto part industry. With extensive professional and
industry expertise of our core management, we have developed insights into the automobile
industries. With understanding of OEM customers’ demands to balance safety, quality,
performance, and cost efficiency, we developed diverse EV battery products as our core
business, placing us in a favorable position of application scenario expansion and rapid
technological advancements in the battery industry. We primarily focus on the sales of battery
products for EV applications during the Track Record Period. As one of the ten largest players
in EV battery market in terms of installation capacity, we operate in China’s power battery
industry, which is highly competitive and concentrated with top ten manufacturers accounting
for 95.3% of total installation capacity in 2024. As measured by installation capacity in 2024,
we held a market share of 1.8% amongst EV battery manufacturers in China, according to
CABIA.
BUSINESS MODEL
We procure raw materials from trusted and selected suppliers to ensure the quality and
stability of raw material supplies. We also extensively collaborate with production equipment
suppliers to customize our production equipment, which helps us achieve a flexible
manufacturing system under which our manufacturing lines can be reconfigured in a timely and
cost-efficient manner to produce battery products of a different technology pathway when
demanded by customer orders. We are also able to understand and fulfill customer needs and
establish relationships with OEMs and other customers worldwide, leveraging our experience
and insight in the auto part industry. We adopt a customer-oriented approach where we closely
and proactively work with customers to predict customer demands.
SUMMARY
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PRODUCTS, RESEARCH AND DEVELOPMENT, AND TECHNOLOGIES
Major EVs include battery electric vehicle (“ BEV”), plug-in hybrid electric vehicle
(“PHEV”), extended-range electric vehicle (“ EREV”), and hybrid electric vehicle (“ HEV”).
Different vehicle types commonly utilize specific battery chemistries based on their
performance needs. BEV batteries typically used to adopt lithium nickel-cobalt-manganate
(“NCM”) materials. In recent years, lithium iron phosphate (“ LFP”) materials are also gaining
popularity for adoption among BEVs due to its safety performance and cost-effectiveness. BEV
batteries typically require high energy density and capacity to satisfy long driving ranges.
PHEVs typically adopt NCM, or LFP batteries. PHEVs typically require batteries to have lower
capacity compared to BEV batteries, while having higher requirements for battery cycle life
and power, as well as the balance between energy density and cost. HEVs typically used to
adopt nickel metal hydride (“ NiMH”) batteries; lithium-ion related materials are also gaining
popularity for adoption in HEV batteries as technology develops. These choices reflect the
varied demands of energy density, safety, and cost across different EV types. The following
table compares main battery types (NCM, LFP, NiMH) focusing on energy density, cost,
lifespan, safety, and examples of use:
Battery Type
Energy
Density Cost Lifespan Safety EV Type
NCM (Nickel-
Cobalt-
Manganese) /H1118/H1118/H1118
High (150-320
Wh/kg)
Moderate to
High
Moderate (800-
4,000 cycles)
Moderate (susceptible
to thermal
runaway, requires
advanced battery
management
systems)
BEV and PHEV
LFP (Lithium Iron
Phosphate) /H1118/H1118/H1118/H1118
Moderate (90-
200 Wh/kg)
Low High (2,000-
10,000 cycles)
High (stable, less
prone to
overheating or
thermal runaway)
BEV and PHEV
NiMH (Nickel-
Metal Hydride) /H1118
Low to
Moderate
(40-120
Wh/kg)
Moderate Moderate (500-
1,000 cycles,
with lower
capacity
retention over
time)
High (safer than
NCM, stable under
most conditions)
HEV
For a comparison of power batteries in different EVs, please see “Industry
Overview—Overview of EV Power Battery Market.”
SUMMARY
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The following diagram demonstrates our products and technologies.
1year
Interconnected
Application
Scenarios
Multi-
pathway
Product
Portfolio
ĐĐ Đ
HEV PHEVĐ EREVĐ BEVĐ
Centralized DistributedĐ
Power
Generation
Commercial
& IndustrialĐ
Resi-
dentialĐ Electric
ESS Battery
Land Sea Air
EV Battery
Marine
Battery
Aviation
Battery
R&D Platformed
battery packs
compatible with
various vehicle
models
Platformed
battery
containers
compatible
with different
scenarios
3years
5years
Semi-
solid-
state
Solid-
state
Provide performance
support for a diverse
product portfolio
Optimize manufacturing
cost by standardized
battery cells
Sedan SUV MPV
Distributed
battery packs
compatible with
aviation
scenarios
Prismatic Cell
Cylindrical Cell
Standardized battery cells
Material
Research
Platform
Design
Product
Development
n
h
hh
Diversified
Electrochemistries
Standardized
Battery Cells
Platformed
Battery Packs
Hybrid
Passenger/Cargo/
Engineering Ship
Multi
Rotor
Optimize development
cost by platformed
battery packs
Compound
Rotor
Tilt Rotor
Na
LFP NCM
LM
FP
We commenced to manufacture and sell battery products in 2016 and commenced our LFP
batteries business in July 2022. Our EV batteries cover a variety of EV types such as BEV ,
PHEV , EREV and HEV and can be installed in multi-functional vehicles such as sedans, SUVs
and MPVs. Our energy storage system (“ ESS”) and marine battery products are primarily LFP
batteries, and our aviation battery products are primarily high-nickel semi-solid-state Lithium-
Ion battery products.
We adopt a market-driven technology and product development approach. We conduct
comprehensive analysis by collecting market information, technology trends, and customer
feedback to form forward-looking judgments on R&D directions. Additionally, we involve a
cross-department project team to design products, taking into account aspects of technology
R&D, manufacturing, quality control, finance, and sales.
We adopt standardized battery cells and platformed battery packs, and differentiated their
performance with diversified electrochemistries, which enables our OEM customers to more
flexibly use our products in different vehicle types and application scenarios. This helps reduce
OEMs’ development costs and our R&D and manufacturing costs. Our R&D activities also
cover different electrochemistries and technology pathways, satisfying customers’ varying
needs for product performance and costs. We have developed various NCM and LFP battery
products, and have a pipeline of LMFP batteries, sodium-ion batteries, and semi-solid-state
product for commercialization in the near future, as well as a pipeline of solid-state
technologies and products as our preparation for the long-term. Our diverse technology
capabilities and pipeline help us develop diversified products that satisfy customers’ rapidly
evolving and diverse needs.
SUMMARY
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As of December 31, 2024, our R&D team consists of 1,060 full-time employees,
approximately 28% of whom held a master’s degree or above. As of the same date, we had
3,613 patent applications and had been authorized 2,225 patents, among which, 412 were
invention patents. We are also funded by the Industry and Information Technology Department
of Jiangsu for sodium-ion battery industrialization.
Our R&D capabilities have enabled us to develop the following battery technologies with
unique product features and advantages:
 High energy density and fast charging LFP battery: Through optimization of
materials and electrode design, we have increased the gravimetric energy density to
approximately 190Wh/kg; through the development and introduction of high press
density Lithium-Iron phosphate materials, our LFP battery achieves volumetric
energy density of over 430 Wh/L as well as fast charging capabilities of 2.2C.
 PHEV and EREV batteries. Our PHEV and EREV batteries enjoy the extremely high
cycle life of up to 4,000 cycles, and can reach up to 80% state of charge (“ SOC”)
in 30 minutes.
 HEV batteries . The HEV batteries developed by us and our joint venture STAES
cover two main technology pathways, namely Lithium-Ion and Ni-MH. They enjoy
the advantages of high power, long cycle life and high safety, with peak discharge
rate of 80C, and cycle life of up to 27,000 cycles.
 Universe series (BEV battery pack) . Although we have not commenced mass
production, we have completed the development of Universe series BEV battery
pack and already produced samples. Our Universe series BEV battery pack enjoys
an energy density up to 260 Wh/kg, and can reach 70% SOC as fast as seven
minutes. It features a pioneering tenon-and-mortise assembly technology, making it
the first in the industry to enable single cell disassembly and easy maintenance.
 Loong series (BEV battery pack) . Although we have not commenced mass
production, we have completed the development of Loong series BEV battery pack
and already produced samples. Our Loong series BEV battery pack achieves a total
battery capacity of 170 kWh, which is the highest among passenger EV battery pack
products in China as of December 31, 2024. It adopts dual semi-solid-state
technology, which enjoys an energy density of 306 Wh/kg and reaches 70% SOC
from 10% SOC within nine minutes.
 Aviation battery products . We are the first EV battery company in China to receive
the AS9100D Aerospace Quality Management System recognition, and one of the
first companies in Suzhou leading the “low-altitude economy” initiative. Our
aviation battery products have an energy density of over 320 Wh/kg, and can reach
up to 80% SOC in 15 minutes. They can maintain a discharge rate of 12C at a low
SOC of 20%. They can also reach aviation-grade level safety standards.
SUMMARY
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OUR MARKET RANKING AND OPPORTUNITIES
Market Ranking
According to Frost & Sullivan, in China:
 we were the 9th largest player in the LFP EV battery market, the NCM EV battery
market and the overall EV battery market in terms of EV battery installation
capacity in 2024.
 we experienced the second fastest growth in overall EV battery installation capacity
among the top ten EV battery companies, and the fastest growth in LFP EV battery
installation capacity among the top ten LFP EV battery companies from 2022 to
2023 (as measured by battery installation capacity in 2023).
Market Opportunities
The global EV battery market experienced steady growth in installation capacity in recent
years, and is expected to further grow from 900.2 GWh in 2024 to 3,564.5 GWh in 2029,
representing a CAGR of 31.7%. In China, EV battery installation capacity is expected to grow
from 549.9 GWh in 2024 to 1,961.4 GWh in 2029, representing a CAGR of 29.0%.
The EV battery industry in China is at an inflection point that poses unique challenges and
opportunities for its players.
Industry Inflection Point
The growth drivers in the battery industry have evolved from policy and capital
investment to market demand over the past few years. Before 2020, decisions to expand EV
battery manufacturing capabilities by EV battery manufacturers were primarily driven by
policy on new energy vehicles, and manufacturing capacity was designed and constructed for
electrochemistries that fit the government subsidy policies under the significant capital
support. After 2021 when such subsidy policies began to expire, such manufacturing capacity
cannot adequately accommodate diversified electrochemistries that are safer and more cost
competitive, and are not flexible to capture the rapid growth in new power battery applications
(such as PHEV and EREV). The power battery industry has now reached a critical inflection
point, where key competitiveness of battery manufacturers hinges on their understanding and
precise alignment with the needs of OEM customers.
Structural changes in market demand
The automobile industry has always been dedicated to striking the optimal balance among
safety, quality, performance, and cost efficiency, which has driven various development trends
in the EV and battery industries including the trend toward more diverse technology pathways.
Compared to NCM batteries, LFP batteries offer lower costs, higher thermal stability, better
SUMMARY
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tolerance to overcharging, longer cycle life, and a higher capacity retention rate. At the same
time, the energy density gap between LFP and NCM batteries is narrowing, and LFP batteries
are now capable of meeting the driving range requirements for the majority of electric vehicles.
As a result, LFP batteries are better aligned with the market’s demand for cost-effectiveness
and safety, leading to their rapid growth in market share in recent years. With the reduction in
subsidies and development of alternative technologies, LFP batteries have surpassed NCM and
become the primary product type in the global EV industry: in China, the proportion of NCM
batteries decreased from 60.9% in 2020 to 25.4% in 2024, of all EV batteries in terms of
installation capacity, whereas the proportion of LFP batteries increased from 38.0% in 2020 to
74.4% in 2024, of all EV Batteries in terms of installation capacity. This shift is further
highlighted by the installation capacity of LFP batteries, which was 408.9 GWh in 2024 in
China, whereas the installation capacity for NCM was 139.8 GWh in 2024 in China.
As the market share of LFP batteries continues to grow, rapid technological advancements
in LFP technology have made high-performance LFP products a key factor in capturing
additional market share. Our LFP technology offers the following advantages, which position
us strongly to expand our presence in the market: (i) to meet the demand for longer driving
ranges, we have increased the volumetric energy density of our LFP products from 175 Wh/kg
to over 190 Wh/kg, enabling vehicles equipped with our batteries to achieve greater range; and
(ii) to further compete with ternary battery technology, fast-charging capability is essential.
Although not in mass production yet, certain of our LFP products has achieved a fast-charging
capability of 4C, which enables them to charge to 80% state of charge in 15 minutes with peak
charging speeds exceeding 5C, giving us a significant competitive edge. These innovations are
critical to further increasing our market share in the LFP segment. In addition, we adopt the
following strategies to further expand our market share in the LFP EV battery market: (i)
leveraging the industry trends of battery cell standardization and battery pack platformization
to integrate our products across a broader range of vehicle models within existing customers’
supply systems, thereby increasing our supply and operational efficiency; (ii) securing
partnerships and supply agreements through multinational joint ventures to launch new
range-extended EVs and plug-in hybrid models, positioning ourselves as a preferred supplier
for these innovative vehicles; (iii) strengthening supply relationships with leading domestic
brands by fostering collaborations with self-owned brands and supporting leading domestic
brands’ integrated vehicle models, to enhance our alignment with their key vehicle platforms;
and (iv) leveraging the increasing adoption of smart automotive technologies and the evolution
of LFP batteries to higher fast-charging capabilities (from 2C to even faster charging
standards), targeting new vehicle launches to expand our market share.
There are also significant changes in the structure of the new energy vehicles (“ NEV”)
market. While BEV still currently accounts for the largest market share, PHEV has experienced
significant growth, leveraging its advantages in cost and driving range. The market penetration
rate of BEVs in China was 24.6% in 2024 in terms of sales volume, and the sales volume is
expected to grow at a CAGR of 14.1% from 2024 to 2029. In contrast, the total market share
of PHEVs (including EREVs) in China was 16.4% in 2024, and the sales volume is expected
to grow at a CAGR of 24.1% from 2024 to 2029, indicating that PHEVs are poised for faster
growth compared to BEVs and will surpass BEVs in sales volume in 2026.
SUMMARY
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Challenges to EV Battery Manufacturers
In the early stages of industry development, to meet the stable supply and demand for
battery products, many power battery companies have already devoted significant resources in
establishing manufacturing lines for high-capacity BEV battery cells and specialized
manufacturing lines for NCM batteries. Such manufacturing lines, compared to our current
manufacturing lines, demonstrate lower compatibility, lower efficiency and higher
manufacturing costs. Utilizing these ternary manufacturing lines for producing small-capacity
PHEV cells or LFP cells would lead to high conversion and manufacturing costs. At the same
time, driven by cost concerns, OEMs have raised higher demands for standardized battery
products that are compatible with different vehicle types and application scenarios and can
accommodate various electrochemistries.
In addition, China’s EV power battery production capacity reached 826 GWh in 2024 and
is projected to grow to 991.2 GWh in 2025, whereas the installation capacity of EV power
battery in China was 549.9 GWh in 2024 and is expected to reach 692.2 GWh in 2025.
According to Frost & Sullivan, this represents a structural overcapacity issue, driven by idle
low-end production capacity with outdated technologies that cannot be upgraded or adapted to
the structural transitions in China’s EV power battery industry. These transitions include the
growing demand for higher-performance EV power batteries, the increasing dominance of LFP,
and the higher growth of PHEVs over BEVs. According to Frost & Sullivan, top ten EV battery
manufacturers accounted for 95.3% of the total EV battery installation capacity in the PRC in
2024. Low-end production capacity accounts for over half of the industry’s capacity. Low-end
production capacity refers to companies that have lower than 3% R&D expenses, lower than
50% production utilization rate who produce products with low energy density with outdated
technologies that cannot be upgraded or adapted to the structural transitions in China’s EV
power battery industry. China’s EV power battery industry is highly competitive and
concentrated and we expect that the trend will last in the future.
As a result, EV battery manufacturers that are fully market-driven, with the flexibility to
easily adapt to technology shifts through the adoption of efficient and flexible manufacturing
lines, and have products and manufacturing capabilities that cover a diverse high quality and
low cost product portfolio, can succeed in the current market.
Our Differentiated Approach
 We adopt standardized battery cells and platformed battery packs, and differentiate their
performance with diversified electrochemistries, which effectively lower our R&D and
manufacturing costs, as well as bring cost efficiency for OEMs.
 We have established a R&D strategy which guide our R&D into new electrochemistries,
advanced materials, technology platforms and new products.
 We have strategically categorized and developed PHEV and EREV battery products in
addition to BEV products, capturing the structural growth opportunity while satisfying
different customer needs.
 Our manufacturing facilities are highly flexible, which enable us to adapt to changes in
market demand for different types of battery products. They are also highly intelligent,
which reduces reliance on manual labor, making the manufacturing process highly
controllable, and increasing the consistency in product quality.
SUMMARY
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These approaches have earned us recognition as an effective supplier by a large number
of OEM customers, including large state-owned enterprises, pure-play EV companies, and
multi-national OEMs through establishing long-term cooperative relationships. Leveraging our
capabilities in technologies and products, we continue to increase the market share of our
battery products to cover more vehicle models from leading OEMs in the global EV industry,
such as FAW Hongqi, GAC Trumpchi, Leap Motor, SAIC-GM Wuling, and SAIC-GM.
MANUFACTURING
Our facilities for battery cell manufacturing are enabled and enhanced by software
systems, including our operational platform, manufacturing operations management
customization system, contactless visual inspection technologies powered by AI, and AI edge
computing-based quality inspection and monitoring system. These capabilities enable us to
continuously improve manufacturing and cost efficiency. The automation rate of major
manufacturing lines (defined by the percentage of machines and equipment that do not require
any human interventions to run smoothly) reached over 95% in 2024, which is significantly
higher than the industry of approximately 90%.
Our manufacturing lines are also highly flexible and can be converted to manufacture
different product types (such as from EV batteries to ESS batteries, and from NCM batteries
to LFP batteries) with relatively low conversion costs and time. We achieve this through
adopting predictive manufacturing equipment design, flexible and intelligent manufacturing
technique design. The time to convert a manufacturing line to produce at full capacity for those
battery products of the same dimension to a different electrochemistry could reach as short as
three days, and the time to convert a manufacturing line to produce at full capacity for those
battery products of different dimensions could reach as short as 50 days.
As of December 31, 2024, we had a total designed manufacturing capacity of 25.5 GWh
for battery cell products. Most of our manufacturing facilities are strategically located in close
vicinities to each other in Changshu, which allows centralized operational management. On
average, we are able to allocate resources among different facilities and respond to abnormal
alerts from each facility in Changshu within 30 minutes. We also adopt a demand-driven
manufacturing capacity expansion strategy, which helps us avoid excessive and idle capacity
and reduce waste of resources.
As of the Latest Practicable Date, we had 48 design-wins that were subsequently
converted into purchase orders. Among these design-wins, 24 entered mass production and
delivery stage and 24 were in the sampling or development stage as of the Latest Practicable
Date.
SUMMARY
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OUR CUSTOMERS
We have forged collaboration with leading players in the automotive industry, and have
cultivated high-caliber customer base. Customers of our battery products are primarily EV
manufacturers. Our EV battery customers include large state-owned enterprises, pure-play EV
companies and multi-national OEMs. The market share of our battery products among vehicle
models of leading global OEMs, such as FAW Hongqi, GAC Trumpchi, Leap Motor, SAIC-GM
Wuling, and SAIC-GM, continues to increase. As of December 31, 2024, our products are
integrated in over 50% of Leap Motor’s main BEV models, and a key PHEV model of
SAIC-GM, GL8 PHEV . We are the main supplier for GL8 PHEV . In addition, we have
established cooperation with various potential customers of our ESS battery products, such as
Deye Holdings. We are also actively pursuing new collaborations in terms of mass production
of our marine and aviation battery products with potential customers in the relevant fields.
In 2021, 2022, 2023 and 2024, sales to our largest customer in each year during the Track
Record Period amounted to RMB828.3 million, RMB962.5 million, RMB1,179.1 million and
RMB1,462.3 million, representing 55.2%, 29.3%, 28.3% and 28.5% of our total revenue for the
respective year, respectively, while our five largest customers in each year during the Track
Record Period amounted to RMB1,337.4 million, RMB2,972.7 million, RMB3,238.2 million
and RMB4,530.0 million, representing 89.1%, 90.4%, 77.8% and 88.2% of our total revenue
for the respective years, respectively. The increase in the percentage of our revenues from the
five largest customers of the total revenue in 2024 was primarily due to (i) our strategic focus
on top OEM customers which we are collaborating more vehicle models given tight production
capacity in 2024; (ii) the revenue growth from three of our top five customers, which increased
by 24.0%, 12.3% and 79.3% compared to 2023, resulting in an overall increase in the
proportion of revenue contributed by our top five customers; and (iii) in addition, the revenue
contribution of our ESS business decreased from 7.6% of total revenues in 2023 to 4.2% in
2024. For more details on our supply chain, see “Business—Sales, Marketing and
Customers—Customers.”
The following table sets forth details of the number of our design-wins, vehicle models,
customers by type, and the average revenue contribution per customer during the Track Record
Period.
As of/for the year ended December 31,
2021 2022 2023 2024
Number of design-wins at the end of each
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 7 23 47
Cumulative number of design-wins /H1118/H1118/H1118/H1118/H1118/H11185 9 25 49
Cumulative number of vehicle models that
entered production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139 2 1
Number of Customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 56 92 81
Number of OEM customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851 11 11 2
SUMMARY
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As of/for the year ended December 31,
2021 2022 2023 2024
Portion of revenues from OEM customers /H1118/H111885.8% 83.0% 76.8% 90.6%
Number of OEM car models /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872 02 63 6
New customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 40 66 38
Customer retention rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893.3% 68.2% 88.9% 94.5%
Customer retention rate represents the proportion of revenue contributed by customers
who had revenue contributions in the following year among the customers from the previous
year. We have relatively low customer retention rate of 68.2% in 2022, which is primarily due
to the one-off impact by WM Customer (as defined below), compared to 93.3%, 88.9% and
94.5% in 2021, 2023 and 2024. The number of our customer decreased from 92 in 2023 to 81
in 2024, which was primarily because (i) in 2024, our production capacity was insufficient to
fulfill orders from smaller customers, resulting in a decline in the number of smaller customers;
and (ii) we prioritized allocating resources to automotive OEM customers to maximize
efficiency and revenue contribution, as a result of our shift in focus to the EV battery business,
the core customers of which are OEM customers. For the same reasons, the portion of revenues
from OEM customers increased from 76.8% in 2023 to 90.6% in 2024. Additionally, in 2023,
as we disposed of down-grade products as a result of the WM Customer Incident, amounting
to RMB173.1 million, we had additional revenue from other products and services, while such
revenue decreased significantly in 2024, leading to an increase in the proportion of revenue
from OEM customers in 2024.
For risks in relation to our customers, please see “Risk Factors—The intense competition,
supply restrictions, trade controls, tariff, or sanctions, on semiconductor chips or other major
components of EVs may disrupt the operations of our end customers and in turn adversely
affect our business, results of operations, and financial condition.” For more details about our
customers, please see “Business—Sales, Marketing, and Customers—Customers.”
OUR SUPPLIERS
Our suppliers are primarily raw material providers based in China. We carefully select our
suppliers and require them to satisfy various assessment criteria. All potential suppliers must
pass our internal supplier admission standard before entering into our qualified supplier list.
We also carry out regular audits of qualified suppliers.
In 2021, 2022, 2023 and 2024, purchases from our largest supplier in each year during the
Track Record Period amounted to RMB665.0 million, RMB1,326.6 million, RMB433.9 million
and RMB674.8 million, representing 40.8%, 38.2%, 14.3% and 19.1% of our total amount of
purchase during the respective years, while purchases from our five largest suppliers in each
year during the Track Record Period amounted to RMB1,079.3 million, RMB2,230.0 million,
RMB1,368.1 million and RMB1,736.4 million, representing 66.1%, 64.2%, 45.0% and 49.2%
of our total amount of purchase during the respective years. We believe that we have a good
cooperation relationship with our key suppliers. For more details on our supply chain, see
“Business—Supply Chain—Suppliers.”
SUMMARY
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BUSINESS OF SUZHOU ZENIO AND JIANGSU TAFEL
Jiangsu TAFEL was engaged in the development, manufacturing and sales of new energy
power batteries. According to Frost & Sullivan, Jiangsu TAFEL and its subsidiaries ranked 7th
largest power battery manufacturers as measured by monthly installation capacity in February
2020 and 7th place in 2021 as measured by accumulative installation capacity. At the time of
the establishment of our Company in February 2019, Jiangsu TAFEL was a minority
shareholder holding 30% of the equity interests in the Company. Our Company had been a
wholly-owned subsidiary of Jiangsu TAFEL from May 2020 until the commencement of the
Business Reorganization in December 2021. In February 2022, as part of the Business
Reorganization, we acquired the business of Jiangsu TAFEL under common control for a total
consideration of RMB1,854.8 million, which was determined based on the valuation of assets
acquired as appraised by an independent professional valuer or the book value of the relevant
assets, including part of the inventories which were still in the physical possession of Jiangsu
TAFEL and not shipped out and could be used for further sale after the acquisition, at the
relevant time. The acquisition of Jiangsu TAFEL’s business under common control enhanced
our business scale and our capabilities in the development and manufacturing of power battery
products. Jiangsu TAFEL did not transfer any liabilities to our Group, apart from warranty
liabilities for products sold of approximately RMB48.0 million.
Suzhou ZENIO was engaged in the manufacturing of battery modules and battery packs.
On February 25, 2022, our Company acquired 100% equity interests in Suzhou ZENIO at a
consideration of RMB306.9 million, being the fair value of identifiable assets and liabilities of
Suzhou ZENIO on the date of the acquisition plus goodwill arising from the acquisition. The
acquisition of Suzhou ZENIO enhanced our capabilities in the development and manufacturing
of battery modules and battery packs, which greatly complements our existing capabilities in
power battery cells. For more details, see “Business—Business of Suzhou ZENIO and Jiangsu
TAFEL—Acquisition and Business of Jiangsu TAFEL.”
Integration of the Acquired Businesses
Since the respective acquisitions of Jiangsu TAFEL’s business and Suzhou ZENIO, we
had undertaken a series of measures to integrate the various aspects of their business operations
into our Group. We also proactively commingled human resources of the acquired businesses
into our Group. Leveraging Jiangsu TAFEL’s established and operational manufacturing
capabilities and customer contacts, we took measures to ensure a smooth transition so as to
continue the manufacturing and sales relationships with Jiangsu TAFEL’s existing customers or
pursue further negotiations with its potential customers.
SUMMARY
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COMPETITION
We primarily compete with other EV power battery manufacturers in China, as currently
the vast majority of power batteries are used in EVs. According to Frost & Sullivan, the overall
power battery industry is expected to grow rapidly in sales volume, driven by factors such as
the accelerating transportation electrification process, technological advancement in EV
batteries, favorable government policies, and continuous cost reductions for EV batteries. The
power battery market is also expected to undergo the following trends, such as continued
technology innovation and breakthroughs on battery performance, reducing costs, increasing
industry concentration, closer collaboration between battery manufacturers and OEMs,
increasing importance of flexible manufacturing capacity, increasing diversity of business
models, and battery standardization. See “Industry Overview” for more details on our
competitive landscape, industry growth drivers and development trends.
OUR COMPETITIVE STRENGTHS
Our competitive strengths include:
 An established EV battery company in China with experience in the auto part
industry;
 Diverse portfolio of market-driven battery products capturing structural industry
growth;
 Standardized battery cells, platformed battery packs, and diversified
electrochemistries which boost cost-efficiency across the industry chain;
 Comprehensive independent R&D capabilities supporting the launch of cutting-edge
products;
 Software-defined and intelligent manufacturing facilities based on AI and big data,
leading to efficient and flexible battery cell manufacturing capabilities that are
highly adaptable to changes in market demand; and
 Deep and well-established customer relationships with leading players in the global
mobility and energy storage industries.
For more details on our competitive strengths, see “Business—Our Competitive
Strengths.”
SUMMARY
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OUR STRATEGIES
Our strategies include:
 Steadily expand manufacturing capabilities driven by changes in market demand;
 Enrich our diverse product portfolio, covering standardized battery cells, platformed
battery packs and diversified electrochemistries to improve the overall efficiency of
the entire power battery industry chain;
 Further implement our R&D strategy; and
 Expand our business globally through diverse approaches.
For more details on our strategies, see “Business—Our Strategies.”
SUMMARY OF MAJOR RISK FACTORS
Our major risk factors include:
 We have a limited operating history and our ability to develop, manufacture and
deliver battery products is still evolving, making it difficult to evaluate our business
prospects, and we may not be successful in expanding our operations or managing
our growth.
 We recorded a net loss in 2021, 2022 and 2023 and a net profit in 2024. We may not
be able to maintain our net profit position in the future, which may affect our
business sustainability.
 We may not be able to derive the desired benefits from our research and
development efforts, and may fail to keep up with rapid technological changes and
evolving industry standards, which may negatively affect our competitiveness and
profitability, and lead to decrease in the demand for our products.
 The power battery industry is highly competitive. Failure to compete effectively or
launch our new products, including new battery types such as hydrogen and
sodium-ion batteries, may materially and adversely affect our market share and
profitability.
 If we are unable to retain existing customers and attract new customers, our
business, financial conditions and results of operations will be adversely affected.
 Our business is exposed to the supply-demand dynamics in various new energy
related industries, and thus is affected by market demand for the end products where
our battery products are used.
SUMMARY
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--- page 23 ---
 We may not be able to increase our production capacity as planned, and even if our
production expansion projects proceed as planned, we may not be able to increase
our production output in a timely manner or at all as envisaged.
 We purchase certain key raw materials from third parties, and we may not be able
to secure our supply of such key raw materials in a stable and timely manner.
 We are exposed to risks relating to price fluctuations of key raw materials.
 We depend significantly on our pricing power and may be materially and adversely
affected if we are forced to lower the selling prices of our products.
SUMMARY OF RESULTS OF OPERATIONS
The following table sets forth our results of operations during the years indicated.
Y ear ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 3,290,253 4,161,670 5,130,317
Cost of sales
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,393,991) (3,001,272) (3,670,744) (4,326,476)
Impairment losses on inventories /H1118/H1118/H1118/H1118/H1118(75,127) (579,261) (282,437) (55,397)
Gross Profit/(Loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,178 (290,280) 208,489 748,444
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,833 48,954 49,265 78,738
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,848) (19,779) (57,618) (35,769)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(134,738) (241,116) (259,466) (301,459)
Research and development expenses /H1118/H1118/H1118/H1118(221,047) (329,277) (424,099) (556,165)
Impairment losses on financial assets and
contract assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,457) (600,057) (10,837) (9,705)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,400) (267,524) (11,568) (14,952)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,217) (32,892) (73,451) (132,585)
Share of profits/(losses) of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 923 (25,094) 302,496
(LOSS)/PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118(411,696) (1,731,048) (604,379) 79,043
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,421 11,067 14,512 11,971
(LOSS)/PROFIT AND TOTAL
COMPREHENSIVE INCOME FOR
THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(Loss)/profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(LOSS)/PROFIT PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE
PARENT
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.26) (1.01) (0.31) 0.04
SUMMARY
–1 4–


--- page 24 ---
Non-IFRS Measure
Our consolidated financial information was prepared in accordance with IFRS. To
supplement our consolidated results which were prepared and presented in accordance with
IFRS, we use EBITDA (non-IFRS measure) and adjusted EBITDA (non-IFRS measure) as
additional financial measures, which are not required by, or presented in accordance with,
IFRS. We believe that the measure facilitates comparisons of operating performance from
period to period and company to company by eliminating the potential impact of items, such
as certain non-cash items. The use of the non-IFRS measure has limitations as an analytical
tool, and you should not consider them in isolation from, as a substitute for, analysis of, or
superior to, our results of operations or financial condition as reported under IFRS. In addition,
the non-IFRS measure may be defined differently from similar terms used by other companies,
and may not be comparable to other similarly titled measures used by other companies.
We define EBITDA (non-IFRS measure) as loss for the year adjusted by finance costs,
depreciation and amortization, and income tax credit and interest income. We define adjusted
EBITDA (non-IFRS measure) as EBITDA (non-IFRS measure) as adjusted by share-based
payment expenses (which is non-cash in nature) and listing expenses. The following table sets
forth a reconciliation of our EBITDA (non-IFRS measure) for 2021, 2022, 2023 and 2024 to
the nearest measures prepared in accordance with IFRS.
Y ear ended December 31,
2021 2022 2023 2024
(RMB in thousands)
(Loss)/profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,217 32,892 73,451 132,585
Depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185,674 294,001 413,853 608,942
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,421) (11,067) (14,512) (11,971)
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,155) (17,896) (33,230) (37,426)
EBITDA (non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(163,960) (1,422,051) (150,305) 783,144
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,611 35,038 43,934 58,875
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 29,285
Adjusted EBITDA
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(141,349) (1,387,013) (106,371) 871,304
Summary of Results of Operations
During the Track Record Period, we experienced growth in our results of operations. Our
revenue increased from RMB1,499.3 million in 2021 to RMB3,290.3 million in 2022, and
further to RMB4,161.7 million in 2023, representing a CAGR of 66.6%. Our revenue grew
from RMB4,161.7 million in 2023 to RMB5,130.3 million in 2024, representing a growth rate
of 23.3%.
SUMMARY
–1 5–


--- page 25 ---
Our revenue increased from RMB1,499.3 million in 2021 to RMB3,290.3 million in 2022,
and further to RMB4,161.7 million in 2023, and increased to RMB5,130.3 million in 2024,
primarily due to an increase in our sales volume of power batteries during each year.
Our cost of sales increased from RMB1,469.1 million in 2021 to RMB3,580.5 million in
2022, and further to RMB3,953.2 million in 2023, and increased to RMB4,381.9 million in
2024, primarily due to an increase in sales volume of our various batteries products, which led
to increases in raw material costs and labor costs in each year. In addition, the significant
increase from 2021 to 2022 was primarily due to the one-off impact by WM Customer, and to
a lesser extent, due to increases in the sales volume of our power batteries and the overall
prices of raw materials in the industry. The increase from 2022 to 2023 was primarily due to
an increase in cost of sales of goods driven by an increase in sales volume of our power
batteries and ESS products, partially offset by a decrease in impairment losses on inventories.
The increase from 2023 to 2024 was primarily due to an increase in manufacturing costs and
driven by an increase in sales volume, partially offset by a decrease in impairment losses on
inventories.
Our impairment losses on financial assets increased significantly from RMB22.5 million
in 2021 to RMB600.1 million in 2022, and subsequently decreased by 98.2% to RMB10.8
million in 2023, primarily because in 2022 we incurred an RMB601.4 million impairment loss
to our trade receivables as a result of material adverse changes in business operations of WM
Customer. See “—Significant factors affecting our financial condition and results of
operations—Specific factors affecting our results of operations” for more details.
Our other expenses for the year 2021, 2022, 2023 and 2024 were RMB1.4 million,
RMB267.5 million, RMB11.6 million and RMB15.0 million, respectively. The significant
increase of other expenses from 2021 to 2022 was primarily because of impairment loss to
property, plant and equipment caused by changes in business plans of Nanjing Zenergy and
Dongguan Zenergy. Nanjing Zenergy ceased substantial production in December 2022, and
Dongguan Zenergy ceased production activities in February 2023, respectively. After
considering the significant conversion costs we would need to incur to adapt the Nanjing
Zenergy production lines to new battery products and technologies which we developed in
recent years, we decided to substantially cease the operations of Nanjing Zenergy facility and
expand our Changshu Zenergy and Changshu Yinhe facilities with new production lines that
are compatible with our new products and technologies. Nanjing Zenergy production lines are
now primarily used for product R&D purposes. As a result, we incurred significant impairment
loss of the property, plant and equipment in 2022. Dongguan Zenergy had a relatively small
capacity compared to our other product lines. Considering the unified planning of the industrial
park where Dongguan Zenergy was located and its lease agreement that would expire in
October 2023, we decided to relocate the entire production base from Dongguan to Changshu
to better integrate our resources. As a result, Dongguan Zenergy ceased its production activities
in February 2023. As such, the relevant property, plant and equipment became idle or scrapped.
SUMMARY
–1 6–


--- page 26 ---
Our loss for the year increased from RMB402.3 million in 2021 to RMB1,720.0 million
in 2022 primarily due to material adverse changes in business operations of WM Customer. Our
loss for the year subsequently decreased to RMB589.9 million in 2023, primarily due to an
increase in sales volume and an improvement in operating efficiency due to economies of scale.
We recorded net profit of RMB91.0 million in 2024. For factors attributable to the change in
our position to become profitable in 2024, please see “—Recent Developments and No
Material Adverse Change.”
Impact of WM Customer
In November 2022, we ceased delivery of NCM battery products for application in BEVs
to Weilmaister New Energy Automotive Parts (Wenzhou) Co., Ltd. and Weima New Energy
Vehicle Sales (Shanghai) Co., Ltd. (collective, “ WM Customer ”) due to material adverse
change in its business operations and WM Customer’s prolonged delay and inability to settle
its receivables (the “ WM Customer Incident ”). The WM Customer Incident largely
contributed to the decline in the sales volume of our NCM batteries from 2.9 GWh in 2022 to
1.5 GWh in 2023, and our revenue from the sales of NCM batteries from RMB2,628.6 million
in 2022 to RMB1,448.0 million in 2023.
We also recorded an RMB601.4 million and RMB422.3 million impairment in trade
receivables and inventories, respectively, in 2022 in relation to WM Customer Incident
pursuant to the relevant accounting policies, judgments and estimates under IFRS, which
materially adversely affected our results of operations for the same year and our trade
receivable balance and financial position as of December 31, 2022. The aggregate amount of
impairment arising from the WM Customer Incident reached RMB1,023.6 million.
Our overall results of operations improved in 2023, partially because impairment in trade
receivables and inventories in relation to WM Customer did not impact our results of
operations in 2023. However, certain impact of the WM Customer Incident carried over to
2023. It takes a certain amount of time for us to develop business relationships with new
customers, obtain design-wins, and ramp up mass production. Therefore, even though sales and
delivery to WM Customer terminated in 2022, sales in 2023 was also adversely affected
because we could not timely make up for the purchase volume that would have been delivered
and sold to WM Customer had WM Customer Incident not occurred. We have also enhanced
our internal control procedures on customer credit approval when establishing sales
relationships with potential customers, focusing on their creditworthiness to avoid future
occurrence of such incidents.
SUMMARY
–1 7–


--- page 27 ---
Revenue by Product Type
The following table sets forth a breakdown of our revenue by product type during the
years indicated, both in absolute amounts and as percentages of total revenue.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 3,116,066 94.7 3,356,865 80.7 4,663,775 90.9
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 2,628,589 79.9 1,447,995 34.8 1,357,268 26.5
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 487,477 14.8 1,908,870 45.9 3,306,507 64.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,447,952 96.6 3,103,107 94.3 2,370,954 57.1 3,012,278 58.7
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,567 0.3 971,673 23.3 1,644,206 32.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 0.0 4,392 0.1 14,238 0.3 7,291 0.2
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,768 0.1 315,306 7.6 213,409 4.2
Other products and services (2) /H1118/H1118/H1118/H111851,251 3.4 171,419 5.2 489,499 11.7 253,133 4.9
Down-grade products (3) /H1118/H1118/H1118/H1118/H1118/H1118/H111816,950 1.1 35,539 1.1 278,017 6.6 92,763 1.8
Waste materials (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,485 1.8 109,540 3.3 132,554 3.2 130,249 2.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,816 0.5 26,340 0.8 78,928 1.9 30,121 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 100.0 3,290,253 100.0 4,161,670 100.0 5,130,317 100.0
Notes:
(1) Primarily include HEVs and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services. The provision of technical support services was mainly to develop and test products for our
customers. Such services were customized and developmental in nature.
(3) Revenue from the sale of down-grade products accounted for 6.6% of our total revenue in 2023, which was
primarily due to the WM Customer Incident in 2022. After the WM Customer Incident, we sold inventories
originally produced for WM Customer to other customers as down-grade products in 2023.
(4) Primarily include materials discarded during the production process, such as cathodes, anodes, battery cells,
and scrap materials like copper foil and aluminum foil.
SUMMARY
–1 8–


--- page 28 ---
EV sales in China demonstrate significant seasonal patterns, primarily driven by seasonal
demand fluctuations, policy influences, holidays, and climate conditions, among other factors.
Specifically, the demand and production schedules of OEM customers typically decrease in the
first quarter due to Chinese New Year holiday, and gradually resume in the second quarter when
OEMs typically launch new vehicle models. The third and fourth quarters are the traditional
peak demand and sales period in the China’s automotive market, with more new models in the
market, leading to higher sales volumes in the second half of each year during the Track Record
Period. The sales of our products to OEMs are also affected by seasonal patterns. Our sales
volumes are typically lower in the first half of each year compared to the second half of each
year during the Track Record Period. For more details on how our sales are subject to seasonal
patterns of EV sales in China, please see “Business—Products.”
Revenue by Region
During the Track Record Period, we generated most of our revenue from operations in
China. Our revenue from direct sales to overseas customers outside China was RMB0.3
million, RMB4.0 million, RMB78.7 million, and RMB34.9 million in 2021, 2022, 2023 and
2024, respectively. We also sold our products and provided services to the European Union
during the Track Record Period, including power batteries, semifinished battery products and
accessories, and technical services. Our revenue from sales and services to the European Union
was nil, nil, RMB73.2 million, and RMB0.8 million in 2021, 2022, 2023, and 2024,
respectively. During the Track Record Period, we generated a small portion of our revenue
from the United States. Such direct sales to the United States primarily consisted of aviation
battery products. Our revenue from the direct sales to the United States was nil, RMB0.6
million, RMB4.7 million, and RMB13.9 thousand in 2021, 2022, 2023, and 2024, respectively.
Key Operating Data
The following table sets forth a breakdown of sales volume during the years indicated.
For the year ended December 31,
2021 2022 2023 2024
(MWh)
Power Battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 3,634.4 5,906.7 11,314.4
By Product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 2,947.3 1,446.0 1,765.0
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 687.1 4,440.7 9,549.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.6 3,631.4 4,980.6 9,210.5
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2.4 924.5 2,095.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.1 0.6 1.5 8.8
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.1 751.0 575.2
Note:
(1) Primarily include HEV and aviation applications.
SUMMARY
–1 9–


--- page 29 ---
The following table sets forth a breakdown of average selling price during the years
indicated.
For the year ended December 31,
2021 2022 2023 2024
(RMB/Wh)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.86 0.57 0.41
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.89 0.99 0.77
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.71 0.43 0.35
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.85 0.48 0.33
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.59 1.05 0.78
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.62 6.88 9.31 0.83
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.89 0.42 0.37
Note:
(1) Primarily include HEV and aviation applications.
The following table sets forth a breakdown of average unit cost of raw materials, unit
manufacturing costs and unit labor costs for our power battery products, ESS battery products
and down-grade products during the years indicated. For more details, please see
“Business—Business Sustainability—Our Historical Results of Operations—Fluctuation in
Raw Material Prices.”
Y ear ended December 31,
2021 2022 2023 2024
(RMB/Wh)
Unit cost of raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.53 0.69 0.38 0.26
Unit manufacturing costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.05 0.04 0.03 0.04
Unit labor costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.04 0.03 0.03 0.02
Average selling price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.88 0.54 0.41
SUMMARY
–2 0–


--- page 30 ---
Cost of Sales
The following table sets forth a breakdown of our cost of sales by nature during the years
indicated, both in absolute amounts and as percentages of our total cost of sales.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141,686 77.7 2,565,621 71.7 2,917,051 73.8 3,268,742 74.6
Manufacturing costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,355 8.0 134,249 3.7 262,294 6.6 529,643 12.1
Labor costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,544 5.2 105,480 2.9 247,944 6.3 275,548 6.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,335,585 90.9 2,805,350 78.3 3,427,289 86.7 4,073,933 93.0
Other operating costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,324 2.3 128,595 3.6 169,254 4.3 143,373 3.2
Warranty costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,082 1.7 67,327 1.9 74,201 1.9 109,170 2.5
Impairment losses on inventories /H1118/H111875,127 5.1 579,261 16.2 282,437 7.1 55,397 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,118 100.0 3,580,533 100.0 3,953,181 100.0 4,381,873 100.0
The following table sets forth a breakdown of our cost of sales by product type and
downstream application during the years indicated, both in absolute amounts and as
percentages of our total cost of sales.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,662 91.2 2,827,885 79.0 2,925,482 74.0 3,899,940 89.0
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,662 91.2 2,409,273 67.3 1,257,029 31.8 1,153,058 26.3
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 418,612 11.7 1,668,453 42.2 2,746,882 62.7
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,578 91.2 2,815,857 78.7 2,085,660 52.8 2,550,935 58.2
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,379 0.2 826,619 20.9 1,344,773 30.7
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884 0.0 3,649 0.1 13,203 0.3 4,232 0.1
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,330 0.1 289,805 7.3 188,938 4.3
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,329 3.7 171,057 4.7 455,457 11.5 237,598 5.4
Impairment losses on inventories /H1118/H111875,127 5.1 579,261 16.2 282,437 7.2 55,397 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,118 100.0 3,580,533 100.0 3,953,181 100.0 4,381,873 100.0
SUMMARY
–2 1–


--- page 31 ---
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services.
Gross Profit/(Loss) and Gross Profit/(Loss) Margin by Product Type and Downstream
Application
The following table sets forth our gross profit/(loss) and gross profit/(loss) margin by
product type and downstream application during the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118108,383 7.5 288,181 9.2 431,383 12.9 763,835 16.4
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,383 7.5 219,316 8.3 190,966 13.2 204,210 15.0
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 68,865 14.1 240,417 12.6 559,625 16.9
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,374 7.5 287,250 9.3 285,294 12.0 461,343 15.3
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 188 2.2 145,054 14.9 299,433 18.2
Other applications (1) /H1118/H1118 9 9.7 743 16.9 1,035 7.3 3,059 42.0
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 438 15.8 25,501 8.1 24,471 11.5
Other products and
services (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,078) (6.0) 362 0.2 34,042 7.0 15,535 6.1
Down-grade products /H1118 (4,054) (23.9) (6,918) (19.5) (8,193) (2.9) (1,461) (1.6)
Waste materials (3) /H1118/H1118/H1118/H1118261 0.9 (5,427) (5.0) (7,855) (5.9) 463 0.4
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715 10.5 12,707 48.2 50,090 63.5 16,533 54.9
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(75,127) N/A (579,261) N/A (282,437) N/A (55,397) N/A
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,178 2.0 (290,280) (8.8) 208,489 5.0 748,444 14.6
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services. We recorded gross loss of RMB3.1 million and gross loss margin of 6.0% for other products
in 2021, primarily due to the gross loss for down-grade products, which were sold at low prices.
(3) Primarily include materials discarded during the production process, such as cathodes, anodes, battery cells,
and scrap materials like copper foil and aluminum foil.
For more details on our results of operations, see “Financial Information—Results of
Operations” and “Financial Information—Principal Components of Statement of Profit or Loss
And Other Comprehensive Income.”
SUMMARY
–2 2–


--- page 32 ---
Rule 13.46(2) of the Listing Rules requires a PRC issuer to send an annual report or a
summary financial report to its shareholders within four months after the end of the financial
year to which the report relates. Since (a) this Prospectus already includes the financial
information of the Company for the year ended December 31, 2024 as required under Appendix
D2 to the Listing Rules in relation to annual reports; (b) we will not be in breach of the Articles
of Association, laws and regulations of the PRC or other regulatory requirements as a result of
not distributing such annual reports and accounts; and (c) we have complied with the applicable
code provisions in Part 2 of the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules, we will not separately prepare and publish and send an annual report to our
Shareholders for the year ended December 31, 2024. In addition, we will issue an
announcement by April 30, 2025 stating that we will not separately prepare and send an annual
report to our Shareholders for the year ended December 31, 2024 as the relevant financial
information has been included in this Prospectus. We will still comply with the requirements
under Rule 13.91(5) of the Listing Rules.
SUMMARY OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
The following table sets forth details of a summary of our consolidated statements of
financial position as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Total non-current assets /H1118/H1118/H1118/H1118/H11182,845,985 5,779,681 9,775,430 9,861,915
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,969,015 4,671,136 4,355,352 5,732,316
Total current liabilities /H1118/H1118/H1118/H1118/H11183,397,917 5,287,822 6,150,006 6,496,681
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118(428,902) (616,686) (1,794,654) (764,365)
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,417,083 5,162,995 7,980,776 9,097,550
Total non-current liabilities /H1118/H1118436,528 2,690,431 3,233,543 3,200,428
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
SUMMARY
–2 3–


--- page 33 ---
The following table sets forth our current assets and liabilities as of the dates indicated.
As of December 31, As of
February 28,
20252021 2022 2023 2024
(RMB in thousands)
(unaudited)
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,539 1,012,920 613,756 678,712 1,088,618
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309,874 326,487 1,147,380 1,623,305 861,188
Bills receivables at fair
value through other
comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 92,936 302,919
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,675 1,951 6,496 5,144 5,144
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,169 195,699 81,136 73,361 491,241
Financial assets at fair
value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,162,565 – – –
Restricted bank balances /H11181,020,347 1,035,350 472,305 957,804 1,013,734
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 101,982 102,050
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072 1,501,256
Total current assets /H1118/H1118/H1118/H11182,969,015 4,671,136 4,355,352 5,732,316 5,366,150
CURRENT
LIABILITIES
Trade and bills payables /H11181,813,289 3,012,332 3,415,854 3,742,586 3,707,040
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,349 1,480,456 1,945,523 1,427,848 1,303,093
Contract liabilities /H1118/H1118/H1118/H1118/H111840,855 145,385 44,662 14,756 12,827
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H11181,159,664 579,134 694,137 1,245,825 1,093,335
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,674 34,046 27,021 30,397 30,482
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 23,511 – 266 –
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,086 12,958 22,809 35,003 36,194
Total current liabilities /H11183,397,917 5,287,822 6,150,006 6,496,681 6,182,971
NET CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118(428,902) (616,686) (1,794,654) (764,365) (816,821)
SUMMARY
–2 4–


--- page 34 ---
Our net current liabilities increased from RMB764.4 million as of December 31, 2024 to
RMB816.8 million as of February 28, 2025, primarily due to (i) an RMB762.1 million decrease
in trade and bills receivables; and (ii) an RMB697.8 million decrease in cash and cash
equivalents, and partially offset by (i) an RMB417.9 million increase in prepayments, other
receivables and other assets; and (ii) an RMB409.9 million increase in inventories.
Our net current liabilities decreased from RMB1,794.7 million as of December 31, 2023
to RMB764.4 million as of December 31, 2024, primarily due to (i) an RMB517.7 million
decrease in other payables and accruals; and (ii) an RMB485.5 million increase in restricted
bank balances, and partially offset by an RMB551.7 million increase in interest-bearing bank
and other borrowings.
Our net current liabilities increased from RMB616.7 million as of December 31, 2022 to
RMB1,794.7 million as of December 31, 2023, primarily due to (i) an RMB1,162.6 million
decrease in financial assets at fair value through profit or loss; (ii) an RMB563.0 million
decrease in restricted bank balances, (iii) an RMB465.1 million increase in other payables and
accruals; and (iv) an RMB403.5 million increase in trade and bills payables, and partially offset
by (i) an RMB1,098.1 million increase in cash and cash equivalents; and (ii) an RMB820.9
million increase in trade and bills receivables.
Our net current liabilities increased from RMB428.9 million as of December 31, 2021 to
RMB616.7 million as of December 31, 2022, primarily due to (i) an RMB1,138.1 million
increase in other payables and accruals; and (ii) an RMB1,199.0 million increase in trade and
bills payables, and partially offset by (i) an RMB1,162.6 million increase in financial assets at
fair value through profit or loss; (ii) an RMB580.5 million decrease in interest-bearing bank
and other borrowings; and (iii) an RMB303.4 million increase in inventories.
SUMMARY OF CASH FLOW
The following table sets forth a summary of our cash flows for the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Net cash flows (used in)/generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(165,420) 1,353,642 284,354 (361,142)
Net cash flows (used in)/generated from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284,275) (4,012,900) 302,733 (775,160)
Net cash flows generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118938,316 2,823,634 511,028 1,298,116
Net increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118488,621 164,376 1,098,115 161,814
SUMMARY
–2 5–


--- page 35 ---
Y ear Ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Effect of foreign exchange rate changes,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,718) 4,377 – 2,979
Cash and cash equivalents at beginning
of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293,508 767,411 936,164 2,034,279
Cash and cash equivalents at end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072
We had net cash outflows in operating activities of RMB165.4 million in 2021, primarily
due to our loss before tax of RMB411.7 million, partially offset by certain non-cash and
non-operating items, primarily including depreciation of property, plant and equipment of
RMB91.2 million. We had net cash outflows in operating activities of RMB361.1 million in
2024, primarily due to (i) profit before tax for the year of RMB79.0 million; and (ii) share of
profits of joint ventures of RMB302.5 million.
For more details on our cash flow, see “Financial Information—Liquidity and Capital
Resources—Cash Flows—Net Cash (Used in)/Generated from Operating Activities.”
SUMMARY OF KEY FINANCIAL RATIOS
The following table sets forth key financial ratios for the years or as of the dates
indicated.
Y ear Ended/As of December 31,
2021 2022 2023 2024
(%)
Gearing ratio (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827.2 47.0 26.4 25.2
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887.4 88.3 70.8 88.2
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866.5 69.2 60.8 77.8
Notes:
(1) Gearing ratio is calculated based on net debt, which includes interest-bearing bank and other borrowings and
lease liabilities, less cash and cash equivalents, divided by capital, which includes equity attributable to the
owners of the parent, plus net debt and multiplied by 100%.
(2) Current ratio is calculated based on the total current assets divided by the total current liabilities as at the end
of the respective year.
(3) Quick ratio is calculated as total current assets less inventories divided by the total current liabilities as at the
end of the respective year.
SUMMARY
–2 6–


--- page 36 ---
STAES REORGANIZATION TRANSACTION
In order to advance our business development strategies and reorganize the shareholding
structure of STAES, we completed the acquisition of 50% of the equity interests in STAES held
by SINOGY VC in December 2023. Pursuant to Rule 4.05A of the Listing Rules, such
transaction, which occurred during the Track Record Period, would have been classified as a
major transaction under Chapter 14 of the Listing Rules at the date of the Company’s
application for Listing. Please refer to Part III of the Accountants’ Report in Appendix I to this
Prospectus for the financial information of STAES from the commencement of the Track
Record Period to the date of acquisition. STAES is considered a material joint venture of the
Group and is accounted for using the equity method.
OUR SHAREHOLDING STRUCTURE
Our Controlling Shareholders
Immediately prior to the Global Offering, our Management Shareholders led by Ms. Cao
and Dr. Chen who had been acting in concert with each other since the incorporation of our
Company in respect of all major affairs concerning the Group, which in aggregate hold
approximately 48.56% of the issued share capital of our Company, are acting in concert
together with the Financial Investors, which in aggregate hold approximately 16.04% of the
issued share capital of our Company, through which they are collectively interested in, and are
entitled to exercise control over, an aggregate of approximately 64.60% of the voting rights of
our Company. The Financial Investors have confirmed that they do not intend to continue to
act in concert or exercise any common control over our Group upon completion of the Global
Offering. Accordingly, the Financial Investors have entered into separate agreements with
Zenergy Investment to terminate the AIC Agreements and V oting Proxy Agreements, with such
termination to take effect upon Listing. For the background of the Acting-in-Concert
Shareholders, please refer to the section headed “History, Reorganization and Corporate
Structure”.
Immediately following the completion of the Global Offering (assuming that the
Over-allotment Option is not exercised), Ms. Cao and Dr. Chen, indirectly through their close
associates Zhengli Consulting, Zenergy Investment, SINOGY VC, Nanjing Miaode, Nanjing
Xuande, Zhengli No. 1 and Zhengli No. 2, will together control the voting rights of
approximately 46.21% of the total issued share capital of our Company. Accordingly, Ms. Cao
and Dr. Chen, together with Zhengli Consulting, Zenergy Investment, SINOGY VC, Nanjing
Miaode, Nanjing Xuande, Zhengli No. 1 and Zhengli No. 2, will be a group of Controlling
Shareholders of our Company upon Listing. Ms. Cao and Dr. Chen will continue to act in
concert in respect of all major affairs concerning the Group in accordance with their
acting-in-concert agreement after the Listing provided that they remain interested in the share
capital of our Company. For details, see “Relationship with Our Controlling Shareholders”.
SUMMARY
–2 7–


--- page 37 ---
Pre-IPO Investments
We underwent rounds of Pre-IPO Investments through the subscription of our increased
registered capital by our Pre-IPO Investors and equity transfers among our existing
shareholders and the Pre-IPO Investors. For further details of the identity and background of
the Pre-IPO Investors and the principal terms of the Pre-IPO Investments, see “History,
Reorganization and Corporate Structure—Pre-IPO Investments.”
BUSINESS SUSTAINABILITY
Business and Industry Background
In the power battery industry, significant upfront investments are required at the initial
stage of industry players’ business operations on manufacturing capacity and product R&D. On
the one hand, players need to invest heavily on establishing and continuously expanding
manufacturing capacity to meet customer demands. Such investment may not yield any
meaningful return until after the manufacturing facilities are constructed and ramped up, which
could take a significant amount of time. On the other hand, players need to invest heavily on
the R&D of technologies and products to ensure they can launch competitive products which
can stay ahead of the latest development in industry trends and market demands.
Intense competition has led to an average of three to five years of net loss position for
new players in China’s power battery industry, according to Frost & Sullivan, because (i) it
generally takes longer time for new players to establish new customer relationships given the
highly concentrated and competitive market landscape; (ii) new players who enter the market
at a later stage do not enjoy first-mover advantages, such as brand recognition, customer
loyalty, and the ability to set standards or prices; and (iii) new players have yet to be able to
leverage economies of scale and to achieve optimal operational efficiency. Therefore, they
need longer time and more investment in product and technology innovation, building and
maintaining customer relationship and implementation of other strategies to compete against
established brands and differentiate themselves, leading to longer time to breakeven and
become profitable compared to those who entered the market early on.
Leveraging the rapid development in battery technology and the expected growth in the
overall market demand, however, players in China’s power battery industry who have (i) made
sufficient upfront investments in R&D and manufacturing capacities; (ii) established sizeable
OEM customer base, especially those with exclusive supply arrangements; and (iii) possessed
the ability to ramp up utilization of manufacturing facilities with overall utilization rate of over
60% are well positioned to achieve profitability and maintain sustainable development in the
long run.
SUMMARY
–2 8–


--- page 38 ---
Our Historical Results of Operations
Our net loss was RMB402.3 million, RMB1,720.0 million, and RMB589.9 million, in
2021, 2022 and 2023, respectively. Our net profit was RMB91.0 million in 2024. Our net loss
position from 2021 to 2023 was primarily due to (i) our significant investment in technology
and product development pursuant to our R&D strategy; (ii) significant spending on
manufacturing capacity expansion; (iii) historical product mix and pricing strategy, (iv) one-off
impact of the WM Customer Incident during the Track Record Period; and (v) fluctuation in
raw material prices (primarily for lithium carbonate prices) during the Track Record Period.
For factors attributable to the change in our position to become profitable in 2024, please see
“—Recent Developments and No Material Adverse Change.”
Significant Investment in Technology and Product Development
We invest significant resources on technological innovation and product development. As
of the Latest Practicable Date, we have entered into a contract and commenced production of
battery products for air application. As of the Latest Practicable Date, our investment in battery
products for sea application has not yet led to mass commercialization. In 2021, 2022, 2023
and 2024, our research and development expenses was RMB221.0 million, RMB329.3 million,
RMB424.1 million and RMB556.2 million, respectively. The percentage of research and
development expenses over total revenue decreased from 14.7% in 2021 to 10.0% in 2022,
primarily due to the significant increase in our sales revenue; such percentage then remained
relatively stable at 10.0%, 10.2% and 10.8% in 2022, 2023 and 2024, respectively. See
“Financial Information—Significant factors affecting our financial condition and results of
operations—Specific factors affecting our results of operations—Seasonality” for details.
Manufacturing Capacity Still under Expansion
Our future growth and profitability depend on our ability to expand our manufacturing
capacity to meet the continuously increasing market demand. As of the Latest Practicable Date,
we are still actively expanding our manufacturing capacity, which has yet to achieve optimal
economies of scale at the current size. Such expanding manufacturing capacity requires
substantial and continuous capitalized spending, which leads to significant depreciation and
amortization that drives up our unit product costs.
Product Mix and Pricing Strategy
The ability to negotiate for premium pricing for our products requires a high level of trust
and dependence by customers, which take time to build. Because we are still in the early stage
of new product launches and forming a competitive product portfolio, we may not enjoy
bargaining power that is as strong as some of our more established peers who have more
advanced product mix, longer sales relationships with their customers and have achieved
higher economies of scale.
SUMMARY
–2 9–


--- page 39 ---
One-off Impact by an OEM Customer
In November 2022, we ceased delivery of NCM battery products for application in BEVs
to WM Customer due to the WM Customer Incident, which led to decrease in our sales volume
of and revenue from NCM batteries. The WM Customer Incident also led to impairment losses
on our inventories and trade receivables in 2022, which materially adversely affected our cost
of sales, gross loss margin and overall results of operations in the same year. As of the Latest
Practicable Date, there was no incident similar to the WM Customer Incident in the course of
our operations.
Fluctuation in Raw Material Prices
Raw material costs, in particular lithium carbonate prices, account for the largest portion
of overall cost of power batteries. In 2021, 2022, 2023 and 2024, cost of raw materials
accounted for 77.7%, 71.7%, 73.8% and 74.6% of our total cost of sales, respectively, and
76.1%, 78.0%, 70.1% and 63.7% of our revenue, respectively. According to Frost & Sullivan,
major raw materials for power batteries experienced a hike in prices in 2022. Thereafter, due
to mining of further lithium mineral resources and improvement in refinery techniques, the
supply of lithium related raw materials increased, which led to a decrease in raw material
prices in 2023.
Path to Profitability
In light of the above background to our historical results of operations, we historically
recorded a net loss in 2021, 2022 and 2023. However, we recorded a net profit in 2024.
Meanwhile, we intend to adopt the following measures to maintain our net profit position in
2025.
Further Increase Sales Revenue
The demand for power batteries globally is expected to continue to expand, driven by the
growth in the global EV industry. To capture such expanding market, we intend to further
develop our product portfolio covering more interconnected land, sea and air applications. We
also intend to improve our product mix, dedicating the sales of products that enjoy higher gross
margin. We plan to actively expand our customer base for our various products, and we have
devoted significant efforts in the R&D of our core battery technologies. These products include
BEV and EREV products in form of battery packs, which offer higher margins due to their
higher value added, as well as PHEV products. PHEV battery cells have higher per unit prices
by KWh due to their smaller capacity and higher power requirements, and projects often
include complete battery packs. The pricing of the pack component is also relatively stable and
less affected by market fluctuations.
SUMMARY
–3 0–


--- page 40 ---
Enhance Cost Management
We cooperate with OEMs to redefine the approach to product development by adopting
standardized battery cells, platformed battery packs, and diversified electrochemistries, which
enables more efficient and low-cost integration of our products into their different vehicle
models.
We also aim to improve our manufacturing process, explore the optimal manufacturing
line set-up and improve flexibility of manufacturing speed of each manufacturing line, in order
to improve overall manufacturing efficiency and lower unit cost.
We also plan to manage our raw material procurement cost by entering into long-term
supply agreements or strategic cooperation with suppliers with respect to raw materials whose
prices are subject to large fluctuations, in which we intend to stipulate that the procurement
price will be adjusted in line with the public market prices.
We also intend to strengthen our internal control throughout our entire organization to
ensure that all spending are made pursuant to preapproved budgets and to avoid excessive and
unnecessary spending.
Economies of Scale
We believe as we continue to expand our overall business scale, we are positioned to
capture growing economies of scale as fixed costs and operating expenses will be allocated by
the increasing sales volume, thus lowering our unit cost and improving our profitability.
Particularly, under our R&D strategy, we expect to develop and launch new diverse battery
products covering more application scenarios. We believe the launch, mass production and
delivery of an increasingly rich product portfolio is expected to drive significant expansion in
our business scale.
Joint V enture with Toyota
STAES is the primary battery pack supplier for major OEMs that are joint ventures with
Toyota in China. We intend to further leverage such close relationships to explore other
business opportunities.
Despite our net loss position during the first three years of the Track Record Period, we
believe our business is sustainable and has sufficient sources of liquidity to support our
continued operations and growth, primarily due to (i) expected and continued development of
diverse products; (ii) expanding high-quality customer base and diverse overseas business
expansion prospects; (iii) enhanced cost control on product development, manufacturing and
raw material procurement; (iv) expected economies of scale which we believe to further
strengthen as we grow larger in scale; and (v) contribution from joint ventures. We recorded
SUMMARY
–3 1–


--- page 41 ---
net profit of RMB91.0 million in 2024. As of February 28, 2025, we had unutilized banking
facilities of RMB3,228.7 million; in addition, in each of 2022 and 2023, we generated positive
cash flow from our operating activities. As such, we believe our liquidity position also supports
our sustainable future growth.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$927.5 million at the Offer Price of HK$8.27 per Share, after deducting the underwriting
fees and commissions (assuming the full payment of the discretionary incentive fee) and
estimated expenses payable by the Company.
We intend to use the net proceeds we will receive from the Global Offering for the
following purposes:
 approximately 80.0% of the net proceeds, or HK$749.1 million (equivalent to
approximately RMB684.7 million), will be used for the expansion of our production
capacity and to construct intelligent manufacturing facilities and flexible
manufacturing lines;
 approximately 10.0% of the net proceeds, or HK$92.8 million (equivalent to
approximately RMB85.6 million), will be used for various R&D activities; and
 approximately 10.0% of the net proceeds, or HK$92.8 million (equivalent to
approximately RMB85.6 million), will be used for providing funding for working
capital and other general corporate purposes.
For more details on our use of proceeds, see “Future Plans and Use of Proceeds—Use of
Proceeds.”
LISTING EXPENSES
The following table sets forth a breakdown of the listing expenses for the Global Offering
at the Offer Price of HK$8.27 per Share (assuming the Over-allotment Option is not exercised).
Listing Expenses
Based on an
Offer Price of
HK$8.27
(HK$ in
thousands)
Non-underwriting related expenses
Legal and audit expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,289
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,360
Underwriting related expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,901
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,550
SUMMARY
–3 2–


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We expect that approximately RMB39.5 million (HK$42.8 million) of listing expenses
have been/will be charged to our statements of profit or loss and other comprehensive income,
of which RMB29.3 million (HK$31.7 million) has been so charged in 2024. We expect that
approximately RMB32.1 million (HK$34.8 million) relating to listing expenses directly
attributable to the issue of shares will be deducted from equity.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that: (i) the Global
Offering is completed and 121,523,700 Offer Shares are issued and sold in the Global Offering;
and (ii) the Over-Allotment Option is not exercised:
Based on an
Offer Price of
HK$8.27 per
H Share
Market capitalization of
our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$20,745.3
million
Market capitalization of
our H shares (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$11,903.6
million
Unaudited pro forma adjusted consolidated
net tangible assets per Share (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$2.75
Notes:
(1) The calculation of market capitalization is based on 2,508,500,103 Shares expected to be in issue
immediately upon completion of the Global Offering.
(2) The calculation of the market capitalization of our H Shares is based on the 1,439,372,739 H Shares,
comprising 121,523,700 H Shares to be issued under the Global Offering and 1,317,849,039 H Shares
to be converted from Unlisted Shares, expected to be in issue immediately upon completion of the
Global Offering.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our
Company and the amounts per share are arrived at after the adjustments referred to in “Appendix
II—Unaudited Pro Forma Financial Information” and on the basis that 2,508,500,103 shares were in
issue assuming the Global Offering had been completed on December 31, 2024, without taking into
account any Shares which may be allotted and issued pursuant to the exercise of the Over-allotment
Option or any Shares which may be issued or repurchased by the Company.
SUMMARY
–3 3–


--- page 43 ---
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Listing Committee for the granting of listing of, and permission
to deal in, our H Shares to be converted from the Unlisted Shares, and our H Shares to be issued
pursuant to the Global Offering (including any H Shares which may be issued pursuant to the
Over-allotment Option). Dealings in the H Shares on the Hong Kong Stock Exchange are
expected to commence on Monday, April 14, 2025. No part of our H Shares is listed on or dealt
in on any other stock exchange, and no such listing or permission to list is being or proposed
to be sought in the near future.
Our listing application is made on the basis that, among other things, we satisfy the
market capitalization/revenue test under Rule 8.05(3) of the Listing Rules with reference to: (i)
our revenue for the year ended December 31, 2024, being approximately RMB5,130.3 million,
which is over HK$500 million as required by Rule 8.05(3) of the Listing Rules; and (ii) our
expected market capitalization based on the Offer Price at the time of Listing which exceeds
HK$4 billion as required by Rule 8.05(3) of the Listing Rules.
DIVIDEND
During the Track Record Period, we did not declare or pay any dividends. As of the Latest
Practicable Date, we did not have a formal dividend policy or a fixed dividend payout ratio.
The Board has approved a dividend policy, which will become effective upon Listing. Under
the dividend policy, we may provide our Shareholders with interim or annual dividends as the
Board deems appropriate. The Board will consider, among other things, the following factors
when proposing dividends and determining the amount of dividends: (i) our actual and
projected financial performance; (ii) our estimated working capital requirements, capital
expenditure requirements and future business expansion plan; (iii) our present and future cash
flow; (iv) other internal and external factors that may have an impact on our business
operations or financial performance and position; and (v) other factors that our Board deem
relevant.
Any declaration and payment as well as the amount of dividends will be subject to our
Articles of Association and applicable laws and regulations. The declaration and payment of
any dividends in the future will be determined by our shareholders’ meeting, in its discretion,
and will depend on a number of factors, including but not limited to our earnings, capital
requirements, overall financial condition and contractual restrictions. We may by ordinary
resolution resolve to declare dividends in any currency and authorize payment of the dividends
out of the funds of our Company lawfully available. There is no assurance that dividends of any
amount will be declared to be distributed in any year. We will continue to re-evaluate our
dividend policy in light of our financial condition and the prevailing economic environment.
SUMMARY
–3 4–


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IMPACT OF COVID-19
The outbreak of COVID-19 pandemic has materially and adversely affected the global
economy since the first quarter of 2020. The COVID-19 pandemic has made it more restrictive
for overseas raw material supplies to enter China due to customer control measures imposed
during the COVID-19 pandemic, which partially led to a raw material shortage and drove up
prices in 2021 and 2022. In addition, freight costs for overseas shipment also increased
significantly during the COVID-19 pandemic, which also drove up the raw material prices. The
COVID-19 pandemic also negatively affected the mobility of some of our employees.
However, the impact of COVID-19 on our overall production and R&D process was limited.
We implemented various precautionary measures in response to COVID-19. During the Track
Record Period and up to the Latest Practicable Date, we did not experience temporary closure
or shutdown of our offices or production facilities due to the COVID-19 pandemic, and our
production activities did not encounter any material disruption, nor has our product delivery
been materially affected. Accordingly, our Directors believe that the outbreak of COVID-19
has not had, and will not have, any material adverse impact on our business, financial condition
or results of operations.
RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE
Price for lithium carbonate in January and February 2025 was RMB76.7 thousand per ton
and RMB76.3 thousand per ton, respectively. Changes in prices for lithium carbonate since
2024 were driven by the rebalancing of lithium carbonate supply-demand and cost-driven
market adjustments triggered by low-cost salt lake expansions in South America and African
lithium projects. Such prices are expected to continue to decrease in the near future, according
to Frost & Sullivan. During the Track Record Period, raw material prices for lithium carbonate
showed a declining trend. According to Frost & Sullivan, the average raw material price for
lithium carbonate in January 2023 was RMB485.1 thousand per ton, which decreased to
RMB76.3 thousand per ton in December 2024.
Our Directors confirmed that, up to the date of this Prospectus, there has been no material
adverse change in our financial or trading position or prospects since December 31, 2024, and
there has been no event since December 31, 2024 that would materially affect the information
as set out in the accountants’ report included in Appendix I of the Prospectus. According to
Frost & Sullivan, as of the date of this Prospectus, there have not been any material changes
in the industry and market environment since December 31, 2024 that would have a material
adverse impact on our business operations. As of the date of this Prospectus, there have been
no key government policies that would have a material adverse impact on our business and
financial performance.
SUMMARY
–3 5–


--- page 45 ---
In this Prospectus, unless the context otherwise requires, the following terms shall
have the meanings set out below. Certain other terms are explained in the section headed
“Glossary of Technical Terms” in this Prospectus.
“Accountants’ Report” the accountants’ report prepared by Ernst & Young,
details of which are set out in Appendix I
“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
“AIC” Administration of Industry & Commerce (၍ଣ
҅) of the PRC (now known as the Administration for
Market Regulation ( ̹ఙ္ຖ၍ଣ҅)) or, where the
context so requires, the SAMR or its delegated authority
at the provincial, municipal or other local level
“Articles of Association” or
“Articles”
the articles of association of our Company, as amended,
which shall become effective on the Listing Date, a
summary of which is set out in Appendix III
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Audit Committee” the audit committee of the Board
“Board” or “our Board” the board of Directors
“Business Day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“CABIA” China Automotive Battery Innovation Alliance
“Capital Market Intermediaries”
or “capital market
intermediary(ies)” or “CMI(s)”
the capital market intermediaries participating in the
Global Offering and has the meaning ascribed thereto
under the Listing Rules
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
DEFINITIONS
–3 6–


--- page 46 ---
“China”, “Mainland China” or
“PRC”
the People’s Republic of China which, for the purpose of
this Prospectus and for geographical reference only,
excluding Hong Kong, Macao Special Administrative
Region of the People’s Republic of China, and Taiwan
Region
“close associate(s)” has the meaning ascribed thereto 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”
Jiangsu Zenergy Battery Technologies Group Co., Ltd.
(ʮ̡), a limited
liability company incorporated in the PRC on February
26, 2019 as Jiangsu Zenergy Battery Technology
Company Limited (ʮ̡) and
converted into a joint stock company with limited
liability on July 17, 2024
“Compliance Adviser” Maxa Capital Limited
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing Rules
and unless the context otherwise requires, refers to Ms.
Cao and Dr. Chen, together with their close associates,
namely Zhengli Consulting, Zenergy Investment,
SINOGY VC, Nanjing Miaode, Nanjing Xuande, Zhengli
No. 1 and Zhengli No. 2. See “Relationship with Our
Controlling Shareholders” for details
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1
to the Listing Rules
“CSDCC” China Securities Depositary and Clearing Corporation
Limited (ப΂ʮ̡)
DEFINITIONS
–3 7–


--- page 47 ---
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Director(s)” the director(s) of our Company
“Dongguan Zenergy” Dongguan Zenergy Battery Technologies Co., Ltd. (୷
ʮ̡), a limited liability company
established in the PRC on December 27, 2021 and one of
our subsidiaries
“Dr. Chen” Dr. Chen Jicheng ( ௓ᘱ೻), our executive Director,
general manager and one of our Controlling Shareholders
“EIT” the PRC enterprise income tax
“EIT Law” the Enterprise Income Tax Law of the People’s Republic
of China (), as
amended, supplemented or otherwise modified from time
to time
“Equity Incentive Platforms” the pre-IPO equity incentive platforms of our Group,
namely Nanjing Xuande, Nanjing Mude, Nanjing
Chengde, Nanjing Gande, Nanjing Yinde, Zhengli No. 1,
Zhengli No. 2, Zhengli No. 3, Zhengli No. 4, Zhengli No.
5, Zhengli No. 6, Zhengli No. 7, Zhengli No. 8 and
Zhengli No. 9
“Exchange Participant” a person (a) who, in accordance with the Rules of the
Hong Kong Stock Exchange, may trade on or through the
Hong Kong Stock Exchange; and (b) whose name is
entered in a list, register or roll kept by the Hong Kong
Stock Exchange as a person who may trade on or through
the Hong Kong Stock Exchange
“Extreme Conditions” extreme conditions as announced by the government of
Hong Kong in the case where a super typhoon or other
natural disaster of a substantial scale serious affects the
working public’s ability to resume work or brings safely
concern for a prolonged period
“FINI” “Fast Interface for New Issuance”, the online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for the Listing
DEFINITIONS
–3 8–


--- page 48 ---
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a
global market research and consulting company, which is
an Independent Third Party
“Frost & Sullivan Report” an independent market research report commissioned by
us and prepared by Frost & Sullivan for the purpose of
this Prospectus
“General Rules of HKSCC” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group”, “our Group”, “we” or
“us”
our Company, its subsidiaries from time to time and the
legal entities the financial results of which had been
consolidated into our consolidated financial statements as
included in Appendix I to this Prospectus, or, where the
context so requires, in respect of the period prior to our
Company becoming the holding company of its present
subsidiaries, such subsidiaries as if they were
subsidiaries of our Company at the relevant time (or our
Company and any one or more of our subsidiaries, as the
context may require)
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024, as
amended, supplemented or otherwise modified from time
to time
“H Share(s)” listed ordinary share(s) in the share capital of our
Company with a nominal value of RMB1.00 each, which
is/are to be subscribed for and traded in HK dollars and
to be listed on the Hong Kong Stock Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HK$” or “Hong Kong dollars”
or “HK dollars”
Hong Kong dollars, the lawful currency of Hong Kong
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
DEFINITIONS
–3 9–


--- page 49 ---
“HKSCC EIPO” the application for Hong Kong Offer Shares to be issued
in the name of HKSCC Nominees and deposited directly
into CCASS to be credited to your designated HKSCC
Participant’s stock account through causing HKSCC
Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Offer Shares” the 12,152,400 H Shares offered by us for subscription at
the Offer Price pursuant to the Hong Kong Public
Offering (subject to reallocation as described in the
section headed “Structure of the Global Offering”)
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for
subscription by the public in Hong Kong (subject to
reallocation as described in the section headed “Structure
of the Global Offering”) at the Offer Price (plus
brokerage, SFC transaction levy, Hong Kong Stock
Exchange trading fee and AFRC transaction levy), on and
subject to the terms and conditions described in the
section headed “Structure of the Global Offering”
DEFINITIONS
–4 0–


--- page 50 ---
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchange and Clearing
Limited
“Hong Kong Takeovers Code” or
“Takeovers Code”
the Codes on Takeovers and Mergers and Share Buy-
backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Hong Kong Underwriters” the underwriters listed in the paragraph headed
“Underwriting—Hong Kong Underwriters”, being the
underwriters of the Hong Kong Public Offering
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated April 2, 2025, relating
to the Hong Kong Public Offering entered into by our
Company, the Controlling Shareholders, the Joint
Representatives and the Hong Kong Underwriters, as
further described in “Underwriting—Underwriting
Arrangements—Hong Kong Public Offering—Hong
Kong Underwriting Agreement”
“IFRS” the International Financial Reporting Standards
“Independent Third Party(ies)” any entity(ies) or person(s) who is not a connected person
of our Company within the meaning of the Hong Kong
Listing Rules
“International Offer Shares” the 109,371,300 H Shares offered by our Company
pursuant to the International Offering (subject to
reallocation as described in the section headed “Structure
of the Global Offering”) together with any additional H
Shares which may be allotted and issued by our Company
pursuant to the exercise of the Over-allotment Option
“International Offering” the offering of the International Offer Shares at the Offer
Price outside the United States in offshore transactions in
reliance on Regulation S and subject to the terms and
conditions of the International Underwriting Agreement,
as further described in the section headed “Structure of
the Global Offering”
“International Underwriters” the underwriters who are expected to enter into the
International Underwriting Agreement to underwrite the
International Offering
DEFINITIONS
–4 1–


--- page 51 ---
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering expected to be entered into on or about April 10,
2025 by, among others, our Company and the
International Underwriters, as further described in the
section headed “Underwriting—Underwriting
Arrangements—International Offering”
“Jiangsu Aiev” Jiangsu Aiev New Energy Technologies Co., Ltd ( Ϫᘽฌ
ʮ̡), a limited liability company
incorporated in the PRC on November 21, 2017
“Jiangsu TAFEL” Jiangsu TAFEL New Energy Technology Co., Ltd. ( Ϫᘽ
ʮ̡), a joint stock company
with limited liability incorporated in the PRC on July 14,
2017
“Joint Bookrunners” the joint bookrunners of the Listing as named in the
section headed “Directors, Supervisors and Parties
Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators of the Listing as named in
the section headed “Directors, Supervisors and Parties
Involved in the Global Offering”
“Joint Lead Managers” the joint lead managers of the Listing as named in the
section headed “Directors, Supervisors and Parties
Involved in the Global Offering”
“Joint Representatives” the joint representatives as named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering”
“Joint Sponsors” the joint sponsors of the Listing as named in the section
headed “Directors, Supervisors and Parties Involved in
the Global Offering”
“Latest Practicable Date” March 26, 2025, being the latest practicable date for the
purpose of ascertaining certain information contained in
this Prospectus prior to its publication
“Listing” the listing of our H Shares on the Main Board
“Listing Committee” the listing committee of the Hong Kong Stock Exchange
DEFINITIONS
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“Listing Date” the date, expected to be on or about Monday, April 14,
2025, on which the H Shares are to be listed and on which
dealings in the Shares are to be first permitted to take
place on the Hong Kong Stock Exchange
“Listing Rules” or “Hong Kong
Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Main Board” the stock exchange (excluding the option market)
operated by the Hong Kong Stock Exchange which is
independent from and operated in parallel with the GEM
of the Hong Kong Stock Exchange
“MIIT” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
“Ministry of Finance” or “MOF” the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” or “Ministry of
Commerce”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅)
“Ms. Cao” Ms. Cao Fang (ٹthe chairperson of the Board, our
executive Director and one of our Controlling
Shareholders
“Nanjing Chengde” Nanjing Chengde Enterprise Management Consulting
Partnership (Limited Partnership) (ԯᆋᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on April 3, 2018, which is an
Equity Incentive Platform
“Nanjing Gande” Nanjing Gande Enterprise Management Consulting
Partnership (Limited Partnership) (ԯ଑ᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on April 3, 2018, which is an
Equity Incentive Platform
“Nanjing Miaode” Nanjing Miaode Enterprise Management Consulting
Partnership (Limited Partnership) (ԯ↿ᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership established
in the PRC on July 7, 2017, and one of our Controlling
Shareholders
DEFINITIONS
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“Nanjing Mude” Nanjing Mude Enterprise Management Consulting
Partnership (Limited Partnership) (ԯӕᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on April 3, 2018, which is an
Equity Incentive Platform
“Nanjing Xuande” Nanjing Xuande Enterprise Management Consulting
Partnership (Limited Partnership) (ԯ᧐ᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership established
in the PRC on July 7, 2017, which is an Equity Incentive
Platform and one of our Controlling Shareholders
“Nanjing Yinde” Nanjing Yinde Enterprise Management Consulting
Partnership (Limited Partnership) (ᅃΆุ၍ଣᚥ
ਪΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on April 3, 2018, which is an
Equity Incentive Platform
“Nanjing Zenergy” Nanjing Zenergy Battery Technologies Co., Ltd. (ԯ͍
ʮ̡), a limited liability company
established in the PRC on December 27, 2021 and one of
our subsidiaries
“NDRC” National Development and Reform Commission of the
PRC (ึ)
“Nomination Committee” the nomination committee of the Board
“Offer Price” the offer price per Offer Share (exclusive of brokerage
fee of 1.0%, SFC transaction levy of 0.0027%, Hong
Kong Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015%) at which the Offer
Shares are to be subscribed for and issued pursuant to the
Global Offering as described in the section headed
“Structure of the Global Offering”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, with any additional H Shares which may be
allotted and issued pursuant to the exercise of the
Over-allotment Option
DEFINITIONS
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“Over-allotment Option” the option granted by us to the International
Underwriters, exercisable by the Joint Representatives
(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
18,228,300 additional H Shares at the Offer Price,
representing approximately 15.0% of the Offer Shares
initially available under the Global Offering, to cover,
among other things, over-allocations in the International
Offering, if any, exercisable at any time from the date of
the International Underwriting Agreement up to (and
including) the date which is the 30th day from the last
day for lodging of applications under the Hong Kong
Public Offering
“Overall Coordinator(s)” the overall coordinators as named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering”
“Overseas Listing Trial
Measures”
The Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies
and five supporting guidelines ( ྤʫΆุྤ̮೯БᗇՎ
ˏ) promulgated by
the CSRC on February 17, 2023 which became effective
on March 31, 2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” Company Law of the PRC (جas
amended, supplemented or otherwise modified from time
to time
“PRC GAAP” generally accepted accounting principles in the PRC
“PRC Legal Adviser” Fangda Partners, our legal adviser on PRC laws in
connection with the Global Offering
“Pre-IPO Equity Incentive Plans” the Share Option Plan and the Share Incentive Plan
“Pre-IPO Investment(s)” the investment(s) in our Group undertaken by the Pre-
IPO Investors prior to this initial public offering, the
details of which are set out in “History, Reorganization
and Corporate Structure”
DEFINITIONS
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“Pre-IPO Investor(s)” the investor(s) making investments in our Group prior to
this initial public offering as set out in “History,
Reorganization and Corporate Structure”
“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 Evaluation
Committee”
the remuneration and evaluation committee of the Board
“Renminbi” or “RMB” the lawful currency of the PRC
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAIC” the State Administration of Industry and Commerce of
the PRC (၍ଣᐼ҅), the
function of which has now been merged into the SAMR
“SAMR” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SAT” the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅)
“Series B Pre-IPO Investments” the Series B Pre-IPO Investments conducted by our
Company as described in “History, Reorganization and
Corporate Structure”
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” or “Securities and Futures
Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, comprising Unlisted
Shares and H Shares
DEFINITIONS
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“Share Incentive Plan” the pre-IPO share incentive plan of our Company
approved and adopted on February 24, 2022, as amended
from time to time, a summary of the principal terms of
which is set forth in “Statutory and General
Information—Pre-IPO Equity Incentive Plans” in
Appendix IV
“Share Option Plan” the pre-IPO share option plan of our Company approved
on January 20, 2023 and effective from December 31,
2021, as amended from time to time, a summary of the
principal terms of which is set forth in “Statutory and
General Information—Pre-IPO Equity Incentive Plans”
in Appendix IV
“Shareholder(s)” holder(s) of our Share(s)
“SINOGY VC” Changshu SINOGY Venture Capital Co., Ltd. ( ੬ᆞอʕ
ʮ̡), a limited liability company
incorporated in the PRC on March 15, 2013, and one of
our Controlling Shareholders
“Sponsor-Overall Coordinators” the sponsor-overall coordinators of the Listing as named
in the section headed “Directors, Supervisors and Parties
Involved in the Global Offering”
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“STAES” Sinogy Toyota Automotive Energy System Co., Ltd. ( อ
ʮ̡), a limited liability
company incorporated in the PRC on November 12,
2013, owned by (i) our Company as to 50%; (ii) Toyota
Motor Corporation (a company listed on Tokyo Stock
Exchange and Nagoya Stock Exchange (stock code:
7203), on New York Stock Exchange (ticker: TM) and on
London Stock Exchange (stock code: TYT)) as to 35%;
(iii) Toyota Battery Co., Ltd. (ʮ̡)
(formerly known as Primearth EV Energyٟa st o
10%; and (iv) Toyota Motor (China) Investment Co., Ltd.
(ᔮ͞ӛԓ(ʕ਷)ʮ̡)a st o5 %
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules
DEFINITIONS
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“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules
“Supervisor(s)” supervisor(s) of the Company
“Supervisory Committee” the committee of the Supervisors
“Suzhou ZENIO” Suzhou ZENIO New Energy Technologies Co., Ltd. ( ᘽ
ʮ̡), a limited liability company
incorporated in the PRC on December 5, 2016 and a
wholly-owned subsidiary of our Company
“Track Record Period” the financial years ended December 31, 2021, 2022, 2023
and 2024
“treasury shares” has the meaning ascribed to it under the Listing Rules
“U.S. Government” the federal government of the United States, including its
executive, legislative and judicial branches
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“Unlisted Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are not listed on any
stock exchange
“United States”, “USA” or
“U.S.”
the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“US$” or “U.S. dollars” United States dollars, the lawful currency of the U.S.
“V AT” value-added tax
“White Form eIPO ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name, submitted online through
the designated website of the White Form eIPO Service
Provider at www.eipo.com.hk
DEFINITIONS
–4 8–


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“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“WM Customer” Weilmaister New Energy Automotive Parts (Wenzhou)
Co., Ltd. and Weima New Energy Vehicle Sales
(Shanghai) Co., Ltd.
“Zenergy Investment” Changshu Zenergy Investment Co., Ltd. ( ੬ᆞ͍ɢҳ༟
ʮ̡), a limited liability company incorporated in
the PRC on August 10, 2016 and held as to 46%, 42% and
12% by Dr. Chen, Ms. Cao and SINOGY VC,
respectively, and one of our Controlling Shareholders
“Zhengli Consulting” Changshu Zhengli Management Consulting Co., Ltd. ( ੬
ʮ̡), a limited liability company
incorporated in the PRC on October 28, 2021 and held by
each of Ms. Cao and Dr. Chen as to 50%, respectively,
and one of our Controlling Shareholders
“Zhengli No. 1” Changshu Zhengli No. 1 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢఠ໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 25, 2022, which is an
Equity Incentive Platform and one of our Controlling
Shareholders
“Zhengli No. 2” Changshu Zhengli No. 2 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢ൩໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on April 29, 2022, which is an
Equity Incentive Platform and one of our Controlling
Shareholders
“Zhengli No. 3” Changshu Zhengli No. 3 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢ䂋໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
“Zhengli No. 4” Changshu Zhengli No. 4 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢໍ໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
DEFINITIONS
–4 9–


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“Zhengli No. 5” Changshu Zhengli No. 5 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢͼ໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
“Zhengli No. 6” Changshu Zhengli No. 6 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢ௔໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
“Zhengli No. 7” Changshu Zhengli No. 7 Management Consulting
Partnership (Limited Partnership) (໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
“Zhengli No. 8” Changshu Zhengli No. 8 Management Consulting
Partnership (Limited Partnership) (໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 31, 2022, which is an
Equity Incentive Platform
“Zhengli No. 9” Changshu Zhengli No. 9 Management Consulting
Partnership (Limited Partnership) ( ੬ᆞ͍ɢӯ໮၍ଣፔ
༔ΥྫΆุ(Υྫ)), a limited partnership
incorporated in the PRC on March 26, 2022, which is an
Equity Incentive Platform
“%” per cent
Certain amounts and percentage figures included in the Prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
For 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. English translations of company
names and other terms from the Chinese language are provided for identification purposes
only.
DEFINITIONS
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In this Prospectus, unless the context otherwise requires, explanations and
definitions of certain terms used in this Prospectus in connection with our Group and our
business shall have the meanings set out below. The terms and their meanings may not
correspond to standard industry meaning or usage of these terms, and may not be
comparable to similarly terms adopted by other companies.
““5-3-1” R&D strategy” Our research and development strategy, under which our
research institute is responsible for analyzing and
preparing for the development trends in battery material
and related technologies of the next five years; our
platform center is responsible for establishing the
requisite R&D platform and capabilities to carry out the
relevant R&D work for the next three years; and our
product center is responsible for designing the detailed
technologies and product specs for battery products for
launch in the next one year
“Ah” Amp-hour, battery capacity unit
“Battery grade lithium carbonate” Lithium carbonate whose quality reaches the YS/T582-
2006 standard, is mainly used in the production of
Lithium-Ion battery materials
“BEV” or “battery electric
vehicle”
Battery electric vehicle, a type of vehicle propelled
entirely by battery-powered electric motors, without
using internal combustion engines
“BIZ Platform” Zenergy big data intelligence platform
“BMS” Battery management system
“C” or “C-rate” Charge or discharge rate, which refers to the rate at which
a battery is charged or discharged relative to its total
capacity and is an industry term. A charging current of
2C, 3C, 4C, 6C, and 12C implies that the battery can be
fully charged in 1/2, 1/3, 1/4, 1/6 and 1/12 of an hour,
respectively
“CAGR” Compound annual growth rate
“Cell” Battery cell
GLOSSARY OF TECHNICAL TERMS
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“CLTC” China Light-Duty Vehicle Test Cycle, a standard used in
China to measure the driving range and efficiency of
vehicles
“CMC” Carboxymethyl cellulose
“CNAS” China National Accreditation Service for Conformity
Assessment
“CNT” Carbon nanotube
“CTC” Cell to chassis, also called cell-to-body, is a technology
to install the battery cells seamlessly into a car’s structure
“CTMTP” Cell to module to pack, a technology install cells in forms
of modules and packs in order to safely and efficiently
manage battery cells mounted in an electric vehicle
“CTP” Cell to pack, an approach used to integrate battery cells
directly into battery packs without the intermediate step
of modules
“cycle life” Or life cycle, refers to the number of times (or cycles)
that the EV or ESS battery can undergo the process of
complete charging and discharging until the end of its
life, and the end life of an EV or ESS battery generally
indicates that the available capacity of the battery has
decay to 80% or 70% of its designed capacity
“die-cutting stage” A stage of manufacturing battery products, which
involves customizing a die by cutting, shaping, or
shearing it to create a certain shape, design, or structure
“Electrode” A structure of Lithium-Ion battery products which
composed of components such as active materials,
binders, conductive agents and collectors
“EMS” Energy management system
“energy density” The amount of energy that can be contained in a battery
relative to its volume or weight, expressed in Wh/L or
Wh/kg
GLOSSARY OF TECHNICAL TERMS
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“EREV” Extended-range electric vehicle, a type of electric vehicle
(EV) that primarily operates as a battery electric vehicle
(BEV) but includes a small internal combustion engine
(ICE) or generator to extend the vehicle’s driving range
when the battery is depleted
“ERP system” Enterprise Resource Planning system
“ESS” energy storage system, a device that can store and output
power, consists of multiple subsystems such as battery
system and energy management system
“EV” or “electric vehicle” New energy vehicles, mainly comprising of battery
electric vehicles and plug-in hybrid electric vehicles
“EV battery system” Usually known as the EV battery pack, which is used in
electric vehicles and consists of cells, modules, battery
management systems and others
“FVTPL” Fair value through profit and loss
“GB 19578-2021” PRC National Standard: <Fuel consumption limits for
passenger cars>
“GB 38031” PRC National Standard: <Electric vehicles traction
battery safety requirements>
“GB 38031-2020” PRC National Standard: “Electric vehicles traction
battery safety requirements”, which was issued on
May 12, 2020
“GB/T23001-2017” national standard for integration of informatization and
industrialization management systems requirements
issued by Standardization Administration of China
“GB/T 31484” PRC National Standard: <Cycle life requirements and
test methods for traction battery of electric vehicle>
“GB/T 31486” PRC National Standard: <Electrical performance
requirements and test methods for traction battery of
electric vehicle>
GLOSSARY OF TECHNICAL TERMS
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“gravimetric energy density” Gravimetric energy density measures the amount of
energy stored in a battery relative to its weight, typically
expressed in watt-hours per kilogram (Wh/kg). Higher
gravimetric energy density means the battery can store
more energy for its weight, which is crucial for
applications like electric vehicles where weight impacts
performance and efficiency
“GWh” The unit of electricity, KWh is the degree,
1 GWh=1,000,000 KWh
“HEV” Hybrid electric vehicle, a type of vehicle that combines a
conventional internal combustion engine (ICE) with an
electric motor and battery to improve fuel efficiency and
reduce emissions
“High nickel cathode material” A ternary cathode material with a high nickel content
“HR System” Human Resource System
“IATF16949” International technical specification of automotive
industry quality management system, which prepared by
IATF (International Automotive Task Force) and ISO
(International Organization for Standardization)
“ICE” internal combustion engine
“IEC 62619” Secondary cells and batteries containing alkaline or
other non-acid electrolytes—Safety requirements for
secondary lithium cells and batteries for use in industrial
applications , which released by International
Electrotechnical Commission (IEC)
“IKW” “Identify, Knowledge & Win,” one of our two platforms
that constitute our management system under which we
manage and operate our business
“installed capacity” or
“installation”
The volume of battery products installed in EVs or ESSs,
usually expressed in electricity unit of GWh, MWh, or
KWh
GLOSSARY OF TECHNICAL TERMS
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“integration efficiency” Integration efficiency refers to how effectively a battery
can be integrated into a system, considering factors like
energy conversion, power management, and
compatibility with other system components. High
integration efficiency means the battery operates
optimally within the system, maximizing performance
and minimizing electrical, thermal and management
losses
“iron phosphate” Iron phosphate, also known as high iron phosphate and
iron orthophosphate, with molecular formula FePO4, is a
white, off-white monoclinic crystal powder, and is a
compound used to synthesize lithium iron phosphate
battery cathode materials
“ISO14001” Environmental Management System, which released by
ISO (International Organization for Standardization)
“ISO45001” Occupational Health and Safety Management System,
which released by ISO (International Organization for
Standardization)
“ISO50001” Energy Management System, which released by ISO
(International Organization for Standardization)
“ISO9001” International Quality Management System, which
released by ISO (International Organization for
Standardization)
“ISO/IEC 17025: 2017” “General Requirements for Competence of Testing and
Calibration Laboratories,” an international standard for
testing and calibration laboratories
“LCO” Lithium cobalt oxide (LiCoO
2)
“LES” Logistics execution system
“LFP” a lithium-ion battery that uses lithium iron phosphate
(LiFePO
4) as the cathode material
“LFP battery” A Lithium-Ion battery that uses lithium iron phosphate
(LiFePO 4) as the cathode material
GLOSSARY OF TECHNICAL TERMS
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“LISA” Interconnected land, sea and air application scenarios for
our battery products
“lithium” A metal chemical element, of which the element symbol
is Li, and the atomic number is 3
“lithium carbonate” A common lithium compound with the chemical formula
Li2CO3. It is the most widely used lithium product with
broad application range. It is classified into industrial
grade lithium carbonate, battery grade lithium carbonate
and high-purity lithium carbonate due to its different
purity levels
“Lithium hydroxide” A common lithium compound whose molecular formula
is LiOH. When it comes to lithium hydroxide, it generally
refers to lithium hydroxide monohydrate in the industry,
which is mainly used in lubricants, purifiers, catalysts
and other industries. Lithium hydroxide monohydrate is a
common lithium compound whose molecular formula is
LiOH.H
2O. It is the main lithium hydroxide product in
the lithium product market, widely known as lithium
hydroxide for short in the industry
“Lithium metal” Elemental lithium metal, mainly used in lithium alloys,
nuclear industry, batteries, aviation industry
manufacturing and other industries. Spodumene refers to
an ore containing lithium with LiAl (Si
2O6)a si t s
chemical formula. It is mainly used in the production of
lithium carbonate and the production of additives in the
glass and ceramic industries
“lithium thionyl chloride” Also called Li-SOCl2, a type of cell batteries where
electrolyte based on sulfonated thionyl chloride serves as
the positive electrode
“Lithium-Ion battery” Rechargeable battery that composes of cells in which
lithium ions move from the negative electrode through
electrolytes to the positive electrode during discharge and
back when charging
“LMFP” Lithium manganese iron phosphate (LiMnxFe1−xPO4)
“mass energy density” The amount of energy that can be contained within a
given mass
GLOSSARY OF TECHNICAL TERMS
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“MES system” Manufacturing execution system
“Module” Battery module
“MWh” The unit of electricity, KWh is the degree,
1MWh=1,000KWh
“nail penetration test” A type of safety testing done to simulate internal short
circuiting. Such test requires that the EV battery pack to
not explode or catch fire due to thermal runaway when it
is entirely penetrated by a steel nail under required
conditions
“NCA” Lithium nickel cobalt aluminum oxide
(Li(Ni
XCoYAlZ)O2), which can be used as cathode
materials for ternary batteries
“NCM” A type of lithium-ion battery chemistry that uses a
combination of Nickel (Ni), Cobalt (Co), and Manganese
(Mn) as key materials in the cathode. Given different
ratios of nickel, cobalt, and manganese, it can be
classified into NCM523, NCM613, NCM811, etc.
“NiMH” Nickel metal hydride, a type of rechargeable battery
commonly used in various applications, including hybrid
electric vehicles (HEVs), consumer electronics, and
power tools. It is named after the materials used in its
composition: nickel oxide hydroxide (NiOOH) as the
positive electrode (cathode) and a hydrogen-absorbing
alloy as the negative electrode (anode)
“NMP” N-methylpyrrolidone, which is a chemical that is widely
used during the manufacture and production of
petrochemicals, electronics and plastic material and resin
manufacturing
“OA System” Office Automation System
“OAC” Operation Approval Committee, one of our organizations
that constitute our management system
“OEM” Automotive original equipment manufacturer
GLOSSARY OF TECHNICAL TERMS
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“PAC” Product Approval Committee, one of our organizations
that constitute our management system
“PDCA” Plan-Do-Check-Act, a problem-solving iterative
technique that uses four steps to improve business
processes
“peak discharge rate” The maximum rate at which a battery can discharge
energy, usually expressed as a multiple of the battery’s
capacity (Crate). A higher peak discharge rate allows the
battery to deliver more power quickly, which is important
for applications requiring sudden bursts of energy, such
as acceleration in electric vehicles
“PHEV” Plug-in hybrid electric vehicle (including REV), a type of
vehicle that combines a battery-powered electric motor
with an internal combustion engine (ICE)
“PLM system” Product Lifecycle Management System
“PVDF” Polyvinylidene difluoride which is a highly non-reactive
thermoplastic fluoropolymer produced by the
polymerization of vinylidene difluoride
“R&D” Research and development
“SAP” System analysis program development
“SARMO action” Supply chain, Artificial intelligence, Research and
development, Marketing, and Operation. They constitute
our key performance indicators
“Solid electrolyte” A new type of electrolyte in which the electrolyte
changes from liquid to solid. According to the content of
the electrolyte, it is divided into semi-solid electrolyte,
solid electrolyte, etc.
“small capacity battery” Battery with capacity of less than 100Ah
“SRM System” Supplier relationship management system
GLOSSARY OF TECHNICAL TERMS
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“state of charge” Also called SOC, the current level of charge in a battery
compared to its capacity, expressed as a percentage. For
example, reaching 80% state of charge means the battery
is charged to 80% of its total capacity
“Super P Li black carbon” Mainly used for improving conductivity of active
materials
“TAC” Technology Approval Committee, one of our
organizations that constitute our management system
“ternary battery” or “ternary
lithium battery”
Lithium-Ion battery whose cathode material composes of
three elements in two forms: nickel-cobalt-manganese, or
nickel-cobalt-aluminum
“thermal propagation” Sequential occurrence of thermal runaway within a
battery system triggered by thermal runaway of a cell in
that battery system
“UL1642” Standard for Lithium Batteries, which released by
Underwriters Laboratories Inc.
“UL1973” Standard for Batteries for Use in Stationary and Motive
Auxiliary Power Applications, which released by
Underwriters Laboratories Inc.
“UL 9540A” Standard for Test Method for Evaluating Thermal
Runaway Fire Propagation in Battery Energy Storage
Systems, which released by Underwriters Laboratories
Inc.
“UN38.3” The prevailing United Nations standard that lithium
batteries must meet to receive certification for safe
transport, which refers to Section 38.3 of Part 3 of the
“United Nations Manual of Tests and Standards for the
Transport of Dangerous Goods”
“V” Basic unit of voltage
“VDA” German Association of the Automotive Industry
GLOSSARY OF TECHNICAL TERMS
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“volumetric energy density” The amount of energy that can be contained in a battery
relative to its volume, expressed in watt-hours per liter
(Wh/L). It indicates how much energy can be packed into
a given space, important for applications with size
constraints like portable electronics or certain vehicle
designs
“WCS system” Warehouse control system
“Wh/kg” Watt hour/kilogram
“WMS system” Warehouse management system
GLOSSARY OF TECHNICAL TERMS
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We have included in this Prospectus forward-looking statements. Statements that are not
historical facts, including but not limited to statements about our intentions, beliefs,
expectations or predictions for the future, are forward-looking statements.
This Prospectus contains forward-looking statements and information relating to us and
our subsidiaries that are based on the beliefs of our management as well as assumptions made
by and information currently available to our management. When used in this Prospectus, the
words “aim,” “anticipate,” “aspire,” “believe,” “could,” “expect,” “going forward,” “intend,”
“may,” “ought to,” “plan,” “project,” “schedule,” “seek,” “should,” “target,” “vision,” “will,”
“would,” and the negative of these words and other similar expressions, as they relate to us or
our management, are intended to identify forward-looking statements. Such statements reflect
the current views of our management with respect to future events, operations, liquidity and
capital resources, some of which may not materialize or may change. These statements are
subject to certain risks, uncertainties and assumptions, including the risk factors as described
in “Risk Factors” and elsewhere in this Prospectus, some of which are beyond our control and
may cause our actual results, performance or achievements, or industry results, to be materially
different from any future results, performance or achievements expressed or implied by the
forward-looking statements. You are strongly cautioned that reliance on any forward-looking
statements involves known and unknown risks and uncertainties. The risks and uncertainties
facing us which could affect the accuracy of forward-looking statements include, but are not
limited to, the following:
 our operations and business prospects;
 future developments, trends and conditions in the industries and markets in which
we operate or plan to operate;
 general economic, political and business conditions in the markets in which we
operate, including but not limited to interest rates, foreign exchange rates;
 changes to the regulatory environment in the industries and markets in which we
operate;
 our ability to maintain relationship with, and the actions and developments
affecting, our major business partners, suppliers and future customers;
 our ability to maintain the market leading positions and the actions and
developments of our competitors;
 our ability to effectively control costs and operating expenses;
 the ability of business partners to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
FORW ARD-LOOKING STATEMENTS
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 our business strategies and plans to achieve these strategies, including our business
development plans, commercialization strategies and geographic expansion plans;
and
 all other risks and uncertainties described in “Risk Factors.”
By their nature, certain disclosures relating to these and other risks are only estimates and
should one or more of these uncertainties or risks, among others, materialize, actual results
may vary materially from those estimated, anticipated or projected, as well as from historical
results. Specifically but without limitation, sales could decrease, costs could increase, capital
costs could increase, capital investment could be delayed and anticipated improvements in
performance might not be fully realized.
Subject to the requirements of applicable laws, rules and regulations, we do not have any
and undertake no obligation to update or otherwise revise the forward-looking statements in
this Prospectus, whether as a result of new information, future events or otherwise. As a result
of these and other risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this Prospectus might not occur in the way we expect or at all.
Accordingly, you should not place undue reliance on any forward-looking information. All
forward-looking statements in this Prospectus are qualified by reference to the cautionary
statements in this section as well as the risks and uncertainties discussed in the section headed
“Risk Factors” in this Prospectus.
In this Prospectus, statements of or references to our intentions or those of our Directors
are made as of the date of this Prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
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An investment in the H Shares involves various risks. You should consider carefully
all the information set out in this Prospectus and, in particular , the risks described below
before making an investment in the H Shares.
The occurrence of any of the following events could materially and adversely affect
our business, financial position, results of operations or prospects. If any of these events
occurs, the trading price of the H Shares could decline and you may lose all or part of
your investment. You should seek professional advice from your relevant advisors
regarding your prospective investment in the context of your particular circumstances.
RISKS RELATING TO OUR INDUSTRY AND BUSINESS
We have a limited operating history and our ability to develop, manufacture and deliver
battery products is still evolving, making it difficult to evaluate our business prospects,
and we may not be successful in expanding our operations or managing our growth.
We commenced business operations in 2019. Our limited operating history makes it
difficult to evaluate our business prospects, and to plan for our future. We have relatively
limited historical data for making judgments on the demand for our products, our ability to
develop, manufacture and deliver products, or our profitability in the future.
Our historical performance is not indicative of our future performance as our EV battery
and ESS battery business went through rapid growth and changes. We may not always be
accurate in predicting industry trends in the EV battery and ESS markets that may emerge and
affect our business. We experienced significant revenue growth and the increase in our
production capacity during the Track Record Period. See “Financial Information—Principal
Components of Statement of Profit or Loss and Other Comprehensive Income—Revenue.”
Investors should comprehensively consider our business and prospects in light of the risks and
challenges we face in the EV battery and ESS battery markets, including but not limited to our
ability to:
 continuously drive technical advancement and balanced development of
electrification multi-path technology;
 effectively manage our supply chain, enhance and maintain operational efficiency;
 effectively manage our growth in the face of the ever-changing regulatory
environment;
 effectively expand our customer base; and
 adapt to changing market conditions, including technological developments and
changes in the competitive landscape.
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If we fail to address any of the aforesaid risks and challenges, our business, financial
condition and results of operations could be materially and adversely affected.
Our growth may also be affected by factors such as our ability to manage a continuously
growing organization as we expand, control expenses and investments in anticipation of
expanded operations, implement and enhance administrative infrastructure, system and
processes, comply with environmental, workplace safety, and relevant regulations, execute our
strategies successfully, and address new markets and potentially unforeseen challenges as they
arise.
If we are unable to manage our growth effectively, we may be unable to take advantage
of market opportunities, execute our business strategies or respond to competitive pressures,
which could have a material adverse effect on our business, results of operations and prospects.
We recorded a net loss in 2021, 2022 and 2023 and a net profit in 2024. We may not be
able to maintain our net profit position in the future, which may affect our business
sustainability.
We have been at a net loss position from operations in 2021, 2022, and 2023. We incurred
net losses of RMB402.3 million, RMB1,720.0 million and RMB589.9 million in 2021, 2022,
and 2023, respectively. Although we have recorded net profit of RMB91.0 million in 2024, we
cannot assure you whether we will continue to be profitable in the future. Our ability to become
profitable in the future will not only depend on our efforts to sell our products but also to
control our costs. If we are unable to adequately expand our sales while controlling the costs
associated with our operations, we may experience losses in the future.
Our ability to achieve profitability depends in part on our ability to manage our future
development effectively, such as our ability to successfully expand our business, expand our
manufacturing capacities, manage growing scales of operations, form economies of scale, and
improve production efficiency. Our ability to achieve profitability is also affected by external
factors such as the fluctuation in prices of key raw materials, changes in market size and
demand for our products, increasingly intense market competition, as well as other risks
discussed herein. We intend to continue to invest substantially in the foreseeable future in
expanding our production facilities to achieve economies of scale. See “Future Plans and Use
of Proceeds.” We are continually executing a number of growth initiatives, strategies and
operating plans designed to enhance our business. We also plan to continue to optimize product
design and improve product performance, and to continue to cooperate with suppliers to ensure
the sustainability of raw materials. However, such plans may not materialize or develop as
timely and to the extend as expected, in which case we may not achieve profitability as planned
or at all. In addition, if we fail to achieve economies of scale through our efforts or fail to adopt
adequate cost control and price adjustment measures, our plan to achieve profitability may be
adversely affected. See “Business—Business Sustainability—Path to Profitability” for details
on how we plan to achieve profitability in the future. These plans may be more costly than we
expect, which may result in significantly increased expenses and failure to achieve our
intended profitability. If we are unable to effectively avoid or mitigate these risks, our ability
to expand our business and achieve profitability will be affected, which could have a material
adverse effect on our business, financial condition, results of operations and prospects.
RISK FACTORS
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We may not be able to derive the desired benefits from our research and development
efforts, and may fail to keep up with rapid technological changes and evolving industry
standards, which may negatively affect our competitiveness and profitability, and lead to
decrease in the demand for our products.
Technological innovation is critical to our success, and we made significant investments
in product research and development. As we believe that technological innovation is a key
trend in the battery industry, we have focused our research and development activities on
exploring new materials, structure and new manufacturing techniques to enhance our product
quality and features while reducing cost. In 2021, 2022, 2023 and 2024, our research and
development expenses were RMB221.0 million, RMB329.3 million, RMB424.1 million, and
RMB556.2 million, respectively. In order to maintain and expand our competitive advantages,
we plan to continue investing significant financial resources in our research and development
infrastructure and activities. In addition to our in-house research and development capabilities,
we also engage in joint research and development collaboration with third parties to jointly
develop new technologies and products. See “Business—Research and Development.”
However, as research and development activities are inherently uncertain, we cannot
assure you that our research and development projects will be successful or be completed
within the anticipated time frame and budget, or that our newly developed products will
achieve wide market acceptance or enjoy the advantages as we expected. Furthermore, the
power battery industry is characterized by rapid technological changes and evolving industry
standards, which are difficult to predict. This, together with the frequent introduction of new
technology, vehicle types, battery products and models, has shortened battery product life
cycles and may render our products obsolete or less marketable. If we fail to keep up with the
latest technological development and industry trends, we may suffer a decline in demand for
our products and our competitive position. Even if such products can be successfully launched,
we cannot assure you that they will be accepted by our customers and achieve anticipated sales
target or profit.
In addition, many private and public companies and research institutions are actively
engaged in the development of new battery technologies that may bring competitive advantages
over the mainstream battery products in the market. Our existing or potential competitors may
develop products which are similar or superior to our products or more competitively priced.
If our competitors develop new technologies that we are not able to keep up with, such
technologies may provide them with significant performance or price advantages over us and
our technology leadership and competitive strengths may be adversely affected. Some of our
competitors are also conducting research and development on alternative battery technologies,
such as fuel cells and super capacitors, and academic studies are ongoing as to the viability of
sulfur and aluminum-based battery technologies. If any viable substitute products emerge and
gain market acceptance because they have more enhanced features, more practical applications,
more power, more attractive pricing, or better reliability, the market demand for our products
may decrease, and accordingly our business, financial condition and results of operations
would be materially and adversely affected.
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Due to uncertainties in the time frame for developing new products and the duration of
market window for these products, there is a substantial risk that we may have to abandon a
product or a potential product that is no longer commercially viable, even after we have
invested significant resources in the development of such product. If we fail to effectively keep
up with rapid technological changes and evolving industry standards by introducing new and
enhanced products, our significant expenditures on research and development may not generate
corresponding benefits, which may materially and adversely affect our business, prospects,
financial condition and results of operations.
The power battery industry is highly competitive. Failure to compete effectively or launch
our new products may materially and adversely affect our market share and profitability.
The global power battery industry is highly competitive and concentrated, and we expect
that the competition will be even more intense in the future. According to Frost & Sullivan, top
ten EV battery manufacturers in China accounted for approximately 95.3% of China’s total
installation capacity in 2024. As measured by installation capacity in 2024, we held a market
share of 1.8% amongst EV battery manufacturers in China, according to CABIA. Our existing
competitors may seek to increase their market shares through various measures, such as
continued research and development efforts, increased production capacity, optimized
production process and active marketing campaigns. Our competitors may also seek to increase
their market shares through the reduction of price. We expect to face competition from both
existing and new competitors as we expand our business into new business lines, geographic
regions and product categories. Competitive pressure could also have an adverse impact on the
demand for and pricing of our products, which in turn affects our growth and market share.
Even if there is sufficient downstream demand for EV and ESS battery products, there is no
guarantee that we will always succeed in competing with other market players for orders from
downstream customers. If we fail to compete effectively, we may not be able to retain or
expand our market share, which would have a material adverse effect on our business, results
of operations and financial condition. China’s power battery industry is also undergoing
overcapacity issues, for details please refer to “—We may face structural overcapacity of
production in China’s power battery industry.”
To achieve effective competition in the power battery industry, we need to continuously
develop and launch new battery products. The development and launch of new products
involve complex efforts and there may be uncertainties at various stages before a product is
launched. Any delay in the financing, design, production and eventually the launch of our new
products could materially damage our competitiveness. To the extent that we delay the launch
of our new products, our growth prospects could be adversely affected as we may fail to
compete with our peers, keep up with competing products, or grow our market share. Due to
the uncertainty in the market window for the new products, any delay in launch of new
products may result in the obsolescence of such products and our investments in developing
such products may become sunk costs, which will materially and adversely affect our business,
financial position and results of operations.
RISK FACTORS
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We may face structural overcapacity of production in China’s power battery industry.
As of December 31, 2024, we had a total designed manufacturing capacity of 25.5 GWh
for battery cell products, which is expected to increase to 50.5 GWh by 2026. See “Business—
Manufacturing—Manufacturing Bases—Planned Production Bases.” Other market players in
China have also been expanding their production capacity quite aggressively since a few years
ago. As a result, China’s EV power battery production capacity reached 826 GWh in 2024 and
is projected to grow to 991.2 GWh in 2025, whereas the installation capacity of EV power
battery in China was 549.9 GWh in 2024 and is expected to reach 692.2 GWh in 2025.
According to Frost & Sullivan, top ten EV battery manufacturers accounted for 95.3% of the
total EV battery installation capacity in the PRC in 2024. China’s EV power battery industry
is highly competitive and concentrated and we expect that the trend will last in the future.
Looking ahead, China’s power battery industry is expected to continue to face overcapacity of
production if future demand from downstream customers, such as EV and ESS manufacturers,
is unable to keep pace with the rapid capacity expansions, which is affected by many factors
out of our control, including the macro-economy which affected the consumption habits of the
society. There is no assurance that we will not face structural overcapacity of production and
concentration in China’s power battery industry. There may be potential structural overcapacity of
production and concentration in China’s power battery industry. See “Business—Manufacturing.”
If there is structural overcapacity of production in China’s power battery industry in the future,
we may face more fierce competition and there is no assurance that we could out-compete other
market players in such situation. As a result, our capacity utilization rate may further decline
and our manufacturing costs may increase significantly, and thus our business and results of
operations will be materially and adversely affected.
If we are unable to retain existing customers and attract new customers, our business,
financial conditions and results of operations will be adversely affected.
During the Track Record Period, we achieved significant growth of our business. Our
total revenue increased from RMB1,499.3 million in 2021 to RMB3,290.3 million in 2022, and
further to RMB4,161.7 million in 2023, and further to RMB5,130.3 million in 2024. We cannot
guarantee that we could retain our existing customers or attract new customers as we did during
the Track Record Period, or at all. While we continue to enrich our offerings and enhance the
performance of our battery products, our abilities to retain existing customers and attract new
customers depend on a number of factors, including our ability to offer more battery products
that address the needs of our customers at competitive prices, the quality of our products and
customer support, and the compatibility of our products. Furthermore, we may find defects,
errors, disruptions or other performance problems in our products, which could hurt our
reputation and may damage our customers’ businesses. If we fail to retain our existing
customers or attract new customers in the future due to that our products could not meet the
requirements of the market, or that our selling prices are not competitive, or due to other
factors disclosed in this herein, our business, financial conditions and results of operations will
be adversely affected.
RISK FACTORS
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In addition, we may fail to predict the future level of demand for our products as the
demand of our customers may be affected by a combination of factors beyond our control, such
as market or economic conditions, government policies and regulatory environment, making it
difficult to predict our future financial performance or increase the spending of our customers.
If we fail to respond to constant changes in market and political conditions, or if the major
industries we operate in do not develop as we expect, we may lose significant business
opportunities, and our business and results of operations may be materially and adversely
affected.
Our business is exposed to the supply-demand dynamics in various new energy related
industries, and thus is affected by market demand for the end products where our battery
products are used.
We primarily provide battery products that are used for EVs. Accordingly, our results of
operations have been and are expected to continue to be affected by downstream demand for
EVs. Strong growths in global and China’s EV market and installation capacity of EV batteries
were major drivers for our growth during the Track Record Period. The downstream demands
for EVs are affected by many factors, such as:
 the specifications of EVs, such as purchase price, charging time, driving range,
reliability and battery life;
 the government policies which promote the development of EVs; and
 the macro-economies which affected the consumers’ habits of purchasing.
There is no assurance that the downstream demand for EVs will remain at the same level
as we experienced during the Track Record Period which drove our revenue to increase rapidly,
or continue to increase in the future. There are several estimates as to the future market demand
for EV batteries. According to Frost & Sullivan and based on data from China Association of
Automobile Manufacturers, the sales volume of EVs in China was 13.8 million units in 2024
and is expected to reach 32.1 million units in 2029, representing a CAGR of 18.4%. The
installation capacity of EV battery in China was 549.9 GWh in 2024, and is expected to reach
1,961.4 GWh in 2029, representing a CAGR of 29.0%. However, we cannot guarantee that the
actual market demand for EV batteries (as reflected by the forecasted growth in EV sales
volume and EV battery installation capacity) will not materially adversely deviate from the
above estimates, whether due to changes in consumer preference, technology development,
regulatory requirements on EV and other downstream markets of our products, among other
potential factors. If future market demand for EV battery products is materially adversely
different from forecast, our business growth may also be limited, and our results of operations
and financial condition may be materially adversely impacted.
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In addition, demand for the products of our other customers, such as eVTOL companies
and sea transportation companies, may also slow down. If our customers experience declines
in demand for their products, then the demand for our products will decrease correspondingly,
which may result in underutilization of our production capacity, and materially and adversely
affect our business, financial condition and results of operations.
We may not be able to increase our production capacity as planned, and even if our
production expansion projects proceed as planned, we may not be able to increase our
production output in a timely manner or at all as envisaged.
While our production capacity achieved to date is already at commercial scale, it has not
achieved what we expect will be necessary to fully meet the demand we see in the market for
our products. We expect to expand our production capacity to meet customers’ expected
demands for our products. We plan to expand our designed production capacity to 50.5 GWh
by 2026. The amount of expected increase in depreciation and operation expenses for each year
as a result of the expansion plans are RMB468.5 million and RMB2,356.0 million,
respectively. See “Future Plans and Use of Proceeds” for more details. Such expansion will
impose significant responsibilities on our senior management and require significant
commitment of our resources, including financial resources and the time needed to identify,
recruit, maintain, and integrate additional employees. Our proposed expansion will also expose
us to greater overhead and support costs and other risks associated with the manufacture and
commercialization of new products. Difficulties in effectively managing the budgeting,
financing, forecasting and other process control issues presented by such expansion could
negatively affect our business, prospects, results of operations and financial condition. Such
expansion is also required to obtain various approvals, permits, licenses and certificates and
complete relevant inspections by and filings with competent government authorities. There is
no assurance that we will be able to execute our expansion plan as contemplated or at all. Any
delay or failure to obtain relevant approvals, permits, licenses and certificates or complete the
inspections and filings for our production expansion projects may materially delay our
production expansion or even result in the cancellation of such plans, which may adversely
affect our business, financial conditions and results of operations. See also “—We are required
to obtain and maintain various approvals, licenses, certificates and permits or to complete
relevant assessment, acceptance process and filing procedures to operate our business and the
loss or failure to obtain or renew any or all of these approvals, licenses, certificates and permits
or failure to conduct such assessment, acceptance process and filing procedures could
materially and adversely affect our results of operations and business prospects.”
However, even if we manage to expand our production capacity as planned, there is no
assurance that we may increase our production output and establish large-scale production
capacity in a timely manner or at all as planned. Our ability to increase our production output
is subject to significant constraints and uncertainties, including but not limited to:
 delays by our suppliers and equipment vendors and cost overruns as a result of a
number of factors, many of which may be beyond our control or cannot be foreseen,
such as increases in raw material prices and problems with equipment vendors;
RISK FACTORS
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 delays in government approval process or denial of required approvals for
production by relevant government authorities;
 our ability to configure the manufacturing lines for specific products in a timely
manner; and
 the performance of the manufacturing equipment we procured and the production
expertise we retained.
Moreover, our product development, manufacturing and testing protocols are complex
and require significant technological and production process expertise. There are risks
associated with scaling up manufacturing to larger commercial volumes, including but not
limited to, technical or other problems with process scale-up, process reproducibility, stability
issues, quality consistency, timely availability of raw materials, cost overruns, and adequate
definitions or qualifications for safety, reliability, and quality. Any change in our processes
could cause one or more production errors, requiring a temporary suspension or delay in our
manufacturing line until the errors can be researched, identified, and properly addressed and
rectified, and thus limit our production output. There is no assurance that our production
facilities will be successful in establishing a larger-scale commercial manufacturing process
that achieves our objectives for production capacity. In addition, our failure to maintain
appropriate quality assurance processes could result in increased product failures, loss of
customers, increased warranty reserve, or increased production and logistics costs, and delays.
We may also incur significant costs and delays in switching our manufacturing lines to
accommodate for different types of batteries in light of potential changes in customer demands.
We work closely with equipment vendors to ensure our manufacturing lines comprise highly
customized equipment which enable us to manufacture different types of batteries in terms of
cathode materials without experiencing significant production interruption and cost overruns.
However, we cannot guarantee that such flexible production system can always meet
customers’ changing needs. New development in the battery industry and changes in customer
demand and battery technology pathways may render our manufacturing lines not flexible
enough, requiring us to incur significant costs, leading to significant interruptions to our
production process, and negatively impacting our production output and capacity.
If we are unable to increase our production output in a timely manner or at all in the end
because of any of the risks described above, we may be unable to fulfill customer orders or
achieve the growth we expect. In addition, if we are unable to fulfill customer orders, our
reputation could be affected, and our customers could source products from other companies.
The combination of the foregoing could materially and adversely affect our business, financial
condition and results of operations.
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We purchase certain key raw materials from third parties, and we may not be able to
secure our supply of such key raw materials in a stable and timely manner.
We currently purchase certain key raw materials needed for the manufacturing of our
battery products from third parties, such as cathode and anode materials, electrolyte, and
separation films. We also cooperate with third-party equipment vendors to co-develop and
purchase highly customized production equipment. We cannot guarantee that our strategic
arrangements with major suppliers will always lead to stable supply of sufficient quantity of
our key raw materials. Our suppliers may also be unable to satisfy our quality standards.
Moreover, the prices of these raw materials could fluctuate significantly due to circumstances
beyond our control. See “—We are exposed to risks relating to price fluctuations of key raw
materials.” If our current suppliers are unable to satisfy our long-term requirements on a timely
basis, we may be required to seek alternative sources for necessary raw materials, produce the
raw materials in-house or redesign our proposed products to manufacture available substitutes.
If we fail to do so, or incur excessive costs in doing so, our manufacturing process will be
significantly delayed, and we may be unable to timely deliver our products, which may result
in negative perception of our business reputation, leading to decline in demand for our products
and damage our overall reputation. Our business, results of operations and financial condition
may therefore be materially adversely affected.
We are exposed to risks relating to price fluctuations of key raw materials.
Prices of raw materials, in particular lithium carbonate prices, have a significant impact
on our cost of sales. In 2021, 2022, 2023 and 2024, costs of raw materials accounted for 77.7%,
71.7%, 73.8%, and 74.6% of our cost of sales for the respective years, respectively. The current
or expected supply of our key raw materials may fluctuate depending on a number of factors
beyond our control, including but not limited to the availability of resources, market demand,
potential speculation, market disruptions, natural disasters and other factors. In addition,
changes in battery related technology pathways may also lead to changing demands in different
types of raw materials, which may significantly affect their prices. We may not be able to
obtain stable, high-quality raw materials at reasonable prices and satisfactory quality at all
times.
Some of our raw material purchase agreements with suppliers either set forth a price
linkage mechanism which automatically adjust the raw material prices periodically. For other
types of raw materials, we actively reach out to suppliers to renegotiate purchase prices to
reflect costs incurred by suppliers, market prevailing prices as well as our own cost
management needs. The prices of major raw materials experienced an overall upward trend
from 2019 to 2022, followed by a significant decline in 2023. Particularly, the prices of lithium
carbonate (Li
2CO3) and lithium hydroxide (LiOH), the key lithium sources in lithium power
batteries, decreased from their 2022 peaks of RMB496.1 thousand per ton and RMB468.9
thousand per ton, respectively, to RMB90.5 thousand per ton and RMB81.8 thousand per ton,
respectively, in 2024, according to Frost & Sullivan. We cannot assure you that we will not
experience significant fluctuations in the prices of raw materials in the future. Under such
circumstances, we may need to further adjust the prices of our products accordingly to pass
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down the increased costs onto our customers, or secure alternative sources of supply. However,
we cannot assure you that we will be able to pass all or a portion of the increased costs to our
customers due to factors such as competition, or we will be able to find alternative sources in
a timely and cost-effective manner, or at all. Additionally, we may not have strong bargaining
power with customers and suppliers, and therefore may not be able to effectively mitigate the
impact of raw material price fluctuations despite the measures put in place. If we fail to
respond appropriately to the increases in the prices of raw materials needed for our products,
we may continue to incur impairment losses on inventories in the future, and our business,
financial condition and results of operations may be materially and adversely affected. Under
our procurement agreements without price linkage mechanisms, we are exposed to certain risks
associated with the market price fluctuations for raw materials. If the market price drops and
we fail to timely respond and renegotiate our price with our suppliers in a timely and
cost-effective manner, our financial performance will be materially and adversely impacted.
Under our procurement agreements with price linkage mechanisms, there are specific risks
associated with time delays and mismatched adjustment cycles. In particular, there may be a
lapse of time from the drop in market prices to our actual adjustment of prices with suppliers.
This delay can result in continued payments at higher rates, which would negatively impact our
cost of goods sold and reduce our profit margins. Additionally, as we adjust prices on a
monthly basis with certain suppliers, but adjust our selling prices only every one to six months
with certain customers, such mismatch of price adjustment cycles can lead to scenarios where
we incur higher costs without the ability to pass these on to customers promptly, adversely
affecting our cash flow and overall financial performance.
We depend significantly on our pricing power and may be materially and adversely
affected if we are forced to lower the selling prices of our products.
We may be forced to adjust the prices of our products in accordance with market
conditions. For example, the average selling prices of our power battery products decreased
from RMB0.86 per Wh in 2022 to RMB0.57 per Wh in 2023, and decreased to RMB0.41 per
Wh in 2024; the average selling prices of our ESS products decreased from RMB0.89 per Wh
in 2022 to RMB0.42 per Wh in 2023, and decreased to RMB0.37 per Wh in 2024, primarily
due to the declined cost of our raw materials, and partially in response to market competition.
We cannot assure that we will not experience any material and adverse effect on our financial
results if we lower the prices of our products in future if the related costs do not also decline
or if we cannot make up for the decreased pricing by increasing sales volume. Any potential
decrease in the selling prices of our products in the future, including in response to changes in
raw material prices, increased market competition or general economic conditions, may have
a material adverse impact on our business, financial condition, results of operations and
prospects.
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We rely on our suppliers; any decrease in supplies, quantity of supplies and breakdown
in the business relationship between us and our suppliers could have a material and
adverse effect on our business and financial conditions.
In 2021, 2022, 2023 and 2024, purchases from our largest supplier in each year during the
Track Record Period amounted to RMB665.0 million, RMB1,326.6 million, RMB433.9 million
and RMB674.8 million, representing 40.8%, 38.2%, 14.3% and 19.1% of our total amount of
purchase during the respective years, while purchases from our five largest suppliers in each
year during the Track Record Period amounted to RMB1,079.3 million, RMB2,230.0 million,
RMB1,368.1 million and RMB1,736.4 million, representing 66.1%, 64.2%, 45.0% and 49.2%
of our total amount of purchase during the respective years. We believe that we have a good
cooperation relationship with our key suppliers. However, we cannot assure you that there will
not be any dispute with our major suppliers, or that we will be able to maintain business
relationships with our existing suppliers. There is no assurance that we are able to maintain
business relationship with our existing suppliers, or we will be able to secure supply of raw
materials at competitive prices. If we cannot locate alternative suppliers for replacement in a
timely manner and/or on comparable commercial terms, our business operation may be
hindered, which could materially and adversely affect our profitability.
Our strategic acquisitions or investments may not be successful, and we may not realize
anticipated strategic benefits and financial returns from such transactions.
We have engaged in strategic acquisitions and other investments, such as joint ventures,
in order to expand our production capacity, diversify our product portfolio, gain access to new
markets and stable sources of raw materials or acquire new technologies. The success of joint
ventures depends on a number of factors, some of which are beyond our control. In accordance
with PRC laws and regulations, the investment agreement and the articles of association of the
joint ventures, certain matters relating to the joint ventures require the consent of all parties to
the joint ventures, while we do not own the entire equity interests in such joint ventures.
Therefore, such investment agreements involve a number of risks, including (i) we may not be
able to pass certain important board resolutions requiring unanimous consent of all of the
directors of our joint ventures if there is a disagreement between us and our partners; (ii) joint
ventures may experience a change of control; (iii) our partners may have economic or business
interests or goals or philosophies that are inconsistent with ours; (iv) our partners may be
unable or unwilling to fulfill their obligations under the investment agreements.
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In addition, our investments in joint ventures are subject to liquidity risk, since they are
not as liquid as other investment products. Due to the illiquidity nature of our investment in
joint ventures, we may significantly limit our ability to disposal of our investment in joint
ventures in respond to adverse changes in economic, financial and investment conditions. We
cannot predict whether we will be able to dispose of any of our interests in the joint ventures
on favorable terms. Also, we cannot predict the length of time we need to find a purchaser and
to complete the relevant transaction. Furthermore, there is no cash inflow to our Group until
dividends are received by us, even if our joint ventures reported profits under the equity
accounting. If there are no dividends received from our joint ventures or share of their results,
we will also be subjected to liquidity risk and our financial condition or results of operations
could be adversely affected.
If any of the above risks materialized in the future, our relationship with those joint
venture partners and the related joint venture business may be adversely affected, which in turn
would affect our business, financial condition and results of operations.
Share of profits or losses of joint ventures could potentially have impact on our financial
performance.
As of December 31, 2021, 2022, 2023 and 2024, the carrying amount of our investments
in joint ventures amounted to nil, RMB64.5 million, RMB3,350.9 million and RMB3,467.2
million, respectively. The performance of such joint venture has affected, and will continue to
affect, our results of operations and financial position. We recorded share of profits of joint
ventures of RMB0.9 million and RMB302.5 million in 2022 and 2024, and incurred share of
losses of joint ventures of RMB25.1 million in 2023. In 2023, we completed the strategic
reorganization of STAES by acquiring 50% equity interests thereof. STAES generated a profit
of RMB29.7 million and RMB587.3 million in the one month ended December 31, 2023 and
the year ended December 31, 2024, respectively.
If the joint ventures do not perform as expected or do not generate sufficient profit in any
financial period, our return on interests in the joint ventures, our financial condition or results
of operations could be materially and adversely affected. In addition, our investments in joint
ventures may subject us to liquidity risks as we may be required to fulfill capital injections in
the future subject to the capital needs and financial performance of these joint ventures. Even
if these joint ventures record profits, we may not immediately receive any dividend
distribution, which is generally subject to the applicable laws and regulations.
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Our business, financial condition and results of operations may be subject to adverse
effect from the risk of customer concentration.
In each of 2021, 2022, 2023 and 2024, our revenue from the top five customers in each
year/period during the Track Record Period was RMB1,337.4 million, RMB2,972.7 million,
RMB3,238.2 million and RMB4,530.0 million, respectively, accounting for 89.1%, 90.4%,
77.8% and 88.2%, respectively, of our total revenue during the respective years. Our revenue
from the largest customer in each year during the Track Record Period was RMB828.3 million,
RMB962.5 million, RMB1,179.1 million and RMB1,462.3 million, respectively, accounting
for 55.2%, 29.3%, 28.3% and 28.5%, respectively, of our total revenue during the respective
years. See “Business—Sales, Marketing and Customers— Customers.”
According to Frost & Sullivan, due to the nature of the power battery industry, significant
interaction with customers in order to successfully integrate our products into our customers’
vehicles is required, and we therefore have a high concentration of customers and are subject
to relevant risks. We cannot assure you that our major customers will not diversify their
suppliers, change their business scope or business model nor suspend their operation, or they
will not encounter any operating or financial difficulties. Any material adverse changes in the
business, operation, financial conditions and demands of our major customers may in turn have
a material adverse effect on us. For example, in November 2022, we ceased delivery of NCM
battery products for application in BEVs to one of our OEM customer (“ WM Customer ”) due
to material adverse change in its business operations and WM Customer’s prolonged delay and
inability to settle their receivables (the “ WM Customer Incident ”). The WM Customer
Incident led to (i) a significant decrease in sales volume of NCM batteries; (ii) a significant
decrease in revenue from the sales of NCM batteries; (iii) impairment losses on our inventories
in 2022; and (iv) impairment in trade receivables in 2022. See “Financial
Information—Significant factors affecting our financial condition and results of
operations—Specific factors affecting our results of operations” for more details. There is no
assurance that we are able to maintain good relationship with our major customers, or our
major customers will continue to have high demands for our products in the future. In addition,
obtaining a design-win does not guarantee sales, as our customers’ anticipated production
volumes stated at the time of design-wins may not be indicative of their actual production
volume and demand for our products, which may be subject to changes due to their own
production plan or market demand. If we are unable to identify and acquire suitable new
customers within a reasonable period of time, our business, financial condition and results of
operations may be materially and adversely affected.
We face competition from manufacturers of other new energy batteries.
The global EV battery market is highly competitive, apart from our existing competitors,
we expect competition from manufacturers of other new energy batteries such as hydrogen
batteries and sodium-ion batteries. According to Frost & Sullivan, hydrogen batteries and
sodium-ion batteries are both new energy battery types with great development potential.
Currently, hydrogen batteries and sodium-ion batteries are still in the early stages of
commercialization. These potential new competitors may seek to increase their market shares
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through various measures, such as continued R&D efforts, increased production capacity,
optimized production process and active marketing campaigns. These new competitors may
also seek to increase their market shares through the reduction of price. We expect to face
competition from both existing and new competitors as we expand our business into new
business lines, geographic regions and product categories. Competitive pressure could also
have an adverse impact on the demand for and pricing of our products, which in turn affects
our growth and market share. Even if there is sufficient downstream demand for EV and ESS
battery products, there is no guarantee that we will always succeed in competing with other
market players for orders from downstream customers. If we fail to compete effectively, we
may not be able to retain or expand our market share, which could have a material adverse
effect on our business, results of operations and financial condition.
Our business depends on our ability to protect our intellectual property rights, and we
may be exposed to intellectual property infringement and other claims by third parties,
which, if successful, could cause us to pay significant damages and incur other costs.
Our success is subject to our ability to use, develop and protect our technology and trade
secrets without infringing the intellectual property rights of third parties. There are numerous
issued intellectual properties and pending patent applications belonging to third parties that
exist in fields in which we operate. Others may hold or obtain patents, copyrights, trademarks,
or other proprietary rights used in our products and service. This might prevent, limit, or
interfere with our production, use, development, sales, or marketing, and could therefore
disturb our daily operations and distract our management. From time to time, we may receive
communications from intellectual property right holders regarding their proprietary rights.
Companies holding patents or other intellectual property rights may, and have in the past
brought suits alleging infringement of such rights or otherwise assert their rights and urge us
or our subsidiaries to obtain licenses. Our uses of trademarks relating to our design, software,
technology could be found to infringe upon existing intellectual property rights owned by
others. In addition, if we are found to have infringed upon a third party’s intellectual property
rights, we may be required to do one or more of the following:
 cease to sell products that are involved in the challenged intellectual property rights
owned by others;
 pay damages;
 redesign our products;
 enter into license agreements with third parties and pay them a license fee; or
 establish and maintain alternative branding for our products.
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For example, Jiangsu TAFEL from which we acquired certain of our business before the
reorganization in February 2022 as described under “History, Reorganization and Corporate
Structure—Corporate Development and Major Shareholding Changes—3. Business
Reorganization of Our Group,” was involved in a series of legal proceedings, including civil
and criminal proceedings concerning intellectual property infringement before the Track
Record Period as alleged by an industry player. As a result of such proceedings, Jiangsu
TAFEL entered into a license agreement and, together with one of its subsidiaries, had paid
monetary damages in full in December 2020, and the relevant patents in the proceedings were
no longer used upon expiration of the license agreement since 2024. Certain of their former
employees were subject to criminal penalties. While such legal proceedings had been
concluded and did not, do not and will not have any material adverse impact on our business,
operations and financial performance, we cannot guarantee you that there will not be future
proceedings of similar nature.
We rely primarily on a combination of our patents, trade secrets, trademarks, the
confidentiality agreements signed by the employees, and confidentiality agreements signed
with the third parties to protect our intellectual property rights. Although we have applied and
obtained a number of trademarks and patents for the operations of our business, there is no
assurance that we are able to successfully apply and be granted new intellectual property rights
in a timely and cost-effective manner in the future, for such applications are expensive and time
consuming. See “Business—Intellectual Properties.” Despite our efforts to protect our
proprietary rights, unauthorized parties may be able to obtain and use information that we
regard as proprietary. Under such circumstances, to protect our intellectual property rights and
maintain our competitive advantages, we may initiate legal proceedings against parties who we
believe are infringing our intellectual property rights. Legal proceedings are often costly and
may divert management attention and resources away from our business. In certain situations,
we may have to initiate such legal proceedings in foreign jurisdictions, in which case we are
subject to additional risks as to the result of the proceedings, the amount of damages that we
can recover, and the enforcement process.
The validity and scope of any potential claims/requests can be complicated and involve
complex scientific, legal and factual questions and analysis and, therefore, may be highly
uncertain. The defense and prosecution of intellectual property suits, patent opposition
proceedings and related legal and administrative proceedings or requests can be both costly and
time consuming and may significantly divert the efforts and resources of our management. A
determination in any such litigation or proceedings or requests to which we are a party may
invalidate our patents, subject us to pay damages to third parties, require us to seek licenses
from third parties, pay ongoing royalties, redesign our products, subject us to injunctions
prohibiting the manufacture and sale of our products or the use of our technologies. In the event
of an adverse result in any such litigation, or even in the absence of litigation, we may need
to obtain licenses from third parties to develop, manufacture or sell our products. Any such
license might not be available on reasonable terms or at all, or is non-exclusive or require us
to pay substantial licensing payments. Any of the afore-mentioned will materially and
adversely affect our business, financial condition and results of operations.
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The intense competition, supply restrictions, trade controls, tariff, or sanctions, on
semiconductor chips or other major components of EVs may disrupt the operations of our
end customers and in turn adversely affect our business, results of operations, and
financial condition.
The installation and application of semiconductor chips on EVs are common in the EVs
industry, as such component is often applied to facilitate vehicle electrification and safety and
driver assistance. Since late 2020, there has been a global shortage in the supply of
semiconductor chips for automotive production resulting from increased demand for consumer
electronics and disruption in semiconductor chip production due to labor shortage and severe
weather. If suppliers of semiconductor chips and other major components are unable to meet
the needs of our downstream customers on acceptable terms, or at all, their production and
delivery processes could be materially disrupted. Such disruptions could result in decreased
sales and increased operational costs of our customers, which may in turn affect their order
volume and demand for our products. This may also prolong customer’s payment period, and
increase the risk of credit loss with respect to our trade and bills receivables. Moreover, there
are various sanctions and export controls related to the trade of advanced semiconductor being
announced or implemented, which have also affected the supply of semiconductor chips
globally. There is no assurance that our downstream customers, including EV manufacturers or
EV battery pack manufacturers designated by EV manufacturers, will be able to obtain
sufficient quantities of semiconductor chips and other major components for their operations
at a reasonable cost, or at all. Also, while to the best of our knowledge, our downstream
customers did not experience any supply restrictions or trade controls, or are subject to
sanctions related to semiconductor chips or other major components which materially affected
their business during the Track Record Period and up to the Latest Practicable Date, there is
no assurance that they will not be materially affected by supply restrictions, trade controls or
sanctions on semiconductor chips or other major components in the future, especially OEMs
in overseas markets who may be directly impacted by semiconductor chip shortages or due to
sanctions or trade restrictions, among other reasons. If suppliers of semiconductor chips and
other major components are unable to meet the needs of our downstream customers on
acceptable terms, or at all, our downstream customer’s production and delivery could be
disrupted, which in turn, could have an adverse effect on their demand for our products, which
could in turn materially adversely affect our business, results of operations and financial
condition.
Our customers’ EV sales in certain jurisdictions may also become subject to trade
restrictions and tariffs, which could impact their sales volume and in turn their procurement
from us. For example, the European Union has raised tariffs on Chinese electric vehicles on top
the 10% duty that was already in place for Chinese EV manufacturers. Such tariffs and trade
restrictions may impact OEMs’ sales and manufacturing volume, which may in turn impact our
sales of battery products. During the Track Record Period, we directly sold our products and
provided services to customers in the European Union. To our best knowledge, the EVs
manufactured by some of our OEM customers which install our power batteries had been sold
to the European Union during the Track Record Period. For sales to the overseas customers
during the Track Record Period, tariffs shall be borne by the relevant customers pursuant to the
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terms of the respective agreements. However, despite passing tariff obligations to our
customers, the imposition of additional tariffs and trade restrictions may still adversely impact
our competitiveness in the European market. Chinese manufacturers, including us, may face
greater pricing pressure compared to peers based in other regions, particularly those not subject
to such tariffs. This could lead to reduced demand for our products and services or require us
to adjust our pricing strategy, which may adversely affect our business, financial condition, and
results of operations. There is no guarantee that additional tariffs or trade restrictions will not
be imposed in the future, which could further impact our ability to compete in overseas
markets.
In recent years, as trade frictions increase between the United States and China, concerns
exist among PRC enterprises transacting with United States companies that a possible trade
war between the two countries could have possible impact on their business. Elevated tensions
between the two countries have been driven by a range of factors, including global pandemic,
legislative actions, economic sanctions, and executive orders. These developments have led to
restrictions on various transactions and investments involving Chinese enterprises. Rising
tensions could reduce levels of trades, investments, technological exchanges and other
economic activities between the two major economies, which would have a material adverse
effect on global economic conditions and the stability of global financial markets. A trade
friction between global large trade partners could also threaten the ongoing global economic
development and the increasing cross-border transactions trend. A deterioration in China-U.S.
relationship could negatively impact the global economic development and the cross-border
transactions between China and the United States. On February 1, 2025, Trump administration
announced a plan to raise a 10% additional tariff on imports from China and this higher tariff
rate became effective on February 4, 2025.
During the Track Record Period, we generated a small portion of our revenue from the
United States. Our revenue from the direct sales to the United States was nil, RMB0.6 million,
RMB4.7 million, and RMB13.9 thousand in 2021, 2022, 2023, and 2024, respectively. All our
direct sales are subject to tariff as mentioned above, as amended from time to time. During the
Track Record Period, all tariffs were borne by our customers pursuant to the terms of our
agreements. However, in light of the raised tariff by Trump administration, our customers in
the United States have to pay higher for our products and services, and we may become less
competitive compared to peers outside China, especially compared to peers in the U.S., who
are not subject to the special tariff imposed on exports from China. There is no guarantee that
there will not be additional tariffs imposed or enhanced measures against imports from China,
which could adversely affect our business and results of operations.
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We may be subject to liabilities and disruption in operations in connection with accidents
that occur during the manufacturing process at our production facilities due to, among
others, failure to comply with safety measures and procedures.
In the course of operations and production, we implement and require our employees to
comply with safety measures and procedures as stipulated in our internal policies, including
occupational safety and fire safety related procedures and protocols. During the Track Record
Period, we did not experience any material safety-related or occupational accidents.
Nevertheless, there is no assurance that our safety measures and procedures are strictly
followed by our employees. As our manufacturing process is complicated and inevitably
involves operation of tools, equipment and machinery and use of chemical materials, accidents
resulting in employee injuries or even deaths may occur. In addition, our existing
manufacturing protocols may not be sufficient to prevent all types of malfunctioning or above
accidents, some of which may have never arisen and may not have been foreseen when the
current protocols are created. Such accidents may result in disruption of our operation and
subject us to liabilities, and we may not have adequate or sufficient insurance to cover such
liabilities, which could then adversely affect our business, results of operations and financial
condition. See “—We may not have adequate insurance to cover losses and liabilities arising
from various operational risks and hazards. Specifically, we may be involved in product
liability claims, and our product liability insurance may not be sufficient to cover potential
liability from product liability claims.”
Work stoppage, increases in labor cost and other labor related matters may have an
adverse effect on our businesses.
Good working relationship with our employees and reasonable labor cost is crucial to our
operations and success. We have not experienced any material work stoppages, strikes or other
major labor problems during the Track Record Period. However, there is no assurance that any
of such events will not arise in the future. If our employees were to engage in a strike or other
work stoppage whether voluntarily or for reasons beyond their control, we could experience
significant disruption of our operations and/or higher on-going labor costs, which may have an
adverse effect on our businesses, financial condition and results of operations. Any conflicts
between us and our employees’ labor union or between our suppliers and customers and their
respective unions, if any, could have an adverse effect on our financial condition and results
of operations.
In 2021, 2022, 2023 and 2024, our labor costs amounted to RMB76.5 million, RMB105.5
million, RMB247.9 million, and RMB275.5 million, representing 5.2%, 2.9%, 6.3%, and 6.3%
of our total cost of sales, respectively. In addition, our labor costs may potentially continue to
increase in the future. We may not be able to pass on these increased costs to customers by
increasing the selling prices of our products in light of competitive pressure in the markets
where we operate. In such circumstances, our profit margin may decrease, which could have
an adverse effect on our financial condition and results of operations.
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We may be subject to financial and reputational risks due to failure to maintain effective
quality control, which may lead to product recalls, product liability claims and sales
return and may have a material adverse effect on our business, reputation, financial
condition and results of operations.
New energy batteries used in EVs and ESSs are inherently complex and may be subject
to failure, accidents or other malfunctions. Although we have not been involved in any material
product quality accident, product recalls or other similar events during the Track Record Period
and up to the Latest Practicable Date, there is no assurance that we will not be involved in those
events in the future. Therefore, our product quality is critical to our success. The effectiveness
of our quality management system depends on a number of factors, including the quality of our
products design, the equipment and raw materials used, the quality control measures during the
manufacturing process, the quality of our staff and related training programs and our ability to
ensure that our employees adhere to our quality management policies and guidelines. We are
required to comply with specific guidelines based on product safety and restrictions and
hazardous materials laws and regulations that are applicable in the jurisdictions into which our
customers sell their products. Our safety standards for the inspection of our products are also
based on relevant national and industry standards. We cannot assure you that our quality
management system will continue to be effective or in compliance with relevant laws and
regulations and standards. See “Business—Manufacturing—Quality Control.” Any significant
failure in or deterioration of the efficacy of our quality management system could result in us
losing accreditations and requisite certifications or qualifications, and lead to product recalls,
product quality claims and sales return, which could in turn have a material adverse effect on
our business, financial condition and results of operations.
The risk of product recalls and product liability claims, and associated adverse publicity,
is inherent in the development, manufacturing and sales of our products. Our products and the
products of third parties in which our products are a component are becoming increasingly
sophisticated and complicated as technologies continue to advance.
Product quality and liability issues may affect not only our own products but also the
third-party products in which our battery products are a component. Our efforts to maintain
product quality may not be successful, which may result in us incurring expenses in connection
with, for example, product recalls and product liability claims, and adversely impact our brand
image and reputation as a producer of high-quality products. Any product recalls or product
liability claims seeking significant monetary damages could have a material adverse effect on
our business and financial condition. Any product recall or product liability claim could
generate substantial negative publicity about our products and business, interfere with our
manufacturing plans and product delivery obligations as we seek to replace, or repair affected
products, and inhibit or prevent commercialization of other future product candidates.
In addition, we accept sales return if there exist product defects for which we are
responsible and the relevant products in question are still within the warranty duration
prescribed in sales contracts or production specification which would partially result in the
decrease in revenue from sales. There is no assurance that we will not encounter material sales
return or cancellation of orders due to product defects. If that happens, our business, results of
operations and financial position will be adversely affected.
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Failure to maintain optimal inventory levels could increase our inventory holding costs
and cause us to lose sales.
In order to operate our business effectively and meet our consumers’ demands and
expectations, we must maintain a certain level of inventory to meet the needs of production and
ensure timely delivery of our products. As of December 31, 2021, 2022, 2023 and 2024, we had
inventories of RMB709.5 million, RMB1,012.9 million, RMB613.8 million and RMB678.7
million, respectively. We determine our level of inventory based on our experience, number of
orders from customers, assessment of customer demand and fluctuation in prices of raw
materials. However, such assessment is inherently uncertain, and the demand for our products
could change significantly between the order date and the projected delivery date. We cannot
assure you that we are able to always maintain optimal inventory levels in the future. If we fail
to accurately assess the demand, we may experience inventory obsolescence and inventory
shortage risk. Inventory levels in excess of demand, or substantial decrease in the expected
market price of our products, may result in inventory write-downs or write-offs and we may
sell the excess inventory at discounted prices, which would have an adverse effect on our
profitability. Our inventory turnover days was 130.1 days, 87.8 days, 75.1 days, and 53.8 days
in 2021, 2022, 2023 and 2024, respectively. Furthermore, if we underestimate the demand for
our products, we may not be able to produce a sufficient number of products to meet such
unanticipated demand, which could result in delays in the delivery of our products and
negatively affect our reputation.
Any of the above may materially and adversely affect our business, results of operations
and financial condition. As we plan to continue to expand our production capacities, we may
continue to face challenges in effectively managing our inventory.
We face risks associated with the international sales of our products, such as the current
tensions in international trade and rising political tensions. If we are unable to effectively
manage these risks, our business and financial condition and results of operations may be
materially and adversely affected.
While we generated a substantial majority of our total revenue during the Track Record
Period from sales to customers located in the PRC, we also made sales to overseas customers
in countries or regions, as well as customers who may incorporate our products and sell their
end-products overseas. Our business and sales overseas are affected by the current international
trade tensions and global economic conditions, such as economic sanctions, export or import
controls against certain countries or regions or against targeted industry sectors, groups of
companies or persons, and/or organizations. During the Track Record Period and up to the
Latest Practicable Date, to our best knowledge, we did not make any direct sales or indirect
sales that would violate laws and regulations relating to economic sanctions. Furthermore, the
uncertainty in global economic conditions could result in substantial volatility in global credit
markets. These conditions affect our business by reducing prices that our customers may be
able or willing to pay for our products or by reducing the demand for our products, which could
in turn negatively impact our sales and result in a material adverse effect on our business, cash
flow, results of operations and financial condition.
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While we expect the PRC will continue to be our primary market, we may expand the
sales of our products overseas, which will expose us to a number of risks, including, but not
limited to:
 fluctuations in foreign currency exchange rates;
 increased costs associated with maintaining the ability to understand the local
markets and develop and maintain effective marketing and distributing presence in
various countries;
 failure to obtain or maintain permits for our products or services in these markets;
 inability to obtain, maintain or enforce intellectual property rights;
 unanticipated changes in prevailing economic conditions and regulatory
requirements; and
 trade barriers such as export requirements, tariffs, taxes, restrictions imposed on
Chinese EVs, and other restrictions and expenses.
We face risks of sharing relevant R&D results with our collaboration partners and
investment partners at the level of jointly established entities.
During the Track Record Period, we collaborated with third parties for certain R&D
projects. See “Business—Research and Development” for details of relevant cooperation
agreements. We may enter into similar arrangements to cooperate on R&D projects or to jointly
establish R&D entities such as joint laboratories with other third parties in the future. Our
agreements in relation to these collaborations may require us to share relevant research and
development results with these partners at the level of jointly established entities. There is no
assurance that our relevant counterparties would not advertently or inadvertently misuse the
research and development results that we collaboratively form, or misappropriate the research
and development results owned solely by us and that are incidentally shared during our
collaboration with them. Our business, financial condition and results of operations may be
adversely impacted if any of the aforementioned incidents happen.
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We may face challenge from new power systems that could be applied to the end products
where our battery products are used.
EV batteries are a core component of EVs, and are one of our major sources of revenue
and focuses on future business development. Benefiting from the growth of global EV industry,
the global EV battery market experienced steady growth in installation capacity from 141.5
GWh in 2020 to 900.2 GWh in 2024, representing a CAGR of 58.8%, and is expected to further
grow to 3,564.5 GWh in 2029, representing a CAGR of 31.7%, according to Frost & Sullivan.
However, there is no assurance that there would not be a development of power system for EVs
that could replace lithium batteries and thus make obsolete all of our EV battery products. In
addition, new types of vehicles may emerge and ultimately replace EVs. In the event that new
power system is to replace lithium batteries, or new types of vehicles emerge to replace EVs,
our business, financial condition and results of operations would be adversely affected.
The proper installation of our battery modules and packs into EVs rely on software and
hardware that are highly technical. If these systems contain bugs or vulnerabilities, or if
we are unsuccessful in addressing or mitigating technical limitations, our business could
be adversely affected.
In addition to battery cells, we also produce battery modules and packs. These products
rely on software and hardware battery management systems that are highly technical and
complex and will require modification and upgrades over their service life. Furthermore,
several of our products depend on the ability of such software and hardware to store, retrieve,
process, and manage large amounts of data. Such software and hardware may contain bugs,
design defects or vulnerabilities, which may compromise our ability to meet the designed
objectives. Some bugs or vulnerabilities are highly concealed, making it difficult to cover them
completely in testing, and issues may only be exposed after product release. Although we
attempt to remedy any issues we discover in our products as effectively and promptly as
possible, such efforts may not be timely, may hamper production, or may not be to the
satisfaction of our customers. If we are unable to prevent or effectively remedy bugs, defects
or vulnerabilities in software and hardware, we may suffer damage in relation to our brand and
reputation, loss of customers, loss of revenue or liability for damages, any of which could
adversely affect our business and results of operations.
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We are required to obtain and maintain various approvals, licenses, certificates and
permits or to complete relevant assessment, acceptance process and filing procedures to
operate our business and the loss or failure to obtain or renew any or all of these
approvals, licenses, certificates and permits or failure to conduct such assessment,
acceptance process and filing procedures could materially and adversely affect our results
of operations and business prospects.
We primarily operate our business in China. In accordance with the laws and regulations
of the PRC, we are required to obtain and maintain various approvals, licenses, certificates and
permits and to complete assessment, acceptance process and filing procedures to operate our
business in the PRC, such as various approvals, permits, licenses, certificates, assessment,
acceptance process and filing procedures throughout multiple stages of our new construction
and expansion projects, and in respect of our procurement of certain chemicals for the
production and technology development of batteries. These approvals, licenses and permits are
granted or renewed upon satisfactory compliance with, among other things, certain conditions
in the applicable laws and regulations. They are also subject to examinations or verifications
by relevant authorities and some of them are valid only for a fixed period subject to renewal
and accreditation. In addition, certain filing procedures are valid only for one-time use.
We may experience difficulties, delays or failures in obtaining or maintaining the
necessary approvals, licenses, certificates and permits, or completing assessment and
acceptance process and filing procedures. In addition, there can be no assurance that we will
be able to obtain or renew all of the approvals, licenses and permits or complete assessment,
acceptance process and filing procedures required for existing business operations promptly or
at all. According to relevant laws and regulations, for projects that commence construction or
production before obtaining such approvals, licenses, certificates and permits or completing
assessment or acceptance process or filing procedures, we may be imposed of administrative
penalties such as fines, rectification within a specific period and suspension or close down of
the construction or projects. If any of these occurs, our ongoing business, financial condition
and our expansion plan may be adversely affected.
During the Track Record Period, we did not obtain certain permits or approvals or
complete the acceptance inspection process or filing procedures for certain of our projects
before commencing construction or production, such as the energy-saving review approval, the
energy-saving acceptance inspection process, the construction project acceptance process and
filing, sewage discharging permit and/or the fire prevention acceptance process and filing for
certain of our projects. Pursuant to relevant PRC laws and regulations, failure to obtain such
permits or approvals or complete such acceptance inspection and filing process or reporting
process may subject us to fines, penalties or other regulatory or administrative actions
including orders to rectify, close or suspend business operations of relevant projects. See
“Compliance and Legal Proceedings—Non-compliance Incidents.” We had obtained written
confirmation or credit reports from competent authorities that we had not been subject to any
administrative penalties during the Track Record Period with regards to energy-saving review,
construction project and/or fire prevention.
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In addition, as of the Latest Practicable Date, we did not complete the filing for the lease
of two of our leased facilities, and we did not complete the required procedures for registering
the change in the lease agreement for the expansion part. We may be required to vacate such
facility and seek alternative facilities for lease if eventually the lessor cannot procure such
ownership certificate, which may disrupt our business operations. Pursuant to relevant PRC
laws and regulations, within 30 days after the conclusion of the lease agreement, the parties
involved shall register the lease and if there is any change in the registered lease, the parties
involved shall file for a change in the lease registration within 30 days. Failure to comply
within the stipulated period may result in a fine ranging from RMB1,000 to RMB10,000
imposed by relevant authorities.
With regards to environment, safety and occupational health, see also “—Failure to
comply with environmental, safety and occupational health laws and regulations in the PRC
may have a material adverse effect on our business, financial condition and results of
operations.”
Complying with government regulations may require substantial expenses, and any
non-compliance may expose us to liability. In case of any non-compliance, we may have to
incur significant expenses and divert substantial management time and resources to resolve any
deficiencies. We may also experience negative publicity arising from such deficiencies, which
may materially and adversely affect our financial performance and business prospects.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and
economic sanctions, and similar laws, and non-compliance with such laws can subject us
to administrative, civil, and criminal penalties, collateral consequences, remedial
measures, and legal expenses, any of which could adversely affect our business, results of
operations, financial condition, and reputation.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and
economic sanctions, and similar laws and regulations in various jurisdictions in which we
conduct activities. We have adopted policies and procedures designed to ensure compliance
with applicable anti-corruption, anti-bribery, anti-money laundering, financial and economic
sanctions, and similar laws and regulations by our employees, suppliers, representatives,
consultants, agents and business partners. We have specifically stipulated the compliance with
above-mentioned policies and procedures in our contracts with our employees, while we were
not able to do so in every contract or agreement we entered into with other parties as some of
those other parties were required by their own internal policies to use their own contract
templates, which was in line with the industry practice. We have established relevant
mechanisms to ensure the implementation of such policies and procedures, such as periodic
review and reporting the issues identified including those related to our employees and other
parties, collecting evidence and reporting to relevant authorities if there involves violation of
applicable laws and regulations of our employees and other parties. However, our policies and
procedures may not be sufficient, and our directors, officers, employees, suppliers,
representatives, consultants, agents, and business partners could engage in improper conduct
for which we may be held responsible.
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Non-compliance with anti-corruption, anti-bribery, anti-money laundering, or financial
and economic sanctions laws could subject us to whistleblower complaints, adverse media
coverage, investigations, and severe administrative, civil and criminal sanctions, collateral
consequences, remedial measures, and legal expenses, any of which could materially and
adversely affect our business, reputation, financial condition and results of operations.
We may be involved in legal or other proceedings arising out of our business operations
from time to time and may face reputational risks and significant liabilities as a result.
As of the Latest Practicable Date, we are involved in a few pending legal proceedings in
relation to ordinary commercial disputes. We may be involved from time to time in disputes
with various parties involved in our business operations, including but not limited to our
customers, suppliers, employees, logistics service providers, factoring companies and banks.
These disputes may lead to legal or other proceedings, including threatened proceedings, which
may result in damages to our reputation, substantial costs and diversion of our resources and
management’s attention. In addition, we may encounter additional compliance issues in the
course of our operations, which may subject us to administrative proceedings and unfavorable
results, and result in delays relating to our production or product launch schedules. We cannot
assure you as to the outcome of such legal proceedings, and any negative outcome may
materially and adversely affect our business, financial condition and results of operations.
We may incur significant costs because of the warranties we provide with our products,
and our provisions to cover future potential claims under our product warranties may be
insufficient.
We provide warranty for our battery products based on the years and/or miles of use,
which varies based on the customers’ needs and the type of products. We provide provisions
for these potential warranty expenses, which is based on a certain percentage of sales revenue
during the period. Our provision for product warranty was RMB39.0 million, RMB100.8
million, RMB168.8 million and RMB262.7 million as of December 31, 2021, 2022, 2023 and
2024, respectively, the increase of which was primarily driven by changes in sales volume of
our battery products during the Track Record Period. As we continue to upgrade our products
design and introduce new products, there is no assurance that future warranty claims will be
consistent with history, and in the event that we experience a significant increase in warranty
claims, there is no assurance that our provision will be sufficient. This could have a material
adverse effect on our business, financial condition and results of operations.
We recorded net current liabilities in the past, which might expose us to certain liquidity
risks and could constrain our operational flexibility.
We recorded net current liabilities of RMB428.9 million, RMB616.7 million,
RMB1,794.7 million and RMB764.4 million as of December 31, 2021, 2022, 2023 and 2024,
respectively. See “Financial Information—Liquidity and Capital Resources.” We may still
retain a net current liabilities position in the future, which may adversely affect our financial
performance. A net current liabilities position exposes us to liquidity risks. Our future liquidity,
capital expenditures, the payment of trade and bills payables and the repayment of debt
financing will primarily depend on our ability to generate an adequate cash flow from our
operating activities. If we have a shortage in the cash flow generated from operations, our
liquidity position may be materially and adversely affected, which in turn may impact our
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ability to execute our business strategies and constrain our business operation. See “—We
recorded net operation cash outflow in the past, and our liquidity, financial condition and
prospects may be adversely affected if we continue to record net operating outflow in the
future.” In such event, our business, financial condition and results of operations could be
materially and adversely affected.
We recorded net operation cash outflow in the past, and our liquidity, financial condition
and prospects may be adversely affected if we continue to record net operating outflow in
the future.
In 2021 and 2024, we recorded net cash outflow from operating activities of RMB165.4
million and RMB361.1 million, respectively. See “Financial Information—Liquidity and
Capital Resources—Cash Flows.” Although we have recorded net cash inflow from operating
activities in 2023, there is no assurance that we will continue to generate net cash inflows from
our operating activities in the future. In the event that we are unable to generate sufficient cash
flow for our operations or otherwise unable to obtain sufficient funds to finance our business,
our liquidity, financial condition and prospects may be adversely affected. We cannot assure
you that we will continue to have sufficient cash from other sources to fund our operations. If
we resort to other financing activities to obtain additional cash, we will incur additional
financing costs, and we cannot assure you that we will be able to obtain financing to satisfy
our needs of cash flow on terms acceptable to us, or at all.
We may fail to recover our trade receivables in a timely manner, which may affect our
financial condition and results of operations.
As of December 31, 2021, 2022, 2023 and 2024, our trade and bills receivables and
contract assets amounted to RMB321.5 million, RMB328.4 million, RMB1,153.9 million and
RMB1,628.4 million, respectively. We had bills receivables at fair value through other
comprehensive income of nil, nil, nil, and RMB92.9 million as of December 31, 2021, 2022,
2023 and 2024, respectively. The increase of RMB92.9 million in 2024 was primarily driven
by a significant increase in the use of bills by customers for settlement along with growth in
products sold. To meet our cash management needs, we utilized a larger portion of these bills
for endorsement and discounting. Due to the increased endorsement and discounting activity
in 2024, these bills were no longer held solely for collection but instead actively used in
transactions. Consequently, under applicable accounting standards, they met the criteria for
reclassification to FVOCI. As a result, certain bills receivables issued by high-credit-grade
banks were reclassified to the category of bills receivables at fair value through other
comprehensive income. We recorded impairment of trade and bills receivables and contract
assets of RMB79.1 million, RMB606.2 million, RMB617.0 million and RMB624.3 million as
of December 31, 2021, 2022, 2023 and 2024, respectively. Our trade and bills receivables and
contract assets turnover days amounted to 60.9 days, 36.1 days, 65.0 days and 99.0 days in
2021, 2022, 2023 and 2024. There can be no assurance that we will be able to maintain our
trade and bills receivables turnover days at a reasonable level. Should the credit worthiness of
our customers deteriorate, or should a significant number of our customers fail to settle their
trade receivables in full for any reason, we may continue to incur impairment losses in the
future and our results of operations and financial position could be materially and adversely
affected. In addition, there may be a risk of delay in payment by our customers within their
respective credit period, which in turn may also result in an impairment loss provision. There
is no assurance that we will be able to fully recover our trade receivables from the customers
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or that they will settle our trade receivables in a timely manner. In the event that settlements
from customers are not made on a timely manner, or at all, our financial condition and results
of operations may be materially and adversely affected. For example, in 2022, we recorded
impairment losses of RMB601.4 million in relation to WM Customer. We recorded such
impairment losses based on our assessment of the recoverability in light of the relevant
circumstances pursuant to IFRS. See “Financial Information—Discussion of Major Items in
Consolidated Statements of Financial Position—Trade and Bills Receivables and Contract
Assets” for further details.
We may not be able to timely fulfill our obligations in respect of contract liabilities to our
customers or at all.
During the Track Record Period, our contract liabilities comprise advances received from
our customers. We typically require some of our customers to pay part of the consideration for
their purchases from us upon or prior to the delivery of the products. As of December 31, 2021,
2022, 2023 and 2024, we had contract liabilities of RMB40.9 million, RMB145.4 million,
RMB44.7 million and RMB14.8 million, respectively. See “Financial Information—Discussion
of Major Items in Consolidated Statements of Financial Position—Contract Liabilities.” Our
recognition of contract liabilities as revenue is subject to future performance of contract
obligations and may not be representative of revenue for future periods. The continued
operation of our production facilities may be substantially interrupted and materially and
adversely affected due to a number of factors, many of which may be beyond our control. As
a result of disruption to any of our production facility or any problems in manufacturing our
products, we may fail to fulfill our contract obligations or meet market demand for our
products, and our results of operations, liquidity and financial position could be adversely
affected.
Share-based payments may lead to shareholding dilution for our existing Shareholders
and adversely affect our financial performance.
We adopted share incentive schemes for the benefit of our Directors, senior management,
backbone employees and new employees who are essential to the development of the Company.
See “Appendix IV—Statutory and General Information—Pre-IPO Equity Incentive Plans.” In
2021, 2022, 2023 and 2024, we incurred share-based payment expenses of RMB22.6 million,
RMB35.0 million, RMB43.9 million, and RMB58.9 million, respectively. To further
incentivize our Directors, senior management, key technicians and key employees, we may pay
additional share-based payment in the future. Issuance of Shares with respect to such
share-based payment may dilute the shareholding percentage of our existing Shareholders.
Such share-based payments may also increase our expenses and therefore have a material and
adverse effect on our financial performance.
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Our financial result may be affected by government grants.
During the Track Record Period, we had recorded government grants. Not all of the
government grants are recurring in nature. See “Financial Information—Principal Components
of Statement of Profit or Loss and Other Comprehensive Income—Other Income and Gains.”
Government grants we received are uncertain and are subject to certain criteria and procedures
stipulated by the local government.
In addition, the development focus of local government may shift to other industries over
time. We cannot assure you that we will be able to receive any such government grants in the
future, or that such government grants we have already received will not be required to be
returned. If we are unable to receive the government grants in the future at the same level as
we had during the Track Record Period, our financial condition and results of operations for
the period may be adversely affected.
If we are unable to fully recover our contract assets, our liquidity and financial position
may be adversely affected.
During the Track Record Period, we recorded contract assets from the sales of products,
which will be reclassified as trade receivables upon certain conditions. As of December 31,
2021, 2022, 2023 and 2024, we had contract assets of RMB11.7 million, RMB2.0 million,
RMB6.5 million and RMB5.1 million, respectively. We cannot assure you that the financial
position of our customers will remain solvent or that we will be able to recover our contract
assets in full or at all in the future. If we are unable to recover our contract assets, our liquidity
and financial position may be materially and adversely affected, in particular as we have
already incurred costs and expenses when conducting preliminary research and development
for products and producing such products.
We may need to provide impairment losses for other intangible assets, which could
negatively affect our results of operations and financial condition.
Our other intangible assets primarily include trademarks, patents and software, which
amounted to RMB592.3 million, RMB549.1 million, RMB491.5 million and RMB423.1
million as of December 31, 2021, 2022, 2023 and 2024, respectively. However, our other
intangible assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If the carrying value of our
intangible assets is considered to exceed its recoverable amount and is therefore determined to
be impaired in the future, we would be required to write down the carrying value or record a
provision of impairment loss for these intangible assets in our financial statements during the
period in which our intangible assets are determined to be impaired, and this impairment would
adversely affect our results of operations and our financial condition. While we did not
recognize impairment loss for intangible assets during the Track Record Period, we cannot
assure you that there will be no such losses in the future, which could adversely affect our
results of operations and financial conditions.
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We may recognize impairment loss on our prepayments, other receivables and other
assets.
We recorded prepayments, other receivables and other assets of approximately RMB548.8
million, RMB350.0 million, RMB136.5 million and RMB113.2 million as of December 31,
2021, 2022, 2023 and 2024, respectively. During the Track Record Period, our prepayments,
other receivables and other assets primarily include prepayments for long-term assets,
prepayments to suppliers, other tax recoverable, prepaid expenses and deposits. See “Financial
Information— Discussion of Major Items in Consolidated Statements of Financial
Position—Prepayment, Other Receivables and Other Assets.” We recorded impairment
allowance for our prepayments, other receivables and other assets of RMB54.6 million,
RMB0.6 million, RMB0.7 million and RMB0.5 million as of December 31, 2021, 2022, 2023
and 2024, respectively. If we record more impairment losses on our prepayments, other
receivables and other assets in the future, our business, financial condition and results of
operations may be materially and adversely affected.
Fair value change of financial assets at fair value through profit or loss may affect our
results of operations.
Fluctuation in fair value change of our financial assets at fair value through profit or loss,
which primarily include structured deposits and wealth management products. As of December
31, 2022, we had financial assets at fair value through profit or loss of RMB1,162.6 million.
Changes in the fair value of the wealth management products are reflected in our consolidated
statement of profit or loss. The methodology that we use to assess the fair value of our
investments in wealth management products involve a significant degree of management
judgment and are inherently uncertain. We cannot assure you that market conditions and
regulatory environment will create fair value gains on the wealth management products we
invest in or that we will not incur any fair value losses on our investments in wealth
management products in the future. If we incur such fair value losses, our results of operations,
financial condition and prospects may be adversely affected.
Our business is capital intensive. The sources of our future financing can be uncertain,
and our working capital can be unstable during certain quarters.
We operate in a capital-intensive industry that requires substantial capital and other
long-term expenditures, including expenditures for the purchase of equipment and construction
of production facilities. To the extent that we expand or add new production facilities, we
expect to fund the related financial commitments and other capital and operating expenses from
cash generated from our operating activities, credit facilities, the proceeds from the Pre-IPO
Investments, banking facilities, and the net proceeds from the Global Offering. However, we
cannot assure you that we will be able to generate sufficient cash from our operations or obtain
the necessary financing or that such financing will be at interest rates and on other terms that
are commercially reasonable and affordable to us or consistent with our expectations. To the
extent we cannot obtain financing for our expansion or acquisitions at reasonable costs or at
all in the future, our business may be adversely affected. In addition, our expansions require
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us to make pre-construction preparation and trial production input, as a result, during certain
quarters we may incur higher working capital needs that may affect our working capital
sufficiency. We cannot assure you that we will not experience any unforeseen circumstances
that may adversely affect our working capital in the future. If that happens, our business,
financial position, results of operations, prospects may be affected.
Our reputation is key to our business success. Negative news or publicity may adversely
affect our reputation, business and growth prospects.
Any negative news or publicity in relation to us, or any of our Directors, management,
Controlling Shareholders and joint ventures or business partners or counterparties, or any of
their respective affiliates, among others, whether or not they act on our behalf or otherwise
utilize or share our brand name, and even if proven untrue, could adversely affect our
reputation, business and growth prospects.
We cannot assure you that such negative news or publicity would not damage our
reputation or brand image. Given our specialized industry and market, negative news, publicity
and word of mouth could spread quickly and negatively impact our reputation, brand image or
relationship with third parties, which could have a material adverse effect on our business,
financial condition and results of operations. Even if we are not a party to, not involved in, and
not liable to litigations, disputes and allegations, we cannot assure you that any of such
negative news or publicity will not affect our reputation, brand image or relationship with third
parties, which could in turn have a material adverse effect on our business, financial condition
and results of operations.
Our facilities or operations could be damaged or adversely affected as a result of natural
disasters, other catastrophic events or risks related to health epidemics and pandemics.
Our facilities or operations could be adversely affected by events outside of our control,
such as natural disasters, wars, health epidemics and pandemics, and other calamities. We
cannot assure you that any backup systems will be adequate to protect us from the effects of
fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war,
riots, terrorist attacks or similar events. Any of the foregoing events may give rise to
interruptions, breakdowns, system failures, technology platform failures or internet failures,
which could cause the loss or corruption of data or malfunctions of software or hardware as
well as adversely affect our ability to produce our products and provide services.
We also face various risks related to public health issues, including epidemics,
pandemics, and other outbreaks. The impact of such public health issues, including changes in
consumer and business behavior, pandemic fears and market downturns, and restrictions on
business and individual activities, may create significant volatility in the global economy and
led to reduced economic activity.
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The success of our business is affected by our ability to attract, train and retain highly
skilled employees and key personnel.
As a result of the highly specialized, technical nature of our business, we must attract,
train and retain a sizable workforce comprising highly-skilled employees and other key
personnel. If one or more of our highly skilled employees or key personnel were unable or
unwilling to continue their services with us, we might not be able to replace them easily, in a
timely manner, or at all. Moreover, our industry is characterized by high demand and intense
competition for talent, we may have to pay higher salaries and wages and provide greater
benefits in order to attract and retain highly-skilled employees or other key personnel that we
will need to achieve our strategic objectives. As we are still a relatively young company, our
ability to recruit, train and integrate new employees into our operations may not meet the
growing demands of our business. Our failure to attract, train or retain highly-skilled
employees and other key personnel in numbers that are sufficient to satisfy our needs would
materially and adversely affect our business and the results of operations. Staff that we are
unable to retain also pose a risk, since they can inform competitors of our commercially
sensitive information such as know-how and may lessen the technological advantages over our
competitors that we have developed.
We may not have adequate insurance to cover losses and liabilities arising from various
operational risks and hazards. Specifically, we may be involved in product liability claims,
and our product liability insurance may not be sufficient to cover potential liability from
product liability claims.
Our business is subject to a variety of operational risks, including but not limited to
production disruptions due to operational errors, power outages, equipment failures and
suspension due to other risks; operational restrictions imposed by environmental or other
regulatory requirements; social, political and labor unrest, environmental or industrial
accidents, and catastrophic incidents such as fires, earthquakes, explosions, floods or other
natural disasters. In addition, as we may begin operations in overseas markets in the future, we
may be exposed to risks related to geopolitical tensions, policy changes and intellectual
property and technology protection. These aforementioned risks may result in, including but
not limited to, damage to or destruction of production facilities, personal injury or casualties,
environmental damage, monetary loss, and legal liability. The occurrence of any of these
events may result in disruption of our operations and cause us to suffer substantial losses or
incur significant liabilities. During the Track Record Period, we maintain product liability
insurance, property insurance and employee insurance for our business operations. There is no
assurance that our insurance will be adequate to cover our exposure to the foregoing risks. If
we incur material losses or liabilities, and insurance is not adequate to cover such losses or
liabilities, our business, financial condition and results of operations may be materially and
adversely affected.
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Designing, manufacturing and sales of quality products that are safe and reliable is of
vital importance to our business. However, we have been, and may be subject to lawsuits of
product liability claims, product recalls, or redesign efforts, all of which would be time
consuming and expensive. Our product liability insurance may not be sufficient to cover
potential liability claims. Inability to obtain sufficient insurance coverage at an acceptable cost
or otherwise to protect against potential product recalls and product liability claims could
prevent or inhibit the commercialization of our products or could result in a loss of customers
and decrease in revenue, unexpected expenses and a loss of market share. If any of our products
are found to have reliability, quality or compatibility problems, we will be required to accept
returns, provide replacements, provide refunds, or pay damages. We cannot assure you that as
we continue distribution of our products, we will be able to obtain or maintain adequate
insurance coverage on acceptable terms, or that such insurance will provide adequate coverage
against all potential claims. In the event that our exposure to liabilities exceeds the coverage
of our insurance, we may still be required to incur substantial amounts, which would materially
and adversely affect our business, financial condition and results of operations. As of the Latest
Practicable Date, we were not aware of any case that would cause product liabilities in the
future.
We depend on information technology and other infrastructure that are exposed to
certain risks, including cyber security risks.
We rely on our computer systems and network infrastructure to conduct and monitor the
daily operations of our manufacturing facilities, and to collect accurate up-to-date financial and
operating and other transaction data for business analysis. We also rely on such systems and
infrastructure to collect, process and store transactional data concerning our customers, and
business partners. See “Business—Information Technology” for details on the various types of
information systems and technologies we adopt in our business operations. Therefore, our
business is dependent upon the continued maintenance and enhancement of our computer
systems and network infrastructure. Such systems and infrastructure are subject to certain
risks, such as malfunction, nature disasters, and also the cyber security risks. Although we have
devoted significant resources to develop our security measures against cyber security issues,
our cybersecurity measures may not detect or prevent all attempts to compromise our systems,
including distributed denial-of-service attacks, viruses, malicious software, break-ins, phishing
attacks, social engineering, security breaches or other attacks and similar disruptions that may
jeopardize the security of information stored in and transmitted by our systems or that we
otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized
access to our systems, misappropriation of information or data, deletion or modification of
customer information, or a denial-of-service or other interruption to our business operations.
In cases of ransomware attacks, we may be asked to make a large lump-sum payment in order
to resume the operation of our system, which may materially and adversely impact our business
and financial condition. As techniques used to obtain unauthorized access to or sabotage
systems change frequently and may not be known until launched against us or our third-party
service providers, we may be unable to anticipate, or implement adequate measures to protect
against these attacks. There is no assurance that we will not be subject to any of those cyber
security issues in the future. Any failure to adequately deal with such issues would result in a
material and adverse effect on our business and results of operations.
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Regulatory requirements regarding data protection and information security are
constantly evolving, the changes of which or any data protection and information security
incidents may have a material and adverse effect on our business and results of
operations.
We are subject to laws and regulations relating to the collection, storage, use, processing,
transmission, retention, security and transfer of personal information and other data. Any
improper handling of personal information or any other information security incidents, such as
unauthorized access to our database by hackers, could result in reputation damage and/or civil
or regulatory liabilities that may have significant legal, financial and operational
consequences.
During the Track Record Period and as of the Latest Practicable Date, we had complied
with applicable laws and regulations in the PRC relating to data security and privacy protection
in material aspects. Regulatory requirements regarding the data security and data protection are
constantly evolving, of which the interpretation and application are also evolving and subject
to change that may affect us. If we are unable to comply with the then applicable laws and
regulations, or to address any data privacy and protection concerns, such actual or alleged
failures could damage our reputation, results of operations and business prospects and/or could
lead to civil or regulatory liabilities. For details of cybersecurity-related regulations, see
“Regulatory Overview—Regulations related to Cyber Security and Data Security.”
Our risk management and internal control systems, as well as the risk management tools
available to us, may not fully protect us against various risks inherent in our business.
We have implemented risk management and internal control systems, and adopted risk
management tools available to us with respect to our business operations. However, there is no
assurance that our risk management, internal control systems and risk management tools are
adequate or effective to fully protect us against the potential risks inherent in our business. In
the event that we fail to identify and deal with any potential risks or internal control
deficiencies, our business, results of operations and prospects may be materially and adversely
affected.
Further, the successful implementation of our risk management and internal control
systems depends on our management, employees and business partners. There is no assurance
that our management, employees and business partners will strictly observe and adhere to
relevant measures and policies. There is also no assurance that our management, employees
and business partners will be able to carry out relevant measures and policies without human
errors or mistakes. In addition, as our business expands, we may have to adopt and modify our
risk management and internal control measures and policies in a timely manner in response to
our business growth. Failure to do so may result in material and adverse effect on our business
and results of operations.
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Global inflationary pressures could adversely affect our profitability and growth.
The global economy has, during certain periods, been accompanied by periods of high
inflation, and we face possible inflationary pressures, such as a general pressure from a global
inflation-related economic slowdown and the effect on the price of raw materials due to
inflation. For example, we have experienced inflationary pressure triggered by the slowdown
in production and disruption to supply chains, which was exacerbated by the regional conflicts,
which led to worsening economic conditions stemming from a decrease in worldwide
productivity. If such or other inflationary pressures continue and are not mitigated by
government measures, our cost of sales will likely increase and our profitability could be
materially reduced, as there is no assurance that we would be able to pass any cost increases
onto our customers.
RISKS RELATING TO DOING BUSINESS IN THE PRC
New legislations or new regulatory requirements regarding the end markets of our
products may affect our business operations and prospects.
Our products are used in our customer’s end products, including EVs and ESSs. New
legislations and new regulatory requirements regarding these end markets may affect our
business, financial condition, results of operations and prospects. For example, a number of
legislations in relation to the new energy vehicle market has been promulgated. On June 28,
2012, the State Council of PRC approved the Energy-saving and New Energy Automobile
Industry Development Plan (2012-2020) (Guo Fa [2012] No. 22) ( ືঐၾอঐ๕ӛԓପุ೯
஝ྌ(2012-2020 ϋ))( ਷೯[2012]22 ໮), granting supports and subsidies to EVs. On July
14, 2014, the General Office of the State Council issued the Guiding Opinion of the General
Office of the State Council on Accelerating the Popularization and Application of New Energy
Vehicle (Guo Ban Fa [2014] No. 35) (ኬจ
Ԉ)( ਷፬೯[2014]35 ໮) to grant further tax incentives and exemptions for new energy
vehicles. On March 13, 2015, the Ministry of Transport issued the Opinions on Accelerating
the Promotion and Application of New Energy Vehicles in the Transportation Industry (Jiao
Yun Fa [2015] No. 34) (จԈ)
(ʹ༶೯[2015]34 ໮). A preferential vehicle licensing system has also been introduced in
several cities in the PRC to further encourage the purchases of new energy vehicles. On
October 20, 2020, the State Council issued the New Energy Automobile Industry Development
Plan (2021-2035) (Guo Ban Fa [2020] No. 39) (஝ྌ(2021-2035 ϋ)
(਷፬೯[2020]39 ໮)), proposing to achieve the large-scale application of vehicles with high
driving automation through a 15-year effort. However, these policies are subject to certain
limits, and we cannot assure you that any new legislations or regulatory requirements, if any,
would be favorable to our business or financial condition. For instance, according to the Notice
on Improving the Financial Subsidy Policies for the Promotion and Application of New Energy
Vehicles (Cai Jian [2020] No. 86) ((ৌ
ܔ[2020]86 ໮)) (the “ 2020 Subsidy Circular ”), released by the Ministry of Finance, the
Ministry of Industry and Information Technology, the Ministry of Science and Technology and
the Development and Reform Commission on April 23, 2020, which was further confirmed on
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December 31, 2020 and December 31, 2021, save in areas such as public transportation, the
subsidies for EV purchases from 2020 to 2022 will generally be reduced by 10%, 20% and
30%, respectively, based on the level of the previous year, and the total number of EVs sold
in China that will be entitled to such subsidies should be no more than two million each year.
In addition, the national EV subsidy policy for purchase of new EVs under the 2020 Subsidy
Circular was terminated on December 31, 2022. The termination of the subsidy policy could
directly affect the profitability of the EV manufacturers in the short term and some of them may
choose to pass down such increased costs to end customers, which may discourage end
customers from choosing EV , and then affect the overall market demand of EV battery
products.
In addition, in the context of the national goal of carbon neutrality, China energy storage
market welcomes a series of favorable policies. For instance, Action Plan for Carbon Dioxide
Peaking Before 2030 issued by the State Council in 2021 unveiled a series of action plan to
accelerate the energy storage development. As for ESS industry, on July 23, 2021, the National
Development and Reform Commission (the “ NDRC”) and the National Energy Administration
(the “ NEA”) issued the Guiding Opinions on Accelerating the Development of New Energy
Storage (Fa Gai Neng Yuan Gui [2021] No. 1051) (ኬจ
Ԉ)( ೯ҷঐ๕஝[2021]1051 ໮), which set the goal of achieving a cumulative installation
capacity of 30 GWh of ESS by 2025, and achieving the comprehensive market development of
new energy storage by 2030. On July 26, 2021, the NDRC issued the Notice on Further
Improvement of the Time-of-use Pricing Mechanism (Fa Gai Jia Ge [2021] No. 1093) (׵
)(ࣸ[2021]1093 ໮), which encouraged the use of
ESS to reduce the power load in peak hours. On December 21, 2021, the NEA issued the
Regulations on Power Grid Connection and Operations (Guo Neng Fa Jian Guan Gui
[2021] No. 60) ()( ਷ঐ೯္၍஝[2021]60 ໮), which included
electrochemical energy storage and other new energy storage into the management of
grid-connected subjects. On January 29, 2022, the NDRC and NEA issued The “14th Five-Year
Plan” New Energy Storage Development Implementation Plan (Fa Gai Neng Yuan [2022] No.
209) ( “ɤ̬ʞ”)( ೯ҷঐ๕[2022]209 ໮), which set the goal of
enhancing the technological performance of electrochemical ESS and reduces the systematic
cost by over 30% by 2025, and encouraged to innovate new energy storage business models and
explore the application of business models such as shared energy storage, cloud energy storage
and energy storage aggregation. The Standards for Lithium-Ion Battery Industry (2024 edition)
቞ᕎɿཥϫБุ஝ᇍૢ΁(2024 ϋ͉) and the Measures for the Administration of Lithium-
Ion Battery Industry (2024 edition)ج2024 ϋ͉) were
released by the Ministry of Industry and Information Technology, which enhanced the
performance specifications requirements for Lithium-Ion batteries and the application
requirements for production capacity expansion. New rules and regulations may be further
issued in the future and there can be no assurance that new rules and regulations will always
be favorable to our business or financial condition.
We may need to change or adapt our business focuses from time to time in response to
the new rules and regulations regarding the end markets of our products, but we may also not
be able to do so timely and efficiently.
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We are subject to the approval, filing or other requirements of the CSRC or other PRC
governmental authorities in connection with the Global Offering and future capital
raising activities.
On July 6, 2021, the General Office of the State Council together with another authority
jointly promulgated the Opinion on Severely Punishing Illegal Activities in Securities Market
(the “Securities Activities Opinions”) (จԈ), which
calls for the enhanced administration and supervision of overseas-listed China-based
companies, proposes to revise the relevant regulation governing the overseas issuance and
listing of shares by such companies and clarifies the responsibilities of competent domestic
industry regulators and government authorities.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the
Overseas Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձ
) (the “Overseas Listing Trial Measures”) and five supporting guidelines,
which took effect on March 31, 2023. According to the Overseas Listing Trial Measures, we,
as a PRC domestic company seeking to listing and offering securities in overseas markets, are
required to file with the CSRC within three working days after submitting the application
documents to the overseas supervisory authorities. In addition, the Overseas Listing Trial
Measures also requires subsequent reports to be submitted to the CSRC on relevant information
or material events, such as change of control or voluntary or forced delisting of the issuer(s)
who have completed overseas offerings and listings.
Given that the Overseas Listing Trial Measures were relatively new, their interpretation,
application, and enforcement are still evolving and we are closely monitoring how they will
affect our operations and our future financing. In addition, we cannot assure you that we will
be able to complete all filing or report requirements in time or at all. Any failure to complete
or delay in completing such filing or report procedures for the Global Offering or future
financing activities would subject us to sanctions by the CSRC or other PRC regulatory
authorities. These regulatory authorities may impose fines and penalties on our operations in
the PRC, limit our ability to pay dividends outside of the PRC, limit our operating activities
in the PRC, delay or restrict the repatriation of the proceeds from this offering or future capital
raising activities into the PRC, or take other actions that could materially and adversely affect
our business, financial condition, results of operations, and prospects, as well as the trading
price of our H Shares.
Changes in economic, political or social conditions could have a material adverse effect on
our business and results of operations.
Most all of our operations are located in the PRC. As a result, our results of operations,
financial condition and prospects are substantially affected by economic, political, and social
conditions in the PRC.
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In addition, factors such as consumer, corporate and government spending, business
investment, volatility of the capital markets and inflation all affect the business and economic
environment, the growth of the new energy industry and ultimately, the profitability of our
business. Our labor and other costs may also increase due to pressure from inflation. Any future
calamities, such as natural disasters, outbreak of contagious diseases or social unrest, may
cause a decrease in the level of economic activities and adversely affect the economic growth
in the world.
Holders of our Shares may not be able to enforce their rights successfully as shareholders
in the PRC according to the PRC Company law or Hong Kong (China) regulatory
provisions.
As substantially all of our business is conducted in the PRC, our operations are
principally governed by the PRC laws and regulations. Due to the difference in legal systems,
certain important aspects of PRC Company Law are different from the corporate laws of
common law jurisdictions such as Hong Kong (China), particularly with respect to investor
protection, such as shareholder class action suits and measures protecting non-controlling
shareholders; restrictions on directors; disclosure requirements; different rights of classes of
shareholders; general meeting procedures and disbursement of dividends. Our Articles of
Association include provisions in accordance with the Listing Rules. Although such provisions
have been included, we cannot assure you that there is no discrepancy exists between the
protections we given to our investors in civil law jurisdictions and those given to investors in
companies formed in common law jurisdictions. In addition, PRC laws and regulations are
statute-based and, similar to other civil law jurisdictions, the interpretation and enforcement of
statutory laws and regulations may be changed to adapt the rapid development of economic,
political, and social conditions, and there can be no assurance that we will be able to fully
comply with new rules and regulations that may be relevant to investor protection, which may
limit the legal protections available to investors, including you. In addition, litigation in any
jurisdiction may be protracted and result in substantial costs and diversion of our resources and
management attention.
Holders of our H Shares may be subject to PRC income tax obligations.
Under the current PRC tax laws and regulations, non-PRC resident individuals and
non-PRC resident enterprises are subject to different tax obligations with respect to the
dividends paid to them by us and the gains realized upon the sale or other disposition of H
Shares.
Non-PRC resident individual holders of H Shares whose names appear on the register of
members of H Shares (“ Non-PRC Resident Individual Holders ”) are subject to the PRC
individual income tax on dividends received from us. Pursuant to the Circular on Questions
Concerning the Collection of Individual Income Tax Following the Repeal of Guo Shui Fa
[1993] No. 045 (Guo Shui Han [2011] No. 348) (਷೼೯[1993]045ࡈ
)( ਷೼Ռ[2011]348 ໮) dated June 28, 2011 and issued by the SAT
of the PRC, the tax rate applicable to dividends paid to Non-PRC Resident Individual Holders
of H Shares varies from 5.0% to 20.0%, depending on whether there is any applicable tax treaty
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between the PRC and the jurisdiction in which the Non-PRC Resident Individual Holder of H
Shares resides, as well as the tax arrangement between the PRC and Hong Kong (China).
Non-PRC Resident Individual Holders who reside in jurisdictions that have not entered into tax
treaties with the PRC are subject to a 20.0% withholding tax on dividends received from us.
In addition, under the Individual Income Tax Law of the PRC (੻೼
) and its implementation regulations, Non-PRC Resident Individual Holders of H Shares
are subject to individual income tax at a rate of 20.0% on gains realized upon the sale or other
disposition of H Shares. However, pursuant to the Circular on Certain Policy Questions
Concerning Individual Income Tax (ٙ
) (Cai Shui Zi [1994] No. 020) issued by the MOF and SAT on May 13, 1994, the
income gained by individual foreigners from dividends and bonuses of enterprise with foreign
investment are exempted from individual income tax for the time being.
In addition, under the Individual Income Tax Law of the PRC and its implementation
regulations, non-PRC resident individual holders are subject to individual income tax at a rate
of 20% on gains realized upon the sale or other disposition of H shares. However, pursuant to
the Circular Declaring that Individual Income Tax Continues to be Exempted over Income of
Individuals from Transfer of Shares (ஷ
) (Cai Shui Zi [1998] No. 61) issued by the MOF of the PRC and the SAT on March 30,
1998, gains of individuals derived from the transfer of listed shares of enterprises may be
exempt from individual income tax. Based on our knowledge, as of the Latest Practicable Date,
no aforesaid provisions have expressly provided that individual income tax shall be levied
non-PRC resident individual holders on the transfer of shares in PRC resident enterprises listed
on overseas stock exchanges, no such individual income tax was levied by PRC tax authorities
in practice. If such tax is collected in the future, the value of such individual holders’
investments in H Shares may be materially and adversely affected.
Under the Enterprise Income Tax Law of the PRC ()
(“EIT Law ”) and its implementation regulations, a non-PRC resident enterprise that do not
have establishments or premises in China, and those have establishments or premises in China
but whose income is not related to such establishments or premises is generally subject to
enterprise income tax at a rate of 10.0% with respect to its PRC-sourced income, including
dividends received from us and gains derived from the disposition of H shares. This rate may
be reduced under any special arrangement or applicable treaty between the PRC and the
jurisdiction in which the non-PRC resident enterprise resides. Pursuant to the Circular on
Questions Concerning Withholding of Enterprise Income Tax for Dividends Distributed by
Resident Enterprises in China to Non-resident Enterprises Holding H-shares of the Enterprises
(Guo Shui Han [2008] No. 897) (͏ΆุΣྤ̮H˾
(਷೼Ռ[2008]897 ໮)) promulgated by the SAT on
November 6, 2008, we intend to withhold tax at 10.0% from dividends payable to non-PRC
resident enterprise holders of H Shares (including HKSCC Nominees). Non-PRC resident
enterprises that are entitled to be taxed at a reduced rate under an applicable income tax treaty
or arrangement will be required to apply to the PRC tax authorities for a refund of any amount
withheld in excess of the applicable treaty rate, and payment of such refund will be subject to
the PRC tax authorities’ approval. PRC tax authorities are responsible for interpreting and
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implementing the EIT Law and its implementation rules, including whether and how enterprise
income tax on gains derived upon the sale or other disposition of H Shares will be collected
from non-PRC resident enterprise holders of H Shares. If such tax is collected in the future, the
value of such non-PRC resident enterprise holders’ investments in H Shares may be materially
and adversely affected.
Under the EIT Law, we cannot guarantee that we will be classified as a “high and
new-technology enterprise” of the PRC in the future. Such classification could result in
unfavorable tax consequences.
Pursuant to the EIT Law, a high and new-technology enterprise may enjoy a preferential
enterprise income tax rate of 15%. The Company received approvals by competent government
authorities, and were recognized as high and new-technology enterprises with a validity period
of three years, which entitled the Company a preferential tax rate of 15% from October 12,
2022 to October 11, 2025.
Despite being eligible for preferential tax rate as high and new-technology enterprises
during the Track Record Period, there is no assurance that the Company or the subsidiary
would successfully reapply for the certificates of high and new-technology enterprises so as to
enjoy the preferential tax rate after the expiry of the certificates, in which case our Group and
our subsidiaries will be subject to the normal enterprise income tax rate of 25% as for all PRC
enterprises. The effective tax rate will therefore significantly increase, which may have a
material adverse effect on our business, results of operations and financial condition.
It may be difficult to effect service of process upon us or our Directors or executive
officers.
Most of our Directors and executive officers reside within the PRC, and most of our assets
and substantially all of the assets of those persons are located within the PRC. Due to the
difference in legal systems, it may be difficult for investors to effect service of process within
certain jurisdictions outside the PRC upon us or those persons. Furthermore, the recognition
and enforcement of a foreign judgement is subject to the satisfaction of certain conditions
provided under the applicable PRC law, and the PRC does not have treaties providing for the
reciprocal recognition and enforcement of judgments of courts in the United States, the United
Kingdom, Japan or many other countries. In addition, Hong Kong (China) has no arrangement
for the reciprocal enforcement of judgments with the United States. As a result, satisfying the
conditions on the recognition and enforcement of a foreign judgement with the absent of
treaties providing for the reciprocal recognition and enforcement in China or Hong Kong
(China) of judgments of a court obtained in the United States and any of the other jurisdictions
mentioned above may be difficult, as the case in many other jurisdictions. Under the
Arrangement on Mutual Recognition and Enforcement of Judgments in Civil and Commercial
Matters by Courts of Mainland and of the Hong Kong Special Administrative Region Pursuant
to Agreed Jurisdiction by Parties Concerned (ʝႩ̙ձੂ
τર) (the “ Agreement ”) , where any designated
PRC court or any designated Hong Kong (China) court has made an enforceable final judgment
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requiring payment of money in a civil or commercial case pursuant to a choice of court
agreement in writing, any party concerned may apply to the relevant PRC court or Hong Kong
(China) court for recognition and enforcement of the judgment.
On January 18, 2019, the PRC Supreme Court and the government of the Hong Kong
Special Administrative Region entered into the Arrangement on Reciprocal Recognition and
Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and
of the Hong Kong Special Administrative Region (ʝႩ̙
τર) (the “ PRC-HK 2019 Arrangement ”), which extends the
scope of judicial assistance available for civil and commercial matters and discontinued the
requirements for a choice of court agreement for bilateral recognition and enforcement. The
Arrangement was superseded upon the effectiveness of the PRC-HK 2019 Arrangement on
January 29, 2024.
Under the PRC-HK 2019 Arrangement, any party concerned may apply to the relevant
PRC court or Hong Kong (China) court for recognition and enforcement of the effective
judgments in civil and commercial cases subject to the conditions set forth in the PRC-HK
2019 Arrangement. Although the PRC-HK 2019 Arrangement has been signed, the outcome
and effectiveness of any action brought under the PRC-HK 2019 Arrangement will be subject
to the PRC courts further adjudication in accordance with PRC laws, including the PRC civil
procedure law.
Laws and regulations over foreign currency conversion and on the remittance of
Renminbi into and out of the PRC may affect our utilization of our revenue and our
ability to remit dividends.
The PRC government imposes laws and regulations on the convertibility of the Renminbi
into foreign currencies and, in certain cases, the remittance of Renminbi into and out of the
PRC. Under the existing PRC foreign exchange regulations, foreign exchange transactions
under the current account conducted by us, including the payment of dividends, can be made
in foreign currencies without prior approval of SAFE by complying with certain procedural
requirements and conduct such transactions at designated foreign exchange banks within the
PRC that have the licenses to carry out foreign exchange business. Foreign exchange
transactions under the capital account, however, normally need to be approved by or registered
with the SAFE or its local branch unless otherwise permitted by law. Any insufficiency of
foreign exchange may restrict our ability to obtain sufficient foreign exchange for dividend
payments to shareholders or satisfy any other foreign exchange obligation. If we do not meet
the procedural approvals in respect of the foreign exchange administration, our potential
offshore capital expenditure plans and even our business may be materially and adversely
affected.
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Fluctuations in exchange rates could result in foreign currency exchange losses and could
materially and adversely affect our financial performance.
Our revenue and expenses are substantially denominated in Renminbi. We may need to
obtain foreign currency to make payments of declared dividends, if any, on our Shares. In
addition, our proceeds from the Global Offering will be denominated in Hong Kong dollars.
The value of currencies against the Hong Kong dollar, the U.S. dollar and other currencies is
based on rates set by the People’s Bank of China, which is affected by, among other things,
changes in global and geographical political and economic conditions, supply and demand in
the monetary markets, and economic and political developments domestically and
internationally. It is difficult for us to predict how external factors in respect of markets or
policies may impact the exchange rate between the Renminbi and the Hong Kong dollar, the
U.S. dollar or other currencies in the future. The proceeds from the Global Offering will be
received in Hong Kong dollars. As a result, any appreciation of the Renminbi against the Hong
Kong dollar may result in a decrease in the value of our proceeds from the Global Offering.
Conversely, any depreciation of the Renminbi may adversely affect the value of, and any
dividends payable on, our Shares in a foreign currency. In addition, there are limited
instruments available for us to reduce our foreign currency risk exposure at reasonable costs.
All of these global and geographical political and economic factors may adversely affect the
value of and any dividends payable on, our Shares in Hong Kong dollars.
Failure to comply with the PRC regulations regarding contribution of social insurance
premium or housing provident fund may subject us to fines and other legal or
administrative sanctions.
Pursuant to the PRC laws and regulations, we are required to participate in the employee
social welfare plan administered by local governments. Such plan consists of pension
insurance, medical insurance, work-related injury insurance, maternity insurance,
unemployment insurance and housing provident fund. The amount we are required to
contribute for each of our employees under such plan should be calculated based on the
employee’s actual salary level of previous year, and be subject to a minimum and maximum
level as from time to time prescribed by local authorities. During the Track Record Period, we
did not pay social insurance and housing provident fund in full for some of our employees
based on their actual salary level. During the Track Record Period, we used third-party service
providers to apply for social insurance registration and housing funds deposit registration and
to pay social insurance and housing fund for some of our employees. As a result, we may be
required by competent authorities to pay the outstanding amount, and could be subject to late
payment penalties or enforcement application made to the court. Pursuant to relevant PRC laws
and regulations, the relevant PRC authorities may demand the employers failing to perform the
aforesaid obligations to pay the outstanding social insurance contributions within a stipulated
timeframe and such employers may be liable to a late payment fee equal to 0.05% of the
outstanding amount for each day of delay. If employers fail to make such payments, they may
be liable to a fine of one to three times the amount of the outstanding contributions. With
respect to a failure to pay the full amount of housing provident fund as required, the housing
provident fund management center may require payment of the outstanding amount within a
stipulated timeframe. If the payment is not made within such time limit, an application may be
made to the PRC courts for compulsory enforcement.
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The enforcement of PRC Labor Contract Law and other labor related regulations may
materially affect our business, financial condition and results of operations.
Pursuant to the Labor Contract law of the PRC () and its
implementation rules, employers are subject to strict requirements in terms of signing labor
contracts, minimum wages, paying remuneration, overtime working hours limitations,
determining the term of employees’ probation and unilaterally terminating labor contracts. The
Labor Contract Law of the PRC and its implementation rules may limit our ability to terminate
employments or to make other labor adjustments at will.
During the Track Record Period, we engaged third-party employment agencies to dispatch
contract workers. On December 28, 2012, the Labor Contract Law of the PRC was amended
to impose more stringent requirements on labor dispatch and such amendments became
effective on July 1, 2013. For example, the number of dispatched contract workers that an
employer hires may not exceed a certain percentage of its total number of employees, to be
decided by the Ministry of Human Resources and Social Security and the dispatched contract
workers may only engage in temporary, auxiliary or substitute work. According to the Interim
Provisions on Labor Dispatch () promulgated by the Ministry of Human
Resources and Social Security on January 24, 2014, which became effective on March 1, 2014
(the “ Interim Provisions ”), the number of dispatched contract workers hired by an employer
shall not exceed 10% of the total number of its employees (including both directly hired
employees and dispatched contract workers).
During the Track Record Period, some of our subsidiaries had exceeded the above 10%
limit. Pursuant to relevant PRC laws and regulations, if an employer violates regulations
related to labor dispatch, the labor administration department will order it to make corrections
within a specified period. Failure to make corrections within the given period may lead to a fine
ranging from RMB5,000 to RMB10,000 per person. As of the Latest Practicable Date, all of
our subsidiaries within our Group had less than 10% of contract workers. Even though we had
not received any notice of warning or been subject to any administrative penalties or other
disciplinary actions from relevant PRC authorities during the Track Record Period and up to
the Latest Practicable Date, we cannot assure you that the relevant PRC authorities will not
take actions retrospectively against us for our past practice, which may adversely affect our
business, results of operations and reputation.
If we are deemed to have violated relevant labor-related laws and regulations, we could
be required to provide additional compensation to our employees and our business, financial
condition and results of operations could be materially and adversely affected.
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Failure to comply with environmental, safety and occupational health laws and
regulations in the PRC may have a material adverse effect on our business, financial
condition and results of operations.
Our business is subject to certain PRC laws and regulations relating to environmental,
safety and occupational health matters. Under these laws and regulations, we are required to
maintain safe production conditions and protect the occupational health of our employees. We
did not complete the safety and occupational health assessment, acceptance and filing
procedures for certain of our projects before commencement of construction or production. We
had obtained written confirmation or the credit reports from the competent authorities that we
had not been subject to any administrative penalties during the Track Record Period with
regards to safety and/or occupational health. While we have conducted periodic inspections of
our operating facilities and carry out equipment maintenance on a regular basis to ensure that
our operations are in compliance with applicable laws and regulations, we cannot assure you
that we will not experience any material accidents or worker injuries in the course of our
manufacturing process in the future.
In addition, our manufacturing process produces pollutants such as wastewater, waste gas,
noises and solid wastes. The discharge of wastewater and other pollutants from our
manufacturing operations into the environment may give rise to liabilities that may require us
to incur costs to remedy such discharge. During the Track Record Period, certain of our
facilities commenced construction or production without obtaining the relevant approvals with
regards to environmental impact assessment or without completing the environmental
protection projects acceptance inspection. We had obtained official credit reports for our Group
which confirm that we were not subject to any administrative penalties with regards to
environmental sector during the Track Record Period. However, we cannot assure you that all
situations that will give rise to material environmental liabilities will be discovered or any
environmental laws adopted in the future will not materially increase our operating costs and
other expense. Should the PRC impose stricter environmental protection standards and
regulations in the future, we cannot assure you that we will be able to comply with such new
regulations at reasonable costs, or at all. Any increase in production costs resulting from the
implementation of additional environmental protection measures and/or failure to comply with
new environmental laws or regulations may have a material adverse effect on our business,
financial condition or results of operations.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares, and their liquidity and market
price maybe volatile.
Prior to the Global Offering, there has been no public market for our H Shares. The initial
Offer Price for our H Shares to the public will be the result of negotiations between us and the
Joint Representatives (for themselves and on behalf of the Underwriters), and the Offer Price
may differ significantly from the market price of our H Shares following the Global Offering.
We have applied to the Stock Exchange for the listing of, and permission to deal in, the H
RISK FACTORS
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Shares. A listing on the Stock Exchange, however, does not guarantee that an active and liquid
trading market for our H Shares will develop, or if it does develop, that it will be sustained
following the Global Offering, or that the market price of our H Shares will not decline
following the Global Offering.
Furthermore, the price and trading volume of our H Shares may be volatile. The following
factors, among others, may cause the market price of our H Shares after the Global Offering
to vary significantly from the Offer Price:
 variations in our revenue, earnings and cash flow;
 unexpected business interruptions resulting from natural disasters or power
shortages;
 major changes in our key personnel or senior management;
 our inability to obtain or maintain regulatory approval for our operations;
 our inability to compete effectively in the market;
 political, economic, financial and social developments in China and Hong Kong
(China) and in the global economy;
 fluctuations in stock market prices and volume;
 changes in analysts’ estimates of our financial performance; and
 involvement in material litigation.
Moreover, shares of other companies listed on the Stock Exchange with operations and
assets in China have experienced significant price volatility in the past. It is possible that our
H Shares may be subject to changes in price not directly related to our performance and as a
result, investors in our H Shares may suffer substantial losses.
Substantial future sales or the expectation of substantial sales of our H Shares in the
public market and conversion of our Unlisted Shares into H Shares could cause the price
of our H Shares to decline and could materially impair our future ability to raise capital
through offerings of our H Shares.
Although our Controlling Shareholders are subject to restrictions on their sales of Shares
within 12 months from the Listing Date as described in “Underwriting” in this Prospectus,
future sales of a significant number of our H Shares by our Controlling Shareholders in the
public market after the Global Offering, or the perception that these sales could occur, could
cause the market price of our H Shares to decline and could materially impair our future ability
to raise capital through offerings of our H Shares. We cannot assure you that our Controlling
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Shareholders will not dispose of Shares held by them or that we will not issue Shares pursuant
to the general mandate to issue shares granted to our Directors or otherwise, upon the
expiration of restrictions set out above. We cannot predict the effect, if any, that any future
sales of Shares by our Controlling Shareholders, or the availability of Shares for sale by our
Controlling Shareholders, or the issuance of Shares by the Company may have on the market
price of the Shares. Sale or issuance of a substantial number of Shares by our Controlling
Shareholders or us, or the market perception that such sale or issuance may occur, could
materially and adversely affect the prevailing market price of the Shares.
We are currently applying for part of the Company’s Unlisted Shares to be converted into
H Shares after the completion of the Global Offering. According to the PRC Company Law,
the Unlisted Shares issued by the Company prior to the Global Offering are restricted from
trading within one year from the Listing Date. Such restriction from trading will limit the
number of H Shares to be circulated on the market, which will in turn adversely affect the
liquidity of the H Shares during such restriction period. If our application for the circulation
of our relevant Unlisted Shares on the Hong Kong Stock Exchange after the completion of the
Global Offering is successful, any future sales (after the expiration of the restrictions set out
above) of Unlisted Shares by relevant Shareholders in the public market may affect the market
price of our H Shares. Moreover, if we convert a substantial amount of Unlisted Shares into
H shares to be listed and traded in the future on the Hong Kong Stock Exchange, it may further
increase the supply of the H shares in the market, which may adversely affect the market price
of the H shares.
We may need additional capital, and the sale or issue of additional Shares or other equity
securities could result in additional dilution to our Shareholders.
Notwithstanding our current cash and cash equivalents and the net proceeds from the
Global Offering, we may require additional cash resources to finance our continued growth or
other future developments, including any investments or acquisitions we may decide to pursue.
The amount and timing of such additional financing needs will vary depending on the timing
of investments in and/or acquisitions of new businesses from third parties, and the amount of
cash flow from our operations. If our resources are insufficient to satisfy our cash
requirements, we may seek additional financing through selling additional equity or debt
securities or obtaining a credit facility. The sale of additional equity securities could result in
additional dilution to our Shareholders. The incurrence of indebtedness would result in
increased debt service obligations and could result in operating and financing covenants that
may, among other things, restrict our operations or our ability to pay dividends. Servicing such
debt obligations could also be burdensome to our operations. If we fail to service the debt
obligations or are unable to comply with such debt covenants, we could be in default under the
relevant debt obligations and our liquidity and financial conditions may be materially and
adversely affected.
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Our ability to obtain additional capital on acceptable terms is subject to a variety of
uncertainties, including:
 investors’ perception of, and demand for, securities of battery producers;
 conditions in Hong Kong (China) and other capital markets in which we may seek
to raise funds;
 our future results of operations, financial condition and cash flows;
 the applicable governmental regulation of foreign investment in new energy sectors;
 economic, political and other conditions in China; and
 the applicable governmental policies relating to foreign currency borrowings.
We cannot assure you that financing will be available in the amounts or on terms
acceptable to us, if at all. If we fail to raise additional funds, we may need to sell debt or
additional equity securities or reduce our growth to a level that can be supported by our cash
flow, or defer planned expenditures.
As the Offer Price of our H Shares is higher than our consolidated net tangible asset book
value per Share, purchasers of our H Shares in the Global Offering may experience
immediate dilution upon such purchases.
As the Offer Price of our H Shares is higher than the consolidated net tangible assets per
Share immediately prior to the Global Offering, purchasers of our H Shares in the Global
Offering may experience an immediate dilution. Our existing Shareholders will receive an
increase in the pro forma adjusted consolidated net tangible asset value per Share of their
Shares. In addition, holders of our H Shares may experience further dilution of their interest
if any Shares are issued upon exercise of any options granted under the Pre-IPO Share Option
Scheme, or if we issue additional Shares in the future to raise additional capital.
Future sale or major divestment of Shares by our Controlling Shareholders may
materially and adversely affect the prevailing market price of our H Shares.
Our Shares held by our Controlling Shareholders are subject to certain lock-up periods,
the details of which are set out in the section headed “Underwriting” in this Prospectus.
However, there is no assurance that after the restrictions of the lock-up periods expire, our
Controlling Shareholders will not dispose of any Shares. Sale of substantial amounts of our
Shares in the public market, or the perception that these sales may occur, may materially and
adversely affect the prevailing market price of our H Shares.
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Our Controlling Shareholders may have substantial influence over the Company and
their interests may not be aligned with the interests of other Shareholders.
Our Controlling Shareholders have substantial influence over our business, including
matters relating to our management, policies and decisions regarding mergers, expansion plans,
consolidations and sales of all or substantially all of our assets, election of Directors and other
significant corporate actions. Immediately following the completion of the Global Offering,
our Controlling Shareholders will be entitled to exercise approximately 46.21% of the voting
rights of the Company. This concentration of ownership may discourage, delay or prevent a
change in control of the Company, which could deprive other Shareholders of an opportunity
to receive a premium for their Shares as part of a sale of the Company and might reduce the
price of our H Shares. These events may occur even if they are opposed by our other
Shareholders. In addition, the interests of our Controlling Shareholders may differ from the
interests of our other Shareholders. It is possible that our Controlling Shareholder may exercise
its 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.
We cannot assure you whether and when we will declare and pay dividends in the future.
While dividends may be paid out of distributable profits under our Articles of
Association, no dividends were distributed during the Track Record Period. Distributable
profits mean our net profits for a period, plus the distributable profits or net of the accumulated
losses, if any, at the beginning of such period, less statutory reserve fund appropriations to
general risk reserve, transaction risk reserve, and discretionary surplus reserve (as approved by
our shareholders’ meeting). As a result, we may not have sufficient profit to enable us to make
future dividend distributions to our shareholders, even if our financial statements prepared in
accordance with IFRSs indicate that our operations have been profitable.
Furthermore, future determination of dividends will also depend on various factors,
including but not limited to our results of operations, cash flows and financial conditions,
capital adequacy ratio, operation and capital expenditure requirement and other factors that our
Board consider relevant. We cannot assure you that the factors we take into consideration will
not change in the future.
Certain facts, forecast and statistics contained in this Prospectus are derived from
publicly available sources from official government publications and they may not be
reliable.
Certain facts, forecast and statistics contained in this Prospectus relating to China, the
PRC economy and the industry in which we operate have been derived from various official
government publications. We have taken reasonable care in the reproduction or extraction of
the official government publications for the purpose of disclosure in this Prospectus. However,
the information from the official government sources have not been prepared or independently
verified by us, the Joint Sponsors, Joint Representatives, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the
RISK FACTORS
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Capital Market Intermediaries or any of their respective affiliates or advisors and, therefore, we
make no representation as to the accuracy of such facts, forecast and statistics, which may not
be consistent with other information compiled within or outside the PRC. Due to possibly
flawed or ineffective collection methods or discrepancies between published information and
market practice, such statistics in this Prospectus may be inaccurate or may not be comparable
to statistics produced with respect to other economies. Further, there is no assurance that they
are stated or compiled on the same basis or with the same degree of accuracy as the case may
be in other jurisdictions. In all cases, investors should give consideration as to how much
weight or importance they should attach to or place on such facts, forecast and statistics.
Forward-looking statements contained in this Prospectus are subject to risks and
uncertainties.
This Prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as “anticipate,” “believe,” “could,” “going forward,”
“intend,” “plan,” “project,” “seek,” “expect,” “may,” “ought to,” “should,” “would” or “will”
and similar expressions. You are cautioned that reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this Prospectus should not be regarded as representations or
warranties by us that our plans and objectives will be achieved and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this Prospectus, whether as a
result of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this
Prospectus are qualified by reference to this cautionary statement.
Investors should read the entire Prospectus carefully and should not consider any
particular statements in this Prospectus or in published media reports without carefully
considering the risks and other information contained in this Prospectus.
Prior to the publication of this Prospectus, there has been coverage in the media regarding
us, the Global Offering or our Controlling Shareholders, which contained among other things,
certain financial information, projections, valuations and other forward-looking information
about us and the Global Offering. We have not authorized the disclosure of any such
information in the press or media and do not accept any responsibility for the accuracy or
completeness of such media coverage or forward-looking statements. We make no
representation as to the appropriateness, accuracy, completeness or reliability of any
information disseminated in the media. We disclaim any information in the media to the extent
that such information is inconsistent or conflicts with the information contained in this
Prospectus. Accordingly, prospective investors are cautioned to make their investment
decisions on the basis of the information contained in this Prospectus only and should not rely
on any other information.
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In preparation for the Listing, our Company has sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
According to Rule 8.12 of the Listing Rules, a new applicant for a primary listing on the
Stock Exchange must have a sufficient management presence in Hong Kong. This normally
means that at least two of our executive Directors must be ordinarily resident in Hong Kong.
Rule 19A.15 of the Listing Rules further provides that the requirement in Rule 8.12 of the
Listing Rules may be waived by having regard to, among other considerations, our
arrangements for maintaining regular communication with the Stock Exchange.
We do not have a sufficient management presence in Hong Kong for the purpose of
satisfying the requirement under Rule 8.12 and Rule 19A.15 of the Listing Rules. Our
management headquarters, senior management, business operations and assets are primarily
based outside Hong Kong. The Directors consider that either by means of relocation of our
existing executive Directors or appointment of additional executive Directors who will be
ordinarily resident in Hong Kong would not be beneficial to, or appropriate for, our Group and
therefore would not be in the best interests of our Company or the Shareholders as a whole.
As such, 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. We will
ensure that there is a regular and effective communication between us and the Stock Exchange
by way of, among others, the following conditions:
(a) pursuant to Rule 3.05 of the Listing Rules, we have appointed and will continue to
maintain two authorized representatives, who will act as our principal channel of
communication with the Stock Exchange and ensure that our Company complies
with the Listing Rules at all times. The two authorized representatives appointed are
Ms. Cao Fang (ٹand Ms. Ho Wing Nga ( О൘ඩ)( “Ms. Ho ”) (the “ Authorized
Representatives ”). Ms. Ho is situated and based in Hong Kong, and will be
available to meet with the Stock Exchange in Hong Kong within a reasonable time
frame upon the request of the Stock Exchange. Both of the Authorized
Representatives will be readily contactable by telephone and email to deal promptly
with enquiries from the Stock Exchange. Our Company has provided contact details
of the two Authorized Representatives to the Stock Exchange and will inform the
Stock Exchange promptly in respect of any change in the authorized representatives;
(b) both Authorized Representatives have means to contact all Directors (including the
independent non-executive Directors) promptly at all times as and when the Stock
Exchange wishes to contact our Directors on any matters. Our Company has
implemented a policy whereby (i) each Director has provided their respective valid
phone numbers or other means of communication to the Authorized Representatives;
(ii) in the event that a Director expects to travel or is otherwise out of office,
he/she will endeavor to provide his/her phone number of the place of his/her
accommodation to the Authorized Representatives or maintain an open line of
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communication via his/her mobile phone; and (iii) each Director has provided
his/her mobile phone number, office phone number, e-mail address and, where
available, fax number to the Stock Exchange and will inform the Stock Exchange
promptly if there are any changes to the contact details of the Directors;
(c) pursuant to Rule 3.20 of the Listing Rules, each Director has provided his/her
contact information to the Stock Exchange and to the Authorized Representatives.
This will ensure that the Stock Exchange and the Authorized Representatives should
have means for contacting all Directors promptly at all times as and when require;
(d) all our Directors who are not ordinarily resident in Hong Kong have confirmed that
they possess or can apply for valid travel documents to visit Hong Kong and will be
able to meet with relevant members of the Stock Exchange in Hong Kong upon
reasonable notice, when required;
(e) pursuant to Rule 3A.19 of the Listing Rules, we have retained the services of Maxa
Capital Limited as our Compliance Adviser upon Listing for a period commencing
on the Listing Date and ending on the date on which we comply with Rule 13.46 of
the Listing Rules in respect of our financial results for the first full financial year
commencing after the Listing Date, which will act as an additional channel of
communication with the Stock Exchange and will be available to respond to
enquiries from the Stock Exchange. The contact details of the Compliance Adviser
have been provided to the Stock Exchange;
(f) our Authorized Representatives, Directors and other officers of our Company will
provide promptly such information and assistance as the Compliance Adviser may
reasonably require in connection with the performance of the Compliance Adviser’s
duties as set forth in Chapter 3A of the Listing Rules. There will be adequate and
efficient means of communication between our Company, Authorized
Representatives, Directors and other officers of our Company and the Compliance
Adviser, and, to the extent reasonably practicable and legally permissible, we will
keep the Compliance Adviser informed of all communications and dealings between
the Stock Exchange and us; meetings between the Stock Exchange and our Directors
could be arranged through our Authorized Representatives or the Compliance
Adviser, or directly with our Directors within a reasonable time frame. We will
inform the Stock Exchange as soon as practicable in respect of any change of
Authorized Representatives and/or the Compliance Adviser;
(g) we will appoint other professional advisors (including legal advisors in Hong Kong)
after the Listing to assist us in dealing with any questions which may be raised by
the Stock Exchange and to ensure that there will be prompt and effective
communication with the Stock Exchange; and
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(h) our Company has designated one of our staff members as the communication officer
at our headquarters after the Listing who will be responsible for maintaining
day-to-day communication with the Authorized Representatives and our Company’s
professional advisors in Hong Kong, including our legal advisors in Hong Kong and
the Compliance Adviser, to keep abreast of any correspondences and/or enquiries
from the Stock Exchange and report to our executive Directors to further facilitate
communication between the Stock Exchange and our Company.
W AIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules and Chapter 3.10 of the Guide for
New Listing Applicants, a new applicant for listing on the Stock Exchange 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 provides that the Stock
Exchange considers the following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); and
(c) 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 provides that the Stock Exchange
considers the following factors in assessing the “relevant experience” of the individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Our Company has appointed Ms. Xu Jing (ẙ)( “ Ms. Xu ”) and Ms. Ho as our joint
company secretaries. See “Directors, Supervisors and Senior Management — Joint Company
Secretaries” for their biographical details.
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The Company believes that it would be in the best interests of the Company and the
corporate governance of the Group to have as its joint company secretary a person such as Ms.
Xu, who has been the deputy chief financial officer of the Company since July 2020 and who
has day-to-day knowledge of the Company’s affairs. Ms. Xu has the necessary nexus to the
Board and close working relationship with management of the Company in order to perform
the function of a joint company secretary and to take the necessary actions in an effective and
efficient manner. However, Ms. Xu presently does not possess any of the qualifications under
Rules 3.28 and 8.17 of the Listing Rules, and may not be able to solely fulfill the requirements
of the Listing Rules. Therefore, we have appointed Ms. Ho, who is a fellow member of both
The Hong Kong Chartered Governance Institute and The Chartered Governance Institute and
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. Xu for an initial period
of three years from the Listing Date to enable Ms. Xu 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.
Accordingly, we have applied to the Stock Exchange for, and the Stock 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. Xu 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, and is
granted on the condition that Ms. Ho, as a joint company secretary of our Company, will work
closely with Ms. Xu to jointly discharge the duties and responsibilities as company secretaries
and assist Ms. Xu in acquiring the relevant experience as required under Rules 3.28 and 8.17
of the Listing Rules. Ms. Ho will also assist Ms. Xu in organizing Board meetings and
Shareholders’ meetings of our Company as well as other matters of our Company which are
incidental to the duties of a company secretary. Ms. Ho is expected to work closely with Ms.
Xu and will maintain regular contact with Ms. Xu, the Directors and the senior management
of our Company. In addition, Ms. Xu will comply with the annual professional training
requirement under Rule 3.29 of the Listing Rules and will enhance her knowledge of the
Listing Rules during the three-year period from the Listing Date. Ms. Xu will also be assisted
by (a) the Compliance Adviser, particularly in relation to compliance with the Listing Rules;
and (b) the Hong Kong legal advisors of our Company, on matters concerning our Company’s
ongoing compliance with the Listing Rules and the applicable laws and regulations.
Pursuant to Chapter 3.10 of the Guide for New Listing Applicants, the waiver will be
revoked immediately if Ms. Ho ceases to provide assistance to Ms. Xu as a joint company
secretary for the three-year period after the Listing Date or where there are material breaches
of the Listing Rules by our Company.
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Prior to the expiration of the initial three-year period, the qualifications and experience
of Ms. Xu 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 demonstrate that Ms. Xu, having benefited from the assistance of Ms.
Ho for the preceding three years, will have acquired the skills necessary to carry out the duties
of 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.
W AIVER FROM STRICT COMPLIANCE WITH RULE 10.04 OF THE LISTING
RULES AND THE STOCK EXCHANGE’S CONSENT UNDER PARAGRAPH 5(2) OF
APPENDIX F1 TO THE LISTING RULES IN RESPECT OF SUBSCRIPTIONS OF
OFFER SHARES BY CERTAIN EXISTING SHAREHOLDER AND CLOSE
ASSOCIATES AS CORNERSTONE INVESTORS
Rule 10.04 of the Listing Rules provides that an existing shareholder of the issuer may
only subscribe for or purchase any securities for which listing is sought which are being
marketed by or on behalf of a new applicant either in his or its own name or through nominees
if the following conditions under Rules 10.03(1) and 10.03(2) of the Listing Rules are fulfilled:
(i) that no securities are offered to the existing shareholder on a preferential basis and
no preferential treatment is given to the existing shareholder in the allocation of the
securities; and
(ii) that the minimum prescribed percentage of public shareholders required by Rule
8.08(1) of the Listing Rules is achieved.
Paragraph 5(2) of Appendix F1 to the Listing Rules provides that, without the prior
written consent of the Stock Exchange, no allocations will be permitted to directors or existing
shareholders of the applicant or their close associates, whether in their own names or through
nominees unless the conditions set out in Rules 10.03 and 10.04 (as set out above) are fulfilled.
Paragraph 12 of Chapter 4.15 of the Guide for New Listing Applicants provides that the
Stock Exchange will consider granting a waiver from Rule 10.04 of the Listing Rules and a
consent, pursuant to paragraph 5(2) of Appendix F1 to the Listing Rules, to allow a listing
applicant’s existing shareholders or their close associates to participate in its initial public
offering if any actual or perceived preferential treatment arising from their ability to influence
the listing applicant during the allocation process can be addressed.
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I. Subscription of Offer Shares by Jiangsu Mixed Ownership Reform Fund and Suzhou
High-end Equipment Fund and as Cornerstone Investors
Paragraph 13 of Chapter 4.15 of the Guide for New Listing Applicants sets out the
conditions required to be fulfilled when the Stock Exchange considers granting a waiver and
consent from Rule 10.04 of the Listing Rules to placing to existing shareholders or their close
associates (the “ Existing Shareholder Conditions ”).
Suchuang Energy Investment (as defined below) and Nanjing Konggang (as defined
below) are existing Shareholders which together hold approximately 2.49% of the total issued
share capital of the Company immediately prior to the Global Offering. Suchuang Energy
Investment, being a limited partnership established under the laws of the PRC conducting
venture capital investments and R&D of emerging energy technologies, is ultimately controlled
by Suzhou Finance Bureau (҅). Nanjing Konggang, being a limited liability
company established under the laws of the PRC and primarily engaged in land and
infrastructure development, construction, property management, information distribution and
logistics-related services, is ultimately controlled by Nanjing Jiangning Economic and
Technological Development Zone Management Committee (ԯϪྐྵ຾᏶Ҧஔක೯ਜ၍ଣ։
ึ). Suzhou Finance Bureau and Nanjing Jiangning Economic and Technological
Development Zone Management Committee are government bodies of Jiangsu Province.
As further described in the section headed “Cornerstone Investors”, Jiangsu State-Owned
Enterprise Mixed Ownership Reform Fund (Limited Partnership) (ϞՓҷ
ږ(Υྫ)) (“ Jiangsu Mixed Ownership Reform Fund ”) and Jiangsu Suzhou
High-end Equipment Industry Special Mother Fund (Limited Partnership) ( Ϫᘽᘽψ৷၌ༀ௪
ږ(Υྫ)) (“ Suzhou High-end Equipment Fund ”) are respectively
ultimately controlled by Jiangsu Provincial People’s Government (ִ݁and
Suzhou Finance Bureau, being government bodies of Jiangsu Province. Accordingly, Jiangsu
Mixed Ownership Reform Fund and Suzhou High-end Equipment Fund, being our Cornerstone
Investors, are close associates of Suchuang Energy Investment and Nanjing Konggang, being
our existing Shareholders which together hold approximately 2.49% of the total issued share
capital of the Company immediately prior to the Global Offering. Each of Jiangsu Mixed
Ownership Reform Fund and Suzhou High-end Equipment Fund have entered into a
cornerstone investment agreement with our Company. For further details of such cornerstone
investments, please refer to the section headed “Cornerstone Investors”.
As further described in the section headed “History, Reorganization and Corporate
Structure”, Changshu Southeast Industrial Investment Co., Ltd. (ʮ̡)
(“Southeast Investment ”), Changshu Southeast Investment Holding Co., Ltd. (ҳ
ʮ̡)( “Southeast Investment Holding ”) and Changshu Southeast Xinneng Equity
Investment Partnership (L.P.) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Southeast
Xinneng ”, and together with Southeast Investment and Southeast Investment Holding, the
“Changshu Entities ”) are existing Shareholders which are ultimately controlled by the
Changshu Finance Bureau (State-owned Assets Supervision and Administration Office of
Changshu Municipal Government) (҅(܃))
“(Changshu SASAC ”).
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While Changshu is a county-level city ( ጤॴ̹) under the supervision of Suzhou and
ultimately subject to the supervision of the People’s Government of Jiangsu Province, the
Changshu Entities are under the supervision of Changshu SASAC and are not under direct
control or supervision of the People’s Government of Jiangsu Province or People’s Government
of Suzhou (including but not limited to Suzhou Finance Bureau) and therefore the Changshu
Entities are independent from the People’s Government of Jiangsu Province, the People’s
Government of Suzhou, and their controlled entities. None of the Changshu Entities is required
to obtain the approval of, or report to, the Suzhou Finance Bureau or Suzhou SASAC for its
investment activities. Neither Jiangsu Mixed Ownership Reform Fund nor Suzhou High-end
Equipment Fund exerts any influence over the investment decisions taken by the Changshu
Entities, given such decisions are made by the Changshu Entities with the approval of and/or
filing with Changshu SASAC, without any need to seek the approval of or make filing with any
upper governmental bodies. The aforementioned relationship of supervision of Changshu by
Suzhou and the People’s Government of Jiangsu Province shall not be considered as indirect
approval or administrative management relationship. According to the Enterprise State-owned
Assets Law of the PRC (), state-owned assets belong to
the State (i.e., such assets are owned by the entire people within the PRC). The State Council
and local governments act, respectively, as investors on behalf of the State, exercising their
respective rights and fulfilling their respective responsibilities in these state-invested
enterprises at their respective levels. Furthermore, in accordance with the Measures for
Guidance and Supervision on Local State-owned Assets Supervisory and Administrative Work
() (the “ Local State-Owned Assets Measures ”), it is
a principle that the State Council and local governments are to independently fulfill their
investor responsibilities. Superior state-owned assets supervision and administrative bodies
must respect and protect the rights of the investors of subordinate state-owned assets
supervision and administrative bodies, and accordingly, these superior state-owned assets
supervision and administrative bodies should not supplant or interfere with the execution of
investor duties by their subordinate bodies. For example, Changshu SASAC, being the
county-level state-owned assets management bureau, is only supervised (ኬ) but is
neither controlled by Suzhou SASAC nor by Jiangsu SASAC or the People’s Government of
Jiangsu Province. According to the Local State-Owned Assets Measures, the primary methods
of carrying out supervision (ኬ) by superior SASAC include, among others, issuing
normative documents, strengthening research and guidance, formulating work plans to address
prominent issues, and conducting inspections to monitor the implementation of state-owned
assets supervision laws and regulations. As such, Jiangsu Mixed Ownership Reform Fund and
Suzhou High-end Equipment Fund are not close associates of the Changshu Entities, for the
purpose of the Existing Shareholder Conditions.
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We have applied to the Stock Exchange for, and the Stock Exchange has granted us, a
waiver from strict compliance with Rule 10.04 of, and the consent under paragraph 5(2) of
Appendix F1 to, the Listing Rules for permitting Jiangsu Mixed Ownership Reform Fund and
Suzhou High-end Equipment Fund to participate in the Global Offering as cornerstone
investors on the following grounds and conditions:
 Shareholding and independence of Suchuang Energy Investment and Nanjing
Konggang — Pursuant to Chapter 4.15 of the Guide for New Listing Applicants, one
of the Existing Shareholders Conditions for the Stock Exchange to grant a consent
to allow the subscription of Offer Shares by an existing shareholder or its close
associate is that such relevant existing shareholder has less than 5% voting rights in
the listing applicant before the offering. Suchuang Energy Investment and Nanjing
Konggang are interested in a total of approximately 2.49% of the Company’s voting
rights immediately prior to the Global Offering, which is less than 5% of the
Company’s voting rights prior to the Listing. In addition, Suchuang Energy
Investment and Nanjing Konggang are not core connected persons of the Company
or its close associate;
 Limited influence of Suchuang Energy Investment and Nanjing Konggang —
Suchuang Energy Investment and Nanjing Konggang, together holding
approximately 2.49% of the equity interests of the Company immediately prior to
the Global Offering, (a) are only minority financial investors of the Company (i.e.
the Company operates independently from Suchuang Energy Investment, Suzhou
Finance Bureau, Nanjing Konggang and Nanjing Jiangning Management
Committee, and none of Suchuang Energy Investment, Suzhou Finance Bureau,
Nanjing Konggang and Nanjing Jiangning Management Committee has any direct
influence over the day-to-day operations, management, and key personnel
appointment of the Company); (b) do not have any power to appoint Directors or any
other special rights in the Company which may influence the allocation process; and
(c) do not have access to material non-public information in respect of the Company
or the Global Offering. Accordingly, Suchuang Energy Investment and Nanjing
Konggang have no influence over the allocation process of the Global Offering;
 No other preferential treatment will be given under the Proposed Placing —N o
preferential treatment has been, or will be, given to Jiangsu Mixed Ownership
Reform Fund and Suzhou High-end Equipment Fund by virtue of the relationship of
Suchuang Energy Investment and Nanjing Konggang with the Company other than
the preferential treatment of assured entitlement under cornerstone investments; the
cornerstone investment agreements to be entered into with Jiangsu Mixed
Ownership Reform Fund and Suzhou High-end Equipment Fund, respectively, will
not contain any material term which is more favourable to Jiangsu Mixed Ownership
Reform Fund and Suzhou High-end Equipment Fund than those in other cornerstone
investment agreements;
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 Compliance with the minimum public float requirement — The Company and the
Joint Sponsors note the public float requirements under Rules 8.08(1) and 8.08(3) of
the Listing Rules, and the allocation to Jiangsu Mixed Ownership Reform Fund and
Suzhou High-end Equipment Fund in the Global Offering will not affect the
Company’s ability to satisfy the public float requirement as prescribed by the Stock
Exchange under the waiver from strict compliance with the minimum public float
requirement under Rule 8.08(1)(a) of the Listing Rules applied for and granted;
 Confirmations from the Joint Sponsors — The Joint Sponsors confirm that, to the
best of their knowledge and belief, they have no reason to believe that either Jiangsu
Mixed Ownership Reform Fund or Suzhou High-end Equipment Fund received any
preferential treatment in the initial public offering allocation as a cornerstone
investor by virtue of the relationship of Suchuang Energy Investment and Nanjing
Konggang with the Company other than the preferential treatment of assured
entitlement to Jiangsu Mixed Ownership Reform Fund and Suzhou High-end
Equipment Fund under their Proposed Cornerstone Investments, and further confirm
that details of the allocation will be disclosed in the prospectus and the allotment
results announcement to be published in connection with the Global Offering; and
 Sufficient disclosure will be made by the Company — The details of the Proposed
Cornerstone Investments by Suzhou High-end Equipment Fund and Jiangsu Mixed
Ownership Reform Fund, including the identity and background information of
Suzhou High-end Equipment Fund and Jiangsu Mixed Ownership Reform Fund, and
the material terms of their cornerstone investments, are disclosed in this Prospectus.
Results of allocation of Offer Shares to Jiangsu Mixed Ownership Reform Fund and
Suzhou High-end Equipment Fund will also be disclosed in the Company’s
allotment results announcement to be published in connection with the Global
Offering.
II. Subscription of Offer Shares by Southeast Investment Holding as Cornerstone
Investor
Paragraph 17 of Chapter 4.15 of the Guide for New Listing Applicants also provides that
the Stock Exchange will consider granting a consent and/or waiver to allow an existing
shareholder and/or its close associates and a cornerstone investor to subscribe or purchase
further securities in the IPO without fulfilment of Existing Shareholder Conditions subject to
the disclosure of details of the allocation in the listing document and/or the allotment results
announcement, and the following:
(i) the offer (excluding any over-allocation) has a total value of at least HK$1 billion;
(ii) securities allocated to all existing shareholders and their close associates (whether
as cornerstone investors and/or as placees) as permitted under this exemption do not
exceed 30% of the total number of securities offered; and
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(iii) each director, chief executive, controlling shareholder and, in the case of PRC
issuers, supervisor of the applicant must have confirmed that no securities have been
allocated to them or their respective close associates under this exemption.
(together, the “ Size-based Exemption Conditions ”)
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 5(2) of Appendix F1 to the Listing Rules and paragraph 17 of Chapter 4.15 of the
Guide for New Listing Applicants for allocation of securities to Southeast Investment Holding,
our existing Shareholder, on the conditions that:
(i) the total value of the offer (excluding any over-allocation) will be HK$1.005 billion,
which exceeds HK$1 billion as required by paragraph 17(i) of Chapter 4.15 of the
Guide for New Listing Applicants;
(ii) the allocation to Southeast Investment Holding as permitted under this exemption
represents 30.00% of the total number of H Shares to be issued pursuant to the
Global Offering (based on the Offer Price of HK$8.27 and assuming the Over-
allotment Option is not exercised), which is in compliance with paragraph 17(ii) of
Chapter 4.15 of the Guide for New Listing Applicants;
(iii) each Director, Supervisor, chief executive and controlling shareholder of the
Company has confirmed that no securities in the Global Offering have been
allocated to them or their respective close associates under this exemption as
required by paragraph 17(iii) of Chapter 4.15 of the Guide for New Listing
Applicants;
(iv) the allocation of H Shares to the Southeast Investment Holding will not affect the
Company’s ability to satisfy the public float requirement as prescribed by the Stock
Exchange under the waiver from strict compliance with the minimum public float
requirement under Rule 8.08(1)(a) of the Listing Rules applied for and granted
separately; and
(v) a full disclosure of details of H Shares to be allocated to Southeast Investment
Holding is made in this Prospectus and will be made in the allotment results
announcement of the Company.
W AIVER IN RELATION TO PUBLIC FLOAT REQUIREMENTS
Rule 8.08(1)(a) of the Listing Rules requires that there must be an open market in the
securities for which listing is sought, and that a sufficient public float of an issuer’s listed
securities shall be maintained. Generally, at least 25% of the issuer’s total issued share capital
must at all times be held by the public. Pursuant to Rule 8.08(1)(d) of the Listing Rules, the
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Stock Exchange may, subject to certain conditions and at its discretion, accept a lower
percentage of between 15% and 25% in the case of issuers with an expected market
capitalization at the time of listing of over HK$10 billion.
Based on the Offer Price HK$8.27 per H Share and assuming no exercise of the
Over-allotment Option, we will achieve a minimum market capitalization of at least HK$20.7
billion upon Listing and we have applied to the Stock Exchange to request the Stock Exchange
to exercise, and the Stock Exchange has confirmed that it will exercise, its discretion under
Rule 8.08(1)(d) of the Listing Rules, pursuant to which the public float of the Company may
fall below 25% of the issued share capital of the Company, to allow the minimum percentage
of the Company’s issued share capital to be held by the public to be the higher of (i) 21.16%
of the total issued share capital of the Company (assuming the conversion of Unlisted Shares
into H Shares is completed and the Over-allotment Option is not exercised); or (ii) such
percentage of Shares to be held by the public H Shareholders upon completion of the Global
Offering and the last exercise of the Over-allotment Option.
In order to support the application of this waiver, we have confirmed to the Stock
Exchange that:
(a) we have an expected market capitalization at the time of Listing of over HK$10
billion;
(b) there will be an open market in the H Shares offered, and the quantity and extent of
their distribution would enable the market to operate properly with a lower
percentage of public float;
(c) we will (i) make appropriate disclosure of the lower prescribed percentage of public
float in the Prospectus and the announcement of allotment results and (ii) announce
the percentage of shares held by the public immediately after the completion of the
Global Offering (before any exercise of the Over-allotment Option) and upon any
exercise of the Over-allotment Option such that the public will be informed of the
minimum public float requirement applicable to the Company;
(d) we will confirm sufficiency of public float in its successive annual reports after the
Listing;
(e) we will implement appropriate measures and mechanisms to ensure continual
maintenance of the minimum 21.16% public float (or a higher percentage upon
completion of the last exercise of the Over-allotment Option) after the Listing; and
(f) in the event that the public float percentage falls below the minimum percentage
prescribed by the Stock Exchange, our Directors will take appropriate steps, which
may include a further issue of H Shares to Independent Third Parties, to ensure the
minimum percentage of public float prescribed by the Stock Exchange will be
complied with.
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This Prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (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 us. Our Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief, the information contained in
this Prospectus is accurate and complete in all material respects and not misleading or
deceptive, and there are no other facts, the omission of which would make this Prospectus or
any statement in this Prospectus misleading.
CSRC FILING
We have filed the required documents with the CSRC, and the CSRC has issued the filing
notice dated February 19, 2025 on the completion of the PRC filing procedures for the
conversion of certain Unlisted Shares into H Shares and the listing of the H Shares on the Hong
Kong Stock Exchange. The notice of filing only confirms the filing information of our
Company’s overseas offering and listing, and does not represent that the CSRC makes any
substantial judgment or guarantee about the investment value of our Company’s securities or
the proceeds of investors, nor does it indicate that the CSRC makes any guarantee or
affirmation about the authenticity, accuracy and completeness of this Prospectus.
UNDERWRITING
This Prospectus is published solely in connection with the Hong Kong Public Offering
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this Prospectus contain the terms and conditions of the Hong Kong Public Offering. The Global
Offering comprises the Hong Kong Public Offering of initially 12,152,400 H Shares and the
International Offering of initially 109,371,300 H Shares (subject, in each case, to reallocation
on the basis described in “Structure of the Global Offering”).
The listing of the Offer Shares on the Hong Kong Stock Exchange is sponsored by the
Joint Sponsors. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public
Offering is underwritten by the Hong Kong Underwriters on a conditional basis, with one of
the conditions being that the Offer Price is agreed between the Joint Representatives (for
themselves and on behalf of the Hong Kong Underwriters) and us. The International Offering
is managed by the Joint Representatives and is underwritten by the International Underwriters.
The International Underwriting Agreement is expected to be entered into on or about April 10,
2025. See “Underwriting” for details about the Underwriters and the underwriting
arrangements.
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RESTRICTIONS ON OFFER AND SALE OF SHARES
No action has been taken to permit a Hong Kong Public Offering of the Offer Shares or
the general distribution of this Prospectus in any jurisdiction other than Hong Kong.
Accordingly, this Prospectus may not be used for the purposes of, and does not constitute, an
offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this Prospectus and the offering and sales 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. Each
person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will be
required to confirm, or be deemed by his or her acquisition of Hong Kong Offer Shares to
confirm, that he or she is aware of the restrictions on offers and sales of the Offer Shares
described in this Prospectus. In particular, the Offer Shares have not been offered or sold, and
will not be offered or sold, directly or indirectly, in the PRC.
The Offer Shares are offered for subscription 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 in connection with the Global
Offering to give any information, or to make any representation not contained in this
Prospectus, and any information or representation not contained in this Prospectus must not be
relied upon as having been authorized by the Company, the Joint Sponsors, the Joint
Representatives, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of their respective directors, officers, employees, agents,
affiliates or advisers or any other persons or parties involved in the Global Offering. For further
details of the structure of the Global Offering, including its conditions, and the procedures for
applying for Hong Kong Offer Shares, see “Structure of the Global Offering” and “How to
Apply for Hong Kong Offer Shares”.
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Listing Committee for the granting of listing of, and permission
to deal in, our H Shares to be converted from the Unlisted Shares, and our H Shares to be issued
pursuant to the Global Offering (including any H Shares which may be issued pursuant to the
Over-allotment Option). Dealings in the H Shares on the Hong Kong Stock Exchange are
expected to commence on Monday, April 14, 2025. No part of our H Shares is listed on or dealt
in on any other stock exchange, and no such listing or permission to list is being or proposed
to be sought in the near future.
The H Shares will be traded in board lot of 300 H Shares. The stock code of the H Shares
is 3677.
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Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotments made in respect of any applications will be invalid if the listing of,
and permission to deal in, the Offer Shares on the Hong Kong 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 the
Company by the Hong Kong Stock Exchange.
COMPLIANCE WITH LISTING RULES
We will comply with applicable laws and regulations in Hong Kong (including the Listing
Rules) and any other undertakings which have been given in favor of the Hong Kong Stock
Exchange from time to time. If the Listing Committee finds that there has been a breach by us
of the Listing Rules or such other undertakings which may have been given by us in favor of
the Hong Kong Stock Exchange from time to time, the Listing Committee may instigate
cancellation or disciplinary proceedings in accordance with the Listing Rules.
H SHARE REGISTER AND STAMP DUTY
All H Shares issued pursuant to applications made in the Hong Kong Public Offering and
the International Offering will be registered on the Company’s H Share register of members to
be maintained by our H Share Registrar, Computershare Hong Kong Investor Services Limited
at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong
Kong. Our principal register of members will be maintained by us at our headquarters in the
PRC.
Dealings in the H Shares registered in our H Share register will be subject to Hong Kong
stamp duty. Hong Kong stamp duty is charged to each of the seller and purchaser at the ad
valorem rate of 0.1% on the higher of the consideration for or the market value of the H Shares
transferred. In other words, a total of 0.2% will be payable on a typical sale and purchase
transaction of the H Shares. In addition, a fixed stamp duty of HK$5.00 is currently payable
on each instrument of transfer of H Shares.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to
register the subscription, purchase or transfer of any H Shares in the name of any particular
holder unless and until such holder delivers a signed form to our H Share Registrar in respect
of those H Shares bearing statements to the effect that the holders:
 agrees with us and each of our Shareholders, and we agree with each Shareholder,
to observe and comply with the PRC Company Law, the Overseas Listing Trial
Measures and our Articles of Association;
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 agrees with us, each of our Shareholders, Directors, Supervisors, managers and
officers, and we, acting for ourselves and for each of our Directors, Supervisors,
managers and officers agree with each of our Shareholders, to refer all differences
and claims arising from our Articles of Association or any rights or obligations
conferred or imposed by the PRC Company Law or other relevant laws and
administrative regulations concerning our affairs to arbitration, and any reference to
arbitration shall be deemed to authorize the arbitration tribunal to conduct hearings
in open session and to publish its award, which arbitration shall be final and
conclusive;
 agrees with us and each of our Shareholders that the H Shares are freely transferable
by the holders thereof; and
 authorizes us to enter into a contract on his or her behalf with each of our Directors,
Supervisors, managers and officers whereby such Directors, Supervisors, managers
and officers undertake to observe and comply with their obligations to our
Shareholders as stipulated in our Articles of Association. Persons applying for or
purchasing H Shares under the Global Offering are deemed, by their making an
application or purchase, to have represented that they are not associates of any of
our Directors, Supervisors or existing Shareholder or a nominee of any of the
foregoing.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of the H Shares will be paid to the Shareholders as recorded on the 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.
According to the Shenzhen Subsidiary of the CSDCC Guide to the Program for “Full
Circulation” of H Shares (ப΂ʮ̡ଉέʱʮ̡  Hٰ“ஷ”ܸ
) promulgated by the Shenzhen Subsidiary of the CSDCC on September 20, 2024, cash
dividends to domestic investors of H-share “full circulation” shall be distributed through
Shenzhen Subsidiary of the CSDCC. An H-share listed company shall transfer RMB cash
dividends to the designated bank account of the Shenzhen subsidiary of CSDCC, who shall
complete the clearing of cash dividends and distribute the cash dividends to investors through
domestic securities companies.
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H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, our H Shares on the Hong
Kong Stock Exchange and our compliance with the stock admission requirements of HKSCC,
our H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in our H Shares
on the Hong Kong Stock Exchange or any other date as HKSCC chooses. Settlement of any
transactions between participants of the Hong Kong Stock Exchange is required to take place
in CCASS on the second settlement day after any trading day. All activities under CCASS are
subject to the General Rules of HKSCC and HKSCC Operational Procedures in effect from
time to time. All necessary arrangements have been made for our H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbroker or other professional advisers for
details of the settlement arrangements as such arrangements may affect their rights and
interests.
PROFESSIONAL TAX ADVICE RECOMMENDED
Applicants for the Offer Shares are recommended to consult their professional advisers if
they are in any doubt as to the tax implications of subscribing for, purchasing, holding,
disposing of and dealing in our H Shares or exercising rights attached to them. None of the
Company, the Underwriters, the Joint Sponsors, the Joint Representatives, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters, any of their
respective directors, supervisors, officers, employees, agents or advisers or any other persons
involved in the Global Offering accepts responsibility for any tax effects or liabilities of
holders of Shares resulting from the subscription, purchase, holding or disposal of, or dealing
in, our H Share.
OVER-ALLOTMENT AND STABILIZATION
In connection with the Global Offering, the Stabilizing Manager (on behalf of the
International Underwriters) or any persons acting for it may over-allot shares or effect any
other transactions with a view to prevent a decline in the market price of our H Shares for a
limited period after the issue date. However, there is no obligation on the Stabilizing Manager
or any person acting for it to do this. Such stabilization action, if taken, may be discontinued
at any time and is required to end after a limited period. In Hong Kong and certain other
jurisdictions, activities aimed at reducing the market price are prohibited, and the price at
which stabilization is effected is not permitted to exceed the Offer Price.
In connection with the Global Offering, the Company intends to grant to the International
Underwriters the Over-allotment Option, exercisable by the Joint Representatives (for
themselves and on behalf of the International Underwriters) for up to 30 days after the last day
for the lodging of applications under the Hong Kong Public Offering. Pursuant to the
Over-allotment Option, the Company may be required to issue and allot at the Offer Price up
to an aggregate of 18,228,300 additional H Shares, representing approximately 15.0% of the
total number of H Shares initially available for subscription under the Global Offering, in
connection with over-allocations in the Global Offering, if any.
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See “Structure of the Global Offering” further details with respect to stabilization and the
Over-allotment Option.
INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES
Our Company has applied for conversion of Unlisted Shares into H Shares, which
involves 1,317,849,039 Unlisted Shares held by the existing Shareholders. See “History,
Reorganization and Corporate Structure” and “Share Capital” for details of our existing
Shareholders and their respective interests in our Company and relevant procedures for the
conversion of Unlisted Shares into H Shares. Such H Shares to be converted from Unlisted
Shares are restricted from trading for a period of one year after the Listing.
The relevant filing procedure in relation to the conversion of Unlisted Shares into H
Shares has been completed on February 19, 2025.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for the Hong Kong Offer Shares are set out in “How to Apply
for Hong Kong Offer Shares”.
STRUCTURE OF THE GLOBAL OFFERING
See “Structure of the Global Offering” for details of the structure of the Global Offering,
including its conditions.
LANGUAGE
The English names of the PRC nationals, entities, departments, facilities, certificates,
titles, laws, regulations and the like are translations of their Chinese names and are included
herein for identification purposes only. If there is any inconsistency, the Chinese name prevail.
ROUNDING
Certain amounts and percentage figures included in this Prospectus have been subject to
rounding adjustments, or have been rounded to one decimal place. Any discrepancies in any
tables or charts between the total shown and the sums of the amounts listed are due to rounding.
MARKET SHARE DATA
The statistical and market share information contained in this Prospectus has been derived
from official government publications, market data providers and other independent third-party
sources. Unless otherwise indicated, the information has not been verified by us independently.
This statistical information may not be consistent with other statistical information from other
sources within or outside the PRC. While reasonable caution has been made in the process of
reproducing the data and statistics extracted from such official government publications or
other sources, the Joint Sponsors and our Company, or any of their directors, employees,
agents, and representatives make no representation to the appropriateness, accuracy,
completeness or reliability of any such statistical and market share information.
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CURRENCY TRANSLATIONS
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:
(i) RMB0.9229 to HK$1
(ii) RMB7.1754 to US$1
(iii) HK$7.7752 to US$1
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.
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DIRECTORS
Name Address Nationality
Executive Directors
Ms. Cao Fang (ٹRoom 1313, Building No. 4
Zhengli Jiayuan
No. 112 Xin’anjiang Road
Dongnan Community
Changshu, Jiangsu Province
PRC
Chinese
Dr. Chen Jicheng ( ௓ᘱ೻) Room 1213, Building No. 4
Zhengli Jiayuan
No. 112 Xin’anjiang Road
Dongnan Community
Changshu, Jiangsu Province
PRC
Chinese
Dr. Yu Zhexun (௸) Room 1601, Unit 1, Building No. 21
Lvcheng Mingyue Lanting
No. 5 Miaogang Road
Changshu, Jiangsu Province
PRC
Chinese
Non-executive Director
Mr. Zhang Li ( ੵɢ) Room 903, Building No. 6
Lane 199 Zixia Road
Huangpu District
Shanghai
PRC
Chinese
Independent Non-executive Directors
Dr. Xu Zhiming (׼4A, Building No. 14
Coastline Villa
Discovery Bay
Hong Kong
Chinese
(Hong Kong)
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 129 –


--- page 139 ---
Name Address Nationality
Dr. Gong Zhengliang ( ᛵ͍Ԅ) 7-503, Wuyuan East Sanli
Jinshan Community
Huli District
Xiamen, Fujian Province
PRC
Chinese
Dr. Xiao Min ( ӽ䊑) Room 404, Wuyuan West Sanli
No. 14
Heshan Community
Huli District
Xiamen, Fujian Province
PRC
Chinese
SUPERVISORS
Name Address Nationality
Mr. Yu Yang (ݱRoom 302, Building 4
Zhengli Jiayuan
Yinfeng Road, Dongnan Community
Changshu, Jiangsu Province
PRC
Chinese
Mr. Hong Ping (̻) Room 402, Building No. 27
Block 2, Jin Shan Yuan
No. 20 Xiangxie Road
Qinchuan Community
Changshu, Jiangsu Province
PRC
Chinese
Mr. Jiang Dongfeng (ࢤ؇۴6-2-101, Zhongxin New District West
Zone
Courtyard 1, Luhua Road
Daxing District, Beijing
PRC
Chinese
See “Directors, Supervisors and Senior Management” for further details of our Directors
and Supervisors.
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 140 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors, Joint Representatives and
Sponsor-Overall Coordinators
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
Overall Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 141 ---
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Huafu International Securities Limited
Units 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
CEB International Capital Corporation
Limited
34/F-35/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 142 ---
Joint Bookrunners China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Huafu International Securities Limited
Units 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
CEB International Capital Corporation
Limited
34/F-35/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 143 ---
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Patrons Securities Limited
Unit 3214, 32/F., Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
Joint Lead Managers China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 134 –


--- page 144 ---
Huafu International Securities Limited
Units 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Hong Kong
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
CEB International Capital Corporation
Limited
34/F-35/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Patrons Securities Limited
Unit 3214, 32/F., Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 145 ---
Tiger Brokers (HK) Global Limited
1/F No. 308 Des V oeux Road Central
Sheung Wan
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Capital Market Intermediaries China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
China Industrial Securities International
Capital Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Huafu International Securities Limited
Units 2603-04, 26/F, Infinitus Plaza
199 Des V oeux Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 146 ---
ICBC International Securities Limited
37/F ICBC Tower
3 Garden Road
Central
Hong Kong
CEB International Capital Corporation
Limited
34/F-35/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Patrons Securities Limited
Unit 3214, 32/F., Cosco Tower
183 Queen’s Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 137 –


--- page 147 ---
Tiger Brokers (HK) Global Limited
1/F No. 308 Des V oeux Road Central
Sheung Wan
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II
Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Legal advisers to our Company As to Hong Kong and United States laws:
Davis Polk & Wardwell
10/F, The Hong Kong Club Building
3A Chater Road
Central
Hong Kong
As to PRC laws:
Fangda Partners
24/F, HKRI Centre Two
HKRI Taikoo Hui
288 Shi Men Yi Road
Shanghai 200041
PRC
As to PRC intellectual property laws:
Guangdong Scihead Law Firm
Room 08-12, 30F
CTF Finance Centre
6 Zhujiang Road East
Guangzhou 510623
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 138 –


--- page 148 ---
Legal advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong and United States laws:
Cooley HK
35/F, Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC laws:
Jingtian & Gongcheng
34/F, Tower 3,
China Central Place
77 Jianguo Road
Beijing
PRC
Auditor and Reporting Accountants Ernst & Y oung
Certified Public Accountants and
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.
2504 Wheelock Square
1717 Nanjing West Road
Shanghai 200040
PRC
Compliance Adviser Maxa Capital Limited
Unit 2602
26/F, Golden Centre
188 Des V oeux Road Central
Sheung Wan
Hong Kong
Receiving Bank China Construction Bank (Asia)
Corporation Limited
26th Floor, China Construction Bank Tower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 149 ---
Registered Office, Headquarter and
Principal Place of Business in the PRC
No. 68 Xin’anjiang Road
Dongnan Community
Changshu
Jiangsu Province
PRC
Principal Place of Business in Hong Kong 46/F, Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong
Company’s Website www.zenergy.cn
(The information contained on this website
does not form part of this Prospectus)
Joint Company Secretaries Ms. Xu Jing (ẙ)
No. 68 Xin’anjiang Road
Dongnan Community
Changshu
Jiangsu Province
PRC
Ms. Ho Wing Nga ( О൘ඩ)
FCG (CS, CGP), HKFCG (CS, CGP) (PE)
46/F, Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong
Authorized Representatives Ms. Cao Fang (ٹ)
No. 68 Xin’anjiang Road
Dongnan Community
Changshu
Jiangsu Province
PRC
Ms. Ho Wing Nga ( О൘ඩ)
46/F, Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong
Audit Committee Dr. Gong Zhengliang ( ᛵ͍Ԅ) (Chairperson)
Dr. Xiao Min ( ӽ䊑)
Mr. Zhang Li ( ੵɢ)
CORPORATE INFORMATION
– 140 –


--- page 150 ---
Remuneration and Evaluation Committee Dr. Xu Zhiming (׼)Chairperson)
Ms. Cao Fang (ٹ)
Dr. Chen Jicheng ( ௓ᘱ೻)
Dr. Gong Zhengliang ( ᛵ͍Ԅ)
Dr. Xiao Min ( ӽ䊑)
Nomination Committee Ms. Cao Fang (ٹ)Chairperson)
Dr. Chen Jicheng ( ௓ᘱ೻)
Dr. Xu Zhiming (׼)
Dr. Gong Zhengliang ( ᛵ͍Ԅ)
Dr. Xiao Min ( ӽ䊑)
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17th Floor
Hopewell Centre
183 Queen’s Road East
Wanchai, Hong Kong
Principal Banks Changshu Sub-branch of Industrial Bank
Co., Ltd.
Units 109 & 201 Yiyuan Century Plaza
No. 19, Haiyu North Road
Changshu, Jiangsu
PRC
Southeast Development Zone Sub-branch
of China Construction Bank Corporation
Room 104, Building 5, Southeast Yunzhi
Business Center
No. 10 Wuqu Road
Dongnan Community
Changshu, Jiangsu
PRC
CORPORATE INFORMATION
– 141 –


--- page 151 ---
The information and statistics set out in this section and other sections of this
Prospectus were extracted from the report prepared by Frost & Sullivan, which was
commissioned by us, and from various official government publications and other
publicly available publications. We engaged Frost & Sullivan to prepare the Frost &
Sullivan Report, an independent industry report, in connection with the Global Offering.
The information from official government sources has not been independently verified by
us, the Joint Sponsors, Joint Representatives, Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners, Joint Lead Managers, Underwriters, any of their
respective directors and advisers, or any other persons or parties involved in the Global
Offering, and no representation is given as to its accuracy.
OVERVIEW OF POWER BATTERY MARKET
Definition and Classification of Power Battery
Power battery refers to rechargeable power storage systems used in EVs, electric ships,
electric aircraft, and other transportation vehicles to provide driving energy. As categorized by
their different power sources, EVs primarily include BEVs, PHEVs (including EREVs), HEVs
and fuel cell electric vehicles (“ FCEVs ”). Because currently FCEVs have not been widely
promoted, and their sales volume remains relatively nominal at the moment, statistics on EVs
in this “Industry Overview” section excludes FCEVs.
EV battery is one of the most critical and indispensable part of the EV , being the power
source of the entire vehicle and directly affecting EV performance, including driving range,
safety, service life, charging time and adaptability of temperature, among other performance
indicators. EV batteries adopt several prevailing electrochemistries such as Lithium-Ion,
sodium-ion and nickel-metal hydride, with Lithium-Ion battery being the dominant type of
power batteries due to its high energy density, low discharge rate and long cycle life.
Meanwhile, other types of EV batteries also enjoy certain advantages. Compared with
Lithium-Ion battery, sodium-ion battery has the advantages of sufficient supply of raw
materials, and better safety and performance in low-temperature environment. However, the
current commercial development of sodium-ion batteries is still faced with technical issues
such as low energy density. Nickel-metal hydride EV battery, as an environment-friendly and
efficient alternative, has lower energy density than Lithium-Ion battery and is primarily used
in HEVs at the moment.
By cathode materials, Lithium-Ion power batteries primarily include ternary batteries and
Lithium Iron Phosphate (LFP) batteries. Some new types of Lithium-Ion batteries are also
under development, such as Lithium Manganese Iron Phosphate (LMFP) battery. The primary
type of ternary batteries in China, namely NCM batteries, could be further divided into
NCM811, NCM523, and NCM613, with the numbers representing the mixing ratio among
nickel, cobalt and manganese.
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The following table compares the key performance metrics of Lithium-Ion power
batteries mentioned above.
NCM
LFP LMFPNCM811 NCM613 NCM523
Cathode
Material /H1118/H1118/H1118/H1118
LiNi0.8Co0.1Mn0.1O2 LiNi0.6Co0.1Mn0.3O2 LiNi0.5Co0.2Mn0.3O2 LiFePO 4 LiMnxFe1-xPO4
Energy Density
(Wh/kg) /H1118/H1118/H1118/H1118
225-300 210-270 200-250 160-200 180-220
Cycle Life
(times) /H1118/H1118/H1118/H1118/H1118
1,500-2,000 1,500-2,000 1,500-2,000 2,000-4,000 2,000-3,000
Safety /H1118/H1118/H1118/H1118/H1118/H1118Low Good Good High High
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118High Good Good Low Low
In terms of physical forms of electrolytes, batteries can be divided into liquid batteries,
mixed solid-liquid batteries (semi-solid-state batteries), and solid-state batteries. Liquid
batteries are the dominant battery type, and primarily adopt organic liquid electrolytes that
have good contact with the electrodes and can provide excellent conductivity. While the
preparation technology for liquid batteries is well developed, the flammable and volatile nature
of liquid electrolytes brings safety hazards to the battery system. Solid-state electrolytes, on the
other hand, are inherently non-flammable, with high thermal decomposition temperatures, thus
avoiding the issues of electrolyte corrosion, volatilization, and leakage, greatly improving
safety. However, solid-state battery technology is still under preliminary development, and has
yet to resolve the hurdles of high cost, short cycle life, and poor power performance. As a
transitional product before solid-state batteries and related technologies mature and
commercialize, semi-solid-state batteries emerge as a viable alternative for the time being,
sharing the same electrochemical principles as liquid batteries and can essentially adopt
existing well-developed battery manufacturing infrastructure, making it easy to manufacture
compared to solid-state batteries. Compared to traditional liquid state batteries, semi-solid-
state batteries enjoy advantages of higher safety. A small number of EV models have already
chosen semi-solid-state batteries.
Overview of Power Battery Value Chain
The power battery value chain primarily includes (i) mining and processing of minerals;
(ii) cell components manufacturing; (iii) battery cell, battery module and battery pack
manufacturing; (iv) battery end-users; and (v) battery recycling.
Power batteries are usually loaded in the form of battery packs. Prevailing cell integration
methods include CTMTP (cell-to-module-to-pack), CTP (cell-to-pack), and CTC
(cell-to-chassis). The traditional CTMTP mode combines battery cells into battery modules,
and then combines the battery modules into the battery pack. The CTP mode skips the
standardized module process and directly integrates battery cells into battery packs. Compared
INDUSTRY OVERVIEW
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--- page 153 ---
to CTMTP, CTP improves volume utilization and energy density of the pack and reduces
manufacturing costs, but requires higher consistency of battery cells, higher repair costs and
a more advanced Battery Management System (BMS). Additionally, the maintenance costs of
CTP battery packs tend to be much higher in the event of battery problems compared to
CTMTP battery packs. CTC integrates the battery cells directly into the vehicle chassis, further
reducing manufacturing costs and enhancing battery structural efficiency. Similarly, CTC
maintenance costs also tends to be much higher in the event of battery problems, and it does
not allow convenient disassembly or swapping.
The following diagram sets forth the main value chains in the power battery industry, as
well as major types and applications for power batteries.
Industry Value Chain of Power Battery (Lithium-Ion power battery for illustrative)
Upstream
Raw Materials
Major
Minerals
Cathode
 NCM/NCA
 LFP
 LCO
...
CTC
CTM
MTP
CTP
Battery Cell Electric
Vehicle
Second-life EV
Battery for
Energy Storage
Battery material
Recycling
Electric Ship
eVTOL
Others
Battery Module
Battery Pack
Anode
Electrolyte
Separator
Nickel Ore
Cobalt Ore
Phosphate Ore
Others
Lithium
CarbonateLithium Ore
Nickel/cobalt
/manganese
Hydroxide
Iron
Phosphate
Others
Major
Chemicals Major Components Manufacturing Major
Applications Recycling
Midstream
Manufacturing
Downstream
Application
Source: Frost & Sullivan
Overview of EV Power Battery Market
Overview of EV Market
EVs use electric motors powered by power battery instead of solely by internal
combustion engines (ICE) to propel the vehicles. EVs primarily include BEV (battery electric
vehicle), PHEV (plug-in hybrid electric vehicle), EREV (extended range electric vehicle), and
HEV (hybrid electric vehicle), with other types of EVs (such as fuel cell electric vehicle)
accounting for only a nominal market share. The number of EREVs is included in the statistics
for PHEVs in this “Industry Overview” section.
INDUSTRY OVERVIEW
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Global EV sales volume increased from 5.5 million units in 2020 to 26.5 million units in
2024, representing a CAGR of 48.3%, and is expected to further increase to 70.2 million by
2029, representing a CAGR of 21.5%. Such growth is primarily driven by technological
progress and innovation in the EV industry, further improvement in industry value chain,
favorable policies, as well as the ongoing transition from fossil fuel energy to renewable
energy. In particular, PHEV sales volume grew from 1.0 million units in 2020 to 6.8 million
units in 2024, representing a CAGR of 62.4%, higher than any other type of EVs, and is
expected to further grow to 18.6 million units in 2029, representing a CAGR of 22.1%.
China is the world’s largest EV market as measured by 2024 sales volume. The growth
of China’s EV market is primarily driven by favorable policies, continuous advancements in
EV technologies, and ongoing improvements in charging infrastructure. From 2020 to 2024,
EV sales volume in China grew from 1.8 million units to 13.8 million units, representing a
CAGR of 66.9%, and is expected to further grow to 32.1 million units by 2029, representing
a CAGR of 18.4%. PHEVs, in particular, have witnessed faster growth in recent years
compared to BEVs due to their longer driving ranges and flexible charging options. PHEV
sales volume in China increased from 0.3 million units in 2020 to 5.1 million units in 2024,
representing a CAGR of 112.7%, and is expected to further grow to 15.2 million units by 2029,
representing a CAGR of 24.1%, higher than the forecasted growth CAGR for BEVs and will
surpass BEVs in sales volume in 2025. HEVs are also playing increasingly important roles in
the transformation away from ICE vehicles. The sales volume of HEVs in China increased from
0.4 million units in 2020 to 0.9 million units in 2024, representing a CAGR of 22.7%. HEVs
are expected to maintain rapid growth in the future, reaching a sales volume of 2.0 million units
by 2029, representing a CAGR of 15.8% from 2024 to 2029.
The following chart sets forth a breakdown of the actual and forecasted EV sales volume
by vehicle types in China during the years indicated.
Sales Volume of EVs (by vehicle types), China, 2020-2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2029E (20-24)
CAGR CAGR
(24-29E)
1.8
4.1
7.7
13.8
10.4
17.2
20.3
24.0
32.1
2028E
28.1
Million Units
Total
PHEV
BEV
HEV
14.9
15.2
2.0
32.1
62.2%
112.7%
22.7%
66.9%
14.1%
24.1%
15.8%
18.4%
0
10
20
30
40
1.1
0.3
0.4
1.8
2.9
0.6
0.6
4.1
5.34
1.5
0.8
7.7
6.7
2.8
0.9
10.4
7.7
5.1
0.9
13.8 17.2
1.1
8.0
8.0 9.2
9.8
1.3
20.3
10.9
11.6
1.5
24.0
12.9
13.5
1.7
28.1
Source: China Association of Automobile Manufacturers, Frost & Sullivan
INDUSTRY OVERVIEW
– 145 –


--- page 155 ---
The global EV penetration rate (as measured by the percentage of EV sales volume over
total automobile sales volume) increased from 6.6% in 2020 to 26.7% in 2024, and is expected
to reach 65.7% in 2029. China is a global leader in EV development: EV penetration rate in
China grew from 7.0% in 2020 to 43.9% in 2024, and is expected to further grow to 93.3% in
2029,.
The following chart sets forth the EV penetration rates globally and in China during the
years indicated.
Penetration Rate of Electric Vehicle, Global and China, 2020-2029E
%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
17.8%12.8%
22.1% 26.7%
33.1%
40.5%
48.3%
56.9%
65.7%
7.0%
15.6%
28.7%
34.4%
43.9%
53.5%
62.0%
72.1%
83.1%
93.3%
Global
China
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
0
10
20
30
40
50
60
70
80
90
6.6%
Source: China Association of Automobile Manufacturers, Frost & Sullivan
Market penetrations for different EV types also differ significantly. The penetration rate
of BEVs in China’s overall EV market has grown steadily in recent years and is expected to
maintain this steady growth trajectory. Meanwhile, PHEVs are experiencing rapid growth and
are becoming increasingly important in China’s overall EV market. Driven mainly by their
superior driving range and competitive pricing, PHEVs are gaining market share and
popularity. It is anticipated that the penetration rate of PHEVs will exceed that of BEVs by
2026. Such forecast is based on several comparative factors between PHEVs and BEVs (taking
standard models of Song Plus and Yuan Plus as examples, which are PHEV and BEV models
from BYD, respectively, and two of the best-selling models in China in 2023 with mostly
equivalent specifications), including (i) driving range; Song Plus offers a driving range of
approximately 1,250 km with a full tank of fuel and a fully charged battery, which is greater
than the CLTC driving range of Yuan Plus at 430 km. This extended range makes PHEVs more
appealing to consumers concerned about driving range; (ii) battery performance; Song Plus
utilizes a smaller battery with a capacity of 18.3 kWh, compared to Yuan Plus, which requires
a larger capacity of 49.9 kWh. This results in lower battery production costs and less
dependency on charging infrastructure for PHEVs. According to data from the China
Association of Automobile Manufacturers, in 2024 the cumulative sales volume of PHEVs
reached approximately 5.1 million units, reflecting a year-over-year growth of 83.3%. In
comparison, the sales volume of BEVs was approximately 7.7 million units, with a
INDUSTRY OVERVIEW
– 146 –


--- page 156 ---
significantly lower year-over-year growth rate of 15.5%, indicating a trend of PHEVs gaining
ground over BEVs, according to Frost & Sullivan. The following chart sets forth a breakdown
of penetration rate of different types of EVs in China during the years indicated.
Penetration Rate of Electric Vehicle (by vehicle types), China, 2020-2029E
%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
2.3%
5.7%
9.3%
20.0%
24.6%
22.2%
3.5%
24.9%
25.1%
3.9%
29.9%
4.4%
28.2%
34.9%
5.0%
32.8%
39.9%
5.7%
44.1%
43.5%
38.3%
PHEV
BEV
HEV
3.0%2.9%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
4.4%
1.6%
1.0% 2.2% 3.1%
16.4%
11.1%
Source: China Association of Automobile Manufacturers, Frost & Sullivan
The amount of supply and demand of EVs in China were relatively balanced. Demand for
EVs in China has been primarily met by EVs manufactured in China. The following chart sets
forth the amount of EV demand and supply in China during the years indicated.
EV Sales and Supply Volume, China, 2020-2024
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2020 2021 2022 2023 2024
1,366
1,367
3,545
3,521
7,058
6,887
9,587
9,495
12,888
12,866
EV production volume
Units in thousands
EV sales volume
Source: China Association of Automobile Manufacturers. Numbers include BEVs, PHEVs and FCEVs, and exclude
HEVs.
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Overview of EV Power Battery Market
The following table sets forth a comparison of power batteries integrated in different
types of EVs.
Comparison of Power Batteries in Different EVs
BEV Power Battery PHEV Power Battery
Battery
Capacity
(kWh)
10-50 1-2
Pure Electric
Range (km) 300-1,000 50-200 <10
Characteristic
HEV Power Battery
50-150
BEVs are generally equipped with
high-capacity Lithium-Ion batter-
ies, including ternary Lithium-Ion
batteries and LFP Lithium-Ion
batteries. High battery energy
density is typically required to
meet longer range driving needs
PHEVs are generally equipped
with Lithium-Ion batteries whose
total battery capacity and energy
density are usually lower than
BEV power batteries
HEVs are generally equipped with
nickel hydrogen batteries or small
capacity Lithium-Ion batteries,
and the battery capacity and
energy density are relatively low,
while the power is relatively high.
The overall structure is simple,
with low maintenance costs
Source: Frost & Sullivan
The following table sets forth a comparison among the two battery shapes (prismatic and
cylindrical battery shapes), as well as pouch cell battery shape which is being developed for
our aviation battery products. Each of these shapes have been adopted by major OEMs
globally.
Prismatic Cylindrical Pouch
Market share (in terms of
installation capacity) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
77%-80% 14%-17% 5%-6%
Energy density /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170-190 Wh/kg 160-170 Wh/kg 170-195 Wh/kg
Safety /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Medium High Low
Ease of customization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Medium Medium Easy
Cost-effectiveness /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Medium cost Medium cost High cost
Cycle life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H113502,000 cycles /H113501,200 cycles /H113501,500 cycles
Global EV battery market is experiencing rapid development, primarily driven by the
growth in BEV and PHEV markets. The global installation capacity of EV battery systems
increased from 141.5 GWh in 2020 to 900.2 GWh in 2024, representing a CAGR of 58.8%, and
is expected to further grow to 3,564.5 GWh in 2029, representing a CAGR of 31.7%. The rapid
growth and increasing market penetration of PHEV and the continuous improvement
performance by PHEV batteries have driven the installation capacity of PHEV battery to grow
from 17.5 GWh in 2020 to 156.0 GWh in 2024, representing a CAGR of 72.9%, and is expected
to further grow to 981.2 GWh in 2029, representing a CAGR of 44.5%.
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The installation capacity of EV batteries in China has also experienced rapid growth
driven by continuous expansion of the EV market in China. Installation capacity of EV
batteries in China increased from 64.2 GWh in 2020 to 549.9 GWh in 2024, representing a
CAGR of 71.1%, and is expected to further grow to 1,961.4 GWh in 2029, representing a
CAGR of 29.0%. Consistent with the global EV battery market, PHEV batteries represent the
fastest historical and forecasted growth among different EV types. The installation capacity of
PHEV batteries in China grew from 4.5 GWh in 2020 to 118.7 GWh in 2024, representing a
CAGR of 127.2%, and is expected to further grow to 848.6 GWh in 2029, representing a CAGR
of 48.2%. PHEV fulfils daily short-distance travel needs with pure electricity power, and
long-distance driving with gasoline power, meeting consumer needs for a pure electric driving
experience but without less mileage anxiety. In addition to PHEV’s ability to meet consumer
needs, regulatory policies also drive the growth of PHEVs in China, as vehicle OEMs face
increasing pressure to reduce fuel consumption. The technological innovations of PHEV have
accelerated the replacement of fuel vehicles. OEMs are also promoting PHEV to load more
battery capacity to meet consumer needs.
Installation capacity is a measure of the amount of demand for EV batteries. OEMs are
typically the party with the demand for power batteries which they install into their vehicles.
Installation capacity represents the amount of battery capacity (as measured by Wh) that was
installed in EVs. Installation capacity is a more meaningful measure for EV batteries than “unit
of vehicle” (which is used to measure the supply/demand volume of EVs), because the amount
of battery capacity for different types of vehicles may vary significantly. For example, each
unit of BEV typically requires a larger amount of battery capacity in Wh compared to each unit
of PHEV . Therefore, the term “installation capacity” in Wh, rather than unit of EVs, is
commonly used to reflect the demand for EV batteries, as it accounts for the actual battery
capacity installed in vehicles.
The following chart sets forth a breakdown of battery installation capacity by power types
during the years indicated.
Installation Capacity of EV Battery (by power type), China, 2020-2029E
6.9% 6.8% 10.6% 16.4% 21.6%
30.4% 33.7% 36.8% 39.6% 43.3%
92.3% 92.7% 89.0% 83.3% 78.1% 69.3% 66.0% 62.9% 60.2% 56.5%
0%
10%
20%
30%
40%
60%
80%
100%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E CAGR
(20-24)
CAGR
(24-29E)
0.8% 0.5% 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2%
59.2
4.5
0.5
64.2
263.3
31.3
1.1
295.8
480.0
210.3
1.9
692.2
1,108.8
848.6
4.1
1,961.4
143.9
10.6
0.8
155.3
324.0
63.8
1.3
389.0
429.7
118.7
1.5
549.9
2.3
577.8
294.9
875.0
713.0
2.7
417.0
1,132.7
20.9%
48.2%
22.4%
29.0%
64.1%
127.2%
30.3%
71.1%
BEV (GWh)
PHEV (GWh)
HEV (GWh)
Total
50%
70%
90%
902.9
594.7
3.4
1,501.0
Source: CABIA, Frost & Sullivan
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With the advantage of lower costs and the narrowing gap in driving range from ternary
batteries, LFP batteries are experiencing an increase in demand in recent years. In China, the
installation capacity of ternary batteries increased from 39.1GWh in 2020 to 139.8 GWh in
2024, representing a CAGR of 37.5%, and is expected to reach 255.7 GWh in 2029,
representing a CAGR of 12.8% from 2024 to 2029. LFP batteries has experienced and is
expected to continue to experience faster growth in China. The installation capacity of LFP
battery surpassed ternary batteries in 2021, growing from 24.4 GWh in 2020 to 408.9 GWh in
2024, representing a CAGR of 102.4%, and is expected to further grow to 1,683.3 GWh in
2029, representing a CAGR of 32.7%. The proportion of LFP batteries in the total installation
capacity in China increased from 38.0% in 2020 to 74.4% in 2024, and it is expected to reach
85.8% in 2029.
Both BEVs and PHEVs can use NCM and LFP batteries. In practice, however, most
PHEVs use LFP batteries. This is because range anxiety is a less significant factor for PHEVs
compared to BEVs, and cost considerations often lead to the preference for LFP in PHEVs.
LFP batteries, on the other hand, due to their cost advantages, are widely used in both BEVs
and PHEVs. Some BEV models offer both LFP and NCM variants to cater to different
consumer needs. The recent growth in LFP adoption has been driven primarily by cost
considerations, while the growth in PHEVs has been driven by consumer need and policy
reasons. The growth drivers for LFP batteries and PHEVs are therefore distinct and reflective
of different market dynamics.
The following chart sets forth a breakdown of installation capacity by battery types in
China during the years indicated.
Installation Capacity of EV Battery (by battery type), China, 2020-2029E
38.0%
51.4%
62.1% 67.1% 74.4% 76.1% 78.4% 80.8% 83.3% 85.8%
60.9%
48.1%
37.5% 32.6% 25.4% 23.7% 21.3% 18.8% 16.1% 13.0%
0%
20%
40%
60%
80%
100%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E CAGR
(20-24)
CAGR
(24-29E)
1.1% 0.5% 0.3% 0.3% 0.2% 0.2% 0.3% 0.3% 0.6% 1.1%
NCM (GWh)
LFP (GWh)
Others (GWh)
Total
39.1 74.7 111.0 126.7 139.8 163.9 18 6.6 213.5 242.4 255.7 37.5% 12.8%
24.4 79.8 183.8 261.2 408.9 526.7 686.1 915.3 1,250.0 102.4% 32.7%
0.7 0.7 1.0 1.1 1.2 1.6 2. 2 3.9 8.6 22.4 14.2% 80.2%
64.2 155.3 295.8 389.0 549.9 692.2 875.0 1,132.7 1,501.0 1,961.4 71.1% 29.0%
1,683.3
Source: CABIA, Frost & Sullivan
Note: Others include sodium-ion battery, nickel-metal hydride battery, LCO battery, LMO battery, etc.
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Overview of Supply in the EV Power Battery Market
In 2024, China’s EV power battery production capacity reached 826 GWh and is
projected to grow to 991.2 GWh in 2025. Meanwhile, the installation capacity of EV power
battery in China was 549.9 GWh in 2024 and is expected to reach 692.2 GWh in 2025.
According to Frost & Sullivan, this represents a structural overcapacity issue, driven by idle
low-end production capacity with outdated technologies that cannot be upgraded or adapted to
the structural transitions in China’s EV power battery industry. These transitions include the
growing demand for higher-performance EV power batteries, the increasing dominance of LFP
batteries over NCM batteries, and the higher growth of PHEVs over BEVs. On the other hand,
there is still significant demand for high-quality production capacity with the flexibility to be
continuously upgraded and adapted to new electrochemistries and other technological
development in power batteries, according to Frost & Sullivan. According to Frost & Sullivan,
top ten EV battery manufacturers accounted for 95.3% of the total EV battery installation
capacity in the PRC in 2024. Low-end production capacity accounts for over half of the
industry’s capacity. Low-end production capacity refers to companies that have lower than 3%
R&D expenses, lower than 50% production utilization rate who produce products with low
energy density with outdated technologies that cannot be upgraded or adapted to the structural
transitions in China’s EV power battery industry. China’s EV power battery industry is highly
competitive and concentrated and we expect that the trend will last in the future.
As the EV and EV power battery industries rapidly grow in recent years, consumers in
China are increasingly demanding EVs with longer cruising range, faster charging and
discharging speed, and higher safety. In response, players in China’s EV and EV power battery
industries are constantly developing new EV and battery technologies to meet these new
consumer demands. This calls for the expansion of production capacity equipped with
advanced technologies as well as the enhanced flexibility to adjust to future technological
advancements and new electrochemistries. For example, several key battery R&D initiatives,
such as large cylindrical batteries, fast-charging batteries, semi-solid and solid-state batteries,
are driving power battery manufacturers to expand more technologically advanced production
capacity to replace outdated, inflexible and technologically obsolete capacity in order to strike
the optimal balance among technology development, cost and battery performance.
In terms of battery materials, LFP batteries have become the market mainstream, enjoying
significant growth potential; whereas NCM battery development is largely confined to the
high-end luxury EV market. The market opportunities for ordinary NCM power batteries is
very limited, which leads to significant risks of overcapacity for production capacity that were
specifically designed for NCM batteries and lack the flexibility to manufacture other types of
batteries. In terms of power types, PHEV batteries are experiencing a significantly higher
growth rate compared to BEV batteries, resulting in an increasing share of PHEV batteries in
the EV power battery market in the next few years. Due to the different performance
requirements and production processes for PHEV and BEV batteries, the expansion of PHEV
batteries necessitates the establishment of new and specialized production lines and may lead
to phaseout of some existing production lines.
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In terms of industry regulations and policies, the Ministry of Industry and Information
Technology released the latest “Lithium-ion Battery Industry Specification (2024 Edition)”
(቞ᕎɿཥϫБุ஝ᇍૢ΁(2024 ϋ͉), the “ Specifications ”) in June 2024. According to
Frost & Sullivan, technologically outdated and inflexible production capacity, especially those
built before 2020, would find it extremely difficult to meet the provisions in the Specifications,
especially the unit energy consumption requirements in the Specifications. The implementation
of the Specifications and other new industry standard signifies the beginning of elimination of
battery production capacity that do not meet certain thresholds on technology, energy
consumption, and production capacity utilization. According to Frost & Sullivan, the supply
and demand in China’s power battery market is expected to return balance in the near future.
Overview of Power Batteries in Non-EV Applications
Electric Ship Power Battery
An electric ship utilizes power batteries to partially or fully substitute fossil fuels for
power generation. In comparison to traditional fuel-powered vessels, electric ships generate
lower noise, and brings higher comfort, environmental friendliness, and control flexibility.
The installation capacity of electric ship power battery in China increased from
approximately 0.2 GWh in 2020 to 2.0 GWh in 2024, representing a CAGR of 72.4%. The
demand for electric ship power batteries is rapidly growing, primarily driven by (i) the
acceleration of investments and R&D in the electrification of shipbuilding and shipping
industry; (ii) the continuous evolution of power battery technologies; (iii) governments policy
incentives for the electric ship industry chain; and (iv) needs by large vessels, such as container
ships, to have additional backup batteries to be stored at docks for battery swapping. The
installation capacity of electric ship power battery in China is expected to grow to 104.7 GWh
in 2029, representing a CAGR of 121.2% from 2024 to 2029.
Electric Aircraft Power Battery
Electric aircraft is an aircraft powered by electricity. Improvements in electric propulsion
technology, battery technology, and lightweight materials are driving the development of more
efficient and powerful electric aircraft. The commercialization of electric aircraft for urban air
mobility (UAM), mainly including eVTOL (electric vertical take-off and landing) and light
electric fixed-wing aircraft, is becoming increasingly feasible.
Currently, eVTOL is the most active area of electric aircraft and it is an aircraft designed
to carry human passengers or cargo. It is capable of vertical take-off and landing like a
helicopter, eliminating the need for a runway. Unlike traditional airplanes and helicopters
which are primarily power by fossil fuels, eVTOLs are powered by electricity.
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From 2024 to the end of 2029, a series of models of the world’s major eVTOL
manufacturers are expected to pass various tests and obtain production permits. Companies
such as Joby Aviation, Archer Aviation and EHang have already secured leading development
positions. In the eVTOL industry, high safety, lightweight, and high power density are among
the most critical features expected of power batteries. Because eVTOLs have yet to achieve
mass production, eVTOL batteries are still before the mass production stage, and has much
higher unit price compared to EV batteries.
As a representative of new quality productive forces, eVTOL is increasingly becoming
the primary driver of robust growth in the low-altitude economy. Their unique capability for
vertical takeoff and landing, combined with a substantial range, is transforming urban air
mobility and short-distance transportation, heralding a new era in aerial transportation.
Recognizing its strategic importance, the Chinese government has identified the eVTOL sector
as a key emerging industry and is actively nurturing its development. Comprehensive policies
have been implemented across multiple domains, including technical R&D, industry support,
and market access, to create a conducive environment for the rapid growth of China’s eVTOL
industry. Additionally, measures such as financial assistance, tax incentives, and talent
cultivation are in place to support the expansion of both the Chinese and global eVTOL
industries. In March 2024, the Ministry of Industry and Information Technology, the Ministry
of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of
China issued the “General Aviation Equipment Innovation Application Implementation Plan
(2024-2030),” which proposes to promote the development of a trillion-yuan low-altitude
economy market by 2030. Against this backdrop, eVTOLs are expected to be utilized in tourist
destinations, urban areas, suburbs, and other regions by 2025.
Overview of Sodium-ion Battery
Sodium-ion batteries, due to their low material costs, excellent electrochemical
performance and high safety, can serve as a significant complement to the lithium battery
industry, with potential applications in electric vehicles, consumer electronics, small power
two-wheelers and energy storage. The primary difference between sodium-ion and lithium-ion
batteries lies in the charge carrier within the battery, with sodium ions replacing lithium ions,
moving between the positive and negative electrodes to enable charging and discharging.
Currently, the sodium-ion battery technology with commercial potential is generally
categorized into three types based on the cathode material: layered metal oxides, polyanionic
materials, and Prussian blue analogs. However, due to the limitations in relative cost and
technological maturity, sodium-ion batteries have not yet achieved large-scale commercial
application.
China is the leading market for the research and application of sodium-ion batteries. In
2024, the aggregate installation capacity of ternary lithium battery, LFP battery, and other types
of batteries (such as sodium-ion batteries) was 139.8 GWh, 408.9 GWh, and 1.2 GWh,
respectively. Key players that have already achieved commercial production and application of
sodium-ion batteries for EVs include CATL, Farasis Energy and HiNa Battery according to
publications of CABIA. The primary applications of sodium-ion batteries currently include
electric vehicles, low-speed vehicles and energy storage.
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EV BATTERY PRODUCTION
Investment and Construction Period of EV Battery Manufacturing Line
EV battery production capabilities require significant capital investment in facility
construction, equipment purchase and installation, working capital, and other expenses. The
investment per GWh of Lithium-Ion power battery equipment is approximately RMB200.0
million. The construction cycle of a Lithium-Ion power battery manufacturing line (from
factory approval to plant construction and equipment commissioning), typically takes one to
two years. Furthermore, the growth drivers in the battery industry have evolved from policy
and capital investment to market demand over the past few years. At the inception of the EV
battery industry, decisions to establish and expand EV battery manufacturing capabilities by
EV battery manufacturers were primarily driven by policy. Industry growth was later also
driven by investment from automobile OEMs who sought to ensure their own EV battery
supply through contracting dedicated battery manufacturing lines of or establishing joint
ventures with battery manufacturers.
To ensure stable battery supply and enhance battery R&D efficiency, OEMs have
gradually begun various forms of cooperation with power battery companies, such as joint
ventures with and equity investment in power battery companies to build power battery
factories, as well as independent investment in construction and purchasing of dedicated
manufacturing lines from power battery companies. Deep cooperation between OEMs and
power battery companies can enhance battery supply stability and efficiency. Considering the
intense competition and evolving technologies in the EV and power battery industries, it is
crucial for power battery companies to maintain product and manufacturing line compatibility
and develop diversified technical capabilities.
Production Cost of Lithium-ion Power Battery and Price of Raw Materials
The following charts set forth the cost breakdowns of battery cell manufacturing in China
in 2024.
Cost Breakdown of Battery Cell, China, 2024
8.1%
4.8%
72.4%
Raw Materials
Ternary Battery Cell LFP Battery Cell
Manufacturing Overhead
Direct Labour
Others
6.0%
5.7%
18.7%
69.6%
14.7%
Source: Frost & Sullivan
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Raw material prices experienced an overall upward trend from 2020 to 2022, followed by
a significant decline in 2023 as the supply and demand relationships gradually stabilized. The
prices of key lithium sources in lithium power batteries, such as lithium carbonate (Li
2CO3)
and lithium hydroxide (LiOH), as well as the phosphorus source yellow phosphorus (P 4)i n
lithium iron phosphate batteries and the nickel source nickel sulfate (NiSO 4) in NCM batteries,
decreased from their 2022 peaks of RMB496.1 thousand per ton, RMB468.9 thousand per ton,
RMB33.2 thousand per ton, and RMB44.8 thousand per ton to RMB90.5 thousand per ton,
RMB81.8 thousand per ton, RMB20.3 thousand per ton, and RMB31.4 thousand per ton
respectively in 2024. These prices are expected to continue to decrease, reaching RMB62.2
thousand per ton, RMB50.9 thousand per ton, RMB18.3 thousand per ton, and RMB26.5
thousand per ton, respectively, by 2029. The following chart sets forth the average price of
major types of raw materials in China during the years indicated. With the decrease in the price
of raw materials, the proportion of raw material costs in the overall production cost is expected
to decrease from around 80% in 2024 to approximately 65%-70% in 2029.
Average Price of Major Raw Materials, China, 2020-2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
0.0 15.7
28.2
55.1
47.1
131.1
116.1
468.9
496.1
263.3
258.7
36.7 44.8 33.7 31.4
90.5
81.8 70.5
76.6
61.3
68.9
65.5 63.5 62.2
55.2 52.4 50.9
29.3 28.1
26.7 33.2 25.2 20.3 19.4 18.9 18.5 18.4 18.3
40.0
80.0
120.0
160.0
200.0
240.0
280.0
320.0
360.0
400.0
440.0
480.0
520.0
Thousand RMB/Ton
Li2CO3
LiOH
P4
NiSO4
27.3 26.7 26.5
Source: Frost & Sullivan
The rapid increase in raw material prices, in particular the lithium carbonate prices, which
peaked in 2022 was primarily driven by the growing demand from the new energy vehicle
industry and tight domestic lithium supply. However, from 2022 to 2024, the raw material
prices experienced significant decrease primarily due to several factors: (i) global supply of
key materials, such as lithium and nickel, significantly increased, with lithium supply growing
by around 30% and nickel sulfate by 20% in 2023, leading to more abundant market supply;
(ii) rising inventory levels due to increased supply and lowered demand, with major lithium
producers reaching historical highs by mid-2023, further drove down the raw material prices;
and (iii) advancements in lithium extraction technology, including mature methods such as
sulfuric acid roasting and ongoing improvements through membrane, adsorption, and
electrodialysis technologies, are expected to further reduce costs. After 2024, the market began
to stabilize mainly due to several factors: the rebalancing of lithium carbonate supply-demand
and cost-driven market adjustments triggered by low-cost salt lake expansions in South
America and African lithium projects. Therefore, the prices of the raw materials which peaked
in 2022 and decreased significantly from 2022 to 2024 are expected to decrease and stabilize
from August 2024 and going forward.
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Price of Lithium Power Battery
The pricing of lithium power batteries is usually based on cost markup, and is mostly
affected by the cost of raw materials. Specifically, the three prevailing pricing practices include
(i) linking battery prices with prices of main raw materials; (ii) determining a battery price and
adjusting based on the changes of in lithium carbonate prices at the end of the year; and (iii)
predetermining a fixed price for the next year. The prices of NCM and LFP batteries generally
experienced an upward trend from 2020 to 2022, and subsequently declined to RMB0.46/Wh
and RMB0.37/Wh in 2024, respectively. The future prices of NCM and LFP batteries are
expected to continue to slowly decline to RMB0.40/Wh and RMB0.31/Wh in 2029,
respectively, as relevant raw material prices are also expected to decline. Battery-grade lithium
carbonate is the core raw material for manufacturing power Lithium-Ion batteries, and its price
fluctuations significantly impact the overall cost of power batteries. Influenced by the market
supply and demand environment, the increasing supply of lithium carbonate has gradually led
to more rational pricing. On the other hand, production costs are gradually decreasing,
primarily driven by production automation and economy of scale. Many companies have
proactively reduced the prices of ternary and lithium iron phosphate batteries to maintain
market competitiveness.
The following chart sets forth the average price of ternary and LFP power battery cells
in China during the years indicated.
Average Price Analysis of Ternary and LFP Power Battery Cell, China, 2020-2029E
2022 2027E2024 2025E20212020 2023 2026E 2028E 2029E
0.48 0.51
0.80
0.62
0.37 0.34 0.33 0.31 0.31
0.61 0.64
0.97
0.70
0.46 0.43 0.42 0.41 0.40
0.31
0.40
0.0
0.5
2.0
RMB/Wh
1.5
1.0
-6.9% -2.8%
-3.6%-6.3%LFP
LFP
Ternary
Ternary
CAGR
(20-24)
CAGR
(24-29E)
Source: Frost & Sullivan
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DRIVERS OF POWER BATTERY MARKET IN CHINA
Accelerating Transportation Electrification Process
Under the “net-zero” targets by most countries worldwide, transportation electrification
emerges as a pivotal strategy. At the forefront of this movement, the development of EV is
recognized as the primary catalyst as well as the most important driving force. The global EV
industry is expected to undergo rapid growth in sales volume, advancements in intelligence
technologies, improvements in charging infrastructure, and coordinated development of
different EV types, especially PHEV , which in turn are expected to drive the expansion of the
global EV market. This, in turn, has driven the rapid growth of the EV battery industry.
Furthermore, the utilization of power batteries in more land, sea and air application scenarios
(including electric aircraft and ships in addition to EVs), is expanding, further stimulating the
power battery market.
Technological Advancement
The EV battery technologies continue to advance, with ongoing innovations in areas such
as cathode materials, packaging methods, electrolytes, manufacturing processes, and
techniques. This not only improves the energy density, performance, and safety of the batteries
but also continuously optimizes the cost structure of battery products, further accelerating their
broader application. For example, new materials are continuously applied, and formulations are
adjusted to improve cathode and anode materials for higher energy density: the uniformity of
coated electrode materials is enhanced to improve safety, and composite copper foil is used to
reduce the weight and cost of metal materials.
Favorable Government Policies
The EV industry has received continuous policy support, especially in China. In 2019, the
policy focus was on optimizing subsidy technical indicators, lowering subsidies, improving the
settlement system, strengthening quality supervision, and promoting industry competition. This
encouraged companies to enhance their technological capabilities, reduce costs, improve
product quality and competitiveness, and make the market more dynamic. In 2020, the State
Council issued the “New Energy Vehicle Industry Development Plan (2021-2035)” ( อঐ๕
஝ྌ(2021-2035 ϋ)), setting goals for new energy vehicle sales, technology,
and other targets by 2025. The plan emphasized breakthroughs in key technologies and
encouraged cross-industry integration. This helped NEV and battery companies clarify their
development directions, accelerate technological research and development, and promote
coordinated industry growth. From 2021 to 2022, various regions actively implemented the
plan, strengthening the construction of infrastructure such as charging stations, encouraging
the application of battery swap models, and increasing the proportion of new energy vehicles
in public sectors. These efforts improved the usage environment for new energy vehicles,
enhanced user convenience and stimulated consumption. Starting 2023, central government
and many local governments in China have implemented policies supporting EVs, such as
consumer vouchers for new EV purchases, exemption from vehicle purchase taxes, and
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exemptions from traffic restrictions. For example, in May 2024, the State Council issued the
“2024-2025 Energy Conservation and Carbon Reduction Action Plan,” ( 2024-2025ࠥ
), which proposed gradually lifting purchase restrictions on NEVs across various
regions, implementing supportive policies to facilitate NEV usage, promoting the
electrification of public sector vehicles, steadily advancing the adoption of new energy
medium- and heavy-duty trucks, and developing zero-emission freight fleets. In June 2024, the
Ministry of Finance issued the “Notice on Allocating the 2024 Central Financial Pre-allocated
Budget for Vehicle Trade-in Subsidies” (ɨ༺2024ཫᅡ༟
), which allocates subsidy and incentive funds to provinces, regions, and
municipalities for the pre-allocation of central financial subsidies for vehicle trade-ins in 2024.
The total annual budget for the 2024 vehicle trade-in subsidies amounts to nearly RMB11.2
billion. These supportive policies are expected to remain one of the main driving forces for the
development of China’s EV industry, which in turn will drive the growth of the EV battery
market.
As advised by Frost & Sullivan, the termination of national EV subsidies at the beginning
of 2023 led to a temporary year-over-year decline in EV sales in January 2023. However, in
February 2023, EV sales rebounded and experienced year-over-year growth. The price of
lithium carbonate has experienced a downward trend since November 2022, primarily due to
an increase on the supply side rather than a weakening of demand. As such, the temporary
slowdown in sales in January 2023 as mentioned above did not have a significant impact on
lithium carbonate prices.
Continuous Cost Reduction for EV Batteries
The prices of key raw materials for power batteries have significantly decreased from
their historical peaks. As major manufacturers expand production, economies of scale are
becoming increasingly significant, leading to a significant reduction in the overall cost of
power batteries. Power battery manufacturers can offer more cost-effective products, driving
the continuous expansion of the application of power battery products.
COMPETITIVE LANDSCAPE OF EV POWER BATTERY MARKET IN CHINA
EV battery market is highly concentrated in China, with top ten manufacturers accounting
for 95.3% of total installation capacity in 2024. With the EV battery installation capacity of 9.9
GWh in 2024, our Group were the 9th largest player among manufacturers of EV battery in
China, according to CABIA. The following table sets forth details of top EV battery
manufacturers in China as measured by EV battery installation capacity in 2024.
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Ranking of EV Battery Manufacturers (by installation capacity),
China, 2024
Rank Company Name
Installation Capacity
(GWh) Market Share
1 /H1118/H1118/H1118/H1118/H1118CATL 246.0 44.7%
2 /H1118/H1118/H1118/H1118/H1118BYD 135.0 24.6%
3 /H1118/H1118/H1118/H1118/H1118CALB 36.5 6.6%
4 /H1118/H1118/H1118/H1118/H1118Gotion 25.0 4.6%
5 /H1118/H1118/H1118/H1118/H1118EVE Battery 18.7 3.4%
6 /H1118/H1118/H1118/H1118/H1118SVOLT 17.4 3.2%
7 /H1118/H1118/H1118/H1118/H1118SUNWODA 15.8 2.9%
8 /H1118/H1118/H1118/H1118/H1118REPT 12.1 2.2%
9 /H1118/H1118/H1118/H1118/H1118Our Group 9.9 1.8%
10 /H1118/H1118/H1118/H1118LGES 7.7 1.4%
Others 25.9 4.7%
Total 550.0 100.0%
Source: CABIA, Frost & Sullivan
Our overall EV battery installation capacity growth ranked fourth, our ternary lithium
battery installation capacity growth ranked third, and our LFP battery installation capacity
growth ranked fourth in China in 2024.
The following table sets forth the top 10 NCM battery companies by installation capacity
in 2024.
Ranking of NCM Battery Manufacturers (by installation capacity),
China, 2024
Rank Company Name
Installation
Capacity
(GWh) Market Share 23-24 yoy growth
1 /H1118/H1118/H1118/H1118/H1118CATL 94.4 67.9% 20.5%
2 /H1118/H1118/H1118/H1118/H1118CALB 12.9 9.3% -14.0%
3 /H1118/H1118/H1118/H1118/H1118LGES 7.7 5.5% -8.2%
4 /H1118/H1118/H1118/H1118/H1118SVOLT 7.0 5.0% 41.5%
5 /H1118/H1118/H1118/H1118/H1118SUNWODA 4.0 2.9% -17.3%
6 /H1118/H1118/H1118/H1118/H1118Farasis Energy 3.3 2.4% -44.9%
7 /H1118/H1118/H1118/H1118/H1118EVE Battery 2.6 1.8% -16.0%
8 /H1118/H1118/H1118/H1118/H1118Gotion 2.4 1.7% 99.2%
9 /H1118/H1118/H1118/H1118/H1118Our Group 1.6 1.2% 23.5%
10 /H1118/H1118/H1118/H1118BYD 0.2 0.1% N/A*
Others 3.0 2.2%
Total 139.0 100.0%
Source: CABIA, Frost & Sullivan
*Note: Due to the very small installed capacity of NCM power batteries by BYD in 2023, which was less than 0.1
GWh, it is not included in the year-on-year growth rate statistics.
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The following table sets forth a comparison between our NCM products and products by
our peers.
Industry Peers’ Products Our Products
Gravimetric energy density
(Wh/kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
230-320 230-306
Fast charging time
(30-80% SOC) (hour) /H1118/H1118/H1118
0.13-0.20 0.17-0.25
Cycle life (cycles) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,500-3,500 1,000-3,000
Driving range
(per charge, km) /H1118/H1118/H1118/H1118/H1118/H1118
500-1,000 450-1,000*
Main OEM customers /H1118/H1118/H1118/H1118Large state-owned
enterprises, pure-play
EV companies and
multi-national OEMs
Large state-owned
enterprises and
multi-national OEMs
Market segments of
EV models /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
High-end and mid-end High-end
Note:
* As certain of our NCM products are still at testing stage, the driving range is calculated based on the
driving range per charge of the vehicle models that may utilize our NCM products. You should not place
undue reliance on such figures as the driving range varies from car model to car model and is largely
dependent on the design of the car model.
The following table sets forth the top 10 LFP battery companies by installation capacity
in 2024.
Ranking of LFP EV Battery Manufacturers (by installation capacity),
China, 2024
Rank Company Name
Installation
Capacity
(GWh) Market Share 23-24 yoy growth
1 /H1118/H1118/H1118/H1118/H1118CATL 151.6 37.1% 70.8%
2 /H1118/H1118/H1118/H1118/H1118BYD 134.8 33.0% 27.9%
3 /H1118/H1118/H1118/H1118/H1118CALB 23.6 5.8% 31.8%
4 /H1118/H1118/H1118/H1118/H1118Gotion 22.7 5.5% 54.0%
5 /H1118/H1118/H1118/H1118/H1118EVE Battery 16.1 3.9% 13.6%
6 /H1118/H1118/H1118/H1118/H1118REPT 12.1 3.0% 158.8%
7 /H1118/H1118/H1118/H1118/H1118SUNWODA 11.8 2.9% 241.4%
8 /H1118/H1118/H1118/H1118/H1118SVOLT 10.4 2.5% 176.6%
9 /H1118/H1118/H1118/H1118/H1118Our Group 8.2 2.0% 102.0%
10 /H1118/H1118/H1118/H1118Jidian New Energy 6.3 1.5% N/A*
Others 11.4 2.8%
Total 409.0 100.0%
Source: CABIA, Frost & Sullivan
*Note: Due to the very small installed capacity of LFP power batteries by Jidian New Energy in 2023, which was
less than 0.2 GWh, it is not included in the year-on-year growth rate statistics.
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PHEV battery market is also highly concentrated in China, with top ten manufacturers
accounting for almost 100% of total installation capacity in 2024. The following table sets
forth details of top PHEV battery manufacturers in China as measured by PHEV battery
installation capacity in 2024.
Ranking of PHEV Battery Manufacturers (by installation capacity),
China, 2024
Rank Company Name
Installation Capacity
(GWh) Market Share
1 /H1118/H1118/H1118/H1118/H1118CATL 46.9 39.5%
2 /H1118/H1118/H1118/H1118/H1118BYD 38.5 32.4%
3 /H1118/H1118/H1118/H1118/H1118SVOLT 8.8 7.4%
4 /H1118/H1118/H1118/H1118/H1118CALB 8.5 7.1%
5 /H1118/H1118/H1118/H1118/H1118SUNWODA 6.6 5.6%
6 /H1118/H1118/H1118/H1118/H1118Gotion 4.4 3.7%
7 /H1118/H1118/H1118/H1118/H1118Our Group 2.1 1.8%
8 /H1118/H1118/H1118/H1118/H1118REPT 2.1 1.8%
9 /H1118/H1118/H1118/H1118/H1118EVE Battery 0.7 0.6%
10 /H1118/H1118/H1118/H1118Ganfeng LiEnergy 0.1 0.1%
Others 0.0 0.0%
Total 118.7 100.0%
Source: CABIA, Frost & Sullivan
The following table sets forth a comparison between our LFP products and products by
our peers.
Industry Peers’ Products Our Products
Gravimetric energy density
(Wh/kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
172-190 180-185
Fast charging time
(30-80% SOC) (hour) /H1118/H1118/H1118
0.25-0.40 0.25-0.5
Cycle life (cycles) /H1118/H1118/H1118/H1118/H1118/H1118/H11186,000 Up to 7,000
Driving range
(per charge, km) /H1118/H1118/H1118/H1118/H1118/H1118
500-600 500-699
Main OEM customers /H1118/H1118/H1118/H1118Large state-owned
enterprises, and pure-
play EV companies
Large state-owned
enterprises, pure-play
EV companies, and
multi-national OEMs
Market segments of
EV models /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
High-end, mid-end and
economy
Mid-end and economy
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DEVELOPMENT TRENDS OF POWER BATTERY MARKET IN CHINA
Continuous Technology Innovation and Breakthroughs on Battery Performance
In recent years, researchers and manufacturers have been pushing the boundaries of
battery technology, focusing on advancements in new materials, battery design, and overall
efficiency. Solid-state battery, sodium-ion battery, high-nickel cathodes, and silicon anodes are
key areas of innovation within power battery industry. Furthermore, industry players are also
focusing on enhancing product performance and ensuring product quality by improving
product yield rate and efficiency, digitizing manufacturing lines to improve their adaptability,
designing flexible manufacturing lines, and real-time optimizing manufacturing lines using
artificial intelligence.
Reducing Cost throughout the Entire Process
EV battery costs significantly impact the overall costs of EVs. As competition among
OEMs intensifies and price competition becomes increasingly fierce, EV battery manufacturers
face increasing pressure to be more cost efficient by continuously reducing costs throughout
the entire battery production process, adopting measures to ensure a stable supply of core raw
materials, control equipment costs, improve manufacturing line efficiency, and optimize
product design.
Closer Collaboration between Battery Manufacturers and OEMs
As competition in China’s EV industry grows increasingly fierce, OEMs are developing
and introducing more vehicle models and adopting different technological routes. This requires
OEMs to collaborate with their suppliers, especially power battery manufacturers, in product
R&D, optimization, and supply chain security, among other areas. Such closer collaboration
can further ensure product development and production efficiency, and ensure supply stability
in response to changes in demands for EVs.
Increasing Importance of Flexible Manufacturing Capability
In light of the rapid ongoing changes in technology pathways and market structures, such
as the accelerating development of PHEV and LFP batteries, battery manufacturers may
encounter undercapacity at certain points in time or for specific types of batteries. It is
becoming increasingly important for manufacturers to enhance their flexible manufacturing
capacity, which allows them to promptly adapt to changes in market structures.
Increasing Diversity of Business Models
Amidst the intensifying competition, battery manufacturers in China are adopting
diversified business models to adapt to the ever-evolving market and enhance profitability.
These strategies include forming strategic alliances with various partners (including suppliers
and customers), expanding into overseas markets, offering technology licensing, and more.
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Battery Standardization
Standardizing battery production involves establishing and adhering to a set of unified
technical specifications and operational procedures throughout the manufacturing process,
ensuring the quality, safety, and consistency (in terms of configuration and size) of the battery
products. This approach enhances production efficiency, reduces costs, and fosters the overall
healthy development of the industry.
ENTRY BARRIERS OF POWER BATTERY MARKET IN CHINA
Technology Barrier
The EV battery industry has extremely high technical requirements, especially in terms
of battery performance, safety and cost control. New entrants must possess advanced battery
technology and robust R&D capabilities, as well as the financial resources to continue to invest
in those technology and capabilities to remain competitive as technology in the power battery
market continues to evolve.
Capital Barrier
The R&D and production in the EV battery industry require huge capital investment.
Establishing and ramping up battery manufacturing facilities, including facility construction,
equipment purchases and plant operations can incur significant costs and expenses. It also
consumes significant financial resources to retain a competitive R&D team and maintain solid
R&D facilities and capabilities to develop new technology and products to stay competitive.
Scale Barrier
Economies of scale are expected to become increasingly apparent in China’s power
battery industry. Top industry players with established scales can reduce costs and improve
market competitiveness through large-scale production, while new entrants may find it hard to
achieve the same.
Brand Barrier
Brand influence and market recognition are crucial for battery companies. Established
brands have spent years to build a stable and loyal customer base, which new entrants would
need to build from scratch.
Customer Barrier
Large battery companies often have long-term relationships with major customers such as
automakers. It takes time for new entrants to build trust and customer relationships to capture
stable orders and market share.
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Supply Chain Barrier
Battery manufacturing involves complex supply chain management, including raw
material procurement, production management, and logistics distribution. Established market
players have built the necessary supply chain relationships to ensure smooth operations and
support potential expansions, while new players may find it difficult to secure sufficient
high-quality raw materials to meet their needs.
ESS BATTERY
Electrochemical energy storage (ESS) refers to a variety of secondary battery energy
storage technologies and measures, that is, the use of chemical batteries to store electrical
energy and release it when needed. ESS battery typically includes Lithium-Ion batteries,
sodium sulphur batteries, flow batteries, and lead batteries, among which Lithium-Ion batteries
currently hold the dominant position due to their cost effectiveness and optimal physical
properties. Compared to other energy storage technologies, ESS is the most widely-used form
with significant growth potential due to the short construction period, flexibility in geographic
locations, gradually reducing costs and increasingly developed technology.
With the wide application of ESS batteries in power consumption, power generation, and
power transmission and distribution, the global ESS battery installation capacity grew from 9.9
GWh in 2020 to 261.0 GWh in 2024, representing a CAGR of 126.9%. With the continuous
advancement of global large-scale renewable power projects, global centralized ESS
installation capacity has reached 163.8 GWh in 2024, and is expected to grow to 601.9 GWh
in 2029, representing a CAGR of 29.7%. In addition, in order to improve the efficiency of
electricity consumption under commercial and household scenarios as well as improve the
stability and sustainability of urban electricity consumption, the distributed ESS installation
capacity is expected to grow to 407.6 GWh in 2029, representing a CAGR of 33.2% from 2024
to 2029.
China’s ESS battery market is also experiencing rapid development, growing from 2.4
GWh in 2020 to 69.6 GWh in 2024, representing a CAGR of 131.3%, and is expected to further
grow to 407.9 GWh in 2029, representing a CAGR of 42.4%.
REPORT COMMISSIONED BY FROST & SULLIV AN
In connection with the Global Offering, we have engaged Frost & Sullivan to conduct a
detailed analysis and to prepare an industry report on the relevant markets. Frost & Sullivan
is an independent global market research and consulting company founded in 1961 and is based
in the United States. Services provided by Frost & Sullivan include market assessments,
competitive benchmarking, and strategic and market planning for a variety of industries.
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We have included certain information from the Frost & Sullivan Report in this Prospectus
because we believe such information facilitates an understanding of the relevant markets for
potential investors. Frost & Sullivan prepared its report based on its in-house database,
independent third-party reports and publicly available data from reputable industry
organizations. Where necessary, Frost & Sullivan contacts companies operating in the industry
to gather and synthesize information in relation to the market, prices and other relevant
information. Frost & Sullivan believes that the basic assumptions used in preparing the Frost
& Sullivan Report, including those used to make future projections, are factual, correct and not
misleading. Frost & Sullivan has independently analyzed the information, but the accuracy of
the conclusions of its review largely relies on the accuracy of the information collected. Frost
& Sullivan research may be affected by the accuracy of these assumptions and the choice of
these primary and secondary sources.
We have agreed to pay Frost & Sullivan a fee of RMB550 thousand for the preparation
of the Frost & Sullivan Report. The payment of such amount was not contingent upon our
successful listing or on the content of the Frost & Sullivan Report. Except for the Frost &
Sullivan Report, we did not commission any other industry report in connection with the
Global Offering.
Our Directors confirm that after taking reasonable care, there has been no adverse change
in the market information since the date of the report prepared by Frost & Sullivan which may
qualify, contradict or have an impact on the information set forth in this section in any material
respect.
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REGULATION
Information disclosed in this section is relevant PRC laws, regulations and regulatory
documents in effect which have a significant impact on our operations in the PRC as of the date
of this Document (hereinafter referred to as “ PRC Laws ”), which are subject to change in the
future, but it does not include a detailed analysis of PRC Laws related to our business activities
and operations in the PRC, or serve as all PRC Laws applicable to our operations in the PRC.
PRINCIPAL REGULATORY AUTHORITIES
We are mainly engaged in the design, development, production and sales of EV batteries
and ESS products, and are subject to the supervision of the National Development and Reform
Commission (the “ NDRC”) and the Ministry of Industry and Information Technology of the
PRC (the “ MIIT”).
The main functions undertaken by the NDRC include: formulating and implementing
strategies on national economic and social development; medium and long-term development
plans and annual plans, coordinating economic and social development, working on the
coordination and solution of major economic concerns and adjusting economic operation.
The main functions undertaken by the MIIT include: drawing up new industrialization
development strategies and policies; formulating and implementing industrial planning, plans
and policies, including the regulations for the industries of EV battery; monitoring and
analyzing the trend of operation of industrial sector; and conducting surveys and publishing the
relevant information; formulating and implementing the policies on industrial energy
conservation and comprehensive utilization of resources and promotion of clean production.
INDUSTRIAL POLICIES
Regulations on EV & ESS and Lithium Battery Industries
According to the Guiding Catalog for Industrial Restructuring (ኬͦ
፽) promulgated by the NDRC on December 2, 2005, which was last amended on December
27, 2023, and came into effect on February 1, 2024, new lithium primary batteries (lithium iron
disulfide and lithium thionyl chloride, among others); Lithium-Ion batteries, semi and
solid-state lithium batteries, fuel cells, sodium-ion batteries, flow batteries, new-structure
(bipolar, lead mesh horizontal, coiled, tubular, and other) sealed lead-acid batteries, lead-
carbon batteries and other new batteries and super-capacitors fall into the state-encouraged
industries.
According to the Guiding Catalog for Key Products and Services for Strategic Emerging
Industries (ኬͦ፽), which was promulgated by the
NDRC on January 25, 2017, and came into effect on the same day, the ESS and its management
system dedicated for Lithium-Ion battery cells, modules and systems; supercapacitor cells,
modules and systems; new system power batteries cells, modules and systems; hybrid energy
storage power modules and systems; modular nickel-metal hydride battery ESS; battery
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management systems, super capacitor management systems; electromechanical coupling
systems, power battery systems, high-voltage wiring harnesses and other components; packet
assemblers for fuel cell system; automobile- specific final assembly equipment; and production
equipment for recycling of used batteries are key products and services for strategic emerging
industries.
The Outline of the 14th Five-Year Plan for Economic and Social Development and
Long-Range Objectives through the Year 2035 of the People’s Republic of China ( ʕശɛ͏
ʞϋ஝ྌձ2035) promulgated by the
National People’s Congress (the “ NPC”) on March 11, 2021 points out that China will focus
on new energy, new energy vehicles, environmental protection and other emerging industries
of strategic importance, and accelerate the innovation and application of core technologies in
key fields to enhance the country’s capacity of ensuring the supply of productive factors and
foster new drivers for industrial development.
According to the Notice of the 14th Five-Year Plan for Circular Economy Development
(“ɤ̬ʞ”), which was issued by the NDRC on July 1, 2021 and
came into effect on the same day, in order to vigorously develop circular economy, promote
resource conservation and intensive use, and build a resource recycling industrial system and
recycling system of waste materials, the establishment of the traceability management platform
for the EV batteries of NEVs shall be strengthened, and the traceability management system
for the recycling and reuse of the EV battery of NEVs shall be improved.
According to the Guiding Opinions on Accelerating the Development of New Energy
Storage (ኬจԈ), which were jointly promulgated by the
NDRC and the National Energy Administration (the “ NEA”) on July 15, 2021 and came into
effect on the same day, the PRC will strive to build a clean, low-carbon, safe and efficient
energy system, and seek to drive down the cost and advance the commercial-scale application
of more mature new energy storage technologies such as Lithium-Ion batteries, in an effort to
achieve carbon peak and carbon neutrality. By 2025, it will realize the transition from the early
stage of commercialization to scale development of new energy storage. By 2030, it will realize
the full market-oriented development of new energy storage, and new energy storage will
become one of the key supports for carbon peak and carbon neutrality in the energy sector.
According to the New Energy Storage Development Plan During China’s “14th Five-Year
Plan” Period ( “ɤ̬ʞ”) jointly promulgated by the NDRC and the
NEA on January 29, 2022, by 2025, new energy storage will expand from the initial stage of
commercialization to the stage of scale development and be ready for large-scale commercial
application. By 2030, new energy storage will be developed on a fully market-oriented basis,
and diversified technology development will be promoted, such as the optimization design and
research of key core technologies, equipment and integration, such as sodium-ion batteries,
new Lithium-Ion batteries, lead-carbon batteries, liquid flow batteries, compressed air,
hydrogen (ammonia) energy storage and heat (cold) energy storage and so on, the intensive
tackling of energy storage technologies such as superconductors and supercapacitors, and the
research on a new generation of high-energy-density energy storage technologies such as liquid
metal batteries, solid Lithium-Ion batteries and metal-air batteries.
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According to the Guiding Opinions on Promoting the Development of the Energy
Electronics Industry (ኬจԈ), which were jointly
promulgated by the MIIT and other five departments on January 3, 2023, and came into effect
on the same day, energy electronics industry is the generic term of electronic information
technologies and products that produce energy, serve energy and apply energy, mainly
including new energy storage batteries and other fields. One of the development goals set out
in these Opinions is to develop safe and economical new energy storage batteries, which means
tackling key problems in the industrialization of new-type energy storage batteries shall be
strengthened and the large-scale application of advanced energy storage technologies and
products shall be promoted.
According to the Standards for Lithium-Ion Battery Industry (2024 edition) ( ቞ᕎɿཥ
ϫБุ஝ᇍૢ΁(2024 ϋ͉)) and the Measures for the Administration of Lithium-Ion Battery
Industry (2024 edition) (ج2024 ϋ͉)), which were
promulgated by the MIIT on June 18, 2024 and became effective on June 20, 2024, lithium-ion
battery enterprises and projects shall comply with the requirements of laws and regulations
regarding various aspects, such as the exploitation and use of resources, ecological and
environmental protection, energy conservation management, safe production, and shall adhere
to the requirements of the national industrial policy and relevant industrial planning and layout,
as well as the requirements of the local national spatial and ecological environmental
protection special planning, and shall have the necessary transportation conditions in place.
Regulations on Battery Treatment and Recycling
The Interim Measures for the Administration of Recycling and Use of Power Storage
Batteries of NEVs (), which was
promulgated by the MIIT, the Ministry of Science and Technology (the “ MOST”), the Ministry
of Environmental Protection (currently known as the Ministry of Ecology and Environment),
the Ministry of Transportation (the “ MOT”), the MOFCOM, the SAMR, and the NEA on
January 26, 2018 and became effective on August 1, 2018, implements the system of extended
responsibility of producers, according to which the main responsibility for power storage
battery recycling is borne by automobile manufacturers, and relevant enterprises shall fulfill
their corresponding responsibilities in all aspects of power storage battery recycling and
utilization to ensure the effective use and environmentally friendly disposal of power storage
batteries. Vehicle manufacturers should establish recycling channels for EV batteries and
should set up recycling service outlets. The cooperation in building and the sharing of scrapped
EV battery recycling channels through various forms between vehicle manufacturers, battery
manufacturers, enterprises recycling and comprehensively utilizing scrapped vehicles are
encouraged. Battery manufacturers and vehicle manufacturers should hand over the scrapped
power storage batteries produced during the production process to recycling service sites or
comprehensive utilization enterprises.
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According to the Interim Provisions on Traceability Management of Power Storage
Battery Recycling for NEVs (), which
was issued by the MIIT on July 2, 2018 and became effective on August 1, 2018, the
“Integrated Management Platform for National Monitoring of NEVs and Traceability of Power
Storage Battery Recycling and Utilization” (္಻ၾਗɢႅཥϫΫϗл͜๑๕
ၝΥ၍ଣ̨̻) shall be established to collect information on the whole lifecycle of power
storage battery production, sales, use, disposal, recycling, and utilization, and to monitor the
fulfillment of the responsibility of battery recycling and utilization by the subjects of each link.
According to Requirements of the Industry Standards for the Comprehensive Utilization
of Wasted Power Storage Batteries of NEVs ( อঐ๕ӛԓᄻᔚਗɢཥϫၝΥл͜Бุ஝ᇍૢ
΁(2024 ϋ͉)) promulgated by the MIIT on December 16, 2024 and became effective on
January 1, 2025, enterprises engaged in the business of echelon utilization or recycling of
wasted power batteries from NEVs shall comply with relevant requirements, including but not
limited to those related to corporate layout and project site selection, comprehensive utilization
capabilities, product quality, environmental protection, product manufacturing and public
health, social responsibility, and vocational education.
The Implementation Plan for Accelerating the Promotion of Comprehensive Utilization of
Industrial Resources (), which was promulgated by
eight departments, including the MIIT, the NDRC and the MOST, and came into effect on 27
January 2022, proposes to improve the recycling and utilization system of waste and used
power batteries and promote the safe echelon application of waste and used power batteries in
areas such as power backup and charging and replacement. Build a number of demonstration
projects for gradient and recycling in key regions such as the Beijing-Tianjin-Hebei Region,
the Yangtze River Delta, and the Guangdong, Hong Kong and Macao Greater Bay Area.
Cultivate a number of backbone enterprises for gradient and recycling, and increase the
research, development and promotion of technologies such as non-destructive testing of power
batteries, automated dismantling and efficient extraction of valuable metals.
On 29 April 2020, the newly amended Law of the PRC on the Prevention and Control of
Environmental Pollution Caused by Solid Waste (ط
) (the “ Solid Waste Law ”) incorporated for the first time the extended producer
responsibility system for products such as automotive power batteries into the law, making
important arrangements for the construction of a system for the recycling and treatment of
waste automotive power batteries from the top-level design. In order to further regulate and
guide the treatment process of waste lithium-ion power batteries and implement the provisions
of the Solid Waste Law, the Ministry of Ecology and Environment (the “ MEE”) promulgated
on August 7, 2021 the Technical Specification of Pollution Control for Treatment of Waste
Power Lithium-ion Battery (for Trial Implementation) (છՓ
Ҧஔ஝ᇍ(༊Б)) (the “ Technical Specification ”), which took effect on January 1, 2022. The
Technical Specification sets out the general requirements for the treatment of waste power
lithium-ion batteries, technical requirements for pollution control in the treatment process,
requirements for pollutant emission control and environmental monitoring, and requirements
for operational environmental management. The Technical Specification is applicable to the
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pollution control of the waste power lithium-ion battery treatment process, and can be used as
a technical reference basis for the environmental impact assessment, construction and
operation, completion environmental protection acceptance and emission permit management
of construction projects related to waste power lithium-ion battery treatment. For other types
of waste lithium-ion batteries such as energy storage and consumer batteries, as well as the
pollution control of lithium-ion battery production waste treatment process, please refer to the
Technical Specification for implementation.
Regulations on Carbon Peaking and Carbon Neutrality
Pursuant to the National Standardization Development Outline (ၤ
) promulgated by the Central Committee of the Communist Party of China (the “ CPC
Central Committee ”) and the State Council on October 10, 2021 and became effective on the
same day, it calls for establishing and improving standards for peaking carbon dioxide
emissions and carbon neutrality. Pursuant to the Notice of Issuing the Implementation Plan for
Establishing and Improving the Measurement System for Carbon Peaking and Carbon
Neutrality Standards ()
(the “ Implementation Plan ”) issued by the SAMR, the NDRC, the MIIT, the Ministry of
Natural Resources, the MEE, the Ministry of Housing and Urban-Rural Development, the
MOT, the China Meteorological Administration, and the National Forestry and Grassland
Administration and became effective on October 18, 2022, it stipulates that the main goals of
this Implementation Plan are that the standard measurement system for carbon peaking and
carbon neutrality be basically established by 2025, the standard measurement system for
carbon peaking and carbon neutrality be more robust by 2030 and a carbon neutrality standard
measurement system be more technologically advanced, more effectively managed, more
efficiently serviced and leading internationally be fully established by 2060. Meanwhile, it sets
up some key tasks, among which the tasks related to the EV battery and energy storage mainly
include focusing on the amending of standards for inspection, monitoring, performance
assessment, safety management, and firefighting for systems and equipment related to new
types of lithium-ion batteries, lead-carbon batteries, flow batteries, fuel cells, and sodium-ion
batteries. Furthermore, pursuant to the Notice of the Action Program for Further Strengthening
the Establishment of the Measurement System for Carbon Peaking and Carbon Neutrality
Standards (2024-2025) (ࣩ2024-2025
ϋ)) issued by the NDRC, the SAMR and the MEE on July 14, 2024 and became
effective on the same day, accelerating the development of national standards for carbon
footprints of lithium batteries is one of the key tasks.
According to the Action Plan for Carbon Dioxide Peaking Before 2030 ( 2030၁༺
), which was promulgated by the State Council on October 24, 2021 and became
effective on the same day, China will focus on the implementation of “Ten Major Carbon
Peaking Actions”, such as the actions for energy transition, energy saving and carbon
reduction, and low-carbon transportation. Among these, the actions related to the EV battery
and energy storage mainly include: (i) in terms of the action for promoting green and
low-carbon transportation, China will promote low-carbon transformation of transportation
vehicles and equipment, expand the application of new and clean energy in transportation and
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vigorously promote NEVs, while gradually reducing the proportion of cars that run on
traditional oil-based fuels in new car sales and car ownership; by 2030, the incremental share
of vehicles fueled by new and clean energy that year will reach around 40%; (ii) in terms of
the green and low-carbon transformation of energy, accelerate the construction of new power
systems, actively develop “new energy + energy storage,” integrate source-grid-load-storage
and multi-energy complementarity, and support the reasonable deployment of energy storage
systems for distributed new energy sources. Accelerate the demonstration and application of
new types of energy storage, and by 2025, the installed capacity of new types of energy storage
will reach more than 30 million kilowatts; in the action of energy saving and carbon reduction
and efficiency, strengthen the energy saving and carbon reduction of new infrastructure, adopt
DC power supply, distributed energy storage, “photovoltaic + energy storage” and other modes,
and explore diversified energy supply; (iii) in terms of the action for advancing green and
low-carbon technology innovation, China will deepen application-oriented basic research and
focus on fields such as the large-scale utilization of renewable energy, new types of power
system, energy conservation, energy storage and power batteries.
According to the Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality
in Full and Faithful Implementation of the New Development Philosophy (ҁ዆๟ᆽΌ
จԈ) promulgated by CPC Central Committee
and the State Council and became effective on September 22, 2021, it expressly stipulates that,
in order to achieve the main objectives of carbon peak and carbon neutrality as scheduled,
China will accelerate the building of a clean, low-carbon, safe and efficient energy system;
speed up the construction of a low-carbon transportation system, optimize the transportation
structure, continue to reduce transportation energy consumption and carbon dioxide emission
intensity, promote energy-saving and low-carbon transportation, guide low-carbon way of
travel; strengthen key green and low-carbon technological research and promotion and
application, carry out research on low-carbon, zero-carbon, carbon negative and new energy
storage materials, and strengthen the research, demonstration and industrial application of new
energy storage technologies such as electrochemistry.
Pursuant to the Notice on the Issuance of Financial Support to Facilitate Efforts in
Reaching Carbon Peak and Carbon Neutralization (၁ʕձʈ
) issued by the MOF and became effective on May 25, 2022, it proposes to
vigorously support the development of NEVs and improve the supporting policies for charging
and replacement infrastructure and calls for adhering to the coordinated advancement of carbon
reduction, pollution reduction, green expansion and growth, actively building a fiscal and tax
policy system that promotes the efficient use of resources and green, low-carbon development,
promoting a better combination of an effective government and a functional market and
supporting the timely achievement of carbon peaking and carbon neutrality goals.
Pursuant to the Implementation Plan for Carbon Peak in Industrial Sectors ( ʈุჯਹ
), which was issued by the MIIT, the NDRC and the MEE on July 7, 2022
and became effective on the same day, in order to accelerate the green and low-carbon
transformation and achieve carbon peak in the industrial sector, the construction of a recycling
system for NEV power batteries shall be promoted.
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NATIONAL POLICIES THAT MAY SIGNIFICANTLY AFFECT THE EV & ESS
INDUSTRY
Government Subsidies for NEV Purchasers
On April 22, 2015, the MOF, the MOST, the MIIT and the NDRC jointly promulgated the
Circular on Financial Subsidies on the Promotion and Application of NEVs from 2016 to 2020
(׵2016-2020) (the “ NEV Financial
Subsidies Circular ”), which took effect on the same day. The NEV Financial Subsidies
Circular provides that those who purchase NEVs specified in the Catalog of Recommended
NEV Models for Promotion and Application (ͦ፽)
(the “ Recommended NEV Catalog ”) issued by the MIIT, may enjoy government subsidies. A
purchaser may purchase a new energy vehicle from a manufacturer by paying the price
deducted from the subsidy amount, and the manufacturer may obtain the subsidy amount from
the PRC central government after such a NEV is sold to the purchaser. Furthermore, a
preliminary phase-out schedule for the provision of subsidies during the period from 2016 to
2020 contained in the NEV Financial Subsidies Circular specifies that the subsidy amount per
vehicle, or subsidy criteria, for the years 2017 to 2018 will be reduced by 20% compared to
that of the year 2016, and the subsidy criteria for the years 2019 to 2020 will be reduced by
40% compared to that of the year 2016.
On December 29, 2016, the MOF, the MOST, the MIIT and the NDRC jointly
promulgated the Circular on Adjusting the Subsidy Policies on Promotion and Application of
NEVs () (the “ Circular on Adjusting
the NEV Subsidy Policies ”), which became effective on January 1, 2017, to enhance the
technical requirements and adjust the subsidy criteria of qualified NEVs in the Recommended
NEV Catalog. The Circular on Adjusting the NEV Subsidy Policies caps the subsidy amount
from the local governments at 50% of the subsidy amount from the central government, and
further specifies that national and local subsidies for purchasers purchasing new energy
vehicles (except for fuel cell vehicles) from 2019 to 2020 will be reduced by 20% as compared
to the then-existing subsidy standards.
According to the Notice of Adjusting and Improving the Policies on the Government
Subsidies for Promotion and Application of NEVs (݁
) and the Notice of Further Improving the Policies on Government Subsidies
for Promotion and Application of NEVs (ഄ
) jointly promulgated by the MOF, the MOST, the MIIT and the NDRC between 2018
and 2019, the aforementioned notices gradually adjusted the subsidy scheme for the promotion
of new energy vehicles and the product technical specifications for new energy vehicles.
The subsidy standard is reviewed and updated on an annual basis. Pursuant to the 2020
Subsidy Circular, the 2020 subsidy standard reduces the base subsidy amount by 10% for each
NEV , sets subsidies for 2 million vehicles as the upper limit of the annual subsidy scale, and
provides that national subsidy shall only apply to an NEV that is either (i) with the sale price
under RMB300,000 or (ii) equipped with a battery swapping mechanism.
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The 2021 subsidy standard, effective from January 1, 2021, was provided in the Circular
on Further Improving the Subsidy Policies for the Promotion and Application of NEVs
() (the “ 2021 NEV Financial
Subsidies Circular ”) jointly promulgated by the MOF, the MOST, the MIIT and the NDRC on
December 31, 2020. According to the 2021 NEV Financial Subsidies Circular, the 2021 subsidy
standard reduces the base subsidy amount by 20% for each NEV on the basis of that for the
previous year. Further, the 2022 subsidy standard, effective from January 1, 2022, was
provided in the Notice of Improving the Policies on Government Subsidies for Promotion and
Application of NEVs in 2022 (׵2022) (the
“2022 Subsidy Notice ”) jointly promulgated by the MOF, the MOST, the MIIT and the NDRC
on December 31, 2021. The 2022 Subsidy Notice provides that the subsidies for new energy
vehicles purchased in 2022 would be generally lowered by 30% compared to the previous year
with limited exceptions in the area of public transport. Such subsidies have been eliminated at
the end of 2022.
Vehicle Purchase Tax Exemption Policies for NEV Purchasers
According to the Announcement on the Exemption of Vehicle Purchase Tax on NEVs
(ʮѓ) jointly promulgated by the MOF, the State
Administration of Taxation (the “ SAT”), MIIT, and the MOST on December 26, 2017 and
implemented on January 1, 2018, from January 1, 2018 to December 31, 2020, the purchase of
NEVs in the Catalog of NEV Models Exempted from Vehicle Purchase Tax ( еᅄԓሿᒅໄ
ͦ፽) was exempted from vehicle purchase tax.
According to the Announcement on the Relevant Policies on the Exemption of Vehicle
Purchase Tax for NEVs (ʮѓ) jointly
promulgated by the MOF, the SAT, and MIIT on April 16, 2020 and implemented on January
1, 2021, the vehicle purchase tax exemption period was further extended to December 31,
2022.
According to the Announcement on the Exemption of Vehicle Purchase Tax on New
Energy Vehicles (ʮѓ) jointly promulgated
by the MOF, the SAT and the MIIT on September 18, 2022 and implemented on January 1,
2023, the vehicle purchase tax exemption period was extended to December 31, 2023.
According to the Announcement on Continuing and Optimizing the Vehicle Purchase Tax
Reduction and Exemption Policy for New Energy VehiclesᚃձᎴʷอঐ๕ӛԓԓሿ
ʮѓ, which was jointly promulgated by the MOF, the SAT and the MIIT
on June 19, 2023 and came into effect on the same date, it is expressively stated that the
purchase tax exemption period for purchase of NEVs listed in the Catalog of NEV Models
Eligible for Exemption and Reduction of Vehicle Purchase Tax (อঐ๕ӛ
ͦ፽) (the “ Vehicle Purchase Tax Catalog ”), was further extended to December 31,
2025; of which the tax exemption amount for each new energy passenger vehicle should not
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exceed RMB30,000; vehicle purchase tax for NEVs listed in the Vehicle Purchase Tax Catalog
with purchase dates from January 1, 2026 to December 31, 2027 is reduced by half, of which
the tax reduction amount for each new energy passenger vehicles should not exceed
RMB15,000.
Vehicle and Vessel Tax Exemption Policies for NEV Purchasers
According to the Notice of Preferential Vehicle and Vessel Tax Policies for Energy-saving
and New-energy Vehicles and Vessels ()
jointly promulgated by the MOF, the SAT, the MIIT and the MOT on July 10, 2018 and
effective from the same date, purely electric commercial vehicles, plug-in (including
extended-range) hybrid vehicles, and fuel cell commercial vehicles are exempt from vehicle
and vessel tax, whereas purely electric passenger vehicle and fuel cell passenger vehicles are
not subject to vehicle and vessel tax. The Catalog of NEV Models Enjoying Vehicle and Vessel
Tax Reduction and Exemption (ͦ
፽) jointly promulgated by MIIT and the SAT from time to time lists the NEV models
eligible for enjoying vehicle and vessel tax reduction and exemption.
Recent Policies to Promote NEV Purchases and Trade-ins
Pursuant to the Guiding Opinions on Further Promoting Electric Energy as Replacement
(ኬจԈ) jointly issued by ten ministries and commissions
including the NDRC and the MIIT on March 4, 2022, it proposes to further promote the
electrification of the transportation sector. It suggests promoting the household electric
vehicles and pushes to speed up the construction of infrastructure such as electric vehicle
charging piles.
Pursuant to the Opinions on Further Unleashing Consumption Potential to Promote
Sustained Recovery of Consumption (จԈ)
issued and implemented by the General Office of the State Council on April 20, 2022, one of
the initiatives is to steadily increase the consumption of automobiles and other consumption in
bulk stocks and no additional vehicle purchase restriction measures shall be issued in all
regions. In the regions where purchase restrictions have been implemented, it shall gradually
increase the number of vehicle increment indicators, relax the eligibility criteria for vehicle
purchasers, and gradually remove vehicle purchase restrictions based on local conditions. It
also vigorously develops green consumption and continues to support the acceleration of
development of NEVs, as well as fully tap into the consumption potential in counties and
townships, while emphasizing guiding enterprises to carry out promotions in rural areas with
the focus on automobile, encouraging eligible areas to introduce NEVs to the countryside, and
promoting the construction of charging piles (stations) and other supporting facilities, so as to
fully explore consumption potentials from counties and villages.
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According to the Notice on the Measures for Invigorating Automobile Circulation and
Boosting Automobile Consumption ( )
issued by 17 departments including the MOFCOM and implemented on July 5, 2022, it
provided to (1) support the purchase and use of NEVs; (2) accelerate the activation of the
second-hand cars market; (3) promote vehicle renewal consumption; (4) promote the
sustainable and healthy development of the parallel import of vehicles; (5) optimize the
environment for vehicle use; (6) enrich vehicle financing services.
Pursuant to the Detailed Implementation Rules for Subsidies for Automobile Trade-ins
() (the “ Implementation Rules for Automobile Trade-ins ”),
which was issued by the MOFCOM and other six ministries and commissions on April 24, 2024
and became effective on the same day, during the period from the issuance date to December
31, 2024, one-time subsidies with quota shall be given to individual consumers who scrap fuel
passenger vehicles of or below Level 3 national emission standards or new energy passenger
vehicles registered before April 30, 2018 (including the date) and purchase new energy
passenger vehicles included in the Vehicle Purchase Tax Catalog and fuel passenger vehicles
with displacement of 2.0 liters and below. A subsidy of RMB10,000 shall be given to those who
scrap the aforesaid two categories of old cars and purchase new energy passenger vehicles. In
addition, pursuant to the Several Measures to Strengthen Support for Large-Scale Equipment
Renewals and Trade-ins of Consumer Goods (˸ᔚ౬
), which was issued by the NDRC and the MOF on July 24, 2024 and became
effective on the same day, the subsidy standard set out in the Implementation Rules for
Automobile Trade-ins shall be increased to RMB20,000 for purchasing new energy passenger
cars. Furthermore, the Notice of Further Effectively Completing the Work Concerning Trade-in
of Vehicles (), which was issued by the
MOFCOM and other six ministries and commissions on August 15, 2024 and became effective
on the same day, restates the aforementioned increased subsidy standard, increases the central
financial support, optimizes the vehicle scrapping renewal review and allocation regulation
process and emphasizes on strengthening supervision and administration. For eligible subsidy
applications filed between April 24, 2024 and January 10, 2025 (including applications for
which the subsidy granting has been completed), subsidies shall be granted according to the
increased standard specified in this notice; for applications for which the subsidies have been
granted according to the former standard, the difference shall be made up according to the
standard specified in this notice. Moreover, pursuant to the Notice on the Implementation of
Large-Scale Equipment Renewal and Consumer Goods Trade-In Policies with Enhanced
Efforts and Expanded Scope in 2025 (׵2025˸
), which was issued by the NDRC and the MOF on January 5, 2025 and
became effective on the same day, on one hand, the scope of vehicles eligible for vehicle
scrapping and replacement has been further expanded. This includes incorporating the scenario
of scrapping fuel vehicles meeting Level IV national emission standards and subsequently
purchasing passenger NEVs in the scope of the subsidy program. Additionally, the registration
time for passenger NEV eligible for scrapping has been extended by 6 months to December 31,
2018, while for other vehicles, it has been extended by 1 year: for gasoline passenger vehicles,
it has been extended to June 30, 2012; for diesel and other fuel passenger vehicles, it has been
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extended to June 30, 2014. On the other hand, the subsidy standards for vehicle replacement
have been improved. Individual consumers who transfer a passenger vehicle registered under
their own name and purchase a new passenger NEV will be eligible for replacement subsidies
up to RMB15,000 per vehicle.
Pursuant to the Notice on the Campaign of Promoting NEVs in Rural Areas for 2024
(࢝2024), which was issued by the MIIT and other
four ministries and commissions on May 15, 2024 and became effective on the same day, from
May to December 2024, the following measures shall be taken to promote NEVs in rural areas:
(i) selecting suitable NEV models for rural markets that have a good reputation and reliable
quality (as listed in the Model Catalogue of the 2024 NEV Promotion in Rural Areas (2024 ϋ
ͦ፽)) and conducting various activities, such as centralized exhibitions,
test rides, and test drives, to enrich consumer experiences and provide diverse options; (ii)
organizing charging and battery swapping services, as well as financial services such as
insurance underwriting, insurance claims, and credit services for NEVs; (iii) coordinating
after-sales services, such as maintenance, in rural areas and addressing the shortcomings of
matched environment in rural areas; and (iv) implementing support policies such as trade-ins
and improvement of charging and swapping facilities in rural areas to deliver substantial
monetary benefits directly to consumers.
We believe these government policies are expected to enhance EV sales of our OEM
customers, which in turn are expected to lead to growth in their purchase of our battery
products and in our sales volume and revenue.
EU Tariff on EVs from China
In July 2024, the European Commission, which oversees EU’s trade policy, has set
provisional duties of up to 37.6% on EVs imported from China to the EU, citing “unfair
subsidies” as the reason. This provisional duty is on top of an existing 10% duty that was
already in place for all EVs from China. We directly sold our battery products to the European
Union during the Track Record Period. To our best knowledge, the EVs manufactured by some
of our OEM customers which install our power batteries had been sold to the European Union
during the Track Record Period.
REGULATIONS ON FOREIGN INVESTMENT
The PRC Company Law promulgated by the Standing Committee of the National People’s
Congress (the “ SCNPC ”) on December 29, 1993, which was last amended on December 29,
2023 and came into effect on July 1, 2024, provides that companies established in China may
take the form of limited liability company or joint stock company with limited liability. Each
company has the status of a legal person and owns the assets itself. The PRC Company Law
also applies to foreign-invested companies.
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According to the Foreign Investment Law of the PRC ()
promulgated by the NPC on March 15, 2019 and the Implementing Rules of the PRC Foreign
Investment Law (ૢԷ) (the “ Implementing Rules of
Foreign Investment Law ”) promulgated by the State Council on December 26, 2019, all of
which came into effect on January 1, 2020, China implements the pre-entry national treatment
and the negative list management system to foreign investments. The pre-entry national
treatment refers to granting to foreign investors and their investments, in the stage of
investment access, the treatment no less favorable than that granted to domestic investors and
their investments except for the foreign investments in the “restricted” or “prohibited” fields
or industries; the negative list (refers to the special administrative measures for foreign
investment’s access to the foregoing “restricted” or “prohibited” fields or industries, which will
be proposed by the competent investment department of the State Council in conjunction with
the competent commerce department of the State Council and other relevant departments, and
be reported to the State Council for promulgation, or be promulgated by the competent
investment department or competent commerce department of the State Council after being
reported to the State Council for approval. The State will give national treatment to foreign
investments outside the negative list. Foreign Investors shall not invest in any field prohibited
by the negative list and shall meet the investment conditions stipulated for any field restricted
by the negative list, while foreign investments outside the negative list shall be administered
under the principle of equal treatment to domestic and foreign investment. The State
establishes a foreign investment information reporting system. In the meantime, relevant
competent government departments have formulated a catalogue of industries for which
foreign investments are encouraged according to the needs for national economic and social
development, to list the specific industries, fields and regions in which foreign investors are
encouraged and guided to invest.
The current industry entry clearance requirements governing investment activities in the
PRC conducted by foreign investors are set out in two catalogues, namely the Special
Management Measures for the Entry of Foreign Investment (Negative List) (2024 version)
(݄(૶ఊ)(2024و)) which was promulgated by the
NDRC and the MOFCOM on September 6, 2024 and became effective on November 1, 2024,
and the Encouraged Industry Catalogue for Foreign Investment (2022 version) ( ོᎸ̮ਠҳ
༟ପุͦ፽(2022و)), which was jointly promulgated by the NDRC and the MOFCOM on
October 26, 2022 and came into effect on January 1, 2023. These two catalogues lay out the
basic framework for foreign investment in the PRC, classifying businesses into three categories
with regard to foreign investment: “encouraged”, “restricted”, and “prohibited”. Industries not
listed in the three catalogues are generally deemed as falling into a fourth category, “permitted”
for foreign investment unless specifically restricted by other PRC laws and regulations.
Pursuant to the Encouraged Industry Catalogue for Foreign Investment (2022 version), the
manufacturing of EV batteries involved in our operation falls within the scope of industries in
which foreign investment is encouraged.
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According to the Measures for the Reporting of Foreign Investment Information ( ̮ਠ
), which were promulgated by the MOFCOM and the State Administration
for Market Regulation on December 30, 2019, and came into effect on January 1, 2020, foreign
investors or foreign-invested enterprises shall submit investment information in a timely
manner, follow the principles of truthfulness, accuracy and completeness, and shall not make
false or misleading reports or material omissions. Where a foreign-invested enterprise invests
(including multi-level investment) to establish an enterprise in the PRC, the relevant
information shall be forwarded by the market supervision department to the competent
department in charge of commerce after the registration and filing with the market supervision
department and the submission of the annual report information.
REGULATIONS ON ENVIRONMENTAL PROTECTION
According to the Environmental Protection Law of the People’s Republic of China ( ʕ
) (the “ Environmental Protection Law ”) promulgated by the
SCNPC on December 26, 1989, and last amended on April 24, 2014 and came into effect on
January 1, 2015, any entity that discharges or will discharge pollutants in the course of
operation or other activities must implement effective environmental protection measures to
control and properly handle hazardous substances such as waste gas, waste water, waste
residues, dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic
radiation generated in the course of such activities. The State implements a pollutant discharge
permit management system in accordance with the law.
Construction Projects
According to the Regulation on the Administration of Environmental Protection of
Construction Projects (ᚐ၍ଣૢԷ) promulgated by the State Council on
November 29, 1998, amended on July 16, 2017 and came into effect on October 1, 2017, the
Interim Measures for Environmental Protection Acceptance Examination Upon Completion of
Construction Projects (), which was promulgated by
the former Ministry of Environmental Protection on November 20, 2017 and came into effect
on the same day, and the Environmental Impact Assessment Law ( ʕശɛ͏΍ձ਷ᐑྤᅂᚤ
), which was promulgated by the SCNPC on December 29, 2018 and came into effect
on the same day, the PRC implements a system to assess the environmental impact of
construction projects. The construction entity shall submit an environmental impact report or
an environmental impact statement for approval prior to the commencement of the construction
project, or an environmental impact registration form as required by the environmental
protection administrative department of the State Council for record. In addition, after the
completion of a construction project for which an environmental impact report or an
environmental impact statement has been prepared, the construction entity shall, in accordance
with the standards and procedures prescribed by the competent administrative department of
environmental protection under the State Council, conduct acceptance checks on the supporting
environmental protection facilities and prepare an acceptance report. For construction projects
that are constructed in phases or put into production or used in phases, the corresponding
environmental protection facilities shall be inspected and accepted in phases. The construction
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projects can only be put into production or use after the completed supporting environmental
protection facilities have passed the acceptance inspection. Facilities that have not been carried
out or have not passed the acceptance examination shall not be put into production or use. If
a construction entity fails to submit an environmental impact assessment report or form for
approval as required and proceeds with construction without approval, the competent
authorities may order the suspension of construction. Depending on the severity of the
violation and the resulting consequences, a fine ranging from 1% to 5% of the total investment
in the project may be imposed, and the authorities may also order the restoration of the original
state and impose the administrative penalties against the directly responsible person in charge
and other directly liable persons of the construction entity. In addition, if the construction
entity fails to complete the construction, acceptance and/or fail to pass the acceptance
inspection of the environmental protection facilities as required before the construction project
is put into production or use, the competent authority may order the construction entity to
rectify within a specified period and impose a fine ranging from RMB200,000 to
RMB1,000,000 on such entity; if the rectification is not made within the specified period, a
fine ranging from RMB1,000,000 to RMB2,000,000 shall be imposed on such entity.
Additionally, the directly responsible persons in charge and other responsible personnel shall
be fined within a range from RMB50,000 and RMB200,000. If significant environmental
pollution or ecological damage is caused, the project shall be ordered to cease production or
use, or be closed upon approval by the competent authority.
Atmospheric Pollution
According to the Atmospheric Pollution Prevention and Control Law of the PRC ( ʕശ
) promulgated by the SCNPC on September 5, 1987, which was
last amended on October 26, 2018 and came into effect on the same day, enterprises, public
institutions, and other business entities shall, according to relevant provisions and monitoring
norms of the state, monitor the industrial waste gases and the toxic and hazardous atmospheric
pollutants listed in the catalogue mentioned in Article 78 of the Atmospheric Pollution
Prevention and Control Law of the PRC they have discharged, and preserve the original
monitoring records. Enterprises and public institutions discharging industrial waste gases or
the toxic or hazardous atmospheric pollutants listed in the aforementioned catalogue and other
entities subject to pollutant discharging licensing administration shall obtain a pollutant
discharge license. In addition, when building projects that have an impact on atmospheric
environment, enterprises, public institutions, and other business entities shall conduct
environmental impact assessments and publish the environmental impact assessment
documents in accordance with the law; when discharging pollutants to the atmosphere, they
shall conform to the atmospheric pollutant discharge standards and abide by the total quantity
control requirements for the discharge of key atmospheric pollutants.
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Solid Waste
According to the Solid Waste Law promulgated by the SCNPC on October 30, 1995,
which was last amended on April 29, 2020 and came into effect on September 1, 2020, any
entity or individual that produces, collects, stores, transports, utilizes, or disposes solid wastes
shall take measures to prevent or reduce environmental pollution caused by solid wastes, and
be liable for resultant environmental pollution in accordance with the law. In addition,
construction projects where solid wastes are generated or projects for storage, utilization or
disposal of solid wastes shall be subject to environmental impact assessment in accordance
with the law. Facilities for the prevention and control of solid wastes are required to be
designed, constructed and put into use simultaneously with the main part of the construction
project.
Water Pollution
According to the Water Pollution Prevention and Control Law of the PRC ( ʕശɛ͏΍
) promulgated by the SCNPC on May 11, 1984, which was last amended
on June 27, 2017 and came into effect on January 1, 2018, an enterprise or public institution
or other business entity which directly or indirectly discharges industrial waste water or
medical sewage to waters or waste water or sewage that may be discharged after a pollutant
discharge license has been obtained as required shall obtain a pollutant discharge license. In
addition, construction, renovation and expansion projects and other upper-water facilities that
directly or indirectly discharge pollutants to water are subject to environmental impact
assessment in accordance with the law. Facilities for water pollution prevention are required
to be designed, constructed and put into operation simultaneously with the main part of the
project.
Noise Pollution
According to the Law of the PRC on Prevention and Control of Pollution From Noise
(), which was promulgated by the SCNPC on December
24, 2021 and came into effect on June 5, 2022, the emission of noise and generation of
vibration shall comply with the noise emission standards, the relevant ambient vibration
control standards and the requirements of relevant laws, regulations and rules. In addition, the
construction, renovation or expansion of projects that might cause environmental noise
pollution shall be subject to environmental impact assessment in accordance with the law.
Facilities for prevention and control of environmental noise pollution must be designed,
constructed and put into use simultaneously with the main part of a construction project. Before
a construction project is put into production or use, the construction employer shall, in
accordance with the provisions of relevant laws and regulations, conduct the acceptance check
of the supporting facilities for noise pollution prevention and control, work out the acceptance
check report, and release it to the public. The construction project may not be put into
production or use before its acceptance check is carried out or if it fails to pass its acceptance
check.
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Pollution Permit
According to the Environmental Protection Law and the Regulation on the Administration
of Pollutant Discharge Licensing ( રϮ஢̙၍ଣૢԷ), which was promulgated by the
State Council on January 24, 2021, and came into effect on March 1, 2021, enterprises,
business units and other producers and operators that implement the pollutant discharge
licensing management shall discharge pollutants according to the requirements of the pollutant
discharge license, and shall not discharge pollutants without obtaining the pollutant discharge
license. The competent environmental protection authorities impose various administrative
penalties on individuals or enterprises in violation of the Environmental Protection Law. In
accordance with the Regulations on Urban Drainage and Sewage Treatment (ᕄર˥ၾϮ
˥ஈଣૢԷ) issued by the State Council on October 2, 2013, and effective as of January 1,
2014, as well as the Administrative Measures for the Permit of Urban Sewage Discharge into
Drainage Networks () promulgated by the Ministry
of Housing and Urban-Rural Development on January 22, 2015, and revised on December 1,
2022, enterprises, public institutions, and individual businesses engaged in industrial,
construction, catering, medical, and other activities that discharge sewage into urban drainage
facilities must apply for and obtain a permit for sewage discharge into the drainage network
from the urban drainage authority. Any sewage discharge entity who discharges sewage into
urban drainage facilities without obtaining a discharge permit shall be ordered by the relevant
authority to cease the illegal activity, to implement corrective measures within a specified
period, and to obtain a sewage discharge permit, with a fine of up to RMB500,000 imposed.
For entities listed as key pollutant discharging units, a fine ranging from RMB300,000 to
RMB500,000 may be imposed.
Environmental Protection Tax Law
According to the Environmental Protection Tax Law of the PRC ( ʕശɛ͏΍ձ਷ᐑྤ
) promulgated by the SCNPC on December 25, 2016, which was last amended on
October 26, 2018 and came into effect on the same day, and the Regulations on the
Implementation of the Environmental Protection Tax Law of the PRC ( ʕശɛ͏΍ձ਷ᐑྤ
ૢԷ), which was promulgated by the State Council on December 25, 2017 and
came into effect on January 1, 2018, enterprises, public institutions and other producers and
operators that directly discharge pollutants to the environment within the territory of the PRC
and other sea areas under the jurisdiction of the PRC are taxpayers of environmental pollution
tax, and shall pay environmental pollution tax in accordance with the aforementioned laws and
regulations.
REGULATIONS ON ENERGY CONSERV ATION
According to the Energy Conservation Law of the People’s Republic of China ( ʕശɛ
) promulgated by the SCNPC on November 1, 1997, last amended on
October 26, 2018 and came into effect on the same day, the State shall implement an energy
conservation assessment and audit system for fixed asset investment projects. For projects
which do not meet the compulsory energy conservation standards, the developer shall not
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commence construction; where the construction is completed, the project shall not be put into
production or use. For government investment projects which do not meet the compulsory
energy conservation standards, the agency in charge of examination and approval pursuant to
the law shall not grant approval for construction. Detailed measures shall be formulated by the
department regulating energy conservation under the State Council jointly with other relevant
State Council departments.
According to the Measures for the Energy Conservation Review of Fixed Asset
Investment Projects (), promulgated by the NDRC on
March 28, 2023 and came into effect on June 1, 2023, the review opinions on energy
conservation of a fixed asset investment project are an important basis for the commencement
of construction, acceptance upon completion as well as operation and management of such
project. For a government-invested project, the project owner shall obtain the review opinions
on energy conservation issued by the energy conservation review authority prior to submitting
its feasibility study report for the project. For an enterprise-invested project, the project owner
shall obtain the review opinions on energy conservation issued by the energy conservation
review authority prior to the commencement of construction. For a project which has not
undergone the energy conservation review or fails to pass the energy conservation review, the
project owner shall not commence construction, or the project shall not be put into production
or use if it is already completed. The administrative departments for energy conservation of the
local people’s governments at or above the county level shall, in light of the actual
circumstances of the local energy conservation, strengthen the overall guidance and overall
coordination of the work of energy conservation review, implement the regulation and control
of the total energy consumption and intensity, enhance the management of obligatory target for
the reduction of energy consumption intensity, effectively increase the flexibility of the
management of total energy consumption, control fossil energy consumption, and resolutely
curb the blind development of high-energy-consumption, high-emission and low-level projects.
Any fixed asset investment project that commences construction or is put into production
and use without undergoing the required energy-saving review, or that fails to pass the review,
shall be ordered to cease construction or halt production and use, to rectify the situation within
a specified period, and to receive criticism in a circulated notice by the relevant authority.
Depending on the severity of the violation, a fine of up to RMB100,000 may be imposed. If
a project is put into production or use without undergoing the required energy-saving
acceptance inspection, or if the project fails the inspection, the relevant authority may order the
construction entity to rectify the situation within a specified period and impose a fine ranging
from RMB30,000 to RMB50,000.
REGULATIONS ON PRODUCTION SAFETY
According to the Production Safety Law of the PRC ()
promulgated by the SCNPC on June 29, 2002, last amended on June 10, 2021 and came into
effect on September 1, 2021, an enterprise shall comply with Production Safety law of the PRC
and other laws and regulations related to production safety, strengthen production safety
management, establish and improve a production safety responsibility system and production
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safety rules and systems for all employees, increase efforts to guarantee the input of funds,
materials, technology, and personnel in production safety, improve production safety
conditions, strengthen standardization and informatization of production safety, construct a
dual prevention mechanism consisting of graded management and control of safety risks and
examination and control of potential risks, improve the risk prevention and resolution
mechanism, raise production safety levels, and ensure production safety.
The person in charge of an enterprise shall be fully responsible for the safety of
production of the enterprise. An enterprise having more than 100 employees shall establish a
production safety management institution or be equipped with dedicated production safety
management personnel. Personnel who is responsible for managing production safety shall
inspect the safety of production regularly based on the characteristics of production of the
enterprise and shall deal with any safety issue identified during the inspection in a timely
manner. Any unsolved issue shall be reported to the person in charge in a timely manner and
the person in charge shall solve such issue immediately. The inspection and measures taken
shall be duly recorded. Enterprises and institutions shall provide their employees with
education and training on production safety and shall truthfully inform their employees of any
potential risks in relation to the workplace and duties, preventive measures and emergency
measures. In addition, an enterprise shall provide its employees with protective equipment that
meets the national or industry standards and supervise and train them to wear and use such
equipment.
According to the Measures for the Supervision and Administration of “Three
Simultaneities” for the Safety Facilities of Construction Projects (݄“ɧΝ
ࣛ”) promulgated by the former State Administration of Work Safety
(currently known as the Ministry of Emergency Management) on December 14, 2010, last
amended on April 2, 2015 and came into effect on May 1, 2015, the safety facilities in a newly
built, reconstructed or expanded construction project must be designed, constructed and put
into use in production simultaneously with the main body of the project. Enterprises shall
conduct a comprehensive analysis of safety production conditions and facilities, form a written
report for future reference, or conduct a safety pre-assessment of their construction projects,
and prepare a safety pre-assessment report. When the enterprise is in the preliminary design of
the construction project, it shall entrust the design unit with corresponding qualifications to
design the safety facilities of the construction project simultaneously and prepare the design of
the safety facilities. Before the construction project is completed and put into use in
production, the enterprise shall organize the completion acceptance of the safety facilities and
form a written report for future reference. After the safety facilities are completed and
accepted, they can be put into production and use. If an enterprise violates the relevant
requirements, it may be ordered to suspend its production, make rectification within the
specified time limit, and impose a fine.
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If a construction entity delivers a project for use without organizing the construction
project acceptance process, the entity shall be ordered to rectify the situation and may be fined
between 2% and 4% of the project construction contract price. If losses are caused, the entity
shall be liable for compensation in accordance with the law. Failure to file the construction
project acceptance report, related approval documents, or permits with the relevant authorities
as required by laws and regulations shall result in an order to rectify the situation and a fine
ranging from RMB200,000 to RMB500,000.
With respect to the design of safety facilities, if operating entity fails to complete the
design of safety facilities, does not pass the completion acceptance of design of safety facilities
and/or no written examination report is formed before the construction project is put into
production or use, the relevant production and operation entity may be ordered to rectify within
a specified period, and a fine ranging from RMB5,000 to RMB30,000 may be imposed.
With respect to the occupational disease prevention, (a) if the construction entity fails to
conduct an occupational disease hazard pre-assessment as required, or the occupational disease
prevention facilities are not designed, constructed, and put into production and use
simultaneously with the construction of main project as required, or the evaluation of the
effectiveness of occupational disease hazard control for the prevention facilities is not carried
out as required, or if the prevention facilities do not pass the acceptance inspection before the
construction project is completed and put into production and use, the relevant authority may
issue a warning to the construction entity and order such entity to rectify within a specified
period. If the rectification is not completed within the specified period, a fine ranging from
RMB100,000 to RMB500,000 may be imposed. In severe cases, the relevant authority may
order the cessation of operations that generate occupational disease hazards, or submit a
request to other relevant authority to order the suspension or closure of the project, (b) if the
occupational disease hazard pre-assessment report, the design of occupational disease
prevention facilities, or the report on the evaluation of occupational disease hazard control
effectiveness is not reviewed as required, or if the acceptance inspection of the occupational
disease prevention facilities is not completed as required, the relevant authority may issue a
warning to the construction entity and order such entity to rectify the situation within a
specified period. If the rectification is not completed within the specified period, a fine ranging
from RMB5,000 to RMB30,000 may be imposed, (c) for construction projects with serious
occupational disease hazards that fail to complete the filing procedures after occupational
health assessment and acceptance, competent authorities may order the construction entity to
rectify within a specified period, issue a warning to and may impose a fine on such entity
ranging from RMB5,000 to RMB30,000.
REGULATIONS ON FIRE PREVENTION
According to the Fire Prevention Law of the PRC ()
promulgated by SCNPC on April 29, 1998, last amended on April 29, 2021 and came into effect
on the same day, the Emergency Management Authority of the State Council and its local
counterparts at or above the county level shall monitor and administer the fire prevention
affairs, and the fire prevention design or construction of a construction project must conform
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to the national fire prevention technical standards. According to the Interim Provisions on the
Administration of Fire Protection Design Review and Final Inspection of Construction Projects
(), promulgated by the Ministry of Housing and
Urban-Rural Development on April 1, 2020, last amended on August 21, 2023 and officially
implemented on October 30, 2023, special construction projects as defined under the Interim
Provisions shall conduct fire protection design review and fire protection acceptance
inspection, construction projects other than such special construction projects shall file
protection acceptance of the project with competent authority. If the construction entity fails
to complete the filing procedures with competent authority for its fire prevention acceptance,
it may be ordered to rectify and may be imposed a fine of up to RMB5,000.
REGULATIONS ON RADIATION SAFETY
According to the Law of the PRC on Prevention and Control of Radioactive Pollution
(), which was promulgated by the SCNPC on June 28,
2003 and came into effect on October 1, 2003, an entity producing, selling or using
radioisotope and ray devices shall, in accordance with the relevant provisions of the State
Council on prevention of radioactivity from the radioisotope and ray devices, apply to obtain
a permit, and make registration accordingly. An entity producing, selling, using or storing
radioactive sources shall set up a sound and safe security system, designate specialized
personnel to be responsible for the system, ensure the implementation of the system of
accountability for safety, and formulate the necessary measures for addressing emergencies in
accidents.
According to the Regulation on the Security and Protection of Radioisotope and
Radioactive Ray Devices (ᇞༀໄτΌձԣᚐૢԷ) promulgated by the
State Council on September 14, 2005, last amended on March 2, 2019 and came into effect on
the same day, and the Measures for Administration of the Safety Licensing of Radioactive
Isotopes and Radioactive Equipment ()
promulgated by the former Ministry of Environmental Protection on January 18, 2006, last
amended on January 4, 2021 and came into effect on the same day, any entity producing, selling
or using radioisotopes or radiation-emitting devices shall obtain a radiation safety license.
REGULATIONS ON PRODUCT QUALITY
According to the Product Quality Law of the PRC ()
promulgated by the SCNPC on February 22, 1993 and last amended on December 29, 2018, the
market supervision and administration department under the State Council is in charge of the
national supervision of product quality, 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 physical injury to a
person or property damage, the aggrieved party may make a claim for compensation from the
producer or the seller of the product. Producers and sellers of non-compliant products may be
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ordered to cease the production or sale of the products and could be subject to confiscation of
the products and/or fines. Earnings from sales in contravention of such standards or
requirements may also be confiscated, and in severe cases, an offender’s business license may
be revoked.
REGULATIONS ON IMPORT AND EXPORT OF GOODS
The Foreign Trade Law of the PRC () was promulgated
by the SCNPC on May 12, 1994, which was most recently amended on December 30, 2022 and
came into effect on the same date. Before December 30, 2022, any foreign trade business
operator engaged in the import and export of goods or technologies must go through the record
filing and registration formalities with the MOFCOM or the agency entrusted by the
MOFCOM, however, according to the latest amendment, such record filing and registration
formalities are no longer required from December 30, 2022.
According to the Customs Law of the PRC () promulgated by
the SCNPC on January 22, 1987 and last amended on April 29, 2021, the General
Administration of Customs of the PRC (the “ GACC”) is the state’s entry and exit customs
supervision and administration authority. According to the relevant laws and administrative
regulations, the Customs supervises the transportation vehicles, goods, luggage, postal articles
and other articles entering and leaving the country, collects customs duties and other taxes and
fees, prevents and counters smuggling, compiles customs statistics and handles other customs
operations. Customs declaration entities refer to the consignees and consignors of import and
export goods and customs declaration enterprises recorded with the customs. The consignee or
the consignor of imports or exports may complete the declaration formalities for inspection on
its own or by entrusting a declaration agency enterprise to complete the declaration formalities
for inspection and complete the filing formalities with the immigration inspection and
quarantine authorities in accordance with the law.
According to the Provisions on the Administration of Recordation of Customs Declaration
Entities of the PRC () promulgated by the
GACC on November 19, 2021 and came into effect on January 1, 2022, customs declaration
entities mean consignees or consignors of imports and exports and customs declaration
enterprises which have filed record with the Customs pursuant to these Provisions. Consignees
or consignors of imports and exports and customs declaration enterprises applying for filing
shall obtain market entity qualification; in the case of consignees or consignors of imports and
exports applying for filing, they shall also complete filing formalities for foreign trade business
operators. According to the Notice by the Department of Enterprise Management and
Audit-Based Control of the General Administration of Customs of Matters Concerning the
Recordation of the Consignees and Consignors of Imported and Exported Goods, promulgated
on January 3, 2023 and took effect on the same day, a consignee or consignor of imported or
exported goods who applies for recordation shall be qualified as a market entity and is not
required to complete such filing formalities for foreign trade business operators.
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REGULATIONS ON EMPLOYMENT, SOCIAL INSURANCE AND HOUSING
PROVIDENT FUND
Employment
According to the Labor Law of the PRC () promulgated by
the SCNPC on July 5, 1994 and last amended on December 29, 2018, the Labor Contract Law
of the PRC () promulgated by the SCNPC on June 29, 2007,
which was last amended on December 28, 2012 and came into effect on July 1, 2013, and the
Implementing Regulations of the Labor Contracts Law of the PRC ( ʕശɛ͏΍ձ਷௶ਗΥ
ૢԷ) promulgated by the State Council on September 18, 2008 and came into
effect on the same day, labor relationships between employers and employees must be executed
in written form. Employers are prohibited from forcing employees to work above certain time
limits and employers must pay employees for overtime work in accordance with national
regulations. In addition, employee wages must not be lower than local standards on minimum
wages and must be paid to employees in a timely manner.
According to the Notice on Issues relating to Confirmation of Labor Relationship ( ᗫ
) promulgated by the former Ministry of Labor and Social
Security on May 25, 2005 and came into effect on the same day, a labor relationship shall be
deemed to be concluded under the following circumstances, even if the employer does not enter
into a written contract with the worker, (i) the employer and the worker satisfy the
requirements on eligibility prescribed by the laws and regulations, (ii) the employer has, in
accordance with the law, formulated such labor regulations and requirements which apply to
the worker; the worker is subject to labor management by the employer and engages in
remunerated labor work arranged by the employer, and (iii) the labor provided by the worker
is a component of the employer’s business.
Social Insurance
The PRC Social Insurance Law (), or the Social
Insurance Law, promulgated by the SCNPC on October 28, 2010 and last amended on
December 29, 2018, has established social insurance systems of basic pension insurance, basic
medical insurance, work-related injury insurance, unemployment insurance and maternity
insurance and has elaborated in detail the legal obligations and liabilities of employers who fail
to comply with relevant laws and regulations on social insurance. According to the Social
Insurance Law and the Provisional Regulations on Collection and Payment of Social Insurance
Premiums (ᎈ൬ᅄᖮᅲБૢԷ), which was promulgated by the State Council on
January 22, 1999, last amended on March 24, 2019 and came into effect on the same day,
enterprises shall register social insurance with local social insurance and pay or withhold
relevant social insurance for or on behalf of its employees. Any employer that fails to make
social insurance contributions may be ordered to rectify the non-compliance and pay the
required contributions within a prescribed time limit and be subject to a late fee. If the
employer still fails to rectify the failure to make the relevant contributions within the
prescribed time, it may be subject to a fine ranging from one to three times the amount overdue.
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Housing Provident Fund
According to the Regulation on the Administration of Housing Provident Fund (ג
၍ଣૢԷ) promulgated by the State Council on April 3, 1999, and last amended on
March 24, 2019, enterprises must register at the designated administrative centers and open
bank accounts for depositing employees’ housing provident fund. Employers and employees
are also required to pay and deposit housing provident fund, with an amount no less than 5%
of the monthly average salary of the employee in the preceding year in full and on time. In case
of overdue payment or underpayment by employers, orders for payment within a specified
period will be made by the housing fund management center. Where employers fail to make
payment within such period, enforcement by the people’s court will be applied. In case of
failure to register and open accounts for depositing employees’ housing provident fund, the
housing fund management center shall order employers to go through the formalities within a
specified period, where employers fail to do such formalities within the prescribed time, a fine
of not less than RMB10,000 nor more than RMB50,000 shall be imposed.
REGULATIONS ON INTELLECTUAL PROPERTY
Patent
According to the Patent Law of the PRC (), which was
promulgated by the SCNPC on March 12, 1984, last amended on October 17, 2020 and came
into effect on June 1, 2021, and the Implementation Regulations for the Patent Law of the PRC
(), which promulgated by the State Council on
December 21, 1992, last amended on December 11, 2023 and came into effect on January 20,
2024, patents are divided into 3 categories, i.e. inventions, utility models and designs. The
validity period of patents for inventions is 20 years, while the validity period of patents for
utility models is 10 years, and the validity period of patents for designs is 15 years, all starting
from the next date of application.
Trademark
The Trademark Law of the PRC (), which was promulgated
by the SCNPC on August 23, 1982, last amended on April 23, 2019 and came into effect on
November 1, 2019, and the Implementation Rules of the Trademark Law of the PRC ( ʕശ
ૢԷ), which was promulgated by the State Council on August 3,
2002, last amended on April 29, 2014 and came into effect on May 1, 2014, stipulate the
application, examination and approval, renewal, alternation, transfer, use and invalidation of
trademark registration, and protect the trademark rights entitled to trademark registrants.
According to the aforesaid laws and regulations, the registration of a trademark shall be valid
for ten years from the date of approval. If there is a continued need for the use of the trademark,
a renewal shall be made in accordance with requirements within 12 months before the expiry
of the trademark registration. If the renewal is not made within the stipulated period, the valid
period may be extended for a further period of six months. Each renewal of registration of a
trademark shall be valid for ten years from the date of the expiry of the previous trademark
registration. A trademark registrant may license others the right to use his/her trademark by
entering into a trademark license agreement.
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Copyright
According to the Copyright Law of the PRC (), which was
promulgated by the SCNPC on September 7, 1990, last amended on November 11, 2020 and
came into effect on June 1, 2021, and the Implementation Rules of the Copyright Law of the
PRC (ૢԷ), which was promulgated by the State Council
on August 2, 2002 and last amended on March 1, 2013, works of Chinese citizens, legal persons
or unincorporated organizations, i.e. intellectual achievements in the field of literature, art and
science that are original and can be expressed in a certain form, whether published or not, are
entitled to copyright in accordance with the Copyright Law. Copyright includes a series of
personal and property rights such as the right of publication, the right of authorship, the right
of modification, the right to protect the integrity of the work and the right of reproduction.
According to the Regulations on the Computer Software Protection (ᚐૢ
Է), which was promulgated by the State Council on December 20, 2001, last amended on
January 30, 2013 and came into effect on March 1, 2013, and the Measures for the Computer
Software Copyright Registration (), which were promulgated
by the National Copyright Administration on February 20, 2002 and last amended on June 18,
2004, the National Copyright Administration shall be the competent governmental authority for
the nationwide administration of software copyright registration and the Copyright Protection
Center of China is designated as the software registration authority which shall grant
registration certificates to the computer software copyrights applicants according to aforesaid
Regulations and Measures.
Domain Names
According to the Administrative Measures for Internet Domain Names ( ʝᑌၣਹΤ၍
), which was promulgated by the MIIT on August 24, 2017 and came into effect on
November 1, 2017, the establishment of domain name root servers and domain name root
server operation institutions, domain name registration management institutions and domain
name registration service institutions within the territory of the PRC shall obtain permission
from the MIIT or the communications administration department of the province, autonomous
region or municipality directly under the central government. The principle of “first come, first
served” applies to domain name registration service. The Notice of the Ministry of Industry
and Information Technology on Regulating the Use of Domain Names in Internet
Information Services (), which
was promulgated by the MIIT on November 27, 2017 and came into effect on January 1, 2018,
stipulates the obligations of Internet information service providers and other entities to combat
terrorism and maintain network security.
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REGULATIONS ON TAXATION
Taxation of Security Holders
The taxation of income and capital gains of holders of H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are resident or otherwise
subject to tax. The following summary of certain relevant taxation provisions is based on
current effective PRC laws and practices and no predictions are made about changes or
adjustments to relevant laws or policies, and no comments or suggestions will be made
accordingly. The discussion does not deal with all possible tax consequences relating to an
investment in the H Shares, nor does it take into account the specific circumstances of any
particular investor, some of which may be subject to special regulations. Accordingly, you
should consult your own tax adviser regarding the tax consequences of an investment in H
Shares. The discussion is based upon current PRC laws and relevant interpretations in effect
as of the date of this document, all of which are subject to change or adjustment. Prospective
investors are urged to consult their financial adviser regarding the PRC and other tax
consequences of owning and disposing of H Shares.
Taxation on dividends
Individual investors
Pursuant to the Individual Income Tax Law of the PRC (੻೼
), which was last amended on August 31, 2018 by the SCNPC and came into effect on
January 1, 2019, and the Regulations on Implementation of the Individual Income Tax Law of
the PRC (ૢԷ), which were last amended on December
18, 2018 by the State Council and came into effect on January 1, 2019, dividends paid by PRC
enterprises are subject to an individual income tax levied at a flat rate of 20%. For a foreign
individual who is not a resident of the PRC, the receipt of dividends from an enterprise in the
PRC is normally subject to an individual income tax of 20% unless specifically exempted by
the tax authority of the State Council or reduced by an applicable tax treaty. In accordance with
the Circular on Certain Issues Concerning the Policies of Individual Income Tax (Cai Shui Zi
[1994] No. 020) ((ৌ೼ο[1994]020 ໮)) promulgated
by MOF and the SAT on May 13, 1994 and effective from the same day, overseas individuals
are, as an interim measure, exempted from the individual income tax for dividends or bonuses
received from foreign-invested enterprises. According to the Notice of the State Council on
Approving and Relaying the Several Opinions of the National Development and Reform
Commission and Other Departments on Deepening Reform of the Income Distribution System
() issued by the
State Council on February 3, 2013, overseas individuals are no longer exempted from the
individual income tax for dividends or bonuses received from foreign-invested enterprises,
which is, however, not specified in the subsequent Individual Income Tax Law of the PRC and
relevant tax regulations.
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Enterprise investors
According to the Enterprise Income Tax Law of the PRC (੻೼
) (the “ EIT Law ”), which was issued on March 16, 2007 and latest amended by the
SCNPC and implemented on December 29, 2018, and the Implementation Rule for the
Enterprise Income Tax Law of the PRC (ૢԷ) enacted
on December 6, 2007 by the State Council and became effective on January 1, 2008, and last
amended on December 6, 2024, a non-resident enterprise is generally subject to a 10%
enterprise income tax on PRC-sourced income (including dividends received from a PRC
resident enterprise that issues shares in Hong Kong (China)), if such non-resident enterprise
does not have an establishment or premise in the PRC or has an establishment or premise in
the PRC but its PRC-sourced income has no real connection with such establishment or
premise. The aforesaid income tax payable for non-resident enterprises is deducted at source,
where the payer of the income is required to withhold the income tax from the amount to be
paid to the non-resident enterprise on each payment or when it is payable on due date. The
withholding tax may be reduced pursuant to applicable treaties or agreements on avoidance of
double taxation.
The Notice on the Issues Concerning Withholding the Enterprise Income Tax on the
Dividends Paid by Chinese Resident Enterprises to H-Share Holders Which Are Overseas
Non-resident Enterprises (Guo Shui Han [2008] No. 897) (͏ΆุΣྤ̮Hڢٰ
(਷೼Ռ[2008]897 ໮)), which
was issued and implemented by the SAT on November 6, 2008, further clarifies that a
PRC-resident enterprise must withhold enterprise income tax at a rate of 10% on the dividends
of 2008 and onwards that it distributes to overseas non-resident enterprise shareholders of H
Shares. In addition, the Response to Questions on Levying Enterprise Income Tax on Dividends
Derived by Non-resident Enterprise from Holding Stock such as B Shares (Guo Shui Han
[2009] No. 394) (͏Άุ՟੻Bҭᔧ(਷೼Ռ
[2009]394 ໮)), which was issued by the SAT and came into effect on July 24, 2009, further
provides that any PRC-resident enterprise whose shares are listed on overseas stock exchanges
must withhold and remit enterprise income tax at a rate of 10% on dividends of 2008 and
onwards that it distributes to non-resident enterprises. Such tax rates may be further modified
pursuant to the tax treaty or agreement that the PRC has entered into with a relevant
jurisdiction, where applicable.
Pursuant to 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 (ᅄ೼
τર) (the “ Arrangement ”), which was signed between the SAT and the
Hong Kong Special Administrative Region Government on August 21, 2006, the PRC
Government may levy taxes on the dividends paid by a PRC company to Hong Kong (China)
residents (including resident individual and resident entities) in an amount not exceeding 10%
of the total dividends payable by the PRC company unless a Hong Kong (China) resident
directly holds 25% or more of the equity interest in the PRC company, then such tax shall not
exceed 5% of the total dividends payable by the PRC company. The Fifth Protocol to the
Arrangement between the Mainland and the Hong Kong Special Administrative Region for the
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Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on
Income ( <τર>֛
), which came into effect on December 6, 2019, provided a criteria for the qualification
of entitlement to enjoy treaty benefits. Although there may be other provisions under the
Arrangement, the treaty benefits under the criteria shall not be granted in the circumstance
where relevant gains, after taking into account all relevant facts and conditions, are reasonably
deemed to be one of the main purposes for the arrangement or transactions which will bring
any direct or indirect benefits under this Arrangement, except when the grant of benefits under
such circumstance is consistent with relevant objective and goal under the Arrangement. The
application of the dividend clause of tax agreements is subject to the requirements of PRC tax
laws and regulations, such as the Notice of the SAT on the Issues Concerning the Application
of the Dividend Clauses of Tax Agreements (Guo Shui Han [2009] No. 81) (೼ਕᐼ҅
(਷೼Ռ[2009]81 ໮)).
Tax Treaties
Non-PRC resident investors residing in jurisdictions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a reduction
of the PRC enterprise income tax imposed on the dividends received from PRC enterprises. The
PRC currently has entered into Avoidance of Double Taxation Treaties or Arrangements with
a number of countries and regions including Hong Kong (China), Macau (China), Australia,
Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United Kingdom
and the United States. Non-PRC resident enterprises entitled to preferential tax rates in
accordance with the relevant taxation treaties or arrangements are required to apply to the PRC
tax authorities for a refund of the enterprise income tax in excess of the agreed tax rate, and
the refund application is subject to approval by the PRC tax authorities.
Taxation on share transfer
Income Tax
Individual investor
According to the Individual Income Tax Law of the PRC and its implementation rules, the
proceeds from the sale of equity interests in PRC-resident enterprise are subject to income tax
at a tax rate of 20%.
According to the Notice Concerning Continuing Temporary Exemption From Individual
Income Tax on The Income From Stocks Transfer (Cai Shui Zi [1998] No. 61) (ɛᔷ
(ৌ೼ο[1998]61 ໮)) promulgated by the MOF
and SAT and became effective on March 30, 1998, since January 1, 1997, the individual income
tax levied on the individual income from transfer of stocks of listed companies will continue
to be temporarily exempted. In the newly revised Individual Income Tax Law of the PRC, the
SAT did not clearly stipulate whether to continue to exempt individuals from tax on the income
from transfer of stocks of listed companies.
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Furthermore, the Notice of the State Administration of Taxation on Issues Concerning the
Levy of Individual Income Tax on Incomes from the Transfer of Restricted Shares of Listed
Companies (Cai Shui [2009] No. 167) (੻೼
(ৌ೼[2009]167 ໮)) jointly issued by the MOF, the SAT and the CSRC and
implemented on January 1, 2010 stipulates that individuals’ income from the transfer of listed
shares obtained from the public offering of listed companies and transfer market on the
Shanghai Stock Exchange and the Shenzhen Stock Exchange shall continue to be exempted
from the individual income tax, except for the relevant restricted shares as defined in the
Supplementary Notice Concerning the Levy of Individual Income Tax on Incomes from the
Transfer of Restricted Shares of Listed Companies (Cai Shui [2010] No. 70) (ɛᔷᜫ
(ৌ೼[2010]70 ໮)) jointly issued
by these departments and implemented on November 10, 2010. As of the Latest Practicable
Date, the aforementioned provisions did not specify whether to impose the individual income
tax on the income from the transfer of shares of PRC-resident enterprise listed on overseas
stock exchanges (such as the Hong Kong Stock Exchange) by non-PRC resident individuals.
Enterprise investors
In accordance with the EIT Law and its implementation rules, a non-resident enterprise
that has not established an establishment or premises in the PRC or it has established an
establishment and premises but the income received has no actual connection with the
establishment and premises, shall pay an enterprise income tax at a rate of 10% for the income
arising within the PRC (including the income from sale of equity interests of PRC-resident
enterprise). The aforesaid income tax payable for non-resident enterprises is deducted at
source, where the payer of the income is required to withhold the income tax from the amount
to be paid to the non-resident enterprise on each payment or when it is payable on due date.
The withholding tax may be reduced pursuant to applicable treaties or agreements on avoidance
of double taxation.
Value-Added Tax
Pursuant to the Notice on the Full Implementation of Pilot Program for Transition from
Business Tax to Value-added Tax (Cai Shui [2016] No. 36) (࠽
 (ৌ೼[2016]36 ໮)), effective from May 1, 2016, entities and individuals
engaged in sales of services within the PRC shall be subject to value-added tax (the “ VAT”)
and sales of services within the PRC refers to the situation where either the seller or the buyer
of a taxable service is located within the PRC. The notice also provides that transfer of
financial products, including transfer of the ownership of marketable securities, shall be
subject to V AT at 6% on the taxable income (which is the balance of sales price upon deduction
of purchase price), for a general or a foreign V AT taxpayer. However, individuals are exempted
from V AT upon transfer of financial products provided in the third appendix of the notice,
namely Provisions on the Transitional Policies for the Pilot Collection of Value-added Tax in
Lieu of Business Tax ().
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Stamp Duty
In accordance with the Stamp Tax Law of the People’s Republic of China ( ʕശɛ͏΍
) promulgated by the SCNPC on June 10, 2021 and came into effect on July
1, 2022, entities and individuals that issue taxable certificates and conduct securities
transactions within the territory of PRC, or entities and individuals who issue taxable
certificates and conduct securities transactions outside the territory of PRC to be used within
the territory of the PRC shall subject to stamp duty.
Estate Duty
As at the Latest Practicable Date, no estate duty is levied within the PRC.
PRINCIPAL TAXATION OF OUR COMPANY IN THE PRC
Enterprise Income Tax
The EIT Law and its implementation rules are the principal law and regulation governing
enterprise income tax in the PRC. According to the EIT Law and its implementation rules,
enterprises are classified into resident enterprises and non-resident enterprises. Resident
enterprises refer to enterprises that are legally established in the PRC, or are established under
foreign laws but whose actual management bodies are located in the PRC. Non-resident
enterprises refer to enterprises that are legally established under foreign laws and have set up
institutions or sites in the PRC but with no actual management body in the PRC, or enterprises
that have not set up institutions or sites in the PRC but have derived incomes from the PRC.
A uniform income tax rate of 25% applies to all resident enterprises and non-resident
enterprises that have set up institutions or sites in the PRC to the extent that such incomes are
derived from their set-up institutions or sites in the PRC, or such income is obtained outside
the PRC but have an actual connection with the set-up institutions or sites. And non-resident
enterprises that have not set up institutions or sites in the PRC or have set up institutions or
sites but the incomes obtained by the said enterprises have no actual connection with the set-up
institutions or sites, shall pay enterprise income tax at the rate of 10% in relation to their
income sources from the PRC.
Value-Added Tax
The major PRC Law governing V AT are the Interim Regulations on Value-added Tax of
the PRC (೼ᅲБૢԷ) issued on December 13, 1993 by the State
Council, last revised and effective on November 19, 2017, as well as the Implementation Rules
for the Interim Regulations on Value-Added Tax of the PRC (೼ᅲБૢ
) issued on December 25, 1993 by the MOF, last revised on October 28, 2011,
and effective on November 1, 2011, which provide that any entities and individuals engaged
in the sale of goods, supply of processing, repair and replacement services, and import of goods
within the territory of the PRC are taxpayers of V AT and shall pay the V AT in accordance with
the law and regulation. The rate of V AT for sale of goods is 17% unless otherwise specified.
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With the V AT reforms in the PRC, the rate of V AT has been changed several times. The MOF
and the SAT issued the Notice of on Adjusting V AT Rates (Cai Shui [2018] No. 32) (׵
(ৌ೼[2018]32 ໮)) on April 4, 2018 to adjust the tax rates of 17% and
11% applicable to any taxpayer’s V AT taxable sale or import of goods to 16% and 10%,
respectively, and this adjustment became effect on May 1, 2018. Subsequently, the MOF, the
SAT and the General Administration of Customs jointly issued the Announcement on Relevant
Policies for Deepening the V AT Reform (ʮѓ) on March
20, 2019 to make a further adjustment, which came into effect on April 1, 2019. The tax rate
of 16% applicable to the V AT taxable sale or import of goods shall be adjusted to 13%, and the
tax rate of 10% applicable thereto shall be adjusted to 9%. On December 25, 2024, the SCNPC
promulgated the Value-Added Tax Law of the PRC (), which will
become effective on January 1, 2026, and the Interim Regulations on Value-added Tax of the
PRC will be abolished.
REGULATIONS ON FOREIGN EXCHANGE
The legal currency of the PRC is Renminbi, which is currently subject to foreign
exchange regulation and cannot be freely converted into foreign currency. The State
Administration of Foreign Exchange (the “ SAFE”), with the authorization of the People’s
Bank of China (the “ PBOC”), is empowered with the functions of administering all matters
relating to foreign exchange, including the enforcement of foreign exchange regulations.
On January 29, 1996, the State Council promulgated the Regulations of the PRC Foreign
Exchange Administration ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) (the “ Foreign Exchange
Regulations ”) which became effective on April 1, 1996. The Foreign Exchange Regulations
classify all international payments and transfers into current items and capital items. Most of
the current items are no longer subject to SAFE’s approval, while capital items remain
unchanged. The Foreign Exchange Regulations were subsequently amended on January 14,
1997 and August 5, 2008. The latest amendment to the Foreign Exchange Regulations clearly
states that no restriction will be imposed on international current payments and transfers.
On June 20, 1996, the PBOC promulgated the Regulations for the Administration of
Settlement, Sale and Payment of Foreign Exchange (Yin Fa [1996] No. 210) ( ഐිeਯිʿ
(ვ೯[1996]210 ໮)), which abolished the then-remaining restrictions on
convertibility of foreign exchange under current items, while retaining the existing restrictions
on foreign exchange transactions under capital items.
According to the Announcement on Improving the Reform of the Renminbi (the PBOC
Announcement [2005] No. 16) (ʮѓ(ʕ਷ɛ͏ვБ
ʮѓ[2005] ୋ16໮)), issued by the PBOC on July 21, 2005 and became effective on the same
date, the PRC began to implement a managed floating exchange rate system in which the
exchange rate would be determined based on market supply and demand and adjusted with
reference to a basket of currencies. As a result, the Renminbi exchange rate was no longer
pegged to the U.S. dollar. The PBOC would publish the closing price of the exchange rate of
the Renminbi against trading currencies such as the U.S. dollar in the interbank foreign
exchange market after the closing of the market on each working day, as the central parity of
the currency against Renminbi transactions on the following working day.
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On August 5, 2008, the State Council promulgated the revised Foreign Exchange
Regulations, which have made substantial changes to the foreign exchange supervision system
of the PRC. First, the regulations have adopted an approach of balancing the inflow and
outflow of foreign exchange. Foreign exchange income received overseas can be repatriated or
deposited overseas, and foreign exchange and settlement funds under the capital account are
required to be used only for purposes as approved by the competent authorities and foreign
exchange administrative authorities; second, the regulations have improved the RMB exchange
rate floating system based on market supply and demand under management; third, in the event
that international balance of payment suffer or may suffer a material misbalance, or the
national economy encounters or may encounter a severe crisis, the State may adopt necessary
safeguard or control measures against international balance of payment; fourth, the regulations
have enhanced the supervision and administration of foreign exchange transactions and grant
extensive authorities to SAFE to enhance its supervisory and administrative powers.
According to the relevant laws and regulations in the PRC, PRC enterprises which need
foreign exchange for current item transactions may, without the approval of the foreign
exchange administrative authorities, effect payment through foreign exchange accounts opened
at designated banks that carry foreign exchange business, on the strength of valid receipts and
proof. Foreign investment enterprises which need foreign exchange for the distribution of
profits to their shareholders and PRC enterprises which, in accordance with regulations, are
required to pay dividends to their shareholders in foreign exchange may, after paying taxes in
according to the law, on the strength of resolutions of the board of directors or resolutions of
shareholders on the distribution of profits, effect payment from foreign exchange accounts
opened at designated banks that carry foreign exchange business, or effect exchange and
payment at designated banks.
The Decisions on Matters including Canceling and Adjusting a Batch of Administrative
Approval Items (Guo Fa [2014] No. 50) (ٙ
(਷೯[2014]50 ໮)) promulgated by the State Council and came into effect on
October 23, 2014, provide to cancel the approval requirement of SAFE and its branches for the
remittance and settlement of the proceeds raised from the overseas listing of the foreign shares
into Renminbi domestic accounts.
Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration of
Overseas Listing (Hui Fa [2014] No. 54) ((ි೯
[2014]54 ໮)) issued by SAFE and became effective on December 26, 2014, a domestic
company shall, within 15 business days of the date of the end of its overseas listing issuance,
register the overseas listing with the branch office of SAFE located at its registered address;
the proceeds from an overseas listing of a domestic company may be repatriated to China or
deposited overseas, provided that the intended use of the proceeds shall be consistent with the
content of the prospectus document or other public disclosure documents. A domestic company
(except for bank financial institutions) shall present its certificate of overseas listing to open
a dedicated foreign exchange account at a domestic bank for its initial public offering (or
follow-on offering) and repurchase business to handle the exchange, remittance and transfer of
funds for the business concerned.
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According to the Notice on Further Simplifying and Improving Policies for the Foreign
Exchange Administration of Direct Investment (Hui Fa [2015] No. 13) (ආɓӉᔊʷձ
(ි೯[2015]13 ໮)) promulgated by SAFE on February
13, 2015 and became effective on June 1, 2015, and partially repealed on December 30, 2019,
the foreign exchange registration under domestic direct investment and the foreign exchange
registration under overseas direct investment shall be directly examined and handled by banks.
SAFE and its branch offices shall indirectly regulate the foreign exchange registration of direct
investment through banks.
According to the Notice on Policies for Reforming and Regulating the Administration of
Foreign Exchange Settlement of Capital Accounts (Hui Fa [2016] No. 16) (ձ஝ᇍ
(ි೯[2016]16 ໮)), promulgated by SAFE and became
effective June 9, 2016, which was last amended on December 4, 2023, the settlement of foreign
exchange proceeds under the capital account (including foreign exchange capital funds, foreign
debt funds, funds transferred back from overseas listings, etc.) that are subject to discretionary
settlement as already specified by relevant policies may be handled at banks based on the
actual business needs of the domestic institutions. The tentative percentage of foreign
exchange settlement for foreign currency proceeds in capital account of domestic institutions
is 100%, subject to adjustment of SAFE in due time in accordance with international revenue
and expenditure situations.
According to the Notice of the State Administration of Foreign Exchange on Further
Promoting the Reform of Foreign Exchange Administration and Improving the Examination of
Authenticity and Compliance (Hui Fa [2017] No. 3) (ආɓӉપආ̮ි
 (ි೯[2017]3 ໮)) issued by the SAFE on January 26,
2017 and implemented on the same date, several measures are introduced, including (a) further
expanding the scope of domestic foreign exchange loan settlement, allowing domestic foreign
exchange loans with the background of commodity trade and exports to be settled, (b) allowing
funds under domestic guarantee and foreign loans to be transferred back, (c) allowing foreign
exchange settlement via the foreign exchange accounts of foreign institutions in pilot free trade
zones, and (d) implementing full-coverage administration of overseas lending in both
Renminbi and foreign currencies, where a domestic institution engages in overseas lending, the
combined balance of foreign exchange lending in Renminbi and foreign currencies shall not
exceed a maximum of 30% of the owner’s equity in the audited financial statements of the
preceding year.
According to the Notice on Further Facilitating Cross-border Trade and Investment (Hui
Fa [2019] No. 28) ( (ි೯[2019]28 ໮)) issued
by the SAFE on October 23, 2019 and implemented on the same date, which was last amended
on December 4, 2023, restrictions have been removed on the use of capital funds by
non-investment foreign-invested enterprises for domestic equity investment. In addition,
restrictions have also been removed on the use of funds in domestic asset realization accounts
for foreign exchange settlement and the use of security deposits for foreign exchange
settlement by foreign investors. Eligible enterprises in pilot areas are allowed to use capital
funds, foreign debt, overseas listings and other income under capital items for domestic
payments without providing the banks with proofs of authenticity in advance, provided that
their use of funds shall be genuine and in compliance with the current regulations governing
the use of income from capital items.
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According to the Notice on Further Deepening Reforms to Promote the Convenience of
Cross-border Trade and Investment (Hui Fa [2023] No. 28) (ආ༨ྤ
)( ි೯[2023]28 ໮)) issued by the SAFE on December 4, 2023 and
implemented on the same date, qualified high-tech, “professional, sophisticated, unique and
new” and technology-based small and medium-sized enterprises in Jiangsu and certain other
areas can borrow foreign debt on their own within an amount not exceeding the equivalent of
US$10 million. The restriction that the cumulative remittance amount of up-front expenses of
overseas direct investment by a domestic enterprise shall not exceed the equivalent of US$3
million was abolished, provided that the cumulative remittance amount shall not exceed 15%
of the total proposed investment amount by the PRC entity. Additionally, the asset realization
account of capital accounts to the settlement account of capital accounts was restructured. The
equity transfer consideration funds in foreign currency received by a domestic equity transferor
(including institutions and individuals) from domestic parties, as well as the foreign exchange
funds raised by domestic enterprises through overseas listing may be directly remitted to the
settlement account of capital accounts. Funds in the settlement account of capital accounts may
be settled and used at discretion. The equity transfer consideration funds received by a
domestic equity transferor from FIEs which are paid with RMB funds derived from the
settlement of foreign exchange (i.e. RMB funds derived from direct settlement of foreign
exchange or from settlement account for pending payment) may be transferred directly to the
RMB account of the domestic equity transferor.
According to the Notice on Optimising Administration of Foreign Exchange to Support
the Development of Foreign-related Business (Hui Fa [2020] No. 8) (׵
(ි೯[2020]8 ໮)) issued by SAFE and became
effective on June 1, 2020, eligible enterprises are allowed to make domestic payments by using
their capital, foreign credits and the income under capital accounts of overseas listing, without
providing materials to the bank in advance for authenticity verification on an item-by-item
basis, provided that their utilized capital shall be authentic and in line with provisions, and
conform to the prevailing administrative regulations related to the use of income under capital
accounts. The concerned bank shall manage and control the relevant business risks under the
principle of prudent business development and conduct spot checks afterwards in accordance
with the relevant requirements. Local foreign exchange authorities shall strengthen monitoring
and analysis and interim and ex-post supervision.
REGULATIONS RELATED TO CYBER SECURITY AND DATA SECURITY
On July 1, 2015, SCNPC issued the National Security Law of the PRC ( ʕശɛ͏΍ձ
), (the “ National Security Law ”) which came into effect on the same day. The
National Security Law provides that the PRC shall build a network and information security
guarantee system and improve network and information security protection capability to realize
the controllable security of the network information key technologies and critical infrastructure
and the information systems and data in important fields.
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On November 7, 2016, SCNPC promulgated the Cybersecurity Law of the PRC ( ʕശ
) (the “ Cybersecurity Law ”), which came into effect on June 1,
2017. The Cybersecurity Law applies to the construction, operation, maintenance, and use of
networks as well as the supervision and administration of cybersecurity in China. Network
service providers who do not comply with the Cybersecurity Law may be subject to corrective
orders, warnings, fines, suspension of their businesses, shutdown of their websites, and
revocation of their business licenses.
On June 10, 2021, SCNPC promulgated the Data Security Law of the PRC ( ʕശɛ͏
) (the “ Data Security Law ”), which took effect on September 1, 2021.
The Data Security Law provides for data security requirements on entities and individuals
carrying out data processing activities. The Data Security Law also introduces a data
classification and layered protection system based on the importance of data in economic and
social development, as well as the degree of harm it will cause to national security, public
interests, or legitimate rights and interests of individuals or organizations when such data is
tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of
protection measures is required to be taken for each respective category of data. Violation of
the Data Security Law may be subject to an order to cease illegal activities, warnings, fines,
suspension of business and revocation of business licenses or operating permits, and the
personnel directly in charge or other directly responsible personnel may be imposed with fines.
On December 28, 2021, the CAC, together with certain other PRC governmental
authorities, promulgated the Cybersecurity Review Measures () that
replaced the previous version and took effect from February 15, 2022. Pursuant to these
measures, the purchase of network products and services by a critical information
infrastructure operator or the data processing activities of a network platform operator that
affect or may affect national security will be subject to a cybersecurity review. The competent
governmental authorities may also initiate a cybersecurity review against the operators if the
authorities believe that the network product or service or data processing activities of such
operators affect or may affect national security.
The Regulation on Network Data Security Management ( ၣഖᅰኽτΌ၍ଣૢԷ),
which was promulgated on September 24, 2024 and became effective on January 1, 2025, aims
to regulate network data processing activities, ensure the security of network data, promote the
reasonable and effective use of network data in accordance with the law, protect the legitimate
rights and interests of individuals and organizations, and safeguard national security and public
interests. This regulation puts forward general requirements and provisions for network data
security, further specifies rules concerning personal information protection, and fine-tunes
mechanisms for the management of important data.
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REGULATIONS ON ANTI-UNFAIR COMPETITION AND ANTI-MONOPOLY
Anti-unfair Competition
According to the Anti-unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅
) promulgated by the SCNPC on September 2, 1993, which was last amended on April
23, 2019 and came into effect on the same day, unfair competition refers to that the operator
disrupts the market competition order and damages the legitimate rights and interests of other
operators or consumers in violation of the provisions set forth therein in its production and
operating activities. Operators shall abide by the principle of voluntariness, equality,
impartiality, integrity, as well as laws and business ethics during production and operating
activities.
Anti-Monopoly
According to the Anti-monopoly Law of the PRC () (the
“Anti-monopoly Law ”) promulgated by the SCNPC on August 30, 2007, which was last
amended on June 24, 2022 and came into effect on August 1, 2022, the monopolistic practices
include any monopoly agreement reached by any operators, abuse of market-dominating
position by any operators and any concentration of operators which has eliminated or limited
or may eliminate or limit the market competition. Specifically, competing business operators
may not enter into monopoly agreements that eliminate or restrict competition, such as by
boycotting transactions, fixing or changing the price of commodities, limiting the number of
output or selling of commodities, dividing the sales markets or the raw material procurement
markets, unless the agreement will satisfy the exemptions under the Anti-Monopoly Law, such
as improving technologies, increasing the efficiency and competitiveness of small and
medium-sized enterprises, or safeguarding legitimate interests in cross-border trade and
economic cooperation with foreign counterparts.
REGULATIONS RELATED TO OVERSEAS SECURITIES OFFERING AND LISTING
AND FULL CIRCULATION
On February 17, 2023, the China Securities Regulatory Commission (the “ CSRC”)
promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies () (the “ Overseas
Listing Trial Measures ”), which took effect from March 31, 2023. The Overseas Listing Trial
Measures reformed the regulatory regime for overseas securities offering and listing by
domestic companies, into a filing-based system. Pursuant to the Overseas Listing Trial
Measures, no overseas offering and listing shall be made under any of the following
circumstances: (i) where such securities offering and listing is explicitly prohibited by
provisions in laws, administrative regulations and relevant state rules; (ii) where the intended
securities offering and listing may endanger national security as reviewed and determined by
competent authorities under the State Council in accordance with law; (iii) where the domestic
company intending to make the securities offering and listing, or its controlling shareholder(s)
and the actual controller, have committed crimes such as corruption, bribery, embezzlement,
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misappropriation of property or have undermined the order of socialist market economy during
the latest three years; (iv) the domestic company intending to make the securities offering and
listing is currently under investigation for suspicion of criminal offenses or major violations of
laws and regulations, and no conclusion has yet been made thereof; or (v) there are material
ownership disputes over equity held by the domestic company’s controlling shareholder(s) or
by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual
controller.
Initial public offerings or listings in overseas markets shall be filed with the CSRC within
three business days after the relevant application is submitted overseas. The Overseas Listing
Trial Measures also require subsequent reports to be filed with the CSRC upon the occurrence
of any of the material events after an issuer has offered and listed securities in an overseas
market, such as (i) change of control; (ii) investigations or sanctions imposed by overseas
securities regulatory agencies or other relevant competent authorities; (iii) change of listing
status or transfer of listing segment; and (iv) voluntary or mandatory delisting. Where an
issuer’s main business undergoes material changes after overseas offering and listing and is
therefore beyond the scope of business stated in the filing documents, such issuer shall submit
to the CSRC an ad hoc report and a relevant legal opinion issued by a domestic law firm within
three business days after occurrence of the changes.
Furthermore, according to the Overseas Listing Trial Measures and their related
guidelines, “Full circulation” represents the shareholders of domestic unlisted shares of
domestic companies, which directly offer and list securities in overseas markets, converting its
domestic unlisted shares into shares listed and traded on an overseas trading venue. The term
“domestic unlisted shares” refers to shares offered by a domestic company but not listed or
quoted for trading on any domestic trading venues. “Full circulation” shall comply with
relevant regulations of the CSRC and the shareholders of domestic unlisted shares shall entrust
the domestic company to report the “Full circulation” with CSRC by filing materials on certain
key issues, including whether the “Full circulation” has fulfilled adequate internal decision-
making procedures, necessary internal approvals and authorizations, and whether the “Full
circulation” involves approval or filing procedures set out in the laws, regulations and policies
for state-owned asset administration, industry supervision and foreign investment, and if so,
whether such approval or filing procedures have been performed.
Failure to fulfill filing procedures or offering and listing securities in an overseas market
in violation of the foregoing prohibitive provisions may subject PRC domestic companies to
order rectification, warnings and a fine of RMB1 million to RMB10 million. Controlling
shareholders and actual controllers of the domestic company that organize or instruct the
aforementioned violations shall be imposed a fine of RMB1 million to RMB10 million.
Directly liable persons-in-charge and other directly liable persons shall be each imposed a fine
of RMB0.5 million to RMB5 million.
REGULATORY OVERVIEW
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As advised by our PRC Legal Adviser, pursuant to the Overseas Listing Trial Measures
and their related guidelines, this Global Offering is subject to the filing requirements of the
CSRC. We are also required to fulfill the filing procedure with the CSRC in accordance with
the Overseas Listing Trial Measures for the conversion of certain domestic unlisted shares into
H Shares and the listing of the H Shares on the Stock Exchange. We submitted initial filing
application to the CSRC on July 30, 2024 with respect to the submission of our application for
the Listing and the conversion of certain domestic unlisted shares into H Shares and the listing
of the H Shares on the Stock Exchange.
Furthermore, on February 24, 2023, the CSRC, together with certain other PRC
governmental authorities, promulgated the Provisions on Strengthening Confidentiality and
Archives Administration of Overseas Securities Offering and Listing by Domestic Companies
(the “ Confidentiality and Archives Administration Provisions ”) (̋੶ྤʫΆุྤ̮
), which came into effect on March 31,
2023. According to the Confidentiality and Archives Administration Provisions, PRC domestic
companies that directly or indirectly conduct overseas offerings and listings, shall strictly abide
by applicable PRC laws and regulations on confidentiality when providing or publicly
disclosing, either directly or through their overseas listed entities, documents and materials to
securities services providers such as securities companies and accounting firms or overseas
regulators in the process of their overseas offering and listing. In the event such documents or
materials contain state secrets or working secrets of government agencies, the PRC domestic
companies shall first obtain approval from competent authorities according to law, and file with
the secrecy administrative department at the same level; in the event that such documents or
materials, if leaked, will jeopardize national security or public interest, the PRC domestic
companies shall strictly fulfill relevant procedures stipulated by applicable national
regulations. The PRC domestic companies shall also provide a written statement of the specific
state secrets and sensitive information provided when providing documents and materials to
securities companies and securities service providers, and the securities companies and
securities service providers shall properly retain such written statements for inspection.
Furthermore, the Confidentiality and Archives Administration Provisions also provide where
overseas securities regulators and relevant competent overseas authorities request to inspect,
investigate or collect evidence from PRC domestic companies concerning their overseas
offering and listing or their securities firms and securities service providers that undertake
securities business for such PRC domestic companies, such inspection, investigation and
evidence collection must be conducted under a cross-border regulatory cooperation
mechanism, and the CSRC or other competent authorities of the PRC government will provide
necessary assistance pursuant to bilateral and multilateral cooperation mechanism. Domestic
companies, securities firms and securities service providers shall first obtain approval from the
CSRC or other competent PRC authorities before cooperating with the inspection and
investigation by the overseas securities regulators or competent overseas authority or providing
documents and materials requested in such inspection and investigation.
REGULATORY OVERVIEW
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REGULATIONS RELATED TO U.S. OUTBOUND INVESTMENT
On October 28, 2024, the U.S. Department of the Treasury issued a final rule on outbound
investment, or the Final Rule, to implement the Executive Order 14105, “Addressing United
States Investments in Certain National Security Technologies and Products in Countries of
Concern” (August 9, 2023). The Final Rule became effective on January 2, 2025. The Final
Rule imposes investment prohibition and notification requirements on U.S. persons for certain
investments in entities associated with China (including Hong Kong and Macau) that are
engaged in certain activities relating to three sectors: (i) semiconductors and microelectronics,
(ii) quantum information technologies, and (iii) artificial intelligence systems, collectively
defined as “Covered Foreign Persons.” U.S. persons subject to the Final Rule are in some
instances prohibited altogether from making, and in other instances required to report, certain
investments in Covered Foreign Persons. Based on our internal due diligence that the artificial
intelligence system we utilize is not (i) designed to be used for a military end use, or
government intelligence or mass-surveillance end use, (ii) intended to be used for
cybersecurity applications, digital forensic tools, penetration testing tools, or the control of
robotic systems, or (iii) trained using computing power greater than the computational
operations prescribed in the Final Rule, among other things, we believe we are not a “Covered
Foreign Person” as defined in the Final Rule on the basis that our current business activities
and operations do not involve the specified technologies in the set of technologies of concern.
Therefore, the implementation of Final Rule has no impact on our business, financial condition
and the results of operations.
REGULATORY OVERVIEW
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OVERVIEW
Our Company was established on February 26, 2019 as a limited liability company under
the laws of the PRC, by Ms. Cao and Dr. Chen together with Jiangsu TAFEL, a power battery
manufacturer in China, as a minority shareholder. From May 2020, our Company had been a
wholly-owned subsidiary of Jiangsu TAFEL until the commencement of the Business
Reorganization of our Group in December 2021. We completed the acquisition of Jiangsu
TAFEL’s business under common control as part of the business reorganization of our Group
in February 2022, details of which are set out in “—Corporate Development and Major
Shareholding Changes—3. Business Reorganization of Our Group” below.
Under the leadership of Ms. Cao and Dr. Chen, we have developed into a lithium-ion
battery manufacturer in China, committed to developing a diverse portfolio of market-driven
and technology-fueled battery products. For the biographies of Ms. Cao and Dr. Chen, see
“Directors, Supervisors and Senior Management”.
OUR BUSINESS MILESTONES
The following table summarizes the key business development milestones of our Group:
Y ear Event
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Company was established in the PRC.
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Changshu Zenergy Base (Phase I) was put into operation.
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our Changshu Yinhe Base (Phase I) was put into operation.
We were recognized as a China Unicorn Enterprise by the Great
Wall Enterprise Institute (הfor the first
time.
We raised proceeds of RMB2,400 million from our Series A
financing.
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We implemented our forward-looking “5-3-1” R&D strategy.
We launched our aviation battery products featuring high energy
density, high safety, high discharge rate and ultra-fast charging
capabilities.
Our Changshu Zenergy Base (Phase II) was put into operation.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Y ear Event
We became the first EV battery company in China to receive
AS9100D Aerospace Quality Management System recognition.
We received an Outstanding Award for Energy Storage
Applications at the SNEC International Energy Storage Exhibition
(SNEC࢝.)
We received IEC product certification and GB/T23001-2017
quality control certification.
We completed the STAES Reorganization Transaction.
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We signed cooperation agreement with the Intellectual Property
Protection Center of Suzhou (ᚐʕː) and was
accredited as a Suzhou Intellectual Property Protection Center
Pre-examiner Practice Base.
We received UL1642 and UL1973 product certifications for our
314Ah and 104Ah battery cells, respectively.
We became CNAS-accredited.
Our Company was converted into a joint stock limited liability
company under the laws of the PRC.
We raised proceeds of RMB1 billion from our Series B financing.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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OUR SUBSIDIARIES
As of the Latest Practicable Date, we had five subsidiaries, all of which were established
in the PRC and wholly owned by our Group. Details are set out below:
Name of subsidiary
Date of
establishment and
commencement of
business Principal business activities
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 5, 2016 R&D, production and sales of
power batteries and energy
storage products
Nanjing Zenergy Battery
Technologies Co., Ltd. (ԯ
ʮ̡) /H1118/H1118
December 27, 2021 Production and sales of power
batteries and energy storage
products
Dongguan Zenergy Battery
Technologies Co., Ltd. (୷
ʮ̡) /H1118/H1118
December 27, 2021 Production and sales of power
batteries and energy storage
products
Suzhou Zenergy Battery
Technologies Co., Ltd. ( ᘽψ
ʮ̡) /H1118/H1118
May 22, 2024 R&D, production and sales of
power batteries and energy
storage products
Changshu Sinogy Technologies
Co., Ltd. (ҦϞ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
March 3, 2025 R&D of newly developed energy
technologies and sales of
batteries
CORPORATE DEVELOPMENT AND MAJOR SHAREHOLDING CHANGES
1. Establishment and Development of Suzhou ZENIO and Investment of Zenergy
Investment in Jiangsu TAFEL
On December 5, 2016, Suzhou ZENIO was established with a registered capital of
RMB150,000,000 and was held as to 65% by Zenergy Investment, a company co-founded and
ultimately owned and controlled by Ms. Cao and Dr. Chen which is principally engaged in
investment in the sector of core components of EV , and 35% by XPT (Nanjing) Energy Storage
System Co., Ltd. ( ᇲ್(ԯ)ʮ̡)( “ XPT Nanjing ”), an Independent Third
Party, respectively, as a joint venture. On February 24, 2022, XPT Nanjing transferred all of
its 35% equity interests in Suzhou ZENIO to Zenergy Investment at a consideration of
RMB92,697,289.36, which was determined after arm’s length negotiations, taking into account
the net book value of assets of Suzhou ZENIO at the time of the relevant transfer.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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On February 11, 2019, Zenergy Investment made a minority investment in Jiangsu TAFEL
by subscription of 6.78% of registered capital of Jiangsu TAFEL at a consideration of RMB160
million. On May 12, 2020, pursuant to the capital increase and transfer agreement entered into
amongst the then shareholders of Jiangsu TAFEL, Zenergy Investment further acquired the
controlling stake of Jiangsu TAFEL, increasing its equity interests to approximately 43.47%
through subscription of the increased registered capital of Jiangsu TAFEL of RMB404,494,382
at a consideration of RMB1,080 million and transfer of registered capital of RMB7,490,637
held by Nanjing Miaode at a consideration of RMB20 million. The consideration for the
aforementioned investments was determined after arm’s length negotiations, taking into
account the registered capital of Jiangsu TAFEL at the relevant time and the potential business
development of Jiangsu TAFEL and its subsidiaries. Upon completion of acquisition of the
controlling stake of Jiangsu TAFEL, Zenergy Investment was entitled with over two-thirds of
the voting rights at the general meetings of Jiangsu TAFEL as it entered into an acting-in-
concert agreement with minority shareholders of Jiangsu TAFEL in aggregate holding 23.67%
of equity interests in Jiangsu TAFEL.
In February 2022, certain parts of Jiangsu TAFEL’s business were acquired and
reorganized under common control, and Suzhou ZENIO was acquired by our Company in
February 2022, details of which are set out in “—3. Business Reorganization of Our Group”
below.
2. Establishment of Our Company, Initial Equity Transfer and Capital Increases
On February 26, 2019, our Company was established as a limited liability company under
the laws of the PRC with a registered capital of RMB200,000,000. Upon establishment, our
Company was held as to 70% by Zenergy Investment and 30% by Jiangsu TAFEL.
On April 15, 2019, the registered capital of our Company was increased to
RMB300,000,000, with the capital increase subscribed by Zenergy Investment and Jiangsu
TAFEL in proportion to their respective equity interests.
On May 29, 2020, Zenergy Investment entered into an equity transfer agreement to
transfer its entire 70% equity interests in our Company to Jiangsu TAFEL at a consideration
of RMB238,350,000. Upon completion of the transfer, our Company became a wholly-owned
subsidiary of Jiangsu TAFEL, which was in turn controlled by Ms. Cao and Dr. Chen through
Zenergy Investment at the relevant time. The consideration was determined after arm’s length
negotiations, taking into account the registered capital of our Company at the time of the
relevant transfer, and its net assets of approximately RMB293.82 million as at December 31,
2019 based on the audited accounts. On June 4, 2020, the registered capital of our Company
was increased to RMB552,495,000, with the capital increase subscribed by Jiangsu TAFEL. At
the time of the transfer, Jiangsu TAFEL was a company engaged in battery manufacturing with
Ms. Cao and Dr. Chen as its controlling shareholders with aggregate equity interests of 43.5%.
The transfer was effected in order to centralize and integrate the management of companies
engaged in battery manufacturing under the common control of Ms. Cao and Dr. Chen.
On January 12, 2021, the registered capital of our Company was increased to
RMB1,552,495,000, with the capital increase subscribed by Jiangsu TAFEL.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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3. Business Reorganization of Our Group
From December 2021 to February 2022, with a view to enhance the awareness and
outreach of our “Zenergy” brand and strategically streamline our operations, we reorganized
our corporate group structure with the following principal steps (the “ Business
Reorganization ”):
(1) Acquisition of Our Company by the Shareholders of Jiangsu TAFEL
On December 28, 2021, each of the then shareholders of Jiangsu TAFEL entered into an
equity transfer agreement with Jiangsu TAFEL and our Company, pursuant to which all the
then shareholders of Jiangsu TAFEL acquired Jiangsu TAFEL’s 100% equity interest in our
Company in proportion to their respective shareholding in Jiangsu TAFEL, at an aggregate
consideration of RMB2,537,574,123. The consideration was determined after arm’s length
negotiations based on the valuation of the equity holder’s interests of our Company appraised
by an independent professional valuer as at October 31, 2021 and the increase of paid up
capital of our Company after the valuation date and before the relevant equity transfers. Upon
completion of the aforementioned equity transfers on December 30, 2021, our Company ceased
to be a wholly-owned subsidiary of Jiangsu TAFEL.
The following table illustrates the shareholding structure of our Company immediately
upon completion of such acquisition:
Name of Shareholder
Amount of
Registered
Capital Held
Approximate
Ownership
Percentage
(RMB)
Zenergy Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118503,278,949 32.42%
Nanjing Miaode /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,988,702 18.10%
Huafu Growth Investment Co., Ltd. (ࠢ
ʮ̡) (formerly known as Xingyin Investment Co.,
Ltd. (ʮ̡)) (“ Huafu Investment ”)(1) /H1118/H1118165,689,009 10.67%
Ningbo Meishan Free Trade Port Xingsi Shenglian
Investment Partnership (L.P.) (ܠ
௷ᑌҳ༟ΥྫΆุ(Υྫ)) (“ Xingsi
Shenglian ”)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,390,811 6.98%
Wuxi Zhenghai Jinxi Venture Capital Partnership (L.P.)
(ೌ፼͍ऎᎀᖗ௴ุҳ༟ΥྫΆุ(Υྫ))
(“Wuxi Zhenghai ”)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,293,737 5.82%
Nanjing Xuande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,275,604 4.27%
Beijing Jiade Enterprise Management Partnership (L.P.)
(̏ԯԳ੻Άุ၍ଣΥྫΆุ(Υྫ))
(“Beijing Jiade ”)(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,205,616 4.07%
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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--- page 218 ---
Name of Shareholder
Amount of
Registered
Capital Held
Approximate
Ownership
Percentage
(RMB)
Fujian Yaohua Industrial Village Development Co., Ltd.
(ʮ̡)( “ Fujian
Y aohua”)(4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,195,825 3.88%
Wukuang Yuanding Equity Investment Fund (Ningbo)
Partnership (L.P.) (ږ(ت)Υྫ
Άุ(Υྫ)) (“ Wukuang Yuanding ”)(5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 3.49%
Gongqingcheng Shuanghe Zhenghua Investment
Partnership (L.P.) (ᕐ͍ͫശҳ༟ΥྫΆุ(Ϟ
Υྫ)) (“ Shuanghe Zhenghua ”)(6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 3.49%
Gongqingcheng Chenxi No. 12 Equity Investment
Partnership (L.P.) (ᛆҳ༟ΥྫΆ
ุ(Υྫ)) (“ Chenxi No. 12 ”)(7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,117,495 2.33%
Nanjing Lukou Konggang Investment Development
Co., Ltd. (ʮ̡)
(“Nanjing Konggang ”)(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,137,802 2.13%
Zhuhai Hengqin New Kinetic Energy Juyuan
Investment Enterprise (L.P.) ( मऎዑೞอਗঐၳʩҳ
༟Άุ(Υྫ)) (“ Hengqin New Kinetic
Energy ”)(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,068,538 1.36%
Ma Shaodong ( ৵ˇಊ)(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,039,166 0.78%
Zhengli Consulting (11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,461,260 0.22%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,552,495,000 100%
Notes:
(1) Xingsi Shenglian is a limited partnership established under the laws of the PRC on July 7, 2017 which
is engaged in industrial investment and investment management. The general partner of Xingsi
Shenglian is Zhongjin (Fujian) Venture Capital Co., Ltd. (ږ(ܔ)ப΂ʮ̡), which is
held as to 80% by Lin Yongzhong (׀an Independent Third Party. Xingsi Shenglian is also held
as to 99.9990% by Huafu Investment as its limited partner. Huafu Investment is a limited liability
company established under the laws of the PRC on June 27, 2013. Huafu Investment conducts financial
and equity investments, and is wholly-owned by Huafu Securities Co., Ltd. (ப΂ʮ̡),
which is ultimately controlled by the Fujian Provincial Department of Finance (ᝂ).
(2) Wuxi Zhenghai is a limited partnership established under the laws of the PRC on July 27, 2020 which
conducts venture capital investments. The general partner of Wuxi Zhenghai is Shanghai Royalsea
Capital Management Ltd. (ʮ̡), which is held as to 51.36% by Wang
Zhengdong (؇an Independent Third Party.
(3) Beijing Jiade is a limited partnership established under the laws of the PRC on March 18, 2021 which
is primarily engaged in the areas of software development, technology development, consulting,
exchange and transfer, as well as sales of machinery, equipment and computer systems. The general
partner of Beijing Jiade is Beijing Weixiu Technology Co., Ltd. (ʮ̡), which is held
as to 60% by Qiu Yuhang ( ໿ρঘ), an Independent Third Party.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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--- page 219 ---
(4) Fujian Yaohua is a limited liability company established under the laws of the PRC on May 30, 1992.
It is primarily engaged in real estate development and operation, construction projects, property
management, residential leasing and non-residential real estate leasing. Fujian Yaohua is held as to
73.56% by Sanyi Development Limited (ʮ̡), a limited liability company incorporated
in Hong Kong (China) which is wholly-owned by Mr. Cho Tak Wong, the brother of Ms. Cao.
(5) Wukuang Yuanding is a limited partnership established under the laws of the PRC on May 28, 2018
which conducts private equity investments. The general partner of Wukuang Yuanding is Minmetals
Innovation Equity Investment Fund Management (Ningbo) Co., Ltd. (၍ଣ(ت)
ʮ̡), which is held as to 45.06% by Minmetals Innovation Investment Co., Ltd. ( ʞᘤ௴อҳ༟Ϟ
ʮ̡). Minmetals Innovation Investment Co., Ltd. is indirectly wholly-owned by the State-owned
Assets Supervision and Administration Commission of the State Council ( ਷ਕ৫਷Ϟ༟ପ္ຖ၍ଣ։
ึ) (“SASAC”).
(6) Shuanghe Zhenghua is a limited partnership established under the laws of the PRC on December 13,
2021 which conducts equity, project and industrial investments. The general partner of Shuanghe
Zhenghua is Gongqingcheng Zhenghua Chuanghuai Investment Partnership (L.P.) (͍ശ௴ᕿҳ༟
ΥྫΆุ(Υྫ)), which is ultimately controlled by Zhuang Yingming (თ), an Independent
Third Party.
(7) Chenxi No. 12 is a limited partnership established under the laws of the PRC on December 2, 2021
which conducts equity, project and industrial investment and investment management. The general
partner of Chenxi No. 12 is Jiaxing Chenxi Private Equity Fund Management Co., Ltd. ( ྗጳોዳӷ෍
ʮ̡), which is held as to 80% by Li Jian ( ҽ਄), an Independent Third Party.
(8) Nanjing Konggang is a limited liability company established under the laws of the PRC on July 8, 2004.
Nanjing Konggang is primarily engaged in land and infrastructure development, construction, property
management, information distribution and logistics-related services, and is held as to 65.53% by
Nanjing Jiangning Economic and Technological Development Group Co., Ltd. (ԯϪྐྵ຾᏶Ҧஔක೯
ʮ̡), which is in turn held as to 93.88% by Nanjing Jiangning Economic and Technological
Development Zone Management Committee (ึ).
(9) Hengqin New Kinetic Energy is a limited partnership established under the laws of the PRC on
December 7, 2021 which conducts self-financed investments. The general partner of Hengqin New
Kinetic Energy is Shenzhen Changsheng Private Equity Fund Management Co., Ltd. (ٰ
ʮ̡) (formerly known as Ningbo Meishan Bonded Port Changsheng Private Equity
Fund Management Co., Ltd. (ʮ̡)), which is held as to 95%
by Jin Yinfeng (ვჾ), an Independent Third Party, who also holds 24.71% of Hengqin New Kinetic
Energy directly.
(10) Mr. Ma Shaodong is a private investor and an Independent Third Party.
(11) Zhengli Consulting is a limited liability company incorporated in the PRC on October 28, 2021 and is
held by each of Ms. Cao and Dr. Chen as to 50%, respectively. On June 21, 2022, Zhengli Consulting
transferred its entire 0.22% equity interest in our Company to Zhengli No. 1 at a consideration of
RMB12,702,824 pursuant to the share purchase agreement dated May 13, 2022. Zhengli Consulting and
Zhengli No. 1 are entities which are ultimately owned and/or controlled by Ms. Cao and/or Dr. Chen.
(2) Acquisition of Business from Jiangsu TAFEL Under Common Control
On February 10, 2022, the then shareholders of Jiangsu TAFEL resolved to transfer its
business and certain assets including properties, plant and equipment, other intangible assets
and part of the inventories held by Jiangsu TAFEL and its subsidiaries to our Company and its
subsidiaries. All liabilities except for provision for warranty claims were retained by Jiangsu
TAFEL. Accordingly, relevant asset transfer agreements were entered into in February 2022
amongst Jiangsu TAFEL and its subsidiaries, and our Company and its subsidiaries to effect the
aforementioned business acquisition and asset transfers at the total consideration of
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RMB1,854,781,500, which was determined based on the valuation of such assets appraised by
an independent professional valuer or the book value of the relevant assets, including part of
the inventories which were still in the physical possession of Jiangsu TAFEL and not shipped
out and could be used for further sale after the acquisition, at the relevant time. Jiangsu TAFEL
no longer conducted any business operations since the acquisition of its business by our Group
by the end of February 2022, which included the substantial completion of transfer of its
employees to and assumption of its relationship with suppliers and customers by our Group.
(3) Acquisition of Suzhou ZENIO from Zenergy Investment
On February 25, 2022, Zenergy Investment transferred its entire 100% equity interests in
Suzhou ZENIO to our Company at a consideration of RMB306,920,000, which was determined
based on the valuation of equity holder interests appraised by an independent professional
valuer as of December 31, 2021. According to Suzhou ZENIO’s articles of association,
important resolutions at its general meetings shall be passed with the affirmative votes by
shareholders representing more than two-thirds of the voting rights in the company, and
important board of directors’ resolutions shall be passed with affirmative votes by directors
representing more than three-fifths of the directors, while Zenergy Investment, one of our
Controlling Shareholders, holds voting rights of 65% and three out of five seats of the board
of directors therein, thereby it cannot control the general meetings and the board of directors
of Suzhou ZENIO. Accordingly, Suzhou ZENIO was treated as a joint venture before the
relevant acquisition by the Company, which was accounted for under acquisition accounting
instead of merger accounting.
Our Directors consider that the Business Reorganization was conducted on normal
commercial terms and is beneficial to the Group and the Shareholders as a whole. Suzhou
ZENIO and certain parts of the business of Jiangsu TAFEL were acquired by the Group as part
of the aforementioned business reorganization, and Jiangsu TAFEL’s business was
consolidated under merger accounting as set out in Note 2.1 to the Accountants’ Report. The
Business Reorganization does not violate the applicable PRC laws and regulations, and the
relevant regulatory registrations or approvals necessary to effect the Business Reorganization
had been obtained in accordance with the PRC laws and regulations.
4. Transfer to and Capital Increase by the Equity Incentive Platforms
In recognition of the contributions of our employees and to incentivize them to further
promote our development, we adopted (i) the Share Option Plan approved on January 20, 2023
and effective from December 31, 2021, as amended from time to time, with Nanjing Xuande,
Nanjing Mude, Nanjing Chengde, Nanjing Gande and Nanjing Yinde as the Equity Incentive
Platforms; and (ii) the Share Incentive Plan on February 24, 2022, as amended from time to
time, with Zhengli No. 1, Zhengli No. 2, Zhengli No. 3, Zhengli No. 4, Zhengli No. 5, Zhengli
No. 6, Zhengli No. 7, Zhengli No. 8 and Zhengli No. 9 as the Equity Incentive Platforms.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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On June 21, 2022, Zhengli Consulting transferred RMB3,461,260 of the registered capital
of our Company to Zhengli No. 1 for employee incentive purpose at a consideration of
RMB12,702,824. The consideration was determined based on the subscription price of Zhengli
Consulting’s investment in Jiangsu TAFEL at the relevant time. On the same date, the
registered capital of our Company was increased to RMB1,572,495,000, with the additional
registered capital of RMB20,000,000 subscribed by Zhengli No. 2 which was reserved for
employee incentive purpose.
For further details of the Share Option Plan and the Share Incentive Plan and the structure
of our Equity Incentive Platforms, see “Statutory and General Information—Pre-IPO Equity
Incentive Plans” in Appendix IV to this Prospectus.
5. Pre-IPO Investments
We underwent rounds of Pre-IPO Investments through the subscription of our increased
registered capital by our Pre-IPO Investors and equity transfers among our existing
shareholders and the Pre-IPO Investors. See “—Pre-IPO Investments” below for details.
6. Conversion into a Joint Stock Limited Company
On June 18, 2024, resolutions were passed at our shareholders’ general meeting
approving, among other matters, (i) the conversion of our Company from a limited liability
company into a joint stock limited company under the laws of the PRC, (ii) the change of our
corporate name to Jiangsu Zenergy Battery Technologies Group Co., Ltd. ( Ϫᘽ͍ɢอঐཥϫ
ʮ̡), and (iii) the conversion of the net asset value of our Company as of
February 29, 2024 into 2,255,935,152 Shares of our Company, with the remaining
RMB3,066,334,982.75 in net assets included as capital reserves of our Company.
Upon completion of the conversion, the registered capital of our Company became
RMB2,255,935,152 divided into 2,255,935,152 Shares with a nominal value of RMB1.00 each,
which were subscribed by all the then Shareholders in proportion to their respective equity
interests in our Company before the conversion. The conversion was completed on July 17,
2024 when our Company obtained a new business license.
Immediately after the conversion into a joint stock company, details of the Shareholders
were as follows:
Name of Shareholder
Number of
Shares Held
Approximate
Shareholding
Percentage
Zenergy Investment (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118460,690,543 20.42%
SINOGY VC (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,941,151 16.35%
Nanjing Miaode (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237,152,124 10.51%
Huafu Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,689,009 7.34%
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Name of Shareholder
Number of
Shares Held
Approximate
Shareholding
Percentage
Changshu Southeast Industrial Investment Co., Ltd.
(ʮ̡)( “ Southeast
Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,902,744 5.32%
Xingsi Shenglian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,390,811 4.80%
Wuxi Zhenghai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,293,737 4.00%
Fujian Yaohua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,195,825 2.67%
Tianjin Haisong Chaoyue Equity Investment Partnership
(L.P.) (ᛆҳ༟ΥྫΆุ(Υྫ))
(“Oceanpine Capital ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,968,563 2.61%
Nanjing Xuande (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,663,715 2.47%
Wukuang Yuanding /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 2.40%
Shuanghe Zhenghua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 2.40%
Beijing Jiade /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,816,795 1.99%
Suzhou Zhongjin SAIC Emerging Industry Equity
Investment Fund Partnership (L.P.) (ɪӛอጳ
ΥྫΆุ(Υྫ)) (“ CICC
SAIC Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,312,375 1.74%
Chenxi No. 12 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,117,495 1.60%
Nanjing Konggang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,137,802 1.47%
Changshu Southeast Xinneng Equity Investment
Partnership (L.P.) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)) (“ Southeast Xinneng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.16%
Xiamen C&D Emerging Industry Equity Investment No. 2
Partnership (L.P.) (ᛆҳ༟൩໮Υྫ
Άุ(Υྫ)) (“ C&D Investment ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.16%
Chuanghe Xincai (Xiamen) Manufacturing Transformation
and Upgrading Fund Partnership (L.P.) ( ௴Υ㒥ҿ(ژ)
ΥྫΆุ(Υྫ))
(“Chuanghe Xincai ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.16%
Tianjin Juxin Xihai Equity Investment Partnership (L.P.)
(ᛆҳ༟ΥྫΆุ(Υྫ))
(“Juxin Xihai ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.16%
Hengqin New Kinetic Energy /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,068,538 0.93%
Beijing Lianhe Jiaying Enterprise Management
Partnership (L.P.) (Άุ၍ଣΥྫΆุ(Ϟ
Υྫ)) (“ Lianhe Jiaying ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,966,600 0.93%
Zhengli No. 2 (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,000,000 0.89%
Xingzheng Capital Management Co., Ltd. ( ጳᗇҳ༟၍ଣ
ʮ̡)( “ China Industrial Securities Investment
Management ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,799,962 0.79%
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Name of Shareholder
Number of
Shares Held
Approximate
Shareholding
Percentage
Jiaxing Chenyue Equity Investment Partnership (L.P.) ( ྗ
ᛆҳ༟ΥྫΆุ(Υྫ)) (formerly known
as Jiaxing Jianxin Chenyue Equity Investment
Partnership (L.P.) (ᛆҳ༟ΥྫΆุ(ࠢ
Υྫ))) (“ Jiaxing Chenyue ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,035,363 0.76%
Anhui Haichuang Green Equity Investment Fund (L.P.)
(ږ(Υྫ))
(“Anhui Haichuang ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,104,125 0.58%
CHENGTUN MINING GROUP CO. LTD ( ସˊᘤุණྠ
ʮ̡)( “ Chengtun Mining ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,104,125 0.58%
Xiamen ITG Group Corp., Ltd. (ᛆҳ
ΥྫΆุ(Υྫ)) (“ Xiamen ITG Group ”) /H1118/H111813,104,125 0.58%
Ma Shaodong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,039,166 0.53%
Zhongtai Ronghao (Xiamen) Investment Partnership (L.P.)
(ʕइፄ㒊(ژ)ҳ༟ΥྫΆุ(Υྫ)) (formerly
known as Huzhou Ronghao Equity Investment
Partnership (L.P.) (ᛆҳ༟ΥྫΆุ(Υ
ྫ))) (“ Zhongtai Ronghao ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,172,888 0.41%
Zhengli No. 1
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,461,260 0.15%
Nanjing Heyi Science and Technology Innovation
Investment Partnership (L.P.) (Ҧ௴อҳ༟Υ
ྫΆุ(Υྫ)) (formerly known as Nanjing Jianxin
Heyi Science and Technology Innovation Investment
Partnership (L.P.) (Ҧ௴อҳ༟ΥྫΆุ
(Υྫ))) (“ Nanjing Heyi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,620,825 0.12%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,255,935,152 100%
Note:
(1) Each of Zenergy Investment, SINOGY VC, Nanjing Miaode, Nanjing Xuande, Zhengli No. 1 and
Zhengli No. 2 is an entity ultimately owned and/or controlled by Ms. Cao and/or Dr. Chen in the
following manner:
 Zenergy Investment is a limited liability company established under the laws of the PRC and held
as to 46%, 42% and 12% by Dr. Chen, Ms. Cao and SINOGY VC, respectively.
 SINOGY VC is held as to 52% and 48% by Ms. Cao and Dr. Chen, respectively.
 Nanjing Miaode and Nanjing Xuande are limited partnerships established under the laws of the
PRC; the general partner of each of them is Zhengli Consulting holding 0.01% partnership
interests therein, which is in turn held as to 50% by each of Ms. Cao and Dr. Chen. Nanjing
Miaode is held as to 99.99% by six limited partners who are Independent Third Parties with its
largest limited partner Long Huijin holding 40% of partnership interests therein. Save for
aforementioned and to the best of knowledge of the Company, none of the limited partners of
Nanjing Miaode holds more than one-third of partnership interests therein.
 Zhengli No. 1 and Zhengli No. 2 are limited partnerships established under the laws of the PRC,
each of which have Ms. Cao and Dr. Chen as the general partners. Save for 20.79% partnership
interests held by Ms. Cao in Zhengli No. 1, each of Ms. Cao and Dr. Chen holds 0.01%
partnership interests in Zhengli No. 1 and Zhengli No. 2.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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MAJOR ACQUISITION
In November 2023, with a view to reorganizing the shareholding structure of STAES, the
Company entered into an equity transfer agreement with SINOGY VC to acquire 50% of the
equity interests in STAES held by SINOGY VC (the “ STAES Reorganization Transaction ”).
The rationale for the STAES Reorganization Transaction was to advance the business
development strategies of our Group, resolve any potential competition issue which may arise
from operating in the same industry between SINOGY VC, one of our Controlling Shareholders
and a former shareholder of STAES prior to the STAES Reorganization Transaction, and us, as
well as promote and maintain our cooperation with Toyota Motor Corporation and Toyota
Motor (China) Investment Co., Ltd.
STAES was established as a limited liability company under the laws of the PRC on
November 12, 2013, and is primarily engaged in the manufacturing, development and sale of
Lithium-Ion and Ni-MH battery packs for use in vehicles. See “Business—Our Competitive
Strengths” for more details about the business of STAES. SINOGY VC was established as a
limited liability company under the laws of the PRC on March 15, 2013, and is primarily
engaged in the investment management and consulting. SINOGY VC is held as to 52% and
48% by Ms. Cao and Dr. Chen, respectively.
The consideration for the STAES Reorganization Transaction, being a combination of
cash and increase in registered capital of our Company subscribed by SINOGY VC, amounted
to approximately RMB3.3 billion, and was determined after arm’s length negotiations between
the parties with reference to the valuation of STAES’ equity interests as of June 30, 2023 by
an independent valuer, as well as the realized distributable profits attributable to SINOGY VC
from January to June 2023. The consideration for the transaction comprised (i) approximately
RMB2.8 billion, in the form of SINOGY VC’s subscription of the additional registered capital
of the Company in the amount of RMB368,941,151 at the price of approximately RMB7.63 per
Share, which was the post-investment price per Share after the Company’s Series A financing,
and (ii) RMB496 million in cash.
The STAES Reorganization Transaction was completed in December 2023, upon which
STAES was held as to 50%, 35%, 10% and 5% by the Company, Toyota Motor Corporation,
Toyota Battery Co., Ltd. (ʮ̡) (formerly known as Primearth EV Energyό
ٟand Toyota Motor (China) Investment Co., Ltd. ( ᔮ͞ӛԓ(ʕ਷)ʮ̡),
respectively. As disclosed in Part III of the Accountants’ Report in Appendix I to this
Prospectus, STAES is considered a material joint venture of the Group and is accounted for
using the equity method.
Pursuant to Rule 4.05A of the Listing Rules, the STAES Reorganization Transaction,
which occurred during the Track Record Period, would have been classified as a major
transaction under Chapter 14 of the Listing Rules at the date of the Company’s application for
Listing. Please refer to Part III of the Accountants’ Report in Appendix I to this Prospectus for
the financial information of STAES from the commencement of the Track Record Period to the
date of completion of the STAES Reorganization Transaction.
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The STAES Reorganization Transaction has been properly and legally completed and
settled, and STAES has obtained all necessary approvals from competent authorities or made
all necessary registration or filings with the relevant local branch of the SAMR in respect of
the STAES Reorganization Transaction.
Save as disclosed above, we did not conduct any other acquisitions, disposals or mergers
that we consider to be material to us during the Track Record Period and up to the Latest
Practicable Date.
PRE-IPO EQUITY INCENTIVE PLANS
We adopted the Pre-IPO Equity Incentive Plans, details of which are set forth in
“Statutory and General Information—Pre-IPO Equity Incentive Plans” in Appendix IV to this
Prospectus. As of the date of this Prospectus, all options or awards subject to the Pre-IPO
Equity Incentive Plans were granted to, vested in, and subscribed for by the specified
participants. No further options or awards will be granted under the Pre-IPO Equity Incentive
Plans following the Listing.
REASONS FOR THE LISTING
Our Company is seeking a listing of its H Shares on the Stock Exchange in order to raise
further capital for the development of our business and expansion of our manufacturing
capacity, to strengthen our business profile and expand our global presence. For details of our
future plans, please refer to the section headed “Future Plans and Use of Proceeds” in this
Prospectus.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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PRE-IPO INVESTMENTS
1. Overview
Details of the Pre-IPO Investments in our Company are set forth below:
No. Round Form of investment
Date of initial
investment
agreement
Date of full
settlement of
consideration
Pre-IPO
Investor (1)
Registered capital
subscribed for
Amount of
consideration paid
Total funds raised
by our Company
Post-money
valuation of our
Company (2)
(approx.)
Cost per Share (3)
(approx.)
Discount to
the H Share
Offer Price (4)
(RMB) (RMB) (RMB billion) (RMB billion) (RMB)
1. /H1118/H1118/H1118Series A Subscription of increased
registered capital by
cash
July 13, 2022 July 22, 2022 Oceanpine Capital 58,968,563 450,000,000 2.4 14.40 7.63 0.03%
Nanjing
Jiangning
(5)
57,658,150 440,000,000
CICC SAIC
Investment
39,312,375 300,000,000
Southeast Xinneng 26,208,250 200,000,000
Chuanghe Xincai 26,208,250 200,000,000
C&D Investment 26,208,250 200,000,000
Juxin Xihai 26,208,250 200,000,000
Lianhe Jiaying 20,966,600 160,000,000
Jiaxing Chenyue 17,035,363 130,000,000
Xiamen ITG Group 13,104,125 100,000,000
Nanjing Heyi 2,620,825 20,000,000
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No. Round Form of investment
Date of initial
investment
agreement
Date of full
settlement of
consideration
Pre-IPO
Investor (1)
Registered capital
subscribed for
Amount of
consideration paid
Total funds raised
by our Company
Post-money
valuation of our
Company (2)
(approx.)
Cost per Share (3)
(approx.)
Discount to
the H Share
Offer Price (4)
(RMB) (RMB) (RMB billion) (RMB billion) (RMB)
2. /H1118/H1118/H1118Acquisition of
registered
capital by
Pre-IPO
Investors
from
December
2022 to
January
2024
Acquisition of registered
capital from existing
shareholder Nanjing
Miaode
September 20,
2022
October 13, 2022 Anhui Haichuang 13,104,125 100,000,000 N/A 14.40 7.63 0.03%
Chengtun Mining 13,104,125 100,000,000
China Industrial
Securities
Investment
Management
17,628,328 134,525,030
Acquisition of registered
capital from existing
shareholder Nanjing
Xuande
September 20,
2022
November 3, 2022 China Industrial
Securities
Investment
Management
171,634 1,309,776 N/A 14.40 7.63 0.03%
Zhongtai Ronghao 9,172,888 70,000,000
Beijing Jiade 1,267,367 9,671,512
Acquisition of registered
capital from existing
shareholder Nanjing
Jiangning
July 26, 2023 August 2, 2023 SINOGY VC 57,658,150 456,539,062.50 N/A 14.40 7.63
(6) 0.03%
Acquisition of registered
capital from existing
shareholder Beijing
Jiade
October 15, 2023 December 21, 2023 SINOGY VC 19,656,188 150,000,000 N/A 14.40 7.63 0.03%
Acquisition of registered
capital from SINOGY
VC
November 1, 2023 January 16, 2024 Southeast
Investment
77,314,338 590,000,000 N/A 14.40 7.63 0.03%
Acquisition of registered
capital from Zenergy
Investment
November 1, 2023 January 16, 2024 Southeast
Investment
42,588,406 325,000,000 N/A 14.40 7.63 0.03%
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No. Round Form of investment
Date of initial
investment
agreement
Date of full
settlement of
consideration
Pre-IPO
Investor (1)
Registered capital
subscribed for
Amount of
consideration paid
Total funds raised
by our Company
Post-money
valuation of our
Company (2)
(approx.)
Cost per Share (3)
(approx.)
Discount to
the H Share
Offer Price (4)
(RMB) (RMB) (RMB billion) (RMB billion) (RMB)
3. /H1118/H1118Series B Subscription of increased
registered capital by
cash
July 24, 2024 August 1, 2024 SINOGY VC 13,104,125 100,000,000 1.0 18.2
(7) 7.63 0.03%
Southeast
Investment
Holding (defined
below)
78,624,750 600,000,000
Suchuang Energy
Investment
(defined below)
26,208,250 200,000,000
Dou Yulin 6,552,063 50,000,000
Wu Yafeng 6,552,063 50,000,000
Notes:
(1) For the details of the Pre-IPO Investors, please refer to “—5. Information about the Pre-IPO Investors” in this section.
(2) The post-money valuation of our Company equals the total consideration paid by the Pre-IPO Investors in each round of the Pre-IPO Investments, div ided by the ownership
or shareholding percentage of the Pre-IPO Investors immediately after the Pre-IPO Investment, save for the transfer between Nanjing Jiangning and S INOGY VC.
(3) The cost per unit of registered capital or Share paid by each Pre-IPO Investor was calculated based on the amount of investment made and amount of reg istered capital or number
of Shares held by the Pre-IPO Investor immediately after the Pre-IPO Investment, save for the transfer between Nanjing Jiangning and SINOGY VC.
(4) The discount to the H Share Offer Price is calculated based on the Offer Price of HK$8.27 per Offer Share.
(5) Nanjing Jiangning Economic Development Industrial Equity Investment Partnership Enterprise (L.P.) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Nanjing Jiangning ”)
is a limited partnership established under the laws of the PRC which is engaged in investments for technological economic development. The general pa rtner of Nanjing
Jiangning is Nanjing Jiangning Development Zone Fund Management Co., Ltd. (ʮ̡), which is indirectly wholly-owned by the State-owned
Assets Supervision and Administration Office of Nanjing Jiangning Economic and Technological Development Zone (܃an
Independent Third Party.
(6) The paid consideration for such transfer includes payment of interests for Nanjing Jiangning’s investment in our Company as mutually agreed betw een the parties therein with
the cost per Share being approximately RMB7.92.
(7) The post-money valuation of our Company after the Series B Pre-IPO Investments have taken into account the fact that the registered capital of the C ompany had been increased
from RMB1,886,994,001 to RMB2,255,935,152 after the Series A financing and before the Series B financing, with the increased registered capital of R MB368,941,151
subscribed for by SINOGY VC as part of the consideration of the STAES Reorganization Transaction. See “—Major Acquisition” above for details.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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2. Principal Terms of the Pre-IPO Investments
Basis of determining the valuation
and consideration paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The determination of the valuation and
consideration is based on arm’s length
negotiations between the relevant parties with
reference to among others, (i) the timing and
market conditions of the investments/equity
transfers and the market value of comparable
companies at the relevant time, (ii) the
operation of our business, the financial
performance of our Group at the relevant
time/period, and (iii) the prospects of our
business.
Lock-up /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Pursuant to the applicable PRC law, within the
12 months following the Listing Date, the
Shares issued by the Company prior to the
Global Offering (including the Shares held by
the Pre-IPO Investors immediately prior to the
Global Offering) are restricted from transfer.
Use of proceeds from the Pre-IPO
Investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We utilized the proceeds from the Pre-IPO
Investments for the operations, business
expansion and general working capital purpose
of our Group. As of the Latest Practicable Date,
approximately 77.9% of the funds raised from
the Pre-IPO Investments have been utilized.
Strategic benefit of the Pre-IPO
Investments to our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
At the time of each of the Pre-IPO Investments,
our Directors were of the view that our
Company could benefit from the capital raised
through the Pre-IPO Investments, the Pre-IPO
Investors’ knowledge and experience, and the
endorsement of and confidence in the Group’s
performance, strength and prospects reflected
by the Pre-IPO Investments. Additionally,
investments from the Pre-IPO Investors,
including state-owned enterprises which are
ultimately owned by the local governments,
participant(s) of our upstream and downstream
industrial chain and professional investment
companies or professional funds, are beneficial
to business development of our Group and could
also diversify our shareholding structure and
Shareholders base.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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3. Special Rights of the Pre-IPO Investors
Certain Pre-IPO Investors have been granted certain special rights in relation to our
Company, including, among others, rights of first refusal, anti-dilution rights, co-sale rights, no
more favorable terms, redemption rights, information rights, recommendation rights and
appointment rights of observer to the board. Pursuant to a termination agreement entered into
on July 23, 2024 amongst others, all Shareholders with special rights, before the date of our
first submission of listing application to the Stock Exchange, and as confirmed by our
Directors, the redemption rights and anti-dilution rights were terminated and invalidated with
retroactive effect from the date of grant of such rights, and all other shareholders’ special rights
granted shall be terminated with immediate effect.
4. Joint Sponsors’ Confirmation
On the basis that (i) the Listing Date, being the first day of trading of the H Shares on
the Stock Exchange, will take place no earlier than 120 clear days after completion of the
Pre-IPO Investments; and (ii) the special rights of the Pre-IPO Investors have been terminated
as disclosed in “—Special Rights of the Pre-IPO Investors” above, the Joint Sponsors confirm
that the Pre-IPO Investments are in compliance with the Pre-IPO Investment Guidance as
defined in Chapter 4.2 of the Guide for New Listing Applicants issued by the Stock Exchange.
5. Information about the Pre-IPO Investors
The background information of our Pre-IPO Investors is set out below.
Southeast Investment Holding, Southeast Investment and Southeast Xinneng
Changshu Southeast Investment Holding Co., Ltd. (ʮ̡)
(“Southeast Investment Holding ”) is a limited liability company established under the
laws of the PRC on October 14, 2022, of which Mr. Hong Ping (̻), our Supervisor,
is a director. Southeast Investment Holding conducts self-financed investments and
venture capital private investments, as well as provides asset management and
consultancy services, and is indirectly wholly-owned by the Changshu Finance Bureau
(State-owned Assets Supervision and Administration Office of Changshu Municipal
Government) (҅(܃“()) Changshu
SASAC ”).
Southeast Investment is a limited liability company established under the laws of the
PRC on May 21, 2020. Southeast Investment conducts venture capital and equity
investments, and is held as to 99.96% by Southeast Investment Holding.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Southeast Investment holds 99.01% of Southeast Xinneng as its limited partner.
Southeast Xinneng is a limited partnership established under the laws of the PRC on June
1, 2022 which conducts venture capital and equity investments. The general partner of
Southeast Xinneng is Minmetals Innovation Investment Co., Ltd. (ʮ
̡), which is indirectly wholly-owned by the State-owned Assets Supervision and
Administration Commission of the State Council (ึ)
(“SASAC ”).
Anhui Haichuang
Anhui Haichuang is a limited partnership established under the laws of the PRC on
March 9, 2022 which is primarily engaged in private equity investment, focusing on
equity investment, investment management and asset management.
The general partner of Anhui Haichuang is Shanghai Royalsea Capital Management
Ltd. (ʮ̡), which is held as to 51.36% by Wang Zhengdong ( ˮ
؇an Independent Third Party.
Oceanpine Capital
Oceanpine Capital is a limited partnership established under the laws of the PRC on
May 13, 2022. The general partner of Oceanpine Capital is Oceanpine (Beijing) Private
Equity Fund Management Co., Ltd. (ჯঘ(̏ԯ)ʮ̡), an
institutional growth equity investment company and 60% of which is held by Lin Yan (؍
ዲ) and 40% of which is held by Tianhong Century Co., Ltd. (ʮ̡), which
is in turn held as to 55% by Lin Qing (૶) and 45% by Lin Yunsheng (ʛ͛),
respectively. Lin Yan, Lin Qing as well as Lin Yunsheng are all Independent Third Parties.
Lianhe Jiaying
Lianhe Jiaying is a limited partnership established under the laws of the PRC on
September 2, 2020 which is engaged in, among others, enterprise management, market
research, consultancy, as well as sales of computers, software and auxiliary equipment.
The general partner of Lianhe Jiaying is Beijing Jintongwei Technology Group Co., Ltd.
(ʮ̡), which is ultimately controlled by Qiu Yuhang ( ໿ρ
ঘ), an Independent Third Party.
CICC SAIC Investment
CICC SAIC Investment is a limited partnership established under the laws of the
PRC on March 11, 2021 which is focused on, among others, private equity and venture
capital fund management and information consulting services. The general partner of
CICC SAIC Investment is CICC Capital Management Co., Ltd. (ʮ̡),
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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which is wholly-owned by China International Capital Corporation Limited (ږ
ʮ̡), a joint stock company incorporated in the PRC whose shares are listed
on the Shanghai Stock Exchange (stock code: 601995) and the Hong Kong Stock
Exchange (stock code: 3908).
C&D Investment
C&D Investment is a limited partnership established under the laws of the PRC on
June 27, 2016. C&D Investment is engaged in the management of non-securities equity
investments and conducts asset and investment management, as well as investments in
primary, secondary and tertiary industries. The general partner of C&D Investment is
Xiamen Jianxin Investment Co., Ltd. (ʮ̡), which is held as to 51%
by Xiamen Jianxing Capital Enterprise Management Consulting Co., Ltd. (ጳ༟͉
ʮ̡), which is in turn held as to 51% and 49% by Cai Xiaofan ( ᇹወ
ω) and Li Yan (֧respectively. Each of Cai Xiaofan and Li Yan is an Independent
Third Party.
Xiamen Jianxin Investment Co., Ltd is also held as to 49% by Xiamen C&D
Emerging Venture Capital Co., Ltd. (ʮ̡), which is wholly-
owned by Xiamen C&D Emerging Industry Equity Investment Co., Ltd. (೯อጳ
ப΂ʮ̡).
Xiamen C&D Emerging Industry Equity Investment Co., Ltd., which also holds
approximately 99.98% of C&D Investment, is ultimately controlled by the State-owned
Assets Supervision and Administration Commission of Xiamen Municipal People’s
Government (ึ)( “ Xiamen SASAC ”).
Chuanghe Xincai
Chuanghe Xincai is a limited partnership established under the laws of the PRC.
Xiamen Chuanghe Luxiang Investment Management Co., Ltd. (௴Υ᜼ജҳ༟၍ଣϞ
ʮ̡) is a limited liability company established under the laws of the PRC and is the
general partner of Chuanghe Xincai, and its largest single shareholder is SDIC Unity
Capital Co., Ltd. (ʮ̡), which is ultimately controlled by State
Development and Investment Corporation (ʮ̡), a state-owned
investment holding company in China, and an Independent Third Party.
Juxin Xihai
Juxin Xihai is a limited partnership established under the laws of the PRC on
September 14, 2017 which conducts investment management. The general partner of
Juxin Xihai is Tianjin Jushun Investment Management Co., Ltd. (ࠢ
ʮ̡), which is indirectly wholly-owned by CITIC Limited (ʮ̡), a
public company limited by shares incorporated in Hong Kong (China) whose shares are
listed on the Hong Kong Stock Exchange (stock code: 267).
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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China Industrial Securities Investment Management
China Industrial Securities Investment Management is a limited liability company
established under the laws of the PRC on March 17, 2015. China Industrial Securities
Investment Management conducts financial products, equity and project investment, and
is wholly-owned by Industrial Securities Co., Ltd. (ʮ̡), a joint stock
company incorporated in the PRC whose shares are listed on the Shanghai Stock
Exchange (stock code: 601377).
Jiaxing Chenyue and Nanjing Heyi
Jiaxing Chenyue is a limited partnership established under the laws of the PRC on
August 18, 2020 which conducts equity and industrial investments, as well as investment
consulting.
Nanjing Heyi is a limited partnership established under the laws of the PRC on June
29, 2020 which conducts equity investment, investment and asset management, and
venture capital activities.
The general partner of Jiaxing Chenyue and Nanjing Heyi is CCB Investment Funds
Management Co., Ltd. (ڦܔ(̏ԯ)ப΂ʮ̡), which is ultimately
controlled by China Construction Bank Corporation (ʮ̡), a joint
stock company incorporated in the PRC whose shares are listed on the Shanghai Stock
Exchange (stock code: 601939) and the Hong Kong Stock Exchange (stock code: 939).
Chengtun Mining
Chengtun Mining is a joint stock company established under the laws of the PRC on
January 14, 1997 and headquartered in Xiamen. Chengtun Mining is committed to
development and utilization of the non-ferrous metal resources, with a focus on copper,
cobalt, and nickel, which are all in high demand by the new energy industry, and its shares
are listed on the Shanghai Stock Exchange (stock code: 600711).
Xiamen ITG Group
Xiamen ITG Group is a limited partnership established under the laws of the PRC
on July 10, 2020 which conducts equity investments, investment and asset management
and self-financed investments. The general partner of Xiamen ITG Group is Guoxing
(Xiamen) Private Equity Fund Management Co., Ltd. ( ਷ጳ(ژ)ʮ
̡), which is held as to 34%, 33% and 33% by Xiamen Mingde Investment Partnership
Enterprise (L.P.) (ᅃҳ༟ΥྫΆุ(Υྫ)), China SDIC Gaoxin Industrial
Investment Corp. Ltd. (ʮ̡) and Xiamen Guomao Huarui
Investment Co., Ltd. (ʮ̡), respectively.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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The general partner of Xiamen Mingde Investment Partnership Enterprise (L.P.) is
Zhang Jiemin ( ੵᆎ͏), an Independent Third Party; China SDIC Gaoxin Industrial
Investment Corp. Ltd. is ultimately controlled by SASAC; and Xiamen Guomao Huarui
Investment Co., Ltd. is indirectly wholly-owned by Xiamen SASAC.
Zhongtai Ronghao
Zhongtai Ronghao is a limited partnership established under the laws of the PRC on
October 22, 2019 which conducts self-financed investments. The general partner of
Zhongtai Ronghao is Beijing Zhongtai Renhe Fund Management Co., Ltd. ( ̏ԯʕइʠ
ʮ̡), which is primarily engaged in investment management and
consulting for non-securities business. Beijing Zhongtai Renhe Fund Management Co.,
Ltd. is held as to 51% and 49% by Han Sen ( ᒵಌ) and Wang Wei ( ˮ⒜), respectively.
Each of Han Sen and Wang Wei is an Independent Third Party.
Suchuang Energy Investment
Suzhou Suchuang Energy Investment Partnership (L.P.) ( ᘽψᘽ௴อঐ๕ҳ༟Υྫ
Άุ(Υྫ)) (“ Suchuang Energy Investment ”) is a limited partnership established
under the laws of the PRC on October 17, 2023 which conducts venture capital
investments and R&D of emerging energy technologies. The general partners of Suchuang
Energy Investment are (i) Suzhou International Development Venture Capital Holding
Co., Ltd. (ʮ̡), which is held as to 94.74% by Suzhou
Innovation Investment Group Co., Ltd. (ʮ̡), and (ii) Changshu
Guofa Venture Capital Co., Ltd. (ʮ̡), which is ultimately
wholly owned by Changshu SASAC. Suzhou Innovation Investment Group Co., Ltd. is
held as to 91.67% by Suzhou International Development Group Co., Ltd. (࢝
ʮ̡), which is in turn wholly-owned by the Suzhou Finance Bureau ( ᘽψ̹ৌ
҅).
Dou Yulin
Mr. Dou Yulin (؍is a private investor and an Independent Third Party.
Wu Yafeng
Ms. Wu Yafeng ( юඩჾ) is a private investor and an Independent Third Party.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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PUBLIC FLOAT
1,069,127,364 Shares held by all existing Shareholders, representing approximately
42.62% of our total issued Shares upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised), will not be considered as part of the public float
following the completion of the Global Offering as they are Unlisted Shares which will not be
converted into H Shares.
Following the conversion of the Unlisted Shares into H Shares and upon completion of
the Global Offering (assuming that the Over-allotment Option is not exercised):
(a) a total of 908,506,732 H Shares held by our core connected persons will not be
counted towards the public float, representing 36.22% of our share capital in
aggregate, including, amongst others, (i) Zenergy Investment and SINOGY VC,
being our substantial Shareholders; (ii) Nanjing Miaode and Nanjing Xuande, which
are indirectly controlled by Ms. Cao, our Chairperson and executive Director, and
Dr. Chen, our executive Director; (iii) Zhengli No. 1 and Zhengli No. 2, each of
which is controlled by Ms. Cao, our Chairperson and executive Director; (iv)
Shareholders ultimately controlled by different levels of government within Jiangsu
Province (including Suchuang Energy Investment, Southeast Investment, Southeast
Investment Holding, Southeast Xinneng, Nanjing Konggang, Jiangsu Mixed
Ownership Reform Fund and Suzhou High-end Equipment Fund) which are
aggregated and collectively regarded as our substantial Shareholders for the purpose
of public float; and (v) Shareholders ultimately controlled by different levels of
government within Fujian Province (including Huafu Investment, Xingsi Shenglian,
China Industrial Securities Investment Management, C&D Investment and Xiamen
ITG Group) which are aggregated and collectively regarded as our substantial
Shareholders for the purpose of public float;
(b) a total of 484,433,807 Unlisted Shares held by the remaining existing Shareholders
will be converted into H Shares and listed on the Stock Exchange, and therefore will
be counted as part of the public float, representing 19.31% of our share capital in
aggregate upon the completion of Global Offering. To the best knowledge of our
Directors, none of such remaining existing Shareholders is accustomed to take
instructions from any of our core connected persons in relation to the acquisition,
disposal, voting or other disposition of their Shares and none of their acquisition of
the Shares were financed directly or indirectly by our core connected person; and
(c) a total of 46,432,200 H Shares issued pursuant to the Global Offering (excluding the
H Shares issued to Jiangsu Mixed Ownership Reform Fund, Suzhou High-end
Equipment Fund and Southeast Investment Holding, the Cornerstone Investors
which are ultimately controlled by different levels of governments within Jiangsu
Province as explained above) will be counted as part of the public float, representing
1.85% of our share capital upon the completion of Global Offering in aggregate.
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Based on the above, it is expected that immediately following completion of the Global
Offering (assuming that the Over-allotment Option is not exercised), a total of 530,865,107 H
Shares, representing 21.16% of our total share capital upon the completion of the Global
Offering (assuming that the Over-allotment Option is not exercised) will be counted as part of
the public float. We have applied to the Stock Exchange to request the Stock Exchange to
exercise its discretion under Rule 8.08(1)(d) of the Listing Rules and the Stock Exchange has
granted the Company a waiver from strict compliance with the requirements of Rule 8.08(1)(a)
of the Listing Rules. For details of the relevant waiver, please see “Waivers—Waiver in relation
to Public Float Requirements.”
CAPITALIZATION
Our Company has applied for H-share full circulation to convert certain Unlisted Shares
into H Shares upon the Listing. The conversion of Unlisted Shares into H Shares will involve
an aggregate of 1,317,849,039 Unlisted Shares, representing approximately 52.54% of total
issued share capital of the Company upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised).
The table below is a summary of the capitalization of our Company as of the Latest
Practicable Date and immediately upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised) and the conversion of Unlisted Shares into H Shares:
As of the Latest
Practicable Date
Immediately upon completion of the Global
Offering (assuming the
Over-allotment Option is not exercised)
Shareholder
Number of
Unlisted Shares
held
Ownership
percentage
(approx.)
Number of
Unlisted Shares
held
Number of H
Shares held
Ownership
percentage
of total
issued
Shares
(approx.)
Zenergy Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118460,690,543 19.30% 322,483,380 138,207,163 18.37%
SINOGY VC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118382,045,276 16.01% 271,362,931 110,682,345 15.23%
Nanjing Miaode /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237,152,124 9.94% – 237,152,124 9.45%
Huafu Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118165,689,009 6.94% 137,144,662 28,544,347 6.61%
Southeast Investment /H1118/H1118/H1118/H1118/H1118/H1118119,902,744 5.02% 59,951,372 59,951,372 4.78%
Xingsi Shenglian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,390,811 4.54% – 108,390,811 4.32%
Wuxi Zhenghai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,293,737 3.78% – 90,293,737 3.60%
Southeast Investment Holding /H1118 78,624,750 3.29% 78,624,750 36,456,900 4.59%
Fujian Yaohua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,195,825 2.52% – 60,195,825 2.40%
Oceanpine Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,968,563 2.47% – 58,968,563 2.35%
Nanjing Xuande /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,663,715 2.33% 3,621,006 52,042,709 2.22%
Wukuang Yuanding /H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 2.27% – 54,176,243 2.16%
Shuanghe Zhenghua /H1118/H1118/H1118/H1118/H1118/H1118/H111854,176,243 2.27% 32,505,746 21,670,497 2.16%
Beijing Jiade /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,816,795 1.88% – 44,816,795 1.79%
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As of the Latest
Practicable Date
Immediately upon completion of the Global
Offering (assuming the
Over-allotment Option is not exercised)
Shareholder
Number of
Unlisted Shares
held
Ownership
percentage
(approx.)
Number of
Unlisted Shares
held
Number of H
Shares held
Ownership
percentage
of total
issued
Shares
(approx.)
CICC SAIC Investment /H1118/H1118/H1118/H1118/H111839,312,375 1.65% 39,312,375 – 1.57%
Chenxi No. 12 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,117,495 1.51% 10,835,248 25,282,247 1.44%
Nanjing Konggang /H1118/H1118/H1118/H1118/H1118/H1118/H111833,137,802 1.39% – 33,137,802 1.32%
Southeast Xinneng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.10% 13,104,125 13,104,125 1.04%
C&D Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.10% 18,345,775 7,862,475 1.04%
Chuanghe Xincai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.10% – 26,208,250 1.04%
Juxin Xihai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,208,250 1.10% 13,104,125 13,104,125 1.04%
Suchuang Energy Investment /H1118 26,208,250 1.10% 26,208,250 – 1.04%
Hengqin New Kinetic Energy /H1118 21,068,538 0.88% – 21,068,538 0.84%
Lianhe Jiaying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,966,600 0.88% 6,289,980 14,676,620 0.84%
Zhengli No. 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,000,000 0.84% 752,500 19,247,500 0.80%
China Industrial Securities
Investment Management /H1118/H1118/H111817,799,962 0.75% – 17,799,962 0.71%
Jiaxing Chenyue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,035,363 0.71% – 17,035,363 0.68%
Anhui Haichuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,104,125 0.55% – 13,104,125 0.52%
Chengtun Mining /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,104,125 0.55% 13,104,125 – 0.52%
Xiamen ITG Group /H1118/H1118/H1118/H1118/H1118/H1118/H111813,104,125 0.55% 9,172,888 3,931,237 0.52%
Ma Shaodong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,039,166 0.50% – 12,039,166 0.48%
Zhongtai Ronghao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,172,888 0.38% – 9,172,888 0.37%
Dou Yulin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,552,063 0.27% 6,552,063 – 0.26%
Wu Yafeng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,552,063 0.27% 6,552,063 – 0.26%
Zhengli No. 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,461,260 0.15% 100,000 3,361,260 0.14%
Nanjing Heyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,620,825 0.11% – 2,620,825 0.10%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,386,976,403 100.00% 1,069,127,364 1,317,849,039 95.16%
Jiangsu Mixed Ownership
Reform Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 12,692,100 0.51%
Suzhou High-end Equipment
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 25,942,500 1.03%
Other public investors taking
part in the Global Offering /H1118 – – – 46,432,200 1.85%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,386,976,403 100.00% 1,069,127,364 1,439,372,739 100.00%
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OUR CORPORATE STRUCTURE
Corporate Structure Immediately Before the Completion of the Global Offering
The following chart sets forth our Group’s corporate structure immediately prior to the completion of the Global Offering:
Financial
Investors(1)
16.04%
Zenergy
Investment(2)
19.30%
SINOGY VC(2)
16.01%
Nanjing
Miaode(2)
9.94%
Nanjing
Xuande(2)
2.33%
Huafu
Investment(3)
6.94%
Zhengli Consulting(2)
50%
Ms. Cao(2)
50%
Dr. Chen(2)
42% 46%
Ms. Cao(2) Dr. Chen(2)
52% 48%
Ms. Cao(2) Dr. Chen(2)
0.15%
Zhengli No. 1(2)
0.84%
Zhengli No. 2(2)
GP GP
GP
Ms. Cao(2)
GP
Dr. Chen(2)
Our Company
(PRC)
Nanjing Zenergy Battery
Technologies Co., Ltd.
Dongguan Zenergy Battery
Technologies Co., Ltd.
Suzhou Zenergy Battery
Technologies Co., Ltd.
Changshu Sinogy
Technologies Co., Ltd.
100% 100% 100% 100% 100%
Suzhou ZENIO
12% Southeast
Investment(4)
5.02%
Other
Shareholders (5)
20.14%
99.96%
Southeast Investment
Holding(4)
3.29%
Notes:
(1) The Financial Investors (as defined in the section headed “Relationship With our Controlling Shareholders” in this Prospectus) are Wuxi Zhengha i, Fujian Yaohua, Wukuang
Yuanding, Beijing Jiade, Juxin Xihai, Hengqin New Kinetic Energy, Lianhe Jiaying, China Industrial Securities Investment Management, Anhui Haich uang, Chengtun Mining,
Mr. Ma Shaodong and Zhongtai Ronghao. For details of each of the Financial Investors, see “3. Business Reorganization of our Group” or “5. Information about the Pre-IPO
Investors” in this section, as applicable.
(2) Immediately before the completion of the Global Offering, Ms. Cao and Dr. Chen together control the voting rights of approximately 64.60% in aggre gate of the total issued
Shares held by the Financial Investors and Management Shareholders by virtue of the AIC Agreements and V oting Proxy Agreements (as defined in the sect ion headed
“Relationship With our Controlling Shareholders” in this Prospectus).
(3) For details of this Shareholder, see “3. Business Reorganization of our Group” in this section.
(4) For details of these Shareholders, see “5. Information about the Pre-IPO Investors” in this section.
(5) These include all of our other existing Shareholders, which are: Xingsi Shenglian, Oceanpine Capital, Shuanghe Zhenghua, CICC SAIC Investment, Chenxi No. 12, Nanjing
Konggang, Southeast Xinneng, C&D Investment, Chuanghe Xincai, Suchuang Energy Investment, Jiaxing Chenyue, Xiamen ITG Group, Mr. Dou Yulin, Ms. Wu Yafeng and
Nanjing Heyi. For details, see “3. Business Reorganization of our Group” or “5. Information about the Pre-IPO Investors” in this section.
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Corporate Structure Immediately Following the Completion of the Global Offering
The following chart sets forth our Group’s corporate structure immediately after completion of the Global Offering (assuming the
Over-allotment Option is not exercised):
Financial
Investors(1)
15.27%
Zenergy
Investment(2)
18.37%
SINOGY VC(2)
15.23%
Nanjing
Miaode(2)
9.45%
Nanjing
Xuande(2)
2.22%
Huafu
Investment(3)
6.61%
Zhengli Consulting(2)
50%
Ms. Cao(2)
50%
Dr. Chen(2)
42% 46%
Ms. Cao(2) Dr. Chen(2)
52% 48%
Ms. Cao(2) Dr. Chen(2)
0.14%
Zhengli No. 1(2)
0.8%
Zhengli No. 2(2)
GP GP
GP
Ms. Cao(2)
GP
Dr. Chen(2)
Our Company
(PRC)
Nanjing Zenergy Battery
Technologies Co., Ltd.
Dongguan Zenergy Battery
Technologies Co., Ltd.
Suzhou Zenergy Battery
Technologies Co., Ltd.
100% 100% 100% 100%
Suzhou ZENIO
12% Southeast
Investment(4)
4.78%
Other
Shareholders (5)
20.7%
Other public
Shareholders
1.85%
Southeast Investment
Holding(4)
99.96%
4.59%
Changshu Sinogy
Technologies Co., Ltd.
100%
Notes:
(1) The Financial Investors (as defined in the section headed “Relationship With our Controlling Shareholders” in this Prospectus) are Wuxi Zhengha i, Fujian Yaohua, Wukuang
Yuanding, Beijing Jiade, Juxin Xihai, Hengqin New Kinetic Energy, Lianhe Jiaying, China Industrial Securities Investment Management, Anhui Haich uang, Chengtun Mining,
Mr. Ma Shaodong and Zhongtai Ronghao. For details of each of the Financial Investors, see “3. Business Reorganization of our Group” or “5. Information about the Pre-IPO
Investors” in this section, as applicable.
(2) Immediately following the completion of the Global Offering, Ms. Cao and Dr. Chen will together control the voting rights of approximately 46.21% in aggregate of the total
issued Shares held by the Management Shareholders (as defined in the section headed “Relationship With our Controlling Shareholders” in this Prospe ctus).
(3) For details of this Shareholder, see “3. Business Reorganization of our Group” in this section.
(4) For details of these Shareholders, see “5. Information about the Pre-IPO Investors” in this section and the section headed “Cornerstone Investor s” in this Prospectus.
(5) These include (i) all of our other existing Shareholders, which are: Xingsi Shenglian, Oceanpine Capital, Shuanghe Zhenghua, CICC SAIC Investme nt, Chenxi No. 12, Nanjing
Konggang, Southeast Xinneng, C&D Investment, Chuanghe Xincai, Suchuang Energy Investment, Jiaxing Chenyue, Xiamen ITG Group, Mr. Dou Yulin, Ms. Wu Yafeng and
Nanjing Heyi, details of which are set out in “3. Business Reorganization of our Group” or “5. Information about the Pre-IPO Investors” in this section ; and (ii) Jiangsu Mixed
Ownership Reform Fund and Suzhou High-end Equipment Fund, being Cornerstone Investors, details of which are set out in the section headed “Cornersto ne Investors” in this
Prospectus.
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OVERVIEW
Who We Are
We are a lithium-ion battery manufacturer in China, committed to developing a diverse
portfolio of market-driven and technology-fueled battery products. We primarily focus on the
R&D, production and sales of EV battery products, ESS battery products and aviation battery
products. We provide integrated battery solutions, encompassing battery cells, modules, packs,
racks, and battery management systems dedicated to large-scale applications of
electrochemical products to interconnect land, sea and air (“ LISA”).
We are founded upon experience in the auto part industry. With extensive professional and
industry expertise of our core management, we have developed insights into the automobile
industries. With understanding of OEM customers’ demands to balance safety, quality,
performance, and cost efficiency, we developed diverse electric vehicle (“ EV”) battery
products as our core business, and are to proactively conducting R&D on aviation battery
products, placing us in a favorable position of application scenario expansion and rapid
technological advancements in the battery industry. As one of the ten largest players in EV
battery market in terms of installation capacity, we operate in China’s power battery industry,
which is highly competitive and concentrated with top ten manufacturers accounting for 95.3%
of total installation capacity in 2024. As measured by installation capacity in 2024, we held a
market share of 1.8% amongst EV battery manufacturers in China, according to CABIA.
Market Ranking
According to Frost & Sullivan, in China:
 we were the 9th largest player in EV battery market in terms of EV battery
installation capacity in 2024.
 we were the 9th largest player in LFP EV battery market, and the 9th largest player
in NCM EV battery market in terms of EV battery installation capacity in 2024.
 we experienced the second fastest growth in overall EV battery installation capacity
among the top ten EV battery companies, and the fastest growth in LFP EV battery
installation capacity among the top ten LFP EV battery companies from 2022 to
2023 (as measured by battery installation capacity in 2023).
Market Opportunities
The global EV battery market experienced steady growth in installation capacity in recent
years, and is expected to further grow from 900.2 GWh in 2024 to 3,564.5 GWh in 2029,
representing a CAGR of 31.7%. In China, EV battery installation capacity is expected to grow
from 549.9 GWh in 2024 to 1,961.4 GWh in 2029, representing a CAGR of 29.0%.
The EV battery industry in China is at an inflection point that poses unique challenges and
opportunities for its players.
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Industry Inflection Point
The growth drivers in the battery industry have evolved from policy and capital
investment to market demand over the past few years. Before 2020, decisions to expand EV
battery manufacturing capabilities by EV battery manufacturers were primarily driven by
policy on new energy vehicles, and manufacturing capacity was designed and constructed for
electrochemistries that fit the government subsidy policies under the significant capital
support. After 2021 when such subsidy policies began to expire, such manufacturing capacity
cannot adequately accommodate diversified electrochemistries that are safer and more cost
competitive, and are not flexible to capture the rapid growth in new power battery applications
(such as PHEV and EREV). The power battery industry has now reached a critical inflection
point, where key competitiveness of battery manufacturers hinges on their understanding and
precise alignment with the needs of OEM customers.
Structural changes in market demand
The automobile industry has always been dedicated to striking the optimal balance among
safety, quality, performance, and cost efficiency, which has driven various development trends
in the EV and battery industries including the trend toward more diverse technology pathways.
Compared to NCM batteries, LFP batteries offer lower costs, higher thermal stability, better
tolerance to overcharging, longer cycle life, and a higher capacity retention rate. At the same
time, the energy density gap between LFP and NCM batteries is narrowing, and LFP batteries
are now capable of meeting the driving range requirements for the majority of electric vehicles.
As a result, LFP batteries are better aligned with the market’s demand for cost-effectiveness
and safety, leading to their rapid growth in market share in recent years. With the reduction in
subsidies and development of alternative technologies, LFP batteries have surpassed NCM and
become the primary product type in the global EV industry: in China, the proportion of NCM
batteries decreased from 60.9% in 2020 to 25.4% in 2024, of all EV batteries in terms of
installation capacity, whereas the proportion of LFP batteries increased from 38.0% in 2020 to
74.4% in 2024, of all EV Batteries in terms of installation capacity. This shift is further
highlighted by the installation capacity of LFP batteries, which was 408.9 GWh in 2024 in
China, whereas the installation capacity for NCM was 139.8 GWh in 2024 in China.
As the market share of LFP batteries continues to grow, rapid technological advancements
in LFP technology have made high-performance LFP products a key factor in capturing
additional market share. Our LFP technology offers the following advantages, which position
us strongly to expand our presence in the market: (i) to meet the demand for longer driving
ranges, we have increased the volumetric energy density of our LFP products from 175 Wh/kg
to over 190 Wh/kg, enabling vehicles equipped with our batteries to achieve greater range; and
(ii) to further compete with ternary battery technology, fast-charging capability is essential.
Although not in mass production yet, certain of our LFP products has achieved a fast-charging
capability of 4C, which enables them to charge to 80% state of charge in 15 minutes with peak
charging speeds exceeding 5C, giving us a significant competitive edge. These innovations are
critical to further increasing our market share in the LFP segment. In addition, we adopt the
following strategies to further expand our market share in the LFP EV battery market: (i)
leveraging the industry trends of battery cell standardization and battery pack platformization
to integrate our products across a broader range of vehicle models within existing customers’
supply systems, thereby increasing our supply and operational efficiency; (ii) securing
partnerships and supply agreements through multinational joint ventures to launch new
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range-extended EVs and plug-in hybrid models, positioning ourselves as a preferred supplier
for these innovative vehicles; (iii) strengthening supply relationships with leading domestic
brands by fostering collaborations with self-owned brands and supporting leading domestic
brands’ integrated vehicle models, to enhance our alignment with their key vehicle platforms;
and (iv) leveraging the increasing adoption of smart automotive technologies and the evolution
of LFP batteries to higher fast-charging capabilities (from 2C to even faster charging
standards), targeting new vehicle launches to expand our market share.
There are also significant changes in the structure of the NEV market. While BEV still
currently accounts for the largest market share, PHEV has experienced significant growth,
leveraging its advantages in cost and driving range. The market penetration rate of BEVs in
China was 24.6% in 2024 in terms of sales volume, and the sales volume is expected to grow
at a CAGR of 14.1% from 2024 to 2029. In contrast, the total market share of PHEVs
(including EREVs) in China was 16.4% in 2024, and the sales volume is expected to grow at
a CAGR of 24.1% from 2024 to 2029, indicating that PHEVs are poised for faster growth
compared to BEVs and will surpass BEVs in sales volume in 2026.
Challenges to EV Battery Manufacturers
In the early stages of industry development, to meet the stable supply and demand for
battery products, many power battery companies have already devoted significant resources in
establishing manufacturing lines for high-capacity BEV battery cells and specialized
manufacturing lines for NCM batteries. Such manufacturing lines, compared to our current
manufacturing lines, demonstrate lower compatibility, lower efficiency and higher
manufacturing costs. Utilizing these ternary manufacturing lines for producing small-capacity
PHEV cells or LFP cells would lead to high conversion and manufacturing costs. At the same
time, driven by cost concerns, OEMs have raised higher demands for standardized battery
products that are compatible with different vehicle types and application scenarios and can
accommodate various electrochemistries.
In addition, China’s EV power battery production capacity reached 826 GWh in 2024 and
is projected to grow to 991.2 GWh in 2025, whereas the installation capacity of EV power
battery in China was 549.9 GWh in 2024 and is expected to reach 692.2 GWh in 2025. The
industry is experiencing a period of overcapacity, leading to intense competition. According to
Frost & Sullivan, this represents a structural overcapacity issue, driven by idle low-end
production capacity with outdated technologies that cannot be upgraded or adapted to the
structural transitions in China’s EV power battery industry. These transitions include the
growing demand for higher-performance EV power batteries, the increasing dominance of LFP,
and the higher growth of PHEVs over BEVs. Low-end production capacity accounts for over
half of the industry’s capacity.
As advised by Frost & Sullivan, the termination of national EV subsidies at the beginning
of 2023 led to a temporary year-over-year decline in EV sales in January 2023. However, in
February 2023, EV sales rebounded and experienced year-over-year growth. The price of
lithium carbonate has experienced a downward trend since November 2022, primarily due to
an increase on the supply side rather than a weakening of demand. As such, the temporary
slowdown in sales in January 2023 as mentioned above did not have a significant impact on
lithium carbonate prices.
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As a result, EV battery manufacturers that are fully market-driven, with the flexibility to
easily adapt to technology shifts through the adoption of efficient and flexible manufacturing
lines, and have products and manufacturing capabilities that cover a diverse high quality and
low cost product portfolio, can succeed in the current market.
Our Differentiated Approach
We adopt a value co-creation management system to manage our operations and growth.
Leveraging our insights into OEMs’ requirements and preferences to weigh the balance among
product safety, quality, performance, and cost efficiency, we have developed the following
approaches:
 V alue co-creation management system.
The following graph sets forth a framework under which we manage and operate our
business.
ROIC&ROE
(Operation Approval
Committee)
Corporate
Governance
Organizational
Reform
Supply Chain
Management
Talent
Management
and Corporate
Culture
Risk and
Compliance
Management
Financial
Management
Leadership
Development
Value
Creation
Organizational
Innovation
Management
System
Safeguard
Mechanisms
1212
management
system
One organizational
structure
One managerial
approach
High-performance
Enterprise
Product Scenarios and
Technologies
(Technology Approval
Committee)
Sustainability
(Product Approval
Committee)
Two platforms
– IKW
(Identify, Knowledge & Win)
– Big Data
Two mechanisms
– Talent Pool Mechanism
– Incentive Mechanism
Total-factor
ProductivityStrategic Guidance Innovation Driver
We have established the “1212” management system, a value co-creation system that
connects high-performance companies along the power battery industry chain. The
“1212” management system includes one organization (consisting of TAC, PAC and
OAC), two platforms (IKW and Big Data), one approach (SARMO action) and two
mechanisms (Talent Pool and Incentive Scheme). We set horizontal organizations
along with the closed-loop PDCA cycle process where we eliminate our shortfalls
and extend our advantages by identifying targets, front-loading issues, dissolving
hurdles, and quantifying tasks.
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 Mutually beneficial approach across the industry value chain . We adopt
standardized battery cells and platformed battery packs, and differentiate their
performance with diversified electrochemistries, which effectively lower our R&D
and manufacturing costs, as well as bring cost efficiency for OEMs.
 “5-3-1” R&D Strategy. We have established the forward-looking “5-3-1” R&D
strategy based on integrated product development process, aiming to plan for new
electrochemistries and advanced materials five years ahead, establish technology
platforms three years ahead, and develop market-ready products one year ahead in
order to maintain the competitive edge of our technologies and products in the
industry.
 Diverse product portfolio. We offer a diverse portfolio of market-driven and
technology-fueled battery products, dedicated to large-scale applications to
interconnect land, sea and air application scenarios. We have strategically
categorized and developed PHEV and EREV battery products in addition to BEV
products, capturing the structural growth opportunity while satisfying different
customer needs.
 Flexible battery cell manufacturing capabilities. We design and build automated and
battery cell manufacturing facilities with flexible production capabilities. We also
adhere to the strategy of concentrating our production capabilities with high focus
and in-depth cultivation, as well as the principle of order-oriented and steady
production capacity expansion.
 Intelligent manufacturing based on big data platform. We have developed an
intelligent big data platform, combining edge computing, and AI visual for
application in our manufacturing facilities, which enables us to analyze operational
data, provide alerts and monitor our operations in real time. It also results into
system models, which reduces reliance on manual labor, making the manufacturing
process highly controllable, and increasing the consistency in product quality.
These approaches have earned us recognition as an effective supplier by a large number
of OEM customers, including large state-owned enterprises, pure-play EV companies, and
multi-national OEMs through establishing long-term cooperative relationships. Leveraging our
capabilities in technologies and products, we continue to increase the market share of our
battery products to cover more vehicle models from leading OEMs in the global EV industry,
such as FAW Hongqi, GAC Trumpchi, Leap Motor, SAIC-GM Wuling, and SAIC-GM.
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Our Products and Technologies
Major EVs include battery electric vehicle (“ BEV”), plug-in hybrid electric vehicle
(“PHEV”), extended-range electric vehicle (“ EREV”), and hybrid electric vehicle (“ HEV”).
Different vehicle types commonly utilize specific battery chemistries based on their
performance needs. BEV batteries typically used to adopt lithium nickel-cobalt-manganate
(“NCM”) materials. In recent years, lithium iron phosphate (“ LFP”) materials are also gaining
popularity for adoption among BEVs due to its safety performance and cost-effectiveness. BEV
batteries typically require high energy density and capacity to satisfy long driving ranges.
PHEVs typically adopt NCM, or LFP batteries. PHEVs typically require batteries to have lower
capacity compared to BEV batteries, while having higher requirements for battery cycle life
and power, as well as the balance between energy density and cost. HEVs typically used to
adopt nickel metal hydride (“ NiMH”) batteries; lithium-ion related materials are also gaining
popularity for adoption in HEV batteries as technology develops. These choices reflect the
varied demands of energy density, safety, and cost across different EV types. The following
table compares main battery types (NCM, LFP, NiMH) focusing on energy density, cost,
lifespan, safety, and examples of use:
Battery Type
Energy
Density Cost Lifespan Safety EV Type
NCM (Nickel-
Cobalt-
Manganese) /H1118/H1118/H1118
High (150-320
Wh/kg)
Moderate to
High
Moderate (800-
4,000 cycles)
Moderate (susceptible
to thermal
runaway, requires
advanced battery
management
systems)
BEV and PHEV
LFP (Lithium Iron
Phosphate) /H1118/H1118/H1118/H1118
Moderate (90-
200 Wh/kg)
Low High (2,000-
10,000 cycles)
High (stable, less
prone to
overheating or
thermal runaway)
BEV and PHEV
NiMH (Nickel-
Metal Hydride) /H1118
Low to
Moderate
(40-120
Wh/kg)
Moderate Moderate (500-
1,000 cycles,
with lower
capacity
retention over
time)
High (safer than
NCM, stable under
most conditions)
HEV
For a comparison of power batteries in different EVs, please see “Industry
Overview—Overview of EV Power Battery Market.”
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The following diagram demonstrates our products and technologies.
1year
Interconnected
Application
scenarios
Multi-
pathway
Product
Portfolio
ĐĐ Đ
HEV PHEVĐ EREVĐ BEVĐ
Centralized DistributedĐ
Power
Generation
Commercial
& IndustrialĐ
Resi-
dentialĐ Electric
ESS Battery
Land Sea Air
EV Battery
Marine
Battery
Aviation
Battery
R&D Platformed
battery packs
compatible with
various vehicle
models
Platformed
battery
containers
compatible
with different
scenarios
3years
5years
Semi-
solid-
state
Solid-
state
Provide performance
support for a diverse
product portfolio
Optimize manufacturing
cost by standardized
battery cells
Sedan SUV MPV
Distributed
battery packs
compatible with
aviation
scenarios
Prismatic Cell
Cylindrical Cell
Standardized battery cells
Material
Research
Platform
Design
Product
Development
n
h
hh
Diversified
Electrochemistries
Standardized
Battery Cells
Platformed
Battery Packs
Hybrid
Passenger/Cargo/
Engineering Ship
Multi
Rotor
Optimize development
cost by platformed
battery packs
Compound
Rotor
Tilt Rotor
Na
LFP NCM
LM
FP
We commenced to manufacture and sell battery products in 2016 and commenced our LFP
batteries business in July 2022. Our EV batteries cover a variety of EV types such as BEV ,
PHEV , EREV and HEV and can be installed in multi-functional vehicles such as sedans, SUVs
and MPVs. Our ESS and marine battery products are primarily LFP batteries, and our aviation
battery products are primarily high-nickel semi-solid-state Lithium-Ion battery products.
We adopt a market-driven technology and product development approach. We conduct
comprehensive analysis by collecting market information, technology trends, and customer
feedback to form forward-looking judgments on R&D directions. Additionally, we involve a
cross-department project team to design products, taking into account aspects of technology
R&D, manufacturing, quality control, finance, and sales.
We adopt standardized battery cells and platformed battery packs, and differentiated their
performance with diversified electrochemistries, which enables our OEM customers to more
flexibly use our products in different vehicle types and application scenarios. This helps reduce
OEMs’ development costs and our R&D and manufacturing costs. Our R&D activities also
cover different electrochemistries and technology pathways, satisfying customers’ varying
needs for product performance and costs. We have developed various NCM and LFP battery
products, and have a pipeline of LMFP batteries, sodium-ion batteries, and semi-solid-state
product for commercialization in the near future, as well as a pipeline of solid-state
technologies and products as our preparation for the long-term. Our diverse technology
capabilities and pipeline help us develop diversified products that satisfy customers’ rapidly
evolving and diverse needs.
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As of December 31, 2024, our R&D team consists of 1,060 full-time employees,
approximately 28% of whom held a Master’s degree or above. As of the same date, we had
3,613 patent applications and had been authorized 2,225 patents, among which 412 were
invention patents. We are also funded by the Industry and Information Technology Department
of Jiangsu for sodium-ion battery industrialization.
Our R&D capabilities have enabled us to develop the following battery technologies with
unique product features and advantages:
 High energy density and fast charging LFP battery: Through optimization of
materials and electrode design, we have increased the gravimetric energy density to
approximately 190Wh/kg; through the development and introduction of high press
density Lithium-Iron phosphate materials, our LFP battery achieves volumetric
energy density of over 430 Wh/L as well as fast charging capabilities of 2.2C.
 PHEV and EREV batteries. Our PHEV and EREV batteries enjoy the extremely high
cycle life of up to 4,000 cycles, and can reach up to 80% state of charge (“ SOC”)
in 30 minutes.
 HEV batteries . The HEV batteries developed by us and our joint venture STAES
cover two main technology pathways, namely Lithium-Ion and Ni-MH. They enjoy
the advantages of high power, long cycle life and high safety, with peak discharge
rate of 80C, and cycle life of up to 27,000 cycles.
 Universe series (BEV battery pack) . Although we have not commenced mass
production, we have completed the development of Universe series BEV battery
pack and already produced samples. Our Universe series BEV battery pack enjoys
an energy density up to 260 Wh/kg, and can reach 70% SOC in as fast as seven
minutes. It features a pioneering tenon-and-mortise assembly technology, making it
the first in the industry to enable single cell disassembly and easy maintenance.
 Loong series (BEV battery pack) . Although we have not commenced mass
production, we have completed the development of Loong series BEV battery pack
and already produced samples. Our Loong series BEV battery pack achieves a total
battery capacity of 170 kWh, which is the highest among passenger EV battery pack
products in China as of December 31, 2024. It adopts dual semi-solid-state
technology, which enjoys an energy density of 306 Wh/kg and reaches 70% SOC
from 10% SOC within nine minutes.
 Aviation battery products . We are the first EV battery company in China to receive
the AS9100D Aerospace Quality Management System recognition, and one of the
first companies in Suzhou leading the “low-altitude economy” initiative. Our
aviation battery products have an energy density of over 320 Wh/kg, and can reach
up to 80% SOC in 15 minutes. They can maintain a discharge rate of 12C at a low
SOC of 20%. They can also reach aviation-grade level safety standards.
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Our Manufacturing Capabilities
Our facilities for battery cell manufacturing are enabled and enhanced by software
systems, including our proprietary operational platform, manufacturing operations
management customization system, contactless visual inspection technologies powered by AI,
and AI edge computing-based quality inspection and monitoring system. These capabilities
enable us to continuously improve manufacturing and cost efficiency. The automation rate of
major manufacturing lines (defined by the percentage of machines and equipment that do not
require any human interventions to run smoothly) reached over 95% in 2024, which is
significantly higher than the industry of approximately 90%.
Our manufacturing lines are also highly flexible and can be converted to manufacture
different product types (such as from EV batteries to ESS batteries, and from NCM batteries
to LFP batteries) with relatively low conversion costs and time. We achieve this through
adopting predictive manufacturing equipment design, flexible and intelligent manufacturing
technique design. The time to convert a manufacturing line to produce at full capacity for those
battery products of the same dimension to a different electrochemistry could reach as short as
three days, and the time to convert a manufacturing line to produce at full capacity for those
battery products of different dimensions could reach as short as 50 days.
As of December 31, 2024, we had a total designed manufacturing capacity of 25.5 GWh
for battery cell products. Most of our manufacturing facilities are strategically located in close
vicinities to each other in Changshu, which allows centralized operational management. On
average, we are able to allocate resources among different facilities and respond to abnormal
alerts from each facility in Changshu within 30 minutes. We also adopt a demand-driven
manufacturing capacity expansion strategy, which helps us avoid excessive and idle capacity
and reduce waste of resources.
According to Frost & Sullivan, China’s EV power battery industry is expected to
experience a structural overcapacity issue, driven by idle low-end production capacity with
outdated technologies that cannot be upgraded or adapted to the technology development in
China’s EV power battery industry. Low-end production capacity accounts for over half of the
industry’s capacity. In addition, production capacity that were specifically designed for NCM
batteries and lack the flexibility to manufacture other types of batteries is also expected to face
significant risk of overcapacity and even elimination. We believe our manufacturing capacity
is well positioned to overcome the issue of overcapacity and elimination for the following
reasons:
 Flexibility. Our flexible battery cell manufacturing capabilities can quickly adapt to
shifting market demands and technological advancements. Leveraging our
standardized battery cells, platformed battery packs, and diversified
electrochemistries, we established manufacturing processes that can be easily
reconfigured to meet the diverse requirements of new battery types. This flexibility
enables us to capture the evolving needs of the EV power battery market with
minimal production disruption and at a lower cost.
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 Demand-driven expansion strategy. We adopted a demand-driven manufacturing
capacity expansion strategy to avoid excessive manufacturing capacity while timely
satisfying customer demand. Our expansion plan is largely based on the expected
delivery volume pursuant to design-wins we had obtained. This reduces the risk of
idle and excessive capacity. In addition, we believe our OEM customers are well
positioned for rapid above-market growth, which is expected to bring us the
opportunity to grow our sales and lead to the need for manufacturing capacity
expansion. For example, we have become the primary battery supplier for Leap
Motor, whose revenue increased from RMB3.1 billion in 2021 to RMB16.8 billion
in 2023 and is expected to further increase to no less than RMB30.8 billion in 2024.
We fully intend to capture the growth opportunities of our OEM customers to grow
our business and to reduce the risk of overcapacity.
 EV penetration. According to Frost & Sullivan, the EV penetration rate in China
grew from 7.0% in 2020 to 43.9% in 2024 and is expected to further grow to 93.3%
in 2029. Such rapid growth in EV penetration is expected to lead to significant
growth in EV sales, which we believe is expected to also drive the significant
increase in demand for power batteries, especially those with more advanced
technological features and electrochemistry systems.
Our Customers
We have forged collaboration with leading players in the automotive industry, and have
cultivated high-caliber customer base.
Our EV battery customers include large state-owned enterprises, pure-play EV
companies, and multi-national OEMs. The market share of our battery products among vehicle
models of leading global OEMs, such as FAW Hongqi, GAC Trumpchi, Leap Motor, SAIC-GM
Wuling, and SAIC-GM, continues to increase. As of December 31, 2024, our products are
integrated in over 50% of Leap Motor’s main BEV models, and a key PHEV model of
SAIC-GM, GL8 PHEV . We are the main supplier for GL8 PHEV .
In addition, we have established cooperation with various potential customers of our ESS
battery products, such as Deye Holdings. We are also actively pursuing new collaborations in
terms of mass production of our marine and aviation battery products with potential customers
in the relevant fields.
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The following table sets forth details of the number of our design-wins, vehicle models,
customers by type, and the average revenue contribution per customer during the Track Record
Period.
As of/for the year ended December 31,
2021 2022 2023 2024
Number of design-wins at the
end of each year (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11184 7 23 47
Cumulative number of
design-wins (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 9 25 49
Cumulative number of
vehicle models that entered
production
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139 2 1
Number of Customers during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 56 92 81
Number of OEM customers
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851 11 11 2
Portion of revenues from
OEM customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885.8% 83.0% 76.8% 90.6%
Number of OEM car models /H1118 72 02 63 6
New customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 40 66 38
Customer retention rate /H1118/H1118/H1118/H111893.3% 68.2% 88.9% 94.5%
Notes:
1. Includes only design-wins retained as of the end of the year, excludes design-wins that had been
terminated.
2. Includes all design-wins that had been obtained as of the end of the year, regardless of whether the
design-win had been terminated.
3. Includes all vehicle models that had entered production as of the end of the year, regardless of whether
production had been terminated.
The relatively low percentage of sales from OEM customers in 2023 compared to other
years during the Track Record Period was primarily due to the relatively high volume of sales
of ESS products and down-grade products in 2023. For more details on the fluctuations from
2022 to 2023, see “Financial Information—Year-to-year Comparison of Results of
Operations—Year Ended December 31, 2023 Compared to Year Ended December 31,
2022—Revenue.”
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Customer retention rate represents the proportion of revenue contributed by customers
who had revenue contributions in the following year among the customers from the previous
year. We have relatively low customer retention rate of 68.2% in 2022 compared to other years,
which is primarily due to the one-off impact by WM Customer. The number of our customer
decreased from 92 in 2023 to 81 in 2024, which was primarily because (i) in 2024, our
production capacity was insufficient to fulfill orders from smaller customers, resulting in a
decline in the number of smaller customers; and (ii) we prioritized allocating resources to
automotive OEM customers to maximize efficiency and revenue contribution, as a result of our
shift in focus to the EV battery business, the core customers of which are OEM customers. For
the same reasons, the portion of revenues from OEM customers increased from 76.8% in 2023
to 90.6% in 2024. Additionally, in 2023, as we disposed of down-grade products as a result of
the WM Customer Incident, amounting to RMB173.1 million, we had additional revenue from
other products and services, while such revenue decreased significantly in 2024, leading to an
increase in the proportion of revenue from OEM customers in 2024.
For risks in relation to our customers, please see “Risk Factors—The intense competition,
supply restrictions, trade controls, tariff, or sanctions, on semiconductor chips or other major
components of EVs may disrupt the operations of our end customers and in turn adversely
affect our business, results of operations, and financial condition.”
Our Financial Performance
During the Track Record Period, we experienced growth in our results of operations. Our
revenue increased from RMB1,499.3 million in 2021 to RMB3,290.3 million in 2022, and
further to RMB4,161.7 million in 2023 and RMB5,130.3 million in 2024, representing a CAGR
of 50.7%. Our revenue grew from RMB4,161.7 million in 2023 to RMB5,130.3 million in
2024, representing a growth rate of 23.3%.
OUR COMPETITIVE STRENGTHS
An established EV battery company in China with experience in the auto part industry
We are founded upon experience in the auto part industry. According to Frost & Sullivan,
in terms of EV battery installation capacity in 2024, we are the 9th largest player in China’s
EV battery market; our overall EV battery installation volume growth ranked fourth, our
ternary lithium battery installation volume growth ranked third, and our LFP battery
installation volume growth ranked fourth among all top 10 players in China in 2024.
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As former core leadership team members of world-renowned auto parts companies, our
core management brings insights into the automobile industries, as well as a comprehensive
and precise understanding of OEMs’ requirements and preferences to weigh the balance among
product safety, quality, performance, and cost efficiency. Leveraging such industry experience
and insights, we have developed unique approaches across the board that differentiate us from
our peer players.
 Industry insights. With their years of professional experience in the automobile
industry with a forward-looking insight into the direction of the structural
development of the automotive industry, our core management team members
accurately and timely perceive and capture the trend toward diverse products and
widespread application scenarios. Such business acumen enables us to launch a
diverse EV battery portfolio, and develop a pipeline of marine and aviation battery
products.
 Customer relationships . We have established relationships with a large customer
base, covering leading companies in the global mobility and energy storage
industries. We strive to establish deep relationships by achieving win-win for our
customers and ourselves. We are recognized as an “excellent supplier” by several
leading OEMs. We generally attain the position as the primary supplier for certain
types of products to our key customers within three to four years of establishing
relationships.
 R&D strategy. We analyze the rapid development in market demand and
technologies to develop our pipeline products accordingly. Driven by OEMs’ needs
for universally compatible battery products, we are dedicated to adopting
standardized battery cells and platformed battery packs, and differentiate their
performance with diversified electrochemistries.
 Manufacturing method. Leveraging our years of experience in manufacturing and
project management, we have designed a highly software-driven and intelligent
manufacturing facilities (featuring AI and big data) that enables us to flexibly
configure and allocate our manufacturing resources to different products in order to
flexibly respond to changes in market demand and reduce costs.
 Customer services. We have established a customer-centric service matrix where our
cross-functional product development team of R&D, engineering, procurement,
manufacturing, sales, and finance personnel collaborate to greatly improve the
efficiency of cross-functional collaboration and shorten the time of the response to
customers’ demand and provide quality services throughout the entire customer
lifecycle.
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Diverse portfolio of market-driven battery products capturing structural industry growth
The NEV industry, as the downstream industry of the power battery industry, is expected
to develop in a more diversified manner in terms of power sources and use cases. The global
EV penetration rate (as measured by the percentage of EV sales volume over total automobile
sales volume) increased from 6.6% in 2020 to 26.7% in 2024, and is expected to reach 65.7%
in 2029. China is a global leader in EV development: EV penetration rate in China grew from
7.0% in 2020 to 43.9% in 2024, and is expected to further grow to 93.3% in 2029.
Meanwhile, PHEVs and EREVs have gained traction and experienced rapid growth in
recent years due to their long driving ranges and flexible charging options. In June 2024, the
MIIT published the draft version of “Fuel Consumption Limits for Passenger Vehicles” (࠱
) for public opinions; in August 2024, the MIIT published further the
draft version of “Assessment Method and Index of Fuel Consumption for Passenger Vehicles”
for public opinions. Both would become effective beginning 2026 if adopted. These policies
and regulations are expected to lead to transformation in China’s automobile industry. PHEVs,
with its cost advantages and fuel emission and consumption level well below the above
published limits, enjoy significant market opportunities and growth potential during the
abovementioned transformation. According to Frost & Sullivan, from 2020 to 2024, EV sales
volume in China grew from 1.8 million units to 13.8 million units, representing a CAGR of
66.9%, and is expected to further grow to 32.1 million units by 2029, representing a CAGR of
18.4%. PHEVs, in particular, have witnessed faster growth in recent years compared to BEVs
due to their longer driving ranges and flexible charging options. PHEV sales volume in China
increased from 0.3 million units in 2020 to 5.1 million units in 2024, representing a CAGR of
112.7%, and is expected to further grow to 15.2 million units by 2029, representing a CAGR
of 24.1%, higher than the forecasted growth CAGR for BEVs and will surpass BEVs in sales
volume in 2025. HEVs are also playing increasingly important roles in the transformation away
from ICE vehicles. The sales volume of HEVs in China increased from 0.4 million units in
2020 to 0.9 million units in 2024, representing a CAGR of 22.7%. HEVs are expected to
maintain rapid growth in the future, reaching a sales volume of 2.0 million units by 2029,
representing a CAGR of 15.8% from 2024 to 2029.
Leveraging our understanding of diversified demand of automotive end-users, we have
developed a diverse EV battery product portfolio with various electrochemistries such as LFP
and NCM which enable us to capture structural growth opportunities in different markets.
 BEV products. Our mass production BEV products cover various electrochemistries,
including NCM, and LFP, and our products under development cover additional
electrochemistries such as LMFP and sodium-ion batteries. Each of these battery
products was designed for BEV models with different driving ranges. Leveraging
our BEV products, we have become the primary supplier of FAW Hongqi, GAC
Trumpchi, Leap Motor, among other leaders in the global EV industry.
 PHEV products. Leveraging our unique industry insights, we gained unique
competitive edges over our peers in the PHEV market under our market-driven
approach.
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 Vision from our market-driven approach : Since 2021, we have been
proactively developing our PHEV product pipeline to seize the growing
opportunities in the PHEV market. We were able to form vision ahead of our
peers due to our market-driven approach, which enables us to gather first-hand
industry insights and devote resources into products based on market needs.
This deep market understanding empowered us to collaborate with several
major OEMs in China on PHEV battery development, laying the groundwork
for our PHEV products.
 Execution of our vision leveraging differentiated approach : We designed our
high-speed manufacturing lines with configurations that are compatible with
PHEV batteries, enhancing production efficiency and reducing costs. Our
flexible battery cell manufacturing capabilities can quickly adapt to shifting
market demands. Leveraging our standardized battery cells, platformed battery
packs, and diversified electrochemistries, we established manufacturing
processes that can be easily reconfigured to meet the diverse requirements of
PHEV batteries with varying types and energy densities. This flexibility
enables us to capture the evolving needs of the PHEV market with minimal
production disruption and at a lower cost.
 Unique competitive advantages : Guided by our vision, we have established
unique competitive advantages and built entry barriers against other players in
the industry. Unlike some market players whose facilities were originally
designed for NCM batteries in BEVs, which make it challenging and costly to
upgrade for LFP battery production, our facilities are designed for flexibility.
This allows us to efficiently manufacture PHEV batteries without incurring
substantial capital expenditure or downtime. Given the relatively compact
development cycle of PHEV cars, lead-in time required for other players to
manufacture the batteries is a significant disadvantage. With established
flexible manufacturing facilities, we are able to capture early market demand
for PHEV battery products.
 Client recognition : Our PHEV batteries are known for their long cycle life and
fast charging performance. Our overall EV battery installation volume growth
ranked fourth, our ternary lithium battery installation volume growth ranked
third, and our LFP battery installation volume growth ranked fourth in China
in 2024. As of December 31, 2024, we had been selected to manufacture PHEV
batteries with a total dimension of over 150 GWh. Our long-term client
relationships reflect our success: for over two years, we have been the
exclusive supplier of a 72Ah battery for multiple PHEV models of an OEM.
Another client has relied on us to support the expansion of its PHEV product
line, both domestically and internationally. We also upgraded PHEV products
for another customer from 104Ah to 114Ah and 120Ah without altering the
form or size of the battery cells, saving them significant time and development
costs.
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 HEV products. We have developed NCM batteries for HEVs. Our joint venture
STAES offered various Lithium-Ion and Ni-MH battery packs for HEVs and
supplied to major OEMs that are joint ventures with Toyota in China for their core
HEV vehicle models. STAES’s HEV battery packs enjoy a market share of over 70%
in China measured 2024 installation capacity of HEV battery packs, according to
Frost & Sullivan.
In addition, China’s battery industry is also experiencing rapid expansion in application
scenarios, including the application of battery products in low-altitude economy scenarios and
related industries, which are expected to reach an overall market size of RMB1,000.0 billion
in 2030, according to the “Implementing Measures for the Innovative Application of General
Aviation Equipment (2024-2030)” jointly promulgated by the Ministry of Industry and
Information Technology, Ministry of Science and Technology, Ministry of Finance, and Civil
Aviation Administration of China. As electrification of marine transportation industry rapidly
develops, power batteries for electric vessels also experienced significant growth in installation
capacity.
We are the first EV battery company in China to receive the AS9100D Aerospace Quality
Management System recognition, and one of the first companies in Suzhou leading the
“low-altitude economy” initiative. Our aviation battery products enjoy the advantages of high
safety, discharge rate, energy density and charging speed. We have established collaboration
with various leading eVTOL companies.
Standardized battery cells, platformed battery packs, and diversified electrochemistries
which boost cost-efficiency across the industry chain
We focus on forward-looking prediction of future technology development trends and,
redefining the product development approach centered on customers’ pain points. We adopted
standardized battery cells and platformed battery packs, and differentiate their performance
with diversified electrochemistries in order to achieve cost-efficiency for players along the
industry value chain.
Standardized Battery Cells and Platformed Battery Packs
Driven by cost concerns, OEMs are increasingly demanding batteries that are compatible
with various vehicle types that have different driving ranges and application scenarios (such as
sedans, SUVs and MPVs) and meet the requirements for diverse product portfolio. This would
enable OEMs to effectively reduce the number of vehicle development platforms, resulting in
significant savings in their development costs. We cooperate with OEMs to redefine the
approach to product development by developing battery products with standardized battery
cells and platformed battery packs, and differentiate their performance with diversified
electrochemistries, enabling more efficient and low-cost integration of our products into their
different vehicle models. This approach also lowers our own R&D and manufacturing costs.
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For example, we developed standardized battery cells and platformed battery packs for
GAC Trumpchi which are compatible with multiple vehicle models such as mid-size and
mid-to-large-size MPV and mid-to-large size SUVs. In our cooperation with another
established OEM in China, we developed different NCM and LFP battery cell products of the
same configuration and size for its PHEV models with 150 km and 200 km driving ranges,
respectively. The manufacturing of battery cells of the same configuration and size but
different electrochemistries requires only one set of molds, and the time to convert the
manufacturing line to produce at full capacity for those battery cells of the same dimension to
a different electrochemistry could be as short as three days.
In 2021, we began cooperating with an OEM customer to develop our 72Ah battery
product under such approach, which achieved mass production and delivery in 2022. After
several years of further development, over 90% of our 72Ah battery products sold in 2024 were
developed under such approach. While industry peers may also adopt development similar
approaches, we believe our early adoption of and deep commitment to the “standardized
battery cell and platformed battery pack” development approach provides our products a
competitive edge in cost of product R&D, manufacturing, and integration into vehicles.
Diversified Electrochemistries
We have also built in diversified electrochemical designs to ensure our battery products,
while maintaining standardized battery cells and platformed battery packs for high
compatibility, satisfy customers’ varying needs for product performance and costs. We have
developed various NCM and LFP battery products, and have a pipeline of LMFP batteries,
sodium-ion batteries, and semi-solid-state and solid-state technologies. Our multi-generation
and diverse technology capabilities and pipeline help us develop diversified products to cover
a number of vehicle types, including sedans, SUVs and MPVs with wide-ranging driving
ranges and cost requirements.
Comprehensive Independent R&D Capabilities Supporting the Launch of Cutting-Edge
Products
We have developed a variety of battery technologies in high energy density, fast charging,
high power, high safety, and long cycle life.
 High energy density. We are the first EV battery manufacturer to introduce both
4.5µm copper foil and 10µm aluminum foil into mass-produced NCM battery cell
products at the same time. Leveraging ultra-thin current collector applications, we
further enhance the energy density of our products. We developed the ultra-high
nickel and silicon anode material system, and achieved energy density of 300
Wh/kg. To further enhance the thermal stability of such electrochemistries, we
developed semi-solid-state electrolyte technology including solid electrolyte surface
modification technology for ultra-high nickel ternary cathode materials, solid
electrolyte hybrid separator technology, and solid electrolyte modification
technology for positive and negative electrode, which have resulted in a 10°C
increase in the cell failure onset temperature and a 150°C reduction in the maximum
temperature after failure.
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 Fast charging. We have significantly improved the Lithium-Ion transportation
capability through the optimization and improvement of raw materials, electrode
and cells, reducing the ohmic resistance and charge transfer impedance. We have
completed the initial development of 6C fast-charging NCM and LFP products.
 High power . Through material design, electrode level optimization and cell structure
design, the maximum pulse discharge rate of our 5.0Ah HEV cell product can reach
80C for ten seconds, and the maximum pulse discharge rate of our 63Ah PHEV cell
product can reach 10C for ten seconds, which is better than the industry average,
according to Frost & Sullivan.
 Safety. We developed the hybrid blue laser welding technology, which greatly
reduces the risk of battery short circuits caused by welding slag. At the same time,
our wing cap technology can effectively prevent the risk of short circuits caused by
the reverse insertion of the tab.
 Long cycle life. Based on pre-lithiation technology, our LFP battery has a cycle life
expected to reach up to 18,000 cycles.
One of the key pain points of power battery R&D is to achieve the optimal balance among
performance level of different indicators. We believe we have not only achieved outstanding
performance in each of the above areas, but also achieved such optimal balance which leads
to high overall performance of our power batteries and competitive advantages:
 In response to high repair costs and difficulties in battery cell disassembling,
although we have not commenced mass production, we have completed the
development of our Universe series BEV battery pack and already produced
samples. Our Universe series BEV battery pack adopts a pioneering tenon-and-
mortise assembly technology in lieu of the traditional laser welding and structural
adhesive bonding technology, which makes our cells easy to assemble, disassemble
and repair. Our Universe series BEV battery pack enjoys an energy density up to 260
Wh/kg, and can reach 70% SOC in as fast as seven minutes.
 In response to the difficulties of achieving both high energy density and high
charging speed, although we have not commenced mass production, we have
completed the development of the Loong series BEV battery pack and already
produced samples. The Loong series BEV battery pack achieves a total battery
capacity of 170 kWh, which is the highest among passenger EV battery pack
products in China as of December 31, 2024. It adopts the double semi-solid-state
technology, which enjoy an energy density of 306 Wh/kg reach 70% SOC from 10%
SOC within nine minutes.
 In response to high requirements on PHEV and EREV battery lifecycle and charging
speed, we launched our PHEV and EREV battery products with cycle life of up to
4,000 cycles, and can reach up to 80% SOC in 30 minutes.
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 In response to high requirements by HEVs on battery power and cycle lives, the
HEV batteries developed by us and our joint venture STAES cover two main
technology pathways, namely Lithium-Ion and Ni-MH. They enjoy the advantages
of high power, long cycle life and high safety with high power and peak discharge
rate of 80C, and cycle life of up to 27,000 cycles.
 In response to the need for high energy density, safety, discharge rate and charging
efficiency for power battery of electric aircraft, we launched our aviation battery
products which have an energy density of over 320 Wh/kg, and can reach up to 80%
SOC in 15 minutes. They can maintain a discharge rate of 12C at a low SOC of 20%.
They can also reach aviation-grade level safety standards.
In addition to EV batteries, we have also introduced the 314 Ah high-capacity ESS battery
product, with a cycle life expected to reach up to 12,000 cycles. We are also funded by the
Industry and Information Technology Department of Jiangsu for sodium-ion battery
industrialization. Our development of sodium-ion battery products includes two technology
pathways, namely sodium-ion layered transition metal oxides and polyanionic compounds.
Software-defined and intelligent manufacturing facilities based on AI and big data,
leading to efficient and flexible battery cell manufacturing capabilities that are highly
adaptable to changes in market demand
We have designed software-defined battery manufacturing facilities with flexible battery
cell manufacturing capabilities to achieve intelligent and efficient production. Our
manufacturing facilities are also strategically located in close vicinities to each other in
Changshu, which allows centralized operational management.
Our battery cell manufacturing facilities enable us to continuously improve
manufacturing and cost efficiency, as well as enjoy a much shorter product development cycle.
In our cooperation with a globally leading OEM on PHEV batteries, the time from initial
product design to final product delivery was as short as one year. The automation rate of major
manufacturing lines (defined by the percentage of machines and equipment that do not require
any human interventions to run smoothly) reached over 95% in 2024, which is significantly
higher than the industry average (approximately 90%), according to Frost & Sullivan.
Our proprietary operational platform integrates the management of various operational steps,
including sales, R&D, manufacturing, and supply chain; it also enables full-cycle management
of technological parameters including parameter submission, changes, approval, application
and tracking, as well as enables monitoring of manufacturing lines to support real-time
decision-making. Our manufacturing work efficiency has increased by 33% (as measured by
the reduction in the number of personnel required) as a result of our proprietary operational
platform. We also collaborate with a global software leader, namely Dassault, in developing
and deploying the manufacturing operations management customized for the battery industry,
which enables the processing of a large amount of data within milliseconds.
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Through AI deep learning and edge computing technologies, we have equipped our
manufacturing lines with a high level of intelligence. Our visual inspection technology
powered by AI can inspect product quality without human interference in order to reduce
damage to bare cells. Our AI edge computing technology enables us to build a comprehensive
coating-pressing-winding quality control system, which helps us to timely analyze and adjust
equipment operating data and parameters throughout the manufacturing process to improve
efficiency and quality. Our AI edge computing technology improves the coating consistency
and pressing thickness consistency.
Our manufacturing lines are also highly flexible and can be converted to manufacture
different product types (such as from EV batteries to ESS batteries, from NCM batteries to LFP
batteries) with relatively low conversion costs and time. We achieve this through the adoption
of predictive equipment design and flexible and intelligent manufacturing technique design
since our expansion of production capacity in 2021. We possess independent manufacturing
equipment development capabilities, and collaborate with leading equipment suppliers to
complete the construction of our highly customized manufacturing lines. The time to convert
a manufacturing line to produce at full capacity for those battery products of the same
dimension to a different electrochemistry could reach as short as three days, and the time to
convert a manufacturing line to produce at full capacity for those battery products of different
dimensions could reach as short as 50 days.
A majority of our manufacturing facilities are also strategically located in close vicinities
from each other in Changshu, which allows centralized operational management. On average,
we are able to allocate resources among different facilities in Changshu and respond to
abnormal alerts from each facility within 30 minutes.
Deep and well-established customer relationships with leading players in the global
mobility and energy storage industries
We have established a large and high-quality customer base by establishing deep
relationships with several leading companies in the global mobility and energy storage
industry. Our EV battery customers include large state-owned enterprises, pure-play EV
companies, and multi-national OEMs. The market share of our battery products among vehicle
models of leading global OEMs, such as FAW Hongqi, GAC Trumpchi, Leap Motor, SAIC-GM
Wuling, and SAIC-GM, continues to increase. In addition, we have established cooperation
with various potential customers of our ESS battery products, such as Deye Holdings. We are
also actively pursuing new collaborations in terms of mass production of our marine and
aviation battery products with potential customers in the relevant fields.
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We strive to establish deep relationships by achieving win-win for our customers and
ourselves. We have been recognized as an “excellent supplier” by several leading OEMs and
generally became the primary supplier for certain types of products by our key customers
within three to four years of establishing relationships. For example,
 Leap Motor : we have become the primary battery supplier for Leap Motor, having
established sales relationships with it for only three years. Leveraging our rich
technologies, rapid product development and highly consistent product
performance, we have received numerous recognitions from Leap Motor, including
“Excellent Supplier” recognition for two consecutive years. We have also been
selected as the battery supplier for all of Leap Motor’s popular vehicle models, and
as the primary battery supplier for its vehicle models exported to Europe.
 SAIC-GM : we established cooperation with SAIC-GM in 2020, leveraging our
superior product development speed. We have been selected as the battery supplier
for several of SAIC-GM’s PHEV products. We completed the development of the
PHEV battery pack product for installation in its vehicles within one year, which
enabled SAIC-GM to launch its PHEV product ahead of schedule.
 GAC Trumpchi : we began cooperation with GAC Trumpchi in 2022, and
successfully developed a customized PHEV battery pack product for it within 12
months, which effectively contributed to the customers’ strategic transformation and
PHEV product launch. We now serve as the supplier of GAC Trumpchi, and provide
battery products for all of its mass-produced PHEV models, including Trumpchi E9,
E8 and ES9, among others.
 SAIC-GM Wuling : we began cooperation with SAIC-GM Wuling in 2022, and have
become its top three battery supplier in terms of installation capacity. We are the
primary battery supplier for many of its popular vehicle models, some of which have
been exported overseas. We also received numerous recognitions from the customer
on our supply stability and quality, and have been selected as the supplier for all of
its battery cell platform projects.
 F AW Hongqi : we are the primary battery supplier for FAW Hongqi’s fleet of
battery-swapping vehicles, the northernmost vehicle fleet in China. Mass
deployment of our battery products enables FAW Hongqi’s fleet to operate under
extremely low temperatures. We have also been selected by FAW Hongqi as the
primary battery supplier for three of its PHEV models.
Notably, STAES is the primary battery pack supplier for major OEMs that are joint
ventures with Toyota in China. Toyota enjoys a market share of over 70% in China’s HEV
market in terms of 2024 sales volume, and has adopted a diverse product development strategy.
We believe our close relationship with Toyota in China well positions us to enhance the
operation performance of STAES. We hold a 50% equity interest in STAES, which is dedicated
to the manufacturing of Lithium-Ion and Ni-MH battery packs for major OEMs that are joint
ventures with Toyota in China. We expect our equity interest in STAES to positively impact our
results of operations. We also expect to cooperate with Toyota on more fronts.
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OUR STRATEGIES
Steadily expand manufacturing capabilities driven by changes in market demand
We plan to further expand our manufacturing capabilities to satisfy rapid increases in
downstream market demand for our products, with an aim to achieve an overall manufacturing
capacity of 50.5 GWh by the end of 2026. In particular, we plan to build new manufacturing
facilities in Changshu in two stages with a total manufacturing capacity of approximately 25.0
GWh. The first stage of the expansion is expected to be completed by October 2025, and the
second stage by December 2026. The newly established manufacturing lines will be equipped
with advanced technology and equipment that reduce energy consumption and carbon
emission, and improve manufacturing automation and intelligence.
We intend to further strengthen our software-defined manufacturing facilities by fully
implementing the Andon management system, equipment failure prediction system,
manufacturing technique optimization, and intelligent repair systems to further improve
manufacturing efficiency. We also intend to improve the flexibility of our manufacturing lines
by independently designing core equipment and shortening the amount of time to convert a
manufacturing line to start manufacturing a different battery product. We will also explore
techniques that enable the manufacturing of multiple product types on the same manufacturing
line.
Enrich our diverse product portfolio, covering standardized battery cells, platformed
battery packs and diversified electrochemistries to improve the overall efficiency of the
entire power battery industry chain
We plan to further enrich our product portfolio to cover more scenarios, featuring
standardized battery cells, platformed battery packs and diversified electrochemistries. For EV
batteries, we intend to launch new battery products for vehicles with different power sources
(BEV , PHEV , EREV and HEV), different usages (sedans, SUVs and MPV), and driving ranges.
We intend to strengthen and deepen our relationships with existing OEM customers to improve
product penetration, as well as establish sales relationships with new OEM customers.
We intend to further develop our aviation battery products. In March 2024, the Ministry
of Industry and Information Technology jointly promulgated the “Implementation Plan for the
Innovation and Application of General Aviation Equipment (2024-2030)” with three other
departments, which states that by 2030, China will have an advanced, intelligent and
environmentally friendly general aviation industry development model; general aviation
equipment will be fully integrated into residential lives, becoming a significant growth driver
for low-altitude economy and leading to the emergence of a large industry of over RMB1,000.0
billion. We are well-positioned to tap into this enormous market opportunity. We are the first
EV battery company in China to receive the AS9100D Aerospace Quality Management System
recognition, and one of the first companies in Suzhou leading the “low-altitude economy”
initiative. Our aviation battery products enjoy the advantages of safety, discharge rate, energy
density and charging speed. We have begun early-stage sample sales.
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We also plan to diversify our ESS battery products for power-generation, industrial and
commercial, industrial and residential energy storage use cases, focusing on both centralized
and distributed energy storage battery products. We intend to further expand our ESS battery
products for marine customers. We have begun cooperation with a customer who has selected
our ESS battery for their ships.
Further implement our R&D strategy
We intend to conduct market-driven layout of new material and electrochemistries,
technology platforms and product. Specifically, we plan to focus on the following areas of
further R&D:
 Ultra fast charging technology. We plan to continue to optimize battery materials,
electrode and cell structures, battery systems, among others, to further improve fast
charging performance while maintaining the energy density of current mass
produced LFP and NCM products to meet customers’ needs. In terms of battery
materials, we plan to optimize the cathode and anode materials as well as their
particle sizes and surface coatings to reduce the solid phase diffusion impedance and
interface charge transfer impedance. At the electrode and cell level, we plan to
further improve the lithium ion transportation capability by means of porous
electrode tortuosity and porosity design, and regulate the ionic conductivity and
interface resistance by optimizing the solvent and lithium salt system and additives.
In terms of battery systems, we plan to continue to increase the research on the
battery pack thermal management, and achieve controlled temperature rise under
extreme fast charging.
 New battery materials. We plan to increase investment in the R&D of in ultra-high
nickel cathode and new silicon-carbon anode materials to achieve the development
of high energy density battery products to meet the needs of high-end passenger
vehicles and other application scenarios. In terms of the development of hybrid
phosphate, we strive to achieve better life performance through the development of
new phosphate materials and their compounding systems and pre-lithiation
technology, thus further improving the cost performance and user experience of
battery products. We also plan to optimize alkali metal ion materials, develop
battery products with better performance and lower costs to meet the needs of
cost-sensitive applications.
 Solid state research. We plan to enhance our efforts to explore solid-state electrolyte
materials with high ionic conductivity, study the interface characteristics of
solid-state electrolytes and porous electrodes, improve the comprehensive
performance of semi-solid-state and solid-state batteries, and accelerate the
industrial application of semi-solid-state and solid-state battery products to meet the
needs of emerging usage scenarios, such as ultra-long-range passenger vehicles and
electric aircraft.
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Expand our business globally through diverse approaches
We plan to actively expand our sales presence overseas through further cooperation with
domestic and overseas customers, specifically:
We plan to collaborate with domestic OEMs on the installation of our batteries on
vehicles that they intend to export in order to expand our sales overseas. We have established
such collaboration with SAIC-GM Wuling where our battery products had been installed in the
vehicles exported to India and Indonesia. We have also been selected by Leap Motor to provide
batteries for their exported vehicle model, T03, which has been bulk exported to the EU
market.
We also intend to directly establish sales relationships with overseas customers and
directly export our batteries. We have entered into a sales agreement with an OEM in Germany
to sell our electrodes, and with a company in France to sell our sodium-ion batteries.
BUSINESS MODEL
We are a lithium-ion battery manufacturer in China, committed to developing a diverse
portfolio of market-driven and technology-fueled battery products. We primarily focus on the
R&D, production and sales of EV battery products, ESS battery products, and aviation battery
products. We provide integrated battery solutions, encompassing battery cells, modules, packs,
racks, and battery management systems dedicated to large-scale applications of
electrochemical products to more application scenarios. We are highly focused on technology
innovation and developing products with strong performance and high safety.
The growth drivers in the battery industry have evolved from policy and capital
investment to market demand over the past few years. Before 2020, decisions to expand EV
battery manufacturing capabilities by EV battery manufacturers were primarily driven by
policy on new energy vehicles, and manufacturing capacity was designed and constructed for
electrochemistries that fit the government subsidy policies under the significant capital
support. After 2021 when such subsidy policies began to expire, such manufacturing capacity
cannot adequately accommodate diversified electrochemistries that are safer and more cost
competitive, and are not flexible to capture the rapid growth in new power battery applications
(such as PHEV and EREV). The power battery industry has now reached a critical inflection
point, where key competitiveness of battery manufacturers hinges on their understanding and
precise alignment with the needs of OEM customers.
For example, regulations and subsidy policies drove the construction of manufacturing
lines that were dedicated to certain battery types, such as NCM batteries or batteries designed
for BEVs. As market demands begin to shift to other electrochemistries, and as other vehicle
types begin to gain tractions in the global EV market, such as PHEVs, EREVs and HEVs, these
early manufacturing lines tend to become increasingly obsolete and their utilization rate
continues to decline, as they did not build in sufficient flexibility to adapt to the evolving
battery technology and market demand. We have developed deep insights and understanding
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into the development trends in China’s EV battery market very early on, and have established
market-driven manufacturing capabilities and technology platforms that can flexibly adapt to
development in prevailing battery technology pathways and use cases. We believe such
insights, understanding and judgment of production capacity help us better serve OEMs’ needs
and achieve more sustainable business growth.
We procure raw materials from trusted and selected suppliers to ensure the quality and
stability of raw material supplies. We also extensively collaborate with production equipment
suppliers to customize our production equipment, which helps us achieve a flexible
manufacturing system under which our manufacturing lines can be reconfigured in a timely and
cost-efficient manner to produce battery products of a different technology pathway when
demanded by customer orders. We are also able to understand and fulfill customer needs and
establish relationships with OEMs and other customers worldwide, leveraging our experience
and insight in the auto part industry. We adopt a customer-oriented approach where we closely
and proactively work with customers to predict customer demands, which then form the basis
for our production capacity expansion, production resource procurement and manufacturing
line allocations. Beyond development and sale of battery products, we are currently negotiating
licensing agreements with potential customers overseas to out-license our battery technologies
to further diversify our business.
PRODUCTS
We have developed a comprehensive portfolio of battery-related products (battery cells,
modules, packs, racks, and management systems) covering a wide range of technology
pathways and use cases. Our products primarily include EV batteries (including BEV , PHEV ,
EREV and HEV), ESS battery products, and aviation battery products. As of the Latest
Practicable Date, our EV battery products and ESS products have reached mass production. We
adopt standardized battery cells and platformed battery packs, and differentiate their
performance with diversified electrochemistries to enable OEM customers to more flexibly use
our products in different vehicle types and use cases.
EV Battery Products
Our EV battery products cover battery cells, modules, packs, and battery management
systems for a wide range of vehicle types, including BEVs, PHEVs, EREVs and HEVs.
BEV Battery Products
BEV battery products represent our primary source of sales revenue during the Track
Record Period. Our BEV batteries have advantages such as high energy density, performance
consistency, long cycle life and ultra-fast charging. Our BEV battery products have been
selected by various OEMs for installation in a variety of vehicle models, and have begun mass
production and delivery. Our revenue from sale of BEV battery products was RMB1,448.0
million, RMB3,103.1 million, RMB2,371.0 million, and RMB3,012.3 million in 2021, 2022,
2023 and 2024, respectively.
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The following table sets forth the details of our key BEV battery products.
Type Picture Specification
LFP NCM
Cell /H1118/H1118/H1118/H1118/H1118
 Battery shape Prismatic Prismatic/
cylindrical
Chemical system LFP/Gr NCM/Gr (SiO)
Capacity (Ah) 103-218 49-230
Gravimetric density
(Wh/kg)
175-196 220-306
Fast charging time
from 10% to
80% SOC (min)
19-35 18-35
Module /H1118/H1118/H1118
Characteristics Single and
double row
modularization;
integration
efficiency
reaches 94%;
no thermal
propagation
Integration
efficiency
reaches 94%; no
thermal
propagation
Pack /H1118/H1118/H1118/H1118
Energy (kWh) 60.4* 73-170*
Gravimetric density
(Wh/kg)
145* 160-245*
Characteristics Integration
efficiency
reaches 76%*;
no-fire and no-
explosion*
Integration
efficiency
reaches 80%
Note:
* Represents specifications in development.
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PHEV and EREV Battery Products
The following table sets forth the details of our key PHEV and EREV battery products.
Type Picture Specification
LFP NCM
Cell /H1118/H1118/H1118/H1118/H1118
 Battery shape Prismatic Prismatic
Chemical system LFP/Gr NCM/Gr
Capacity (Ah) 54-88 72
Gravimetric density
(Wh/kg)
167-180 225
Fast charging time
from 10% to
80% SOC (min)
18-35 35
Module /H1118/H1118/H1118
Energy (kWh) N.A. 6.4
Gravimetric density
(Wh/kg)
210
Characteristics Integration
efficiency
reaches 93%; no
thermal
propagation
Pack /H1118/H1118/H1118/H1118
Energy (kWh) 24.4 25.6
Gravimetric density
(Wh/kg)
130 147
Characteristics No-fire and no-
explosion
No-fire and
no-explosion
HEV Battery Products
The HEV batteries developed by us and our joint venture STAES cover two main
technology pathways, namely Lithium-Ion and Ni-MH battery packs. They enjoy the
advantages of high power, long cycle life and high safety. They have also passed the nail
penetration test. Their peak discharge rate of 80C, and cycle lives of up to 27,000 cycles. Our
HEV battery products have been selected by various OEMs for installation in a variety of
vehicle models, and have begun mass production and delivery.
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The following table sets forth the details of key HEV battery products.
Type Picture Specification
LFP NCM
Cell /H1118/H1118/H1118/H1118/H1118
 Battery shape Prismatic Prismatic
Chemical system NCM/Gr NCM/Gr
Capacity (Ah) 5.5 5.0
Gravimetric density
(Wh/kg)
102 92
Maximum pulse
discharge rate
(C)
60 80
ESS Battery Products
Our ESS battery product portfolio covers battery cells, modules, systems and battery
racks, providing one-stop service from battery cells to system integration. In particular, our 314
Ah high-capacity energy storage battery cells have obtained TÜV IEC 62619 and UL 9540A
certifications, with a maximum energy density of 180 Wh/kg, a cycle life expected to reach up
to 12,000 cycles, an energy efficiency of up to 95%, and a capacity retention rate of over 91%
at temperatures below -20°C. Along with our existing ESS battery product portfolio, including
50Ah, 104Ah, 280Ah, and 302Ah, we provide comprehensive coverage across various use
cases such as power-generation, commercial, industrial and residential energy storage.
We also offer battery modules and battery packs used for ESS scenarios. Our ESS battery
module and battery pack offerings include air cooling battery packs, liquid-cooled battery
packs, battery clusters, outdoor cabinets and containers, which can fully cover various energy
storage use cases, including electricity power generation, commercial, industrial and
residential energy storage.
The customers for our ESS products during the Track Record Period apply our ESS
products under scenarios on the power-generation side as well as on the demand side (such as
commercial, industrial, and residential). According to Frost & Sullivan, the energy storage
market in China faces many uncertainties in terms of relatively low entry barriers and increased
competition. We enter into sales agreements with our ESS customers with typical terms of one
year. As of the Latest Practicable Date, we did not have any backlog orders.
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The following table sets forth the details of our key ESS and marine battery products.
Type Picture Specification
LFP
Cell /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Battery shape Prismatic
Chemical system LFP/Gr
Capacity (Ah) 104-314
Gravimetric density
(Wh/kg)
165-180
Module /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Characteristics Integration efficiency
reaches 94%; no
thermal
propagation
Liquid-cooled
Battery Pack /H1118/H1118/H1118
Energy (kWh) 6.7-50.3
Gravimetric density
(Wh/kg)
126-136
Characteristics No-fire and no-
explosion
Liquid-cooled
Outdoor
Cabinet* /H1118/H1118/H1118/H1118/H1118/H1118
Capacity (Ah) 302
Nominal voltage (V) 1,331.2
Energy (kWh) 402
Cooling method Liquid-cooled
Size (length, width,
height, mm)
1,380×1,400×2,330
5MWh Container* /H1118
Capacity (Ah) 3,768
Nominal voltage (V) 1,331.2
Energy (kWh) 5,016
Cooling method Liquid-cooled
Container size (ft/m) 20/6.05
Energy Storage
Power Battery
System for
Electric Ships /H1118/H1118
Capacity (Ah) 560
Nominal voltage (V) 691.2
Energy (kWh) 387
Cooling method Liquid-cooled
Size (length, width,
height, mm)
1,752×1,900×1,380
Note:
* Represents products in development.
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ESS Products under Sea Application Scenario
The development of electric ship batteries since 2019 has been marked by significant
policy support and financial incentives from central and local governments in China. This has
catalyzed the growth of new energy vessels, guiding the industry with strategic plans and
subsidies. As a result, the installed capacity of electric ship batteries in China has grown from
approximately 0.2 GWh in 2020 to 2.0 GWh in 2024, representing a CAGR of 72.4%, and is
expected to further reach 104.7 GWh by 2029, representing a CAGR of 121.2% from 2024 to
2029.
To capture such growth opportunities to the nautical application of battery products, we
have developed multiple battery products suitable for electric ships, including the 1P18S,
1P24S, and 1P30S variants, addressing both energy and power-intensive applications. 1P24S
and 1P30S are still under product development. In terms of certifications, we have been
included in the Ministry of Industry and Information Technology’s “Lithium-Ion Battery
Industry Norms and Conditions” whitelist (the eighth batch), qualifying us as a participant in
the electrification of ships.
Aviation Battery Products
Our aviation battery products are distinguished by their high energy density, rapid
charging capability, and robust discharge rates, essential for safe landings and emergency
situations. With energy densities exceeding 320 Wh/kg and the ability to charge to 80% SOC
in 15 minutes, our batteries maintain high discharge rate of 12C even at low power level of
20% SOC, meeting aviation needs for safe landing and emergency handling. Utilizing a
thermal-electrical separation design, our battery systems meet manned aviation safety
standards by preventing thermal runaway at the pack level.
Our offerings include prismatic, pouch, and large cylindrical formats, catering to diverse
customer needs with comprehensive solutions encompassing cells, modules, packs, and battery
management systems (“ BMS”). We have established collaborative relationships with leading
eVTOL manufacturers, both domestically and internationally, for product validation.
Our aviation battery solution features high energy density, high safety, high discharge rate
and ultra-fast charging capabilities. We are the first power battery company in China to obtain
AS9100D Aerospace Quality Management System Certification. This ensures both ultra-high
energy density and high safety, meeting energy density requirements of over 320 Wh/kg. The
negative electrode of our aviation battery products adopts a novel silicon-based hybrid
material, exhibiting lower expansion and longer cycle performance compared to traditional
silicon negative electrode materials. This ensures a long lifespan while meeting high energy
density requirements, with a cycle life of over 1,500 cycles. Our unique electrode and system
design enables 80% SOC within 15 minutes, and 12C discharge at 20% SOC, matching various
unique operating conditions such as aircraft takeoff, landing, and handling of an emergency.
Our aviation battery products are available in various forms including cylindrical, pouch and
prismatic, catering to diverse aviation battery use cases.
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The following table sets forth the details of our key aviation battery products.
Type Picture Specification
NCM
Cell /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Battery shape Prismatic/pouch/
cylindrical
Chemical system NCM/Gr (SiO)
Capacity (Ah) 8.1-68
Gravimetric density
(Wh/kg)
275-306
Fast charging time
from 10% to 80%
SOC (min)
15-21
Pack* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Characteristics CTP structure
Note:
* Represents products in development.
In June 2024, we entered into a strategic cooperation framework agreement with an
aviation research institute, an aircraft manufacturing company, and an aviation company on the
development of electric light sport aircraft, and subsequent models, aiming to lead both the
domestic and international electric aircraft markets. We are the first power battery company in
China to receive the AS9100D aerospace quality management system certification, affirming
our capabilities in R&D, manufacturing, and management within the air application scenario.
As one of the first companies in Suzhou leading the “low-altitude economy” initiative, we
plan to continue increasing investment to maintain our competitive edge in this emerging field.
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The following table sets forth a breakdown of our revenue by product type both in
absolute amount and as percentages of our total revenue during the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 3,116,066 94.7 3,356,865 80.7 4,663,775 90.9
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 2,628,589 79.9 1,447,995 34.8 1,357,268 26.5
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 487,477 14.8 1,908,870 45.9 3,306,507 64.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,447,952 96.6 3,103,107 94.3 2,370,954 57.1 3,012,278 58.7
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,567 0.3 971,673 23.3 1,644,206 32.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 0.0 4,392 0.1 14,238 0.3 7,291 0.2
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,768 0.1 315,306 7.6 213,409 4.2
Other products and services (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,251 3.4 171,419 5.2 489,499 11.7 253,133 4.9
Down-grade products (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,950 1.1 35,539 1.1 278,017 6.6 92,763 1.8
Waste materials (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,485 1.8 109,540 3.3 132,554 3.2 130,249 2.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,816 0.5 26,340 0.8 78,928 1.9 30,121 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 100.0 3,290,253 100.0 4,161,670 100.0 5,130,317 100.0
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services. The provision of technical support services was mainly to develop and test products for our
customers. Such services were customized and developmental in nature.
(3) Revenue from the sale of down-grade products accounted for 6.6% of our total revenue both in 2023, which
was primarily due to material adverse change in the business operations of one of our OEM customers (“ WM
Customer ”) and its prolonged delay and inability to settle its receivables (the “ WM Customer Incident ”) in
2022. After the WM Customer Incident, we sold inventories originally produced for WM Customer to other
customers as down-grade products in 2023.
(4) Primarily include materials discarded during the production process, such as cathodes, anodes, battery cells,
and scrap materials like copper foil and aluminum foil.
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EV sales in China demonstrate significant seasonal patterns, primarily driven by seasonal
demand fluctuations, policy influences, holidays, and climate conditions, among other factors;
EV sales during the second half of each year tend to be higher than the first half, with the fourth
quarter bringing the largest quarterly sales volume of the year, according to Frost & Sullivan.
Specifically, the demand and production schedules of OEM customers typically decrease in the
first quarter due to Chinese New Year holiday, and gradually resume in the second quarter when
OEMs typically launch new vehicle models. The third and fourth quarters are the traditional
peak demand and sales period in the China’s automotive market, with more new models in the
market, leading to higher sales volumes in the second half of each year during the Track Record
Period. The sales of our products to OEMs are therefore also affected by the above patterns.
Our sales volumes are typically lower in the first half of each year compared to the second half
of each year during the Track Record Period.
Sales Volume and Average Selling Price
The following table sets forth a breakdown of sales volume during the years indicated.
For the year ended December 31,
2021 2022 2023 2024
(MWh)
Power Battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 3,634.4 5,906.7 11,314.4
By Product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 2,947.3 1,466.0 1,765.0
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 687.1 4,440.7 9,549.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.6 3,631.4 4,980.6 9,210.5
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2.4 924.5 2,095.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H11180.1 0.6 1.5 8.8
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.1 751.0 575.2
Note:
(1) Primarily include HEV and aviation applications.
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The following table sets forth a breakdown of average selling price during the years
indicated.
For the year ended December 31,
2021 2022 2023 2024
(RMB/Wh)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.86 0.57 0.41
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.89 0.99 0.77
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.71 0.43 0.35
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.85 0.48 0.33
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.59 1.05 0.78
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H11180.62 6.88 9.31 0.83
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.89 0.42 0.37
Note:
(1) Primarily include HEV and aviation applications.
Based on customer demand, we offer different battery cells, modules and packs for
different vehicle models, and our standardized battery products can be customized for multiple
OEM customers based on their specifications.
Our Star Products
Our R&D capabilities have enabled us to develop the following battery technologies with
unique product features and advantages:
 High energy density and fast charging LFP battery: Through optimization of materials
and electrode design, we have increased the gravimetric energy density to approximately
190Wh/kg; through the development and introduction of high press density lithium iron
phosphate materials, our LFP battery achieves volumetric energy density of over 430
Wh/L as well as fast charging capabilities of 2.2C.
 PHEV and EREV batteries. Our PHEV and EREV batteries enjoy the extremely high cycle
life of up to 4,000 cycles, and can reach up to 80% SOC in 30 minutes.
 HEV batteries . The HEV batteries developed by us and our joint venture STAES cover
two main technology pathways, namely Lithium-Ion and Ni-MH. They enjoy the
advantages of high power, long cycle life and high safety, with peak discharge rate of
80C, and cycle life of up to 27,000 cycles.
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 Universe series (BEV battery pack) . Although we have not commenced mass production,
we have completed the development of our Universe series BEV battery pack and already
produced samples. Our Universe series BEV battery pack enjoys an energy density up to
260 Wh/kg, and can reach 70% SOC in as fast as seven minutes. It features a pioneering
tenon-and-mortise assembly technology, making it the first in the industry to enable
single cell disassembly and easy maintenance, according to Frost & Sullivan.
 Loong series (BEV battery pack) . Although we have not commenced mass production, we
have completed the development of our Loong series BEV battery pack and already
produced samples. Our Loong series BEV battery pack achieves a total battery capacity
of 170 kWh, which is the highest among passenger EV battery pack products in China as
of December 31, 2024. It adopts dual semi-solid-state technology, which enjoy an energy
density of 306 Wh/kg, and can reach 70% SOC from 10% SOC within nine minutes.
 Aviation battery products . We are the first EV battery company in China to receive the
AS9100D Aerospace Quality Management System recognition, and one of the first
companies in Suzhou leading the “low-altitude economy” initiative. Our aviation battery
products have an energy density of over 320 Wh/kg, and can reach up to 80% SOC in 15
minutes. They can maintain a discharge rate of 12C at a low SOC of 20%. They can also
reach aviation-grade level safety standards.
RESEARCH AND DEVELOPMENT
With understanding of OEM customers’ demands to balance safety, quality, performance,
and cost efficiency, we established our forward-looking “5-3-1” R&D strategy under which we
developed diverse EV battery products, and are proactively conducting R&D on aviation
battery products, placing us in a favorable position of application scenario expansion and rapid
technological iterations in the battery industry. Under our “5-3-1” R&D strategy, our research
institute is responsible for analyzing and preparing for the development trends in battery
material and related technologies of the next five years; our platform center is responsible for
establishing the requisite R&D platform and capabilities to carry out the relevant R&D work
for the next three years; and our product center is responsible for designing the detailed
technologies and product specs for battery products for launch in the next one year.
Our R&D process includes the following steps. Based on our communications and deep
connections with customers, our senior management team determines trends in customer
demands, and strategizes on which technologies to develop. After initiating a technology
development project, we assign an overall project manager who then assembles project teams
consisting of personnel from various teams, such as raw material development, product design,
testing and verification, engineering and production, quality control, finance, and sales. Such
cross-departmental R&D project teams ensure that technology development can be smoothly
converted into viable commercial products, namely that our newly developed technologies can
be implemented into actual products that appropriately address customer demands, meet
relevant quality standards, can be compatible with our production capacity, and achieve cost
efficiency.
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Our R&D team then develops sample products for technical assessment, which primarily
compares the details of the newly developed products and technologies against customer
requirements. After entering mass production, our R&D team continues to carefully monitor
the supplier selection, production and quality control processes, and conducts routine
maintenance and modifications based on customer feedback and circumstances that arise
during actual production and application.
R&D Teams
We had 1,060 full-time employees in our R&D function as of December 31, 2024,
approximately 28% of whom held a Master’s degree or above. Our core R&D team has an
average professional experience of over 10 years in the new energy battery industry. Our R&D
function comprises the following entities, each tasked with a different aspect of our research
and development activities.
 Research institute. Our research institute is responsible for conducting scientific
research on (i) research on new electrochemistries and advanced materials and
technologies, such as solid-state batteries and sodium-ion batteries; and (ii) research
on application materials for cathode, anodes, separators, electrolytes, and other
components of battery products. Our research institute also has laboratories to
perform testing and verification of raw materials and batteries.
 Platform center . Our platform center is dedicated to establishing a common R&D
platform encompassing research on advanced product design, process technology
and failure mechanism and emulation, which helps improve the efficiency in
developing new technologies and products.
 Product center . Our product center is responsible for (i) analyzing the latest industry
development trends and understanding customer needs in order to develop new types
of battery cells, modules and packs; (ii) R&D on product reliability and safety; and
(iii) management of intellectual properties that arise during our R&D efforts.
 Engineering center . Our engineering center is responsible for coordinating our
product technologies with our manufacturing lines to ensure that the newly
developed technologies and product designs can be converted into commercialized
products.
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Our Key Technologies
R&D Pipeline
The following chart sets forth our major technologies.
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 3 electrochemistries and advanced materials. Our R&D pipeline includes the
adoption of three different electrochemical cathode materials, namely ultra-high
nickel multi-element material, hybrid phosphate material and new alkali metal ion
materials. The ultra-high nickel NCM material, such as Ni92 to Ni98, is primarily
designed for batteries for high-end passenger vehicles that require a long driving
range. Hybrid phosphate materials, such as LMFP materials, are further developed
based on existing LFP materials with higher energy density. New alkali metal ion
materials, such as sodium-ion and potassium-ion materials, are designed for
price-sensitive use cases, such as small-sized EVs and ESS use cases.
 2 Battery Shapes. While currently all our battery cell products under mass
production adopt the prismatic battery shape, we are developing the cylindrical
battery shape and planning the corresponding manufacturing lines to enrich the
shapes of our battery cell products and provide diversified choices for future market
demand.
 1 Cell Renewable Pack System. Our highly integrated Universe series BEV battery
pack system has high energy density and ultra-fast charging capabilities. It adopts
thermoelectric separation, pole cooling and dual liquid cooling technologies. Its
pole mortise and tenon joint structure realizes the electrical connection of the battery
cells, avoiding the use of busbar laser welding and structural adhesive, thus enabling
the replacement of a single battery cell in the battery system, which greatly reduces
the after-sales maintenance cost, and brings convenience for future reuse and raw
material recycling. As of December 31, 2024, we have been granted 60 patents for
the key technologies of our Universe series BEV battery pack system.
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Standardized Battery Cells and Platformed Battery Packs
Driven by cost concerns, OEMs are increasingly demanding batteries that are compatible
with various vehicle types that have different driving ranges and application scenarios (such as
sedans, SUVs and MPVs) and meet the requirements for diverse product portfolio. This would
enable OEMs to effectively reduce the number of vehicle development platforms, resulting in
significant savings in their development costs. We cooperate with OEMs to redefine the
approach to product development by adopting standardized battery cells and platformed battery
packs, and differentiate their performance with diversified electrochemistries, which enable
more efficient and low-cost integration of our products into their different vehicle models. This
approach also lowers our own R&D and manufacturing costs.
For example, we developed standardized battery cells and platformed battery packs for
GAC Trumpchi which are compatible with multiple vehicle models such as mid-size and
mid-to-large-size MPV and mid-to-large size SUVs. In our cooperation with another
established OEM in China, we developed different NCM and LFP battery cell products of the
same shape for its PHEV models with 150 km and 200 km driving ranges, respectively. The
manufacturing of battery cells of the same configuration but different electrochemistries
requires only one set of molds, and the time to convert the manufacturing line to produce at
full capacity for those battery cells of the same dimension to a different electrochemistry could
be as short as three days.
Diversified Electrochemistries
We have also built in diversified electrochemical designs to ensure our battery products,
while maintaining standardized battery cells and platformed battery packs for high
compatibility, satisfy customers’ varying needs for product performance and costs. We have
developed various NCM and LFP battery products, and have a pipeline of LMFP batteries,
sodium-ion batteries, and semi-solid-state and solid-state technologies. Our multi-generation
and diverse technology capabilities and pipeline help us develop diversified products to cover
a number of vehicle types, including SUV , sedans and MPV with wide-ranging driving ranges
and cost requirements.
High Energy Density Technology
To enhance the energy density of our battery products, we have developed a series of the
following technologies focusing on improving the energy density of our products.
High Energy Density NCM Battery
With respect to NCM battery, we utilize ultra-high nickel cathode materials with more
than 90% nickel combined with silicon-based anodes, achieving an energy density exceeding
300-330Wh/kg in prismatic cases. Our product currently under development with the highest
energy density has reached 400Wh/kg.
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Semi-solid-state and Solid-state Battery
The introduction of ultra-high nickel positive electrode and silicon negative electrode
decreases the thermal stability of the cell, which brings great challenges in terms of safety. We
have developed semi-solid electrolyte technologies, including solid electrolyte surface
modification technology for ultra-high nickel ternary cathode materials, solid electrolyte
hybrid separator technology, and solid electrolyte modification for positive and negative
electrode, which have resulted in a 10°C increase in the cell failure onset temperature and a
150°C reduction in the maximum temperature after failure, improving the safety of ultra-high
nickel-silicon anode systems and enabling the application of such radical chemical systems.
Meanwhile, we are also developing solid-state electrolytes which include sulfides and oxides,
and are designed to avoid the use of flammable organic solvents, further enhancing the safety
of the battery cells.
High Energy Density Battery Materials
With respect to LFP battery, through optimization of materials and electrode design, we
have increased the gravimetric energy density to approximately 190Wh/kg in prismatic
aluminum cases. In addition, we have elevated volumetric energy density to over 430Wh/L
through the development of high press density LFP materials, which enables more energy to
be stored within the same battery pack space. In addition, through multi-layer coating
technology, we have optimized electrode porosity structure to enhance kinetic performance,
achieving fast-charging capabilities of up to 4C, and even 6C, while maintaining thick coatings
and high energy density, further enhancing the competitive strengths of LFP products.
Given its safety and cost efficiency, the LFP system, with the overwhelming
comprehensive advantages, will dominate the market in the foreseeable future. The
development of such high-energy-density, fast-charging LFP cells will significantly bolster our
commercial success. As an upgrade of lithium iron phosphate, lithium manganese iron
phosphate (LMFP) has gained wide attention in the industry in recent years. With similar
capacity, LMFP features a higher voltage plateau. However, the LMFP material has its own
defects, such as poor electrical conductivity and low press density. Therefore, while optimizing
the LMFP material itself, we are also developing the hybrid electrochemistry, which blends
LMFP with NCM simultaneously. Currently, we have developed LMFP blended NCM products
with energy densities of 220Wh/kg and 500Wh/L, which are substantially higher than LFP
products. The LMFP blended NCM product has been sent to European leading OEMs for
evaluation.
High Energy Density Sodium-ion Battery
As a supplement to Lithium-Ion batteries, we are also actively laying out the field of
sodium-ion batteries to deal with the possible shortage of lithium resources. Our sodium-ion
battery technology routes are divided into the polyanion cathode route and the layered oxide
cathode route. In terms of polyanion cathode, we have developed a 15Ah sodium-ion battery
in cooperation with a company in France, which has a nominal voltage of 3.6V , a capacity
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retention rate of more than 94% in 20C discharge, and a long lifespan of more than 3,000
cycles. This product is designed for PHEVs and UPS energy storage. In terms of layered oxide
cathode, we have independently developed high specific capacity cathode materials. We first
carry out simulation screening at the theoretical level, and then seek the optimal element type
and ratio content through experimental verification. At the same time, we are also actively
developing high-capacity and high press density hard carbon anode materials, and through the
optimization of cell chemistry, cell design and DOE, the energy density of sodium-ion battery
cell products has exceeded 130 Wh/Kg. Meanwhile, we won the industrialization project of
sodium-ion battery from the Industry and Information Technology Department of Jiangsu.
High Energy Density Semi-solid Large Cylindrical Battery
For our large cylindrical batteries, we pioneered the same-side tab technology, employing
a multi-tab winding structure that places both the positive and negative tabs on the same side
of the jelly roll, which led to a 3% improvement in volume utilization rate. Concurrently,
current extraction from the top of the cell significantly shortens the electron transmission path,
reducing the ohmic resistance by 29%. Combined with ultra-high nickel cathode and silicon
anode systems as well as semi-solid electrolytes, the cell achieves an energy density of up to
306Wh/kg, while supporting fast-charging capabilities up to 4C. As of December 31, 2024, we
had been granted 17 patents for our semi-solid-state large cylindrical technology.
Ultra-thin Current Collectors
We introduced the 4.5µm copper foil and 10µm aluminum foil. Leveraging such ultra-thin
current collector technologies, we can further enhance the gravimetric energy density of our
battery cell products by approximately 3%.
As of December 31, 2024, we have been granted 52 patents for our high energy density
technology.
Ultra-fast Charging Technologies
We holistically optimize battery material, electrode structure and battery system, among
other things, which greatly improve the fast charging capacity of the battery cells and have a
very high safety profile. Currently, we have completed the initial development of 6C
fast-charging NCM and LFP products. As of December 31, 2024, we have been granted 57
patents for our ultra-fast charging technologies.
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In terms of cathode materials, we engage in the forward design of the particle morphology
and particle gradation through simulation to optimize material capacity, compaction and
dynamic performance. Through the doping of specific elements, the lattice parameters are
optimized to reduce the binding force of lithium ions and shorten the lithium ion transmission
path so as to improve the ion conductivity of the cathode. Through efficient carbon coating
technology, the thickness and crystallinity of the carbon coating layer are optimized to achieve
the unity of the capacity and kinetic performance of the material. In the design of the cathode,
we build a three-dimensional conductive network in the cathode by designing different types
of conductive agent compounding to improve the electronic conductivity of the cathode.
In terms of anode materials, we developed isotropic and small particle size graphite
materials, and optimized the thickness and structure of its surface coating layer, thereby
reducing electrochemistry impedance and improving charging capacity. In terms of anode
design, we use gradient electrode design technology to achieve a balance between high energy
density and high dynamic performance.
Through multi-layer coating technology, we optimized the anode reactive dynamics and
void structure, which greatly improve the ion transmissibility of the anodes. Compared with
single-layer coating, the multi-layer coating technology incorporates different designs for each
layer, thus giving full play to the synergistic effect of multiple materials, and realizing the
targeted design of the distribution of active materials as well as conductive agents and
adhesives in the electrode. This improves the batteries’ charging speed, reduces battery
impedance. The mechanism includes (i) improving the interfacial reactivity of the surface layer
of the electrode to transport lithium ions from the electrolyte to the anode at medium and fast
speed; and (ii) increasing the porosity of the surface layer of the electrode and decreasing the
tortuosity of the electrode so as to facilitate the lithium ions diffusion from the surface layer
to the bottom layer of the electrode. The multilayer coating technology can shorten charging
time to less than ten minutes while ensuring high-energy density, which greatly enhances the
competitiveness of the products. As of December 31, 2024, we have been granted 15 patents
for our multi-layer coating technology.
In terms of separator design, we improve the ion transportation capability of the separator
through the design of a high porosity and thinned separator.
In terms of electrolytes, we optimize the solvent system and film formation to form a thin
and uniform SEI layer with a tough anode surface, which improves the ionic conductivity and
reduces the cracking of the SEI layer.
Long-life Battery Technology
The main cause of the capacity decay of LFP batteries is the loss of active lithium.
Technology to prolong battery cycle life includes a lithium compensation mechanism. Our
pre-lithiation technology can effectively slow down the battery capacity decay, thereby
improving battery cycle life.
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On the one hand, we slow down the loss and consumption of active lithium by technical
means, which can be specifically reflected in (i) the development and design of low rebound
graphite anode materials to reduce the consumption of excessive active lithium at the new
interface due to graphite expansion during the cycling process; (ii) the formulation design of
anode, which is to further reduce the expansion of anode by the matching of different binders;
(iii) the optimized design of the electrolyte to improve the stability of the SEI and CEI
interfaces; and (iv) the optimized design of cathode materials to ensure the stability and
performance of cathode materials during the cycling process.
On the other hand, we increase the amount of active lithium in the battery and establish
a compensation mechanism for the consumption of cyclic active lithium by adding additional
active lithium, which can be specifically reflected in (i) cathode lithium metal calendering for
lithium replenishment; (ii) anode lithium-rich compounds for lithium replenishment; and (iii)
exploration and application of techniques such as gradient step-by-step lithium replenishment.
Combined with the above technical means, our current long-life LFP products, with the
cycle life expected to reach up to 18,000 cycles, have a strong competitive advantage among
similar products in the market. As of December 31, 2024, we have been granted 52 patents for
our battery life technology.
We improve the monomer space utilization rate and full-life-cycle reliability through
nano-injection molding of the top cover, thus significantly improving air tightness of two
orders of magnitude. This extends the expected life of ESS products to as long as 20 years, thus
satisfying the market demand for ultra-long life cycles for ESS products. The traditional
sealing ring technology uses fluorine rubber rings to achieve sealing. Fluorine rubber rings are
mostly imported at high costs, and supply is often unstable. The nano-injection molding sealing
technology removes the fluorine rubber ring used in the traditional battery core pole seal, and
instead adopts the nano-injection molding process to realize the integral molding of the cover
plate-pole-upper plastic, ensuring the structural strength and air tightness at the electrode, and
reducing the cost while improving the sealing and reliability of the product.
Battery Safety Technology
We use high-nickel and low-cobalt cathode materials and adopt solid-state electrolyte
surface modification technology to reduce the interface impedance and significantly improve
the thermal stability. The solid-state electrolyte hybrid separator helps maintain power while
improving safety. We use high-wettability electrolytes to solve the problem of infiltration of
cylindrical batteries while greatly reducing the content of flammable organic solvents and
significantly improving the safety performance of batteries. In terms of manufacturing
techniques, we developed the hybrid blue laser welding technology, which greatly reduces the
risk of battery short circuits caused by welding slag.
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We have also developed new designs of battery cell structural component. The battery cell
is prone to the tab redundancy during assembly, and the tabs are reversely inserted into the jelly
roll, resulting in an internal short circuit, leading to a large pressure difference in the battery
product, and even short-circuit and thermal runaway. Through our own innovative wing cap
technology, we press and mold the tab, which can solve the safety problem of short circuit
inside the battery cell due to the reverse insertion of the tab. In addition to the above functions,
the wing cap technology also physically isolates the internal laser welding area of the battery
cell from the jelly roll area, thus preventing welding residues from falling into the interior of
the jelly roll and further improving the safety of the battery cell. As of December 31, 2024, we
have been granted 37 patents for our wing cap technology.
R&D Bases
As of the Latest Practicable Date, we have multiple sample manufacturing lines which can
accommodate the sample production of prismatic battery cells, cylindrical battery cells, and
pouch cells. Our physicochemical laboratory has over 150 pieces of equipment for
physicochemical analysis, component analysis, structural analysis, heat analysis and
electrochemical testing. Our electrical property laboratory can carry out various electrical
performance tests in the field of energy storage and power batteries with over 15,000 sample
testing channels to meet the needs of ORT and R&D testing requirements. Our safety and
reliability laboratory is equipped with 30 sets of equipment related to nail penetration,
extrusion, vibration and thermal runaway, meeting the testing requirements of GB/T 31484,
GB/T 31486, Q/Z 10201-2023, and GB 38031-2020, among others. The lab mainly carries out
lithium battery abuse, environment, and mechanical safety testing in compliance with ISO/IEC
17025: 2017 and other EV battery safety testing requirements.
R&D Collaborations
In 2023, we collaborated with Nanjing University and Changshu Institute of Technology
to jointly undertake an industrial and information industry transformation and upgrading
special fund project in Jiangsu Province for the research and industrialization of high-rate,
long-life sodium-ion power batteries. We are responsible for the development of sodium-ion
battery anode materials and their preparation processes, electrolyte optimization technologies,
cell manufacturing processes, and system integration. We are also responsible for the mass
production of sodium-ion batteries.
In addition, we also collaborated with the Changshu Institute of Technology on the
development of optimized high-temperature solid-phase synthesis technology, which involves
the reaction of doped sodium-ion cathode material precursors with sodium salts to produce
sodium-ion battery cathode materials with high-rate capability and long life. The target
material achieves a capacity of over 140mAh/g and a tap density of over 3.1 g/cm
3. We also
collaborated with Nanjing University on developing a molecular design of binders and
preparation process for binders of sodium-ion batteries, which aims to improve the capacity of
sodium electrode materials and extend their cycle life.
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Battery Electrochemistries Upgrade
The following chart sets forth our electrochemistries upgrade roadmap for our batteries
in the years indicated.
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Our electrochemistries development roadmap consists of a low-cost pathway and a
high-performance pathway. The low-cost pathway focuses on phosphate (LFP and LFMP)
systems and sodium-ion systems. In terms of LFP, we have achieved an energy density of
around 190 Wh/kg in prismatic cells and are moving towards fast charging (4C to 6C). We
intend to develop new material systems, such as LMFP and its hybrid with NCM materials, to
further increase the energy density to over 220 Wh/kg. Regarding sodium-ion battery, we have
developed a product with an energy density of 130 Wh/kg; through material system upgrades,
we aim to increase the energy density to 190 Wh/kg, reaching a level comparable to LFP.
The high-performance path primarily focuses on NCM products. Currently, we use
high-voltage nickel-based ternary materials paired with graphite anodes, achieving an energy
density of 260 Wh/kg in prismatic cells. Our internal research on prismatic battery cells has
achieved an energy density of around 320 Wh/kg, utilizing a high-nickel and silicon anode
system. With the gradual maturity and integration of new materials and technologies such as
ultra-high nickel cathodes, lithium metal anodes, and solid-state electrolytes, we aim to further
increase the energy density to over 350 Wh/kg.
INTELLECTUAL PROPERTIES
As of December 31, 2024, we had submitted applications for a total of 3,613 patents, and
had been authorized 2,225 patents, among which 412 were invention patents. We also had 21
granted copyrights and 183 registered trademarks as of December 31, 2024.
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Our intellectual property department is involved throughout the product and technology
R&D process. Our intellectual property department carries out the patent application, mining,
risk prevention and control comprehensively in the early stage of the R&D process. After an
R&D project is initiated, our intellectual property department personnel follow up on project
progress throughout the process, and protect our intellectual property rights comprehensively
through patent mining and layout. In addition, we incorporate intellectual property risk
assessment into our product development and design process, and carry out comprehensive and
systematic patent infringement risk screening of design plans to avoid such risks.
Our intellectual property management personnel are responsible for establishing an
enterprise intellectual property management system and early risk warning mechanism, dealing
with material matters in relation to intellectual property, and coordinating and handling
intellectual property disputes and litigation. Our intellectual property processing staff is
responsible for preparing patent applications, patent status maintenance, trademark
management and other procedural and ministerial matters. Our patent engineers communicate
with technical personnel, assist R&D personnel in searching and analyzing existing patents,
form intellectual property risk assessment report, and analyze patent risks and competitor
dynamics. We have established the Intellectual Property Management Manual and the
Intellectual Property Award System to guide our work around intellectual property
management.
In April 2024, the Suzhou Intellectual Property Protection Center signed a cooperation
agreement and issued a license to us for the establishment of a patent pre-examiner training
base. The training base serves as a platform of communication and interaction between the
regulatory authorities and patent applicants, helping pre-examiners gain a deeper
understanding of applicants’ R&D and enhancing the quality and efficiency of their
pre-examination work. Simultaneously, it allows for timely understanding of the patent
pre-examination needs by potential patent applicants, providing specialized guidance for
applicants’ R&D, patent exploration, and layout, thereby expediting patent applications,
improving application success rate and protecting innovative achievements.
We have established a scientific and standardized intellectual property management
system and obtained the GB/T29490—2013 intellectual property management system
certification in October 2022.
As of the Latest Practicable Date, no material disputes, litigations or proceedings relating
to our patents and patent application was identified, according to our special intellectual
property counsel.
In evaluating the risk of patent infringement, the special intellectual property counsel
conducts patent searches of major market players and takes the following steps in making a
determination of “relatively low risk” of infringement:
(i) Our special intellectual property counsel analyzes and determines four main visible
and reversible fields of technologies of our products, namely (i) battery cell
structure; (ii) modules; (iii) packs; and (iv) battery materials (anode, cathode, plates,
separators, electrolytes, and current collector). The IP counsel then determines
further sub-levels of detailed technologies.
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(ii) Our special intellectual property counsel then compares these technologies with
patents by relevant peers (the “ Peers’ Patents ”), using mainstream databases
including INCOPAT, PatSnap, HIMMPAT, and State Intellectual Property Office
patent search and analysis website. Based on such searches, our special intellectual
property counsel filters out the Peers’ Patents that bear resemblance with the above
technologies of our products.
(iii) Our special intellectual property counsel then determines whether any legal defense
is available against the Peers’ Patents by peers, such as the defenses of (i) existing
technology; (ii) prior sales; and (iii) prior use. Our special intellectual property
counsel also analyzes the stability of the Peers’ Patents, and whether there are
alternative technologies available in the market if our technologies in the products
are deemed to infringe on the Peers’ Patents. If (i) a legal defense is available; (ii)
the Relevant Patent was unstable; or (iii) alternative technologies can be easily
adopted to enable us to commercialize the products without infringing on the Peers’
Patents, then the IP counsel would issue the opinion of “relatively low risk.”
Specifically in our case, the conclusion by the special intellectual property counsel that
there is relatively low risk of patent infringement lawsuits being initiated against us by major
industry competitors was based on the following analysis:
(i) The Relevant Patent was unstable or can be avoided using alternative technologies
in the art. Based on the abovementioned searches and analysis, our special
intellectual property counsel determined certain Peers’ Patents whose scope of
protection may overlap with the technologies of our products. However, based on
patent searches and analysis, our special intellectual property counsel was of the
view that these Peers’ Patents were mostly unstable or can be avoided using
alternative technologies in the market, which indicates low risk of infringement, and
low risk that this would cause material adverse impact on our manufacturing and
sale of the product. According to our special intellectual property counsel, major
market players in China’s power battery industry all possess a comprehensive patent
portfolio as a strategic defense, including us. This creates the situation of potential
cross-infringement, which makes it difficult to block a major players’ product
manufacturing and sales based on infringement claims.
(ii) We have long established an R&D team focused on independently developing power
battery related technologies. We have created a comprehensive intellectual property
protection system based on our own product characteristics on top of general
technologies in the industry. We have also taken steps to protect our core
technologies through trade secret policies (regarding technologies that cannot be
publicly disclosed) and through patents (regarding technologies that are visible to
others or can be reverse-engineered by others). We have a comprehensive patent and
intellectual property portfolio, and the technologies in our current products can be
clearly traced to our own intellectual property portfolio which has clear ownership
relationships without material disputes. As of the Latest Practicable Date, to the best
knowledge of our Directors, we do not have any pending disputes with respect to our
intellectual property, including our patents, on core technologies with any third
parties.
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(iii) We have established comprehensive policies on intellectual property management,
which includes clear and specific provisions on procurement, maintenance, risk
management over intellectual properties. We have also assigned dedicated personnel
with professional experience in patent searches and analysis to implement these
policies. We routinely conduct patent infringement analysis on our product
structures and technology components and those in the market to avoid potential
infringement.
MANUFACTURING
Battery Cell Manufacturing Facilities
Our facilities for battery cell manufacturing are enabled and enhanced by software
systems, including our proprietary (Zenergy Operational Excellence) operational platform,
manufacturing operations management customization system, visual inspection technologies
powered by AI, and AI edge computing-based quality inspection and monitoring system. These
capabilities enable us to continuously improve manufacturing and cost efficiency. The
automation rate of major manufacturing lines (defined by the percentage of machines and
equipment that do not require any human interventions to run smoothly) reached over 95% in
2023, which is significantly higher than the industry average of approximately 90%, according
to Frost & Sullivan. Our proprietary operational platform integrates the management of various
operational steps, including sales, R&D, manufacturing, and supply chain; it also enables
full-cycle management of technological parameters including parameter submission, changes,
approval, application and tracking, as well as enables monitoring of manufacturing lines to
support real-time decision-making. Our average response time to customer requests has
reduced by over 50% and our manufacturing work efficiency has increased by 33% as a result
of our proprietary operational platform. We also collaborate with a global leader in
manufacturing equipment, namely Dassault, in developing and deploying the manufacturing
operations management system customized for the battery industry, which enables processing
of a large amount of data within milliseconds.
Flexible Manufacturing System
Our manufacturing lines are also highly flexible and can be converted to manufacture
different product types (such as from EV batteries to ESS batteries, and from NCM batteries
to LFP batteries) with relatively low conversion costs and time. We achieve this through the
adoption of predictive equipment design and flexible and intelligent manufacturing technique
design, taking into account the development trends in terms of market demand and battery
technologies in the future. We possess independent manufacturing equipment development
capabilities, and collaborate with leading equipment suppliers to construct our highly
customized manufacturing lines.
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The time to convert a manufacturing line to produce at full capacity for those battery
products of the same dimension to a different electrochemistry could reach as short as three
days, and the time to convert a manufacturing line to produce at full capacity for those battery
cell products of different dimensions could reach as short as 50 days.
Our production equipment, fixtures and testing instruments follow the principles of
standardization and are easy to adjust, replace or reconfigure to meet the production needs of
different product types. Through automated material transferring systems and programmable
machining centers, we can flexibly and efficiently adjust the production pace, processing
sequence and process routes. We also implement lean manufacturing principles, reduce
non-value-added activities, simplify work processes, and improve the flexibility and
responsiveness of our manufacturing lines to improve our overall manufacturing efficiency.
Strategic Manufacturing Site Locations
A majority of our manufacturing facilities are also strategically located in close vicinities
from each other in Changshu, which allows convenient, smooth and centralized operational
management and timely and flexible resource allocations among different facilities. On
average, we are able to allocate resources among different facilities in Changshu and respond
to abnormal alerts from each facility within 30 minutes.
Manufacturing Bases
We have three production bases for the manufacturing of battery cells, namely, the
Changshu Zenergy Base, the Changshu Yinhe Base and the Nanjing Zenergy Base, which are
equipped with an aggregate of 15 manufacturing lines with a total designed annual production
capacity of 25.5 GWh for battery cell products. We also have a production base for the
manufacturing of battery modules and battery packs, namely, the Changshu Pingqian Base. Our
first manufacturing line, namely, line A1 at Changshu Zenergy Base, started its production in
March 2021 and commenced mass production in April 2021.
The manufacturing line of Nanjing Zenergy was not designed or tailored specifically for
any particular customer. Before being assigned to manufacture for WM Customer’s NCM 153
Ah products in the second half of 2020, the manufacturing line in Nanjing Zenergy had also
been assigned to manufacture a variety of battery products, including NCM 135Ah, NCM
100Ah and NCM 120Ah products. In 2022, approximately 91.0% of battery products
manufactured in Nanjing Zenergy as measured by GWh was sold to WM Customer.
Through a centralized layout of our production bases, we aim to achieve resource sharing
of raw materials, equipment and components, maximize synergies and improve operational
efficiency, to ensure the rapid delivery of safe and reliable battery products to our customers.
To that end, we undertook the following facility operational adjustments with respect to
Nanjing Zenergy and Dongguan Zenergy.
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Nanjing Zenergy ceased substantial production in December 2022, and Dongguan
Zenergy ceased production activities in February 2023. In particular, we decided to cease
operations for the following reasons:
 Insignificance and inefficiency . The total designed capacity previously assigned to
the production bases of Nanjing Zenergy before it ceased substantial production
activities were 1.4 GWh, accounting for approximately 5.4% of the total designed
capacity of all of our total production bases as of December 31, 2024. The total
production volume of Nanjing Zenergy during the Track Record Period before they
ceased substantial production in December 2022 was 1.9 GWh. Further, the Nanjing
Zenergy facility was not owned by us; rather, it was leased with lease expiration in
the third quarter of 2027. These indicate the relative insignificance of the Nanjing
Zenergy facility. In addition, the Nanjing Zenergy facility was also inefficient: the
Nanjing Zenergy production line had a relatively low ppm (parts per minute) and
cannot perform as favorable as the new lines in Changshu Zenergy and Changshu
Yinhe facilities. The efficiency of the Nanjing Zenergy production line was limited
by the then available technologies when it was first constructed.
 Design limitations. Due to the limitations on the design of the Nanjing Zenergy
production line, retooling of such line is technically impossible for certain new
battery cell products that were developed in recent years. The production line in
Nanjing Zenergy was designed to accommodate only battery cells with a width of
under 200 millimeters, while a majority of new battery cell products on the market
in the past two years had width over 200 millimeters, such as 220-millimeter width
prismatic battery cells and 300-millimeter width battery cells. Therefore, even
before the WM Customer Incident, we had begun contemplating ceasing substantial
production of Nanjing Zenergy facility. In addition, WM Customer had already
indicated before the WM Customer Incident that it would begin ordering NCM
227Ah battery cells with width of 225 millimeters, which the Nanjing Zenergy
production line was not capable of manufacturing.
 Inflexibility. The production line at the Nanjing Zenergy facility was not as flexible
as the production lines in our other facilities. This means that it takes longer time
and higher costs to retool the Nanjing Zenergy production line for production of
different types of battery cells under 200 millimeters in width compared to our other
manufacturing lines. As a matter of commercial reality, such time and costs are
prohibitively high for us if it wants to maintain competitive in pricing and delivery
schedule.
Nanjing Zenergy production lines are now primarily used for product R&D purposes, and
we plan to gradually move such R&D activities to our manufacturing bases in Changshu. As
a result, we incurred significant impairment loss of the property, plant and equipment in 2022.
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Dongguan Zenergy had a relatively small capacity compared to our other product lines.
The total production volume of Dongguan Zenergy during the Track Record Period before they
ceased substantial production in February 2023 was 834.3 MWh. Considering the unified
planning of the industrial park where Dongguan Zenergy was located and its lease that would
expire in October 2023, we decided to relocate the entire production base from Dongguan to
Changshu to better integrate our resources. As a result, Dongguan Zenergy ceased its
production activities in February 2023. As such, the relevant property, plant and equipment
became idle or scrapped. As a result, we incurred impairment loss of the property, plant and
equipment in 2022.
We have established internal measures for approving, monitoring, and reviewing the
execution of business plans, including the termination of a manufacturing base. Our investment
department monitors, evaluates each project, and proposes its disposal plan based on its
business judgement. Depending on the nature and scale of its proposal, the investment
departments seeks approval from the department manager, executive officers, Board of
Directors, and shareholders’ meetings. Our financial department is responsible for budget
preparation, profit forecasting, capital raising, and accounting for such proposal and provides
advice and reports to management. Our legal department supervises projects and ensures
compliance with laws and regulations. With support from the financial and legal departments,
our department managers, executive officers, Board of Directors, and shareholders’ meetings
serve as deliberative bodies, making decisions on project investments, suspensions, and
terminations.
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The following table sets forth the key information and production details of our manufacturing bases during the Track Record Period.
Location
Site
area
(sq.m.) Production type
Designed
capacity
(GWh)
Production capacity (GWh) (1) Production volume (GWh) Utilization rate (%) (2)
2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024
Changshu Zenergy /H1118/H1118/H1118/H1118/H1118/H1118/H1118Changshu 305,000 LFP and NCM battery
cells for BEV , PHEV
and HEV
17.7 1.3 2.2 8.4 12.7 0.9 1.8 3.0 7.2 72.9 82.9 36.1 56.6
Changshu Yinhe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Changshu 68,600 LFP and NCM battery
cells for BEV and
PHEV
6.4 N/A 2.9 6.1 6.9 N/A 1.3 4.0 5.1 N/A 42.6 66.1 73.5
Nanjing Zenergy
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Nanjing 34,000 NCM battery cells for
BEV and PHEV
1.4 1.0 1.0 N/A N/A 1.0 0.9 N/A N/A 97.7 85.3 N/A N/A
Changshu Pingqian (4) /H1118/H1118/H1118/H1118/H1118/H1118Changshu 8,300 Battery modules and
battery packs
6.2 4.1 2.3 2.9 4.3 3.3 1.5 1.9 2.9 81.3 64.5 65.9 68.0
Notes:
(1) The production capacity is calculated by multiplying the single-cell capacity by the daily standard output quantity and the annual standard prod uction days.
(2) The utilization rate refers to the percentage of the production volume to the production capacity during the period indicated. The utilization ra te of Changshu Zenergy decreased
significantly from 82.9% in 2022 to 36.1% in 2023, primarily due to the completion of the new energy phase II of Changshu Zenergy in 2023, which added 15. 6 GWh of total
capacity. The utilization rate of Changshu Zenergy increased from 36.1% in 2023 to 56.6% in 2024, primarily due to the increase in designated projects and order volume, leading
to improved capacity utilization. The utilization rate of Changshu Yinhe increased from 42.6% in 2022 to 66.1% in 2023, primarily because Changshu Yi nhe was completed
in 2022 and was in the ramp-up phase when it first started production; by 2023, it obtained stable customers and product models, resulting in an increas e in utilization rate.
The utilization rate of Changshu Yinhe increased from 66.1% in 2023 to 73.5% in 2024, primarily due to our manufacturing lines have entered into mass pr oduction stage. The
utilization rate of Nanjing Zenergy decreased from 97.7% in 2021 to 85.3% in 2022, primarily due to the WM Customer Incident in 2022. The utilization ra te of Changshu
Pingqian decreased from 81.3% in 2021 to 64.5% in 2022, primarily because of a customer’s suspension of its production for specific models in 2022 whic h resulted in a decrease
in the amount of battery packs to be produced by Changshu Pingqian. The utilization rate of Changshu Pingqian increase from 65.9% in 2023 to 68.0% in 202 4, primarily due
to the increase in order volumes from our customers pack products in 2024.
(3) Nanjing Zenergy has ceased its substantial production activities since December 2022.
(4) As of December 31, 2024, our total designed annual production capacity was 25.5 GWh, which includes the designed capacity of Changshu Zenergy, Cha ngshu Yinhe and
Nanjing Zenergy. The production capacity of Changshu Pingqian is not included because its capacity of 6.2 GWh represent battery modules and battery p acks which contain
battery cells manufactured by Changshu Zenergy, Changshu Yinhe and/or Nanjing Zenergy. Counting the production capacity of Changshu Pingqian woul d therefore involve
double-counting.
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Planned Production Bases
We plan to construct a new production base in Changshu, Jiangsu Province. The new
production base, with a site area of approximately 525,000 sq.m., will be used for R&D
expansion projects and employee dormitory. The construction of the new production base is
expected to be conducted in two phases: (i) Phase I construction will commence in March 2025
including three manufacturing lines for PHEV battery products with an aggregate production
capacity of 10.0 GWh. The planned products for Phase I include LFP batteries (86Ah, 70Ah,
54Ah, 104Ah, and 88Ah), and NCM batteries (78Ah). The construction of Phase I is expected
to finish by October 2025; (ii) Phase II construction will commence in December 2025
including four manufacturing lines with an aggregate production capacity of 15.0 GWh. The
planned products for Phase II include LFP batteries (86Ah, 89Ah, 88Ah, 140Ah, and 104.2Ah).
The construction of Phase II is expected to finish by December 2026. For both phases, 80% of
the production will be LFP batteries and 20% will be NCM batteries. We have completed the
feasibility study of the new production base and are currently undergoing the planning and
design for the overall layout. The types of battery products to be produced in our new
production bases are determined primarily based on the design-wins we obtained from our
customers. The relevant design-win agreements typically specify the types of battery products,
types of EV models where the battery products are applied, and estimated demand volume for
the upcoming years. Additionally, we estimate the sales volume of EV models by analyzing
their historical sales performance, which in turn guides our determination of the types of
products and production volume.
Manufacturing Process
The manufacturing of our battery products consists of three stages: battery cells, battery
modules and battery packs. We deploy our manufacturing skills and technologies to optimize
the process and enhance efficiency. For details, see “—Battery Cell Manufacturing Facilities”
and “—Flexible Manufacturing System.” The following are brief descriptions of each main
stage in our manufacturing process.
Battery Cells
Our battery cells are produced under strictly controlled cleanliness and humidity
conditions in our manufacturing facilities. The production process of our battery cells consists
of three main stages: electrode manufacturing, cell assembly and cell chemical testing. All of
these production processes are performed in-house. The following diagram illustrates the key
production steps for our battery cells.
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Mixing Coating Rolling Die-cutting
Baking
Electrolyte injection Formation Seal nail welding Self-discharge testing
Capacity testingInsulating film wrappingGroupingWarehousing
Aluminum shell welding Assembly Winding
 Mixing: The cathode (anode) materials, conductive agents, binders and solvents are
added to the mixing tank via an automatic feeding system and stirred at high speed
to form a stable and homogeneous cathode (anode) slurry.
 Coating: The cathode (anode) slurry is coated onto the current collector and dried in
an oven to produce cathode (anode) electrodes.
 Rolling: The cathode (anode) electrodes are rolled to the desired thickness.
 Die-cutting: The cathode (anode) electrodes are die-cut into multiple electrode tab
structures.
 Winding: The cathode (anode) electrodes and separator film are wound into a bare
cell in a certain order.
 Assembly: The bare cell, busbars and top cover components are welded into the
aluminum shell.
 Aluminum shell welding: The aluminum shell and top cover are welded together
using laser welding technology.
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 Baking: The bare cell is baked at high temperature and high vacuum to remove
internal moisture.
 Electrolyte injection: The bare cell is filled with electrolyte.
 Formation: The injected cell undergoes charge activation at a certain temperature,
forming a passivation protective film on the surface of the anode at the electrolyte
interface.
 Seal nail welding: Laser welding technology is used to seal nail weld the injection
holes.
 Self-discharge testing: Battery cell discharge is monitored by observing voltage
drop.
 Capacity testing: SOC and discharge testing of the battery cells to determine
capacity.
 Insulating film wrapping: Insulating film is wrapped around the surface of the
battery cells.
 Grouping: Battery cells are sorted according to a predetermined order.
 Warehousing: Battery cells are packed and warehoused for shipment.
Battery Modules
Open Circuit
V oltage test
Insulation
and
pressure test
Offline test
All
dimension
inspection
Busbar
welding
Side seam
weldingStacking
 Open Circuit V oltage test: The voltage is measured without an external load
connected to evaluate the stability and performance.
 Stacking: The battery cells are connected in series or parallel to stack and form a
reliable unit, and a metal casing is added to the outside of the unit.
 Side seam welding: The splicing of the metal casings adopts a precision laser
welding process to achieve a reliable connection between the casings.
 Insulation and pressure test: The insulation of the metal casing and the battery are
tested.
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 Busbar welding: The laser welding process is used to weld the conductive strips and
each battery pole together, so that each battery cell is connected in series or parallel
to output energy.
 Offline test and all dimension inspection: In the final step, we run an online
automatic test on the wire bonding quality, module size, module electrical
performance and appearance quality.
Battery Packs
Liquid
cooling air
tightness test
Assembly of
high and low
voltage
components
Gluing Modules
into cases
End-of-line
test
Liquid cooling
and air tightness
test of the whole
packs
System test
 Liquid cooling air tightness test: The air tightness of the liquid cooling system is
tested.
 Assembly of high and low voltage components: The high and low voltage
components are assembled together according to design specifications to form the
complete battery pack.
 Gluing: In the metal case, a layer of thermally conductive adhesive is evenly coated.
 Modules into cases: A certain number of batteries are assembled into the metal case
and fastened.
 End-of-line test: A comprehensive testing at the end of the assembly line is
conducted to verify its functionality, safety and performance.
 Liquid cooling and air tightness test of the whole pack: The case cover and the case
body are tightened and sealed to test the air tightness of the whole pack.
 System test: The last step is to perform a complete system dynamic test to test the
electrical performance of the relevant system.
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Manufacturing Equipment
We possess independent manufacturing equipment development capabilities, and
collaborate with leading equipment suppliers to complete the construction of our highly
customized manufacturing lines. The following table sets forth information on our key
manufacturing equipment.
No. Name Description
1 /H1118/H1118/H1118Extrusion Coating
Machine
Evenly applying the mixed slurry onto the substrate,
ensuring that dimensions, weight, and other
parameters stay within the design specifications;
drying the coated material and automatically
rewinds it into rolls.
2 /H1118/H1118/H1118Roll Pressing and Pre-
Cutting Machine
Continuously rolling and cutting Lithium-Ion
battery electrode sheets to the desired thickness,
ensuring uniform thickness, and cutting them into
appropriately sized electrode sheets.
3 /H1118/H1118/H1118Laser Die-Cutting and
Winding Machine
Cutting and forming tabs, and winding the positive
and negative electrode sheets, along with the
separator, into individual bare cells.
4 /H1118/H1118/H1118Soft Connection Welding
Machine
Welding the connecting tabs to the top cover poles.
5 /H1118/H1118/H1118Negative Pressure
Formation System
Activating the cells and forming a solid electrolyte
interface on the surface of the anode active
materials.
6 /H1118/H1118/H1118Capacity Testing System Measuring the performance parameter of battery
capacity.
Manufacturing Planning
We establish annual, quarterly and monthly rolling production plan management
mechanism. Our production plan is mainly affected by the volume of orders. Based on the
number of orders and demand of customers, we develop our production plans, which in turn
determine the upstream procurement plan for raw materials and equipment. We align our
manufacturing lines with customer demand and upstream procurement to ensure that we
produce in sufficient quantities and on time while avoiding overstocking.
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As of the Latest Practicable Date, we had 48 design-wins that were subsequently
converted into purchase orders. Among these purchase orders, 24 entered mass production and
delivery stage and 24 were in the sampling or development stage as of the Latest Practicable
Date.
Quality Control
Since our inception, we have been highly dedicated to ensuring product quality, and have
established a comprehensive quality management team and quality assurance system covering
product design, reliability analysis, supply chain, raw materials, processing, shipment, and
customer service, among other processes. Our quality management system was established in
accordance with IATF16949 standards. Through SAP and manufacturing operations
management systems, we closely monitor the relevant quality data and information from raw
material procurement to finished product delivery, and ensure accurate traceability of all
shipped products.
Our full-cycle product quality management system primarily encompasses the following
steps and measures:
Supplier Selection
We have established the “QSP-019 Raw Material Supplier Development and Management
Procedure,” which states that our procurement, R&D and supplier quality engineer (“ SQE”)
teams jointly examine the qualifications of a potential supplier, and conduct on-site
inspections. After a supplier passes such inspections, we collect sample products from the
supplier for testing, which is typically led by our R&D department. Our SQE team then leads
the supplier PPAP audit to ensure that the supplier’s manufacturing techniques, quality control
and production capacity meet our requirements. After selecting a supplier, we conduct periodic
review on them and their products, and may suspend or terminate procurement if the supplier
fails to rectify to our satisfaction. Unless specifically otherwise required by our customers, we
maintain alternative suppliers for all of our key raw materials. At the project development
stage, we begin to consider alternative suppliers. During the mass production stage, key raw
materials are sourced from more than one suppliers of the same type to ensure supply chain
stability.
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Raw Material Inspection
We have established the “QSI-006 Incoming Material Inspection Work Guidelines” and
the “QSI-009 Incoming Material Exception Handling Specification” pursuant to the
IATF16949 standards, which define the standardized inspection process and exception
handling process for raw material inspections. For different materials and components, our
product development personnel prepare raw material demand list according to the development
requirements during the design process, and clarify the specification requirements and testing
requirements of each material. Our quality department prepares the inspection specifications
sampling level, acceptance level, and other procedures according to the demand list, and issues
them to quality inspectors as inspection guidelines.
Production Process Quality Control
We have established a series of production process quality control guidelines, such as the
“Product Inspection and Test Control Procedures,” “Non-conforming Product Control
Procedures,” “Process Monitoring Work Guidelines,” “Process and Shipment Quality
Abnormal Handling Specifications,” “QA Seal and Related Status Identification Control,” and
“Non-conforming Product Rework Guidelines”. Our manufacturing staff shall make a sample
piece and check and confirm its compliance with the quality guidelines before the shift starts.
During production, our quality team inspects the products under processing, the operation
status of the production equipment, production environmental control, and personnel job
fulfillment according to the inspection requirements and the quality documents, and records the
inspection results. If abnormal quality is found, the process engineer leads the review and
handling of abnormal materials; the responsible manufacturing unit carries out root cause
analysis and formulate corrective and preventive measures, and the quality engineer confirms
the effect of such measures and the results of abnormal material handling.
Finished Product Inspection
We have formulated the “QSI-090 FQA Warehouse Inspection Work Guidelines” and the
“QSI-091 OQA Inspection Work Guidelines” to clarify the quality inspection process for
battery cells before warehousing and shipment inspection process. We conduct visual
inspection of product exteriors using AI technology, and the electrical performance
requirements (such as DCIR, capacity and insulation resistance) will be automatically checked
by the manufacturing operations management system.
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As of the Latest Practicable Date, we have received the following certifications with
respect to quality control.
Certifications Certifying Authorities Expiry Date
Built-in Quality Supply-based
(BIQS) 2.0 Certification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
SAIC General Motors
(ɪӛஷ͜)
January 13, 2027
GBT29490-2013 Intellectual
Property Management System /H1118/H1118/H1118/H1118
Zhongzhi (Beijing)
Certification Co., Ltd.
(ٝ(̏ԯ)ʮ
̡)
October 27, 2025
IATF16949:2016 Automotive quality
management system /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
SGS September 4,
2025
AS9100D Aerospace quality
management system /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
BV November 26,
2026
ISO14001:2015 Environmental
management systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
SGS May 16, 2027
ISO45001:2018 Occupational health
and safety management systems /H1118/H1118
SGS May 16, 2027
ISO14067 Carbon footprint of
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hangzhou WIT
Assessment Co. Ltd.
(ʮ̡)
October 10, 2026
ISO50001 Energy management
system /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hangzhou WIT
Assessment Co. Ltd.
(ʮ̡)
October 23, 2026
Certificate of Confirmation of
Measurement Qualified /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jiangsu Metrology
Association
(ඎ՘ึ)
May 22, 2028
GB/T 23001-2017 Integration of
Informatization and
Industrialization Management
System Certificate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
CLT Hongxin Information
Technology Co., Ltd.
(ࠢ
ʮ̡)
October 27, 2026
SUPPLY CHAIN
Procurement and Supplier Selection Process
Our procurement department is divided into three main modules: direct production
material procurement, indirect production material procurement and fixed-asset procurement.
Our procurement process involves coordination among multiple departments including
the finance department, materials and planning department, supply chain management
department and demand department. Upon the procurement requests submitted by our demand
department, we select suitable suppliers and appropriate procurement methods. We will sign
procurement contracts with selected suppliers and track purchase orders. After receiving the
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procured materials and equipment, we will conduct a receipt inspection and arrange
warehousing, handle disqualified product returns and process invoicing and payments.
Additionally, our procurement department continuously introduces new suppliers, maintains a
list of qualified suppliers, and conducts annual audits and monthly evaluations for our
suppliers.
We generally follow the following criteria when selecting suppliers:
 Quality. Suppliers must meet our quality standards, and any failure in quality
inspection will result in exclusion from the qualified supplier list. We also require
our suppliers to provide timely delivery and reliable pre-sales and after-sales
services.
 Price . We prioritize suppliers offering more competitive prices if the product quality
is consistent.
 Proximity Preference. We prefer suppliers located closer to us if the quality, price
and supply capacity are equal.
 Transparency and Fairness. Our supply chain management department, in
collaboration with relevant departments, evaluates suppliers in accordance with our
specified procedures to ensure transparent, fair and impartial supplier selection.
 Shorten Supply Chain Process. We aim to source directly from manufacturers
whenever possible to shorten the supply chain process and lower costs.
 Priority for New Product Development Supply. Suppliers actively cooperating in our
new product development may be prioritized in product selection, provided their
products meet quality standards. We offer procurement guarantees for such suppliers
and increase the procurement of other related products provided thereby.
 Sustainable Development. We require suppliers to comply with labor laws, refrain
from employee abuse, and avoid using or hiring child labor. They must also comply
with environmental and safety regulations, prohibit bribery, obtain ISO system
certification, adhere to national carbon reduction strategies, and implement energy-
saving and carbon-reduction measures.
The key raw materials we procure can be categorized into key components, which are
essential for the product and constitute a significant portion of the cost, and other major
materials. Key components mainly include: (i) battery cell materials, such as nickel-cobalt-
lithium-manganate and lithium iron phosphate for the positive electrode, graphite for the
negative electrode, barrier film, copper foil, aluminum foil, electrolyte, top cover and
aluminum case; (ii) battery module materials, such as upper covers, CCS assemblies, positive
and negative electrode end plates, and side plates; and (iii) battery pack materials, such as
boxes, liquid cooling system, and battery management system (“ BMS”). Other major materials
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mainly include polyvinylidene difluoride (PVDF), Super P Li (SP), carboxymethyl cellulose
(CMC), N-Methylpyrrolidone (NMP), Carbon Nanotube (CNT), and related raw materials. The
key raw materials of our power batteries include nickel-cobalt-lithium-manganese, lithium iron
phosphate, aluminum foil, graphite, copper foil, electrolyte and separator membranes.
We have experienced fluctuations in the cost of our raw materials during the Track Record
Period. Particularly, the average price of lithium carbonate, a kind of key raw material for our
NEV battery products, has experienced a significant increase during such period. According to
Frost & Sullivan, the average price for lithium carbonate increased from RMB131,100 per ton
in 2021 to RMB496,100 per ton in 2022, which was primarily due to a shortage in the supplies
of lithium carbonate since the last quarter of 2020 resulting from the rising demand for lithium
battery products. Specifically, from the demand side, the growing global demand for new
energy vehicles led to a surge in demand for power batteries, creating a supply-demand
imbalance for upstream raw materials, which, coupled with the impact of the COVID-19
pandemic, resulted in greater raw material price volatility; from the supply side, battery
manufacturers were operating with low inventory levels and required restocking, while lithium
producers tightened the supply of lithium carbonate, triggering a strong price rebound. The
average price for lithium carbonate subsequently decreased to RMB258,700 per ton in 2023,
which was primarily due to the increasing supply of lithium carbonate in 2023. As a result, the
average price for LFP battery products increased significantly from RMB0.51 per Wh in 2021
to RMB0.80 per Wh in 2022, and decreased to RMB0.62 per Wh in 2023. Similar to the price
fluctuations of lithium carbonate, the prices of lithium hydroxide (LiOH), yellow phosphorus
(P
4) and nickel sulfate (NiSO 4) experienced an overall upward trend from RMB116.1 thousand
per ton, RMB26.7 thousand per ton, and RMB36.7 thousand per ton in 2021 to the peaks of
RMB468.9 thousand per ton, RMB33.2 thousand per ton, and RMB44.8 thousand per ton in
2022, followed by a significant decline to RMB263.3 thousand per ton, RMB25.2 thousand per
ton, and RMB33.7 thousand per ton in 2023, respectively, as the supply and demand
relationship gradually stabilized. In 2024, the average price for lithium hydroxide (LiOH),
yellow phosphorus (P
4) and nickel sulfate (NiSO 4) amounted to RMB81.8 thousand per ton,
RMB20.3 thousand per ton and RMB31.4 thousand per ton, respectively. We recorded
impairment losses on inventories of RMB282.4 million in 2023, which was primarily due to a
significant decrease in overall prices of raw materials in the industry, mainly including lithium
carbonate, which led to a decrease in the recoverable amount of inventories to below their
carrying amount. We take various measures to mitigate the impact of raw material price
fluctuations on us. For instance, from the customer side, we can pass on the increased raw
material costs to downstream customers; from the supplier side, we strengthen strategic
partnerships with certain suppliers to proactively lock in supply prices. The procurement price
of key raw materials comprises the prices of bulk materials and relevant processing fees. Some
of our procurement agreements include provisions on price adjustment for bulk materials.
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We may include price linkage mechanisms in our raw material purchase agreements for
raw materials such as metal materials such as lithium iron phosphate, lithium carbonate, copper
foil, and aluminum foil. Suppliers of these raw materials would adjust their prices monthly
based on metal quotations from non-ferrous metal websites. The reference prices for
procurement from suppliers varies depending on the type of raw material. Specifically, (i) for
copper foil and aluminum foil, both the price in the initial price quote and the price at which
we settle payment are typically linked to the average monthly price as quoted on the metal
market website during the month preceding the purchase order; (ii) for LFP, the price in the
initial price quote is linked to the real-time price on the metal market website on the date of
requesting the price quote, or the average price for a period less than a month preceding the
price quote on the website; the final settlement pricing at which we make payments is typically
linked to the monthly average price of the month in which we receive the raw material as
quoted on the website during the month of taking delivery. For purchase agreements that do not
contain a price linkage mechanism, we actively reach out to suppliers to renegotiate purchase
prices to reflect changes in costs incurred by suppliers, market prevailing prices as well as our
own cost management needs. These raw materials mainly include aluminum shells and top
covers. See “Risk Factors—We are exposed to risks relating to price fluctuations of key raw
materials” for a more detailed discussion of our risk exposures. Even though we do not plan
to completely lock in our cost of supplies going forward, we intend to maintain our current
procurement price linkage mechanism and adjust procurement prices in alignment with market
prices to the extent commercially practicable.
We manage and monitor our inventory risks and to mitigate the impacts of delayed price
adjustments and mismatched adjustment cycles. In particular, (i) we hold weekly team
meetings to forecast sales and plan production schedules, ensuring alignment of production and
inventory. During such meetings, we would make prompt warehousing decisions if we detect
potential mismatch between our planned production and delivery to avoid excessive inventory
or stockout; (ii) we track our inventory and shipment status to ensure reasonable flow of
inventory on a daily basis; and (iii) we closely monitor the purchase orders we received, review
sales contracts, and compare the current production progress with outstanding order volumes
to ensure effective management.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any significant shortage of raw material supplies, and the raw materials provided
by our suppliers did not have any significant quality issues.
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Key Terms of Procurement Agreements
The major terms of the procurement agreements we enter into with our suppliers generally
include the following:
Purchase order /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We shall notify the suppliers of the type, specification,
quantity, unit price, tax rate and date of delivery of the raw
materials we need in written purchase orders.
Price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Depending on the type of raw material and supplier, our
procurement agreements may or may not include price
linkage mechanisms. For procurement agreements with
price linkage mechanisms, the price is referenced with the
market price of relevant raw materials as published on the
relevant industry association websites such as Shanghai
Metals Market (updated daily based on market conditions).
For example, among all the raw material we purchase,
generally the purchase price of lithium iron phosphate,
lithium carbonate, aluminum foil, cooper foil and lithium
nickel manganese cobalt oxides are referenced with the
market price. For the years ended December 31, 2023 and
2024, approximately 58.8% and 50.1% of our total
purchases were in relation to the purchase of such raw
materials with its price referenced to the market price.
For purchase agreements that do not contain a price
linkage mechanism, we actively reach out to suppliers to
renegotiate purchase prices to reflect changes in costs
incurred by suppliers, market prevailing prices as well as
our own cost management needs. In some cases where
there is no price linkage mechanisms, we require suppliers
to promptly lower prices if they provide such lower prices
to other customers.
Inspection and product
returns /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We conduct product inspection after delivery of the raw
materials to us. We shall be entitled to return to the
suppliers the defective raw materials that do not meet the
agreed quality standard, and the suppliers shall remedy the
same, including product return and replacement.
Credit terms and
payment method /H1118/H1118/H1118/H1118/H1118/H1118
The credit period and payment method shall be in
accordance with the purchase order. We are typically
offered a credit term of 30-90 days.
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Confidentiality /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We usually set confidentiality clauses in the framework
agreements, and the period of confidentiality obligations
may be extended to after the expiration of the agreements.
Duration, termination
and renewal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The term of framework agreements is typically one year,
which, if no further notice, could be automatically renewed
upon the expiry of each term. The framework agreements
may be terminated bilaterally or unilaterally by either
party under the circumstances provided in the agreements.
Suppliers
Our suppliers are primarily raw material providers based in China. Our suppliers source
lithium carbonate, a key raw material for producing cathode material, primarily from domestic
sources, which is generally less expensive compared to overseas sources due to shipping costs.
There are no trade restrictions or tariffs on importing spodumene or lithium carbonate from
overseas as of the Latest Practicable Date. However, for upstream mineral resources like
nickel, copper, and lithium, suppliers may engage in overseas procurement for domestic
processing, the prices of which are primarily affected by fluctuations in the global market. We
carefully select our suppliers and require them to satisfy various assessment criteria. All
potential suppliers must pass our internal supplier admission standard before entering into our
qualified supplier list. We also carry out regular audits of qualified suppliers.
In 2021, 2022, 2023 and 2024, purchases from our largest supplier in each year during the
Track Record Period amounted to RMB665.0 million, RMB1,326.6 million, RMB433.9 million
and RMB674.8 million, representing 40.8%, 38.2%, 14.3% and 19.1% of our total amount of
purchase during the respective years, while purchases from our five largest suppliers in each
year during the Track Record Period amounted to RMB1,079.3 million, RMB2,230.0 million,
RMB1,368.1 million and RMB1,736.4 million, representing 66.1%, 64.2%, 45.0% and 49.2%
of our total amount of purchase during the respective years. We believe that we have a good
cooperation relationship with our key suppliers.
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The following tables set forth the details for each of our five largest suppliers during the
Track Record Period.
Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
For the year ended December 31, 2021
1/H1118/H1118/H1118Hunan
Changyuan
Lico Co., Ltd.
and its
subsidiaries
Cathode
materials
A public company in
Hunan Province
founded in 2002
with approximately
RMB1.9 billion in
registered capital
that engages in the
production of
cathode battery
materials.
2019 60 days Bank
transfer/
acceptance
bill
665,013 40.8
2/H1118/H1118/H1118Shenzhen
Capchem
Technology
Co., Ltd.
Electrolyte A public company in
Guangdong
Province founded
in 1996 with
approximately
RMB753.9 million
in registered
capital that
engages in the
production of
battery materials.
2019 30 days Bank
transfer/
acceptance
bill
150,859 9.2
3/H1118/H1118/H1118WAH WEI
COPPER FOIL
TECHNOLOGY
LTD and its
subsidiaries
Copper foil A private company in
Hong Kong
founded in 2002
that engages in the
production of
copper foil.
2019 30 days Bank
transfer/
acceptance
bill
127,321 7.8
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Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
4/H1118/H1118/H1118Dongguan
Silicon Xiang
Insulation
Material
Co., Ltd.
System
main
materials
A private company in
Guangdong
Province founded
in 2008 with
approximately
RMB28.8 million
in registered
capital that
engages in the
production of
battery heating
film.
2019 30-60 days Bank
transfer/
acceptance
bill
77,043 4.7
5/H1118/H1118/H1118Guangdong
Kaijin New
Energy
Technology
Corp., Ltd. and
its subsidiaries
Anode
battery
materials
A public company in
Guangdong
Province founded
in 2012 with
approximately
RMB369.1 million
in registered
capital that
engages in the
production of
anode battery
materials.
2019 60-90 days Bank
transfer/
acceptance
bill
59,033 3.6
Total 1,079,269 66.1
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Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
For the year ended December 31, 2022
1 /H1118/H1118Hunan
Changyuan
Lico Co., Ltd.
and its
subsidiaries
Cathode
materials
A public company in
Hunan Province
founded in 2002
with approximately
RMB1.9 billion in
registered capital
that engages in the
production of
cathode battery
materials.
2019 60 days Bank
transfer/
acceptance
bill
1,326,649 38.2
2 /H1118/H1118Supplier A
(1) Cathode
materials
A private company in
Jiangsu Province
founded in 2021
with approximately
RMB300.0 million
in registered
capital that
engages in the
production of
battery materials.
2021 50%
prepayment;
50%
payment
upon
receipt/
payment
upon
receipt
Bank
transfer/
acceptance
bill
435,670 12.5
3 /H1118/H1118Nantong Reshine
New Material
Co., Ltd
Cathode
materials
A private company in
Jiangsu Province
founded in 2006
with approximately
RMB467.8 million
in registered
capital that
engages in the
production of
battery materials.
2019 30 days Bank
transfer/
acceptance
bill
176,200 5.1
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Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
4 /H1118/H1118Shenzhen
Capchem
Technology
Co., Ltd.
Electrolyte A public company in
Guangdong
Province founded
in 1996 with
approximately
RMB753.9 million
in registered
capital that
engages in the
production of
battery materials.
2019 30-60 days Bank
transfer/
acceptance
bill
173,259 5.0
5 /H1118/H1118WAH WEI
COPPER FOIL
TECHNOLOGY
LTD and its
subsidiaries
Copper foil A private company in
Hong Kong
founded in 2002
that engages in the
production of
copper foil.
2019 30-180 days Bank
transfer/
acceptance
bill
118,226 3.4
Total 2,230,004 64.2
Note:
(1) According to publicly available information, Supplier A has registered capital of RMB300 million and it is
wholly owned by a company engaged in lithium battery cathode material business, which is in turn controlled
by a company listed on the Shanghai Stock Exchange.
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Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
For the year ended December 31, 2023
1 /H1118/H1118Sichuan
Langsheng New
Energy
Technology
Co., Ltd.
Cathode
materials
A private company in
Sichuan Province
founded in 2017
with approximately
RMB680.9 million
in registered
capital that
engages in the
production of
cathode battery
materials.
2022 30-60 days Bank
transfer/
acceptance
bill
433,931 14.3
2 /H1118/H1118Supplier B Cathode
materials
A public company in
Fujian Province
founded in 2016
with approximately
RMB420.8 million
in registered
capital that
engages in the
production of
battery materials.
2021 30 days Bank
transfer/
acceptance
bill
301,000 9.9
3 /H1118/H1118Hunan Changyuan
Lico Co., Ltd.
and its
subsidiaries
Cathode
materials
A public company in
Hunan Province
founded in 2002
with approximately
RMB1.9 billion in
registered capital
that engages in the
production of
cathode battery
materials.
2019 60-180 days Bank
transfer/
acceptance
bill
230,467 7.6
BUSINESS
– 299 –


--- page 309 ---
Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
4 /H1118/H1118Hunan Yuneng
New Energy
Battery Material
Ltd
Cathode
materials
A public company in
Hunan Province
founded in 2016
with approximately
RMB757.3 million
in registered
capital that
engages in the
production of
battery materials.
2022 30 days Bank
transfer/
acceptance
bill
219,989 7.2
5 /H1118/H1118Shenzhen
Capchem
Technology Co.,
Ltd.
Electrolyte A public company in
Guangdong
Province founded
in 1996 with
approximately
RMB753.9 million
in registered
capital that
engages in the
production of
battery materials.
2019 60-90 days Bank
transfer/
acceptance
bill
182,680 6.0
Total 1,368,067 45.0
BUSINESS
– 300 –


--- page 310 ---
Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
For the year ended December 31, 2024
1 /H1118/H1118Hunan Changyuan
Lico Co., Ltd.
and its
subsidiaries
Cathode
materials
A public company in
Hunan Province
founded in 2002
with approximately
RMB1.9 billion in
registered capital
that engages in the
production of
cathode battery
materials.
2019 60 days Bank
transfer/
acceptance
bill
674,843 19.1
2 /H1118/H1118Anhui WAH WEI
COPPER FOIL
TECHNOLOGY
LTD
Copper foil A private company in
Hong Kong
founded in 2002
that engages in the
production of
copper foil.
2019 30 days Bank
transfer/
acceptance
bill
369,849 10.5
3 /H1118/H1118Sichuan
Langsheng New
Energy
Technology
Co., Ltd.
Cathode
materials
A private company in
Sichuan Province
founded in 2017
with approximately
RMB680.9 million
in registered
capital that
engages in the
production of
cathode battery
materials.
2022 30-60 days Bank
transfer/
acceptance
bill
356,100 10.1
BUSINESS
– 301 –


--- page 311 ---
Rank Supplier
Type of
products
purchased Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods
Purchase
amount
Percentage
of total
purchase
(RMB in
thousands) %
4 /H1118/H1118Jiangsu Ruidefeng
Precision
Technology
Co., Ltd.
Other core
materials
for battery
cells
(including
top cover,
soft
connection,
and
aluminum
shell)
A private company in
Jiangsu Province
founded in 2010
with approximately
RMB100.0 million
in registered
capital that
engages in the
production of
structural parts.
2019 30 days Bank
transfer/
acceptance
bill
187,123 5.3
5 /H1118/H1118Guangdong
Dongdao New
Energy Co.,
Ltd.
Graphite A private company in
Guangdong
Province founded
in 2011 with
approximately
RMB60.2 million
in registered
capital that
engages in the
production of
battery materials.
2020 90 days Bank
transfer/
acceptance
bill
148,467 4.2
Total 1,736,382 49.2
Our Directors confirm that none of our Directors or their respective associates or any
Shareholder holding more than 5% of our issued share capital held any interest in any of our
five largest suppliers during the Track Record Period.
BUSINESS
– 302 –


--- page 312 ---
SALES, MARKETING AND CUSTOMERS
Leveraging our experience in the auto part industry, we have established long-term
relationships and trust with a large number of OEMs in China. Our differentiated business
approaches have earned us recognition as an effective supplier by a large number of OEM
customers, including large state-owned enterprises, pure-play EV companies in China, and
multi-national OEMs. We have established sales relationships with respect to several key
battery products with OEMs such as GAC-Toyota, SAIC-GM, SAIC-GM Wuling, Leap Motor,
FAW Hongqi, GAC Trumpchi and Dongfeng Peugeot Citroën, among other leaders in the
global EV industry. As of the Latest Practicable Date, we were in cooperation with 11 OEMs
on 48 design-win projects. We have also received numerous supplier awards from our
customers, including the following:
Y ear Client Awards
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Dongfeng Peugeot
Citroën
Best Supplier
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Leap Motor 2022 Pioneering and Innovation Award
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118GAC Trumpchi 2023 Top Ten Suppliers
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Leap Motor 2023 Outstanding Partner
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118FAW Hongqi Flag Quality Award
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118SAIC-GM Pioneer and Innovation Award
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118SAIC-GM Wuling Guaranteed Supply Excellence
Execution Award
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Deye Holdings 2023 Excellent Quality Award
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118FAW Hongqi Flag Quality Award
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118SAIC-GM Wuling 2024 Excellent Quality Award
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Leap Motor 2024 Leap Value Award
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118GAC Trumpchi 2024 Top Ten Suppliers
BUSINESS
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--- page 313 ---
Sales and Marketing
As of December 31, 2024, our sales and marketing department consists of 69 employees,
focusing on three segments including power battery business, emerging market business and
energy storage business. The primary responsibilities of our sales personnel include developing
sales and marketing plans, identifying product markets, acquiring clients, conducting business
negotiations, and establishing cooperative relationships with our clients. Our sales and
marketing team conducts annual, quarterly, monthly and weekly sales forecasts, executes sales
and marketing plans, implements profit point indicator plans, follows up on customer
payments, and prevents bad debts. In addition, after signing sales contracts, our sales and
marketing team will follow up on key milestones such as order placement and delivery, and
provide support such as bill checking and invoicing.
Our customer acquisition and sales process mainly involve the following aspects:
 target customer screening;
 visiting customers and building relationships;
 customers’ site visits and audits;
 communication of project proposals and quotations;
 project approval, kick-off and development;
 delivery, review, testing and validation of samples;
 order execution and delivery; and
 payment settlement and after-sales service.
Once we obtain a design-win, we initiate the project development phase to prepare for
mass production, and sign a framework sales agreement with our customer. Thereafter,
customers place purchase orders, which kick start the mass production process. We prepare raw
materials, manufacture the products, and arrange delivery. After the product delivery, we
reconcile the accounts and issue invoices in accordance with the purchase orders. The customer
then completes the payment process accordingly. Such an end-to-end process generally takes
around 14 to 27 months, including 11 to 24 months from design-win to receiving the purchase
order, and approximately three months until delivery and recording revenue.
Customers
The customers of our battery products are primarily EV manufacturers in China, including
large state-owned enterprises, pure-play EV companies, and multi-national OEMs. Our sales
volume is primarily dependent on the EV mass production and sales of our customers.
BUSINESS
– 304 –


--- page 314 ---
In 2021, 2022, 2023 and 2024, sales to our largest customer in each year during the Track
Record Period amounted to RMB828.3 million, RMB962.5 million, RMB1,179.1 million and
RMB1,462.3 million, representing 55.2%, 29.3%, 28.3% and 28.5% of our total revenue for the
respective years, respectively, while our five largest customers in each year during the Track
Record Period amounted to RMB1,337.4 million, RMB2,972.7 million, RMB3,238.2 million
and RMB4,530.0 million, representing 89.1%, 90.4%, 77.8% and 88.2% of our total revenue
for the respective years, respectively. The increase in the percentage of our revenues from the
five largest customers of the total revenue in 2024 was primarily due to (i) our strategic focus
on top OEM customers which we are collaborating more vehicle models given tight production
capacity in 2024; (ii) the revenue growth from three of our top five customers, which increased
by 24.0%, 12.3% and 79.3% compared to 2023, resulting in an overall increase in the
proportion of revenue contributed by our top five customers; and (iii) in addition, the revenue
contribution of our ESS business decreased from 7.6% of total revenues in 2023 to 4.2% in
2024.
The following tables set forth the details for each of our five largest customers during the
Track Record Period.
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
For the year ended December 31, 2021
1 /H1118/H1118WM Motor
Technology
Group Company
Limited and its
subsidiaries
NCM and
LFP
battery
A private company in
Shanghai founded
in 2015 with
approximately
RMB6.0 billion in
registered capital
that engages in the
electric vehicle
manufacturing.
2019 45 days Bank
transfer/
acceptance
bill
828,335 55.2
2 /H1118/H1118FAW Group
Co., Ltd. and
its subsidiaries
NCM
battery
A public company in
Jilin Province
founded in 1956
with approximately
RMB78.0 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2019 60 days Bank
transfer/
acceptance
bill
203,816 13.6
BUSINESS
– 305 –


--- page 315 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
3 /H1118/H1118Dongfeng
Liuzhou Motor
Co., Ltd.
NCM
battery
A private company in
Guangxi Zhuang
Autonomous
Region founded in
1954 with
approximately
RMB1.2 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2019 60 days Bank
transfer/
acceptance
bill
168,530 11.2
4 /H1118/H1118Dongfeng
Peugeot Citroën
Automobile
Company LTD
NCM
battery
A sino-foreign joint
venture in Hubei
Province founded
in 1992 with
approximately
RMB7.0 billion in
registered capital
that engages in the
automobile and
parts
manufacturing.
2021 90 days Bank transfer 83,654 5.6
BUSINESS
– 306 –


--- page 316 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
5 /H1118/H1118Customer A (1) NCM
battery
A private company in
Guangdong
Province founded
in 2006 with
approximately
RMB62.3 million
in registered
capital that
engages in
the battery
management
system
manufacturing.
2021 Prepayment/
35 days
Bank
transfer/
acceptance
bill
53,039 3.5
Total 1,337,374 89.1
Note:
(1) We became acquainted with Customer A through collaboration on an EV project, where we proactively
promoted our products to Customer A and initiated further cooperation. Customer A primarily engages in the
manufacturing of power battery management systems, which are primarily used in electric commercial
vehicles, electric passenger vehicles, electric forklifts and logistics vehicles, and power battery systems, which
includes battery packs. The end customers of Customer A primarily include OEMs and battery cell
manufacturers.
BUSINESS
– 307 –


--- page 317 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
For the year ended December 31, 2022
1 /H1118/H1118WM Motor
Technology
Group Company
Limited and its
subsidiaries
NCM and
LFP
battery
A private company in
Shanghai founded
in 2015 with
approximately
RMB6.0 billion in
registered capital
that engages in the
electric vehicle
manufacturing.
2019 45 days Bank
transfer/
acceptance
bill
962,452 29.3
2 /H1118/H1118FAW Group
Co., Ltd.
NCM
battery
A public company in
Jilin Province
founded in 1956
with approximately
RMB78.0 billion in
registered capital
that engages in the
automobile and
parts
manufacturing.
2019 60 days Bank
transfer/
acceptance
bill
943,440 28.7
3 /H1118/H1118Zhejiang
Leapmotor
Technology
Co., Ltd. and
its subsidiaries
LFP battery A public company in
Zhejiang Province
founded in 2015
with approximately
RMB1.3 billion in
registered capital
that engages in the
electric vehicle
manufacturing.
2021 60 days Bank
transfer/
acceptance
bill
488,072 14.8
BUSINESS
– 308 –


--- page 318 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
4 /H1118/H1118Dongfeng
Peugeot Citroën
Automobile
Company LTD
NCM
battery
A sino-foreign joint
venture in Hubei
Province founded
in 1992 with
approximately
RMB7.0 billion in
registered capital
that engages in the
automobile and
parts
manufacturing.
2021 30 days Bank transfer 321,352 9.8
5 /H1118/H1118TWS Technology
(Guangzhou)
Ltd and its
subsidiaries
NCM
battery
A private company in
Guangdong
Province founded
in 1998 with
approximately
RMB127.6 million
in registered
capital that
engages in the
Lithium-Ion battery
module
manufacturing.
2021 15%
prepayment;
85%
payment
upon
receipt
Bank transfer 257,424 7.8
Total 2,972,740 90.4
BUSINESS
– 309 –


--- page 319 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
For the year ended December 31, 2023
1 /H1118/H1118Zhejiang
Leapmotor
Technology
Co., Ltd. and
its subsidiaries
LFP battery A public company in
Zhejiang Province
founded in 2015
with approximately
RMB1.3 billion in
registered capital
that engages in the
electric vehicle
manufacturing.
2021 60 days Bank
transfer/
acceptance
bill
1,179,146 28.3
2 /H1118/H1118A subsidiary
(1)
and a branch (2)
of Guangzhou
Automobile
Group Co., Ltd.
NCM
battery
A public company in
Guangdong
Province founded
in 1997 with
approximately
RMB10.2 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2021 60 days Bank transfer 959,022 23.0
3 /H1118/H1118SAIC GM Wuling
Automobile
Company
Limited
LFP battery A public company in
Guangxi Zhuang
Autonomous
Region founded in
1998 with
approximately
RMB1.7 billion in
registered capital
that engages in the
automobile
manufacturing.
2023 60 days Acceptance
bill
647,589 15.6
BUSINESS
– 310 –


--- page 320 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
4 /H1118/H1118FAW Group
Co., Ltd.
NCM
battery
A public company in
Jilin Province
founded in 1956
with approximately
RMB78.0 billion in
registered capital
that engages in the
automobile and
parts
manufacturing.
2019 30 days Bank
transfer/
acceptance
bill
260,774 6.3
5 /H1118/H1118Customer B
(3) Other
products (4)
A private company in
Hunan Province
founded in 2023
with approximately
RMB2.0 million in
registered capital
that engages in the
trading of lithium
batteries.
2023 Prepayment Bank transfer 191,673 4.6
Total 3,238,204 77.8
Notes:
(1) Represents GAC Motor Co., Ltd.
(2) Represents Guangzhou Automobile Group Company Automotive Engineering Institute.
(3) We became acquainted with Customer B during the bidding process for the down-grade products which were
originally manufactured for WM Customer. In 2022, due to the WM Customer Incident, we had certain
inventories originally manufactured for WM Customer which cannot be retooled for other customers. Instead,
such products could only be sold at discounted price as down-grade products. With Customer B’s purchase
intention, we sold the down-grade products to them at the agreed price and amount. The end customers of
Customer B primarily include domestic and foreign trade companies, with the main products being ESS
products, and low-voltage power battery manufacturers, with the main products being applied in electric
low-speed two-wheelers and energy storage scenarios.
(4) “Other products” were down-grade products, primarily including battery cells and modules, which were
originally produced for WM Customer and unable to be sold at full price to other customers after WM
Customer Incident due to the customized nature.
BUSINESS
–3 1 1–


--- page 321 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
For the year ended December 31, 2024
1 /H1118/H1118Zhejiang
Leapmotor
Technology
Co., Ltd. and
its subsidiaries
LFP battery A public company in
Zhejiang Province
founded in 2015
with approximately
RMB1.3 billion in
registered capital
that engages in the
electric vehicle
manufacturing.
2021 60 days Bank
transfer/
acceptance
bill
1,462,322 28.5
2 /H1118/H1118Subsidiaries
(1)
and a branch (2)
of Guangzhou
Automobile
Group Co., Ltd.
NCM
battery
A public company in
Guangdong
Province founded
in 1997 with
approximately
RMB10.2 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2021 60 days Bank transfer 1,076,672 21.0
3 /H1118/H1118SAIC GM Wuling
Automobile
Company
Limited
LFP battery A public company in
Guangxi Zhuang
Autonomous
Region founded in
1998 with
approximately
RMB1.7 billion in
registered capital
that engages in the
automobile
manufacturing.
2023 60 days Acceptance
bill
1,160,950 22.6
BUSINESS
– 312 –


--- page 322 ---
Rank Customer
Type of
products
purchased
from us Background
Y ear of
commencement
of business
relationship
Credit
terms
Payment
methods Revenue
Percentage
of total
revenue
(RMB in
thousands) %
4 /H1118/H1118Customer C NCM
battery/
LFP
battery
A sino-foreign joint
venture in
Shanghai founded
in 1997 with
approximately
US$1.1 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2022 40 days Bank
transfer/
acceptance
bill
566,554 11.0
5 /H1118/H1118FAW Group
Co., Ltd.
NCM
battery
A public company in
Jilin Province
founded in 1956
with approximately
RMB78.0 billion in
registered capital
that engages in
the automobile
and parts
manufacturing.
2019 60 days Bank
transfer/
acceptance
bill
263,509 5.1
Total 4,530,007 88.2
Notes:
(1) Represents GAC Motor Co., Ltd. and GAC Aion New Energy Automobile Co., Ltd.
(2) Represents Guangzhou Automobile Group Company Automotive Engineering Institute.
Our Directors confirm that none of our Directors or their respective associates or any
Shareholder holding more than 5% of our issued share capital held any interest in any of our
five largest customers during the Track Record Period.
BUSINESS
– 313 –


--- page 323 ---
Pricing
We consider a number of factors in determining the pricing of our products, including the
length of our relationship with the customer, level of competition for similar products, raw
material price, manufacturing complexity and costs, among other factors. We believe our
long-standing relationship, product quality, wide coverage of product use cases and unique
value propositions to customers help us negotiate for more premium pricing for our products
while remaining competitive in the market.
We have adopted pricing policies which prescribe different pricing strategies for different
types of battery products. For battery cells, the pricing reflects the specific power requirements
and capacity ranges of different applications. For example, PHEVs typically require batteries
to deliver higher power output than BEVs, resulting in a higher per-Wh price for PHEV battery
cells. Battery cells at the same capacity also have different pricing depending on the
electrochemistry system: NCM battery cells typically have a higher per-Wh price compared to
LFP battery cells, primarily due to the higher production costs involved with NCM battery
cells.
In addition, our flexible pricing policies consider factors such as customer segments, the
strategic importance of products, technological advancements, project competitiveness, costs
(especially for purchase agreements with price linkage mechanisms), and target profitability.
Pursuant to our pricing policies, we typically charge lower prices for customers with large
purchase volumes due to their economies of scale and the strategic importance of such
customers.
Below is a comparison of the pricing of our battery product with comparable products by
peers in 2023. Our pricing is relatively lower in 2023 compared to peers, primarily because (i)
the price of major raw materials (in particular lithium carbonate) as well as the selling price
of battery products continuously declined throughout 2023, and our sales in the second half of
the year (when the average selling price was lower than the first half of the year) accounted
for 78.1% of our total annual sales volume in 2023 in terms of GWh; and (ii) the percentage
of our sales from battery cells was 75.0% in 2023 in terms of GWh which is typically higher
than peers, and battery cells typically have lower selling price per Wh compared to battery
packs, according to Frost & Sullivan.
Pricing Note
(RMB/Wh)
Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.57
EVE Battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.85
CALB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.67
CATL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.89
Sunwoda /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.93
REPT BATTERO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.79
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Note:
Refers to the average selling prices of power battery products in 2023. Numbers were calculated by dividing
sales revenue by sales volume in 2023 using latest publicly disclosed information and data. The battery
products include various products such as battery cells, modules and packs.
We also typically include price adjustment mechanisms, which allow us to adjust pricing
within a pre-agreed range under certain circumstances, such as drastic fluctuations in raw
material prices. According to Frost & Sullivan, such price adjustment mechanisms are in line
with industry norms.
Key Terms of Sales Agreements
We typically enter into sales agreements with our major customers, under which our
customers will enter into individual purchase orders with us. Our sales agreements typically
contain the following terms:
Specification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Since our business involves the
development of products and technologies
for customers, we usually set relevant
technical parameters in the agreements,
which specify certain characteristics of the
products to be delivered.
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Price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically specify the price of each
product and service provided to customers
in the individual purchase order, including
unit price and total price. We also specify
price adjustment mechanism in the
framework agreements that gives us more
flexibility in pricing. In some of our sales
agreements, we are entitled to adjust the
cost of raw materials, which is part of the
price of our products, based on the market
price. Specifically, we adjust the pricing of
our products based on changes in the costs
of such raw materials over a specified
period. This pricing mechanism may
involve transitioning from fixed pricing to
floating pricing, where product prices are
linked to the movements in the market
prices of key raw materials, as published on
trusted industry platforms such as the
Shanghai Metals Market. In addition, for
certain customers, we may negotiate
supplementary adjustments or
compensations to reflect the impact of raw
material price changes on previously
completed sales during a given period. The
specifics of our pricing adjustments,
including timing, calculation formulae, and
adjustment parameters, vary across
customers and depend on factors such as
the terms of the agreements, the timing of
the contracts, and the negotiation outcomes
with those customers. For agreements
incorporating price adjustment
mechanisms, we typically review and
adjust prices on a regular basis to ensure
alignment with the agreed-upon terms. The
adjusted prices are then applied to orders
for a specified period or may be used to
determine compensation for prior sales, as
applicable.
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Payment term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We grant credit period to our customers
according to their credit profile and
historical performance, with typical credit
terms of 30-90 days to eligible customers.
Delivery term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically bear the costs and risks in the
delivery process.
Duration, termination
and renewal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The term of framework agreements
generally ranges from 5 months to five
years. The renewal of framework
agreements is negotiated on a case-by-case
basis.
Minimum purchase requirement /H1118/H1118/H1118/H1118/H1118/H1118We typically do not set minimum purchase
requirements in the framework agreements,
and the exact purchase amount is specified
in the individual sales orders.
Warranty period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We offer a warranty period for our battery
products based on the years and/or miles of
use, which varies based on the customers’
needs and the type of products.
Confidentiality /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We usually set confidentiality clauses in
the framework agreements with customers,
and the period of confidentiality
obligations may be extended to after the
expiration of the sales contract.
The following table sets forth key terms of sales agreement between STAES and its
customers.
Specification /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Customers set relevant technical
parameters in the agreements, which
specify certain characteristics of the
products to be delivered.
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Price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118In each June and December, parties
negotiate and determine the purchase price
for the next six months. The framework
agreements include price adjustment
mechanisms that enable price changes in
response to material changes in laws,
economic conditions or raw material
supplies.
Payment term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Payment for delivery in a certain month is
generally due by the 25th of the next
month.
Delivery term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118STAES bears risk of loss until products are
delivered to carrier or venue designated by
the customers.
Duration, termination
and renewal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The framework agreements are
automatically renewed for one additional
year each time, unless either party
terminates in writing 90 days before
expiration. The framework agreement may
also be terminated due to material changes
or breaches by either party.
Minimum purchase requirement /H1118/H1118/H1118/H1118/H1118/H1118The framework agreements do not set
minimum purchase requirements, and the
exact purchase amount is specified in the
individual sales orders. In each December,
customers undertake to provide an estimate
of demand for the next three years, which is
indicative only.
Warranty period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118STAES offers warranty periods which vary
based on the type of products delivered and
the reason that caused the need for repairs.
Confidentiality /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Parties may not disclose the content of the
framework agreement without mutual
consent except for content that is already
available to the public.
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Customer Service
We believe that timely and quality customer services are one of the important competitive
factors, as they are directly related to customer satisfaction and help in shaping the customer’s
purchase decisions.
We are committed to building a professional customer service team and standardized
customer service processes to provide high-quality services to our customers. We have
established a dedicated after-sales customer service team, providing a comprehensive
after-sales service system including after-sales quality, support and services. Our after-sales
customer service team is primarily responsible for receiving and addressing customer
complaints, conducting product failure analysis and providing after-sales maintenance and
technical support.
We have a rapid response mechanism to our customer complaints. We require after-sale
customer complaints to be responded to within one business day for our customer complaints
and requests. During the Track Record Period and as of the Latest Practicable Date, we have
not received any material customer complaints.
We have a comprehensive process to handle customer returns and exchanges. Upon
receiving customer complaints or requests for product returns and exchanges, our sales
department, after-sales customer service department, and R&D department will internally
discuss and review to determine if the conditions for product returns or exchanges are met. If
the product return conditions are not met, our PMC will communicate and coordinate with the
customers; if the product return conditions are met, the relevant return process will be
executed. Our product return process mainly includes the following steps: (i) the sales
department and after-sales customer service department initiate the customer complaint
application; (ii) the after-sales customer service department handles packaging and counting of
the products, and the PMC is responsible for logistics return, warehouse receipt and inspection
review; (iii) the sales department, after-sales customer service department and R&D
department propose solutions to handle the returned products, and (iv) the PMC completes the
inventory processing of customer returns.
We have also established a comprehensive warranty policy. We assess our ability to
achieve quality assurance based on customer technical specifications. Generally, we provide an
8-year or 150,000-kilometer warranty for EV battery products and a warranty for ESS battery
products ranging from 6,000 to 8,000 cycles. During the Track Record Period and up to the
Latest Practicable Date, we did not experience any significant product returns from customers.
Overlapping Customer and Supplier
During the Track Record Period, to the best knowledge and belief of our Directors, we
had one supplier who is also our major customer.
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TWS Technology (Guangzhou) Ltd (“ TWS”) is our supplier for the OEM of battery
modules and also one of our major customers. We sell NCM battery cells to TWS, who then
processes part of them into modules and sells the modules to us as well as other customers. The
reason for this arrangement was because before we acquired Suzhou ZENIO, we lacked
sufficient capacity to manufacture battery modules, and considering TWS’ rich experience in
the industry of module production, we decided to commission them as the OEM supplier for
modules. TWS was originally selected by Jiangsu TAFEL to help process battery cells into
modules in 2018 when Jiangsu TAFEL did not have battery module and pack manufacturing
capacity. TWS was selected because (i) its location was in close proximity with Jiangsu
TAFEL’s facilities in Nanjing; and (ii) TWS was one of the very limited number of available
battery module and pack manufacturers in China at the time when China’s new energy industry
was still at an early development stage. Jiangsu TAFEL began having its internal battery
module and pack capacity in 2019, but still retained TWS to help process battery modules
because its own internal capacity was not sufficient to satisfy the significant growth in demand
from a number of OEM customers. After we acquired Jiangsu TAFEL’s business under
common control, we replaced Jiangsu TAFEL in its relationships with TWS.
In each year of 2021, 2022, 2023 and 2024, revenue from TWS accounted for 2.4%, 7.8%,
1.4% and nil of our total revenue, purchases from TWS accounted for 1.3%, 0.4%, nil and nil
of our total purchases.
BUSINESS OF SUZHOU ZENIO AND JIANGSU TAFEL
Acquisition and Business of Jiangsu TAFEL
Jiangsu TAFEL was engaged in the development, manufacturing and sales of new energy
power batteries. According to Frost & Sullivan, Jiangsu TAFEL and its subsidiaries ranked 7th
largest power battery manufacturers as measured by monthly installation capacity in February
2020 and 7th place in 2021 as measured by accumulative installation capacity. At the time of
the establishment of our Company in February 2019, Jiangsu TAFEL was a minority
shareholder holding 30% of the equity interests in the Company. Our Company had been a
wholly-owned subsidiary of Jiangsu TAFEL from May 2020 until the commencement of the
Business Reorganization in December 2021. In February 2022, the then shareholders of Jiangsu
TAFEL resolved to transfer its business and certain assets including properties, plant and
equipment, other intangible assets and part of the inventories held by Jiangsu TAFEL and its
subsidiaries to our Company and its subsidiaries. Accordingly, relevant asset transfer
agreements were entered into in February 2022 amongst Jiangsu TAFEL and its subsidiaries,
and our Company and its subsidiaries to effect the aforementioned business acquisition and
asset transfers at the total consideration of RMB1,854.8 million, which was determined based
on the valuation of such assets appraised by an independent professional valuer or the book
value of the relevant assets, including part of the inventories which were still in the physical
possession of Jiangsu TAFEL and not shipped out and could be used for further sale after the
acquisition, at the relevant time. The acquisition of Jiangsu TAFEL’s business enhanced our
business scale and our capabilities in the development and manufacturing of power battery
products. Jiangsu TAFEL did not transfer any liabilities to our Group, apart from warranty
liabilities for products sold of approximately RMB48.0 million.
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Accounting Policy Information Related to the Business Reorganization
Pursuant to the Business Reorganization, as more fully explained in “History,
Reorganization and Corporate Structure—Corporate Development and Major Shareholding
Changes—3. Business Reorganization of Our Group,” our Group acquired businesses of
Jiangsu TAFEL and its subsidiaries which were under the common control of the controlling
shareholders before and after the Business Reorganization. Accordingly, the historical financial
information has been prepared on a consolidated basis by applying the principles of merger
accounting as if the Business Reorganization had been completed at the beginning of the Track
Record Period. Therefore, Jiangsu TAFEL is combined into our Group’s financial statements
since the beginning of the Track Record Period by applying the principles of merger
accounting.
According to the terms of the Business Reorganization, our Group (i) undertook the
business; (ii) acquired certain assets including properties, plant and equipment, other
intangible assets, and part of the inventories; (iii) assumed provision for warranty claims and
the personnel held by Jiangsu TAFEL that constitute a business combination; while other
current assets and liabilities that do not constitute a business combination and are not related
to our Group’s long-term business operation and development were retained by Jiangsu TAFEL
on February 28, 2022. From an accounting perspective, the assets and liabilities retained by
Jiangsu TAFEL were deemed as disposal of assets by our Group in 2022 upon the Business
Reorganization as all assets and liabilities of Jiangsu TAFEL had been included into our
Group’s financial statements since the beginning of the Track Record Period.
Acquisition and Business of Suzhou ZENIO
Suzhou ZENIO was engaged in the manufacturing of battery modules and battery packs.
On February 25, 2022, Zenergy Investment transferred its entire 100% equity interests in
Suzhou ZENIO to our Company at a consideration of RMB306.9 million, being the fair value
of identifiable assets and liabilities of Suzhou ZENIO on the date of the acquisition of
RMB305.6 million plus goodwill arising from the acquisition of RMB1.3 million. The
acquisition of Suzhou ZENIO enhanced our capabilities in the development and manufacturing
of battery modules and battery packs, which greatly complements our existing capabilities in
power battery cells.
Materiality of the Acquisitions
The total consideration for the acquisition of Jiangsu TAFEL’s business under common
control was RMB1,854.8 million, which was determined based on the valuation of acquired
assets as appraised by an independent professional valuer or the book value of the relevant
assets at the relevant time. The total consideration of the acquisition of Suzhou ZENIO was
RMB306.9 million, being the fair value of identifiable assets and liabilities of Suzhou ZENIO
on the date of the acquisition of RMB305.6 million plus goodwill arising from the acquisition
of RMB1.3 million.
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As of December 31, 2021, being the most recent balance sheet date prior to the above
acquisition of Jiangsu TAFEL’s business under common control, the total assets of our Group
was RMB5,815.0 million (which consolidated the balance of Jiangsu TAFEL’s assets as of
December 31, 2021). See note 2.1 to the Accountants’ Report included in Appendix I to this
Prospectus for basis of consolidation.
Integration of the Acquired Businesses
Since the respective acquisitions of Jiangsu TAFEL and Suzhou ZENIO, we had
undertaken a series of measures to integrate the various aspects of their business operations
into our Group. For example, we integrated the equipment, tools, patents and other assets that
are necessary for the research, development, manufacturing and sales of new energy power
batteries. We also proactively commingled human resources of the acquired businesses into our
group, including key personnel procured from the acquired business of Jiangsu TAFEL and
Suzhou ZENIO. For example, Dr. Yu Zhexun, our employee representative Director, joined our
Group in March 2022 upon completion of the acquisition of Jiangsu TAFEL’s business where
he accumulated working and research experience in battery related research and development.
Leveraging Jiangsu TAFEL’s established and operational manufacturing capabilities and
customer contacts, we took measures to ensure a smooth transition so as to continue the
manufacturing and sales relationships with Jiangsu TAFEL’s existing customers or pursue
further negotiations with its potential customers. Specifically, we completed the supplier
change procedures by Jiangsu TAFEL’s OEM customers and became the official supplier for
these customers.
BUSINESS SUSTAINABILITY
Business and Industry Background
In the power battery industry, significant upfront investments are required at the initial
stage of industry players’ business operations on manufacturing capacity and product R&D. On
the one hand, players need to invest heavily on establishing and continuously expanding
manufacturing capacity to meet customer demands. Such investment may not yield any
meaningful return until after the manufacturing facilities are constructed and ramped up, which
could take a significant amount of time. On the other hand, players need to invest heavily on
the R&D of technologies and products to ensure they can launch competitive products which
can stay ahead of the latest development in industry trends and market demands. For example,
players need to make substantial investments in R&D projects that can effectively improve
product performance, safety and cost efficiency, and can streamline the manufacturing process.
Such intense initial investments in manufacturing capacity and R&D activities may not yield
immediate financial return, causing acute initial financing pressure for industry players.
Intense competition has led to an average of three to five years of net loss position for
new players in China’s power battery industry, because new players have yet to be able to
leverage economies of scale and to achieve optimal operational efficiency. According to Frost
& Sullivan, competition in China’s power battery industry is increasingly intense primarily due
to increasing capital resources invested in China’s battery and new material industries,
fluctuations in raw material prices, and emergence of new players. Existing players are
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continuously raising the industry’s entry barrier, forcing players to invest more in product
R&D, customer engagement, and branding. In addition, players’ ability to achieve profitability
is also affected by raw material price fluctuations, product pricing capabilities, inventory
turnovers, among other factors.
Leveraging the rapid development in battery technology and the expected growth in the
overall market demand, however, players in China’s power battery industry who have (i) made
sufficient upfront investments in R&D and manufacturing capacities; (ii) established sizeable
OEM customer base, especially those with exclusive supply arrangements; and (iii) possessed
the ability to ramp up utilization of manufacturing facilities with overall utilization rate of over
60% are well positioned to achieve profitability and maintain sustainable development in the
long run.
Future Growth in Market Demand
The market demand in the global EV battery industry has experienced rapid growth.
According to Frost & Sullivan, the global EV battery market experienced steady growth in
installation capacity in recent years, and is expected to further grow from 900.2 GWh in 2024
to 3,564.5 GWh in 2029, representing a CAGR of 31.7%. In China, EV battery installation
capacity is expected to grow from 549.9 GWh in 2024 to 1,961.4 GWh in 2029, representing
a CAGR of 29.0%. In particular, PHEV sales volume grew from 1.0 million units in 2020 to
6.8 million units in 2024, representing a CAGR of 62.4%, higher than any other type of EVs,
and is expected to further grow to 18.6 million units in 2029, representing a CAGR of 22.1%.
The global installation capacity of EV battery systems increased from 141.5 GWh in 2020 to
900.2 GWh in 2024, representing a CAGR of 58.8%, and is expected to further grow to 3,564.5
GWh in 2029, representing a CAGR of 31.7%. The power battery industry, in which we
operate, enjoys significant room for growth; and we believe industry leaders who can stay
ahead of the increasingly intense market competition are well positioned to achieve growth in
sales, profitability and sustainable development.
Our Historical Results of Operations
During the Track Record Period, we experienced rapid revenue growth. Our revenue was
RMB1,499.3 million, RMB3,290.3 million, RMB4,161.7 million and RMB5,130.3 million in
2021, 2022, 2023 and 2024, respectively, representing a CAGR of 50.7%. Our revenue grew
from RMB4,161.7 million in 2023 to RMB5,130.3 million in 2024, representing a growth rate
of 23.3%. We also maintained a healthy cash flow sufficiency: our cash and cash equivalent
also experienced stable growth during the Track Recorded Period, increasing from RMB767.4
million as of December 31, 2021 to RMB936.2 million as of December 31, 2022, and further
to RMB2,034.3 million and RMB2,199.1 million as of December 31, 2023 and 2024,
respectively.
We recorded a net profit in 2024. Our gross profit was RMB30.2 million, RMB208.5
million, and RMB748.4 million in 2021, 2023 and 2024, and our gross loss was RMB290.3
million in 2022. Our net loss was RMB402.3 million, RMB1,720.0 million, RMB589.9 million
in 2021, 2022 and 2023, respectively. Our net profit was RMB91.0 million in 2024.
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Our net loss position during the first three years of the Track Record Period was primarily
due to the following reasons:
Significant Investment in Technology and Product Development
It is a key growth driver for our business operations to develop battery technology that
suits industry development trends and customer preferences. To that end, we must invest
significant resources on technological innovation and product development. As of the Latest
Practicable Date, our investment in battery products for sea and air use cases have not yet led
to mass commercialization. We have also established the forward-looking “5-3-1” R&D
strategy, aiming to plan for new electrochemistries and advanced materials five years ahead,
establish technology platforms three years ahead, and develop market-ready products one year
ahead. Specifically, we have initiated R&D projects on ultra-rapid charging technologies,
solid-state electrolyte surface modification technology on ultra-high nickel cathode materials
and the solid-state electrolyte hybrid separator technologies. We also have a portfolio of battery
products, such as our PHEV battery systems, aeronautical batteries, among other products
under development. We expect to explore the relevant markets and further commercialize these
products to improve our results of operations.
In 2021, 2022, 2023 and 2024, our research and development expenses was RMB221.0
million, RMB329.3 million, RMB424.1 million, and RMB556.2 million, respectively,
accounting for 14.7%, 10.0%, 10.2%, and 10.8% of our total revenue during the same years,
respectively. The decrease in the research and development expenses as a percentage of total
revenue in 2022 was primarily due to the increase in the total revenue. Meanwhile, the size of
our R&D team also grew significantly from 632 as of December 31, 2021 to 1,060 as of
December 31, 2024. The increase in research and development expenses over total revenue
increased slightly from 2023 to 2024 was primarily due to an increase in staff compensation
in relation to research and development and an increase in depreciation and amortization. See
“Financial Information—Significant factors affecting our financial condition and results of
operations—Specific factors affecting our results of operations—Seasonality” for details.
Manufacturing Capacity Still under Expansion
Our future growth and profitability depend on our ability to expand our manufacturing
capacity to meet the continuously increasing market demand. Starting 2021, we adopted a
demand-driven manufacturing capacity expansion strategy to avoid excessive manufacturing
capacity while timely satisfying customer demand. As of the Latest Practicable Date, however,
we are still actively expanding our manufacturing capacity, which has yet to achieve optimal
economies of scale at the current size. In 2021, 2022, 2023 and 2024, our total manufacturing
capacity (including battery cells, modules and packs) reached 6.4 GWh, 8.5 GWh, 17.3 GWh
and 23.9 GWh, respectively. Such expanding manufacturing capacity requires substantial and
continuous capitalized spending, which leads to significant depreciation and amortization that
drives up our unit product costs. Typically, the ramp-up process of a newly constructed battery
manufacturing facility takes approximately four months, during which time the equipment and
manufacturing lines need to be configured to work in sync, and testing and other measures must
be undertaken to lower manufacturing costs. Thus, our expanding manufacturing capacity
negatively affects our gross margin, especially at the early ramp-up stage when the fixed
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depreciation and amortization is allocated to a relatively small amount of product output. In
2021, 2022, 2023 and 2024, our cost of sales of goods as a percentage of total revenue was
93.0%, 91.2%, 88.2%, and 84.3%, respectively. The decreasing trend during the Track Record
Period was primarily due to our efforts to reduce costs on raw materials, improve
manufacturing efficiency, and optimize operational management. However, we expect further
improvement in our gross margin position as our manufacturing facilities are further
ramped-up. For example, the phase II of our Changshu Zenergy facility was put into production
in 2023, and completed the ramp-up stage by the end of 2024.
We have adopted various measures to improve our manufacturing efficiency, including
new manufacturing techniques, installation of advanced equipment, and demand-driven
manufacturing capacity expansion strategy. Since 2021, when we began constructing our
manufacturing facilities, we have adopted predictive manufacturing equipment design and
flexible and intelligent manufacturing technique design. The time to convert a manufacturing
line to produce at full capacity for those battery products of the same dimension to a different
electrochemistry could reach as short as three days, and the time to convert a manufacturing
line to produce at full capacity for those battery products of different dimensions could reach
as short as 50 days. Our battery cell manufacturing facilities contribute to precise
manufacturing capacity management in response to changes in market demand. Our visual
inspection technology powered by AI can inspect product quality without human interference
in order to reduce damage to bare cells. These manufacturing related technologies help us
reduce manufacturing cost and increase overall capacity utilization rate, which we believe
helps us reduce our overhead costs and improve our profitability.
Product Mix and Pricing Strategy
The ability to negotiate for premium pricing for our products requires a high level of trust
and dependence by customers, which take time to build. Because we are still in the early stage
of new product launches and forming a competitive product portfolio, we may not enjoy
bargaining power that is as strong as some of our more established peers who have more
advanced product mix, longer sales relationships with their customers and have achieved
higher economies of scale.
To improve our pricing capabilities, we have devoted significant efforts in improving
product quality, technology innovation and customer service capabilities. We have received
recognitions from several leading OEM customers in China. Leveraging the quality and
performance of our key products, we have become the primary supplier for many OEM
customers, such as FAW Hongqi, Leap Motor, and SAIC-GM Wuling. Going forward, we
intend to further improve our product quality and performance and develop more advanced
technologies, which we believe contributes to higher pricing capabilities and more favorable
profitability position. We also seek to improve customer stickiness by forecasting industry
trends and develop our capabilities in more electrochemistry pathways and application
scenarios. We believe improved customer stickiness helps us better understand customer needs
and offer more customized battery solutions, as well as obtain more design-wins and stable
sources of revenue.
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One-off Impact by an OEM Customer
In November 2022, we ceased delivery of NCM battery products for application in BEVs
to WM Customer due to the WM Customer Incident. NCM batteries were the only products we
sold to WM Customer. As a result, our sales volume of NCM batteries decreased from 2.9 GWh
in 2022 to 1.5 GWh in 2023, and our revenue from the sales of NCM batteries decreased from
RMB2,628.6 million in 2022 to RMB1,448.0 million in 2023. It takes a certain amount of time
for us to develop business relationships with new customers, obtain design-wins, and ramp up
mass production. Therefore, even though sales and delivery to WM Customer terminated in
2022, sales in 2023 was also adversely affected because we could not immediately make up for
the purchase orders volume that would have been delivered and sold to WM Customer had WM
Customer Incident not occurred.
The WM Customer incident also led to an RMB422.3 million of impairment losses on our
inventories in 2022, which materially adversely affected our cost of sales, gross loss margin
and overall results of operations in the same year. The inventories manufactured for WM
Customer were subsequently disposed as down-grade product at lower prices in 2023. The
Nanjing Zenergy Facility where products for WM Customer were produced ceased substantial
production in December 2022. For more details about the changes in business plans of Nanjing
Zenergy, please see “—Manufacturing—Manufacturing Base.”
We also recorded an RMB601.4 million impairment in trade receivables in 2022 which
was due from WM Customer as a result of the WM Customer Incident pursuant to the relevant
accounting policies, judgments and estimates under IFRS, which significantly increased our
impairment losses on financial assets and contract assets, net in 2022, and materially adversely
affected our results of operations for the same year and our trade receivable balance and
financial position as of December 31, 2022. The aggregate impairment in trade receivables and
inventories in 2022 arising from the WM Customer Incident was RMB1,023.6 million.
However, we believe such impact was one-off in nature. We have since obtained new
customers with demand that improves the utilization rate of our manufacturing capacity. In the
second half of 2023, our overall utilization rate for the relevant manufacturing lines has
recovered to 82.3%. Meanwhile, we have also enhanced our internal control procedures on
customer credit approval when establishing sales relationships with potential customers,
focusing on their creditworthiness to avoid future occurrence of such incidents. We conduct
background search on our customers and suppliers during their onboarding process, including
searches on their amount of registered capital, payment of registered capital, operational scope,
litigation records, credit record, and other noncompliance with laws and regulations. This is to
reduce the risks of our cooperating partners being involved in existing operational difficulties
or other adverse conditions. As of the Latest Practicable Date, there was no incident similar to
the WM Customer Incident in the course of our operations.
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Fluctuation in Raw Material Prices
Raw material costs, in particular the lithium carbonate prices, account for the largest
portion of overall cost of power batteries. In 2021, 2022, 2023 and 2024, cost of raw materials
accounted for 77.7%, 71.7%, 73.8% and 74.6% of our total cost of sales, respectively, and
76.1%, 78.0%, 70.1%, and 63.7% of our revenue, respectively. According to Frost & Sullivan,
major raw materials for power batteries experienced a hike in prices in 2022. Thereafter, due
to mining of further lithium mineral resources and improvement in refinery techniques, the
supply of lithium related raw materials increased, which led to a decrease in raw material
prices in 2023 and 2024. The average selling price for lithium carbonate increased from
RMB131,100 per ton in 2021 to RMB496,100 per ton in 2022, and then declined to
RMB258,700 per ton in 2023. In 2024, the average price of lithium carbonate decreased to
RMB90,510.7 per ton. This led to a corresponding fluctuation in the average industry-wide
selling price of LFP batteries from RMB0.51 per Wh in 2021 up to RMB0.80 per Wh in 2022,
down to RMB0.62 per Wh in 2023 and down to RMB0.37 per Wh in 2024. Material declines
in raw material prices during the Track Record Period also negatively affected our results of
operations, leading to an impairment losses on inventories of RMB282.4 million in 2023 and
RMB55.4 million in 2024.
Path to Profitability
In light of the above background to our historical results of operations, we recorded a net
loss in 2021, 2022, and 2023 of our Track Record Period. However, we recorded a net profit
in 2024. The turnaround to profitability in 2024 is primarily attributable to the following
improvements in our operations and financial performance:
 Increased production capacity, higher utilization rate, and improved profitability.
Following a significant increase in orders received in 2024, we experienced strong
demand growth. To meet this rising demand, on top of the gradual completion of the
new energy phase II of Changshu Zenergy in late 2023, we continued to undergo
testing and adjustments throughout 2024, adding 15.6 GWh of total production
capacity. As a result, most of our production lines moved beyond the ramp-up phase
after September 2024, achieving higher levels of mass production. This progress has
enabled us to significantly increase both production capacity and utilization rates in
2024. The expansion subsequently allowed us to accept and fulfill more orders in
2024, driving an increase in our sales volume of power battery products from 5.91
GWh in 2023 to 11.31 GWh in 2024. The increase in scale and operational efficiency
has led to lower average manufacturing costs, resulting in economies of scale and
a substantial improvement in gross profit and profit margins. During the Track
Record Period, raw material prices for lithium carbonate showed a declining trend
but have stabilized since August 2024. According to Frost & Sullivan, the average
raw material price for lithium carbonate in January 2023 was RMB485.1 thousand
per ton, which decreased to RMB309.7 thousand per ton, RMB108.8 thousand per
ton, and RMB97.4 thousand per ton in June 2023, December 2023, and June 2024,
respectively. It further decreased to RMB77.0 thousand per ton in August 2024 and
remained stable thereafter.
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 Declines in raw material costs. In line with the industry trend, the raw material
costs in particular costs for lithium carbonate for NCM and LFP battery products
continue to reduce throughout 2024. The average cost of raw materials in 2024 was
RMB0.26 per Wh, compared to RMB0.38 per Wh in 2023. However, the decrease
of raw material prices in 2024 was not as significant as that in 2023, and therefore
we recorded a substantial reduction in impairment losses on inventories.
 Growth in share of profits of joint venture and other income. We recorded an share
of profits from STAES in 2024, reflecting its strong operational performance and the
full-year recognition of our 50% equity interest acquired in late 2023. Additionally,
our other income and gains rose in 2024 due to significant increase in government
grants in 2024, primarily from value-added tax credit policies for advanced
manufacturing enterprises. For details about our financial performance in 2024, see
“Financial Information—Year-to-year Comparison of Results of Operations—Year
Ended December 31, 2024 Compared to Year Ended December 31, 2023.”
Meanwhile, we intend to adopt the following measures to maintain our net profit position
in 2025.
Further Increase Sales Revenue
The demand for power batteries globally is expected to continue to expand, driven by the
growth in the global EV industry. To capture such expanding market, we intend to further
develop our product portfolio covering more application scenarios. We also intend to improve
our product mix, dedicating the sales of products that enjoy higher gross margin. We plan to
actively expand our customer base for our various products, and we have devoted significant
efforts in the R&D of our core battery technologies. These products include BEV and EREV
products in form of battery packs, which offer higher margins due to their higher value added,
as well as PHEV products. PHEV battery cells have higher per unit prices by KWh due to their
smaller capacity and higher power requirements, and projects often include complete battery
packs. The pricing of the pack component is also relatively stable and less affected by market
fluctuations.
Specifically, we intend to adopt the following approaches:
 EV batteries . We plan to cover more vehicle types with different driving ranges and
fuel sources, including BEV , PHEV and EREV . We plan to solidify and deepen our
cooperation with existing OEM customers to obtain design-wins in more of their
vehicle types and models. We have established a large and high-quality customer
base, consisting of several leading companies in the automotive industry. Our EV
battery customers include large state-owned enterprises, pure-play EV companies in
China, and multi-national OEMs. We have also established sales relationships with
respect to several key battery products with OEMs such as GAC-Toyota, SAIC-GM,
SAIC-GM Wuling, Leap Motor, FAW Hongqi, GAC Trumpchi, and Dongfeng
Peugeot Citroën, among other leaders in the global EV industry. We also plan to
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expand our customer base to serve more industry-leading OEMs. As of the Latest
Practicable Date, we had obtained 48 design-win projects of EV batteries covering
29 product types, including 16 PHEV battery products. We expect over 19 of these
design-wins to enter into mass production and delivery in 2025, among which 9 are
related to PHEV models.
 Aviation batteries. Riding on the industry and policy tailwind of low-altitude
application scenarios, we are actively working with many domestic and overseas
eVTOL companies on aviation battery testing, and have started small-scale sales of
sample products to certain internationally renowned customers. We plan to establish
further cooperation, including mass production and delivery of aviation batteries,
with more industry-leading eVTOL companies worldwide.
 Marine batteries . We have established connections and cooperation with various
potential customers of our marine ESS battery products, such as Deye Holdings. We
intend to expand our customer base for marine ESS battery products. We have
established cooperation with a customer in Singapore, and expect to further expand
our customer base for our marine ESS battery products.
We plan to actively expand our overseas customer base for our various products.
Specifically, we intend to continue to focus on BEV and PHEV (including EREV) batteries,
and continue to adopt standardized battery cells and platformed battery packs, and differentiate
their performance with diversified electrochemistries. In terms of pricing, we plan to achieve
premium pricing for our products, especially PHEV (including EREV) batteries, leveraging
their distinguished performance compared to our peers. We also intend to explore the potential
synergy between power batteries and ESS products to expand the application scenarios of our
standardized products. During the Track Record Period, our efforts in product and technology
R&D has contributed to our ability to obtain design-wins and realize revenue growth.
We believe we have several distinguished technologies embedded in our products and
product pipelines, which provide us competitive edges and enable us to effectively compete
against our peers, and contribute to our future revenue growth. For example, these edges
include battery products that are easier to dissemble, repair, and recycle, have more optimal
volume utilization rate, capacity, power, stability, security and durability. Examples are as
follows:
 Universe series. Although we have not commenced mass production, we have
completed the development of Universe series and already produced samples. In
response to high repair and recycling costs and difficulties in battery cell
disassembling, we developed our Universe series BEV battery pack which adopts a
pioneering tenon-and-mortise assembly technology in lieu of the traditional laser
welding and structural adhesive bonding technology, which makes our cells easy to
assemble, disassemble and repair. Most battery cell products in the market are
electrically connected by busbar laser welding, and the cells are fixed in the battery
modules with structural glue to ensure a high degree of integration. However, this
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approach makes it highly inconvenient to disassemble the battery cells. If issues
arise for one or more battery cells in the battery pack, due to the challenges of
disassembling the cells from the pack, the whole pack often need to be replaced to
resolve the issue. To resolve this, we adopted technologies that replace the
traditional laser welding and structural adhesive bonding, which enable customers to
replace only the battery cells that have issues without having to replace the whole
pack, which greatly enhance the convenience of after-sales maintenance. Our
Universe series BEV battery pack enjoys an energy density up to 260 Wh/kg, and
can reach 70% SOC in as fast as seven minutes. As of December 31, 2024, our
Universe series have more than 90 patents and patent applications.
 Loong series. Although we have not commenced mass production, we have
completed the development of Loong series and already produced samples. Our
Loong series encompass technologies which enable it to achieve improved volume
utilization rate, battery cell capacity and fast-charging capabilities. Our Loong series
adopts the large cylindrical battery shape, and pioneered the same-side tab
technology, employing a multi-tab winding structure that places both the positive
and negative tabs on the same side of the jelly roll, which led to a 3% improvement
in volume utilization rate. This requires high manufacturing precision, because if the
thickness of cathode and anode plates are not consistent, the tabs may misalign. To
that end, we developed an equipment which can perform both die cutting and
winding and can monitor tab misalignment and adjust in real time in order to ensure
the effectiveness of the same-side tab design. Such technologies enable Loong series
to achieve a capacity of 170 kWh, which was one of the largest among passenger
vehicle batteries as of December 31, 2024, and can support 1,000 km in driving
range for MPVs. Our Loong series BEV battery pack enjoys an energy density of
306 Wh/kg and reaches 70% SOC from 10% SOC within nine minutes. Because the
same-side tab technology can effectively reduce the electrotransmission pathway,
the power resistance of our cylindrical battery cells is also relatively lower. Coupled
with heat management system, our cylindrical battery cells can achieve 4C fast
charging. As of December 31, 2024, our Loong series have more than 60 patents and
patent applications.
To improve the thermal stability of our product, we developed the dual-level
semi-solid technology, which encompass the solid electrolyte surface modification
technology and solid electrolyte composite separator technology. Such dual-level
semi-solid technology increases the initial temperature at which battery cells
experience failure by 10°C, and reduces the maximum temperature after failure by
150°C. In addition to improved safety, the dual-level semi-solid technology also
improves the power performance of batteries: battery power at -20°C environment
is increased by 20%.
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 Sodium-ion batteries. We have also developed technologies on battery cell materials
(such as polyanion-type electrode materials for sodium-ion batteries) to improve
battery power, stability, security and durability. In addition to R&D on layered
oxides, which is a more prevailing field of interest in China, we have also heavily
invested in polyanion system, as polyanion materials have a high ion diffusion
coefficient which are suitable for high-power applications. In addition, their crystal
structure is relatively stable, highly secure, and durable. We are developing a 15Ah
sodium-ion battery product with high power (designed voltage of 3.6V), high
discharge rate (20C discharge capacity maintenance rate of over 94%), and high
durability (cycle life of over 3,000 cycles). We expect to deploy such products for
PHEV and ESS applications. As of December 31, 2024, our sodium-ion batteries
have more than 81 patents and patent applications. As of the Latest Practicable Date,
we had established R&D cooperation with a customer in France regarding our
sodium-ion batteries, and had begun sales of sample sodium-ion products to such
customer.
 Aviation batteries. Our aviation battery products are designed to achieve energy
density of 320Wh/kg with fast charging time of 15 minutes from 10% to 80% SOC,
and reach 12C discharge rate at 20% power level. At the system level, we adopted
the thermal separation design to avoid heat dissipation of aviation battery packs and
to satisfy aviation safety standards. We are the first power battery company to obtain
the AS9100D certification for aviation and space quality management systems and
one of the first leaders in the low-altitude economy in Suzhou. As of December 31,
2024, our aviation batteries have more than 90 patents and patent applications.
In addition to our product development capabilities, we have also devoted significant
efforts in the R&D of the following core battery technologies, which we believe will further
enhance the performance and competitiveness of our future products and drive our sustainable
growth.
 Long life battery technology . We improve the monomer space utilization rate and
full-life-cycle reliability through nano-injection molding of the top cover, thus
significantly improving air tightness of two orders of magnitude. This extends the
expected life of ESS products to as long as 20 years, thus satisfying the market
demand for ultra-long life cycles for ESS products. The traditional sealing ring
technology uses fluorine rubber rings to achieve sealing. Fluorine rubber rings are
mostly imported at high costs, and supply is often unstable. The nano-injection
molding sealing technology removes the fluorine rubber ring used in the traditional
battery core pole seal, and instead adopts the nano-injection molding process to
realize the integral molding of the cover plate-pole-upper plastic, ensuring the
structural strength and air tightness at the electrode, and reducing the cost while
improving the sealing and reliability of the product.
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 Battery safety technology. In terms of manufacturing techniques, we developed the
hybrid blue laser welding technology, which greatly reduces the risk of battery short
circuits caused by welding slag. We have also developed new designs of battery cell
structural component. The battery cell is prone to the tab redundancy during
assembly, and the tabs are reversely inserted into the jelly roll, resulting in an
internal short circuit, leading to a large pressure difference in the battery product,
and even short-circuit and thermal runaway. Through our own innovative wing cap
technology, we press and mold the tab, which can solve the safety problem of short
circuit inside the battery cell due to the reverse insertion of the tab. In addition to
the above functions, the wing cap technology also physically isolates the internal
laser welding area of the battery cell from the jelly roll area, thus preventing welding
residues from falling into the interior of the jelly roll and further improving the
safety of the battery cell.
Our R&D capabilities have already attracted several design-wins which are expected to
convert to mass production and revenue growth in the near future. For example, we developed
the standardized 72Ah PHEV battery cell with energy density of 225Wh/kg, maximum
discharge rate of 10C, and cycle life of up to 4,000 cycles. These technology features helped
attract design-win for three vehicle models of GAC-Trumpchi (covering mid- to large-sized
SUV , mid-sized MPV and mid- to large-sized MPV). As of the Latest Practicable Date, such
design-win has converted into revenue of approximately RMB2,096.6 million. In addition, our
standardized LFP 104Ah BEV battery cells achieve an energy density of 390Wh/L, 1.2C fast
charging, and cycle life up to 7,000 cycles. We also introduced two upgraded versions of this
product, namely the 104Ah (2.2C fast charging) and 114Ah (2.2C fast charging). As of the
Latest Practicable Date, such features have attracted design-wins that have converted into
revenue of approximately RMB3,455.3 million. The LFP 104Ah product also obtained
design-win for ESS use, which has converted into revenue of approximately RMB181.5 million
as of the Latest Practicable Date. We also developed the LFP 70Ah PHEV battery cell with
energy density of 180 Wh/kg, cycle life of 3,300 cycles, and 10% to 80% state of charge fast
charging time of 33 minutes. Such performance enables a CLTC driving range of over 1,300
km. Leveraging its superior performance, our LFP 70Ah product was selected by a
multi-national OEM customer. This design-win has also led to a cumulative sales revenue of
RMB564.9 million as of December 31, 2024. We have established collaboration with
SAIC-GM Wuling where our battery products had been installed in the vehicles exported to
India and Indonesia. We have also been selected by a pure-play EV company in China to
provide batteries for one of their exported vehicle models. We have successfully completed
business with a Company in Germany for the supply of our electrodes. We plan to further
explore other overseas opportunities and grow our global customer base, either through direct
sales relationships with overseas OEMs, or through cooperation with domestic OEMs on
exported vehicles.
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Enhance Cost Management
We cooperate with OEMs to redefine the approach to product development by adopting
standardized battery cells and platformed battery packs, and differentiate their performance
with diversified electrochemistries, which enable more efficient and low-cost integration of our
products into their different vehicle models. This approach also lowers our R&D and
manufacturing costs. The manufacturing of battery cells of the same configuration and size but
different electrochemistries requires only one set of molds, thus reducing cost of product
development.
For example, through improvement in manufacturing equipment performance and
manufacturing techniques, we were able to improve the manufacturing capacity to 14,000
battery cells per day, compared to the standard approximately 12,500 battery cells per day
baseline manufacturing capacity for the same manufacturing line. Such increase in unit
manufacturing capacity contributes to a decrease in unit product costs considering that the
allocated overhead costs remain the same for the manufacturing line. For illustrative purpose
only, if the total fixed overhead allocated to such manufacturing line is RMB3.0 million, then
the above improvement in manufacturing capacity would reduce per-unit overhead from
RMB240.0 to RMB214.3. The decrease in unit cost of sales in turn leads to an increase in gross
profitability for our products.
Our software-defined manufacturing facilities are also highly flexible. Through the
adoption of predictive equipment design and flexible and intelligent manufacturing technique
design, we effectively shortened the amount of time to convert a manufacturing line to
manufacture different product types (such as from EV batteries to ESS batteries, from NCM
batteries to LFP batteries, and from BEV batteries to PHEV , EREV and/or HEV batteries) with
relatively low conversion costs and time. We believe the above measures effectively enhance
the utilization rate of our manufacturing facilities and improve our profitability. We also plan
to deepen our collaboration with key customers to increase per-customer and per-battery-type
manufacturing volume, which effectively reduce the initial set-up and manufacturing line
re-tooling time and costs. Specifically, we intend to focus our business development on vehicle
models with the most strategic value and growth potential for the OEMs. We also plan to
further enhance our efforts on standardized battery cell and platformed battery pack in order
to integrate our products on more vehicle models while reducing the number of times we have
to convert manufacturing lines. We also plan to further align our planned manufacturing
capacity with customers’ projected growth and demand for our products in order to improve
manufacturing facility utilization rate and reduce product unit cost. Thus, we aim to improve
our manufacturing process, explore the optimal manufacturing line set-up, and improve
flexibility of manufacturing speed of each manufacturing line, in order to improve overall
manufacturing efficiency and lower unit cost. The time to convert a manufacturing line to
produce at full capacity for those battery products of the same dimension to a different
electrochemistry could reach as short as three days with a cost of approximately RMB62.2
thousand for each conversion; while the time to convert a manufacturing line to produce at full
capacity for those battery products of different dimensions could reach as short as 50 days with
a cost of approximately RMB1.7 million to RMB2.2 million.
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Through AI deep learning and edge computing technologies, we have equipped our
manufacturing lines with a high level of intelligence. Our AI-based visual inspection
technology can inspect product quality without human interference in order to reduce damage
to bare cells. Our AI edge computing technology enables us to build a comprehensive
coating-pressing-winding quality control system, which helps us to timely analyze and adjust
equipment operating data and parameters throughout the manufacturing process to improve
efficiency and quality. Aided by these technologies and our accumulated manufacturing
experience as we further scale up, we believe we are well positioned to lower per-unit
manufacturing time, labor input and energy consumption, enabling us to reduce unit cost and
realize economies of scale.
We currently do not expect to enter into a long-term supply agreement with any of our
suppliers for raw materials in the near-term based on our evaluation of competitive market
prices and ample raw material supply. Subject to our actual business needs, we may in the
future plan to manage our raw material procurement cost by entering into long-term supply
agreements or strategic cooperation with suppliers with respect to raw materials whose prices
are subject to large fluctuations, in which we plan to include provision on procurement price
linkage mechanism to keep our procurement cost in line with the public market prices. We
believe this helps us reduce exposure to material adverse changes in raw material prices.
Meanwhile, strengthening the relationships with our suppliers also helps us obtain stable
supply and favorable pricing.
We also intend to strengthen our internal control throughout our entire organization to
ensure that all spending are made pursuant to preapproved budgets and to avoid excessive and
unnecessary spending.
Economies of Scale
We believe as we continue to expand our overall business scale, we are positioned to
capture growing economies of scale as fixed costs and operating expenses will be allocated by
the increasing sales volume, thus lowering our unit cost and improving our profitability.
Particularly, we expect to develop and launch new diverse battery products for use under more
application scenarios. We believe the launch, mass production and delivery of an increasingly
rich product portfolio is expected to drive significant expansion in our business scale.
Besides expansion in business scale, we expect operating expenses, including selling and
marketing, administrative and R&D expenses, to account for a decreasing percentage of our
revenue. For example, our operating expenses was RMB368.6 million, RMB590.2 million,
RMB741.2 million and RMB893.4 million in 2021, 2022, 2023 and 2024, accounting for
approximately 24.6%, 17.9%, 17.8% and 17.4% of our total revenue during the same years.
Specifically, our selling and marketing expenses were RMB12.8 million, RMB19.8 million and
RMB57.6 million and RMB35.8 million in 2021, 2022, 2023 and 2024, accounting for 0.9%,
0.6%, 1.4% and 0.7% of our total revenue during the same years, respectively. The increase in
selling and marketing expenses both in absolute amount and as a percentage of total revenue
in 2023 was primarily due to an increase in headcounts of our selling and marketing personnel,
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our efforts to promote our brand image, attend trade shows and explore sales opportunities in
overseas markets. Our administrative expenses were RMB134.7 million, RMB241.1 million,
RMB259.5 million and RMB301.5 million, accounting for 9.0%, 7.3%, 6.2% and 5.9% of our
total revenue during the same years, respectively. Our research and development expenses were
RMB221.0 million, RMB329.3 million, RMB424.1 million and RMB556.2 million, accounting
for 14.7%, 10.0%, 10.2% and 10.8% of our total revenue during the same years, respectively.
From 2021 to 2023, with the exception of selling and marketing expenses from 2022 to 2023
as explained above and research and development expenses from 2022 to 2023 (which was
relatively insignificant from 10.0% to 10.2%), each of our operating expenses and our total
operating expenses as percentages of revenue exhibited a general downward trend. Our
operating expenses were RMB893.4 million in 2024, accounting for approximately 17.4% of
our total revenue during the same year.
An expansion of our business scale as reflected by revenue driven by launch and mass
production of new products, plus a decrease in operating expenses as a percentage of revenue,
is expected to lead to further improvements in our profits and profitability position.
Joint V enture with Toyota
STAES is the primary battery pack supplier for major OEMs that are joint ventures with
Toyota in China. We intend to further leverage such close relationships to explore other
business opportunities.
We hold a 50% equity interest in the joint venture with Toyota, namely STAES, which
primarily focuses on the development and manufacturing of Lithium-Ion and Ni-MH battery
packs for sale to major OEMs that are joint ventures with Toyota in China, with solid
profitability and promising prospects. We were responsible for 50% of the total capital
contribution to the joint venture, and Toyota was responsible for the other 50% through several
of its related entities. Toyota entities also contributed the usage right of “Toyota” brand name,
trademarks, as well as certain technology materials, trainings, personnel, know-hows, and
related consulting services to the joint venture. We are entitled to a profit-sharing percentage
of 50% of the distributable profits (if any after deducting statutory reserves, past losses, taxes
and fees, and as determined fit by the board of STAES) based on our paid-in capital
contribution into the joint venture. In the one month ended December 31, 2023 and the year
ended December 31, 2024, STAES recognized revenue of RMB657.0 million and RMB6,665.3
million, respectively, contributing to investment return for our Group.
Due to the abovementioned profit sharing arrangement with our joint venture, we believe
STAES’s business success also contributes to our overall growth. In 2024, STAES enjoyed a
market share of over 70% in terms of installation capacity of HEV battery packs in China,
according to Frost & Sullivan. This market share is expected to further increase, driven by
policies and industry standards that favor the wider adoption of HEVs over ICEs. In June 2024,
the MIIT introduced amendment proposal to its GB 19578-2021 standards on passenger vehicle
carbon emission, which, if adopted, will take effect in 2026, and is expected to further phase
out ICEs from the market. Within Toyota itself, HEV sales as a percentage of its total sales was
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31% in 2023. In addition to the significant growth potential in HEV product enjoyed by
STAES, our joint venture with Toyota also positions us to establish deeper relationships with
Toyota and to explore business opportunities on BEV and PHEV battery products, and
residential ESS batteries. As of the Latest Practicable Date, we have entered into several BEV
battery product development projects with GAC-Toyota. We believe STAES’s capabilities in
HEV battery products complements our capabilities in PHEV products, helping our Group
cover a wider range of customer needs and industry opportunities, which we believe will help
us achieve sustainable growth and competitiveness.
Despite our net loss position during the first three years of the Track Record Period, we
believe our business is sustainable and has sufficient sources of liquidity to support our
continued operations and growth, primarily due to (i) expected and continued development of
diverse products; (ii) expanding high-quality customer base and diverse overseas business
expansion prospects; (iii) enhanced cost control on product development, manufacturing and
raw material procurement; (iv) expected economies of scale which we believe to further
strengthen as we grow larger in scale; and (v) contribution from joint ventures. We recorded
net profit of RMB91.0 million in 2024. As of February 28, 2025, we had unutilized banking
facilities of RMB3,228.7 million; in addition, in each of 2022 and 2023, we generated positive
cash flow from our operating activities. As such, we believe our liquidity position also supports
our sustainable future growth.
W AREHOUSING, LOGISTICS AND INVENTORY MANAGEMENT
Our inventory management strategy includes the overall consideration of various factors
such as anticipated price increases in raw materials and equipment, as well as trends in demand
growth. In response to these uncertainties, we implement measures to set safety inventory
levels, such as developing inventory policies based on market trends, maintaining high levels
of safety inventory for critical raw materials, and establishing stable partnerships with
suppliers to ensure timely delivery and stable production. Through effective inventory
management and the establishment of safety inventory, we aim to reduce supply chain risks and
enhance our ability to respond to market changes.
We utilize a digital management system that covers the entire supply and delivery chain
to facilitate coordination and resource allocation among order placement, procurement,
manufacturing, transportation, and other processes. We also employ efficient smart logistics
system and data system to improve operation efficiency and precise management, and achieve
optimal inventory turnover efficiency.
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Warehousing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We utilize an integrated intelligent logistics system and an
information platform for smart manufacturing lines to
achieve intelligent monitoring of material and finished
product quality status, storage environment, precise
traceability and operational processes.
Our WMS (Warehouse Management System) oversees
warehouse information, integrating smart warehouse
equipment with technologies such as barcodes, RFID and
smart sensors. This enables automated material handling
based on actual production plans, coupled with material
information management, seamlessly integrated with ERP
systems for closed-loop warehouse management,
significantly reducing storage management costs.
In addition, our LES (Logistics Execution System) and WCS
(Warehouse Control System) coordinate warehouse
management, integrating smart logistics equipment with
technologies such as visual and laser navigation and indoor
positioning for dynamic scheduling, automated distribution
and route optimization. This enables intelligent scheduling
management of workshop materials, and timely supply of
production materials, and greatly enhances material turnover
efficiency while tracking the entire process flow of raw
materials, work in progress and finished products.
Inventory Control /H1118/H1118/H1118/H1118Leveraging our information management systems, we
calculate optimal inventory standards based on
comprehensive production capacity and customer demand.
Our data platform monitors and precisely manages the entire
process of raw material procurement, production, inventory
of work in progress and finished products, and product
shipments.
Transportation and
Packaging /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Through our product transport management system, we
connect inventory information from various checkpoints to
monitor the actual logistics distribution process in real time.
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INFORMATION TECHNOLOGY
We believe that information technology is essential to maintain our competitive position.
We utilize a number of information technology systems to manage all aspects of our operations,
including but not limited to sales management, material procurement, production, quality
control, inventory management, financial reporting and human resources. The following
information technology systems are the most critical to our business among our collective
integrated information systems:
ERP System
(Enterprise Resource
Planning System) /H1118/H1118/H1118
Our ERP system is built on the globally leading SAP ERP
platform, customized deeply to fit industry-specific needs. It
supports various technical interfaces for efficient interaction
with other information systems. The comprehensive and
detailed group organizational structure within our ERP
system supports our overall operations. The deployment and
application of five core modules, namely, FI (Financial
Accounting), CO (Controlling), SD (Sales and Distribution),
MM (Materials Management), and PP (Production Planning),
enable seamless integration of key value chains from sales to
financial clearing, procurement to payment clearing, and
production control to cost management. Each step in the
process is supported by document flows, traceable data flows
and real-time correspondence between business documents
and financial vouchers, achieving integrated business and
financial operations. The ERP system’s optimized process
design for us ensures quick response to delivery demands,
enhancing overall efficiency in sales, procurement,
production, financial integration and collaboration.
Manufacturing
Operations
Management
System /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Powered by the globally renowned Dassault APRISO
manufacturing platform, our manufacturing operations
management system serves as a vital platform for intelligized
software-defined facilities. The system integrates advanced
technologies such as big data analytics, edge computing, AI
and IoT, and encompasses multiple advanced management
and control subsystems, including MES (Manufacturing
Execution System), QMS (Quality Management System),
LES (Logistics Execution System), WMS (Warehouse
Management System) and EMS (Energy Management
System). The superior real-time data collection and
intelligent analysis capabilities of our manufacturing
operations management system ensure millisecond-level
response to vast amounts of data (TPS exceeding 3,100),
coupled with graphical and low-code development tools,
providing a robust data and software foundation for smart
manufacturing, supporting operational improvements and
iterations.
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In production execution, our manufacturing operations
management system uses real-time data analysis and
feedback on a 24/7 basis to provide comprehensive
monitoring of key performance indicators. It achieves
automation in error-proofing and mistake-proofing of all
production factors, including individual, machine, material,
method, environment and measurement, through real-time
analysis and feedback. For critical process control, it
incorporates process modeling, big data, real-time
optimization and predictive control technologies to achieve
precise, real-time and closed-loop process control, with
real-time warnings for process deviations.
In quality control, the short-code, embedded and instruction-
based quality control system on the Dassault APRISO
platform reversely controls equipment shutdown/alarms and
automatically triggers inspections, which ensure detection,
containment and resolution of process quality anomalies,
while manufacturing quality big data analysis models drive
design improvements in R&D quality.
In logistics execution, leveraging the warehouse control
system and intelligent logistics equipment, as well as
vision/laser navigation and indoor positioning technologies,
our manufacturing operations management system achieves
dynamic scheduling, automatic delivery and route
optimization. Shop floor logistics are managed through work
order picking, water-level replenishment, and automatic AGV
handling, ensuring timely supply of production materials,
greatly enhancing material turnover efficiency, and tracking
the entire flow of raw materials, work-in-progress and
finished products.
In warehouse management, our manufacturing operations
management system integrates a warehouse management
system. With barcodes, RFID, and intelligent sensing
technologies, it achieves automatic in-and-out warehousing
based on actual production operation plans, while managing
material information. Combined with ERP documents and
vouchers, it creates a closed-loop warehouse management
process, significantly reducing warehouse management costs.
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In energy management, through comprehensive energy
consumption monitoring, efficiency analysis optimization
and energy balance scheduling, our manufacturing operations
management system achieves refined energy management,
improves energy utilization efficiency, and reduces energy
costs.
PLM System (Product
Lifecycle
Management
System) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Leveraging the Dassault ENOVIA platform, our PLM system
encompasses a comprehensive project management module
that covers the entire product development process, which
includes product design management modules for material
libraries, component libraries, formula libraries,
development, packaging and drawings. Additionally, our
PLM system features process design modules for BOM,
PFMEA, PFC process routes, control plans and process
specifications. The PLM system also incorporates a change
management module for managing product data changes.
Leveraging the integration with our ERP, manufacturing
operations management and OA systems, our PLM system
enables synchronization of materials and BOMs, issuance of
process parameters and cross-system integrated operations
for workflow approvals and other business processes.
OA System (Office
Automation System) /H1118
Integrated with DingTalk, our OA system supports and
enhances the overall business collaboration efficiency for our
Group. Our OA system facilitates group architecture design
and fosters cross-departmental and cross-organizational
business collaboration, providing an efficient and intelligent
working environment. It ensures the execution of company
policies through coordinated approvals across departments
and companies and the standardized conduct of internal
departmental activities. Our OA system also supports the
standardized submission of pre-approval forms, process flow
approvals and timeout alerts, efficiently supporting various
business operations. The high-level API integration of our
OA system, EHR and DingTalk systems enables mobile
support for work collaboration, allowing employees to handle
work matters anytime and anywhere, thus enhancing user
satisfaction and work efficiency.
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SRM System (Supplier
Relationship
Management
System) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our SRM system serves as a platform for collaborative
procurement and supply chain management between us and
suppliers. Our SRM system is designed with a global and
group-wide perspective to comprehensively manage
procurement activities and supports global business
operations, ensuring seamless coordination and
communication throughout the entire procurement process.
By integrating data channels across various systems, the
SRM system ensures data consistency and accuracy,
optimizing data flow and transmission efficiency. It
establishes collaborative portals and workflows that engage
multiple departments and suppliers, improving overall
procurement efficiency. The SRM system includes
comprehensive supplier certification requirements, price
analysis templates, sourcing scoring compositions and
material planning modes based on supplier types and
categories. It also enhances centralized procurement by
optimizing the catalog of centrally procured materials and
increasing centralized procurement rates. The SRM system
also encourage supplier competition through various sourcing
modes, ensuring the selection of cost-effective and high-
quality goods, ultimately achieving cost reduction and
efficiency improvements on the supply side.
HR System (Human
Resource System) /H1118/H1118/H1118
Our HR system supports the comprehensive operation of our
HR business, which enables unified organization
management by updating and interacting with our OA system,
DingTalk, IAM (single sign-on), and other systems on a
real-time basis, ensuring consistent data flow and efficiency.
The HR system provides detailed attendance management,
integrating with various attendance hardware and offering
flexible scheduling strategies, combined with leave
adjustments to meet various attendance needs. Recruitment
and contract management are enhanced with features such as
resume database, online meetings and integration with
E-Signature platforms, making the overall process flexible,
convenient and efficient. The API integration with DingTalk
allows employees to easily access information on salaries,
attendance, meal expenses, dormitory maintenance requests
and bill inquiries, which facilitates our employees to retrieve
and address their information and any discrepancies
promptly.
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Zhuoyi ( ՙᖻ) ZOE
Zenergy Big Data
Intelligence
Platform /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our proprietary operating platform Zenergy big data
intelligence platform is an integral part of our Zhuoyi ( ՙᖻ)
ZOE platform, which serves as an intelligent data asset
empowerment platform and a “smart brain.” It can
dynamically integrate, analyze, and intelligently alert data in
real-time from various dimensions, including sales, finance,
supply chain, production, equipment, processes and quality.
Zenergy big data intelligence platform creates a
comprehensive visualization and analysis system based on
points, lines and surfaces, empowering lean production and
cost improvement through data modeling for various business
scenarios, which is able to address and enhance issues related
to production efficiency, process optimization, cost control
and quality management.
PROPERTIES
We own and lease certain properties in China primarily to be used as production facilities
and offices. 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
December 31, 2024, none of our properties has a carrying amount of 15% or more of our
consolidated total assets.
Owned Land and Properties
As of the Latest Practicable Date, we had the right to use three parcels of land with a total
gross land area of approximately 800,189 sq.m. located in China. As of the Latest Practicable
Date, we had obtained all relevant land use rights certificates of such three parcels of land in
China.
As of the Latest Practicable Date, we owned two properties in Changshu, China, with an
aggregate area of approximately 397,573 sq.m. primarily used for industrial purposes.
Leased Properties
As of the Latest Practicable Date, we had five leased properties in China with a total area
of approximately 140,846 sq.m.. The above properties are primarily used for production
facilities, offices and industrial and storage purposes. As of the Latest Practicable Date, we
have not completed the filing procedure for the lease of two of the leased properties, and have
not completed the procedures for change in filing and registration of the lease regarding the
expansion part leased later.
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COMPLIANCE AND LEGAL PROCEEDINGS
Non-compliance Incidents
We are committed to complying with the laws and regulations applicable to our business.
During the Track Record Period and up to the Latest Practicable Date, we did not have
non-compliance incidents which our Directors believe would, individually or in the aggregate,
have a material operational or financial impact on our business and operation as a whole.
Social Insurance and Housing Provident Fund
Background of Non-compliance
During the Track Record Period, we did not pay social insurance and housing provident
fund in full for some of our employees based on their actual salary level. During the Track
Record Period, we used third-party service providers to apply for social insurance registration
and housing funds deposit registration and to pay social insurance and housing fund for some
of our employees. In 2021, 2022, 2023 and 2024, the number of employees whose social
insurance and housing funds were paid through third-party service providers was 19, 30, 18 and
11, and amount of contributions for these employees accounted for approximately 2.7%, 3.0%,
2.4% and 1.2% of our total contribution during the same years, respectively. The difference
between actual contribution and the amount of required contribution based on actual salary
level of these employees was approximately RMB0.7 million during the Track Record Period.
For all of our employees during the Track Record Period, the difference between actual
contribution and the amount of required contribution based on actual salary level was
approximately RMB15.7 million. We have implemented a series of corrective measures during
the Track Record Period. Pursuant to relevant PRC laws and regulations, the relevant PRC
authorities may demand the employers to pay the outstanding social insurance contributions
within a stipulated timeframe and such employers may be liable to a late payment fee equal to
0.05% of the outstanding amount for each day of delay. If employers fail to make such
payments, they may be liable to a fine of one to three times the amount of the outstanding
contributions. With respect to a failure to pay the full amount of housing provident fund as
required, the housing provident fund management center may require payment of the
outstanding amount within a stipulated timeframe. If the payment is not made within such time
limit, an application may be made to the PRC courts for compulsory enforcement.
Reason for Non-compliance
We were unable to make full social insurance and housing provident fund contributions
for some of our employees during the Track Record Period primarily because (i) our labor force
is highly mobile, which is consistent with the industry practice, (ii) some of our employees
were not willing to bear the amount of full personal contribution to social insurance and
housing provident funds according to applicable statutory rates, which would reduce the
amount of take-home pay they receive; and (iii) some of our employees are migrant workers
are not willing to participate in the social welfare schemes of the city where they work for us
BUSINESS
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because they only intend to temporarily reside in such city and they need to go through
additional procedures to transfer their contributions to other cities where they may want to
relocate. Specifically, the highly mobile nature of our labor force resulted in our inability to
make full contributions, as (i) some employees leave our Group before completing the
minimum period required for registration and/or contribution for social insurance and housing
provident funds; (ii) some employees do not plan long-term work in the city where they are
employed, and are therefore unwilling to reduce their take-home pay to cover their required
contributions for social insurance and housing provident funds.
Risks of the Non-compliance
As of the Latest Practicable Date, no competent government authorities had imposed
administrative action, fine or penalty to us with respect to this non-compliance incident nor had
any competent government authorities required us to settle the outstanding amount of social
insurance payments and housing provident fund contributions.
In June 2024, we conducted an interview with the head of Changshu Municipal Human
Resources and Social Security Bureau (ღ҅) and the payment
section chief of Suzhou Housing Provident Fund Management Center (၍ଣ
ʕː) on our compliance with relevant social insurance and housing provident laws and
regulations, respectively. In late September and early October 2024 and February 2025, we
conducted further interviews with the head of Changshu Municipal Human Resources and
Social Security Bureau (ღ҅) and the payment section chief of
Suzhou Housing Provident Fund Management Center (၍ଣʕː)o no u r
compliance with relevant social insurance and housing provident laws and regulations,
respectively. During the interviews, we obtained confirmations that our Company had not been
required to pay any outstanding social insurance or housing provident fund contributions
accrued from the start of the Track Record Period to the date of the consultations, and that the
risk of making such payment in the future is relatively remote.
We believe the risk of administrative penalties against us for violation of any laws,
regulations or rules in relation to social insurance and housing provident fund is relatively low,
on the basis that (i) we obtained the confirmations from competent authorities as stated in the
previous paragraph; (ii) during the Track Record Period and as of the Latest Practicable Date,
our Group had not been subject to any material investigation, inquiry, sanction, penalty,
litigation or legal proceedings due to failure of paying the full amount of the social insurance
and housing provident fund contributions; and (iii) we intend to, upon the request of the
competent authorities, promptly and fully settle any outstanding amounts of our social
insurance and housing provident fund contributions and comply with their other instructions,
if any.
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Remedial Measures
We have taken and will continue to take the following remedial measures to comply with
the regulatory requirements for social insurance and housing provident fund: (i) in July 2024,
we adjusted the payment basis of housing provident fund for all of our employees in full
compliance with relevant laws and regulations to avoid any shortfalls and are in the process of
communicating with our employees with a view to seek their understanding and cooperation
in complying with the applicable payment base for social insurance, which also requires
additional contributions from our employees; (ii) we have minimized and will make continuous
efforts to minimize the adoption of the third-party service providers to pay social insurance and
housing provident fund. As of December 31, 2024, the number of employees whose social
insurance and housing funds were paid through third-party service providers was reduced to 11;
(iii) we have established an internal control department to monitor our ongoing compliance
with the social insurance and housing provident fund contribution regulations and oversee the
implementation of any necessary measures; (iv) we will regularly review and monitor the
reporting and contributions of social insurance and housing provident fund to keep us abreast
of relevant regulatory developments; and (v) we undertake to maintain close communication
with relevant authorities on a regular basis to understand their requirements and interpretation
of relevant rules and regulations, and make contributions to social insurance and housing
provident fund in accordance with their specific guidance in a timely manner.
Failure to Obtain Certain Permits or Approvals or Complete Certain Acceptance Inspection
During the Track Record Period, we did not obtain certain permits or approvals or
complete the acceptance inspection process or filing procedures for certain of our projects
before commencing construction or production, such as the energy-saving review approval, the
energy-saving acceptance inspection process, the construction project acceptance process and
filing, sewage discharging permit and/or the fire prevention acceptance process and filing for
certain of our projects.
Pursuant to relevant PRC laws and regulations, (i) with respect to energy-saving review
and acceptance inspection, failure to undergo or pass the energy-saving review may subject us
to a fine of up to RMB100,000, and failure to complete the energy-saving acceptance
inspection may subject us to a fine ranging from RMB30,000 to RMB50,000. See “Regulatory
Overview—Regulations on Energy Conservation;” (ii) with respect to construction project
acceptance process and filing, failure to complete the acceptance process may subject us to a
fine ranging from 2% to 4% of the project contract price, and failure to file the acceptance
report may subject us to a fine ranging from RMB200,000 to RMB500,000. We estimate that
the potential maximum aggregate fines that may be imposed to our failure to
complete the acceptance process is approximately RMB2.2 million. See “Regulatory
Overview—Regulations on Production Safety;” (iii) with respect to sewage discharging permit,
failure to obtain such permit may subject us to a fine of up to RMB500,000. See “Regulatory
Overview—Regulations on Environmental Protection—Pollution Permit;” (iv) with respect to
the fire prevention acceptance process and filing, failure to complete such filing procedures
may subject us to a fine of up to RMB5,000. See “Regulatory Overview—Regulations on Fire
BUSINESS
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Prevention;” (v) with respect to the reporting and filing procedures regarding the change of
construction project’s legal entity, if such entity fails to conduct the aforementioned reporting
and filing procedures for filing information changes, it may be ordered to make rectification
within a prescribed time period, and failure to rectify within the specified time may result in
a fine ranging from RMB20,000 to RMB50,000.
As of the Latest Practicable Date, we had obtained written confirmation or credit reports
from competent authorities that we had not been subject to any administrative penalties during
the Track Record Period with regards to energy-saving review, construction project and/or fire
prevention.
Exceeding the Statutory Limit of Dispatched Contract Workers
According to the Labor Contract Law of the PRC ()
amended on December 28, 2012, which became effective on July 1, 2013, more stringent
requirements on labor dispatch were imposed. For example, the number of dispatched contract
workers that an employer hires may not exceed a certain percentage of its total number of
employees, to be decided by the Ministry of Human Resources and Social Security and the
dispatched contract workers may only engage in temporary, auxiliary or substitute work.
According to the Interim Provisions on Labor Dispatch () promulgated
by the Ministry of Human Resources and Social Security on January 24, 2014, which became
effective on March 1, 2014 (the “Interim Provisions”), the number of dispatched contract
workers hired by an employer shall not exceed 10% of the total number of its employees
(including both directly hired employees and dispatched contract workers).
During the Track Record Period, we engaged third-party employment agencies to dispatch
contract workers, and some of our subsidiaries had exceeded the above 10% limit. Pursuant to
relevant PRC laws and regulations, if an employer violates regulations related to labor
dispatch, the labor administration department will order it to make corrections within a
specified period. Failure to make corrections within the given period may lead to a fine ranging
from RMB5,000 to RMB10,000 per person. As of the Latest Practicable Date, all of our
subsidiaries within our Group had less than 10% of dispatched contract workers.
Lack of Property Ownership Certificates and Failure to Complete the Required Procedures
for Lease Registration
As of the Latest Practicable Date, the expansion part of one of our leased facilities did
not have property ownership certificate, and we did not complete the filing procedure for the
lease of two of our leased properties and did not complete the procedures for change in filing
and registration of the lease regarding the expansion part leased later. Pursuant to relevant PRC
laws and regulations, within 30 days after the conclusion of the lease agreement, the parties
involved shall register the lease and if there is any change in the registered lease, the parties
involved shall file for a change in the lease registration within 30 days. Failure to comply
within the stipulated period may result in a fine ranging from RMB1,000 to RMB10,000
imposed by relevant authorities.
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Failure to Complete Safety and Occupational Health Acceptance
During the Track Record Period, we did not complete the safety and occupational health
assessment, acceptance and filing procedures for certain of our projects before commencement
of construction or production.
Pursuant to relevant PRC laws and regulations, (i) failure to complete the design of safety
facilities and/or pass the relevant acceptance of design of safety facilities may subject us to a
fine ranging from RMB5,000 to RMB30,000, and (ii) failure to complete the occupational
health pre-assessment, the design and construction of the occupational disease prevention
facilities, occupational disease hazard control effectiveness assessment and/or failure to pass
the occupational disease hazard prevention facilities acceptance may subject us to a fine
ranging from RMB100,000 to RMB500,000, and failure to arrange the review for effectiveness
report, failure to arrange the acceptance of relevant facilities, and/or failure to submit the
relevant written report for construction projects with serious occupational disease hazards may
subject to a fine ranging from RMB5,000 to RMB30,000. See “Regulatory
Overview—Regulations on Production Safety.”
We had obtained written confirmation or the credit reports from the competent authorities
that we had not been subject to any administrative penalties during the Track Record Period
with regards to safety and/or occupational health.
Failure to Obtain Environmental Approvals
During the Track Record Period, certain of our facilities commenced construction or
production without obtaining the relevant approvals with regards to environmental impact
assessment or without completing the environmental protection projects acceptance inspection.
Pursuant to relevant PRC laws and regulations, failure to submit an environmental impact
assessment report or form for approval may subject us to a fine ranging from 1% to 5% of the
total investment in the project, and failure to complete the construction, acceptance and/or
inspection of the environmental protection facilities may subject us to a fine of up to
RMB1,000,000, depending on the circumstances. We estimate that the potential maximum
fines that may be imposed to our failure to submit an environmental impact assessment report
is RMB2.5 million. See “Regulatory Overview—Regulations on Environmental
Protection—Construction Projects.”
We had obtained official credit reports for our Group which confirm that we were not
subject to any administrative penalties with regards to environmental sector during the Track
Record Period.
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Legal Proceedings
We may from time to time be involved in contractual disputes or legal proceedings arising
out of the ordinary course of our business. During the Track Record Period and up to the Latest
Practicable Date, we were not subject to any claims, damages or losses which would have a
material adverse effect on our financial position or results of operations as whole. As of the
Latest Practicable Date, no material litigation, arbitration or administrative proceedings had
been threatened against us. During the Track Record Period, the Company applied for
intellectual properties, and applied for re-consideration and filed administrative proceedings
with competent authorities in certain application cases where the initial and re-consideration
applications were refused by the relevant authorities. Other than the above legal proceedings,
we were not involved in any legal proceedings and/or lawsuits or arbitrations relating to
intellectual property rights during the Track Record Period and up to the Latest Practicable
Date, and our Directors are not aware of any intellectual property infringements, investigations
or pending lawsuits as of the Latest Practicable Date.
LICENSES, PERMITS AND APPROV ALS
The following table sets forth a summary of the material licenses, permits and approvals
that we have obtained for our business operations as of the Latest Practicable Date.
Licenses/Permits/Approvals Issuing Authority Issue Date Expiry Date (1)
Radiation Safety
License (τΌ஢
̙ᗇ)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Suzhou Ecology and
Environment Bureau
(ᘽψ̹͛࿒ᐑྤ҅)
July 22, 2022 December 26,
2025
Radiation Safety
License (τΌ஢
̙ᗇ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nanjing Ecology and
Environment Bureau
(ԯ̹͛࿒ᐑྤ҅)
September 17,
2022
September 16,
2027
Pollutant Discharge
Permit ( રϮ஢̙ᗇ) /H1118
Suzhou Ecology and
Environment Bureau
(ᘽψ̹͛࿒ᐑྤ҅)
June 24, 2021 June 23, 2026
Pollutant Discharge
Permit ( રϮ஢̙ᗇ) /H1118
Suzhou Ecology and
Environment Bureau
(ᘽψ̹͛࿒ᐑྤ҅)
June 25, 2022 June 24, 2027
Pollutant Discharge
Permit ( રϮ஢̙ᗇ) /H1118
Suzhou Ecology and
Environment Bureau
(ᘽψ̹͛࿒ᐑྤ҅)
June 19, 2023 June 18, 2028
Pollutant Discharge
Permit ( રϮ஢̙ᗇ) /H1118
Nanjing Ecology and
Environment Bureau
(ԯ̹͛࿒ᐑྤ҅)
April 27, 2022 April 26, 2027
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Licenses/Permits/Approvals Issuing Authority Issue Date Expiry Date (1)
Foreign Trade
Operators
Registration Form
(ࣩ
ڌ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jiangsu Changshu
Foreign Trade
Operators
Registration Authority
(຾
೮াዚᗫ)
June 24, 2020 N/A
Foreign Trade
Operators
Registration Form
(ࣩ
ڌ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jiangning Development
Zone Foreign Trade
Operators
Registration Authority
(׸
೮াዚᗫ)
August 19,
2022
N/A
Foreign Trade
Operators
Registration Form
(ࣩ
ڌ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jiangsu Changshu
Foreign Trade
Operators
Registration Authority
(຾
೮াዚᗫ)
October 12,
2019
N/A
Customs Filing Receipt
of Consignees and
Consigners of
Imported and
Exported Goods ( ऎ
ϗ೯஬
Ϋੂ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changshu Custom ( ੬ᆞ
ऎᗫ)
July 12, 2019 N/A
Customs Filing Receipt
of Consignees and
Consigners of
Imported and
Exported Goods ( ऎ
ϗ೯஬
Ϋੂ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jinling Custom (௒ऎ
ᗫ)
July 28, 2021 N/A
Customs Filing Receipt
of Consignees and
Consigners of
Imported and
Exported Goods ( ऎ
ϗ೯஬
Ϋੂ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changshu Custom ( ੬ᆞ
ऎᗫ)
January 23,
2017
N/A
Note:
(1) “N/A” represents licenses that do not have an expiration date and will remain valid unless revoked.
BUSINESS
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COMPETITION
As one of the ten largest players in EV battery market in terms of installation capacity,
we operate in China’s power battery industry, which is highly competitive and concentrated
with top ten manufacturers accounting for 95.3% of total installation capacity in 2024. We
primarily compete with other EV power battery manufacturers in China, as currently the vast
majority of power batteries are used in EVs. With the EV battery installation capacity of 9.9
GWh in 2024, our Group were the 9th largest player among manufacturers of EV battery in
China, according to CABIA. Our overall EV battery installation volume growth ranked fourth,
our ternary lithium battery installation volume growth ranked third, and our LFP battery
installation volume growth ranked fourth among all top 10 players in China in 2024. According
to Frost & Sullivan, the overall power battery industry is expected to grow rapidly in sales
volume, driven by factors such as the accelerating transportation electrification process,
technological advancement in EV batteries, favorable government policies, and continuous
cost reductions for EV batteries. The power battery market is also expected to undergo the
following trends, such as continued technology innovation and breakthroughs on battery
performance, reducing costs, increasing industry concentration, closer collaboration between
battery manufacturers and OEMs, increasing importance of flexible manufacturing capacity,
increasing diversity of business models, and battery standardization. See “Industry Overview”
for more details on our competitive landscape, industry growth drivers and development trends.
We believe we are well positioned to capture the growth trend in China’s power battery
industry, and further improve our competitive position. We offer a diverse product portfolio,
capturing the structural growth opportunity while satisfying different customer needs. Our
R&D process is highly forward looking in detecting and mastering the latest technological
development in electrochemistries and advanced materials as well as other technologies and
product development trends in the industry. Our standardized battery cells and platformed
battery pack products effectively lower our R&D and manufacturing costs, and our highly
software-driven and intelligent manufacturing capacities enable us to flexibly configure and
allocate our manufacturing resources to different products in order to flexibly respond to
changes in market demand, enabling us to avoid excessive manufacturing capacities while
ensuring sustainable and efficient growth.
We have experienced improved market share and ranking in 2024, which serves as proof
of how we are well positioned to achieve further growth in scale and competitiveness. As
measured by installation capacity in 2024, we were the 9th largest EV battery manufacturer and
held a market share of 1.8% amongst EV battery manufacturers in China, compared to 10th and
1.4% in terms of 2023 installation capacity.
We have a track record of timely adjusting to the latest development trend in China’s
power battery industry. For example, we strategically decided to focus on developing batteries
with LFP electrochemistry system in addition to our established NCM electrochemistry
products, and also significantly invested in the development of battery products for PHEV
(including EREV) application scenario in addition to BEV application scenarios, driven by our
understanding of the development trend in China’s EV and power battery industries.
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We have established a balanced and sustainable customer base with major customers
spanning across state-owned enterprises, pure-play EV companies, and multinational OEMs,
and without material reliance on any single customer. According to Frost & Sullivan, in 2023,
revenue contribution from top customer for our peers range from approximately 17.3% to
85.2%, while the revenue contribution from our top customer in 2023 was only 28.3%, being
near the low end of peers’ range. We also enjoy deep and high-quality relationships with our
customers, as demonstrated by the series of awards from our customers. Please see
“Business—Sales, Marketing and Customers” for more details.
We obtained 48 design-wins as of the Latest Practicable Date, with total planned delivery
volume for PHEV batteries alone of over 150 GWh over the next four to five years, according
to planned vehicle delivery plans of the OEMs from whom we had obtained design-wins. Such
customer relationships as demonstrated by obtained design-wins are expected to help us
achieve significant growth in the future and outcompete against our peers.
A W ARDS AND RECOGNITIONS
The following table sets forth some of our recent major awards and achievements.
Award Y ear Award name Award institution
2024 /H1118/H1118/H1118/H1118/H11182023 China Unicorn Enterprises Beijing Great Wall Enterprise Strategic
Research Institute (޼
ה)
2024 /H1118/H1118/H1118/H1118/H11182024 World Unicorn Enterprises Beijing Great Wall Enterprise Strategic
Research Institute (޼
ה)
2024 /H1118/H1118/H1118/H1118/H11182024 Jiangsu Province Four-Star
Cloud Enterprises
Jiangsu Province Department of Industry and
Information Technology (ڦ
ʷᝂ)
2024 /H1118/H1118/H1118/H1118/H11182024 Suzhou Industrial Design
Center of the Year
Suzhou Bureau of Industry and Information
Technology (ʷ҅)
2024 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou City 3A Green Factory Industry and Information Technology Bureau
of Suzhou (ʷ҅)
2024 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou City Low Altitude Economy
Leading Enterprises
Suzhou Municipal People’s Government ( ᘽ
ִ݁)
2024 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou Intellectual Property
Protection Center Pre-examiner
Practice Base
Intellectual Property Protection Center of
Suzhou (ᚐʕː)
2024, 2023 /H1118/H1118IEC, UL1642, UL1973,
GB-T23001-2017, UN38.3
product certification
Technischer überwachungs-Verein (TUV),
Societe Generale de Surveillance S.A.
(SGS) and China Telecom Hongxin
Information Technology Co., Ltd. ( ʕཥᒿ
ʮ̡)
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Award Y ear Award name Award institution
2024, 2022 /H1118/H1118IATF16949, ISO45001, ISO14001,
CNAS system certification
Societe Generale de Surveillance S.A. (SGS)
and China National Accreditation Service
for Conformity Assessment (CNAS) ( ʕ਷
ึ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Enterprise of the Year of Future
Business King
36Kr (36 ὄ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118High-Tech Golden Globe Award —
2023 Rapidly Growing Enterprise
Gaogong Industry Institute Co., Ltd. (GGII)
Lithium-Ion Batteries ( ৷ʈ቞ཥ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Top 100 New Energy Storage
Brands
EESA (ᑌຑ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Unicorn Enterprises Productivity Center of Jiangsu Province ( Ϫ
ආʕː)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Top 150 New Economy Unicorn
Enterprises
The Internet Weekly ( ʝᑌၣ඄̊)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Annual Impact Enterprise, Annual
Innovation Enterprise
The 7th China Battery Industry “Lithium
Summit” Honor Ceremony and the 2023
China Battery Industry Chain Honorary
Enterprise Recommendation (ʕ਷
ཥϫБุ“቞ซ”࿲ᚑସՊ࿬2023 ʕ਷ཥϫ
ପุᗡ࿲ᚑΆุપʧ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Outstanding Award for Energy
Storage Applications
The SNEC International Energy Storage
Exhibition (SNEC࢝)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Province Private
Technology Enterprise
Jiangsu Private Science & Technology
Enterprise Association (ҦΆ
ุ՘ึ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Province Three-Star Cloud
Enterprise
Industry and Information Technology
Department of Jiangsu Province (ʈ
ʷᝂ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou Municipal Enterprise
Technology Center
Suzhou Municipal People’s Government ( ᘽ
ִ݁)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Province High-tech
Industrial Development Zone
Gazelle Enterprise
Productivity Center of Jiangsu Province ( Ϫ
ආʕː
)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Province Integrated
Management System
Standardization Demonstration
Enterprise for the Integration of
Informatization and
Industrialization
Industry and Information Technology
Department of Jiangsu Province (ʈ
ʷᝂ)
2023 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou Municipal Engineering
Technology Research Center
Science and Technology Bureau of Suzhou
(ኪҦஔ҅)
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Award Y ear Award name Award institution
2023, 2022 /H1118/H1118China Unicorn Enterprises Great Wall Enterprise Institute (۬ڗ
ה)
2022 /H1118/H1118/H1118/H1118/H1118/H1118Top Ten High-tech Enterprises in
Changshu High-tech Zone
Management Committee of Changshu New &
Hi-tech Industrial Development Zone ( ੬
ึ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118Jiangsu Province Intelligent
Manufacturing Demonstration
Workshop
Industry and Information Technology
Department of Jiangsu Province (ʈ
ʷᝂ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118National High-tech Enterprise State Taxation Administration of the People’s
Republic of China (೼ਕᐼ҅),
Taxation Administration of Jiangsu
Province (೼ਕ҅), Science and
Technology Department of Jiangsu
Province (ኪҦஔᝂ) and Finance
Department of Jiangsu Province (ৌ
ᝂ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118Suzhou Municipal Demonstration
Intelligent Workshop
Industry and Information Technology Bureau
of Suzhou (ʷ҅)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
Our mission is to build a sustainable energy supply framework for the future world
through the development of forward-looking technology covering interconnected land, sea and
air application scenarios. Our vision is to join forces with our stakeholders in creating a
carbon-neutral society. We recognize environmental, social, and governance (“ ESG”) as an
integral part of our core corporate philosophy and integrate ESG in our business operations,
with commitment to the new quality productive forces for green energy covering all land, sea,
and air application scenarios. By constantly improving battery technology, we provide digital,
precise, and efficient new energy solutions for the global Lithium-Ion power and energy
storage sectors, creating sustainable value for our stakeholders.
ESG Governance
We continuously improve our ESG management system. The Board of Directors
identifies, assesses, and oversees major ESG matters; deliberates the ESG vision, objectives,
management policies, and strategies; and reviews the progress and performance of ESG
objectives. We have established an efficient ESG organizational structure with defined
responsibilities to provide organizational support for our ESG efforts. A Sustainable
Development Commission is in place to identify and assess ESG risks and opportunities;
formulate ESG objectives, strategies, management policies, and tactics; and regularly review
the progress and performance of ESG matters, aiming to promote the integration of ESG into
the Company’s day-to-day operations and management. We value stakeholders’ expectations
and demands and will further improve our ESG governance structure and enhance our ESG
management.
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ESG Materiality Assessment and Risk Management
ESG materiality assessment and the identification and management of ESG-related risks
are crucial to the sustainable development. Referring to the Environmental, Social, and
Governance Reporting Guide of the Hong Kong Stock Exchange, and considering our business
dynamics and industry trends, we have identified material ESG issues and risks through peer
benchmarking and stakeholder questionnaires.
 We conducted an industry benchmarking analysis to identify material ESG issues
that are relevant to the actual operation of our business.
 We focus on stakeholder expectations on corporate ESG issues, and distribute
questionnaires to key internal and external stakeholders, including shareholders and
investors, government and regulatory agencies, customers, suppliers and partners,
the public, the media and industry associations, and employees, to understand the
concerns and opinions of each stakeholder on ESG issues.
 Based on the questionnaire results, we prioritized ESG issues according to their
materiality to corporate growth and stakeholders. We have identified highly material
ESG issues and integrated them into our ESG strategy and development plan.
The results of our materiality assessment indicate that our ESG priorities include
environmental management, employee rights and benefits, product quality and safety,
occupational health and safety, energy management, and research and development (R&D) and
innovation.
We attach great importance to the impact of climate change on our financial operations
and sustainable development. By examining relevant policies and our internal operations, we
have identified climate-related risks and opportunities, assessed their potential impact on
various aspects of our operations and development, and developed appropriate
countermeasures.
 Physical risks . Extreme weather events such as typhoons, heavy rains, and floods
caused by global climate change may lead to the depreciation of our fixed assets,
loss of labor, or instability in production and personnel. Additionally, sea level rises,
climate warming, and other greenhouse effects may increase our production energy
consumption, potentially destabilizing our facilities. To address these issues, we
have implemented contingency plans and measures for extreme weather conditions
(such as high temperatures, extreme cold, floods, and typhoons) and are promoting
energy conservation and emission reduction measures to mitigate the impact of
physical risks.
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 Transition risks . We have identified the transition risks of legal and policy risks,
technology risks, market risk, and reputation risk, which may affect our operations
and financials in the short to medium term. Stricter government regulations on
carbon emissions increase our compliance pressure. The growing demand for
cleaner technologies requires us to invest more in R&D and clean energy
technologies. Additionally, heightened concern from customers, consumers, and
other stakeholders about response to climate change could impact the image and
reputation of companies without climate actions. To address these challenges, we
focus on developing and implementing energy-efficient, low-emission, and clean
technologies. We aim to understand market demands and provide low-carbon
products and services through technological innovation, thus ensuring that we can
meet both regulatory requirements and consumer expectations.
 Potential opportunities . As sustainability gains more recognition, customers and
consumers are increasingly preferring environmentally friendly products and
services. Focusing on the core performance of batteries, we independently research
cutting-edge technologies in various fields, develop industry-leading feature
products, and integrate the concepts of environmental protection and low carbon
into our business model and business development. This showcases to stakeholders
our action to address climate change and helps us build a responsible corporate
image and capture more market opportunities.
As of December 31, 2024, we have not incurred any penalties for violations related to
product quality and safety, occupational health and safety, or social and environmental laws
and regulations. Furthermore, we have not experienced any significant impacts from
environmental, social, or climate-related risks on our business, strategy, and financial
performance. Upon listing, we will continue to refine our risk identification and assessment
processes, enhance our risk management capabilities, and regularly publish ESG reports in line
with regulatory requirements.
Environment
We strictly comply with the Environmental Protection Law of the People’s Republic of
China and other environmental protection regulations and standards. We have developed
internal management systems, including the Identification, Evaluation, and Control Process for
Environmental Factors, and have enhanced our environmental management system, which is
certified under ISO 14001. Our commitment is to minimize the impact of our production and
operations on the ecology, environment, and natural resources. As of December 31, 2024, we
have not experienced any environmental pollution incidents.
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We have set the following environment-related targets in light of the current state of
business and environmental management to promote the green and low-carbon development of
the Company:
 Emission reduction target : We will continue to maintain 100% exhaust emissions in
compliance with the standard.
 Waste reduction targets : We aim to achieve a 1.25% year-on-year reduction in
hazardous waste discharge per unit of production capacity in 2025 compared to
2024, 100% of hazardous waste is legally disposed.
 Energy and water efficiency targets : We are constantly improving energy
efficiency, aiming at an 18% decrease in comprehensive energy consumption per
unit of production capacity in 2025 compared to 2024. We are also actively
managing water consumption in our production and operations, targeting an 8%
decrease in water consumption per unit of production capacity in 2025 compared to
2024.
Emissions Management
We strictly abide by the Atmospheric Pollution Prevention and Control Law of the
People’s Republic of China, the Law of the People’s Republic of China on the Prevention and
Control of Environment Pollution Caused by Solid Wastes, and other pertinent laws and
regulations. We have formulated internal management systems such as the Management
Process for Atmospheric Pollution Prevention and Control, the Management Process for Water
Pollution Prevention and Control, and the Waste Control Process. All waste gas, wastewater,
and solid waste generated by the Company are rigorously controlled and discharged until they
meet the standards.
 Waste gas management . We seek to effectively manage and control all equipment,
facilities, and activities that emit pollutants into the atmosphere. We install and use
low-emitting and energy-saving equipment and facilities and prefer new energy
vehicles with lower exhaust emissions for our business operations to further reduce
waste gas emissions. Waste gases generated from our production and operations are
primarily NOx, SOx, and particulate matter (PM). Our waste gas emissions in 2021,
2022, 2023, and 2024 were 6.26 tons, 14.35 tons, 6.27 tons and 6.28 tons,
respectively. The exhaust emission densities are 0.003 kg per unit output (kWh),
0.004 kg per unit output (kWh), 0.001 kg per unit output (kWh), and 0.001 kg per
unit output (kWh), respectively.
 Wastewater discharge . The wastewater generated during our production and
operations primarily consists of domestic and industrial wastewater. We ensure that
wastewater cannot be discharged into the rainwater pipe network. We require that
wastewater from the cafeteria shall be treated with grease and slag insulation and
then discharged to the municipal sewage through the domestic sewage treatment
station in compliance with the standards. We collect wastewater using dedicated
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sewage collection pipes and tanks, treat it in an industrial wastewater plant, and then
reuse it in cooling water towers. In 2021, 2022, 2023 and 2024, we discharged
approximately 31,313 tonnes, 50,608 tonnes, 149,940 tonnes and 231,407 tonnes of
wastewater, respectively. The wastewater discharge density is approximately 0.016
tons per unit output (kWh), 0.013 tons per unit output (kWh), 0.021 tons per unit
output (kWh), and 0.019 tons per unit output (kWh) in 2021, 2022, 2023 and 2024,
respectively.
 Hazardous and non-hazardous waste . We have standardized our waste
classification system and intensified our waste segregation efforts. Hazardous waste,
such as waste acid and liquids, are collected according to regulations and entrusted
to qualified agencies for proper disposal. The hazardous wastes generated in the
production process are mainly packaging drums, waste rags, cathode sludge, waste
oil, waste filter elements, waste activated carbon, and waste electrolyte etc. Our
hazardous waste emissions were 89,070 kg, 510,560 kg, 559,980 kg and 862,871 kg
in 2021, 2022, 2023 and 2024, respectively, and the hazardous waste emissions per
unit output were 0.045kg, 0.129kg, 0.080kg and 0.070kg in 2021, 2022, 2023 and
2024, respectively, all of which were 100% compliant of applicable standards and
rules. We host regular employee training on “standardized waste management” to
raise employees’ awareness of environmental protection, and we strive to reduce the
amount of waste generated to minimize the environmental impact of our operations.
In 2021, 2022, 2023 and 2024, it is estimated that we discharged approximately
2,033 tons, 3,787 tons, 7,377 tons and 10,277 tons of non-hazardous waste,
respectively, with an average density of about 0.001 tons per unit output (kWh) for
the four years. The non-hazardous waste generated in the process of our production
and operation mainly consists of waste paper, waste wood, household waste, and
kitchen waste, among others.
Our pollutant emissions are in line with the industry norm. According to publicly
available information, the average and median number of total intensity of
greenhouse gas (“ GHG”) emissions (Scope 1 and Scope 2) of the leading companies
in the industry in 2023 is 0.031 tonnes of carbon dioxide equivalent per unit output
(kWh).
Hazardous waste disposal suppliers’ selection
We have developed a series of internal policies on selecting hazardous waste disposal
suppliers to reduce the risk of accidental leakage and contamination, including but not limited
to: (i) we have set up waste control procedures which requires our supply chain management
department to strictly follow the procedures when select waste disposal suppliers; (ii) our
environmental, health and safety department will review the qualifications of waste disposal
suppliers, including business licenses, hazardous waste operation permits, etc.; and (iii) after
being reviewed and approved by the environmental, health and safety department, the selected
supplies will be included in our list of qualified suppliers. The supply chain management
department can select suitable waste disposal suppliers from the list of qualified suppliers. Our
current business does not involve used power battery or parts recycling.
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Energy and Resource Management
To optimize our management of energy efficiency, we have set up an Energy Conservation
Committee and formulated internal policies and systems such as the Management Standards for
Energy Conservation and Consumption Reduction, the Control Process for Energy Reviews,
the Control Process for Energy Operations, and the Control Process for Energy Performance
Monitoring and Evaluation. We decrease energy consumption by promoting energy-efficiency
retrofitting of equipment, using new energy sources, and greening our offices. Digital and
intelligent administration has enabled comprehensive monitoring and evaluation of energy use
and carbon footprint across the Company. In addition, our demand-driven business strategy and
core philosophy help us reduce the waste of production resources. We adopt standardized
battery cells, platformed battery packs, and differentiated their performance with diversified
electrochemistries to meet diversified customer needs while reducing product material
consumption.
 Green offices : We advocate green and energy-saving practices in our offices. Our
energy-saving measures include maximizing the use of natural lighting, using timed
or sound-activated switches in public areas, setting air-conditioning temperatures no
lower than 26°C in summer, turning off lights during non-working hours, and cutting
off electricity after work.
Metric Unit 2021 2022 2023 2024
Electricity consumption /H1118/H1118kWh 59,710,112 124,804,527 259,674,611 304,080,555
Electricity consumption
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
kWh/
Production
output (kWh)
30.42 31.50 36.95 24.76
Gasoline consumption /H1118/H1118/H1118L 20,203 30,647 32,475 23,292
Natural gas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118m
3 7,771,261 15,367,477 28,969,454 28,918,430
Packaging material
consumption /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
t 13,148 4,698 13,733 23,608
Our primary water is obtained from the municipal supply, and we have not faced any
water shortages. By using water-saving equipment and recycling water, we have successfully
decreased water consumption and increased water efficiency.
 Reducing water consumption : We install water-saving equipment in office and
production areas, such as water-saving faucets, toilet flushing devices, shower
heads, and automatic shut-off faucets to minimize water waste as far as possible. A
water monitoring system is in place to detect abnormalities in water usage through
data analysis and monitoring, allowing us to take timely corrective measures. We
regularly inspect and maintain the water supply system and optimize the layout of
the water supply pipe network to ensure its efficient operation and decrease leakage.
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 Increasing water efficiency : We install rainwater collection facilities to recycle
rainwater for irrigation, flushing, and other non-potable uses. A circular cooling
water system is integrated into the production process to recycle cooling water.
Treated wastewater is reused for flushing, cleaning, replenishing cooling towers,
and other purposes.
We consumed 241,664 m
3, 646,060 m 3, 944,459 m 3 and 1,083,703 m 3 of water in 2021,
2022, 2023 and 2024, respectively.
We also prioritize the impact of our production and operations on biodiversity and natural
resources and promote the ecological thinking of sustainability and recycling across our value
chain. We advocate for resource recycling and enhance recycling rates through innovations in
materials systems, structures, processes, and equipment, thereby contributing to a green
circular economy. This approach helps us fulfill our commitment to providing customers with
green, high-quality products while protecting the health and stability of the ecosystem.
Responding to Climate Change
We are striving for green, low-carbon, and sustainable development. We actively respond
to climate change, improve climate governance, and set up the Energy Management
Department as the main department responsible for carbon emission management, and the
director of the Energy Management Department as the person in charge of energy management,
responsible for establishing and optimizing the construction and management of the energy
system, setting, decomposing and assessing the annual targets of the Group’s bases, and
continuously improving the energy management performance.
Through the establishment of ISO 50001 energy management system and the
establishment of FMCS plant management system platform, the Energy Management
Department monitors and tracks the energy consumption of each base of the Group in real time,
realizes the refined and visual management of energy consumption and carbon emission data,
ensures the timely analysis and judgment of abnormal deviation data, and takes corresponding
countermeasures and adjustments. The department regularly holds weekly, monthly and annual
energy consumption optimization and carbon reduction meetings since May 2024, focusing on
the analysis and improvement of energy and carbon emission reduction deviations, ensuring
that the responsibility is assigned to the people, and continuously strengthening energy use
management and carbon emission reduction measures.
By installing renewable energy equipment and facilities such as rooftop distributed
photovoltaic power generation systems, we utilize solar energy to reduce electricity
consumption and thereby reduce carbon emissions from day-to-day operations. Other
initiatives to reduce carbon emissions include storing, converting, and releasing electricity
through energy storage plants, thus effectively balancing peak and valley electricity
consumption.
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Since 2023, we verify our GHG emissions and certify the carbon footprint of our products
every year.
Metric Unit 2021 2022 2023 2024
GHG emissions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 49,075 100,635 202,746 226,442
GHG emission intensity /H1118/H1118Tonne CO 2e/
Production
output (kWh)
0.025 0.025 0.029 0.018
Scope 1 GHG emissions /H1118tCO
2e 17,034 33,664 63,405 63,273
Scope 1 GHG emission
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonne CO 2e/
Production
output (kWh)
0.009 0.008 0.009 0.005
Scope 2 GHG emissions /H1118tCO
2e 32,040 66,970 139,341 163,170
Scope 2 GHG emission
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonne CO 2e/
Production
output (kWh)
0.016 0.017 0.020 0.013
Scope 3 GHG emissions /H1118tCO
2e 501,437 748,507 874,179 1,315,430
Note: Scope 1 GHG emissions are primarily from the consumption of direct energy (gasoline, natural gas, etc.)
in our operations; Scope 2 GHG emissions are primarily from the consumption of indirect energy
(purchased or acquired electricity) in our operations. The data refers to the Reporting Guidance on
Environmental KPIs of the Hong Kong Stock Exchange, and the GHG emission factor for purchased
electricity refers to the national grid average emission factor for 2022; and Scope 3 GHG emissions are
derived from purchased goods and services, use of sold products and employees’ commuting of our
business operation, where the activity level data is mainly based on internal data systems and purchasing
records and sales records, internal survey questionnaires, and relevant emission factors and parameters
are derived from the US Environmentally-Extended Input-Output (EEIO) databases, Ecoinvent
database, China Products Carbon Footprint Factors Database, Guidelines for Accounting Methods and
Reporting of Greenhouse Gas Emissions for Land Transportation Enterprises, Fuel Consumption Limits
and Measurement Methods for Natural Gas Operating Buses (JT/T 1444-2022), UK DEFRA GHG
Conversion factor 2022, IPCC Sixth Assessment Report, and 2006 IPCC Guidelines for National
Greenhouse Gas Inventories.
In response to China’s “dual carbon” strategy, we plan to reduce our greenhouse gas
emissions per unit of production capacity (Scope 1 and 2) by 15% by the end of 2025. We have
calculated the carbon emissions from purchased goods and services, use of sold products and
employee commuting in Scope 3 and expect to gradually expand the calculation to other
categories of emissions from the second half of 2024 to 2025. Scope 3 carbon emissions from
purchased goods and services refer to emissions from extractions, production, and
transportation of goods and services purchased or acquired by the Company in the relevant
period, including all upstream (cradle-to-gate) emissions of purchased goods and services.
Scope 3 carbon emissions from use of sold products refer to emissions from end use of goods
and services sold by the Company in the relevant period, including the direct use-phase
emissions of sold products over their expected lifetime. We will aim for a 2.5% annual
reduction in Scope 3 emissions based on science-based targets. We will achieve our Scope 3
emissions reduction targets by increasing the proportion of green and low-carbon
transportation, promoting green travel for employees, green office, and optimizing the energy
structure.
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Social
Quality and Services of Products
Adhering to the corporate values of “Excellence, Renovation, and Inspire”, we always
pursue improvements and better quality, and never be satisfied with what we have achieved.
Our guidelines are to serve the market, satisfy consumers, meet customers’ needs, and our
commitment is to provide customers with reliable products.
Product Quality Management
We have been improving our product quality management system and obtained quality
management system certifications such as IATF 16949 and AS9100D. We are the first power
battery company to obtain the AS9100D certification for aviation and space quality
management systems and one of the first leaders in the low-altitude economy in Suzhou. We
have also comprehensively strengthened our quality management in the aspects of product
design, reliability analysis, supply chain. Our SAP, MES, and manufacturing operations
management systems enable data monitoring across the process and precise product
traceability.
We have created a standardized business quality management model under the intelligent
information system platform. With “lean quality management” as the core to drive the internal
cycle, the model is facilitated by the “product safety management system” and “performance
excellence” management model of intelligent manufacturing. We have created a quality culture
engaging all employees, aiming at “excellent quality, technological innovation, chip-based
services, and continuous improvement,” and promoted the integration and enhancement of
design quality, monitoring and measurement quality, process quality control, system
management, and the quality culture. In this way, we are constantly pursuing mature quality
management.
In addition, digital and intelligent manufacturing effectively ensures our product quality.
We replace manual inspection with visual inspection technology enabled by AI deep learning
and build a quality closed-loop control system with AI edge computing technology, effectively
improving product quality consistency.
In terms of product safety, we follow the Product Safety Control Standards to identify the
safety characteristics and process characteristics of our products and their manufacturing
processes, and take the necessary monitoring measures to ensure that we meet our customers’
needs. We minimize the risks related to product safety faced by our employees at the stages of
product design, development, and manufacturing, striving to avoid any safety defects in our
products delivered to customers. We refer to the Standards for Handling Product Safety
Abnormalities to control manufacturing process defects involving product safety and have a
rapid response process for abnormalities in place to ensure timely and effective closure of
anomalous issues. In addition, we have developed the wing-fin top cover design, pioneered the
use of blue-laser compound-nugget welding technology and many other advanced
technologies, and prevented product safety risks through technologically advanced
management strategies and other means. During the Track Record Period and up to the Latest
Practicable Date, the Company was not subject to any material lawsuits of product liability
claims or redesign efforts.
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Product Recall
We actively fulfill our obligations to recall defective products in strict accordance with
relevant provisions in the Regulations on the Analysis and Management of Market Recalled
Parts. To standardize the analysis and management of recalled products, a recalled product
analysis team composed of professional technicians from various departments is put in place,
responsible for the return of recalled products to the factory and analysis. We have set out a
process for product recall analysis, raising clear requirements for the formulation of plans for
the return and analysis of recalled products, on-site confirmation and return of recalled
products to the factory, and analysis of recalled products. During the Track Record Period and
up to the Latest Practicable Date, we had not experienced any material product recalls, return
or complaints, and we are not aware of any pending product recalls or investigations or actions
by relevant authorities or customers which may lead to a product recall.
Customer Service
We have constructed a front and back-end matrix organization corresponding to customer
management lines. With customers at the center, the R&D, purchasing, production, marketing,
and finance departments are coordinated into a cross-departmental product development team.
This approach facilitates rapid response to customer needs, quality customer service, and
continuous improvements in customer service satisfaction.
 After-sales service and management : We have formulated regulations on after-sales
standardized operations in line with the International Automotive Task Force (IATF)
system standards to effectively control the key elements of after-sales service. With
an operation model featuring after-sales maintenance and technical support, we
provide customers with diversified after-sales service projects, including battery
inspection, battery replacement, battery repair, battery charging, and battery
maintenance, along with continuously improving service experience.
 Customer complaint handling : We have established a complete end-to-end issue
handling mechanism that consists of quality information feedback, information
collection, analysis plans, issue tracking, report generation, issue follow-up,
horizontal rollout, and lesson summary, which enables closed-loop management of
customer complaints.
 Customer information security and privacy protection : We have formulated and
observed the Information Security Management System, the Classified Document
Management Standards, and other internal management systems. We sign
confidentiality agreements with our customers for strict protection of both parties’
information and data. Data is categorized at different levels according to its
sensitivity, and corresponding protection measures are in place for each level.
Information and data security is safeguarded through access control and identity
authentication, security auditing and monitoring, and contingency plans. In addition,
we host regular information security awareness education and skill training for our
employees, including phishing attack identification, password management, and
data protection, to enhance their information security awareness.
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R&D and Innovation
We continuously enhance the core competitiveness of our products, provide a diverse
product portfolio, and commit ourselves to covering more application scenarios to meet the
needs of different customers and seize the market opportunities in clean technology. As a
result, we have developed a series of industry-leading feature products, such as the Universe
series BEV battery pack, which is the first in the industry to realize detachable single cells and
easy repairment by adopting the first mortise-and-tenon joint technology, thus effectively
reducing the waste of resources. Furthermore, we actively cooperate with external
organizations to facilitate material and product upgrades. In 2024, our R&D expenses reached
RMB556.2 million.
Intellectual Property Protection
We have formulated several internal intellectual property management systems to
facilitate the commercialization and protection of technological achievements, including the
Intellectual Property Management Manual, the Intellectual Property Management and
Incentive System, the Patent Package Management System, and the Know-How Management
System. We have also set up teams of patent application, patent risk control, and patent
intelligence collection to ensure professional management of intellectual property affairs. An
intellectual property incentive mechanism is in place to encourage our employees to invent and
create while ensuring timely filing and protection of innovative achievements. Through a
comprehensive review of internal intellectual property, we have created detailed intellectual
property lists and files for reasonable planning and management. We have established an
intellectual property data platform and improved contract management and compliance review
to avoid infringement of other people’s rights. We have also enhanced our intellectual property
infringement monitoring mechanism and take legal measures to reasonably safeguard our own
rights and interests in case of infringement found. At the same time, we organize our
employees to attend training on legal knowledge of intellectual property and awareness of
confidentiality to ensure compliance with pertinent laws and regulations in their day-to-day
work and prevent unintentional disclosure or infringement of others’ intellectual property
rights. As of December 31, 2024, we have been authorized a total of 2,225 patents, among
which 412 were invention patents, as well as 183 registered trademarks.
Human Capital
Employees are our most valuable assets. We provide an equal and inclusive workplace for
our employees and strive to enhance their sense of belonging and happiness.
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Employment Compliance
We strictly follow the Labor Law of the People’s Republic of China, the Labor Contract
Law of the People’s Republic of China, the Provisions on the Prohibition of Using Child Labor,
the Law of the People’s Republic of China on the Protection of Minors, and other pertinent
laws and regulations. We have formulated the Recruitment Channel Management System, the
Recruitment and Staffing Management Standards, the Attendance Management System, and the
Reward and Penalty Management System, among other internal policies and systems, along
with resolute bans on the use of child labor and forced labor. All of our employees are of legal
employment age. There have been no incidents of child labor or forced labor.
Diversity, Equity and Inclusion
We are committed to fostering an equitable and non-discriminatory work environment and
ensuring equal employment opportunities for all employees. Our recruitment policy
emphasizes inclusiveness, with special efforts in recruiting people with disabilities, to actively
fulfill social responsibility. We strive to ensure the supply of highly compatible and
high-caliber talent through a strict, fair, unbiased, open, and standardized hiring process and
continuously regulate our recruitment management. Discrimination based on race, color, age,
gender, disability, pregnancy, religious beliefs, or marital status is strictly prohibited in every
stage, including job announcements, interviews, and hiring. As of December 31, 2024, we had
a total of 4,033 employees, 1,087 of whom were women. Among our employees, 53.3% are 30
years old and below, 46.1% are 31-50 years old, and 0.6% are over 50 years old.
Employee Health and Safety
We strictly follow the Law of the People’s Republic of China on the Prevention and
Control of Occupational Diseases, the Measures for the Administration of Occupational Health,
the Regulation on Work-Related Injury Insurance, and other pertinent laws and regulations. We
have formulated the Safety and Occupational Health System and the Standards for Labor
Protective Equipment, among internal management systems, and maintained efforts in
improving our occupational health management system. A platform for occupational physical
examination files is in place to ensure that employees in positions exposed to occupational
hazards can receive regular pre-employment, on-the-job, and off-the-job physical
examinations. In addition, our employees’ safety skills and awareness are effectively enhanced
through regular safety training, safety inspections, and emergency drills. During the Track
Record Period, we have not experienced any accidents involving work-related injuries or
fatalities, with 0 working days lost due to work-related injuries.
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Career Development
We have established a science-based and comprehensive talent management system, set
paths for talent development, and provided our employees with a favorable growth
environment and a vast development platform. We have formulated internal management
systems to provide comprehensive support for the career development of our employees,
including the Training Management Manual and the Academic Upgrading Release Policy,
which are aimed at increasing their professional knowledge and skills and motivating them to
upgrade their academic qualifications and obtain professional certifications. We provide
diverse internal and external training programs, including induction training, Tongchuang
Academy, 6 Sigma training, and professional skill upgrading, to help our employees realize
their professional values. Our training program includes new employee orientation training,
occupational health and safety education and technical knowledge training, training on quality,
information security, among others, with the coverage rate of the training program reaching
100%. At the same time, for specific positions, we will conduct targeted training according to
the nature of the position, such as internal training for key position holders, special training for
quality management personnel, technical courses, management courses and general courses.
We also invite external trainers to our Company from time to time to conduct training, or send
our employees to participate in external seminars or training programs.
Employee Care
We prioritize the work-life balance of our employees and enrich their spare time by
organizing diversified activities, including the “Fighter” basketball competition, the Movie
Watching Association, employee birthday parties, mooncake making for the Mid-Autumn
Festival, scented sachet making for the Dragon Boat Festival, and the Chinese New Year party
for staying employees.
We also pay attention to the physical and mental health of employees and have a
basketball court, an indoor badminton court, ping-pong tables, karaoke, and other facilities in
the Company. The labor union has set up five associations, namely for basketball, badminton,
table tennis, board and card games, and running and hiking, which regularly organize sports
activities. We also partner with fitness centers to provide employees with free fitness benefits
once a week.
We have also built a residential community called “Zenergy Home,” which is equipped
with delivery lockers, delivery stations, hairdressers, vending machines, employee
supermarkets, to facilitate lives of our employees. In addition, we have established a Lechu
Foundation, and employees who join the foundation can enjoy the “Three Support Funds” and
“Medical Mutual Aid” benefits.
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Responsible Supply Chain
We have established a comprehensive supply chain management system and formulated
the Procurement Management Control Process, the Acquisition and Management Process for
Raw Material Suppliers, the Acquisition and Control Standards for Non-Direct Material
Suppliers, the Management Standards for Non-Productive Material Procurement, and the
Management Standards for Fixed Asset Procurement. These management systems cover the
aspects of supplier acquisition and admission, performance assessment, regular management,
performance management, optimization, and removal. We have also formulated procurement
operation standards for direct production materials, non-direct production materials, and fixed
assets to ensure efficient, transparent, and sustainable supply chain management. In 2024, we
partnered with a total of 184 raw material suppliers, two of which were from outside China.
In terms of supplier management, we have implemented the following measures:
 Supplier screening and admission : We follow the ‘Raw Material Supplier
Development and Management Procedure’ to standardize the process of
procurement and development of raw material suppliers. In the admission process,
we adhere to the principles of ‘Quality First’ and ‘ESG sustainable development’,
assessing suppliers’ performance in product quality with an focus on environmental
protection, labor rights, employee health and safety, business ethics, intellectual
property protection and other ESG performance and related certifications. We
require suppliers to provide relevant management system certifications, such as
ISO45001, ISO14001, ISO9001, IATF16949, complying with labor laws to protect
the basic rights and interests of employees, and complying with environmental
protection laws and safety production laws to ensure the occupational health and
safety of employees. In addition, we have incorporated energy-saving certification
evaluation standards such as carbon footprint and carbon emissions to promote
suppliers’ improvement and enhancement in the field of low carbon environmental
protection. We also incorporate ESG compliance requirements into supply contract,
requesting suppliers to sign various agreements, including Supplier Code of
Conduct, Supplier Environmental and Occupational Health and Safety Management
Commitment, and Non use of Prohibited Substances Guarantee, which clearly define
the responsibilities of both parties.
 Supplier evaluation and removal : We continuously monitor the ESG performance
of our suppliers through online reviews, on-site visits, and audits. We use a monthly
performance evaluation mechanism to evaluate our suppliers’ performance in
quality, price, service, delivery, and technology, and the evaluation results are
categorized into four grades: A, B, C, and D. Suppliers graded D in an annual
performance evaluation will face removal. Suppliers graded C in a performance
evaluation for two consecutive months and presenting no significant improvement in
quality performance will be considered for suspension of supply, and a search will
start for replacement.
 Supplier communication and exchange : To enhance the engineering and quality
management capabilities of our suppliers, we provide free 6 Sigma training and
conduct regular audits for continuous improvement.
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Recycling
We have reached a green supply chain collaboration agreement with a third party new
energy materials company, to recycle batteries and related materials, jointly creating a
recycling process from battery waste to raw materials to new energy batteries.
Business Ethics
We strictly abide by the Anti-Money Laundering Law of the People’s Republic of China
and other pertinent laws and regulations to prevent bribery, extortion, fraud, money laundering,
and other unethical business practices. Our Employee Handbook and labor contracts outline
clear policies and penalties regarding anti-bribery, anti-corruption, and professional ethics to
ensure employees remain honest and disciplined in their day-to-day work. As of December 31,
2024, we have not been involved in any litigation cases in this regard.
We continuously improve our complaint and reporting procedures by establishing
dedicated email addresses and telephone numbers for reporting. Employees and business
partners are encouraged to report any malpractice, bribery, misconduct, or suspicious activities
to their knowledge related to the Company’s regular operations and business activities. We
ensure strict confidentiality of the whistleblower’s identity and the reporting materials to
protect their legitimate rights and interests. Any individual who discloses information about
whistleblowers or retaliates against them will face dismissal or termination of their labor
contract. Those who violate the law will be referred to judicial authorities for legal action.
We promote a culture of integrity by emphasizing business ethics and anti-corruption in
our induction training for new employees. All new hires are required to sign the Sunshine
Agreement, a written commitment to adhere to the Company’s anti-corruption and anti-bribery
policies.
Public Welfare and Charity
We are committed to social welfare and encourage our employees to participate in social
volunteering. Through financial support, we participated in the construction of the Riverside
Park, which has effectively improved the surrounding ecology and environment and upgraded
urban greening, providing a pleasant place for residents to relax. In addition, we donated
RMB600,000 to the Changshu Charity Federation, aiming to improve the quality of life of local
impoverished residents, thus contributing to a harmonious society.
INSURANCE
As of the Latest Practicable Date, we believe that our insurance coverage is in line with
the industry practice and adequate to cover our key assets, facilities and liabilities, including
but not limited to all property-related risks insurance, cargo transportation insurance, employer
liability insurance and product liability insurance. We procured insurance policies by type and
amount that we consider sufficient, and evaluated such insurance policies from time to time
based on our past experience, changes in production and industry developments.
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We are committed to minimizing the risks of product liability claims, warranty claims and
product recalls through stringent quality control. In addition, in the event that one or more of
our suppliers is determined to be liable (in whole or in part), we will assess the compensation
or contributions sought from the relevant suppliers (if applicable) in accordance with the terms
and conditions of the supply contracts entered into with the relevant suppliers, taking into
account various commercial considerations, including but not limited to the amount sought, the
financial ability of the relevant supplier and the risk of interruption in the supply of our
products to our customers as a result of claims for compensation or contributions that may be
made by us. See “Risk Factors—Risks Relating to Our Industry and Business—We may not
have adequate insurance to cover losses and liabilities arising from various operational risks
and hazards. Specifically, we may be involved in product liability claims, and our product
liability insurance may not be sufficient to cover potential liability from product liability
claims.”
EMPLOYEES
As of December 31, 2024, we had 4,033 full-time employees. Generally, we enter into
labor contracts with our employees. Substantially all of our employees were in China. The
following table sets forth the number of our employees by function as of December 31, 2024.
Number of
employees Percentage (%)
R&D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,060 26.3
Management and administration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118403 10.0
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 0.5
Sales and marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869 1.7
Manufacturing and production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,479 61.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,033 100.0
We have established a labor union to protect the legal rights of all employees and
encourage employees to participate in the management decision-making process. We maintain
good relationships with employees and are committed to creating a fair and conducive work
environment for individual growth. We prohibit all forms of discrimination based on race,
gender, religion, age, nationality or any other characteristic. During the Track Record Period
and up to the Latest Practicable Date, there were no material labor disputes that would have
a material and adverse effect on our business, financial conditions or results of operations.
We hire outsourced employees for certain entry-level non-technical positions. We
regularly review the qualifications of outsourcing vendors and specify the rights and
obligations of outsourcing vendors, outsourced employees and us in the outsourcing
agreements.
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Recruiting
Based on our strategic development plan, we formulate personnel planning and
recruitment plans, reserve talents in advance, and build a talent pool. We have developed
detailed policies governing our recruitment process. In the course of the recruitment process,
we identify the talents most suitable for our development needs through multiple channels,
mainly including internal referrals, online recruitment, campus recruitment and local job fairs.
We enter into standard employment contracts and confidentiality agreements with our
employees. We also enter into a non-competition agreement with our key employees.
Remuneration and Benefits
We believe in providing our employees with attractive remuneration packages and a
dynamic work environment that can motivate our employees to grow rapidly and create value.
We offer employees competitive compensation and benefits, including monthly salaries,
incentive plans, various welfare benefits and opportunities for employee learning and
development. Our incentive plans include performance-based bonuses, which are linked to
quarterly performance evaluations and organizational performance, and various project awards,
including chairman’s awards, president’s awards, outstanding contribution awards, business
development awards, IKW improvement project awards, patent application awards, safety
production awards, outstanding employee awards and long service contribution awards. In
terms of benefits, we provide employees with various holidays and social insurance and
housing provident fund contributions.
Training
We focus on the career development of all employees. We have established a systematic
training management system providing corresponding training programs specialized for the
needs and requirements of different employees. Our employee training system mainly consists
of new employee orientation training, professional skills training, leadership training and
general skills training.
Onboarding Training. We provide company-level training for all new employees covering
our corporate culture, rules and regulations, safety, quality, information security, processes and
production. The departments are responsible for the training for new employees on
departmental structures, responsibilities, operational procedures and performance standards, as
well as the examination during the probationary period. Frontline production staff are required
to complete relevant job training to obtain a work permit. Special training plans are developed
for new graduates to help them quickly understand and integrate into the company.
Professional Skills Training. Our professional skills training focuses on the employees’
job responsibilities, required professional skills, internal departmental sharing and project
training (such as 6 Sigma) to enhance their professional capabilities.
Leadership Training. Our leadership training focuses on corporate culture, corporate
strategy, team management, talent development, market insights, etc., empowering middle-
level and key personnel with leadership responsibilities.
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General Skills Training. General skills training refers to the training on skills that are not
specific to a profession or job type, aiming to provide employees with essential work methods
and abilities, such as office software, business etiquette, communication skills and time
management.
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management
We are exposed to various risks during our business operations. We have established risk
management systems consisting of appropriate policies and procedures, and we continue to
improve these systems. We have adopted, among other things, the following risk management
measures:
(i) Our board of directors is responsible for monitoring our internal control system,
reviewing its effectiveness, and maintaining our risk at an appropriate and effective
level. Our audit department is responsible for the evaluation of the risks faced by us.
A review of our risk management and internal control system will be conducted
annually, which will include a review of all material controls, including financial,
operational and compliance controls;
(ii) We require all departments to proactively identify the risks they face and various
internal and external factors that affect the occurrence of the risks;
(iii) We will monitor sanctions-related risks in our course of business and will use our
best endeavors to ensure that we do not sell our products to any entities subject to
economic sanctions; and
(iv) We will engage external professional advisors, where necessary, and work with our
internal audit and legal team to conduct regular reviews to ensure the effectiveness
of all registrations, licenses, permits, filings and approvals.
Internal Control
We have engaged an independent internal control consultant to help identify and advise
on mitigating risks relating to our operation. During the review by our independent internal
control consultant, certain deficiencies were identified based on sample review and we have
adopted the appropriate internal control measures to improve such deficiencies. In particular,
the internal control consultant had identified that the operation of certain special committees
of the board of directors is slightly different from the requirements of Hong Kong Stock
Exchange for listed companies. To rectify such deficiencies, we have adjusted and improved
the policies and procedures of certain special committees of the Board of Directors, such as the
Nomination Committee, Audit Committee and Remuneration Committee, to meet the
requirements of the Hong Kong Stock Exchange for listed companies. Except as described
above, we are not aware of any material internal control weaknesses or incidents during the
Track Record Period and up to the Latest Practicable Date.
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We had adopted additional internal control measures to comply with the Listing Rules.
Except as described above, we are not aware of any material internal control weaknesses or
incidents during the Track Record Period and up to the Latest Practicable Date.
We are committed to establishing and maintaining risk management and internal control
systems. We have adopted and implemented a comprehensive risk management policy
encompassing risks that may arise in R&D, procurement management, production
management, sales management, and the construction of new projects. Our risk management
and internal control systems also cover the general functional operations such as human
resources, financial management, asset management, warehousing and logistics management,
information system management and corporate governance as well as decision-making
processes. Meanwhile, we are committed to supervising and evaluating the effectiveness of risk
management and internal control system to ensure that the system is rectified and effectively
controlled as our business develops.
We have established internal audit mechanism to continuously monitor our risk
management and internal control systems. We pursue a zero-tolerance policy towards bribery
and corruption. We have adopted internal procedures that contain relevant requirements for
confidentiality, integrity, conflicts of interest and other guidelines on the code of behaviors. We
also designated responsible departments to monitor the compliance of the above internal
procedures. For example, we have put in place a whistle-blowing channel where external
suppliers, employees and other relevant parties can file complaints or report violation acts.
When receiving whistle-blowing or internal reports of relevant incidents, we will initiate the
investigation procedures. Our Directors confirmed that during the Track Record Period and up
to the Latest Practicable Date, we did not encounter any incidents of breaches of our
anti-corruption, anti-bribery and anti-money laundering policies and procedures.
To address and manage the litigation risk of infringement of intellectual properties, we
have adopted enhanced internal control measures to ensure effective and compliant intellectual
property management and prevent further infringement of intellectual properties including but
limited to:
 We obtained the certificate of intellectual property management system certification,
implemented the national standard of “Enterprise Intellectual Property Management
Standard” approved and promulgated by the State Standardization Administration
Committee, and enhanced monitoring and control process;
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 We continually expand our intellectual property department with more professionals
and talents. Our recruiting and human resources department conducts background
check on candidates especially for R&D positions to make sure their onboarding
would not violate any non-competition obligation from their previous employment.
The R&D staff who are closely connected to intellectual property matters are
required to sign a declaration letter to avoid potential infringement of intellectual
property rights. We also request candidates who have obligations under non-
competition agreements to provide confirmation or notice on the termination of such
obligations;
 Our intellectual property department is involved in the entire process of the design
and development of each new product to control and prevent the risk of intellectual
property infringement throughout the process of developing new products and/or
technologies and ensure the compliance of the intellectual property rights of all
products. Specifically, the Intellectual Property Representative (IPR) conducts
continuous patent searches and coordinates technical personnel such as product
chief engineers, product engineers, design engineers, manufacturing representatives
and other technical personnel to carry out detailed patent infringement analyses and
patent infringement avoidance activities on specific product designs and process
designs. The IPR supervises the technical personnel to complete the drafting of
patent applications and the deployment of relevant patents on time.
BUSINESS
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BOARD OF DIRECTORS
Our Board comprises seven Directors, including three executive Directors, one non-
executive Director and three independent non-executive Directors. Pursuant to the Articles of
Association, our Directors serve a term of three years and may be re-elected for successive
re-appointments. Our Board is responsible and has general powers for the management and
conduct of our business. The table below sets forth certain information in respect of the
members of the Board.
Name Age Position/Title
Date of
appointment
as a Director
Date of joining
our Group
Roles and
responsibilities
Executive Directors
Ms. Cao Fang (ٹ)H111866 Chairperson of
the Board and
executive
Director
February 2019 February 2019 Overall strategic
planning and
business development
of our Group
Dr. Chen Jicheng
(௓ᘱ೻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
53 Executive
Director and
general
manager
February 2019 February 2019 Overall management
and operations of our
Group
Dr. Yu Zhexun (ࡪ
௸) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
42 Executive
Director
(employee
representative
Director)
June 2024 March 2022 Overall management of
the platform center
of our Group
Non-executive Director
Mr. Zhang Li ( ੵɢ) /H1118/H111850 Non-executive
Director
June 2023 June 2023 Providing strategic
advice to our Group
Independent non-executive Directors
Dr. Xu Zhiming
(׼)H1118/H1118/H1118/H1118/H1118/H1118/H1118
63 Independent
non-executive
Director
June 2024 June 2024 Providing independent
opinion and
judgment to the
Board
Dr. Gong Zhengliang
(ᛵ͍Ԅ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
45 Independent
non-executive
Director
June 2024 June 2024 Providing independent
opinion and
judgment to the
Board
Dr. Xiao Min ( ӽ䊑) /H1118/H111854 Independent
non-executive
Director
June 2024 June 2024 Providing independent
opinion and
judgment to the
Board
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Executive Directors
Ms. Cao Fang (ٹ)aged 66, joined our Group in February 2019 and has served as the
chairperson of the Board of our Company since its establishment. Ms. Cao was re-designated
as an executive Director in June 2024.
Ms. Cao has extensive enterprise management experience. She co-founded Zenergy
Investment, which engages in investment in the sector of core components of EV , with Dr.
Chen in August 2016. Ms. Cao has served as the chairperson of STAES since November 2013.
She also founded SINOGY VC engaging in venture capital investment in March 2013 and has
served as the executive director since its incorporation. From August 1987 to September 1994,
Ms. Cao served as the manager of the sales department at Fuyao Glass Industry Group Co., Ltd.
(ʮ̡)( “ Fuyao Glass ”), a company listed on the Shanghai Stock
Exchange (stock code: 600660) and the Hong Kong Stock Exchange (stock code: 3606), and
she served as a director and the vice general manager of Fuyao Glass from October 1994 to
April 2014.
Ms. Cao received an executive master’s degree in business administration from Peking
University ( ̏ԯɽኪ) in the PRC in June 2017.
Dr. Chen Jicheng ( ௓ᘱ೻), aged 53, joined our Group in February 2019 and has served
as a Director and the general manager of our Company since its establishment. Dr. Chen was
re-designated as an executive Director in June 2024.
Prior to joining our Group, Dr. Chen co-founded Zenergy Investment with Ms. Cao in
August 2016 and has served as the executive director since its incorporation. He also
co-founded SINOGY VC in March 2013 with Ms. Cao. Dr. Chen joined Fuyao Glass in October
2003 and successively held multiple positions at the Fuyao Glass group, including as an
executive director of Fuyao Glass from October 2015 to April 2016, and as the vice general
manager of Fuyao Glass from February 2011 to April 2016.
Dr. Chen received his bachelor’s degree in economy and administrative management from
Nanjing Political Academy (ኪ৫) (currently known as Political College of National
Defence University (ኪ৫)) in the PRC, his executive master’s degrees in
business administration from Tsinghua University ( ૶ശɽኪ) and INSEAD Business School in
France, respectively, and his doctoral degree in business administration from The University of
Hong Kong. Dr. Chen published a research article in Advanced Materials as a co-author in
cooperation with a research team from Institute of Chemistry, Chinese Academy of Sciences
in July 2024. Dr. Chen has been pursuing his second doctoral degree in materials and chemicals
from Peking University ( ̏ԯɽ䕎) in the PRC since August 2022.
Dr. Yu Zhexun (௸), aged 42, was elected as an employee representative Director in
June 2024 and re-designated as an executive Director of our Company in July 2024. He joined
our Group in March 2022 as the director of platform center and has served as the chief product
officer since December 2022.
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Prior to joining our Group, Dr. Yu accumulated working and research experience in
battery related research and development, including serving as a senior officer at Jiangsu
TAFEL from October 2018 to March 2022. Dr. Yu served as a senior engineer of Huawei
Technologies Co., Ltd. (ʮ̡) from September 2015 to October 2018, and
worked in Dongguan Amperex Technology Co., Ltd. (ʮ̡) as a senior
engineer from December 2010 to August 2015.
Dr. Yu received his bachelor’s degree in chemistry from Peking University ( ̏ԯɽኪ)i n
the PRC in July 2005 and his doctoral degree in condensed matter physics from the Institute
of Physics, Chinese Academy of Sciences (הin the PRC in January
2011. He was a post-doctoral fellow in South China University of Technology (ଣʈɽኪ)
in the PRC from December 2011 to December 2014.
Non-executive Director
Mr. Zhang Li ( ੵɢ), aged 50, has served as a Director of our Company since June 2023
and was re-designated as a non-executive Director in June 2024.
Mr. Zhang has served as the secretary of the Party Committee and chairman of the board
of directors of Huafu Growth Investment Co., Ltd. (ʮ̡) (formerly known
as Xingyin Investment Co., Ltd. (ʮ̡)) since August 2023, where he served as
the general manager from March 2021 to July 2023. Previously, Mr. Zhang served as the
general manager of Xingyin Fund Management Co., Ltd. (ப΂ʮ̡)
(“Xingyin Fund ”) from March 2015 to January 2021. From December 2014 to September
2019, Mr. Zhang served as an executive director of Shanghai Xinghan Asset Management Co.,
Ltd. (ʮ̡), a wholly-owned subsidiary of Xingyin Fund.
Mr. Zhang received his bachelor’s degree in engineering from Qingdao Chemical College
(ʷʈኪ৫) (currently known as Qingdao University of Science and Technology (߅ࢥڡ
Ҧɽኪ)) in the PRC in July 1997, and his master’s degree in accounting from Shanghai
University of Finance and Economics ( ɪऎৌ຾ɽኪ) in the PRC in June 2013.
Independent non-executive Directors
Dr. Xu Zhiming (׼)aged 63, was appointed as an independent non-executive
Director in June 2024.
Dr. Xu has extensive experience in corporate governance. Dr. Xu is a partner of China
Broadband Capital ( ᄱ੭༟͉). From January 2002 to May 2005, Dr. Xu successively served
as a Senior Advisor of TOM Group Ltd. (TOMʮ̡), and an executive director and
chief operating officer of TOM Online Inc. (TOMʮ̡). From August 1999 to
December 2001, Dr. Xu successively served as an executive director of China Resources
Enterprise Limited (ʮ̡), an executive director of China Resources (Beijing)
Land Limited (ʮ̡), and the managing director and chief operating officer
of China Resources Logic Limited (ʮ̡).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Dr. Xu has served as an independent non-executive director of Genertec Universal
Medical Group Company Limited (ʮ̡), a company listed on the Hong
Kong Stock Exchange (stock code: 2666), since June 2022. He previously served as an
independent non-executive director in each of (i) DFZQ (ʮ̡), a company
listed on the Hong Kong Stock Exchange (stock code: 3958) and the Shanghai Stock Exchange
(stock code: 600958), from July 2016 to November 2022, and (ii) Tianjin Capital
Environmental Protection Group Company Limited (ʮ̡), a
company listed on the Hong Kong Stock Exchange (stock code: 1065) and the Shanghai Stock
Exchange (stock code: 600874), from November 2021 to September 2022.
Dr. Xu received his bachelor’s degree in astrophysics from Peking University ( ̏ԯɽኪ)
in the PRC in July 1983, his master’s degree in industrial economy from Chinese Academy of
Social Sciences (ኪ৫) in the PRC in July 1986, and his doctoral degree from The
University of Manchester in the United Kingdom in July 1993.
Dr. Gong Zhengliang ( ᛵ͍Ԅ), aged 45, was appointed as an independent non-executive
Director in June 2024.
Dr. Gong has served as a professor in the College of Energy, Xiamen University (ɽ
ኪ) from August 2019 and has long been committed to low-cost and high-efficiency energy
storage and conversion devices with his recent focus on electrochemical energy storage devices
and their key materials. Dr. Gong has undertaken more than 10 projects under the National Key
Research and Development Program (ྌ) and the National Natural Science
Foundation of China (ږetc. and has published more than 80 SCI-indexed
papers in Energy & Environmental Science , Advanced Energy Materials , Acs Energy Letters ,
Advanced Functional Materials , Nano Letters , and other academic journals. Dr. Gong has
successively served as an assistant professor, associate professor and professor in the College
of Energy of Xiamen University (ɽኪ) from July 2010. Prior to that, he served as a
research fellow in the department of chemical and biomolecular engineering of the National
University of Singapore from August 2008 to July 2010.
Dr. Gong received his bachelor’s degree in chemistry from Hunan Normal University ( ಳ
ᇍɽኪ) in the PRC in July 2001, and his master’s and doctoral degree in physical
chemistry from Xiamen University (ɽኪ) in the PRC in July 2004 and December 2007,
respectively.
Dr. Xiao Min ( ӽ䊑), aged 54, was appointed as an independent non-executive Director
in June 2024.
Dr. Xiao has successively served as a teaching assistant, lecturer, associate professor,
professor, and doctoral supervisor in the MBA Education Center and the Department of
Finance in the School of Management at Xiamen University (ɽኪ) since April 2001.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Dr. Xiao has served as (i) an independent director of Dnake (Xiamen) Intelligent
Technology Co., Ltd. (ʮ̡), a company listed on the Shenzhen
Stock Exchange (stock code: 300884), since September 2024; (ii) an independent director of
Xiamen Faratronic Co., Ltd. (ʮ̡), a company listed on the Shanghai
Stock Exchange (stock code: 600563), from April 2011 to April 2017, and since April 2023,
respectively; (iii) an independent director and the chairperson of the audit committee of Fujian
Yanjing Huiquan Beer Co., Ltd. (ʮ̡), a company listed on the
Shanghai Stock Exchange (stock code: 600573), from May 2009 to April 2015, and since May
2022, respectively, (iv) an independent director of Fuxin Futong Technology Co., Ltd. (ڦ
ʮ̡), a company listed on the National Equities Exchange and Quotations
(stock code: 835213), since December 2020; and (v) an independent director of Yimi Fund
Management Co., Ltd (ʮ̡) since August 2020.
Dr. Xiao previously served as an independent director and a member of the audit
committee of Zhangzhou Yabao Electronic Co., Ltd. (ʮ̡) from
November 2020 to February 2024. She also served as (i) an independent director and the
chairperson of the audit committee of Fujian Wanchen Biotechnology Group Co., Ltd. (ܔ
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code:
300972), from August 2020 to September 2023, and (ii) an independent director of Xiamen
R&T Plumbing Technology Co., Ltd. (ʮ̡), a company listed
on the Shenzhen Stock Exchange (stock code: 002790), from May 2018 to May 2024.
Dr. Xiao cumulated extensive experience in the corporate governance especially in the
financial management perspective through her working experience in the A Share listed
companies as mentioned above. Dr. Xiao served as chairperson of audit committee in each of
Fujian Yanjing Huiquan Beer Co., Ltd. (ʮ̡), Fujian Wanchen
Biotechnology Group Co., Ltd. (ʮ̡) and Xiamen Faratronic Co.,
Ltd. (ʮ̡), and had been involved in (i) overseeing internal audit
procedures, (ii) communications with auditors in relation to the auditing scope, measures,
audited financials and material issues identified, (iii) reviewing of the auditors’ report and (iv)
evaluation of the independence and professionalism of the accounting firms and etc.
Additionally, Dr. Xiao has been teaching accounting and financial related courses at Xiamen
University (ɽኪ) since January 2009. Therefore, our Company believes that Dr. Xiao has
appropriate accounting and related financial management expertise under Rule 3.10(2) of the
Listing Rules.
Dr. Xiao received her bachelor’s degree in accounting from Anhui College of Finance &
Trade ( τᏏৌ൱ኪ৫) (currently known as Anhui University of Finance & Economics ( τᏏৌ
຾ɽኪ)) in the PRC in June 1992, her master’s and doctoral degree in enterprise management
from Xiamen University (ɽኪ) in the PRC in December 2000 and June 2007, respectively.
Dr. Xiao also received a master’s degree in business administration from Babson College in the
United States in May 2013.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not
have any interest in a business which competes or is likely to compete, either directly or
indirectly, with our Company’s business which would require disclosure under Rule 8.10 of the
Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules in July 2024, and (ii) understands his or her
obligations as a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his/her independence
as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he/she
has no past or present financial or other interest in the business of the Company or its
subsidiaries or any connection with any core connected person of the Company under the
Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors that may
affect his/her independence at the time of his/her appointments.
SUPERVISORY COMMITTEE
Our Supervisory Committee consists of three Supervisors, including one employee
representative Supervisor. The employee representative Supervisor is elected at the staff
representative assembly for a term of three years, which is renewable upon re-election and
re-appointment. The functions and duties of the Supervisory Committee include, among other
things, reviewing periodic reports prepared by the Board, overseeing the financial conditions
of our Group, and supervising the performance of our Directors and senior management
members.
The following table sets out information in respect of the Supervisors.
Name Age Position/Title
Date of
appointment
as a
Supervisor
Date of joining
our Group
Roles and
responsibilities
Mr. Yu Yang (ݱ)H1118/H111837 Chairperson of
the Supervisory
Committee and
employee
representative
Supervisor
January 2025 July 2019 Management of the
Supervisory
Committee and
supervising the daily
operation of the
Group
Mr. Hong Ping (̻) /H111848 Supervisor June 2024 June 2024 Supervising the daily
operation of the
Group
Mr. Jiang Dongfeng
(ࢤ؇۴)H1118/H1118/H1118/H1118/H1118/H1118/H1118
48 Supervisor December 2024 October 2019 Supervising the daily
operation of the
Group
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Supervisors
Mr. Yu Y ang (ݱ)aged 37, is the chairperson of our Supervisory Committee and the
employee representative Supervisor.
Mr. Yu joined our Group in July 2019 as a translator of Suzhou ZENIO, a wholly-owned
subsidiary of our Group, until March 2020. He has served as a senior sales manager of our
Company since January 2022.
Prior to joining our Group, Mr. Yu served as an application engineer at TI Automotive
Japan Ltd. (TI Automotive Japanٟfrom January 2015 to June 2019. He worked at
Central Engineering Co., Ltd. ( 㘮㙦㘻㙜㙞㘛㙦㘫㘾㘕㙝㙦㘣ٟfrom November 2013
to January 2014. Mr. Yu worked at Pasona Tech, Inc. (ٟ㙄㘰㘽㘹㘶㘢) from May 2011
to November 2012. He served as a technician (intern) at Liao River Petroleum Exploration
Authority (ਖઞ҅) from July 2010 to March 2011.
Mr. Yu received his bachelor’s degrees in mechanical engineering and Japanese from
Dalian University of Technology ( ɽஹଣʈɽኪ) in the PRC in June and July 2010,
respectively.
Mr. Hong Ping (̻), aged 48, is a Supervisor.
Mr. Hong has served as (i) the deputy general manager of Changshu Kuncheng Lake
Construction Investment Group Co., Ltd. (ʮ̡) since
December 2024, (ii) the chairperson of Haohua Financing Leasing (Jiangsu) Co., Ltd. (ശፄ
༟ॡ༣(Ϫᘽ)ʮ̡) since February 2024, (iii) the executive director of Changshu
Southeast Investment Holding Co., Ltd. (ʮ̡) since August 2022,
(iv) the executive director and general manager of Changshu Kuncheng Nikko Hotel
Management Co., Ltd. (ʮ̡) since February 2022, (v) the
executive director of Changshu Kuncheng Construction Development Co., Ltd. (ண
ʮ̡) since October 2021, (vi) the chairperson of the board and general manager of
Changshu Southeast Asset Operation Investment Co., Ltd. (ʮ̡)
since August 2018, (vii) the general manager of Changshu Kuncheng Lake Development and
Construction Co., Ltd. (ʮ̡) from January 2015 to August 2022,
(viii) chief of the investment and financing section of the Changshu Hi-tech Zone Finance
Bureau (҅) from December 2002 to January 2015, (ix) member of the
budget section of the Changshu Finance Bureau (҅) from July to December 2002,
and (x) accountant at the Changshu Meili Township Finance Office (ה݁)
from August 1997 to June 2002.
Mr. Hong received his bachelor’s degree in accounting from China Central Radio and TV
University ( ʕ̯ᄿᅧཥൖɽኪ) (currently known as The Open University of China (׳
ɽኪ)) in the PRC in January 2004. Mr. Hong obtained his securities qualification certificate
(ࣸin April 2016, futures qualification certificate (ࣸin April 2017,
financial leasing qualification certificate (ࣸin May 2017 and fund
qualification certificate (ࣸin July 2016.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Jiang Dongfeng (ࢤ؇۴)aged 48, is a Supervisor.
Mr. Jiang joined our Group in October 2019 as a project manager of Suzhou ZENIO, a
wholly-owned subsidiary of our Group, until May 2020. He then served as the executive vice
president of Suzhou ZENIO from May 2020 to March 2022. Mr. Jiang served as the executive
deputy general manager of Jiangsu Aiev from August 2020 to April 2021 before serving as the
general manager of Jiangsu Aiev since April 2021. He has served as the senior director of
Zenergy System Base of Suzhou ZENIO in charge of the management and operation of the
Zenergy System Base since March 2022.
Prior to joining our Group, Mr. Jiang served as a senior project manager of the ESS
division of Shanghai XPT Technology Limited (ʮ̡) from July 2018 to
October 2019. He also served as a senior quality manager of the operations and supply chain
department of Beijing ASU Tech Co., Ltd. (ʮ̡) from October 2017 to July
2018. Mr. Jiang worked at Beijing Boston Power Technology Co., Ltd. (ɻ཭ཥϫҦஔ
ʮ̡) from February 2016 to September 2017. Mr. Jiang worked at Beijing Changji
Refueling Equipment Co., Ltd. (ʮ̡) (currently known as Gilbarco
Veet-root Mobility Technology Beijing Co., Ltd. (Ҧ(̏ԯ)ʮ̡)) from June
2014 to January 2016. He worked at Perlos (Beijing) Electronic and Telecommunication
Components Co., Ltd. ( Ԏဧᖯ౶(̏ԯ)ʮ̡) (currently known as Beijing
Lite-On Mobile Electronic and Telecommunication Components Co., Ltd. ( ̏ԯΈᘒ୅ਗཥɿ
ʮ̡)) from November 2008 to May 2014. Mr. Jiang worked at TD Tech Limited
(ʮ̡) from June 2007 to October 2008. He worked at Xinhuikai Electronics
(Beijing) Co., Ltd. ( อሾකཥɿ(̏ԯ)ʮ̡) from February 2005 to May 2007.
Mr. Jiang received his bachelor’s degree in chemical engineering (polymer chemistry and
engineering) and his master’s degree in materials science and engineering from Tianjin
University (ɽኪ) in the PRC in June 2000 and January 2005, respectively.
SENIOR MANAGEMENT
The following table sets out information regarding the members of senior management of
our Company.
Name Age Position/Title
Date of
appointment
as senior
management
Date of joining
our Group
Roles and
responsibilities
Dr. Chen Jicheng
(௓ᘱ೻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
53 Executive
Director and
general
manager
February 2019 February 2019 Overall management
and operations of our
Group
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Name Age Position/Title
Date of
appointment
as senior
management
Date of joining
our Group
Roles and
responsibilities
Mr. Tang Jia (Գ) /H1118/H111839 Executive deputy
general
manager
January 2024 January 2023 Overall management of
the commercial and
technical department,
project management
department and after-
sales service
department of our
Group
Mr. Liang Wangchun
(݆׶)H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Chief financial
officer and
secretary of
the Board
August 2020 August 2020 Overall management of
the accounting and
finance, investment
and financing, and
investor relations of
our Group
Dr. Chen Jicheng ( ௓ᘱ೻), aged 53, is an executive Director and the general manager
of our Company. See “—Executive Directors” above for details of his biography.
Mr. Tang Jia (Գ), aged 39, is the executive deputy general manager of our Company.
Mr. Tang joined our Group in January 2023 as deputy general manager until January 2024. He
has served as the executive deputy general manager of our Group since January 2024.
Mr. Tang served as the general manager of the Ghana office of SUNDA GROUP CO.,
LIMITED (ʮ̡) from November 2021 to January 2023. Prior to that, he served
as the assistant of the president at the Lighting Engineering International division of Shenzhen
Ocean’s King Lighting Technology Co., Ltd. (ʮ̡) from January
2020 to December 2020. Mr. Tang worked at Huawei Technologies Co., Ltd. (ʮ
̡) from November 2008 to July 2019, where he successively served as the Representative of
the Paraguay Representative Office of Huawei and a department head.
Mr. Tang obtained his bachelor’s degree in economics from Xiamen University (ɽ
ኪ) in the PRC in July 2007. He obtained the executive master’s degree of business
administration with merit from The University of Lancaster in the United Kingdom in July
2024.
Mr. Liang Wangchun (݆׶)aged 43, is the chief financial officer and secretary of the
Board of our Company.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Before joining our Group in August 2020 as the chief financial officer of our Company,
Mr. Liang successively worked at several subsidiaries of Fuyao Glass, including serving as the
finance manager at Tianjin Hongde Auto Glass Co., Ltd. (ʮ̡) from
May 2018 to July 2020 and the finance manager at Fuyao Group (Shenyang) Automotive Glass
Co., Ltd. ( ၅ᘴණྠ(ᓨජ)ʮ̡) from April 2014 to May 2018. Mr. Liang also
worked at Fuyao Group (Fujian) Engineering Glass Co., Ltd. ( ၅ᘴණྠ(ܔ)ʮ
̡), as the finance manager from April 2005 to April 2014. He worked at Xinyuan (Fujian)
Package Printing Co., Ltd. ( 㒥෤(ܔ)ʮ̡) from January to March 2005. From
August 2000 to August 2004, Mr. Liang worked as an accountant at Fujian Xinfuxing Glass
Co., Ltd. (ʮ̡) (currently known as Xinfuxing Glass Industrial Group
Co., Ltd. (ʮ̡)).
Mr. Liang received his college degree in accounting from Fuzhou University ( ၅ψɽኪ)
in the PRC in June 2007. Mr. Liang was accredited as a non-practicing Certified Public
Accountant by The Liaoning Provincial Institute of Certified Public Accountants (ൗ̅
՘ึ) in March 2018. He has been a senior accountant certified by Tianjin Human
Resources and Social Security Bureau (ღ҅) since December 2019.
Mr. Liang was accredited the International Certified Internal Auditors’ Certificate by the
International Institute of Internal Auditors in December 2018 and the Certified Management
Accountant Certificate by the Institute of Certified Management Accountants in the USA in
September 2019.
INTERESTS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
Saved as disclosed above, to the best of the knowledge, information and belief of our
Directors having made all reasonable enquiries, as of the Latest Practicable Date, none of our
Directors, Supervisors and senior management had been a director of any public company the
securities of which were listed on any securities market in Hong Kong or overseas in the three
years immediately preceding the date of this Prospectus. There are no other matters with
respect to the appointment of our Directors and Supervisors that need to be brought to the
attention of the Shareholders, nor is there any information relating to our Directors and
Supervisors that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing
Rules.
Saved as disclosed above, as of the Latest Practicable Date, none of our Directors,
Supervisors or senior management were related to other Directors, Supervisors or senior
management of our Company.
Saved as disclosed in the sections headed “Relationship with our Controlling
Shareholders,” “Substantial Shareholders” and “Appendix IV—Statutory and General
Information—Further Information about Our Directors, Supervisors, Senior Management and
Substantial Shareholders—Interests and short positions of our Directors, Supervisors and chief
executive of our Company in the Shares, underlying Shares and debentures of our Company
and our associated corporations,” as of the Latest Practicable Date, none of our Directors and
Supervisors held any interest in the securities within the meaning of Part XV of the SFO.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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JOINT COMPANY SECRETARIES
Ms. Xu Jing (ẙ), aged 39, joined our Group in July 2020 as the deputy chief financial
officer of our Company. Ms. Xu was appointed as our joint company secretary in October 2024.
Before joining our Group, Ms. Xu worked at Che Li Fang Culture Development (Beijing)
Co., Ltd. (࢝(̏ԯ)ʮ̡) as a finance supervisor from July 2015 to June
2020. Ms. Xu also worked at several subsidiaries of Fuyao Glass, including serving as the chief
financial officer at Tianjin Hongde Auto Glass Co., Ltd. (ʮ̡) in July
2015, successively as an accountant of finance department and the chief officer of accounting
division at FUYAO Group Beijing Futong Safety Glass Co., Ltd. (ᆨ
ʮ̡) from May 2008 to June 2015, and as an accountant at Guangzhou FUYAO Glass
Co., Ltd. (ʮ̡) from July 2007 to May 2008.
Ms. Xu received her bachelor’s degree in financial management from East China
University of Technology (ശଣʈɽኪ) in the PRC in July 2007 and her master’s degree in
business administration from Peking University ( ̏ԯɽኪ) in the PRC in January 2020. Ms.
Xu was accredited the intermediate-level accounting professional qualification by the Ministry
of Human Resources and Social Security (ღ௅) and the Ministry of Finance
(௅) of the PRC in September 2021.
Ms. Ho Wing Nga ( О൘ඩ) was appointed as our joint company secretary in July 2024.
Ms. Ho currently serves as the managing director of governance services of Computershare
Hong Kong Development Limited and the joint company secretary and company secretary for
various companies listed on the Stock Exchange. Ms. Ho has over 25 years of experience in
corporate governance services. She obtained a master’s degree in corporate governance from
the Hong Kong Polytechnic University in December 2006 and became an associate of The
Hong Kong Chartered Governance Institute (the “ HKCGI ,” previously known as the Hong
Kong Institute of Chartered Secretaries) in the same month. In March 2015, Ms. Ho became
a fellow member of both the HKCGI and The Chartered Governance Institute. She is also a
holder of the practitioner’s endorsement of the HKCGI and a member of The Hong Kong
Institute of Directors.
BOARD COMMITTEES
Our Board delegates certain responsibilities to various committees. In accordance with
the relevant PRC laws and regulations and the Corporate Governance Code as set out in the
Appendix C1 to the Listing Rules, our Company has formed three Board committees, namely
the Audit Committee, the Remuneration and Evaluation Committee and the Nomination
Committee.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Audit Committee
We have established an Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules, paragraph C.4 and paragraph D.3 of Part 2 of the Corporate
Governance Code. The Audit Committee consists of three Directors, namely Dr. Gong
Zhengliang ( ᛵ͍Ԅ), Dr. Xiao Min ( ӽ䊑) and Mr. Zhang Li ( ੵɢ). Dr. Xiao Min ( ӽ䊑) has
the accounting and related financial management expertise as required under Rules 3.10(2) and
3.21 of the Listing Rules, and Dr. Gong Zhengliang ( ᛵ͍Ԅ) serves as the chairperson of the
Audit Committee. The primary duties of the Audit Committee include, but not limited to, the
following:
 proposing the appointment or change of external auditors to our Board, and
monitoring the independence of external auditors and evaluating their performance;
 guiding internal audit work;
 examining the financial information of our Company, reviewing financial reports
and statements of our Company and giving comments on relevant matters;
 assessing the effectiveness of internal control;
 coordinating the communication among management, internal audit department,
related departments and external audit agency; and
 dealing with other matters that are authorized by the Board or involved in relevant
laws and regulations.
Remuneration and Evaluation Committee
We have established a Remuneration and Evaluation Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of Part 2 of the
Corporate Governance Code. The Remuneration and Evaluation Committee consists of five
Directors, namely Dr. Xu Zhiming (׼Ms. Cao Fang (ٹDr. Chen Jicheng ( ௓ᘱ೻),
Dr. Gong Zhengliang ( ᛵ͍Ԅ) and Dr. Xiao Min ( ӽ䊑). Dr. Xu Zhiming (׼serves as
the chairperson of the Remuneration and Evaluation Committee. The primary duties of the
Remuneration and Evaluation Committee include, but not limited to, the following:
 formulating individual remuneration plans for Directors and members of the senior
management in accordance with the terms of reference of the job responsibilities,
the importance of their positions as well as the remuneration benchmarks for the
relevant positions in other comparable companies;
 examining the criteria of performance evaluation of Directors and the senior
management of our Company, and conducting annual performance evaluation;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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 supervising the implementation of the remuneration plan of the Company;
 reviewing and/or approving matters relating to share schemes under Chapter 17 of
the Listing Rules; and
 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 Part 2 of the Corporate
Governance Code. The Nomination Committee consists of five Directors, namely Ms. Cao
Fang (ٹDr. Chen Jicheng ( ௓ᘱ೻), Dr. Xu Zhiming (׼Dr. Gong Zhengliang ( ᛵ
͍Ԅ) and Dr. Xiao Min ( ӽ䊑). Ms. Cao Fang (ٹserves as the chairperson of the
Nomination Committee. The primary duties of the Nomination Committee include, but not
limited to, the following:
 making recommendations to our Board with regards to the size and composition of
our Board based on our Company’s business operation, asset scale and equity
structure;
 researching and developing standards and procedures for the election of our Board
members, general managers and members of the senior management, and making
recommendations to our Board;
 conducting extensive search and providing to our Board suitable candidates for
Directors, general managers and other members of the senior management;
 examining our Board candidates, general manager and members of the senior
management and making recommendations to our Board;
 assessing and reviewing the independence of independent non-executive Directors;
and
 dealing with other matters that are authorized by our Board.
COMPENSATION OF DIRECTORS AND SUPERVISORS
Our Directors and Supervisors received their remuneration in the form of fees, salaries,
allowances and benefits in kind, performance related bonuses, share-based payment expenses
and pension scheme contributions.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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For the years ended December 31, 2021, 2022, 2023 and 2024, the total remuneration
accrued to our then Directors amounted to approximately RMB5.1 million, RMB4.9 million,
RMB5.1 million and RMB8.0 million respectively.
For the years ended December 31, 2021, 2022, 2023 and 2024, the total remuneration
accrued to our then Supervisors amounted to approximately RMB1.9 million, RMB2.7 million,
RMB3.2 million and RMB5.3 million respectively.
Under the arrangement currently in force, we estimate the total compensation before
taxation to be accrued to our Directors and our Supervisors in kind for their service for the year
ending December 31, 2025 to be approximately RMB6.7 million. The actual remuneration of
Directors and Supervisors in 2025 may be different from the expected remuneration.
For the years ended December 31, 2021, 2022, 2023 and 2024, the total emoluments
accrued to the five highest paid individuals (including Directors and Supervisors) by our Group
amounted to approximately RMB10.4 million, RMB11.3 million, RMB17.3 million and
RMB22.6 million, respectively.
During the Track Record Period, no remuneration was paid by our Company to, or
receivable by, our Directors, Supervisors or the five highest paid individuals as an inducement
to join or upon joining our Company or as compensation for loss of office in connection with
the management positions of any subsidiary of our Company.
Save as disclosed above, none of our Directors or Supervisors waived any remuneration
during the relevant period. The remuneration of Directors, Supervisors and senior management
is determined with reference to factors including operating results of our Company, market
comparables and the achievement of major operating indicators of our Company.
PRE-IPO EQUITY INCENTIVE PLANS
We adopted the Pre-IPO Equity Incentive Plans, details of which are set forth in
“Statutory and General Information—Pre-IPO Equity Incentive Plans” in Appendix IV to this
Prospectus.
CORPORATE GOVERNANCE CODE
Our Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, our Company
intends to comply with 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.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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BOARD DIVERSITY POLICY
We are committed to promoting the culture of diversity in the Company. We have strived
to promote diversity to the extent practicable by taking into consideration a number of factors
in our corporate governance structure.
We have adopted the board diversity policy (the “ Board Diversity Policy ”) which sets
out the objective and approach to achieve and maintain diversity of our Board in order to
enhance the effectiveness of our Board. Pursuant to the board diversity policy, we seek to
achieve Board diversity through the consideration of a number of factors, including but not
limited to gender, age, race, cultural background, educational background, industry experience
and professional experience. Our Directors have a balanced mix of knowledge and skills,
including knowledge and experience in the areas of business administration, material physics
and chemistry, accounting and etc. Our three independent non-executive Directors have
different industry backgrounds, with solid experiences in the fields of finance and accounting,
investment and corporate governance and battery related research, representing more than
one-third of the members of our Board. Our Board Diversity Policy is well implemented as
evidenced by the fact that there are Directors ranging from 42 years old to 66 years old and
comprises two female Directors and five male Directors. Pursuant to the Board Diversity
Policy, we aim to maintain at least 10% female representation in the Board and the current
composition of the Board satisfies this target gender ratio. We will implement policies to
ensure gender diversity when recruiting staff to develop a pipeline of female senior
management and potential successors to the Board. We will strive to enhance our female
representation and achieve appropriate balance of gender diversity with reference to the
stakeholders’ expectation and international and local recommended best practices.
Furthermore, we will implement comprehensive programs aimed at identifying and training our
female staff who display leadership and potential, with the goal of promoting them to the senior
management or the Board.
Our Nomination Committee is responsible for ensuring the diversity of our Board
members. After the Listing, our Nomination Committee will review the Board Diversity Policy
from time to time, develop and review measurable objectives for implementing the policy, and
monitor the progress on achieving these measurable objectives to ensure its continued
effectiveness. We will disclose in our corporate governance report about the implementation of
the board diversity policy on an annual basis.
COMPLIANCE ADVISER
We have appointed Maxa Capital Limited as our Compliance Adviser pursuant to Rules
3A.19 and 3A.23 of the Listing Rules. The Compliance Adviser will provide us with guidance
and advice as to compliance with the Listing Rules and other applicable laws, rules, codes and
guidelines. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Adviser will advise
our Company in certain circumstances including:
 before the publication of any regulatory announcement, circular or financial report;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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 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;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this Prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this Prospectus;
and
 where the Hong Kong Stock Exchange makes an inquiry to our Company regarding
unusual movements in the price or trading volume of its listed securities or any other
matters in accordance with Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Adviser will, on a timely
basis, inform our Company of any amendment or supplement to the Listing Rules that are
announced by the Hong Kong Stock Exchange. The Compliance Adviser will also inform our
Company of any new or amended law, regulation or code in Hong Kong applicable to us, and
advise us on the 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 our Company complies with Rule 13.46 of the Listing Rules in respect
of our financial results for the first full financial year commencing after the Listing.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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OUR CONTROLLING SHAREHOLDERS
Historically, Ms. Cao (the Chairperson of the Board and an executive Director) and Dr.
Chen (an executive Director and the general manager of our Company) have been acting in
concert with each other since the incorporation of our Company in respect of all major affairs
concerning the Group and together led the management and operation of the business of our
Company and effected control over our Company through Shareholders which are their close
associates and jointly controlled by them (the “ Management Shareholders ”), namely:
(a) Zenergy Investment, a company held by (i) Dr. Chen as to 46%; (ii) Ms. Cao as to
42%; and (iii) Ms. Cao and Dr. Chen indirectly through SINOGY VC, their
controlled corporation, as to 12%;
(b) SINOGY VC, a company held by (i) Ms. Cao as to 52%; and (ii) Dr. Chen as to 48%;
(c) Nanjing Miaode, a limited partnership of which the general partner is Zhengli
Consulting, which is a company held by each of Ms. Cao and Dr. Chen as to 50%;
(d) Nanjing Xuande, a limited partnership of which the general partner is Zhengli
Consulting, which is a company held by each of Ms. Cao and Dr. Chen as to 50%;
(e) Zhengli No. 1, a limited partnership of which Ms. Cao and Dr. Chen are the general
partners; and
(f) Zhengli No. 2, a limited partnership of which Ms. Cao and Dr. Chen are the general
partners.
In order to further consolidate the control of the Management Shareholders of our
Company and improve the efficiency of shareholders’ decision-making process, Zenergy
Investment entered into separate acting-in-concert agreements (the “ AIC Agreements ”) and
voting proxy agreements (the “ Voting Proxy Agreements ”) in 2021 and 2022 with certain
minority financial investors (the “ Financial Investors ”), which comprise Wuxi Zhenghai,
Fujian Yaohua, Wukuang Yuanding, Beijing Jiade, Juxin Xihai, Hengqin New Kinetic Energy,
Lianhe Jiaying, China Industrial Securities Investment Management, Anhui Haichuang,
Chengtun Mining, Mr. Ma Shaodong and Zhongtai Ronghao. The Financial Investors agreed to:
(a) pursuant to the AIC Agreements, exercise their voting rights or express their
opinions based on and in the same manner as Zenergy Investment for key corporate
decisions, including but not limited to our Company’s operations and investment
planning, the appointment, remuneration and replacement of directors and
supervisors, changes to registered capital, merger, demerger, dissolution or
liquidation, and the amendment of articles of association; and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(b) pursuant to the V oting Proxy Agreements, irrevocably grant proxy of voting rights
to Zenergy Investment where resolutions by way of shareholders’ meeting are
required in accordance with the applicable laws, regulations and corporate
governance rules for matters relating to our Company’s day-to-day operations
management and development, IPO and financing.
Immediately prior to the Global Offering, the Management Shareholders, which in
aggregate hold approximately 48.56% of the issued share capital of our Company, are acting
in concert together with the Financial Investors, which in aggregate hold approximately
16.04% of the issued share capital of our Company (together with the Management
Shareholders, the “ Acting-in-Concert Shareholders ”). Accordingly, the Acting-in-Concert
Shareholders are collectively interested in, and are entitled to exercise control over, an
aggregate of approximately 64.60% of the voting rights of our Company. As such, they are
considered as our controlling shareholders before Listing and will be subject to applicable
lock-up requirements pursuant to Rule 10.07 of the Listing Rules after Listing.
For the background of the Acting-in-Concert Shareholders, please refer to the section
headed “History, Reorganization and Corporate Structure”.
The Financial Investors have confirmed that they do not intend to continue to act in
concert or exercise any common control over our Group upon completion of the Global
Offering. Accordingly, the Financial Investors have entered into separate agreements with
Zenergy Investment to terminate the AIC Agreements and V oting Proxy Agreements, with such
termination to take effect upon Listing.
Immediately upon completion of the Global Offering (assuming that the Over-allotment
Option is not exercised), Ms. Cao and Dr. Chen will together control the voting rights of
approximately 46.21% of the total issued share capital of our Company through the
Management Shareholders. Accordingly, Ms. Cao and Dr. Chen, together with the Management
Shareholders (namely Zenergy Investment, SINOGY VC, Nanjing Miaode, Nanjing Xuande,
Zhengli No. 1 and Zhengli No. 2) and Zhengli Consulting, will be a group of Controlling
Shareholders of our Company upon Listing. Ms. Cao and Dr. Chen will continue to act in
concert in respect of all major affairs concerning the Group in accordance with their
acting-in-concert agreement after the Listing provided that they remain interested in the share
capital of our Company. For the background of our Controlling Shareholders, please refer to
the sections headed “History, Reorganization and Corporate Structure” and “Directors,
Supervisors and Senior Management”.
INDEPENDENCE OF OUR BUSINESS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying out our business independently from our Controlling Shareholders after the Listing
for the reasons set out below.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Management Independence
Our business is managed and conducted by our Board and senior management. Upon the
Listing, our Board will consist of three executive Directors, one non-executive Director and
three independent non-executive Directors. For more details, please see the section headed
“Directors, Supervisors and Senior Management”.
Notwithstanding the roles of Ms. Cao and Dr. Chen, our Directors are of the view that our
Company is able to function independently from our Controlling Shareholders for the
following reasons:
(i) each of our Directors is aware of his or her fiduciary duties and responsibilities
under the Listing Rules as a director, which require that he or she must act for the
benefit and in the best interests of our Company and not allow any conflict between
his or her duties as a Director and his or her personal interests;
(ii) our daily management and operations are carried out by a senior management team,
all of whom have substantial experience in the industry in which our Company is
engaged, and will therefore be able to make business decisions that are in the best
interests of our Group. For details of the industry experience of our senior
management team, please see the section headed “Directors, Supervisors and Senior
Management”;
(iii) we have appointed three independent non-executive Directors, who (i) account for
more than one-third of the Board, (ii) do not and will not hold any directorships or
management positions in our Controlling Shareholders, (iii) possess the requisite
industry knowledge and experience and are qualified to provide independent, sound
and professional advice to our Company, and (iv) will be responsible for deciding
certain matters of our Company which must always be referred to the independent
non-executive Directors for review;
(iv) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and our Directors or their respective
associates, any interested Director is required to declare the nature of such interest
and shall abstain from voting at the relevant Board meetings of our Company in
respect of such transactions and shall not be counted in the quorum; and
(v) to support our management independence, we have adopted a series of corporate
governance measures to management conflicts of interest, if any, between our Group
and our Controlling Shareholders. For more details, please refer to “—Corporate
Governance Measures” in this section.
Based on the above, our Directors believe that our Board and senior management as a
whole are able to play a managerial role in our Company independently from our Controlling
Shareholders after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Operational Independence
Our Group is not operationally dependent on our Controlling Shareholders. Our Company
(including through our subsidiaries) holds all relevant licenses and owns all relevant
intellectual properties and research and development facilities necessary to carry on our
business. We have sufficient capital, facilities, technology, equipment and employees to
operate our business independently from our Controlling Shareholders. We also have
independent access to our customers and suppliers and an independent management team to
handle our day-to-day operations.
Based on the above, our Directors consider there to be no operational dependence on any
of our Controlling Shareholders.
Financial Independence
Our Group is not financially dependent on our Controlling Shareholders, and we do not
expect to rely on our Controlling Shareholders for financing after the Listing. Our Company
has established its own independent finance department and implemented its own independent
audit, accounting, internal control and financial management systems. We make financial
decisions and determine our use of funds according to our own business needs. We have opened
accounts with banks independently and do not share any bank account with our Controlling
Shareholders. We have made tax filings and paid tax independently of our Controlling
Shareholders pursuant to applicable laws and regulations. We have adequate internal resources
to support our daily operations, and we are capable of obtaining financing from third parties,
if necessary, without reliance on our Controlling Shareholders. We also have an audit
committee comprising non-executive Directors only to oversee our accounting and financial
reporting processes.
As of the Latest Practicable Date, there is no outstanding loan extended by our
Controlling Shareholders and/or their close associates to us. Any guarantee previously
provided by the Controlling Shareholders and/or their close associate(s) for our benefit has
been released. All material amounts due from or due to our Controlling Shareholders and/or
their close associate(s) not arising out of our ordinary course of business will be fully settled
before the Listing.
In view of our internal resources, our undrawn banking facilities, our net cash generated
from operating activities and the estimated net proceeds from the Global Offering, our
Directors confirm that we will not rely on our Controlling Shareholders for financing support
after the Global Offering. Our Directors also believe that, upon Listing, the sustainability of
our business - as demonstrated by our results of operations and financial position during the
Track Record Period - will enhance our ability to obtain or renew loans and borrowings from
banks on an independent basis without the support of the Controlling Shareholders.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Based on the above, our Directors consider there to be no financial dependence on any
of our Controlling Shareholders.
DISCLOSURE UNDER RULE 8.10 OF THE LISTING RULES
Save and except for the interests of our Controlling Shareholders in our Company and its
subsidiaries, our Controlling Shareholders and our Directors do not have any interest in any
business, other than our Group, which competes or is likely to compete, either directly or
indirectly, with our Group’s business and which requires disclosure pursuant to Rule 8.10 of
the Listing Rules.
CORPORATE GOVERNANCE MEASURES
Our Company will comply with the provisions of the Corporate Governance Code, which
sets out principles of good corporate governance in relation to, among other matters, directors,
the chairperson, board composition, the appointment, re-election and removal of directors,
their responsibilities and remuneration and communications with shareholders. Details are set
out in the section headed “Directors, Supervisors and Senior Management—Corporate
Governance Code”.
Our Directors recognize the importance of good corporate governance to protect the
interests of our Shareholders. We have adopted the following corporate governance measures
to ensure good corporate governance, and to avoid potential conflicts of interest between our
Group and our Controlling Shareholders:
(i) where a Shareholders’ meeting is to be held for considering proposed transactions
in which any of our Controlling Shareholders has any material interest, our
Controlling Shareholders will not vote on the resolutions and shall not be counted
in the quorum for the voting;
(ii) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Group enters into connected transactions with our
Controlling Shareholders, our Company will comply with the applicable
requirements under the Listing Rules;
(iii) the independent non-executive Directors will review, on an annual basis, whether
there are any conflicts of interest between our Group and the Controlling
Shareholders (the “Annual Review”), and provide impartial and professional advice
to protect the interests of our minority Shareholders;
(iv) the Controlling Shareholders will undertake to provide all information necessary,
including all relevant financial, operational and market information, as well as any
other information required by the independent non-executive Directors, for the
Annual Review;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(v) our Company will disclose decisions, with basis, on matters reviewed by the
independent non-executive Directors, either in its annual or interim reports or by
way of announcements, as required by the Listing Rules;
(vi) where the advice from an independent professional, such as a financial or legal
adviser, is reasonably requested by our Directors (including the independent
non-executive Directors), the appointment of such an independent professional will
be made at our Company’s expense; and
(vii) we have appointed Maxa Capital Limited as our Compliance Adviser, who will
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, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage conflict of interests between our Group and our
Controlling Shareholders, and to protect our minority Shareholders’ rights after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, immediately following the completion of the Global
Offering and the conversion of our Unlisted Shares to H Shares, assuming the Over-allotment
Option is not exercised, the following persons will have an interest and/or short position in the
Shares or the underlying Shares which would fall to be disclosed to us and the Stock Exchange
under the provisions of Divisions 2 and 3 of Part XV of the SFO, or will be directly or
indirectly interested in 10% or more of the nominal value of any class of our share capital
carrying rights to vote in all circumstances at general meetings of our Company:
Name of Shareholder Nature of Interest
As of the Latest Practicable Date
Immediately following the Global Offering (assuming the
Over-allotment Option is not exercised)
Number of
Shares
Approximate
percentage of
shareholding in
our total share
capital
Number of
Shares (1)
Approximate
percentage of
shareholding in
Unlisted Shares/
H Shares (2)
Approximate
percentage of
shareholding in
our total share
capital (2)
Ms. Cao (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporations
1,159,012,918 48.56% 598,319,817
Unlisted
Shares (L)
55.96% 23.85%
560,693,101
H Shares (L)
38.95% 22.35%
Interest in parties acting
in concert through a
controlled corporation
382,946,254 16.04% – – –
Dr. Chen
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporations
1,159,012,918 48.56% 598,319,817
Unlisted
Shares (L)
55.96% 23.85%
560,693,101
H Shares (L)
38.95% 22.35%
Interest in parties acting
in concert through a
controlled corporation
382,946,254 16.04% – – –
Zenergy Investment
(3) /H1118/H1118Beneficial interest 460,690,543 19.30% 322,483,380
Unlisted
Shares (L)
30.16% 12.86%
138,207,163
H Shares (L)
9.60% 5.51%
Interests of parties acting
in concert
382,946,254 16.04% – – –
SINOGY VC (3) /H1118/H1118/H1118/H1118/H1118Beneficial interest 382,045,276 16.01% 271,362,931
Unlisted
Shares (L)
25.38% 10.82%
110,682,345
H Shares (L)
7.69% 4.41%
SUBSTANTIAL SHAREHOLDERS
– 395 –


--- page 405 ---
Name of Shareholder Nature of Interest
As of the Latest Practicable Date
Immediately following the Global Offering (assuming the
Over-allotment Option is not exercised)
Number of
Shares
Approximate
percentage of
shareholding in
our total share
capital
Number of
Shares (1)
Approximate
percentage of
shareholding in
Unlisted Shares/
H Shares (2)
Approximate
percentage of
shareholding in
our total share
capital (2)
Zhengli Consulting (3) /H1118/H1118Interest in controlled
corporations
292,815,839 12.27% 3,621,006
Unlisted
Shares (L)
0.34% 0.14%
289,194,833
H Shares (L)
20.09% 11.53%
Nanjing Miaode (3) /H1118/H1118/H1118/H1118Beneficial interest 237,152,124 9.94% 237,152,124
H Shares (L)
16.48% 9.45%
Fujian Financial
Investment Co., Ltd.
(ப
΂ʮ̡)
(4) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
274,079,820 11.48% 137,144,662
Unlisted
Shares (L)
12.83% 5.47%
136,935,158
H Shares (L)
9.51% 5.46%
Huafu Securities Co.,
Ltd. (ப
΂ʮ̡)(4) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
274,079,820 11.48% 137,144,662
Unlisted
Shares (L)
12.83% 5.47%
136,935,158
H Shares (L)
9.51% 5.46%
Huafu Investment (4) /H1118/H1118/H1118Beneficial interest 165,689,009 6.94% 137,144,662
Unlisted
Shares (L)
12.83% 5.47%
28,544,347
H Shares (L)
1.98% 1.14%
Interest in a controlled
corporation
108,390,811 4.54% 108,390,811
H Shares (L)
7.53% 4.32%
Lin Yongzhong (͑
׀4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
108,390,811 4.54% 108,390,811
H Shares (L)
7.53% 4.32%
Zhongjin (Fujian) Venture
Capital Co., Ltd. (ږ
(ܔ)ப
΂ʮ̡)(4) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
108,390,811 4.54% 108,390,811
H Shares (L)
7.53% 4.32%
SUBSTANTIAL SHAREHOLDERS
– 396 –


--- page 406 ---
Name of Shareholder Nature of Interest
As of the Latest Practicable Date
Immediately following the Global Offering (assuming the
Over-allotment Option is not exercised)
Number of
Shares
Approximate
percentage of
shareholding in
our total share
capital
Number of
Shares (1)
Approximate
percentage of
shareholding in
Unlisted Shares/
H Shares (2)
Approximate
percentage of
shareholding in
our total share
capital (2)
Xingsi Shenglian (4) /H1118/H1118/H1118Beneficial interest 108,390,811 4.54% 108,390,811
H Shares (L)
7.53% 4.32%
Changshu Hi-Tech
Holding Co., Ltd. ( ੬
ʮ
̡)
(5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
224,735,744 9.42% 151,680,247
Unlisted
Shares (L)
14.19% 6.05%
73,055,497
H Shares (L)
5.08% 2.91%
Southeast Investment
Holding (5) /H1118/H1118/H1118/H1118/H1118/H1118
Beneficial interest 78,624,750 3.29% 78,624,750
Unlisted
Shares (L)
7.35% 3.13%
Interest in a controlled
corporation
146,110,994 6.12% 73,055,497
Unlisted
Shares (L)
5.08% 2.91%
73,055,497
H Shares (L)
5.08% 2.91%
Southeast Investment (5) /H1118Beneficial interest 119,902,744 5.02% 59,951,372
Unlisted
Shares (L)
5.61% 2.39%
59,951,372
H Shares (L)
4.17% 2.39%
Interest in a controlled
corporation
26,208,250 1.10% 13,104,125
Unlisted
Shares (L)
1.23% 0.52%
13,104,125
H Shares (L)
0.91% 0.52%
Wang Zhengdong ( ˮ͍
؇5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in a controlled
corporation
103,397,862 4.33% 103,397,862
H Shares (L)
7.18% 4.12%
Shanghai Royalsea
Capital Management
Ltd. ( ɪऎ͍ऎ༟ପ၍
ʮ̡)
(5) /H1118/H1118/H1118/H1118
Interest in controlled
corporations
103,397,862 4.33% 103,397,862
H Shares (L)
7.18% 4.12%
Wuxi Zhenghai (5) /H1118/H1118/H1118/H1118Beneficial interest 90,293,737 3.78% 90,293,737
H Shares (L)
6.27% 3.60%
Notes:
(1) The letter “L” denotes the person’s long position in the Shares.
SUBSTANTIAL SHAREHOLDERS
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--- page 407 ---
(2) The calculation is based on the total number of 1,069,127,364 Unlisted Shares and 1,439,372,739 H Shares in
issue immediately after completion of the Global Offering since 1,317,849,039 Unlisted Shares will be
converted into H Shares and 121,523,700 H Shares will be issued pursuant to the Global Offering, assuming
that the Over-allotment Option is not exercised.
(3) Ms. Cao and Dr. Chen: (i) hold Zenergy Investment as to 42% and 46% directly and as to 12% indirectly
through SINOGY VC; (ii) hold SINOGY VC as to 52% and 48%; (iii) hold Zhengli Consulting as to 50% each,
thereby controlling the general partnership interests in Nanjing Miaode and Nanjing Xuande; (iv) are the
general partners of Zhengli No. 1 and Zhengli No. 2.
Therefore, by virtue of the SFO: (i) Zhengli Consulting is deemed to be interested in the Shares held by
Nanjing Miaode and Nanjing Xuande (which holds 2.33% of the total issued share capital of our Company as
of the Latest Practicable Date); and (ii) Ms. Cao and Dr. Chen are deemed to be interested in the Shares held
by Zenergy Investment, SINOGY VC, Nanjing Miaode, Nanjing Xuande, Zhengli No. 2 (which holds 0.84%
of the total issued share capital of our Company as of the Latest Practicable Date), and Zhengli No. 1 (which
holds 0.15% of the total issued share capital of our Company as of the Latest Practicable Date).
According to the AIC Agreements and V oting Proxy Agreements entered into between Zenergy Investment and
the Financial Investors in 2021 and 2022, the Financial Investors agreed to: (i) pursuant to the AIC
Agreements, exercise their voting rights or express their opinions based on and in the same manner as Zenergy
Investment for key corporate decisions, including but not limited to our Company’s operations and investment
planning, the appointment, remuneration and replacement of directors and supervisors, changes to registered
capital, merger, demerger, dissolution or liquidation, and the amendment of articles of association; and (ii)
pursuant to the V oting Proxy Agreements, irrevocably grant proxy of voting rights to Zenergy Investment
where resolutions by way of shareholders’ meeting are required in accordance with the applicable laws,
regulations and corporate governance rules for matters relating to our Company’s day-to-day operations
management and development, IPO and financing.
Since Ms. Cao and Dr. Chen are deemed to be interested in the Shares held by Zenergy Investment, as of the
Latest Practicable Date, they are also entitled to exercise control over the equity interests held by the Financial
Investors, which amounts to 16.04% of the total issued share capital of our Company.
Therefore, as of the Latest Practicable Date, Ms. Cao and Dr. Chen are collectively deemed to be interested
in a total of 64.60% of the total issued share capital of our Company under the SFO.
The AIC Agreements and V oting Proxy Agreements will terminate upon Listing. As such, immediately upon
completion of the Global Offering (assuming that the Over-allotment Option is not exercised), Ms. Cao and
Dr. Chen will be deemed under the SFO to be interested in the Shares held by the Management Shareholders
only.
(4) The general partner of Xingsi Shenglian is Zhongjin (Fujian) Venture Capital Co., Ltd. (ږ(ܔ)௴ุҳ༟
ப΂ʮ̡), which is held as to 80% by Lin Yongzhong (׀Xingsi Shenglian is also held as to
99.9990% by Huafu Investment as its limited partner.
Huafu Investment is a wholly-owned subsidiary of Huafu Securities Co., Ltd. (ப΂ʮ̡), which
is in turn held as to 46.72% by Fujian Financial Investment Co., Ltd. (ப΂ʮ̡). Fujian
Financial Investment Co., Ltd. is wholly owned by the Fujian Provincial Department of Finance (݁
ᝂ). Therefore, by virtue of the SFO, each of Zhongjin (Fujian) Venture Capital Co., Ltd. and Lin Yongzhong
is deemed to be interested in the Shares held by Xingsi Shenglian, and each of Huafu Securities Co., Ltd. and
Fujian Financial Investment Co., Ltd. is deemed to be interested in the Shares held by Huafu Investment and
Xingsi Shenglian.
(5) Southeast Investment holds 99.01% of Southeast Xinneng (which holds 1.10% of the total issued share capital
of our Company as of the Latest Practicable Date) as its limited partner. Southeast Investment is held as to
99.96% by Southeast Investment Holding, which is a wholly-owned subsidiary of Changshu Hi-Tech Holding
Co., Ltd. (ʮ̡), which is in turn wholly owned by the Changshu Finance Bureau
(State-owned Assets Supervision and Administration Office of Changshu Municipal Government) ( ੬ᆞ̹ৌ
҅(܃Therefore, by virtue of the SFO: (i) Southeast Investment is
deemed to be interested in the Shares held by Southeast Xinneng; (ii) Southeast Investment Holding is deemed
to be interested in the Shares held by Southeast Xinneng and Southeast Investment; and (iii) Changshu Hi-Tech
Holding Co., Ltd. is deemed to be interested in the Shares held by Southeast Xinneng, Southeast Investment
and Southeast Investment Holding.
(6) The general partner of Wuxi Zhenghai and Anhui Haichuang (which holds 0.55% of the total issued share
capital of our Company as of the Latest Practicable Date) is Shanghai Royalsea Capital Management Ltd. ( ɪ
ʮ̡), which is held as to 51.36% by Wang Zhengdong (؇Therefore, by virtue of
the SFO, each of Shanghai Royalsea Capital Management Ltd. and Wang Zhengdong is deemed to be interested
in the Shares held by Wuxi Zhenghai and Anhui Haichuang.
SUBSTANTIAL SHAREHOLDERS
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--- page 408 ---
This section presents certain information regarding our share capital before and upon
completion of the Global Offering.
BEFORE THE COMPLETION OF THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered capital of our Company was
RMB2,386,976,403, comprising 2,386,976,403 Unlisted Shares in issue of nominal value
RMB1.00 each.
UPON THE COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering and the conversion of
certain Unlisted Shares into H Shares, assuming that the Over-allotment Option is not
exercised, the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
total share capital
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,069,127,364 42.62%
H Share to be converted from Unlisted Shares /H1118/H1118/H11181,317,849,039 52.54%
H Shares to be issued under the Global Offering /H1118/H1118121,523,700 4.84%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,508,500,103 100.00%
Immediately following the completion of the Global Offering and the conversion of
certain Unlisted Shares into H Shares, assuming the Over-allotment Option is fully exercised,
the issued share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
total share capital
Unlisted Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,069,127,364 42.31%
H Share to be converted from Unlisted Shares /H1118/H1118/H11181,317,849,039 52.16%
H Shares to be issued under the Global Offering /H1118/H1118139,752,000 5.53%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,526,728,403 100.00%
RANKING
Upon completion of the Global Offering, the Shares will consist of H Shares and Unlisted
Shares. H Shares and Unlisted Shares are all ordinary Shares in the share capital of our
Company. However, apart from certain qualified domestic institutional investors in the PRC,
the qualified PRC investors under the Shanghai — Hong Kong Stock Connect or the Shenzhen
— Hong Kong Stock Connect and other persons who are entitled to hold our H Shares pursuant
to relevant PRC laws and regulations or upon approvals of any competent authorities, H Shares
generally cannot be subscribed for by or traded between investors of the PRC.
SHARE CAPITAL
– 399 –


--- page 409 ---
Unlisted Shares and H Shares will rank pari passu with each other in all respects and, in
particular, will rank equally for all dividends or distributions declared, paid or made after the
date of this Prospectus. All dividends for H Shares will be denominated and declared in
Renminbi, and paid in Hong Kong dollars or Renminbi, whereas all dividends for Unlisted
Shares will be paid in Renminbi. Other than cash, dividends could also be paid in the form of
Shares.
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
The Company has filed for a “full circulation” of the existing 1,317,849,039 Unlisted
Shares into H Shares on a one-for-one basis, and submitted the application reports,
authorization documents of the shareholders of Unlisted Shares for which an H-share “full
circulation” are applied, explanation about the compliance of share acquisition and other
documents in accordance with the requirements of the CSRC.
The relevant filings of the conversion of the existing 1,317,849,039 Unlisted Shares held
by the existing Shareholders into H Shares on a one-for-one basis have been completed on
February 19, 2025.
Upon completion of the Global Offering, all our Unlisted Shares (other than those to be
converted to H Shares) are not listed or traded on any stock exchange. The holders of our
Unlisted Shares may convert their Shares into H Shares provided such conversion shall have
gone through any requisite internal approval process and complied with the regulations
prescribed by the securities regulatory authorities of the State Council and the regulations,
requirements and procedures prescribed by the overseas stock exchange(s) and have completed
the required filing with the securities regulatory authorities of the State Council, including the
CSRC. The listing of such converted Shares on the Hong Kong Stock Exchange will also
require the approval of the Hong Kong Stock Exchange.
Based on the procedures for the conversion of our Unlisted Shares into H Shares as
disclosed in this section, we can apply for the listing of all or any portion of our Unlisted
Shares on the Hong Kong Stock Exchange as H Shares in advance of any proposed conversion
to ensure that the conversion process can be completed promptly upon notice to the Hong Kong
Stock Exchange and delivery of Shares for entry on the H Share register. As any listing of
additional Shares after our initial listing on the Hong Kong Stock Exchange is ordinarily
considered by the Hong Kong Stock Exchange to be a purely administrative matter, it will not
require such prior application for listing at the time of our initial listing in Hong Kong.
No class Shareholder voting is required for the listing and trading of the converted Shares
on the Hong Kong Stock Exchange. Any application for listing of the converted Shares on the
Hong Kong Stock Exchange after our initial listing is subject to prior notification by way of
announcement to inform Shareholders and the public of such proposed conversion.
SHARE CAPITAL
– 400 –


--- page 410 ---
After all the requisite approvals have been obtained, the following procedures will need
to be completed: the relevant Unlisted Shares will be withdrawn from the Share register and
we will re-register such Shares on our H Share register maintained in Hong Kong and instruct
the H Share Registrar to issue H Share certificates. Registration on our H Share register will
be on the condition that (a) our H Share Registrar lodges with the Hong Kong Stock Exchange
a letter confirming the proper entry of the relevant H Shares on the H Share register of
members and the due dispatch of H Share certificates and (b) the admission of the H Shares
to trade on the Hong Kong Stock Exchange will comply with the Listing Rules and the General
Rules of HKSCC and the HKSCC Operational Procedures in force from time to time. Until the
converted Shares are re-registered on our H Share register, such Shares would not be listed as
H Shares.
For further details, see “Risk Factors—Risks Relating to the Global Offering—Substantial
future sales or the expectation of substantial sales of our H Shares in the public market and
conversion of our Unlisted Shares into H Shares could cause the price of our H Shares to decline
and could materially impair our future ability to raise capital through offerings of our H Shares.”
TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL OFFERING
Pursuant to the PRC Company Law, our Shares issued prior to the Global Offering shall
not be transferred within one year from the Listing Date. Shares transferred by our Directors,
Supervisors and members of the senior management each year during their term of office shall
not exceed 25% of their total respective shareholdings in our Company. The Shares that the
aforementioned persons hold in our Company cannot be transferred within one year from the
Listing Date, nor within half a year after they leave their positions as Directors, Supervisors
or members of the senior management in our Company.
See “Underwriting—Underwriting Arrangements—Hong Kong Public Offering—Undertakings
pursuant to the Hong Kong Underwriting Agreement” for details of the lock-up undertakings.
PRE-IPO EQUITY INCENTIVE PLANS
We adopted the Pre-IPO Equity Incentive Plans, details of which are set forth in
“Statutory and General Information—Pre-IPO Equity Incentive Plans” in Appendix IV to this
Prospectus.
GENERAL MANDATE TO ISSUE SHARES, SELL AND/OR TRANSFER TREASURY
SHARES AND REPURCHASE MANDATE
Subject to the completion of the Global Offering, pursuant to the Shareholders resolutions
of the Company, our Directors have been granted general unconditional mandates to issue our
Shares and sell and/or transfer our Shares out of treasury that are held as treasury shares and
repurchase our Shares. See “Statutory and General Information—Further Information about
Our Company—Resolutions of our Shareholders” in Appendix IV to this Prospectus for further
details.
SHARE CAPITAL
– 401 –


--- page 411 ---
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines on Application for the “Full Circulation” Program for
Domestic Unlisted Shares of H-Share Listed Companies ( H΅͡ሗ“Ό
ஷ”ˏ) published and implemented by the CSRC on November 14, 2019, which was
most recently amended on August 10, 2023, the domestic shareholders of our Shares that are
not listed on the overseas stock exchange shall handle share conversion registration business
in accordance with the relevant business rules of the CSDCC. Further, H-share companies
should submit the relevant status reports to the CSRC within 15 days after the conversion
registration with the CSDCC of such shares involved in the application is completed.
SHAREHOLDERS’ GENERAL MEETING
See Appendix III to this Prospectus for details of circumstances under which our general
Shareholders’ meeting is required.
SHARE CAPITAL
– 402 –


--- page 412 ---
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and notes
included the accountants’ report included in Appendix I of the Prospectus. The financial
information as set out in the Accountants’ Report incorporates the financial statements
of the Company during the Track Record Period. You should read the whole Accountants’
Report and not rely merely on the information in this section. For the purpose of this
section, unless the context otherwise requires, references to 2021, 2022, 2023 and 2024
refer to our financial years ended December 31 of such years.
The following discussion and analysis contain forward-looking statements that
involve risks and uncertainties. These statements are based on assumptions and analysis
made by us in light of our experience and perception of historical trends, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. You should not place undue reliance on any such
statements. Our actual future results and timing of selected events could differ materially
from those anticipated in these forward-looking statements as a result of various factors,
including those set forth under “Risk Factors,” “Forward-Looking Statements” and
elsewhere in this Prospectus.
OVERVIEW
We are a lithium-ion battery manufacturer in China, committed to developing a diverse
portfolio of market-driven and technology-fueled battery products. We primarily focus on the
R&D, production and sales of EV battery products, ESS battery products and aviation battery
products. We provide integrated battery solutions, encompassing battery cells, modules, packs,
racks, and battery management systems dedicated to large-scale applications of
electrochemical products to interconnect land, sea and air (“ LISA”).
During the Track Record Period, we experienced growth in our results of operations. Our
revenue increased from RMB1,499.3 million in 2021 to RMB3,290.3 million in 2022, then to
RMB4,161.7 million in 2023, and further to RMB5,130.3 million in 2024, representing a
CAGR of 50.7%.
SIGNIFICANT FACTORS AFFECTING OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Our results of operations and financial condition during the Track Record Period had been
affected by the following factors affecting the overall industry in which we operate:
 macroeconomic conditions and the growth of the EV market, fluctuations in demand
for power batteries by EV companies, and overall growth of the ESS market;
FINANCIAL INFORMATION
– 403 –


--- page 413 ---
 continuous investment and innovation in battery technology to improve product
performance, safety and cost efficiency, catch up with cutting-edge technologies in
the market and changing customer demands;
 fluctuations in EV sales and customer demand for EV batteries, including
seasonality in EV sales volume; and
 government policies and regulations for NEVs and smart technology, such as
subsidies for NEV purchases and government grants for NEV manufacturers.
Specific Factors Affecting Our Results of Operations
Besides the general factors affecting the industry, our business and results of operations
are also affected by specific factors, including the following major factors:
Our ability to attract new customers, design-wins and orders, as well as to retain and obtain
more design-wins from existing customers
We generated revenue primarily from sale of our battery products to OEM customers
during the Track Record Period. Our ability to establish sales relationship with new customers
through design-wins leads to more purchase orders, and in turn increases our sales revenue. We
continuously improve the performance, safety and cost efficiency of our battery products to
enhance our brand reputation, which helps attract new OEM customers. Our results of
operations are also affected by demand from customers other than automobile OEMs, such as
customers with energy storage needs in relation to (i) power-generation; (ii) industrial and
commercial operations; and (iii) residential energy storage use cases. As we are developing
aviation battery products, our results of operations are also affected by our ability to attract
new customers in the low-altitude economy sector, which is expected to reach a market size of
RMB1,000.0 billion in 2030, according to the “Implementing Measures for the Innovative
Application of General Aviation Equipment (2024-2030).”
Our results of operations also depend on our ability to retain existing customers and
obtain more design-wins on more vehicle models and more purchase orders from them. We
begin our cooperation with OEM customers very early-on in the process to fully understand
customer needs and the features and battery needs of their vehicle models (such as vehicle
design, intended application scenarios, requirement for battery pack configuration and
electrochemistries) and to customize our battery products. We also make detailed plans to
ensure our manufacturing capacity can match customer orders to ensure we can timely fulfill
customer orders without having excessive capacity. We also offer timely aftersales customer
support to timely resolve any battery related issues that may arise from time to time. These
above measures ensure smooth integration of our products into vehicle bodies as well as stable
functioning of our products during their lifecycles, which we believe enhance customer
satisfaction with our products, and thus lead to recurring order placements and improved
results of operations.
FINANCIAL INFORMATION
– 404 –


--- page 414 ---
Manufacturing capacity management and expansion
We strategically invest in expanding our manufacturing capacity based on market demand
for our products, which on the one hand ensures we can timely fulfill customer orders, and on
the other hand avoids excessive expenditure on facility expansion and inventory management.
Leveraging our software-defined factory management capabilities, we have established a
streamlined and efficient manufacturing process, which contributes to our ability to manage
manufacturing costs and improve our profit margins. To match the expected changes in
customer demand, we intend to continue to expand our manufacturing capacity and introduce
advanced and highly intelligent equipment and manufacturing lines to save energy, reduce
environmental impact, and improve manufacturing efficiency and product quality. We believe
the above measures of manufacturing capacity management and expansion effectively enable
us to deliver more products and generate more revenue, while optimizing our costs and profit
margin.
Fluctuation in raw material prices
During the Track Record Period, the cost of raw materials, in particular the lithium
carbonate prices, has been the largest component of our cost of sales. In 2021, 2022, 2023 and
2024, the cost of raw materials was RMB1,141.7 million, RMB2,565.6 million, RMB2,917.1
million, and RMB3,268.7 million, respectively, accounting for 77.7%, 71.7%, 73.8%, and
74.6% of our total cost of sales, respectively. Thus, the prices of key raw materials have a
significant impact on our results of operations. According to Frost & Sullivan, the prices of key
lithium sources, such as lithium carbonate and lithium hydroxide, experienced an increase
between 2019 and 2022, followed by a significant decline in 2023 as the supply and demand
dynamics gradually stabilized. Changes in raw material prices directly affect our cost of sales.
Because we adjust the selling prices of our battery products based on fluctuations in raw
material price, our revenue is also affected by fluctuations in raw material costs. In some of
our sales contracts with customers, the price we charge does not change based on fluctuations
in raw material prices. To the extent we cannot pass along the changes in raw material cost to
our customers, our profit margin would also be affected by the changes in raw material price.
Investment in R&D and expansion of diverse product portfolio
Our investment in R&D not only enables us to develop our battery technologies that
improve the performance, safety and cost efficiency of our battery products, but also to launch
new products covering more comprehensive electrochemistry pathways and application
scenarios. With understanding of OEM customers’ demands to balance safety, quality,
performance, and cost efficiency, we developed diverse EV battery products (covering battery
products for BEV , PHEV , EREV and HEV vehicle models), and are proactively conducting
R&D on aviation battery products, placing us in a favorable position of application scenario
expansion and rapid technological iterations in the battery industry. We believe our R&D
strategy enables us to address more market demands, expand our sales, and effectively compete
against our competitors, which we believe positively affect our results of operations and
financial condition.
FINANCIAL INFORMATION
– 405 –


--- page 415 ---
Seasonality
According to Frost & Sullivan, the EV sales in China exhibit noticeable seasonality for
a variety of reasons, including seasonal demand fluctuations, policy influences, holidays, and
climate conditions, among others. EV sales in China in the second half of the year tends to be
higher compared to the first half. Such changes in EV sales may impact OEM customers’
manufacturing and battery procurement plan, which in turn may affect our results of operations
within a specific year. We also experience seasonality in the sales of ESS products, with the
first and last quarter of each year recording less sales compared to the second and third
quarters.
One-off Impact by an OEM Customer
In November 2022, we ceased delivery of NCM battery products for application in BEVs
to one of our OEM customers (“ WM Customer ”) due to material adverse change in its
business operations and WM Customer’s prolonged delay and inability to settle their
receivables (the “ WM Customer Incident ”). NCM batteries were the only products we sold
to WM Customer. As a result, our sales volume of NCM batteries decreased from 2.9 GWh in
2022 to 1.5 GWh in 2023, and our revenue from the sales of NCM batteries decreased from
RMB2,628.6 million in 2022 to RMB1,448.0 million in 2023. It takes a certain amount of time
for us to develop business relationships with new customers, obtain design-wins, and ramp up
mass production. Therefore, even though sales and delivery to WM Customer terminated in
2022, sales in 2023 was also adversely affected because we could not immediately make up for
the purchase orders volume that would have been delivered and sold to WM Customer had WM
Customer Incident not occurred.
The WM Customer Incident also led to an RMB422.3 million of impairment losses on our
inventories in 2022, which materially adversely affected our cost of sales, gross loss margin
and overall results of operations in the same year. The inventories manufactured for WM
Customer were subsequently disposed as down-grade product at lower prices in 2023. The
Nanjing Zenergy Facility where products for WM Customer were produced ceased substantial
production in December 2022. For more details about the changes in business plans of Nanjing
Zenergy, please see “Business—Manufacturing—Manufacturing Base.”
We also recorded an RMB601.4 million impairment in trade receivables in 2022 which
was due from WM Customer pursuant to the relevant accounting policies, judgments and
estimates under IFRS, which significantly increased our impairment losses on financial assets
and contract assets, net in 2022, and materially adversely affected our results of operations for
the same year and our trade receivable balance and financial position as of December 31, 2022.
The aggregate impairment in trade receivables and inventories in 2022 arising from the WM
Customer Incident was RMB1,023.6 million.
FINANCIAL INFORMATION
– 406 –


--- page 416 ---
However, we believe the impact of the WM Customer Incident was one-off in nature. We
have implemented various remedial measures and enhanced our credit policies to reduce the
risk of recurrence of similar incidents. Our enhanced credit approval process includes the
following:
 Enhanced Customer Selection and Development : we implemented a more rigorous
process for screening and expanding our customer base. Moving forward, we focus
on OEM customers with strong backgrounds, including those affiliated with
state-owned enterprises, multinational automotive companies, and publicly listed
companies with proven track record of business operations in the NEV market. We
closely monitor our OEM customers’ vehicle sales performance, market ranking,
overall financial and operational health, and payment timeliness and regularly track
for any significant changes or negative news related to the customers. Historically,
we have proactively exited relationships with higher-risk OEM customers based on
our evaluations on the customers’ credibility, background, shareholders, track
record, credit terms, and payment history. As part of our internal management, the
business team leads monthly product approval committee meetings to evaluate
whether to expand relationships with specific customers or projects. For customers
that do not meet our business development requirements or are deemed high-risk,
the committee decides not to proceed with or further develop the relationship. We
believe this reduces potential operational exposure to similar risks in the future. We
would exit the relationships with a client upon learning any material adverse change
in its operational or financial performance as we monitor each of our material clients
through publicly available information. We also have a customer credit limit
management policy in place, which outlines detailed procedures (including
mechanism on adjusting credit period and credit limit for customers) for assessing
customer creditworthiness and managing risks. For customers who fail to meet our
standards or experience material adverse changes in their operations or financial
performance, we promptly terminate the relationship in accordance with this policy
and ensure no further exposure to the associated risks.
 Establishment of dedicated committee : we instituted a dedicated general manager’s
committee to evaluate and make decisions on products to be developed and
produced. New projects and products must be approved by this committee before
proceeding to development and production line modifications. This measure ensures
that all customers and projects meet stringent quality and risk management standards
before implementation.
 Credit term : we typically grant a credit term of 30 to 90 days for approved purchase
orders from customer.
 Data driven credit assessment : based on customers’ historical operational and
payment records, as well as leveraging market information database, we timely
evaluate and update customers’ credit rating to reflect their changes, if any.
FINANCIAL INFORMATION
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 Automated credit approval process : we enhanced credit approval efficiency
leveraging an automated credit approval process under which credit profiles of
customers are managed more accurately with less human errors, and orders from
customers with favorable historical records can be approved with more efficiency.
 Customer risk assessment : for customers who had exceeded their credit terms for
one or more past orders, our sales team must submit a special request for approval
before new orders can be placed. Depending on the amount of past-due amount and
the number of days past due, such special requests are presented for approval by
different levels of management officers.
 Ongoing monitoring : we track the creditworthiness and determine and update the
appropriate amount of credit that can be extended based on internal and public
record and information. We require our sales team to generate periodic risk
assessment reports to facilitate management’s decision-making.
See “Business—Business Sustainability” for details on our subsequent measures to
prevent similar incidents going forward. As of the Latest Practicable Date, there was no
incident similar to the WM Customer Incident in the course of our operations.
The Impact of COVID-19
The outbreak of COVID-19 pandemic has materially and adversely affected the global
economy since the first quarter of 2020. In response, the PRC government and the governments
of other countries have implemented numerous anti-pandemic measures, including travel bans
and restrictions, quarantines, remote work arrangement and shutdowns. Particularly, the
emergence of the Omicron variant of COVID-19 in 2022 resulted in extended duration of
aforementioned measures. However, substantially all of the cities in the PRC eased or lifted the
restrictive measures in January 2023.
The COVID-19 pandemic has made it more restrictive for overseas raw material supplies
to enter China due to customer control measures imposed during the COVID-19 pandemic,
which partially led to a raw material shortage and drove up prices in 2021 and 2022. In
addition, freight costs for overseas shipment also increased significantly during the COVID-19
pandemic, which also drove up the raw material prices. The COVID-19 pandemic also
negatively affected the mobility of some of our employees.
However, the impact of COVID-19 on our overall production and R&D process was
limited. During the Track Record Period and up to the Latest Practicable Date, we did not
experience temporary closure or shutdown of our offices or production facilities due to the
COVID-19 pandemic, and our production activities did not encounter any material disruption,
nor has our product delivery been materially affected by the COVID-19 pandemic. In response
to COVID-19, we implemented various precautionary measures in line with government
guidelines and regulations to ensure that we could maintain our daily operation, production and
R&D activities, and we incurred over RMB253.4 thousand to purchase facial masks, protective
gears and disinfectants for pandemic prevention and control. Accordingly, our Directors
believe that the outbreak of COVID-19 has not had, and will not have, any material adverse
impact on our business, financial condition or results of operations.
FINANCIAL INFORMATION
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BASIS OF PRESENTATION AND PREPARATION
See Notes 2.1 and 2.2 of the accountants’ report included in Appendix I to this Prospectus
for details on our basis of presentation and preparation.
MATERIAL ACCOUNTING POLICY INFORMATION AND MATERIAL
ACCOUNTING JUDGMENTS AND ESTIMATES
See Notes 2.4 and 3 of the accountants’ report included in Appendix I to this Prospectus
for details on our material accounting policy information and material accounting judgments
and estimates.
Accounting Policy Information Related to the Business Reorganization
Pursuant to the Business Reorganization, as more fully explained in “History,
Reorganization and Corporate Structure—Corporate Development and Major Shareholding
Changes—3. Business Reorganization of Our Group,” our Group acquired businesses of
Jiangsu TAFEL and its subsidiaries which were under the common control of the controlling
shareholders before and after the Business Reorganization. Accordingly, the historical financial
information has been prepared on a consolidated basis by applying the principles of merger
accounting as if the Business Reorganization had been completed at the beginning of the Track
Record Period. Therefore, Jiangsu TAFEL is combined into our Group’s financial statements
since the beginning of the Track Record Period by applying the principles of merger
accounting.
According to the terms of the Business Reorganization, our Group (i) undertook the
business; (ii) acquired certain assets including properties, plant and equipment, other
intangible assets, and part of the inventories; (iii) assumed provision for warranty claims and
the personnel held by Jiangsu TAFEL that constitute a business combination; while other
current assets and liabilities that do not constitute a business and are not related to our Group’s
long-term business operation and development were retained by Jiangsu TAFEL on February
28, 2022. From an accounting perspective, the assets and liabilities retained by Jiangsu TAFEL
were deemed as disposal of assets by our Group in 2022 upon the Business Reorganization as
all assets and liabilities of Jiangsu TAFEL had been included into our Group’s financial
statements since the beginning of the Track Record Period.
FINANCIAL INFORMATION
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RESULTS OF OPERATIONS
The following table sets forth our results of operations during the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 3,290,253 4,161,670 5,130,317
Cost of sales
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,393,991) (3,001,272) (3,670,744) (4,326,476)
Impairment losses on inventories /H1118/H1118/H1118/H1118/H1118/H1118(75,127) (579,261) (282,437) (55,397)
Gross Profit/(Loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,178 (290,280) 208,489 748,444
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,833 48,954 49,265 78,738
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,848) (19,779) (57,618) (35,769)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(134,738) (241,116) (259,466) (301,459)
Research and development expenses /H1118/H1118/H1118/H1118/H1118(221,047) (329,277) (424,099) (556,165)
Impairment losses on financial assets and
contract assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,457) (600,057) (10,837) (9,705)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,400) (267,524) (11,568) (14,952)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,217) (32,892) (73,451) (132,585)
Share of profits/(losses) of joint ventures /H1118/H1118 – 923 (25,094) 302,496
(LOSS)/PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(411,696) (1,731,048) (604,379) 79,043
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,421 11,067 14,512 11,971
(LOSS)/PROFIT AND TOTAL
COMPREHENSIVE LOSS FOR
THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(Loss)/profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(LOSS)/PROFIT PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.26) (1.01) (0.31) 0.04
FINANCIAL INFORMATION
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NON-IFRS MEASURE
Our consolidated financial information was prepared in accordance with IFRS. To
supplement our consolidated results which were prepared and presented in accordance with
IFRS, we use EBITDA (non-IFRS measure) and adjusted EBITDA (non-IFRS measure) as
additional financial measures, which are not required by, or presented in accordance with,
IFRS. We believe that the measure facilitates comparisons of operating performance from
period to period and company to company by eliminating the potential impact of items, such
as certain non-cash items. The use of the non-IFRS measure has limitations as an analytical
tool, and you should not consider them in isolation from, as a substitute for, analysis of, or
superior to, our results of operations or financial condition as reported under IFRS. In addition,
the non-IFRS measure may be defined differently from similar terms used by other companies,
and may not be comparable to other similarly titled measures used by other companies.
We define EBITDA (non-IFRS measure) as loss for the year adjusted by finance costs,
depreciation and amortization, and income tax credit and interest income. We define adjusted
EBITDA (non-IFRS measure) as EBITDA (non-IFRS measure) as adjusted by share-based
payment expenses (which is non-cash in nature) and listing expenses. The following table sets
forth a reconciliation of our EBITDA (non-IFRS measure) for 2021, 2022, 2023 and 2024 to
the nearest measures prepared in accordance with IFRS.
Y ear Ended December 31,
2021 2022 2023 2024
(RMB in thousands)
(Loss)/profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,217 32,892 73,451 132,585
Depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185,674 294,001 413,853 608,942
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,421) (11,067) (14,512) (11,971)
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,155) (17,896) (33,230) (37,426)
EBITDA (non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(163,960) (1,422,051) (150,305) 783,144
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,611 35,038 43,934 58,875
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 29,285
Adjusted EBITDA
(non-IFRS measure) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(141,349) (1,387,013) (106,371) 871,304
FINANCIAL INFORMATION
–4 1 1–


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PRINCIPAL COMPONENTS OF STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Revenue
Revenue by Product Type
We generate revenue primarily from the sales of our power battery and ESS products. See
“Business—Products” for more details on the power battery and ESS products we sold during
the Track Record Period. To a much lesser extent, we also generate revenue from (i)
miscellaneous sales of down-grade products and waste materials; and (ii) technical support
services on battery product development and testing (such as vibration testing, overheating
protection testing, pressure testing, collision testing, heat dissipation testing, energy density
testing) to enable OEM customers to successfully integrate our power batteries into their
vehicle models. The following table sets forth a breakdown of our revenue by product type and
downstream application during the years indicated, both in absolute amounts and as
percentages of total revenue.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 3,116,066 94.7 3,356,865 80.7 4,663,775 90.9
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 96.6 2,628,589 79.9 1,447,995 34.8 1,357,268 26.5
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 487,477 14.8 1,908,870 45.9 3,306,507 64.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,447,952 96.6 3,103,107 94.3 2,370,954 57.1 3,012,278 58.7
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,567 0.3 971,673 23.3 1,644,206 32.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893 0.0 4,392 0.1 14,238 0.3 7,291 0.2
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,768 0.1 315,306 7.6 213,409 4.2
Other products and services (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,251 3.4 171,419 5.2 489,499 11.7 253,133 4.9
Down-grade products (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,950 1.1 35,539 1.1 278,017 6.6 92,763 1.8
Waste materials (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,485 1.8 109,540 3.3 132,554 3.2 130,249 2.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,816 0.5 26,340 0.8 78,928 1.9 30,121 0.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 100.0 3,290,253 100.0 4,161,670 100.0 5,130,317 100.0
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services.
(3) Revenue from the sale of down-grade products accounted for 6.6% of our total revenue in 2023, which was
primarily due to the WM Customer Incident in 2022. After the WM Customer Incident, we sold inventories
originally produced for WM Customer to other customers as down-grade products in 2023.
(4) Primarily include materials discarded during the production process, such as cathodes, anodes, battery cells,
and scrap materials like copper foil and aluminum foil.
FINANCIAL INFORMATION
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Our revenue from sales of down-graded products arose from 2021 to 2022 and further to
2023 when the finished battery products could no longer be sold to the originally intended
OEMs because (i) sales to the intended OEM ceased (i.e. WM Customer); and (ii) the product
experienced minor defects, such as scratches, unfit sizes or insufficient battery capacity, and
could no longer meet the quality requirement of the intended OEM. The percentage of revenue
from sales of down-graded products declined in 2024.
However, such down-grade products can still find alternative applications, such as energy
storage and low-speed vehicles. We sell down-grade products to third parties specialized in the
recycling of such battery products. Once classifying a product as “down-grade,” we would
relabel the relevant products and remove the logo of the originally intended customer of the
relevant products to transfer them into down-grade products.
Our down-grade products may incur impairment of inventories. As our inventories are
stated at the lower of cost and net realizable value and our provision for inventories is based
on estimates of the realizable value with reference to the conditions of the inventories, together
with the economic circumstances on the marketability of such inventories. In the case of
down-grade products, impairment represents the difference between cost of producing the
inventories (cost) and selling price of such inventory as down-grade products (net realizable
value) when the net realizable value dropped to a level lower than the cost. The reasons for the
lower price of down-grade products (which may give rise to inventory impairment) are
primarily (i) change of intended use; and (ii) further processing needed by buyers. In particular:
 Change in intended use : In order for battery products to be integrated into a vehicle
model, we must conduct customization work for the battery products to be used in
the vehicle model and follow filing procedures as required by regulations. As such,
battery products produced for one customer’s vehicles could not be integrated into
vehicle models of other OEMs. Therefore, the value of the down-grade product to
other purchasers is lower compared to the originally intended customer.
 Additional processing needed : In addition, end-users of down-grade products must
undergo additional processing on the down-grade products before they could be
utilized in other application scenarios, which, according to customers of down-grade
products, include energy storage and low-speed vehicles. This further suppresses the
price at which purchasers are willing to purchase the down-grade products.
Revenue by Region
During the Track Record Period, we generated most of our revenue from operations in
China. Our revenue from direct sales to overseas customers outside China was RMB0.3
million, RMB4.0 million, RMB78.7 million, and RMB34.9 million in 2021, 2022, 2023 and
2024, respectively. We also sold our products and provided services to the European Union
during the Track Record Period, including power batteries, semifinished battery products and
accessories, and technical services. Our revenue from sales and services to the European Union
was nil, nil, RMB73.2 million, and RMB0.8 million in 2021, 2022, 2023, and 2024,
FINANCIAL INFORMATION
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--- page 423 ---
respectively. During the Track Record Period, we generated a small portion of our revenue
from the United States. Such direct sales to the United States primarily consisted of aviation
battery products. Our revenue from the direct sales to the United States was nil, RMB0.6
million, RMB4.7 million, and RMB13.9 thousand in 2021, 2022, 2023, and 2024, respectively.
Sales V olume and Average Selling Price of Battery Products
The following table sets forth a breakdown of sales volume during the years indicated.
For the year ended December 31,
2021 2022 2023 2024
(MWh)
Power Battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 3,634.4 5,906.7 11,314.4
By Product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.7 2,947.3 1,466.0 1,765.0
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 687.1 4,440.7 9,549.4
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106.6 3,631.4 4,980.6 9,210.5
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2.4 924.5 2,095.0
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.1 0.6 1.5 8.8
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.1 751.0 575.2
Note:
(1) Primarily include HEV and aviation applications.
The following table sets forth a breakdown of average selling price during the years
indicated.
For the year ended December 31,
2021 2022 2023 2024
(RMB/Wh)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.86 0.57 0.41
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.89 0.99 0.77
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.71 0.43 0.35
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.85 0.48 0.33
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.59 1.05 0.78
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.62 6.88 9.31 0.83
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.89 0.42 0.37
Note:
(1) Primarily include HEV and aviation applications.
FINANCIAL INFORMATION
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--- page 424 ---
The following table sets forth a breakdown of average unit cost of raw materials, unit
manufacturing costs and unit labor costs for our power battery products, ESS battery products
and down-grade products during the years indicated. For more details, please see
“Business—Business Sustainability—Our Historical Results of Operations—Fluctuation in
Raw Material Prices.”
Y ear ended December 31,
2021 2022 2023 2024
(RMB/Wh)
Unit cost of raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.53 0.69 0.38 0.26
Unit manufacturing costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.05 0.04 0.03 0.04
Unit labor costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.04 0.03 0.03 0.02
Average selling price /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.69 0.88 0.54 0.41
Cost of Sales
Our cost of sales primarily includes raw materials (particularly lithium carbonate),
manufacturing expenses, staff compensation, other operating expenses, warranty expenses and
impairment losses on inventories. The following table sets forth a breakdown of our cost of
sales by nature during the years indicated, both in absolute amounts and as percentages of our
total cost of sales.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141,686 77.7 2,565,621 71.7 2,917,051 73.8 3,268,742 74.6
Manufacturing costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,355 8.0 134,249 3.7 262,294 6.6 529,643 12.1
Labor costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,544 5.2 105,480 2.9 247,944 6.3 275,548 6.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,335,585 90.9 2,805,350 78.3 3,427,289 86.7 4,073,933 93.0
Other operating costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,324 2.3 128,595 3.6 169,254 4.3 143,373 3.2
Warranty costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,082 1.7 67,327 1.9 74,201 1.9 109,170 2.5
Impairment losses on inventories /H1118/H1118/H1118/H1118/H111875,127 5.1 579,261 16.2 282,437 7.1 55,397 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,118 100.0 3,580,533 100.0 3,953,181 100.0 4,381,873 100.0
FINANCIAL INFORMATION
– 415 –


--- page 425 ---
The following table sets forth a breakdown of our raw materials by type, both in absolute
amount and as percentages of total cost of sales.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Cathode materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118644,131 56.5 1,631,577 63.7 1,503,681 51.5 1,254,526 38.4
Anode materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,447 17.0 329,606 12.8 513,004 17.6 702,547 21.5
Electrolyte /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,061 11.7 201,218 7.8 214,480 7.4 180,549 5.5
Separation film /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,622 5.4 124,178 4.8 119,446 4.1 161,865 5.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,425 9.4 279,042 10.9 566,440 19.4 969,255 29.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141,686 100.0 2,565,621 100.0 2,917,051 100.0 3,268,742 100.0
Note:
(1) Primarily include raw materials used in battery cells (such as caps and aluminum shells) and battery packs
(such as exterior boxes and various electrical instruments). These materials account for a relatively high
percentage of total raw material costs in 2024, primarily because of the increase in sale of battery packs in
2024 which led to an increase in battery pack related raw material costs while the costs of cathode material
decreased since 2023 which led to a relatively lower percentage in 2024 compare to the total cost of raw
materials.
The following table sets forth a breakdown of our cost of sales by product type and
downstream application during the years indicated, both in absolute amounts and as
percentages of our total cost of sales.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,662 91.2 2,827,885 79.0 2,925,482 74.0 3,899,940 89.0
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,662 91.2 2,409,273 67.3 1,257,029 31.8 1,153,058 26.3
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 418,612 11.7 1,668,453 42.2 2,746,882 62.7
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,339,578 91.2 2,815,857 78.7 2,085,660 52.8 2,550,935 58.2
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 8,379 0.2 826,619 20.9 1,344,773 30.7
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884 0.0 3,649 0.1 13,203 0.3 4,232 0.1
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,330 0.1 289,805 7.3 188,938 4.3
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,329 3.7 171,057 4.7 455,457 11.5 237,598 5.4
Impairment losses on inventories /H1118/H1118/H1118/H1118/H111875,127 5.1 579,261 16.2 282,437 7.2 55,397 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,118 100.0 3,580,533 100.0 3,953,181 100.0 4,381,873 100.0
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services.
FINANCIAL INFORMATION
– 416 –


--- page 426 ---
Impairment losses on inventories
Impairment losses on inventories are recognized only if the carrying amount of
inventories exceeds the recoverable amount. We assess the recoverable amount of inventories
at the end of each year during the Track Record Period 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, we estimate new recoverable amount and adjust impairment losses
accordingly. See Note 2.4 of the accountants’ report included in Appendix I to this Prospectus
for further details on accounting information regarding impairment losses.
Impairment losses on inventories were RMB75.1 million, RMB579.3 million, RMB282.4
million, and RMB55.4 million in 2021, 2022, 2023 and 2024, respectively. The significant
impairment losses in 2022 were primarily due to the WM Customer Incident. We recorded
RMB422.3 million of impairment on inventories in relation to inventories manufactured for
WM Customer which were subsequently disposed as down-grade product at lower prices in
2023. Down-grade products typically arise when the finished battery products could no longer
be sold to the originally intended OEMs. In WM Customer’s case, the battery products
originally produced for WM Customer could no longer be delivered to WM Customer due to
the WM Customer Incident. To recoup our cost of manufacturing such products, we found
alternative customers for such battery products and disposed them as down-grade products at
a discount. This leads to the net realizable value which is equivalent to the price of the
down-grade products, being lower than the inventory’s carrying amount, thus leading to
impairment losses in 2022. See “—Significant factors affecting our financial condition and
results of operations—Specific factors affecting our results of operations” for more details.
The significant impairment losses of RMB157.0 million in 2022 (inventory impairment
losses in 2022 beyond those of RMB422.3 million caused by the WM Customer Incident) and
in 2023 were primarily due to a significant decrease in overall prices of raw materials in the
industry, mainly including lithium carbonate, whose average price increased from
RMB131,100 per ton in 2021 to RMB496,100 per ton in 2022, and subsequently decreased to
RMB258,700 per ton in 2023. As a result, the average price for LFP battery products increased
significantly from RMB0.51 per Wh in 2021 to RMB0.80 per Wh in 2022, and decreased to
RMB0.62 per Wh in 2023. This led to a decrease in the net realizable value of inventories to
below their carrying amount at the time of impairment assessment on December 31, 2022 and
2023.
FINANCIAL INFORMATION
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--- page 427 ---
Gross Profit/(Loss) and Gross Profit/(Loss) Margin
The following table sets forth a breakdown of our gross profit/(loss) and gross
profit/(loss) margin by product type and downstream application during the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
Gross
profit/(loss)
Gross
profit/
(loss)
margin
%%%%
(RMB in thousands, except for percentages)
Power battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,383 7.5 288,181 9.2 431,383 12.9 763,835 16.4
By product
NCM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,383 7.5 219,316 8.3 190,966 13.2 204,210 15.0
LFP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 68,865 14.1 240,417 12.6 559,625 16.9
By downstream application
BEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,374 7.5 287,250 9.3 285,294 12.0 461,343 15.3
PHEV /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 188 2.2 145,054 14.9 299,433 18.2
Other applications (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 9.7 743 16.9 1,035 7.3 3,059 42.0
ESS products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 438 15.8 25,501 8.1 24,471 11.5
Other products and services (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,078) (6.0) 362 0.2 34,042 7.0 15,535 6.1
Down-grade products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,054) (23.9) (6,918) (19.5) (8,193) (2.9) (1,461) (1.6)
Waste materials (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261 0.9 (5,427) (5.0) (7,855) (5.9) 463 0.4
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715 10.5 12,707 48.2 50,090 63.5 16,533 54.9
Impairment losses on inventories /H1118/H1118/H1118/H1118/H1118/H1118(75,127) N/A (579,261) N/A (282,437) N/A (55,397) N/A
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,178 2.0 (290,280) (8.8) 208,489 5.0 748,444 14.6
Notes:
(1) Primarily include HEV and aviation applications.
(2) Primarily include the sales of down-grade products and waste materials, as well as the provision of technical
support services. We recorded gross loss of RMB3.1 million and gross loss margin of 6.0% for other products
in 2021, primarily due to the gross loss for down-grade products, which were sold at low prices.
(3) Primarily include materials discarded during the production process, such as cathodes, anodes, battery cells,
and scrap materials like copper foil and aluminum foil.
FINANCIAL INFORMATION
– 418 –


--- page 428 ---
Other Income and Gains
Our other income and gains primarily include government grants, interest income,
investment income on structured deposits and wealth management products, fair value gains on
financial assets at fair value through profit and loss, and gain on disposal of property, plant and
equipment. The following table sets forth a breakdown of our other income and gains during
the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Other income
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,088 29.2 5,067 10.4 889 1.8 38,387 48.8
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,155 39.1 17,896 36.6 33,230 67.5 37,426 47.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,712 22.7 1,804 3.6 7,192 14.6 1,754 2.2
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,955 91.0 24,767 50.6 41,311 83.9 77,567 98.5
Gains
Investment income on structured deposits
and wealth management products /H1118/H1118/H1118/H11181,775 8.5 9,501 19.4 6,596 13.4 205 0.3
Fair value gains on financial assets at
fair value through profit or loss /H1118/H1118/H1118/H1118– – 6,395 13.1 – – – –
Foreign exchange gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0.0 58 0.1 – – 966 1.2
Gains on remeasurement of lease
payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– 3 5 0 . 1 ––
Gain on disposal of items of property,
plant and equipment and other
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101 0.5 8,233 16.8 1,323 2.6 – –
Total gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,878 9.0 24,187 49.4 7,954 16.1 1,171 1.5
Total other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H111820,833 100.0 48,954 100.0 49,265 100.0 78,738 100.0
FINANCIAL INFORMATION
– 419 –


--- page 429 ---
Selling and Marketing Expenses
Our selling and marketing expenses primarily include staff compensation expenses,
advertising and promotion expenses, travel and entertainment expenses, consulting expenses,
and share-based payment expenses. The following table sets forth a breakdown of our selling
and marketing expenses during the years indicated, both in absolute amounts and as
percentages of total selling and marketing expenses.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Staff compensation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,010 31.2 8,093 40.9 16,854 29.3 15,598 43.6
Advertising and promotion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715 5.6 2,746 13.9 22,065 38.3 4,249 11.9
Travel and entertainment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,012 15.7 2,393 12.1 7,376 12.8 4,488 12.5
Consulting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,693 13.2 1,943 9.8 4,369 7.6 5,346 14.9
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,464 27.0 2,757 13.9 3,334 5.8 3,463 9.7
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118954 7.3 1,847 9.4 3,620 6.2 2,625 7.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,848 100.0 19,779 100.0 57,618 100.0 35,769 100.0
Note:
1. Others primarily include miscellaneous consumables, utilities and office expenses, and lease expenses.
Administrative Expenses
Our administrative expenses primarily include staff compensation expenses, depreciation
and amortization expenses, share-based payment expenses, office related expenses (such as
utilities, insurance, rent, and property management fees), recruiting expenses, legal and
professional service expenses, and travel expenses. The following table sets forth a breakdown
of our administrative expenses during the years indicated, both in absolute amounts and as
percentages of total administrative expenses.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Staff compensation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,482 44.9 109,569 45.4 126,128 48.6 110,908 36.9
Depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H111823,693 17.6 57,249 23.7 55,239 21.3 74,268 24.6
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,795 5.8 16,497 6.8 25,346 9.8 36,654 12.2
Office related expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,977 16.3 25,736 10.7 16,809 6.5 12,506 4.1
Recruiting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,007 1.5 7,999 3.3 11,732 4.5 3,061 1.0
Legal and professional service /H1118/H1118/H1118/H1118/H1118/H11186,443 4.8 7,928 3.3 8,115 3.1 10,573 3.5
Travel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,212 0.9 1,627 0.7 3,294 1.3 1,920 0.6
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 29,285 9.7
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,129 8.2 14,511 6.1 12,803 4.9 22,284 7.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,738 100.0 241,116 100.0 259,466 100.0 301,459 100.0
Note:
1. Others primarily include tax, such as stamp duty.
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses primarily include staff compensation expenses,
depreciation and amortization expenses, utilities, materials and consumables consumed in our
R&D activities, experiment fees to carry out our R&D projects, and share-based payment
expenses. The following table sets forth a breakdown of our research and development
expenses during the years indicated, both in absolute amounts and as percentages of total
research and development expenses.
Y ear Ended December 31,
2021 2022 2023 2024
%%%%
(RMB in thousands, except for percentages)
Staff compensation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,349 43.1 145,900 44.3 189,260 44.6 258,094 46.4
Depreciation and amortization /H1118/H1118/H1118/H1118/H1118/H1118/H111879,764 36.1 82,454 25.0 102,008 24.1 144,869 26.0
Utilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,077 5.9 26,834 8.1 48,472 11.4 60,168 10.8
Materials and consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,611 5.3 35,152 10.7 34,370 8.1 32,735 5.9
Experiment fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,710 4.4 11,324 3.4 22,828 5.4 22,865 4.1
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,196 3.7 13,947 4.2 13,642 3.2 17,070 3.1
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,340 1.5 13,666 4.3 13,519 3.2 20,364 3.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118221,047 100.0 329,277 100.0 424,099 100.0 556,165 100.0
Note:
1. Others primarily include expenses in relation to repair and maintenance expenses and technical consulting fees
(which primarily relate to patent application fees). Others increased significantly from RMB3.3 million in
2021 to RMB13.7 million in 2022, primarily due to an increase in repair expenses and patent application fees,
which is in turn driven by the amount of repair and patent application work conducted in 2022.
Impairment Losses on Financial Assets and Contract Assets, Net
Our impairment losses on financial assets and contract assets, net primarily represent
credit loss. Our impairment losses were RMB22.5 million, RMB600.1 million, RMB10.8
million, and RMB9.7 million in 2021, 2022, 2023 and 2024, respectively. The significant
impairment loss on financial assets in 2022 was primarily due to the WM Customer Incident.
See “—Significant factors affecting our financial condition and results of operations—Specific
factors affecting our results of operations” for more details.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs primarily include interest on interest-bearing bank and other
borrowings and interest on lease liabilities. The following table sets forth a breakdown of our
finance costs and as percentages of our total finance costs for the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Interest on interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,578 64,859 134,475 136,493
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,170 13,292 11,089 9,597
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,748 78,151 145,564 146,090
Less: Interest capitalised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,531) (45,259) (72,113) (13,505)
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,217 32,892 73,451 132,585
Share of Profits/(Losses) of Joint Ventures
Our share of profits/(losses) of joint ventures primarily represents the amount of profits
and losses attributable to our Group as a result of the business operations of our joint ventures,
namely STAES and Jiangsu Aiev.
YEAR-TO-YEAR COMPARISON OF RESULTS OF OPERATIONS
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue increased by 23.3% from RMB4,161.7 million in 2023 to RMB5,130.3
million in 2024, primarily due to an increase in our sales volume of power batteries from
5,906.7 MWh in 2023 to 11,314.4 MWh in 2024. Specifically:
 Our revenue from the sales of NCM battery decreased from RMB1,448.0 million in
2023 to RMB1,357.3 million in 2024, primarily due to a decrease in its average
selling price, which is primarily due to changes in overall raw material prices in the
industry; partially offset by an increase in its sales volume.
 Our revenue from the sales of LFP batteries increased from RMB1,908.9 million in
2023 to RMB3,306.5 million in 2024, primarily due to an increase in its sales
volume from 4,440.7 MWh in 2023 to 9,549.4 MWh in 2024, partially offset by a
decrease in its average selling price, which is primarily due to changes in overall
raw material prices in the industry.
FINANCIAL INFORMATION
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 Our revenue from the sales of ESS products decreased from RMB315.3 million in
2023 to RMB213.4 million in 2024, primarily due to a decrease in sales volume of
ESS products from 751.0 MWh in 2023 to 575.2 MWh in 2024, as well as a decrease
in the average selling price of ESS products, which is primarily due to changes in
overall raw material prices in the industry. The number of our ESS customers
decreased from 36 in 2023 to 34 in 2024.
Changes in our revenue from power battery products were also driven by the following
changes in the vehicle models for which our batteries are designed. Specifically:
 Our revenue from the sales of BEV battery products increased from RMB2,371.0
million in 2023 to RMB3,012.3 million in 2024, primarily due to an increase in sale
volume from 4,980.6 MWh in 2023 to 9,210.5 MWh in 2024 as we began mass
production and delivery of more BEV battery products; partially offset by a decrease
in average selling price of BEV battery products, which is primarily due to changes
in overall raw material prices in the industry.
 Our revenue from the sales of PHEV battery products increased significantly from
RMB971.7 million in 2023 to RMB1,644.2 million in 2024, primarily due to a
significant increase in its sales volume from 924.5 MWh in 2023 to 2,095.0 MWh
in 2024 as we began mass production and delivery of more PHEV battery products,
partially offset by a decrease in average selling price of PHEV battery products,
which is primarily due to changes in overall raw material prices in the industry.
Cost of Sales
Our cost of sales increased by 10.8% from RMB3,953.2 million in 2023 to RMB4,381.9
million in 2024, primarily due to the significant increase in sales volume of our various
batteries products, which led to significant increases in raw material costs, manufacturing costs
and labor costs. This is partially offset by (i) a decrease in raw material prices in 2024; and (ii)
a decrease in impairment losses on inventories in 2024 as the decline in raw material prices was
less significant compared to 2023, leading to a smaller disparity between the market value and
cost. Specifically:
 Our cost of sales of NCM battery decreased from RMB1,257.0 million in 2023 to
RMB1,153.0 million in 2024, primarily due to a decrease in the overall price of raw
materials in the industry.
 Our cost of sales of LFP batteries increased from RMB1,668.5 million in 2023 to
RMB2,746.9 million in 2024, primarily due to an increase in sales volume of LFP
batteries from 4,440.7 MWh to 9,549.4 MWh, partially offset by a decrease in the
overall price of raw materials.
 Our cost of sales of ESS products decreased from RMB289.8 million in 2023 to
RMB189.0 million in 2024, primarily due to a decrease in sales volume of ESS
products from 751.0 MWh to 575.2 MWh, and a decrease in raw material prices in
the industry.
FINANCIAL INFORMATION
– 423 –


--- page 433 ---
Changes in cost of sales of power battery products were also driven by the following
changes in the vehicle models for which our batteries are designed. Specifically:
 Our cost of sales of BEV battery products increased from RMB2,085.7 million in
2023 to RMB2,550.9 million in 2024, primarily due to an increase in sales volume
from 4,980.6 MWh to 9,210.5 MWh, partially offset by a decrease in raw material
prices.
 Our cost of sales of PHEV battery products increased from RMB826.6 million in
2023 to RMB1,344.8 million in 2024, primarily due to a significant increase in sales
volumes of PHEV battery products from 924.5 MWh to 2,095.0 MWh, partially
offset by a decrease in raw material prices.
Gross Profit/(Loss) and Gross Profit/(Loss) Margin
As a result of the above, we had gross profit of RMB208.5 million and RMB748.4 million
in 2023 and 2024, respectively. Our gross profit margin was 5.0% and 14.6% in 2023 and 2024,
respectively.
Our gross profit margin for NCM products increased from 13.2% in 2023 to 15.0% in
2024, primarily due to (i) a decrease in overall unit cost of raw materials, which declined by
31.6% from RMB0.38 per Wh in 2023 to RMB0.26 per Wh in 2024, in particular, the cost of
raw materials of one of our battery module products which contributed 18.9% of our revenue
from NCM products in 2024 decreased by approximately 33.8% while the its average selling
price decreased by approximately 14.8%. The overall decrease in unit cost of raw materials was
partially offset by a 22.2% decrease in average selling price for NCM batteries from RMB0.99
per Wh in 2023 to RMB0.77 per Wh in 2024; and (ii) an increase in the sales volume of NCM
batteries from 1,446.0 MWh in 2023 to 1,765.0 MWh in 2024, which led to decrease in overall
unit labor costs from RMB0.03 per Wh in 2023 to RMB0.02 per Wh in 2024.
Our gross profit margin for LFP products increased from 12.6% in 2023 to 16.9% in 2024,
primarily due to (i) recent mass-produced LFP PHEV products had higher gross profit margin
as compared to our general gross profit margin for LPF. Such products accounted for
approximately 17.1% of total LFP revenue, contributing to an overall higher profit margin for
LFP products. This higher gross profit margin of the respective products was largely due to
higher selling prices during the initial mass production phase, which are typically adjusted
downward over time as production scales and market competition intensifies in the new energy
battery industry; and (ii) decrease in unit cost of raw material, which declined by 31.6% from
RMB0.38 per Wh in 2023 to RMB0.26 per Wh in 2024. It was partially offset by a 18.6%
decrease in average selling price for LFP batteries from RMB0.43 per Wh in 2023 to RMB0.35
per Wh in 2024. Additionally, the total labor cost savings for LFP products also contributed to
the gross profit margin improvement, which was in turn due to an increase in the sales volume
of LFP batteries from 4,440.7 MWh in 2023 to 9,549.4 MWh in 2024 that led to a decrease in
overall unit labor costs from RMB0.03 per Wh in 2023 to RMB0.02 per Wh in 2024.
FINANCIAL INFORMATION
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--- page 434 ---
Our gross profit margin for ESS products increased from 8.1% in 2023 to 11.5% in 2024,
primarily due to the fact that our ESS products sold in 2024 are produced and sold on demand,
reflecting the current lower raw material costs and avoiding inventory-related expenses, while
our ESS products sold in 2023 were manufactured earlier by us when raw material prices were
higher and were held in inventory for longer period of time, leading to higher production and
carrying costs.
Our gross profit margin for others under “other products and services” decreased from
7.0% in 2023 to 6.1% in 2024, primarily due to sales of pole pieces of RMB72.2 million in
2023 to an OEM customer. The pole pieces, also referred to as electrodes, are conductors in a
battery where reduction reactions occur. Pole pieces include cathode and anodes. The pole
pieces we sold were semi-finished products of our battery products. Our customers buy
cathodes and anodes from us and use them for product development and equipment testing. We
were able to record a relatively high gross profit margin for such sales of pole pieces due to
the stringent and highly specific quality and product requirements by the OEM customer. We
believe the sales of pole pieces serve as a critical step in potentially establishing further battery
sales relationships with this OEM customer in the future.
Other Income and Gains
Our other income and gains increased by 59.8% from RMB49.3 million in 2023 to
RMB78.7 million in 2024, primarily due to an RMB37.5 million increase in government grants
which was mainly attributable to the introduction of the additional value-added tax credit
policy for advanced manufacturing enterprises.
Selling and Marketing Expenses
Our selling and marketing expenses decreased by 37.8% from RMB57.6 million in 2023
to RMB35.8 million in 2024, primarily due to (i) an RMB17.8 million decrease in advertising
and promotion expenses primarily due to more product launch events adopting live-streamed
format with reduced offline expenses; and (ii) an RMB2.9 million decrease in travel and
entertainment.
Administrative Expenses
Our administrative expenses increased by 16.2% from RMB259.5 million in 2023 to
RMB301.5 million in 2024, primarily due to (i) an RMB19.0 million increase in depreciation
and amortization driven by an increase in our buildings and other office equipment and
electronic devices as we expanded our business scale; and (ii) an RMB29.3 million increase in
listing expenses.
Research and Development Expenses
Our research and development expenses increased by 31.1% from RMB424.1 million in
2023 to RMB556.2 million in 2024, primarily due to (i) an RMB68.8 million increase in staff
compensation driven by the increase in R&D headcount; (ii) an RMB43.0 million increase in
depreciation and amortization driven by an increase in our R&D facilities; and (iii) an
RMB11.7 million increase in utilities expenses as we conducted more R&D activities.
FINANCIAL INFORMATION
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Impairment Losses on Financial Assets
Our impairment losses on financial assets remained relatively stable at RMB10.8 million
and RMB9.7 million in 2023 and 2024, respectively.
Other Expenses
Our other expenses increased by 29.3% from RMB11.6 million in 2023 to RMB15.0
million in 2024, primarily due to the loss on asset disposal.
Finance Costs
Our finance costs increased from RMB73.5 million in 2023 to RMB132.6 million in 2024,
primarily due to (i) a decrease in capitalized interest driven by the capitalization of phase II
of our Changshu Zenergy facility; and (ii) an increase in our interest-bearing bank borrowing.
Share of Profits/(Losses) of Joint V entures
Our share of losses of joint ventures was RMB25.1 million in 2023, primarily due to
losses incurred by Jiangsu Aiev who ceased production in 2023. Our share of profits of joint
ventures was RMB302.5 million in 2024, primarily due to the investment income of RMB293.7
million from STAES and RMB8.8 million from Jiangsu Aiev.
Loss/(Profit) for the Y ear
As a result of the foregoing, we recorded net loss of RMB589.9 million in 2023 and net
profit of RMB91.0 million in 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue increased by 26.5% from RMB3,290.3 million in 2022 to RMB4,161.7
million in 2023, primarily due to an increase in our sales volume of power batteries from
3,634.4 MWh in 2022 to 5,906.7 MWh in 2023. Specifically:
 Our revenue from the sales of NCM battery decreased from RMB2,628.6 million in
2022 to RMB1,448.0 million in 2023, primarily due to the WM Customer Incident
and a general development market demand for other electrochemistry systems such
as LFP. It takes a certain amount of time for us to develop business relationships
with new customers, obtain design-wins, and ramp up mass production. Therefore,
even though sales and delivery to WM Customer terminated in 2022, sales in 2023
was also adversely affected because we could not immediately make up for the
purchase orders volume that would have been delivered and sold to WM Customer
had WM Customer Incident not occurred. Our revenue from NCM battery products
FINANCIAL INFORMATION
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--- page 436 ---
was primarily generated from battery modules and battery packs. Battery packs in
general have higher selling prices than battery modules. Therefore, an increase in
the percentage of revenue from battery packs would contribute to an increase in
average selling price. In 2022, our revenue generated from battery modules and
battery packs contributed to 89.9% and 0.3% of the total revenue of NCM battery
products, with average selling prices of RMB0.89 per Wh and RMB1.96 per Wh,
respectively. In 2023, revenues generated from battery modules and battery packs
contributed to 29.4% and 68.3% of the total revenue of NCM battery products, with
average selling prices of RMB0.86 per Wh and RMB1.05 per Wh. Therefore,
although the selling prices of each of NCM battery modules and battery packs fell
in 2023 due to fluctuations in key raw material prices, the overall selling price of
NCM battery products increased in 2023 due to the shift in product sales mix.
 Our revenue from the sales of LFP battery increased from RMB487.5 million in
2022 to RMB1,908.9 million in 2023, primarily due to an increase in sales volume
of our LFP batteries from 687.1 MWh in 2022 to 4,440.7 MWh in 2023; partially
offset by a decrease in average selling price of our LFP batteries, primarily driven
by a decrease in cost of key raw materials such as lithium iron phosphate from 2022
to 2023.
 Our revenue from the sales of ESS products increased from RMB2.8 million in 2022
to RMB315.3 million in 2023, primarily due to an increase in sales volume from 3.1
MWh in 2022 to 751.0 MWh in 2023, and an increase in the number of ESS
customers from four in 2022 to 36 in 2023. The significant growth in 2023 was due
to the fact that we only recorded revenue from testing projects of ESS projects in
2022 and commenced mass production of ESS products in May 2023, resulting in
the quick ramping up of ESS revenue in 2023.
 Our revenue from the sales of other goods increased from RMB171.4 million in
2022 to RMB489.5 million in 2023, primarily due to an increase in sales of
down-grade products as a result of the WM Customer Incident and the sale of related
inventories as down-grade products and waste materials.
Changes in our revenue from power battery products were also driven by the following
changes in the vehicle models for which our batteries are designed. Specifically:
 Our revenue from the sales of BEV decreased from RMB3,103.1 million in 2022 to
RMB2,371.0 million in 2023, primarily due to a decrease in average selling price of
BEV batteries, driven by a decrease in prices of lithium iron phosphate, as well as
the impact of the WM Customer Incident.
 Our revenue from the sales of PHEV increased from RMB8.6 million in 2022 to
RMB971.7 million in 2023, primarily because we began mass production of PHEV
power battery products in 2023 with total sales volume of 924.5 MWh, while in
2022 we only had sales of a small amount of PHEV battery products.
FINANCIAL INFORMATION
– 427 –


--- page 437 ---
Cost of Sales
Our cost of sales increased by 10.4% from RMB3,580.5 million in 2022 to RMB3,953.2
million in 2023, primarily due to an RMB385.1 million increase cost of sales of goods driven
by an increase in sales volume of our power batteries and ESS products, partially offset by a
decrease in impairment losses on inventories. In 2022, we incurred RMB579.3 million in
impairment losses on inventories primarily as a result of the WM Customer Incident. See
“—Significant factors affecting our financial condition and results of operations—Specific
factors affecting our results of operations” for more details. In 2023, we incurred RMB282.4
million in impairment losses on inventories, primarily due to a significant decrease in overall
prices of raw materials in the industry, which led to a decrease in expected selling price and
impairment of ESS product inventories. Changes in our cost of sales are more specifically due
to the following:
 Our cost of sales of NCM battery decreased from RMB2,409.3 million in 2022 to
RMB1,257.0 million in 2023, primarily due to (i) a decrease in sales volume from
2,947.3 MWh in 2022 to 1,466.0 MWh in 2023 driven by the WM Customer
Incident; and (ii) a decrease in the cost of NCM battery raw materials.
 Our cost of sales of LFP battery increased from RMB418.6 million in 2022 to
RMB1,668.5 million in 2023, primarily due to a significant increase in sales volume
of LFP battery products from 687.1 MWh in 2022 to 4,440.7 MWh in 2023, which
called for increases in LFP battery manufacturing related costs for labor and raw
materials consumed.
 Our cost of sales of ESS products increased from RMB2.3 million in 2022 to
RMB289.8 million in 2023, primarily due to an increase in our sales volume of ESS
products in 2023.
Changes in cost of sales of power battery products were also driven by the following
changes in the vehicle models for which our batteries are designed. Specifically:
 Our cost of sales of BEV decreased from RMB2,815.9 million in 2022 to
RMB2,085.7 million in 2023, primarily due to a decrease in the raw material cost,
as well as the impact of the WM Customer Incident.
 Our cost of sales of PHEV increased from RMB8.4 million in 2022 to RMB826.6
million in 2023, primarily due to the commencement of mass production and
delivery of batteries to PHEV models in the second half of 2023.
FINANCIAL INFORMATION
– 428 –


--- page 438 ---
Gross Profit/(Loss) and Gross Profit/(Loss) Margin
As a result of the above, we had gross loss of RMB290.3 million and gross loss margin
of 8.8% in 2022, and gross profit of RMB208.5 million and gross profit margin of 5.0% in
2023. Our gross loss position in 2022 was primarily due to an RMB422.3 million impairment
loss on inventories as a result of the WM Customer Incident. See “—Significant factors
affecting our financial condition and results of operations—Specific factors affecting our
results of operations” for more details. The above RMB422.3 million impairment loss on
inventories was included in the calculation of cost of sales in 2022. Therefore, such impairment
contributed to the gross loss position in 2022. In 2023, we moved into gross profit position
because our impairment losses significantly declined as the impact of the WM Customer
Incident on inventory impairment in 2022 did not carry over to 2023; this was partially offset
by the impairment losses caused by a decrease in prices of raw materials in 2023 such as
lithium carbonate, which led to a decrease in expected selling price and impairment of ESS
product inventories. Such decrease in expected selling price and impairment of ESS product
inventories also led to a decrease in gross profit margin of ESS products from 15.8% in 2022
to 8.1% in 2023. Changes in gross profit margin to 5.0% in 2023 was primarily due to an
increase in gross profit margin for NCM products from 8.3% in 2022 to 13.2% in 2023,
primarily due to our newly mass-produced NCM PHEV products, which have a higher project
gross profit margin. Our gross profit margin for LFP products decreased from 14.1% in 2022
to 12.6% in 2023, primarily due to intensified market competition in 2023, which led to a
decline in the selling price of lithium iron phosphate battery products and consequently caused
a drop in the gross profit margin.
Our gross profit margin for others under “other products and services” increased from
0.2% in 2022 to 7.0% in 2023, primarily due to sales of pole pieces of RMB72.2 million in
2023 to an OEM customer. The pole pieces, also referred to as electrodes, are conductors in a
battery where reduction reactions occur. Pole pieces include cathode and anodes. The pole
pieces we sold were semi-finished products of our battery products. Our customers buy
cathodes and anodes from us and use them for product development and equipment testing. We
were able to record a relatively high gross profit margin for such sales of pole pieces due to
the stringent and highly specific quality and product requirements by the OEM customer. We
believe the sales of pole pieces serve as a critical step in potentially establishing further battery
sales relationships with this OEM customer in the future.
Other Income and Gains
Our other income and gains remained relatively stable at RMB49.0 million in 2022 and
RMB49.3 million in 2023.
Selling and Marketing Expenses
Our selling and marketing expenses increased significantly from RMB19.8 million in
2022 to RMB57.6 million in 2023, primarily due to (i) an RMB19.3 million increase in
advertising and business promotion expenses as we devoted more efforts to promote our brand
image and attended more trade shows; (ii) an RMB8.8 million increase in staff compensation
expenses as we increased the headcount of our selling and marketing personnel; and (iii) an
RMB2.4 million increase in consulting service expenses as we engaged consulting services to
explore sales opportunities in overseas markets.
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses increased by 7.6% from RMB241.1 million in 2022 to
RMB259.5 million in 2023, primarily due to an increase in our administrative headcount to
support our growing business scale.
Research and Development Expenses
Our research and development expenses increased by 28.8% from RMB329.3 million in
2022 to RMB424.1 million in 2023, primarily due to (i) an RMB43.4 million increase in staff
compensation expenses due to an increase in headcount of our R&D personnel; (ii) an
RMB19.6 million increase in depreciation and amortization and an RMB21.6 million increase
in utilities expenses as we used more facilities to conduct R&D activities; and (iii) an RMB11.5
million increase in experiment expenses.
Impairment Losses on Financial Assets
Our impairment losses on financial assets decreased by 98.2% from RMB600.1 million
in 2022 to RMB10.8 million in 2023, primarily because in 2022 we incurred an RMB601.4
million impairment loss to our trade receivables as a result of the WM Customer Incident. See
“—Significant factors affecting our financial condition and results of operations—Specific
factors affecting our results of operations” for more details.
Other Expenses
Our other expenses decreased by 95.7% from RMB267.5 million in 2022 to RMB11.6
million in 2023, primarily due to changes in business plans of Nanjing Zenergy and Dongguan
Zenergy, which had a significant impact on our financial performance in 2022 and 2023 which
resulted in impairment losses to property, plant and equipment of RMB244.6 million and
RMB7.0 million in 2022 and 2023, respectively. After considering the significant conversion
costs we would need to incur to adapt the Nanjing Zenergy production lines to new battery
products and technologies which we developed in recent years, we decided to substantially
cease the operations of Nanjing Zenergy facility. As a result, we incurred significant
impairment loss of the property, plant and equipment in 2022. For details and circumstances
leading to the changes in business plans of Nanjing Zenergy and Dongguan Zenergy, please see
“Business—Manufacturing—Manufacturing Base.” We engaged an independent third-party
valuer to assess the value of their properties and equipment. Based on such assessment, we
concluded that recording of impairment of RMB244.6 million in 2022 and RMB7.0 million in
2023 in relation to the above subsidiaries was appropriate.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs increased significantly from RMB32.9 million in 2022 to RMB73.5
million in 2023, primarily due to an increase in interest on interest-bearing bank and other
borrowings.
Impact of WM Customer
In November 2022, we ceased delivery of NCM battery products for application in BEVs
to WM Customer due to the WM Customer Incident. Such cancellation has largely contributed
to the decline in the sales volume of our NCM batteries from 2.9 GWh in 2022 to 1.5 GWh in
2023, and our revenue from the sales of NCM batteries from RMB2,628.6 million in 2022 to
RMB1,448.0 million in 2023.
We also recorded an RMB601.4 million and RMB422.3 million impairment in trade
receivables and inventories, respectively, in 2022, as a direct result of the WM Customer
Incident pursuant to the relevant accounting policies, judgments and estimates under IFRS,
which materially adversely affected our results of operations for the same year and our trade
receivable balance and financial position as of December 31, 2022. The aggregate impairment
in trade receivables and inventories in 2022 arising from the WM Customer Incident was
RMB1,023.6 million.
As discussed in more details above, our overall results of operations improved in 2023,
partially because impairment in trade receivables and inventories in relation to WM Customer
did not impact our results of operations in 2023. However, certain impact of the WM Customer
Incident carried over to 2023. It takes a certain amount of time for us to develop business
relationships with new customers, obtain design-wins, and ramp up mass production.
Therefore, even though sales and delivery to WM Customer terminated in 2022, sales in 2023
was also adversely affected because we could not immediately make up for the purchase orders
volume that would have been delivered and sold to WM Customer had WM Customer Incident
not occurred. We have also enhanced our internal control procedures on customer credit
approval when establishing sales relationships with potential customers, focusing on their
creditworthiness to avoid future occurrence of such incidents.
Loss for the Y ear
As a result of the foregoing, our loss for the year decreased from RMB1,720.0 million in
2022 to RMB589.9 million in 2023.
FINANCIAL INFORMATION
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Y ear Ended December 31, 2022 Compared to Y ear Ended December 31, 2021
Revenue
Our revenue increased significantly from RMB1,499.3 million in 2021 to RMB3,290.3
million in 2022, primarily due to (i) an increase in our sales volume of power batteries from
2,106.7 MWh in 2021 to 3,634.4 MWh in 2022; and (ii) an increase in average selling prices
for our battery products. Specifically:
 Our revenue from the sales of NCM battery increased from RMB1,448.0 million
2021 to RMB2,628.6 million in 2022, primarily due to (i) an increase in sales
volume of NCM batteries from 2,106.7 MWh to 2,947.3 MWh; and (ii) an increase
in overall raw material prices in the industry, which drives an increase in selling
price of NCM batteries.
 Our revenue from the sales of LFP battery increased from nil in 2021 to RMB487.5
million in 2022, primarily because we began sales of LFP battery products in 2022.
 Our revenue from the sales of other goods increased from RMB51.3 million in 2021
to RMB171.4 million in 2022, primarily due to an increase in sales of waste
materials of approximately RMB82.1 million which is in line with the expansion of
our business scale.
Cost of Sales
Our cost of sales increased significantly from RMB1,469.1 million in 2021 to
RMB3,580.5 million in 2022, primarily due to the changes in the following business lines:
 Our cost of sales of NCM battery increased from RMB1,339.7 million 2021 to
RMB2,409.3 million in 2022, primarily due to (i) an increase in sales volume of
NCM batteries from 2,106.7 MWh to 2,947.3 MWh; and (ii) an increase in overall
raw material prices in the industry.
 Our cost of sales of LFP battery increased from nil in 2021 to RMB418.6 million in
2022, primarily because we began sales of LFP battery products in 2022.
 Our cost of sales of other goods increased from RMB54.3 million in 2021 to
RMB171.1 million in 2022, primarily due to an increase in sales of waste materials
which is in line with growth in our business scale.
FINANCIAL INFORMATION
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Gross Profit/(Loss) and Gross Profit/(Loss) Margin
Our gross profit of RMB30.2 million and gross profit margin of 2.0% in 2021 turned into
gross loss of RMB290.3 million and gross loss margin of 8.8% in 2022, primarily due to the
WM Customer Incident which led to significant impairment losses on inventories. Our gross
profit margin for NCM products increased from 7.5% in 2021 to 8.3% in 2022, primarily due
to our NCM battery sales that increased from 2,106.7 MWh in 2021 to 2,947.3 MWh in 2022,
which led to economies of scale as fixed cost of sales (such as manufacturing costs) did not
experience increase at a similar rate.
Other Income and Gains
Our other income increased from RMB20.8 million in 2021 to RMB49.0 million in 2022,
primarily due to (i) an RMB9.7 million increase in interest income driven by an increase in our
bank balances; and (ii) an RMB7.7 million investment income on structured deposits and
wealth management products.
Selling and Marketing Expenses
Our selling and marketing expenses increased significantly from RMB12.8 million in
2021 to RMB19.8 million in 2022, primarily due to (i) an RMB4.1 million increase in staff
compensation expenses driven by an increase in headcount of our sales and marketing
personnel; and (ii) an RMB2.0 million increase in advertising and business promotion expenses
as we devoted more efforts to promote our brand image.
Administrative Expenses
Our administrative expenses increased by 79.0% from RMB134.7 million in 2021 to
RMB241.1 million in 2022, primarily due to (i) an RMB49.1 million increase in staff
compensation expenses driven by an increase in headcount of our administrative personnel; (ii)
an RMB33.6 million increase in depreciation and amortization expenses driven by expanded
use of facilities by our administrative staff due to its expansion in size; (iii) an RMB8.7 million
increase in share-based payment expenses driven by the grant of share incentives in March
2022; and (iv) an RMB6.0 million increase in recruitment expenses to expand our employee
pool to support our growing business operations.
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses increased by 49.0% from RMB221.0 million in
2021 to RMB329.3 million in 2022, primarily due to (i) an RMB50.6 million increase in staff
compensation expenses due to an increase in headcount of our R&D personnel; (ii) an
RMB23.5 million increase in raw materials and consumables expenses driven by an increase
in R&D activities we conducted to develop and launch new battery products; (iii) an RMB13.8
million increase in utilities expenses as we used more facilities to conduct R&D activities; and
(iv) an RMB5.8 million increase in share-based payment expenses driven by the grant of share
incentives in March 2022.
Impairment (Losses)/Gains on Financial Assets
Our impairment losses on financial assets increased significantly from RMB22.5 million
in 2021 to RMB600.1 million in 2022, primarily because in 2022 we incurred an RMB601.4
million impairment loss to our trade receivables as a result of the WM Customer Incident. See
“—Significant factors affecting our financial condition and results of operations—Specific
factors affecting our results of operations” for more details.
Other Expenses
Our other expenses increased significantly from RMB1.4 million in 2021 to RMB267.5
million in 2022, primarily due to changes in business plans of Nanjing Zenergy, which had a
significant impact on our financial performance in 2022 which resulted in impairment losses
to property, plant and equipment. After considering the significant conversion costs we would
need to incur to adapt the Nanjing Zenergy production lines to new battery products and
technologies which we developed in recent years, we decided to substantially cease the
operations of Nanjing Zenergy facility. For details and circumstances leading to the changes in
business plans of Nanjing Zenergy and Dongguan Zenergy, please see
“Business—Manufacturing—Manufacturing Base.” We engaged an independent third-party
valuer to assess the value of their properties and equipment. Based on such assessment, we
concluded that recording of impairment of RMB244.6 million in relation to the above
subsidiaries was appropriate.
Loss for the Y ear
As a result of the foregoing, our loss for the year increased from RMB402.3 million in
2021 to RMB1,720.0 million in 2022.
FINANCIAL INFORMATION
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DISCUSSION OF MAJOR ITEMS IN CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The following table sets forth details of a summary of our consolidated statements of
financial position as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
NON-CURRENT ASSETS
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,413,220 4,707,407 5,618,993 5,704,152
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,850 303,119 257,403 226,422
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,277 1,277 1,277
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118592,251 549,059 491,492 423,079
Investment in joint ventures /H1118 – 64,537 3,350,901 3,467,173
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118398,664 154,282 55,364 39,812
Total non-current assets /H1118/H1118/H11182,845,985 5,779,681 9,775,430 9,861,915
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11182,969,015 4,671,136 4,355,352 5,732,316
Total current liabilities /H1118/H1118/H1118/H11183,397,917 5,287,822 6,150,006 6,496,681
NET CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(428,902) (616,686) (1,794,654) (764,365)
TOTAL ASSETS
LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,417,083 5,162,995 7,980,776 9,097,550
NON-CURRENT
LIABILITIES
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,310,258 2,841,494 2,768,659
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,882 207,537 175,769 146,034
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,934 87,823 145,979 227,741
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H111890,712 84,813 70,301 57,994
Total non-current liabilities /H1118 436,528 2,690,431 3,233,543 3,200,428
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
EQUITY
Equity attributable to owners
of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Share capital/Paid-in capital /H1118 1,552,495 1,881,850 2,255,935 2,386,976
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118428,060 590,714 2,491,298 3,510,146
Total Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
FINANCIAL INFORMATION
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Current Assets and Current Liabilities
The following table sets forth our current assets and liabilities as of the dates indicated.
As of December 31, As of
February 28,
20252021 2022 2023 2024
(RMB in thousands)
(unaudited)
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,539 1,012,920 613,756 678,712 1,088,618
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309,874 326,487 1,147,380 1,623,305 861,188
Bills receivables at fair
value through other
comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 92,936 302,919
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,675 1,951 6,496 5,144 5,144
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,169 195,699 81,136 73,361 491,241
Financial assets at fair
value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,162,565 – – –
Restricted bank
balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,020,347 1,035,350 472,305 957,804 1,013,734
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 101,982 102,050
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072 1,501,256
Total current assets /H1118/H1118/H1118/H11182,969,015 4,671,136 4,355,352 5,732,316 5,366,150
CURRENT
LIABILITIES
Trade and bills payables /H11181,813,289 3,012,332 3,415,854 3,742,586 3,707,040
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,349 1,480,456 1,945,523 1,427,848 1,303,093
Contract liabilities /H1118/H1118/H1118/H1118/H111840,855 145,385 44,662 14,756 12,827
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H11181,159,664 579,134 694,137 1,245,825 1,093,335
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111836,674 34,046 27,021 30,397 30,482
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 23,511 – 266 –
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,086 12,958 22,809 35,003 36,194
Total current liabilities /H11183,397,917 5,287,822 6,150,006 6,496,681 6,182,971
NET CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118(428,902) (616,686) (1,794,654) (764,365) (816,821)
FINANCIAL INFORMATION
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We intend to adopt the following measures to narrow our net current liabilities position
and to turn into net current assets position going forward:
 Efficiency : we plan to continue to improve the cost and operational efficiency, and
more effectively monitor and control cash expenditure. We believe as we further
expand our business scale, especially with the further ramp-up of our Changshu
Zenergy facility, we are well positioned to enhance economies of scale, and improve
our results of operations, including our profit margins and liquidity position.
 Expansion of business scale : we plan to continue to expand our manufacturing
capacity to fulfill more customer orders, increase sales volume and market share to
generate more revenue, improve our results of operations, and generate more cash
and other assets from operating activities.
 Borrowings : we intend to monitor and control our short-term and long-term
borrowings in light of actual business needs in order to optimize our liability
position. In particular, we intend to optimize our long-term versus short-term
borrowing structure to avoid strains on our liquidity caused by sudden and
significant amount of borrowing due within one year.
 Equity financing. We intend to leverage equity financing to improve our liquidity
position and realize net current asset position.
Our net current liabilities increased from RMB764.4 million as of December 31, 2024 to
RMB816.8 million as of February 28, 2025, primarily due to (i) an RMB762.1 million decrease
in trade and bills receivables; and (ii) an RMB697.8 million decrease in cash and cash
equivalents, and partially offset by (i) an RMB417.9 million increase in prepayments, other
receivables and other assets, which was primarily due to (a) the addition of RMB296 million
in dividends receivable from STAES, (b) a payment of RMB60.1 million as a performance
guarantee in relation to the acquisition of the leasehold land of our New Changshu Facility and
(c) an increase of RMB54.7 million in recoverable V AT credit; and (ii) an RMB409.9 million
increase in inventories.
Our net current liabilities decreased from RMB1,794.7 million as of December 31, 2023
to RMB764.4 million as of December 31, 2024, primarily due to (i) an increase in trade and
bills receivables from RMB1,147.4 million to RMB1,623.3 million; and (ii) an RMB485.5
million increase in restricted bank balances.
Our net current liabilities increased from RMB616.7 million as of December 31, 2022 to
RMB1,794.7 million as of December 31, 2023, primarily due to (i) an RMB1,162.6 million
decrease in financial assets at fair value through profit or loss; (ii) an RMB563.0 million
decrease in restricted bank balances, (iii) an RMB465.1 million increase in other payables and
accruals; and (iv) an RMB403.5 million increase in trade and bills payables, and partially offset
by (i) an RMB1,098.1 million increase in cash and cash equivalents; and (ii) an RMB820.9
million increase in trade and bills receivables.
FINANCIAL INFORMATION
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Our net current liabilities increased from RMB428.9 million as of December 31, 2021 to
RMB616.7 million as of December 31, 2022, primarily due to (i) an RMB1,138.1 million
increase in other payables and accruals; and (ii) an RMB1,199.0 million increase in trade and
bills payables, and partially offset by (i) an RMB1,162.6 million increase in financial assets at
fair value through profit or loss; (ii) an RMB580.5 million decrease in interest-bearing bank
and other borrowings; and (iii) an RMB303.4 million increase in inventories.
Property, Plant and Equipment
Our property, plant and equipment primarily include buildings, machinery, office
equipment and electronic devices, vehicles, leasehold improvements and construction in
progress. We had property, plant and equipment of RMB1,413.2 million, RMB4,707.4 million,
RMB5,619.0 million and RMB5,704.2 million as of December 31, 2021, 2022, 2023 and 2024,
respectively. The following table sets forth a breakdown of our property, plant and equipment
as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,137 441,237 1,626,991 1,597,226
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118641,955 1,527,550 2,471,099 3,470,734
Office equipment and
electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,632 24,574 25,227 24,487
Vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,362 14,134 13,726 10,122
Leasehold improvements /H1118/H1118/H1118/H1118131,045 272,255 277,072 274,451
Construction in progress /H1118/H1118/H1118/H1118343,089 2,427,657 1,204,878 327,132
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,413,220 4,707,407 5,618,993 5,704,152
Our property, plant and equipment increased by 233.1% from RMB1,413.2 million as of
December 31, 2021 to RMB4,707.4 million as of December 31, 2022, primarily because we
began construction of our Changshu Yinhe and phase II of Changshu Zenergy manufacturing
bases in the fourth quarter of 2021 and recognized substantial buildings, construction in
progress, and machinery in relation to those two bases.
Our property, plant and equipment increased by 19.4% from RMB4,707.4 million as of
December 31, 2022 to RMB5,619.0 million as of December 31, 2023, primarily due to the
further construction of phase II of Changshu Zenergy.
Our property, plant and equipment increased by 1.5% from RMB5,619.0 million as of
December 31, 2023 to RMB5,704.2 million as of December 31, 2024, primarily due to
completion of our manufacturing lines.
FINANCIAL INFORMATION
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Impairment of Non-Financial Assets
We conducted impairment testing for our non-financial assets and assessed whether the
carrying amount of an asset exceeds its recoverable amount. Due to changes in business plans,
which led to the cessation of substantial production at Nanjing Zenergy in December 2022, and
cessation of production activities at Dongguan Zenergy in February 2023, respectively, we have
engaged external experts to perform an impairment assessment on the recoverable amounts of
their property, plant and equipment. As a result of such assessment (which considered similar
assets or observable market prices, as well as costs arising from disposal), we determined that the
recoverable amounts for the properties, plants, and equipment of Nanjing Zenergy and Dongguan
Zenergy were below their carrying values. Accordingly, we recorded impairment losses of nil,
RMB244.6 million, RMB7.0 million and nil in 2021, 2022, 2023 and 2024, respectively. For
more details, please see Note 13 to the Accountants’ Report in Appendix I to this Prospectus. For
more details about the cessation of production activities of Nanjing Zenergy and Dongguan
Zenergy, please see “Business—Manufacturing—Manufacturing Bases” in this Prospectus.
For assets in continuous use, we compared their carrying amounts to their recoverable
amounts, defined by their value in use. Value in use is calculated as the present value of
expected future cash flows from an asset or cash-generating unit (“CGU”). We estimated the
expected future cash flows from the cash-generating unit and selected the suitable discount rate
in order to calculate the present value of those cash flows. These cash flow projections are
based on financial budgets approved by senior management, reflecting past performance and
industry expectations, with consideration of the remaining useful lives of the assets. We
engaged an independent external valuer to estimate the recoverable amounts of the CGUs. Our
assessments showed that the value in use exceeded the carrying amounts for these non-
financial assets, and thus, no impairment was recognized during the Track Record Periods.
Right-of-Use Assets
Our right-of-use assets primarily relate to our leased properties and land use rights.
Changes in right-of-use assets from RMB441.9 million as of December 31, 2021 to RMB303.1
million as of December 31, 2022, primarily due to early termination of leases. Our right-of-use
assets subsequently decreased to RMB257.4 million as of December 31, 2023 and RMB226.4
million as of December 31, 2024 were primarily due to depreciation of right-of-use assets.
Other Intangible Assets
Our other intangible assets primarily include trademarks, patents and software. Changes
in other intangible assets from RMB592.3 million as of December 31, 2021 to RMB549.1
million as of December 31, 2022 and from RMB491.5 million as of December 31, 2023 to
RMB423.1 million as of December 31, 2024 were primarily due to amortization, partially
offset by increases in software from RMB13.2 million as of December 31, 2021 to RMB34.2
million, RMB47.4 million and RMB47.8 million as of December 31, 2022, 2023 and 2024,
respectively, primarily due to the purchase of software for our business operations.
FINANCIAL INFORMATION
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Investment in Joint Ventures
Our investment in joint ventures was nil, RMB64.5 million, RMB3,350.9 million and
RMB3,467.2 million as of December 31, 2021, 2022, 2023 and 2024, respectively. In
December 2023, we acquired a 50% equity interest in STAES in order to expand our influence
in the HEVs industry. The total consideration was approximately RMB3,311.0 million, which
is comprised of cash consideration of RMB496.0 million and share consideration of
RMB2,815.0 million. STAES is considered our material joint venture and is accounted for
using the equity method. In the one month ended December 31, 2023 and the year of 2024,
STAES recorded revenue of RMB657.0 million and RMB6,665.3 million, respectively, and
recorded profit for the year of RMB29.7 million and RMB587.3 million, respectively. See note
16 to the accountants’ report included in Appendix I of the Prospectus for more details.
Inventories
Our inventories primarily consist of raw materials, work in progress and finished goods.
Our inventories increased from RMB709.5 million as of December 31, 2021 to RMB1,012.9
million as of December 31, 2022, and then decreased to RMB613.8 million as of December 31,
2023, and subsequently increased to RMB678.7 million as of December 31, 2024. The
following table sets forth a breakdown of our inventories as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118179,768 232,176 168,100 202,140
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,989 68,722 93,864 132,688
LFP battery products /H1118/H1118/H1118/H1118/H1118113 26,304 25,905 118,206
NCM battery products /H1118/H1118/H1118/H111871,940 39,243 67,132 10,600
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,936 3,175 827 3,882
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118502,804 1,270,612 542,511 377,122
LFP battery products /H1118/H1118/H1118/H1118/H11181,758 198,465 440,926 300,926
NCM battery products /H1118/H1118/H1118/H1118500,968 1,071,993 101,485 74,897
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 154 100 1,299
756,561 1,571,510 804,475 711,950
Less: Provision for
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,022) (558,590) (190,719) (33,238)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,539 1,012,920 613,756 678,712
FINANCIAL INFORMATION
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Our raw materials increased from RMB179.8 million as of December 31, 2021 to
RMB232.2 million as of December 31, 2022, primarily due to an increase in overall price of
raw materials in the industry. Our raw materials subsequently decreased to RMB168.1 million
as of December 31, 2023, primarily because we began mass production of LFP batteries in the
second half of 2022, and began procuring lithium iron phosphate, which significantly lower the
prices compared to raw materials for NCM batteries. Additionally, the prices of raw materials
for NCM batteries also declined after 2022. Our raw materials subsequently increased to
RMB202.1 million as of December 31, 2024, primarily due to an increase in order at hand
which led to an increase in raw material procurement.
Our work in progress remained relatively stable at RMB74.0 million as of December 31,
2021 and RMB68.7 million as of December 31, 2022. Our work in progress subsequently
increased to RMB93.9 million as of December 31, 2023 and RMB132.7 million as of December
31, 2024, respectively, primarily due to the further ramp-up of our manufacturing facilities and
expansion in production scale to meet customer demands.
Our finished goods increased from RMB502.8 million as of December 31, 2021 to
RMB1,270.6 million as of December 31, 2022, primarily due to an increase in the overall
prices of raw materials in the industry as well as an increase in sales volume which led to an
increase in finished goods reserve. Our finished goods subsequently decreased to RMB542.5
million as of December 31, 2023, primarily because we began manufacturing LFP batteries in
the second half of 2022, and began procuring lithium iron phosphate, which has significantly
lower prices compared to raw materials of our NCM batteries. Additionally, the prices of raw
materials of our NCM batteries also declined after 2022. Our finished goods further decreased
to RMB377.1 million as of December 31, 2024, primarily because our sales volume increased
and we enhanced inventory management that resulted in enhanced inventory turnover.
Our provision for inventories was RMB47.0 million, RMB558.6 million, RMB190.7
million and RMB33.2 million as of December 31, 2021, 2022, 2023 and 2024. The significant
provision for inventories as of December 31, 2022 was primarily due to sale of certain
inventories originally manufactured for WM Customer as down-grade products after the WM
Customer Incident. The subsequent provision for inventories of RMB190.7 million as of
December 31, 2023 and RMB33.2 million as of December 31, 2024 was primarily due to a
decrease in overall raw material prices in the industry which led to a decrease in selling prices
of finished goods.
Our inventory turnover days was 130.1 days, 87.8 days, 75.1 days and 53.8 days in 2021,
2022, 2023 and 2024, respectively. The decrease in inventory turnover days from 2021 to 2023
and further to 2024 was primarily due to our enhanced inventory management in an effort to
improve our warehousing efficiency. The following table sets forth our inventory turnover days
for the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
Inventory turnover days (1) /H1118/H1118 130.1 87.8 75.1 53.8
Note:
(1) Inventory turnover days were calculated based on the average of opening and closing inventory balance
(net of provision for inventories) for the relevant period, divided by the cost of sales for the same period,
and multiplied by the number of days in that period.
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of our inventories as of the dates
indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,178 593,050 397,740 519,048
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,595 269,581 111,857 57,641
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,015 145,109 58,760 49,062
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,119 5,180 40,425 33,901
Over 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,632 – 4,974 19,060
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,539 1,012,920 613,756 678,712
As of February 28, 2025, approximately RMB476.7 million, or 70.2%, of our inventories
as of December 31, 2024, had been consumed. Having considered the relatively high
subsequent utilization of inventories, and relatively short inventory turnover days, we do not
expect any issues on subsequent consumption and sales of our inventories.
Trade and Bills Receivables and Contract assets
The following table sets forth a breakdown of our trade and bills receivables and contract
assets as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Current
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118346,532 692,459 1,328,257 1,860,218
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,966 2,000 6,658 5,388
Commercial acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,070 – 20,465 2,003
Bank acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,818 238,899 415,489 385,149
Due from related parties /H1118/H1118/H1118/H1118254 1,287 – –
400,640 934,645 1,770,869 2,252,758
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118(79,091) (606,207) (616,993) (624,309)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118321,549 328,438 1,153,876 1,628,449
Our trade and bills receivables and contract assets increased from RMB321.5 million as
of December 31, 2021 to RMB328.4 million as of December 31, 2022, primarily due to an
RMB345.9 million increase in trade receivables and an RMB210.1 million increase in bank
acceptance bills receivables in line with an increase in sales volume and revenue. We typically
grant a credit period of approximately 30 to 90 days, and allow payment through bank and
FINANCIAL INFORMATION
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commercial acceptance bills. Our trade and bills receivables and contract assets further
increased to RMB1,153.9 million as of December 31, 2023, primarily due to an RMB635.8
million increase in trade receivables and an RMB176.6 million increase in bank acceptance
bills receivables in line with an increase in sales volume and revenue. Our trade and bills
receivables and contract assets further increased to RMB1,628.4 million as of December 31,
2024, primarily due to an increase in sales volume.
We had bills receivables at fair value through other comprehensive income of nil, nil, nil,
and RMB92.9 million as of December 31, 2021, 2022, 2023 and 2024, respectively. The
increase of RMB92.9 million in 2024 was primarily due to the increased frequency of
endorsement and discounting of bills receivables during the year. As a result, certain bills
receivables issued by high-credit-grade banks were reclassified to the category of bills
receivables at fair value through other comprehensive income. For more details, please see
Note 21 to the Accountants’ Report in Appendix I to this Prospectus.
In 2022, we recorded RMB601.4 million in impairment losses of trade receivables due
from WM Customer. See “—Significant factors affecting our financial condition and results of
operations—Specific factors affecting our results of operations” for details on the impact of
seasonality and the WM Customer Incident on our results of operations.
We seek to maintain strict control over our outstanding receivables and have a credit
control department to minimize credit risk. Our senior management regularly reviews the
recoverability of our outstanding balances and when appropriate, provides for impairment of
these trade receivables. Trade receivables relating to customers with known financial
difficulties or significant doubt on collection are assessed individually for impairment
allowance. The remaining trade receivables are grouped and collectively assessed for
impairment allowance. When onboarding new customers, we conduct initial screening to
evaluate their creditworthiness, which we also routinely review and monitor. Under the
collective approach, an impairment analysis is performed at each reporting date using a
provision matrix to measure expected credit losses. The provision rates are based on aging
analysis for grouping of customers that have similar loss patterns. Generally, trade receivables
are written off according to management approval.
The following table sets forth an aging analysis of our trade receivables, commercial
acceptance bills receivables, bank acceptance bills receivables and contract assets, based on the
recognition date and net of loss allowance, as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118297,181 315,117 890,722 1,417,462
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,239 13,321 259,402 196,026
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 3,752 7,753
1 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104 – – 7,208
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,549 328,438 1,153,876 1,628,449
FINANCIAL INFORMATION
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The following table sets forth the movements in the loss allowance for impairment of
trade and bills receivables and contract assets as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
At beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H111880,461 79,091 606,207 616,993
Impairment losses
(reversed)/recognized /H1118/H1118/H1118/H1118/H1118(1,370) 605,877 10,786 9,213
Amounts written off as
uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,897)
Decrease from the
Reorganization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (78,761) – –
At end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,091 606,207 616,993 624,309
The impairment allowance was from Jiangsu TAFEL before the Reorganization and the
transactions that gave rise to the related receivables took place before the Track Record Period.
Upon the Reorganization, our Group acquired certain assets including properties, plant and
equipment, other intangible assets and inventories held by Jiangsu TAFEL and did not acquire
any receivables of Jiangsu TAFEL. Therefore, impairment allowance for trade and bills
receivables and contract assets of RMB78.8 million was deemed as disposal in 2022 upon the
Reorganization.
Our impairment loss allowance increased significantly from RMB79.1 million as of
December 31, 2021 to RMB606.2 million as of December 31, 2022, primarily due to
receivables of RMB601.4 million by WM Customer. We recorded such impairment in light of
the low likelihood of recovery pursuant to the relevant accounting policies under IFRS
regarding credit losses.
The following table sets forth our trade and bills receivables and contract assets turnover
days during the years indicated.
Y ear Ended December 31,
2021 2022 2023 2024
Trade and bills receivables
and contract assets
turnover days
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860.9 36.1 65.0 99.0
Note:
(1) Trade and bills receivables and contract assets turnover days were calculated based on the average of
opening and closing trade and bills receivable and contract assets balance (net of impairment losses for
the same period), divided by the revenue for the same period, and multiplied by the number of days in
that period.
FINANCIAL INFORMATION
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Our trade and bills receivables and contract assets turnover days decreased from 60.9 days
in 2021 to 36.1 days in 2022, primarily because we recognized impairment losses of RMB601.4
million from WM Customer, which led to a significant decrease in trade and bills receivables
and contract assets. The increase in trade and bills receivables and contract assets turnover days
from 2022 to 2023 and further to 2024 was primarily due to (i) a significant portion of sales
made in the third and fourth quarters of 2024 had not yet become due or settled as of the end
of 2024; (ii) changes in payment terms for certain customers, where upfront payment
requirements were reduced and replaced with longer credit terms; and (iii) changes in invoicing
practices for certain customers, where invoicing was delayed from the month of delivery to the
following month, resulting in an extended collection cycle. These factors collectively
contributed to the increase in trade and bills receivables and contract assets turnover days.
As of February 28, 2025, approximately RMB1,016.1 million, or 54.6% of our trade
receivables as of December 31, 2024, and 80.7%, of our trade receivables (after excluding the
one-off impact of the WM Customer related impairment) as of December 31, 2024 had been
settled.
We believe that the recoverability of the trade receivables is relatively high and do not
expect any trade receivable recoverability issue. Our major customers other than WM
Customer are mostly well-known automotive manufacturers in the industry with good credit
and relatively low risks of default, and they have not experienced payment default during the
Track Record Period. We typically grant our major customers a credit period of 30 to 90 days.
In addition, sufficient provision has been made in view of the subsequent settlement amount.
We apply the simplified approach in calculating ECLs for trade and bill receivables and
contract assets. Trade and bill receivables and contract assets relating to customers who do not
share similar credit risk with others (such as customers with known financial difficulties or
customers with whom we had significant doubt on collection) are assessed individually for
impairment allowance. The remaining trade and bills receivables and contract assets are
grouped and collectively assessed for impairment allowance. Under the collective approach, an
impairment analysis is performed at the end of each year during the Track Record Period using
a provision matrix to measure expected credit losses. The provision rates are based on ageing
analysis for grouping of customers that have similar loss patterns. The calculation reflects the
age of the balance, existence of disputes, recent historical payment patterns, any other
available information concerning the creditworthiness of counterparties and influence from the
macroeconomy.
Prepayments, Other Receivables and Other Assets
Our current portion of prepayments, other receivables and other assets primarily include
prepayments to suppliers, other tax recoverable, prepaid expenses, and deposits. The following
table sets forth a breakdown of our prepayments, other receivables and other assets as of the
dates indicated.
FINANCIAL INFORMATION
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--- page 455 ---
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Current:
Prepayments to suppliers /H1118/H1118/H1118/H111824,552 16,071 8,556 8,586
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,304 135 202 2,105
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118116,580 167,469 68,168 49,757
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,426 6,022 3,415 4,505
Listing fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 8,051
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,553 6,055 805 366
204,415 195,752 81,146 73,370
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118(54,246) (1) (53) (10) (9)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,169 195,699 81,136 73,361
Non-current:
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,179 702 702 –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,499 46,118 46,186 39,727
Prepayments for long-term
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118378,316 108,109 9,186 618
398,994 154,929 56,074 40,345
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118(330) (647) (710) (533)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118398,664 154,282 55,364 39,812
Note:
1. The RMB54.2 million in impairment allowance arises from Jiangsu TAFEL’s trade receivables in 2020
before the Reorganization. We acquired certain assets held by Jiangsu TAFEL, which do not include any
receivables. Therefore, the related impairment allowance on Jiangsu TAFEL’s receivables were deemed
as disposal in 2022 upon the Reorganization.
Our current prepayments, other receivables and other assets increased from RMB150.2
million as of December 31, 2021 to RMB195.7 million as of December 31, 2022, primarily due
to an RMB50.9 million increase in other tax recoverable because we received invoices for
spendings on our manufacturing facility construction which led to an increase in input V AT.
Our current prepayments, other receivables and other assets subsequently decreased to
RMB81.1 million as of December 31, 2023 and RMB73.4 million as of December 31, 2024,
primarily due to an RMB99.3 million decrease in 2023 and an RMB18.4 million decrease in
2024 in other tax recoverable as we received fewer input V AT invoices because construction
of our manufacturing facilities of phase II of Changshu Zenergy plant was completed in 2023,
and more output V AT invoices due to an increase in sales volume.
As of February 28, 2025, approximately RMB57.2 million, or 78.0%, of our prepaid
expenses, other receivables, and other assets (net of impairment losses) as of December 31,
2024, had been settled.
FINANCIAL INFORMATION
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Our non-current prepayments, other receivables and other assets decreased from
RMB398.7 million as of December 31, 2021 to RMB154.3 million as of December 31, 2022,
primarily due to an RMB270.2 million decrease in prepayments for long-term assets as the
construction of Changshu Yinhe was completed, and significant amount of prepayment was
transferred to property, plant and equipment; partially offset by an RMB37.6 million increase
in deposits in relation to (i) our leased properties; (ii) our use of utilities; and (iii) facility
constructions. Our non-current prepayments, other receivables and other assets further
decreased to RMB55.4 million as of December 31, 2023, primarily due to an RMB98.9 million
decrease in prepayments for long-term assets as the construction of phase II of Changshu
Zenergy was completed. Our non-current prepayment, other receivables and other assets
subsequently decreased to RMB39.8 million as of December 31, 2024, primarily due to (i) an
RMB8.6 million decrease in prepayments for long-term assets; and (ii) an RMB6.5 million
decrease in deposits.
Financial Assets at Fair Value through Profit or Loss
Our financial assets measured at fair value through profit or loss primarily include
structured deposits and wealth management products. We had financial assets measured at fair
value through profit or loss of nil, RMB1,162.6 million, nil and nil as of December 31, 2021,
2022, 2023 and 2024, respectively. The fair values of our financial assets measured at fair value
through profit or loss are measured using level 2 input.
We believe we can make better use of our cash by making appropriate investments in
wealth management products of low-to-medium risk, which generate income without
interfering with our business operation or capital expenditures. Our investment decisions with
respect to financial products are made on a case-by-case basis and after due and careful
consideration of a number of factors, including, but not limited to, the market conditions, the
economic developments, the anticipated investment conditions, the investment cost, the
duration of the investment and the expected benefit and potential loss of the investment. We
have established a set of internal measures which allow us to achieve reasonable returns on our
investment while mitigating our exposure to investment risks. We will comply with
requirements under Chapter 14 of the Listing Rules and disclose the details of our investments
and other notifiable transactions to the extent necessary and as appropriate after the Global
Offering.
Restricted Bank Balances and Time Deposits
Our restricted bank balances remained relatively stable at RMB1,020.3 million and
RMB1,035.4 million as of December 31, 2021 and 2022, respectively, and decreased to
RMB472.3 million as of December 31, 2023 and increased to RMB957.8 million as of
December 31, 2024, primarily due to changes in the amount of deposits demanded to be
pledged by banks when we issue bank acceptance bills.
FINANCIAL INFORMATION
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Trade and Bills Payables
Our trade and bills payables increased from RMB1,813.3 million as of December 31,
2021 to RMB3,012.3 million as of December 31, 2022, then to RMB3,415.9 million as of
December 31, 2023 and further to RMB3,742.6 million as of December 31, 2024, primarily due
to an increase in procurement of raw materials to expand our production volume to meet
increasing customer demand.
The following table sets forth our trade and bills payable turnover days during the years
indicated.
Y ear Ended December 31,
2021 2022 2023 2024
Trade and bills payables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118322.0 246.0 296.8 298.1
Note:
(1) Trade and bills payables turnover days were calculated based on the average of opening and closing
trade payable balance for the relevant period, divided by the cost of sales (including impairment losses
on inventories) for the same period, and multiplied by the number of days in that period.
Our trade and bills payable turnover days decreased from 322.0 days in 2021 to 246.0
days in 2022, primarily due to a significant increase in cost of sales (including impairment
losses on inventories) in 2022 driven by the significant impairment losses on inventories in the
same year as a result of the WM Customer Incident. Our trade and bills payable turnover days
subsequently increased to 296.8 days in 2023, primarily due to an increase in cost of sales
(including impairment losses on inventory) in 2023 as the impact of WM Customer on
impairment losses on inventories did not carry over in 2023. Our trade and bills payable
turnover days remained relatively stable at 298.1 days in 2024.
The following table sets forth an ageing analysis of our trade and bills payables as of the
dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,808,665 3,011,888 3,415,144 3,741,138
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,781 444 710 1,394
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,843 – – 54
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,813,289 3,012,332 3,415,854 3,742,586
FINANCIAL INFORMATION
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As of February 28, 2025, approximately RMB668.1 million, or 41.9%, of our trade
payables as of December 31, 2024 had been settled.
During the Track Record Period, we did not have any material default on our trade and
bills payables.
Other Payables and Accruals
Our other payables and accruals primarily include (i) payables for purchase of property,
plant and equipment in relation to our manufacturing and other facilities; (ii) payroll and
welfare payable due to our employees; (iii) accrued expenses; (iv) other tax payables; (v)
deposits; (vi) acquisition consideration payable in relation to unpaid consideration for our
major reorganization; (vii) amount due to related parties. See “—Related Party Transactions”;
and (viii) other payables.
The following table sets forth a breakdown of our other payables and accruals as of the
dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Payables for purchase of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278,731 959,468 1,305,086 1,160,950
Payroll and welfare payable /H1118/H1118 28,527 38,546 49,448 63,117
Accrued listing expenses /H1118/H1118/H1118 – – – 11,569
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,185 40,317 67,521 45,251
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,562 42,755 38,688 10,409
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,344 30,713 33,541 27,985
Acquisition consideration
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 346,000 –
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118– 368,657 105,239 108,567
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,349 1,480,456 1,945,523 1,427,848
Our other payables and accruals increased from RMB342.3 million as of December 31,
2021 to RMB1,480.5 million as of December 31, 2022, primarily due to (i) an RMB680.7
million increase in payables for purchase of property, plant and equipment in relation to the
construction of manufacturing facilities; (ii) an RMB368.7 million increase in amount due to
related parties driven by advances from related parties. See “—Related Party Transactions.”
Our other payables and accruals increased to RMB1,945.5 million as of December 31, 2023,
primarily due to (i) an RMB345.6 million in payables for purchase of property, plant and
equipment driven by the construction of manufacturing facilities; and (ii) an RMB346.0
million increase in acquisition consideration payable in relation to our major reorganization,
FINANCIAL INFORMATION
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partially offset by an RMB263.4 million decrease in due to related parties as we partially repaid
the advances. Our other payables and accruals decreased to RMB1,427.8 million as of
December 31, 2024, primarily due to (i) an RMB346.0 million decrease in acquisition
consideration payable due to payment in 2024; and (ii) an RMB144.1 million decrease in
payables for purchase of property, plant and equipment as the construction of Changshu Yinhe
and phase II of Changshu Zenergy facilities were completed.
As of February 28, 2025, approximately RMB504.0 million, or 35.3%, of our other
payables and accrued expenses as of December 31, 2024, had been settled.
Contract Liabilities
Our contract liabilities represent advances received to deliver products. Our contract
liabilities increased from RMB40.9 million as of December 31, 2021 to RMB145.4 million as
of December 31, 2022, primarily due to an increase in our sales volume. Our contract liabilities
subsequently decreased to RMB44.7 million as of December 31, 2023 and RMB14.8 million
as of December 31, 2024, primarily due to a decrease in prepayments for battery products by
a customer in 2024.
As of February 28, 2025, approximately RMB2.9 million, or 19.8%, of our contract
liabilities as of December 31, 2024 had been settled.
Provision
Provision represents liabilities recorded for aftersales obligations, and is generally
recorded as a percentage of total sales amount.
Our provision increased from RMB39.0 million as of December 31, 2021 to RMB100.8
million as of December 31, 2022, further to RMB168.8 million as of December 31, 2023, and
RMB262.7 million as of December 31, 2024, primarily due to an increase in sales volume and
revenue.
Deferred Tax Liabilities
Our deferred tax liabilities are recognized for taxable temporary differences arising from
acquisition of property, plant and equipment and other intangible assets. Our deferred tax
liabilities was RMB90.7 million, RMB84.8 million, RMB70.3 million and RMB58.0 million as
of December 31, 2021, 2022, 2023 and 2024, respectively.
FINANCIAL INFORMATION
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LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we financed our operations primarily through capital
contribution from shareholders, cash generated from operating activities, and banking
facilities. Going forward, we believe our liquidity requirements will be satisfied by using funds
from a combination of cash generated from operating activities, banking facilities and net
proceeds from the Global Offering.
Taking into account the above sources of liquidity available to us, our Directors believe
that we have sufficient working capital to meet our present and future cash requirements for
at least the next 12 months from the date of this Prospectus.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated.
Y ear ended December 31,
2021 2022 2023 2024
(RMB in thousands)
Net cash flows (used in)/generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(165,420) 1,353,642 284,354 (361,142)
Net cash flows (used in)/generated from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284,275) (4,012,900) 302,733 (775,160)
Net cash flows generated from financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118938,316 2,823,634 511,028 1,298,116
Net increase in cash and cash equivalents /H1118/H1118 488,621 164,376 1,098,115 161,814
Effect of foreign exchange rate changes,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,718) 4,377 – 2,979
Cash and cash equivalents at beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293,508 767,411 936,164 2,034,279
Cash and cash equivalents at end of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072
Net Cash (Used in)/Generated from Operating Activities
Net cash used in operating activities was RMB361.1 million in 2024, primarily due to our
profit before tax of RMB79.0 million, plus interest received of RMB37.4 million, as adjusted
by (i) certain non-cash and non-operating items, primarily including depreciation of property,
plant and equipment of RMB497.3 million, share of profits of joint ventures of RMB302.5
million and finance costs of RMB132.6 million; (ii) changes in working capital that negatively
affected the cash flow from operating activities, primarily including an increase in trade and
bills receivables and contract assets of RMB483.8 million and an increase in inventories of
RMB120.4 million; and (iii) partially offset by changes in working capital that positively
affected the cash flow from operating activities, primarily including an increase in trade and
FINANCIAL INFORMATION
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bills payables of RMB218.7 million. To improve operating cash flow, we plan to implement the
following measures: (i) expanding business scale to increase cash inflows, while reducing costs
and improving efficiency; (ii) maintaining strong relationships with banks and leveraging
financial tools such as bank acceptance bills; (iii) negotiating better credit terms with suppliers
to extend payment cycles and improve terms with customers; (iv) aligning raw material
purchases with the actual orders, optimizing inventory levels, and improving inventory
turnover; and (v) strengthening receivables management with a robust credit control system to
ensure timely collections.
Net cash generated from operating activities was RMB284.4 million in 2023, primarily
due to our loss before tax of RMB604.4 million, less income tax paid of RMB23.5 million and
plus interest received of RMB33.2 million, as adjusted by (i) certain non-cash and
non-operating items, primarily including depreciation of property, plant and equipment of
RMB293.9 million, impairment losses on inventories of RMB282.4 million and finance costs
of RMB73.5 million; (ii) changes in working capital that positively affected the cash flow from
operating activities, primarily including a decrease in pledged deposits of RMB524.3 million;
and (iii) partially offset by changes in working capital that negatively affected the cash flow
from operating activities, primarily including an increase in trade and bills receivables and
contract assets of RMB836.2 million.
Net cash generated from operating activities was RMB1,353.6 million in 2022, primarily
due to our loss before tax of RMB1,731.0 million, less income tax paid of RMB4.9 million and
plus interest received of RMB17.9 million, as adjusted by (i) certain non-cash and
non-operating items, primarily including impairment losses on financial assets and contract
assets, net of RMB600.1 million, impairment losses on inventories of RMB579.3 million and
impairment losses on property, plant and equipment of RMB244.6 million; (ii) changes in
working capital that positively affected the cash flow from operating activities, primarily
including an increase in trade and bills payables of RMB2,491.4 million and an increase in
other payables and accruals of RMB1,869.2 million; and (iii) partially offset by changes in
working capital that negatively affected the cash flow from operating activities, primarily
including an increase in trade and bills receivables and contract assets of RMB1,372.6 million.
Net cash used in operating activities was RMB165.4 million in 2021, primarily due to our
loss before tax of RMB411.7 million, plus interest received of RMB8.2 million, as adjusted by
(i) certain non-cash and non-operating items, primarily including depreciation of property,
plant and equipment of RMB91.2 million; (ii) changes in working capital that negatively
affected the cash flow from operating activities, primarily including an increase in pledged
deposits of RMB663.2 million and an increase in inventories of RMB446.5 million; and (iii)
partially offset by changes in working capital that positively affected the cash flow from
operating activities, primarily including an increase in trade and bills payables of RMB1,034.3
million.
FINANCIAL INFORMATION
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Net Cash (Used in)/Generated from Investing Activities
Net cash flows used in investing activities was RMB775.2 million in 2024, primarily due
to (i) investment in a joint venture of RMB346.0 million, and (ii) purchases of items of
property, plant, equipment and right-of-use assets of RMB614.8 million.
Net cash flows generated from investing activities was RMB302.7 million in 2023,
primarily due to redemption of financial assets at fair value through profit or loss of
RMB1,169.2 million, partially offset by (i) purchases of items of property, plant, equipment
and right-of-use assets of RMB791.8 million, and (ii) investment in a joint venture of
RMB150.0 million.
Net cash flows used in investing activities was RMB4,012.9 million in 2022, primarily
due to (i) purchases of items of property, plant, equipment and right-of-use assets of
RMB2,688.0 million, and (ii) subscription of financial assets at fair value through profit or loss
of RMB1,146.7 million, partially offset by receipt of government grants for property, plant and
equipment and right-of-use assets of RMB68.3 million.
Net cash flows used in investing activities was RMB284.3 million in 2021, primarily due
to purchases of items of property, plant, equipment and right-of-use assets of RMB896.1
million, partially offset by redemption of financial assets at fair value through profit or loss of
RMB612.1 million.
Net Cash Generated from Financing Activities
Net cash flows generated from financing activities was RMB1,298.1 million in 2024,
primarily due to proceeds from (i) interest-bearing bank and other borrowings of RMB1,369.1
million; and (ii) capital contribution from shareholders of RMB1,000.0 million, partially offset
by (i) repayment of interest-bearing bank and other borrowings of RMB901.0 million, and (ii)
interest paid of RMB125.7 million.
Net cash flows generated from financing activities was RMB511.0 million in 2023,
primarily due to proceeds from interest-bearing bank and other borrowings of RMB1,221.3
million, partially offset by (i) repayment of interest-bearing bank and other borrowings of
RMB576.2 million, and (ii) interest paid of RMB133.4 million.
Net cash flows generated from financing activities was RMB2,823.6 million in 2022,
primarily due to (i) proceeds from interest-bearing bank and other borrowings of RMB2,886.4
million, (ii) contribution from the ordinary shareholders of RMB2,414.9 million, partially
offset by (i) business combination under common control of RMB1,970.1 million, and (ii)
repayment of interest-bearing bank and other borrowings of RMB303.0 million.
Net cash flows generated from financing activities was RMB938.3 million in 2021,
primarily due to (i) contribution from the ordinary shareholders of RMB1,289.8 million, and
(ii) proceeds from interest-bearing bank and other borrowings of RMB69.0 million, partially
offset by (i) repayment of interest-bearing bank and other borrowings of RMB368.0 million,
and (ii) lease payments of RMB40.9 million.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURES AND COMMITMENTS
Capital Expenditure
Our capital expenditures during the Track Record Period primarily related to purchases
of properties, plants and equipment, right-of-use assets, and purchases of other intangible
assets, and amounted to RMB896.7 million, RMB2,707.5 million, RMB813.7 million and
RMB625.1 million, respectively, in 2021, 2022, 2023 and 2024. We funded our capital
expenditure requirements during the Track Record Period mainly from a combination of cash
generated from our operating activities, bank loans and equity financing. We plan to fund our
planned capital expenditure by the cash flow generated from our operations, bank loans, equity
financing, and the net proceeds received from the Global Offering.
The following table sets forth a summary of our capital expenditure as of the dates
indicated.
Y ear ended 31 December,
2021 2022 2023 2024
(RMB in thousands)
Purchases of properties,
plants and equipment,
and leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118896,123 2,687,978 791,751 614,798
Purchases of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118586 19,565 21,993 10,329
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118896,709 2,707,543 813,744 625,127
Capital Commitments
Our capital commitments primarily related to properties, plant and equipment. The
following table sets forth a summary of our capital commitments as of the dates indicated.
As of December 31,
2021 2022 2023 2024
(RMB in thousands)
Properties, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,661,603 1,163,135 514,662 109,225
FINANCIAL INFORMATION
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INDEBTEDNESS
Our indebtedness during the Track Record Period consists of interest-bearing bank and
other borrowings and lease liabilities. The following table sets forth our indebtedness position
as of December 31, 2021, 2022, 2023 and 2024, and February 28, 2025.
As of December 31, As of
February 28,
20252021 2022 2023 2024
(unaudited)
(RMB in thousands)
Current
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H11181,159,664 579,134 694,137 1,245,825 1,093,335
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,674 34,046 27,021 30,397 30,482
Non-current
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118– 2,310,258 2,841,494 2,768,659 2,844,009
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,882 207,537 175,769 146,034 145,658
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,508,220 3,130,975 3,738,421 4,190,915 4,113,484
Interest-bearing bank and other borrowings
Our interest-bearing bank and other borrowings typically have terms ranging from one
year to five years, with effective interest rates ranging from 0.77% to 5.35%. As of December
31, 2021, certain of our interest-bearing bank borrowings were guaranteed by one of our
Shareholders, and other borrowings of RMB1,090.6 million were guaranteed by our Company.
As of December 31, 2022, these guarantees have been released.
As of December 31, 2022 and 2023, our certain interest-bearing bank borrowings were
secured by the right-of-use assets with aggregate carrying amounts of approximately RMB53.8
million and RMB52.7 million, respectively, and property, plant and equipment with aggregate
carrying amounts of approximately RMB650.2 million and RMB609.5 million, respectively,
and guaranteed by SINOGY VC and Zenergy Investment which are shareholders of the
Company, and guaranteed by Jiangsu TAFEL. As of December 31, 2024, these guarantee has
been released. As of December 31, 2022, our interest-bearing bank borrowings were also
secured by the pledged deposits amounting to RMB38.7 million.
As of December 31, 2024, our certain interest-bearing bank borrowings were secured by
the right-of-use assets with aggregate carrying amounts of approximately RMB51.6 million
and property, plant and equipment with aggregate carrying amounts of approximately
RMB3,283.9 million.
Unutilized Banking Facilities
As of February 28, 2025, we had unutilized banking facilities of RMB3,228.7 million.
FINANCIAL INFORMATION
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Lease liabilities
Our lease liabilities primarily relate to our lease of two properties and facilities in Suzhou
and Nanjing for manufacturing and business operations purposes. The lease terms are 122
months and 55 months respectively, ending in 2031 and 2027, respectively. The decrease in our
lease liabilities during the Track Record Period was primarily due to our periodic lease
payments and termination of certain leases.
Save as disclosed above, we did not have any outstanding loan, capital issued or agreed
to be issued, debt securities, mortgages, charges, debentures, bank overdrafts, loans or other
similar indebtedness, liabilities under acceptances or acceptance credits, hire purchase
commitments, guarantees or other contingent liabilities as of February 28, 2025.
We had not guaranteed the indebtedness of any independent third parties as of the Latest
Practicable Date. Our Directors confirm that there has not been any material change in our
indebtedness since February 28, 2025 and up to the date of this Prospectus.
Our Directors confirm that as of the Latest Practicable Date, there was no material
covenant on any of our outstanding debt and there was no breach of any covenant during the
Track Record Period and up to the Latest Practicable Date. Our Directors further confirm that
we did not experience any difficulty in obtaining bank loans and other borrowings, default in
payment of bank loans and other borrowings during the Track Record Period and up to the
Latest Practicable Date.
CONTINGENT LIABILITIES
As of the Latest Practicable Date, we did not have any material contingent liabilities,
guarantees or any litigations or claims of material importance, pending or threatened against
any member of our Company.
KEY FINANCIAL RATIOS
The following table sets forth key financial ratios for the periods or as of the dates
indicated.
Y ear Ended/As of December 31,
2021 2022 2023 2024
(%)
Gearing ratio (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827.2 47.0 26.4 25.2
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887.4 88.3 70.8 88.2
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866.5 69.2 60.8 77.8
FINANCIAL INFORMATION
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Notes:
(1) Gearing ratio is calculated based on net debt, which includes interest-bearing bank and other borrowings
and lease liabilities, less cash and cash equivalents, divided by capital, which includes equity
attributable to the owners of the parent, plus net debt and multiplied by 100%.
(2) Current ratio is calculated based on the total current assets divided by the total current liabilities as at
the end of the respective year.
(3) Quick ratio is calculated as total current assets less inventories divided by the total current liabilities as
at the end of the respective year.
Gearing Ratio
Our gearing ratio decreased from 26.4% as of December 31, 2023 to 25.2% as of
December 31, 2024, primarily due to capital injection in 2024.
Our gearing ratio decreased from 47.0% as of December 31, 2022 to 26.4% as of
December 31, 2023, primarily due to a significant increase in cash and cash equivalent in 2023.
Our gearing ratio increased from 27.2% as of December 31, 2021 to 47.0% as of
December 31, 2022, primarily due to a significant increase in interest-bearing bank and other
borrowings in 2022.
Current Ratio
Our current ratio increased from 70.8% as of December 31, 2023 to 88.2% as of
December 31, 2024, primarily due to an increase in current assets as of December 31, 2024.
Our current ratio decreased from 88.3% as of December 31, 2022 to 70.8% as of
December 31, 2023, primarily due to an increase in current liabilities as of December 31, 2023.
Our current ratio remained relatively stable at 87.4% and 88.3% as of December 31, 2021
and 2022, respectively.
Quick Ratio
Our quick ratio increased from 60.8% as of December 31, 2023 to 77.8% as of
December 31, 2024, primarily due to an increase in current assets as of December 31, 2024.
Our quick ratio decreased from 69.2% as of December 31, 2022 to 60.8% as of
December 31, 2023, primarily due to an increase in current liabilities as of December 31, 2023.
Our quick ratio remained relatively stable at 66.5% and 69.2% as of December 31, 2021
and 2022, respectively.
FINANCIAL INFORMATION
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DISCLOSURE ABOUT FINANCIAL RISK
Our principal financial instruments comprise interest-bearing bank and other borrowings,
and cash and deposits. The main purpose of these financial instruments is to raise funds for our
operations. We also have various other financial assets and liabilities, such as trade and bills
receivables and trade and bills payables, which arise directly from our business operations. The
main risks arising from the Group’s financial instruments are interest rate risk, credit risk and
liquidity risk. See note 39 to the accountants’ report included in Appendix I of the Prospectus
for more details on financial risks.
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
DIVIDEND
During the Track Record Period, we did not declare or pay any dividends. As of the Latest
Practicable Date, we did not have a formal dividend policy or a fixed dividend payout ratio.
The Board has approved a dividend policy, which will become effective upon Listing. Under
the dividend policy, we may provide our Shareholders with interim or annual dividends as the
Board deems appropriate. The Board will consider, among other things, the following factors
when proposing dividends and determining the amount of dividends: (i) our actual and
projected financial performance; (ii) our estimated working capital requirements, capital
expenditure requirements and future business expansion plan; (iii) our present and future cash
flow; (iv) other internal and external factors that may have an impact on our business
operations or financial performance and position; and (v) other factors that our Board deem
relevant.
Any declaration and payment as well as the amount of dividends will be subject to our
Articles of Association and applicable laws and regulations. The declaration and payment of
any dividends in the future will be determined by our shareholders’ meeting, in its discretion,
and will depend on a number of factors, including but not limited to our earnings, capital
requirements, overall financial condition and contractual restrictions. We may by ordinary
resolution resolve to declare dividends in any currency and authorize payment of the dividends
out of the funds of our Company lawfully available. There is no assurance that dividends of
any amount will be declared to be distributed in any year. We will continue to re-evaluate our
dividend policy in light of our financial condition and the prevailing economic environment.
According to the PRC Company Law, any future net profit that we make will have to be
first applied to make up for our historically accumulated losses, after which we will be obliged
to allocate 10% of our net profit to our statutory common reserve fund. We will, therefore, only
be able to declare dividends after: (i) all our historically accumulated losses have been made
up for; and (ii) we have allocated sufficient net profit to our statutory common reserve fund as
described above. We may stop allocate the net profit when the aggregate balance of the
statutory common reserve fund has reached more than 50% of our registered capital.
DISTRIBUTABLE RESERVE
As of December 31, 2024, we did not have any distributable reserves.
DISCLOSURE REQUIRED UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, they were not aware of any
circumstances that would give rise to a disclosure requirement under Rules 13.13 to Rules
13.19 of the Listing Rules.
FINANCIAL INFORMATION
– 458 –


--- page 468 ---
RELATED-PARTY TRANSACTIONS
Related party transactions are set out in note 37 to the accountants’ report included in
Appendix I of the Prospectus. Our Directors confirm that these transactions were conducted in
the ordinary and usual course of business and at arm’s length basis. The non-trade payables
amounted to approximately RMB108.6 million as of December 31, 2024, which will be settled
prior to Listing. Any guarantee previously provided by related parties has been released.
LISTING EXPENSES
The total listing expenses payable by our Company are estimated to be approximately
HK$77.6 million, representing 7.7% of the total gross proceeds from the Global Offering,
assuming the Over-allotment Option is not exercised and at the Offer Price of HK$8.27 per
Share. These listing expenses mainly comprise legal and other professional fees paid and
payable to the professional parties, commissions payable to the Underwriters, and printing and
other expenses for their services rendered in relation to the Listing and the Global Offering. We
expect that approximately RMB39.5 million (HK$42.8 million) of listing expenses have
been/will be charged to our statements of profit or loss and other comprehensive income, of
which RMB29.3 million (HK$31.7 million) has been so charged in 2024. We expect that
approximately RMB32.1 million (HK$34.8 million) relating to listing expenses directly
attributable to the issue of shares will be deducted from equity.
The following table sets forth a breakdown of the listing expenses for the Global Offering
at the Offer Price of HK$8.27 per Share (assuming the Over-allotment Option is not exercised).
Listing Expenses
Based on an
Offer Price of
HK$8.27
(HK$ in
thousands)
Non-underwriting related expenses
Legal and audit expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,289
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,360
Underwriting related expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,901
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,550
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma adjusted consolidated net tangible assets prepared in
accordance with paragraph 4.29 of the Listing Rules and with reference to Accounting
Guideline 7 “Preparation of Pro Forma Financial Information for inclusion in Investment
Circulars” issued by the Hong Kong Institute of Certified Public Accountants to illustrate the
effect of the Global Offering on the consolidated net tangible assets attributable to owners of
the Company as of December 31, 2024 as if the Global Offering had taken place on that date.
FINANCIAL INFORMATION
– 459 –


--- page 469 ---
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to owners of the Company has been prepared for illustrative purposes only and
because of its hypothetical nature, it may not give a true picture of the consolidated net tangible
assets of the Group as of December 31, 2024 or any future dates following the Global Offering.
Consolidated net
tangible assets
attributable to
owners of the
Company as of
December 31, 2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
Unaudited pro forma
adjusted consolidated net
tangible assets
attributable to owners of
the Company per Share
(RMB in thousands) RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer
Price of HK$8.27
per Share /H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,766 885,193 6,357,959 2.53 2.75
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as of December 31, 2024 is
arrived at after deducting other intangible asset of RMB423,079,000 and goodwill of RMB1,277,000
from the consolidated equity attributable to owners of the Company of RMB5,897,122,000 as of
December 31, 2024, as shown in Appendix I to this Prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$8.27 per Share,
after deduction of the underwriting fees and other related expenses payable by our Company (excluding
the listing expenses that have been charged to profit or loss during the Track Record Period) and does
not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option.
The estimated net proceeds from the Global Offering are converted from Hong Kong dollars into
Renminbi at an exchange rate of RMB0.9229 to HK$1.00.
(3) The unaudited pro forma adjusted net tangible assets per Share is calculated based on 2,508,500,103
Shares in issue immediately following the completion of the Global Offering without taking into account
any Shares which may be issued upon the exercise of the Over-allotment Option.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong
Kong dollars at an exchange rate of RMB0.9229 to HK$1.00.
(5) No adjustment has been made to reflect any trading result or open transaction of the Group entered
subsequent to December 31, 2024.
NO MATERIAL ADVERSE CHANGE
Our Directors confirmed that, up to the date of this Prospectus, there has been no material
adverse change in our financial or trading position or prospects since December 31, 2024, and
there has been no event since December 31, 2024 that would materially affect the information
as set out in the accountants’ report included in Appendix I of the Prospectus.
FINANCIAL INFORMATION
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--- page 470 ---
FUTURE PLANS AND PROSPECTS
See “Business—Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$927.5 million assuming no Over-allotment Option is exercised, at the Offer Price of
HK$8.27 per Share, after deducting the underwriting fees and commissions (assuming the full
payment of the discretionary incentive fee) and estimated expenses payable by the Company.
We intend to use the net proceeds we will receive from the Global Offering for the
following purposes:
1. approximately 80.0% of the net proceeds, or HK$741.9 million (equivalent to
approximately RMB684.7 million), will be used for the expansion of our production
capacity and to construct intelligent manufacturing facilities and flexible
manufacturing lines. We adopt a market-driven expansion plan where we design our
overall manufacturing capacity and facility expansion plans to match the orders we
have on hand and the expected orders we expect to receive, taking into account our
understanding and analysis of our customers’ needs.
Our market-driven expansion plan also takes into account the expected growth in the
EV battery industry. According to Frost & Sullivan, the global EV battery market
experienced steady growth in installation capacity in recent years, and is expected
to further grow from 900.2 GWh in 2024 to 3,564.5 GWh in 2029, representing a
CAGR of 31.7%. In China, EV battery installation capacity is expected to grow from
549.9 GWh in 2024 to 1,961.4 GWh in 2029, representing a CAGR of 29.0%.
Besides EV batteries, several types of non-EV power batteries (including electric
ship batteries and eVTOL power batteries) and ESS batteries are also expected to
experience significant growth in the next five years. Our market-driven approach,
which takes into account orders on hand and the expected growth in demand, helps
avoid excessive manufacturing capacities and ensure sustainable and efficient
growth.
We believe there will be that sufficient demand for our products to support our plans to
expand our production capacity, because:
(i) the penetration rates for PHEV/EREV and the market share for LFP power batteries
are expected to increase significantly, according to Frost & Sullivan. The market
penetration rate of BEVs in China was 24.6% in 2024 in terms of sales volume, and
the sales volume is expected to grow at a CAGR of 14.1% from 2024 to 2029. In
contrast, the total market share of PHEVs (including EREVs) in China was 16.4%
in 2024, and the sales volume is expected to grow at a CAGR of 24.1% from 2024
to 2029, indicating that PHEVs are poised for faster growth compared to BEVs and
FUTURE PLANS AND USE OF PROCEEDS
– 461 –


--- page 471 ---
will surpass BEVs in sales volume in 2026. In China, the proportion of NCM
batteries decreased from 60.9% in 2020 to 25.4% in 2024, of all EV batteries in
terms of installation capacity, whereas the proportion of LFP batteries increased
from 38.0% in 2020 to 74.4% in 2024, of all EV Batteries in terms of installation
capacity. This shift is further highlighted by the installation capacity of LFP
batteries, which was 408.9 GWh in 2024 in China, whereas the installation capacity
for NCM was 139.8 GWh in 2024 in China. This growth necessitates the
establishment of new production lines to ensure adequate supply capabilities.
(ii) we obtained 48 design-wins as of the Latest Practicable Date, with total planned
delivery volume for PHEV batteries alone of over 150 GWh over the next four to
five years, according to planned vehicle delivery plans of the OEMs from whom we
had obtained design-wins, which requires manufacturing capacity that exceeds our
current level of 25.5 GWh per year.
(iii) our seemingly low utilization rates reflect the industry norm that the start of mass
production of batteries depends on the customer’s vehicle start of production
(“SOP”) schedule. If the SOP does not begin on certain point of time as originally
planned, the production lines can be left idle; such demand from customers is cyclic,
with typically lower production rates in the first quarter. See also “Financial
Information—Specific Factors Affecting Our Results of Operations—Seasonality.”
Our use of proceeds from the Global Offering on manufacturing capacity expansion is
planned as follows:
(i) approximately 44.0% of the net proceeds, or HK$407.9 million (equivalent to
approximately RMB376.5 million), will be used for construction, equipment
purchases and preparation costs in relation to the construction of Phase I of the
new production facility in Changshu (the “ Phase I Facility ”). The Phase I
Facility is designed to have an annual production capacity of approximately
10.0 GWh per year. More specifically:
(a) approximately 16.5% of the net proceeds, or HK$153.0 million
(equivalent to approximately RMB141.2 million), will be used for the
construction of factories, manufacturing lines and supportive warehouses;
(b) approximately 26.0% of the net proceeds, or HK$241.0 million
(equivalent to approximately RMB222.5 million), will be used for the
purchase and installation of production equipment, storage equipment,
control systems and equipment; and
(c) approximately 1.5% of the net proceeds, or HK$13.9 million (equivalent
to approximately RMB12.8 million), will be used for preliminary
production preparation, trial production and other expenses.
FUTURE PLANS AND USE OF PROCEEDS
– 462 –


--- page 472 ---
The construction of Phase I Facility is expected to commence in March 2025,
and trial production is expected to commence in November 2025.
(ii) approximately 36.0% of the net proceeds, or HK$334.0 million (equivalent to
approximately RMB308.2 million), will be used for construction, equipment
purchases and preparation costs in relation to the construction of Phase II of
the new Changshu production facility (the “ Phase II Facility, ” together with
the Phase I Facility, the “ New Changshu Facility ”). The Phase II Facility is
designed to have an annual production capacity of approximately 15.0 GWh
per year. After the completion of the Phase II Facility, the New Changshu
Facility is expected to have a total gross floor area of nearly 620,000 square
meters, and a capacity of 25.0 GWh per year.
(a) approximately 10.0% of the net proceeds, or HK$92.8 million (equivalent
to approximately RMB85.6 million), will be used for the construction of
factories, manufacturing lines and supportive warehouses;
(b) approximately 25.0% of the net proceeds, or HK$231.9 million
(equivalent to approximately RMB214.0 million), will be used for the
purchase and installation of production equipment, storage equipment,
control systems and equipment; and
(c) approximately 1.0% of the net proceeds, or HK$9.3 million (equivalent to
approximately RMB8.6 million), will be used for preliminary product
preparation, trial production and other expenses.
The construction of Phase II Facility is expected to commence in December
2025, and trial production is expected to commence in 2026.
The New Changshu Facility is designed with advanced manufacturing
equipment and lines that enable the manufacturing of battery products that (i)
have distinctive technological features in high energy density, long life cycle,
high power density, high performance under low temperature, high safety and
fast charging capabilities; (ii) have standardized battery cells, which enable
large-scale automation during the manufacturing process and adoption by a
variety of vehicle models; and (iii) can achieve high cost efficiency during the
manufacturing process. Equipments to be installed in the New Changshu
Facility will cover the full manufacturing process from mixing to capacity
testing and warehousing. Types of equipments will include, among others,
extrusion coating machine, roll pressing and pre-cutting machine, laser-die
cutting and winding machine, soft connection welding machine, negative
pressure formatting system and capacity testing system.
FUTURE PLANS AND USE OF PROCEEDS
– 463 –


--- page 473 ---
The following table sets forth our proposed timeline and allocation of net
proceeds for the expansion of the New Changshu Facility.
Facility
Total
investment
amount
Investment
made as of
December 31,
2024 Net proceeds to be used in
(RMB in thousands)
2025 2026
Phase I Facility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,346,693 4,440 376,500 –
Phase II Facility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,655,246 – 35,000 273,200
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,001,939 4,440 411,500 273,200
The total investment amounts for the above facilities are determined primarily
based on (i) the amount and size of facilities and infrastructure necessary to
manufacture our battery products; (ii) the types and number of equipment for
the design and manufacturing of our battery products; (iii) manufacturing
timeline based on design-wins and orders at hand; and (iv) our available
sources of funding besides this Global Offering.
The following table sets forth the expected annual production capacity in the
years indicated, assuming that the New Changshu Facility is completed and
ramped up according to our current plans.
Designed annual production capacity in the year ending December 31,
2024 2025 2026
GWh
25.5 35.5 50.5
We believe the decision to allocate 80% of the net proceeds towards expanding and
constructing manufacturing facilities and lines is justified by several strategic considerations:
(i) Anticipated market growth . The projected increase in PHEV/EREV penetration and
LFP power battery market share necessitates additional production capacity to meet
growing demand. This aligns with forecasts by Frost & Sullivan as mentioned above
and underscores the need for expansion.
(ii) Current capacity constraints . As mentioned above, our existing orders exceed our
current production capabilities. The establishment of new facilities is crucial to
accommodate this demand and prevent production bottlenecks.
FUTURE PLANS AND USE OF PROCEEDS
– 464 –


--- page 474 ---
(iii) Strategic realignment . While production activities substantially ceased at the
Nanjing Zenergy in 2022, and ceased at Dongguan Zenergy in 2023, respectively,
this decision is a part of our strategic realignment to focus resources on more
favorable locations and promising technologies. Specifically, we intend to focus our
future growth on PHEV batteries (in terms of application scenarios) and LFP
batteries (in terms of electrochemistry), which would be achieved in a more
commercially feasible way by constructing new facilities instead of renovating old
ones (such as Nanjing Zenergy and Dongguan Zenergy sites).
(iv) Industry production dynamics . The nature of the battery cell industry, as
aforementioned, including pre-booked production lines and cyclical demand
patterns, requires flexible and scalable production capabilities. Expanding and
constructing new facilities will enable us to better align production with customer
demand cycles. Therefore, we believe our proposed use of 80% of net proceeds to
expand and construct our manufacturing facilities and manufacturing lines is
justified.
2. approximately 10.0% of the net proceeds, or HK$92.8 million (equivalent to
approximately RMB85.6 million), will be used for various R&D activities.
(i) approximately 5.0% of the net proceeds, or HK$46.4 million (equivalent to
approximately RMB42.8 million), will be used to explore various new battery
electrochemistries and advanced materials;
(a) approximately 2.5% of the net proceeds, or HK$23.2 million (equivalent
to approximately RMB21.4 million), will be used for the R&D and
commercialization of sodium-ion power batteries with high discharge
rates and long useful lives. Our sodium-ion battery products current have
the energy density of 130Wh/Kg and aim to achieve high energy density
of over 160Wh/Kg and a cycle life of over 3,000 cycles.
(b) approximately 1.5% of the net proceeds, or HK$13.9 million (equivalent
to approximately RMB12.8 million), will be used to develop the
ultra-high nickel multi-element materials and new silicon carbon
materials; and
(c) approximately 1.0% of the net proceeds, or HK$9.3 million (equivalent to
approximately RMB8.6 million), will be used to develop compounded
NCM and hybrid phosphate systems.
FUTURE PLANS AND USE OF PROCEEDS
– 465 –


--- page 475 ---
(ii) approximately 1.5% of the net proceeds, or HK$13.9 million (equivalent to
approximately RMB12.8 million), will be used to optimize the next-generation
intelligent manufacturing capabilities to improve manufacturing efficiency and
product quality, such as root cause analysis system, contactless vision system,
quality system for winding and coating, and multi-layer coating technology;
(iii) approximately 1.5% of the net proceeds, or HK$13.9 million (equivalent to
approximately RMB12.8 million), will be used for the development of
high-power battery cells and battery systems for application in low-altitude
economy scenarios and related industries, which are expected to reach an
overall market size of RMB1,000.0 billion in 2030, according to the
“Implementing Measures for the Innovative Application of General Aviation
Equipment (2024-2030)” jointly promulgated by the Ministry of Industry and
Information Technology, Ministry of Science and Technology, Ministry of
Finance, and Civil Aviation Administration of China;
(iv) approximately 1.0% of the net proceeds, or HK$9.3 million (equivalent to
approximately RMB8.6 million), will be used to further develop semi-solid-
state and solid-state battery products and technologies, which improves
thermal stability and battery safety; and
(v) approximately 1.0% of the net proceeds, or HK$9.3 million (equivalent to
approximately RMB8.6 million), will be used for the development of high
energy density ultra-fast charging battery products and technologies, focusing
on the standardized battery cells, platformed battery packs and diversified
electrochemistries and advanced materials to improve battery performance in
terms of charging speed.
3. approximately 10.0% of the net proceeds, or HK$92.8 million (equivalent to
approximately RMB85.6 million), will be used for providing funding for working
capital and other general corporate purposes.
If the Over-allotment Option is not exercised, the net proceeds that we will receive will
be approximately HK$927.5 million, at the Offer Price of HK$8.27 per Share, and after
deducting the underwriting fees and commissions payable by our Company.
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will
be approximately HK$1,073.7 million, at the Offer Price of HK$8.27 per Share, and after
deducting the underwriting fees and commissions payable by our Company.
FUTURE PLANS AND USE OF PROCEEDS
– 466 –


--- page 476 ---
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 generated from
operations, bank loans and other borrowings. To the extent that the net proceeds from the
Global Offering are not immediately used for the purposes described above and to the extent
permitted by the relevant laws and regulations, they will be placed in 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). We will issue an appropriate announcement if there is any material change
to the above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
– 467 –


--- page 477 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors, namely (i) Jiangsu Mixed Ownership Reform Fund, (ii) Suzhou
High-end Equipment Fund, and (iii) Southeast Investment Holding as 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, cause their designated
entities to subscribe at the Offer Price for a certain number of Offer Shares (rounded down to
nearest whole board lot of 300 H Shares) that may be purchased for an aggregate amount of
US$79.9 million (approximately HK$621.0 million, exclusive of brokerage, SFC transaction
levy, AFRC transaction levy and Stock Exchange trading fee) (the “ Cornerstone Placing ”).
The calculations in this section, which are based on the exchange rate as disclosed in the
section headed “Information about this Prospectus and the Global Offering”, are for illustration
purpose.
Based on the Offer Price of HK$8.27 per H Share, the total number of Offer Shares to be
subscribed by the Cornerstone Investors would be 75,091,500 Offer Shares, representing
approximately (i) 61.79% of the H Shares offered pursuant to the Global Offering (assuming
the Over-allotment Option is not exercised); (ii) 2.99% of our total issued share capital
immediately upon completion of the Global Offering (assuming the Over-allotment Option is
not exercised); and (iii) 2.97% of our total issued share capital immediately upon completion
of the Global Offering and the full exercise of the Over-allotment Option.
Our Company is of the view that, (i) the Cornerstone Investments will ensure a reasonable
size of solid commitment at the beginning of the marketing period of the Global Offering and
will provide confidence to the market, and (ii) leveraging on the investment experience of the
Cornerstone Investors, the Cornerstone Placing will help to raise the profile of our Company
and to signify that such investors have confidence in our business and prospect. Our Company
became acquainted with each of the Cornerstone Investors in its ordinary course of operation
through the business network of our Group, introduction by our existing Shareholder(s), or
previous financing.
Among the Cornerstone Investors, Jiangsu Mixed Ownership Reform Fund and Suzhou
High-end Equipment Fund are close associates of two existing Shareholders, namely Suzhou
Suchuang Energy Investment Partnership (L.P.) ( ᘽψᘽ௴อঐ๕ҳ༟ΥྫΆุ(Υྫ))
(“Suchuang Energy Investment ”) and Nanjing Konggang Hub Economic Zone Investment
Development Co., Ltd (ʮ̡) (formerly known as Nanjing
Lukou Konggang Investment Development Co., Ltd. (ʮ̡))
(“Nanjing Konggang ”), which together hold approximately 2.49% of the total issued share
capital of the Company immediately prior to the Global Offering. Suchuang Energy
Investment, being a limited partnership established under the laws of the PRC conducting
venture capital investments and R&D of emerging energy technologies, is ultimately controlled
by Suzhou Finance Bureau (҅). Nanjing Konggang, being a limited liability
company established under the laws of the PRC and primarily engaged in land and
CORNERSTONE INVESTORS
– 468 –


--- page 478 ---
infrastructure development, construction, property management, information distribution and
logistics-related services, is ultimately controlled by Nanjing Jiangning Economic and
Technological Development Zone Management Committee (ԯϪྐྵ຾᏶Ҧஔක೯ਜ၍ଣ։
ึ). For details on Suchuang Energy Investment and Nanjing Konggang, see “History,
Reorganization and Corporate Structure—Pre-IPO Investments—5. Information about the
Pre-IPO Investors.” Suzhou Finance Bureau and Nanjing Jiangning Economic and
Technological Development Zone Management Committee are government bodies of Jiangsu
Province. Our Cornerstone Investors, Jiangsu Mixed Ownership Reform Fund and Suzhou
High-end Equipment Fund, are respectively ultimately controlled by Jiangsu Provincial
People’s Government (ִ݁and Suzhou Finance Bureau, being government bodies
of Jiangsu Province. Accordingly, Jiangsu Mixed Ownership Reform Fund and Suzhou
High-end Equipment Fund, as close associates of Suchuang Energy Investment and Nanjing
Konggang, have been permitted to participate in the Cornerstone Placing pursuant to a waiver
from strict compliance with the requirements under Rule 10.04 of, and consent under paragraph
5(2) of Appendix F1 to, the Listing Rules and Chapter 4.15 of the Guide for New Listing
Applicants as further described in the section headed “Waivers” in this Prospectus.
For the purpose of the Existing Shareholder Conditions under paragraph 13 of Chapter
4.14 of the Guide for New Listing Applicants, Jiangsu Mixed Ownership Reform Fund and
Suzhou High-end Equipment Fund are not regarded as close associates of the Changshu
Entities, details of which are explained in the section headed “Waivers” in this Prospectus. For
the purpose of public float of the Company under Rule 8.08 of the Listing Rules, the
shareholding of all state-owned shareholders within the Jiangsu Province are aggregated. As
Jiangsu Mixed Ownership Reform Fund and Suzhou High-end Equipment Fund, together with
the Changshu Entities (as defined below), will collectively hold over 10% of our total issued
Shares immediately following completion of the Global Offering, the Offer Shares to be
subscribed for by Jiangsu Mixed Ownership Reform Fund and Suzhou High-end Equipment
Fund will not count towards the public float of the Company under Rule 8.08 of the Listing
Rules. For further details, see “History, Reorganization and Corporate Structure—Public
Float”.
In addition, Southeast Investment Holding, an existing Shareholder and a close associate
of two other existing Shareholders, namely, the other Changshu Entities (as defined below), has
been permitted to participate in the Cornerstone Placing pursuant to a waiver from strict
compliance with the requirements under Rule 9.09(b) and Rule 10.04 of, and consent under
paragraph 5(2) of Appendix F1 to, the Listing Rules and Chapter 4.15 of the Guide for New
Listing Applicants as further described in the section headed “Waivers” in this Prospectus.
To the best knowledge of our Company and save for the facts of the relationship of the
relevant Cornerstone Investors and the existing Shareholders as disclosed in this section, (i)
each of the Cornerstone Investors and their respective ultimate beneficial owners is an
Independent Third Party and is independent of the Group, its connected persons and their
respective close associates; (ii) none of the Cornerstone Investors is accustomed to taking
instructions from our Company, the Directors, the Supervisors, chief executive, our Controlling
Shareholders, substantial Shareholders, existing Shareholders or any of their respective
CORNERSTONE INVESTORS
– 469 –


--- page 479 ---
subsidiaries or their respective close associates in relation to the acquisition, disposal, voting
or other disposition of the Offer Shares; (iii) none of the subscription of the relevant Offer
Shares by any of the Cornerstone Investors is financed by our Company, the Directors, the
Supervisors, chief executive, our Controlling Shareholders, substantial Shareholders, existing
Shareholders or any of their respective subsidiaries or their respective close associates; (iv)
each Cornerstone Investor will be utilizing their proprietary funding or the proprietary funding
of the funds under their management, as appropriate, as their source of funding for the
subscription of the Offer Shares; and (v) no approval from another stock exchange is required
for each Cornerstone Investor’s investment in our Company as described in this section. The
subscription of the Offer Shares by all Cornerstone Investors under the Cornerstone Investment
Agreements is not required to be submitted to the shareholders of Cornerstone Investors’ listed
holding company (as the case may be) for approval.
The Cornerstone Placing will form part of the International Offering and the Cornerstone
Investors will not subscribe for any Offer Shares under the Global Offering (other than
pursuant to the Cornerstone Investment Agreements). The Offer Shares to be subscribed by the
Cornerstone Investors will rank pari passu in all respect with the fully paid Shares in issue.
Immediately following the completion of the Global Offering, save as disclosed in this section
and in the section headed “Substantial Shareholders” in this Prospectus, none of the
Cornerstone Investors will become a substantial shareholder of the Company, and the
Cornerstone Investors will not have any Board representation in our Company.
Other than a guaranteed allocation of the relevant Offer Shares at the final Offer Price,
the Cornerstone Investors do not have any preferential rights in the Cornerstone Investment
Agreements compared with other public Shareholders. As confirmed by each of the
Cornerstone Investors, their subscription under the Cornerstone Placing would be financed by
their own internal resources or the funds under its management, and that they have sufficient
funds to settle their respective investments under the Cornerstone Placing. There are no side
arrangements between our Company and the Cornerstone Investors or any benefit, direct or
indirect, conferred on the Cornerstone Investors by virtue of or in relation to the Cornerstone
Placing.
The total number of Offer Shares to be subscribed by the Cornerstone Investors may be
affected by reallocation of the Offer Shares between the International Offering and the Hong
Kong Public Offering in the event of over-subscription under the Hong Kong Public Offering
as described in the paragraph headed “Structure of the Global Offering—The Hong Kong
Public Offering—Reallocation” in this Prospectus. The number of Offer Shares to be acquired
by each Cornerstone Investor may be reduced on a pro rata basis in accordance with the terms
of the Cornerstone Investment Agreement to satisfy the short fall, after taking into account the
requirements under Appendix F1 to the Listing Rules as well as the discretion of the Joint
Representatives (for themselves and on behalf of the International Underwriters) to exercise
the Over-allotment Option.
CORNERSTONE INVESTORS
– 470 –


--- page 480 ---
If there is over-allocation in the International Offering, the settlement of such over-
allocation may be effected through delayed delivery of the Offer Shares to be subscribed by
certain Cornerstone Investors under the Cornerstone Placing. Where delayed delivery takes
place, each Cornerstone Investor that may be affected by such delayed delivery has agreed that
it shall nevertheless pay for the relevant Offer Shares on or before 8:00 a.m. on the Listing
Date. If there is no over-allocation in the International Offering, delayed delivery will not take
place. As such, there will be no deferred settlement of the investment amount for the Offer
Shares to be subscribed by the Cornerstone Investors pursuant to the Cornerstone Investment
Agreements. For details of the Over-allotment Option, please refer to the paragraph headed
“Structure of the Global Offering—Over-allotment Option” in this Prospectus.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around April 11, 2025.
OUR CORNERSTONE INVESTORS
Set out below in the aggregate number of Offer Shares, and the corresponding percentages
to the Offer Shares and our Company’s total issued share capital under the Cornerstone
Placing:
Based on the Offer Price of HK$8.27
Name
Investment
Amount 1
Number of
Offer Shares
(rounded
down to
nearest whole
board lot
of 300
H Shares)
Approximately % of total
number of Offer Shares
Approximate % of H Shares
in issue immediately following
the completion of
the Global Offering
Approximately % of total
Shares in issue immediately
following the completion of
the Global Offering
Assuming
the Over-
allotment
Option is not
exercised
Assuming
the Over-
allotment
Option is
fully
exercised
Assuming
the Over-
allotment
Option is not
exercised
Assuming
the Over-
allotment
Option is
fully
exercised
Assuming
the Over-
allotment
Option is not
exercised
Assuming
the Over-
allotment
Option is
fully
exercised
(in millions)
Jiangsu Mixed
Ownership
Reform Fund /H1118/H1118/H1118US$13.5 12,692,100 10.44% 9.08% 0.88% 0.87% 0.51% 0.50%
Suzhou High-end
Equipment
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$27.6 25,942,500 21.35% 18.56% 1.80% 1.78% 1.03% 1.03%
Southeast
Investment
Holding /H1118/H1118/H1118/H1118/H1118US$38.8 36,456,900 30.00% 26.09% 2.53% 2.50% 1.45% 1.44%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$79.9 75,091,500 61.79% 53.73% 5.22% 5.15% 2.99% 2.97%
Note:
(1) The investment amount is exclusive of brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee. The calculations are based on the exchange rate as disclosed in this Prospectus.
CORNERSTONE INVESTORS
– 471 –


--- page 481 ---
The following information about the Cornerstone Investors was provided to our Company
by the Cornerstone Investors in relation to the Cornerstone Placing.
1. Jiangsu Mixed Ownership Reform Fund
Jiangsu Mixed Ownership Reform Fund is a limited partnership established in the PRC,
primarily engaged in private equity investment fund management and venture capital fund
management services. The general partner of Jiangsu Mixed Ownership Reform Fund is
Jiangsu Gaotou Venture Capital Management Co., Ltd. (ʮ̡)
(“Jiangsu Gaotou VC ”), which holds 1% of its equity interest. Jiangsu Gaotou VC is
wholly-owned by Jiangsu Hi-Tech Investment Group Co., Ltd. (ʮ̡)
(“Jiangsu Gaotou ”), a limited liability company controlled by Jiangsu Provincial People’s
Government (ִ݁Jiangsu Gaotou Innovation Investment Co., Ltd. ( Ϫᘽ৷ҳ௴
ப΂ʮ̡) and Jiangsu Gaotou Chuangzhi Investment Co., Ltd. ( Ϫᘽ৷ҳ௴౽ҳ༟
ப΂ʮ̡), both of which are wholly-owned subsidiaries of Jiangsu Gaotou, are also
limited partners of Jiangsu Mixed Ownership Reform Fund, and each holds 12% of the equity
interest in Jiangsu Mixed Ownership Reform Fund. Jiangsu Mixed Ownership Reform Fund
has 17 other limited partners, each holding no more than 10% equity interest.
For the purpose of this cornerstone investment, Jiangsu Mixed Ownership Reform Fund
will subscribe for and hold the relevant number of the Offer Shares under the Cornerstone
Investment Agreement through its wholly-owned subsidiary, Jiangsu Govtor Zhengli
Technology Innovation Limited (ʮ̡).
2. Suzhou High-end Equipment Fund
Suzhou High-end Equipment Fund is a limited partnership enterprise established in the
PRC. Its principal activities are equity investment, investment management and asset
management through private equity funds. The general partner of Suzhou High-end Equipment
Fund is Suzhou Zhanxin Private Equity Fund Management Co., Ltd. (၍ଣ
ʮ̡)( “Suzhou Zhanxin Fund ”), which holds 1% of its equity interest. Suzhou Zhanxin
Fund is held as to 75% by Suzhou Innovation Investment Group Co., Ltd. ( ᘽψ௴อҳ༟ණྠ
ʮ̡)( “ Suzhou Innovation Investment ”), which is ultimately controlled by the Suzhou
Finance Bureau (҅), and as to 25% by Jiangsu Gaotou Zhanxin Private Equity
Fund Management Co., Ltd. (ʮ̡), which is ultimately
controlled by the People’s Government of Jiangsu Province (ִ݁The limited
partners of Suzhou High-end Equipment Fund include Jiangsu Strategic Emerging Industries
Mother Fund Co., Ltd. (ʮ̡), which is ultimately
controlled by the People’s Government of Jiangsu Province (ִ݁holding 25% of
its limited partnership interest; Suzhou Wujiang Dongfang State-owned Capital Investment and
Management Co., Ltd. (ʮ̡), which is ultimately
controlled by the State-owned Assets Supervision and Administration Office of Wujiang
District Government of Suzhou (܃holding
CORNERSTONE INVESTORS
– 472 –


--- page 482 ---
approximately 22.83% of its limited partnership interest; and Suzhou Innovation Investment,
holding 15.33% of its limited partnership interest. There are 16 other limited partners of
Suzhou High-end Equipment Fund and each of them holds no more than 10% equity interest
therein.
For the purpose of the Cornerstone Investment, Suzhou High-end Equipment Fund will
subscribe for and hold the relevant number of the Offer Shares under the Cornerstone
Investment Agreement through its wholly-owned subsidiary, HONGKONG ZENGERSC
LIMITED (ʮ̡).
3. Southeast Investment Holding
Changshu Southeast Investment Holding Co., Ltd. (ʮ̡)
(“Southeast Investment Holding ”), our existing Shareholder, is a limited liability company
established under the laws of the PRC on October 14, 2022. Southeast Investment Holding is
a close associate of two existing Shareholders, namely, Changshu Southeast Industrial
Investment Co., Ltd. (ʮ̡)( “ Southeast Investment ”) and Changshu
Southeast Xinneng Equity Investment Partnership (L.P.) (ᛆҳ༟ΥྫΆุ(Ϟ
Υྫ)) (“ Southeast Xinneng ”, and together with Southeast Investment and Southeast
Investment Holding, the “ Changshu Entities ”). For details on Changshu Entities, see “History,
Reorganization and Corporate Structure—Pre-IPO Investments—5. Information about the
Pre-IPO Investors.”
For the purpose of the Cornerstone Investment, Southeast Investment Holding will
subscribe for and hold the relevant number of the Offer Shares under the Cornerstone
Investment Agreement through its wholly-owned subsidiary, HongKong ZengerHT Limited (࠰
ʮ̡).
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Underwriting Agreements being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither of the Underwriting
Agreements having been terminated;
(ii) the Offer Price having been agreed according to the Underwriting Agreements and
price determination agreement to be signed among the parties thereto in connection
with the Global Offering;
CORNERSTONE INVESTORS
– 473 –


--- page 483 ---
(iii) the Listing Committee having granted the listing of, and permission to deal in, the
H Shares (including the H Shares subscribed for by the Cornerstone Investors as
well as other applicable waivers and approvals) and such approval, permission or
waiver having not been revoked prior to the commencement of dealings in the H
Shares on the Stock Exchange;
(iv) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or the 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
(v) the respective representations, warranties, acknowledgments, undertakings and
confirmations of the relevant Cornerstone Investor under the relevant Cornerstone
Investment Agreement are (as of the date of the respective Cornerstone Investment
Agreement) and will be (as of the Listing Date) accurate and true in all respects or
material respects (as the case may be) and not misleading or not misleading in any
material respect (as the case may be) and that there is no material breach of the
respective Cornerstone Investment Agreement on the part of the relevant
Cornerstone Investor.
RESTRICTIONS ON 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 purchased pursuant to the
relevant Cornerstone Investment Agreements, save for 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.
CORNERSTONE INVESTORS
– 474 –


--- page 484 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
CMB International Capital Limited
CCB International Capital Limited
China Industrial Securities International Capital Limited
Huafu International Securities Limited
ICBC International Securities Limited
CEB International Capital Corporation Limited
BOCI Asia Limited
ABCI Securities Company Limited
Patrons Securities Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
Livermore Holdings Limited
UNDERWRITING ARRANGEMENTS
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, the Company is offering 12,152,400
Hong Kong Offer Shares (subject to reallocation) for subscription by the public in Hong Kong
on and subject to the terms and conditions of this Prospectus at the Offer Price.
Subject to the Hong Kong Stock Exchange granting 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), and certain other
conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters
have agreed to severally (and not jointly or jointly and severally) to subscribe or procure
subscribers for their respective applicable proportions of the Hong Kong Offer Shares now
being offered which are not taken up under the Hong Kong Public Offering on and subject to
the terms and conditions of this Prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on and subject to, amongst other
things, the International Underwriting Agreement having been signed and becoming
unconditional and not having been terminated in accordance with its terms.
UNDERWRITING
– 475 –


--- page 485 ---
Grounds for Termination
The Joint Representatives (for themselves and on behalf of the Hong Kong Underwriters)
shall, in their sole and absolute discretion, be entitled by notice to the Company to terminate
the Hong Kong Underwriting Agreement with immediate effect if prior to 8:00 a.m. on the
Listing Date:
(A) there develops, occurs, exists or comes into force:
(a) any event or series of events, whether in continuation, or circumstances in the
nature of force majeure (including, without limitation, acts of government,
labor disputes, strikes, lock-outs, fire, explosion, earthquake, flooding,
tsunami, volcanic eruption, civil commotion, riots, rebellion, public disorder,
acts of war (whether declared or undeclared), acts of terrorism (whether or not
responsibility has been claimed), acts of God, accident or interruption or delay
in transportation, destruction of power plant, outbreak, escalation, mutation or
aggravation of diseases, epidemics or pandemics including, but not limited to,
COVID-19, SARS, swine or avian flu, H5N1, H1N1, H1N7, H7N9, Ebola
virus, Middle East respiratory syndrome (MERS) and such related/mutated
forms, economic or comprehensive sanction, any local, national, regional or
international outbreak or escalation of hostilities (whether or not war is or has
been declared) or other state of emergency or calamity or crisis in whatever
form, political change, paralysis of government operations, other industrial
action) in or directly or indirectly affecting Hong Kong, the PRC, Singapore,
Japan, Russia, the United States, the United Kingdom, the European Union (or
any member thereof) or any other jurisdiction relevant to any member of the
Group or the Global Offering (each a “ Relevant Jurisdiction ” and
collectively, the “ Relevant Jurisdictions ”); or
(b) any change or any development involving a prospective change or
development, or any event or circumstances or series of events likely to result
in or representing a change or development or prospective change or
development, in any local, national, regional or international financial,
economic, political, military, industrial, legal, fiscal, regulatory, currency,
credit or market matters or conditions, equity securities or exchange control or
any monetary or trading settlement system (including, without limitation,
conditions in the stock and bond markets, money and foreign exchange markets
and inter-bank markets, a change in the system under which the value of the
Hong Kong currency is linked to that of the currency of the United States or
a change of the Hong Kong dollars or of the Renminbi against any foreign
currencies) in or affecting any Relevant Jurisdiction; or
UNDERWRITING
– 476 –


--- page 486 ---
(c) any moratorium, suspension or restriction (including, without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) in or on trading in securities generally on the Stock Exchange, the New
York Stock Exchange, the NASDAQ Global Market, the London Stock
Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the
Singapore Exchange Limited or the Tokyo Stock Exchange; or
(d) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority or
other competent governmental authority), New York (imposed at the U.S.
Federal or New York State level or other competent governmental authority),
Russia, London, Singapore, the PRC, the European Union (or any member
thereof), Japan or any Relevant Jurisdiction or any disruption in commercial
banking or foreign exchange trading or securities settlement or clearance
services, procedures or matters in or affecting any Relevant Jurisdiction; or
(e) any new law or regulation or any change or development involving a
prospective change in existing laws or regulations or any change or
development involving a prospective change in the interpretation or
application thereof by any court or other competent authority in or affecting
any of the Relevant Jurisdictions; or
(f) the imposition of economic or comprehensive sanctions or export control under
any sanctions laws or regulations in, or the withdrawal of trading privileges
which existed on the date of the Hong Kong Underwriting Agreement, in
whatever form, directly or indirectly, by, or for, any of the Relevant
Jurisdictions on the Company or any member of the Group; or
(g) any change or development involving a prospective change or amendment in
or affecting taxation or exchange controls, currency exchange rates or foreign
investment regulations (including, without limitation, a change of the United
States dollars, the Hong Kong dollars or RMB, against any foreign currencies,
a change in the system under which the value of the Hong Kong dollars is
linked to that of the United States dollars or RMB is linked to any foreign
currency or currencies), or the implementation of any exchange control, in any
of the Relevant Jurisdictions or adversely affecting an investment in the Offer
Shares; or
(h) any litigation, dispute, arbitration, legal action, proceeding or claim or
regulatory or administrative investigation or action being threatened, instigated
or announced against the Company, any member of the Group, any Director,
Supervisor or member of the senior management of the Company or any of the
Controlling Shareholders; or
UNDERWRITING
– 477 –


--- page 487 ---
(i) any Director, Supervisor or member of the senior management of the Company
vacating his/her office; or
(j) any contravention of the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the PRC Company Law or the
Listing Rules or any other applicable Laws by the Company, any member of
the Group, any Director, Supervisor or member of the senior management of
the Company or any of the Controlling Shareholders; or
(k) issue or requirement to issue by the Company of a supplemental or amendment
to this prospectus, the preliminary offering circular or the offering circular or
other documents in connection with the offer and sale of the H Shares pursuant
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance or
the Listing Rules, or upon any requirement or request of the Stock Exchange,
or the SFC; or
(l) any change or development involving a prospective change which has the
effect of materialization of any of the risks set out in section headed “Risk
Factors” in this prospectus; or
(m) any demand by creditors for repayment of indebtedness or a petition being
presented for the winding-up or liquidation of any member of the Group, or any
member of the Group making any composition or arrangement with its
creditors or entering into a scheme of arrangement or any resolution being
passed for the winding-up of any member of the Group or a provisional
liquidator, receiver or manager being 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) any adverse change or prospective adverse change in the earnings, results of
operations, business, business prospects, financial or trading position,
conditions (financial or otherwise) or prospects of any member of the Group
(including any litigation or claim of any third party being threatened or
instigated against any member of the Group),
which, individually or in the aggregate, in the sole and absolute opinion of the Joint
Representatives (for themselves and on behalf of the Hong Kong Underwriters):
(a) is or will be or may be materially adverse to, or materially and prejudicially
affects, the assets, liabilities, general affairs, business, management,
shareholder’s equity, profit, losses, earnings, results of operations,
performance, position or condition (financial, operational or otherwise), or
prospects of the Company or the Group as a whole or to any present or
prospective shareholder of the Company in its capacity as such;
UNDERWRITING
– 478 –


--- page 488 ---
(b) has or will have or may have a material adverse effect on the success or
marketability of the Global Offering or the level of Offer Shares being applied
for or accepted or subscribed for or purchased or the distribution of Offer
Shares and/or has made or is likely to make or may make it impracticable or
inadvisable 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;
(c) makes or will make it or may make it inadvisable, inexpedient, impracticable
or incapable to proceed with the Hong Kong Public Offering and/or the Global
Offering or the delivery of the Offer Shares on the terms and in the manner
contemplated by this prospectus, the formal notice, the preliminary offering
circular or the offering circular; or
(d) had or will have 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 which prevents or delays the processing of
applications and/or payments pursuant to the Global Offering or pursuant to
the underwriting thereof; or
(B) there has come to the notice of the Joint Representatives (for themselves and on
behalf of the Hong Kong Underwriters) that:
(a) any statement contained in the Offering Documents (as defined in the Hong
Kong Underwriting Agreement) and/or any notices, announcements,
advertisements, communications or other documents (including any
announcement, circular, document or other communication pursuant to the
Hong Kong Underwriting Agreement) issued or used by or on behalf of the
Company in connection with the Global Offering (including any supplement or
amendment thereto) (collectively, the “ Offer Related Document ”) was or has
become, untrue, incorrect, inaccurate, incomplete in any respects or misleading
or deceptive, or that any estimate, forecast, expression of opinion, intention or
expectation contained in any of such documents is not fair and honest and
based on reasonable grounds or, where appropriate, based on reasonable
assumptions;
(b) the issue or requirement to issue by the Company of any supplement or
amendment to this prospectus, the preliminary offering circular or the offering
circular or any other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies Ordinance, the Companies (Winding
Up and Miscellaneous Provisions) Ordinance or the Listing Rules or any
requirement or request of the Stock Exchange and/or the SFC; or
(c) any contravention by the Company, any member of the Group of any applicable
law; or
UNDERWRITING
– 479 –


--- page 489 ---
(d) any material non-compliance of this prospectus (or any other documents used
in connection with the contemplated subscription and sale of the Offer Shares),
the CSRC filings or any aspect of the Global Offering with the Listing Rules
or any other applicable law; or
(e) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, not having been
disclosed in this prospectus, constitutes an omission from, or misstatement in,
any of the Offer Related Documents;
(f) either (i) there has been a breach of any of the representations, warranties,
undertakings or provisions of either the Hong Kong Underwriting Agreement
or the International Underwriting Agreement by the Company and/or
Controlling Shareholders; or (ii) any of the representations, warranties and
undertakings given by the Company and/or the Controlling Shareholders in the
Hong Kong Underwriting Agreement or the International Underwriting
Agreement, as applicable, is (or would when repeated be) untrue, incorrect,
incomplete or misleading; or
(g) any breach of any of the obligations of the Company and/or the Controlling
Shareholders under the Hong Kong Underwriting Agreement or the
International Underwriting Agreement (including any supplement or
amendment thereto); or
(h) any event, act or omission which gives or is likely to give rise to any liability
of the Company and/or the Controlling Shareholders pursuant to the
indemnities given by the Company and/or the Controlling Shareholders under
the Hong Kong Underwriting Agreement or the International Underwriting
Agreement; or
(i) any litigation or dispute, which would materially and adversely affect the
operation, financial condition or reputation of the Group; or
(j) any cornerstone investor is unlikely to fulfil its obligation under the respective
agreement; or
(k) any material adverse change, prospective material adverse change or any
development involving a prospective material adverse change, in the assets,
liabilities, business, general affairs, management, shareholders’ equity, profits,
losses, properties, earnings, solvency, liquidity position, funding, results of
operations, performance, position or condition (financial, operational or
otherwise) or prospects of the Company and its subsidiaries, as a whole; or
UNDERWRITING
– 480 –


--- page 490 ---
(l) any breach of, or any event or circumstance rendering untrue or incorrect,
incomplete or misleading in any respect, any of the warranties contained in the
Hong Kong Underwriting Agreement; or
(m) any of the chairperson, general manager, chief financial officer or Director,
Supervisor, chief executive of the Company vacating his/her office; or
(n) the grant or agreement to grant by the Listing Committee of the Stock
Exchange of the listing on the Main Board of, and permission to deal on the
Main Board in, the H Shares (the “ Admission ”) is refused or not granted, other
than subject to customary conditions, on or before the Listing Date, or if
granted, the Admission is subsequently withdrawn, cancelled, qualified (other
than by customary conditions), revoked or withheld; or
(o) the Company has withdrawn this prospectus (and/or any other documents
issued or used in connection with the Global Offering) or the Global Offering;
or
(p) any expert whose consent is required for the issue of the prospectus with the
inclusion of its reports, letters or opinions and references to its name included
in the form and context in which it respectively appears, has withdrawn its
respective consent (other than the Joint Sponsors) prior to the issue of the
prospectus; or
(q) a prohibition on the Company for whatever reason from offering, allotting,
issuing or selling the Offer Shares (including H Shares to be issued upon the
exercise of the Over-allotment Option) pursuant to the terms of the Global
Offering; or
(r) any Director, Supervisor or member of senior management of the Company is
being charged with an indictable offence or is prohibited by operation of law
or otherwise disqualified from taking part in the management of a company or
that there is the commencement by any governmental, political or regulatory
body of any investigation or other action against any Director, Supervisor or
member of senior management of the Company in his/her capacity as such or
any member of the Group, or an announcement by any governmental, political
or regulatory body that it intends to commence any such investigation or take
any such action; or
UNDERWRITING
– 481 –


--- page 491 ---
(s) any order or petition for the winding-up of any member of the Group or any
composition or arrangement made by any member of the Group with its
creditors or a scheme of arrangement entered into by any member of the Group
or any resolution for the winding-up of any member of the Group or the
appointment of a provisional liquidator, receiver or manager over all or part of
the assets or undertaking of any member of the Group or anything analogous
thereto occurring in respect of any member of the Group; or
(t) a significant portion of the orders placed or confirmed in the bookbuilding
process at the time of the International Underwriting Agreement is entered into
or the investment commitments by any cornerstone investors after signing of
agreements with such cornerstone investors, have been withdrawn, terminated
or cancelled.
Undertaking to the Stock Exchange pursuant to the Listing Rules
Undertakings by the Company
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Hong
Kong Stock Exchange that it will not issue any further Shares or securities convertible into
equity securities of the Company (whether or not of a class already listed) or form the subject
of any agreement to such issue within six months from the date on which our Shares first
commence dealing on the Hong Kong Stock Exchange (whether or not such issue of Shares or
securities will be completed within six months from the commencement of dealing), except
pursuant to the Global Offering (including the exercise of the Over-allotment Option) or under
any of the circumstances provided under Rule 10.08 of the Listing Rules.
Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders and
the Financial Investors has undertaken to the Hong Kong Stock Exchange that, except pursuant
to the Global Offering and the Over-allotment Option, it shall not and shall procure that the
relevant registered holders of the Shares in which it is beneficially interested shall not, unless
in compliance with the requirements of the Listing Rules,
(a) in the period commencing on the date by reference to which disclosure of its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date, dispose of, nor enter into any agreement to dispose of or
otherwise create any options, rights, interests or encumbrances in respect of, any of
the Shares in respect of which it is shown by this prospectus to be the beneficial
owner; and
UNDERWRITING
– 482 –


--- page 492 ---
(b) in the period of six months commencing on the date on which the period referred to
in the preceding paragraph expires, dispose of, or enter into any agreement to
dispose of or otherwise create, any options, rights, interests or encumbrances in
respect of, any of the Shares referred to in the preceding paragraph to such an extent
that immediately following such disposal, or upon the exercise or enforcement of
such options, rights, interests or encumbrances, it would cease to be a Controlling
Shareholder of our Company or a member of the group of Controlling Shareholders
of our Company or would together with the other Controlling Shareholders cease to
be Controlling Shareholders of our Company.
Pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders and the Financial Investors has further undertaken to the Hong Kong Stock
Exchange and to the Company that within the period commencing on the date by reference to
which disclosure of its shareholding is made in this prospectus and ending on the date which
is 12 months from the Listing Date, it shall:
(a) when it pledges or charges any Shares beneficially owned by it in favor of an
authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)) for a bona fide commercial loan pursuant to Note 2 to Rule
10.07(2) of the Listing Rules, immediately inform the Company of such pledge or
charge together with the number of Shares so pledged or charged; and
(b) when it receives indications, either verbal or written, from the pledgee or chargee of
any Shares that any of the pledged or charged Shares will be disposed of,
immediately inform the Company in writing of such indications.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by the Company
The Company has undertaken to each of the Joint Sponsors, the Sponsor-overall
Coordinators, the Joint Representatives, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong
Underwriters that except pursuant to the Global Offering (including pursuant to the
Over-allotment Option), at any time during the period commencing on the date of the Hong
Kong Underwriting Agreement and ending on, and including, the date falling six months after
the Listing Date (the “ First Six-Month Period ”), it will not, and will procure each other
member of the Group not to, without the prior written consent of the Joint Sponsors and the
Joint Representatives (for themselves and on behalf of the Hong Kong Underwriters) and
unless in compliance with the requirements of the Listing Rules:
(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, transfer, 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
UNDERWRITING
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transfer or dispose of or create an Encumbrance (as defined in the Hong Kong
Underwriting Agreement) 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, as applicable, or any interest in any of the foregoing (including,
without limitation, any securities convertible into or exchangeable or exercisable for
or that represents the right to receive, or any warrants or other rights to purchase any
share capital or other securities of the Company, as applicable), or deposit any share
capital or other securities of the Company, as applicable, with a depositary in
connection with the issue of depositary receipts; or
(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 the H
Shares or any other securities of the Company or any shares or other securities of
such other member of the Group, as applicable, or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any H Shares or any other securities of the Company or
any shares or other securities of such other member of the Group, as applicable); or
(iii) enter into any transaction with the same economic effect as any transaction specified
in (i) or (ii) above; or
(iv) offer to or agree to do any of the foregoing or announce any intention to effect any
transaction specified in (i), (ii) or (iii) above,
in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other securities of the Company in cash or otherwise (whether or not the issue
of share capital or such other securities will be completed within the First Six-Month Period).
The Company further agrees that, in the event the Company is allowed to enter into any of the
transactions specified in (i), (ii) or (iii) above or offers to or agrees to or announces any
intention to effect any such transaction during the period of six months commencing on the
date on which the First Six-Month Period expires (the “ Second Six-Month Period ”), it will
take all reasonable steps to ensure that such an issue or disposal will not create a disorderly or
false market for any Shares or other securities of the Company.
The Company has agreed and undertaken that it will comply with the minimum public
float requirements specified in the Listing Rules or any waiver granted and not revoked by the
Stock Exchange (the “ Minimum Public Float Requirement ”) and it will not effect any
purchase of H Shares, or agree to do so, which may reduce the holdings of H Shares held by
the public (as defined in Rule 8.24 of the Listing Rules) below the Minimum Public Float
Requirement on or before the date falling six months after the Listing Date without first having
obtained the prior written consent of the Joint Representatives (for themselves and on behalf
of the Hong Kong Underwriters).
UNDERWRITING
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Undertakings by Controlling Shareholders
Pursuant to the Hong Kong Underwriting Agreement, each of our Controlling
Shareholders has undertaken to each of the Company, the Joint Sponsors, the Sponsor-Overall
Coordinators, the Joint Representatives, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong
Underwriters that, except pursuant to the Global Offering (including pursuant to the
Over-allotment Option), it will not, and will procure that none of its associates, the Financial
Investors or their respective associates will, without the prior written consent of the Joint
Representatives (for themselves and on behalf of the Hong Kong Underwriters):
(a) at any time during the First Six-Month Period:
(i) offer, accept subscription for, pledge, charge, allot, issue, sell, lend, mortgage,
hypothecate, assign, contract to allot, issue or sell, sell any option, warrant or
contract to purchase, purchase any option, warrant or contract to sell, grant or
agree to grant any option, right or warrant to purchase or subscribe for, lend or
otherwise transfer or dispose of or create an Encumbrance over, or agree to
transfer or dispose of, either directly or indirectly, conditionally or
unconditionally, or repurchase any of its share capital or other securities of the
Company or any interest therein (including but not limited to any securities
convertible into or exercisable or exchangeable for or that represent the right
to receive any such share capital or securities or any interest therein); or
(ii) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership (legal or beneficial)
of any H Shares or share capital or securities of the Company or any interest
therein (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any
warrants or other rights to purchase, any H Shares or any such other securities,
as applicable or any interest in any of the foregoing); or
(iii) engage into any transaction with the same economic effect as any transaction
described in (i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction
specified in (i), (ii) or (iii) above.
in each case, whether any of the foregoing transactions is to be settled by delivery
of share capital or such other securities of our Company, in cash or otherwise
(whether or not the issue of share capital or such other securities will be completed
within the First Six-Month Period);
(b) during the Second Six-Month Period, enter into any of the transactions specified in
(a)(i), (a)(ii) or (a)(iii) above or offer to or agree to or announce any intention to
effect any such transaction if, immediately following such transaction, it will cease
to be a controlling shareholder (as defined in the Listing Rules) of our Company.
UNDERWRITING
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--- page 495 ---
Indemnity
The Company has agreed to indemnify, among others, the Joint Sponsors, Joint
Representatives, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters for certain losses
which they may suffer, including, among other matters, losses incurred arising from the
performance of their obligations under the Hong Kong Underwriting Agreement and any
breach by the Company of the Hong Kong Underwriting Agreement.
Commissions and Expenses
The Hong Kong Underwriters will receive an underwriting commission of 2.00% of the
aggregate Offer Price payable for the Hong Kong Offer Shares offered under the Hong Kong
Public Offering (excluding any Hong Kong Offer Shares reallocated to the International
Offering), and the International Underwriters are expected to receive an underwriting
commission of 2.00% of the aggregate Offer Price payable for the International Offer Shares
offered under the International Offering. For unsubscribed Hong Kong Offer Shares reallocated
to the International Offering and International Offer Shares reallocated to the Hong Kong
Public Offering, if any, the Company will pay an underwriting commission at the rate
applicable to the International Offering as set out in the International Underwriting Agreement,
and such commission will be paid to the Joint Representatives (for themselves and on behalf
of the International Underwriters), and no underwriting commission will be paid to the Hong
Kong Underwriters for such reallocated Offer Shares. In addition, at the discretion of the
Company, the Underwriters may also receive an incentive fee of not more than 1.00% of the
aggregate Offer Price in respect of all the Offer Shares to be issued by the Company under the
Global Offering (including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option). The ratio of fixed fee and discretionary fee payable by the Company
to all syndicate members participating in the Global Offering is expected to be approximately
67:33 (assuming the discretionary incentive fee will be paid in full).
Assuming the full payment of the discretionary incentive fee and the exercise of the
Over-allotment Option in full, the aggregate commissions and fees, together with the Hong
Kong Stock Exchange listing fees, the Hong Kong Stock Exchange trading fee of 0.00565%,
SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015%, legal and other
professional fees and printing and other expenses relating to the Global Offering, payable by
us, are estimated to be approximately HK$82.1 million, which is subject to adjustment to be
agreed by the Company, the Joint Representatives and other parties.
Each of the Joint Sponsors will receive a fee of US$300,000 for acting as a sponsor for
the Listing. As of the Latest Practicable Date, US$150,000 remained payable by the Company
to each of the Joint Sponsors.
UNDERWRITING
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--- page 496 ---
Hong Kong Underwriters’ Interests in the Company
Save for the obligations under the Hong Kong Underwriting Agreement and as disclosed
in this Prospectus, none of the Hong Kong Underwriters has any shareholding or beneficial
interests in any member of the Group or has any right or option (whether legally enforceable
or not) to subscribe for or purchase or to nominate persons to subscribe for or purchase
securities in 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 H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
International Offering
In connection with the International Offering, it is expected that the Company will enter
into the International Underwriting Agreement with, among others, the Joint Representatives
(for themselves and on behalf of the International Underwriters) on or about April 10, 2025.
Under the International Underwriting Agreement and subject to the Over-allotment Option, it
is expected that the International Underwriters would, subject to certain conditions set out
therein, severally but not jointly, agree to procure purchasers for, or to purchase, the
International Offer Shares being offered pursuant to the International Offering or procure
purchasers for their respective applicable proportions of International Offer Shares. Please
refer to the section headed “Structure of the Global Offering—The International Offering” in
this prospectus for details.
Over-allotment Option
The Company expects to grant to the International Underwriters, exercisable by the Joint
Representatives (for themselves and on behalf of the International Underwriters), the
Over-allotment Option, which will be exercisable from the date of the International
Underwriting Agreement until 30 days after the last day for the lodging of applications under
the Hong Kong Public Offering, to issue up to 18,228,300 H Shares by the Company,
representing approximately 15% of the initial Offer Shares, at the same price per Offer Share
under the International Offering, to, among other things, cover over-allocations in the
International Offering, if any.
Joint Sponsors’ Independence
The Joint Sponsors satisfy the independence criteria applicable to sponsors as set out in
Rule 3A.07 of the Listing Rules. Please refer to the section headed “Statutory and General
Information—Other Information—Joint Sponsors” in Appendix IV to this Prospectus.
UNDERWRITING
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--- page 497 ---
RESTRICTIONS ON THE OFFER SHARES
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this prospectus and the offering and sales 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 Hong Kong Offer Shares have not been publicly offered or sold, directly or
indirectly, in China or the United States.
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.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of the Company
and/or persons and entities with relationships with the Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the 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 and unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Such transactions may be carried out as bilateral agreements or trades
with selected counterparties. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares, which may have a
negative impact on the trading price of the H Shares. All such activity could occur in Hong
UNDERWRITING
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--- page 498 ---
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 the Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Hong Kong Stock Exchange
or on any other stock exchange, the rules of the exchange may require the issuer of those
securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in
the security, and this will also result in hedging activity in the H Shares in most cases.
Such activities may affect the market price or value of the H Shares, the liquidity or
trading volume in the H Shares and the volatility of the price of the H Shares, and the extent
to which this occurs from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer
Shares, effect any transactions (including issuing or entering into any option or other
derivative transactions relating to the Offer Shares), whether in the open market or
otherwise, with a view to stabilizing or maintaining the market price of any of the
Offer Shares at levels other than those which might otherwise prevail in the open
market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to the
Company and its affiliates for which such Syndicate Members or their respective affiliates have
received or will receive customary fees and commissions.
UNDERWRITING
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--- page 499 ---
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 CMB International Capital Limited are the Joint Representatives of the Global Offering.
The listing of the H Shares on the Stock Exchange is sponsored by the Joint Sponsors. The
Joint Sponsors has 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.
121,523,700 Offer Shares will initially be made available under the Global Offering
comprising:
(a) the Hong Kong Public Offering of initially 12,152,400 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 109,371,300 H Shares (subject to reallocation
and the Over-allotment Option) outside the United States in offshore transactions in
reliance on Regulation S as described in the sub-section headed “The International
Offering” 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 4.84% 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 5.53% 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.
References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 500 ---
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 12,152,400 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. The number
of Offer Shares initially offered under the Hong Kong Public Offering, subject to any
reallocation of Offer Shares between the International Offering and the Hong Kong Public
Offering, will represent approximately 10% of the total Shares in issue immediately following
the completion of the Global Offering (assuming the Over-allotment Option is not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities that regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in the
sub-section headed “Conditions of the Global Offering” in this section.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
could mean that some applicants may receive a higher allocation than others who have applied
for the same number of Hong Kong Offer Shares, and those applicants who are not successful
in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below)
will be divided equally into two pools (with any odd lots being allocated to pool A): pool A
and pool B. The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to
applicants who have applied for Hong Kong Offer Shares with an aggregate price of HK$5
million (excluding the brokerage, the SFC transaction levy, the AFRC transaction levy and the
Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in pool B will be
allocated on an equitable basis to applicants who have applied for Hong Kong Offer Shares
with an aggregate price of more than HK$5 million (excluding the brokerage, the SFC
transaction levy, the AFRC transaction levy and the Stock Exchange trading fee payable) and
up to the total value in pool B.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 501 ---
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Hong Kong Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 6,076,200 Hong Kong Offer
Shares (being approximately 50% of the Hong Kong Offer Shares initially available under the
Hong Kong Public Offering) is liable to be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation under the Listing Rules. Paragraph 4.2 of
Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place, which
would have the effect of increasing the number of Hong Kong Offer Shares to certain
percentages of the total number of Offer Shares to be offered under the Global Offering if
certain prescribed total demand levels in the Hong Kong Public Offering are reached.
Assuming that the Over-allotment Option is not exercised, the allocation of the Offer
Shares shall be subject to reallocation on the following basis:
 12,152,400 Offer Shares are initially available in the Hong Kong Public Offering
representing approximately 10% of the Offer Shares initially available under the
Global Offering.
In the event that the International Offer Shares are fully subscribed or over-subscribed:
 if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 15 times or more but less than 50 times of the total number of
Offer Shares initially available for subscription under the Hong Kong Public
Offering, then the Offer Shares will be reallocated to the Hong Kong Public Offering
from the International Offering, so that the total number of Offer Shares available
under the Hong Kong Public Offering will be 36,457,200 Offer Shares, representing
approximately 30% of the total number of Offer Shares initially available under the
Global Offering;
STRUCTURE OF THE GLOBAL OFFERING
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--- page 502 ---
 if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 50 times or more but less than 100 times of the total number of
Offer Shares initially available for subscription under the Hong Kong Public
Offering, then the Offer Shares will be reallocated to the Hong Kong Public Offering
from the International Offering, so that the total number of Offer Shares available
under the Hong Kong Public Offering will be 48,609,600 Offer Shares, representing
approximately 40% of the total number of Offer Shares initially available under the
Global Offering;
 if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 100 times or more of the total number of Offer Shares initially
available for subscription under the Hong Kong Public Offering, then the Offer
Shares will be reallocated to the Hong Kong Public Offering from the International
Offering, so that the total number of Offer Shares available under the Hong Kong
Public Offering will be 60,762,000 Offer Shares, representing 50% of the total
number of Offer Shares initially available under the Global Offering.
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 Joint Representatives (for themselves and on behalf of the Underwriters).
Subject to the foregoing paragraph, the Joint Representatives 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 for, the Joint Representatives (for themselves and on behalf of
the Underwriters) has the authority to reallocate all or any unsubscribed Hong Kong Offer
Shares to the International Offering, in such proportions as the Joint Representatives deem
appropriate.
In addition, the Joint Representatives (for themselves and on behalf of the Underwriters)
may, at its discretion, reallocate Offer Shares initially allocated for the International Offering
to the Hong Kong Public Offering to satisfy valid applications in pool A and pool B under the
Hong Kong Public Offering.
In the event that (i) the International Offer Shares are undersubscribed and the Hong Kong
Offer Shares are fully subscribed or oversubscribed irrespective of the number of times; or
(ii) the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong
Offer Shares are fully subscribed or over-subscribed as to less than 15 times of the number of
Hong Kong Offer Shares initially available under the Hong Kong Public Offering, in
accordance with Chapter 4.14 of the Guide for New Listing Applicants published by the Stock
Exchange, certain Offer Shares may be reallocated to the Hong Kong Public Offering from the
International Offering, so that the maximum number of the Offer Shares available under the
Hong Kong Public Offering will be increased to 24,304,800 Offer Shares, representing twice
of the number of the Offer Shares initially available under the Hong Kong Public Offering
(before any exercise of the Over-allotment Option).
STRUCTURE OF THE GLOBAL OFFERING
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--- page 503 ---
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 Friday, April 11, 2025.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him/her/it that he/she/it and any
person(s) for whose benefit he/her/it is making the application has not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
International Offer Shares under the International Offering. Such applicant’s application is
liable to be rejected if such undertaking and/or confirmation is/are breached and/or untrue
(as the case may be) or if he/she/it has been or will be placed or allocated International Offer
Shares under the International Offering.
Applicants under the Hong Kong Public Offering are required to pay, on application,
(subject to application channel) the price of HK$8.27 per Offer Share in addition to the
brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange
trading fee payable on each Offer Share, amounting to a total of HK$2,506.02 for one board
lot of 300 H Shares. Further details are set out in 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 initial offering of 109,391,300 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 10% of the total Shares in issue immediately following the completion
of the Global Offering (assuming the Over-allotment Option is not exercised).
STRUCTURE OF THE GLOBAL OFFERING
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--- page 504 ---
Allocation
The International Offering will include selective marketing of Offer Shares institutional
and professional investors and other investors anticipated to have a sizeable demand for such
Offer Shares in Hong Kong and other jurisdictions outside the United States. Professional
investors generally include brokers, dealers, companies (including fund managers) whose
ordinary business involves dealing in shares and other securities and corporate entities that
regularly invest in shares and other securities. Allocation of Offer Shares pursuant to the
International Offering will be effected in accordance with the “book-building” process
described in sub-section headed “Pricing and Allocation” in this section and based on a number
of factors, including the level and timing of demand, the total size of the relevant investor’s
invested assets or equity assets in the relevant sector and whether or not it is expected that the
relevant investor is likely to buy further H Shares and/or hold or sell its H Shares after the
Listing. Such allocation is intended to result in a distribution of the H Shares on a basis which
would lead to the establishment of a solid professional and institutional shareholder base to the
benefit of the Group and the Shareholders as a whole.
The Joint Representatives (for themselves and on behalf of the Underwriters) may require
any investor who has been offered Offer Shares under the International Offering and who has
made an application under the Hong Kong Public Offering to provide sufficient information to
the Joint Representatives 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 Hong Kong Public Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the clawback arrangement described in the subsection “The
Hong Kong Public Offering—Reallocation” in this section above, the exercise of the
Over-allotment Option in whole or in part and/or any reallocation of unsubscribed Offer Shares
originally included in the Hong Kong Public Offering.
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 Joint
Representatives (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 Joint Representatives (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 18,228,300 additional H Shares, representing not more than 15% of the total
number of Offer Shares initially available under the Global Offering, at the Offer Price under
the International Offering to, cover over-allocations (if any) in the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 495 –


--- page 505 ---
If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto will represent approximately 0.72% 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. 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 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.
Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) over-allocation 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;
STRUCTURE OF THE GLOBAL OFFERING
– 496 –


--- page 506 ---
(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. 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 18,228,300 H Shares, representing up to 15% of the initial Offer Shares,
through delayed delivery arrangements with investors who have been allocated Offer Shares in
the International 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.
Both the size of such cover and the extent to which the Over-allotment Option can be exercised
will depend on whether arrangements can be made with investors such that a sufficient number
of H Shares can be delivered on a delayed basis. If no investor in the International Offering
agrees to the delayed delivery arrangements, no stabilizing actions will be undertaken by the
Stabilizing Manager and the Over-allotment Option will not be exercised.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-Allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or 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.
STRUCTURE OF THE GLOBAL OFFERING
– 497 –


--- page 507 ---
PRICING AND ALLOCATION
Price Payable on Application
Applicants under the Hong Kong Public Offering required to pay, on application (subject
to application channel) the Offer Price of HK$8.27 per H Share plus brokerage of 1.0%, SFC
transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading
fee of 0.00565%, amounting to a total of HK$2,506.02 for one board lot of 300 H Shares.
Reduction in Offer Price and/or Number of Offer Shares
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Joint Representatives (on behalf of the Underwriters) may, where they deem
appropriate, based on the level of interest expressed by prospective investors during the
book-building process in respect of the International Offering, and with the consent of our
Company, reduce the number of Offer Shares offered and/or the Offer Price stated in this
Prospectus at any time on or prior to the morning of the last day for lodging applications under
the Hong Kong Public Offering. In such a case, our Company will, as soon as practicable
following the decision to make such reduction, and in any event not later than the morning of
the last day for lodging applications under the Hong Kong Public Offering, cause to be
published on the websites of our Company and the Stock Exchange at www.zenergy.cn and
www.hkexnews.hk , respectively, notices of the reduction of the Offer Shares and/or the Offer
Price, and the cancellation of the Global Offering and relaunch of the offer at the revised
number of Offer Shares and/or the revised Offer Price. Our Company will also, as soon as
practicable following the decision to make such change, issue a supplemental prospectus
updating investors of the change in the number of Offer Shares being offered under the Global
Offering and/or the Offer Price. The Global Offering must first be canceled and subsequently
relaunched on FINI pursuant to the supplemental prospectus.
In the absence of any such notice and supplemental prospectus so published, the number
of Offer Shares will not be reduced.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or the Offer Price may not be made until the last day for lodging applications under the
Hong Kong Public Offering. 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 this prospectus, and any other financial information which may change as a result of any
such reduction.
STRUCTURE OF THE GLOBAL OFFERING
– 498 –


--- page 508 ---
Announcement of Basis of Allocations
The level of indications of interest in the International Offering, the level of applications
in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Offer Shares and
the results of allocations in the Hong Kong Public Offering are expected to be made available
through a variety of channels in the manner described in the section headed “How to Apply for
Hong Kong Offer Shares—B. Publication of Results”.
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement.
Our Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or about April 10, 2025.
These underwriting arrangements, including the Underwriting Agreements, are
summarized in the section headed “Underwriting” in this prospectus.
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
April 10, 2025; and
(c) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements, in each case on or before the dates and times specified in the respective
Underwriting Agreements (unless and to the extent such conditions are validly
waived on or before such dates and times).
STRUCTURE OF THE GLOBAL OFFERING
– 499 –


--- page 509 ---
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of
the lapse of the Hong Kong Public Offering will be published by our Company on the websites
of our Company and the Stock Exchange at www.zenergy.cn and www.hkexnews.hk ,
respectively, on the next day following such lapse. In such a situation, all application monies
will be returned, without interest, on the terms set out in the section headed “How to Apply for
Hong Kong Offer Shares—D. Despatch/Collection of H Share Certificates and Refund of
Application Monies” in this prospectus. In the meantime, all application monies will be held
in separate bank account(s) with the receiving bank(s) 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 certificates of title at 8:00
a.m. on Monday, April 14, 2025, provided that the Global Offering has become unconditional
in all respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before
8:00 a.m. in Hong Kong on Monday, April 14, 2025, it is expected that dealings in the H Shares
on the Stock Exchange will commence at 9:00 a.m. on Monday, April 14, 2025.
The H Shares will be traded in board lots of 300 H Shares each and the stock code of the
H Shares will be 3677.
STRUCTURE OF THE GLOBAL OFFERING
– 500 –


--- page 510 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.zenergy.cn.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Thursday, April 3,
2025 and end at 12:00 noon on Wednesday, April 9, 2025 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 501 –


--- page 511 ---
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.eipo.com.hk Investors who
would like to
receive a
physical H Share
certificate. Hong
Kong Offer
Shares
successfully
applied for will
be allotted and
issued in your
own name.
From 9:00 a.m. on
Thursday, April 3,
2025 to
11:30 a.m. on
Wednesday,
April 9, 2025,
Hong Kong time.
The latest time
for completing
full payment of
application
monies will be
12:00 noon on
Wednesday,
April 9, 2025,
Hong Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Your broker or
custodian who is
a HKSCC
Participant will
submit electronic
application
instructions
on your behalf
through HKSCC’s
FINI system in
accordance with
your instruction
Investors who
would not like
to receive a
physical H Share
certificate. Hong
Kong Offer
Shares
successfully
applied for will
be allotted and
issued in the
name of HKSCC
Nominees,
deposited
directly into
CCASS and
credited to your
designated
HKSCC
Participant’s
stock account.
Contact your broker
or custodian for
the earliest and
latest time for
giving such
instructions, as
this may vary by
broker or
custodian.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 502 –


--- page 512 ---
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different payment reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO service provider to apply on the terms and conditions in this prospectus,
as supplemented and amended by the terms and conditions of the White Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 503 –


--- page 513 ---
3. Information Required to Apply
You must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong Address. 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.
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 account holders on FINI is capped at 4
1 in accordance with market
practice.
1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower
cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 504 –


--- page 514 ---
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other
stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which carries
no right to participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Joint Representatives, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 300 H Shares
Permitted number of
Hong Kong Offer
Shares for
application and
amount payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the amount
payable associated with each specified board lot size in
the table below.
The Offer Price is HK$8.27 per H Share.
If you are applying through the HKSCC EIPO channel,
you are required to pre-fund your application based on
the amount specified by your broker or custodian, as
determined 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 505 –


--- page 515 ---
By instructing your broker or custodian to apply for the
Hong Kong Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of the
Offer Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy by
debiting the relevant nominee bank account at the
Designated Bank for your broker or custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the amount
payable for the number of H Shares you have selected.
You must pay the respective amount payable on
application in full upon application for Hong Kong
Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
300 2,506.02 9,000 75,180.63 90,000 751,806.27 1,500,000 12,530,104.43
600 5,012.04 12,000 100,240.84 105,000 877,107.31 1,800,000 15,036,125.31
900 7,518.06 15,000 125,301.05 120,000 1,002,408.35 2,100,000 17,542,146.20
1,200 10,024.08 18,000 150,361.25 135,000 1,127,709.39 2,700,000 22,554,187.96
1,500 12,530.10 21,000 175,421.46 150,000 1,253,010.44 3,300,000 27,566,229.74
1,800 15,036.12 24,000 200,481.67 300,000 2,506,020.89 3,900,000 32,578,271.50
2,100 17,542.15 27,000 225,541.88 450,000 3,759,031.32 4,500,000 37,590,313.28
2,400 20,048.17 30,000 250,602.09 600,000 5,012,041.76 5,400,000 45,108,375.94
2,700 22,554.18 45,000 375,903.14 750,000 6,265,052.21 6,076,200
(1) 50,756,947.00
3,000 25,060.21 60,000 501,204.18 900,000 7,518,062.65
6,000 50,120.41 75,000 626,505.22 1,200,000 10,024,083.55
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) This is 50% of the Hong Kong Offer Shares initially offered, and 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 H
Share Registrar (for applications made through the application channel of the H Share Registrar) 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 506 –


--- page 516 ---
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 cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any
Global Offer Shares.
6. Terms and Conditions of an Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Joint Representatives, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 507 –


--- page 517 ---
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Joint Sponsors, the Joint Representatives, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
any of their or the Company’s respective directors, officers, employees, partners,
agents, advisers and any other parties involved in the Global Offering (the
“Relevant Persons ”), the H Share Registrar and HKSCC will not be liable for any
information and representations not in this prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “ —G. Personal Data—3.
Purposes ” and “ 4. Transfer of personal data ” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “—B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “ —C.
Circumstances in Which You Will not Be Allocated Hong Kong Offer Shares ” in this
section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 508 –


--- page 518 ---
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Joint Representatives will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the H Share Registrar or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and (2)
you have due authority to give electronic application instructions on behalf of that
other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 509 –


--- page 519 ---
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 White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC EIPO
channel, and (ii) the number of
Hong Kong Offer Shares conditionally
allotted to them, among other things,
will be displayed on the “Allotment
Results” page of the White Form eIPO
service at www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment ).
24 hours, from 11:00 p.m. on
Friday, April 11, 2025
to 12:00 midnight on
Thursday, April 17, 2025
(Hong Kong time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.zenergy.cn which will provide
links to the above mentioned websites
of the H Share Registrar.
No later than 11:00 p.m. on
Friday, April 11, 2025
(Hong Kong time).
Telephone /H1118+852 2862 8555 — the allocation results
telephone enquiry line provided by the
H Share Registrar
between 9:00 a.m. and
6:00 p.m. on, from
Monday, April 14, 2025 to
Thursday, April 17, 2025
(Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Thursday, April 10, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, April 10, 2025 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 510 –


--- page 520 ---
Allocation Announcement
We expect to announce the results of the final price, the level of indications of interest
in the Global Offer, the level of applications in the Hong Kong Public Offering and the basis
of allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.zenergy.cn by no later than 11:00 p.m. on Friday,
April 11, 2025 (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 for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Joint Representatives, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. You may refer to
the paragraph headed “ —A. Application for Hong Kong Offer Shares—5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–5 1 1–


--- page 521 ---
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Joint Representatives believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank(s) 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 H 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 Global Offer. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on Monday, April 14, 2025 (Hong
Kong time), provided that the Global Offer has become unconditional and the right of
termination described in the section headed “Underwriting” has not been exercised. Investors
who trade H Shares prior to the receipt of H Share certificates or the H Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 522 ---
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For physical
H Share
certificates of
1,000,000 or
more Hong
Kong Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person from our H Share
Registrar at Shops 1712-1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road East,
Wan Chai, Hong Kong.
Time: from 9:00 a.m. to 1:00 p.m. on
Monday, April 14, 2025 (Hong Kong time)
If you are an individual, you must not
authorize any other person to collect for
you. If you are a corporate applicant, your
authorized representative must bear a letter
of authorization from your corporation
stamped with your corporation’s chop.
Both individuals and authorized
representatives must produce, at the time
of collection, evidence of identity
acceptable to the H Share Registrar.
H Share certificate(s) will be
issued in the name of
HKSCC Nominees,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account
No action by you is required
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
1 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or
Extreme Conditions in force in Hong Kong in the morning on Friday, April 11, 2025 rendering it impossible
for the relevant H Share certificates to be dispatched to HKSCC in a timely manner, the Company shall procure
the Share Registrar to arrange for delivery of the supporting documents and H Share certificates in accordance
with the contingency arrangements as agreed between them. You may refer to “—E. Severe Weather
Arrangements” in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 523 ---
White Form eIPO service HKSCC EIPO channel
For physical
H Share
certificates of
less than
1,000,000 Hong
Kong Offer
Shares issued
under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Your H Share certificate(s) will be sent to
the address specified in your application
instructions by ordinary post at your own
risk
Time: Friday, April 11, 2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, April 14, 2025 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118H Share Registrar Your broker or custodian
Application
monies paid
through single
bank account /H1118/H1118
White Form e-Refund payment instructions
to your designated bank account
Your broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it
Application
monies paid
through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be despatched to the
address as specified in your application
instructions by ordinary post at your own
risk
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, April 9, 2025 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 ”),
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 514 –


--- page 524 ---
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, April 9,
2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in 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.zenergy.cn of the revised timetable.
If a Severe Weather Signal is hoisted on Friday, April 11, 2025, the 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 Monday, April 14,
2025.
If a Severe Weather Signal is hoisted on Monday, April 14, 2025:
 for physical H Share certificates of 1,000,000 or more offer shares issued under your
own name, you may pick them up from the Share Registrar’s office after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Monday, April 14,
2025 or on Tuesday, April 15, 2025.
If a Severe Weather Signal is hoisted on Friday, April 11, 2025:
 for physical H Share certificates of less than 1,000,000 offer shares issued under
your own name, despatch will be made by ordinary post when the post office
re-opens after the Severe Weather Signal is lowered or cancelled (e.g. in the
afternoon of Friday, April 11, 2025 or on Monday, April 14, 2025.
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the
H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H Shares
or any other date HKSCC chooses. Settlement of transactions between Exchange Participants
is required to take place in CCASS on the second settlement day after any trading day.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 515 –


--- page 525 ---
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 516 –


--- page 526 ---
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and White Form e-refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
H Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 527 ---
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 operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 528 ---
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺979噆
⤑⏋✱ᷧ⺎27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF JIANGSU ZENERGY BATTERY TECHNOLOGIES GROUP CO.,
LTD., CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG
SECURITIES LIMITED AND CMB INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of Jiangsu Zenergy Battery Technologies
Group Co., Ltd. (the “Company”) and its subsidiaries (together, the “Group”) set out on pages
I-3 to I-97, which comprises the consolidated statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the
Group for each of the years ended 31 December 2021, 2022, 2023 and 2024 (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 2021, 2022, 2023 and 2024
and material accounting policy information and other explanatory information (together, the
“Historical Financial Information”). The Historical Financial Information set out on pages I-3
to I-97 forms an integral part of this report, which has been prepared for inclusion in the
prospectus of the Company dated 3 April 2025 (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
presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial
Information, respectively, 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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 529 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the
Historical Financial Information, respectively, 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 2021, 2022, 2023 and 2024 and of the financial performance and cash flows
of the Group for each of the Relevant Periods in accordance with the basis of presentation and
basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information,
respectively.
Report on matters under the Rules Governing the Listing of Securities on the Stock
Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which states that no dividends
have been paid by the Company in respect of the Relevant Periods.
Certified Public Accountants
Hong Kong
3 April 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 530 ---
I HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Young in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 531 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 1,499,296 3,290,253 4,161,670 5,130,317
Cost of sales
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (1,393,991) (3,001,272) (3,670,744) (4,326,476)
Impairment losses on inventories /H1118/H1118/H1118/H1118/H11186 (75,127) (579,261) (282,437) (55,397)
Gross profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,178 (290,280) 208,489 748,444
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 20,833 48,954 49,265 78,738
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,848) (19,779) (57,618) (35,769)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(134,738) (241,116) (259,466) (301,459)
Research and development expenses /H1118/H1118/H1118/H11186 (221,047) (329,277) (424,099) (556,165)
Impairment losses on financial assets and
contract assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (22,457) (600,057) (10,837) (9,705)
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,400) (267,524) (11,568) (14,952)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (70,217) (32,892) (73,451) (132,585)
Share of profits/(losses) of joint ventures /H1118 16 – 923 (25,094) 302,496
(LOSS)/PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H11186 (411,696) (1,731,048) (604,379) 79,043
Income tax credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 9,421 11,067 14,512 11,971
(LOSS)/PROFIT AND TOTAL
COMPREHENSIVE INCOME FOR
THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(Loss)/profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
(LOSS)/PROFIT PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT
Basic and diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (0.26) (1.01) (0.31) 0.04
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H111813 1,413,220 4,707,407 5,618,993 5,704,152
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 441,850 303,119 257,403 226,422
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,277 1,277 1,277
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 592,251 549,059 491,492 423,079
Investments in joint ventures /H1118/H1118/H1118/H111816 – 64,537 3,350,901 3,467,173
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 398,664 154,282 55,364 39,812
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H11182,845,985 5,779,681 9,775,430 9,861,915
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 709,539 1,012,920 613,756 678,712
Trade and bills receivables /H1118/H1118/H1118/H1118/H111820 309,874 326,487 1,147,380 1,623,305
Bills receivables at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 – – – 92,936
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 11,675 1,951 6,496 5,144
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 150,169 195,699 81,136 73,361
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H111823 – 1,162,565 – –
Restricted bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H111824 1,020,347 1,035,350 472,305 957,804
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – – 101,982
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H111824 767,411 936,164 2,034,279 2,199,072
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,969,015 4,671,136 4,355,352 5,732,316
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111825 1,813,289 3,012,332 3,415,854 3,742,586
Other payables and accruals /H1118/H1118/H1118/H1118/H111826 342,349 1,480,456 1,945,523 1,427,848
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 40,855 145,385 44,662 14,756
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 1,159,664 579,134 694,137 1,245,825
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 36,674 34,046 27,021 30,397
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 23,511 – 266
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 5,086 12,958 22,809 35,003
Total current liabilities
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,397,917 5,287,822 6,150,006 6,496,681
NET CURRENT LIABILITIES /H1118 (428,902) (616,686) (1,794,654) (764,365)
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118/H1118/H1118 2,417,083 5,162,995 7,980,776 9,097,550
NON-CURRENT LIABILITIES
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – 2,310,258 2,841,494 2,768,659
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 311,882 207,537 175,769 146,034
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 33,934 87,823 145,979 227,741
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 90,712 84,813 70,301 57,994
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118 436,528 2,690,431 3,233,543 3,200,428
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
EQUITY
Equity attributable to owners of
the parent
Share capital/Paid-in capital /H1118/H1118/H1118/H1118/H111830 1,552,495 1,881,850 2,255,935 2,386,976
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 428,060 590,714 2,491,298 3,510,146
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 533 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2021
Attributable to owners of the parent
Share
capital/
Paid-in
capital
Share
premium*
Other
reserve*
Share-based
payment
reserve*
Merger
reserve*
Accumulated
losses*
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 32 Note 32 Note 32 Note 32
As at 1 January 2021 /H1118/H1118/H1118/H1118/H11181,552,495 789,155 – 62,582 671,166 (2,006,996) 1,068,402
Loss and total comprehensive
loss for the year /H1118/H1118/H1118/H1118/H1118/H1118– – – – – (402,275) (402,275)
Share-based payments /H1118/H1118/H1118/H1118/H1118– – – 22,611 – – 22,611
Deemed contribution from
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,002 – 1,289,815 – 1,291,817
As at 31 December 2021 /H1118/H1118/H11181,552,495 789,155 2,002 85,193 1,960,981 (2,409,271) 1,980,555
Y ear ended 31 December 2022
Attributable to owners of the parent
Share
capital/
Paid-in
capital
Share
premium*
Other
reserve*
Share-based
payment
reserve*
Merger
reserve*
Accumulated
losses*
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 32 Note 32 Note 32 Note 32
As at 1 January 2022 /H1118/H1118/H1118/H1118/H11181,552,495 789,155 2,002 85,193 1,960,981 (2,409,271) 1,980,555
Loss and total comprehensive
loss for the year /H1118/H1118/H1118/H1118/H1118/H1118– – – – – (1,719,981) (1,719,981)
Share-based payments /H1118/H1118/H1118/H1118/H1118– – – 35,038 – – 35,038
Contribution from
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118329,355 2,085,501 – – – – 2,414,856
Deemed contribution from
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 9,390 – – – 9,390
Business combination under
common control /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (247,294) – (247,294)
As at 31 December 2022 /H1118/H1118/H11181,881,850 2,874,656 11,392 120,231 1,713,687 (4,129,252) 2,472,564
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 534 ---
Y ear ended 31 December 2023
Attributable to owners of the parent
Share
capital/
Paid-in
capital
Share
premium*
Other
reserve*
Share-based
payment
reserve*
Merger
reserve*
Special
reserve*
Accumulated
losses* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 32 Note 32 Note 32 Note 32 Note 32
As at 1 January
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,881,850 2,874,656 11,392 120,231 1,713,687 – (4,129,252) 2,472,564
Loss and total
comprehensive loss
for the year /H1118/H1118/H1118/H1118 – – – – – – (589,867) (589,867)
Share-based
payments /H1118/H1118/H1118/H1118/H1118 – – – 43,934 – – – 43,934
Contribution from
shareholders /H1118/H1118/H1118/H11185,144 – – – – – – 5,144
Issuance of shares
for acquisition of a
joint venture /H1118/H1118/H1118368,941 2,446,517 – – – – – 2,815,458
Safety fund
appropriation to
special reserve /H1118/H1118 – – – – – 2,323 (2,323) –
As at 31 December
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,255,935 5,321,173 11,392 164,165 1,713,687 2,323 (4,721,442) 4,747,233
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 535 ---
Y ear ended 31 December 2024
Attributable to owners of the parent
Share
capital/
Paid-in
capital
Share
premium*
Other
reserve*
Share-based
payment
reserve*
Merger
reserve*
Special
reserve*
Accumulated
losses* Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 32 Note 32 Note 32 Note 32 Note 32
As at 1 January
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,255,935 5,321,173 11,392 164,165 1,713,687 2,323 (4,721,442) 4,747,233
Profit and total
comprehensive
income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 91,014 91,014
Share-based
payments /H1118/H1118/H1118/H1118/H1118 – – – 58,875 – – – 58,875
Contribution from
shareholders /H1118/H1118/H1118/H1118131,041 868,959 – – – – – 1,000,000
Safety fund
appropriation to
special reserve /H1118/H1118 – – – – – 812 (812) –
As at 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,386,976 6,190,132 11,392 223,040 1,713,687 3,135 (4,631,240) 5,897,122
* These reserve accounts represent the total consolidated reserves of RMB428,060,000, RMB590,714,000,
RMB2,491,298,000 and RMB3,510,146,000 in the consolidated statements of financial position as at
31 December 2021, 2022, 2023 and 2024, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 536 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING
ACTIVITIES
(Loss)/Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(411,696) (1,731,048) (604,379) 79,043
Adjustments for:
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 91,170 173,882 293,908 497,298
Depreciation of right-of-use assets /H1118/H1118/H1118/H111814 21,864 43,704 40,449 32,902
Amortisation of other intangible assets /H1118 15 72,640 76,415 79,496 78,742
Share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H111831 22,611 35,038 43,934 58,875
Share of (profits)/losses of joint
ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 – (923) 25,094 (302,496)
Impairment losses on financial assets
and contract assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,457 600,057 10,837 9,705
Impairment losses on property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 – 244,640 6,982 –
Impairment losses on inventories /H1118/H1118/H1118/H1118/H111819 75,127 579,261 282,437 55,397
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 70,217 32,892 73,451 132,585
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (8,155) (17,896) (33,230) (37,426)
Investment income on structured
deposits and wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (1,775) (9,501) (6,596) (205)
Fair value gains on structured deposits
and wealth management products /H1118/H1118/H11185 – (6,395) – –
(Gains)/losses on disposal of items of
property, plant and equipment and
other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (101) (8,233) (1,323) 8,797
Losses/(gains) on remeasurement of
lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 – 5,490 (35) –
(45,641) 17,383 211,025 613,217
(Increase)/decrease in inventories /H1118/H1118/H1118/H1118/H1118/H1118(446,515) (941,517) 116,727 (120,353)
(Increase)/decrease in restricted bank
balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(663,180) (584,883) 524,345 (485,499)
Increase in time deposits with original
maturity of more than three months to
one year when acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (101,982)
Increase in trade and bills receivables and
contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(141,596) (1,372,573) (836,224) (483,786)
Increase in bills receivables at fair value
through other comprehensive income /H1118/H1118 – – – (92,936)
Decrease/(increase) in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,707 (327,532) 114,507 20,634
Increase/(decrease) in other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,653 1,869,175 (226,551) (30,518)
Increase in trade and bills payables /H1118/H1118/H1118/H1118/H11181,034,289 2,491,418 403,522 218,675
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 537 ---
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
(Increase)/decrease in contract liabilities /H1118 (64,911) 128,477 (100,723) (29,906)
Increase in provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,619 60,682 68,007 93,956
Cash (used in)/generated from operations /H1118 (173,575) 1,340,630 274,635 (398,498)
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,155 17,896 33,230 37,426
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,884) (23,511) (70)
Net cash flows (used in)/from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(165,420) 1,353,642 284,354 (361,142)
CASH FLOWS FROM INVESTING
ACTIVITIES
Dividends received from joint ventures /H1118/H1118 – – – 186,224
Proceeds from disposal of items of
property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118326 12,507 7,417 3,528
Purchases of items of property, plant and
equipment and right-of-use assets /H1118/H1118/H1118/H1118 (896,123) (2,687,978) (791,751) (614,798)
Purchases of other intangible assets /H1118/H1118/H1118/H1118/H1118 (586) (19,565) (21,993) (10,329)
Receipt of government grants for
property, plant and equipment and
right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 68,344 89,899 6,010
(Subscription)/redemption of financial
assets at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118612,108 (1,146,669) 1,169,161 205
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 – (239,539) – –
Investment in a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (150,000) (346,000)
Net cash flows (used in)/from investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284,275) (4,012,900) 302,733 (775,160)
CASH FLOWS FROM FINANCING
ACTIVITIES
Payment of listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (6,367)
Business combination under common
control /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,970,073) – –
(Increase)/decrease in pledged deposits /H1118/H1118 – (38,700) 38,700 –
Capital contribution from shareholders /H1118/H1118/H1118 1,289,815 2,414,856 5,144 1,000,000
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,854) (56,017) (44,580) (37,877)
New interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,000 2,886,426 1,221,339 1,369,057
Repayment of interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(368,000) (303,022) (576,168) (901,000)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,645) (109,836) (133,407) (125,697)
Net cash flows from financing activities /H1118/H1118 938,316 2,823,634 511,028 1,298,116
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 538 ---
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NET INCREASE IN CASH AND CASH
EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118488,621 164,376 1,098,115 161,814
Cash and cash equivalents at beginning
of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118293,508 767,411 936,164 2,034,279
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,718) 4,377 – 2,979
Cash and cash equivalents at end of year /H1118 767,411 936,164 2,034,279 2,199,072
ANALYSIS OF BALANCES OF CASH
AND CASH EQUIV ALENTS
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 1,787,758 1,971,514 2,506,584 3,258,858
Less: Time deposits with original
maturity between three months to
one year when acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – – 101,982
Restricted bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H111824 1,020,347 1,035,350 472,305 957,804
Cash and cash equivalents as stated in the
consolidated statements of cash flows
and statements of financial position /H1118/H1118/H1118 767,411 936,164 2,034,279 2,199,072
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 539 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H111813 863,108 4,351,252 5,416,795 5,548,823
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 294,731 247,027 224,241 202,827
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 400 537,388 480,859 414,713
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H111817 – 920,853 865,380 1,844,005
Investment in a joint venture /H1118/H1118/H1118/H111816 – – 3,326,310 3,433,744
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 344,846 149,166 50,836 35,907
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,503,085 6,205,686 10,364,421 11,480,019
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 356,999 670,468 564,314 641,883
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H111820 433,343 217,752 1,142,014 1,653,125
Bills receivables at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 – – – 92,936
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 – 1,951 6,496 5,144
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 157,434 151,230 42,420 52,397
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 – 970,012 – –
Restricted bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H111824 450,767 763,419 457,906 927,984
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – – 101,982
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H111824 694,862 861,892 1,826,928 994,624
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,093,405 3,636,724 4,040,078 4,470,075
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 914,041 2,475,820 3,359,144 3,803,549
Other payables and accruals /H1118/H1118/H1118/H1118/H111826 242,141 1,401,239 2,197,729 1,647,337
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 6,168 223,420 44,644 13,461
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – 579,134 694,137 1,233,260
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 14,821 16,302 17,874 20,648
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 72 12,958 22,809 35,003
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,177,243 4,708,873 6,336,337 6,753,258
NET CURRENT
ASSETS/(LIABILITIES) /H1118/H1118/H1118/H1118/H1118916,162 (1,072,149) (2,296,259) (2,283,183)
TOTAL ASSETS LESS
CURRENT LIABILITIES /H1118/H1118/H1118/H11182,419,247 5,133,537 8,068,162 9,196,836
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings
and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – 2,310,258 2,841,494 2,768,659
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 183,697 167,395 149,521 129,973
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 507 87,216 145,372 227,134
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,461 1,433 627 98
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118186,665 2,566,302 3,137,014 3,125,864
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,232,582 2,567,235 4,931,148 6,070,972
EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Share capital/Paid-in capital /H1118/H1118/H1118/H1118/H111830 1,552,495 1,881,850 2,255,935 2,386,976
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118680,087 685,385 2,675,213 3,683,996
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,232,582 2,567,235 4,931,148 6,070,972
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 540 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
The Company was incorporated in the People’s Republic of China (“PRC”) with limited liability on 26
February 2019 and was converted into a joint stock company on 17 July 2024. The registered office of the Company
is located at No. 68 Xin’anjiang Road, Dongnan Community, Changshu, Jiangsu Province, PRC.
During the Relevant Periods, the Company and its subsidiaries were principally engaged in developing a
multi-pathway portfolio of market-driven and technology-fueled battery products.
As at 31 December 2024, the Company had direct interests in its subsidiaries, all of which are private limited
liability companies, the particulars of the subsidiaries are set out below:
Place and date of
incorporation/
registration and
operations
Nominal value of
issued ordinary/
registered paid-in
capital
Percentage of equity
attributable to the
Company
Principal activitiesName Note Direct Indirect
(‘000) % %
Suzhou ZENIO New
Energy Technologies
Co., Ltd. (“Suzhou
ZENIO”)
ҦϞ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(a) PRC/Mainland
China/
5 December
2016
RMB150,000 100 – Research and
development,
production and
sales of power
batteries and
energy storage
products
Nanjing Zenergy Battery
Technologies Co., Ltd.
ԯ͍ɢอঐཥϫҦஔ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(a) PRC/Mainland
China/
27 December
2021
RMB2,300,000 100 – Production and
sales of power
batteries and
energy storage
products
Dongguan Zenergy
Battery Technologies
Co., Ltd.
୷͍ɢอঐཥϫҦஔ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(a) PRC/Mainland
China/
27 December
2021
RMB100,000 100 – Production and
sales of power
batteries and
energy storage
products
Suzhou Zenergy Battery
Technologies Co., Ltd.
Ҧ
ʮ̡ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC/Mainland
China/
22 May 2024
RMB1,000,000 100 – R&D, production
and sales of
power batteries
and energy
storage products
The English names of all group companies registered in the PRC represent the best efforts made by the
management of the Company to translate the Chinese names of these companies as they do not have official English
names.
(a) The statutory financial statements of these entities for the years ended 31 December 2021 and 2022
prepared in accordance with PRC Generally Accepted Accounting Principles have been audited by
Nanjing Zhonghan Tonghua Certified Public Accountants Co., Ltd. (ʮ
̡), a certified public accounting firm registered in the PRC, and the statutory financial statements of
these entities for the year ended 31 December 2023 prepared in accordance with PRC Generally
Accepted Accounting Principles have been audited by Jiangsu Ruiyuan Certified Public Accountants
Co., Ltd. (ʮ̡), a certified public accounting firm registered in the PRC.
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 541 ---
2.1 BASIS OF PRESENTATION
Pursuant to the Reorganisation, as more fully explained in the paragraph headed “Business Reorganisation of
Our Group” in the section headed “History, Reorganisation and Corporate Structure” in the Prospectus, the companies
now comprising the Group were under the common control of the controlling shareholders before and after the
Reorganisation. Accordingly, for the purpose of this report, the Historical Financial Information has been prepared
on a consolidated basis by applying the principles of merger accounting as if the Reorganisation had been completed
at the beginning of the Relevant Periods. Therefore, Jiangsu TAFEL New Energy Technology Co., Ltd. ( Ϫᘽ෫ിဧ
ʮ̡), a joint stock company with limited liability incorporated in the PRC on July 14, 2017 is
combined into the Group’s financial statements since the beginning of the Relevant Periods by applying the principles
of merger accounting.
The consolidated statements of profit or loss and other comprehensive income, statements of changes in equity
and statements of cash flows of the Group for the Relevant Periods include the results and cash flows of all companies
now comprising the Group from the earliest date presented or since the date when the subsidiaries and/or businesses
first came under the common control of the controlling shareholders, where this is a shorter period. The consolidated
statements of financial position of the Group as at 31 December 2021, 2022, 2023 and 2024 have been prepared to
present the assets and liabilities of the subsidiaries and/or businesses using the existing book values from the
controlling shareholders’ perspective. No adjustments are made to reflect fair values, or recognise any new assets or
liabilities as a result of the Reorganisation.
All intra-group transactions and balances have been eliminated on consolidation.
2.2 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with International Financial Reporting
Standards (“IFRSs”), issued by the International Accounting Standards Board (the “IASB”), which comprise all
standards and interpretations approved by the IASB. All IFRSs effective for the accounting period commencing from
1 January 2024, 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.
The Historical Financial Information has been prepared on a going concern basis. As at 31 December 2024,
the Group had net current liabilities of RMB764,365,000. In view of such circumstances, the management of the
Company has given consideration to the future liquidity and financial resources available to the Group, which mainly
include the net cash flows generated from the Group’s operating activities and financial credit facilities, in assessing
whether the Group will have sufficient financial resources to continue as a going concern and will not have any going
concern issue as a result of the shortage of working capital. Accordingly, the management of the Company is of the
opinion that it is appropriate to prepare the Historical Financial Information on a going concern basis.
The Historical Financial Information has been prepared under the historical cost convention, except for bills
receivables at fair value through other comprehensive income and financial assets at fair value through profit or loss
which have been measured at fair value.
2.3 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group has not applied the following new and revised IFRSs, that have been issued but are not yet effective,
in the Historical Financial Information. The Group intends to apply these new and revised IFRSs, if applicable, when
they become effective.
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial Statements
3
IFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability: Disclosures 3
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118Amendments to the Classification and Measurement of Financial
Instrument 2
Amendments to IFRS 10 and IAS 28 /H1118/H1118Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture 4
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Lack of Exchangeability 1
Annual Improvements to IFRS
Accounting Standards – V olume 11 /H1118/H1118
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 2
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 542 ---
1 Effective for annual periods beginning on or after 1 January 2025
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual/reporting periods beginning on or after 1 January 2027
4 No mandatory effective date yet determined but available for adoption
The Group is in the process of making an assessment of the impact of these new and amended standards upon
initial application. IFRS 18 introduces new requirements for presentation within the statement of profit or loss,
including specified totals and subtotals. Entities are required to classify all income and expenses within the statement
of profit or loss into one of the five categories: operating, investing, financing, income taxes and discontinued
operations and to present two new defined subtotals. It also requires disclosures about management-defined
performance measures in a single note and introduces enhanced requirements on the grouping (aggregation and
disaggregation) and the location of information in both the primary financial statements and the notes. The new
requirements are expected to impact the Group’s presentation of the statement of profit or loss and disclosures of the
Group’s financial performance. So far, the Group considers that the new and amended standards are unlikely to have
a significant impact on the Group’s results of operations and financial position.
2.4 MATERIAL ACCOUNTING POLICIES
Investments in joint ventures
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint ventures. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
The Group’s investments in joint ventures are 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 joint ventures is included in the consolidated
statement of profit or loss and other comprehensive income, respectively. In addition, when there has been a change
recognised directly in the equity of the joint ventures, the Group recognises its share of any changes, when applicable,
in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between
the Group and its joint ventures are eliminated to the extent of the Group’s investments in joint ventures, except
where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the
acquisition of joint ventures is included as part of the Group’s investments in joint ventures.
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 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.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognised in profit or loss or other comprehensive
income, as appropriate.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 543 ---
Any contingent consideration to be transferred by the acquirer is recognised 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
recognised 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 recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in
the acquiree over the identifiable assets acquired and liabilities 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, recognised 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 recognised. An impairment
loss recognised 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 gain or loss 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 certain financial instruments at fair value at the end of each reporting period. Fair value
is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability,
or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or
the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
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For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for non-financial asset is
required (other than inventories and deferred tax assets), the asset’s recoverable amount is estimated. An asset’s
recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of
disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate asset (e.g.,
a headquarters building) is allocated to an individual cash-generating unit if it can be allocated on a reasonable and
consistent basis or, otherwise, to the smallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. An
impairment loss is charged to the statement of profit or loss in the period in which it arises in those expense categories
consistent with the function of the impaired asset.
An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there
has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher
than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment
loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss
in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group; and the sponsoring employers of the post-employment benefit plan;
the entity is controlled or jointly controlled by a person identified in (a);
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(vi) 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
(vii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated
depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase
price and any directly attributable costs of bringing the asset to its working condition and location for its intended
use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs
and maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In
situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the
carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required
to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and
depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and
equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as
follows:
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.8%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The shorter of remaining lease terms and
estimated useful lives
Vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8% to 23.8%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.5% to 19.0%
Office equipment and electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 19.0% to 31.7%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is
allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives
and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially recognised is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
or retirement recognised in the statement of profit or loss in the year the asset is derecognised is the difference
between the net sales proceeds and the carrying amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is reclassified
to the appropriate category of property, plant and equipment when completed and ready for use.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The 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 finite. Intangible assets with finite lives are subsequently amortised over the useful economic life
and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least
at each of the financial year end.
Software
Purchased software is stated at cost less any impairment losses and is amortised on the straight-line basis over
its estimated useful lives of 3 to 5 years, which is mainly determined by reference to the authorised period of the
purchased software.
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Trademarks and patents
Purchased trademarks and patents are stated at cost less any impairment losses and are amortised on the
straight-line basis over their estimated useful lives of 10 years, which is mainly determined by reference to the period
during which such assets are expected to bring economic benefits to the Group.
Trademarks and patents are expected to have a useful life of 10 years. Useful lives frequently cannot be
established objectively for trademarks and patents, thus the management of the Group set the useful lives based on
the circumstances. To set the useful lives of trademarks and patents, the management consider, among other things,
trends, forecasts and budgets, and the development of technologies. The management consider factors including
validity period of patent protection, legal or regulator’s limit on the maximum useful life, obsolescence, demand,
competition or other economic factors, actions of competitors and others, which may restrict present competitive
advantages. Considering the above factors, the management set the useful lives of trademarks and patterns at 10
years.
Research and development costs
All research costs are charged to profit or loss as incurred.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease terms and the estimated useful lives of the assets as follows:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Plant and properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.2 to 10.2 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term
reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on
an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment
occurs.
APPENDIX I ACCOUNTANTS’ REPORT
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In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification,
a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a
change in an index or rate) or a change in assessment of an option to purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
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 and laptop computers that are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient of not
adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair
value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are
measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue
recognition” below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other
comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”)
on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured
at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held
within a business model with the objective to hold financial assets in order to collect contractual cash flows, while
financial assets classified and measured at fair value through other comprehensive income are held within a business
model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not
held within the aforementioned business models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established by
regulation or convention in the marketplace are recognised on the trade date, that is, the date that the Group commits
to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and are
subject to impairment. Gains and losses are recognised in the statement of profit or loss when the asset is
derecognised, modified or impaired.
APPENDIX I ACCOUNTANTS’ REPORT
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Financial assets at fair value through other comprehensive income (debt instruments)
For bills receivables at fair value through other comprehensive income, interest income, foreign exchange
revaluation and impairment losses or reversals are recognised in 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 recognised in other comprehensive
income is recycled to 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 recognised in the statement of profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When
it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement.
In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At the end of each of the Relevant Periods, 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.
APPENDIX I ACCOUNTANTS’ REPORT
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The Group considers a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified
approach as detailed below.
Stage 1 — Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month
ECLs
Stage 2 — Financial instruments for which credit risk has increased significantly since initial
recognition but that are not credit-impaired financial assets and for which the loss allowance
is measured at an amount equal to lifetime ECLs
Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal
to lifetime ECLs
Simplified approach
For trade and bills receivables and contract assets and bills receivables at fair value through other
comprehensive income that do not contain a significant financing component or when the Group applies the practical
expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach
in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as loans and borrowings, or payables, as appropriate.
All financial liabilities are recognised 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 and bills payables, other payables and accruals and
interest-bearing bank and other borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and bills payables, other payables, and interest-bearing bank and other
borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of
discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in the
statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance
costs in the statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 550 ---
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or
expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
a derecognition of the original liability and a recognition of a new liability, and the difference between the respective
carrying amounts is recognised in the statement of profit or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an
appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs
to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-
term highly liquid deposits with a maturity of generally within three months that are readily convertible into known
amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of meeting short-term
cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand
and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form
an integral part of the Group’s cash management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event
and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable
estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the
end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase
in the discounted present value amount arising from the passage of time is included in finance costs in the statement
of profit or loss.
The Group provides for warranties in relation to the sale of battery products for general repairs of defects
occurring during the warranty period. Provisions for these assurance-type warranties granted by the Group are
initially recognised based on sales volume and past experience of the level of repairs and returns, discounted to their
present values as appropriate. The warranty-related cost is revised annually.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss
is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the
Group operates.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 551 ---
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries, associates and
a joint venture, when the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carryforward of unused tax credits and
unused tax losses can be utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries, associates
and a joint venture, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right
to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected
to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received and all attaching conditions will be complied with. When the grant relates to an expense item, it is
recognised as income on a systematic basis over the periods that the costs, for which it is intended to compensate,
are expensed or deducted from the related expense.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to
the statement of profit or loss over the expected useful life of the relevant asset by equal annual instalments or
deducted from the carrying amount of the asset and released to the statement of profit or loss by way of a reduced
depreciation charge.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 552 ---
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods 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.
Sales of power batteries and energy storage system products
The Group manufactures and sells battery-related products in the market. Revenue from sales of products is
recognised at the point in time when control of the products has transferred, being when the products are delivered
to the customer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.
Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have
been transferred to the customer, and either the customer has accepted the products in accordance with the sales
contract, or the acceptance provisions have lapsed.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter
period, when appropriate, to the net carrying amount of the financial asset.
Contract assets
If the Group performs by transferring goods to a customer before being unconditionally entitled to the
consideration under the contract terms, a contract asset is recognised 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 recognised when a payment is received or a payment is due (whichever is earlier) from
a customer before the Group transfers the related goods. Contract liabilities are recognised as revenue when the
Group performs under the contract (i.e., transfers control of the related goods to the customer).
Share-based payments
The Company operates a share option scheme and a restricted stock scheme. Employees (including directors)
of the Group receive remuneration in the form of share-based payments, whereby employees render services in
exchange for equity instruments (“equity-settled transactions”). The cost of equity-settled transactions with
employees for grants is measured by reference to the fair value at the date at which they are granted. The fair value
of the share option is determined by an external valuer using Black-Scholes Option Pricing Model, and the fair value
of the restricted stock is determined by an external valuer based on investors’ recent capital contribution price.
Further details of which are given in note 31 to the Historical Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents
the movement in the cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also service and/or performance conditions.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 553 ---
For awards that do not ultimately vest because non-market performance and/or service conditions have not
been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are
treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any
modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee
as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award is recognised immediately.
Other employee benefits
Pension schemes
The employees of the Group are required to participate in a central pension scheme operated by the local
municipal government. The Group is 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.
Housing fund and other social insurances
The Group has participated in defined social security contribution schemes for its employees pursuant to the
relevant laws and regulations of the PRC. These include housing fund, basic medical insurance, unemployment
insurance, injury insurance and maternity insurance. The Group makes monthly contributions to the housing fund and
other social insurances. The contributions are charged to profit or loss on an accrual basis. The Group’s liability in
respect of these funds is limited to the contributions payable in each of the Relevant Periods.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e.,
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially
ready for their intended use or sale. All other borrowing costs are expensed in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders in a general meeting.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency.
Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective
functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period.
Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss
on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised
in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss,
respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of
initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability
arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines
the transaction date for each payment or receipt of the advance consideration.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 554 ---
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected
in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in the
financial statements:
Determining the lease term
In determining the lease term at the commencement date for leases that include renewal options exercisable
by the Group, the Group evaluates the likelihood of exercising the renewal options taking into account all relevant
facts and circumstances that create an economic incentive for the Group to exercise the option, including favourable
terms, leasehold improvements undertaken and the importance of that underlying asset to the Group’s operation.
Generally, periods covered by an extension option in other properties leases have not been included in the lease
liability because the Group could replace the assets without significant cost or business disruption. See note 14 for
further information.
The lease term is reassessed when there is a significant event or significant change in circumstance that is
within the Group’s control.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.
Provision for expected credit losses on trade receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision
rates are based on ageing of trade receivables and contract assets for groupings of various customer segments that
have similar loss patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit
and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will
calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if
forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can
lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At each
reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are
analysed.
The assessment of the correlation among historical observed default rates, forecast economic conditions and
ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic
conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be
representative of a customer’s actual default in the future. The information about the ECLs on the Group’s trade
receivables and contract assets is disclosed in note 20 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 555 ---
Estimation of provision for warranty claims
Generally, the Group provides an 8-year or 150,000-kilometer warranty for EV battery products and a warranty
for ESS battery products ranging from 6,000 to 8,000 cycles. Management estimates the related provision for future
warranty claims based on historical warranty claim information, as well as recent trend that might suggest that past
cost information may differ from future claims. The assumptions made in respect of the Relevant Periods are
consistent with those in the prior years. Factors that could impact the estimated claim information include the success
of the Group’s productivity and quality initiatives, as well as parts and labor costs.
Impairment of non-current assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets as at the end
of each reporting period. The 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. Further details are included in note 13, note 15 and note 17 to the Historical Financial
Information.
Provision of inventories
The Group’s inventories are stated at the lower of cost and net realisable value. The Group’s provision for its
inventories based on estimates of the realisable value with reference to the ageing and conditions of the inventories,
together with the economic circumstances on the marketability of such inventories. Inventories will be reviewed
annually for provision, if appropriate. Further details of the inventories are set out in note 19 to the Historical
Financial Information.
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay
to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value
to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have
to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter
into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The
Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to
make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will
be available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits,
together with future tax planning strategies. Further details on deferred tax are disclosed in note 18 to the Historical
Financial Information.
4. OPERATING SEGMENT INFORMATION
The Group is principally engaged in developing a multi-pathway portfolio of market-driven and technology-
fueled battery products. Information reported to the Group’s chief operating decision maker, for the purpose of
resource allocation and performance assessment, focuses on the operating results of the Group as a whole as the
Group’s resources are integrated and no discrete operating segment financial information is available. Accordingly,
no operating segment information is presented.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 556 ---
Geographical information
Almost all the non-current assets of the Group are physically located in the Mainland China. The geographical
location of customers is based on the location at which the customers operate, and almost all of the revenue of the
Group was derived from operations in the Mainland China during the Relevant Periods.
Information about major customers
The revenue generated from sales to customers which individually amounted to more than 10% of the Group’s
total revenue during each of the Relevant Periods is set out below:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Subsidiaries and a branch of
Guangzhou Automobile Group
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * 959,022 1,076,672
Zhejiang Leapmotor Technology
Co., Ltd. and its subsidiaries /H1118/H1118/H1118 * 488,072 1,179,146 1,462,322
SAIC GM Wuling Automobile
Company Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * 647,589 1,160,950
SAIC GM Automobile Company
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* * * 566,554
FAW Group Co., Ltd. and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118203,816 943,440 * *
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118828,335 962,452 * *
Dongfeng Liuzhou Motor Co., Ltd. /H1118 168,530 * * *
* Less than 10% of the Group’s revenue.
Seasonality of operations
The Group is an EV and ESS battery manufacturer. Higher revenues and operating profits are usually expected
in the second half of the year. Higher sales during the second half of the year are mainly attributed to the fact that
EV sales in China in the second half of the year tends to be higher compared to the first half due to a variety of
reasons, including seasonal demand fluctuations, policy influences, holidays, and climate conditions. Such changes
in EV sales may impact customers’ manufacturing and battery procurement plan, resulting in the concentration of
customers’ stocking demand in the second half of the year. The Group also experiences seasonality in the sales of
ESS products, with the first and last quarter of each year recording less sales compared to the second and third
quarters.
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Revenue from contracts with customers /H1118/H11181,499,296 3,290,253 4,161,670 5,130,317
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 557 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Types of goods
Power Battery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 3,116,066 3,356,865 4,663,775
Nickel-cobalt-manganese ternary
materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,448,045 2,628,589 1,447,995 1,357,268
Lithium iron phosphate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 487,477 1,908,870 3,306,507
Energy Storage System /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,768 315,306 213,409
Others* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,251 171,419 489,499 253,133
Total revenue from contracts with
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,499,296 3,290,253 4,161,670 5,130,317
* Primarily include sales of down-grade products and waste materials sales.
Geographical markets
Since almost of the revenue of the Group was derived from operations in Mainland China during the
Relevant Periods, revenue from the overseas markets of the Group is assessed as not material.
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Timing of revenue recognition
Transferred at a point in time /H1118/H1118/H1118/H11181,499,296 3,290,253 4,161,670 5,130,317
The following table shows the amounts of revenue recognised in the Relevant Periods that were included
in the contract liabilities at the beginning of the reporting period and recognised from performance obligations
satisfied in previous periods:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Revenue recognised that was
included in contract liabilities at
the beginning of the reporting
period: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,766 40,855 145,385 44,662
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sales of products
The performance obligation is satisfied upon acceptance and payment generally varies from 30 days to
90 days.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 558 ---
All amounts of transaction prices allocated to the performance obligations of sales of goods are expected
to be recognised as revenue within one year. The Group has no significant unsatisfied performance obligations
arising from revenue contracts that have an original expected duration more than one year, thus management
applied practical expedient under IFRS 15 and is not disclosing the aggregate amount of the transaction price
allocated to the performance obligations that are unsatisfied or partially satisfied at the end of each reporting
period.
An analysis of other income and gains is as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Other income
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,088 5,067 889 38,387
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,155 17,896 33,230 37,426
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,712 1,804 7,192 1,754
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,955 24,767 41,311 77,567
Gains
Investment income on structured
deposits and wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,775 9,501 6,596 205
Fair value gains on financial assets
at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,395 – –
Foreign exchange gains, net /H1118/H1118/H1118/H1118 2 58 – 966
Gains on remeasurement of lease
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 5–
Gains on disposal of items of
property, plant and equipment
and other intangible assets /H1118/H1118/H1118/H1118101 8,233 1,323 –
Total gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,878 24,187 7,954 1,171
Total other income and gains /H1118/H1118/H1118/H111820,833 48,954 49,265 78,738
6. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,393,991 3,001,272 3,670,744 4,326,476
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 91,170 173,882 293,908 497,298
Depreciation of right-of-use assets /H1118/H1118/H111814 21,864 43,704 40,449 32,902
Amortisation of other intangible assets /H1118 15 72,640 76,415 79,496 78,742
Research and development expenses /H1118/H1118 221,047 329,277 424,099 556,165
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 29,285
Lease payments not included in the
measurement of lease liabilities /H1118/H1118/H1118/H111814 7,448 25,534 12,611 13,299
Employee benefit expense (including
directors’ and supervisors’
remuneration (note 8) ):
Wages and salaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,007 280,023 440,335 501,861
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 559 ---
Y ear ended 31 December
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Pension scheme contributions and
social welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,378 89,019 139,851 158,286
Share-based payment expenses /H1118/H1118/H1118/H1118 22,611 35,038 43,934 58,875
Impairment losses on property, plant
and equipment* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 – 244,640 6,982 –
Impairment losses on financial assets
and contract assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,457 600,057 10,837 9,705
Impairment losses on inventories /H1118/H1118/H1118/H111819 75,127 579,261 282,437 55,397
Losses/(gains) on remeasurement of
lease payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – 5,490 (35) –
Foreign exchange (gains)/losses, net /H1118/H1118 (2) (58) 1,672 (966)
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 25,082 67,327 74,201 109,170
(Gains)/losses on disposal of items of
property, plant and equipment and
other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(101) (8,233) (1,323) 8,797
Investment income on structured
deposits and wealth management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (1,775) (9,501) (6,596) (205)
Fair value gains on financial assets at
fair value through profit or loss /H1118/H1118/H1118/H11185 – (6,395) – –
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (8,155) (17,896) (33,230) (37,426)
* The impairment losses on property, plant and equipment are included in “Other expenses” in the
consolidated statement of profit or loss and other comprehensive income.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Interest on interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,578 64,859 134,475 136,493
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,170 13,292 11,089 9,597
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,748 78,151 145,564 146,090
Less: Interest capitalised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,531 45,259 72,113 13,505
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,217 32,892 73,451 132,585
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 560 ---
8. DIRECTORS’ AND SUPERVISORS’ REMUNERATION
The remuneration paid or payable to directors and supervisors of the Company during the Relevant Periods is
as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 2 4 3
Other emoluments:
Salaries, allowances and
benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,447 5,897 6,064 8,331
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118296 1,349 1,842 4,189
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118302 372 394 826
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,045 7,618 8,300 13,346
Total fees and other emoluments /H1118/H1118/H1118/H1118/H1118/H11187,045 7,618 8,300 13,589
The remuneration disclosed above included the remuneration received by certain directors and supervisors
prior to their appointments as the directors and supervisors of the Company.
During the Relevant Periods, certain directors and supervisors were granted share options or restricted shares,
in respect of their services to the Group, under the employee incentive scheme of the Company, further details of
which are set out in note 31 to the Historical Financial Information. The share-based payments expenses included in
the financial statements for the Relevant Periods is included in the above directors’ and supervisors’ remuneration
disclosures.
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods were as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Dr. Xiao Min /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 8 1
Dr. Xu Zhiming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 8 1
Dr. Gong Zhengliang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 8 1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 2 4 3
Dr. Xiao Min, Dr. Xu Zhiming and Dr. Gong Zhengliang were appointed as independent non-executive
directors in June 2024.
(b) Directors and supervisors
Mr. Yu Hongjiang and Mr. Wu Shinong were appointed as directors in June 2023, and resigned as directors with
effect from 18 June 2024.
Mr. Zhang Li was appointed as a director in June 2023.
Mr. Liu Gang was appointed as a supervisor in June 2023 and resigned as a supervisor with effect from 31
December 2024.
Ms. Zhao Yanlei was appointed as a supervisor in May 2020, and resigned as a supervisor with effect from
15 June 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 561 ---
Mr. Jiang Kecheng and Mr. Zou Jian were appointed as supervisors in June 2023, and resigned as supervisors
with effect from 18 June 2024.
Mr. Yu Zhexun was appointed as a director in June 2024.
Mr. Hong Ping and Mr. Ge Wei were appointed as supervisors in June 2024.
Mr. Jiang Dongfeng was appointed as a supervisor in December 2024.
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expenses
Pension scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2021
Directors:
Ms. Cao Fang /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Dr. Chen Jicheng /H1118/H1118/H1118/H1118/H11184,155 – – 87 4,242
Mr. Wu Shinong /H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Li /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Yu Hongjiang /H1118/H1118/H1118/H1118/H1118721 – 113 51 885
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,876 – 113 138 5,127
Supervisors:
Ms. Zhao Yanlei /H1118/H1118/H1118/H1118/H1118–––––
Mr. Liu Gang /H1118/H1118/H1118/H1118/H1118/H1118/H1118529 – 45 84 658
Mr. Jiang Kecheng /H1118/H1118/H1118/H1118899 – 128 51 1,078
Mr. Zou Jian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143 – 10 29 182
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,571 – 183 164 1,918
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,447 – 296 302 7,045
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expenses
Pension scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2022
Directors:
Ms. Cao Fang /H1118/H1118/H1118/H1118/H1118/H1118/H11181,269––– 1,269
Dr. Chen Jicheng /H1118/H1118/H1118/H1118/H11181,823 – – 95 1,918
Mr. Wu Shinong /H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Li /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Yu Hongjiang /H1118/H1118/H1118/H1118/H11181,044 – 563 90 1,697
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,136 – 563 185 4,884
Supervisors:
Ms. Zhao Yanlei /H1118/H1118/H1118/H1118/H1118–––––
Mr. Liu Gang /H1118/H1118/H1118/H1118/H1118/H1118/H1118553 – 279 84 916
Mr. Jiang Kecheng /H1118/H1118/H1118/H11181,044 – 497 76 1,617
Mr. Zou Jian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118164 – 10 27 201
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,761 – 786 187 2,734
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,897 – 1,349 372 7,618
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 562 ---
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expenses
Pension scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2023
Directors:
Ms. Cao Fang /H1118/H1118/H1118/H1118/H1118/H1118/H11181,500––– 1,500
Dr. Chen Jicheng /H1118/H1118/H1118/H1118/H11181,500 – – 117 1,617
Mr. Wu Shinong /H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Li /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Yu Hongjiang /H1118/H1118/H1118/H1118/H11181,044 – 884 88 2,016
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,044 – 884 205 5,133
Supervisors:
Ms. Zhao Yanlei /H1118/H1118/H1118/H1118/H1118–––––
Mr. Liu Gang /H1118/H1118/H1118/H1118/H1118/H1118/H1118601 – 325 83 1,009
Mr. Jiang Kecheng /H1118/H1118/H1118/H11181,045 – 608 78 1,731
Mr. Zou Jian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374 – 25 28 427
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,020 – 958 189 3,167
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,064 – 1,842 394 8,300
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expenses
Pension scheme
contributions
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2024
Directors:
Ms. Cao Fang /H1118/H1118/H1118/H1118/H1118/H1118/H11181,500––– 1,500
Dr. Chen Jicheng /H1118/H1118/H1118/H1118/H11181,500 – – 210 1,710
Mr. Wu Shinong /H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhang Li /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Yu Zhexun /H1118/H1118/H1118/H1118/H1118/H11181,001 – 1,167 94 2,262
Mr. Yu Hongjiang /H1118/H1118/H1118/H1118/H11181,185 – 1,255 89 2,529
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,186 – 2,422 393 8,001
Supervisors:
Mr. Ge Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118457 – 554 90 1,101
Mr. Hong Ping /H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Jiang Dongfeng /H1118/H1118/H1118 631 – 492 130 1,253
Mr. Liu Gang /H1118/H1118/H1118/H1118/H1118/H1118/H1118584 – – 90 674
Mr. Jiang Kecheng /H1118/H1118/H1118/H11181,081 – 668 84 1,833
Mr. Zou Jian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118392 – 53 39 484
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,145 – 1,767 433 5,345
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,331 – 4,189 826 13,346
There was no arrangement under which a director or a supervisor waived or agreed to waive any remuneration
during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 563 ---
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the year ended 31 December 2021 included one director and one
supervisor and, during the year ended 31 December 2022 included two directors, details of whose remuneration are
set out in note 8 above. Details of the remuneration for the remaining highest paid employees who are neither a
director nor a supervisor of the Company during the Relevant Periods are as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Salaries, allowances and benefits in
kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,119 2,409 4,446 7,401
Performance related bonuses /H1118/H1118/H1118/H1118/H1118 – – 4,597 34
Share-based payment expenses /H1118/H1118/H1118/H11182,804 5,129 8,007 14,733
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118200 176 273 408
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,123 7,714 17,323 22,576
The numbers of non-director and non-supervisor highest paid employees whose remuneration fell within the
following bands are as follows:
Number of employees
Y ear ended 31 December
2021 2022 2023 2024
HK$1,000,001 to HK$1,500,000 /H1118/H1118/H1118 1–––
HK$1,500,001 to HK$2,000,000 /H1118/H1118/H1118 –1––
HK$2,000,001 to HK$2,500,000 /H1118/H1118/H1118 212–
HK$3,000,001 to HK$3,500,000 /H1118/H1118/H1118 ––12
HK$3,500,001 to HK$4,000,000 /H1118/H1118/H1118 –1––
HK$4,500,001 to HK$5,000,000 /H1118/H1118/H1118 ––11
HK$5,000,001 to HK$5,500,000 /H1118/H1118/H1118 ––11
HK$8,000,001 to HK$8,500,000 /H1118/H1118/H1118 –––1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183355
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions
in which members of the Group are domiciled and operate.
Mainland China
The subsidiaries incorporated in Mainland China are subject to tax at the statutory rate of 25% on the taxable
profits determined in accordance with the PRC Corporate Income Tax Law.
The Company was qualified as High and New Technology Enterprises in 2022 and is entitled to a preferential
tax rate of 15% from 2022 to 2024.
Jiangsu TAFEL New Energy Technology Co., Ltd. (“Jiangsu TAFEL”), which the business was acquired by the
Group on 28 February 2022, was entitled to a preferential tax rate of 15% from 2021 to 2022. Further details of the
Reorganisation are given in note 32 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 564 ---
Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions
in which the Group operates.
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,395 – 336
Deferred tax credit (note 18) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,421) (39,462) (14,512) (12,307)
Total tax credit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,421) (11,067) (14,512) (11,971)
A reconciliation of the tax expense applicable to (loss)/profit before tax at the statutory rate for the
jurisdictions in which the Company and its subsidiaries are domiciled and/or operate to the tax expense at the
effective tax rate is as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
(Loss)/profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(411,696) (1,731,048) (604,379) 79,043
Tax at the statutory tax rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(102,924) (432,762) (151,095) 19,761
Effect of preferential tax rates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,363 98,196 41,382 (11,035)
Profit and losses attributable to
joint ventures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (231) 7,759 (46,258)
Expenses not deductible for tax /H1118/H1118/H1118/H1118/H1118/H1118/H11184,091 5,907 7,817 12,761
Super deduction on research and
development expenses (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,793) (42,142) (49,894) (70,952)
Deductible temporary differences
not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,493 307,681 18,522 15,287
Recognition of previously unrecognised
tax losses and temporary differences /H1118/H1118 (5,170) (4,757) (104,501) (49,555)
Tax losses not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,519 57,041 215,498 118,020
Tax credit at the Group’s effective
tax rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,421) (11,067) (14,512) (11,971)
(a) Super deductible allowance was for qualified research and development costs. According to the relevant
laws and regulations promulgated by the State Taxation Administration of the PRC, enterprises engaging
in research and development activities are entitled to claim 175% of their research and development
costs so incurred as tax deductible expenses when determining their assessable profits for the year ended
31 December 2021 and the nine months ended 30 September 2022. According to the relevant laws and
regulations, starting from 1 October 2022, the aforementioned deduction rate increased to 200%.
11. DIVIDENDS
No dividends have been paid or declared by the Company during the Relevant Periods.
12. LOSS/PROFIT PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The basic loss/profit per share is calculated by dividing the loss attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares in issue during the Relevant Periods.
The share award scheme (Note 31) granted and remained unexercised are not included in the calculation of
diluted loss/profit per share because performance conditions has not been met at the end of the reporting period.
Accordingly, diluted loss/profit per share for the year ended 31 December 2021, 2022, 2023 and 2024 are the same
as basic loss/profit per share.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 565 ---
The weighted average number of ordinary shares outstanding was determined assuming that the paid-in capital
had been fully converted into share capital at the same conversion ratio of 1:1 as upon transformation into a joint
stock company on 17 July 2024.
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
(Loss)/profit attributable to owners of the
parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(402,275) (1,719,981) (589,867) 91,014
Weighted average number of ordinary
shares outstanding /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,552,495,000 1,701,983,497 1,912,639,133 2,313,018,766
Basic and diluted (loss)/profit per share
(expressed in RMB per share) /H1118/H1118/H1118/H1118/H1118/H1118(0.26) (1.01) (0.31) 0.04
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 490,986 36,246 4,343 178,880 385,973 1,096,428
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118– (123,765) (17,926) (2,204) (35,605) (11,793) (191,293)
Net carrying amount /H1118/H1118/H1118 – 367,221 18,320 2,139 143,275 374,180 905,135
At 1 January 2021,
net of accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 367,221 18,320 2,139 143,275 374,180 905,135
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,806 1,334 77 4,344 691,919 699,480
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 427,451 7,809 5,662 5,233 (723,010) –
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (100,000) – – – – (100,000)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (214) (11) – – – (225)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,718) (54,309) (8,820) (1,516) (21,807) – (91,170)
At 31 December 2021, net
of accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,137 641,955 18,632 6,362 131,045 343,089 1,413,220
At 31 December 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 820,002 45,364 10,082 188,457 354,790 1,695,550
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(4,718) (178,047) (26,732) (3,720) (57,412) (11,701) (282,330)
Net carrying amount /H1118/H1118/H1118272,137 641,955 18,632 6,362 131,045 343,089 1,413,220
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 566 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 820,002 45,364 10,082 188,457 354,790 1,695,550
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(4,718) (178,047) (26,732) (3,720) (57,412) (11,701) (282,330)
Net carrying amount /H1118/H1118/H1118272,137 641,955 18,632 6,362 131,045 343,089 1,413,220
At 1 January 2022, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H1118272,137 641,955 18,632 6,362 131,045 343,089 1,413,220
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892 1,282 185 520 5,894 3,676,208 3,684,181
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,970 1,111,090 16,151 9,116 263,403 (1,588,730) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,242) (7) (11) (14) – (4,274)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,962) (108,223) (11,426) (4,926) (29,345) – (173,882)
Acquisition of a subsidiary
(note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 69,307 1,549 3,075 1,595 1,120 76,646
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (43,844) – – – – (43,844)
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (139,775) (510) (2) (100,323) (4,030) (244,640)
At 31 December 2022,
net of accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,237 1,527,550 24,574 14,134 272,255 2,427,657 4,707,407
At 31 December 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,917 1,938,674 53,037 21,555 453,041 2,431,687 5,363,911
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(24,680) (411,124) (28,463) (7,421) (180,786) (4,030) (656,504)
Net carrying amount /H1118/H1118/H1118441,237 1,527,550 24,574 14,134 272,255 2,427,657 4,707,407
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,917 1,938,674 53,037 21,555 453,041 2,431,687 5,363,911
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(24,680) (411,124) (28,463) (7,421) (180,786) (4,030) (656,504)
Net carrying amount /H1118/H1118/H1118441,237 1,527,550 24,574 14,134 272,255 2,427,657 4,707,407
At 1 January 2023, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H1118441,237 1,527,550 24,574 14,134 272,255 2,427,657 4,707,407
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118669 3,601 91 – 497 1,303,547 1,308,405
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,220,083 1,237,280 12,244 5,310 51,409 (2,526,326) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,183) (185) (23) (1,639) – (6,030)
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (89,899) – – – – (89,899)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,998) (198,976) (11,480) (5,695) (42,759) – (293,908)
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,274) (17) – (2,691) – (6,982)
At 31 December 2023, net
of accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,626,991 2,471,099 25,227 13,726 277,072 1,204,878 5,618,993
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 567 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,686,669 3,029,693 60,864 26,734 441,815 1,204,878 6,450,653
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(59,678) (558,594) (35,637) (13,008) (164,743) – (831,660)
Net carrying amount /H1118/H1118/H11181,626,991 2,471,099 25,227 13,726 277,072 1,204,878 5,618,993
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,686,669 3,029,693 60,864 26,734 441,815 1,204,878 6,450,653
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(59,678) (558,594) (35,637) (13,008) (164,743) – (831,660)
Net carrying amount /H1118/H1118/H11181,626,991 2,471,099 25,227 13,726 277,072 1,204,878 5,618,993
At 1 January 2024, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H11181,626,991 2,471,099 25,227 13,726 277,072 1,204,878 5,618,993
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 445 140 96 12 600,099 600,792
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,646 1,361,175 10,377 1,849 52,725 (1,477,772) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,552) (211) (13) (1,476) (73) (12,325)
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,010) – – – – (6,010)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(81,411) (345,423) (11,046) (5,536) (53,882) – (497,298)
At 31 December 2024, net
of accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,597,226 3,470,734 24,487 10,122 274,451 327,132 5,704,152
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,738,315 4,346,171 68,195 28,071 480,205 327,132 6,988,089
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(141,089) (875,437) (43,708) (17,949) (205,754) – (1,283,937)
Net carrying amount /H1118/H1118/H11181,597,226 3,470,734 24,487 10,122 274,451 327,132 5,704,152
Due to the business adjustment and the unsatisfactory performance of certain subsidiaries, Nanjing Zenergy
Battery Technologies Co., Ltd. and Dongguan Zenergy Battery Technologies Co., Ltd. has ceased their production
activities since December 2022 and February 2023 respectively, and the relevant property, plant and equipment were
idle or scrapped. The management concluded that there was indication for impairment and conducted impairment
assessment on property, plant and equipment. At 31 December 2021, 2022, 2023 and 2024, the Group involved
external experts to perform an impairment assessment on recoverable amounts of property, plant and equipment.
The recoverable amounts of these property, plant and equipment have been determined based on their fair value
less costs of disposal. The Group uses market approach and considers the similar assets or observable market prices
to estimate the fair value less costs of disposal of the assets. The relevant assets were impaired to their recoverable
amounts if their carrying values were higher than the recoverable amounts when the impairment assessment was
performed and the impairment of nil, RMB244,640,000, RMB6,982,000 and nil has been recognised in profit or loss
within the relevant functions to which these assets relate as at 31 December 2021, 2022, 2023 and 2024, respectively.
At the end of the Relevant Periods, certain of the Group’s property, plant and equipment were pledged to secure
bank facilities granted to the Group for bank borrowings (note 28).
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 568 ---
The Company
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 293 661 6 356,849 357,809
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (207) (63) – – (270)
Net carrying amount /H1118/H1118/H1118 – – 86 598 6 356,849 357,539
At 1 January 2021, net of
accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 86 598 6 356,849 357,539
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,773 1,333 4 1,684 612,675 617,469
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 397,361 2,933 5,604 1,112 (683,865) –
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (100,000) – – – – (100,000)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – – –
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,718) (5,617) (471) (675) (419) – (11,900)
At 31 December 2021, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,137 293,517 3,881 5,531 2,383 285,659 863,108
At 31 December 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 299,134 4,559 6,269 2,802 285,659 875,278
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,718) (5,617) (678) (738) (419) – (12,170)
Net carrying amount /H1118/H1118/H1118272,137 293,517 3,881 5,531 2,383 285,659 863,108
31 December 2022
At 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,855 299,134 4,559 6,269 2,802 285,659 875,278
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,718) (5,617) (678) (738) (419) – (12,170)
Net carrying amount /H1118/H1118/H1118272,137 293,517 3,881 5,531 2,383 285,659 863,108
At 1 January 2022, net of
accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272,137 293,517 3,881 5,531 2,383 285,659 863,108
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892 1,262 155 6 109 3,593,293 3,594,917
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (43,844) – – – – (43,844)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,970 1,008,881 14,467 8,782 242,656 (1,463,756) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,129) (5) – (14) – (4,148)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,962) (31,894) (2,705) (2,348) (1,872) – (58,781)
At 31 December 2022, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,237 1,223,793 15,793 11,971 243,262 2,415,196 4,351,252
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 569 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,917 1,260,899 19,084 15,057 245,420 2,415,196 4,421,573
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,680) (37,106) (3,291) (3,086) (2,158) – (70,321)
Net carrying amount /H1118/H1118/H1118441,237 1,223,793 15,793 11,971 243,262 2,415,196 4,351,252
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,917 1,260,899 19,084 15,057 245,420 2,415,196 4,421,573
Accumulated depreciation /H1118 (24,680) (37,106) (3,291) (3,086) (2,158) – (70,321)
Net carrying amount /H1118/H1118/H1118/H1118441,237 1,223,793 15,793 11,971 243,262 2,415,196 4,351,252
At 1 January 2023, net of
accumulated depreciation /H1118 441,237 1,223,793 15,793 11,971 243,262 2,415,196 4,351,252
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118669 85,172 907 198 5,932 1,286,096 1,378,974
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,220,083 1,223,736 11,339 5,300 39,766 (2,500,224) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,577) (179) (2) – – (1,758)
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (89,899) – – – – (89,899)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,998) (144,894) (6,285) (4,141) (31,456) – (221,774)
At 31 December 2023, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,626,991 2,296,331 21,575 13,326 257,504 1,201,068 5,416,795
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,686,669 2,478,151 31,089 20,552 291,118 1,201,068 5,708,647
Accumulated depreciation /H1118 (59,678) (181,820) (9,514) (7,226) (33,614) – (291,852)
Net carrying amount /H1118/H1118/H1118/H11181,626,991 2,296,331 21,575 13,326 257,504 1,201,068 5,416,795
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,686,669 2,478,151 31,089 20,552 291,118 1,201,068 5,708,647
Accumulated depreciation /H1118 (59,678) (181,820) (9,514) (7,226) (33,614) – (291,852)
Net carrying amount /H1118/H1118/H1118/H11181,626,991 2,296,331 21,575 13,326 257,504 1,201,068 5,416,795
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 570 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024, net of
accumulated depreciation /H11181,626,991 2,296,331 21,575 13,326 257,504 1,201,068 5,416,795
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,640 235 48 714 591,411 597,048
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,646 1,356,624 10,141 1,849 50,815 (1,471,075) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,608) (128) (13) (84) (73) (10,906)
Assets-related government
grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,010) – – – – (6,010)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(81,411) (308,630) (8,709) (5,069) (44,285) – (448,104)
At 31 December 2024, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,597,226 3,332,347 23,114 10,141 264,664 321,331 5,548,823
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,738,315 3,800,865 39,178 21,726 342,444 321,331 6,263,859
Accumulated depreciation /H1118(141,089) (468,518) (16,064) (11,585) (77,780) – (715,036)
Net carrying amount /H1118/H1118/H1118/H11181,597,226 3,332,347 23,114 10,141 264,664 321,331 5,548,823
14. LEASES
The Group as a lessee
The Group has lease contracts for various items of leasehold land and plant and properties used in its
operations. Leases of leasehold land generally have lease terms of 50 years, while plant and properties generally have
lease terms between 1.2 and 10.2 years. Other equipment generally has lease terms of 12 months or less or is
individually of low value.
(a) Right-of-use assets
The carrying amounts of right-of-use assets and the movements during the Relevant Periods are as follows:
The Group
Leasehold land
Plant and
properties Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,285 70,976 80,261
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,189 312,264 383,453
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(665) (21,199) (21,864)
As at 31 December 2021 and 1 January 2022 /H1118/H1118/H1118 79,809 362,041 441,850
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 44,113 44,113
Acquisition of a subsidiary (note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12,658 12,658
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,531) (42,173) (43,704)
Assets-related government grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,500) – (24,500)
Remeasurement of lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (127,298) (127,298)
As at 31 December 2022 and 1 January 2023 /H1118/H1118/H1118 53,778 249,341 303,119
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,113) (39,336) (40,449)
Remeasurement of lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,267) (5,267)
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 571 ---
Leasehold land
Plant and
properties Total
RMB’000 RMB’000 RMB’000
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118 52,665 204,738 257,403
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,921 1,921
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,113) (31,789) (32,902)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,552 174,870 226,422
At the end of the Relevant Periods, certain of the Group’s right-of-use assets were pledged to secure bank
facilities granted to the Group for bank borrowings (note 28).
The Company
Leasehold land
Plant and
properties Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,285 – 9,285
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,189 220,341 291,530
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(665) (5,419) (6,084)
As at 31 December 2021 and 1 January 2022 /H1118/H1118/H1118 79,809 214,922 294,731
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,531) (21,673) (23,204)
Assets-related government grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,500) – (24,500)
As at 31 December 2022 and 1 January 2023 /H1118/H1118/H1118 53,778 193,249 247,027
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,113) (21,673) (22,786)
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118 52,665 171,576 224,241
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,921 1,921
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,113) (22,222) (23,335)
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,552 151,275 202,827
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are as follows:
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,976 348,556 241,583 202,790
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118312,264 44,113 – 1,921
Acquisition of a subsidiary (note 33) /H1118/H1118/H1118 – 13,447 – –
Accretion of interest recognised during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,170 13,292 11,089 9,597
Remeasurement of lease payments /H1118/H1118/H1118/H1118 – (121,808) (5,302) –
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,854) (56,017) (44,580) (37,877)
Carrying amount at the end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348,556 241,583 202,790 176,431
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,674 34,046 27,021 30,397
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,882 207,537 175,769 146,034
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 572 ---
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 198,518 183,697 167,395
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,341 – – 1,921
Accretion of interest recognised during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,591 9,774 9,033 8,235
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,414) (24,595) (25,335) (26,930)
Carrying amount at the end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118198,518 183,697 167,395 150,621
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,821 16,302 17,874 20,648
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118183,697 167,395 149,521 129,973
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,170 13,292 11,089 9,597
Depreciation charge of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,864 43,704 40,449 32,902
Expenses relating to short-term leases
and leases of low-value assets /H1118/H1118/H1118/H11187,448 25,534 12,611 13,299
Losses/(gains) on remeasurement of
lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,490 (35) –
Total amount recognised in profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,482 88,020 64,114 55,798
15. OTHER INTANGIBLE ASSETS
The Group
Trademarks
and patents Software Total
RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118776,742 17,834 794,576
Accumulated amortisation and impairment /H1118/H1118/H1118 (127,442) (2,829) (130,271)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118649,300 15,005 664,305
Cost at 1 January 2021, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118649,300 15,005 664,305
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 586 586
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,218) (2,422) (72,640)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,082 13,169 592,251
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 573 ---
Trademarks
and patents Software Total
RMB’000 RMB’000 RMB’000
At 31 December 2021 and at 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118776,742 18,420 795,162
Accumulated amortisation and impairment /H1118/H1118/H1118 (197,660) (5,251) (202,911)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,082 13,169 592,251
31 December 2022
Cost at 1 January 2022, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,082 13,169 592,251
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,147 18,418 19,565
Acquisition of a subsidiary (note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,369 8,289 13,658
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,733) (5,682) (76,415)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118514,865 34,194 549,059
At 31 December 2022 and at 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118783,258 45,127 828,385
Accumulated amortisation and impairment /H1118/H1118/H1118 (268,393) (10,933) (279,326)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118514,865 34,194 549,059
31 December 2023
Cost at 1 January 2023, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118514,865 34,194 549,059
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,993 21,993
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (64) (64)
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,807) (8,689) (79,496)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,058 47,434 491,492
At 31 December 2023 and at 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118783,258 65,042 848,300
Accumulated amortisation and impairment /H1118/H1118/H1118 (339,200) (17,608) (356,808)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,058 47,434 491,492
31 December 2024
Cost at 1 January 2024, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,058 47,434 491,492
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,329 10,329
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(68,774) (9,968) (78,742)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375,284 47,795 423,079
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118783,258 75,371 858,629
Accumulated amortisation and impairment /H1118/H1118/H1118 (407,974) (27,576) (435,550)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375,284 47,795 423,079
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 574 ---
The Company
Trademarks and
patents Software Total
RMB’000 RMB’000 RMB’000
31 December 2021
Cost at 1 January 2021, net of accumulated
amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 417 417
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (17) (17)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 400 400
At 31 December 2021 and at 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 417 417
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (17) (17)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 400 400
31 December 2022
Cost at 1 January 2022, net of accumulated
amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 400 400
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118568,525 29,882 598,407
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,582) (2,837) (61,419)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509,943 27,445 537,388
At 31 December 2022 and at 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118568,525 30,299 598,824
Accumulated amortisation and impairment /H1118/H1118/H1118 (58,582) (2,854) (61,436)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509,943 27,445 537,388
31 December 2023
Cost at 1 January 2023, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509,943 27,445 537,388
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,175 20,175
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(70,270) (6,434) (76,704)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118439,673 41,186 480,859
At 31 December 2023 and at 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118568,525 50,474 618,999
Accumulated amortisation and impairment /H1118/H1118/H1118 (128,852) (9,288) (138,140)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118439,673 41,186 480,859
31 December 2024
Cost at 1 January 2024, net of accumulated
amortisation and impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118439,673 41,186 480,859
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,329 10,329
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(68,237) (8,238) (76,475)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,436 43,277 414,713
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118568,525 60,803 629,328
Accumulated amortisation and impairment /H1118/H1118/H1118 (197,089) (17,526) (214,615)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,436 43,277 414,713
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 575 ---
16. INVESTMENTS IN JOINT VENTURES
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 64,537 468,695 584,967
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,882,206 2,882,206
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 64,537 3,350,901 3,467,173
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 444,104 551,538
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,882,206 2,882,206
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,326,310 3,433,744
The Group’s and the Company’s outstanding balances with the joint ventures are disclosed in note 37.
In November 2023, with a view to reorganizing the shareholding structure of Sinogy Toyota Automotive
Energy System Co., Ltd. (“STAES”), the Company entered into an equity transfer agreement with Changshu SINOGY
Venture Capital Co., Ltd. (“SINOGY VC”) to acquire 50% of the equity interests in STAES (the “STAES
Reorganization Transaction”). The rationale for the STAES Reorganization Transaction was to advance the business
development strategies of the Group, resolve any potential competition issue which may arise from operating in the
same industry between SINOGY VC, one of the Group’s Controlling Shareholders and a former shareholder of
STAES prior to the STAES Reorganization Transaction, and the Group, as well as promote and maintain cooperation
with Toyota Motor Corporation and Toyota Motor (China) Investment Co., Ltd. The total consideration was
approximately RMB3,311 million, which comprises cash consideration of RMB496 million and share consideration
of RMB2,815 million (issued and exchanged 368,941,151 paid-in capital measured at cost per capital after Series A
at RMB7.63).
STAES is considered a material joint venture of the Group and is accounted for using the equity method.
As at 31 December As at 31 December
2023 2024
RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118628,654 681,515
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,162,698 1,117,803
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,791,352 1,799,318
Non-current assets, excluding goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118371,558 316,329
Goodwill on acquisition of the joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,882,206 2,882,206
Financial liabilities, excluding trade and other payables
and provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(426,000) (267,311)
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(829,838) (727,926)
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,255,838) (995,237)
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,865) (17,333)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,770,413 3,985,283
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 576 ---
As at 31 December As at 31 December
2023 2024
RMB’000 RMB’000
Net assets, excluding goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118888,207 1,103,077
Reconciliation to the Group’s interest in the joint venture:
Proportion of the Group’s ownership /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850% 50%
Group’s share of net assets of the joint venture,
excluding goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118444,104 551,538
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,882,206 2,882,206
Carrying amount of the investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,326,310 3,433,744
For the period from
1 December 2023
(date of commencement
of equity method
accounting) to
31 December 2023
Y ear ended
31 December 2024
RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118656,982 6,665,307
Profit for the period/year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,704 587,316
Dividend received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 186,224
The following table illustrates the financial information of the Group’s joint venture that is not individually
material:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share of the joint venture’s
(gain)/loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (923) 39,946 (8,838)
Carrying amount of the Group’s
investment in the joint venture /H1118/H1118/H1118 – 64,537 24,591 33,429
17. INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Investments, at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,618,658 1,619,710 2,628,532
Impairment losses on investments in
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (697,805) (754,330) (784,527)
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118– 920,853 865,380 1,844,005
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 577 ---
The impairment losses on those subsidiaries are as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Nanjing Zenergy Battery
Technologies Co., Ltd.* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 624,805 660,341 690,538
Dongguan Zenergy Battery
Technologies Co., Ltd.* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 68,651 93,989 93,989
Jiangsu Zenergy Power Battery
System Co., Ltd.** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,349 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 697,805 754,330 784,527
* Due to the business adjustment and the unsatisfactory performance of certain subsidiaries, Nanjing
Zenergy Battery Technologies Co., Ltd. and Dongguan Zenergy Battery Technologies Co., Ltd. have
ceased their production activities since December 2022 and February 2023, respectively. The
management concluded that there was indication for impairment and perform an impairment assessment
on recoverable amounts of property, plant and equipment (Note 13) and investments in those
subsidiaries.
** Jiangsu Zenergy Power Battery System Co., Ltd. was deregistered on 8 February 2023.
The Company’s outstanding balances with the subsidiaries are disclosed in note 37.
18. DEFERRED TAX
The Group
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax assets
Leases
RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,646
Deferred tax credited to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,637
Gross deferred tax assets at 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,283
Deferred tax charged to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,046)
Gross deferred tax assets at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,237
Deferred tax charged to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,818)
Gross deferred tax assets at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,419
Deferred tax charged to profit or loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,927)
Gross deferred tax assets at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,492
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 578 ---
Deferred tax liabilities
Fair value
adjustment arising
from acquisition of
subsidiaries Leases Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,133 10,646 110,779
Deferred tax (credited)/charged to profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,444) 43,660 32,216
Gross deferred tax liabilities at 31 December 2021 /H1118/H1118/H1118/H111888,689 54,306 142,995
Acquisition of a subsidiary (note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,563 – 33,563
Deferred tax credited to profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,603) (16,905) (55,508)
Gross deferred tax liabilities at 31 December 2022 /H1118/H1118/H1118/H111883,649 37,401 121,050
Deferred tax credited to profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,640) (6,690) (20,330)
Gross deferred tax liabilities at 31 December 2023 /H1118/H1118/H1118/H111870,009 30,711 100,720
Deferred tax credited to profit or loss
during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,113) (2,121) (14,234)
Gross deferred tax liabilities at 31 December 2024 /H1118/H1118/H1118/H111857,896 28,590 86,486
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of
financial position. The following is an analysis of the deferred tax balances of the Group for financial reporting
purposes:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in
the consolidated statement of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Net deferred tax liabilities
recognised in the consolidated
statement of financial position /H1118/H1118/H1118 90,712 84,813 70,301 57,994
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,507,764 556,472 1,507,595 2,260,627
Deductible temporary differences /H1118/H1118 269,324 1,884,176 1,587,225 1,445,680
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,777,088 2,440,648 3,094,820 3,706,307
The Group has tax losses arising in Mainland China of RMB1,507,764,000, RMB556,472,000,
RMB1,507,595,000 and RMB2,260,627,000 as at 31 December 2021, 2022, 2023 and 2024, respectively, that will
expire in one to ten years for offsetting against future taxable profits. The management believes that it is not
considered probable that taxable profits will be available against which the tax losses can be utilized, accordingly,
deferred tax assets have not been recognised in respect of these losses.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 579 ---
19. INVENTORIES
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118179,768 232,176 168,100 202,140
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,989 68,722 93,864 132,688
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118502,804 1,270,612 542,511 377,122
756,561 1,571,510 804,475 711,950
Less: Provision for inventories /H1118/H1118/H1118/H111847,022 558,590 190,719 33,238
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,539 1,012,920 613,756 678,712
As at 31 December 2021, 2022, 2023 and 2024, inventories were stated at the lower of cost and net realisable
value.
The movements in provision
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,940 47,022 558,590 190,719
Impairment losses recognised /H1118/H1118/H1118/H1118/H111875,127 579,261 282,437 55,397
Amounts written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100,045) (67,693) (650,308) (212,878)
Carrying amount at the end of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,022 558,590 190,719 33,238
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,386 161,179 131,738 178,881
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,353 38,576 91,227 131,802
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,805 662,671 521,828 363,531
362,544 862,426 744,793 674,214
Less: Provision for inventories /H1118/H1118/H1118/H11185,545 191,958 180,479 32,331
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,999 670,468 564,314 641,883
As at 31 December 2021, 2022, 2023 and 2024, inventories were stated at the lower of cost and net
realisable value.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 580 ---
The movements in provision
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887 5,545 191,958 180,479
Impairment losses recognised /H1118/H1118/H1118/H1118/H111826,512 204,992 265,377 54,031
Amounts written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,054) (18,579) (276,856) (202,179)
Carrying amount at the end of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,545 191,958 180,479 32,331
20. TRADE AND BILLS RECEIV ABLES AND CONTRACT ASSETS
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118346,532 692,459 1,328,257 1,860,218
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,966 2,000 6,658 5,388
Commercial acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,070 – 20,465 2,003
Bank acceptance bills receivables /H1118/H1118 28,818 238,899 415,489 385,149
Due from related parties – trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254 1,287 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400,640 934,645 1,770,869 2,252,758
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,091 606,207 616,993 624,309
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,549 328,438 1,153,876 1,628,449
The Group’s trading terms with its customers are mainly on credit. Each customer has a maximum credit limit.
The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to
minimise credit risk.
The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade
receivables are non-interest-bearing.
An ageing analysis of the Group’s trade and bills receivables and contract assets, based on recognition date
and net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118297,181 315,117 890,722 1,417,462
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,239 13,321 259,402 196,026
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 3,752 7,753
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104 – – 7,208
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,549 328,438 1,153,876 1,628,449
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 581 ---
The movements in the impairment losses on trade and bills receivables and contract assets are as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,461 79,091 606,207 616,993
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118(1,370) 605,877 10,786 9,213
Amounts written off as
uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,897)
Decrease from the Reorganisation /H1118/H1118 – (78,761) – –
At end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,091 606,207 616,993 624,309
The Group applies the simplified approach in calculating ECLs for trade and bill receivables and contract
assets. Trade and bill receivables and contract assets relating to customers not sharing similar credit risk with others
are assessed individually for impairment allowance, for instance, customers with known financial difficulties or
significant doubt on collection. The remaining trade and bills receivables and contract assets are grouped and
collectively assessed for impairment allowance. Under the collective approach, an impairment analysis is performed
at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on
ageing analysis for grouping of customers that have similar loss patterns. The calculation reflects the age of the
balance, existence of disputes, recent historical payment patterns, any other available information concerning the
creditworthiness of counterparties and influence from macro economy.
Set out below is the information about the credit risk exposure on the Group’s trade receivables and contract
assets using a provision matrix:
Within
3 months
3t o
6 months
6 months to
1 year
2t o
3 years Total
As at 31 December 2021
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.73% 3.73% 37.50% 89.73% 4.03%
Gross carrying amount (RMB’000) /H1118/H1118273,741 16,611 40 1,013 291,405
Expected credit losses (RMB’000) /H1118/H1118/H111810,201 619 15 909 11,744
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount (RMB’000) /H1118/H1118 67,347
Expected credit losses (RMB’000) /H1118/H1118/H1118 67,347
Within
3 months
3t o
6 months
6 months to
1 year Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50% 2.50% – 2.50%
Gross carrying amount (RMB’000) /H1118/H1118/H1118/H111890,240 2,002 – 92,242
Expected credit losses (RMB’000) /H1118/H1118/H1118/H1118/H11182,259 50 – 2,309
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100%
Gross carrying amount (RMB’000) /H1118/H1118/H1118/H1118 603,504
Expected credit losses (RMB’000) /H1118/H1118/H1118/H1118/H1118 603,504
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 582 ---
Within
3 months
3t o
6 months
6 months to
1 year Total
As at 31 December 2023
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.76% 1.76% 6.50% 1.79%
Gross carrying amount (RMB’000) /H1118/H1118/H1118/H1118696,293 31,105 4,013 731,411
Expected credit losses (RMB’000) /H1118/H1118/H1118/H1118/H111812,252 547 261 13,060
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100%
Gross carrying amount (RMB’000) /H1118/H1118/H1118/H1118 603,504
Expected credit losses (RMB’000) /H1118/H1118/H1118/H1118/H1118 603,504
Within
3 months
3t o
6 months
6 months to
1 year 1 to 2 years Total
As at 31 December 2024
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.33% 1.33% 6.90% 33.92% 1.65%
Gross carrying amount (RMB’000) /H1118/H11181,227,266 15,600 8,328 10,908 1,262,102
Expected credit losses (RMB’000) /H1118/H1118/H111816,323 207 575 3,700 20,805
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100%
Gross carrying amount (RMB’000) /H1118/H1118 603,504
Expected credit losses (RMB’000) /H1118/H1118/H1118 603,504
The bills receivables held by the Group were mostly issued by reputable banks and with short-term maturity.
Accordingly, the identified impairment loss was assessed to be minimal as at the end of each of the Relevant Periods.
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 690,094 1,325,877 1,858,078
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,000 6,658 5,388
Commercial acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 20,465 2,003
Bank acceptance bills receivables /H1118/H1118 4,000 111,419 410,329 385,149
Due from subsidiaries – bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,000 – 29,820
Due from related parties – trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118303,581 – – –
Due from related parties – bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,885 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433,466 823,513 1,763,329 2,280,438
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 603,810 614,819 622,169
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433,343 219,703 1,148,510 1,658,269
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 583 ---
An ageing analysis of the Company’s trade and bills receivables and contract assets, based on recognition date
and net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433,343 215,414 888,499 1,417,462
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,289 256,259 225,846
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,752 7,753
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 7,208
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433,343 219,703 1,148,510 1,658,269
The movements in the loss allowance for impairment of trade and bills receivables and contract assets are as
follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 123 603,810 614,819
Impairment losses recognised /H1118/H1118/H1118/H1118/H1118100 603,687 11,009 9,247
Amounts written off as
uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,897)
At end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 603,810 614,819 622,169
Set out below is the information about the credit risk exposure on the Company’s trade receivables and contract
assets using a provision matrix:
Within
3 months
3t o
6 months
6 months to
1 year 1 to 2 years Total
As at 31 December 2021
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Gross carrying amount (RMB’000) /H1118/H1118303,58 1––– 303,581
Expected credit losses (RMB’000) /H1118/H1118/H1118 –––––
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –
Gross carrying amount (RMB’000) /H1118/H1118 –
Expected credit losses (RMB’000) /H1118/H1118/H1118 –
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50% 3.75% – – 2.56%
Gross carrying amount (RMB’000) /H1118/H1118 86,728 4,002 – – 90,730
Expected credit losses (RMB’000) /H1118/H1118/H11182,172 150 – – 2,322
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100%
Gross carrying amount (RMB’000) /H1118/H1118 601,364
Expected credit losses (RMB’000) /H1118/H1118/H1118 601,364
As at 31 December 2023
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.76% 1.76% 6.50% – 1.79%
Gross carrying amount (RMB’000) /H1118/H1118696,051 31,107 4,013 – 731,171
Expected credit losses (RMB’000) /H1118/H1118/H111812,247 547 261 – 13,055
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 584 ---
Within
3 months
3t o
6 months
6 months to
1 year 1 to 2 years Total
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount (RMB’000) /H1118/H1118 601,364
Expected credit losses (RMB’000) /H1118/H1118/H1118 601,364
As at 31 December 2024
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.33% 1.33% 6.90% 33.92% 1.65%
Gross carrying amount (RMB’000) /H1118/H11181,227,266 15,600 8,328 10,908 1,262,102
Expected credit losses (RMB’000) /H1118/H1118/H111816,323 207 575 3,700 20,805
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount (RMB’000) /H1118/H1118 601,364
Expected credit losses (RMB’000) /H1118/H1118/H1118 601,364
21. BILLS RECEIV ABLES AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE INCOME
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 92,936
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 92,936
All these bills receivables at fair value through other comprehensive income are aged within six months. The
identified impairment loss was assessed to be minimal as at the end of each of the Relevant Periods.
22. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,552 16,071 8,556 8,586
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,304 135 202 2,105
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116,580 167,469 68,168 49,757
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,426 6,022 3,415 4,505
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 8,051
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,553 6,055 805 366
204,415 195,752 81,146 73,370
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 585 ---
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(54,246) (53) (10) (9)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118150,169 195,699 81,136 73,361
Non-current portion:
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,179 702 702 –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,499 46,118 46,186 39,727
Prepayments for long-term assets /H1118/H1118 378,316 108,109 9,186 618
398,994 154,929 56,074 40,345
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(330) (647) (710) (533)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118398,664 154,282 55,364 39,812
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118548,833 349,981 136,500 113,173
At the end of each of the Relevant Periods, the ECLs of the financial assets included in prepayments, other
receivables and other assets were measured based on the 12-month expected credit loss if they were not past due and
there was no information indicating that the financial assets had a significant increase in credit risk since initial
recognition. Otherwise, they were measured based on the lifetime expected credit loss. An impairment analysis was
performed at the end of each of the Relevant Periods.
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current portion:
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,037 13,512 7,769 8,013
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845 123 163 2,093
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,925 17,931 30,260 29,378
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,349 5,933 3,374 4,505
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 3,498 677 366
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 8,051
Due from a related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,074 – – –
Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000 152,270 42,184 42,000
157,435 193,267 84,427 94,406
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (42,037) (42,007) (42,009)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,434 151,230 42,420 52,397
Non-current portion:
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,497 42,415 42,611 36,080
Prepayments for long-term assets /H1118/H1118 336,383 107,353 8,880 297
344,880 149,768 51,491 36,377
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34) (602) (655) (470)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118344,846 149,166 50,836 35,907
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118502,280 300,396 93,256 88,304
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 586 ---
23. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits, at fair value /H1118/H1118/H1118 – 944,104 – –
Wealth management products /H1118/H1118/H1118/H1118/H1118 – 218,461 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,162,565 – –
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits, at fair value /H1118/H1118/H1118 – 815,000 – –
Wealth management products /H1118/H1118/H1118/H1118/H1118 – 155,012 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 970,012 – –
As at 31 December 2022, the structured deposits and wealth management products were issued by banks in
Mainland China. 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. All the structured deposits and wealth
management products were disposed in 2023.
24. CASH AND CASH EQUIV ALENTS, TIME DEPOSITS AND RESTRICTED BANK BALANCES
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072
Time deposits with original maturity
of more than three months to one
year when acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 101,982
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,020,347 1,035,350 472,305 953,254
Restricted cash from lawsuit /H1118/H1118/H1118/H1118/H1118 – – – 4,550
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,787,758 1,971,514 2,506,584 3,258,858
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118764,932 936,164 2,034,279 2,142,711
Denominated in United States dollar
(“USD”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,443 – – 56,361
Denominated in Euro (“ EUR”) /H1118/H1118/H1118/H1118 3 6–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 587 ---
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Time deposits with original maturity
of more than three months to one
year when acquired in RMB /H1118/H1118/H1118/H1118 – – – 101,982
Pledged deposits denominated
in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,020,347 1,035,350 472,305 953,254
Restricted cash from lawsuit
denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,550
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,862 861,892 1,826,928 938,263
Denominated in USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 56,361
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,862 861,892 1,826,928 994,624
Time deposits with original maturity
of more than three months to one
year when acquired in RMB /H1118/H1118/H1118/H1118 – – – 101,982
Pledged deposits denominated in
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,767 763,419 457,906 923,434
Restricted cash from lawsuit in
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 4,550
Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited
with creditworthy banks with no recent history of default.
At the end of the Relevant Periods, the Group’s and the Company’s certain deposits were pledged for issuance
of bank acceptance bills (note 25) and interest-bearing bank borrowings (note 28).
As at 31 December 2021, 2022, 2023 and 2024, the Group and the Company have assessed the credit risk of
cash and cash equivalents, time deposits, pledged deposits and restricted cash from lawsuit to be minimal as they
were placed in reputable financial institutions.
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 588 ---
25. TRADE AND BILLS PAYABLES
An ageing analysis of the trade and bills payables as at the end of the Relevant Periods, based on recognition
date, is as follows:
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,808,665 3,011,888 3,415,144 3,741,138
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,781 444 710 1,394
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,843 – – 54
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,813,289 3,012,332 3,415,854 3,742,586
The trade payables are non-interest-bearing and are normally settled in 30 to 90 days upon receipt of the V AT
invoice.
In 2024, the Group entered into supplier finance arrangements with China Construction Bank Corporation
Changshu Branch (“CCB”) and Jianxin Rongtong Co., Ltd. (“Jianxin”), together as the “factoring companies”. Under
these supplier finance arrangements, the Group’s suppliers can elect to have their undue trade receivables from the
Group factored by the factoring companies. Upon the Group’s approval, the suppliers will sign an accounts
receivables transfer agreements with the factoring companies, whereby their corresponding accounts receivables
transfer from the Group to the factoring companies. The factoring companies will pay the suppliers directly for the
factored receivables. The Group will subsequently make payments to the factoring companies to settle the factored
accounts receivables.
From the perspective of the Group, the supplier finance arrangements effect a non-cash movement of the
reclassification from payables to suppliers to payables to the factoring companies. As at 31 December 2024, under
these supplier finance arrangements, factoring financing funds amounting to RMB6,600,000 has been paid to the
Group’s suppliers.
As at 31 December 2021, 2022, 2023 and 2024, the Group’s certain bills payables were secured by the pledged
deposits amounting to RMB1,020,347,000, RMB996,650,000, RMB472,305,000 and RMB953,254,000, respectively.
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118914,041 2,475,434 3,358,969 3,802,183
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 386 175 1,366
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118914,041 2,475,820 3,359,144 3,803,549
As at 31 December 2021, 2022, 2023 and 2024, the Company’s certain bills payables were secured by the
pledged deposits amounting to RMB450,767,000, RMB724,719,000, RMB457,906,000 and RMB923,434,000,
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 589 ---
26. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payables for purchase of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118278,731 959,468 1,305,086 1,160,950
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H111828,527 38,546 49,448 63,117
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,569
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,185 40,317 67,521 45,251
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,562 42,755 38,688 10,409
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,344 30,713 33,541 27,985
Acquisition consideration payable
for a joint venture (note 16 and
note 37(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 346,000 –
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 368,657 105,239 108,567
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,349 1,480,456 1,945,523 1,427,848
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payables for purchase of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118221,419 942,660 1,287,718 1,151,812
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H111811,854 23,695 40,714 55,874
Accrued listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,569
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,071 38,744 65,809 44,458
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,148 32,414 12,980 7,954
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,649 15,394 27,146 23,490
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 332,143 263,613
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 348,332 85,219 88,567
Acquisition consideration payable
for a joint venture (note 16 and
note 37(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 346,000 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,141 1,401,239 2,197,729 1,647,337
Other payables are non-interest-bearing, unsecured and have no fixed terms of settlement.
27. CONTRACT LIABILITIES
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,855 145,385 44,662 14,756
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 590 ---
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,168 223,420 44,644 13,461
Contract liabilities represented advances received to deliver products. The increase in contract liabilities in the
year 2022 was mainly due to the increase in several large short-term advances received from customers in relation
to the sales of products at the end of the period. The decrease in contract liabilities from 2022 to 2024 was mainly
due to the fulfillment of the performance obligations of delivering goods.
28. INTEREST-BEARING BANK AND OTHER BORROWINGS
The Group
As at 31 December 2021
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00%-4.35% 2022 69,082
Other borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.35% 2022 1,090,582
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,664
As at 31 December 2022
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50%-3.45% 2023 426,369
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.30%-3.50% 2023 150,135
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.10% 2023 2,630
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,134
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.10% 2025-2027 2,310,258
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,889,392
As at 31 December 2023
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.30% 2024 251,253
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00%-3.20% 2024 350,330
Other borrowings from discounting bills
receivables (note (a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.65% 2024 89,103
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00% 2024 3,451
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,137
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00% 2025-2028 2,841,494
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,535,631
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 591 ---
As at 31 December 2024
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.80%-2.85% 2025 600,560
Other borrowings from discounting bills
receivables (note (a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.77%-1.10% 2025 141,892
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.25%-3.50% 2025 503,373
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,245,825
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.25%-3.65% 2026-2028 2,768,659
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,014,484
(a) As at 31 December 2023 and 2024, the Group discounted certain bills receivables accepted by certain
banks in Mainland China with carrying amounts in aggregate of RMB89,819,000 and RMB142,124,000,
respectively.
The Company
As at 31 December 2022
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50%-3.45% 2023 426,369
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.30%-3.50% 2023 150,135
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.10% 2023 2,630
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,134
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.10% 2025-2027 2,310,258
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,889,392
As at 31 December 2023
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.30% 2024 251,253
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00%-3.20% 2024 350,330
Other borrowings from discounting bills
receivables (note (a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.65% 2024 89,103
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00% 2024 3,451
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,137
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.00% 2025-2028 2,841,494
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,535,631
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 592 ---
As at 31 December 2024
Effective interest
rate Maturity RMB’000
Current
Bank borrowings – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.80%-2.85% 2025 600,560
Other borrowings from discounting bills
receivables (note (a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.85%-1.10% 2025 129,327
Current portion of long-term bank borrowings
– secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.25%-3.50% 2025 503,373
Total – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,233,260
Non-current
Bank borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.25%-3.65% 2026-2028 2,768,659
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,001,919
(a) As at 31 December 2023 and 2024, the Company discounted certain bills receivables accepted by certain
banks in Mainland China with carrying amounts in aggregate of RMB89,819,000 and RMB129,559,000,
respectively.
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,082 579,134 694,137 1,245,825
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 500,000 1,000,000
In the third to fifth years,
inclusive /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,310,258 2,341,494 1,768,659
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,082 2,889,392 3,535,631 4,014,484
Other borrowings repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,090,582 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,664 2,889,392 3,535,631 4,014,484
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 579,134 694,137 1,233,260
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 500,000 1,000,000
In the third to fifth years,
inclusive /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,310,258 2,341,494 1,768,659
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,889,392 3,535,631 4,001,919
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 593 ---
As at 31 December 2021, certain Group’s interest-bearing bank borrowings were guaranteed by Nanjing Lukou
Konggang Investment Development Co., Ltd., the shareholder of the Company and other borrowings of
RMB1,090,582,000 were guaranteed by the Company to Jiangsu TAFEL. As at 31 December 2022, these guarantees
have been released.
As at 31 December 2022, the Group and the Company’s certain interest-bearing bank borrowings were secured
by the pledged deposits amounting to RMB38,700,000.
As at 31 December 2022 and 2023, the Group’s and the Company’s certain interest-bearing bank borrowings
were secured by the right-of-use assets with aggregate carrying amounts of approximately RMB53,778,000 and
RMB52,665,000, respectively, and property, plant and equipment with aggregate carrying amounts of approximately
RMB650,201,000 and RMB609,502,000, respectively, and guaranteed by SINOGY VC and Changshu Zenergy
Investment Co., Ltd. (“Zenergy Investment”) which are shareholders of the Company, and guaranteed by Jiangsu
TAFEL. As at 31 December 2024, the guarantee has been released.
As at 31 December 2024, the Group’s and the Company’s certain interest-bearing bank borrowings were
secured by the right-of-use assets with aggregate carrying amounts of approximately RMB51,552,000 and property,
plant and equipment with aggregate carrying amounts of approximately RMB3,283,944,000.
29. PROVISION
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H111817,401 39,020 100,781 168,788
Additional provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,082 67,327 74,201 109,170
Acquisition of a subsidiary
(note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,079 – –
Amounts utilised during the year /H1118/H1118/H1118 (3,463) (6,645) (6,194) (15,214)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,020 100,781 168,788 262,744
Portion classified as current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,086 12,958 22,809 35,003
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,934 87,823 145,979 227,741
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118 – 579 100,174 168,181
Transferred from Reorganisation* /H1118/H1118 – 48,015 – –
Additional provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579 57,753 74,201 109,170
Amounts utilised during the year /H1118/H1118/H1118 – (6,173) (6,194) (15,214)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579 100,174 168,181 262,137
Portion classified as current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872 12,958 22,809 35,003
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118507 87,216 145,372 227,134
* Further details of the Reorganisation are given in note 32 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 594 ---
30. SHARE CAPITAL/PAID-IN CAPITAL
The Group and the Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Issued and fully paid:
Share capital/Paid-in capital /H1118/H1118/H1118/H1118/H1118/H11181,552,495 1,881,850 2,255,935 2,386,976
A summary of movements in the Company’s share capital/paid-in capital is as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H11181,552,495 1,552,495 1,881,850 2,255,935
Shareholders’ capital contribution /H1118/H1118 – 329,355 5,144 131,041
Issuance of shares for acquisition of
a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 368,941 –
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,552,495 1,881,850 2,255,935 2,386,976
In June 2022, the registered capital of the Company was increased to RMB1,572,495,000, with the additional
registered capital of RMB20,000,000 subscribed by the Company’s employee shareholding platform which was
reserved for employee incentive purpose. The total proceeds of RMB14,856,000 and RMB5,144,000 were received
in 2022 and 2023, respectively, which were fully recognised in paid-in capital.
In July 2022, the Company issued 314,499,001 paid-in capital with a nominal value of RMB1.00 each to 11
investors (collectively, the “Series A Investors”) with a cash consideration of an aggregate amount of
RMB2,400,000,000. The total proceeds were received in 2022, with approximately RMB314,499,001 and
RMB2,085,500,999 credited to the Company’s share capital and share premium, respectively.
In November 2023, the Company issued and exchanged 368,941,151 paid-in capital to acquire a 50% equity
interest in STAES. Further details are given in note 16 to the Historical Financial Information.
In July 2024, the Company issued 131,041,251 share capital with a value of RMB7.63 each to 5 investors
(collectively, the “Series B Investors”) with a cash consideration of an aggregate amount of RMB1,000,000,000. The
total proceeds were received in 2024, with approximately RMB131,041,251 and RMB868,958,749 credited to the
Company’s share capital and share premium, respectively.
31. SHARE-BASED PAYMENTS
Expenses arising from equity-settled share-based payment transactions were as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share Option Plan (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,611 6,772 13,201 21,908
Share Incentive Plan (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,266 30,733 36,967
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,611 35,038 43,934 58,875
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 595 ---
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,156 1,837 1,612 1,688
Selling and marketing expenses /H1118/H1118/H1118 3,464 2,757 3,334 3,463
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,795 16,497 25,346 36,654
Research and development expenses /H1118 8,196 13,947 13,642 17,070
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,611 35,038 43,934 58,875
(a) Share Option Plan
To improve the incentive mechanism of the Group, further enhance the work enthusiasm and creativity of the
participants thereto, promote the continued growth of the performance of the Group, and bring economic benefits to
the participants while enhancing the value of the Group, so as to realize the common development of the participants
and the Group, on 15 April 2018, a share incentive scheme (the “Share Option Plan”), which was then supplemented
in 2023, upon the Reorganisation, was approved by the Shareholders. There is no overall change or no incremental
fair value identified in accordance with the supplement Option Plan. Employees will become limited partners
according to the number of options granted under the Share Option Plan (“Share Awards”) and indirectly hold the
shares underlying the options by virtue of their capacity as partners of the relevant Equity Incentive Platform.
Pursuant to the Share Option Plan, each grant of Share Awards needs to meet service requirements from the
date of grant to the later of (1) the date of successful IPO of the Company (the “Lock-up Period”) and (2) the “Service
Period”, for most eligible participants of the Share Option Plan, one-third of the Share Awards shall be released on
the date of grant, one-third shall be released at the first anniversary of the date of grant, and the remaining one-third
shall be released at the second anniversary of the date of grant, upon meeting certain individual performance targets.
Once the Service Period meets, the share options exercised to restricted shares which also require to meet the Lock-up
Period. After taking into consideration of the best estimation of the IPO, the management determined the vesting
period of the relevant Share Awards based on the above service requirements. As such, the share-based payment
expenses are amortized during the vesting period.
There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these
Share Awards. The Group accounts for the Scheme as an equity-settled plan.
Share Awards do not confer rights on the holders to dividends or to vote at shareholders’ meetings.
Movements in the number of Share Awards granted and their exercise prices are as below:
Y ear ended 31 December 2021
Exercise price
Number of
Share Awards*
’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB0.00-RMB1.44 48,604
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.12-RMB4.20 3,020
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB0.00-RMB1.00 (7,806)
Cancelled /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB0.00-RMB1.44 (5,339)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 38,479
Y ear ended 31 December 2022
Exercise price
Number of
Share Awards*
’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 38,479
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.10-RMB1.64 1,168
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB1.44 (4,693)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 34,954
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 596 ---
Y ear ended 31 December 2023
Exercise price
Number of
Share Awards*
’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 34,954
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.15-RMB4.05 2,959
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB1.44 (2,959)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 34,954
Y ear ended 31 December 2024
Exercise price
Number of
Share Awards*
’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 34,954
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.15-RMB4.05 1,823
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB1.44 (1,823)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118RMB1.00-RMB4.20 34,954
During the year ended 31 December 2021, 5,338,847 granted options under the Share Option Plan were
cancelled which was approved by the shareholders and recognised RMB8,333,000 share-based payment expenses.
* Number of Share Awards is the number of options or restricted shares granted under the Share Option Plan on
relevant Equity Incentive Platform.
The fair value of share options granted was estimated as at the date of grant, using Black-Scholes Option
Pricing Model, taking into account the terms and conditions upon which the options were granted. The following
table lists the inputs to the model used:
Dividend yield (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.00
Expected volatility (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837.00-54.82
Risk-free interest rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.39-3.25
Weighted average share price (RMB per share) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.77-7.63
The directors estimated the risk-free interest rate based on the yield of national debts with a maturity life close
to the option life of the share option. V olatility was estimated at granted date based on average historical volatilities
of the comparable companies with length commensurable to the time to maturity of the share option. Dividend yield
is based on management estimation at the grant date.
(b) Share Incentive Plan
On 24 February 2022, a share incentive scheme (the “Share Incentive Plan”), which was then supplemented
in 2023, was approved by the shareholders. The maximum number of shares that may be issued by all awards under
the Share Incentive Plan shall be 26,000,000 shares. Pursuant to the Share Incentive Plan, 20,322,700 shares and
7,513,187 shares and 3,820,000 shares of the Company were granted to eligible participants, including directors,
senior management and backbone employees, through the incentive platforms of the Share Incentive Plan on 1 March
2022 and 25 August 2023 and 23 July 2024, respectively, in the form of restricted shares at the subscription price
of RMB1.00 per share and RMB3.67 per share.
The grant date fair value of the shares of the Share Incentive Plan Schemes was RMB7.63 per share, which
was determined by a third-party valuer based on investors’ recent capital injection price. The difference between the
fair value of the shares granted and the subscription price was recorded in the share-based payment reserve within
equity with the corresponding “share-based payment expenses” in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 597 ---
Each grant of shares needs to meet service requirements, certain shares will be vested at the date of successful
listing and certain shares will be vested to the later of (1) the date of successful IPO of the Company and (2) locked
for three-year period from the date of the grant. After taking into consideration of the best estimation of the IPO, the
management determined the vesting period of the relevant shares based on the above service requirements. As such,
the share-based payment expenses are amortized during the vesting period.
Movements in the number of shares granted and the respective grant date fair value were as follows:
Y ear ended 31 December
2022 2023 2024
Grant date fair
value Number of shares Number of shares Number of shares
’000 ’000 ’000
At the beginning of the year /H1118/H1118/H1118/H1118/H11183.96-6.63 – 16,335 21,564
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.96-6.63 20,322 7,513 3,820
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.96-6.63 (3,987) (2,284) (2,304)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.96-6.63 16,335 21,564 23,080
32. RESERVES
The amounts of the Group’s reserves and the movements therein for the Relevant Periods are presented in the
consolidated statements of changes in equity of the Historical Financial Information.
(i) Share premium
The share premium of the Group represents the premium in issuing capitals.
(ii) Merger reserve
The merger reserve of the Group represents the reserve arising pursuant to the Reorganisation of the Group
completed in 2022.
For the purpose of business integration, on 28 February 2022, the Group acquired businesses of Jiangsu TAFEL
and its subsidiaries now comprising the Group were under the common control of the controlling shareholder before
and after the Reorganisation. The Group acquired certain assets including properties, plant and equipment, other
intangible assets and inventories held by Jiangsu TAFEL and its subsidiaries for an aggregate cash consideration of
RMB1,854,781,500. Upon the Reorganisation, the Group undertook the business, aforementioned assets, provision
for warranty claims, and the personnel of Jiangsu TAFEL and its subsidiaries, while all liabilities except for provision
for warranty claims were inherited by Jiangsu TAFEL.
(iii) Share-based payment reserve
The share-based payment reserve represents the equity-settled share awards as set out in note 31 to the
Historical Financial Information.
(iv) Special reserve
According to relevant PRC regulations, transfer of production and maintenance funds at fixed rates based on
relevant bases to a specific reserve account is required. The amounts are generally expenses in nature and charged
to profit or loss as incurred, and at the same time, the corresponding amounts of safety reserve fund were utilized
and transferred back to retained profits until such special reserve was fully utilised.
33. BUSINESS COMBINATION
Acquisition of Suzhou ZENIO
On 25 February 2022, the Group acquired 100% of the voting shares of Suzhou ZENIO, a non-listed company
based in Mainland China specialising in the manufacture of battery and related components, at a cash consideration
of RMB306,920,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 598 ---
The fair values of the identifiable assets and liabilities of Suzhou ZENIO as at the date of acquisition were:
Notes
Fair value recognised
on acquisition
RMB’000
Assets
Investment in a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,614
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 76,646
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 12,658
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 13,658
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,381
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,276
Prepayments, other receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302,481
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,403
Liabilities
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(140,116)
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,621)
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(789)
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,859)
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 (13,447)
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 (1,079)
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 (33,563)
Total identifiable net assets at fair value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118305,643
Goodwill arising on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,277
Purchase consideration transferred /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118306,920
An analysis of the cash flows in respect of the acquisition of a subsidiary is as follows:
RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(306,920)
Cash and cash equivalents acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,381
Net outflow of cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(239,539)
The fair values of the trade and bills receivables, prepayments, other receivables and other assets as at the date
of acquisition amounted to RMB319,757,000. The gross amount of trade and bills receivables, prepayments, other
receivables and other assets is RMB334,453,000 and it is expected that the full contractual amounts can be collected.
The Group measured the acquired lease liabilities using the present value of the remaining lease payments at
the date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities and adjusted
to reflect the favourable terms of the leases relative to market terms.
The goodwill recognised is primarily attributed to the expected business synergies arising from the acquisition,
which is not separately recognised. The goodwill recognised is not expected to be deductible for income tax purposes.
From the date of acquisition, Suzhou ZENIO contributed RMB124,687,000 of revenue and RMB13,719,000
of loss before tax to the Group. If the combination had taken place at the beginning of the year, revenue would have
been RMB3,297,384,000 and loss before tax for the Group would have been RMB1,722,243,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 599 ---
34. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2021 and 2022, the Group had non-cash additions to right-of-use assets
and lease liabilities of RMB312,264,000 and RMB44,113,000 respectively, in respect of lease arrangements for plant
and equipment.
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank and other
borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,404,731 70,976 1,475,707
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(310,645) (40,854) (351,499)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 312,264 312,264
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,578 6,170 71,748
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,664 348,556 1,508,220
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,473,568 (56,017) 2,417,551
Reorganisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(948,815) – (948,815)
Acquisition of a subsidiary (note 33) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118140,116 13,447 153,563
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 44,113 44,113
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,859 13,292 78,151
Remeasurement of lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (121,808) (121,808)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,889,392 241,583 3,130,975
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118511,764 (44,580) 467,184
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,475 11,089 145,564
Remeasurement of lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,302) (5,302)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,535,631 202,790 3,738,421
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,360 (37,877) 304,483
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,921 1,921
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,493 9,597 146,090
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,014,484 176,431 4,190,915
(c) Total cash outflow for leases
The total cash outflow for leases included in the consolidated statements of cash flows is as follows:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,448 25,534 12,611 13,299
Within financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,854 56,017 44,580 37,877
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,302 81,551 57,191 51,176
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 600 ---
35. COMMITMENTS
The Group had the following capital commitments at the end of the reporting year:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H11181,661,603 1,163,135 514,662 109,225
36. PLEDGE OF ASSETS
Details of the assets pledged for the Group’s interest-bearing bank and other borrowings and issuance of bank
acceptance bills are included in notes 24, 25 and 28 to the Historical Financial Information.
37. RELATED PARTY TRANSACTIONS
(a) Transactions with related parties:
In addition to the transactions detailed elsewhere in the Historical Financial Information, the Group had the
following transactions with related parties during the Relevant Periods:
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
A joint venture of the shareholder of the
Company:
Sales of goods
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,786 675 – –
A subsidiary of a joint venture of the shareholder
of the Company:
Purchase of goods
Suzhou Zenlead Energy Storage Technologies
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,838 – – –
A fellow subsidiary:
Sales of goods
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,346 – 3
Purchase of goods
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 74,368 – –
Reception of rental services
Shanghai Zhaoyuan Technology Co., Ltd. /H1118/H1118/H1118/H1118/H11185,045 – – 191
Shareholders:
Reception of rental services
Nanjing Lukou Konggang Investment
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,270 2,480 1,810 945
Interest charge for other borrowings
Ningbo Meishan Bonded Port Xingsi Shenglian
Investment Partnership Enterprise (Limited
Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,000 – – –
Nanjing Lukou Konggang Investment
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,500 8,233 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,500 8,233 – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 601 ---
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
A joint venture:
Sales of goods
Jiangsu Aiev New Energy Technologies Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,939 – –
Reception of rental services
Jiangsu Aiev New Energy Technologies Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,772 1,148 3,918
Reception of labor dispatch services
Jiangsu Aiev New Energy Technologies Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 115 160
(b) Outstanding balances with related parties:
The Group
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade related
A joint venture of the shareholder
of the Company:
Trade and bills receivables
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 5 4–––
Contract liabilities
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 6 4–––
A subsidiary of a joint venture of
a shareholder of the Company:
Trade and bills payables
Suzhou Zenlead Energy Storage
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H111813,75 9–––
A joint venture:
Trade and bills receivables
Jiangsu Aiev New Energy
Technologies Co., Ltd /H1118/H1118/H1118/H1118/H1118 – 1,287 – –
Non-trade related
A fellow subsidiary:
Other payables and accruals
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 348,332 85,219 88,567
Shareholders:
Consideration payable for
acquisition of STAES
SINOGY VC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 346,000 –
Other borrowings
Nanjing Lukou Konggang
Investment Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,090,582 – – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 602 ---
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Other payables and accruals
Nanjing Lukou Konggang
Investment Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
A joint venture:
Other payables and accruals
Jiangsu Aiev New Energy
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 20,325 20,020 20,000
Details of the Group’s borrowings from the Company’s shareholder as at 31 December 2021 are
included in note 28.
Except the abovementioned borrowings, as at 31 December 2021, 2022, 2023 and 2024, all the
remaining balances due from or due to related parties were non-interest-bearing, unsecured and had no fixed
terms of settlement.
The Company
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade related
A fellow subsidiary:
Trade and bills receivables
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118429,212 – – –
A joint venture of the shareholder
of the Company:
Trade and bills receivables
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 5 4–––
A subsidiary of a joint venture of
a shareholder of the Company:
Trade and bills payables
Suzhou Zenlead Energy Storage
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H111813,27 5–––
Subsidiaries:
Trade and bills receivables
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 7,350
Nanjing Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 20,000 – 22,470
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 20,000 – 29,820
Trade and bills payables
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 100,785 349,809 313,614
Nanjing Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 450,527 27,544 15,137
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 551,312 377,353 328,751
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 603 ---
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments, other receivables
and other assets
Dongguan Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 4,698 – –
Nanjing Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 8 3––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,781 – –
Non-trade related
A shareholder:
Consideration payable for
acquisition of STAES
SINOGY VC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 346,000 –
A fellow subsidiary:
Other payables and accruals
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 348,332 85,219 88,567
Prepayments, other receivables
and other assets
Jiangsu TAFEL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,074 – – –
Subsidiaries:
Prepayments, other receivables
and other assets
Jiangsu Zenergy Power Battery
System Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000–––
Dongguan Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 131,109 42,000 42,000
Nanjing Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118/H1118 – 16,380 – –
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 184 –
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (42,000) (42,000) (42,000)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000 105,489 184 –
Other payables and accruals
Nanjing Zenergy Battery
Technologies Co., Ltd. /H1118/H1118/H1118/H1118 – – 332,143 260,833
Suzhou ZENIO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,780
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 332,143 263,613
As at 31 December 2021, 2022, 2023 and 2024, all the remaining balances due from or due to related
parties were non-interest-bearing, unsecured and had no fixed terms of settlement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 604 ---
(c) Compensation of key management personnel of the Group
Y ear ended 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Short term employee benefits /H1118/H1118/H1118/H1118/H1118/H1118/H11186,981 6,571 8,221 12,486
Share-based payment expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118296 2,272 3,927 10,708
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118393 457 593 1,028
Total compensation paid to key
management personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,670 9,300 12,741 24,222
Further details of directors’ and supervisors’ emoluments are included in note 8 to the Historical Financial
Information.
38. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant
Periods are as follows:
The Group
As at 31 December 2021
Financial assets
Financial assets at
amortised cost
RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309,874
Financial assets included in prepayments, other receivables and other assets /H1118/H1118/H1118/H1118/H1118/H111825,959
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,020,347
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118767,411
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,123,591
Financial liabilities
Financial liabilities at
amortised cost
RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,813,289
Financial liabilities included in other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,260
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,664
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,281,213
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 605 ---
As at 31 December 2022
Financial assets
Financial assets at
fair value through
profit or loss
Financial assets at
amortised cost Total
RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,162,565 – 1,162,565
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 326,487 326,487
Financial assets included in prepayments,
other receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 52,310 52,310
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,035,350 1,035,350
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 936,164 936,164
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,162,565 2,350,311 3,512,876
Financial liabilities
Financial liabilities at
amortised cost
RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,012,332
Financial liabilities included in other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,399,155
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,889,392
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,300,879
As at 31 December 2023
Financial assets
Financial assets at
amortised cost
RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,147,380
Financial assets included in prepayments, other receivables and other assets /H1118/H1118/H1118/H1118/H1118/H111847,175
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118472,305
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,034,279
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,701,139
Financial liabilities
Financial liabilities at
amortised cost
RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,415,854
Financial liabilities included in other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,857,387
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,535,631
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,808,872
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 606 ---
As at 31 December 2024
Financial assets
Financial assets
at fair value
through other
comprehensive
income
Financial assets at
amortised cost Total
RMB’000 RMB’000 RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,623,305 1,623,305
Bills receivables at fair value through other
comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,936 – 92,936
Financial assets included in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 41,656 41,656
Pledged deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 953,254 953,254
Time deposits with original maturity of more
than three months to one year when acquired /H1118/H1118 – 101,982 101,982
Restricted cash from lawsuit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,550 4,550
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,199,072 2,199,072
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,936 4,923,819 5,016,755
Financial liabilities
Financial liabilities at
amortised cost
RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,742,586
Financial liabilities included in other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,354,322
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,014,484
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,111,392
39. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, time deposits, restricted bank
balances, trade and bills receivables, financial assets included in prepayments, other receivables and other assets,
trade and bills payables, financial liabilities included in other payables and accruals, and short-term interest-bearing
bank and other borrowings approximate to their carrying amounts largely due to the short-term maturities of these
instruments. The non-current portion of interest-bearing bank borrowings approximate to their carrying amounts
mainly due to the floating interest rate.
The Group’s finance department headed by the finance manager is responsible for determining the policies and
procedures for the fair value measurement of financial instruments. The finance manager reports directly to the chief
financial officer. At each reporting date, the finance department analyses the movements in the values of financial
instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the
chief financial officer.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values:
The Group invests in financial assets at fair value through profit or loss, which represent structured deposits
and wealth management products issued by banks in Mainland China. The Group has estimated the fair values of
these structured deposits and wealth management products based on the net values announced by the banks at the end
of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 607 ---
The fair values of bills receivables at fair value through other comprehensive income 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 values as a result of the Group for bills receivables at fair value through other
comprehensive income as at 31 December 2024 were assessed to be insignificant.
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 2022
Fair value measurement using
Quoted prices in
active markets
Level 1
Significant
observable inputs
Level 2
Significant
unobservable
Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,162,565 – 1,162,565
As at 31 December 2024
Fair value measurement using
Quoted prices in
active markets
Level 1
Significant
observable inputs
Level 2
Significant
unobservable
Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 92,936 – 92,936
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.
40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments, comprise interest-bearing bank and other borrowings, and cash
and 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 bills payables,
which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity
risk. The board of directors reviews and agrees policies for managing each of these risks and they are summarised
below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long term
debt obligations with a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed
and variable rate debts.
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 608 ---
The following table demonstrates the sensitivity at the end of each of the Relevant Periods to a reasonably
possible change in interest rates, with all other variables held constant, of the Group’s loss before tax:
Increase/(decrease)
in basis points
(Increase)/decrease
in loss before tax
RMB’000
Year ended 31 December 2021
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 –
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(50) –
Year ended 31 December 2022
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 (13,250)
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(50) 13,250
Year ended 31 December 2023
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 (15,280)
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(50) 15,280
Year ended 31 December 2024
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 (16,407)
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(50) 16,407
Credit risk
The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit
policy, which is mainly based on past due information unless other information is available without undue cost or
effort, and year-end staging classification.
As at 31 December 2021
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 388,674 388,674
Contract assets* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,966 11,966
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,32 0––– 26,320
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 54,215 – 54,215
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H11181,020,347 – – – 1,020,347
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118767,41 1––– 767,411
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,814,078 – 54,215 400,640 2,268,933
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 609 ---
As at 31 December 2022
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 932,645 932,645
Contract assets* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,000 2,000
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,01 0––– 53,010
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H11181,035,350 – – – 1,035,350
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118936,16 4––– 936,164
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,024,524 – – 934,645 2,959,169
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,764,211 1,764,211
Contract assets* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,658 6,658
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,89 5––– 47,895
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118472,30 5––– 472,305
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H11182,034,279 – – – 2,034,279
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,554,479 – – 1,770,869 4,325,348
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 610 ---
As at 31 December 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,247,370 2,247,370
Bills receivables at fair
value through other
comprehensive income* /H1118 – – – 92,936 92,936
Contract assets* /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,388 5,388
Financial assets included
in prepayments, other
receivables and other
assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,19 8––– 42,198
Pledged deposits
– Not yet past due /H1118/H1118/H1118/H1118953,25 4––– 953,254
Time deposits with
original maturity of
more than three months
to one year when
acquired
– Not yet past due /H1118/H1118/H1118/H1118101,98 2––– 101,982
Restricted cash from
lawsuit
– Not yet past due /H1118/H1118/H1118/H11184,550––– 4,550
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H11182,199,072 – – – 2,199,072
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,301,056 – – 2,345,694 5,646,750
* For trade and bills receivables and contract assets and bills receivables at fair value through other
comprehensive income to which the Group applies the simplified approach for impairment, information
based on the provision matrix is disclosed in note 20 and note 21.
** The credit quality of the 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”.
As at the end of each of the Relevant Periods, the Group had certain concentrations of credit risk as 47.0%,
86.7%, 45.3%, 32.31% and 95.8%, 99.4%, 90.8%, 87.8% of the Group’s trade receivables were due from the Group’s
largest debtor and five largest debtors, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 611 ---
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management
of the Group to finance the operations and mitigate the effects of fluctuations of cash flows.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of interest-bearing bank and other borrowings and lease liabilities.
The maturity profile of the Group’s financial liabilities as at the end of the Relevant Periods, based on the
contractual undiscounted payments, is as follows:
Within 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,248,140 – – 1,248,140
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,562 240,843 138,096 431,501
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,813,289 – – 1,813,289
Financial liabilities included in
other payables and accruals /H1118/H1118/H1118/H1118/H1118308,260 – – 308,260
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,422,251 240,843 138,096 3,801,190
Within 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118628,728 2,463,672 – 3,092,400
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,317 183,898 62,594 291,809
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,012,332 – – 3,012,332
Financial liabilities included in
other payables and accruals /H1118/H1118/H1118/H1118/H11181,399,155 – – 1,399,155
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,085,532 2,647,570 62,594 7,795,696
Within 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118721,799 3,054,555 – 3,776,354
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,388 145,001 62,594 245,983
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,415,854 – – 3,415,854
Financial liabilities included in
other payables and accruals /H1118/H1118/H1118/H1118/H11181,857,387 – – 1,857,387
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,033,428 3,199,556 62,594 9,295,578
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 612 ---
Within 1 year
or on demand 1 to 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,352,854 2,896,067 – 4,248,921
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,563 136,390 31,758 208,711
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,742,586 – – 3,742,586
Financial liabilities included in
other payables and accruals /H1118/H1118/H1118/H1118/H11181,354,322 – – 1,354,322
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,490,325 3,032,457 31,758 9,554,540
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as
a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders
or issue new capitals.
The Group monitors capital using a gearing ratio, which is net debt divided by capital plus net debt. Net debt
includes interest-bearing bank and other borrowings and lease liabilities, less cash and cash equivalents. Capital
includes equity attributable to the owners of the parent. The gearing ratios as at the end of the Relevant Periods are
as follows:
As at 31 December
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,664 2,889,392 3,535,631 4,014,484
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348,556 241,583 202,790 176,431
Less: Cash and cash equivalents /H1118/H1118/H1118767,411 936,164 2,034,279 2,199,072
Net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118740,809 2,194,811 1,704,142 1,991,843
Equity attributable to owners
of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980,555 2,472,564 4,747,233 5,897,122
Capital and net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,721,364 4,667,375 6,451,375 7,888,965
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827% 47% 26% 25%
41. EVENTS AFTER THE RELEV ANT YEARS
There are no significant events subsequent to 31 December 2024.
42. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the companies now
comprising the Group in respect of any period subsequent to 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 613 ---
III SUPPLEMENTARY PRE-ACQUISITION FINANCIAL INFORMATION OF STAES
Financial information of STAES for the period from 1 January 2021 to 30 November 2023
(the date prior to the date of acquisition of STAES) (the “Pre-acquisition Period”) has been
prepared by the directors of STAES in accordance with the accounting policies as set out in
Section II Note 2.4 above. This information is hereafter referred to as the “Financial
Information of STAES”.
1. Financial Information of STAES
Statements of Profit or Loss and Other Comprehensive Income
Y ear ended 31 December
Eleven
months
ended
30 November
Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 6,272,826 6,605,747 5,819,676
Cost of sales
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,487,049) (5,679,831) (5,037,953)
Impairment losses on inventories /H1118/H1118/H1118 – (35,148) –
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118785,777 890,768 781,723
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,405 16,491 33,115
Other expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,515) (14,296) (5,663)
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118(85,230) (91,352) (81,105)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,946) (32,110) (24,152)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,010) (13,786) (10,654)
PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 713,481 755,715 693,264
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (179,610) (191,056) (174,852)
PROFIT AND TOTAL
COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118533,871 564,659 518,412
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 614 ---
Statements of Financial Position
As at 31 December
As at
30 November
Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H11186 340,624 304,062 295,545
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 20,449 19,994 19,568
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 1,266 1,316 989
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,039 6,759 14,175
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118365,378 332,131 330,277
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 460,631 351,531 324,548
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 777,782 583,598 833,293
Prepayments, other receivables and
other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 3,783 13,436 3,848
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,200 6,600 8,600
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,132 510,646 540,421
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,598,528 1,465,811 1,710,710
CURRENT LIABILITIES
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 628,215 276,684 494,532
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 55,123 47,141 265,778
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,866 56,979 43,205
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H111814 306,534 441,128 440,097
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,053,738 821,932 1,243,612
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118544,790 643,879 467,098
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118910,168 976,010 797,375
NON-CURRENT LIABILITIES
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,282 4,075 3,886
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H111814 31,331 13,203 6,650
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,613 17,278 10,536
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118874,555 958,732 786,839
EQUITY
Paid-in capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 308,839 308,839
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118565,716 649,893 478,000
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118874,555 958,732 786,839
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 615 ---
Statements of Changes in Equity
Year ended 31 December 2021
Paid-in
capital
Statutory
reserve*
Retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 31,844 286,526 627,209
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 533,871 533,871
Transfer from retained profits /H1118/H1118/H1118/H1118– 53,387 (53,387) –
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (286,525) (286,525)
As at 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 85,231 480,485 874,555
Year ended 31 December 2022
Paid-in
capital
Statutory
reserve*
Retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 85,231 480,485 874,555
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 564,659 564,659
Transfer from retained profits /H1118/H1118/H1118/H1118– 56,466 (56,466) –
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (480,482) (480,482)
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 141,697 508,196 958,732
Eleven months ended 30 November 2023
Paid-in
capital
Statutory
reserve*
Retained
profits* Total equity
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 141,697 508,196 958,732
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 518,412 518,412
Transfer from retained profits /H1118/H1118/H1118/H1118– 51,841 (51,841) –
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (690,305) (690,305)
As at 30 November 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,839 193,538 284,462 786,839
* These reserve accounts comprise the reserves of RMB565,716,000 and RMB649,893,000 and
RMB478,000,000 in the statements of financial position as at 31 December 2021 and 2022 and 30 November
2023, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 616 ---
Statements of Cash Flows
Y ear ended 31 December
Eleven
months
ended
30 November
Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit for the year/period: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,871 564,659 518,412
Adjustments for:
Impairment losses on inventories /H1118/H1118/H1118/H1118/H1118 – 35,148 –
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 40,973 40,478 36,426
Depreciation of right-of-use assets /H1118/H1118/H1118/H11187 565 455 426
Amortisation of other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 336 392 460
(Increase)/decrease in working capital /H1118 (98,703) (91,594) 34,968
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118477,042 549,538 590,692
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from disposal of items of
property, plant and equipment /H1118/H1118/H1118/H1118/H1118 5,302 5,839 2,440
Purchases of items of property, plant
and equipment and other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,414) (21,123) (34,140)
Net cash flows used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,112) (15,284) (31,700)
CASH FLOWS FROM FINANCING
ACTIVITIES
New bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206,000 190,000 207,000
Repayment of borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(267,446) (73,446) (217,271)
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(286,525) (480,482) (508,193)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,627) (12,590) (11,032)
Net cash flows used in financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(362,598) (376,518) (529,496)
NET INCREASE IN CASH AND
CASH EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,332 157,736 29,496
Cash and cash equivalents at
beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266,875 345,132 510,646
Effect of foreign exchange rate
changes, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,075) 7,778 279
CASH AND CASH EQUIV ALENTS
AT END OF YEAR/PERIOD /H1118/H1118/H1118/H1118/H1118/H1118345,132 510,646 540,421
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 617 ---
2. Material Accounting Policy Information
The Financial Information of STAES has been prepared in accordance with the
accounting policies as set out in Section II Note 2.4 above.
3. Revenue
An analysis of revenue is as follows:
(a) Disaggregated revenue information:
Y ear ended 31 December
Eleven
months ended
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Types of goods
Sales of batteries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,272,826 6,605,747 5,819,676
Timing of revenue recognition
Goods transferred at a point in
time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,272,826 6,605,747 5,819,676
(b) Performance obligations
Information about the STAES’s performance obligations is summarised below:
Sales of products
The performance obligation is satisfied upon delivery of the products and
payment is generally due within 30 days from delivery.
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 618 ---
4. Profit Before Tax
Y ear ended 31 December
Eleven
months
ended
30 November
Notes 2021 2022 2023
RMB’000 RMB’000 RMB’000
Cost of sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,487,049 5,679,831 5,037,953
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 40,973 40,478 36,426
Depreciation of right-of-use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 565 455 426
Amortisation of other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 336 392 460
Employee benefit expense:
Wages and salaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,634 48,341 52,640
Pension scheme contributions
and social welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,103 7,869 8,224
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,737 56,210 60,864
Impairment losses on inventories /H1118 – 35,148 –
Losses on disposal of items of
property, plant and equipment /H1118 144 13,309 3,658
Foreign exchange differences,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,591 (9,411) 938
5. Income Tax
STAES was subject to tax at the statutory rate of 25% on the taxable profits determined
in accordance with the PRC Corporate Income Tax Law.
A reconciliation of the tax expense applicable to profit before tax at the statutory rate for
the jurisdiction in which STAES is domiciled to the tax expense at the effective tax rate is as
follows:
Y ear ended 31 December
Eleven months
ended
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118713,481 755,715 693,264
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 619 ---
Y ear ended 31 December
Eleven months
ended
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Tax at the statutory tax rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118178,370 188,929 173,316
Expenses not deductible
for tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,064 1,827 1,367
Adjustments in respect of current tax of
previous periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176 300 169
Total tax expense for the year/period /H1118/H1118/H1118179,610 191,056 174,852
6. Property, Plant and Equipment
Buildings Machinery
Office
equipment
and
electronic
devices
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 220,577 2,830 31,161 406,275
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,666) (39,889) (1,851) – (63,406)
Net carrying amount /H1118/H1118/H1118/H1118130,041 180,688 979 31,161 342,869
At 1 January 2021,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,041 180,688 979 31,161 342,869
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 16,208 11 23,254 39,473
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 53,584 127 (53,711) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (745) – – (745)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118(6,909) (33,706) (358) – (40,973)
At 31 December 2021,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,132 216,029 759 704 340,624
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 620 ---
Buildings Machinery
Office
equipment
and
electronic
devices
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 289,376 2,968 704 444,755
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,575) (73,347) (2,209) – (104,131)
Net carrying amount /H1118/H1118/H1118/H1118123,132 216,029 759 704 340,624
31 December 2022
At 31 December 2021
and at 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 289,376 2,968 704 444,755
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,575) (73,347) (2,209) – (104,131)
Net carrying amount /H1118/H1118/H1118/H1118123,132 216,029 759 704 340,624
At 1 January 2022,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,132 216,029 759 704 340,624
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,432 204 19,428 23,064
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 483 246 (729) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (19,087) (61) – (19,148)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118/H1118(6,909) (33,191) (378) – (40,478)
At 31 December 2022,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116,223 167,666 770 19,403 304,062
At 31 December 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 271,819 3,357 19,403 446,286
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,484) (104,153) (2,587) – (142,224)
Net carrying amount /H1118/H1118/H1118/H1118116,223 167,666 770 19,403 304,062
30 November 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 271,819 3,357 19,403 446,286
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,484) (104,153) (2,587) – (142,224)
Net carrying amount /H1118/H1118/H1118/H1118116,223 167,666 770 19,403 304,062
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 621 ---
Buildings Machinery
Office
equipment
and
electronic
devices
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118116,223 167,666 770 19,403 304,062
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 18,427 595 14,985 34,007
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,478 23 (17,501) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,060) (38) – (6,098)
Depreciation provided
during the period /H1118/H1118/H1118/H1118(6,333) (29,751) (342) – (36,426)
At 30 November 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,890 167,760 1,008 16,887 295,545
At 30 November 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118151,707 299,692 3,937 16,887 472,223
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(41,817) (131,932) (2,929) – (176,678)
Net carrying amount /H1118/H1118/H1118/H1118109,890 167,760 1,008 16,887 295,545
7. Right-Of-Use Assets
Leasehold land
RMB’000
31 December 2021
Cost at 1 January 2021, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,014
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(565)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,449
31 December 2022
Cost at 1 January 2022, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,449
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(455)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,994
30 November 2023
Cost at 1 January 2023, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,994
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(426)
At 30 November 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,568
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 622 ---
8. Other Intangible Assets
Software
RMB’000
31 December 2021
Cost at 1 January 2021, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(336)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,266
Software
RMB’000
31 December 2022
Cost at 1 January 2022, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,266
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118442
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(392)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,316
Software
RMB’000
30 November 2023
Cost at 1 January 2023, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,316
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(460)
At 30 November 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118989
9. Inventories
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143,019 114,402 141,020
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,567 1,626 1,501
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314,045 235,503 182,027
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118460,631 351,531 324,548
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 623 ---
Inventories are stated at the lower of cost and net realisable value. STAES assessed the
net realisable value of the inventories at the end of each reporting period. During the year
ended 31 December 2022, STAES recognised impairment losses on inventories of
RMB35,148,000 and then wrote off such inventory provision in the same year attributable to
the sales of finished goods.
10. Trade Receivables
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777,782 583,598 833,293
Trade receivables are non-interest-bearing. The expected credit loss was assessed to be
minimal as the major customers of STAES were highly reputable.
An ageing analysis of the trade receivables as at 31 December 2021 and 2022 and 30
November 2023, based on recognition date, is as follows:
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Within 3 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777,782 546,296 832,866
3 to 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,297 318
6 months to 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5 109
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118777,782 583,598 833,293
11. Prepayments, Other Receivables and Other Assets
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118389 11,950 3,065
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,574 1,486 783
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,820 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,783 13,436 3,848
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 624 ---
12. Trade Payables
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Trade payables
– related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118422,312 222,332 288,507
– third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118205,903 54,352 206,025
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118628,215 276,684 494,532
13. Other Payables and Accruals
As at 31 December
As at
30 November
2021 2022 2023
RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,517 5,171 6,480
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,657 21,557 54,091
Dividends payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 182,112
Other tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,949 20,413 23,095
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,123 47,141 265,778
14. Interest-Bearing Bank Borrowings
As at 31 December 2021 As at 31 December 2022 As at 30 November 2023
Current
Non-
current Total Current
Non-
current Total Current
Non-
current Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Unsecured bank borrowings /H1118/H1118/H1118306,534 31,331 337,865 441,128 13,203 454,331 440,097 6,650 446,747
15. Dividends
Pursuant to the resolutions of the board of directors, STAES declared dividends in the
amount of RMB286,525,000, RMB480,482,000 and RMB508,193,000 for the years ended 31
December 2020 and 2021 and 2022, respectively, which were fully paid before the acquisition.
Pursuant to the resolutions of the board of directors in 2023, STAES declared dividends
in the amount of RMB182,112,000 for the six months ended 30 June 2023, which was fully
paid in May 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 625 ---
The following information does not form part of the Accountants’ Report from Ernst &
Young, Certified Public Accountants, Hong Kong, the Company’ s reporting accountants, as set
out in Appendix I to this prospectus, and is included herein for illustrative purpose only. The
unaudited pro forma financial information should be read in conjunction with the section
headed “Financial Information” in this prospectus and the Accountants’ Report set out in
Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable
to the owners of the Company has been prepared in accordance with Rule 4.29 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and with
reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for
inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants to illustrate the effect of the Global Offering on the consolidated net tangible
assets attributable to owners of the Company as at 31 December 2024 as if the Global Offering
had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to owners of the Company has been prepared for illustrative purposes only and
because of its hypothetical nature, it may not give a true picture of the consolidated net tangible
assets of the Group as at 31 December 2024 or any future dates following the Global Offering.
Consolidated net
tangible assets
attributable to
owners of the
Company as at
31 December 2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
Unaudited pro forma
adjusted consolidated net
tangible assets
attributable to owners of
the Company per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer
Price of HK$8.27
per Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,766 885,193 6,357,959 2.53 2.75
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 626 ---
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as at 31 December 2024 is
arrived at after deducting other intangible asset of RMB423,079,000 and goodwill of RMB1,277,000
from the consolidated equity attributable to owners of the Company of RMB5,897,122,000 as at
31 December 2024, as shown in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$8.27 per Share,
after deduction of the underwriting fees and other related expenses payable by the Company (excluding
the listing expenses that have been charged to profit or loss during the Track Record Period) and does
not take into account of any Shares which may be issued upon the exercise of the Over-allotment Option.
The estimated net proceeds from the Global Offering are converted from Hong Kong dollars into
Renminbi at an exchange rate of RMB0.9229 to HK$1.00.
(3) The unaudited pro forma adjusted net tangible assets per Share is calculated based on 2,508,500,103
Shares in issue immediately following the completion of the Global Offering without taking into account
any Shares which may be issued upon the exercise of the Over-allotment Option.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong
Kong dollars at an exchange rate of RMB0.9229 to HK$1.00.
(5) No adjustment has been made to reflect any trading result or open transaction of the Group entered
subsequent to 31 December 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 627 ---
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺979噆
⤑⏋✱ᷧ⺎27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of Jiangsu Zenergy Battery Technologies Group Co., Ltd.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Jiangsu Zenergy Battery Technologies Group Co., Ltd. (the
“Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) by the
directors of the Company (the “Directors”) for illustrative purposes only. The pro forma
financial information consists of the pro forma consolidated net tangible assets as at 31
December 2024 and related notes as set out on pages II-1 and II-2 of the prospectus dated 3
April 2025 issued by the Company (the “Pro Forma Financial Information”). The applicable
criteria on the basis of which the Directors have compiled the Pro Forma Financial Information
are described in Part A of Appendix II to the Prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the
impact of the global offering of shares of the Company on the Group’s financial position as at
31 December 2024 as if the transaction had taken place at 31 December 2024. As part of this
process, information about the Group’s financial position has been extracted by the Directors
from the Group’s financial statements for the period ended 31 December 2024, on which an
accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline (“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the
“HKICPA”).
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 628 ---
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the Pro Forma Financial Information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the Directors have compiled the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely
to illustrate the impact of the global offering of shares of the Company on unadjusted financial
information of the Group as if the transaction had been undertaken at an earlier date selected
for purposes of the illustration. Accordingly, we do not provide any assurance that the actual
outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the Pro Forma Financial Information provide a reasonable basis for presenting
the significant effects directly attributable to the transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 629 ---
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, the transaction in respect
of which the Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Certified Public Accountants
Hong Kong
3 April 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 630 ---
This Appendix is mainly providing investors with an overview on the Articles of
Association of our Company. The following information is only a summary, not covering all
the information that may be material to investors.
SHARES AND REGISTERED CAPITAL
The issuance of the shares of our Company shall be conducted in the principle of fairness
and justness, and each share of the same class shall be entitled to equal rights. For shares issued
at the same time and within the same class, it shall be issued in the same conditions and price;
and subscribers shall pay the same price for each share they subscribe. The domestic unlisted
shares issued by our Company shall be deposited at a domestic securities depository and
settlement agency. The overseas listed shares issued by our Company may be deposited in
accordance with applicable laws of Hong Kong and the general practice of securities
registration and depository.
INCREASE/DECREASE, REPURCHASE AND TRANSFER OF SHARES
Increase/Decrease of Shares
According to the needs for operation and development of our Company, and subject to
applicable laws, administrative regulations, departmental rules, normative documents, Listing
Rules, and requirements by relevant regulatory authorities upon respective resolution by a
Shareholders’ meeting, our Company may increase its registered capital by any of the
following means:
(1) public offering of shares;
(2) non-public offering of shares;
(3) distribution of bonus shares to existing Shareholders;
(4) converting the reserved funds into share capital;
(5) other means stipulated by applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules or approved by or filed with the relevant
regulatory authorities.
To reduce its registered capital, our Company shall proceed it in compliance with the PRC
Company Law, Listing Rules, other relevant applicable laws, administrative regulations,
departmental rules, normative documents and the Articles of Association.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-1 –


--- page 631 ---
Repurchase of Shares
In any of the following circumstances, our Company may repurchase its issued shares in
accordance with the PRC Company Law, Listing Rules, other relevant applicable laws,
administrative regulations, departmental rules, normative documents and the Articles of
Association and subject to the registration or filing with the relevant regulatory authorities:
(1) reducing the registered capital of our Company;
(2) merging with another company holding shares of our Company;
(3) using shares for stock incentive plans and employee stock plans;
(4) acquiring the shares of Shareholders who vote against any resolution adopted at the
Shareholders’ meeting on the merger or demerger of our Company and request our
Company to acquire their shares;
(5) using shares for converting corporate bonds into shares issued by our Company;
(6) as required for our Company to maintain corporate value and Shareholders’
interests;
(7) other circumstances approved by applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and regulatory authorities.
Any repurchase under circumstances (3), (5) or (6) above, subject to the requirements of
Listing Rules and the regulatory rules and guidelines of the Hong Kong Stock Exchange, shall
be conducted through open and centralized trading.
A resolution of a Shareholders’ meeting is required for repurchasing shares under
circumstances (1) or (2) above. In accordance with the provisions of the Articles of Association
or the authorization of the Shareholders’ meeting, repurchase of shares under circumstances
(3), (5) or (6) above may be resolved by a resolution of a meeting of the Board with a quorum
of more than two-thirds of Directors, unless otherwise provided by Listing Rules. In
compliance with Listing Rules, the shares acquired under the above circumstance (1), shall be
de-registered within 10 days from the date of repurchase; the shares acquired under the above
circumstances (2) or (4), shall be transferred or de-registered within six months; and the shares
acquired under the above circumstances (3), (5) or (6), shall be transferred or de-registered
within three years, and the shares held in total by our Company shall not exceed 10% of total
shares issued by our Company. Where applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and securities regulatory authorities
where our Company’s shares are listed provide otherwise regarding the relevant matters
involved in the aforementioned share repurchase, those provisions shall prevail.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-2 –


--- page 632 ---
Where our Company acquires its own shares, it shall fulfill its information disclosure
obligations in accordance with relevant laws, regulations, Listing Rules and the relevant
provisions of the CSRC and the Hong Kong Stock Exchange.
Transfer of Shares
Unless otherwise required by applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association, the fully paid shares
of our Company may be transferred freely. The transfer of overseas listed shares shall be
registered with the local Hong Kong share registrar entrusted by our Company.
Shares issued by our Company prior to the public offering shall not be transferred within
one year from the date our Company’s shares are listed and traded on the Hong Kong Stock
Exchange.
The Directors, Supervisors, general manager and other senior management of our
Company shall report their shareholding in our Company and changes thereof to our Company,
and during their tenure determined at the time of taking office, the shares transferred each year
shall not exceed 25% of the total number of Company shares held by them; our Company
shares held by them shall not be transferred within one year from the date when the shares of
our Company are listed and traded; within half a year from departure from our Company, the
aforesaid persons shall not transfer our Company shares held by them. If applicable laws,
administrative regulations, departmental rules, normative documents and the Listing Rules
provide otherwise, such rules shall apply in the principle of strictness.
All transfers of overseas listed shares shall adopt the written transfer instrument in
general or common format or any other form acceptable to the Board (including the standard
transfer format or transfer form prescribed by Hong Kong Stock Exchange from time to time);
the written transfer documents may only be manually signed with signatures, or (if the
transferor or the transferee is a corporation) stamped with valid seals. If the transferor or
transferee of the shares of our Company is a recognised clearing house or its nominee as
defined by the relevant regulations in force from time to time under the laws of Hong Kong,
the written transfer documents may be signed by hand or machine printing. All transfer
documents must be placed at the legal address of our Company, the address of the transfer
office or such other place as the Board may designate from time to time. If our Company
refuses to register the transfer of shares, our Company shall, within two months from the date
of the formal application for transfer, provide the transferor and transferee with a notice of
refusal to register the transfer of the shares.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-3 –


--- page 633 ---
Directors, Supervisors, senior management and Shareholders holding more than 5% of
our Company’s shares who sell shares or other securities of equity nature of our Company held
by them within six months after purchase of the same, or purchase such shares or securities
again within six months after sale of the same, shall have the profits gained returned to our
Company, and the Board shall reclaim such profits. However, this does not apply under
circumstances where securities companies hold more than 5% of the shares due to underwriting
and purchasing remaining shares after sale, or other circumstances stipulated by the CSRC.
SHAREHOLDERS AND SHAREHOLDERS’ MEETING
Shareholders
Shareholders of our Company are persons who lawfully hold shares of our Company and
whose names are entered in the register of Shareholders, unless there is evidence to the
contrary. Shareholders enjoy rights and assume obligations according to the class of shares they
hold; each share of the same class shall bear the same rights and obligations.
The Shareholders of our Company shall be entitled to the following rights:
(1) receiving dividends and other form of interest distribution in proportion to their
shareholdings;
(2) requiring, convening, chairing, attending by person or by proxy a Shareholders’
meeting pursuant to the laws, and exercising the speaking right, inquiry right and
voting right at the meeting;
(3) supervising, presenting suggestions on or making inquiries about the business
operation of our Company;
(4) transferring, gifting or pledging the shares held by them, in accordance with
applicable laws, administrative regulations, departmental rules, normative
documents, Listing Rules and the Articles of Association;
(5) accessing and replicating the Articles of Association, the register of Shareholders,
minutes of Shareholders’ meeting, resolutions of Board, resolutions of Supervisory
Committee and publicly disclosed financial and accounting reports;
(6) participating in the distribution of residual assets of our Company in proportion to
their shareholdings, upon termination or liquidation of our Company;
(7) for Shareholders who vote against any resolution adopted at the Shareholders’
meeting on the merger or demerger of our Company, requesting our Company to
acquire its shares;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-4 –


--- page 634 ---
(8) any other rights stipulated by applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules or the Articles of
Association.
In the event that any resolution by the Shareholders’ meeting or the Board meeting
violates applicable laws and administrative regulations, the Shareholders may request people’s
court to invalidate such resolution. In the event that the convening procedures or voting means
of the Shareholders’ meeting or the Board meeting violate the laws, administrative regulations
or the Articles of Association, or any resolution violates the Articles of Association,
Shareholders may request people’s court to withdraw such resolution within 60 days from the
date of resolution, unless there are only minor defects in the convening procedures or voting
means of the Shareholders’ meeting or the Board meeting, which do not have a material impact
on the resolutions.
The Shareholders of our Company shall undertake the following obligations:
(1) abiding by applicable laws, administrative regulations, departmental rules,
normative documents, Listing Rules and the Articles of Association;
(2) making payment according to the number of shares subscribed for and the manners
of subscription;
(3) not withdrawing the shares, unless otherwise stipulated by applicable laws,
administrative regulations, departmental rules, normative documents, Listing Rules
and the Articles of Association;
(4) not abusing Shareholder’s rights to harm the interests of our Company or other
Shareholders; not abusing the independent legal person status of our Company and
the limited liability of Shareholders to harm the interests of our Company’s
creditors;
(5) any other obligations stipulated by applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of
Association.
Any Shareholder who abuses Shareholder’s rights causing losses to our Company or other
Shareholders shall be liable for compensation pursuant to the laws. Any Shareholder who
abuses the independent legal person status of our Company and the limited liability of
Shareholders to evade debts and severely infringe upon the interests of our Company’s
creditors shall be held jointly and severally liable for our Company’s debts.
The controlling Shareholder or actual controller of our Company shall not utilise its
connected relationship against the interests of our Company, or else, shall compensate our
Company for any loss incurred.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-5 –


--- page 635 ---
General Rules for Shareholders’ Meetings
The Shareholders’ meeting is the organ of authority of our Company, and shall duly
exercise following functions and powers:
(1) to elect and remove any Director or Supervisor (not including employee
representative(s)), and to determine the remuneration of the relevant Directors and
Supervisors;
(2) to review and approve the reports of the Board;
(3) to review and approve the reports of the Supervisory Committee;
(4) to review and approve our Company’s annual financial budgets and final accounts
plans;
(5) to review and approve our Company’s profit distribution plans and loss recovery
plans;
(6) to resolve on our Company’s increase/decrease of registered capital;
(7) to resolve on our Company’s issuance of bonds or any class of shares, warrants and
other similar securities as well as the listing;
(8) to resolve on our Company’s merger, division, spin-off, dissolution, liquidation or
change of its corporate form;
(9) to modify the Articles of Association;
(10) to decide on the engagement or dismissal of the accounting firm and the audit fee
of the accounting firm;
(11) to review and approve the motions proposed by Shareholder(s) individually or
jointly holding at least 1% voting shares of our Company;
(12) to review and approve the relevant transactions and guarantee matters required to be
resolved by the Shareholders’ meeting as specifically provided in the Articles of
Association;
(13) to review and approve transactions between our Company and its connected persons
that meet the requirements for approval by the Shareholders’ meeting under Listing
Rules;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-6 –


--- page 636 ---
(14) to review and approve our Company’s purchase or disposals of material assets
accumulated within one year in the amount exceeding 30% of latest audited total
assets of our Company;
(15) to review and approve the change in the use of raised proceeds;
(16) to review and approve the stock incentive plans and employee stock plans;
(17) to adopt resolutions on certain acquisition of our Company’s own shares by itself
due to the circumstances as specifically provided in the Articles of Association;
(18) other matters to be decided by Shareholders’ meeting under applicable laws,
administrative regulations, departmental rules, normative documents, Listing Rules
and the Articles of Association.
There are two types of Shareholders’ meetings: annual Shareholders’ meeting and
extraordinary Shareholders’ meeting. The annual Shareholders’ meeting shall be convened
once a year, and shall be held within six months from the end of last accounting year.
The extraordinary Shareholders’ meeting shall be convened when necessary. The
extraordinary Shareholders’ meeting shall be convened within two months from the date of
occurrence of any of the following events:
(1) the number of Directors is less than two-thirds of the quorum required by the PRC
Company Law, or less than two-thirds of the quorum required by the Articles of
Association;
(2) the outstanding losses of our Company account for one-third of our Company’s total
share capital;
(3) Shareholder(s) individually or jointly holding at least 10% shares of our Company
send(s) a written request for meeting;
(4) the Board deems necessary;
(5) the Supervisory Committee proposes to convene the meeting;
(6) more than two independent non-executive Directors propose to convene the
meeting;
(7) other circumstances under applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules, or the Articles of Association.
The motions proposed by the convener shall be included in the agenda of the
Shareholders’ meeting under circumstances (3), (4) (5) or (6) above.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-7 –


--- page 637 ---
Convening of Shareholders’ Meetings
Independent Non-Executive Directors may propose to convene an extraordinary
Shareholders’ meeting. In accordance with applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association, the
Board shall provide written feedback on whether to agree or disagree with the proposal to
convene such extraordinary Shareholders’ meeting within 10 days after receiving the proposal.
In the event the Board agrees to convene an extraordinary Shareholders’ meeting, the Board
shall issue an extraordinary Shareholders’ meeting notice within five days of making its
resolutions. In the event that the Board declines to convene an extraordinary Shareholders’
meeting, the Board shall specify the reasons and make an announcement.
The Supervisory Committee may propose in writing to convene an extraordinary
Shareholders’ meeting. In accordance with applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association, the
Board shall provide written feedback on whether to agree or disagree with the proposal to
convene such extraordinary Shareholders’ meeting within 10 days after receiving the proposal.
In the event the Board agrees to convene an extraordinary Shareholders’ meeting, the Board
shall issue an extraordinary Shareholders’ meeting notice within five days of making its
resolutions, and any changes to the original proposal in such notice shall be agreed upon by the
Supervisory Committee. In the event that the Board declines to convene an extraordinary
Shareholders’ meeting or fails to respond within 10 days, it shall be deemed to be unable or
to fail to fulfill its duty to convene a Shareholders’ meeting and then the Supervisory
Committee may convene and preside over the meeting on its own.
Shareholder(s) individually or jointly holding 10% or more of shares may request in
writing to convene an extraordinary Shareholders’ meeting to the Board, and specify the
subject of the meeting. In accordance with applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules, the Articles of Association and the
relevant rules of procedure for the meeting, the Board shall provide written feedback on
whether to agree or disagree with the request to convene such extraordinary Shareholders’
meeting within 10 days after receiving the request. In the event the Board agrees to convene
an extraordinary Shareholders’ meeting, the Board shall issue an extraordinary Shareholders’
meeting notice within five days of making its resolutions, and any changes to the original
request in such notice shall be agreed upon by the requesting Shareholder(s). In the event that
the Board declines to convene an extraordinary Shareholders’ meeting or fails to respond in
writing within 10 days after receiving the request, Shareholder(s) individually or jointly
holding 10% or more of shares may request in writing to convene an extraordinary
Shareholders’ meeting to the Supervisory Committee. In the event the Supervisory Committee
agrees to convene an extraordinary Shareholders’ meeting, the Supervisory Committee shall
issue an extraordinary Shareholders’ meeting notice within five days of receiving such request,
and any changes to the original request in such notice shall be agreed upon by the requesting
Shareholder(s). In the event that the Supervisory Committee fails to issue the notice within the
time limit, it shall be deemed to fail to convene and chair a Shareholders’ meeting, and then
the Shareholder(s) individually or collectively holding 10% or more of shares for at least 90
consecutive days may convene and chair the meeting on its/their own.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-8 –


--- page 638 ---
In the event of the Supervisory Committee or the Shareholder(s) convening and holding
a Shareholders’ meeting on its/their own, the necessary expenses incurred for such meeting
shall be borne by our Company.
Notice of Shareholders’ Meetings
To hold an annual Shareholders’ meeting, the convener shall notify all Shareholders by
announcement 21 days in advance. To hold an extraordinary Shareholders’ meeting, the
convener shall notify all Shareholders by announcement 10 business days or 15 days
(whichever is longer) in advance. If applicable laws, administrative regulations, departmental
rules, normative documents, the Listing Rules and the Articles of Association provide
otherwise, such rules shall apply. The period shall exclude the date on which the meeting is
convened.
The notice of Shareholders’ meeting shall be made in writing (including paper documents
or electronic documents that meet the requirements of the relevant regulatory rules of the place
where our Company’s securities are listed) and include the following:
(1) the time, place and duration of meeting;
(2) convening method of the meeting;
(3) matters and proposals submitted to the meeting for review;
(4) if any Director, Supervisor, general manager or other senior management has a
material interest in the matter to be discussed at the meeting, the nature and degree
of interest shall be disclosed; if the implications of the matter to be discussed on
such Director, Supervisor, general manager or other senior management in their
capacity as Shareholders are different from the implications on other Shareholders,
such difference shall be explained;
(5) meeting materials necessary for Shareholder’s voting;
(6) a conspicuous statement: all Shareholders have the right to attend the Shareholders’
meeting and may appoint proxies in writing to attend the meeting and participate in
the voting, and a Shareholder proxy need not be a Shareholder of our Company;
(7) time and address for lodging proxy forms;
(8) record date for determining Shareholders’ entitlement to attend the Shareholders’
meeting;
(9) the convener and chairman of the meeting, the proposer of an extraordinary
Shareholders’ meeting and the proposer’s written proposal;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-9 –


--- page 639 ---
(10) name and telephone number of the permanent contact person for meeting affairs;
(11) time and voting procedures for voting online or by other means;
(12) the notice and supplementary notice of Shareholders’ meeting shall contain
information as required by Listing Rules and the Articles of Association and shall
fully, completely and accurately disclose the specific contents of all proposals and
all information or explanations necessary for the Shareholders to make reasonable
judgment on the proposed matters. Where the opinions of independent non-
executive Directors are necessary for matters to be discussed, the opinions and
reasons given by independent non-executive Directors shall be disclosed
simultaneously when the Shareholders’ meeting notice or supplementary notice is
issued.
Proposals at Shareholders’ Meetings
When our Company convenes a Shareholders’ meeting, the Shareholder(s) individually or
jointly holding 1% or more of shares of our Company are entitled to put forward new proposals
to our Company and submit them in writing to the convener ten days in advance, and the
convener of the Shareholders’ meeting shall issue a supplemental notice of Shareholders’
meeting, announcing the contents of the new proposals, within two days after receiving such
proposals, and include the matters in the new proposals that fall within the scope of authorities
of the Shareholders’ meeting in the agenda of the meeting and submit the same to the
Shareholders’ meeting for deliberation.
Proxy at Shareholders’ Meetings
A Shareholder may appoint a proxy in writing, and the appointing Shareholder or his/her
attorney proxy shall sign a proxy form in writing; if the appointing Shareholder is a corporate
entity, such appointment shall be signed by its duly authorised representative.
The power of attorney issued by any Shareholder for appointing a proxy to attend the
Shareholders’ meeting shall include the instructions to vote for, vote against or abstain from
each matter to be discussed as listed in the agenda of the Shareholders’ meeting. Such power
of attorney shall specify whether the proxy may vote at his/her own discretion in absence of
instructions from the Shareholder. If it is not specified, it shall be deemed that the proxy is
entitled to vote at his/her own discretion.
Where the appointing Shareholder dies, loses the capacity to act, withdraws the power of
attorney, withdraws the authorization to sign the power of attorney or where the relevant shares
have been assigned before voting, the vote made by the proxy so appointed shall be still valid,
as long as our Company did not receive a notice in writing of such events before meeting.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 640 ---
Resolutions of Shareholders’ Meetings
There are two kinds of resolutions made at Shareholders’ meeting, namely: ordinary
resolutions and special resolutions. Ordinary resolutions shall be approved by more than half
of voting rights held by the Shareholders (including proxies) attending the Shareholders’
meeting. Special resolutions shall be approved by above two-thirds of the voting rights held by
Shareholders (including proxies) attending the Shareholders’ meeting.
A Shareholder or proxy shall exercise its voting rights pertaining to the voting shares held
by it when voting at Shareholders’ meeting, and each share shall have one vote. When voting
on shares, Shareholders (including their proxies) with two or more voting rights are not
required to cast all their votes in favor or against a proposal. However, there is no voting rights
attached to the shares held by our Company, and such portion of shares shall not be included
in the total number of shares with voting rights at Shareholders’ meeting.
When the matters of connected transactions (as defined in Listing Rules) are reviewed at
Shareholders’ meeting, connected Shareholders or their close associates (as defined in Listing
Rules) shall not vote, and the number of voting shares held by them shall not be included in
the total number of valid votes. The announcement on resolution of Shareholders’ meeting shall
fully disclose the voting results of non connected Shareholders. Before the Shareholders’
meeting reviews connected transactions, our Company shall determine the scope of connected
Shareholders in accordance with relevant laws, regulations, and normative documents.
Connected Shareholders or their proxies may attend the Shareholders’ meeting and express
their views to the attending Shareholders in accordance with the meeting procedures.
If any Shareholder is required to abstain from voting in respect of a certain motion, or any
Shareholder is restricted to vote for or against a certain motion in accordance with applicable
laws, administrative regulations, departmental rules, Listing Rules, the Articles of Association
and relevant rules of procedure for the meeting, such Shareholder shall abstain from voting or
vote pursuant to such requirement and restriction. The votes of such Shareholder or its proxy
shall not be counted in the event that such requirement or restriction is violated.
The following matters shall be approved by ordinary resolutions at the Shareholders’
meeting:
(1) the work report of the Board or the Supervisory Committee;
(2) the profit distribution plan and plan for covering losses formulated by the Board;
(3) the election and removal of members of the Board and the Supervisory Committee
(not being employee representative(s)) and their remunerations and the method of
payment thereof;
(4) our Company’s annual financial budgets and final accounts plans;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 641 ---
(5) the annual reports of our Company;
(6) the engagement or dismissal of the accounting firm and the audit fee of the
accounting firm;
(7) the relevant transactions and guarantee matters required to be resolved by the
Shareholders’ meeting as specifically provided in the Articles of Association;
(8) connected transactions between our Company and its connected persons that meet
the requirements for approval by the Shareholders’ meeting under the Listing Rules;
(9) change in the use of raised proceeds;
(10) other matters to be decided by the Shareholders’ meeting other than those required
to be approved by a special resolution under applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the Articles
of Association.
The following matters shall be approved by special resolutions at the Shareholders’
meeting:
(1) the increase or decrease of share capital of our Company;
(2) the issuance of any class of shares, warrants and other similar securities as well as
the listing of our Company;
(3) the division, spin-off, merger, or the change of corporate form of our Company;
(4) the termination, dissolution or liquidation of our Company;
(5) the amendment to the Articles of Association;
(6) the purchase, disposals of material assets or provision of guarantees accumulated
within one year in the amount exceeding 30% of latest audited total assets of our
Company;
(7) the equity stock incentive plans and employee stock plans;
(8) resolutions on certain acquisition of our Company’s own shares by itself due to the
circumstances as specifically provided in the Articles of Association;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 642 ---
(9) any other matters to be approved by extraordinary resolutions as required by
applicable laws, administrative regulations, departmental rules, normative
documents, Listing Rules and the Articles of Association as well as other matters
that are determined by the ordinary resolutions of the Shareholders’ meeting to have
a significant impact on our Company and require to be approved by special
resolutions.
DIRECTORS AND THE BOARD OF DIRECTORS
Directors
The Directors of our Company shall be natural persons.
Directors shall be elected or replaced at Shareholders’ meeting, for a tenure of three years.
Upon the expiration of his tenure, a Director may be re-elected and serve consecutive terms.
The tenure of a Director shall be from the date of appointment to the expiry of tenure of
the current Board. If a Director’s tenure expires but an alternate Director is not elected in time,
then before the alternate Director holding office, the original Director shall still perform the
duties as Director, in accordance with applicable laws, administrative regulations,
departmental rules, normative documents, Listing Rules and the Articles of Association.
A Director may propose resignation before expiry of tenure, by filing a resignation report
in writing to the Board. The Board will disclose the relevant information within the time limit
specified by applicable laws, administrative regulations, departmental rules, normative
documents, and Listing Rules. Directors shall not evade their responsibilities through
resignation or other means. If the resignation of a Director causes the number of board
members to be less than the quorum, then before the alternate Director holds office, the original
Director shall still perform the duties as Director under applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the Articles of
Association. Otherwise, a Director’s resignation shall be effective from the time such
resignation report is delivered to the Board.
Chairman
The Board shall have one Chairman, who shall be elected by more than half of Directors
with a tenure of three years, and may be re-elected and serve consecutive terms.
The Chairman of the Board shall exercise the following powers and functions:
(1) leading the Board and ensuring the effective operation of the Board;
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--- page 643 ---
(2) presiding over Shareholders’ meetings, convening and presiding over Board
meetings, formulating and approving the agenda for each Board meeting, taking into
account any matters proposed to be added to the agenda by other Directors where
appropriate, and ensuring that all Directors at the Board meeting are properly
informed of such matters;
(3) supervising and inspecting the implementation of resolutions of the Board;
(4) signing the securities issued by our Company;
(5) ensuring that Directors receive adequate information in a timely manner and that
such information is accurate, clear, complete and reliable;
(6) ensuring that appropriate measures are taken to maintain effective liaison with
Shareholders and ensuring that Shareholders’ opinions can be conveyed to the entire
Board;
(7) ensuring that good corporate governance practices and procedures are formulated by
our Company;
(8) encouraging dissenting Directors to express their concerned matters, providing
adequate time to discuss these matters, and ensuring that the resolutions of the
Board can fairly reflect the consensus of the Board;
(9) examining and approving other matters beyond the scope of authorities of the
Shareholders’ meeting, the Board and the general manager prescribed by laws,
regulations or the Articles of Association; and
(10) other duties granted by the Board.
Where the Chairman is incapable of performing or fails to perform his/her duties, such
duties shall be performed by a Director jointly elected by a majority of Directors.
Board
Our Company sets up the Board, composed of 7 Directors. Directors of our Company
shall be divided into executive Directors, non-executive Directors and independent non-
executive Directors. The number of independent non-executive Directors shall account for at
least one-third of the total number of Directors and shall be no less than three.
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--- page 644 ---
The Board shall be responsible to the Shareholders’ meetings and exercise the following
functions and powers:
(1) convening the Shareholders’ meeting, submitting proposals and motions to the
Shareholders’ meetings, proposing to the Shareholders’ meetings for approval of
relevant matters, and submitting work reports to the Shareholders’ meetings;
(2) implementing resolutions of the Shareholders’ meetings;
(3) determining the operating plans and investment schemes of our Company;
(4) formulating the annual budget plan and final accounts plan of our Company;
(5) formulating the profit distribution plan and loss makeup plan of our Company;
(6) formulating our Company’s plans for increase or decrease of the registered capital,
issuance of shares, corporate bonds or other securities, or listing plans;
(7) contemplating the plans for major acquisitions, share repurchase, merger, division,
dissolution or change of form of our Company;
(8) deciding, to the extent authorized by the Shareholders’ meeting, our Company’s
external investment, acquisition and sale of assets, mortgage of assets, external
guarantee, entrusted management of wealth, connected transactions, external
donations and other matters;
(9) deciding on the setup of internal management bodies of our Company;
(10) deciding on the appointment or dismissal of our Company’s general manager, board
secretary, and other senior officers, and deciding on their remuneration, reward and
punishment; deciding on the appointment or dismissal of the executive deputy
general manager, chief financial officer, and other senior officers according to the
nomination by the general manager, and deciding on their remuneration, reward and
punishment;
(11) formulating the fundamental management systems of our Company;
(12) formulating the stock incentive plans and employee stock plans;
(13) formulating the modification plan of the Articles of Association;
(14) managing the information disclosure of our Company;
(15) proposing to the Shareholders’ meeting the engagement or replacement of the
accounting firm which provides audit services to our Company;
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--- page 645 ---
(16) hearing the work reports by the general manager and other senior officers of our
Company and inspecting the work performed by the general manager and other
senior officers;
(17) under the authorization of the Articles of Association or the Shareholders’ meeting,
resolving on certain acquisition of our Company’s own shares by itself due to the
circumstances as specifically provided in the Articles of Association;
(18) agree to the appointment or dismissal of the directors and/or general managers of our
Company’s wholly-owned and/or controlled subsidiaries by themselves; and
(19) any other functions and powers granted by applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules, the Articles of
Association or the Shareholders’ meeting.
Upon the consent of more than half of the Board, the Chairman may be authorized to
exercise certain functions and powers of the Board when it is not in session, which shall be
determined by the Board resolutions. However, major matters of our Company shall be decided
collectively by the Board. The statutory functions and powers that should be exercised by the
Board shall not be delegated to the Chairman, the general manager or others.
The Board shall explain to Shareholders’ meeting about the non-standard audit opinions
issued by the CPA firm against the financial statements of our Company.
The Board may hold two kinds of meetings, namely: regular meetings and interim
meetings. The Board shall hold at least four regular meetings per year, approximately once
every quarter, convened by the Chairman. The Chairman shall hold at least one meeting
annually with the independent non-executive Directors without the presence of other Directors.
The notice and relevant documents for the regular meeting shall be delivered to all Directors
and Supervisors at least fourteen days prior to the date of regular meetings (excluding the day
on which the meeting is held) for the purpose of enabling all Directors to attend the meeting.
The notice of interim meeting shall be sent to all Directors and Supervisors five days prior
to the date of interim meetings by fax, e-mail, or other means. In an emergency requiring the
Board to hold an interim meeting as soon as possible, the notice of meeting may be given by
telephone or other oral means, provided that the convener shall make explanations at the
meeting. With the consent of all Directors of our Company, the notification time limit specified
in the preceding paragraph may be waived.
A meeting of the Board may not be held without more than half of Directors being
present, which shall include the presence of three executive Directors. To determine whether
a quorum of meeting exists, any Director who or whose close associates (as defined in Listing
Rules) has an interest in or has a connection with any matter to be resolved at the meeting, or
is required to abstain from voting according to Listing Rules shall not be counted.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 646 ---
Every Director may cast one vote. A motion at the meeting of the Board may be passed
as resolution by a simple majority of all Directors unless otherwise required by the Articles of
Association, and any Director who or whose close associates (as defined in Listing Rules) has
an interest in or has a connection with any matter to be resolved at the meeting, or is required
to abstain from voting according to the Listing Rules shall abstain from voting, nor shall they
exercise voting rights on behalf of other Directors.
Where there is a tie of votes cast both for and against a resolution, the Chairman shall
have the right to cast one more vote.
Directors shall attend Board meetings in person or actively participate in Board meetings
through electronic means. A Director who is unable to attend a meeting for any reason shall
appoint another Director to attend a Board meeting on its behalf in writing, and the appointed
Director shall issue the power of attorney to the Board. The appointed Director shall exercise
the rights as Director within the scope of authorisation. The failure of a Director to attend a
Board meeting in person or by proxy shall be deemed as waiving his/her voting rights at such
meeting.
General Manager and Other Senior Management
Our Company shall have one general manager and one executive deputy general manager
who shall be appointed or dismissed by the Board. Our Company’s senior management is
composed of general manager, executive deputy general manager, chief financial officer and
secretary to the Board.
The term of office of the general manager shall be three years and the general manager
may be reappointed and serve consecutive terms upon the expiration of the term.
The general manager shall be responsible to the Board, and exercises the following
functions and powers:
(1) take charge of the production, operation and management of our Company, organize
the implementation of Board resolutions and report to the Board;
(2) organize the implementation of the annual operation plan and investment plan of our
Company;
(3) contemplate the internal management bodies setup plan of our Company;
(4) contemplate the fundamental management system of our Company;
(5) formulate the specific rules and regulations of our Company;
(6) propose to the Board the appointment or dismissal of the executive deputy general
manager or the chief financial officer;
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--- page 647 ---
(7) appoint or dismiss a manager other than those who should be appointed or dismissed
by the Board;
(8) other duties authorized by the Articles of Association or the Board;
The general manager shall attend Board meetings.
The senior management shall faithfully perform his/her duties and safeguard the
maximum interest of our Company and all Shareholders. If the senior management fails to
faithfully perform their duties or violate their integrity obligations, causing damage to the
interest of our Company and the public Shareholders, they shall bear compensation liability in
accordance with the law.
SUPERVISORS AND THE SUPERVISORY COMMITTEE
The Supervisory Committee shall be composed of three Supervisors, one of whom shall
be the staff’s representative. The staff’s representative Supervisor shall be democratically
elected at our Company’s staff representative meeting, the staff general meeting or by other
means.
A Supervisor shall not be a Director, general manager or other member of senior
management of our Company.
One of the Supervisors shall act as the chairman. The election of the chairman is subject
to the approval by at least one half of the members of the Supervisory Committee through
voting.
The Supervisory Committee exercises the following functions and powers:
(1) examine and give written opinions on our Company’s regular reports prepared by the
Board;
(2) examine the finance of our Company;
(3) supervise the act of Directors and senior management during their performance of
duties and propose the dismissal of any Director or senior management who
contravenes applicable laws, administrative regulations, departmental rules,
normative documents, Listing Rules, the Articles of Association or the resolutions
of Shareholders’ meeting;
(4) require a Director or senior management to correct its act that has harmed the
interests of our Company;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 648 ---
(5) propose an extraordinary Shareholders’ meeting, and when the Board fails to
perform its duties to convene or hold the Shareholders’ meeting as required by the
PRC Company Law, convene or hold the Shareholders’ meeting;
(6) submit proposals to the Shareholders’ meeting;
(7) file a lawsuit against a Director or senior management in accordance with the PRC
Company Law;
(8) investigate abnormalities identified in the operation of our Company and, where
necessary, to engage an accounting firm, a law firm or any other professional firm
to assist with its work at the expense of our Company; and
(9) other duties under applicable laws, administrative regulations, the Articles of
Association or granted by Shareholders’ meeting.
Eligibility and Obligations of Directors, Supervisors, and Senior Management
Any of the following persons shall not act as Director, Supervisor, general manager or
other senior management of our Company:
(1) who has no or limited civil capacity;
(2) who was sentenced for corruption, bribery, embezzlement or misappropriation of
properties or destruction of the order of socialist market-oriented economy, and the
execution of such sentence has expired for no more than five years; or who was
deprived of political rights due to any crime, and the execution of such deprivation
has expired for no more than five years, and for those who have been declared on
probation, the probation period has expired for no more than two years;
(3) who acted as director, factory manager, manager of a company or enterprise in
bankruptcy liquidation, and was personally liable for the bankruptcy of such a
company or enterprise, and a three-year period has not elapsed since the completion
of bankruptcy liquidation of such company or enterprise;
(4) who acted as the legal representative of a company or enterprise whose business
license was revoked or which was ordered to close down due to violation of law and
who is personally liable, and a three-year period has not elapsed since the revocation
of the business license or the closure of such company or enterprise;
(5) who has a significant amount of due and outstanding debts and was listed as
dishonest person subjected to enforcement by the people’s court;
(6) who has been barred from the securities market by the CSRC for a certain period of
time and such period has not expired yet;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 649 ---
(7) any other circumstances stipulated by applicable laws, administrative regulations,
departmental rules, normative documents and Listing Rules.
The Directors shall comply with applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association and assume the duty
of loyalty to our Company. Such obligations include:
(1) shall not accept any bribery or other illegal income by using his or her powers and
position;
(2) shall not embezzle our Company’s property or misappropriate our Company’s funds;
(3) shall not open accounts in his/her own name or in the names of others to deposit
funds or assets of our Company;
(4) shall not lend our Company’s funds to others or pledge Company’s properties to
others in violation of the Articles of Association and without the approval of the
Shareholders’ meeting or the Board;
(5) shall not accept commission for transactions between our Company and others as
personal gains;
(6) shall not take advantage of duty to seek business opportunities for themselves or
others that would have been directed to our Company, except for those that our
Company may not take the advantage of as resolved by the Board or the
Shareholders’ meeting or as stipulated by applicable laws, administrative
regulations and the Articles of Association;
(7) shall not engage in business similar to those of our Company for themselves or
others, without the approval of the Board or the Shareholders’ meeting in accordance
with the Articles of Association;
(8) shall not conclude any contract directly or indirectly with our Company without the
approval of the Board or the Shareholders’ meeting in accordance with the Articles
of Association; these provisions shall apply to the close relatives of Directors or
enterprises directly or indirectly owned by their close relatives, as well as connected
persons with other connection with Directors where they conclude contracts or
conduct transactions with our Company;
(9) shall not disclose any confidential information involving our Company without
authorisation;
(10) shall not impair the interests of our Company through connected relationship;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-20 –


--- page 650 ---
(11) other loyalty obligations in accordance with applicable laws, administrative
regulations, departmental rule, normative documents, Listing Rules and the Articles
of Association.
The senior management assume the aforementioned duty of loyalty.
The Directors shall comply with applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association and assume the duty
of diligence to our Company. Such obligations include:
(1) shall exercise the powers granted by our Company carefully, faithfully, and
diligently so that the business carried out by our Company is in compliance with
applicable laws, administrative regulations, departmental rules, normative
documents, Listing Rules and economic policies of the state, and such business
activities are within the business scope specified in our Company’s business license;
(2) shall treat all Shareholders equally;
(3) shall stay informed with the business and operation of our Company timely;
(4) shall sign the written confirmation opinions on our Company’s regular reports, and
ensure that the information disclosed by our Company is true, accurate, and
complete;
(5) shall provide relevant information and materials to the Supervisory Committee
truthfully and shall not hinder the Supervisory Committee or the Supervisors from
performing their duty;
(6) other diligence obligations in accordance with applicable laws, administrative
regulations, departmental rules, normative documents, Listing Rules and the Articles
of Association.
The senior management assume the aforementioned obligations in items (4), (5) and (6).
Supervisors shall abide by applicable laws, administrative regulations, departmental
rules, normative documents, Listing Rules and the Articles of Association, and shall owe duties
of loyalty and due diligence to our Company. Supervisors may not abuse their authority by
accepting bribes or other illegal income, nor may they misappropriate the property of our
Company.
FINANCIAL ACCOUNTING POLICY
Our Company formulates the financial and accounting system according to applicable
laws, administrative regulations, departmental rules, normative documents and Listing Rules.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-21 –


--- page 651 ---
The Board shall submit the financial reports prepared by our Company as required by
applicable laws, administrative regulations, departmental rules, normative documents of local
governments and authorities as well as the Listing Rules to Shareholders at each annual
Shareholders’ meeting. Our Company shall not establish other accounting books other than
those required by laws. Our Company’s assets shall not be deposited into any account opened
in the name of any individual person.
The financial report shall be made available for Shareholders’ inspection 20 days prior to
the annual Shareholders’ meeting. The foregoing financial report shall include the Board of
Director’s report, the balance sheet (including various documents as required to be attached by
PRC or other applicable laws, administrative regulations, departmental rules, normative
documents and the Listing Rules) and the profit and loss statement (income statement) or
income and expenditure statement (cash flow statement) or a financial summary report
approved by the Hong Kong Stock Exchange (provided that there will be no violation of
applicable PRC laws, administrative regulations, departmental rules or normative documents).
Our Company shall publish the financial reports at international or Hong Kong
accounting standards twice each accounting year, that is, publish the annual report within four
months from the end of each accounting year, and publish the interim report within three
months from the end of the first six months of each accounting year. Our Company shall
publish performance announcements twice each accounting year, namely, publish the annual
performance announcement within three months from the end of each accounting year, and
publish the interim performance announcement within two months from the end of the first six
months of each accounting year. Our Company shall prepare the above-mentioned annual
report and interim report in accordance with applicable laws, administrative regulations,
departmental rules and the Listing Rules, and report, disclose and/or submit the annual report
and interim report and other documents to Shareholders. If the relevant laws, administrative
regulations, securities regulatory authorities of the place where our Company’s shares are
listed, or the Hong Kong Stock Exchange provide otherwise, such provisions shall prevail.
PROFITS DISTRIBUTION
To distribute after-tax profits of current year, our Company shall allocate 10% of profits
for the statutory reserves of our Company. If the cumulative amount of statutory reserves
exceeds 50% of the registered capital of our Company, no further allocation is required. If the
statutory reserves are insufficient to make up previous losses, then our Company shall firstly
make up previous losses with current profits, before any allocation is made to the statutory
reserves in accordance with the preceding sentence.
After allocation is made to the statutory reserves from after-tax profits, our Company may
also draw discretionary reserves from after-tax profits, subject to the resolution of the
Shareholder’s meeting.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-22 –


--- page 652 ---
The remaining after-tax profits after loss makeup and allocation to reserves shall be
distributed to Shareholders in proportion to their shareholding percentages, except for those
that are not distributed in proportion to the shareholding percentages as stipulated in the
Articles of Association.
If the Shareholder’s meeting breaches the foregoing provisions and distributes profits to
Shareholders before losses are made up and the statutory reserves are drawn, then Shareholders
shall refund the distributed profits to our Company in violation of the foregoing provisions.
The shares held by our Company per se shall not participate in the profit distribution.
The reserves of our Company are used to make up losses, expand production and
operation, or increase the registered capital of our Company. To make up for our Company’s
losses using reserves, the discretionary reserves and statutory reserves should be used first; if
it is still unable to make up for it, the capital reserves can be used in accordance with relevant
provisions.
When the statutory reserves are converted into registered capital, the remaining amount
of said reserves shall not be less than 25% of the registered capital of our Company before such
conversion.
After the Shareholders’ meeting of the Company has resolved on the profit distribution,
the Board shall complete the distribution of dividends (or shares) within six months from the
date of the resolutions of the Shareholders’ meeting.
The amounts paid by Shareholders for shares before our Company’s calls for payments
may incur interest, but Shareholders may not receive dividends upon the amounts prepaid for
shares.
Our Company shall appoint a collection agent for the holders of overseas listed shares,
who shall receive the dividends and other payables of our Company in respect of overseas
listed shares, on behalf of said Shareholders.
The collection agent appointed by our Company shall meet the requirements of laws of
Hong Kong and the relevant regulations of Hong Kong Stock Exchange.
The collection agent appointed by our Company for the holders of overseas shares listed
in Hong Kong Stock Exchange shall be a trust company registered under the Trustee Ordinance
of Hong Kong.
Subject to the relevant laws and Listing Rules, our Company may confiscate any dividend
unclaimed, provided that such power shall not be exercised before expiration of its applicable
limitation period.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 653 ---
Our Company also has the power to terminate the delivery of a dividend warrant by post
to an holder of offshore listed shares; provided that our Company may exercise such power
only if the cash on such dividend warrant is not withdrawn consecutively two times or more.
However, our Company may also exercise this power if the dividend warrant has been returned
undelivered to the recipient on the first attempt.
Our Company has the right to issue warrants to bearer holders. No new warrant shall be
issued to replace a lost warrant unless it is reasonably assured that the original warrant has been
lost. Our Company shall have the power to sell the shares of offshore listed Shareholders who
have been unable to contact in such manner as the Board may think appropriate, provided,
however, that:
(1) dividends are distributed onto such shares at least three times within 12 years, but
such dividends are unclaimed in such period; and
(2) upon expiration of the 12-year period, our Company shall publish a public
announcement on one or more newspapers in Hong Kong, specifying the intention
to sell such shares, and shall notify Hong Kong Stock Exchange of such intention.
ENGAGEMENT OF ACCOUNTING FIRM
Our Company shall engage an independent accounting firm in compliance with relevant
laws and regulations, to conduct accounting statement auditing, net asset verification and other
related consulting services. The engagement period is one year and can be renewed.
The accounting firm engaged by our Company is entitled to following rights:
(1) to access the books of accounts, records, or vouchers of our Company at any time,
and require the Directors, general manager, or other senior management of our
Company to provide related information and explanations;
(2) to require our Company to take all reasonable measures to obtain from its
subsidiaries all information and notes required for said accounting firm to perform
its duties;
(3) to attend Shareholders’ meeting, receive the notice of meeting, or other information
related to the meeting accessible to any Shareholder, and make a speech at any
Shareholders’ meeting in respect of any matter involving its role as the accounting
firm of our Company.
If any position of the accounting firm is vacant, the Board may appoint an accounting firm
to fill up such vacancy before the convening of the Shareholders’ meeting. Any other
accounting firm which has been engaged by our Company may continue to act during the
period when such a vacancy exists.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 654 ---
The Shareholders’ meeting may, by means of an ordinary resolution, dismiss any
accounting firm prior to the expiration of its term of office, notwithstanding the terms in the
contract between the accounting firm and our Company, but without prejudice to such
accounting firm’s right, if any, to claim damages from our Company in respect of such
dismissal.
The remuneration of the accounting firm shall be decided by an ordinary resolution of the
Shareholders’ meeting. The engagement, dismissal or removal of an accounting firm shall be
decided by the Shareholders’ meeting. The Board shall not engage an accounting firm prior to
the decision by the Shareholders’ meeting.
Our Company shall send a 15-day prior notice to the accounting firm, in order to dismiss
or not to reappoint the accounting firm, and the said accounting firm is entitled to give opinions
when the Shareholders’ meeting votes on the dismissal of the same. The accounting firm, in
order to resign, shall make representations whether our Company has any improper affairs to
the Shareholders’ meeting.
MERGER AND DIVISION OF OUR COMPANY
The merger of our Company may take two forms: merger by absorption or merger by new
establishment.
If our Company merges with a company in which it holds more than ninety percent of the
shares, the merger does not require a resolution of the shareholders’ meeting of the merged
company, but other shareholders must be notified and have the right to request our Company
to purchase their shares at a reasonable price.
If the consideration paid by our Company for the merger does not exceed ten percent of
our Company’s net assets, a resolution of the Shareholders’ meeting is not required, unless
otherwise provided by the Articles of Association and the regulations of the securities exchange
and securities regulatory authorities where our Company’s shares are listed.
Mergers conducted in accordance with the preceding two paragraphs without a resolution
of the Shareholders’ meeting must be approved by a resolution of the Board.
In a merger of our Company, all parties to the merger shall sign the merger agreement and
shall prepare their respective balance sheets and inventory lists of assets. Our Company shall
notify its creditors within 10 days from the date of passing the merger resolution and to make
a public announcement in newspaper or on the National Enterprise Credit Information
Publicity System within 30 days from the date of passing the merger resolution. Upon the
merger, the creditors’ rights and the indebtedness of each merging party shall be assumed by
the surviving entity or the newly established company resulting from the merger.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-25 –


--- page 655 ---
Where our Company is to be divided, its assets shall be divided accordingly. In the event
of the division of our Company, the parties to such division shall prepare a balance sheet and
a list of assets. Our Company shall notify its creditors within 10 days from the date of the
resolution on such division and shall make a public announcement in newspaper or on the
National Enterprise Credit Information Publicity System within 30 days from the date of the
resolution on such division. The company resulting from the division shall be jointly and
severally liable for the pre-division debts of our Company, unless provided otherwise in a
written agreement pertaining to the payment of debts between our Company and its creditors
prior to the division.
Where our Company undergoes a merger or division, changes in the particulars of our
Company shall be registered with the company registration authorities in accordance with the
laws. Where our Company is dissolved, cancellation of its registration shall be conducted in
accordance with the laws. Where a new company is established, it shall be registered in
accordance with the laws.
DISSOLUTION AND LIQUIDATION OF OUR COMPANY
Our Company shall be dissolved upon the occurrence of any of the following events:
(1) expiry of the term of the business or the occurrence of other events of dissolution
as stated in the Articles of Association;
(2) a resolution for dissolution is passed by a Shareholders’ meeting;
(3) dissolution is necessary due to a merger or division of our Company;
(4) our Company is revoked of business license, ordered to close or canceled according
to law;
(5) serious difficulties arise in the operation and management of our Company and its
continued existence would cause material loss to the interests of the Shareholders
and such difficulties cannot be resolved through other means, in which case
Shareholders holding at least 10% of all Shareholders’ voting rights may petition a
people’s court to dissolve our Company.
Where our Company is dissolved in accordance with the provisions of items (1), (2), (4)
and (5) above, it shall be liquidated. The Directors shall be the obligors of our Company’s
liquidation and shall form a liquidation committee to carry out the liquidation within 15 days
from the date on which the cause of dissolution arises. The members of the liquidation
committee shall be Directors or other persons appointed by a Shareholders’ meeting. If a
liquidation committee is not established within the time period or a liquidation is not carried
out after the establishment of the liquidation committee, the interested parties may apply to the
people’s court to appoint relevant personnel to establish a liquidation committee to proceed
with the liquidation.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-26 –


--- page 656 ---
The liquidation committee shall exercise the following functions and powers during the
period of liquidation:
(1) to dispose of the property of our Company, and to prepare a balance sheet and a list
of properties;
(2) to inform creditors by notice and public announcement;
(3) to handle unfinished business of our Company relating to the liquidation;
(4) to pay up all outstanding taxes and tax arising during the liquidation process;
(5) to clear up claims and debts;
(6) to distribute the residual properties of our Company after the full settlement of
debts;
(7) to represent our Company in civil litigations.
The liquidation committee shall notify the creditors within 10 days after its establishment,
and publish announcements in the newspaper or on the National Enterprise Credit Information
Publicity System within 60 days. Creditors shall, within 30 days from the date of receiving the
notice; or for creditors who do not receive the notice, within 45 days from the date of the public
announcement, declare their claims to the liquidation committee.
The creditor shall provide a description and supporting evidence of the matters relating
to their claims when declaring their claims. The liquidation committee shall register the
creditors’ claims.
The liquidation committee shall not make any debt settlement during the period of
declaration of claims.
A liquidation plan shall be formulated by the liquidation committee after the stocktaking
of our Company’s assets has been carried out and the balance sheet and a inventory of assets
have been formulated, and shall be submitted to the Shareholders’ meeting or people’s court for
confirmation.
After payment of liquidation expenses, staff wages, social insurance expenses and
statutory compensation, payment of outstanding taxes, and payment of our Company’s debts,
the residual assets of our Company shall be distributed to the Shareholders of our Company
according to the proportion of their shareholdings.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-27 –


--- page 657 ---
During the liquidation period, our Company shall continue to exist but shall not carry out
business activities unrelated to the liquidation. Before our Company’s debts have been fully
repaid in accordance with the provisions of the preceding paragraph, no assets of our Company
shall be distributed to its Shareholders.
Where the liquidation committee, having examined our Company’s assets and having
prepared a balance sheet and an inventory of assets, discovers that our Company’s assets are
insufficient to pay its debts in full, it shall immediately apply to the people’s court for a
declaration of bankruptcy. Once the people’s court has declared our Company bankrupt, the
liquidation committee shall turn over any matters regarding the liquidation to the people’s
court.
Following the completion of liquidation, the liquidation committee shall formulate a
report on liquidation, which shall be submitted to the Shareholders’ meeting or the people’s
court for confirmation. The liquidation committee shall also submit the aforesaid documents to
the company registration authority and apply for cancellation of registration of our Company.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
Under one of the following circumstances, our Company shall amend the Articles of
Association:
(1) when the Articles of Association contradicts the newly implemented amendments of
PRC Company Law or the relevant applicable laws, administrative regulations,
departmental rules, normative documents and Listing Rules;
(2) due to any change, when the information of our Company is inconsistent with the
matters set forth in the Articles of Association;
(3) when the Shareholders’ meeting has made a resolution to amend the Articles of
Association.
In the event that the amendment to the Articles of Association adopted by the
Shareholders’ meeting needs to be approved by the competent authority, our Company shall
seek approval from relevant authority and if it involves company registration matters, change
registration shall be handled in accordance with the law. The Board shall follow such resolution
by the Shareholders’ meeting and the approval opinions of relevant authority when amending
the Articles of Association.
In the event that an amendment to the Articles of Association qualifies as required
disclosure under applicable laws, administrative regulations, departmental rules, normative
documents and Listing Rules, such amendment should be publicly announced.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-28 –


--- page 658 ---
FURTHER INFORMATION ABOUT OUR COMPANY
Establishment of our Company
Our Company was established as a limited liability company in the PRC on February 26,
2019 and was converted into a joint stock limited company with limited liability on July 17,
2024 under the laws of the PRC. As of the Latest Practicable Date, the registered share capital
of our Company is RMB2,386,976,403.
Our Company has established a place of business in Hong Kong at 46/F, Hopewell Centre,
183 Queen’s Road East, Wanchai, Hong Kong and has been registered as a non-Hong Kong
company in Hong Kong under Part 16 of the Companies Ordinance on August 8, 2024. Ms. Ho
Wing Nga ( О൘ඩ), one of our joint company secretaries, has been appointed as the authorized
representative for the acceptance of service of process and notices on behalf of our Company
in Hong Kong. The address for service of process on our Company in Hong Kong is the same
as our principal place of business in Hong Kong as set out above.
As we are established in the PRC, our corporate structure and Articles of Association are
subject to the relevant laws and regulations of the PRC. A summary of the relevant provisions
of our Articles of Association is set out in Appendix III to this Prospectus.
Changes in Share Capital of Our Company
Save as disclosed in the section headed “History, Reorganization and Corporate
Structure—Corporate Development and Major Shareholding Changes” and “History,
Reorganization and Corporate Structure—Pre-IPO Investments”, there has been no other
alteration in the share capital of our Company during the two years immediately preceding the
date of this Prospectus.
Changes in Share Capital of Our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries as at
December 31, 2024 are set out in the Accountants’ Report in Appendix I to this Prospectus.
Details of the changes in the share capital of the Company’s subsidiaries within the two
years immediately preceding the date of this Prospectus are set out below:
(a) on May 22, 2024, Suzhou Zenergy Battery Technologies Co., Ltd. ( ᘽψ͍ɢอঐཥ
ʮ̡) was established in the PRC as a wholly-owned subsidiary of our
Company with registered capital of RMB1,000 million; and
(b) on March 3, 2025, Changshu Sinogy Technologies Co., Ltd. (ࠢ
ʮ̡) was established in the PRC as a wholly-owned subsidiary of our Company
with registered capital of RMB100 million.
Save as disclosed above, there had been no other alterations of share capital of our
subsidiaries within the two years preceding the date of this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1–


--- page 659 ---
Resolutions of our Shareholders
Pursuant to the Shareholders’ meeting held on July 24, 2024, the following resolutions,
among other things, were (subject to the relevant regulatory approval, filing and registration)
duly passed:
(a) the issuance by our Company of the H Shares of nominal value of RMB1.00 each
and such H Shares being listed on the Hong Kong Stock Exchange;
(b) the number of H Shares to be issued pursuant to the Global Offering, and the grant
to the underwriters (or their representatives) of the Over-allotment Option of not
more than 15% of the number of H Shares issued pursuant to the Global Offering;
(c) upon completion of the Global Offering, 1,317,849,039 Unlisted Shares in aggregate
will be converted into H Shares on a one-for-one basis;
(d) authorization of the Board and its authorized persons to handle matters relating to,
among other things, the Global Offering, the issue and listing of the H Shares; and
(e) subject to the completion of the Global Offering, the granting of a general mandate
to the Board to repurchase H Shares issued on the Stock Exchange with an aggregate
number of not exceeding 10% of the number of the total issued H Shares (excluding
any treasury shares) as at the date of the resolution granting the general mandate;
(f) subject to the completion of the Global Offering, the granting of a general mandate
to the Board to allot, issue Shares, or sell and/or transfer Shares out of treasury that
are held as treasury shares at any time within a period up to the date of the
conclusion of the next annual general meeting of the Shareholders or the date on
which the Shareholders pass a special resolution to revoke or change such mandate,
whichever is earlier, upon such terms and conditions and for such purposes and to
such persons as the Board in their absolute discretion deem fit, and to make
necessary amendments to the Articles of Association, provided that, the number of
Shares to be issued shall not exceed 20% of the number of the Shares in issue
(excluding any treasury shares) as at the date of the resolution granting the general
mandate; and
(g) subject to the completion of the Global Offering, the conditional adoption of the
Articles of Association, which shall become effective on the Listing Date and the
authorization of the Board to amend the Articles of Association in accordance with
relevant laws and regulations and upon the request from the Stock Exchange and
relevant PRC regulatory authorities.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2–


--- page 660 ---
Explanatory Statement on Repurchase of Our Own Securities
The following paragraphs include, among others, certain information required by the
Stock Exchange to be included in this Prospectus concerning the repurchase of our own
securities.
(a) Reasons for repurchase
The Board considered that the repurchase of the Shares would be beneficial to and in the
best interests of the Company and its Shareholders as a whole. It can strengthen the investors’
confidence in the Company and promote a positive effect on maintaining the Company’s
reputation in the capital market. Such repurchases will only be made when the Board believes
that such repurchases will benefit the Company and its Shareholder as a whole.
Following a repurchase of Shares, the Company may cancel any repurchased Shares
and/or hold them as treasury shares subject to, among others, market conditions and its capital
management needs at the relevant time of the repurchases, which may change due to evolving
circumstances.
(b) Exercise of the general mandate to repurchase Shares
Subject to the passing of the special resolution approving the grant of the general mandate
to repurchase H Shares at annual general meetings, the Board will be granted general mandate
to repurchase H Shares until the end of the relevant period. The general mandate to repurchase
Shares would expire on the earlier of:
(i) the conclusion of the next annual general meeting of the Company of which time it
shall lapse unless, by special resolutions passed at that meeting, the authority is
renewed, either conditionally or subject to conditions; or
(ii) the revocation or variation of the mandate under the resolution by a special
resolution at any general meeting of the Company.
Furthermore, we need to complete registration and approval procedures with relevant
government authorities for the actual grant of the repurchase mandate to the Board, as
applicable. The exercise in full of the general mandate to repurchase H Shares (on the basis of
1,439,372,739 H Shares in issue as of the Listing Date and no H Shares will be allotted and
issued or repurchased by the Company on or prior to the date of the next annual general
meeting to be held after the Listing) would result in a maximum of 143,937,273 H Shares being
repurchased by the Company during the relevant period, being the maximum of 10% of the H
Shares in issue (excluding any treasury shares) as of the Listing Date.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3–


--- page 661 ---
(c) Source of funds
In repurchasing its Shares, the Company intends to apply funds from the Company’s
internal resources (which may include surplus funds and retained profits) legally available for
such purpose in accordance with the Articles of Association and the applicable laws, rules and
regulations of the PRC.
The Company is empowered by its Articles of Association to repurchase its Shares. Any
shares to be repurchased will be cancelled or kept as treasury shares if allowed by the Articles
of Association and applicable laws and regulations. The Company may not purchase securities
on the Stock Exchange for a consideration other than cash or for settlement otherwise than in
accordance with the trading rules of the Stock Exchange from time to time.
(d) Suspension of repurchase
A listed company shall not repurchase its shares on the Stock Exchange at any time after
inside information has come to its knowledge until the information is made publicly available.
In particular, during the period of one month immediately preceding the earlier of: (i) the date
of the board meeting (as such date is first notified to the Stock Exchange in accordance with
the Listing Rules) for the approval of the company’s results for any year, half-year, quarterly
or any other interim period (whether or not required under the Listing Rules); and (ii) the
deadline for the issuer to announce its results for any year or half-year under the Listing Rules,
or quarterly or any other interim period (whether or not required under the Listing Rules), until
the date of the results announcement, the company may not repurchase its shares on the Stock
Exchange unless there are exceptional circumstances.
(e) Close associates and core connected persons
None of our Directors or, to the best of their knowledge having made all reasonable
inquiries, any of their close associates have a present intention, in the event the general
mandate to repurchase Shares is approved, to sell any Shares to our Company.
No core connected person of our Company has notified our Company that they have a
present intention to sell Shares to our Company, or have undertaken to do so, if the general
mandate to repurchase Shares is approved.
A listed company shall not knowingly purchase its shares on the Stock Exchange from a
core connected person (namely a director, supervisor, chief executive or substantial
shareholder of the company or any of its subsidiaries, or a close associate of any of them), and
a core connected person shall not knowingly sell their interest in shares of the company to it.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4–


--- page 662 ---
(f) Status of repurchased Shares
Subject to the Articles of Association, the Listing Rules and any other applicable laws and
regulations, the Shares repurchased by the Company will be cancelled or kept as treasury
shares.
(g) Takeover implications
If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the
voting rights of our Company increases, such increase will be treated as an acquisition for the
purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting
in concert could obtain or consolidate control of our Company and become obliged to make a
mandatory offer in accordance with Rule 26 of the Takeovers Code.
Save as aforesaid, our Directors are not aware of any consequences which would arise
under the Takeovers Code as a consequence of any repurchases pursuant to the general mandate
to repurchase Shares.
(h) Interim measures
For any treasury shares of the Company deposited with CCASS pending resale on the
Stock Exchange, the Company shall, upon approval by the Board, implement the below interim
measures which include (without limitation):
(i) procuring its broker not to give any instructions to HKSCC to vote at general
meetings for the treasury shares deposited with CCASS;
(ii) in the case of dividends or distributions (if any and where applicable), withdrawing
the treasury shares from CCASS, and either re-register them in its own name as
treasury shares or cancel them, in each case before the relevant record date for the
dividend or distributions; or
(iii) taking any other measures to ensure that it will not exercise any Shareholders’ rights
or receive any entitlements which would otherwise be suspended under the
applicable laws if those Shares were registered in its own name as treasury shares.
(i) General
The Company did not hold any treasury shares as of the Latest Practicable Date and will
not hold any treasury shares upon Listing.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 5–


--- page 663 ---
If the general mandate to repurchase Shares were to be carried out in full at any time,
there may be a material and adverse impact on our working capital or gearing position (as
compared with the position disclosed in our most recent published audited accounts). However,
our Directors do not propose to exercise the general mandate to repurchase Shares to such an
extent as would have a material and adverse effect on our working capital or gearing position.
Our Directors have undertaken to the Stock Exchange that they will exercise the general
mandate to repurchase Shares in accordance with the Listing Rules and the applicable laws in
the PRC. Neither the Explanatory Statement on Repurchase of Our Own Securities nor the
proposed share repurchase has any unusual feature.
FURTHER INFORMATION ABOUT OUR BUSINESS
Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
Prospectus that is or may be material:
(a) the equity transfer agreement relating to Sinogy Toyota Automotive Energy System
Co., Ltd. (ᛆᔷᜫ՘ᙄ) dated November 22,
2023 entered into between our Company and Changshu SINOGY Venture Capital
Co., Ltd. (ʮ̡), pursuant to which our Company acquired
50% of the equity interests in Sinogy Toyota Automotive Energy System Co., Ltd.
(ʮ̡) at a consideration of RMB3,311,458,101.35;
(b) the cornerstone investment agreement dated April 1, 2025 entered into among our
Company, Jiangsu State-Owned Enterprise Mixed Ownership Reform Fund (Limited
Partnership) (ږ(Υྫ)), China International
Capital Corporation Hong Kong Securities Limited and CMB International Capital
Limited to subscribe for H Shares of our Company at the Offer Price in an aggregate
amount of the Hong Kong dollar equivalent of US$13,500,000 (excluding
brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC
transaction levy in respect of such number of H Shares of our Company);
(c) the cornerstone investment agreement dated April 1, 2025 entered into among our
Company, Jiangsu Suzhou High-end Equipment Industry Special Mother Fund
(Limited Partnership) (ږ(Υྫ)), China
International Capital Corporation Hong Kong Securities Limited and CMB
International Capital Limited to subscribe for H Shares of our Company at the Offer
Price in an aggregate amount of the Hong Kong dollar equivalent of
RMB200,000,000 (including brokerage, the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy in respect of such number of
H Shares of our Company);
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 6–


--- page 664 ---
(d) the cornerstone investment agreement dated April 1, 2025 entered into among our
Company, Changshu Southeast Investment Holding Co., Ltd. (ٰ
ʮ̡), China International Capital Corporation Hong Kong Securities Limited
and CMB International Capital Limited to subscribe for H Shares of our Company
at the Offer Price in an aggregate amount of HK$301,498,563 (excluding brokerage,
the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction
levy in respect of such number of H Shares of our Company); and
(e) the Hong Kong Underwriting Agreement.
Intellectual Property Rights
As of the Latest Practicable Date, our Group has registered the following intellectual
property rights which we consider to be material to our Group’s business.
Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be or may be material to our business:
No.
Trademark
Registered Owner
Registration
Number
Place of
Registration Expiry Date
1 /H1118/H1118
 Suzhou ZENIO 37892134 PRC February 6,
2030
2 /H1118/H1118
 Suzhou ZENIO 38434220 PRC February 6,
2030
3 /H1118/H1118
 Suzhou ZENIO 67296768 PRC January 20,
2034
4 /H1118/H1118
 Suzhou ZENIO 63606345 PRC November 27,
2033
5 /H1118/H1118
 Suzhou ZENIO 71370890 PRC November 13,
2033
6 /H1118/H1118
 Our Company 71374747 PRC December 13,
2033
7 /H1118/H1118
 Our Company 65007580 PRC November 27,
2033
8 /H1118/H1118
 Our Company 65939157 PRC March 27,
2033
9 /H1118/H1118
 Our Company 68762221 PRC June 6, 2033
10 /H1118/H1118
 Our Company 67774665 PRC April 20,
2033
11 /H1118/H1118
 Our Company 67788955 PRC April 20,
2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 7–


--- page 665 ---
No.
Trademark
Registered Owner
Registration
Number
Place of
Registration Expiry Date
12 /H1118/H1118
 Our Company 68772529 PRC June 6, 2033
13 /H1118/H1118
 Our Company 65924307 PRC March 27,
2034
14 /H1118/H1118
 Our Company 306512931 Hong Kong,
the PRC
March 26,
2034
15 /H1118/H1118
 Our Company 306512940 Hong Kong,
the PRC
March 26,
2034
16 /H1118/H1118
 Our Company 306512959 Hong Kong,
the PRC
March 26,
2034
Patents
As of the Latest Practicable Date, we had registered the following patents which we
consider to be material to our business:
No. Patent Name Type Registered Owner Patent Number Expiry Date
1 /H1118/H1118/H1118A binder for a Lithium-Ion
battery and a Lithium-Ion
battery using the binder
(ɓ၇቞ᕎɿཥϫ͜ῡഐኒ
቞ᕎɿ
ཥϫ)
Invention Our Company 2016108904427 October 12,
2036
2 /H1118/H1118/H1118A hybrid solid-state battery
(Όո࿒ཥϫ)
Invention Our Company 2018107715287 July 13, 2038
3 /H1118/H1118/H1118A Lithium-Ion battery, a
Lithium-Ion battery barrier
film and its preparation
method
(ɓ၇቞ᕎɿཥϫeɓ၇቞
ᕎɿཥϫཞᕎᇫʿՉႡ௪
ج)
Invention Our Company 2019102052342 March 18, 2039
4 /H1118/H1118/H1118An inorganic fast ionic
conductor nanofiber and
its preparation method and
application ( ɓ၇ೌዚҞᕎ
ɿኬ᜗ॶϷᜄၪʿՉႡ௪
ձᏐ͜)
Invention Our Company 2019111431761 November 20,
2039
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 8–


--- page 666 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
5 /H1118/H1118/H1118Solid-state electrolyte film,
solid-state Lithium-Ion
battery and its preparation
method ( ո࿒ཥ༆ሯᇫeո
࿒቞ᕎɿཥϫʿՉႡ௪˙
ج)
Invention Our Company 2020107935284 August 10, 2040
6 /H1118/H1118/H1118An electrode, battery cell and
secondary battery ( ɓ၇฽
ʿɚϣཥϫ)
Invention Our Company 2020112204236 November 5,
2040
7 /H1118/H1118/H1118A Lithium-Ion battery ( ɓ၇
቞ᕎɿཥϫ)
Invention Our Company 2020113361003 November 25,
2040
8 /H1118/H1118/H1118A heat-conduction coating
separator of power battery
and its preparation method
(ɓ၇ਗɢཥϫኬᆠ෩ᄴཞ
ج)
Invention Our Company 2021109009459 August 6, 2041
9 /H1118/H1118/H1118A hollow silicon-carbon
anode material and its
preparation method ( ɓ၇
ʿ
ج)
Invention Our Company 2021108641827 July 29, 2041
10 /H1118/H1118An anode and its preparation
method, and a secondary
battery (฽฽˪ʿՉ
˸ʿɓ၇ɚϣཥ
ϫ)
Invention Our Company 2022106958112 June 20, 2042
11 /H1118/H1118A lithium replenishment
anode and secondary
battery (฽฽˪
ձɚϣཥϫ)
Invention Our Company 202210875323X July 25, 2042
12 /H1118/H1118A Lithium-Ion battery ( ɓ၇
቞ᕎɿཥϫ)
Invention Our Company 2022108572840 July 20, 2042
13 /H1118/H1118A Lithium-Ion battery and
battery pack ( ɓ၇቞ᕎɿ
ཥϫʿཥϫଡ଼)
Invention Our Company 2022106837724 June 17, 2042
14 /H1118/H1118A Lithium-Ion battery and
battery pack ( ɓ၇቞ᕎɿ
ཥϫeཥϫ̍)
Invention Our Company 2022106836238 June 17, 2042
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 9–


--- page 667 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
15 /H1118/H1118Preparation method of silicon
anode material at carbon-
containing layer, anode
and its preparation
method, and Lithium-Ion
battery (ࣘ
฽฽˪ʿ
ձ቞ᕎɿཥϫ)
Invention Our Company 2022112290495 October 9, 2042
16 /H1118/H1118A lithium replenishment
barrier film, battery cell
and secondary battery ( ɓ
ʿ
ɚϣཥϫ)
Invention Our Company 2022111932428 September 28,
2042
17 /H1118/H1118A silicon @ carbon-graphite
hybrid anode material,
hybrid layer anode and its
secondary battery ( ɓ၇ᾼ
@၁-e
฽˪ʿՉɚϣཥ
ϫ)
Invention Our Company 2022114357625 November 16,
2042
18 /H1118/H1118A porous silicon carbon
anode material, preparation
method and application ( ɓ
eႡ
˸ʿᏐ͜)
Invention Our Company 2023100777921 February 6,
2043
19 /H1118/H1118A double-layer cladding
oxide material and its
preparation and application
(ي
ʿՉႡ௪ձᏐ͜)
Invention Our Company 2023101575486 February 23,
2043
20 /H1118/H1118An anode of Lithium-Ion
battery and its preparation
method (ࠋ
ج)
Invention Our Company 2023100870047 February 7,
2043
21 /H1118/H1118MXene-coated cathode
materials and its
preparation method,
cathode and lithium-ion
battery (MXene ̍ᔧ͍฽ҿ
e͍฽˪
ձ቞ᕎɿཥϫ)
Invention Our Company 2023100620662 January 13,
2043
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 668 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
22 /H1118/H1118An anode material and its
preparation method and
application (ࣘ
ၾᏐ͜)
Invention Our Company 2023104778406 April 28, 2043
23 /H1118/H1118An anode and its application
(ɓ၇͍฽฽˪ʿՉᏐ͜)
Invention Our Company 2023106094834 May 29, 2043
24 /H1118/H1118A silicon-carbon anode
material and its application
(ʿՉᏐ
͜)
Invention Our Company 2023107104462 June 15, 2043
25 /H1118/H1118Anode material and its
application in sodium-ion
secondary battery (฽ҿ
ʿՉίඒᕎɿɚϣཥϫ
Ꮠ͜)
Invention Our Company 2023109589773 August 1, 2043
26 /H1118/H1118A solid carbon anode material
and its preparation method
and application ( ɓ၇೷၁
ၾ
Ꮠ͜)
Invention Our Company 2023109957328 August 9, 2043
27 /H1118/H1118A Lithium-Ion secondary
battery ( ɓ၇቞ᕎɿɚϣཥ
ϫ)
Invention Our Company 2023109507190 July 31, 2043
28 /H1118/H1118A cathode material and its
preparation method and
sodium-ion battery ( ɓ၇͍
ձඒ
ᕎɿཥϫ)
Invention Our Company 2023116118074 November 29,
2043
29 /H1118/H1118Electrode, battery cell and
battery
(ʿཥϫ)
Utility Model Our Company 2020208774694 May 22, 2030
30 /H1118/H1118A battery and ESS ( ɓ၇ཥϫ
ʿᎷঐༀໄ)
Utility Model Our Company 2022212308210 May 20, 2032
31 /H1118/H1118Separator, battery cell and
electrical equipment ( ཞ
ʿ͜ཥண௪)
Utility Model Our Company 2022233866325 December 15,
2032
32 /H1118/H1118A Power battery top cover
assembly structure and
power battery ( ɓ၇ਗɢཥ
ϫ௟ႊༀৣഐ࿴ʿਗɢཥ
ϫ)
Utility Model Our Company 2020213177602 July 8, 2030
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 1–


--- page 669 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
33 /H1118/H1118A power battery lower plastic
part and top cover
assembly structure and
power battery ( ɓ၇ਗɢཥ
ϫ͜ɨ෧ᇭ΁e௟ႊༀৣ
ഐ࿴ʿਗɢཥϫ)
Utility Model Our Company 2020213181379 July 8, 2030
34 /H1118/H1118A power battery plastic part
and top cover and power
battery (ٙ
෧ᇭ΁eਗɢཥϫ௟ႊʿ
ਗɢཥϫ)
Utility Model Our Company 2020216788400 August 13, 2030
35 /H1118/H1118A power battery top cover
assembly structure and
power battery ( ɓ၇ਗɢཥ
ༀৣഐ࿴ʿਗɢ
ཥϫ)
Utility Model Our Company 2020223110613 October 16,
2030
36 /H1118/H1118A power battery top cover
structure and power
battery ( ɓ၇ਗɢཥϫ௟ႊ
ഐ࿴ʿਗɢཥϫ)
Utility Model Our Company 202022381137X October 23,
2030
37 /H1118/H1118A power battery top cover
structure and power
battery (௟
ႊഐ࿴ʿਗɢཥϫ)
Utility Model Our Company 2020226590400 November 17,
2030
38 /H1118/H1118A battery top cover and
battery ( ɓ၇ཥϫ௟ႊʿཥ
ϫ)
Utility Model Our Company 2020226620088 November 17,
2030
39 /H1118/H1118A battery lower plastic part
and top cover and battery
(ɨ෧ᇭ΁e
௟ႊʿཥϫ)
Utility Model Our Company 2020227555758 November 25,
2030
40 /H1118/H1118A power battery lower plastic
part and top cover and
power battery ( ɓ၇ਗɢཥ
ɨ෧ᇭ΁e௟ႊʿ
ਗɢཥϫ)
Utility Model Our Company 2020230602383 December 17,
2030
41 /H1118/H1118A plastic structure of top
cover for power battery,
and battery ( ɓ၇ਗɢཥϫ
෧ᇭഐ࿴e௟ႊʿ
ཥϫ)
Utility Model Our Company 2021207352007 April 12, 2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 670 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
42 /H1118/H1118Insulated parts of top cover
of battery, and power
battery ( ཥϫ௟ႊഒᇝ΁ձ
ਗɢཥϫ)
Utility Model Our Company 2022200667570 January 11,
2032
43 /H1118/H1118Lower plastic and battery ( ɨ
෧ᇭձཥϫ)
Utility Model Our Company 2022220762205 August 8, 2032
44 /H1118/H1118A lower plastic part and top
cover of battery, and
battery (ɨ෧
ᇭ΁e௟ႊʿཥϫ)
Utility Model Our Company 2022231312086 November 24,
2032
45 /H1118/H1118Battery top cover and battery
(ཥϫ௟ႊʿཥϫ)
Utility Model Our Company 2023203750697 March 3, 2033
46 /H1118/H1118A battery top cover
component and power
battery ( ɓ၇ཥϫ௟ႊଡ଼΁
ʿਗɢཥϫ)
Utility Model Our Company 2023203778847 March 3, 2033
47 /H1118/H1118A secondary battery plastic
part and battery ( ɓ၇ɚϣ
෧ᇭ΁ʿཥϫ)
Utility Model Our Company 2023203891055 March 6, 2033
48 /H1118/H1118Battery top cover
components, battery cells,
battery and electrical
equipment ( ཥϫ௟ႊଡ଼
΁eཥϫఊ᜗eཥϫʿ͜
ཥண௪)
Utility Model Our Company 2023205576549 March 21, 2033
49 /H1118/H1118A battery and electrical
devices ( ɓ၇ཥϫʿ͜ཥༀ
ໄ)
Utility Model Our Company 2023207721157 April 10, 2033
50 /H1118/H1118A battery plastic part, battery
top cover, battery and
electrical equipment ( ɓ၇
ཥϫ෧ᇭ΁eཥϫ௟ႊe
ཥϫʿ͜ཥண௪)
Utility Model Our Company 2023214065203 June 5, 2033
51 /H1118/H1118A top cover component,
battery and electrical
equipment ( ɓ၇௟ႊଡ଼
΁eཥϫʿ͜ཥண௪)
Utility Model Our Company 2023218105106 July 11, 2033
52 /H1118/H1118Top cover component ( ௟ႊଡ଼
΁)
Utility Model Nanjing Zenergy 2023222639464 August 22, 2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 671 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
53 /H1118/H1118Battery coiled cell protection
structure, battery and
electrical equipment ( ཥϫ
ԣᚐഐ࿴eཥϫʿ͜
ཥண௪)
Utility Model Our Company 202322444896X September 8,
2033
54 /H1118/H1118Battery pack and electrical
devices ( ཥϫ̍ձ͜ཥༀ
ໄ)
Utility Model Our Company 2023101429884 February 21,
2043
55 /H1118/H1118A battery ( ɓ၇ཥϫ) Utility Model Our Company 2023202754900 February 21,
2033
56 /H1118/H1118A battery pack ( ཥϫ̍) Utility Model Our Company 2022230150351 November 11,
2032
57 /H1118/H1118A jumper conflux component
and battery
(ଡ଼΁ʿཥϫ)
Utility Model Our Company 2023202744400 February 21,
2033
58 /H1118/H1118A battery pack ( ཥϫ̍) Utility Model Our Company 2022230201688 November 14,
2032
59 /H1118/H1118A battery and electrical
equipment ( ɓ၇ཥϫʿ͜
ཥண௪)
Utility Model Our Company 2023202746124 February 21,
2033
60 /H1118/H1118A battery and electrical
device ( ɓ၇ཥϫʿ͜ཥༀ
ໄ)
Utility Model Our Company 2023202744453 February 21,
2033
61 /H1118/H1118A battery pack and electrical
device ( ɓ၇ཥϫ̍ʿ͜ཥ
ༀໄ)
Utility Model Our Company 2023206948642 March 31, 2033
62 /H1118/H1118A battery and electrical
device ( ɓ၇ཥϫʿ͜ཥༀ
ໄ)
Utility Model Our Company 2023206944336 March 31, 2033
63 /H1118/H1118Battery thermal management
system ( ཥϫᆠ၍ଣӻ୕)
Utility Model Our Company 2022225679810 September 27,
2032
64 /H1118/H1118A battery case, battery pack
and electrical equipment
(ɓ၇ཥϫಠ᜗eཥϫ̍ձ
͜ཥண௪)
Invention Our Company 2023113988348 October 26,
2043
65 /H1118/H1118A battery pack, electrical
device and battery pack
thermal runaway test and
control method ( ɓ၇ཥϫ
ٙ
ج)
Invention Our Company 2022111049923 September 9,
2042
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 672 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
66 /H1118/H1118A battery module, battery
pack, electrical device and
battery module
temperature control
method ( ɓ၇ཥϫᅼଡ଼eཥ
ϫ̍e͜ཥༀໄձཥϫᅼ
ج)
Invention Our Company 2022111050032 September 9,
2042
67 /H1118/H1118A filling method for inner
flat layer at explosion-
proof valve of battery cell
case, devices and battery
cells (ԣᖑ
eༀ
ڃ)
Invention Our Company 2022111053806 September 9,
2042
68 /H1118/H1118A battery module, battery
pack, electrical device and
battery module
manufacturing equipment
(ɓ၇ཥϫᅼଡ଼eཥϫ̍e
͜ཥༀໄձႡிཥϫᅼଡ଼
ண௪)
Utility Model Our Company 2022224116476 September 9,
2032
69 /H1118/H1118A battery pack case, battery
pack, electrical device and
equipment for
manufacturing battery pack
(ɓ၇ཥϫ̍ᇌ᜗eཥϫ
̍e͜ཥༀໄձႡிཥϫ
ண௪)
Utility Model Our Company 2022224089055 September 9,
2032
70 /H1118/H1118A battery module, battery
pack, electrical device and
equipment for
manufacturing battery
module ( ɓ၇ཥϫᅼଡ଼eཥ
ϫ̍e͜ཥༀໄձႡிཥ
ண௪)
Utility Model Our Company 2022224091375 September 9,
2032
71 /H1118/H1118A battery pack case, battery
pack, electrical device and
equipment for
manufacturing battery pack
(ɓ၇ཥϫ̍ᇌ᜗eཥϫ
̍e͜ཥༀໄձႡிཥϫ
ண௪)
Utility Model Our Company 2022224089021 September 9,
2032
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 673 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
72 /H1118/H1118A battery pack case, battery
pack, electrical device and
equipment for
manufacturing battery pack
(ɓ၇ཥϫ̍ᇌ᜗eཥϫ
̍e͜ཥༀໄձႡிཥϫ
ண௪)
Utility Model Our Company 2022224116029 September 9,
2032
73 /H1118/H1118A battery pack case, battery
pack, electrical device and
equipment for
manufacturing battery pack
(ɓ၇ཥϫ̍ᇌ᜗eཥϫ
̍e͜ཥༀໄձႡிཥϫ
ண௪)
Utility Model Our Company 2022224090226 September 9,
2032
74 /H1118/H1118A battery cell, battery module
and battery pack ( ɓ၇ཥ
eཥϫᅼଡ଼ձཥϫ̍)
Invention Our Company 2022105015953 May 9, 2042
75 /H1118/H1118A Lithium-Ion secondary
battery and electrical
device ( ɓ၇቞ᕎɿɚϣཥ
ϫʿ͜ཥༀໄ)
Invention Our Company 2022106312779 June 6, 2042
76 /H1118/H1118A battery and electrical
device ( ɓ၇ཥϫձ͜ཥༀ
ໄ)
Invention Our Company 2022109680490 August 12, 2042
77 /H1118/H1118A cathode and its preparation
method and Lithium-Ion
battery ( ɓ၇͍฽฽˪ʿՉ
ձ቞ᕎɿཥϫ)
Invention Our Company 2022115035239 November 29,
2042
78 /H1118/H1118A manganese-nickel
bimetallic compound as
well as its preparation and
application
(ʿ
ՉႡ௪ձᏐ͜)
Invention Our Company 2023104760722 April 28, 2043
79 /H1118/H1118A cylindrical battery and its
can-cap component ( ɓ၇
ཥϫʿՉႊసଡ଼΁)
Invention Our Company 2022104058951 April 18, 2042
80 /H1118/H1118A battery can-cap structure,
battery, electrical device
and the preparation
method of battery ( ɓ၇ཥ
ϫႊసഐ࿴eཥϫe͜ཥ
ج)
Invention Our Company 2022108094139 July 11, 2042
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 674 ---
No. Patent Name Type Registered Owner Patent Number Expiry Date
81 /H1118/H1118A pouch battery and its
forming method ( ɓ၇ழ̍
˙
ج)
Invention Our Company 2022112345479 October 10,
2042
82 /H1118/H1118A surface treatment device
for battery top cover ( ɓ၇
ஈଣༀໄ)
Invention Our Company 2022113425964 October 31,
2042
83 /H1118/H1118A cylindrical battery and
electrical equipment ( ɓ၇
ཥϫʿ͜ཥண௪)
Invention Our Company 202310507071X May 8, 2043
84 /H1118/H1118Battery, battery module and
electrical equipment ( ཥ
ϫeཥϫᅼଡ଼ʿ͜ཥண௪)
Invention Our Company 2023115727037 November 23,
2043
85 /H1118/H1118Battery connector, battery and
electrical equipment ( ཥϫ
ᔷટଡ଼΁eཥϫʿ͜ཥண
௪)
Invention Our Company 202311573042X November 23,
2043
86 /H1118/H1118An anode material and its
preparation method and
application (ࣘ
ձ͜௄)
Invention Our Company 2019108748070 September 17,
2039
87 /H1118/H1118A modified anode material
and its preparation method
and application (׌
ձ
͜௄)
Invention Our Company 2019110876645 November 8,
2039
88 /H1118/H1118An anode, its preparation
method and secondary
battery (฽˪ʿՉႡ
ձɚϣཥϫ)
Invention Our Company 2022106461805 June 9, 2042
89 /H1118/H1118Silicon-based anode and
secondary battery and
electrical devices equipped
with such anode (฽
ɚ
ϣཥϫe͜ཥༀໄ)
Invention Our Company 202210726306X June 24, 2042
90 /H1118/H1118An anode material, its
preparation method, anode
and Lithium-Ion battery
(eՉႡ௪˙
฽˪ʿ቞ᕎɿཥϫ)
Invention Our Company 2022110141477 August 23, 2042
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 675 ---
Copyrights
As of the Latest Practicable Date, we have the following copyrights which we consider
to be or may be material to our business:
No. Copyright Name Registered Owner
Registration
Number Registration Date
1 /H1118/H1118HEV high speed ultrasonic
soldering mark visual
inspection system
(Soldering mark visual
inspection system V1.0)
(HEVଔΙൖᙂ
Ꮸ಻ӻ୕(ᔊ၈:ଔΙൖᙂᏨ
಻ӻ୕)V1.0)
Our Company 2023SR0579501 June 5, 2023
2 /H1118/H1118Online detection and control
software for new energy
battery pack V1.0 ( อঐ๕
ཥϫଡ଼ίᇞᏨ಻છՓழ΁
V1.0)
Suzhou ZENIO 2018SR414474 June 4, 2018
3 /H1118/H1118New energy battery pack
liquid-cooled control
manufacturing line control
software V1.0 ( อঐ๕ཥϫ
ଡ଼૰иછՓ͛ପᇞછՓழ΁
V1.0)
Suzhou ZENIO 2018SR414456 June 4, 2018
4 /H1118/H1118New energy battery pack
status monitoring
manufacturing line control
software V1.0 ( อঐ๕ཥϫ
࿒္છ͛ପᇞછՓழ΁
V1.0)
Suzhou ZENIO 2018SR415964 June 5, 2018
5 /H1118/H1118Suzhou ZENIO battery pack
electrical performance test
manufacturing line control
software V1.0 ( ͍ɢᇲԸอ
ঐ಻༊͛ପ
ᇞછՓழ΁V1.0)
Suzhou ZENIO 2018SR419308 June 5, 2018
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 676 ---
Domain Name
As of the Latest Practicable Date, we have the following registered internet domain name
which we consider to be or may be material to our business:
No. Domain Name Registered Owner Expiry Date
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118zenergy.cn Our Company January 28,
2028
Save as the above, as of the Latest Practicable Date, there were no other intellectual
property rights which were material to our business.
FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS, SENIOR
MANAGEMENT AND SUBSTANTIAL SHAREHOLDERS
Interests and short positions of our Directors, Supervisors and chief executive of our
Company in the Shares, underlying Shares and debentures of our Company and our
associated corporations
Save as disclosed in the section headed “Substantial Shareholders” and below,
immediately following the completion of the Global Offering (assuming that the Over-
allotment Option is not exercised), so far as our Directors are aware, none of our Directors,
Supervisors and chief executives has any interests and short positions in our Shares, underlying
Shares or debentures of our Company or any of our associated corporations (within the
meaning of Part XV of the SFO) (i) which will have to be notified to us and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions
in which they are taken or deemed to have under such provisions of the SFO), or (ii) which will
be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein,
or (iii) which will be required to be notified to us and the Stock Exchange pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing
Rules:
Name of Shareholder Nature of Interest
As of the Latest Practicable Date
Immediately following the Global Offering (assuming the
Over-allotment Option is not exercised)
Number of
Shares
Approximate
percentage of
shareholding in
our total share
capital
Number of
Shares (1)
Approximate
percentage of
shareholding in
Unlisted Shares/
H Shares (2)
Approximate
percentage of
shareholding in
our total share
capital (2)
Ms. Cao (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporations
1,159,012,918 48.56% 598,319,817
Unlisted
Shares (L)
55.96% 23.85%
560,693,101
H Shares (L)
38.95% 22.35%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 677 ---
Name of Shareholder Nature of Interest
As of the Latest Practicable Date
Immediately following the Global Offering (assuming the
Over-allotment Option is not exercised)
Number of
Shares
Approximate
percentage of
shareholding in
our total share
capital
Number of
Shares (1)
Approximate
percentage of
shareholding in
Unlisted Shares/
H Shares (2)
Approximate
percentage of
shareholding in
our total share
capital (2)
Interest in parties acting
in concert through a
controlled corporation
382,946,254 16.04% – – –
Dr. Chen
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporations
1,159,012,918 48.56% 598,319,817
Unlisted
Shares (L)
55.96% 23.85%
560,693,101
H Shares (L)
38.95% 22.35%
Interest in parties acting
in concert through a
controlled corporation
382,946,254 16.04% – – –
Notes:
(1) The letter “L” denotes the person’s long position in the Shares.
(2) The calculation is based on the total number of 1,069,127,364 Unlisted Shares and 1,439,372,739 H Shares in
issue immediately after completion of the Global Offering since 1,317,849,039 Unlisted Shares will be
converted into H Shares and 121,523,700 H Shares will be issued pursuant to the Global Offering, assuming
that the Over-allotment Option is not exercised.
(3) Ms. Cao and Dr. Chen: (i) hold Zenergy Investment as to 42% and 46% directly and as to 12% indirectly
through SINOGY VC; (ii) hold SINOGY VC as to 52% and 48%; (iii) hold Zhengli Consulting as to 50% each,
thereby controlling the general partnership interests in Nanjing Miaode and Nanjing Xuande; (iv) are the
general partners of Zhengli No. 1 and Zhengli No. 2.
Therefore, by virtue of the SFO: (i) Zhengli Consulting is deemed to be interested in the Shares held by
Nanjing Miaode and Nanjing Xuande (which holds 2.33% of the total issued share capital of our Company as
of the Latest Practicable Date); and (ii) Ms. Cao and Dr. Chen are deemed to be interested in the Shares held
by Zenergy Investment, SINOGY VC, Nanjing Miaode, Nanjing Xuande, Zhengli No. 2 (which holds 0.84%
of the total issued share capital of our Company as of the Latest Practicable Date), and Zhengli No. 1 (which
holds 0.15% of the total issued share capital of our Company as of the Latest Practicable Date).
According to the AIC Agreements and V oting Proxy Agreements entered into between Zenergy Investment and
the Financial Investors in 2021 and 2022, the Financial Investors agreed to: (i) pursuant to the AIC
Agreements, exercise their voting rights or express their opinions based on and in the same manner as Zenergy
Investment for key corporate decisions, including but not limited to our Company’s operations and investment
planning, the appointment, remuneration and replacement of directors and supervisors, changes to registered
capital, merger, demerger, dissolution or liquidation, and the amendment of articles of association; and (ii)
pursuant to the V oting Proxy Agreements, irrevocably grant proxy of voting rights to Zenergy Investment
where resolutions by way of shareholders’ meeting are required in accordance with the applicable laws,
regulations and corporate governance rules for matters relating to our Company’s day-to-day operations
management and development, IPO and financing.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 678 ---
Since Ms. Cao and Dr. Chen are deemed to be interested in the Shares held by Zenergy Investment, as of the
Latest Practicable Date, they are also entitled to exercise control over the equity interests held by the Financial
Investors, which amounts to 16.04% of the total issued share capital of our Company. Therefore, as of the
Latest Practicable Date, Ms. Cao and Dr. Chen are collectively deemed to be interested in a total of 64.60%
of the total issued share capital of our Company under the SFO. The AIC Agreements and V oting Proxy
Agreements will terminate upon Listing. As such, immediately upon completion of the Global Offering
(assuming that the Over-allotment Option is not exercised), Ms. Cao and Dr. Chen will be deemed under the
SFO to be interested in the Shares held by the Management Shareholders only.
Interests of the substantial shareholders in the Shares
Save as disclosed in “Substantial Shareholders”, immediately following the completion of
the Global Offering and without taking into account any H Shares which may be issued
pursuant to the exercise of the Over-allotment Option, our Directors are not aware of any other
person who will have an interest or short position in our Shares or the underlying Shares which
would fall to be disclosed to us and the Hong Kong 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.
Interests of the substantial shareholders in other members of our Group
As of the Latest Practicable Date, our Directors are not aware of any persons who would,
immediately following the completion of the Global Offering, be directly or indirectly
interested in 10% or more of the issued voting shares of the other members of our Group (other
than our Company).
Particulars of Directors’ and Supervisors’ Service Contracts and Appointment Letters
We have entered into a service contract or a letter of appointment with each of our
Directors and Supervisors in respect of, among other things, compliance with the relevant laws
and regulations and the Articles of Association.
Save as disclosed above, we have not entered, and do not propose to enter, into any
service contracts with any of our Directors or Supervisors in their respective capacities as
Directors or Supervisors (other than contracts expiring or determinable by the employer within
one year without any payment of compensation (other than statutory compensation)).
Remuneration of Directors and Supervisors
Save as disclosed in “Directors, Supervisors and Senior Management” and Note 8 to the
Accountants’ Report set out in Appendix I to this Prospectus, none of our Directors or
Supervisors received other remunerations of benefits in kind from us for the financial years
ended December 31, 2021, 2022, 2023 and 2024.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 679 ---
Under the arrangement currently in force, we estimate that the aggregate remuneration
payable to, including any benefits in kind receivable by, our Directors and Supervisors by any
member of our Group in respect of the year ending December 31, 2025 is approximately
RMB6.7 million.
Save as disclosed above, there is no arrangement under which any Director or Supervisor
has waived or agreed to waive any remuneration or benefits in kind during the Track Record
Period.
Disclaimers
Save as disclosed in this Prospectus:
(a) save as disclosed in “History, Reorganization and Corporate Structure,” none of our
Directors or Supervisors 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;
(b) none of our Directors or Supervisors is materially interested in any contract or
arrangement subsisting at the date of this Prospectus which is significant in relation
to the business of our Group taken as a whole; and
(c) without taking into account any Shares which may be taken up under the Global
Offering, none of our Directors knows of any person (not being a Director or chief
executive of our Company) who will, immediately following completion of the
Global Offering, be interested in 10% or more of the nominal value of any class of
share capital carrying rights to vote in all circumstances at Shareholders’ meetings
of any member of our Group in the Shares or underlying Shares of our Company.
PRE-IPO EQUITY INCENTIVE PLANS
The following is a summary of the principal terms of the Pre-IPO Equity Incentive Plans.
The terms of the Pre-IPO Equity Incentive Plans are not subject to the provisions of Chapter
17 of the Listing Rules as each of the Pre-IPO Equity Incentive Plans does not involve the grant
of new options or awards by our Company after the Listing. The Pre-IPO Equity Incentive
Plans will not cause any dilution of the shareholding of our Shareholders after the Listing given
all underlying Shares of the options and awards granted under the Pre-IPO Equity Incentive
Plans have been issued to the Equity Incentive Platforms.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 680 ---
1. Share Option Plan
Purpose
The main purpose of the Share Option Plan is to improve the incentive mechanism of the
Group, further enhance the work enthusiasm and creativity of the participants thereto, promote
the continued growth of the performance of the Group, and bring economic benefits to the
participants while enhancing the value of the Group, so as to realize the common development
of the participants and the Group.
Administration
For the purpose of implementing the Share Option Plan, the share incentive
administration group (the “ Administration Group ”), as approved by the shareholders in
general meeting of the Company, shall be the management body of the Share Option Plan and
shall be specifically responsible for the implementation of the Share Option Plan in accordance
with its provisions.
Eligible Participants
Unless determined by the Administration Group, the eligible participants under the Share
Option Plan shall be personnel at D1 level of position with at least one-year employment with
the Company, B level or above of performance appraisal for the recent year, and fulfillment of
results assessment requirements at the Company-level and personal-level.
Form of Awards under the Share Option Plan
The participants shall subscribe for partnership interests of the Equity Incentive
Platforms, which are limited partnerships, as partners according to the number of options
granted under the Share Option Plan, thereby indirectly holding the Shares underlying the
options by virtue of their capacity as partners of the relevant Equity Incentive Platform.
Rights Attached to Options
The general partner(s) of the Equity Incentive Platforms shall exercise voting rights on
behalf of the eligible participants under the Share Option Plan in respect of the Shares
underlying the options. The participants have the rights to any dividends or distributions from
any Shares underlying the options.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 681 ---
2. Share Incentive Plan
Purpose
The main purpose of the Share Incentive Plan is to improve the incentive mechanism of
the Group, further enhance the work enthusiasm and creativity of the participants thereto,
promote the continued growth of the performance of the Group, and bring economic benefits
to the eligible participants under the Share Incentive Plan while enhancing the value of the
Group, so as to realize the common development of the eligible participants under the Share
Incentive Plan and the Group.
Administration
The Board is responsible for the day-to-day management and implementation of the Share
Incentive Plan, and may, based on specific needs, establish a working group (the “ Working
Group ”) for the Share Incentive Plan, which will be responsible for the implementation and
management of the Share Incentive Plan.
Eligible Participants
The eligible participants under the Share Incentive Plan include Directors, senior
management, backbone employees across the departments of the Company, new employees
who are essential to the development of the Company, other participants as determined by the
executive Directors/Board.
Form of Awards under the Share Incentive Plan
The participants shall subscribe for partnership interests of the Equity Incentive
Platforms, which are limited partnerships, as partners according to the number of awards
granted under the Pre-IPO Equity Incentive Scheme, thereby indirectly holding the Shares
and/or restricted Shares of our Company by virtue of their capacity as partners of the relevant
Equity Incentive Platform.
Lock-up Period and Transfer Restrictions
Certain awards shall be subject to a lock-up period ending upon the date of successful
listing of the Company, and certain other awards will be subject to a lock-up period ending
upon (a) the date of successful IPO of the Company or (b) three years from the date of the
grant, whichever is the later. Upon the expiration of such lock-up period, the Working Group
shall determine whether the release conditions as agreed under the relevant agreement(s) for
the award of restricted Shares and the Share Incentive Plan are met.
Prior to the listing of the Company, except as otherwise reviewed and approved by the
Working Group, the grantees shall not directly or indirectly dispose the partnership interests
held in the Equity Incentive Platforms.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 682 ---
Rights Attached to Awards
The general partner(s) of the Equity Incentive Platforms shall exercise voting rights on
behalf of the eligible participants under the Share Incentive Plan in respect of the Shares
underlying the awards. The eligible participants under the Share Incentive Plan have the rights
to any dividends or distributions from any Shares underlying the awards.
Structure of the Equity Incentive Platforms
The structure of the Pre-IPO Equity Incentive Plans as at the Latest Practicable Date is
set out below.
Zhengli No. 3(2)
Nanjing Mude(1)
Nanjing Xuande(1) Zhengli No. 2(2)
Our Company
Zhengli No. 1(2)
Nanjing Yinde(1)
53.45%*
43.84%* 12.32%* 15.32%* 13.23%*
2.33% 0.84% 0.15%
12.39%* 3.31%* 10.47%* 4.58%* 10.77%* 5.03%*
Nanjing Gande(1) Nanjing Chengde(1)
Zhengli No. 4(2) Zhengli No. 5(2) Zhengli No. 6(2) Zhengli No. 7(2) Zhengli No. 8(2) Zhengli No. 9(2)
* representing limited partnership interests
Notes:
(1) Nanjing Xuande is held as to approximately (i) 0.01% by Zhengli Consulting as its general partner, (ii)
43.84%, 12.32%, 15.32% and 13.23% by Nanjing Mude, Nanjing Yinde, Nanjing Gande and Nanjing Chengde
as limited partners, respectively, and (iii) 15.29% by a former employee of Jiangsu TAFEL as a limited partner.
Nanjing Mude is held as to approximately (i) 16.18% by Zhengli Consulting as its general partner, (ii) 71.05%
by 15 employees, including former employees, who have participated (“ Participant(s) ”) in the Share Option
Plan as limited partners, and (iii) 12.77% by a former employee of Jiangsu TAFEL as a limited partner.
Nanjing Yinde is held as to approximately (i) 29.14% by Zhengli Consulting as its general partner, (ii) 27.66%
by 13 Participants of the Share Option Plan as limited partners, and (iii) 43.19% by a former employee of
Jiangsu TAFEL as a limited partner.
Nanjing Gande is held as to approximately (i) 22.51% by Zhengli Consulting as its general partner, (ii) 60.14%
by 19 Participants of the Share Option Plan as limited partners, and (iii) 17.35% by a former employee of
Jiangsu TAFEL as a limited partner.
Nanjing Chengde is held as to approximately (i) 27.71% by Zhengli Consulting as its general partner, (ii)
58.90% by 16 Participants of the Share Option Plan as limited partners, and (iii) 13.39% by a former employee
of Jiangsu TAFEL as a limited partner.
The minority limited partnership interests held by the former employees of Jiangsu TAFEL in the above Equity
Incentive Platforms are not equity incentives granted under the Pre-IPO Equity Incentive Plans and such
former employees are not Participants of the Pre-IPO Equity Incentive Plans. The reason for the
non-participants’ interests in the Equity Incentive Platforms is that the aforementioned limited partnerships
were historically direct or indirect shareholders of Jiangsu TAFEL; through such limited partnerships, certain
employees of Jiangsu TAFEL had held their minority interests in Jiangsu TAFEL since its early stage of
development. Such minority limited partnership interests became indirect interests in the Company after all the
then shareholders of Jiangsu TAFEL (including the Equity Incentive Platforms) became shareholders of the
Company in December 2021 as part of the Business Reorganization, details of which are set out in “History,
Reorganization and Corporate Structure—Corporate Development and Major Shareholding Changes—3.
Business Reorganization of Our Group.”
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 683 ---
(2) Zhengli No. 1 is held as to approximately (i) 3.47% and 0.003% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 96.53% by 28 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 2 is held as to approximately (i) 0.001% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 53.45%, 12.39%, 3.31%, 10.47%, 4.58%, 10.77% and 5.03% by Zhengli No. 3, Zhengli
No. 4, Zhengli No. 5, Zhengli No. 6, Zhengli No. 7, Zhengli No. 8 and Zhengli No. 9 as limited partners,
respectively.
Zhengli No. 3 is held as to approximately (i) 1.19% and 0.001% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 98.81% by 44 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 4 is held as to approximately (i) 0.88% and 0.004% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 99.12% by 41 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 5 is held as to approximately (i) 7.35% and 0.02% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 92.64% by 25 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 6 is held as to approximately (i) 0.97% and 0.01% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 99.02% by 25 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 7 is held as to approximately (i) 0.23% and 0.01% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 99.76% by 22 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 8 is held as to approximately (i) 2.79% and 0.01% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 97.21% by 31 Participants of the Share Incentive Plan as limited partners.
Zhengli No. 9 is held as to approximately (i) 2.00% and 0.01% by Ms. Cao and Dr. Chen as general partners,
respectively, and (ii) 97.2% by 36 Participants of the Share Incentive Plan as limited partners.
Details of shares held by the Equity Incentive Platforms and interests granted under the
Equity Incentive Plans
As of the date of this Prospectus, all partnership interests in the Equity Incentive
Platforms have been granted to, vested in and subscribed by the partners, and the relevant
registration had been completed. The Equity Incentive Platforms held a total of 79,124,975
Shares in our Company representing approximately 3.31% of the total issued shares of our
Company, of which:
(i) 51,741,152 Shares have been utilized for granting options or awards (all of which
have been vested) to Participants of the Pre-IPO Equity Incentive Plans in the form
of limited partnership interests in the Equity Incentive Platforms;
(ii) 10,329,730 Shares are indirectly held by Ms. Cao and Dr. Chen in their capacity as
general partners of the Equity Incentive Platforms, which become beneficially held
by Ms. Cao and Dr. Chen in accordance with the terms of the Pre-IPO Equity
Incentive Plans, and not used for any further grant after the Listing. Accordingly, no
new options or awards will be further granted after the Listing pursuant to the
Pre-IPO Equity Incentive Plans; and
(iii) 17,054,093 Shares are indirectly held by certain former employees of Jiangsu
TAFEL (who are not Participants of the Pre-IPO Equity Incentive Plans) in the form
of limited partnership interests in the Equity Incentive Platforms.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-26 –


--- page 684 ---
Details of grants made under (i) above (i.e. vested options and awards granted to Directors, Supervisors, senior management and connected
persons under the Pre-IPO Equity Incentive Plans are set out below:
Name
Percentage of capital contribution in relevant Equity Incentive Platform
Approximate
number of Shares
corresponding to
partnership interests
held in the Equity
Incentive
Platforms (1)
Approximate
shareholding
percentage of total
issued Shares
immediately prior to
the Listing (2)
Nanjing
Mude
Nanjing
Yinde
Nanjing
Gande
Nanjing
Chengde
Zhengli
No. 1
Zhengli
No. 2
Zhengli
No. 3
Zhengli
No. 4
Zhengli
No. 5
Zhengli
No. 6
Zhengli
No. 7
Zhengli
No. 8
Zhengli
No. 9
Director
Dr. Yu Zhexun
(௸) /H1118/H1118/H1118/H1118/H1118 – – 6.4772% –––––– 23.8688% – – – 1,052,297 0.04%
Supervisors
Mr. Yu Yang (ݱ)H1118/H1118 –––––– 0.4677% –––––– 50,000 0.0021%
Mr. Jiang Dongfeng
(ࢤ؇۴)H1118/H1118/H1118/H1118/H1118 –––––– 2.3387% –––––– 250,000 0.01%
Senior management of the Company (other than Directors)
Mr. Tang Jia (Գ) /H1118/H1118 –––– 26.0021% – 10.2904% –––––– 2,000,000 0.08%
Mr. Liang Wangchun
(݆׶)H1118/H1118/H1118/H1118/H1118 –––––– 9.3549% –––––– 1,000,000 0.04%
Connected persons of
the Company
(3) /H1118/H1118 0.6951% ––––– 8.4194% – 1.5088% –––– 1,079,630 0.05%
Other grantees /H1118/H1118/H1118 70.3510% 27.6642% 53.6626% 58.9033% 70.5278% – 67.9342% 99.1175% 91.1299% 75.1550% 99.7596% 97.2048% 97.9904% 46,349,224 1.94%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-27 –


--- page 685 ---
* representing general partnership interests indirectly held by Ms. Cao and Dr. Chen.
Notes:
(1) To illustrate the indirect interests of grantees in the Shares, the number of Shares are presented and calculated by multiplying the relevant perc entage of their partnership interests
in the Equity Incentive Platforms by the total number of Shares held by such relevant Equity Incentive Platforms.
(2) For details of the conversion of Unlisted Shares to H Shares held by the Equity Incentive Platforms, please refer to “History, Reorganization and C orporate
Structure—Capitalization”.
(3) Include Mr. Lin Sen (ಌ), a supervisor of our subsidiaries, and Mr. Wu Shigang (࡝a director of our subsidiaries.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-28 –


--- page 686 ---
OTHER INFORMATION
Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to be
imposed 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.
Preliminary Expenses
As of the Latest Practicable Date, our Company has not incurred any material preliminary
expenses.
Promoter
All of the promoters of the Company are the then Shareholders as at June 18, 2024
immediately before our conversion into a joint stock limited liability company. Save as
disclosed in this Prospectus, within the two years immediately preceding the date of this
Prospectus, no cash, securities or benefit has been paid, allotted or given, or is proposed to be
paid, allotted or given to the promoters named above in connection with the Global Offering
or the related transactions described in this Prospectus.
Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares registered with our Hong Kong branch
register of members will be subject to Hong Kong stamp duty. The current rate charged on each
of the seller and purchaser is HK$1.00 for every HK$1,000 (or part thereof) of the
consideration or, if higher, the fair value of the H Shares being sold or transferred.
No Material Adverse Change
Our Directors confirm that up to Latest Practicable Date, there has been no material
adverse change in our financial, operational or trading positions or prospects since
December 31, 2024, being the end of the period reported on as set out in the Accountants’
Report included in Appendix I to this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-29 –


--- page 687 ---
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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO to
conduct Type 1 (dealing in securities),
Type 2 (dealing in futures contracts),
Type 4 (advising on securities), Type 5
(advising on futures contracts) and
Type 6 (advising on corporate finance)
regulated activities as defined under the
SFO
CMB International Capital Limited /H1118/H1118/H1118/H1118/H1118/H1118A licensed corporation to conduct Type 1
(dealing in securities) and Type 6
(advising on corporate finance)
regulated activities as defined under the
SFO
Ernst & Young /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and
Registered Public Interest Entity
Auditor
Fangda Partners /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC legal adviser
Frost & Sullivan (Beijing) Inc., Shanghai
Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
Guangdong Scihead Law Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Special intellectual property counsel to
our Company
Save as disclosed in this Prospectus, as of the Latest Practicable Date, none of the experts
named above had any shareholding interest in our Company or any of our subsidiaries or the
right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe
for securities in any member of our Group.
Consents of Experts
Each of the experts as referred to “—Qualifications of Experts” in this Appendix has
given and has not withdrawn its written consent to the issue of this Prospectus with the
inclusion of its report and/or letter and/or opinion and/or references to its name included herein
the form and context in which it is respectively included.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-30 –


--- page 688 ---
Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for
the listing of, and permission to deal in, our H Shares. All necessary arrangements have been
made to enable the securities to be admitted into CCASS.
China International Capital Corporation Hong Kong Securities Limited, one of the Joint
Sponsors, is a wholly-owned subsidiary of China International Capital Corporation
(International) Limited (ፄ(਷ყ)ʮ̡), which is in turn a wholly-owned
subsidiary of China International Capital Corporation Limited. CICC Capital Management Co.,
Ltd., a wholly-owned subsidiary of China International Capital Corporation Limited, is the
general partner of CICC SAIC Investment. As at the date of this Prospectus, China
International Capital Corporation Limited is deemed to hold approximately 1.65% of the equity
interest of our Company through CICC SAIC Investment. CICC SAIC Investment will hold
approximately 1.57% of the equity interest of the Company immediately upon completion of
the Global Offering, assuming the Over-allotment Option is not exercised. Therefore, as at the
Latest Practicable Date and upon the completion of the Global Offering, the sponsor group and
any director or close associate of a director of the sponsor collectively holds or will hold,
directly or indirectly, no more than 5% of the number of issued shares of our Company.
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. Each of the Joint Sponsors will receive a fee of US$300,000 for
acting as a sponsor for the Listing. As of the Latest Practicable Date, US$150,000 remained
payable by the Company to each of the Joint Sponsors.
Restriction on Share Repurchase
For details of the restrictions on share repurchases by our Company, see Appendix III to
this Prospectus.
Binding Effect
This Prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
Bilingual Prospectus
The English and Chinese language versions of this Prospectus are being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-31 –


--- page 689 ---
Miscellaneous
Save as otherwise disclosed in this Prospectus:
(a) within the two years preceding the date of this Prospectus:
(i) no share or loan capital of our Company or any of our subsidiaries has been
issued or agreed to be issued, or is proposed to be fully or partly paid either
for cash or a consideration other than cash;
(ii) no share or loan capital of our Company or any of our subsidiaries is under
option or is agreed conditionally or unconditionally to be put under option;
(iii) no commissions, discounts, brokerages or other special terms have been
granted or agreed to be granted in connection with the issue or sale of any share
of our Company or any of our subsidiaries; and
(iv) no commission has been paid or is payable for subscription, agreeing to
subscribe, procuring subscription or agreeing to procure subscription for any
share in or debentures of our Company;
(b) there are no founder, management or deferred shares or any debentures in our
Company or any of our subsidiaries;
(c) there are no contracts for hire or hire purchase of plant to or by us for a period of
over one year which are substantial in relation to our business;
(d) there has not been any interruption in the business of our Group which may have or
has had a significant effect on the financial position of our Group in the 12 months
preceding the date of this Prospectus;
(e) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(f) our Company has no outstanding convertible debt securities or debentures;
(g) there is no arrangement under which future dividends are waived or agreed to be
waived;
(h) none of our equity and debt securities is listed or dealt with in any other stock
exchange nor is any listing or permission to deal being or proposed to be sought;
(i) our Company is a joint stock limited company and is subject to the PRC Company
Law; and
(j) our Company has adopted a code of conduct regarding Directors’ and Supervisors’
securities transactions on terms as required under the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing
Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-32 –


--- page 690 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this Prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to in “Statutory and General
Information—Further Information about Our Business—Summary of Material
Contracts” in Appendix IV to this Prospectus; and
(b) the written consents referred to in “Statutory and General Information—Other
Information—Consents of Experts” in Appendix IV to this Prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the Stock Exchange’s website at
www.hkexnews.hk and the Company’s website at www.zenergy.cn during a period of 14 days
from the date of this Prospectus:
(a) the Articles of Association;
(b) the audited consolidated financial statements of our Group for the years ended
December 31, 2021, 2022, 2023 and 2024;
(c) the Accountants’ Report from Ernst & Young, the text of which is set out in
Appendix I to this Prospectus;
(d) the report from Ernst & Young on the unaudited pro forma financial information of
our Group as at December 31, 2024, the text of which is set out in Appendix II to
this Prospectus;
(e) the material contracts referred to in “Statutory and General Information—Further
Information about our Business—Summary of Material Contracts” in Appendix IV
to this Prospectus;
(f) the written consents referred to in “Statutory and General Information—Other
Information—Consents of Experts” in Appendix IV to this Prospectus;
(g) the service contracts and letters of appointment referred to in “Statutory and General
Information—Further Information about our Directors, Supervisors, Senior
Management and Substantial Shareholders—Particulars of Directors’ and
Supervisors’ Service Contracts and Appointment Letters” in Appendix IV to this
Prospectus;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
–V - 1–


--- page 691 ---
(h) the legal opinions issued by Fangda Partners, our PRC Legal Adviser, in respect of,
among other things, the general corporate matters and property interests of our
Group under the PRC law;
(i) the industry report issued by Frost & Sullivan referred to in “Industry Overview”;
(j) the legal opinion issued by Guangdong Scihead Law Firm, our special intellectual
property counsel, in respect certain aspects of the intellectual property matters of
our Group; and
(k) a copy of the following PRC laws, together with unofficial English translations:
(i) the PRC Company Law;
(ii) the PRC Securities Law; and
(iii) the Trial Measures for the Administration on Overseas Securities Offering and
Listing by Domestic Companies.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
–V - 2–


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江蘇正力新能電池技術股份有限公司
Jiangsu Zenergy Battery Technologies Group Co., Ltd.
