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OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’s Republic of China with limited liability )
Stock Code: 6600
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order )
(-0#"-0''&3*/(


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If you are in any doubt about any of the contents of this pros pectus, you should obtain independent professional advice.
OneRobotics (Shenzhen) Co., Ltd.
臥 安 機 器 人（ 深 圳 ）股 份 有 限 公 司
(A joint stock company incorporated in the Peopl e’s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under
the Global Offering
: 22,222,300 H Shares (subj ect to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 2,222,300 H Shares (subject to reallocation)
Number of International Offer Shares : 20,000,000 H Shares (subject to reallocation and
the Over-allotment Option)
Maximum Offer Price : HK$81.0 per H Share, plus brokerage of 1.0%,
SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable in full on
a p p l i c a t i o ni nH o n gK o n gd o l l a r sa n ds u b j e c tt o
refund)
Nominal Value : RMB0.1 per H Share
Stock Code : 6600
Joint Sponsors, Overall Coordinators, Joint Global Coordinators
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Li mited and Hong Kong Securities Clearing Company Limited take no responsib ility
for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for an y loss howsoever
arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the paragraph headed ‘‘Documents Delivered to The Registrar of Compani es in Hong
Kong and Available on Display’’ in Appendix VII to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Sectio n 342C of
the Companies (WUMP) Ordinance. The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to
the contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be fixed by agreement by the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company on th eP r i c e
Determination Date. The Price Determination Date is expected to be on or a bout Wednesday, December 24, 2025 (Hong Kong time) and, in any event, not late rt h a n
12 : 00 noon on Wednesday, December 24, 2025 (Hong Kong time). The Offer Price will be not more than HK$81.0 per Offer Share and is currently expected to be not
less than HK$63.0 per Offer Share, unless otherwise announced. If, for any reason, the Offer Price is not agreed by Wednesday, December 24, 2025 (Hong K ong time)
between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company, the Global Offering will not proceed and will lap se.
Applicants for Hong Kong Offer Share are required to pay, on application, the maximum Offer Price of HK$81.0 for each Hong Kong Offer Share together wit ha
brokerage fee of 1.0%, a SFC transaction levy of 0. 0027%, a Stock Exchange trading fee of 0.00565% and an AFRC transaction levy of 0.00015%, subject to r efund if
the Offer Price as finally determined is less than HK$81.0.
The Overall Coordinators, for themselves and on behalf of the Underwriters, and with our consent may, where considered appropriate, reduces the numb er of Hong
Kong Offer Shares and/or the indicative Offer Price range below that is sta ted in this prospectus (which is HK$63. 0 to HK$81.0) at any time prior to the m orning of the
last day for lodging applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the number of Hong Kong Offer Shares an d/or the
indicative Offer Price range will be published 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. Such notices will also be available on the website of our Company at
www.onero.cn and on the website of the Stock Exchange at www.hkexnews.hk . Further details are set forth in ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for
Hong Kong Offer Shares’’ in this prospectus.
Prior to making an investment decision, prospectiv e investors should carefully consider all of the information set out in this prospectus, in partic ular, the risk factors set
out in the section headed ‘‘Risk Factors’’.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Offer Shares, the Joint Sponsors and the
Overall Coordinators, acting for themselves and on behalf of the Hong Kong Underwriters, have the right in certain circumstances, in its absolute dis cretion, to
terminate the obligation of the Hong Kong Underwriters pursuant to the Hong Kong Underwriting Agreement at any time prior to 8 : 00 a.m. on the Listing Da te.
Further details of the terms of the termination provisions are set out in the section headed ‘‘Underwriting — Underwriting Arrangements and Expenses — Grounds for
Termination’’ in this prospectus. It is important that you refer to that section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red or sold,
pledged or transferred within the United States, except that the Offer Shares may be offered, sold or delivered in offshore transactions outside the U nited States in
reliance on Regulation S under the U.S. Securities Act.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Publ ic Offering. We will not provide printed copies of this prospectus to the p ublic in relation
to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.onero.cn. If you require a printed copy of this prospectus,
you may download and print from the website addresses above.
December 18, 2025
IMPORTANT


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide printed copies of this prospectus to the public in relation to the
Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews > New Listings > New Listing Information’’ section, and our
website at www.onero.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:
(1) apply online through the White Form eIPO service at
www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via HKSCC’s
FINI system to apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channel s to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this prospectus
are identical to the printed prospectus as registered with the Registrar of Companies in
Hong Kong pursuant to Section 342C of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses
above.
Please refer to ‘‘How to Apply for Hong Kong Offer Shares’’ in this prospectus for
further details on 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 service
must be made for a minimum of 100 Hong Kong Offer Shares and in one of the numbers set
out in the table. You are required to pay the amount next to the number you select.
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.
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 an d regulations in Hong Kong.
IMPORTANT
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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$
100 8,181.69 2,000 163,633.76 10,000 818,168.86 300,000 24,545,065.50
200 16,363.38 2,500 204,542.21 20,000 1,636,337.70 400,000 32,726,754.00
300 24,545.07 3,000 245,450.65 30,000 2,454,506.56 500,000 40,908,442.50
400 32,726.75 3,500 286,359.10 40,000 3,272,675.40 600,000 49,090,131.00
500 40,908.44 4,000 327,267.55 50,000 4,090,844.26 700,000 57,271,819.50
600 49,090.13 4,500 368,175.98 60,000 4,909,013.10 800,000 65,453,508.00
700 57,271.82 5,000 409,084.43 70,000 5,727,181.96 900,000 73,635,196.50
800 65,453.51 6,000 490,901.31 80,000 6,545,350.80 1,000,000 81,816,885.00
900 73,635.20 7,000 572,718.20 90,000 7,363,519.66 1,111,100
(1) 90,906,740.93
1,000 81,816.89 8,000 654,535.08 100,000 8,181,688.50
1,500 122,725.32 9,000 736,351.96 200,000 16,363,377.00
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is s uccessful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange
trading fee and AFRC transaction levy are pai d to the Stock Exchange (in the case of the SFC
transaction levy, collected by the Stock Exchange on behalf of the SFC; and in the case of the AFRC
transaction levy, collected by the Stock Exchange on behalf of the AFRC).
No application for any other number of 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 Stock
Exchange’s website at
www.hkexnews.hk and our website at www.onero.cn .
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s .........................9 : 0 0a . m .o n
Thursday, December 18, 2025
Latest time for completing electronic applications
under the White Form eIPO service through the
designated website at www.eipo.com.hk (2) .....................1 1 : 3 0a . m .o n
Tuesday, December 23, 2025
Application lists for the Hong Kong Public Offering
open (3) .............................................1 1 : 4 5a . m .o n
Tuesday, December 23, 2025
Latest time to complete payment of White Form eIPO
applications by effecting internet banking transfer(s)
or PPS payment transfer(s) and giving electronic
application instructions to HKSCC
(4) ........................ 1 2 : 0 0n o o no n
Tuesday, December 23, 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, you are advised to contact your broker or custodian for the
latest time for giving such instructions which may be different from the earliest and latest
time as stated above, as this may vary by broker or custodian .
Application lists for the Hong Kong Public Offering
close
(3) ............................................. 1 2 : 0 0n o o no n
Tuesday, December 23, 2025
Expected Price Determination Date (5) ............. W e d n e s d a y ,D e c e m b e r2 4 , 2025
(1) Announcement of:
. the final Offer Price;
. the level of applications in the Hong Kong Public Offering;
. the level of indications of interest in the International Offering; and
. the basis of allocations of the Hong Kong Offer Shares under the Hong Kong
Public Offering,
EXPECTED TIMETABLE (1)
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to be published on the Stock Exchange’s website at
www.hkexnews.hk and our website at
www.onero.cn (6) o no rb e f o r e ............................ 1 1 : 0 0p . m .o n
Monday, December 29, 2025
(2) Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety
of channels, including:
. in the announcement to be posted on the
website of the Stock Exchange at
www.hkexnews.hk and our website at
www.onero.cn as described in the section
headed ‘‘How to Apply for Hong Kong
O f f e rS h a r e s—B .P u b l i c a t i o no fR e s u l t s ’ ’.......... a to rb e f o r e1 1 : 0 0p . m .
on Monday, December 29, 2025
. from the designated results of allocations
website at
www.iporesults.com.hk
(alternatively: www.eipo.com.hk/
eIPOAllotment ).................................f r o m1 1 : 0 0p . m .
Monday, December 29, 2025
12 : 00 midnight on
Sunday, January 4, 2026
. from the allocation results telephone
enquiry by calling +852 2862 8555
b e t w e e n9 : 0 0a . m .a n d6 : 0 0p . m .o n . .......... T u e s d a y ,D e c e m b e r3 0 ,2 0 2 5 ,
Wednesday, December 31, 2025,
Friday, January 2, 2026 and
Monday, January 5, 2026
(excluding Saturday, Sunday and
public holiday in Hong Kong)
For those applying through HKSCC EIPO channel,
you may also check with your broker or custodian
f r o m ................................................ 6 : 0 0p . m .o n
Wednesday, December 24, 2025
H Share certificates in respect of wholly or partially
successful applications under the Hong Kong Public
Offering to be despatched or deposited into CCASS
on or before
(7)(8) ............................ M o n d a y ,D e c e m b e r2 9 , 2025
White Form e-Refund payment instructions/refund
cheques in respect of wholly successful (if applicable)
or wholly or partially unsuccessful applications to be
despatched on or before
(9) . ..................... T u e s d a y ,D e c e m b e r3 0 , 2025
Dealings in the Shares on the Stock Exchange expected
t oc o m m e n c ea t .........................................9 : 0 0a . m .o n
Tuesday, December 30, 2025
EXPECTED TIMETABLE (1)
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The application for the Hong Kong Offer Shares will commence on Thursday,
December 18, 2025 through Tuesday, December 23, 2025. The application monies
(including brokerage, AFRC transaction levy, SFC transaction levy and Stock Exchange
trading fee) will be held by the receiving bank on behalf of us and the refund monies, if
any, will be returned to the applicant(s) without interest on Tuesday, December 30, 2025.
Investors should be aware that the dealings in H Shares on the Stock Exchange are
expected to commence on Tuesday, December 30, 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 fo r submitting applications. If you
have already submitted your application and obt ained an application reference number from the
designated website at or before 11 : 30 a.m., you will be permitted to continue the application process (by
completing payment of application monies) until 12 : 0 0 noon on the last day for submitting applications,
when the application lists close.
(3) If there is/are Severe Weather Signal(s) (as def ined in the section headed ‘‘How to Apply for Hong Kong
Offer Shares — E. Severe Weather Arrangements’’ in this prospectus) in force in Hong Kong at any time
between 9 : 00 a.m. and 12 : 00 noon on Tuesday, Decemb er 23, 2025, the applicat ion lists will not open and
close on that day. Please refer to the section hea ded ‘‘How to Apply for Hong Kong Offer Shares — E.
Severe Weather Arrangements’’ in this prospectus . If the application lists do not open and close on
Tuesday, December 23, 2025, the dates mentioned in t his section headed ‘‘Expected Timetable’’ may be
affected. We will make an announcement in such event.
(4) Applicants who apply for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed ‘‘How to Apply for Hong Kong Offe r Shares — A. Application for Hong Kong Offer
Shares — 2. Application Channels’’ in this prospectus.
(5) The Price Determination Date, being the date on whi ch the Offer Price is to be determined, is expected to
be on or about Wednesday, December 24, 2025 and, in any event, not later than 12 : 00 noon on
Wednesday, December 24, 2025. If, for any reason, the Offer Price is not agreed by our Company and the
Joint Global Coordinators (for them selves and on behalf of the Underwriters) on or before Wednesday,
December 24, 2025, the Global Offering (including th e Hong Kong Public Offering) will not proceed and
will lapse.
(6) None of the websites or any of the information cont ained on the websites forms part of this prospectus.
(7) H Share certificates will only beco me valid evidence of title at 8 : 00 a.m. on the Listing Date provided that
the Global Offering has become unconditional and the rig ht of termination described in ‘‘Underwriting —
Underwriting Arrangements and Expenses — Grounds fo r Termination’’ has not been exercised. Investors
who trade H Shares on the basis of publicly available allocation details prior to the receipt of Share
certificates or prior to the H Share certificates becomi ng valid evidence of title do so entirely at their own
risk.
(8) White Form e-Refund payment instructions/refund cheques w ill 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 a pplication is made by joint applicants, part of the
Hong Kong identity card number or passport numbe r of the first-named applicant, provided by the
applicant(s) may be printed on the refund cheque, i f any. Such data would also be transferred to a third
EXPECTED TIMETABLE (1)
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party for refund purposes. Banks may require verifi cation of an applicant’s Hong Kong identity card
number or passport number before encashment of t he refund cheque. Inaccurate completion of an
applicant’s Hong Kong identity card number or pass port number may invalidate or delay encashment of
the refund cheque.
(9) Applicants being individuals who are eligible for per sonal collection may not authorize any other person
to collect on their behalf. If you are a corporate applic ant which is eligible for personal collection, your
authorized representative must be ar a letter of authorization from your corporation stamped with your
corporation’s chop. Both individuals and authorized re presentatives must produce evidence of identity
acceptable to our H Share Registrar at the time of collection.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should
refer to ‘‘How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates
and Refund of Application Monies’’ for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form
of White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through mul tiple bank accounts may have refund monies (if any)
dispatched to the address as specifi ed in their application instructions in the form of refund cheques by
ordinary post at their own risk.
White Form e-Refund payment instructions/refund cheques will b e issued in respect of wholly or partially
unsuccessful applications and in respect of wholly or pa rtially successful applications if the Offer Price is
less than the price per Offer Share payable on application.
Further information is set out in ‘‘How to Apply for Hong Kong Offer Shares — D. Despatch/Collection
of H Share Certificates and Refund of Application Monies’’.
Share certificates will only become valid certificates provided that the Global Offering
has become unconditional in all respects and neither of the Underwriting Agreements has been
terminated in accordance with its terms. Inves tors who trade Shares on the basis of publicly
available allocation details prior to the receipt of their Share certificates or prior to the Share
certificates becoming valid certificates do so entirely at their own risk.
The above expected timetable is a summary only. For further details in relation to the
structure of the Global Offering, including the conditions of the Hong Kong Public
Offering and the procedures for application for the Hong Kong Offer Shares, see the
sections headed ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for Hong Kong
Offer Shares’’ in this prospectus.
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 the
distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of
this prospectus and the offering of the Offer Shares in other jurisdictions are subject to
restrictions and may not be made except as permitted under the applicable securities laws of
such jurisdictions 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. We have not authorized anyone to provide you with information that is
different from what is contained in this prospectus. Any information or representation not
made in this prospectus must not be relied on by you as having been authorized by us, the
Joint Sponsors, the Overall Coordinators, Joint Global Coordinators, Joint Bookrunners,
and Joint Lead Managers, the Underwriters, any of our or their respective directors or any
other person or party involved in the Global Offering.
EXPECTED TIMETABLE ....................................................... i i i
CONTENTS ..................................................................... v i i
SUMMARY ...................................................................... 1
DEFINITIONS ................................................................... 2 5
GLOSSARY OF TECHNICAL TERMS ......................................... 3 9
FORWARD-LOOKING STATEMENTS ......................................... 4 6
RISK FACTORS ................................................................. 4 8
WAIVERS FROM STRICT COMPLIANCE WITH THE HONG KONG
LISTING RULES ............................................................. 9 7
INFORMATION ABOUT THIS PROSPECTUS AND
THE GLOBAL OFFERING .................................................... 1 0 1
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 1 0 6
CORPORATE INFORMATION ................................................. 1 1 2
INDUSTRY OVERVIEW ........................................................ 1 1 4
CONTENTS
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REGULATORY OVERVIEW .................................................... 1 3 6
HISTORY AND CORPORATE STRUCTURE ................................... 1 6 7
BUSINESS ....................................................................... 1 9 5
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDER GROUP .... 3 3 3
DIRECTORS AND SENIOR MANAGEMENT .................................. 3 3 7
SUBSTANTIAL SHAREHOLDERS ............................................. 3 5 6
CORNERSTONE INVESTORS .................................................. 3 6 2
SHARE CAPITAL ............................................................... 3 7 1
FINANCIAL INFORMATION ................................................... 3 7 5
F U T U R EP L A N SA N DU S EO FP R O C E E D S................................... 4 5 2
UNDERWRITING ............................................................... 4 5 9
STRUCTURE OF THE GLOBAL OFFERING .................................. 4 7 1
HOW TO APPLY FOR HONG KONG OFFER SHARES ....................... 4 8 0
APPENDIX I — ACCOUNTANTS’ REPORT ............................ I - 1
APPENDIX II — UNAUDITED PRO FORMA FINANCIAL
INFORMATION ..................................... I I - 1
APPENDIX III — TAXATION A ND FOREIGN EXCHANGE ............. III-1
APPENDIX IV — SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS ....................... I V - 1
APPENDIX V — SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY ................................. V - 1
APPENDIX VI — STATUTORY AN D GENERAL INFORMATION ...... V I - 1
APPENDIX VII — DOCUMENTS DELIVERED TO THE REGISTRAR
O FC O M P A N I E SI NH O N GK O N GA N D
AVAILABLE ON DISPLAY .......................... V I I - 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 the whole document 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 before you decide to invest in the Offer
Shares.
OVERVIEW
We are a global provider of home robotic systems, with a particular focus on the
markets in Japan, Europe and North America , and are dedicated to building an ecosystem
centered around smart home robotic produc ts. According to the Frost & Sullivan Report,
we are a leading global provider of home robotic systems offering a broad range of home
robotic categories designed for a variety of home living scenarios. Our offerings primarily
comprise: (i) execution-enhanced robots, including dexterous hand-mimic robots such as
lock robots, curtain robots and finger robots, enhanced mobile robots such as multitasking
household robots, and sports robots; (ii) perception and decision-making systems, including
smart hubs, smart sensors and smart came ras; and (iii) other smart home products and
services, such as light and power tools and smart home appliances. With technical R&D and
product innovation as our core drivers, we leverage our advantages across the industry
chain encompassing R&D, production, and sales to continuously enhance the application
and development of home robotic technology in a wide array of home living scenarios,
including home automation, domestic chores, AI butler, elderly care, security and energy
management, while continuously expanding the depth of our scenario coverage and
enhancing our products’ autonomous learnin g and decision-making capabilities to provide
users with a complete and enriche d smart home living ecosystem.
R&D Practitioner. As a R&D practitioner in the global home robotic system industry,
we have launched multiple products while building strong intellectual property assets and
maintaining significant R&D investments . We introduced and commercialized several
innovative products in the home robotic system industry. We launched the SwitchBot Bot in
2017. In 2020, we introduced SwitchBot Curtain, followed by SwitchBot Lock in 2021, and
SwitchBot S10, an enhanced mobile robot in 2023. As of the Latest Practicable Date, we
owned 311 patents globally, including 56 invention patents that represent our key
technological developments. We have assembled a highly capable R&D team, accounting
for 43.4% of our total employees as of the Latest Practicable Date. Our commitment to
innovation is further demonstrated by our si gnificant R&D investment, with R&D expenses
accounting for approximately 20% of our revenue from 2022 to 2024.
SUMMARY
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Global Operator. Our rise as a global operator is demonstrated by our extensive
worldwide reach, high user engagement, and strong product adoption across diverse
markets and demographics. Building upo n our technological foundation, we have
developed a comprehensive ecosystem that seamlessly connects our innovative products
with users worldwide. As of the Latest Practicable Date, over 3.5 million users had
registered with our SwitchBot App since its launch, and over 10.8 million devices had been
connected to our SwitchBot App since its launch. Our products are sold to more than 90
countries and regions worldwide during the Tr ack Record Period, with availability in over
2,000 offline retail stores globally as of the Lat est Practicable Date. Approximately 55.9%
of all users who had registered with our SwitchBot App had connected two or more of our
SwitchBot products with the SwitchBot App as of the Latest Practicable Date,
demonstrating strong adoption across our product ecosystem, underscoring our strong
consumer loyalty and brand positioning.
Growth Driver. During the Track Record Period, we achieved strong financial
performance, with steady growth in revenue and gross profit margin. For the years ended
December 31, 2022, 2023 and 2024, our revenue amoun ted to RMB274.6 million,
RMB457.3 million and RMB609.9 million, respec tively, representing a CAGR of 49.0%
over the period. Our revenue increased fro m RMB275.0 million for the six months ended
June 30, 2024 to RMB396.3 million for the six months ended June 30, 2025. Our DTC
channels experienced significant growth, with a CAGR of 73.3% from 2022 to 2024. For the
years ended December 31, 2022, 2023 and 20 24, and our gross profit was RMB94.1 million,
RMB230.5 million and RMB315.6 million, respec tively, representing a CAGR of 83.1%
over the period. Our gross profit increa sed from RMB138.8 million for the six months
ended June 30, 2024 to RMB214.8 million for the six months ended June 30, 2025. Our
gross profit margin has reached 50.4% and 51.7% in 2023 and 2024, respectively. Our
adjusted-EBITDA (non-IFRS measure) has also shown significant improvement, turning
from negative RMB69.1 million for the yea r ended December 31, 2022 to RMB5.8 million
and RMB26.1 million for the years ended Decem ber 31, 2023 and 2024, respectively, and
increasing from RMB0.2 million for the six months ended June 30, 2024 to RMB54.1
million for the six months ended June 30, 2025 , demonstrating our en hanced operational
efficiency and progress toward sustainable profitability.
SUMMARY
–2–


--- page 13 ---
Our home robotic systems represent a fundamental advancement over both traditional
single-unit smart home devices and general home robotics. While single-unit smart home
devices offer only basic intellig ent control without interco nnectivity, and general home
robotics operate on preset programs or simple commands, our home robotic systems
integrate artificial intelligence, robotic s and IoT technologies to achieve autonomous
learning and intelligent decision-making. Our systems mimic human behavioral features,
including hands, feet, eyes, skin, and brain, e nabling real-time environmental perception,
multifunctional device collaboration, an d edge intelligence processing through our
decision-making smart hubs.
We offer comprehensive product portfolio across seven categories with 47 SPUs. We
have established an extensive omni-channel sales and distribution network covering DTC
channels via e-commerce platforms and our self-operated website, retailer channels that
include major international retailers such as Amazon, and distribution channels. Our
widespread brand recognition is evidenced through our SwitchBot App, which has achieved
a large and growing user base with millions of registered users and connected devices,
demonstrating strong customer retention and brand positioning within our expanding smart
home ecosystem.
COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiate us
from our competitors: (i) a leading provider of home robotic systems with deployment in
comprehensive home living scenarios: (ii) powering technological innovation through
experienced R&D teams and self-developed proprietary technologies; (iii) leveraging
product innovation capability to devel op a home robotic system and establish a
comprehensive smart home ecosystem with a diversified product matrix; (iv) proven
brand heritage and strong brand influence, buoyed by omni-channel sales network with
global reach; (v) a complete and highly synergetic value chain integrating R&D, production
and sales, ensuring operational efficiency; and (vi) stable and cohesive core management
team with years of cooperation and an e fficient organizational structure.
SUMMARY
–3–


--- page 14 ---
BUSINESS STRATEGIES
To solidify our market leading position and further propel our business growth, we
intend to pursue the following business strat egies: (i) enhance R&D capabilities and expand
our product portfolio; (ii) strengthen market position and expand global reach; (iii)
continue to expand our customer base to attract corporate and institutional customers; and
(iv) pursue strategic acquisitions/investm ents to enhance our technology ecosystem.
OUR BRAND AND PRODUCTS
During the Track Record Period and as of t he Latest Practicable Date, we offered a
wide range of products under multiple categories, primarily including (i)
execution-enhanced robots, including dexterous hand-mimic robots such as lock robots,
curtain robots and finger robots, enhanced mobile robots such as multitasking household
robots, and sports robots; (ii) perception and decision-making systems, including smart
hubs, smart sensors and smart cameras; and ( iii) other smart home products and services,
such as light tools, power tools and smart home appliances. Our products are offered under
the brand names SwitchBot and Acemate. Our users can interact with our products at any
time through primarily our SwitchBot App t o address their diverse home living needs,
enabling our products to generate effective r eal-time interactions. As of the Latest
Practicable Date, we had a total of seven product categories of home robotic system
products with 47 SPUs.
SUMMARY
–4–


--- page 15 ---
The following table sets forth the revenue, sales volume and ASP by product category for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2025
Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1)
RMB’000 RMB RMB’000 RMB RMB’000 RMB RMB’000 RMB
Home Robotic System Products .......... 229,146 1,800,356 — 416,334 2,116,673 — 546,960 2,402,756 — 348,845 1,217,071 —
Execution-enhanced Robots .............. 1 3 9 , 8 9 6 7 7 1 , 4 0 8 — 2 5 5 , 0 9 1 9 0 7 , 4 8 5 — 347,869 971,085 — 237,735 547,552 —
— D e x t e r o u sH a n d - m i m i cR o b o t s ..... 1 3 9 , 8 9 6 7 7 1 , 4 0 8 — 1 9 8 , 3 4 5 8 7 7 , 6 2 0 — 237,579 918,500 — 173,623 522,973 —
— L o c kr o b o t s ................. 5 8 , 6 8 9 2 5 9 , 8 3 1 2 2 6 7 8 , 5 8 2 2 7 7 , 5 8 9 2 8 3 112,904 334,578 338 102,591 236,610 434
— C u r t a i nr o b o t s............... 4 0 , 6 4 3 1 6 3 , 0 3 0 2 4 9 7 6 , 9 7 3 2 6 0 , 1 5 0 2 9 6 8 2 , 7 8 2 296,485 279 (4) 43,717 135,223 323
— Finger robots ................ 4 0 , 0 5 3 3 4 8 , 5 4 7 1 1 5 4 2 , 2 5 1 3 3 9 , 8 8 1 1 2 4 3 6 , 3 2 9 287,437 126 20,321 151,140 134
— Related accessories (2) .......... 5 1 1 — — 5 3 9 — — 5 , 5 6 4 — — 6 , 9 9 4 — —
— Enhanced Mobile Robots ......... — — — 5 6 , 7 4 6 2 9 , 8 6 5 — 110,290 52,585 — 64,112 24,579 —
— M u l t i t a s k i n gh o u s e h o l dr o b o t s .... — — — 5 4 , 2 0 0 2 9 , 8 6 5 1 , 8 1 5 107,524 52,585 2,045 48,293 24,579 1,965
— Related accessories (2) .......... — — — 2 , 5 4 6 — — 2 , 7 6 6 — — 1 5 , 8 1 9 — —
Perception and Decision-making Systems .... 8 9 , 2 5 0 1 , 0 2 8 , 9 4 8 — 1 6 1 , 2 4 3 1 , 2 0 9 , 1 8 8 — 199,091 1,431,671 — 111,110 669,519 —
— S m a r th u b s ................... 3 2 , 9 0 3 4 0 7 , 8 6 1 8 1 9 5 , 7 6 6 5 2 3 , 8 7 7 1 8 3 115,826 596,102 194 52,834 215,872 245
— S m a r ts e n s o r s .................. 3 3 , 2 2 4 4 8 0 , 4 3 4 6 9 4 1 , 8 7 8 5 7 3 , 5 0 7 7 3 6 1 , 1 2 6 731,007 84 41,336 390,798 106
— S m a r tc a m e r a s................. 2 1 , 5 4 4 1 4 0 , 6 5 3 1 5 3 2 3 , 0 9 4 1 1 1 , 8 0 4 2 0 7 2 1 , 7 9 9 104,562 208 16,551 62,849 263
— Related accessories (2) ............ 1 , 5 7 9 — — 5 0 5 — — 3 4 0 — — 3 8 9 — —
Other Smart Home Products and Services (3) .. 45,451 — — 40,930 — — 62,964 — — 47,449 — —
Total ........................... 274,597 1,800,356 (5) — 457,264 2,116,673 (5) — 609,924 2,402,756 (5) — 396,294 1,217,071 (5) —
Notes:
(1) ASP is calculated by dividing the revenue generated by a product by i ts sales volume. Since our products are sometimes sold in bundles with
discounts, the average selling price may not accurately reflect the aver age selling price of our bundled offering s. The ASPs presented in the above
table for the Track Record Period are generally lo wer than the retail price range of our products as of the Latest Practicable Date. This variance is
primarily attributable to our continuous product i teration during the Track Record Period and up t o the Latest Practicable Date, as we introduced
advanced new models with higher retail prices wh ile phasing out simpler and outdated models.
(2) We believe sales volume and ASP for accessories are not meaningful me trics for analysis because these it ems are primarily consumables or
complementary components sold in high volumes at relatively low-pr ice points, unlike our core products which are sold on a unit basis. The
accessories’ revenue contribution is ancillary to our main product lines, and their purchase patterns are typically driven by replacement cycles or
bundled with primary device purch ases rather than representing di stinct consumer adoption trends.
(3) Other smart home products and services primaril y include the revenue generated from the sales o f smart light tools, smart power tools and smart
home appliances and cloud storage services.
(4) The ASP of our curtain robots decreased in 2024 because we strategically chose to offer more competitive pr oduct pricing while maintaining high
gross profit margins.
(5) The sales volume only reflects the sales volume of our hom e robotic system products, excluding relevant accessories.
SUMMARY
–5–


--- page 16 ---
Our SwitchBot App
In 2018, we developed and launched our own SwitchBot App, available for iOS and
Android devices. Our SwitchBot App is designed to provide users with a user-friendly and
customized experience to control our home robo tic system products remotely wherever they
have an internet connection. The table below sets forth the cumulative number of users who
had registered with, and the cumulative number of devices that had been connected to, our
SwitchBot App from its initial launch through the dates indicated.
As of December 31,
As of
June 30,
As of
the Latest
Practicable
Date2022 2023 2024 2025
Cumulative number of
SwitchBot App users (1) .... 1 , 2 5 2 , 1 3 8 2 , 004,206 2,806,210 3,151,433 3,564,849
Cumulative number of devices
connected to Switchbot
App
(2) ................ 3 , 0 0 1 , 1 4 0 5 , 387,255 8,147,627 9,375,187 10,889,251
Cumulative number of users
who purchased our
perception and
decision-making systems and
paired with our products via
SwitchBot App
(3) ......... 9 8 8 , 5 8 3 1 , 502,637 2,061,509 2,274,931 2,538,492
Notes:
(1) For the purposes of ‘‘cumulative number of Swi tchBot App users’’, we count a user by reference to
the first SwitchBot App account that successful ly connects a device (each device having a unique
device identifier) to the SwitchBot App. Wher e multiple SwitchBot App accounts subsequently
connect to the same device, only the first account that connected that device is counted as a user and
the later accounts are not counted again.
(2) ‘‘Cumulative number of devices connected to Swit chBot App’’ represents, as at the relevant date, the
total number of distinct devices, identified by t heir unique device identifiers, that have ever been
successfully connected to the SwitchBot App. A device is counted once irrespective of (i) how many
SwitchBot App accounts have connected to it or (ii) how many times it has been disconnected and
re-connected. In addition, certain registered users have connected more than one device to the
SwitchBot App.
(3) For the purposes of ‘‘cumulative number of users who purchased our perception and
decision-making systems and paired with our pr oducts via SwitchBot App’’, we count the first
SwitchBot App account that successfully conn ects at least one perception and decision-making
system product to the SwitchBot App. Where (i) mu ltiple accounts connect to the same perception
and decision-making system product, only the firs t account that connected that product is counted
as one user; and (ii) one account connects multiple p erception and decision-ma king system products,
that account is counted as one user only.
SUMMARY
–6–


--- page 17 ---
Our products are compatible with major sma rt home platforms such as Amazon Alexa,
Google Assistant, Apple Home and others. For details of our products, please refer to the
section headed ‘‘Business — Our Brand and Products’’ in this prospectus.
OUR TECHNOLOGIES
We have independently developed and mastered three core technologies: (i) robot
positioning and environment constructio n technology, which enables millimeter-level
positioning and dynamic environment modeling through multi-sensor fusion and visual
reconstruction, allowing home robotic systems to adapt to complex layouts and
autonomously plan paths; (ii) AI machine v ision control technology, which combines
multi-modal large language models, vertical models, and diffusion models to achieve
millisecond-level object reco gnition and real-time feedba ck via CMOS visual sensors,
widely applied in cleaning and security scen arios; and (iii) distributed neural control
network technology, which features bio-inspired communication protocols to form a
low-power, self-healing network that ensures coordinated whole-house responses while
automatically adapting to different layout s and device combinations, providing the
technological foundation for a complete smart home ecosystem. All of these core
technologies have been successfully applied to our products.
For details of our technologies, please refe rt ot h es e c t i o nh e a d e d‘ ‘ B u s i n e s s—O u r
Technologies’’ in this prospectus.
RESEARCH AND DEVELOPMENT
We have established interdi sciplinary R&D capabilities that draw upon diverse fields,
including robotics, AI, IoT technology, visual algorithms, motion control, and machine
learning, which establish the foundation for our comprehensive, proprietary core
technologies. Our in-house R&D team strives to expand the functionalities and use cases
of our home robotic system products, accommodating specific needs of various smart home
scenarios. As of the Latest Practicable Date, we had a R&D team of 278 personnel,
accounting for 43.4% of our workforce. For the years ended December 31, 2022, 2023, and
2024, our total R&D expenses amounted to RMB61.8 million, RMB89.2 million and
RMB112.0 million, respectively, reflectin g a CAGR of 34.7% from 2022 to 2024. Our total
R&D expenses increased from RMB56.7 millio n for the six months ended June 30, 2024 to
RMB58.7 million for the six months ended June 30, 2025. These expenses accounted for
approximately 20% of our total revenue in each year from 2022 to 2024.
Since our inception and up to the Latest Practicable Date, we have independently
worked on over 31 R&D projects that resulted in the development and commercialization of
our products. For details of our research and de velopment capabilities, please refer to the
section headed ‘‘Business — Research and Development’’ in this prospectus.
OUR SALES AND DISTRIBUTION NETWORK
We have established an omni-channel sales an d distribution network that is tailored to
the respective markets in which our products are sold. We maintain a well-balanced online
and offline sales network because we believe our d iversified offline and online channels play
SUMMARY
–7–


--- page 18 ---
equally significant roles in our business. Ou r sales and distribution network generally
consists of DTC channels, retailer channels and distribution channels. Under the DTC
channels, we sell products directly to end consumers either via a number of e-commerce
platforms, including Amazon SC, among othe rs, or our self-operated website. Under the
retailer channel, we primarily sell our products to major international and national
retailers, including Amazon VC, which purchase products directly from us and sell them to
end consumers. Under our distribution channel, we mainly sell our products to distributors,
which purchase products from us and subsequently distribute them to sub-distributors,
and/or retailers.
The following table sets forth a breakdown of our revenue by sales channel for the
periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
DTC channels ........ 101,182 36.9 210,965 46.2 303,732 49.8 120,391 43.7 177,469 44.8
— Amazon SC. . . . . 79,817 29.1 120,043 26.3 173,020 28.4 62,732 22.8 90,386 22.8
— Self-operated
w e b s i t e ...... 2 0 , 4 6 0 7 . 5 6 0 , 7 9 3 1 3 . 3 8 8 , 6 8 8 1 4 . 5 3 5 , 8 3 6 1 3 . 0 6 0 , 5 8 8 1 5 . 3
— Other online
marketplaces . . 905 0.3 30,129 6.6 42,024 6.9 21,823 7.9 26,495 6.7
Retailer channels ...... 172,115 62.6 204,783 44.7 244,824 40.1 125,628 45.7 183,008 46.2
— Amazon VC . . . . 145,080 52.8 178,186 38.9 218,634 35.8 112,447 40.9 175,233 44.2
— Other retailers . . . 27,035 9.8 26,597 5.8 26,190 4.3 13,181 4.8 7,775 2.0
Distribution channels .... 1,300 0.5 41,516 9.1 61,368 10.1 29,002 10.6 35,817 9.0
Total .............. 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
The following table sets forth a breakdown of our gross profit and gross profit margin
by sales channels for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
DTC channels ....... 61,082 60.4 139,571 66.2 197,640 65.1 80,029 66.5 114,141 64.3
— Amazon SC . . . . 48,185 60.4 84,687 70.5 119,168 68.9 44,379 70.7 60,286 66.7
— Self-operated
w e b s i t e ...... 1 2 , 3 3 9 6 0 . 3 3 8 , 7 0 2 6 3 . 7 5 3 , 8 6 6 6 0 . 7 2 2 , 9 3 7 6 4 . 0 3 7 , 3 0 7 6 1 . 6
— Other online
marketplaces . . 558 61.7 16,182 53.7 24,606 58.6 12,713 58.3 16,548 62.5
Retailer channels ..... 32,643 19.0 76,390 37.3 98,309 40.2 50,535 40.2 87,403 47.8
— Amazon VC . . . . 24,910 17.2 69,786 39.2 88,429 40.4 45,924 40.8 84,385 48.2
— Other retailers . . . 7,733 28.6 6,604 24.8 9,880 37.7 4,611 35.0 3,018 38.8
Distribution channels ... 414 31.8 14,577 35.1 19,648 32.0 8,274 28.5 13,209 36.9
Total ............. 94,139 34.3 230,538 50.4 315,597 51.7 138,838 50.5 214,753 54.2
SUMMARY
–8–


--- page 19 ---
During the Track Record Period, our products were sold in more than 90 countries and
regions globally, primarily in Japan, Europe and North America. The table below sets out
the breakdown of our revenue by region for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Japan .............. 168,381 61.4 285,057 62.3 352,408 57.7 167,390 60.9 268,354 67.7
Europe ............. 46,193 16.8 68,737 15.0 130,465 21.4 47,769 17.4 68,055 17.2
G e r m a n y ......... 1 2 , 4 4 3 4 . 5 1 9 , 6 8 5 4 . 3 5 1 , 4 5 0 8 . 4 1 6 , 3 6 4 6 . 0 3 1 , 1 6 1 7 . 9
The United Kingdom . 10,592 3.9 16,341 3.6 20,048 3.3 8,760 3.2 9,844 2.5
Other European
countries . ...... 2 3 , 1 5 8 8 . 4 3 2 , 7 1 1 7 . 1 5 8 , 9 6 7 9 . 7 2 2 , 6 4 5 8 . 2 2 7 , 0 5 0 6 . 8
North America ........ 47,614 17.3 83,482 18.3 96,735 15.9 42,394 15.4 46,176 11.7
The United States . . . 45,101 16.4 78,451 17.2 86,878 14.3 38,687 14.1 40,860 10.3
Other North American
countries . ...... 2 , 5 1 3 0 . 9 5 , 0 3 1 1 . 1 9 , 8 5 7 1 . 6 3 , 7 0 7 1 . 3 5 , 3 1 6 1 . 4
Rest of the world
(1) ..... 12,409 4.5 19,988 4.4 30,316 5.0 17,468 6.3 13,709 3.4
Total .............. 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Note:
(1) Rest of the world include over 40 countries and r egions, including, am ong others, Australia,
Singapore and South Korea, each contributed relati vely insignificant revenue to us during the Track
Record Period.
For details of our sales channels, please refer to the section headed ‘‘Business — Our
Sales and Distribution Network’’ in this prospectus.
SUPPLIERS
During the Track Record Period, our su ppliers primarily included raw material
suppliers and subcontractors. For the years ended December 31, 2022, 2023 and 2024 and
the six months ended June 30, 2025, our purchases from the five largest suppliers in each
year/period during the Tr ack Record Period amounted to RMB74.7 million, RMB58.3
million, RMB70.6 million and RMB60.1 million, accounted for 41.4%, 25.7%, 24.0% and
3 3 . 1 %o fo u rt o t a lc o s to fs a l e sf o rt h er e s p e c tive periods. For the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2025, our purchases from the
largest supplier in each year/period during the Track Record Period amounted to RMB18.3
million, RMB16.3 million, RMB21.8 million and RMB16.4 million, accounted for 10.1%,
7.2%, 7.4% and 9.0% of our total cost of sales for the respective periods.
To the best knowledge of our Directors, all of our five largest suppliers in each
year/period during the Track Record Period w ere Independent Third Parties. None of our
Directors, their respective close associates, or any Shareholder who, to the knowledge of
our Directors, owns more than 5% of our issued capital, had any interest in these suppliers
during the Track Record Period and up to the Latest Practicable Date.
SUMMARY
–9–


--- page 20 ---
For details of our procurement and five large st suppliers in each year/period during the
Track Record Period, please refer to the section headed ‘‘Business — Procurement and
Supply Chain Management’’ in this prospectus.
CUSTOMERS
We sell products to end consumers, retaile rs, and distributors. For the years ended
December 31, 2022, 2023 and 2 024 and the six months ended June 30, 2025, our revenue
generated from the five largest customers in each year/period during the Track Record
Period amounted to RMB164.0 milli on, RMB229.3 million, RMB289.1 million and
RMB211.8 million, accounted for 59.6%, 50.2%, 47.4% and 53.5% of our total revenue
for the respective periods. For the years ended December 31, 2022, 2023 and 2024 and the
six months ended June 30, 2025, our revenue generated from the largest customer in each
year/period during the Track Record Period amounted to approximately RMB145.1
million, RMB178.2 million, RMB218.6 mill ion and RMB175.2 million, accounted for
52.8%, 38.9%, 35.8% and 44.2% of our total revenue for the respective periods.
To the best knowledge of our Directors, all of our five largest customers in each
year/period during the Track Record Period w ere Independent Third Parties. None of our
Directors, their respective close associates, or any Shareholder who, to the knowledge of
our Directors, owns more than 5% of our issued capital, had any interest in these customers
during the Track Record Period and up to the Latest Practicable Date.
For details of our five largest customers i n each year/period during the Track Record
Period, please refer to the section headed ‘‘ Business — Customers’’ in this prospectus.
RELATIONSHIP WITH AMAZON
We have a significant business relationship with Amazon, which commenced in 2018.
We sell our products through Amazon’s e-commerce platforms primarily via two separate
programs, namely, Amazon SC and Amazon VC. During the Track Record Period, a
substantial portion of our revenue was gen erated from the sales through such Amazon
programs.
Under the Amazon SC program, we operate as a third-party seller, selling our products
directly to end consumers on the Amazon marketplace. This arrangement allows us to set
the retail price for our products. In connection with these sales, we procure a range of
services from Amazon, including platform services, Fulfilment by Amazon warehousing
and logistics, marketing and advertising services, for which we pay separate service fees.
For the years ended December 31, 2022, 2023, and 2024, and the six months ended June 30,
2024 and 2025, revenue generated from the sales through Amazon SC amounted to
approximately RMB79.8 million, RMB120.0 million, RMB173.0 million, RMB62.7 million
and RMB90.4 million, respectively, representi ng approximately 29.1%, 26.3%, 28.4%,
22.8% and 22.8%, respectively, of our total revenue for such periods. The gross profit
attributable to the sales through Amazo n SC for these periods was RMB48.2 million,
RMB84.7 million, RMB119.2 million, RMB44.4 million and RMB60.3 million,
respectively, with a corresponding gross profit margin of 60.4%, 70.5%, 68.9%, 70.7%
and 66.7%, respectively.
SUMMARY
–1 0–


--- page 21 ---
Our participation in Amazon VC began in June 2019. Through this program, we act as
a first-party supplier, selling our products in bulk directly to Amazon at negotiated
wholesale prices, which may be lower than our retail prices for the sales made through
Amazon SC. We may, from time to time, offer additional discounts to Amazon under this
program based on mutual negotiations, particularly during major promotional events.
Amazon then sells our products to end consumers under its own account. For the years
ended December 31, 2022, 2023, and 2024, an d the six months ended June 30, 2024 and
2025, revenue generated from Amazon VC amounted to approximately RMB145.1 million,
RMB178.2 million, RMB218.6 million, RMB112.4 million and RMB175.2 million,
respectively, representing approximately 52.8%, 38.9%, 35.8%, 40.9% and 44.2%,
respectively, of our total revenue for such p eriods. The gross profit attributable to the
sales under Amazon VC for these peri ods was RMB24.9 million, RMB69.8 million,
RMB88.4 million, RMB45.9 million and RMB84.4 million, respectively, with a
corresponding gross profit margin of 17.2%, 39.2%, 40.4%, 40.8% and 48.2%,
respectively.
Through both Amazon SC and Amazon VC, we mainly target the same end-users,
being Amazon’s online purchasers and shoppers. In addition to the services related to our
e-commerce operations, we also utilized AWS a s our primary computi ng service provider
during the Track Record Period.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following is a summary of our historica l financial information as of and for the
years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, extracted from the Accountant’s Report s et out in Appendix I to this prospectus. The
summary below should be read in conjunction with the consolidated financial information
in Appendix I, including the accompanying notes and the information set forth in the
section headed ‘‘Financial Information’’ in this prospectus. Our consolidated financial
information was prepared in accordance with the IFRS Accounting Standards.
SUMMARY
–1 1–


--- page 22 ---
Summary of Our Consolidated Statements of Profit or Loss
The table below presents a summary of our consolidated statement of profit or loss and
other comprehensive income for the periods indicated:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue ................... 274,597 457,264 609,924 275,021 396,294
Cost of sales . . . . . . . . . . . . . . . . (180,458) (226,726) (294,327) (136,183) (181,541)
Gross profit ................. 94,139 230,538 315,597 138,838 214,753
Other income and gains . . . . . . . . . 6,787 8,342 9,111 4,578 10,364
Selling and distribution expenses. . . . (102,104) (136,698) (171,894) (70,969) (106,829)
Administrative expenses . . . . . . . . . (21,006) (24,139) (32,372) (15,936) (30,864)
Research and development expenses. . (61,761) (89,192) (112,022) (56,737) (58,679)
Impairment losses on financial assets,
n e t ..................... ( 1 3 6 ) ( 7 9 8 ) 1 5 1 ( 1 2 0 ) ( 4 9 0 )
Other expenses . . . . . . . . . . . . . . . (431) (2,100) (6,836) (10,886) (1,964)
Finance costs . . . . . . . . . . . . . . . . (2,422) (2,240) (4,409) (1,738) (2,165)
(Loss)/profit before tax .......... (86,934) (16,287) (2,674) (12,970) 24,126
Income tax (expense)/credit . . . . . . . (49) (89) (400) (671) 3,777
(Loss)/profit for the year/period .... (86,983) (16,376) (3,074) (13,641) 27,903
Attributable to:
Owners of the parent . . . . . . . . . (86,983) (16,376) (3,074) (13,641) 27,903
For details on the accounting treatment of redemption rights, see ‘‘— Share Capital
and Total Equity’’ in the section headed ‘‘Financial Information’’ and note 28 to the
Accountants’ Report set out in Appendix I to this prospectus.
Non-IFRS Measures
In order to supplement our consolidated financial statements, which are presented in
accordance with IFRS, we also use Adjusted Ne t Loss/(Profit) (a non-IFRS measure) and
adjusted EBITDA (a non-IFRS measure) as addit ional financial measures. We present these
financial measures because they are used by our management to evaluate our financial
performance by eliminating the impact of ce rtain items. We also believe that these
non-IFRS measures provide additional information to investors and others in their
understanding and evaluating our results of operations in the same manner as they help our
management and in comparing financial results across accounting periods and to those of
our peer companies. However, our presentation of such non-IFRS measures may not be
comparable to similarly titled measures presented by other companies. The use of these
non-IFRS measures has limitations as an analytical tool, and you should not consider this
in isolation from, or as a substitute for analysis of, our results of operations as report under
IFRS.
SUMMARY
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We define adjusted net (loss)/profit (a non-I FRS measure) as (loss )/profit for the year
adjusted for equity-settled share-based payment expenses. We define adjusted EBITDA (a
non-IFRS measure) as EBITDA adjusted for equ ity-settled share-based payment expenses.
The equity-settled share-based payment expenses are non-cash in nature. The following
table sets for the reconciliation of adjust net ( loss)/profit for the yea r (a non-IFRS measure)
and adjusted EBITDA (a non-IFRS measure) for the periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Loss)/profit for the year . . . . . . . . (86,983) (16,376) (3,074) (13,641) 27,903
Add:
Equity-settled share-based payment
expenses (1) . . . . . . . . . . . . . . . . 3,378 4,181 4,181 2,091 5,041
L i s t i n ge x p e n s e ............... — — — — 1 1 , 2 6 1
Adjusted net (loss)/profit for the year
(a non-IFRS measure) . . . . . . . . . (83,605) (12,195) 1,107 (11,550) 44,205
Add:
Interest on bank loans . . . . . . . . . . — — 1,275 104 803
Interest on factored trade receivables . 666 749 698 325 398
Interest on lease liabilities . . . . . . . . 1,756 1,491 2,436 1,309 964
Income tax expense/(credit) . . . . . . . 49 89 400 671 (3,777)
Depreciation of property, plant and
equipment . . . . . . . . . . . . . . . . 3,005 5,113 9,589 4,229 5,567
Depreciation of right-of-use assets. . . 10,430 11,451 10,988 5,124 4,594
Amortization of intangible assets . . . 222 676 1,646 822 1,940
Less:
I n t e r e s ti n c o m e ............... 1 , 6 4 7 1 , 5 6 0 2 , 0 5 8 8 6 4 5 5 0
Adjusted EBITDA (a non-IFRS
measure) . . . . . . . . . . . . . . . . . (69,124) 5,814 26,081 170 54,144
Note:
(1) Equity settled share-based payme nt expenses are non-cash in nature.
For the years ended December 31, 2022, 2023, 2024, we recorded net loss of RMB87.0
million, RMB16.4 million, RMB3.1 million, resp ectively. Our net losses between 2022 and
2024 were primarily due to the expenditures in relation to (i) our R&D expenses incurred to
enhance our core technologies and product and services offerings to maintain our
established position in the global home robotic system industry; (ii) our selling and
distribution expenses incurred to enhance our brand reputation and expand our customer
and end-user base; and (iii) our administr ative expenses. We recorded a net loss of
RMB13.6 million for the six months ended June 30, 2024, compared to a net profit of
RMB27.9 million for the six months ended June 3 0, 2025. The turnaround to profitability
was primarily attributable to significant r evenue growth as we expanded our business
SUMMARY
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operation and improved gross profit margin, resulting from higher margins of our core
products, a favorable shift in our product mix toward higher-margin products, and the
continued implementation of cost optimization measures. The reduction of our loss for the
years ended December 31, 2022, 2023 and 2024 and our net profit for the six months ended
June 30, 2025 were primarily attributable to a combination of the following factors:
(i) the increase of the market penetration of our products, as evidenced by the
significant growth in our revenue, which recorded a CAGR of 49.0% from
RMB274.6 million in 2022 to RMB609.9 m illion in 2024. Likewise, our revenue
increased significantly from RMB275.0 million for the six months ended June 30,
2024 to RMB396.3 million for the six months ended June 30, 2025;
(ii) the continuous improvement in the sales of established core home system product
categories, the continuous optimization of our product mix and the successful
launch of new, higher-margin products, wh ich collectively resulted in an increase
in our overall gross profit margin from 34.3% in 2022 to 50.4% in 2023 and
51.7% in 2024, and from 50.5% for the six months ended June 30, 2024 to 54.2%
for the six months ended June 30, 2025;
(iii) our highly effective and efficient mar keting activities, which leveraged our
established brand influence and mature marketing models. This resulted in
improved operating leverage as our revenue grew at a faster pace than our related
expenses. As a result, our selling and distribution expenses as a percentage of
revenue decreased from 37.2% in 2022 to 29.9% in 2023 and 28.2% in 2024, and
was 25.8% and 27.0% for the six months ended June 30, 2024 and 2025,
respectively, while our revenue continued to increase during the same period;
(iv) our disciplined and strategic investment in research and development, which we
believe is crucial for maintaining our t echnological leadership and long-term
growth. Our research and development expenses as a percentage of revenue were
22.5%, 19.5% and 18.4% for the years ended December 31, 2022, 2023 and 2024,
respectively, and 20.6% and 14.8% for the six months ended June 30, 2024 and
2025, respectively, reflecting our prudent approach in selecting projects with
strong commercialization potential an d our ability to successfully translate
technological advancements into revenue growth in a cost-efficient manner;
(v) the optimization of our sales channels with a strategic focus on our higher-margin
DTC channels. The revenue generated from our DTC channels as a percentage of
our total revenue increased from 36.9% in 2022 to 46.2% in 2023 and further to
49.8% in 2024. Likewise, the revenue generated from our DTC channels as a
percentage of our total revenue increased from 43.7% for the six months ended
June 30, 2024 to 44.8% for the six months ended June 30, 2025. These DTC
channels carried higher gross profit margins compared to our overall gross profit
margin of the same periods, thereby contributing to the improvement in our
overall gross profit and gross profit margin; and
SUMMARY
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(vi) the strategic market expansion across k ey regions, particularly evidenced by our
rapid growth in Europe, where our revenue grew at a CAGR of 68.1% from
RMB46.2 million in 2022 to RMB130.5 m illion in 2024, and increased from
RMB47.8 million for the six months ended June 30, 2024 to RMB68.1 million for
the six months ended June 30, 2025.
For a detailed analysis of our operation of results during the Track Record Period,
please refer to the section headed ‘‘Financi al Information — Period to Period Comparison
of Results of Operations’’ in this prospectus.
Summary of Consolidated Statements of Cash Flows
The table below sets forth a summary of our cash flows for the periods indicated:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Net cash flows generated from/(used
in) operating activities . . . . . . . . (106,994) 24,621 (31,278) (32,804) 29,167
Net cash flows (used in)/generated
from investing activities . . . . . . . (13,169) (13,743) (90,656) (8,781) 55,114
Net cash flows (used in)/generated
from financing activities . . . . . . . 226,826 (24,411) 60,595 26,485 43,820
Net increase/(decrease) in cash and
cash equivalents . . . . . . . . . . . . 106,663 (13,533) (61,339) (15,100) 128,101
Cash and cash equivalents at
beginning of year/period . . . . . . . 38,706 145,265 130,177 130,177 62,337
Effect of foreign exchange rate
changes, net . . . . . . . . . . . . . . . (104) (1,555) (6,501) (11,201) 6,627
Cash and cash equivalents at end of
year/period, represented by bank
balances and cash . . . . . . . . . . . 145,265 130,177 62,337 103,876 197,065
For a detailed analysis of our cash flows during the Track Record Period, please refer
to the section headed ‘‘Financial Information — Liquidity and Capital Resources’’ in this
prospectus.
SUMMARY
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Summary of Consolidated Statements of Financial Position
The table below sets forth the key items of our consolidated statements of financial
position as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets ....... 4 6 , 4 0 3 7 4 , 5 6 8 8 4 , 5 3 7 1 0 3 , 7 5 8
Current assets .......... 2 9 4 , 7 6 5 2 9 9 , 9 0 1 3 6 7 , 9 9 5 5 6 6 , 9 2 2
Non-current liabilities . . . . 23,556 40,762 55,290 97,936
Current liabilities ....... 1 0 9 , 0 8 6 1 3 7 , 3 0 6 1 9 9 , 7 3 7 2 8 1 , 6 4 3
Net current assets ....... 1 8 5 , 6 7 9 1 6 2 , 5 9 5 1 6 8 , 2 5 8 2 8 5 , 2 7 9
Total assets less current
liabilities ............ 2 3 2 , 0 8 2 2 3 7 , 1 6 3 2 5 2 , 7 9 5 3 8 9 , 0 3 7
Net assets ............ 2 0 8 , 5 2 6 1 9 6 , 4 0 1 1 9 7 , 5 0 5 2 9 1 , 1 0 1
For details on the accounting treatment of redemption rights, see ‘‘— Share Capital
and Total Equity’’ in the section headed ‘‘Financial Information’’ and note 28 to the
Accountants’ Report set out in Appendix I to this prospectus.
For a detailed analysis of our assets and lia bilities during the Track Record Period,
please refer to the section headed ‘‘Financi al Information — Description of Certain Key
Items from Our Consolidated Statement of Financial Position’’ in this prospectus.
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as at the dates and for
the periods indicated:
As of/for the year ended December 31,
As of/for the
six months
ended June 30,
2022 2023 2024 2025
Profitability ratios
R e v e n u eg r o w t hr a t e( % ) ....... N / A 6 6 . 5 3 3 . 4 4 4 . 1
G r o s sp r o f i tg r o w t hr a t e( % ) .... N / A 144.9 36.9 54.7
G r o s sp r o f i tm a r g i n( % )....... 3 4 . 3 5 0 . 4 5 1 . 7 5 4 . 2
N e t( l o s s ) / p r o f i tm a r g i n( % ) .... ( 3 1 . 7 ) ( 3 . 6 ) ( 0 . 5 ) 7 . 0
Adjusted EBITDA margin (%)
(a non-IFRS measure) ....... ( 2 5 . 2 ) 1 . 3 4 . 3 1 3 . 7
Liquidity ratio
C u r r e n tr a t i o............... 2 . 7 2 . 2 1 . 8 2 . 0
Capital ratio
G e a r i n gr a t i o............... 0 . 5 0 . 6 1 . 0 0 . 7
SUMMARY
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For a detailed analysis of our key financial ratios during the Track Record Period,
p l e a s er e f e rt ot h es e c t i o nh e a d e d‘ ‘ F i n a n c i a lInformation — Key Financial Ratios’’ in this
prospectus.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Li controlled approximately 44.53% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (1) 21.82% beneficially owned by him directly; (2) 8.24% beneficially owned by
Wonder Innovation ESOP, an employee share ownership platform controlled by Mr. Li as
the general partner; and (3) 14.47% beneficially owned by Mr. Pan, in respect of which Mr.
Li has the right to direct voting and other shareholder actions of Mr. Pan pursuant to the
terms of the Acting-in-concert Agreement, whereby Mr. Pan agreed to act in concert with
Mr. Li in relation to all matters requiring the exercise of shareholder rights and director
rights in our Company (where applicable). Upon the Listing and pursuant to the issuance of
new Shares under the Global Offering, Mr. Li will control approximately 40.07% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (i) 19.64% beneficially owned by Mr. Li directly; (ii) 7.41% beneficially owned
by Wonder Innovation E SOP; and (iii) 13.02% beneficially owned by Mr. Pan, assuming
the Over-allotment Option is not exercised. Therefore, Mr. Li, Mr. Pan and Wonder
Innovation ESOP are the Controlling Sharehold er Group as of the Latest Practicable Date
and upon the Listing.
PRE-IPO INVESTMENT
To fund our strategic growth and broaden our shareholder base, we have conducted
several rounds of Pre-IPO Investments since the establishment of Woan Technology and
our Company. For details, see ‘‘History and Corporate Structure — Pre-IPO Investments’’
in this prospectus.
Pursuant to the shareholders subscription agreements entered into prior to Relevant
Periods, on March 23, 2022 and May 26, 2025, our Company issued an aggregate of
1,390,789 ordinary shares (representing the number of shares before capitalisation of
reserves) to the Pre-IPO investors at a total net cash proceed amounted to approximately
RMB389.68 million (collectively the ‘‘Pre- IPO Investments’’). Pursuant to the above
agreements, the Pre-IPO Investors were gran t e db yo u rC o m p a n yw i t hs p e c i a lr i g h t sw h i c h
included redemption rights.
There was no exercise of redemption rights granted by our Company throughout the
Relevant Periods.
On May 26, 2025, our Company and the Pre-IPO Investors subsequently entered into
supplemental agreements, agreeing that the redemption rights granted by our Company to
Pre-IPO investors have been irrecoverably terminated and shall be void ab initio .T a k i n g
into account the legal and regulatory framework of our Company’s jurisdiction and the
governing law of the supplemental agreements, the directors considered that it is
appropriate to present the Pre-IPO Investments as equity throughout the Track Record
Period.
SUMMARY
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--- page 28 ---
For details, see note 28 to the Accountants’ Report set out in Appendix I to this
prospectus.
APPLICATION FOR LISTIN G ON THE STOCK EXCHANGE
We have applied to the listing committee of the Stock Exchange under Rule 8.05(3) of
the Listing Rules for the granting of the listing of, and permission to deal in, our H Shares
to be issued pursuant to the Global Offering and the H shares to be converted from the
Domestic Unlisted Shares 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 of RMB609.9 million (equivalent to ap proximately HK$657.2 million) for the year
ended December 31, 2024, which exceeds HK$500 million; and (ii) our expected market
capitalization at the time of Listing, which , based on the Offer Price of HK$72.00 per Offer
Share (being the mid-point of the indicative Offer Price range of HK$63.00 to HK$81.00
per Offer Share).
DIVIDENDS
No dividend was paid or declared by our Company during the Track Record Period.
W ec u r r e n t l yd on o th a v ead i v i d e n dp o l i c y .T h e r ei sn oe x p e c t e do rp r e - d e t e r m i n e d
dividend payout ratio after the Listing. According to the Company Law, a company is only
permitted to distribute after-tax profits afte r it has fully made up for prior years’ losses. As
advised by our PRC Legal Advisers, we are not permitted to pay or declare any dividends
until such accumulated losses have been fully covered. However, we may make up
accumulated losses with capital surplus o r by capital reduction. Once the Company
becomes steadily profitable and achieves pos itive operating cash flow, we will consider
implementing a dividend polic y, which will be subject to a number of factors, including our
revenue and profit, financial position, cash re quirements, business plans, future prospects,
prevalent market conditions, statutory and re gulatory restrictions, and other factors that
our Board may deem relevant. The payment and the amount of any future dividends will be
at the discretion of our Board. Holders of our Shares will be entitled to receive such
dividends pro rata according to the amounts paid up on our Shares. The dividend policy,
once implemented, will be reviewed by our Board from time to time.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our total listing expenses
(including underwriting commission) will be approximately RMB86.4 million (equivalent to
HK$95.1 million). The estimated listing ex penses of approximately RMB34.2 million are
expected to be charged to our consolidated statements of profit or loss for the year ending
2025, and the remaining listing expenses of ap proximately RMB52.2 million are expected to
be deducted from equity upon Listing. The listing expenses are expected to consist of
RMB55.8 million for underwriting fees, spons or fees and listing application fees, and
RMB30.6 million for non-underwriting-relate d expenses (including fees and expenses of
legal advisors and the reporting accountant of RMB15.8 million and other fees and
expenses of RMB14.8 million).
SUMMARY
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--- page 29 ---
GLOBAL OFFERING STATISTICS
The statistics in the following table are ba sed on the assumptions that (i) the Global
Offering is completed and 22,222,300 Shares a re issued in the Global Offering; and (ii) the
Over-allotment Option is not exercised:
B a s e do na n
Offer Price of
HK$63.0
B a s e do na n
Offer Price of
HK$72.0
B a s e do na n
Offer Price of
HK$81.0
Market capitalization (HK$ in million) ......... 1 4 , 000.0 16,000 18,000
Unaudited pro forma adjusted consolidated net
tangible assets per Share of our Company
attributable to owners of our Company (HK$) . 7.23 8.11 8.99
Notes:
(1) The calculation of market capitalisation a nd unaudited pro forma adj usted consolidated net
tangible assets per Share is based on 22,222,300 H Shares that will be issued pursuant to the Global
Offering and 200,000,000 Unli sted Shares that will be converted into H Shares upon completion of
the Global Offering, without taking into accoun t any exercise of the Over-allotment Option.
(2) The unaudited pro forma adjusted consolidated ne t tangible assets per Share was calculated after
adjustments as specified in Appendix II to this prospectus.
F U T U R EP L A N SA N DU S EO FP R O C E E D S
We estimate that the net proceeds of the Global Offering, after deducting the estimated
underwriting commissions and other fees and expenses paid and payable by us in
connection with the Global Offe ring, will be approximately HK$1,504.9 million, assuming
an Offer Price of HK$72.0 per H Share (being th e mid-point of the indicative range of the
Offer Price of HK$63.0 to HK$81.0 per H Share), and that the Over-allotment Option is
not exercised.
We intend to use the net proceeds from the Global Offering for the purposes and in the
amounts set out below:
. Approximately HK$1,000.1 million, repres enting approximately 66.5% of the net
proceeds of the Global Offering will be used to continuously enhance our R&D
capabilities to further develop the key t echnologies relating to and products
within our home robotic systems.
. Approximately HK$297.4 million, representing approximately 19.8% of the net
proceeds of the Global Offering, will be used for the expansion of our sales
channels and geographic coverage and enhance our brand awareness globally.
SUMMARY
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--- page 30 ---
. Approximately HK$56.9 million, repres enting approximately 3.8% of the net
proceeds of the Global Offering, will be used to repay a portion of our
outstanding bank loans within 24 months from the Listing.
. Approximately HK$150.5 million, representing approximately 10.0% of the net
proceeds of the Global Offering, will be used for general working capital and
corporate purposes.
Please refer to the section headed ‘‘Future Plans and Use of Proceeds’’ in this
prospectus for more details.
COMPETITIVE LANDSCAPE
The home robotic system industry has experienced rapid growth. The market size of
the global home robotic system industry in terms of retail sales increased from RMB2.2
billion in 2022 to RMB5.9 billion in 2024, representing a CAGR of approximately 63.7%
for the period, and it is projected to reach RMB70.7 billion in 2029, representing a CAGR
of approximately 64.2% from 2024 to 2029. The competition in the global home robotic
system industry has gradually intensified i n recent years and is highly dynamic. On the one
hand, existing enterprises in this industry are continuously advancing embodied intelligence
technologies for home scenarios and the implem entation of system-level applications. On
the other hand, new market entrants are actively competing for market share. Additionally,
leading international technology companies, leveraging their comprehensive strengths in
fields such as artificial intelligence algorithms and hardware manufacturing are accelerating
the introduction of innovative products and technical solutions, thereby further intensifying
competition and adding uncertainty to th e industry’s competitive environment.
Despite the increasing competition we f aced, according to Frost & Sullivan, we
maintained a market share of 11.9% in home robotic systems in terms of retail sale in 2024.
In the Japanese market, we ranked first in home robotic system industry in terms of retail
sales from 2022 to 2024.
RISK FACTORS
Our business operations and the Global Offering involve certain risks and
uncertainties. Please refer to the section headed ‘‘Risk Factors’’ in this prospectus for
further information. Some of the major risk factors are set forth as follows:
. There are uncertainties in the future market demand for home robotic system
products, and our order-by-order sales model presents additional risks to our
business growth.
. The home robotic system market is still emerging and may not grow as rapidly as
anticipated, which could adversely affect our business prospects.
. We have invested heavily in R&D for robotic technologies, but these investments
face significant risks and uncertainties that could materially affect our business
prospects.
SUMMARY
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--- page 31 ---
. We have operations in a number of different countries and jurisdictions, which are
subject to legal, regulatory, operational and other risks inherent in international
and cross-border operations.
. Our business relies, and may continue to rely, on certain prominent e-commerce
platforms, in particular, Amazon, for its operations, and is exposed to various
risks associated with operating on these platforms.
. Alternative technologies, evolving standards and uncertain public acceptance of
AI technologies pose risks to our home robotic system business.
LEGAL PROCEEDINGS AND COMPLIANCE
From time to time, we may become involved in legal proceedings in the ordinary course
of our business. During the Track Record Peri od and up to the Latest Practicable Date, we
had not been and were not a party to any mater ial legal, arbitral or administrative
proceedings, and we were not aware of any pending or threatened legal, arbitral or
administrative proceedings against us or our Directors that could, individually or in the
aggregate, have a material adverse effect on our business, financial condition, and results of
operations.
We are subject to various regulatory requirements and guidelines issued by regulatory
authorities in China and other major jurisdictions where our products are sold. During the
Track Record Period and as of the Latest Practicable Date, we did not commit any material
and systemic non-compliance of the laws and regulations, and we did not experience any
material non-compliance incident, which tak en as a whole, in the opinion of our Directors,
is likely to have a material and adverse effe ct on our business, results of operations or
financial condition. As advised by our P RC Legal Advisers, during the Track Record
Period and up to the Latest Practicable Date, we had complied with the relevant laws and
regulations in all material respects.
RECENT REGULATIONS IN RELATION T O TARIFFS, EXPORT CONTROLS AND
SANCTIONS
U.S. Tariff Policies
Since early 2025, the U.S. government has a dopted new tariff measures that increased
duties on imports from China, including certain of our products.
As a result, our core home robotic system products exported from the PRC to the U.S.
were subject to elevated U.S. tariffs. Based on the best knowledge, information and belief of
the Directors as of the Latest Practicable Dat e, the maximum U.S. tariff rate applicable to
our core products was approximately 63%, subject to product classification and any other
applicable duties, exclusions and adjustment s. U.S. tariff and trade policies are subject to
change and may be amended, expanded or repl aced with little or no advance notice. For
further details of recent U.S. and PRC tariff measures, see ‘‘Regulatory Overview — Laws
and Regulations in relation to Importation o f Goods into the United States — Tariffs’’.
SUMMARY
–2 1–


--- page 32 ---
The Directors are of the view that the U.S. tariffs imposed on our products have not
had, and are not expected to have, any material adverse effect on our business operations or
financial performance, based on the following key considerations:
(i) Market diversification: We have significantly reduced our reliance on the U.S.
market through global expansion, and the majority of our revenue growth during
the Track Record Period came from other key markets such as Japan and Europe.
(ii) Customer sales distribution: Our largest customers focus primarily on non-U.S.
markets, and we have not experienced any material adverse impact on order
volume, pricing, customer payments or l ogistics as a result of U.S. tariffs.
(iii) Strong pricing power: We have maintained robust pricing power and product
competitiveness globally, with continued growth in sales volume and stable or
increasing prices in the U.S. despite higher tariffs.
(iv) Product differentiation and flexibility: Our focus on innovative, higher-end
product categories and our vertically integrated operations enable us to adjust
costs and supply arrangements effectivel y, mitigating the impact of tariff-related
cost increases.
On the basis of the above, our Directors are of the view that existing U.S. tariffs have
not had, and are not expected to have, any material adverse effect on our business
operations or financial performance. Based on their independent due diligence work,
nothing has come to the attention of the Joint Sponsors which would cause them to cast
doubt on the reasonableness of the Directors’ views.
U.S. Export Controls and Sanctions
The U.S. maintains export control and economic sanctions regimes administered by:
. the U.S. Department of Commerce, Bu reau of Industry and Security (BIS),
primarily under the Export Administration Regulations (EAR) and related
restricted-party lists (collectively, the ‘‘BIS Lists’’); and
. the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC),
which administers various sanctions programs and restricted-party lists
(collectively, the ‘‘OFAC Lists’’).
We utilize certain semiconductor chips in ou r products. The Directors are of the view
that the potential risks related to U.S. sanctions or export controls on our use of such chips
are minimal and that such regulations are not expected to have a material adverse impact on
our business.
SUMMARY
–2 2–


--- page 33 ---
In forming this view, the Directors have tak en into account, among others, that (i) our
products are consumer products for household use and the chips used support standard
(rather than advanced or sensitive) functions; (ii) as advised by our U.S. Legal Advisers,
current U.S. export control and sanctions measures focus on advanced semiconductors,
sensitive technologies and restricted jurisdictions, parties or end-uses, and the chips used in
our products during the Track Record Period did not fall within such categories; (iii) during
the Track Record Period, we did not procure products from any entity on the OFAC Lists,
and, as advised by our U.S. Legal Advisers, none of our major semiconductor suppliers, nor
their identified principal officers, is listed o n any BIS or OFAC restricted-party list, our
limited purchases of chips orig inally manufactured by BIS-lis ted entities were immaterial,
indirect and have ceased as of the Latest Practicable Date, and such procurement activities
do not trigger U.S. export control restrictions under the EAR; and (iv) as advised by our
U.S. Legal Advisers, our products do not involv e military, proliferative or other sensitive
applications, and based on the nature of our products and the chips used (including
U.S.-branded chips manufactured primarily in Asia), our products and related procurement
and distribution activities are not subject to U.S. sanctions laws or export control
prohibitions and do not give rise to licensing requirements under the EAR or OFAC
regulations, as the semiconductors used are treated as EAR99.
We monitor developments in relevant U.S. export control and sanctions regimes on an
ongoing basis and will adjust our procurement and distribution arrangements as necessary.
Accordingly, our Directors are of the view that existing U.S. export controls and
sanctions have not had, and are not expected to have, any material adverse effect on our
business operations or financial performance, and that the risk of future restrictions
materially affecting our business is low. Ba sed on their independent due diligence work,
nothing has come to the attention of the Joint Sponsors which would cause them to cast
doubt on the reasonableness of the Directors’ views.
For more information, please refer to ‘‘Bu siness — Recent Regulations in Relation to
Tariffs, Export Controls and Sanctions.’’ in this prospectus.
Impact of Small Parcel Tariff Policy
In the United States, the ‘‘small parcel tari ff’’ regime generally refers to the de minimis
exemption under Section 321 of the U.S. Tariff Act, which, as advised by our U.S. Legal
Adviser, allows low-value parcels (valued at US$800 or below) shipped directly to U.S.
consumers to enter duty-free. As our products are shipped in bulk to U.S. warehouses and
fulfilled locally to end consumers, such ship ments do not fall within the scope of this de
minimis small-parcel regime. Accordingly, the U.S. small parcel tariff policy has not had
any material impact on our procurement costs, pricing or margins during the Track Record
Period and up to the Latest Practicable Date. The Group will continue to monitor any
changes in U.S. de minimis or import-duty polic ies and adjust its fulfilment arrangements as
appropriate.
SUMMARY
–2 3–


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Potential Net Loss
We expect to incur a net loss for the year ended December 31, 2025, and such
loss-making position may continue or even in crease thereafter. We anticipate this result
primarily because (i) we expect to continue incurring expenses in connection with the
Listing prior to the Listing Date; and (ii) we are enhancing our core technologies, which
requires substantial and ongoing investments in, among other things, recruiting R&D talent
and strengthening our technological capabilit ies. These efforts are intended to maintain our
competitive market position and are expected to support our future revenue growth.
Nevertheless, we have implemented and will continue to implement measures to enhance
sustainability and drive business growth, wit h the goal of achieving sustained profitability.
For more information, please see ‘‘Business — Path to Sustainability’’ in this prospectus.
After performing suffici ent due diligence work whic h our Directors consider
appropriate and after due and careful consideration, our Directors confirm that, up to
the date of this prospectus, there has been no material adverse change in our financial or
trading position or prospects since June 30, 202 5, being the date on which our latest audited
consolidated financial statements were prepared, and there is no event since June 30, 2025
which would materially affect the informati on as set out in the Accountants’ Report in
Appendix I to this prospectus.
SUMMARY
–2 4–


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In this prospectus, unless the context otherwise requires, the following terms and
expressions have the meanings set forth below.
‘‘Accountant’s Report’’ the accountant’ s report of our Group for the Track Record
Period as set out in Appendix I to this prospectus
‘‘Acting-in-concert
Agreement’’
the acting in concert agreement dated September 8, 2022 entered
into between Mr. Li and Mr. Pan, details of which are set out in
the section headed ‘‘History and Corporate Structure’’ in this
prospectus
‘‘affiliate(s)’’ with respect to any speci fic 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
‘‘Amazon’’ Amazon.com. Inc. and its subsidiaries
‘‘Amazon SC’’ Amazon Seller Central Program, a platform that enables
third-party sellers to list and sell products directly to end
consumers through the Amazon marketplace
‘‘Amazon VC’’ Amazon Vendor Central Program, a platform that allows
manufacturers and distributors to sell products wholesale
directly to Amazon, which then resells these products to end
consumers
‘‘Articles’’ or ‘‘Articles
of Association’’
the articles of association of our Company, which shall become
effective upon Listing, as amend ed from time to time, a summary
of which is contained in Appendix V to this prospectus
‘‘ASP’’ average selling price
‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules
‘‘Audit Committee’’ the audit committee of the Board
‘‘Authorized
Representatives’’
the authorized representatives of our Company for the purpose
of Rule 3.05 of the Listing Rules
‘‘AWS’’ Amazon Web Services, a cloud computing platform provided by
Amazon
‘‘Board’’ or ‘‘Board of
Directors’’
the board of directors of our Company
DEFINITIONS
–2 5–


--- page 36 ---
‘‘Brizan Ventures V’’ Brizan Ventures V LP, an exempted limited partnership
registered under the laws of Cayman Island on January 8, 2025
and a Pre-IPO Investor controlled by Professor Ko and Mr.
Kwong U Hoi Andrew ( 鄺宇開)
‘‘business day(s)’’ any day (other than a Saturday, Sunday or public holiday in
Hong Kong) on which banks in Hong Kong are generally open
for normal banking business
‘‘CAGR’’ compound annual growth rate
‘‘Capital Market
Intermediaries’’
the capital market intermediari es 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
‘‘Chairman’’ the chairman of our Board
‘‘China’’ or ‘‘PRC’’ or
‘‘mainland China’’
the People’s Republic of China excluding for this purpose of this
prospectus, Hong Kong, Macau 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
Ordinance’’
the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
‘‘Companies (WUMP)
Ordinance’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
supplemented or otherwise modified from time to time
‘‘Company’’ or ‘‘our
Company’’
OneRobotics (Shenzhen) Co., Ltd.* ( 臥安機器人（深圳）股份有限
公司), a limited liability company established in the PRC on
October 18, 2018 and converted into a joint stock limited
company on April 25, 2025
‘‘Company Law’’ or
‘‘PRC Company
Law’’
the Company Law of the People’s Republic of China ( 《中華人民
共和國公司法》) as amended, supplemented or otherwise
modified from time to time
‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules
‘‘connected
transaction(s)’’
has the meaning ascribed to it under the Listing Rules
DEFINITIONS
–2 6–


--- page 37 ---
‘‘Controlling
Shareholder(s)’’ or
‘‘Controlling
Shareholder Group’’
has the meaning ascribed to it under the Listing Rules and unless
the context requires otherwise, refers to Mr. Li, Mr. Pan and
Wonder Innovation ESOP, as further detailed in the section
headed ‘‘Relationship with Ou r Controlling Shareholder Group’’
in this prospectus
‘‘core connected
person(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Corporate Governance
Code’’
the Corporate Governance Code set out in Appendix C1 to the
Listing Rules
‘‘COVID-19’’ COVID-19 virus, a coronavirus identified as the cause of an
outbreak of respiratory illness tha t believed to have first emerged
in late 2019
‘‘CSDC’’ China Securities Depository and Clearing Corporation Limited
(中國證券登記結算有限責任公司)
‘‘CSRC’’ China Securities Regulatory Commission ( 中國證劵監督管理委
員會)
‘‘Director(s)’’ the director(s) of our Company
‘‘Dongguan Yunhe’’ Dongguan Yunhe Equity Investment Company Limited ( 東莞蘊
和股權投資有限公司), a limited liability company established
under the laws of the PRC on December 20, 2017 and a Pre-IPO
Investor which is ultimately controlled by Professor Li, our
non-executive Director
‘‘DTC’’ direct-to-customer
‘ ‘ E a r l y2 0 2 1C a p i t a l
Increase’’
the financing of our Company completed in May 2021, details of
which are set out in the section headed ‘‘History and Corporate
Structure’’ in this prospectus
‘‘EIT’’ enterprise income tax
‘‘EIT Law’’ the Enterprise Income Tax Law of the PRC ( 中華人民共和國企業
所得稅法), as amended, supplemented or otherwise modified
from time to time
‘‘ESG’’ environmental, social, and corporate governance
‘‘EU Data Compliance
Advisers’’
Studio Legale De Berti Jacchia Franchini Forlani, the legal
advisers of our Company as to European Union data compliance
matters
DEFINITIONS
–2 7–


--- page 38 ---
‘‘Exchange
Participant(s)’’
a person (a) who, in accordance with the Hong Kong Listing
Rules, may trade on or through the Stock Exchange; and (b)
whose name is entered in a list, register or roll kept by the Stock
Exchange as a person who may trade on or through the Stock
Exchange
‘‘Extreme Conditions’’ extreme conditions including but not limited to serious
disruption of public transport services, extensive flooding,
major landslides or large-scale power outage after super
typhoons as announced by the government of Hong Kong
‘‘FBA’’ fulfillment by Amazon
‘‘FINI’’ Fast Interface for New Issuance, an online platform operated by
HKSCC that is mandatory for admission to trading and, where
applicable, the collection and processing of specified information
on subscription in and settlement for all New Listings
‘‘Frost & Sullivan’’ Frost & Sullivan (Beijin g) Inc., Shanghai Branch Co., a market
research and consulting company, which is an Independent Third
Party
‘‘Frost & Sullivan
Report’’
an independent market research report commissioned by our
Company on the global home robot industry and the global
home robotic system and prepared by Frost & Sullivan, as
referred to in the section headed ‘ ‘Industry Overview’’ in this
prospectus
‘‘GDPR’’ General Data Protection Regulation, Europe’s data privacy and
security law
‘‘German and EU Legal
Adviser’’
Ro¨ dl & Partner, the legal advisers of our Company as to
German and European Union laws
‘‘GFA’’ gross floor area
‘‘Global Offering’’ the Hong Kong Public Offering and the International Offering
‘‘Group’’, ‘‘our Group’’,
‘‘the Group’’, ‘‘we’’,
‘‘us’’, or ‘‘our’’
our Company and its subsidiaries from time to time, or, where
the context so requires in respect of the period before our
Company became the holding company of our present
subsidiaries, the entities or the predecessors of the present
subsidiaries (as the case may be) which carried on the business of
the present Group at the relevant time
‘‘GSA’’ gross site area
DEFINITIONS
–2 8–


--- page 39 ---
‘‘Guide’’ the Guide for New Listi ng Applicants issued by the Stock
Exchange (as amended, supplemented or otherwise modified
from time to time)
‘‘H Share Registrar’’ Computershare Hong Kong Investor Services Limited
‘‘HK$’’, ‘‘Hong Kong
dollars’’ or ‘‘HKD’’
Hong Kong dollars, the lawful currency of Hong Kong
‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
‘‘HKSCC EIPO
channel’’
the arrangement in these HKSCC Operational Procedures for
instructions to be given electronically to HKSCC by Participants
via FINI for applications to be made on their behalf for new
issue shares and for the payment of application moneys, and for
those instructions to be acted upon
‘‘HKSCC Nominees’’ HKSCC Nominees Lim ited, a wholly-owned subsidiary of
HKSCC
‘‘HKSCC Operational
Procedures’’
the operational procedures of HKSCC in relation to CCASS,
containing the practices, procedures and administrative
requirements relating to the o perations and functions of
CCASS, as from time to time in force
‘‘HKSCC Participant’’ a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a custodian
participant
‘‘Hong Kong’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong Listing
Rules’’ or ‘‘Listing
Rules’’
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (as amended from time to time)
‘‘Hong Kong Offer
Shares’’
the 2,222,300 H Shares initially being offered for subscription in
the Hong Kong Public Offering (subject to reallocation as
described in the section headed ‘‘Structure of the Global
Offering’’ in this prospectus)
DEFINITIONS
–2 9–


--- page 40 ---
‘‘Hong Kong Public
Offering’’
the offer of the Hong Kong Offer Shares for subscription by the
public in Hong Kong at the Offer Price (plus brokerage of 1%,
SFC transaction levy of 0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading fee of 0.00565%) on the
terms and subject to the conditions as further described in the
section headed ‘‘Structure of the Global Offering — The Hong
Kong Public Offering’’ in this prospectus
‘‘Hong Kong
Underwriters’’
the underwriters of the Hong Kong Public Offering as listed in
the section headed ‘‘Underwrit ing — Hong Kong Underwriters’’
in this prospectus
‘‘Hong Kong
Underwriting
Agreement’’
the underwriting agreement, da ted December 17, 2025, relating
to the Hong Kong Public Offering , entered into by among others,
our Company, the Joint Sponsors, the Joint Sponsor-OCs and
the Hong Kong Underwriters, as further described in the section
headed ‘‘Underwriting — Underwriting Arrangements and
Expenses’’ in this prospectus
‘‘H Share(s)’’ overseas-listed, foreig n-invested, ordinary shares issued by us
with a nominal value of RMB0.10 each in the share capital of our
Company, which are to be subscribed for and traded in Hong
Kong dollars and for which an application has been made for
l i s t i n ga n dp e r m i s s i o nt ot r a d eo nt h eS t o c kE x c h a n g e
‘‘H-Share Full
Circulation’’
the conversion of 200,000,000 Unlisted Shares in aggregate
(representing the entire issued Unlisted Shares) held by the
H-Share Full Circulation Partic ipating Shareholders upon the
completion of the Global Offering. Such conversion of Unlisted
Shares into H Shares has been filed with the CSRC on June 8,
2025 and CSRC has issued the filing notice in respect of the
Global Offering dated December 5, 2025; and an application for
HS h a r e st ob el i s t e do nt h eS t o c kE x c h a n g eh a sb e e nm a d et o
the Listing Committee
‘‘H-Share Full
Circulation
Participating
Shareholder(s)’’
a total of 200,000,000 Unlisted Shares that will be converted into
H Shares upon completion of the Global Offering
‘‘IAS’’ International Accounting Standards
‘‘IFRS(s)’’ International Financial Reporting Standards which include
standards and interpretations promulgated by the International
Accounting Standards Board
DEFINITIONS
–3 0–


--- page 41 ---
‘‘Independent Third
Party(ies)’’
person(s) or company(ies) and their respective ultimate beneficial
owner(s), who/which, to the best of our Directors’ knowledge,
information and belief, having made all reasonable enquiries, is/
are not connected (within the meaning of the Listing Rules) with
our Company
‘‘IEEE’’ Institute of Electrical and Electronics Engineers
‘‘International
Offering’’
the conditional placing of the International Offer Shares at the
Offer Price outside the United States in offshore transactions in
reliance on Regulation S under the U.S. Securities Act or any
other available exemption from the registration requirement
under the U.S. Securities Act, as further described in the section
headed ‘‘Structure of the Global Offering’’ in this prospectus
‘‘International Offer
Shares’’
the 20,000,000 new H Shares b eing initially offered for
subscription and purchased at the Offer Price under the
International Offering together, where relevant, with any
additional H Shares that may be sold and transferred pursuant
to any exercise of the Over-allotment Option, subject to
reallocation as described under the section headed ‘‘Structure
of the Global Offering’’ in this prospectus
‘‘International
Underwriters’’
the underwriters of the International Offering
‘‘International
Underwriting
Agreement’’
the international underwriting agreement relating to the
International Offering and e xpected to be entered into by, inter
alia , our Company, the Joint Sponsors, the Joint Sponsor — OCs
and the International Underwriters on or about December 24,
2025, as further described in the section headed ‘‘Underwriting
— Underwriting Arrangements and Expenses — The
International Offering’’ in this prospectus
‘‘Japanese Legal
Advisers’’
TMI Associates, the legal advisers of our Company as to
Japanese laws
‘‘Joint Bookrunners’’ the joint bookrunners as named in the section headed ‘‘Directors
and Parties Involved in the Globa l Offering’’ of this prospectus
‘‘Joint Global
Coordinators’’
the joint global coordinators as named in the section headed
‘‘Directors and Parties Involved in the Global Offering’’ of this
prospectus
‘‘Joint Lead Managers’’ the joint lead managers as named in the section headed
‘‘Directors and Parties Involved in the Global Offering’’ of this
prospectus
DEFINITIONS
–3 1–


--- page 42 ---
‘‘Joint Sponsors’’ Guotai Junan Capital Limited and Huatai Financial Holdings
(Hong Kong) Limited (in alphabetical order)
‘‘Joint Sponsor-OCs’’ Guotai Junan Secu rities (Hong Kong) Limited and Huatai
Financial Holdings (Hong Kong) Limited (in alphabetical order)
‘‘Latest Practicable
Date’’
December 11, 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 the H Shares on the Main Board of the Stock
Exchange
‘‘Listing Committee’’ the listing committee of the Stock Exchange
‘‘Listing Date’’ the date, expected to be on or around December 30, 2025, from
which the H Shares are listed and dealings in the H Shares are
permitted to take place on the Main Board of the Stock
Exchange
‘‘Main Board’’ the stock exchange (excluding the option market) operated by the
Stock Exchange which is independent from and operated in
parallel with the GEM of the Stock Exchange
‘‘MIIT’’ The Ministry of Industry and Information Technology of the
PRC ( 中華人民共和國工業和信息化部)
‘‘MOF’’ the Ministry of Finance of the PRC ( 中華人民共和國財政部)
‘‘MOFCOM’’ the Ministry of Commerce of the PRC ( 中華人民共和國商務部)
‘‘Mr. Li’’ Mr. Li Zhichen ( 李志晨), our co-founder, chairman of our
Board, the chief executive officer of our Company and an
executive Director, and a memb er of the Controlling Shareholder
Group
‘‘Mr. Pan’’ Mr. Pan Yang ( 潘陽), our co-founder, executive Director and the
chief technology officer of our Company, and a member of the
Controlling Shareholder Group
‘‘NDRC’’ National Development and Reform Commission of the PRC ( 中
華人民共和國國家發展和改革委員會)
‘‘Nomination
Committee’’
the nomination committee of the Board
DEFINITIONS
–3 2–


--- page 43 ---
‘‘Offer Price’’ the offer price per Offer Share (exclusive of brokerage of 1.00%,
Stock Exchange trading fee of 0.00565%, SFC transaction levy
of 0.0027% and AFRC transaction levy of 0.00015%) at which
the Offer Shares are to be subscribed pursuant to the Global
Offering
‘‘Offer Shares’’ Hong Kong Offer Shares and International Offer Shares
‘‘OIR Legal Advisers’’ Holman Fenwick Willan LLP, our legal advisers as to U.S.
Outbound Investment Rule
‘‘Over-allotment
Option’’
t h eo p t i o ne x p e c t e dt ob eg r a n t e db yo u rC o m p a n yt ot h e
International Underwriters under the International
Underwriting Agreement, exercisable by the Overall
Coordinators (for themselves and on behalf of the
International Underwriters), pursuant to which our Company
m a yb er e q u i r e dt oa l l o ta n di s s u eu pt oa na g g r e g a t eo f
3,333,300 H Shares at the Offer Price, to cover over-allocations
in the International Offering, if any, as further described in
‘‘Structure of the Global Offering’’ in this prospectus
‘‘Overall Coordinators’’ has the meaning given to it in the Listing Rules and, unless the
context requires otherwise, refers to the overall coordinators as
named in the section headed ‘‘Directors and Parties Involved in
the Global Offering’’ in this prospectus
‘‘PBOC’’ the People’s Bank of China ( 中國人民銀行)
‘‘PRC Data Compliance
Adviser’’
Jingtian & Gongcheng, the legal advisers of our Company as to
the PRC data compliance matters
‘‘PRC GAAP’’ generally accepted accounting principles of PRC
‘‘PRC government’’ or
‘‘State’’
the Central People’s Government of the PRC, including all
governmental subdivisions (inclu ding provincial, municipal and
other regional or local government entities) and their
instrumentalities or, where the context requires, any of them
‘‘PRC Legal Advisers’’ Jingtian & Gongcheng, the legal advisers of our Company as to
P R Cl a w si nc o n n e c t i o nw i t ht h eG l o b a lO f f e r i n g
‘‘Pre-IPO
Investment(s)’’
the investments made by the Pre-IPO Investors in our Group,
details of which are set out in ‘‘History and Corporate Structure
— Pre-IPO Investments’’ in this prospectus
‘‘Pre-IPO Investor(s)’’ the pre-IPO invest ors of our Company, details of which are set
out in ‘‘History and Corporate Structure — Pre-IPO
Investments’’ in this prospectus
DEFINITIONS
–3 3–


--- page 44 ---
‘‘Price Determination
Agreement’’
the agreement expected to be entered into among our Company
and the Overall Coordinators (for themselves and on behalf of
the Underwriters) on or about the Price Determination Date to
record the agreement on the final Offer Price
‘‘Price Determination
Date’’
the date, expected to be on or around Wednesday, December 24,
2025 (Hong Kong time), on which the Offer Price is determined,
or such later time as our Company and the Overall Coordinators
(for themselves and on behalf of the Underwriters) may agree,
but in any event not later than 12 : 00 noon on Wednesday,
December 24, 2025 (Hong Kong time)
‘‘Professor Ko’’ Professor KO Ping Keung ( 高秉強), our non-executive Director
and one of the ultimate controller of Brizan Ventures V, our
Pre-IPO Investor, details of which are set out in ‘‘History and
Corporate Structure — Pre-IPO Investments’’ in this prospectus
‘‘Professor Li’’ Professor LI Zexiang ( 李澤湘), our non-executive Director and
the ultimate controller of Songshan Lake Robot Institute,
Yinghu Intelligent and Dongguan Yunhe, our Pre-IPO
Investors, details of which are set out in ‘‘History and
Corporate Structure — Pre-IPO Investments’’ in this prospectus
‘‘prospectus’’ this prospectus being issued in connection with the Hong Kong
Public Offering
‘‘Province’’ a province or, where the context requires, a provincial level
autonomous region or municipality, under the direct supervision
of the central government of the PRC
‘‘R&D’’ research and development
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
‘‘Remuneration and
Appraisal
Committee’’
the remuneration and appraisal committee of the Board
‘‘Reporting
Accountants’’
Ernst & Young, the reporting accountants of our Company
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC ( 中華
人民共和國國家外匯管理局), the PRC governmental agency
responsible for matters relating to foreign exchange
administration, including local branches, when applicable
DEFINITIONS
–3 4–


--- page 45 ---
‘‘SAT’’ State Administration of Taxation ( 國家稅務總局)
‘‘SCNPC’’ the Standing Committee of the National People‘s Congress ( 全國
人民代表大會常務委員會)
‘‘Series Angel
Financing’’
the financing of Woan Technology completed in October 2017,
details of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘Series A Financing’’ the financing of our Company completed in July 2020, details of
which are set out in the section headed ‘‘History and Corporate
Structure’’ in this prospectus
‘‘Series A+ Financing’’ the financing of our Company completed in February 2021,
details of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘Series B Financing’’ the financing of our Company completed in November 2021,
details of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘Series B+ Financing’’ the financing of our Company completed in March 2022, details
of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘Series C Financing’’ the financing of our Company conducted in May 2025, details of
which are set out in the section headed ‘‘History and Corporate
Structure’’ in this prospectus
‘‘Series Pre-A
Financing’’
the financing of our Company completed in December 2018,
details of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘SFC’’ the Securities and Futures Commission of Hong Kong
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws
of Hong Kong), as amended, supplemented or otherwise
modified from time to time
‘‘Share(s)’’ ordinary share(s) with nominal value of RMB0.10 each in the
share capital of our Company, comprising our Unlisted Shares
and our H Shares
‘‘Shareholder(s)’’ holder(s) of Shares
DEFINITIONS
–3 5–


--- page 46 ---
‘‘Share Subdivision’’ the subdivision of our Shares whereby each of our Shares with a
nominal value of RMB1.00 each shall be sub-divided into 10
Shares with a nominal value of RMB0.10 each, and such Share
Subdivision shall take effect immediately before the Listing, the
details of which are set out in the section headed ‘‘History and
Corporate Structure’’ in this prospectus
‘‘Songshan Lake Robot
Institute’’
Dongguan Songshan Lake International Robot Research
Institute Co., Ltd ( 東莞松山湖國際機器人研究院有限公司), a
limited liability company established under the laws of the
PRC on February 1, 2016 and a Pre-IPO Investor which is
ultimately controlled by Professor Li, our non-executive Director
‘‘sq.m.’’ square meters
‘‘Stabilising Manager’’ Guotai Junan Securities (Hong Kong) Limited
‘‘State Council’’ the State Council of the PRC ( 中華人民共和國國務院)
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘subsidiary(ies)’’ has the meaning ascr ibed thereto in section 15 of the Companies
Ordinance
‘‘substantial
shareholder(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘SwitchBot JP’’ SWITCHB OT Co., Ltd. (SWITCHBOT 株式会社), a private
limited liability company incor porated under the laws of Japan
on September 24, 2020. As of the Latest Practicable Date,
SwitchBot JP was held by us as to 100%
‘‘SwitchBot US’’ SWITCHBOT INC, a corporation organized under the General
Corporation Law of the State of Delaware, the United States, on
October 11, 2021. As of the Latest Practicable Date, SwitchBot
U Sw a sh e l db yu sa st o1 0 0 %
‘‘Takeovers Code’’ the Hong Kong Codes on Takeovers and Mergers and Share
Buy-backs issued by the SFC, as amended, supplemented or
otherwise modified from time to time
‘‘Track Record Period’’ the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2025
‘‘Underwriters’’ the Hong Kong Underwriters and the International Underwriters
‘‘Underwriting
Agreements’’
the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
DEFINITIONS
–3 6–


--- page 47 ---
‘‘Unlisted Share(s)’’ ordinary Shares in the share capital of our Company with a
nominal value of RMB0.10 each, which are subscribed for and
paid up in RMB
‘‘U.S.’’ or ‘‘United
States’’
the United States of America, its territories, its possessions and
all areas subject to its jurisdiction
‘‘US$’’ or ‘‘U.S. dollar’’ United States do llars, the lawful currency of the United States
‘‘U.S. Legal Advisers’’ The Law Office of Mark. A Kerstein, the legal advisers of our
Company as to the United States laws
‘‘U.S. Securities Act’’ the United States Securities Act 1933, as amended, supplemented
or otherwise modified from time to time
‘‘VAT’’ Value-added tax
‘‘White Form eIPO ’’ the application for Hong Kong Offer Shares to be issued in the
applicant’s own name by submitting applications online through
the designated website at
www.eipo.com.hk
‘‘White Form eIPO
Service Provider’’
Computershare Hong Kong Investor Services Limited
‘‘Woan HK’’ Woan Technology Limited ( 臥安科技有限公司), a private
company limited by shares in corporated under the laws of
Hong Kong on May 4, 2020. As of the Latest Practicable Date,
Woan HK was held by us as to 100%
‘‘Woan Technology’’ Woan Technology (Shenzhen) Co., Ltd.* ( 臥安科技（深圳）有限公
司), a limited liability company established under the laws of the
PRC on January 22, 2015. As of the Latest Practicable Date,
Woan Technology was held by us as to 100%
‘‘Wonder Innovation
ESOP’’
Wonder Innovation Technology (Shenzhen) Partnership
(Limited Partnership) ( 萬德創新科技（深圳）合夥企業（有限合
夥）), a limited liability partnersh ip established under the laws
of the PRC on May 27, 2017 and an employee share ownership
platform controlled by Mr. Li as its general and executive
managing partner
‘‘Wonderlabs HK’’ Wonderlabs Limited ( 萬德創新科技有限公司), a private
company limited by shares in corporated under the laws of
Hong Kong on March 16, 2018. As of the Latest Practicable
Date, Wonderlabs HK was held by us as to 100%
DEFINITIONS
–3 7–


--- page 48 ---
‘‘Wonderlabs US’’ WONDERLABS, Inc., a corporation organized under the
General Corporation Law of the State of Delaware, the United
States, on January 23, 2017. As of the Latest Practicable Date,
W o n d e r l a b sU Sw a sh e l db yu sa st o1 0 0 %
‘‘Yinghu Intelligent’’ Yinghu Inte lligent Technology Company Limited ( 盈湖智能科技
有限公司), a limited liability company established under the laws
of the PRC on May 23, 2018 and a Pre-IPO Investor which is
ultimately controlled by Professor Li, our non-executive Director
‘‘%’’ per cent
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
In this prospectus, unless otherwise stated, certain amounts denominated in RMB have
been translated into Hong Kong dollars or U.S. dollars at an exchange rate of RMB0.90862 =
HK$1.00 or RMB7.0686 = US$1.00, respectively, for illustration purpose only. Such
conversions shall not be construed as representations that amounts in RMB were or could have
been or could be converted into Hong Kong dollars or U.S. dollars at such rates or any other
exchange rates on such date or any other date.
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. If there is any inconsistency between the names of any
of the entities, laws and regulations mentioned in this prospectus which are not in the English
language and their English translations, the names in their respective original languages shall
prevail. The English translations are marked with ‘‘*’’ for identification purpose only.
Unless otherwise specified, all relevant info rmation in this prospectus assumes no exercise
of the Over-allotment Option.
DEFINITIONS
–3 8–


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This glossary of technical terms contains explanations of certain terms used in this
prospectus as they relate to our Company and as they are used in this prospectus in
connection with our business or us. These terms and their given meanings may not
correspond to standard industry definitions.
‘‘adaptive topology
networking’’
a network architecture that dynamically adjusts its structure and
routing paths based on changing conditions, enabling efficient
communication between multiple devices in smart home
environments with minimal latency and enhanced reliability
‘‘AI’’ artificial intelligence
‘‘AI tennis robot’’ refers to a tennis robot that is capable of receiving, serving and
rallying skills
‘‘AI machine vision
control technology’’
technology that enables robots to perceive and interpret visual
information from their environmen t using artificial intelligence
algorithms, allowing for accurate object recognition, spatial
awareness, and context-based de cision-making in home scenarios
‘‘autonomous learning’’ the capability of AI s ystems to independently acquire knowledge,
improve performance, and adapt to new situations without
explicit human programming, t ypically through analyzing
patterns in data and environmental interactions
‘‘BLE’’ bluetooth low energy, a wireless personal area network
technology
‘‘Bio-inspired Neural
Communication
Protocol’’
a communication protocol designed for artificial systems that
draws on the structure, functions, and communication
mechanisms of biological nervous systems, aiming to enhance
the performance of systems suc h as intelligence, adaptability,
and efficiency
‘‘cloud-based’’ referring to applications, services, or resources that are delivered
and accessed over the internet rath er than being hosted locally,
allowing for remote data processing, storage, and management
‘‘cloud computing’’ the delivery of compu ting services, such as servers, storage,
databases, networking, software, analytics, and intelligence, over
the internet
‘‘CMOS’’ complementary metal-oxide-semiconductor, a technology used in
constructing integrated circuit chips, particularly for image
sensors in robotic vision systems
GLOSSARY OF TECHNICAL TERMS
–3 9–


--- page 50 ---
‘‘communication
protocol’’
a set of rules and standards that define how data is transmitted
and received between electronic devices, ensuring consistent and
reliable information exchange
‘‘dexterous hand-mimic
robot’’
designed for home living scenarios, these robotic products
simulate the functional movements of human ‘‘fingers’’ and
‘‘wrists’’ using robotics technology to perform physical
interactions like pressing, di aling, and rotating. Typical
products include finger robots, lock robots and curtain robots
‘‘diffusion model’’ a type of generative AI model that creates data by gradually
transforming random noise into a coherent output through an
iterative denoising process, enabling robots to generate novel
solutions to complex tasks
‘‘distributed neural
control network
technology’’
a decentralized system that distributes AI processing and
decision-making across multiple interconnected nodes in a
robotic system, allowing for more efficient task execution, fault
tolerance, and scalable control architecture
‘‘EBITDA’’ earnings before interest, t axes, depreciation, and amortization
‘‘Electrical Appliances
and Materials’’
devices, machines, or components that utilize electrical energy
for operation, as well as the materials used in their construction
or related applications. This includes but is not limited to
household appliances, industria l electrical equipment, wiring
materials, and components such a s switches, sockets, and cables.
In the context of the Electrical Appliance and Material Safety
Act, the term specifically covers items categorized under the act
to ensure safety and regulatory compliance
‘‘edge intelligence’’ or
‘‘edge computing’’
the deployment of computing resources and AI capabilities
directly on or near devices where data is generated, reducing
latency and bandwidth usage by processing information locally
before transferring selected data to cloud systems
‘‘enhanced mobile
robot’’
this refers to robots that expand home automation capabilities
through multi-functional combinations — such as whole-house
patrolling with cameras or ref illing humidifiers — by mimicking
human ‘‘foot’’ movements. Designed for scenario extension, they
integrate compound functio ns (e.g., sweeping + object
transport) to enhance smart home ecosystems
GLOSSARY OF TECHNICAL TERMS
–4 0–


--- page 51 ---
‘‘execution-enhanced
robot’’
execution-enhanced robot is a m echanical product specifically
designed for home living scenario s. By leveraging technologies
such as motion control and mechanical engineering, it utilizes
robotics to simulate the movem ents of human ‘‘hands’’ and
‘‘feet,’’ enabling physical interaction. As the motion execution
component of a home robotic system, it can replicate human
actions, freeing users from manual tasks. Through integration
with perception and decision-making control systems, the robot
can perform more complex home automation tasks, making
household life smarter and more efficient
‘‘general home
robotics’’
hub products: communication hubs primarily designed for
connectivity, without local com puting capabilities; execution
products: home robots that can only connect to communication
hubs, as well as those that can connect to smart decision-making
hubs but lack enhanced functionalities. Examples include
cameras without edge computing or preprocessing, smart
lighting control systems, smart speaker systems, and household
robots
‘‘home robotic system’’ in modern smart home environments, advanced robotic systems
combine AI decision-making, robotic actuation, and IoT
connectivity to achieve remarkably human-like functionality.
These systems precisely mimic hum an dexterity (through robotic
hands and limbs), mobility (via a daptive locomotion systems),
and cognitive processing (including, among others, but not
limited to eye and skin). The integ ration of multi-modal sensors
including 3D vision, tactile feedback, and environmental
scanners enables seamless real-world interaction. By leveraging
edge computing and distributed IoT networks, the system
maintains continuous situatio nal awareness while executing
complex domestic tasks. This technological synergy ultimately
creates responsive, context-aware home assistants that learn and
adapt to residents’ unique living patterns
‘‘home robots’’ in daily home living scenarios, home robots are integrated with
artificial intelligence (AI), robo tics, and sensor technology. They
can connect with a communication hub or a smart
decision-making hub and operate under its control to
autonomously complete household tasks and routines
‘‘IMU’’ inertial measurement unit, a device that measures and reports a
body’s specific force, angular rate, and sometimes orientation,
using a combination of accelerometers, gyroscopes, and
sometimes magnetometers
GLOSSARY OF TECHNICAL TERMS
–4 1–


--- page 52 ---
‘‘IoT’’ internet of things, the network of physical objects embedded with
sensors, software, and other technologies for connecting and
exchanging data with other devices and systems over the internet
‘‘ID’’ industrial design, which enco mpasses the visual, ergonomic, and
aesthetic design of a product’s physical appearance and
structure, focusing on how the product looks, feels, and
interacts with users. At this stage , industrial design involves
creating the tangible form of the product, ensuring it aligns with
both functional requirements and user experience objectives
‘‘IR’’ infrared, electromagnetic ra diation with wavelengths longer than
those of visible light, used in sensing, communication, and heat
detection in robotic systems
‘‘IT’’ information technology
‘‘LIDAR’’ light detection and ranging, a remote sensing method that uses
light in the form of a pulsed lase r to measure ranges to create
precise, three-dimensional information about the surrounding
environment
‘‘meta-learning’’ a machine learning app roach where systems learn how to learn,
developing the ability to quickly adapt to new tasks with minimal
data by leveraging knowledge gained from previous learning
experiences
‘‘minimum viable
product delivery
verification’’
the process of ensuring that the firmware of an Engineering
Verification Test prototype meets the essential functional
requirements necessary for the product to be deemed viable.
The verification focuses on co nfirming that the firmware
supports the most critical featu res required for the product to
operate and deliver basic value to users, without including all
potential features or optimizations
‘‘motion control’’ the technology governing the precise movement of robotic
components through algorithms that coordinate velocity,
acceleration, and positioning to achieve smooth and accurate
mechanical actions
‘‘multi-level robot task
architecture’’
a hierarchical framework that organizes robotic tasks into
different levels of abstraction. from high-level goal planning to
mid-level action sequencing to low-level motion execution,
enabling efficient task comp letion through structured
decomposition
GLOSSARY OF TECHNICAL TERMS
–4 2–


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‘‘neural network’’ a computational model that imitates the structure of human
brain neurons. Through communication links between devices
and learning via relevant data algorithms, it achieves
autonomous decisi on-making and inte lligent control among
home devices
‘‘NFC’’ near-field communication, a set of communication protocols that
enables communication between two electric devices within close
proximity, usually within 4 centimetres
‘‘NPU’’ neural processing unit, a specialized computer microprocessor
designed to mimic the processing function of the human brain
‘‘perception and
decision-making
system’’
the sensory devices and smart hub form the intelligent
decision-making core of AI-powered home robots, mimicking
human brain, skin and eye functions for household applications.
This perception-decision system enables multi-device
coordination through shared computing power and AI-powered
visual processing, dynamically prioritizing tasks like cleaning
and security while continuously optimizing decisions via machine
learning. By integrating edge-cloud computing with adaptive
algorithms and knowledge graphs, it creates a self-improving
smart home ecosystem with auto nomous learning capabilities
‘‘PSE’’ Product Safety of Electrical Appliances and Materials. It is a
marking required under Japan’s Electrical Appliance and
Material Safety Act ( 電氣用品安全法) for electrical appliances
and materials that must comply wi th specific safety standards.
The PSE mark indicates that the product has met the safety
requirements set by Japanese regulations, and it is mandatory for
certain categories of electrical products to bear this mark before
t h e yc a nb es o l do ri m p o r t e di n t oJ a p a n
‘‘reinforcement
learning’’
an interdisciplinary area of machine learning where an agent
learns to make decisions by performing actions and receiving
feedback in the form of rewards or penalties
‘‘robot(s)’’,
‘‘robotic(s)’’or
‘‘robotic product(s)’’
means an actuated mechanism programmable in two or more
axes with a degree of autonomy (i.e. the ability to perform
intended tasks based on current state and sensing, without
human intervention), moving within its environment, to perform
intended tasks
GLOSSARY OF TECHNICAL TERMS
–4 3–


--- page 54 ---
‘‘robot positioning and
environment
construction
technology’’
technology that enables robots to accurately determine their
location within physical spaces and build detailed digital
representations of their surround ings, facilitating navigation
and interaction with objects
‘‘robotic motion
planning
and control’’
robotic motion planning and control refers to the process of
breaking down a desired movement task into discrete motions
that satisfy movement constraints and optimize some aspect of
the movement
‘‘self-healing network’’ a network system capable of automatically detecting, diagnosing,
and repairing connectivity issues or failures without human
intervention, ensuring continuous communication between smart
home devices
‘‘Sim2Real’’ a technical approach that transfers knowledge from real-world
environments to simulations and back again, allowing robots to
learn safely in virtual environments before applying those skills
in physical spaces
‘‘SLAM’’ simultaneous localization and mapping
‘‘smart home
product(s)’’
smart home products refer to a new generation of home service
products that integrat e advanced intelligent I oT devices, control
chips, communication technolo gies and other intelligent
technologies. Smart home products can usually achieve remote
control, automated management or intelligent responses in an
intelligent way, and can automatically adjust according to users’
needs and changes in the environment, providing consumers with
more convenient, comfortable and safe living experiences
‘‘SPU’’ Standard product unit, a standardized classification of products
that share common attributes, specifications or functionality
regardless of variations in size, color or packaging
‘‘structural tooling’’ the physical molds, dies, fixtures, or specialized equipment used
to manufacture and shape the structural components of a
product (e.g., hardware enclosures and mechanical parts). It
involves the design and fabric ation of tools that directly
influence the physical form, durability, and assembly of
hardware, often requiring verification through firmware
support to ensure compatibility and functionality
‘‘TOps’’ tera operations per second, a measure of computing performance
indicating the ability to process one trillion operations per
second, often used to quantify AI processing capabilities
GLOSSARY OF TECHNICAL TERMS
–4 4–


--- page 55 ---
‘‘visual algorithm’’ mathematical procedures and computational methods used to
process, analyze, and interpret visual data from cameras and
other optical sensors, enabling robots to recognize objects and
understand their environment
‘‘vision-language-action
model’’ or ‘‘VLA
model’’
an integrated AI framework tha t connects visual perception,
natural language understanding , and physical action execution,
allowing robots to interpret visual scenes, understand verbal
instructions, and perform appropriate physical responses
GLOSSARY OF TECHNICAL TERMS
–4 5–


--- page 56 ---
This prospectus contains certain 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 ‘‘anticipate’’, ‘‘ believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’,
‘‘forecast’’, ‘‘going forward’’, ‘‘intend’’, ‘‘may’’, ‘‘ought to’’, ‘‘plan’’, ‘‘project’’, ‘‘seek’’,
‘‘should’’, ‘‘will’’, ‘‘would’’, ‘‘wish’’ and similar expressions, as they relate to our Company
or our management, are intended to identify forward-looking statements. Such statements
reflect the current views of our Company’s m anagement with respect to future events,
operations, liquidity and capital resour ces, some of which may not materialize or may
change. These forward-looking statements are subject to certain risks, uncertainties and
assumptions, including the other risk factors as described in this prospectus. Although we
believe that our expectations expressed in thes e forward-looking statements are reasonable,
our expectations may later be found to be incorrect. Our actual results could be materially
different from our expectations. Important risks and factors that could cause our actual
results to be materially different from our exp ectations are generally set forth in ‘‘Risk
Factors’’, ‘‘Business’’, ‘‘Financial Information’’ and other sections in this prospectus. You
should read thoroughly this prospectus with the understanding that our actual future
results may be materially different from and worse than what we expect.
You are strongly cautioned that reliance on any forward-looking statements involves
known and unknown risks and uncertainties. The risks and uncertainties facing our
Company that could affect the accuracy of forward-looking statements include, but are not
limited to, the following:
. our business strategies, plans, objectives and goals and our ability to implement
such strategies, plans, objectives and goals;
. our business operations and prospects;
. our future business development, financial conditions and results of operations;
. the expected growth of the global home robot industry and home robotic system
industry and the markets in which we operate;
. our expectations regarding the demand for our products;
. our ability to maintain good relationships with our business partners;
. our ability to manage our risk exposure;
. changes to regulatory and operating conditions in the industry and markets in
which we operate;
. the future developments, trends and conditions (including economic, political and
business conditions), as well as competitive environment in our industry;
. our ability to stay in compliance with the laws and regulations that currently
apply or become applicable to our busines s both in the PRC and internationally;
FORWARD-LOOKING STATEMENTS
–4 6–


--- page 57 ---
. our future debt levels and capital needs;
. our capital expenditure plans;
. intellectual property;
. margins, overall market trends, risk management and exchange rates;
. the actions and developments of our competitors;
. capital market development;
. other statements in this prospectus that are not historical fact; and
. all other risks and uncertainties described in the section headed ‘‘Risk Factors’’ in
this prospectus.
Since actual results or outcomes could di ffer materially from those expressed in any
forward-looking statements, we strongly caution investors against placing undue reliance
on any such statements. Any forward-looking statements speaks only as of the date on
which such statement is made, and, except as required by the Listing Rules, we undertake
no responsibility to update any forward-lookin g statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the occurrence of
any subsequent unanticipated event. Statements of or references to our intentions or those
of any of our Directors are made as of the date of this prospectus. Any such intentions may
change in light of futu re developments.
All forward-looking statements in this prospectus are expressly qualified by reference
to this cautionary statement.
FORWARD-LOOKING STATEMENTS
–4 7–


--- page 58 ---
You should carefully consider all of the information in this prospectus, including the
risks and uncertainties described below before making an investment decision in our H
Shares. Our business, financial condition, results of operations or prospects may be
materially and adversely affected by any of these risks and the trading price of our H Shares
may decline as a result. You may lose all or part of your investment.
These factors are contingencies that may or may not occur, and we are not in a position
to express a view on the likelihood of any such contingency occurring. The information given
is as of the Latest Practicable Date, unless otherwise stated, will not be updated after the
date hereof, and is subject to the cautionary statements in ‘‘Forward-looking Statements’’ in
this prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categor ized these risks and uncertainties into: (i)
risks relating to our business and our industry; (ii) risks relating to doing business in the
jurisdictions in which we operate; and (iii) ri sks relating to the Global Offering. There may
be additional risks and uncertainties presently not known to us or not expressed or implied
below or those we currently deem immaterial could also harm our business, financial
condition and results of operations. You should consider our business and prospects in light
of the challenges we face, including the risks discussed in this section.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
There are uncertainties in the future market demand for home robotic system products.
According to Frost & Sullivan Report, the global home robotic system industry is
characterized by evolving technologies, pr oducts, increasing competition, changing
government regulations and industry standa rds, and rapidly shifting consumer living
habits and preferences. The global home robotic system market has experienced significant
growth, with market size increasing fro m RMB2.2 billion in 2022 to RMB5.9 billion in
2024, representing a CAGR of 63.7%. The mark et size is expected to reach RMB70.7 billion
in 2029, representing a CAGR of 64.2% from 2024 to 2029. Similarly, the penetration rate
of home robots has increased from 1.0% in 2022 to 2.3% in 2024, and is expected to reach
16.2% in 2029. The future growth of the home robotic system industry may be subject to
various uncertainties, including, but not limited to, the change of consumer adoption,
potential impact from macroeconomic fluctuations, the development and expanding
applications of AI technologies, and increasi ng competition from alternative smart home
solutions. If the market for home robotic s ystem products does not develop as we expected
or develops more slowly than we anticipated, our business, prospects, financial condition
and results of operations will be adversely affected.
RISK FACTORS
–4 8–


--- page 59 ---
Our revenue increased from RMB274.6 m illion for the year ended December 31, 2022
to RMB457.3 million for the year ended Dece mber 31, 2023, and further to RMB609.9
million for the year ended December 31, 2024. Our revenue also incr eased from RMB275.0
million for the six months ended June 30, 2 024 to RMB396.3 million for the six months
ended June 30, 2025. According to Frost & Sullivan Report, the global market size of the
home robotic system industry has grown rapi dly from approximately RMB2.2 billion in
2022 to RMB5.9 billion in 2024, representin g a CAGR of 63.7%, and is expected to grow to
RMB70.7 billion in 2029, representing a CAG R of 64.2% between 2024 and 2029. However,
we cannot assure you that these markets will continue to grow at the same rate, that we will
continue to generate the same or higher level of revenue, or that our business will continue
to grow.
Our order-by-order sales model presents risks to our business growth.
Our business model faces specific challenges related to product lifecycle and purchase
patterns. Our home robotic system products, such as our curtain robots, lock robots, finger
robots, and enhanced mobile robots, are design ed with relatively long lifecycles compared
to many other consumer electronics and can remain functional for several years after
purchase. Under our DTC channels, end consumers typically procure our products through
direct purchases on a case-by-case basis, without recurring purchase commitments. Given
this market reality, there is no assurance that u sers will place reorders, repurchase newer
models, or upgrade their existing products within a short period of time, or at all.
Furthermore, it is part of our strategies to diversify and broaden our product offerings
across different home living scenarios incorporating our technologies. Our comprehensive
product matrix includes execution-enhanced robots and perception and decision-making
system products. There is no assurance that positive consumer attitudes will remain
unchanged or that market demand for our products will continue to grow at the level we
expect.
The use and implementation of our products do not usually require continuous
post-sales service and operational support, as they are designed to be used by end
consumers independently. Although there are attempts within the industry to promote
recurrent revenue models throug h premium services or subscrip tion offerings, the market
understanding of such models is still immature, and it takes time to cultivate a recurrent
spending pattern among customers.
If we fail to attract new customers and/or retain existing customers, or if consumer
preferences for home robotic system products shift or market adoption slows, our business,
financial condition, results of operations and prospects would be materially and adversely
affected.
RISK FACTORS
–4 9–


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Our business relies, and may continue to rely, o n certain prominent e-commerce platforms, in
particular, Amazon, for its operations, and is exposed to various risks associated with
operating on these platforms.
During the Track Record Period, we gener ated a large portion of our revenue from
certain prominent e-commerce platforms, in particular, Amazon, through Amazon VC and
Amazon SC. Amazon was our largest custo mer, and we generated RMB145.1 million,
RMB178.2 million, RMB218.6 million, RM B112.4 million and RMB175.2 million of
revenue from Amazon VC for the years en ded December 31, 2022, 2023 and 2024 and the
six months ended June 30, 2024 and 2025, respectively, accounting for 52.8%, 38.9%,
35.8%, 40.9% and 44.2% of our total revenu e for the same periods, respectively. In
addition, we generated RMB79.8 million, RM B120.0 million, RMB173.0 million, RMB62.7
million and RMB90.4 million of revenue thr ough Amazon SC for the y ears ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, accounting for
29.1%, 26.3%, 28.4%, 22.8% and 22.8% of our total revenue for the same periods,
respectively.
We cannot assure you that we will be able to maintain our collaboration with Amazon,
or other e-commerce platforms on favorable terms. As our sales volume increases, Amazon
and other e-commerce platforms may gain increasing bargaining power to demand higher
rebates, discounts, or less favorable terms. T hese platforms can also suspend seller accounts
and withhold proceeds under certain circumstances, such as alleged violations of platform
policies, suspected fraudulent activities, intellectual property infringement claims or others.
Our agreements with partners generally do not prohibit them from working with our
competitors or selling competing products. C ompetitors may be more effective in providing
incentives to e-commerce platforms to favor t heir products and promote their sales.
In addition, any change in product placeme nt algorithms or search result rankings
could significantly reduce traffic to our product listings. E-commerce platforms may modify
their terms of service, commission structures, advertising policies, or operational
requirements without prior notice, potentially requiring us to adjust our business
practices and increasing our costs.
Moreover, the proper functioning of these e-commerce platforms is critical to our
business success. We coordinate major promo tions around key e-commerce events like
Black Friday, which create significant sales volume. Any system failures or reduced
performance during these high-volume periods could materially affect our sales and damage
our business.
Building and maintaining strong relation ships with our third-party e-commerce
platforms requires significant time and resources. Any deterioration in these
relationships, or any material disruptions to the operations of Amazon, or other
third-party e-commerce platforms could significantly reduce our sales volume and market
reach. Please see the section headed ‘‘Business — Customers — Our Relationship with
Amazon’’ in this prospectus. While we continue to develop our self-operated website and
diversify through other offline retail and distribution channels, these alternatives may not
be able to match the scale and efficiency of major third-party e-commerce platforms,
RISK FACTORS
–5 0–


--- page 61 ---
particularly in key markets such as Japan, Europe and North America. If we were to lose
access to these platforms, we would face substantial challenges in quickly establishing
alternative sales channels with comparable re ach and customer bases. Our inability to find
suitable alternatives in a timely manner and on favorable commercial terms would likely
result in revenue losses, potentially causin g material adverse effects on our business
operations, financial condition, and profitability.
We have invested heavily in R&D for our technologies, but these investments face significant
risks and uncertainties that could materially affect our business prospects.
The home robotic system industry is still ev olving, with its full potential yet to be
realized. Achieving the level of functionality needed to satisfy increasingly complex
customer demands requires significant technological advancement across multiple
disciplines. Our vision demands the seamless integration of various robotic and AI
technologies to deliver the enhanced functionalities end consumers expect.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our R&D expenses am ounted to RMB61.8 million, RMB89.2 million,
RMB112.0 million, RMB56.7 million and RM B58.7 million, respectively. We intend to
continue these substantial investments as technological innovation is critical to our
competitive position in this r apidly evolving industry.
However, several factors cr eate uncertainty around the return on these investments:
. Technical development across different disciplines progresses at uneven rates,
potentially creating bottlenecks in our product development;
. As home robotics gain popularity, unexp ected technical challenges may emerge;
. We may need to dedicate additional resources to R&D, lengthening development
cycles and increasing expenses; and
. Product development requires not only significant investment but also successful
execution across multiple domains including (i) designing innovative functions
that differentiate our product; (ii) continuously improving our core technology
stack; (iii) responding effectively to com petitors’ technological advancements; and
(iv) adapting quickly to evolving market conditions and customer preferences.
Despite our continued R&D investments, we may encounter unforeseen technical and
production challenges or delays in developing new products or enhancing existing ones. If
we fail to overcome these challenges or if technological advancement in any critical
discipline falls short of our expectations, we may be unable to satisfy customer demands or
achieve broader market acceptance.
Such outcomes would significantly impact our ability to realize the growth potential of
our products and services, potentially causing material adverse effects on our business,
financial condition, results of operations, competitive position, and future prospects.
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We have operations in a number of different countries and jurisdictions, which are subject to
legal, regulatory, operational and other risks inherent in international and cross-border
operations.
Our business involves international and cross-border operations. We sold our products
to over 90 countries and regions around the world during the Track Record Period,
particularly in Japan, Europe, and Nort h America. We source raw materials and
components primarily from su ppliers in the PRC, and our m anufacturing facility is
currently located in the PRC. As a result of our global footprint, we are subject to the legal,
regulatory, operational, econo mic, commercial and other risk s associated with operations
in multiple jurisdictions, including:
. fluctuations in foreign currency exchange rates;
. increased costs associated with mainta ining the ability to understand the local
markets and follow their trends, as well as develop and maintain an effective
marketing and distribution presence;
. difficulty in providing efficient customer service and support in certain markets
abroad;
. risks associated with dealing with regulatory regimes, regulatory bodies and
government policies with which we might be unfamiliar, in order to obtain
overseas permits, licenses, and appro vals necessary to manufacture or import,
market and sell products in or to overseas jurisdictions;
. adverse changes in international laws and a greements, especially those affecting
trade and investment;
. trade barriers such as export requirements, sanctions, tariffs, licensing, and other
restrictions and prohibitions;
. high costs relating to compliance with the commercial and legal requirements of
overseas markets, including those re lating to labor, environmental, and
industry-specific regulations;
. instability of and disruptions to the globa l shipping routes, and logistics and
warehousing network;
. managing widespread operations and enforcing internal policies and procedures
such as compliance with foreign anti-bribery and anti-corruption regulations;
. difficulty in obtaining or enforcing intellectual property rights;
. strict foreign exchange controls and cash repatriation restrictions;
. unanticipated changes in the prevailing political and economic conditions and
regulatory requirements;
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. risks associated with complying with local tax laws and regulations, including, but
not limited to, timely filing of tax return s, tax payment (including value-added
tax), payment of import duties and dis putes or disagreements with local tax
authorities with respect to matters incl uding but not limited to calculation of tax
liabilities and preferential tax treatments;
. the instability of governments, including the threat of war, or terrorist attacks;
and
. the difficulty of enforcing agreements and protecting assets through legal systems
in certain countries.
Our overall success as a global business dep ends, in part, on our ability to succeed in
managing such risks. The risks and their potential impact on us or our business partners
vary from country to country and are difficult to predict with any degree of accuracy. We
may not be able to develop and implement policies and strategies that address these risks
effectively in each location where we conduct business, and there can be no assurance that
our exposure to such risks, which may become greater as we expand our international
operations, will not adversely affect our reputation, business, results of operations and
financial condition or otherwise divert our resources in handling any lawsuits, legal
proceedings or complaints.
In addition, our suppliers and the shipping and warehousing services providers may
face the same risks described above. As a result, even if international or cross-border events
occur in regions in which we do not operate, su ch events could still affect our supply and
logistics networks and may have a material adverse effect on our business, financial
condition and results of operations.
The home robotic system industry is becoming in creasingly competitive. If we fail to compete
successfully, our business, fin ancial condition and results of operations may be materially and
adversely affected.
The home robotic system industry is charac terized by increasing competition from
diverse market participants. We face competiti ve pressure from severa l types of companies
across multiple segments of our business.
In the platform ecosystem segment, we pr imarily compete with open platforms
developed by major technology companies with substantial financial resources, established
brand recognition, and large user bases. Thes e platforms often serve as the foundation for
third-party device integration within smar t home environments, potentially limiting the
adoption of our home robotic solutions. For our hardware products, we face competition
from various specialized manufacturers across different robotic and smart device
categories.
In addition, we anticipate potential fu ture competition from large technology
hardware companies with strong supply chain c apabilities, specialized robotics companies
developing advanced robots, and AI foundation model companies that may leverage their
technological capabilities to enter the home robotic system industry.
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We may also face potential competition from l arge-scale multinat ional conglomerates
and global technology companies with better financial resources, more sophisticated
technological R&D capabilities and broader s ales channels than we do, which seek to enter
into the markets where we currently operate. Increased competition could result in lower
sales, price reductions, reduced margins and loss of market share for us. In response to
market competition, we may increase our investments in R&D, and marketing and sales.
However, there is no assurance that such investm ents will be effective. If we fail to compete
successfully, or if competing successfully requires us to take costly actions, our business,
financial condition and results of operations could be adversely affected.
Our business is dependent on the strengths and market acceptance of our brand. If we fail to
maintain, promote and enhance our brand, our business prospect may be adversely affected.
We believe our brand ‘‘SwitchBot’’ is an integral part of and critical to our success.
Maintaining and enhancing our brand name w ill largely depend on our ability to continue
to provide competitive, quality, well-designed, useful and reliable products and services to
meet market demands. However, we cannot assure you that we will be able to maintain and
enhance our brand name.
We believe our brand recognition will increa se when competition increases. However,
we cannot assure you that our marketing activities such as media coverage, social media
marketing, content marketing with influencers/key opinion leaders, and participation in
industry exhibitions and events will be successful or that we will be able to achieve the
promotional effect we expect or at all. If we are unable to maintain our reputation, enhance
our brand recognition or promote our produc ts and services, or if we incur excessive
expenses in this effort, our business and growth prospects may be materially and adversely
affected.
Alternative technologies, evolving standards and uncertain public acceptance of AI
technologies pose risks to our home robotic system business.
During the Track Record Period, we prima rily offered a diverse portfolio of home
robotic system products including execution-enhanced robots and perception and
decision-making systems. For details, please refer to the ‘‘Business — Our Brand and
Products’’ section of this prospectus.
The success of our business depends significantly on acceptance of home robotic
system products by end consumers, which we cannot guarantee will continue to grow. As AI
technology evolves and becomes more commercialized, industry slowdowns could
negatively impact our pricing and profit margins. If market adoption decreases due to
economic factors, technical limitations, pri vacy concerns, or regulatory changes, our
business and growth prospects could be materially affected.
Robotics and AI technologies are constantly evolving in terms of standards and
applications, creating both opportunities a nd risks for our business. We utilize AI edge
computing technologies in our products and are expanding our application of computer
vision, visual language models, and other a dvanced AI capabilities to enhance how our
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products perceive and interact with home environments. How ever, as these capabilities
grow more sophisticated, so does the complexity of ensuring they operate safely and
ethically.
Similar to many disruptive innovations, robotics and AI technologies face public
perception challenges that could affect mark et acceptance, including concerns about job
automation, algorithm reliability, safety risk s from robotic movements, potential misuse of
deep learning, algorithmic bi as, surveillance capabilities, and compliance with ethical
standards and data protection regulations.
Alternative technologies present anothe r risk to our business model. While our
products provide automation through physical devices that interact with the home
environment, emerging technologies such as a ugmented reality, holographic interfaces,
and voice-only control systems could potentially reduce or eliminate the need for physical
robotic devices. For example, smart glasses or holographic projections might provide
virtual interfaces that perform similar functions without requiring physical robots.
If these competing technologies develop faster than anticipated or prove more efficient,
user-friendly, and affordable than our products, they could render robotics less relevant or
even obsolete in certain scenarios. Despite our plans to position our products as
embodiments for artificial intelligence, rap id technological change could undermine the
value of our approach.
Any inappropriate use or undetected flaws in robotics and AI technologies — whether
actual or perceived, intended or inadvert ent, and whether by us or third parties — may
dissuade prospective customers, impair general market acceptance, attract negative
publicity, and damage our reputation. Such issues may also violate applicable laws and
regulations in Japan, countries in North America and Europe, and other jurisdictions,
potentially subjecting us to legal proceedings, activist pressures, and increased regulatory
scrutiny. Each of these factors could materially and adversely affect our business, financial
condition and results of operations.
We may face shortages of key raw materials, which could disrupt our production, increase our
costs, and adversely affect our business operations and financial performance.
Our home robotic system products rely on various key components and raw materials,
particularly specialized semiconductors t hat power computations and sensors of our
products. Semiconductor chips incorporated in our products are used primarily for
standard functionalities, including remote control, seamless communication across our
product ecosystem, and data storage. The global semiconductor industry has experienced
significant supply chain disruptions and shortages in recent years, and these challenges may
continue or recur in the future due to factors beyond our control, including:
. increased global demand for chips across multiple industries, including
automotive, consumer electro nics, and cloud computing;
. geopolitical tensions and trade restrictio ns affecting the semiconductor industry;
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. concentration of chip manufacturi ng capabilities in a limited number of
companies and regions;
. natural disasters, public health crises, o r other events affecting semiconductor
production facilities; and
. limited production capacity expansion s that cannot keep pace with growing
demand.
We source semiconductors and other key components from various suppliers.
Although we strive to maintain good relationships with our suppliers and have
implemented inventory management strategies to mitigate supply risks, we cannot
guarantee that we will be able to secure suffici ent quantities of these critical components
at commercially reasonable prices in the future.
Any prolonged shortage of semiconductor chips or other key components could:
. disrupt our production schedules and delay product launches;
. increase our procurement costs, poten tially reducing our profit margins;
. force us to redesign products to accommod ate alternative components, requiring
additional R&D expenses;
. prevent us from fulfilling customer order s on time, damaging our reputation and
customer relationships; and
. limit our ability to scale producti on to meet growing market demand.
If we are unable to obtain sufficient quantities of semiconductor chips or other key raw
materials at acceptable prices and in a timely manner, our business operations, financial
condition, results of operations and prospects could be materially and adversely affected.
Our business could be materially and adversely affected if we fail to successfully adapt our
SwitchBot App to consumer requi rements or maintain compatibility with third-party products
and services.
We have developed and launched our own SwitchBot App, available for iOS and
Android devices. Most of our home robotic system products are only fully functional when
operated through our SwitchBot App, which serves as the central control point for our
entire home robotics ecosystem, connecting a nd coordinating our various devices while
collecting valuable user feedback and preferences that help us improve our products and
services. For our business to be successful, we will need to design, develop, promote and
operate new products that will be compatible with the SwitchBot App while continuously
improving the App’s functionality and user experience.
We cannot assure you that end consumers will not encounter difficulties with the
installation of SwitchBot App on their mobile devices or the connectivity or configuration
of the devices they own using the App, or that SwitchBot App would function smoothly at
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all times. There can be no assurance that we will be able to detect and fix all issues and
defects in SwitchBot App. Failure to identify and remedy any issues and defects may reduce
satisfaction among our end consumers in our software and products, which could result in
reduced consumer demand for our products and harm to our reputation.
Any changes to mobile operating systems that degrade or impede the SwitchBot App’s
proper functions could adversely affect user experience with our products. In order to
deliver high quality services, it is also important that our SwitchBot App works well across
a range of networks, mobile devices and standards that we do not control.
As new products are released or updated, we may encounter issues and defects in
developing and upgrading our SwitchBot App for use on mobile devices, and we may need
to devote significant resources to the creation, support and maintenance of our SwitchBot
App, and we may not be successful in doing so. There is no assurance that we will be able to
provide full functionality of the SwitchBot App and connected devices for all end
consumers.
Beyond our SwitchBot App, the competitive position of our products and services
depends in part on their ability to operate with the products and services of third parties.
We intend to facilitate the compatibility o f our products and ser vices with various
third-party hardware, software, and infrast ructure by maintaining and expanding our
business and technical relationships. Our products are compatible with major smart home
ecosystems with our smart hubs serving as central connectivity points that enable our
products to communicate with each other and with certain other third-party platforms, such
as Amazon Alexa, Google Assistant and Apple Home.
As we make our products and services available across a variety of IT systems and
devices, we depend on the compatibility of o ur products and services with mainstream
devices and IT systems that we do not control. If a third-party were to develop software or
services that compete with ours, that provider may choose not to support one or more of
our products and services. In addition, technology companies may choose not to support
the operation of their hardware, software, or in frastructure that our p roducts and services
are compatible with, or our products and serv ices may not support the capabilities needed
to operate with such hardware, software, or infrastructure. If we fail to address these
challenges successfully, our business, financia l condition, and results of operations could be
materially and adversely affected.
We may face risks associated with our reliance o n certain artificial intelligence and machine
learning models.
In order to increase the ability of our home robotic system products to interact with
humans and achieve a higher level of human- like functionalities, we utilize multi-modal
large language models, vertical models, and diffusion models in our core technologies. For
example, Our AI applications include the use of visual language models for our home
robotic system products, enabling them to understand and interact with the physical home
environment.
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If the models are incorrectly designed, the data we use to train them is incomplete,
inadequate, or biased in some way, or if we do not have sufficient rights to use the data on
which our models rely, the performance of our products, services, and business, as well as
our reputation, could suffer or we could incu r liability through the violation of laws,
third-party privacy, or other rights, or contracts to which we are a party.
For example, if our visual recognition systems misidentify objects in the home
environment or incorrectly in terpret spatial relationship s, our enhanced mobile robots,
smart cameras, or other products might malfunction, leading to poor user experiences or
potentially unsafe operating conditions. Sim ilarly, if our training data overrepresents
certain demographics or environmental conditions, our AI systems might perform poorly in
different cultural contexts or home settings. These risks are heightened as we expand into
more sophisticated AI applications like those described in our roadmap for home service
robots and AI edge computing.
We have incurred net losses during the Track Record Period, and there is uncertainty
regarding our ability to achieve or ma intain profitability in the future.
For the years ended December 31, 2022, 2023 and 2024, we had net losses for the year
of RMB87.0 million, RMB16.4 million and RMB3 .1 million, respectively. These net losses
were primarily due to the expenditures in relation to (i) our R&D expenses incurred to
enhance our core technologies and product and services offerings to maintain our
established position in home robotic system i ndustry; (ii) our selling and distribution
expenses incurred to enhance our brand reputation and expand our customer and end
consumer base; and (iii) our administrative expenses.
We may incur net losses in future periods as we continue to invest in R&D and expand
our business operations in a competitive mar ket. Our costs and expenses may increase as we
grow our business and operations. In addition, we expect to incur additional costs and
expenses as a result of being a public company. If we are unable to effectively manage our
expenses or achieve sufficient revenue growth, we may face challenges in achieving or
maintaining profitability.
We may face challenges in developing new sales channels and maintaining, expanding or
optimizing our omni-channel sales and distribution network.
To achieve further growth, we have been making efforts to expand our sales and
distribution channels. See ‘‘Business — Business Strategies — Strengthen market position
and expand global reach’’ in this prospectus. We rely on our omni-channel sales and
distribution network to promote and sell products, with sales to our retailers and
distributors accounting for a material portion of our total revenue. For the years ended
December 31, 2022, 2023 and 2024 and the si x months ended June 30, 2024 and 2025,
63.2%, 53.9%, 50.2%, 56.3% and 55.2% of our total revenue, respectively, were generated
from sales to retailers and distributors.
Expansion into new sales channels presents multiple challenges. First, we face
operational and marketing challenges when entering channels where we have limited
brand recognition and operating experience. These new channels may have different
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competitors, regulatory envi ronments, and consumer preferences compared to our existing
sales channels. Second, such expansion requ ires significant capital investment and
experienced personnel, and we may not have sufficient capital to diversify our sales
channels effectively. Third, we may find it d ifficult to hire, train, and retain qualified
employees who are familiar with new sales cha nnels. Finally, end consumers in new sales
channels are likely to be unfamiliar with our brand and products, requiring increased
investments in advertising and promotional activities, which may necessitate higher product
prices that could affect the via bility of these new operations and our overall profitability.
Maintaining our existing sales and distribution network also presents challenges. The
competition for high-quality retailers and dis tributors is intense in our industry. Although
we generally designate territories for distributors who can only sell products in their
designated territory, they may choose to distribute competing branded products if they find
our agreements and arrangements less favorable than those of our competitors. When we
terminate relationships with certain retaile rs and distributors in line with our business
strategies, finding replacements may be time-consuming, and any resulting delay may be
disruptive and costly to our business. We cannot assure you that we will always be able to
maintain relationships with existing retailers an d distributors or develop relationships with
new ones to replace existing ones.
The success of our sales and distribution network expansion is subject to several
factors, including: (i) the availability of sui table distribution channels or geographical
locations; (ii) our ability to negotiate favora ble cooperation terms with our retailers and
distributors; (iii) the availability of manag ement and financial resources; (iv) the
availability of suitable retailers and distrib utors, especially in less developed markets
where we rely on their in-depth local market knowledge; (v) our ability to hire, train, and
retain skilled personnel in our DTC channels ; and (vi) the adaptation of our logistics and
other operational systems to an expanded network.
Additionally, our expansion plans could strain our managerial, operational, and
financial resources. Our ability to manage fu ture growth will depend on our ability to
continue improving operational, financial, and management systems and to expand, train,
motivate, and manage our workforce. We cannot assure you that our personnel, systems,
procedures, and controls will be adequate to support our future growth. If we are not able
to successfully develop new sales channels or if we encounter difficulties in maintaining,
expanding, or optimizing our sales and distribution network, our business, financial
condition, results of operations, and prospec ts may be materially and adversely affected.
We cannot guarantee that our growth strategies will be successfully implemented or bring
about the outcomes as we expected.
We continue to execute a number of strategies to expand our business. See ‘‘Business —
Business Strategies’’ and ‘‘Future Plans and Use of Proceeds’’ for details. However,
expanding our business involves risks and challenges. These business initiatives are new and
evolving, some of which may prove unsucces sful. It may also take a longer time than
expected for us to develop the technologies and build market acceptance of our products,
and we may not have sufficient experience in e xecuting these new business initiatives
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effectively. We cannot assure you that any of these new business initiatives will achieve our
expected market acceptance and generate desire d outcome. If our efforts fail to enhance our
monetization abilities, we may not be able to ma intain or increase our revenues or recover
any associated costs, and our business, results of operations and financial condition may be
materially and adversely affected.
If we fail to obtain and maintain the requisite licenses and approvals required in any
jurisdictions where we operate, our business, results of operations and financial condition may
be materially and adversely affected.
We are required to obtain and maintain the requisite licenses and approvals for our
business in mainland China and other jurisdictions where we operate our business. We
cannot assure you that we can successfully update or renew the licenses required for our
business in a timely manner or that these license s are sufficient to conduct all of our present
or future businesses.
Our products are subject to various regula tory certifications and approvals,
particularly as we sell them internationally in Japan, Europe, North America, and other
markets. These requirements include, among others, product safety certifications,
electromagnetic compatibility testing, rad io frequency approvals, and in some cases,
specialized certifications for certain product categories.
Any failure to obtain or renew any approvals, licenses, permits or certificates necessary
for our operations, may result in enforcement a ctions thereunder, including orders issued by
the relevant regulatory authorities ceasing our operations, and may include corrective
measures requiring capital expenditure or remedial actions. The interpretation and
implementation of existing and future laws, regulations and policies governing our
business activities may be subject to change. We cannot assure you that we will not be
found in violation of any of the laws, regulati ons and policies currently in effect or any
future laws, regulations and policies. If we fa il to complete, obtain or maintain any of the
required licenses or approvals or make the nece ssary filings in any of the jurisdictions where
we operate our business, we may be subject to various penalties, such as the imposition of
fines and the discontinuation or restriction of our operations. Any such penalties may
disrupt our business operations and materially and adversely affect our business, results of
operations and financial condition.
We may be subject to the risks associated with international trade policies, geopolitics and
trade protection measures, including imposit ion of trade restrictions and sanctions, and our
reputation, business, results of operations and financial condition could be adversely affected.
Our operations are subject to potential deterioration in political and economic
relations among countries, sanctions, export controls, and other geopolitical challenges,
including increased duties, t axes and political instability.
Our products are manufactured in the PRC and exported to international markets,
with Japan, the Europe, and North America being our primary sales regions. This exposes
us to various international trade risks, parti cularly as trade tensions between the PRC and
other countries have intensified in recent years.
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During the Track Record Period, we exporte d two product class and other component
to Japan which were subject to maximum tariff rate of 5.3%. For the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2025, our revenue contributed
by sales of these tariffed product and component to Japan, accounted for approximately
0.2%, 3.0%, 3.7% and 10.1% of our total revenue, respectively. Based on the best
knowledge, information and belief of the Directors, the product and component that is
subject to tariffs and their applicable rate s have remained unchanged during the Track
Record Period. The Group’s exports to Japan are not subject to any import restrictions, and
our product or component do not fall within any sensitive or controlled categories.
While the current tariff regime in Japan gen erally allows for the import of consumer
electronics such as our products at relatively low or zero tariff rates, there is no assurance
that such treatment will remain unchanged. The Japanese government may, in response to
changes in global trade dynamics, domestic industrial policies, or international
negotiations, revise its tariff schedule or impose additional import-related charges or
non-tariff barriers (such as s tricter product certificatio n, labelling, or environmental
compliance requirements). Nevertheless, th e Group will continue to closely monitor any
such developments to ensure continued com pliance and mitigate potential risks. In
addition, heightened Sino-Japanese geopolitical tensions or any deterioration in bilateral
trade relations could result in increased regulatory scrutiny or the introduction of new trade
barriers that may adversely affect the Group’s exports to Japan.
The Sino-U.S. trade tensions present ongoing risks to our business. We are monitoring
this relationship closely, as increases in tariff could adversely impact our product pricing
and competitiveness. Additionally, since the U.S. government has imposed a series of tariffs
specifically targeting imports from China, as well as from other countries, tariff imposed on
our products by the U.S. government could force us to increase the retail prices and shift
the burden of such price increase to end consu mers, potentially reducing their demand or
weakening our competitive position. For further details of recent U.S. and PRC tariff
measures, see ‘‘Regulatory Overview — Laws and Regulations in relation to Importation of
Goods into the United States — Tariffs’’. There is significant uncertainty on how this
matter will evolve, and any rising political tensions, as well as increase in tariffs or changes
to trade policies between the U.S. and Chin a, may have a material impact on our business.
Thus, it is uncertain whether any further tariff measures will be implemented. For the years
ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
revenue generated from the sales in the U .S. amounted to RMB45.1 million, RMB78.5
million, RMB86.9 million, RMB38.7 millio n and RMB40.9 million, respectively,
representing 16.4%, 17.2%, 14.3%, 14.1% and 10.3% of our revenue in the same
periods, respectively. As of the Latest Practi cable Date, the impact of the increased tariffs
by the U.S. and the countermeasures taken by China on our business operations was
limited. However, the uncertainty surrounding potential changes in U.S. trade policies
towards China, particularly relating to tari ffs on Chinese imports, could adversely affect
our business operations and financial performance. Moreover, any further trade restrictions
imposed by the U.S. on home robotics, and in particular, home robotic systems, could
significantly increase the import prices of our products manufactured in the PRC, and thus
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make our products less competitive and desirable. As a result, our business, financial
condition and results of operations could be materially and adversely affected, and it is
possible that we may continue to record net losses in the future.
Moreover, on August 9, 2023, the Biden Admi nistration issued the Executive Order on
Addressing United States Investments in Certain National Security Technologies and
Products in Countries of Concern (‘‘Reverse CFIUS EO’’) granting the U.S. government the
authority to establish and enforce an outbound investment screening regime. On October
28, 2024, the U.S. Department of the Treasury issued the Provisions Pertaining to U.S.
Investments in Certain National Security Technologies and Products in Countries of
Concern (the ‘‘Final Rule’’) to implement the Executive Order of August 9, 2023. The Final
Rule has become effective on January 2, 2025. Th e Final Rule targets investments involving
persons and entities associated with ‘‘countries of concern,’’ currently including China, and
it imposes requirements (such as prohibition or notification requirements) on a wide range
of investments in persons engaged in activitie s in certain sectors such as semiconductors and
microelectronics, quantum information techno logies or artificial intelligence, which the
Final Rule defines as ‘‘covered activities,’’ with persons from countries of concern engaged
in covered activities defined as ‘‘Covered Foreign Persons.’’ Investments by U.S. persons
subject to the Final Rule, which are defined as ‘‘covered transactions,’’ include acquisitions
of equity interests (including purchases of sh ares in an initial public offering), certain debt
financing, joint ventures, and certain invest ments as a limited partner in a non-U.S. person
pooled investment fund. We may be deemed a Covered Foreign Person because we design
and develop home robotics technology on certain software, including home automation,
domestic chores, AI butler, elderly car e, security and energy management, while
continuously expanding the depth of our scenario coverage and enhancing our products’
autonomous learning and decisi on-making capabilities to provi de users with a complete and
enriched smart home living ecosystem.
As advised by our OIR Legal Advisers, since our Company does not design, produce,
fabricate, package or manufacture item covered under the ‘‘prohibited activities’’, in
particular for military end use, government intelligence or mass-surveillance end use or over
the specified computing power, our Directors b elieve that our business activities do not fall
under ‘‘prohibited activities’’; while the investments by U.S. persons in us is not a prohibited
transaction, it may constitute a ‘‘notifiab le transaction’’ under the Final Rule, which
imposes an obligation on U.S. persons (but not our Company) to notify the U.S.
Department of Treasury (the ‘‘Department of Treasury’’). Following the completion of the
Global Offering, it is expected that U.S. persons will be able to invest in our H Shares
without the notification obligations based on the publicly traded securities exception under
the Final Rule as long as the investment made does not afford a U.S. person certain rights
that are not standard minority shareholder protections. However, the Final Rule
nonetheless may increase the compliance burden of U.S. investors and may cause certain
U.S. investors to adopt a more cautious approach in their investments, which may
negatively impact our ability to rai se capital from U.S. investors.
The rules and regulations regarding U.S. outbound investment may be subject to
further development. For example, President Donald Trump issued a National Security
Presidential Memorandum titled ‘‘America Fi rst Investment Policy’’ on February 21, 2025
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to, among others, direct the U.S. Secretary of the Treasury to consider expanding
restrictions on outbound investment to China into new sectors, as well as expanding
coverage over more types of transactions. Th e memorandum also contemplates potential
restrictions on investments in publicly traded securities by pension funds, university
endowments and other limited partner investors. The memorandum does not change
existing law or regulations. However, depending on how such policy is implemented, it may
have a significant impact on how the U.S. government regulates U.S. outbound investments
in China. U.S. investors seeking to inves t in China may face expanded investment
restrictions, which may negatively impact our ability to raise capital from U.S. investors.
Having considered the advice of our OIR Legal Advisers, our Directors are of the view
that the Final Rule will not have material adverse impact on our Company’s business
operations, financial performance, the Global Offering or our investment prospects.
In addition, we sold our products to over 90 countries and regions around the world
during the Track Record Period. Changes to trad e or investment policies, treaties or tariffs
in the countries or regions where our products are sold could adversely affect our
international operations, financial condition and results of operations. In the event that any
of these countries impose trade sanctions, import restrictions or extra customs duties on the
products we sell, our business and operations may be materially and adversely affected.
We may not be able to efficiently manage our inventory and the inventory of our retailers and
distributors.
Maintaining optimal inventory level is cr itical to the success of our business. As of
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025, the balance of
our inventories amounted to RMB83.6 m illion, RMB82.4 million, RMB163.6 million and
RMB202.7 million, respectively, accounting f or approximately 28.4%, 27.5%, 44.5% and
35.8%, respectively, of our total current a ssets. For the years ended December 31, 2022,
2023 and 2024 and the six months ended June 30, 2025, our average inventory turnover days
were 111.9 days, 76.8 days, 82.0 days and 90.5 days, respectively. We are exposed to
inventory risks as a result of a variety of factors beyond our control, including changing
consumption trends and customer preferences, launches of competing products, disruptions
to international and local shipping, and economic and political factors such as the
Sino-U.S. trade tension. Moreover, for stoc king purposes, we generally estimate the
demand for certain products we sell ahead of the actual time of sale. We cannot assure you
that we can accurately predict these trends and events and maintain adequate levels of
inventory at all times. An unexpected decrease in the market demand for the products we
sell could lead to excessive or obsolescent inventory, and we may be forced to offer
discounts or conduct promotional activities to dispose of slow-moving inventory, which in
turn may materially and adversely affect our fin ancial condition and results of operations.
On the other hand, inventory under-stock ma y cause us to lose sales. Any of these events
could materially and adversely affect our business, financial condition, results of operations
and prospects.
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Moreover, we sell some of the products to retailers and distributors, which may face
inventory management challenges that impact our business. Failure to manage inventory
level may strain our retailers’ and distrib utors’ financial resources and impair their
liquidity, which may lead to their reluctan ce or inability to purchase products from us.
Under-stocking can lead to missed sales opportunities, while over-stocking could result in
inventory obsolescence, decreased shelf space for stocks that are in higher demand. If they
experience decreased profitab ility or suffer losses as a result, they may quit our distribution
or retailer network. Additionally, retailers or distributors may, with or without any merit,
complain about and attribute their slow inventory turnover to us, harming our relationship
with them and potentially damaging our reputation among retailers and distributors. If any
of such incidents occurs, the stability of our sales and distribution network may be
impaired, and our business, results of operations and financial condition may be materially
and adversely affected. Furthermore, we may not be able to track the sales and inventory
level of our retailers and distributors. This could in turn lead to our inability to accurately
predict sales trends and forecast customer de mand, which could result in excess inventory
levels or a shortage of products.
Our use of derivative financial instruments to mitigate foreign exchange risks may not be
effective and could result in financial losses.
During the Track Record Period, we entered into foreign exchange derivative
contracts, including foreign exchange fo rward contracts and foreign exchange swap
deposits with qualified banks in the PRC to mitigate currency risks arising from our
bank loans and trade receivables denominated in foreign currencies, particularly Japanese
yen. As of December 31, 2022, 2023 and 2024 and June 30, 2025, we recorded financial
assets at fair value through profit or loss related to these derivative instruments of
RMB8,000, nil, RMB54.4 million and nil, respectively.
Despite our comprehensive foreign exchange risk management policy, these derivative
instruments expose us to certain risks that could adversely affect our financial condition
and results of operations:
. our strategies may not fully offset the underlying foreign exchange exposures;
. rapid or unexpected changes in exchang e rates between the RMB and relevant
foreign currencies may reduce the effe ctiveness of our foreign currency
arrangements;
. these derivative contracts are marked-to-market on our balance sheet, and
adverse changes in their fair value could neg atively impact our reported financial
results;
. the counterparty banks with whom we enter into these arrangements may default
on their obligations, potentially resu lting in financial losses for us; and
. we may incorrectly estimate our actual foreign exchange exposure when
implementing our strategies.
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While we have implemented risk management p olicies that prioritize operational risk
mitigation, we cannot guarantee that our fo reign currency mitigation activities will
effectively protect against all foreign exchange risks or prevent potential financial losses
that could materially affect our business, financial condition and results of operations.
Our trade receivable factoring arrangements may expose us to financial risks and impact our
liquidity position.
As part of our normal business operations, we have entered into trade receivable
factoring arrangements (the ‘‘Arrangements ’’) with a bank in the PRC, under which we
transfer certain trade receivables in exchange for bank loans. As of December 31, 2022,
2023 and 2024 and the six months ended June 30, 2025, the aggregate amount of trade
receivables transferred under the Arra ngements amounted to RMB118.8 million,
RMB146.9 million, RMB183.5 million and RMB73.3 million, respectively.
Under these Arrangements, we may be required to reimburse the bank for loss of
interest if any trade debtors have late payments up to 120 days. These factoring
arrangements expose us to several risks that could adversely affect our financial
condition and liquidity:
. if our trade debtors experience financial d ifficulties or delays in payment, we may
be required to make interest reimbursem ents to the bank, which could negatively
impact our cash flows and financial condition;
. the continued recognition of both the receivables and associated loans on our
balance sheet affects our debt ratios and could impact our ability to obtain
additional financing;
. changes in banking regulations or the bank’s policies in the PRC could result in
modifications to the term s of our factoring arrangements or limit our ability to
continue such arrangements;
. any deterioration in our relationship with such bank could restrict our access to
this source of financing; and
. reliance on factoring as a financing tool exposes us to interest rate risks, as costs
associated with these arrangements may increase if interest rates rise.
Our continuing involvement in these arrangements could create financial burdens that
may materially and adversely affect our business operations, financial condition and
liquidity position.
We may not be able to prevent unauthorized use of our intellectual properties, which could
harm our brand and reputation.
As of the Latest Practicable Date, our Group had registered (i) 191 trademarks, 307
patents (including 54 invention patents), 22 software copyrights, and six work copyrights in
the PRC; (ii) 113 trademarks, four patents (in cluding two invention patents), and one work
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copyright in other jurisdictions; and (iii) three domain names which we consider to be
material or may be material to our business. We consider our patents, copyrights,
trademarks, trade secrets and other intellectual properties to be critical to our success. We
rely on a combination of copyright, trademark, patent and other intellectual property laws,
trade secret protection, confidentiality agr eements with our employees and third parties,
and other measures to protect our intellectual property rights.
Despite our efforts, unauthorized parties may attempt to copy or otherwise obtain and
use our intellectual properties. Our agreements with employees and third parties may not
effectively prevent disclosure of our intellect ual properties and confidential information
and may not provide adequate remedies in the event of unauthorized disclosure. Monitoring
for infringement or unauthorized use is difficult and expensive, and may not be effective.
Litigation to enforce our rights can result in substantial costs, diversion of resources,
business disruption, and could materially and adversely affect our financial condition and
results of operations.
Protecting our intellectual property rights g lobally presents additional challenges.
Filing, prosecuting, and defending patents on our technologies across multiple jurisdictions
is extremely expensive and time-consuming. Many companies have encountered significant
problems in protecting intellectual property rights overseas. The legal systems in many
countries and regions do not favo r enforcement of patents and other intellectual property
protection, making it difficult to stop infringement.
Consequently, we may not be able to prevent third parties from practicing our
inventions in all countries and regions outside the jurisdictions where we have registered our
intellectual propertie s. Competitors may use our technologies in jurisdictions where we have
not obtained patent protection to develop their own products. Our patents or other
intellectual property rights may not be effective or sufficient to prevent them from
competing with us.
Proceedings to enforce our patent rights in overseas jurisdictions could substantially
increase costs, divert resources and attention from other aspects of our business, risk
invalidation or narrow interpretation of our pa tents, rejection of pat ent applications, and
provoke third-party claims against us. We may not prevail in lawsuits that we initiate or be
awarded damages or remedies we deem sufficient. Accordingly, our efforts to enforce our
intellectual property rights around the worl d may be inadequate to obtain significant
commercial advantage from the intellectual properties that we develop.
We may be subject to intellectual property infringement claims or other allegations, which
could expose us to substantial liability for inte llectual property infringement and other losses.
We cannot be certain that our operations or any aspects of our business do not or will
not infringe upon or otherwise violate patents, trademarks, copyrights or other intellectual
property rights held by third parties. We ma y from time to time be subject to proceedings
and claims relating to intellectual property rights in the future. We cannot assure you that
holders of patents and other intellectual prope rties purportedly relating to some aspect of
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our technology infrastructure or business, if any such holders exist, would not seek to
enforce such patents and other intellectual p roperties against us in the PRC or any other
jurisdictions.
If we are found to have violated the intellectual property rights of others, we may be
subject to liability for our infringement acti vities or may be prohibited from using such
intellectual property, and we may incur licensi ng fees or be forced to develop alternatives of
our own. Defending against such infringeme nt or licensing allegations and claims is
relatively costly and time consuming and may divert management’s time and other
resources from our business and operations. If a judgment, a fine or a settlement involving a
payment of a material sum of money were to occur, or injunctive relief were issued against
us, it may result in significant monetary liabi lities and may materially disrupt our business
and operations by restricting or prohibiting our use of the intellectual property in question,
and our business, financial position and results of operations could be materially and
adversely affected.
Trademarks registered, internet search engine keywords purchased and domain names
registered by third parties that are similar to our trademarks, brands or websites could
cause confusion to our existing and potential customers and divert them away from our
products and services.
Competitors and other third parties may register trademarks or purchase internet
search engine keywords or domain names that are similar to ours, in order to divert our
existing and potential customers and end-users from our products and services to theirs. It
is difficult to prevent such unfair competition activities, and if we fail to do so, competitors
and other third parties may drive existing and p otential customers and end-users away from
our products and services, which could harm our business and materially and adversely
affect our results of operations.
Obtaining and maintaining our patent prote ction depends on compliance with various
procedural, documentary, fee payment and other requirements imposed by governmental
patent agencies, and our patent protection could be reduced or eliminated for non-compliance
with these requirements.
The China National Intellectual Property Administration and various governmental
patent agencies in other jurisdictions require compliance with a number of procedural,
documentary, fee payment and other similar provisions during the patent application
process and over the lifetime of the patent. Non-compliance events, including failure to
respond to official actions within prescr ibed time limits, non-payment of periodic
maintenance fees, and failure to properly legalize and submit formal documents, can
result in abandonment or lapse of the patent o r patent application, leading to partial or
complete loss of patent rights in the relevant jurisdictions. In any such event, our
competitors might be able to enter the market , which would materially and adversely affect
our business, results of operations and financial condition.
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We may be unable to protect the confidentiality of our trade secrets, and we may be subject to
claims that we, or our employees or our business partners have wrongfully used or disclosed
trade secrets allegedly owned by others.
In addition to our registered patents and patent applications, we rely on trade secrets,
including unpatented know-how, technology and other proprietary information, to protect
our products and thus maintain our competitive position. We protect these trade secrets, in
part, by entering into non-disclosure and confidentiality agreements, non-compete
covenants or include such undertakings in the agreements with parties that have access to
them. We also enter into employment agre ements with our employees that include
undertakings regarding assignment of inventions and discoveries. Nevertheless, there can be
no guarantee that an employee or a third party will not make an unauthorized use or
disclosure of our proprietary confidential information. This might happen intentionally or
inadvertently. It is possible that a competitor will gain access to such information and make
use of such information, and that our competitive position will be compromised, despite
any legal action we might take against such persons. In addition, to the extent that our
employees or business partners use intellectual property owned by others in their work for
us, disputes may arise as to the rights in related or resulting know-how and inventions.
Trade secrets are difficult to protect. Ou r employees or business partners might
intentionally or inadvertently disclose our trade secret information to competitors, or our
trade secrets may otherwise be misappropriated. Enforcing a claim that a third party
illegally obtained and/or is using any of our trad e secrets is expensive and time-consuming,
and the outcome is unpredictable. We also seek to enter into agreements with our employees
that obligate them to assign any inventions created during their work for us to us. However,
we may not obtain these agreements in all circumstances and the assignment of intellectual
property under such agreements may not be self-executing. It is possible that technology
relevant to our business will be independently developed by a person that is not a party to
such agreement. Furthermore, if the employees who are parties to these agreements breach
the terms of these agreements, we may not have adequate remedies for any such breach, and
we could lose our trade secrets and inventions through such breaches. We may be involved
in claims by or against us related to the ownership of such intellectual property. If we fail in
prosecuting or defending any such claims, in addition to paying monetary damages, we may
lose valuable intellectual property rights. Even if we are successful in prosecuting or
defending against such claims, litigatio n could result in substantial costs and be a
distraction to our management and R&D personnel.
Changes in patent law could diminish the value of patents in general, thereby impairing our
ability to protect our products.
The scope of patent protection in various jurisdictions is uncertain. Changes in either
the patent laws or their interpretation in mainland China or other jurisdictions may
diminish our ability to protect our invention s, obtain, maintain, defend and enforce our
intellectual property rights and, more genera lly, could affect the value of our intellectual
property or narrow the scope of our patent rights. We cannot predict whether the patent
applications we are currently pursuing and may pursue in the future will be granted as
patents in any particular jurisdiction or whether the claims of any future granted patents
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will provide sufficient protection from com petitors. The coverage claimed in a patent
application can be significantly reduced before the patent is granted, and its scope can be
reinterpreted after such grant.
Even if our patent applications are succes sfully granted, such grant may not be in a
form that can provide us with any meaningful protection, prevent competitors or other
third parties from competing with us, or otherwise provide us with any competitive
advantage. As a result, the grant of patent app lication, scope, validity, enforceability and
commercial value of our patent rights are highly uncertain.
Product defects and errors may lead to lia bility claims and damage our reputation.
The quality of our products depends on the effectiveness of our quality control and
quality assurance systems, which rely on mul tiple factors including the reliability of
components, the competence of our staff, and adherence to established protocols. Despite
our efforts, we cannot guarantee that our quality control procedures will consistently
prevent deviations from our quality standards . Any significant failure or deterioration of
our quality control and quality assurance protocols could render our products unable to
perform their regular functions, cause safety concerns that may result in physical injuries to
individuals, or harm our market reputation and relationship with business partners.
The technology underlying our home robotic system products is inherently complex,
making it difficult to identify all potential defects or errors. This is particularly true when
introducing new products or features. Despite internal testing, serious errors, security
vulnerabilities, or software issues may only b e discovered after the commercialization and
deployment of our products.
We also rely on components and parts from various suppliers, and their quality is
beyond our direct control. We cannot assure you that the parts, components and/or
products we procure from them are safe and free of defects or can meet the relevant quality
standards. We depend on the quality control procedures of our suppliers. In the event of
quality issues involving supplier-manufa ctured parts and components used in our
production, we could be subject to complain ts and product liability claims and may not
be able to seek indemnification from them. If we engage in legal proceedings against our
suppliers, such proceedings may be time-consuming and costly regardless of the outcomes.
In the event defects or errors are discovered, we may be required to recall defective
products from end consumers, or otherwise offer refunds, repairs and/or replacements as
part of our remedial measures. The consequences of such defects can be severe, including:
. significant expenses related to product recalls, repairs, or replacements;
. costly and time-consuming remediation efforts;
. lawsuits filed against us by customers or other parties, exposing us to potential
liabilities and damages;
. revenue loss and delay or loss in market acceptance; and
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. substantial negative publicity aff ecting our brand and reputation.
Our insurance coverage may be insuffici ent to fully cover all damages sought in
product liability claims, and the claiming proc ess itself can be prolonged. Any material
product liability claim or litigation could re quire substantial expenditure of funds and
managerial resources while simultaneously damaging our reputation, ultimately having a
material adverse effect on our business prospects and financial condition.
Expanding our product offerings may expose us to new operational and market challenges.
We aim to continuously expand our product range to meet evolving customer needs
and preferences. This includes expanding our existing offerings as well as venturing into
new categories to further diversify our product range. However, such efforts may come with
substantial risks and challenges. For instance, by expanding our product offerings to
include a broader range of items or SPUs, we may inadvertently increase the complexity in
inventory management and exert additional pressure on our procurement practice,
requiring significant resources to predict and meet customer demand. Furthermore, a
broader product range could result in higher return rates and increased consumer
complaints, particularly if these new produ cts do not meet the standards our customers
have come to expect. Such issues, if not managed effectively, could lead to costly product
liability claims and cause damage to our re putation and financial performance,
undermining the customer-centric approach in our operation and expansion endeavors.
We may also face additional challenges when introducing new product categories. In
particular, we may fail to introduce products t hat align with shifts in customer preferences,
or misjudge consumer demand for our new products, resulting in inventory buildup and
costly inventory write-downs. Moreover, to gain market share in new product categories,
aggressive pricing strategies might be require d. Such strategies, while effective in attracting
customers, could adversely impact our profita bility. In addition to these market challenges,
we may also encounter difficulties in sourcing and production processes that delay our
product release and delivery. Furthermore, each new product may be subject to its own set
of regulatory requirements, varying by jurisdictions and markets. Navigating this
regulatory landscape can be both complex and costly. Failure to effectively manage these
risks and challenges in the introduction o f new products could have a material adverse
effect on our business, results of operations, and financial condition.
After-sale service challenges may adversely affect our business and reputation.
Providing high-quality after-sale mainte nance and support services is critical to
maintaining positive relationships with our customers and end users. We face several
challenges in this area that could impact our business performance and reputation.
We may not be able to recruit or retain sufficient qualified support personnel with
experience in supporting our products and services. This could prevent us from responding
quickly enough to accommodate increases in customer demand for technical support or
maintenance assistance. We may also have difficulty adapting our maintenance services and
technical support to compete with changes in the technical services provided by our
competitors.
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If customer demand for after-sale support increases, we may face higher costs that
harm our results of operations. This is particularly true as we expand to countries and
regions with more stringent consumer protection regulations and different market practices.
Our return policies also present financia l challenges. We generally allow retail
customers to return products within 30 days after receipt. In addition, customers may be
entitled by law to have products replaced for specific defects or quality issues, and we may
be required to adopt or amend return policies to comply with regulations. While these
policies improve shopping experiences and promote customer loyalty, they subject us to
additional costs that we may not recover. If a significant number of customers misuse these
policies, our costs could increase substantially . Conversely, making policies more restrictive
might dissatisfy end consumers, resulting in customer loss or slower acquisition of new
customers. Any failure to maintain excellent a fter-sale services, or even a perception that
our support is inadequate, could materially and adversely affect our business, financial
condition and results of operations.
Our business depends substantially on the continuing efforts of our management team, as well
as a competent pool of talents that supports our existing operations and future growth. If we
are unable to retain, attract, recruit and train such personnel, our business may be materially
and adversely affected.
The success of our business depends on the continued services and efforts of our
Directors and senior management, in particular our co-founders, Mr. Li and Mr. Pan who
serve as our chief executive officer and chief technology officer, respectively.
If any of our Directors or senior management becomes unable or unwilling to continue
to contribute their services to us, there can be no assurance that we would be able to find
suitable replacements in a timely manner or at all. The loss of services of such Directors or
senior management or the inability to identify, hire, train and retain other qualified and
managerial personnel to replace them in the future may materially and adversely affect our
business, financial condition, results of operations and prospects.
Additionally, our future success also depen ds on our ability to attract, recruit and train
qualified employees and retain existing key personnel. In particular, we rely on our top
in-house R&D team to develop our core technologies, products and services, and our
experienced sales and marketing personnel to maintain relationships with our customers
and end-users of our products and services. In order to compete for talents, we may need to
offer higher compensation, better trainings and more attractive career opportunities,
employees share incentives schemes and other benefits to our employees, which may be
costly and time-consuming. We cannot assure y o ut h a tw ew i l lb ea b l et oa t t r a c to rr e t a i na
qualified workforce necessary to support our future growth. Furthermore, any disputes
between us and our employees or any labor-related regulatory or legal proceedings may
divert management and financial resources, negatively impact staff morale, reduce our
productivity, or harm our reputation and futur e recruiting efforts. In addition, our ability
to train and integrate new employees into our operations may not meet the demands of our
growing business. Any of the foregoing issues related to our workforce may materially and
adversely affect our opera tions and future growth.
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Our distributors may have unsatisfactory performance which is beyond our control and their
improper conduct or any changes in their business relationships with us may adversely affect
our business, financial conditions and results of operations.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, 0.5%, 9.1%, 10.1%, 10.6% and 9.0% of our revenue were generated
from our distribution channels, respectiv ely. As of December 31, 2022, 2023 and 2024 and
June 30, 2025, we had three, five, six and six distributors, respectively.
Our distributors may not effectively market and sell our products for various reasons.
If distributors reduce orders, request significant discounts, or fail to renew agreements with
us, it could lead to overstock, lost sales, and adversely impact our business and financial
results. We cannot assure you that distributors will sell our products to end consumers in a
timely manner, which could affect our inven tory turnover and operational efficiency.
Improper use of our brands, products or intellectual property by distributors could
damage our reputation and reduce customer demand. Distributors may subject us to
liability if they misrepresent our products or vi olate laws. Although we require compliance
with distribution agreements, we cannot ens ure adherence or detect non-compliance, which
could disrupt our sales and damage relationships.
Our distributors can engage sub-distributors without our authorization, limiting our
control. We mainly rely on distributors to manage their sub-distributors and cannot ensure
these sub-distributors will follow our polic ies or avoid competing with each other,
potentially affecting our sales and business.
Events that could adversely affect our business include: reduction or cancellation of
distributor orders; failure to maintain distr ibutor relationships; inability to establish
favorable terms with new distributors; chal lenges in replacing lost distributors; and
distributors prioritizing competitive products. We may not successfully manage our
distribution network, and expansion costs may exceed generated revenue. These factors
could decrease our sales volume and materially affect our business, results of operations
and financial condition.
Any unexpected disruption at our production fa cilities could materially and adversely affect
our business, financial condition and results of operations.
Our ability to meet the demand of our custom ers and grow our business relies in part
on the efficient, proper and uninterrupted operation of our production plant and a constant
and sufficient supply of utilities. In the event of earthquake, fire, dro ught, flood or other
natural disaster, political instability, riot or ci vil unrest, extended outage of critical utilities
or transportation systems, terrorist attack or other events that limit or disrupt our ability to
operate our production facilities, we may exper ience substantial losses, including loss of
revenue from disrupted production. We may also need to incur substantial additional
expenses, exceeding our insurance coverage to repair or replace any damaged equipment or
facility. In addition, our ability to manufactu re and supply products and our ability to meet
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our delivery obligations to our customers woul d be disrupted and our relationships with our
customers could be damaged, which could have a material and adverse effect on our
business, financial condition and results of operations.
Failure to successfully upgrade our equipment or expand our production capacities could
adversely affect our business operations and financial performance.
Our future success will depend, to an exten t, on our ability to continuously increase
our production output and enhance our production efficiency. If we fail to achieve these
objectives, we may not be able to attain the desired level of economies of scale in our
operations or reduce our marginal manufacturing costs to the level necessary to maintain
our pricing and other competitive advantages and achieve our business expansion plan.
The future equipment upgrade and capacity expansion may require substantial capital
investment, significant engineering efforts, timely delivery of manufacturing equipment and
dedicated management attention, and are subj ect to the following risks and uncertainties:
. negative effect on the working capital available to us;
. the need to finance our equipment upgrade and capacity expansion through bank
or other borrowings, which may not be available on commercially reasonable
t e r m so ra ta l l ;
. increase in depreciation charges associated with our new equipment and interest
expenses associated with our future borrowings for planned upgrade or
expansion;
. cost overruns, construction delays, manufacturing equipment problems, including
delays in equipment delivery or deliv ery of equipment that does not meet our
specifications, and other operating difficulties;
. failure to improve our operational and financial systems and risk monitoring and
management system in line with our upgrade or expansion;
. decrease in the prices of our products, which fail to cover our increased
production costs;
. failure to maintain or establish relatio nships with our existing or prospective
customers and suppliers to match our increased production output;
. the failure of our new equipment to perform as expected and lower our
manufacturing cost;
. insufficient management resources to properly oversee and manage our planned
capacity expansion; and
. delay in or denial of government appro vals, permits or documents of similar
nature necessary and required for our expansion.
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Any of the abovementioned or similar risks or uncertainties could significantly delay
or constrain our plan to upgrade our manufacturing equipment and expand our capacity in
the future, which may in turn hinder our ability to achieve economies of scale and
satisfactory utilization rates. As a result, our business, financial conditions and results of
operations may be materially and adversely affected.
Technology infrastructure vulnerabilities may adversely affect our business operations.
Our business relies heavily on technology in frastructure to enable our robotics and AI
technologies, creating vulnerabilities from both third-party services and our own internal
systems.
During the Track Record Period, we use d AWS as our primary computing service
provider. For details of our AWS, please refer to the section headed ‘‘Business —
Customers — Our Relationship with Amazon’’. These third parties maintain the
configuration, architecture, features, and security of our virtual infrastructure, but we
have limited or no control over their operatio ns or facilities. Capacity limitations from
these providers could impede our ability to s erve existing customers or attract new ones.
Unpredictable incidents affecting their infrastructure, such as natural disasters, fire, floods,
severe storms, power loss, telecommunicat ions failures, or security breaches, could
significantly disrupt some of the services we provide to our customers. Our internal
technology infrastructure faces similar vulnerabilities despite precautionary measures.
Telecommunication failures, power outages, human error, or system attacks can cause
service interruptions that we may not resolve q uickly or at all. These disruptions prevent
customers from accessing certain features of our products, damaging our reputation and
potentially driving customers to ward alternative solutions.
Any prolonged service disr uption of technology infrastructure would adversely impact
our customer service capabilities, expose us t o liability, and harm our business reputation.
If our agreements with third-party provider s terminate or experience service lapses, we
would face not only interruptions but also significant delays and expenses when arranging
alternative solutions or re-architecting our software for deployment on different platforms.
The consequences of these infrastructure v ulnerabilities extend beyond temporary
inconvenience to include reduced future revenues, potential regulatory scrutiny, and
decreased customer satisfaction. Failure to maintain consistent network performance could
materially and adversely affect our business operations, financial condition, and results of
operations.
We rely on third party business partners in our business operations and we may experience
difficulties or suffer delay under such arrangements, and as a result our operations may be
materially and adversely affected.
We procure certain raw materials and components from third-party suppliers, and
outsource parts of our production process involving certain products to third-party
contract manufacturers and logistics to relevan t third-party service providers. Stable supply
of such raw materials, components and services, quality of production, and stable
relationships with such business partners are crucial to our business operations and success.
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We may experience operational difficulties with our suppliers and business partners,
including, but not limited to, the reduction in a vailability of productio n capacity, the failure
to comply with our product specifications and services standards, insufficient quality
control and the failure to meet the production schedules of our customers. Our suppliers
may also experience disruption in their operations due to various reasons such as
breakdown of machinery, shortage of materials, increase in operational costs,
environmental non-compliance issues or other similar problems.
Further, we may not be able to renew contract arrangements with our suppliers and
may fail to find alternative suppliers in a timely manner. While we generally maintain
alternative suppliers for critical components, not all components have readily available
alternatives. Any such failures or delays in p erformance by our suppliers could materially
and adversely affect our business and financial results.
Our business strategies require a significant amount of capital. If we fail to obtain sufficient
financing to support our business development, our business operation, financial condition, and
prospects may be materially and adversely affected.
Our business and future strategy are cap ital intensive and require substantial
investments in, among other things, R&D, improvement in production capability and
increasing products promotion and marketing. As we increase our production capacity and
operations, we may also require significant capital to maintain our property, plant and
equipment and such costs may be greater tha n anticipated. We expect that our level of
capital expenditures will be significantly affected by user demand for our products. Our
future capital requirements may be uncertain and actual capital requirements may be
different from those we currently anticipate. We may seek equity or debt financing to
finance a portion of our capital expenditures. If we fail to obtain sufficient capital in a
timely manner or on acceptable terms, or at all, we may be required to significantly reduce
our spending, delay or cancel our planned activities, or substantially change our corporate
strategy, which may materially and adversely affect our business, financial condition, and
prospects.
In addition, our future capital needs and other business reasons could require us to
issue additional equity or debt securities or obtain a credit facility. The issuance of
additional equity or equity-linked securities could dilute our shareholders and decrease the
dividend per share. The incurrence of indebtedness would result in an increase in debt
service obligations and could result in operatin g and financing covenants that would restrict
our operations or our ability to pay dividends to our shareholders.
Our sales are affected by seasonal fluctuations.
Our products are sold on an order-by-order basis and our sales experience significant
seasonal patterns. We typically experience increased sales before and during holiday
seasons, festivals and events. Our sales gen erally peak during the fourth quarter of each
year, primarily driven by major shopping events such as Amazon Big Deal Day, Black
Friday (in November), and end-of-year holiday shopping seasons across various overseas
markets where our products are sold.
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There is no assurance that our customers’ purchase orders and delivery will be
consistent with our expectations over each season. Accordingly, our results of operations
may vary from period to period. If we cannot ef fectively plan our production and delivery
schedules and secure purchase orders from our customers during non-peak seasons, our
business, financial condition and results of operations may be adversely affected.
We are subject to credit risk of our customers which may adversely affect our financial
position, profitability, and cash flow.
We are subject to credit risk of our customers and our profitability and cash flow are
dependent on our receipt of timely payments from our customers. If there is any delay or
default in payment by our custom ers, our profitability, workin g capital, and cash flow may
be adversely affected. There is no assurance that we will be able to collect all or any of our
trade and notes receivable in a timely manner, or at all.
As of December 31 2022, 2023 and 2024 and the six months ended June 30, 2025, our
trade receivables amounted to RMB45.1 m illion, RMB62.1 million, RMB45.8 million and
RMB133.0 million, respectively. For the year ended December 31, 202 2, 2023 and 2024 and
the six months ended June 30, 2025, our average trade receivables turnover days were 43.0
days, 43.0 day, 32.6 days and 41.5 days, respectively. If any of our customers faces
unexpected situations, such as financial difficulties or deterioration in credit worthiness,
there may be challenges in collecting full or p artial payments from them, and enforcing
judgment debts against them could be difficult. These unforeseen circumstances may also
render our judgments or estimations on credit loss allowances inaccurate, potentially
resulting in higher losses than currently estimated.
We had experienced net cash outflows from operating activities during the Track Record
Period. If we cannot improve our operating cash flows and if we fail to obtain sufficient capital
on acceptable terms and on a continuous basis to fund our operations, our business, financial
condition and prospects may be materially and adversely affected.
We experienced cash flows used in operating activities for the years ended December
31, 2022 and 2024. which amounted t o RMB107.0 million and RMB31.3 million,
respectively. Our net cash outflows are main ly attributable to our R&D expenses, selling
and distribution expenses, administrative expenses to develop core technologies and new
products. We plan to continue to invest heavily in our R&D efforts, as well as our sales and
marketing efforts, and incur significant capital expenditures.
However, it typically takes a long period of time to realize returns on such investments,
if at all. As such, we expect to continue to have ne t cash outflow from operating activities in
the near future. Our negative operating cash flows could adversely affect our operations by
reducing the amount of cash available to meet the cash needs for operating our businesses
and fund our investments in our business innovation and expansion. If our future operating
cash flows fails to improve to a level to sufficiently cover our overall cash needs, we will
have to rely on external debt or equity financing, and we cannot assure you that we will be
able to obtain external financing in amount s or on terms acceptable to us, if at all. Our
ability to obtain additional capital in the future, however, is subject to a number of
uncertainties, including those relating to our future business development, financial
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condition and results of operations, general market conditions for financing activities by
companies in our industry and macro-economic and other conditions in jurisdictions where
we operate and globally. If we cannot obtain sufficient funding to meet our capital needs,
we may not be able to execute our growth strategies, and our business, financial condition
and prospects may be materially and adversely affected.
We may not be able to sustain our historical growth rates, and our historical growth may not
be indicative of our future growth or financial results.
We have experienced rapid growth in revenue and gross profit in recent years. Our
revenue increased from RMB274.6 million in 2 022 to RMB457.3 million in 2023 and further
to RMB609.9 million in 2024. Our revenue also increased from RMB275.0 million for the
six months ended June 30, 2024 to RMB396. 3 million for the six months ended June 30,
2025. Similarly, our gross profit increas ed from RMB94.1 million in 2022 to RMB230.5
million in 2023 and further to RMB315.6 million in 2024. It also increased from RMB138.8
million for the six months ended June 30, 2 024 to RMB214.8 million for the six months
ended June 30, 2025. However, historical growth may not be indicative and there is no
assurance that we will be able to mainta in our growth rates in future periods.
Our growth rates depend on, among other things, the overall economic growth in our
key markets, including Japan, Europe, and North America, and globally in general,
technology development of the home robotic system industry, awareness of end consumers
to adopt home robotic system products, our investment in technology development, our
ability to retain and attract new customers and end-users of our products, and our ability to
manage costs and enhance operational efficiency.
There is no assurance that we will be able to effectively implement our business
strategies and maintain our business growth. If the market does not develop as we expect or
if we fail to address the dynamic market needs, our results of operations and financial
performance would be materially and adversely impacted.
Our success depends on our ability to improve and streamline our operations to control or
reduce costs.
We are continuously seeking opportunities to streamline our processes, though there
can be no assurance that the savings of thes e actions will not be mitigated by various
factors, including economic weakness, competitive pressures, and decisions to increase costs
in areas such as sales promotion or R&D above levels that were otherwise assumed. Failure
to achieve or delays in achieving projected levels of efficiencies and cost savings from such
measures, or unanticipated inefficiencies resu lting from manufacturing and administrative
reorganization actions in progress or contemplated, would adversely affect our results. Our
rapid growth has and is expected to continue to place a strain on our administrative and
operational infrastructure, in particular on our internal accounting and financial reporting
processes and systems. Over the past years, our expansion has required us to expand our
management personnel numbers and increase the complexity of our management structure.
There can be no assurance that the new personnel and management structure will enable us
to successfully execute our strategy or that we will be able to integrate the new personnel
a n dn e ws t r u c t u r ei nat i m e l ym a n n e ra n dw ithout incurring unexpected costs and
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inefficiencies. We will continue to require additional resources to manage relationships with
new customers in new geographic areas, as wel l as other third parties, such as contracted
suppliers, equipment providers and consultants, as our operations expand. Our ability to
manage our operations and growth will require us to continue to improve our operational,
financial and management controls and reporting systems and procedures. If we are unable
to manage our growth and execute our business strategy effectively, our business, financial
condition or results of operations may be materially and adversely affected.
We have granted, and may continue to grant, share-based awards, which may further increase
our share-based payments expenses, adversely affect our financial performance, and dilute
existing Shareholders’ stake.
We recorded share-based payment expenses of RMB3.4 million, RMB4.2 million,
RMB4.2 million, RMB2.1 million and RMB5.0 million for the year ended December 31,
2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively. We
believe such share-based awards are importan t to our ability to attract, retain and motivate
our key individuals, and we may continue to grant share-based awards in the future. As a
result, our share-based payment expenses may increase, which may further increase our
share-based payments expense s, adversely affect our financial performance, and dilute
existing Shareholders’ stake.
If we are unable to conduct our marketing activities cost-effectively, our results of operations
and financial condition may be materially and adversely affected.
We have incurred expenses on a variety of different marketing and advertising efforts
designed to enhance our brand recognition and increase sales of our products. For details,
please refer to the section headed ‘‘Business — Marketing and Promotion’’ in this
prospectus. Our marketing and advertisin g activities may not achieve the desired
promotional effects and may not result in the levels of product sales that we anticipate.
We incurred RMB102.1 million, RMB136.7 million, RMB171.9 million, RMB71.0 million
and RMB106.8 million of selling and distribu tion expenses for the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively. We
expect to recruit and expand our sales and marketing team and enhance our sales and
marketing efforts in markets where we are expanding or increasing our presence, which may
or may not yield the anticipated benefits. We expect our sales and marketing expenses to
increase along with our expansion.
Additionally, we primarily use online marketing strategies such as social media or
online advertisement products available on e-commerce platforms. However, there are
significant differences between online and offline advertising models, and if we fail to
implement these strategies appropriately, our marketing efforts may not achieve optimal
results. Our ability to increase revenue and pro fitability from advertising may be adversely
impacted by a number of factors, many of which are beyond our control, such as increased
competition and potential upward adjustment of o nline advertising prices and difficulties in
acquiring and retaining advertisers.
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We have incurred, and will continue to incur indebtedness in the future. The increased level of
indebtedness could adversely affect our financia l health and our ability to generate sufficient
cash to satisfy our outstanding and future debt obligations.
We have incurred, and will continue to incur, indebtedness to fund our ongoing
operations and expansions. As of December 31, 2022, 2023 and 2024 and June 30, 2025, our
interest-bearing bank loans amounted to RMB40.2 million, RMB30.2 million, RMB106.3
million and RMB98.7 million, respectively.
Our indebtedness could have important consequences to you. For example, it could:
. limit our ability to satisfy our obligations under bank and other borrowings;
. increase our vulnerability to adverse gene ral economic and industry conditions;
. require us to dedicate a substantial portion of our cash flow from operations to
repaying our indebtedness, thereby reducing the availability of our cash flow to
fund working capital and for other general corporate purposes;
. limit our flexibility in planning for or reacting to changes in our businesses and
the industry in which we operate;
. place us at a competitive disadvantage com pared to our competitors that have less
debt; and
. increase the cost of additional financing.
We cannot assure you that we will be able to obtain adequate financing to fund our
operations. Apart from bank borrowings, should we fail to obtain external financing on
reasonable terms, or at all, our operation and expansion may be adversely affected and
disrupted.
In addition, our ability to generate sufficien t cash to satisfy our outstanding and future
debt obligations will depend upon our future operating performance, which will be affected
by prevailing economic conditio ns and financial, business and other factors, many of which
are beyond our control. If we are unable to repay our indebtedness, we will be forced to
adopt an alternative strategy that may include a ctions such as selling assets, restructuring or
refinancing our indebtedness or seeking equity capital. These strategies may not be
instituted on satisfactory terms, if at all.
We are exposed to market risk from changes in foreign currency exchange rates, which could
materially and negatively impact our profitability.
We manufacture a majority of our products in the PRC and sell them to customers in
more than 90 countries around the world. As a result, we are exposed to foreign currency
risk as we enter into transactions and make investments denominated in multiple currencies.
Our predominant currency exposures are to the Japanese yen, US dollar and Euro. Changes
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in currency exchange rates may affect the relative prices at which we and our competitors
sell products in the same markets and the costs of products and services we require for our
operations.
We manufacture and source products primarily from the PRC for sale in international
markets. To the extent the RMB appreciates agai nst our sales currencies, we may experience
cost increases that reduce our profit marg ins. We may not be successful at adjusting our
pricing strategy or implementing other mitigat i o nm e a s u r e st oo f f s e tt h e s ec o s ti n c r e a s e s ,
which could adversely impact our profitability.
We are subject to both translational risks (when converting our international
operations’ financial results to RMB) and tr ansactional risks (from export sales and
international procurement). These currenc y fluctuations can significantly impact our
reported financial results. Despite our efforts to manage foreign exchange risk, there can be
n oa s s u r a n c et h a tw ec a ni m p l e m e n te f f e c t i v em e a s u r e st or e d u c eo re l i m i n a t eo u re x p o s u r e
to fluctuations in foreign exchange rates.
Our net foreign exchange loss for the years ended December 31, 2022, 2023 and 2024
was RMB3,000, RMB1.6 million and RMB6.5 m illion, respectively, demonstrating the
impact these currency fluctuations can have on our financial performance.
We may not be able to receive PRC tax preferential treatment and certain government grants
or subsidies in the future, which could have an impact on our financial results.
The discontinuation of the preferential tax treatment for High Technology Enterprises
or government grants currently available to us in the PRC or other unfavorable changes in
tax law or government grant policy could result in additional tax obligations and expenses.
Our subsidiary, Woan Technology, currently holds the certificate of High Technology
Enterprises and is entitled to a preferentia l income tax rate of 15% on their taxable income.
The qualification of Woan Technology as a High Technology Enterprise is currently valid
until November 14, 2026. We intend to apply for renewal of such qualification thereafter
but there is no assurance that our application will succeed.
The High Technology Enterprises qualific ation is re-assessed by the relevant
authorities every three years, and standa rd of the assessment may be changed. In the
event that this preferential tax treatment i s discontinued, Woan T echnology will become
subject to a 25% standard enterp rise income tax rate, which would increase our income tax
expenses and could materially reduce our net income and profitability. Our business and
financial performance could also be adversely affected by unfavorable changes in or
interpretation of existing, or promulgation o f new tax laws or regulations applicable to our
business. And any unfavorable changes in tax law could result in additional tax obligations
and expenses.
In addition, we received government grant s in the amount of RMB5.0 million, RMB4.7
million, RMB4.2 million, RMB3.1 million and RM B3.3 million, respectively, for the years
ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
as encouragement for R&D, emplo yment stabilization and contribution to local economy.
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The amounts of and conditions attached to such government grants were determined at the
sole discretion of the relevant PRC authorities. We cannot assure you that we will continue
to receive such government grants or that th ea m o u n to fa n ys u c hg o v e r n m e n tg r a n t sw i l l
not be reduced in the future. Even if we contin ue to be eligible to receive such government
grants, we cannot guarantee that any conditions attached to the grants will be as favorable
to us as they have historically been. Reduction or discontinuation of these government
grants could adversely affect our financi al condition and results of operations.
We are required to adhere to privacy, information security and data protection regulations in
connection with data handling practices, and any security breaches or non-compliance with
such obligations could harm our reputation and business.
Our home robotic system products can be configured and controlled through our
mobile phone app, SwitchBot App, which requires user registration. Collection, storage,
processing and use of personal information and other consumer data subjects us to
governmental regulations and other legal obligations in countries and regions, where we
operate such as GDPR in the European Union, Act on the Protection of Personal
Information in Japan (‘‘APPI’’), and various st ate-level privacy laws in the United States,
see ‘‘Regulatory Overview — B. Japan Laws and Regulations — Laws and Regulations in
Relation to Personal Data Collection’’, ‘‘Regulatory Overview — C. U.S. Laws and
Regulations — Laws and Regulations in Rela tion to Data Privacy’’ and ‘‘Regulatory
Overview — D. Germany and European Union Laws and Regulations — Laws and
Regulations relating to Data Protection’’ in t his prospectus. We may also become subject to
additional regulatory requirements regarding data protection and data privacy, which may
necessitate adjustments to our data framework and incur additional costs.
We are committed to protecting our consumer data. We have adopted security policies
and measures, including encryption technology, to protect our proprietary data and
consumer information. However, companies that collect and retain sensitive and
confidential information are under increasing attack by cybercriminals around the world.
IoT products, being connected to the internet, are particularly vulnerable to cyberattack.
While we implement cybersecurity measures within our products, operations and systems,
our cybersecurity measures may not detect, prevent or control all attempts to compromise
our systems, including distributed denial-o f-service attacks, viruses, Trojan horses,
malicious software, break-ins, phishing attacks, third-party manipulation, security
breaches, employee misconduct or negligence or other attacks, risks, data leakage and
similar disruptions that may jeopardize the security of data 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 and our SwitchBot App, misappropriation of information or data, deletion or
modification of user information, or a denial-of-service or other interruption to our
business operations. As techniques used to obtain unauthorized access to or sabotage
systems change frequently and may not be known until after they are launched against us or
our third-party service providers, there can be no assurance that we will be able to
anticipate, or implement adequate measures to protect against, these attacks. A
cybersecurity incident could lead to unauthorized access, copying, or other misuse of
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personal data about our end consumers, often known as a data breach. The compromised
information may include, for example, account information or information about how our
end consumers use our products. It could also, under certain circumstances, lead to end
consumers’ products and/or th eir smart home functions failing t o function, not functioning
as designed, or exhibiting other unanticipated behavior. Further, while we implement
measures to prevent insider theft including co nfidentiality agreements and monitoring of IT
usage, we may be unable to prevent employees or contractors from misappropriating
personal information relating to our end cons umers and selling it or putting it to some other
unauthorized use. Customers may be entitl ed to notice of that data breach, and may be
entitled to receive, or expect, compensation or services such as credit monitoring. Such data
breaches may also expose us to regulatory investigations, fines and penalties, and may also
harm our credibility with customers.
Our e-commerce platforms partners and our other business partners could also be a
source of security risk to us in the event of a failure of their own products, components,
networks, security systems, and infrastruct ure. In addition, we cannot be certain that
advances in criminal capabilities, new discove ries in the field of cryptography, or other
developments will not cause a compromise or breach of the technology protecting the
networks that access our products and servi ces. Such an event could not only disrupt our
operations, but could also result in unfavora ble publicity and therefore materially and
adversely affect the market’s perception of th e security and reliability of our services and
our credibility and reputation with our customers, which may lead to customer
dissatisfaction and could result in lost sales and increased customer revenue attrition.
Further, changes in regulations relating to transfers of personal data may impact our
growth.
If we fail to comply with various environmental a nd fire safety related laws and regulations, we
may be subject to fines and penalties.
We are subject to national and local environmental protection and fire safety related
laws and regulations applicable to us in the PRC including but not limited to the
Administration Rules on Environmental Protection of Construction Projects ( 《建設項目環
境保護管理條例》), the Environmental Impact Appraisal Law of PRC ( 《中華人民共和國環
境影響評價法》), Pollutant Discharge Permit A dministrative Regulations ( 《排污許可管理條
例》) and Fire Prevention Law of the PRC ( 《中華人民共和國消防法》).
If we fail to comply with the relevant environmental and fire safety related laws and
regulations, we may be liable for correction, fines or penalties or also be ordered to suspend
or terminate the construction if such non-compliance causes material environment pollution
or ecological damage. If any of such penalties are imposed on us, our operations could be
materially and adversely affected and we will in cur significant costs which will negatively
impact our financial performance. We cannot assure you that we will be able to obtain all
the regulatory approvals for our production lines and factories construction projects in a
timely manner, or at all. Delays or failures in obtaining all the requisite regulatory
approvals of such facilities m ay affect our abilities to develop, manufacture and
commercialize our products as we plan.
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We may be subject to fines and penalties as a result of our non-compliance with certain PRC
laws and regulations regarding the social insurance and housing provident fund during the
Track Record Period.
Pursuant to the relevant PRC laws and regulat ions, employers in the PRC are required
to make social insurance and housing provident fund contributions for their employees, and
entities failing to make such contributio ns may be ordered to settle the outstanding
contributions within a prescribed time limit and subject to late payments or fines. During
the Track Record Period and up to the Latest Practicable Date, we did not pay social
insurance and housing provident fund in full for certain full-time employees based on their
actual wages in accordance with the applicable PRC laws and regulations. The aggregate
shortfall of social insurance and housing provident fund contributions amounted to
RMB27.5 million during the Track Record Pe riod. This non-compliance incident was
primarily caused by requests by some of our full-time employees to make contributions to
social insurance and housing provident funds for them based on a lower standard instead of
their actual salaries, as they did not want to bear the full amount of their portion of the
relevant contributions.
According to the Social Insurance Law of the PRC ( 《中華人民共和國社會保險法》)a n d
Regulation on the Administrat ion of Housing Provident Fund ( 《住房公積金管理條例》),
social insurance and housing provident fund are divided into the employer’s contributions
and the employee’s contributions. When full payment of social insurance and housing
provident fund is made, both the employer and employee are required to make their
respective contributions. Such contributions from employee’s part are directly deductible
from the employee’s salary on a monthly basis, which will lead to a reduction in the amount
of the salary received by the employee. There fore, some of our employees were unwilling to
make full contributions to social insurance and housing provident fund based on their
actual salaries.
Our PRC Legal Advisers advised us that: ( i) if we fail to pay social insurance in
accordance with PRC laws and regulations, we may be ordered by the competent PRC
government authority to pay the outstanding balance within a prescribed period of time and
an overdue fine of 0.05% of the total outstanding balance per day from the date of such
failure of payment. If we fail to do so within the prescribed period, we may be subject to an
administrative penalty ranging from one to three times of the total outstanding balance; and
(ii) if we fail to pay the housing provident fu nd in accordance with the Chinese laws and
regulations, the housing provident fund management center may order us to make the
outstanding payment within a prescribed time limit. If the payment is not made within such
time limit, an application may be made to the PRC courts for compulsory enforcement.
T h e r ei sn oa s s u r a n c et h a tw ew i l ln o tb es u b ject to late payments, fines or penalties
imposed by the relevant PRC government aut horities as a result of such non-compliance
incidents, requested by the relevant PRC government authorities to pay the unpaid social
insurance payments or housing provident fund contributions, or any order to rectify such
non-compliance incidents. There is also no assurance that there will be no employee
complaint against us in relation to our failu re to make full social insurance and housing
provident fund contributions. In addition, we may incur additional costs to comply with
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such laws and regulations by the relevan t PRC government authorities. Any such
development may harm our corporate image and may have an adverse effect on our
financial condition and results of operations.
Failure to renew our current leases or locate desi rable alternatives for our leased premises
could adversely affect our business operations.
We lease properties mainly for office and m anufacturing facilities. We may not be able
to extend or renew our current leases on comm ercially reasonable terms, or at all. We
compete with other businesses for premises at certain locations or of desirable sizes, which
m a yr e s u l ti ns i g n i f i c a n t l yi n c r e a s e dr e n t a lp a y m e n t sd u et oh i g hd e m a n df o rt h el e a s e d
properties.
In the event we cannot renew our leases upon expiration of the current terms, we may
be forced to relocate our affected operations. This could disrupt our business and result in
significant relocation expenses. We may not be able to locate desirable alternative sites for
o u ro f f i c e sa so u rb u s i n e s sc o n t i n u e st og r o w .F o rt h el e a s e ds i t e su s e da st h er e g i s t e r e d
address of our PRC subsidiaries, we risk being included in the list of enterprises with
abnormal business operations if we fail to ex tend such leases or properly relocate the
registered address and file with local authorities.
We may be involved in legal proceedings and commercial disputes, which could materially
affect on our business, financial condition and results of operations.
We may be involved in legal or other proceedings arising out of our operations from
time to time, which can expose us to reputationa l risks and significant liabilities. Disputes
may arise with various parties involved in our business operations, including customers,
suppliers, employees, logistics service provid ers, insurers, and banks. These disputes have
the potential to escalate into legal or other pr oceedings, including threats of legal action.
Such proceedings can damage our reputation, incur substantial costs, and divert our
resources and management’s attention. Additionally, in the course of our operations, we
may encounter compliance issues that could r esult in administrative proceedings and
unfavorable outcomes, leading to liabilities a nd delays in our production or product launch
schedules. The outcome of these legal proceedings is uncertain, and any negative outcome
could have a material and adverse impact on our business, financial condition, and
operational results.
Our manufacturing operations are subject to increasing costs and labor challenges that may
adversely impact our operations.
All of our manufacturing operations are curre ntly located at our production facilities
in Huizhou, Guangdong Province, and our supp ly chain is primarily located in the same
region. While the local economy has experien ced rapid growth, such economic growth can
lead to growth in the money supply and rising inflation. General inflation has led to
increases in labor, transportation and commodity costs. If utility and supply costs increase
at a higher rate than our prices, particularly if combined with adverse changes in foreign
currency exchange rates, we may not realize the expected cost efficiencies of our current
manufacturing location.
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In addition, as the regional economy continues to grow, average wages are also
expected to increase. We expect that our staff costs, including wages and employee benefits,
will continue to rise. Our labor costs may further increase if the labor supply decreases or if
job availability rates increase sharply due to a sudden increase in manufacturers in regions
where our facilities are located. New labor la ws, employee benefit systems or labor taxes
implemented by local governments may also a ffect our labor costs. We therefore cannot
provide assurances that we will be able to hire workers at the same cost as in the past.
U n l e s sw ea r ea b l et op a s st h e s ei n c r e a s e ds t a f fcosts to our customers by raising the price of
our products and services, ou r profit margin may shrink.
Consistent product quality depends partly on middle management supervision,
including quality control supervisors and pr oduction line supervisors. The availability of
skilled middle management capabl e of directing manufacturing and adapting quickly to new
production processes varies considerably in our manufacturing regions. In areas where
competition for middle management is inte nse, we may encounter increased costs in
recruitment, training and retention. If we are unable to retain or attract middle
management at a reasonable cost, or at all, we may encounter delays or slowdowns in
our manufacturing schedule and deterioration in product quality. Thus, if we are unable to
manage these cost increases and labor challenges effectively, our business, financial
condition and results of operations may be materially and adversely affected.
Our limited insurance coverage could expose us to significant costs and business disruption.
Any uninsured occurrence of business disruption, litigation or natural disaster, or
significant damages to our uninsured equipme nt or facilities could have a material adverse
effect on our results of operations. Our current insurance coverage may not be sufficient to
prevent us from any loss and there is no certainty that we will be able to successfully claim
our losses under our current insurance policy on a timely basis, or at all. It may also be
difficult for us to find insurance coverage for some of our business activities such as credit
insurance for our overseas business operations. If we incur any loss that is not covered by
our insurance policies, or the compensated amount is significantly less than our actual loss,
our business, financial condition and results of operations could be materially and adversely
affected. If such risks materialize, we may also suffer substantial losses.
We may experience disruptions and delays in local and global supply chain and logistics, which
could have material and adverse impact on our business operation.
As of the Latest Practicable Date, we operated one production base in Huizhou,
Guangdong Province, the PRC. Further, we operate our warehouses for storing
semi-finished and finished products and certain components and raw materials, and we
engage third-party logistics service providers for the delivery of our products to customers.
We rely on the timely supply of our raw materials in order to carry out our production
plans as scheduled. Any delays or disruptions in raw material supplies from our suppliers
may have a material and adverse impact on ou r ability to meet the market demands and our
marketing and sale of our products and services. In addition, any natural or man-made
disasters or other unanticipated catastrophic events, including adverse weather, fires,
technical or mechanical difficulties, storms, explosions, earthquakes, strikes, acts of
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terrorism, wars and outbreaks of pandemics could disrupt our transportation channels and
impair the operations of our suppliers, and i mpede our ability to manufacture and deliver
our products to customers in a timely manner. Any disruption or delay in our production
and product and services deliver y in the future could have an adverse impact on our ability
to produce sufficient quantities of products and our ability to meet the needs of our
customers. In such cases, our business, fina ncial condition, results of operations and
prospects could be materially and adversely affected.
Fluctuations in shipping costs may have a material adverse effect on our operating results and
profitability.
During the Track Record Period, we incurre d shipping costs primarily related to (i)
courier services for delivering products directly to our customers and transporting products
to the warehouses of e-commerce platforms, an d (ii) last-mile delivery services provided by
e-commerce platforms, which deliver products from their warehouses to our customers. In
addition, we incurred storage fees as part of the fulfillment services provided by certain
e-commerce platforms such as Amazon, which handles product receiving, storage, packing,
shipping, and returns for orders. For the years ended December 31, 2022, 2023 and 2024
and the six months ended June 30, 2024 and 2025, our transportation and storage costs
amounted to RMB33.5 million, RMB36.9 million, RMB55.3 million, RMB19.8 million and
RMB27.6 million, respectively, accounting for 18.5%, 16.3%, 18.8%, 14.5% and 15.2% of
our cost of sales in the respective periods, res pectively. As our business continue to grow,
we anticipate a corresponding increase in our shipping costs and storage fees. Furthermore,
we may experience fluctuations in shipping costs in the future, which could be attributable
to various factors beyond our control, including potential suspension and closure of
services by logistic service providers, increases in labor costs or shortages of labor for these
service providers, and unexpected events such as natural disasters or pandemics that could
restrict the free movement of goods around the regions where our customers are located,
among others. As a result, our results of opera tions and profitability could be materially
and adversely affected.
We may be adversely affected by any significant disruption to the warehouses where we store
our products and raw materials.
We primarily store our products in warehouses operated by Amazon and other
third-party service providers, and our raw mat erials primarily in warehouses at or near our
manufacturing facilities. Any significant downtime arising from major and unexpected
repairs or servicing of any of these warehouses that result in major disruptions to our
operations could cause us to be unable to store our products or raw materials for an
extended period and require us to make signif icant unanticipated capital expenditures
and/or delay our production or delivery of products.
If any one or more of the above risks were to materialize, our financial condition and
results of operations may be adversely affected. The warehouses where we store our
products and raw materials are also subject to a number of risks, such as fires, floods,
explosions, natural disasters, third-party interference, disruptions in power supply or power
outages, war, terrorism and communal unrest, w hich could lead to a significant disruption
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to our operations or result in significant damages to our warehouses or inventories. These
hazards could also result in personal injury or wrongful death claims and other damage to
our warehouses. These disruptions may mat erially and adversely affect our business,
financial condition and results of operations.
Our business growth and results of operations may be materially and adversely affected by
macroeconomic uncertainties, natural disaste rs, health epidemics, and other force majeure
events beyond our control.
Our business, results of operations, fi nancial condition and prospects may be
materially and adversely affected by uncertainties about global and regional
macroeconomic conditions, including fluctuat ions in interest rates, inflation levels,
unemployment, labor and healthcare costs, consumer confidence, and access to credit.
Additionally, our operations are vulnerable to disruptions caused by events beyond our
control, including:
. Natural disasters such as floods, earthquakes, sandstorms, snowstorms, fires, or
droughts;
. Outbreaks of widespread health epidemics or pandemic diseases such as SARS,
Ebola, Zika, H5N1 avian flu, H1N1 influenza, or COVID-19; and
. Acts of war, terrorism, or other social disruptions.
These events may seriously disrupt public life and economic activities in affected areas,
impacting our R&D activities, manufacturing processes, commercialization initiatives,
supply chain, and overall business operations. For example, COVID-19 has materially and
adversely affected the global economy. Such events could also harm the global economy
generally and potentially damage relationships with our customers and suppliers, disrupting
product procurement, and causing our business to suffer in ways we cannot anticipate. Any
of these outcomes could have a material adver se effect on our sales, overall results of
operations, and financial condition.
Our operations may be subject to transfer pricing adjustments by competent authorities.
Our tax position may be subject to review and possible challenge by the relevant
government authorities and any possible change in laws. If our tax position is subject to
review and possible challenge by the relevant government authorities or there is a change in
the tax policy and relevant tax laws in the relevan t jurisdictions, it may adversely affect our
results of operations and financial position. In preparing our financial information, our
Directors have reviewed and assessed our transfer pricing risk as it is possible that the tax
authorities may challenge our tr ansfer pricing arrangements.
There can be no assurance that we will not be found to be operating in breach of the
relevant transfer pricing laws and regulations, or that such laws will not be modified, which,
as a result, may require changes to our transfer pricing arrangements. Any determination of
i n c o m er e a l l o c a t i o n so rm o d i f i c a t i o n so ft h er elevant transfer pricing laws and regulations
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could result in an income tax assessment and other relevant charges on the portion of
income deemed to be derived from the taxing ju risdiction that so reallocates the income or
modifies its relevant transfer pricing-related laws.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
We are subject to regulatory requirements under laws and regulations on overseas offerings
and listings issued by PRC government authorities.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures for
Overseas Securities Offering and Listing by Domestic Companies ( 《境內企業境外發行證券
和上市管理試行辦法》) (the ‘‘Overseas Listing Trial Measures’’) along with five relevant
guidelines, which became effective on March 31, 2023. The Overseas Listing Trial Measures
require, among others, that PRC domestic com panies that seek to initially offer and list
securities in overseas markets, either directly or indirectly, shall file the required documents
with the CSRC within three business days after its application for overseas listing is
submitted, and shall file the required documents with the CSRC within three business days
after future offering. We will file with CSRC within a specific time limit as required by the
Overseas Listing Trial Measures. However , we cannot assure you that we could complete
such filing in a timely manner or at all, the f ailure of which may restrict our ability to
complete the offering and have a material and adverse effect on our business, prospects,
results of operations, financial condition, and cash flows.
On February 24, 2023, the CSRC, the MOF, the National Administration of State
Secrets Protection of China, and the National Archives Administration of China published
the Provisions on Strengthening Confidentiality and Archives Administration of Overseas
Securities Offering and Listing by Domestic Companies ( 《關於加強境內企業境外發行證券
和上市相關保密和檔案管理工作的規定》) (the ‘‘Archives Rules’’), which came into effect on
March 31, 2023. The Archives Rules require that, in relation to the overseas securities
offering and listing activities of domestic ente rprises, either in direct or indirect form, such
domestic enterprises, as well as securities co mpanies and securities service institutions
providing relevant securities services, are required to strictly comply with relevant
requirements on confidentiality and ar chives management, establish a sound
confidentiality and archives system, and take necessary measures to implement their
confidentiality and archiv es management responsibilitie s. The interpretation and
implementation of the Archives Rules may k eep evolving, failure to comply with which
may materially affect our business, results of operations or financial conditions.
The interpretation, application, and enforcement of the relevant laws and regulations
are still evolving and subject to change. We are closely monitoring how they will affect our
operations and our future financing activities.
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Changes in economic, regulatory, political and social conditions in jurisdictions where we have
material business operations and globally could have a material and adverse effect on our
results of operations, financial performance and business prospects.
We have significant business operations across multiple jurisdictions, including
manufacturing facilities and he adquarters in various regions. Accordingly, our results of
operations, financial performance and business prospects may be influenced by the
economic, regulatory, political and social conditions in these jurisdictions. Governments
worldwide have implemented, and may continue to introduce, various policies and measures
to encourage economic growth and guide the allocation of resources. Our industry in
general is affected by macro-economic factors, including international, national, regional
and local economic conditions, trade relationships, employment levels, consumer demand
and discretionary spending. Any changes in these factors across the jurisdictions where we
have material business operations, as well as globally, may have material and adverse effect
on our results of operations, financial performance and business prospects.
We are subject to the currency exchange regulatory system.
The conversion of Renminbi is subject to ap plicable laws and regulations in the PRC.
It cannot be guaranteed that under a certain ex change rate, we will have sufficient foreign
exchange to meet our foreign exchange requ irements. Under the current PRC foreign
exchange regulatory system, foreign exchan ge transactions under the current account
conducted by us, including the payment of dividends, do not require advance approval from
the SAFE, but we are required to present docum entary evidence of such transactions and
conduct such transactions at designated foreign exchange banks within China that have the
licenses to carry out foreign exchange business.
Under existing foreign exchange regulations, following the completion of the Global
Offering, we will be able to pay dividends in fo reign currencies without prior approval from
the SAFE by complying with certain procedural requirements. However, there is no
assurance that these foreign exchange policie s regarding payment of dividends in foreign
currencies will continue in the future. In addi tion, any insufficiency of foreign exchange
may restrict our ability to pay dividend to shareholders or to satisfy any other foreign
exchange requirements, capitalize our capita l expenditure plans, and even our results of
operations, financial performance and business prospects may be affected.
Holders of our H Shares may be subject to PRC income tax obligations.
Under the current PRC tax laws and regulations, non-PRC resident individuals and
non-PRC resident enterprises are subject to different tax obligations with respect to the
dividends paid to them by us and the gains realized upon the sale or other disposition of H
Shares.
Non-PRC resident individuals are require d to pay PRC individual income tax at a 20%
rate for the income derived in China under the Individual Income Tax Law of the PRC ( 《中
華人民共和國個人所得稅法》) (‘‘IIT Law’’) and its implementation guidelines. Accordingly,
we are required to withhold such tax from dividend payments, unless applicable tax treaties
between China and the jurisdiction in which the foreign individual resides reduce or provide
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an exemption for the relevant tax obligations. However, pursuant to the Circular on Certain
Policy Questions Concerning Individual Income Tax ( 《財政部、國家稅務總局關於個人所得
稅若干政策問題的通知》)( C a iS h u iZ i[ 1 9 9 4 ]N o .0 2 0 )i s s u e db yt h eM O Fa n dS A To nM a y
13, 1994, the income gained by individual foreigners from dividends and bonuses of
enterprises with foreign investment are exe mpted from individual income tax for the time
being. In addition, under the IIT Law and its implementation regulations, non-PRC
resident individual holders of H Shares are subject to individual income tax at a rate of 20%
on gains realized upon the sale or other dispos ition of H Shares. However, pursuant to the
Circular of Declaring that Individual Income Tax Continues to be Exempted over Income
of Individuals from the Transfer of Shares ( 《關於個人轉讓股票所得繼續暫免徵收個人所得
稅的通知》) (Cai Shui Zi [1998] No. 61) issued by the MOF and the SAT on March 30, 1998,
from January 1, 1997, the income of individuals from the transfer of the shares of listed
enterprises continues to be exempted from individual income tax.
As of the Latest Practicable Date, no aforesa id provisions has expressly provided that
individual income tax shall be levied on non-PRC resident individual holders on the transfer
of shares in PRC resident enterprises listed on overseas stock exchanges, and to our
knowledge, no such individual income tax was levied by PRC tax authorities in practice.
However, there is no assurance that the PRC tax authorities will not change these practices
which could result in levying income tax on no n-PRC resident individual holders on gains
from the sale of H Shares.
For non-PRC resident enterprises that do no t have establishments or premises in the
PRC, and for those that have establishments or premises in the PRC but whose income is
not related to such establishments or premis es, under the EIT Law and its implementation
regulations, dividends paid by us and gains realized by such foreign enterprises upon the
sale or other disposition of H Shares are subject to PRC EIT at a 10% rate. In accordance
with the Circular on Issues Relating to Withholding of Enterprise Income Tax by PRC
Resident Enterprises on Dividends Paid to Overseas Non-PRC Resident Enterprise
Shareholders of H Shares ( 《關於中國居民企業向境外H股非居民企業股東派發股息
代扣代
繳企業所得稅有關問題的通知》) (Guo Shui Han [2008] No. 897) issued by SAT on
November 6, 2008, the withholding tax rate for dividends payable to non-PRC resident
enterprise holders of H Shares will be 10% and we intend to withhold tax at a rate of 10%
from dividends paid to non-PRC resident enterprise holders of our H Shares (including
HKSCC Nominees). Non-PRC resident enterpri ses that are entitled to be taxed at a reduced
rate under an applicable income tax treaty o r 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.
Despite the arrangements mentioned a bove, the applicable PRC tax laws and
regulations, as well as the interpretation a nd application of existing applicable PRC tax
laws and regulations may be evolving and s ubject to change. New taxes may be imposed
which may materially and adversely affect the value of your investment in our H Shares.
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You may experience difficulties in effecting service of the legal process upon us and our
management and seeking recognition and enforcement of judgments against them across
jurisdictions.
The legal systems across different jurisdic tions vary significantly. Therefore, the
effecting service of legal process and the process of recognizing and enforcing any
judgments may be different across jurisdictions and are subject to treaties or arrangements
providing for the recognition and enforcement of judgments made by courts of other
jurisdictions. As a result, investors may experience difficulties to effect service of process
and/or recognize and enforce any judgments for disputes brought in other jurisdictions.
We are a company incorporated under the laws of the PRC, and the vast majority of
our assets are located in the PRC. Substantially all of our Directors and senior management
reside within the PRC, and the assets of our Directors and senior management are likely to
be located within mainland China. As a result, it may be difficult for you to effect service of
process in places outside the PRC upon us or these persons, or to bring an action in Hong
Kong against us or these individuals. Moreover, the PRC has not entered into treaties with
certain other jurisdictions that provide for the reciprocal recognition and enforcement of
judicial rulings and awards.
An original action may only be brought in the PRC against us or our Directors and
senior management if the actions are not required to be arbitrated by the PRC laws and
upon satisfaction of the conditions for commencing a cause of action pursuant to the civil
procedure laws in the PRC.
Adverse fluctuations in foreign exchange rates, particularly a continued depreciation of the
Japanese yen, may materially and adversely affect our business, financial condition, and
results of operations
During the Track Record Period, we derive d a material portion of our revenue from
sales in Japan and received customer paymen ts primarily in Japanese yen. However, a
substantial portion of our costs, including manufacturing, component procurement, and
logistics expenses, are denominated in foreig n currencies, particularly in RMB. As a result,
we are exposed to risks associated with fluctuations in foreign exchange rates.
If the Japanese yen weakens further agains t other major currencies, including RMB,
our revenue, when converted into these currencies for reporting or settlement purposes, will
decrease relative to our costs. This mismatch may erode our profit margins and adversely
affect our results of operations. In addition, a weaker Japanese yen could reduce the
purchasing power of Japanese end consumer s and increase the cost of imported goods,
which may in turn dampen consumer demand for our products in Japan.
Although we have implemented certain measures including entering into foreign
currency derivatives to manage foreign exchang e risk, such measures may not be effective or
feasible in all circumstances. Continued depr eciation of the Japanese yen could materially
and adversely impact our profitability, financ ial position, and competitive standing in the
Japanese market.
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Our business may be affected by downturns in the economy (such as the recent recessionary
trends in the Japanese economy), economic uncertainty, and other factors affecting
discretionary consumer spending
Our revenue is largely dependent on consumer demand for home robotic system
products, which are typically discretionary purchases. Extended economic downturns,
inflationary pressures, or continued uncer tainty in global and regional economies —
especially in Japan, one of our key markets — may reduce consumer willingness to spend on
non-essential products, including our products.
In early 2025, Japan showed signs of recessionary pressure, with weakening consumer
sentiment, stagnant wage growth, and increased cost of living concerns. If macroeconomic
conditions in Japan continue to deteriorate, it could result in reduced consumer spending,
delayed purchase decisions, or a shift in consumer priorities away from technology
upgrades and home automation — directly impacting demand for our products.
Any material reduction in discretionary consumer spending in Japan, whether due to
macroeconomic instability, empl oyment uncertainty, or decreased disposable income, may
lead to lower sales volumes, slower inventory t urnover, or increased pricing pressure. If we
are unable to effectively respond to such changes in consumer behavior, our business,
financial condition, and results of operations may be materially and adversely affected.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares and the liquidity and market price of
our H Shares may be volatile.
Prior to the completion of the Global Offering, there has been no public market for our
H Shares. There can be no guarantee that an active trading market for our H Shares will
develop or be sustained after the completion of the Global Offering. The Offer Price is the
result of negotiations between our Company and the Overall Coordinators (for themselves
and on behalf of the Underwriters), which may not be indicative of the price at which our H
Shares will be traded following the completion of the Global Offering. The market price of
our H Shares may drop below the Offer Price at any time after completion of the Global
Offering.
The trading price of our H Shares may be volatile, which could result in substantial losses to
you.
The trading price of our H Shares may be volatile and could fluctuate widely in
response to factors beyond our control. In par ticular, the performance and fluctuation of
the market prices of other companies offer sim ilar products or operate in the same/related
industries that have listed their securities in Hong Kong may affect the volatility in the price
of and trading volumes for our H Shares. A number of mainland China-based companies
have listed their securities, and some are in the process of preparing for listing their
securities, in Hong Kong. The share price of some of these companies have experienced
significant volatility, including significant pr ice declines after their initial public offerings.
The trading performances of the securities of these companies at the time of or after their
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offerings may affect the overall investor sentiment towards mainland China-based
companies listed in Hong Kong and consequently may impact the trading performance of
our H Shares. Pursuant to the applicable PRC law, within one year following the Listing
Date, all existing Shareholders (including the Pre-IPO Investors) could not dispose of any
of the Shares held by them. Due to such lock-up requirement, the liquidity and trading
volume of the H Shares in the short term followi ng the Global Offering may be significantly
affected. These factors may significantly a ffect the market price and volatility of our H
Shares, regardless of our actual operating performance.
Future sales or perceived sales of substantial amounts of our H Shares in the public market
could have a material and adverse effect on the price of our H Shares and our ability to raise
additional capital in the future.
The market price of our H Shares could decline as a result of future sales of a
substantial number of our H Shares or other securities relating to our H Shares in the public
market, the issuance of new shares or other secu rities, or the perception that such sales or
issuances may occur. Future sales, or perceived sales, of substantial amounts of our
securities, including any future offerings, could also materially and adversely affect our
ability to raise capital at a specific time and on terms favorable to us. In addition, our
Shareholders may experience dilution in their holdings if we issue more securities in the
future. New shares or shares-linked securities issued by us may also confer rights and
privileges that take priority over those conferred by the H Shares.
You will incur immediate and substantial dilu tion and may experience further dilution
if we issue additional s hares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net
tangible asset value. To expand our business, we may consider offering and issuing
additional shares in the future. Purchasers of the Offer Shares may experience dilution in
the net tangible asset value per Share of their Shares if we issue additional shares in the
future at a price that is lower than the net tangible asset value per Share at that time.
We cannot guarantee that our new business initiatives and use of proceeds plan will be
successfully implemented or generate revenue and profit as we expected.
As a provider of home robotic system products globally, we continue to implement
various growth strategies and plans to dive rsify our business. For instance, we launched
lock robots, curtain robots and door robots, all designed to enhance home automation and
user experience. Additionally, we are committed to continuously expanding our product
l i n et om e e tm a r k e td e m a n df o rs m a r th o m esolutions while building a self-sustaining
ecosystem. We plan to use the net proceeds from the Global Offering to enhance our R&D
capabilities, and expand our sales channel s and brand awareness, among others. See
‘‘Business — Our Business Strategies’’ and ‘‘Future Plans and Use of Proceeds’’ for further
details. However, expanding into new busin esses involves risks and challenges. These
business initiatives are new and evolving, s ome of which may prove unsuccessful. It may
also take a longer time than expected for us to develop the technologies and build market
RISK FACTORS
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acceptance of our products and services, and we may not have sufficient experience in
executing these new business initiatives effectiv ely. Further, we will incur substantial costs
on R&D, sales and marketing, personnel and compliance for developing, conceptualizing
and commercializing our new products and services. We cannot assure you that any of these
new business initiatives will achieve our expected market acceptance and generate revenue
or profit. If our efforts fail to enhance our m onetization abilities, we may not be able to
maintain or increase our revenues or recover a ny associated costs, and our business and
results of operations may be materially and adversely impacted.
Any possible conversion of our Unlisted Shares into H Shares in the future could increase the
supply of our H Shares in the market and negatively impact the market price of our H Shares.
Subject to the approval by the CSRC, any of our Unlisted Shares may be converted
into H Shares, and such converted Shares may be listed or traded on an overseas stock
exchange. Any listing or trading of the converted Shares on an overseas stock exchange
shall also comply with the regulatory procedures, rules and requirements of such stock
exchange. No class shareholder voting is required for the listing and trading of the
converted Shares on an overseas stock ex change. However, the PRC Company Law
provides that in relation to the public offering of a company, the shares of that company
which are issued prior to the public offering shall not be transferred within one year from
the date of the listing. Therefore, upon obtaining the requisite approval, shares currently
held on our domestic share register may be traded, after the conversion, in the form of H
Shares on the Stock Exchange after one year of the Global Offering, which could further
increase the supply of our H Shares in the market and could negatively impact the market
price of our H Shares.
Our Controlling Shareholder Group has subst antial influence over our Company and their
interests may not be aligned with the interests of other Shareholders.
Immediately upon the completion of the Glo bal Offering, our Controlling Shareholder
Group will continue to have significant influence over our business and affairs, including
decisions of mergers and acquisition, disposit ion of assets, issuance of additional Shares or
other equity securities, timing and amount of dividend payments, and our management.
There may be a conflict between the Controllin g Shareholder Group’s interests and your
interests. In addition, without the approval of the Controlling Shareholder Group, we could
be prevented from entering into transactions that could be beneficial to us. This
concentration of ownership may also discourage, delay or prevent a change in control of
our Company, which could deprive our Shareholders of an opportunity to receive a
premium for the Shares as part of a sale of our Company and may significantly reduce the
price of our H Shares.
There can be no assurance that we will declare and distribute any amount of dividends in the
future.
As a holding company, our ability to declar e future dividends will depend on the
availability of dividends, if any, received f rom us and our subsidiaries. Under PRC law and
the constitutional documents of our PRC operating subsidiaries, dividends may be paid
only out of distributable profits, which refe r to after-tax profits as determined under PRC
RISK FACTORS
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GAAP less any recovery of accumulated losses and required allocations t o statutory capital
reserve funds. Any distributable profits that are not distributed in a given year are retained
and become available for distribution in subsequent years. The calculation of our
distributable profits under PRC GAAP differs in many aspects from the calculation
under IFRS Accounting Standards. In addition, as stipulated by our Articles, distributable
profits are recognized as our after-tax profit determined under PRC GAAP or IFRS
Accounting Standards, whichever is lower, less any recovery of accumulated losses and
appropriations to statutory and other reserves that we are required to make. As a result, our
Company and our subsidiaries may not be able to pay a dividend in a given year if our
Company or our subsidiaries do not have distr ibutable profits as determined under PRC
GAAP even if they have profits as determined under IFRS Accounting Standards. See
‘‘Financial Information — Dividends’’ for details of our dividend policy.
There can be no assurance that we will declare and distribute any amount of dividends
in the future. The declaration, payment and amount of any future dividends are subject to
the discretion of our Directors, after taking into account our results of operations, financial
conditions, cash requirements and availability, and other factors as they may deem relevant,
and subject to the approval at a Shareholders’ meeting. We may not have sufficient or any
profits to enable us to distribute dividends to our Shareholders in the future, even if our
financial statements indicate that our operations have been profitable.
Certain statistics contained in this prospectus are derived from a third-party report and
publicly available official sources.
This prospectus, particularly the sectio n headed ‘‘Industry Overview’’, contains
information and statistics relating to the home robot industry and home robotic system
industry internationally. Suc hi n f o r m a t i o na n ds t a t i s t i c sh a v eb e e nd e r i v e df r o mv a r i o u s
official governments and other publications and from a third-party report commissioned by
us. However, we cannot guarantee the quality or reliability of information and statistics
from these official governments sources. The in formation from official government sources
has not been independently verified by us, the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, any of the
Underwriters, any of our or their respective d irectors, officers or representatives or any
other parties involved in the G lobal Offering and no representation is given as to their
accuracy. In addition, we cannot assure you that the information from official government
sources is stated or compiled on the same basis or with the same degree of accuracy as or
consistent with similar statistics presented elsewhere, and such information may not be
complete or up-to-date. For these reasons, the information from various government
sources contained in this prospectus may not be accurate and should not be given undue
reliance as a basis for making your investment in our H Shares. In any event, you should
consider carefully the importance placed on s uch information or statistics from these
official government sources.
RISK FACTORS
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Forward-looking statements contained in this document are subject to risks and uncertainties.
This document contains certain statements and information that are forward-looking
and uses forward-looking terminology such as ‘‘a im’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘can’’,
‘‘could’’, ‘‘continue’’, ‘‘estimate’’, ‘‘going forward’’, ‘‘intend’’, ‘‘plan’’, ‘‘project’’, ‘‘potential’’,
‘‘predict’’, ‘‘seek’’, ‘‘expect’’,‘‘may’’, ‘‘might’’, ‘‘ought to’’, ‘‘should’’, ‘‘would’’ or ‘‘will’’ and
similar expressions. These statements are, by their nature, subject to significant risks and
uncertainties. Prospective investors are cau tioned that reliance on any forward-looking
statement involves risk and uncertainties and that, even if the Directors believe the
assumptions related to those forward-looking statements are reasonable, any or all of those
assumptions could prove to be inaccurate and as a result, the forward-looking statements
based on those assumptions could also be incorrect.
The risks and uncertainties in this regard co nsist of those identified in the risk factors
discussed above. In light of these and other r isks and uncertainties, the disclosure of
forward-looking statements in this document should not be regarded as representations by
our Company that the plans and objectives will be achieved, and investors should not place
undue reliance on such statements. Past performance is no guarantee of future results. Our
Company does not undertake any obligation to update publicly or release any revisions of
any forward-looking statements, whether as a r esult of new information, future events, or
otherwise. For details of these forward-looking statements including the associated risks,
see ‘‘Forward-looking Statements.’’
You should read the entire prospectus carefu lly, and we strongly caution you not to place any
reliance on any information contained in press articles and other media regarding us and the
Global Offering.
We strongly caution you not to rely on any information contained in press articles or
other media regarding us and the Global Offering. Prior to the publication of this
prospectus, there has been press and media coverage regarding us, our business, our
industry, and the Global Offering. There may be additional media coverage regarding us,
our business, our industry, and the Global Offering after the date of this prospectus but
prior to the completion of the Global Offering. Such press and media coverage may include
references to certain information that does not appear in this prospectus, including certain
operating and financial information and projections, valuations and other information.
Neither our Company nor any other person invo lved in the Global Offering has authorized
the disclosure of any such information in the press or media, and none of us accepts any
responsibility for any such press or media coverage or the accuracy or completeness of any
such information or publication. We make no representation as to, and do not accept any
responsibility for, the approp riateness, accuracy, completeness or reliability of any such
information or publication. To the extent that any such information is inconsistent or
conflicts with the information contained in thi s prospectus, we disclaim responsibility for it,
and you should not rely on such information.
RISK FACTORS
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In preparation for the Global Offering, we have applied to the Stock Exchange for the
following waivers from strict compliance with t he relevant provisions of the Listing Rules.
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, an issuer must have a sufficient
management presence in Hong Kong. This will normally mean that at least two of its
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 sufficient management presence
in Hong Kong for the purposes of Rules 8.12 and 19A.15 of the Listing Rules.
Our Group’s management headquarters, senior management, business operations and
assets are primarily based and will continue to be based outside Hong Kong, in mainland
China. The Directors consider that the appointment of 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.
Accordingly, we have applied for, and the S tock Exchange has granted, a waiver from
strict compliance with Rules 8.12 and 19A.15 of the Listing Rules. We will ensure that there
is an effective channel of communication between us and the Stock Exchange in accordance
with paragraph 10 of Chapter 3.10 of the Guide by way of the following arrangements:
(a) pursuant to Rule 3.05 of the Listing Rules, our Company has appointed and will
continue to maintain two authorised representatives who shall act at all times as
the principal channel of communication with the Stock Exchange. Each of our
authorised representatives will be read ily contactable by the Stock Exchange by
telephone and/or e-mail to deal promptly w ith enquiries from the Stock Exchange.
Both of our authorised representatives are authorised to communicate on our
behalf with the Stock Exchange. At prese nt, our two authorised representatives
are Mr. Hu Zhidong ( 胡治東) (‘‘Mr. Hu’’), our executive Director and chief
financial officer, and Mr. Chung Ming Fai ( 鍾明輝) (‘‘Mr. Chung’’), our joint
company secretary;
(b) pursuant to Rule 3.20 of the Listing Rules, each Director will provide his/her
contact information (including their mobile phone numbers, office phone
numbers and e-mail addresses (if available)) to the Stock Exchange and to the
authorised representatives. This will ensure that the Stock Exchange and the
authorised representatives should have means for contacting all Directors
promptly at all times as and when required;
WAIVERS FROM STRICT COMPLIANCE W ITH THE HONG KONG LISTING RULES
–9 7–


--- page 108 ---
(c) each Director who is not ordinarily resident in Hong Kong possesses or can apply
for valid travel documents to visit Hong Kong and can meet with the Stock
Exchange within a reasonable period;
(d) pursuant to Rule 3A.19 of the Listing Rules, our Company has retained the
services of Quam Capital Limited as compliance adviser (the ‘‘Compliance
Adviser’’), who will act as an additional channel of communication with the Stock
Exchange. The Compliance Adviser will pr ovide our Company with professional
advice on ongoing compliance with the Listing Rules. We will ensure that the
Compliance Adviser has prompt a ccess to our Company’s authorised
representatives and Directors. In turn, they will provide the Compliance
Adviser with such information and assistance as the Compliance Adviser may
need or may reasonably request in connection with the performance of the
Compliance Adviser’s duties. The Compliance Adviser will also provide advice to
our Company when consulted by our Company in compliance with Rule 3A.23 of
the Listing Rules; and
(e) meetings between the Stock Exchange an d the Directors can be arranged through
the authorised representatives or the Compliance Adviser, or directly with the
Directors within a reasonable time fram e. We will inform the Stock Exchange as
soon as practicable in respect of any change in the authorised representatives, the
Directors and/or the Compliance Adviser in accordance with the Listing Rules.
JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, the company secretary must be an
individual who, by virtue of his/her academic or professional qualifications or relevant
experience, is, in the opinion of the Stock Exchange, capable of discharging the functions of
company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in th e 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).
WAIVERS FROM STRICT COMPLIANCE W ITH THE HONG KONG LISTING RULES
–9 8–


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Pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing ‘‘relevant
experience,’’ the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he/she
played;
(b) familiarity with the Listing Rules and othe r relevant law and regulations including
the SFO, Companies Ordinance, Companies (Winding Up and Miscellaneous
Provisions) Ordinance, and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum
requirement under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Our Company appointed Mr. Hu, our executive Director and chief financial officer,
and Mr. Chung of SWCS Corporate Services Group (Hong Kong) Limited, as joint
company secretaries of our Company. See the section headed ‘‘Directors and Senior
Management — Joint Company Secret aries’’ for their biographies.
Mr. Chung is a member of The Hong Kong Chartered Governance Institute, and
therefore meets the qualification requirements under Note 1 to Rule 3.28 of the Listing
Rules and is in compliance with Rule 8.17 of the Listing Rules.
The Company’s principal bus iness activities are outside Hong Kong. We believe that it
would be in the best interests of our Company and the corporate governance of our Group
to have as its joint company secretary a person such as Mr. Hu, who is our chief financial
officer and executive Director, and who has day-to-day knowledge of our Company’s
affairs. Mr. Hu has the necessary nexus to the Board and close working relationship with
the management of our Company in order to perform the function of a joint company
secretary and to take the necessary actions i n the most effective and efficient manner.
Accordingly, while Mr. Hu does not possess th e academic or professional qualifications
required of a company secretary under Rules 3.28 and 8.17 of the Listing Rules, our
Directors believe that Mr. Hu is capable of discharging the functions of a joint company
secretary with the assistance of Mr. Chung, who meets the requirements under Rule 3.28 of
the Listing Rules.
Our Company has applied for, and the Stock Exchange has granted, a waiver from
strict compliance with Rules 3.28 and 8.17 of t he Listing Rules for a three-year period from
the Listing Date on the conditions that: (i) Mr. Chung is appointed as a joint company
secretary to assist Mr. Hu in discharging his functions as a company secretary and in
gaining the relevant experience under Rule 3.28 of the Listing Rules; (ii) the waiver will be
revoked immediately if Mr. Chung, during the three-year period, ceases to provide
assistance to Mr. Hu as a joint company secretary, or if there are material breaches of the
Listing Rules by our Company.
WAIVERS FROM STRICT COMPLIANCE W ITH THE HONG KONG LISTING RULES
–9 9–


--- page 110 ---
In addition, Mr. Hu will comply with the annual professional training requirement
under Rule 3.29 of the Listing Rules and will enhance his knowledge of the Listing Rules
during the three-year period from the Listing Date. Our Company will further ensure that
Mr. Hu has access to the relevant training and support that would enhance his
understanding of the Listing Rules and the duties of a company secretary of an issuer
listed on the Stock Exchange. Before the end of the three-year period, the qualifications and
experience of Mr. Hu and the need for on-going assistance of Mr. Chung will be further
evaluated by our Company. We will liaise with the Stock Exchange before the end of the
three-year period to enable it to assess whether Mr. Hu, having benefited from the
assistance of Mr. Chung for the preceding three years, will have acquired the skills
necessary to carry out the duties of company secretary and the relevant experience within
t h em e a n i n go fN o t e2t oR u l e3 . 2 8o ft h eL i s t i n gR u l e ss ot h a taf u r t h e rw a i v e rw i l ln o tb e
necessary.
For details of Mr. Hu and Mr. Chung’s biographies, please refer to the section headed
‘‘Directors and Senior Management’’ in this prospectus.
WAIVERS FROM STRICT COMPLIANCE W ITH THE HONG KONG LISTING RULES
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including the proposed Directors to be
appointed upon the Listing) collectively and individually accept full responsibility, contains
particulars given in compliance with the Comp anies (WUMP) Ordinance, the Securities and
Futures (Stock Market Listing) Rules (C hapter 571V of the Laws of Hong Kong) and the
Listing Rules for the purpose of giving information with regard to us. Our Directors, having
made all reasonable enquiries, confirmed that to the best of their knowledge and belief, the
information contained in this prospectus is accurate and complete in all material respects
and not misleading or deceptive, and there are no other matters the omission of which
would make any statement in this prospectus or this prospectus misleading.
CSRC FILING
We have obtained a filing notice from the CSRC for the Global Offering and the
making of the application to list the H Shares on the Stock Exchange dated December 5,
2025. In granting such filing notice, the CSR C accepts no responsibility for the financial
soundness of us or for the accuracy of any of the statements made or opinions expressed in
this prospectus. As advised by our PRC Legal Advisers, our Company has obtained all
necessary approvals and authorisations in the PRC pursuant to the applicable PRC laws
and regulations in relation to the Global Offering and the Listing and the conversion of
some of our Unlisted Shares into H Shares upon the Listing.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering and does not constitute an o f f e rt os e l lo ras o l i c i t a t i o no fa no f f e rt ob u y
any security other than the Hong Kong Offer Shares offered by this prospectus pursuant to
the Hong Kong Public Offering. This prospectus may not be used for the purpose of, and
does not constitute, an offer or invitation in any other jurisdiction or in any other
circumstances. No action has been taken to permit a public offering of the Offer Shares in
a n yj u r i s d i c t i o no t h e rt h a nH o n gK o n ga n dn oa c t i o nh a sb e e nt a k e nt op e r m i tt h e
distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution
of this prospectus and the offering and sale of the Offer Shares in other jurisdictions are
subject to restrictions and may not be made except as permitted under the applicable
securities laws of such jurisdictions pursuan tt or e g i s t r a t i o nw i t ho ra u t h o r i z a t i o nb yt h e
relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. We have not authorised anyone to provide you with information that
is different from what is contained in this prospectus. Any information or representation
not made in this prospectus must not be relied on by you as having been authorized by us,
the Joint Sponsors, the Joint Global Coordinators, the Overall Coordinators, the Capital
Market Intermediaries, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
any of our or their affiliates or any of their resp ective directors, officers, employees, agents,
advisors or representatives, or any other perso ns or parties involved in the Global Offering.
Information contained in our website, located at
www.onero.cn , does not form part of this
prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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RESTRICTIONS ON OFFER AND SALE OF OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public
Offering will be required to, or be deemed by his acquisition of Offer Shares to, confirm
that he is aware of the restrictions on offers of the Offer Shares described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares, or the
distribution of this prospectus, in any jurisdiction other than Hong Kong. Accordingly, this
prospectus may not be used for the purpose of, and does not constitute, an offer or
invitation in any jurisdiction or in any circumstances in which such an offer or invitation is
not authorized or to any person to whom it is unlawful to make such an offer or invitation.
The distribution of this prospectus and the o ffering and sale of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under the
applicable securities laws of such jurisd ictions pursuant to registration with or
authorization by the relevant securities re gulatory authorities or an exemption from
those authorities. In particular, the Offer S hares have not been offered and sold, and will
not be offered and sold, directly or indirectly, in the PRC or the United States.
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the approval for the listing of, and
permission to deal in, our H Shares in issue and to be issued pursuant to the Global
Offering (including any Shares which may be issued under the exercise of the
Over-allotment Option) and the H Shares to be converted from the Unlisted Shares. 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. At present, our
Company is not seeking or proposing to seek such listing or permission to deal in our H
Shares on any other stock exchanges.
Under section 44B(1) of the Companies (WUMP) Ordinance, any allotment made in
respect of any application will be invalid if th e listing of, and permission to deal in, the H
Shares on the Stock Exchange is refused before the expiration of three weeks from the date
of the closing of the application lists, or suc h longer period (not exceeding six weeks) as
may, within the said three weeks, be notified to our Company by or on behalf of the Stock
Exchange.
ADMISSION OF OUR H SHARES INTO CCASS
Subject to the granting of the approval for the listing of, and permission to deal in, our
H Shares on the Main Board of the 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 settleme nt in CCASS with effect from the Listing Date
or any other date which HKSCC chooses. Settlement of transactions between Exchange
Participants (as defined in the Listing Rule s) 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 113 ---
All necessary arrangements have been made enabling our H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional
advisers for details of the settlement arrang ements and how such arrangements will affect
your rights and interests as such arrangements may affect their rights and interests.
INFORMATION ON THE CONVERSION OF UNLISTED SHARES INTO H SHARES
Our Company has applied for conversion of 200,000,000 Unlisted Shares (representing
90% of our issued share capital immediately upon completion of the Global Offering) held
by certain existing Shareholders. See ‘‘History and Corporate Structure’’ and ‘‘Share
Capital’’ in this prospectus for details of the Shareholders and their interests in our
Company and the relevant procedures for conversion of Unlisted Shares into H Shares.
Such H Shares to be converted from the Unliste d Shares are restricted from trading for
a period of one year after the Listing. Our Company has received the filing notice from the
CSRC dated December 5, 2025 in relation to the conversion of the Unlisted Shares.
PROFESSIONAL TAX ADVICE RECOMMENDED
Professional investors in the Global Offering are recommended to consult their
professional advisers as to the taxation implications of subscribing for, purchasing, holding
or disposing of, and dealing in, our H Shares (or exercising rights attaching to them) under
the laws of Hong Kong and the place of their opera tions, domicile, residence, citizenship or
incorporation. None of the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, us, any
of our or their respective directors, officers, agents, employees, advisers or representatives,
or any other parties involved in the Global Offering accepts responsibility for any tax
effects on, or liabilities of, any person resulting from the subscription for, purchasing,
holding or disposing of, or dealing in, our H Shares (or exercise of any rights attaching to
them).
REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares issued pursuant to applications made in the Global Offering will be
registered on our H Share register of members to be maintained in Hong Kong by our H
Share Registrar, Computershare Hong Kong Investor Services Limited, Hong Kong. Our
principal register of members will be main tained by us at our head office in the PRC.
Dealings in our H Shares registered on our H Share register of members will be subject
to Hong Kong stamp duty. Please refer to ‘‘Appendix VI — Statutory and General
Information — 5. Other Information — J. Taxation of Holders of H Shares’’ to this
prospectus for further details.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 114 ---
According to the Guide to the Program for ‘‘H-Share Full Circulation’’ of H shares
promulgated by CSDC on February 7, 2020, cash dividends to domestic investors of
H-share ‘‘H-Share Full Circulation’’ shall be distributed through CSDC. An H-share listed
company shall transfer RMB cash divide nds to the designated bank account of the
Shenzhen subsidiary of CSDC, who shall complete the clearing of cash dividends by
distributing the cash dividends to investors through domestic securities companies.
DIVIDENDS PAYABLE TO HOLDERS OF H SHARES
Unless determined otherwise by our Company, dividends payable in Hong Kong
dollars in respect of our H Shares will be paid to the Shareholders as recorded on 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.
OVER-ALLOTMENT OPTI ON AND STABILIZATION
Details of the arrangements relating to the Ov er-allotment Option and stabilization are
set out in the section headed ‘‘Structure of the Global Offering’’ in this prospectus.
PROCEDURE FOR APPLICATIO N FOR HONG KONG OFFER SHARES
The procedure for applying for Hong Kong Offer Shares is set out in the section
headed ‘‘How to Apply for Hong Kong Offer Shares’’ in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering (including the Hong Kong Public
Offering and its conditions) are set out in th e section headed ‘‘Structure of the Global
Offering’’ in this prospectus.
COMMENCEMENT OF DEALINGS IN OUR H SHARES
Dealings in our H Shares on the Stock Exchange are expected to commence at 9 : 00
a.m. on December 30, 2025. Our H Shares will be traded in board lots of 100 H Shares each.
The stock code of our H Shares will be 6600.
EXCHANGE RATE
Solely for convenience purposes, this prospectus includes translations among certain
amounts denominated in RMB, Hong Kong dollars and U.S. dollars. No representation is
made that the RMB amounts could actually be converted into another currency at the rates
indicated, or at all. Unless otherwise indicated, (i) the translation between RMB and Hong
Kong dollars was made at the rate of RMB0.90862 to HK$1.00, and (ii) the translation
between RMB and U.S. dollars was made at the rate of RMB7.0686 to US$1.00, each based
on exchange rates published by the PBOC on December 11, 2025.
No representation Is made that any amounts in one currency can be or could have been
at the relevant dates converted at the above rate or any other rates, or at all.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 115 ---
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. If there is any inconsistency between the names of
any of the entities, laws and regulations mentioned in this prospectus which are not in the
English language and their English translati ons, the names in their respective original
languages shall prevail. The E nglish translations are marked with ‘‘*’’ for identification
purpose only.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject
to rounding adjustments. Any discrepancies in any table, chart or elsewhere between the
total shown and the sum of the amounts listed are due to rounding.
OTHERS
Unless otherwise specified, all references to any shareholdings in our Company
following the completion of the Global Offeri ng assume that the Over-allotment Option is
not exercised.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Address Nationality
Executive Directors
Mr. LI Zhichen ( 李志晨)
(alias Connery Lee,
formerly known as
XU Zhichen ( 徐志晨))
Room 1307, Block A,
Lingshang Huafu,
Linghang City,
Xixiang Street,
Bao’an District,
Shenzhen,
Guangdong Province,
The PRC
Chinese
Mr. PAN Yang
(潘陽)
2B5105,
Qiancheng Binhai Garden,
Baoan District,
Shenzhen,
Guangdong Province,
The PRC
Chinese
Mr. HU Zhidong
(胡治東)
Room 4103, Block B,
Building 2, Phase I,
Shenzhen Metro Grace Mansion,
No. 33, Shenyun Road,
Nanshan District,
Shenzhen,
Guangdong Province,
The PRC
Chinese
Ms. YANG Minghui
(楊明輝)
Room 2102, Block A1,
Jinhengli Yujingyuan,
Beizhan Community,
Minzhi Street,
Longhua District,
Shenzhen,
Guangdong Province,
The PRC
Chinese
Non-executive Directors
Professor LI Zexiang
(李澤湘)
Room 801, Building 3
No. 11 University Road,
Songshan Lake, Dongguan,
Guangdong Province,
The PRC
Chinese (Hong Kong)
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 6–


--- page 117 ---
Name Address Nationality
Professor KO Ping Keung
(高秉強)
Flat A, 37/F, Block 25,
Double Cove Starview Prime,
8 Wu Kai Sha Road,
Ma On Shan,
New Territories,
Hong Kong
Chinese (Hong Kong)
Independent Non-executive
Directors
Ms. LI Hui
(李輝)
Room 2401, Block 11,
District 1,
Hang Yao Landmark Center,
Hangzhou,
Zhejiang Province,
The PRC
Chinese
Dr. LEUNG Suk Wai Winnie
(梁淑慧)
Flat F, 3/F,
Block T7 Sausalito,
1 Yuk Tai Street,
Ma On Shan,
New Territories,
Hong Kong
Chinese (Hong Kong)
Professor WANG Yong
(王勇)
Yunxia Academy, No. 190,
Biyuan Road, Hudie Village,
Hongguang Street,
Pidu District,
Chengdu City,
Sichuan Province,
The PRC
Chinese
For the biographies and other relevant information of the Directors, please see the
section ‘‘Directors and Senior M anagement’’ in this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 118 ---
PARTIES INVOLVED IN T HE GLOBAL OFFERING
Joint Sponsors
(in alphabetical order)
Guotai Junan Capital Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Central, Hong Kong
Joint Sponsor-OCs
(in alphabetical order)
Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Central, Hong Kong
Overall Coordinators and
Joint Global Coordinators
(in alphabetical order)
Guotai Junan Securities (Hong Kong) Limited
26/F-28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Central, Hong Kong
Joint Bookrunners and Joint Lead
Managers and Capital Market
Intermediaries
Guotai Junan Securities (Hong Kong) Limited
26/F–28/F, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Central, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 119 ---
China Galaxy International Securities (Hong Kong)
Co., Limited
20F Wing On Centre
111 Connaught Road Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Legal Advisors to the Company as to Hong Kong law:
Jingtian & Gongcheng LLP
Suites 3203–3209, 32/F., Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
as to PRC law and as to PRC data compliance
matters:
Jingtian & Gongcheng
34/F, Tower 3
China Central Place
77 Jianguo Road, Beijing
PRC
as to Japanese law:
TMI Associates
23rd Floor, Roppongi Hills Mori Tower
6–10–1 Roppongi, Minato-ku
Tokyo 106–6123
Japan
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 120 ---
as to US law:
The Law Office of Mark A Kerstein
950 Echo Lane, Suite 200
Houston
Texas
The United States of America
as to Germany and European Union law:
Ro¨dl & Partner
Denninger Straße 84,
81925 Munich,
Germany
as to European Union data compliance matters:
Studio Legale De Berti Jacchia Franchini Forlani
Via San Paolo, 7
20121 Milan,
Italy
as to U.S. Outbound Investment Rule:
Holman Fenwick Willan LLP
8 Bishopsgate
London EC2N 4BQ
United Kingdom
Legal Advisors to the Joint Sponsors
and the Underwriters
as to Hong Kong law:
Morgan, Lewis & Bockius
19th Floor, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
as to PRC law:
AllBright Law Offices (Shenzhen)
21, 22, 23/F, Tower 1
Excellence Century Center
F u H u a3R o a d
Futian District, Shenzhen
Guangdong Province
The PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Auditors and Reporting Accountants Ernst & Young
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
2504, Wheelock Square
1717 Nanjing West Road
Shanghai
PRC
Compliance Advisor Quam Capital Limited
5/F and 24/F (Rooms 2401 and 2412)
Wing On Centre
111 Connaught Road Central
Hong Kong
Receiving Bank Bank of Ch ina (Hong Kong) Limited
1 Garden Road
Hong Kong
China CITIC Bank International Limited
80 Floor, International Commerce Centre,
1 Austin Road West, Kowloon
Hong Kong
CMB Wing Lung Bank Limited
45 Des Voeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 1–


--- page 122 ---
Registered Office, Headquarters
and Principal Place of Business
in the PRC
Room 1706, Qiancheng Commercial Center
No. 5 Haicheng Road
Mabu Community
Xixiang Street, Bao’an District
Shenzhen
Guangdong Province
The PRC
Principal Place of Business
in Hong Kong
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wan Chai
Hong Kong
Company Website
www.onero.cn
(Information contained on this website does not form
part of this prospectus)
Joint Company Secretaries and
Authorized Representatives
Mr. HU Zhidong ( 胡治東)
Room 4103, Block B
Building 2, Phase I
Shenzhen Metro Grace Mansion
No. 33, Shenyun Road
Nanshan District
Shenzhen
Guangdong Province
The PRC
Mr. CHUNG Ming Fai ( 鍾明輝)
(Fellow member of the Hong Kong Institute of
Certified Public Accountants and a member of CPA
Australia)
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wan Chai
Hong Kong
Audit Committee Ms. LI Hui ( 李輝) (Chairman)
Professor KO Ping Keung ( 高秉強)
Professor WANG Yong ( 王勇)
Remuneration and Appraisal
Committee
Professor WANG Yong ( 王勇) (Chairman)
Ms. LI Hui ( 李輝)
Dr. LEUNG Suk Wai Winnie ( 梁淑慧)
Mr. LI Zhichen ( 李志晨)
Mr. HU Zhidong ( 胡治東)
CORPORATE INFORMATION
–1 1 2–


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Nomination Committee Mr. LI Zhichen ( 李志晨) (Chairman)
Dr. LEUNG Suk Wai Winnie ( 梁淑慧)
Professor WANG Yong ( 王勇)
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 Bankers China Merchants Bank Co., Ltd. Shenzhen Branch
China Merchants Bank Shenzhen Branch Building
No. 2016, Shennanda Road
Futian District, Shenzhen
The PRC
CORPORATE INFORMATION
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This and other sections of this prospectus contain information relating to the industry
in which we operate. Certain information and statistics set forth in this section have been
extracted from the First & Sullivan Report i ssued by Frost & Sullivan, an independent
consulting firm, which we commissioned, and from various official government publications
and other publicly available publications. Information and statistics from official
government sources have not been independen tly verified by us, the Joint Sponsors, the
Overall Coordinators, Joint Global Coordinators, the Capital Market Intermediaries, Joint
Bookrunners, and Joint Lead Managers, any of the Underwriters, any of our or their
respective directors, officers or representatives or any other person involved in the Global
Offering (other than Frost & Sullivan), and no re presentation is given as to their accuracy.
S O U R C E SO FI N F O R M A T I O N
We commissioned Frost & Sullivan, an independent consulting firm, to conduct a
detailed research on the global home robot industry and the global home robotic system
industry from 2022 to 2029. The report commissioned has been prepared by Frost &
Sullivan independent of our influence. Frost & Sullivan is an independent global consulting
firm, which was founded in 1961 in New York. It offers industry research and market
strategies and provides growth consulting a nd corporate training. In connection with the
market research services provided, we have agreed to pay a fee of RMB500,000 to Frost &
Sullivan in connection with the preparat ion of the Frost & Sullivan Report. We have
extracted certain information from the Fros t & Sullivan Report in this section, as well as in
the sections headed ‘‘Summary’’, ‘‘Risk Factors’’, ‘‘Business’’, ‘‘Financial Information’’ and
elsewhere in this prospectus to provide our potential investors with a more comprehensive
presentation of the industry in which we operate.
Frost & Sullivan performed both primary and secondary research, and obtained
knowledge, statistics, information and industry insights on the industry trends of the target
research markets. Primary research involved interviewing with industry participants.
Secondary research involved reviewing company reports, independent research reports and
data based on Frost & Sullivan’s own research database.
The Frost & Sullivan Report was compiled based primarily on the following
assumptions: (i) the overall global social, eco nomic, and political environment is expected
to maintain a stable trend over the next decade; (ii) during the forecast period, related key
industry drivers are likely to continue driving growth in China, and global market; and (iii)
there are no extreme force major event or industry regulations by which the market
situation may be affected either dramatically or fundamentally.
Our Directors confirmed that, after taking reasonable care, as of the Latest Practicable
Date, there had been no adverse change in the market information set forth herein since the
date on which the Frost & Su llivan Report was issued.
INDUSTRY OVERVIEW
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OVERVIEW OF GLOBAL HOME ROBOT INDUSTRY
Definition of Home Robot
Home robot products are intelligent devices specifically designed for home scenarios,
which are capable of assisting humans in completing tasks such as housekeeping, security
and living service through automatic perception, learning, decision-making and execution
capabilities, playing the role of a family steward.
Difference Between Home Robot and Single-unit Smart Home Device
Single-unit smart home device offers basic i ntelligent control through manual, voice,
or remote means but lacks the ability to connect with a communication hub or intelligent
decision-making hub to achieve interoperab ility, such as single-unit smart TVs, smart
toilets and smart lights.
The home robot product integrates art ificial intelligence, robotics and IoT
technologies in daily home living scenarios t o complete daily tasks under the control and
drive of a communication hub or in telligent decision-making hub.
Classification of Home Robot
Home robots include general home robotics and home robotic systems. Compared to
general home robotics, home robotic systems can automatically learn and achieve dynamic
decision-making for comple x tasks through an intelligent hub with local computing
capabilities, realizing functional enhancements akin to human ‘‘hands’’, ‘‘feet’’, ‘‘brain’’,
‘‘skin’’, and ‘‘eyes’’.
General home robotics include (i) hub products, which are communication hubs
primarily function as communic ation links without local computing capabilities; and (ii)
execution products, which are home robots that can only connect to a communication hub
and are single-function, focusing on completing a single type of work.
Home robotic systems are intellig ent robot systems that integrate artificial intelligence,
robotics and smart IoT device technologies in d aily home living scenarios. They can link to
an intelligent decision-making hub and, by mim icking human behavioral features, such as
hands, feet, brain and perception abilities (in cluding but not limited to eyes and skin),
achieve functional enhancements and interact extensively with the real world. For the
specific meaning of home robotic systems, please refer to the section hea ded ‘‘Glossary’’ in
this prospectus.
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The following table sets for the comparison between general home robotics and home
robotic systems.
Comparison Dimension Home Robotic Systems General Home Robotics
Autonomous learning &
intelligent decision-making
capacity
With the ability of
autonomous learning,
understanding and
adapting to user
habits, and active
control of device
operations.
Making real-time
multimodal decisions
b a s e do nv i s i o n ,
motion and
environmental data.
Primarily operate based
on preset programs or
simple commands,
lacking autonomous
learning capabilities.
Decisions are simple,
mostly relying on
fixed logic or limited
trigger rules.
Perception and response Capable of perceiving
environmental
changes in real time
and responding
intelligently, such as
fall detection alerts,
automatic light/TV
shutdown.
Typically responds only
after explicit
commands triggered
by the user, with
limited environmental
perception and
processing.
Multifunctionality A single device can
perform multiple
functional tasks (e.g.,
a household robot
that can also refill a
humidifier while
cleaning)
Devices are
single-function,
focused on
completing a single
type of task.
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Comparison Dimension Home Robotic Systems General Home Robotics
Device collaboration Em phasizing intelligent
collaboration
between different
devices, capable of
breaking down
complex tasks for
multi-device
collaboration (e.g.,
sensors
collaboratively
working with, among
others, curtain robots
and finger robot).
Devices operate
independently, with
weak collaboration or
reliance on manual
orchestration.
Edge intelligence Leveraging terminal
device perception
(e.g., CMOS vision,
edge AI chips) to
achieve fast local
processing and
feedback.
Most processing occurs
in the cloud or on
simple chips inside
the devices, with few
edge intelligence
applications.
Specific examples Household robots: With
a powerful intelligent
control system, the
household robot can
not only accurately
add water to the
humidifier and
efficiently transport
clothes, but also link
with home devices
such as cameras to
achieve security
monitoring and
multifunctional home
services.
Household robots:
Follow simple maps
for cleaning, unable
to perform multiple
functions or operate
across devices.
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Market Size of Global Home Robot Industry
According to Frost & Sullivan, the global adoption rate of AI has exceeded 70%. With
the continuous development of technologies such as AI, the improvements in intelligence
and flexibility are driving the growing dem and for smart product s in the home robot
industry. The market size of the global smart home industry reached RMB1,000.5 billion in
2024. In 2029, the market size of the global smart home industry will reach RMB1,462.4
billion, with a CAGR of 7.9%. The market size of the global home robot industry grew
from RMB213.3 billion in 2022 to RMB257.7 billion in 2024, with a CAGR of 9.9%. Its
penetration rate, which is calculated as the market size of the global home robot industry
divided by the market size of the global smart home industry, also increased from 25.1% in
2022 to 25.8% in 2024.
With individuals aged 65 and above comprising approximately 10% of the global
population in 2024, the global trend of population aging is expected to continue driving the
growing demand for home robots. As a result, the market size of the global home robot
industry is expected to grow steadily. It is projected that by 2029, the market size of the
global home robot industry will reach appro ximately RMB436.5 billion, with a CAGR of
11.1% from 2024 to 2029. The penetration of home robot product is expected to grow to
29.9% by 2029 in the global market. The following chart illustrates the market size of the
global home robot industry in terms of retail sales from 2022 to 2029.
Market Size of Global Home Robot Industry, By Retail Sales
RMB billion, 2022–2029E
211.1 230.2 251.8 273.8 296.1 318.7 341.8 365.8
1.0% 1.6% 2.3% 3.4% 5.3% 7.9%
11.8%
16.2%
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
213.3
233.9
283.4
312.7
257.7
345.9
387.4
436.5
27.2
45.6
16.6
70.7
2.2
3.6
5.9
9.5
2022–2024CAGR 2024–2029E
Home Robotic System 63.7% 64.2%
General Home Robotics 9.2% 7.8%
Home Robotic System
General Home Robotics
Penetration Rate of Home Robotic System
Note: The penetration rate of home robotic system is calc ulated by dividing the market size of global
home robot industry by the market si ze of home robotic system industry.
Source: Frost & Sullivan Analysis, World Bank Group, Na tional Bureau of Statistics of China, e-commerce
platforms
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With the gradual acceptance and widespread adoption of AI technology, its
application in global home robot industry has driven steady growth in market size,
especially in home robotic system. Global home robotic system market size grew from
RMB2.2 billion in 2022 to RMB5.9 billion in 2024, with a CAGR of 63.7%. From 2022 to
2024, the penetration rate of home robotic systems, which is calculated by the market size of
global home robots industry divided by the market size of home robotic system industry,
increased from 1.0% to 2.3% in the global market.
In the future, as AI technology becomes better at meeting people’s demands for
personalized home solutions, the market size of the global home robotic system industry is
expected to continue growing. From 2024 to 2029, the market size of global home robotic
system industry is expected to rise at a CAGR of 64.2%, and is expected to reach RMB70.7
billion in 2029. The penetration rate of home robotic systems will reach 16.2% in 2029 in
the global market.
Market Drivers of Global Home Robot Industry
According to Frost & Sullivan Report, the global home robot industry is expected to
continue its growth, and such expectation is largely driven by the following drivers:
. AI technological innovation accelerates the intelligence of home robots: Continuous
technological innovation has elevated the intelligence of home robots to new
heights. Advances in AI, particularly in machine vision, multidimensional
perception, and navigation algorith ms, have demonstrated significant
advantages. For example, home robotic system, empowered by AI technology,
can actively perceive environmental ch anges, simulate human behavior, and
collaboratively execute multiple tasks, greatly enhancing user experience.
. Robotics technology development drives growth in demand for home robots products:
Rapid advancements in robotics technology, including improvements in sensors
and power systems technology, have significantly expanded the application scope
of home robots, driving demand for intellig ent products. With progress in IoT and
automatic control technologies, home r obots are increasingly used in cleaning,
security, health monitoring, and other fields.
. Global aging population and solo-living trends drive demand for home robot
products: As human aging accelerates, the elderly population’s demand for health
monitoring, safety protection, and life convenience has surged. Meanwhile, young
solo-living individuals prioritize emoti onal companionship and life efficiency,
leading to innovative products such as remotely controlled pet feeders and
voice-activated smart lighting systems. These two groups collectively push home
robots to evolve from single-function to multi-scenario collaboration and
sensor-less services.
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. Growing consumer demand for convenient and comfortable home experiences: The
demand of comfortable home experiences remains a key driver of home robot
development. However, as life rhythms accelerate, end consumers are no longer
satisfied with basic functionalities but seek autonomous, systematic solutions for
household tasks. Home robotic systems, with their environmental understanding
and autonomous decision-making frameworks, overcome the limitations of
traditional smart devices which rely on p reset programs, en abling complicated
task execution through intelligent hubs. This shift from passive response to
proactive service is redefining the boundaries of home automation services,
integrating robots seamlessly into d aily life and showcasing market growth
potential.
Future Trends of the Global Home Robot Industry
Future trends of the global home robot industry include the following:
. Empowering edge computing tech nology through intelligent hubs: Edge computing
nodes, as the core of smart home networks, convert and adapt data of different
protocols and formats, forming a unif ied network that enables devices to
understand and communicate with each other for collaborative work between
multiple devices. Additionally, edge com puting’s computational capabilities
enhance the connection between percepti on and decision-making collaboration.
The empowerment of the edge computing technology provides solid technical
support for integrated intelligent hubs and brings a smoother application
experience for the overall synergy.
. Increasing market penetration of home robotic systems: Intelligent hubs are
systems capable of collecting and preprocessing scenario data. Through hubs,
home robotic systems can execute tasks more precisely, enhancing the user
experience through multidimensional collaboration of various home robotic
systems. Currently, as consumer demand for comfortable home experiences
grows, the collaboration between hom e robotic systems and intelligent hubs
further enhances service capabilities of t he robots, aligning with overall market
trends and demands. This mutual reinforcement mechanism, aimed at enhancing
home experience and supported by technological progress, will expand the
application of home robotic systems in home scenarios. The penetration rate of
home robotic systems in the global home robot industry will keep rising and is
expected to rise from 2.3% in 2024 to 16.2% in 2029.
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. Trends from ‘‘tool-type’’ to ‘‘interactive-type ’’: Compared with general home
robotics that rely on preset programs, home robotic systems demonstrate
significant advantages in perception, cognition and interaction due to ongoing
advancements in AI technology. By integrating multimodal sensing technologies
such as visual recognition, voice interac tion, tactile feedback, and environmental
perception, these systems achieve high -precision dynamic modeling of home
scenarios, thus optimizing real-time and adaptive multi-device coordination.
Empowered by AI, the robots not only accurately interpret user intent but also
provide highly ‘‘human-like’’ services, ultimately creating an intelligent home
ecosystem that is both efficient and emotionally engaging. Moreover, continuous
learning mechanisms enable these syste ms to evolve their interaction models
dynamically based on user habits, achi eving truly personalized long-term
adaptation.
OVERVIEW OF HOME ROBOTIC SYSTEM INDUSTRY
Classification of the Home Robotic System
Home robotic systems feature autonomous learning and device collaboration. Through
machine vision and multimodal perception, home robotic systems continuously learn user
habits and environmental changes, autonomously building personalized behavior models.
They execute tasks spontaneously without commands and collaborate with other devices for
proactive responses, delivering a more natural and senseless home experience. Classification
of home robotic system includes the following:
. Perception and decision-making systems include perception products and
intelligent hubs. As the intelligent con trol components of home robotic system
products, perception and decision-making systems simulate the functions of the
human ‘‘brain’’, ‘‘skin’’ and ‘‘eyes’’ in home living scenarios. Through machine
learning algorithms, perception and decision-making systems continuously
optimize decision-making capabilities a nd enable multi-device collaborative
computing through a shared computing architecture. The systems analyze
camera data through visual preprocessing technologies and dynamically
coordinate devices through adaptive decision models. At task execution level,
they perform intelligent task layering, adjusting in real time priorities for
cleaning, security and other tasks based on environmental changes and optimize
the decision-making logic, and ultimatel y realize a deeply interconnected smart
home ecosystem with aut onomous learning and intelligent decision-making
capabilities. These systems include cor e components such as intelligent hubs,
smart IoT devices, and cameras.
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. Execution-enhanced robots are advanced mechanical products designed
specifically for household scenarios and certain sports scenarios. They integrate
motion control, mechanical engineering, and robotics technologies, capable of
accurately simulating the movements of human ‘‘hands’’ and ‘‘feet’’ to achieve
efficient physical interaction. As a key motion execution component of home
robotic systems, they can undertake household automation tasks, such as cleaning
and delivery. In specific sports scenario s, execution-enhanced robots rely on
high-precision stereo tracking system s to capture the trajectory, speed, and
rotation of targets in real-time, use omni -directional movement systems to flexibly
adjust positions, and analyze users’ habi ts and skill levels based on intelligent
algorithms to provide personalized training programs. Through
multi-dimensional data collection and analysis, they help improve skills, greatly
expanding the application boundaries of robots in daily life and professional
fields.
Importance Analysis of Home Robotic Systems
Importance Analysis of the Perception and Decision-making Systems
The perception and decision-making systems in home living scenarios serve as the
‘‘neural network’’ and ‘‘execution hub’’ of smart homes. Their importance lies in two
aspects, including (i) whole-home management , where the perception and decision-making
systems achieve 3D spatial semantic underst anding through multimodal environmental
interaction, dynamically optimizing service strategies for home robotic systems based on
deep learning of user habits and environmental conditions; and (ii) risk prevention and
control, where these systems enable accident prevention through the linkage of smart IoT
devices at different levels.
In particular, the importance of edge computing technology is becoming increasingly
prominent. In home robotic systems, edge computing is critical as it enables fast local
processing, ensuring timely responses to environmental changes of the robots, thus
enhancing user experience. Edge computing a llows robots to perform visual recognition,
path planning, and autonomous decisions without relying on the cloud, effectively reducing
latency and protecting user privacy. Especially in scenarios involving multi-robot
collaboration and complex home environments, edge computing supports real-time,
multimodal data fusion and control command generation, improving system stability and
reliability while enabling true implementat ion and application of embodied intelligence.
Importance Analysis of Execution-enhanced Robots
Execution-enhanced robots are mechanical products that achieve physical interaction
by simulating human ‘‘hands’’, ‘‘feet’’ and other behaviors and apply ing robotics product
technology in home living scenarios. These robots serve as the motion execution
components of home robotic systems. By simulating human behaviors,
execution-enhanced robots free users from manual tasks. When integrated with
INDUSTRY OVERVIEW
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perception and decision-making systems, they can accomplish more complex home
automation tasks, making home living smarter and more efficient. Specific classifications
include:
. Dexterous hand-mimic robots. Dexterous hand-mimic robots are designed for
home living scenarios. These robotic products simulate the functional movements
of human ‘‘fingers’’ and ‘‘wrists’’ by using robotics technology to perform physical
interactions like pressing, dialing and rotating. Specific products include finger
robots, lock robots, and curtain robots.
. Enhanced mobile robots. Enhance mobile robots refer to robots that expand
household life scenarios through product combinations — such as carrying
cameras for whole-house patrols and adding water to humidifiers — by imitating
human ‘‘foot’’ movements and featuring multiple composite functions (e.g.,
sweeping and carrying). In sports scenarios, they can flexibly adjust their
positions relying on omni-directio nal movement systems, work with
high-precision cameras and other sensing devices to capture target trajectories
and dynamics, and analyze interaction needs in combination with intelligent
algorithms. For instance, in tennis training, they can simulate human foot
movements to track and return balls accurately, adjust serving speed and landing
points, thereby forming the composite capability of ‘‘mobility + specialized
interaction’’ and further expanding the application boundaries in household and
sports scenarios.
Value Chain of Global Home Robotic System Industry
Value Chain
Upstream Midstream Downstream
Component Suppliers
Technology Developers
Research Institutions
Sales Channel Providers
Service Providers
End Users
Certification & Testing
Organizations
Product Manufacturers
Solution Providers
Brand Operators
Source: Frost & Sullivan Analysis
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The value chain of home robotic system i ndustry covers the entire process from
components to consumption: upstream enterprises are responsible for component supply,
technology development and research, as wel l as certification and testing. Midstream
enterprises focus on complete machine manufacturing, technology integration, and brand
operation. Downstream entities are engaged in sales through channels, after-sales services,
and end-user purchases.
Market Size of Home Robotic System Industry
The home robotic system industry has experienced rapid growth. The market size of
the global home robotic system industry in terms of retail sales increased from RMB2.2
billion in 2022 to RMB5.9 billion in 2024, representing a CAGR of approximately 63.7%
for the period. Driven by factors such as (i) increasing consumer demand for convenient and
comfortable home experiences, with over 40% of the people surveyed by Frost & Sullivan
identifying ‘‘comfort and convenience’’ as key as pects of their lifestyle; (ii) the adoption of
modular design in robotic systems; (iii) applic ation of AI edge computing; and (iv) emerging
Vision-Language-Action (‘‘VLA’’) techno logy, the global market size of home robotic
system industry is projected to reach RMB70.7 billion, representing a CAGR of
approximately 64.2% from 2024 to 2029.
The market size of the global perception and decision-making system industry in terms
of retail sales increased from RMB0.7 billion in 2022 to RMB2.3 billion in 2024, with a
CAGR of approximately 75.7%, and is expected to reach RMB31.9 billion in 2029,
representing a CAGR of approximately 69.0 % from 2024 to 2029. The market size of the
global execution-enhanced robot industry in terms of retail sales increased from RMB1.3
billion in 2022 to RMB3.2 billion in 2024, wi th a CAGR of approximately 57.0%, and is
expected to reach RMB34.3 billion in 2029, re presenting a CAGR of approximately 61.0%
from 2024 to 2029.
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The following chart illustrates the market size of the global home robotic system
industry in terms of retail sales from 2022 to 2029.
Market Size of Global Home Robotic System Industry, By Retail Sales
RMB billion, 2022–2029E
2022–2024 2024–2029E
Overall 63.7% 64.2%
Global Perception and Decision-making System 75.7% 69.0%
Global Execution-enhanced Robot 57.0% 61.0%
Others 59.1% 59.3%
Global Perception and Decision-making System
Global Execution-enhanced Robot
Others
0.7
0.2 0.21.3 0.4
1.4
2.1
2.3 4.8
4.2
3.2 2.8
70.7
4.5
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
3.62.2
5.9
27.2
16.6
45.6
9.5
8.2
7.5
12.8
12.7
20.9
34.3
31.9
21.9
1.71.00.5
Note: Others refers to home robotic systems’ accessories , including key pad touch associated with lock
robot, purifiers and fans associated with enha nced mobile robots, cleaning supplies, power
solutions, and smart home control a ccessories, among other things.
Source: Frost & Sullivan Analysis, World Bank Group, Na tional Bureau of Statistics of China, e-commerce
platforms
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As end consumers’ lives accelerate, there is a growing demand for autonomous and
integrated household solutions, evidenced by the fact that the number of households
worldwide equipped with smart home d evices surpassed 300 million in 2023.
Simultaneously, the highly responsive interaction model of home robotic systems is
reshaping home environments. As a result, th e market size for these systems is expected to
grow steadily. Specifically, (i) the market si ze of Japanese home robotic system industry is
estimated to reach RMB14.9 billion in 2029 with a CAGR of approximately 52.8% from
2024 to 2029, where a rapidly aging population and strong demand for lifestyle convenience
create favorable conditions for home robotic systems; (ii) the market size of the U.S. home
robotic system industry is estimated to reach RMB12.7 billion in 2029 with a CAGR of
approximately 101.2% from 2024 to 2029, benefiting from a leading technological
ecosystem, a large base of smart home users, and a vibrant innovation environment; and
(iii) the market size of European home robot ic system industry is estimated to reach
RMB15.5 billion in 2029 with a CAGR of approximately 94.7% from 2024 to 2029, driven
by strong consumer purchasing power, and a high acceptance of automation and intelligent
products. The following chart illustrates the market size of the global home robotic system
by retail sales and countries/regions.
Market Size of Global Home Robotic System Industry,
By Retail Sales and Countries/Regions
RMB billion 2022–2029E
2022–2024 2024–2029E
Europe 59.3% 94.7%
United States 91.7% 101.2%
Japan 61.0% 52.8%
ROW 63.5% 54.0%
Japan
United States
Europe
0.1
ROW
0.2 0.3
0.4
2.1
1.81.1
4.83.2
19.4
70.7
2.8
27.6
15.5
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
3.6
5.9
2.2
27.2
16.6
9.5
45.6
1.8
2.5
6.6 9.0
10.1
0.7 7.9
12.30.8
14.9
7.1
0.1 0.6
1.1
1.2
4.4 5.0
3.3
12.7
Note:
(1) ‘‘ROW’’ refers to the rest of the world, encomp assing countries and regions excluding Japan, the
United States, and Europe.
Source: Frost & Sullivan Analysis, World Bank Group, e-commerce platforms
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The AI tennis robot is an intelligent s ports partner capable of autonomous
decision-making, playing against human players, and performing returning and hitting
actions. Its emergence marks a significant exp ansion of embodied intelligence in the field of
sports. With the growing popularity of tennis, the AI tennis robot not only provides
e n t h u s i a s t sw i t hap r a c t i c ep a r t n e ra v a i l a b l ea r o u n dt h ec l o c kt oh e l pi m p r o v et h e i rs k i l l s
and enjoy the fun of sports, but also, due to its cost-effectiveness compared to human
coaches, enables ordinary tennis enthusiasts to learn and practice the sport at a lower cost.
The market demand for tennis robots has also expanded correspondingly. The market size
of the global tennis robot indus try in terms of retail sales will grow from RMB0.03 billion in
2025. In the future, many professional and semi-professional players will rely on tennis
robots to improve their skills, making them a valu able investment for training institutions.
From 2025 to 2029, the industry is expected to rise at a CAGR of 293.0%, and the market
size of the global tennis robot industry in terms of retail sales is expected to reach RMB8.27
billion in 2029. In addition, the penetration rate will increase to 1.0%. The following chart
illustrates the market size of the global ten nis robot industry in terms of retail sales.
Market size of Tennis Robot Industry, By Retail Sales
RMB billion, 2025E-2029E
0.03 0.21
1.10
4.22
8.27
0.00% 0.02%
0.10%
0.42%
1.00%
2025E 2026E 2027E 2028E 2029E
2025E–2029E
CAGR 293.0%
Tennis Robot
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
Penetration Rate of Tennis Robot
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Source: Frost & Sullivan Analysis, International Tennis Federation
In the future, considering that tennis robots will provide not only general services but
also value-added services such as action ana lysis reports for users, the subscription fee
market for this segment is expected to exceed RMB1 billion by 2030.
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Market Drivers for Home Robotic Systems
According to Frost & Sullivan Report, the home robotic system industry is largely
driven by the following key growth drivers:
. Consumer demand for convenient and comfortable home experiences: end
consumers’ demand for convenient and comfortable home experiences drives a
higher demand for responsive home robotic systems. Tasks involving sensing and
collaboration are growing. For example, by visually detecting changes in ambient
light and leveraging edge computing to autonomously determine whether to open
or close curtains, the systems can optimize indoor lighting without user
commands and collaborate with tempera ture control and lighting systems. In
such scenarios, the empowerment of home robotic systems enables whole-home
integration, incorporating more inte lligent and automated functions to make the
living experience more comfortable and con venient. The increasing complexity of
scene logic, combined with multi-device collaboration, continuously elevates the
importance of perception and decision-making collaboration.
. Modular design drives product function expansion: Execution-enhanced robots will
feature more modular designs, integrating more intelligent and automated
functions to handle increasingly complex household tasks. Dexterous
hand-mimic robots can be equipped with different tool modules, and their
modular design and product stacking ca pabilities enable flexible function
replacement and iteration. For example, they can perform diverse tasks such as
opening/closing curtains and serving tea, evolving from a single sweeping function
to a comprehensive whole-home service platform.
. Application of AI edge computing: Leveraging on chips, home robotic systems can
deploy local computing power and real-time multimodal AI models, enabling user
demand anticipation and proactive services. For example, they can interpret
users’ natural language commands and combine them with 3D mapping for object
localization and route planning. Meanwh ile, cloud-based computing and AI edge
computing complement each other in data processing, real-time response, and
security, working collaboratively to improve response efficiency. For
computationally intensive tasks with re latively low real-time requirements,
cloud-based processing is adopted. For tasks demanding high real-time
performance but lower computing power, local edge computing is adopted.
. Applications of VLA technology: With the adoption of the VLA new paradigm in
embodied intelligence, home robotic sy stems can make autonomous decisions in
diverse scenarios and flexibly respond to unseen environments. The application of
VLA models significantly enhances ro bots’ understanding and adaptability in
complex environments, driving home robotic systems toward greater
generalizability and broader applicability across varied scenarios.
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Future Trends of Home Robotic Systems
Key trends of home robotic system industry include the following:
. Energy efficiency upgrades: In terms of energy optimization, home robotic systems
leverage edge computing to analyze device loads in real time, through dynamically
adjusting communication frequency and power modes to reduce consumption.
With continuous AI algorithm optimization, energy efficiency upgrades will
further drive the development of lighter, l onger-lasting, and higher-performance
home robotic systems, enhancing their wider application value in smart homes.
. Gradually enhanced autonomous learning and more flexible human-robot
interaction: AI technology is transforming traditional command-based
interactions. With the adoption of VLA technology, perception and
decision-making systems are evolving, enabling home robotic systems to
understand users’ complex instructions. In the future, the autonomous learning
capabilities of home robotic systems wil l remain a core trend in the industry’s
development. Robots will no longer rely solely on pre-programmed tasks but will
dynamically adapt to different home environments and user needs through
autonomous perception, comprehension, and decision-making. Continuous
advancements in visual recognition, semantic understanding and environmental
modeling will allow robots to accumulate data through daily interactions,
updating user behavior models in real time to deliver personalized,
context-aware service experiences. Moreover, autonomous learning will also
facilitate cross-device collaboration, e nabling multiple devices to work together
on complex tasks, forming a more efficient and intelligent home ecosystem.
Ultimately, home robots will proactivel y identify needs and predict behaviors,
significantly improving living comfort and safety. This trend will also drive the
industry toward more sophisticated and natural human-robot collaboration,
fostering new application s cenarios and service models.
Entry Barriers of the Home Robotic System
According to Frost & Sullivan Report, n ew entrants of the home robotic system
industry primarily encounter the following entry barriers:
. Profound industry understanding and consumer pain point insight: In the
execution-enhanced robot industry, a profound insight into consumer needs is
one of the keys to success. Execution-enhanced robot companies need to
accurately identify pain points in vari ous home application scenarios, design
and develop products tailored to address these pain points, and satisfy end
consumers’ personalized, intelligen t and all-around service demands.
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. Solid technological innovation capabilities: In the home robotic system industry,
the key to a company’s success hinges on the accumulation of core technologies,
reflected in areas such as 3D environment mapping and machine vision.
Positioning and environment construction technologies, through multi-sensor
fusion and edge technologies, enable robots to achieve high-precision positioning
and 3D environment mapping in complex home environments, ensuring accurate
obstacle recognition and environmen tal awareness. This provides a solid
foundation for stable autonomous movement and task execution. Secondly,
machine vision control technology combines cloud-based deep learning and edge
computing, utilizing visual sensors and opt imized processing units to ensure home
robots can recognize and understand their environment and perform complex
tasks, thereby enhancing the product’s i ntelligence level and user experience.
Additionally, distributed neural control network technology employs low-power,
high-efficiency communication protocols to ensure real-time collaborative control
among smart home devices. Overall, so lid technological capabilities enable
robotic products to achieve high intelligence, adaptability and stability, which are
core advantages for companies to stand out in a highly competitive market.
. Continuous optimization of enhanced product functionalities: Multifunctional
execution-enhanced robots can perform and achieve more functions, as well as
enable multi-dimensional task coordinat ion. For example, in cleaning, a robot can
first perform cleaning and then reposition a humidifier to achieve all-around
environmental optimization services. This multi-task coordination and
collaborative operation significantly enh ances the practicality and convenience
of execution-enhanced robots, allowing end consumers to enjoy more efficient and
intelligent service experiences during use.
. Strong brand image: A strong brand image and reputation can increase end
consumers’ trust and recognition of execution-enhanced robots. By offering
diverse product functionalities, user-centric services, and unique usage
experiences, companies can gain consumer approval and establish a positive
reputation. Users who experience stable, high-quality products are more likely to
develop long-term trust and make repeat purchases. Positive word-of-mouth can
also attract more potential end consumers, driving sustained market growth for
the brand.
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COMPETITION LANDSCAPE OF GLOB AL HOME ROBOTIC SYSTEM INDUSTRY
Overview of Major Players in Global Home Robotic System Industry
The competition in the global home robotic sy stem industry has gradually intensified
in recent years and is highly dynamic. On the one hand, existing enterprises in this industry
are continuously advancing embodied intellig ence technologies for home scenarios and the
implementation of system-level applications. On the other hand, new market entrants are
actively competing for market share. Additionally, leading international technology
companies, leveraging their comprehensi ve strengths in fields such as artificial
intelligence algorithms and hardware manufac turing are accelerating the introduction of
innovative products and technical solutions, thereby further intensifying competition and
adding uncertainty to the industry’s competitive environment.
By the end of 2024, the major players in the industry included our Company and
Company A. Leveraging its technological innovation capabilities, our Company stands out
as an industry player who fully deploys the home robotic system category and it is also the
pioneer of dexterous hand-mimic robots, including finger robots, fingerprint lock robots
and curtain robots, and enhanced mobile robots and their combinations.
From the perspective of comprehensive product solutions, we are a company to achieve
full deployment of home robotic categories across comprehensive home living scenarios.
Full deployment means our product portfolio covers the entire range of execution-enhanced
robots, perception and decision-making systems.
In terms of retail sales, we ranked first among providers of home robotic system
products in the global market in 2024. The following chart illustrates the ranking and
market share of the top five players in the gl obal home robotic system industry in terms of
retail sales in 2024.
~7.1
~5.8
~5.6
~5.0
~2.3
~11.9%
~9.8%
~9.4%
~8.4%
~3.9%
Company
Company A(2)
Company B(3)
Company C(4)
Company D(5)
Ranking
1
2
3
RMB100 million
4
5
Market Share %
Ranking of Players in Global Home Robotic System Industry, by Retail Sales(1), 2024
INDUSTRY OVERVIEW
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Notes:
(1) For the specific meaning of home robotic systems, pl ease refer to the section headed ‘‘Glossary’’ in
this prospectus.
(2) Retail sales refers to the total sales value of a p roduct when it is sold to the final consumer through
retail channels, including any markups added by distributors or retailers.
(3) Company A: was established in 2010 with its hea dquarters in Beijing, China. It was listed on the
Stock Exchange in 2018. Company A is a consumer electronics and intelligent manufacturing
company centered on smartphones, smart hardware, and the IoT platform.
(4) Company B: was founded in 2009 with its headquarters in Shenzhen. Company B focuses on smart
home and IoT solutions, covering the research and development, production, and sales of smart
devices.
(5) Company C: was founded in 1891, headquartered in Am sterdam, the Netherlands, and listed on the
New York Stock Exchange in 1987. Company C is a large comprehensive company with
departments including healthcare, lighting, and premium lifestyle, covering a wide range of
business areas.
(6) Company D: was established in 2015 with its headquarters in Hangzhou, China. It was listed on the
Shanghai Stock Exchange in 2022. Company D is co mmitted to becoming a trustworthy smart home
service provider and an IoT cloud platform provider.
Source: Frost & Sullivan Analysis, e-commerce platforms
Competitive Landscape in Various Sub-markets
From the perspective of competition in various sub-markets, we achieved market
shares of 6.2%, 9.4% and 12.9% in finger robots, lock robots and curtain robots,
respectively, respectively ranked first, fourth , first in terms of retail sales in 2024 in global
market. We have also developed the world’s smallest intelligent laser robotic vacuum
cleaner. As of May 2025, we launched the SwitchBot AI Hub that integrates large language
models with edge computing, which significantly boosts local computing power, enabling
faster and more efficient decision-making. This product represents a further upgrade from
the AI capabilities of the original Hub, with a dded edge computing ca pabilities, enabling
multi-source perception and autonomous decision-making in multiple scenarios. It can also
collaborate with home robots to complete various functions such as home patrol.
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--- page 143 ---
In the Japanese market, we ranked first among providers of home robotic system
products in terms of retail sales from 2022 to 2024 and our finger robot, lock robot and
curtain robot ranked first from 2022 to 2024 i nJ a p a n e s em a r k e t .T h es p e c i f i cr a n k i n gi s
shown in the graphs below.
~3.7
~1.0
~0.6
~0.4
~0.2
~20.7%
~5.4%
~3.5%
~2.5%
~1.2%
Company
Company A
Company B
Company C
Company E(2)
Ranking
1
2
3
RMB100 million
4
5
Market Share %
Ranking of Players in Japanese Home Robotic System Industry, by Retail Sales(1), 2024
Notes:
(1) For the specific meaning of home robotic systems, pl ease refer to the section headed ‘‘Glossary’’ in
this prospectus.
(2) Retail sales refers to the total sales value of a p roduct when it is sold to the final consumer through
retail channels, including any markups added by distributors or retailers.
(3) Company E: was registered in 2019 with its he adquarters in China. Company E is to design and
provide comprehensive solutions to smart home devices.
Source: Frost & Sullivan Analysis, e-commerce platforms
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--- page 144 ---
In terms of retail sales by product category, we achieved market shares of 11.2% and
14.2% with respect to perception and decision-making systems and execution-enhanced
robots, respectively, in 2024. We ranked fourth and first globally in terms of retail sales of
perception and decision-making systems and execution-enhanced robots in 2024. Market
participants in the global home robotic system s can be roughly divided into two categories.
The first category is vertical participants, w hich means enterprises focusing on a single
product line, specifically including those that only focus on perception and decision-making
systems, and those that only specialize in exe cution-enhanced robots. The second category
is comprehensive participants, which means enterprises that lay out both of the
above-mentioned product categories. In addition, the market distribution of the global
home robotic systems industry is mainly concentrated in Japan, Europe and North
America. Currently, both the perception a nd decision-making systems market and the
execution-enhanced robots market are in a fierce competition, with our Company,
Company A, Company B and Company C being the major participants. We achieved
market shares of 27.0% and 28.0% in Europe and North America, respectively, in terms of
retail sales in 2024. The following charts illust rate the market share information of the top
five players in the global perception and decision-making system and execution-enhanced
robot industries in terms of retail sales in 2024.
~3.3
~3.0
~2.8
~2.6
~1.3
~14.0%
~13.0%
~11.9%
~11.2%
~5.0%
Company
Company B
Company C
Company A
Company D
Ranking
1
2
3
RMB100 million
4
5
Market Share %
Ranking of Players in Global Perception and Decision-making System Industry, by Retail Sales(1), 2024
Note:
(1) Retail sales refers to the total sales value of a p roduct when it is sold to the final consumer through
retail channels, including any markups added by distributors or retailers.
Source: Frost & Sullivan Analysis, e-commerce platforms
INDUSTRY OVERVIEW
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--- page 145 ---
~4.5
~2.6
~2.6
~2.3
~1.0
~14.2%
~8.1%
~8.1%
~7.1%
~3.2%
Company
Company A
Company B
Company C
Company D
Ranking
1
2
3
RMB100 million
4
5
Market Share %
Ranking of Players in Global Execution-enhanced Robot Industry, by Retail Sales(1), 2024
Note:
(1) Retail sales refers to the total sales value of a p roduct when it is sold to the final consumer through
retail channels, including any markups added by distributors or retailers.
Source: Frost & Sullivan Analysis, e-commerce platforms
INDUSTRY OVERVIEW
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--- page 146 ---
This section sets out a summary of certain aspects of the laws and regulations which are
relevant to the business and operations of our Group. The principal objective of this
summary is to provide potential investors with an overview of the key laws and regulations
applicable to us. This summary does not purport to be a comprehensive description of all the
laws and regulations applicable to our business and operations and/or which may be
important to potential investors. Investors should note that the following summary is based
on laws and regulations in force as at the date of this prospectus, which may be subject to
change.
A. PRC LAWS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of the PRC,
which are relevant to the business and operations of our Group.
Regulations Relating to Foreign Investment
All limited liability companies incorporated and operating in the PRC are
governed by Company Law of the People’s Republic of China (《中華人民共和國公司
法》) (the ‘‘Company Law’’), which was amended on December 29, 2023 and became
effective on July 1, 2024. The Company Law stipulates on the establishment and
dissolution of the company, the organizational structure and the capital system of the
company, and strengthens the responsib ilities of shareholders and management
personnel and corporate social responsibility.
The Foreign Investment Law of the People’s Republic of China (《中華人民共和國外
商投資法》) (the ‘‘Foreign Investment Law’’), was promulgated by the National
People’s Congress and became effective on January 1, 2020, repealing simultaneously
the Law of the PRC on Sino-foreign Equity Joint Ventures (《中華人民共和國中外合資經
營企業法》), the Law of the PRC on Wholly Foreign-owned Enterprises (《中華人民共和
國外資企業法》)a n d the Law of the PRC on Sino-foreign Cooperative Joint Ventures
(《中華人民共和國中外合作經營企
業法》). On December 26, 2019, the State Council
promulgated the Regulation for Implementing the Foreign Investment Law of the
People’s Republic of China (《中華人民共和國外商投資法實施條例》) (the ‘‘FIE
Implementing Regulations’’), which became effective on January 1, 2020 and
replaced the implementation rules of each of the Law of the PRC on Sino-foreign
Equity Joint Ventures, the Law of the PRC on Wholly Foreign-owned Enterprises and the
Law of the PRC on Sino-foreign C ooperative Joint Ventures . The FIE Implementing
Regulations strictly implements the legislative principles and purpose of the Foreign
Investment Law, emphasizes promoting and protecting the foreign investment and
refines the specific measures to be implemented.
The Foreign Investment Law and the FIE Implementing Regulation apply the
administrative system of pre-establishment national treatment plus negative list to
foreign investment and clarify the state s hall develop a catalogue of industries for
encouraging foreign investment to specify the industries, fields, and regions where
foreign investors are encouraged and direct ed to invest. Investment activities in the
REGULATORY OVERVIEW
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--- page 147 ---
PRC by foreign investors were principally governed by the Catalog of Industries for
Encouraged Foreign Investment (2022 Version) (《鼓勵外商投資產業目錄（2022 年版）》)
(the ‘‘Encouraged Catalog’’), and the Special Administrative Measures for Access of
Foreign Investment (Negative List) (《外商投資准入特別管理措施（負面清單）》) (the
‘‘Negative List’’). The current Encouraged Catalog took effect on January 1, 2023 and
the current Negative List is the 2024 Negative List took effect on November 1, 2024,
and serves as the main basis for the management and supervision of foreign
investments in PRC. Foreign investment in those industries not set out on the 2024
Negative List and Encouraged Catalog is generally deemed as permitted unless
specifically restricted or prohibited under other PRC laws. The Encouraged Catalog
a n dt h eN e g a t i v eL i s tare subject to review and update by the PRC government from
time to time. Our business does not fall within the restricted or prohibited catalogue.
Regulations Relating to Product Quality
According to the Product Quality Law of the People’s Republic of China (《中華人
民共和國產品質量法》) (the ‘‘Product Quality Law’’) promulgated on February 22,
1993, and last amended on December 29, 2018, producers shall be responsible for the
quality of their products and sellers shal l adopt measures to maintain the quality of
products for sale. Where a defective product causes physical injury or damage to a
third party’s property, the victim may claim compensation from the manufacturer or
the seller of the product. If the seller pays compensation and it is the manufacturer that
should bear the liability, the seller has a r ight of recourse again st the manufacturer,
and vice versa, if the manufacturer pays compensation and it is the seller that is liable,
the manufacturer has a right of recourse.
Standardisation Law of the People’s Republic of China (《中華人民共和國
標準化
法》), promulgated on December 29, 1988, and last amended on November 4, 2017,
stipulates that products and services which do not comply with mandatory standards
shall not be manufactured, sold, imported or provided.
Regulations Relating to E-commerce Activities and Cross-Border E-commerce
E-commerce Activities
On August 31, 2018, the SCNPC promulgated the E-Commerce Law of the
People’s Republic of China (《中華人民共和國電子商務法》) (the ‘‘E-Commerce Law’’),
which became effective on January 1, 2019. Business activities conducted online to sell
commodities or offer services shall be governed by the E-Commerce Law .P u r s u a n tt o
the E-Commerce Law , e-commerce operators that engage in the business activities of
selling commodities or offering services th rough the internet and other information
networks include e-commerce platform operators, intra-platform business operators,
and other e-commerce operators that sell commodities or offer services through a
self-built website or o ther network services.
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--- page 148 ---
Cross-Border E-Commerce
Since 2013, the PRC government has promulg ated multiple regulations or policies
to encourage and support the development of cross-border e-commerce in China.
These include the Notice of the General Office of the State Council on Forwarding the
Opinions of the Ministry of Commerce and Other Departments on Implementing Relevant
Policies to Support the Cross-Border E-Commerce Retail Export (《國務院辦公廳轉發商
務部等部門關於實施支持跨境電子商務零售出口有關政策意見的通知》) issued by the
General Office of the State Council on August 21, 2013, the Guiding Opinions of the
General Office of the State Council on Promoting the Sound and Rapid Development of
Cross-Border E-Commerce (《國務院辦公廳關於促進跨境電子商務健康快速發展的指導
意見》) issued by the General Office of the State Council on June 16, 2015, the Several
Opinions of the State Council on Promoting the Stabilization and Upswing of Foreign
Trade (《國務院辦公廳關於支持外貿穩定增
長的若干意見》) issued by the State Council
on May 15, 2014, and the Letter of 14 Departments including the Ministry of Commerce
on Replicating and Popularizing Mature Experience and Practices from Cross-Border
E-Commerce Comprehensive Pilot Zones joi ntly issued by the Ministry of Commerce
(《商務部等14個部門關於複製推廣跨境電子商務綜合試驗區探索形成的成熟經驗做法的
函》), the NDRC and another twelve departments on October 26, 2017. These policies
support implementation of preferent ial tax policies for e-commerce export,
establishment of the e-commerce export cr edit system, establishment of warehouses
for export products and overseas operation centers, creation of independent brands
and improvement of export product quality, optimization of cross-border e-commerce
management model and customs clearance formalities, and provisions of payment
services and foreign exchange settlement services to cross-border e-commerce
enterprises.
Exportation of Goods
Pursuant to the Foreign Trade Law of the People’s Republic of China (《中華人民共
和國對外貿易法》) which took effect on July 1, 1994, and last amended on December
30, 2022, foreign traders engaging in import and export of goods or technology shall
submit documents and material related to it s foreign trade activities to the relevant
departments in accordance with the provisions of the foreign trade department of the
State Council or other relevant State Council departments in accordance with the law.
Pursuant to the Law of the People’s Republic of China on Import and Export
Commodity Inspection (《中華人民共和國進出口商品檢驗法
》) which was promulgated
on February 21, 1989 and last amended on April 29, 2021, the import and export
commodities which are listed in the Catalogue shall be inspected in accordance with the
compulsory requirements of the technical regulations of the State.
Pursuant to the Customs Law of the People’s Republic of China (《中華人民共和國
海關法》) promulgated on January 22, 1987 and last amended April 29, 2021, unless
otherwise stipulated, the declaration of import and export goods may be made by
consignees and consignors themselves, and such formalities may also be completed by
REGULATORY OVERVIEW
–1 3 8–


--- page 149 ---
their entrusted customs brokers that have registered with the Customs. The consignees
and consignors for import or export of goods and the customs brokers engaged in
customs declaration shall file for record with the Customs in accordance with the laws.
Pursuant to the Administrative Provisions of the Customs of the PRC on the Filing
of Customs Declaration Entities (《中華人民共和國海關報關單位備案管理規定》)w h i c h
took effect on January 1, 2022, the consignees and consignors for imported or exported
goods and the customs brokers engaged in customs declarations shall undergo
recordation formalities at the relevant a dministration department of customs in
accordance with the laws.
Regulations Relating to Intellectual Property
Copyright
On September 7, 1990, the SCNPC promulgated Copyright Law of the People’s
Republic of China (《中華人民共和國著作權法》), which was last amended in 2020. The
implementing regulations of the PRC Copyright Law (《中華人民共和國著作權法實施條
例》)was promulgated in 2002 and amended in 2013. The PRC Copyright Law and its
implementation regulations are the principal laws and regulations governing copyright
related matters. Pursuant to the amended PRC Copyright Law , products disseminated
over the internet and software products, among others, are entitled to copyright
protection. Registration of copyright is voluntary, and it is administrated by the China
Copyright Protection Center.
The State Council and National Copyright Adm inistration (hereinafter referred to
as ‘‘NCA’’), have promulgated various rules and regulations relating to the protection
of software in China, including the Regulations on Protection of Computer Software
(《計算機軟件保護條例》) which took effect on March 1, 2013, and the Measures for
Registration of Copyright of Computer Software (《計算機
軟件著作權登記辦法》)w h i c h
took effect on February 20, 2002. According to these rules and regulations, software
owners, licensees, and transferees may register their rights in software with the NCA or
its local branches and obtain software copyr ight registration certificates. Although
such registration is not mandatory unde r PRC law, software owners, licensees, and
transferees are encouraged to complete the registration process and thus the registered
software rights may be entitled to better protections.
Trademark
According to the Trademark Law of the People’s Republic of China (《中華人民共
和國商標法》), promulgated by the SCNPC in August 1982, and last amended in 2019,
the Trademark Office of China National Intellectual Property Administration is
responsible for the registration and administration of trademarks. Registered
trademarks are valid for ten years from the date the registration is approved. A
registrant may apply to renew a registra tion within twelve months before the
expiration date of the registration. If the registrant fails to apply in a timely
manner, a grace period of six additional months may be granted. If the registrant fails
to apply before the grace period expires, the registered trademark shall be deregistered.
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Renewed registrations are valid for ten years. In April 2014, the State Council issued
the revised Implementing Regulations of the PRC Trademark Law (《中華人民共和國商
標法實施條例》), which specified the requirements of applying for trademark
registration and review.
Patent
According to the Patent Law of the People’s Republic of China (《中華人民共和國
專利法》) promulgated by the SCNPC in 1984 and last amended in 2020, a patentable
invention or a utility model must meet three criteria: novelty, inventiveness and
practicability. The Patent Office under the State Intellectual Property Office is
responsible for receiving, examining, and approving patent applications. A patent is
valid for a twenty-year term for an inventi on, a ten-year term for a utility model and a
fifteen-year term for a design, starting from the application date. Except for certain
specific circumstances provided by law, any third-party users must obtain consent or a
proper license from the patent owners to use the patent, otherwise, the use of the
patent will constitute an infringement of the rights of the patent holder.
Domain Names
On August 24, 2017, the MIIT promulgated the Administrative Measures on
Internet Domain Names (《互聯網域名管理辦法》). Internet domain name services as
well as the operation, maintenance, supervis ion, and administration thereof and other
relevant activities within the territory o f the PRC shall be made in compliance with the
Administrative Measures for Internet Domain Names . In accordance with the Measures
on Country Top-level Domain Name Dispute Resolution (《中國互聯網絡信息中心國家頂
級域名爭議解決辦法》) promulgated by the China Internet Network Information
Center (hereinafter referred to as ‘‘CNNIC’’), which became effective on June 18,
2019, domain name dispute can be resolved by a domain name dispute resolution
institution recognized by the CNNIC.
Regulations Relating to Outbound Investments By Enterprises
Pursuant to the Administrative Measures on Outbound Investment s(《
境外投資管理
辦法》), which was promulgated by the MOFCOM on March 16, 2009, lastly amended
on October 6, 2014, overseas investments of e nterprises involving sensitive countries
and regions and sensitive industries shal l be subject to examination and approval by
the competent department of commerce and other overseas investments of enterprises
shall be subject to filing. The competent department of commerce shall carry out the
administration of overseas investments of e nterprises through the overseas investment
administration system, and issue to enterpr ises which have obtained filing or approval
a Certificate of Overseas Investments of E nterprises. When the domestic institution
invests in an overseas enterprise through its overseas subsidiary, it shall report to the
competent department of commerce after completing the overseas legal formalities of
reinvestment.
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Pursuant to the Administrative Measures for the Outbound Investments by
Enterprises (《企業境外投資管理辦法》), which was promulgated by the NDRC on
December 26, 2017 and became effective on March 1, 2018, projects subject to
approval are sensitive projects to be carried out by investors either directly or through
overseas enterprises controlled thereby and the approval authority is NDRC. Projects
subject to filing are non-sensitive projects directly carried out by investors.
Pursuant to the Provisions on the Foreign Exchange Administration of the Overseas
Direct Investment of Domestic Institutions (《境內機構境外直接投資外匯管理規定》)
promulgated by the SAFE on July 13, 2009 and implemented on August 1, 2009 and
the Notice on Further Simplifying and Improving Policies for the Foreign Exchange
Administration of Direct Investment (《關於進一步簡化和改進直接投資外匯管理政策的
通知》) promulgated by the SAFE on February 13, 2015, implemented on June 1, 2015
and was partially repealed on December 30, 2019, stipulates that, upon obtaining the
approval for overseas investment, the overseas direct investment of PRC enterprises
shall apply for foreign exchange registration to the banks at their places of registration.
Regulations Relating to Foreign Exchange
Pursuant to the Foreign Exchange Administration Regulations of the People’s
Republic of China (《中華人民共和國外匯管理條例》) last amended in August 2008, the
RMB is freely convertible for current acco unt items, including the distribution of
dividends, interest payments, trade and service-related foreign exchange transactions,
but is subject to certain foreign exchange regulations for capital account items, such as
direct investments, loans, repatriation of investments and investments in securities
outside the PRC, which require prior registration with SAFE or its designated banks.
Pursuant to the Notice on Further Simplifying and Improving Policies of Foreign
Exchange Administration on Direct Investment (《關於進一步簡化和改進直接投資外匯
管理政策的通知》), promulgated by the SAFE and effective on June 1, 2015, two
administrative approval matters, including foreign exchange registration approval
under domestic direct investment and foreign exchange registration approval under
overseas direct investment, shall be revi ewed and processed directly by banks. The
SAFE and its local bureaus shall implement indirect supervision through the foreign
exchange registration with banks for direct investment.
Pursuant to the Notice of the SAFE on Reforming the Administration of Foreign
Exchange Settlement of Capital of Foreign-invested Enterprises (《國家外匯管理局關於
外商投資企業外匯資本金結匯管理方式的通知》) (the ‘‘SAFE Circular 19’’), which took
effect on June 1, 2015, and was partially amended on March 23, 2023, and t h eN o t i c eo f
the State Administration of Foreign Exchange on Reforming and Standardizing the
Foreign Exchange Settlement Management Policy of Capital Account (《國家外匯管理局
關於改革和規範資本項目結匯管理政策的通知》) (the ‘‘SAFE Circular 16’’),
promulgated and effective on June 9, 2016, and was partially amended on December
4, 2023, the system of voluntary foreign ex change settlement is implemented for the
foreign exchange earnings of foreign exchange capital of foreign-invested enterprises
(‘‘FIE’’). Foreign exchange capital in an FI E’s capital account, for which the monetary
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contribution has been registered, may be settled at a bank as required by the actual
management needs of the enterprise. The proportion of discretionary foreign exchange
settlement of the foreign exchange capital is temporarily determined as 100%. The
SAFE may make adjustments to the said ratio at appropriate times based on the status
of the international balance of payments. In addition, The foreign exchange incomes of
capital accounts and capital in RMB obtained by an FIE from foreign exchange
settlement shall not be used for any of the following purposes: (i) directly or indirectly
for payments outside the business scope of the FIE or payments prohibited by
applicable laws and regulations; (ii) directl y or indirectly for investment in securities or
financial schemes other than bank guaranteed products (except for wealth management
products and structured deposits with a risk rating not higher than level two) unless
otherwise provided by applicable laws and regulations; (iii) the granting of loans to
non-affiliated enterprises, unless otherwise permitted by its business scope; and (iv) the
construction or purchase of real estate that is not for self-use (except for enterprises
engaged in real estate development and leasing operations).
On October 23, 2019, the SAFE promulgated t h eN o t i c eo ft h eS t a t e
Administration of Foreign Exchange on Further Promoting the Convenience of
Cross-border Trade and Investment (《國家外匯管理局關於進一步促進跨境貿易投資便
利化的通知》) (the ‘‘SAFE Circular 28’’), which was partially amended. The SAFE
Circular 28 provides that non-investment foreign-invested enterprises may use capital
to make equity investment in the PRC in accordance with laws under the premise that
the investment is not in violation of the applicable special entry management measures
for foreign investment (negative list) and the projects invested are true and in
compliance with relevant laws and regulations.
On April 10, 2020, the SAFE issued the Notice of the SAFE on Optimizing Foreign
Exchange Administration to Support the Development of Foreign-related Business (《國家
外匯管理局關於優化外匯管理支持涉外業務發展的通知》) (‘‘the SAFE Circular 8’’). The
SAFE Circular 8 provides that under the condition that the use of the funds is genuine
and compliant with current administrative provisions on use of income relating to
capital account, enterprises are allowed to use income under capital account such as
capital funds, foreign debts and overseas listings for domestic payment, without
submission to the bank prior to each transaction of materials evidencing the veracity of
such payment.
Regulations Relating to Dividend Distributions
According to the Company Law and Foreign Investment Law , the PRC Entities, as
FIEs, are required to draw 10% of its after-tax profits each year, if any, to fund a
statutory reserve, which may stop drawing its after-tax profits if the aggregate balance
of the statutory reserve has already account e df o ro v e r5 0 %o fi t sr e g i s t e r e dc a p i t a l .
These reserves are not distributable as cash dividends.
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Regulations Relating to Share Incentive Plans
According to the Notice of the State Administration of Foreign Exchange on Issues
Relating to the Foreign Exchange Administration for Domestic Individuals Participating
in Stock Incentive Plan of Overseas Listed Company (《國家外匯管理局關於境內個人參
與境外上市公司股權激勵計劃外匯管理有關問題的通知》) (the ‘‘Share Incentive
Rules’’), which was issued on February 15, 2012, and other related regulations,
directors, supervisors, senior management and other employees who are (i) PRC
citizens or non-PRC citizens residing in mainland China for a continuous period of not
less than one year, and (ii) participating in a ny share incentive plan of a company listed
overseas, subject to certain exceptions, are required to register with the SAFE. All such
participants need to authorize a qualified PRC agent, such as a PRC subsidiary of the
company listed overseas, to register with t he SAFE and to deal with foreign exchange
matters such as account opening and transfer and settlement of proceeds. The Share
Incentive Rules further require an offshore agent to be designated to take charge over
matters relating to the exercise of share op tions and sales proceeds for participants of
the share incentive plans. Failure to comple te the said SAFE registrations may subject
the participating directors, supervisors, senior management and other employees to
fines and other legal sanctions.
The State Administration of Taxation has further issued several circulars
concerning employee share options and restricted shares. Under these circulars,
employees working in the PRC who exercise share options or are granted with
restricted shares will be subject to PRC individual income tax. The mainland China
subsidiaries of a company listed overseas are required to file documents relating to
employee share options and restricted sha res with relevant tax authorities and to
withhold individual income tax for employees who exercise their share options or
purchase restricted shares. If an emplo yee fails to pay or the mainland China
subsidiaries fail to withhold income ta x in accordance with relevant laws and
regulations, the mainland China subsidiaries may face penalties imposed by the tax
authorities.
Regulations Relating to Cybersecurity and Data Security
According to the Cybersecurity Law of the People’s Republic of China (《中華人民
共和國網絡安全法》) (the ‘‘Cybersecurity Law’’), which was promulgated by the
SCNPC and became effective on June 1, 2017, and other related laws and
regulations, network service providers are required to take measures to safeguard
cybersecurity by complying with cybersecuri ty obligations, formulating cybersecurity
emergency response plans, and providing technical assistance and support to public
security and national security authorit ies. Failure to comply with such laws and
regulations may subject the network service providers to administrative penalties
including, without limitation, fines, suspension of business operation, shutdown of
business websites, revocation of licen ses as well as criminal liabilities. The
Cybersecurity Law applies to the construction, operation, maintenance and use of
the network as well as the supervision and adm inistration of cybersecurity within the
territory of China.
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After the release of the Cybersecurity Law , on May 2, 2017, the Cyberspace
Administration of Chin a (the ‘‘CAC’’) issued the Measures for Security Reviews of
Network Products and Services (Trial) (《網絡產品和服務安全審查辦法（試行）》), which
was later replaced by the Cybersecurity Review Measures (《網絡安全審查辦法》). The
Cybersecurity Review Measures was promulgated by the CAC and other relevant
authorities on April 13, 2020 and last amended on February 15, 2022. The
Cybersecurity Review Measures establishes the basic framework and principle for
national security reviews of network products and services. Pursuant to the
Cybersecurity Review Measures , in addition to critical information infrastructure
operators purchasing network products or services that affect or may affect national
security, any ‘‘online platform operators’ ’ controlling personal information of more
than one million users which seeks to list on a foreign stock exchange should also be
subject to cybersecurity review. Government authorities may initiate a cybersecurity
review against an online platform operator if such authorities believe that the network
products or services or data processing activities of such operator affect or may affect
national security.
On July 30, 2021, the State Council promulgated the Regulations on Protection of
Critical Information Infrastructure (《關鍵信息基礎設施安全保護條例》) which took
effect on September 1, 2021, and pursuant to which, ‘‘critical information
infrastructures’’ is defined to mean crit ical network facilities and information
systems involved in important industries and sectors, such as public communication
and information services, energy, transportation, water conservancy, finance, public
services, governmental digital services, s cience and technology related to national
defense industry, as well as those which may seriously endanger national security,
national economy, livelihood of citizens, or public interests if any damage is suffered
or caused to malfunction, or if any leakage of data in relation thereto occurs. Pursuant
to these regulations, the relevant governmental authorities are responsible for
stipulating rules for the identification of critical information infrastructures with
reference to several factors set forth in the regulations, and further identify critical
information infrastructure operators in th e related industries in accordance with such
rules. The relevant authorities shall also notify any operator if it is identified as a
critical information infrastructure operator. As of the date of this prospectus, we have
not been informed as a critical information infrastructure operator by any government
authorities.
On June 10, 2021, the SCNPC promulgated the Data Security Law of the People’s
Republic of China (《中華人民共和國數據安
全法》) (the ‘‘Data Security Law’’), which
took effect on September 1, 2021. The Data Security Law provides for data security
and privacy obligations on entities and individuals carrying out data-related activities.
The Data Security Law also introduces a data classificati on and hierarchical protection
system based on the importance of the data with respect to economic and social
development, as well as the degree of harm that will result on national security, public
interests, or legitimate rights and interests of individuals or organizations if such data
is tampered with, destroyed, leaked, or ille gally acquired or used. The appropriate level
of protection measures is required to be taken for each respective category of data. For
example, a processor of important data shall have designated personnel and a
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management body responsible for data security, carry out risk assessments for its data
processing activities and file its risk assessment reports with the competent authorities.
In addition, the Data Security Law sets out a national security review procedure
applicable to data processing activities that affect or may affect national security and
imposes restrictions on the export of certain data.
On December 8, 2022, the MIIT issued the Administrative Measures for Data
Security in the Field of Industry and Information Technology (Trial Implementation)
(《工業和信息化領域數據安全管理辦法（試行）》) (the ‘‘MIIT Data Security Measures’’),
which took effect on January 1, 2023. The MIIT Data Security Measures prescribes
that data processors in the field of industr y and information technology shall follow
the principles of lawfulness and appropriat eness in collecting data. During the data
collection process, the data processors shal l take security measures corresponding to
and appropriate for the relevant data.
On May 10, 2024, the MIIT issued the Implementing Rules for the Risk Assessment
of Data Security in the Field of Industry and Information Technology (Trial
Implementation) (《工業和信息化領域數據安全風險評估實施細則（試行）》), which took
effect on June 1, 2024. Such implementing rules apply to data security risk assessment
activities conducted by important data or core data processors in the field of industry
and information technology in China. Gene ral data processors may also refer to these
rules to conduct data security risk assessme nt. The implementing rules establish data
security risk assessment mechanisms at both ministerial and provincial levels, refine
assessment obligations of processors of important data and core data, and clarify the
mechanism and procedures for competent industrial authorities to supervise and
administer such assessment activities.
On September 24, 2024, the Regulations on Network Data Security Management
(《網絡數據安全管理條例》) was issued by the State Council, which took effect on
January 1, 2025. According to the Regulations on Network Data Security Management ,
network data handlers shall, in accordance with the provisions of laws and
administrative regulations and the manda tory requirements of national standards,
and on the basis of classified protection of cyber security, strengthen the protection of
network data security, establish and perfect the system of network data security
management, take technical measures to protect network data, and prevent illegal and
criminal activities aiming at and using network data.
Regulations Relating to Labor
Labor Law and Labor Contracts
According to
the Labor Law of the People’s Republic of China (《中華人民共和國勞
動法》) promulgated on July 5, 1994, and last amended on December 29, 2018,
enterprises shall establish and improve their system of workplace safety and sanitation,
strictly abide by state rules and standards o n workplace safety, and conduct employees
training on labor safety and sanitation in the PRC. Labor safety and sanitation
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facilities shall comply with statutory standards. Enterprises and institutions shall
provide employees with safe workplace and sa nitation conditions that follow relevant
laws and regulations of labor protection.
The Labor Contract Law of the People’s Republic of China (《中華人民共和國勞動
合同法》) promulgated on June 29, 2007, and amended on December 28, 2012, and the
Implementation Rules of the Labor Contract Law of the People’s Republic of China (《中
華人民共和國勞動合同法實施條例》) promulgated on September 18, 2008, set out
specific provisions in relation to the execution, the terms and the termination of a labor
contract and the rights and obligations of the employees and employers, respectively.
At the time of employment, the employers sh all truthfully inform the employees of the
scope of work, working conditions, workplace, occupational hazards, work safety,
salary, and other matters that the employees request.
Social Insurance and Housing Fund
Employers in the PRC are required to contribute, for and on behalf of their
employees, to a number of social insurance funds, including funds for pension,
unemployment insurance, medical insurance, work related injury insurance, maternity
insurance, and housing fund. These payments are made to local administrative
authorities and employers. The various laws and regulations that govern the
employers’ obligations to contribute to the social insurance funds include the Social
Insurance Law of the People’s Republic of China (《中華人民共和國社會保險法》), which
was promulgated by the SCNPC on October 28, 2010, and amended on December 29,
2018, the Interim Regulations on the Collection and Payment of Social Insurance
Premiums (《社會保險費徵繳暫行條例》), which was promulgated by the State Council
on January 22, 1999, and amended on March 24, 2019, the Regulations on Work-related
Injury Insurance (《工傷保險條例》), which was promulgated by the State Council on
April 27, 2003, and amended on December 20, 2010, and the Regulations on
Management of the Housing Fund (《住房
公積金管理條例》), which was promulgated
and became effective on April 3, 1999, and was last amended on March 24, 2019.
Under the abovementioned laws and regulations, employers who fail to contribute to
the above social insurance and housing provident funds may be subject to a fine and
ordered to make full payment within a prescribed time period.
Regulations Relating to Work Safety
Under relevant construction safety laws and regulations, including Work Safety
Law of the People’s Republic of China (《中華人民共和國安全生產法》), which was
promulgated by the SCNPC on June 29, 2002 and last amended on June 10, 2021,
production and operating business entities must establish objectives and measures for
work safety and improve the working environment and conditions for workers in a
planned and systematic way. A work safety protection scheme must also be set up to
implement the work safety responsibilit y system. In addition, production and
operating business entities must arrange work safety training and provide their
employees with protective equipment that meets the national or industrial standards.
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Regulations Relating to Environmental Protection
Pollutant discharge
Pursuant to the Environmental Protection Law of the People’s Republic of China
(《中華人民共和國環境保護法》) (the ‘‘Environmental Prot ection Law’’) promulgated by
the SCNPC on December 26, 1989, amended on April 24, 2014, and effective on
January 1, 2015, any entity which discharges or will discharge pollutants during the
course of manufacturing, construction or other activities must implement effective
environmental protection safeguards and procedures to control and properly treat
waste gas, waste water, waste residue, dust, malodorous gases, radioactive substances,
noise, vibrations, electromagnetic radiation, and other hazards produced during such
activities.
Environmental protection authorities impose various administrative penalties on
persons or enterprises in violation of the Environmental Protection Law .S u c hp e n a l t i e s
include warnings, fines, orders to rectify within a prescribed period, orders to cease
construction, orders to restrict or suspend production, orders to make recovery, orders
to disclose relevant information or make an announcement, imposition of
administrative action against relevant res ponsible persons, and orders to shut down
enterprises. In addition, environmental organizations may also bring lawsuits against
any entity that discharges pollutant s detrimental to the public welfare.
Pursuant to the Administrative Measures for Pollutant Discharge Licensing (for
Trial Implementation) (排污許可管理辦法（試行）) promulgated on January 10, 2018
and partially amended on August 22, 2019, which were subsequently replaced by the
Administrative Measures for Pollutant Discharge Licensing (排污許可管理辦法)t h a t
took effect on July 1, 2024, enterprises, public institutions and other producers and
operators under the administration of discharge permits shall apply for and obtain a
pollutant discharge license and discharge po llutants in accordance with the provisions
of the discharge permit. Any enterprise that fails to obtain a pollutant discharge license
as required shall not discharge pollutants. According to the Catalog of Classified
Administration of Pollutant Discharge License for Stationary Pollution Sources (2019)
(固定污染源排污許可分類管理名錄（2019 年版）) issued by the MEE on December 20,
2019, key management, simplified management and registration management of
pollutant discharge permits are implemented according to factors including the
amount of pollutants generated, the amount of pollutants discharged, the degree of
impact on the environment, etc., and only pollutant discharge entities that implement
registration management do not need to apply for a pollutant discharge permit.
Regulations Relating to Fire Control
Fire Protection Design Procedure
The Fire Prevention Law of the People’s Republic of China (《中華人民共和
國消防
法》) (the ‘‘Fire Prevention Law’’) was adopted on April 29, 1998, and last amended on
April 29, 2021. According to t h eF i r eP r e v e n t i o nL a wand other relevant laws and
regulations of the PRC, the Emergency Management Authority of the State Council
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and local governments at or above the county level shall monitor and administer the
fire prevention affairs, and the fire prevention and rescue departments of such
governments are responsible for implementation. T h eF i r eP r e v e n t i o nL a wprovides
that the fire prevention design or construction of a construction project must conform
to the national fire prevention technical standards.
The Required As-built Accep tance Check on Fire Preventi on and Fire Safety Filing
Pursuant to t h eF i r eP r e v e n t i o nL a w, upon the completion of a construction
project to which the fire prevention design has been applied, such project must pass the
required as-built acceptance check on fire prevention by, or file with, relevant housing
and urban-rural development authority. After the Fire Prevention Law was amended on
April 23, 2019, the relevant housing and urb an-rural development authority replaced
fire prevention and rescue departments to mo nitor and administer the required as-built
acceptance check on fire prevention and fire safety filing. Even if the construction
project has completed the fire safety filing, it may be randomly inspected by the
relevant government authorities and if it fails to pass random inspection by the
relevant government authorities after the fire safety filing, the construction entity shall
close down the construction project, and if rectification is not made, it will be ordered
by the relevant government authorities to close down or cease the business operations
and be fined not less than RMB30,000 but not more than RMB300,000.
Regulations Relating to Lease Property
Pursuant to Administrative Measures on the Lease of Commodity Housing (《商品房
屋租賃管理辦法》) issued by the Ministry of Housing and Urban-Rural Development
on December 1, 2010, parties to a lease agreem ent shall complete the lease registration
and filing process with the competent construction (real estate) departments of the
municipalities directly under the PRC governments of cities and counties where the
housing is located within 30 days after the lease agreement is signed. For those who fail
to comply with the above regulations, such competent departments may impose a fine
ranging from RMB1,000 and RMB10,000 per lease.
Regulations Relating to Overseas Listings
On July 6, 2021, the General Office of the Central Committee of the Communist
Party of China and the General Office of the State Council jointly issued the Opinions
on Strictly Cracking Down Illegal Securit ies Activities in Accordance with the Law (《關
於依法從嚴打擊證券違法活動的意見》), which requests improvement on the laws and
regulations related to data security, cross-border data transfer and the management of
confidential information, st rengthening responsibility for the information security of
overseas listed companies, strengthening standardized mechanisms for providing
cross-border information and improvem ent of cross-border audit regulatory
cooperation in accordance with the law and the principle of reciprocity.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures
of Overseas Securities Offering and Listing by Domestic Companies (《境內企業境外發行
證券和上市管理試行辦法) (the ‘‘Trial Administrative Measures’’), which came into
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effect on March 31, 2023. On the same date, the CSRC circulated the Supporting
Guidance Rules No. 1 through No. 5, Notes on the Trial Administrative Measures,
Notice on Administration Arrangements for the Filing of Overseas Listings by
Domestic Enterprises and relevant CS RC Answers to Reporter Questions, or
collectively, the Guidance Rules and Not ice. Under the Trial Administrative
Measures and the Guidance Rules and No tice, domestic companies conducting
overseas securities offering and listing, either directly or indirectly, shall complete
filings with the CSRC pursuant to the Trial A dministrative Measures’ requirements
within three working days following the submission of an initial public offering or
listing application. If a domestic company fails to complete required filing procedures
or conceals any material fact or falsifies an y major content in its filing documents, such
domestic company may be subject to administrative penalties, such as order to rectify,
warnings, fines, and its controlling shareho lders, actual controllers, the person directly
in charge and other directly liable perso ns may also be subject to administrative
penalties, such as warnings and fines.
On February 24, 2023, the CSRC, Ministry of Finance of the PRC, National
Administration of State Secrets Protection, and National Archives Administration of
China jointly issued the Provisions on Strengthening the Confidentiality and Archive
Management Work Relating to the Overseas Securities Offering and Listing (《關於加強
境內企業境外發行證券和上市相關保密和檔案管理工作的規定》) (the ‘‘Confidentiality
Provisions’’), which came into effect on March 31, 2023, with the Trial
Administrative Measures. The Confidentiality Provisions require that, among other
things, (a) a domestic company that plans to, either directly or through its
overseas-listed entity, publicly disclose or provide to relevant individuals or entities
including securities companies, securities service providers, and overseas regulators,
any documents and materials that contain state secrets or working secrets of
government agencies, shall first obtain approval from competent authorities
according to law, and file with the secrec y administrative department at the same
level; and (b) domestic comp any that plans to, either directly or through its overseas
listed entity, publicly disclose or provide to r elevant individuals and entities including
securities companies, securities service p roviders and overseas regulators, any other
documents and materials that, if leaked, will be detrimental to national security or the
public interest, shall strictly fulfill rele vant procedures stipulated by applicable
national regulations. Any failure or perceived failure by the company, or its PRC
subsidiary to comply with the above confid entiality and archives administration
requirements under the Confidentiality Provisions, and other PRC laws and
regulations may result in the relevant entiti es being held legally liable by competent
authorities and referred to the judicial authority to be inves tigated for criminal liability
if suspected of committing a crime.
Laws and Regulations in Relation to the H Share ‘‘Full Circulation’’
We shall comply with regulations on the H share ‘‘full circulation’’ to converse its
domestic shares into H shares and circulate on the Stock Exchange. Pursuant to the
Guidelines on Application for ‘‘Full Circulat ion’’ of Domestic Unlisted Shares of H-share
Companies (《H股公司境內未上市股份申請「
全流通」業務指引）》(the ‘‘Full Circulation
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Guidelines’’) promulgated and implemented by the CSRC on November 14, 2019, and
last revised and effective on August 10, 2023, shareholders of domestic unlisted shares
may determine by themselves through con sultation the amount and proportion of
shares, for which an application will be filed for circulation, provided that the
requirements laid down in the relevant laws a nd regulations and set out in the policies
for state-owned asset administration, fore ign investment and industry regulation are
met. After domestic unlisted shares are listed and circulated on the Stock Exchange,
t h e ym a yn o tb et r a n s f e r r e db a c kt oC h i n a .
According to the Full Circulation Guidelin es, ‘‘Full Circulation’’ represents the
shareholders of domestic unlisted shares of domestic companies (including the unlisted
domestic shares held by domestic shareholders before overseas listing, the unlisted
domestic shares issued in the territory after o verseas listing and the unlisted shares held
by foreign shareholders) are listed and circulated on the Stock Exchange. The
shareholders of domestic unlisted shares shall authorize the domestic company to file
the ‘‘Full Circulation’’ application with the CSRC by filing materials on key
compliance issues, including whether the ‘‘Full Circulation’’ has fulfilled adequate
internal decision-making procedures, necessa ry internal approvals and authorizations,
and whether the ‘‘Full circulation’’ involv es approval or filing procedures set out in the
laws, regulations and policies for state-owned asset administration, industry
supervision and foreign investment, an d if so, whether such approval or filing
procedures have been performed.
According to the Measures for Implementation of H-share ‘‘Full Circulation’’
Business (《H股「全流通」業務實施細則》) (the ‘‘Measures for Implementation’’),
promulgated by the CSDC and the Shenzhen Stock Exchange (the ‘‘SZSE’’) on
December 31, 2019, the businesses of cross-bor der transfer registration, maintenance
of deposit and holding details, transaction entrustment and instruction transmission,
settlement, management of participants, ser vices of nominal holders, etc. in relation to
the H-share ‘‘full circulation business,’’ are subject to the Measures for
Implementation. Where there is no provisi on in the Measures for Implementation, it
shall be handled with reference to oth er business rules of the CSDC and China
Securities Depository and Clearing (Hong Kong) Company Limited (the ‘‘CSDC
(Hong Kong)’’), and the SZSE. In order to fully promote the reform of H-shares ‘‘Full
Circulation’’ and clarify the business arrangement and procedures for the relevant
shares’ registration, custody, settlement and delivery, CSDC (Hong Kong)
promulgated the Circular on Issuing the amendment and publication of the
‘‘Guidelines for the Full Circulation’’ of H-Shares of China Securities Depository
and Clearing (Hong Kong) Company Limite d on September 20, 2024, effective on
September 23, 2024, which specifies the bus iness preparation, account arrangement,
cross-border share transfer registratio n and overseas centralized custody, among
others.
B. JAPAN LAWS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of Japan,
which are relevant to the business and operations of our Group.
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Laws and Regulations in Relation to Pr oduct Liability and Consumer Protection
Pursuant to the Product Liability Act of Japan (Act No. 85 of 1994), in the case
where a defect in a product causes damage to the life, body, or property of others, ‘‘the
manufacturer, etc.’’ is liable for such damage . If such product is imported, the importer
is included in definition of ‘‘manufacturer, etc.’’
Pursuant to the Act on Specified Commercial Transactions (Act No.57 of 1976, as
amended), a seller must include certain deta ils of a product in its advertisement and
application form, when such advertising and applicatio n for purchase are done via
websites or other media, and where the transaction of the product is conducted via
communication devices (postal mail or othe r information processing devices). These
details include selling prices, timing and means of paying, time of delivery, the
applicable policy on withdrawal/cancella tion of the transaction. A seller is also
prohibited from making misleading advertis ements, as well as sending advertisements
via email without the consent of the recipient.
Pursuant to the Act against Unjusti fiable Premiums and Misleading
Representations (Act No. 134 of 1962, as amended), entrepreneurs are prohibited
from making representations to general consumers that significantly exaggerate the
quality, standard, or other attributes of goods or services, thereby likely inducing
unjust transactions and impairing rational consumer choice (a ‘‘Misleading
Representation’’).
If the Prime Minister (or the Secretary General of the Consumer Affairs Agency
by delegation) deems it necessary to assess whether a representation constitutes a
Misleading Representation, they may designate a period during which the entrepreneur
must submit substantiating data. Failure to provide such data results in a presumption
that the representation is misleading.
Entrepreneurs found to have made Misleading Representations may be subject to:
1. Administrative orders, including:
. Rectification measures;
. Preventive actions; and
. Commitments not to repeat the violation;
2. Surcharges, equal to 3% of the sales amount related to the misleading
goods/services during the violation period (up to three years, including a
post-violation period of up to six months); and
3. Criminal penalties, including impri sonment (up to two years), individual
fines (up to JPY3 million), and corporate fines (up to JPY300 million) for
non-compliance with administrative orders.
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Entrepreneurs are also required to establish and implement internal compliance
systems under the Act. A failure to do so without just cause may lead to administrative
guidance.
Laws and Regulations in Relation to Electrical Appliances
Under the Electrical Appliance and Material Safety Act, all persons engaged in
importing Electrical Appliances and Materia ls shall fulfil the following obligations:
(i) Notification to the Minister of Economy, Trade and Industry;
(ii) Confirmation of compliance with the technical standards;
(iii) Assessment of the Electrical Appl iances and Materials and keeping the
record of the assessment for three years from the assessment;
(iv) Labelling the PSE mark with the Electrical Appliances and Materials; and
A person, including a judicial person (i.e .t h ec o m p a n y ) ,w h of a i l e dt of u l f i lt h e
obligations above may be subject to order for action and criminal penalty.
Under the Radio Act, when the specified radio equipment does not conform to the
technical regulations, etc., the Ministe r of Internal Affairs and Communications may
order to report on the specified radio equipment pertaining to the relevant technical
regulations conformity certification, to insp ect the relevant specified radio equipment,
etc., to submit the relevant specified radio equipment, etc., and to take measures
necessary for preventing the relevant obstruction or harm caused by the relevant
specified radio equipment from expanding, etc.
Therefore, in order to confirm the technical regulations under the Radio Act, a
person selling the specified radio equipme nt needs to receive the technical regulations
conformity certification service by the registered certification body and obtain the
technical regulations conformity certification.
Laws and Regulations in Relation to Labor and Employment
In Japan, several key labor laws govern employment relationships, including:
. the Labor Standards Act (Act No. 49 of 1947);
. the Industrial Safety and Health Act (Act No. 57 of 1972); and
. the Labor Contract Act (Act No. 128 of 2007).
The Labor Standards Act sets out minim um working conditions applicable to
most workers and employers in Japan (excluding, for example, national public
officers). Any contractual provision below these statutory standards is void, and
penalties apply for violations.
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The Industrial Safety and Health Act requires employers to implement workplace
safety and health measures, including formu lating industrial accident prevention plans
and establishing a safety and health management system.
The Labor Contract Act governs the employment contracts, dismissals, and
disciplinary actions. It emphasizes mutual agreement in employment terms and
protects employees by requiring that dismi ssals have objectively reasonable grounds
and be socially appropriate. Changes t o employment terms that disadvantage
employees must also be reasonable, or they will be deemed invalid.
Laws and Regulations in Relation to International Trade/Cross-border Trade
Under the Customs Act of Japan (Act No. 61 of 1954), in the case where an
importer is accepting goods arriving in Japan from a foreign country, an import
declaration shall be filed with Japan Customs in principle and customs duties, if any,
shall be paid. When an import declaration is made, Japan Customs shall inspect the
goods as necessary, and after confirming that the importer has paid the corresponding
customs duties, permit the importation of the goods.
If goods require a permit upon importation under laws and regulations other than
the Customs Act of Japan, it would be necessary for an importer to obtain a permit
prior to filing the import declaration.
Laws in Relation to Trademark
The Trademark Act (Act No. 127 of 1959, as amended) aims to protect registered
trademarks. A holder of registered trademark right or an exclusive license thereof may
demand a person who infringes or is likel y to infringe the trademark right or the
exclusive license to stop or prevent such infringement.
Laws and Regulations in Relation to Tax
Japanese companies are obliged to pay corporate tax. Corporate tax is broken
down into two parts: one part is levied based on the annual income of the previous
year, and the other part is levied uniformly regardless of the annual income. Corporate
tax rates and amounts vary depending on a company’s income and size (capital and
number of employees), ranging from 15% to 23.2%.
Laws and Regulations in Relation to Personal Data Collection
The Act on the Protection of Personal Information (Act No. 57 of 2003, as
amended) imposes various requirements on businesses that use databases containing
personal information. Under this Act, any holder of personal information must
lawfully use such personal information and must not use it beyond the scope of the
purposes specified when the information was obtained. Entities holding personal
information are also restricted from provid ing personal informati on to third parties,
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subject to certain narrow exceptions. This Act is also applicable to the operators
outside Japan which obtain personal information in relation to the provision of goods
or services to persons in Japan.
C. U.S. LAWS AND REGULATIONS
This section sets out a summary of certain a spects of laws and regulations of the U.S.,
which are relevant to the business and operations of our Group.
Laws and Regulations in Relation to Pr oduct Liability and Consumer Protection
As a manufacturer and seller of smart home robotic products, we may be subject
to liability under the relevant U.S. product liability and consumer protection laws if
our products are found to be defective. While specific laws and judicial interpretations
vary across the 50 U.S. states, product lia bility claims generally fall into three
categories: (i) design defects; (ii) manufa cturing defects; and (iii) failure to warn. Some
states also impose a post-sale duty to warn of newly discovered defects.
Product liability lawsuits may be brough t by end consumers or as class actions,
and manufacturers may face indemnity or contribution claims from others in the
supply chain. Remedies available to plain tiffs may include compensatory damages
(e.g., medical expenses, lost income, pro perty damage), and in some cases, punitive
damages for reckless or intentional misconduct.
The law of product safety is primarily under the jurisdiction of the U.S. Consumer
Product Safety Commission (the ‘‘CPSC’’), an administrative agency of the United
States federal government that regulates cer tain classes of products sold to the public.
The CPSC was established pursuant to the 1972 Consumer Product Safety Act (as
amended, the ‘‘CPSA’’). The CPSA is the umbrella statute at the federal level with
respect to product safety for consumer products.
The CPSA was amended by the U.S. Consumer Product Safety Improvement Act
of 2008 (the ‘‘CPSIA’’) in 2008. The imple mentation of CPSIA was a significant
overhaul of consumer product safety laws in the United States and was designed to
enhance federal and state efforts to improve the safety of all products imported into
and distributed in the United States. Prod ucts imported into the United States which
fail to comply with CPSIA’s requirements a re subject to confiscation and the importer
and/or distributor in the United States is subject to civil penalties and fines, as well as
possible criminal prosecution.
The Magnuson-Moss Warranty Act, administered by the Federal Trade
Commission, governs written and implied warranties for consumer products. While
warranties are not mandatory, any warranty provided must comply with disclosure and
labeling requirements under the Act. Consumers may pursue remedies for warranty
breaches through litigation, including recovery of attorneys’ fees.
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Laws and Regulations in Relation to International Trade
Our cross-border operations include the importation of goods into the United
States and the exportation of goods from the United States. As a result, our business
requires compliance with tariffs and other import controls, anti-dumping rules and
regulations, export controls, U.S. economic and other sanctions programs, and
anti-bribery laws and regulations.
Laws and Regulations in Relation to Importation of Goods into the United States
The importation of goods into the United States is mainly governed by the Tariff
Act of 1930, the Customs Modernization Act , and regulations issued by U.S. Customs
and Border Protection (‘‘CBP’’). Under th ese rules, U.S. importers are primarily
responsible for correctly declaring the value, classification, and duty rate of imported
goods. Importers must exercise ‘‘reasona ble care’’ when submitting information and
documents to CBP, to ensure proper duty assessment, accurate import data, and legal
compliance.
If someone uses false or misleading infor mation to bring goods into the U.S., CBP
may impose civil penalties. The severity of the penalty depends on the level of fault,
which may be classified as neglig ence, gross negligence, or fraud:
1. Negligence occurs when someone fails to use reasonable care to ensure the
information provided is complete and accurate or fails to perform required
actions.
2. Gross negligence involves a clear disre gard of known facts or responsibilities.
3. Fraud means the person knowingly and intentionally provided false
information, proven by clear and convincing evidence.
Penalties increase with the level of culpa bility, especially if the false statements
affect the amount of duties assessed on the imported goods.
Anti-dumping Laws and Regulations
U.S. federal anti-dumping laws and regula tions prohibit unfair global competition
by prohibiting non-U.S. entities from sellin g products in the U.S. for unreasonably low
prices. The usual test is whether the goods are being sold in the U.S. for less than they
are sold for in the home market. If a company is found to be violating anti-dumping
regulations, U.S. customs can impose additional duties on the imported goods.
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Tariffs
The United States imposes various tari ffs on imported goods. While the U.S.
Constitution grants Congress the authori ty to impose tariffs, certain laws allow the
President to exercise this power under specific circumstances. All goods imported into
the U.S. are classified for tariff purposes under the Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’). The HTSUS is ma intained by the U.S. ITC and is regularly
updated to reflect changes in international trade and tariff policy. Every product
imported into the U.S. must be classified under a specific HTSUS subheading. Key
government agencies involved in the administration of international trade and tariffs
include the U.S. Customs and Border Protection (the ‘‘CBP’’), the U.S. International
Trade Commission (‘‘ITC’’), and the Offi ce of the U.S. Trade Representative (the
‘‘USTR’’).
The CBP is responsible for collecting tar iffs at the time goods are cleared through
U.S. customs. The ITC is an independent f ederal agency that enforces U.S. trade
remedy laws and advises the President, Congress, and the USTR on trade-related
matters. It also investigates alleged violation s of U.S. trade laws, including unfair trade
practices under Section 337 of the Tariff Act of 1930, and import surges that may harm
U.S. industries under Section 201 of the Trade Act of 1974.
The USTR, a cabinet-level official, acts as the President’s chief adviser and
representative on international trade ma tters. Under Section 301 of the Trade Act of
1974, the USTR may impose tariffs or other trade restrictions if it determines that a
foreign government has engaged in unfair trade practices. In 2018, following an
investigation, the U.S. imposed additional tariffs on certain goods originating from
China. These Section 301 tariffs are applied in addition to other duties, such as
anti-dumping duties. The resulting trade measures have led to disputes between the
United States and China, including pro ceedings initiated before the World Trade
Organization.
Depending on the latest development of the trade negotiations between the U.S.
and China, the level and number of products subject to additional tariffs may change
over time. For details of the latest U.S. tariff development, please refer to the section
headed ‘‘Summary — Recent Regulations in Relation to Tariffs, Export Controls and
Sanctions — U.S. Tariff Policies’’.
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L a w sa n dR e g u l a t i o ni nR e l a t i o nt oD a t aP r i v a c y
We are subject to a variety of laws and regulations in the United States that
involve privacy, data protection and personal information, data security, and data
retention and deletion. In particular, we ar e subject to federal, state, and foreign laws
regarding privacy and protection of people’s data. U.S. federal and state laws and
regulations, which in some cases can be enforced by private parties in addition to
government entities, are constantly evolving and can be subject to significant change.
As a result, the application, interpretation, and enforcement of these laws and
regulations are often uncertain, particularly in the new and rapidly evolving industry in
which we operate and may be interpreted and ap plied inconsistently from state to state
and country to country and inconsistently with our current policies and practices.
Laws and Regulations in Relation to Tax
Federal government
The U.S. federal government can levy a variety of taxes on U.S. businesses,
non-U.S. businesses engaging in certain activities in the United States, and business
owners and their employees. Our business activities in the U.S. require us to pay U.S.
federal income tax, taxes on the sale of certain assets, income tax on dividends,
distributions, and interest, sales and other transfer taxes, employee payroll taxes,
withholding obligations, and other taxes.
A corporation organized under the laws of the U.S. or any state is subject to U.S.
corporate tax on its worldwide income and gains. Corporate income tax is imposed at a
flat rate of 21% (plus any applicable state or local corporate tax). Taxes are based on
operating earnings after expenses have been deducted.
State and Local Governments
In addition to the federal government, the 50 U.S. states and their political
subdivisions play an important role in taxing and regulating business activity within
their respective jurisdictions. For example, our business activities within a U.S. state
may be subject to the state’s business and personal income tax, payroll tax, sales tax,
real and personal property tax, franchise tax, withholding obligations, and other taxes.
In addition, some local governments, such as counties and cities, may impose their own
similar taxes.
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Laws and Regulations in Relation to Registration and Regulation
Corporations in the United States are registered and organized in one of the 50
states. In addition to its legal formation in a particular state, a corporation that does
business in more than one state may need to q ualify or register to do business in other
states if the corporation’s activities estab lish ‘‘minimum contacts’’ for tax purposes in
those states. Individual state laws apply to business transactions occurring in each
state, unless such laws conflict with, or are superseded by, U.S. federal law, which
takes precedence over state and local law. For this reason, U.S. businesses frequently
must comply with separate federa l, state and local regulations.
Final Rule by the U.S. Department of the Treasury
On October 28, 2024, the Department of the Treasury issued the Final Rule to
implement an outbound investment program that restricts investments by U.S. persons
and U.S.-controlled entities imposed by Ex ecutive Order 14105, ‘‘Addressing United
States Investments in Certain National Security Technologies and Products in
Countries of Concern’’. The Final Rule became effective on January 2, 2025.
Application Scope of the Final Rule
The Final Rule applies to investments by U.S. persons as to ‘‘covered
transactions’’ involving ‘‘covered fore ign person’’ associated with a ‘‘country of
concern’’ in ‘‘covered activities.’’
. ‘‘Covered activities’’ include activities in (1) semiconductors and
microelectronics sectors, (2) quantum information technologies sectors and
(3) artificial intelligence sectors that p ertain to national security technologies
and products.
. ‘‘Covered transactions’’ under the Final Rule include (1) acquisition of equity
(including purchases of shares in an initial public offering) or contingent
equity, (2) debt financing, (3) conversion of contingent equity interest, (4)
greenfield and brownfield investments, (5) joint ventures, and (6) investments
made as a limited partner.
. ‘‘Covered foreign person’’ means (1) a person of a country of concern who or
who is engaged in activities involving one or more of the three sectors of
semiconductors and microelectronics, quantum information technologies,
and artificial intelligence, and (2) a person that directly or indirectly holds a
board seat on, a voting or equity interest in, or any contractual power to
direct the management or policies of a person of a country of concern.
. ‘‘Country of concern’’ for now is the People’s Republic of China, including
Hong Kong and Macau.
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Major Components of the Final Rule
Under the Final Rule, a ‘‘covered transaction’’ may be a ‘‘prohibited transaction’’,
which is outright prohibited, or a ‘‘notifiable transaction’’, which are subject to
notification requirements. In addition, certain transactions that would have been
considered prohibited or notifiable transactions may be exempted from the prohibition
or notification requirements and may be considered an ‘‘excepted transaction’’ under
the Final Rule if certain conditions are met . Details of the prohibited transactions,
notifiable transactions and excepted transactions are set forth below.
Prohibited Transactions
Prohibited transactions refer to the prohibition on certain U.S. investments in a
covered foreign person engaged in covered act ivities pertaining to specified categories
of advanced technologies and products. A U.S. person may not engage in such
transaction unless an exemption for that tra nsaction has been granted. For instance,
investments by U.S. persons in covered f oreign persons engaged in the following
activities in the artificial intelligence i ndustry reach the threshold for ‘‘prohibited
transactions’’ under the Final Rule:
. Military end use;
. Government intelligence or mass-surveillance end use; or
. Develops any AI system that is trained using a quantity of computing power
greater than 10^24 computational operations.
Notifiable Transactions
Notifiable transactions refer to the tran sactions where the business activities
conducted by a covered foreign person do not reach the threshold for prohibited
transactions but still require notificatio n by a U.S. person of their transactions to the
Department of Treasury. For instance, tran sactions are notifiable if the covered
foreign person in the artificial intelligence sector is engaged in machine-based system
that can, for a given set of human-defined objectives, make predictions,
recommendations, or decisions influencing real or virtual environments. A U.S.
person shall file a notification of their covered transactions with the Department of
Treasury.
Excepted Transactions
The Final Rule provided certain categories of excepted transactions from
coverage, provided that such transactions did not afford the U.S. person certain
rights beyond standard minority shareholder protection. Excepted transactions include
(1) investments in publicly traded securities, (2) securities issued by investment
companies, (3) certain limited partner or equi valent investments, (4) derivatives, (5)
full buyouts from a person of a country of concern, (6) intracompany transactions, (7)
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certain syndicated debt financings, (8) eq uity-based compensation, and (9) certain
transactions involving a person of a countr y or territory outside of the U.S. based on a
determination by the U.S. Secretary of the Treasury.
Notably, under the Final Rule, the ‘‘publicly traded security’’ exception exempts
the investments in publicly traded securities of covered foreign persons. However, any
acquisition of an equity interest in a cove red foreign person that is not yet publicly
traded for the purpose of facilitating an initial public offering would not be an
excepted transaction of the Final Rule.
D. GERMANY AND EUROPEAN UNION LAWS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of Germany,
which are relevant to the business and operations of our Group.
Laws and Regulations Relating to Product Safety and Product Liability
Product Safety
Pursuant to applicable product-related laws in the European Union and
Germany, all products must be designed, manufactured, and used in a manner that
does not pose unacceptable risks to users. In particular, electrical and electronic
equipment must comply with specific technical standards, environmental protection
requirements, waste disposal regulations , eco-design and energy labelling rules, and
electromagnetic compatibility standards. Th e specific regulatory requirements vary
depending on the nature and specifications of each product.
Relevant (non-exhaustive) regulations for our products include:
. Directive 2014/35/EU (Low Voltage Directive)
. Directive 2014/30/EU (EMC Directive)
. Directive 2014/53/EU (Radio Equipment Directive)
. Directive 2011/65/EU (RoHS Directive)
. Directive 2012/19/EU (WEEE Directive)
. Regulation (EU) 2023/1542 on batteries and accumulators
. Directive 2009/125/EC (Eco-design Directive)
. Regulation (EU) 2017/1369 (E nergy Labelling Regulation)
. Directive 2006/42/EC (Machinery Directive), replaced by Regulation (EU)
2023/1230 (already partially applicable)
. General Product Safety Regulation (in force since 13 December 2024)
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. Regulation (EU) 2019/1020 (Market Surveillance Regulation)
German equivalents include, in particular, the German Product Safety Act
(Produktsicherheitsgesetz — ProdSG ) and other national implementing or
supplementary provisions that transpo s e ,a p p l y ,a n df u r t h e rd e f i n eE Ul e g a l
requirements.
The above-mentioned regulations generally provide for:
. Product properties — including restrictions on certain substances,
construction and design requirements, technical standards, radio or
electromagnetic frequency compliance, and other essential product
characteristics.
. Product labelling — such as manufacturer/importer identification, CE
marking (where applicable), and energy efficiency labels.
. Registration and notification obligations — e.g., registration of electrical and
electronic equipment or batteries/ac cumulators in public registers, and
participation in authorised recycling systems.
. Take-back obligations — including end-of-life take-back for electronic
equipment and batteries/accumulators.
. Technical documentation — e.g., testing reports, expert opinions, design
drawings, and declarations of conformi ty for CE marking (where applicable).
. User information and instructions — provision of user manuals in the official
language(s) of the country of sale (i.e ., in German), and affixing necessary
warnings directly to the product.
Under the German Product Safety Act ( Produktsicherheitsgesetz —P r o d S G ) ,
distributors may only place products on the German market if, when used as intended
or in a reasonably foreseeable manner, they do not pose any risk to health or safety. In
general, product-related EU and German laws apply when a product is placed on the
market ( Inverkehrbringen ), made available on the market ( Bereitstellen ), or imported
(Einfu¨hren ) into the German or EU market.
Compliance must be demonstrated through a conformity assessment. Where the
product falls under EU harmonization legislation requiring CE marking, compliance
must be evidenced by the CE marking and supported by comprehensive technical
documentation, typically including a r isk assessment, user and maintenance
instructions, and safety and disposal guidelines.
If a product does not fall within the scope of CE marking requirements, the
manufacturer (or other responsible economic operator) must nevertheless ensure
compliance with all applicable national an d EU product safety rules. In such cases,
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conformity is generally demonstrated by preparing and maintaining appropriate
technical documentation showing compliance with relevant national or EU
requirements (e.g. General Product Safe ty Regulation, sector-specific rules).
If a product is found to be non-compliant , authorities may impose enforcement
measures such as prohibition of sale or display, mandatory product recall or
withdrawal, or confiscation and destruction of the product. Non-compliance with
product safety requirements may result in administrative fines of up to EUR100,000
per violation, or criminal penalties, including imprisonment of up to one year in
serious cases. In circumstances involving harm to individuals, more severe penalties
may apply.
Product Liability
Product liability in Germany is prima rily governed by the German Product
Liability Act ( Produkthaftungsgesetz — ProdHaftG ), which transposes the EU Product
Liability Directive (85/374/EEC) into national law. The ProdHaftG establishes a strict
(no-fault) liability regime for damages c aused by defective p roducts. Under this
regime, manufacturers, importers, distribut ors, or any party presenting itself as the
producer (e.g. by affixing a trademark or name on the product), may be held liable for
personal injury or damage to privately used property resulting from product defects,
regardless of fault or negligence.
A product is considered defective if it fa ils to provide the level of safety that a
person is entitled to expect, taking into account all circumstances, including the
product’s presentation, its intended use, and the time it was placed on the market
(Section 3 ProdHaftG ). Defects can arise from design flaws ( Konstruktionsfehler ),
manufacturing issues, or inadequate instructions and warnings ( Instruktionsfehler ).
If a defective product causes harm, the in jured party may claim compensation.
The ProdHaftG provides for a standard limitation p eriod of three years from the date
on which the claimant becomes aware of the damage and the liable party, and an
absolute limitation period of ten years fro m the date the product was first placed on
the market. The maximum amount for personal injuries caused by a product or by
identical products with the same d efect is EUR85 million. (Section 10 ProdHaftG ).
This limitation applies exclusively to perso nal injuries and refers to one and the same
event. There is no statutory lim itation of liability for property damage. Multiple liable
parties may be held jointly and severally liable.
The ProdHaftG does not contain any explicit requirements regarding the place of
residence or the place of purchase. The decisive factor is that the damage concerns the
legal interests specified in Section 1 ProdHaftG (life, body, health, or certain property
damage) and that a product defect is present. Pursuant to Section 4(2) ProdHaftG ,a
manufacturer is also deemed to be anyone who, in the course of business, imports or
brings a product into the territory of the E uropean Economic Area (EEA). As a result,
the Act is generally applicable in practice when the defective product enters the EEA —
particularly Germany — and is used here as intended, regardless of the place of
manufacture.
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Specifically, the ProdHaftG applies when:
. the injured party resides in Germany and the defective product was placed on
the German market;
. t h ep r o d u c tw a sp u r c h a s e di nG e r m a n ya n dp l a c e do nt h eG e r m a nm a r k e t ;o r
. the harm occurred in Germany and the product was placed on the German
market.
It is sufficient that the producer could have reasonably foreseen that the product
may be made available in Germany by a third party, such as a customer or distributor.
Importantly, liability under the ProdHaftG cannot be contractually excluded or limited
in advance.
In addition to strict liability, according to Section 15(2) ProdHaftG , claims arising
from other statutory bases of liability remai n unaffected, in particular tort liability
under the German Civil Code (Sections 823 et seq. Bu¨rgerliches Gesetzbuch — BGB)
may apply where damage is caused by a producer’s negligence or wilful misconduct.
This includes liability for breach of legal d uties to ensure product safety, which may
encompass obligations to monitor the mark et and to take corrective measures (e.g.
p r o d u c tr e c a l l so rs a f e t yw a r n i n g s )i fn e wr isks arise after the product is marketed. As a
result, tort claims can be asserted alongsi de product liability claims. This can be
relevant for enforcing claims, as tort la w does not provide for maximum liability
amounts and in some cases applies different lim itation rules. The scope of tort liability
is generally unlimited.
Furthermore, under contractual warranty rules in the BGB, sellers are obliged to
deliver defect-free products. In the event of a defect, the buyer may be entitled to
remedies such as repair, replacement, price r eduction, or contract rescission. Sellers
may seek recourse against the producer where contractually or legally permitted.
Laws and Regulations Relating to Data Protection
Our operations in the European Union (‘‘ EU’’), including Germany, are subject to
the GDPR, which sets out a comprehensive framework governing the collection, use,
processing, and transfer of personal data. The GDPR applies to EU-based entities and,
in certain circumstances, to entities established outside the EU that process personal
data of individuals located in the EU and carry out activities such as offering goods or
services to, or monitoring the behavior of, individuals within the EU.
The GDPR adopts a risk-based approach to compliance. Organizations must
implement appropriate risk management practices to document and demonstrate
compliance, including regular and ad hoc risk assessments and the implementation of
risk-mitigation measures. Personal data must be processed in line with the GDPR’s
core principles: lawfulness, transparency , purpose limitation, data minimization,
accuracy, storage limitation, security, a nd accountability. These principles apply
regardless of the technology or medium used and extend to both automated and
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non-automated processing operations. Before any processing takes place, a valid legal
basis must be identified as provided under the GDPR (and, as applicable, the German
Federal Data Protection Act (Bundesdatenschutzgesetz — BDSG)).
Data subjects are afforded a range of rights, and organizations have
corresponding obligations — such as proactive transparency and the duty to provide
information. These rights include, among ot hers, access, rectification, erasure in
certain circumstances, and data portability. In addition, individuals may have the right
to restrict or object to certain types of processing, including processing for direct
marketing purposes, and the right not to be subject to decisions based solely on
automated processing, including profiling, which produces legal effects concerning
them or similarly significantly affects them.
Organizations are required to maintain records of processing activities that
specify, for example, the purposes of proce ssing, categories of personal data, and
categories of recipients. Where processing is outsourced to a service provider acting as
a processor, a data processing agreement must be in place to ensure appropriate
technical and organizational measures and compliance with GDPR requirements.
Controllers must also ensure that processo rs do not engage sub-processors without
prior written authorization and that any sub-processing is subject to equivalent
contractual safeguards.
E. HONG KONG LAWS AND REGULATIONS
This section sets out a summary of certain aspects of laws and regulations of Hong
Kong, which are relevant to the business and operations of our Group.
Laws and Regulations Relating to the Sale of Goods
In Hong Kong, laws and regulations on the sale of goods are provided in
legislation as well as common law. Civil liability in relation to product liability claims
under the sale of goods arises under the law of contract and the law of negligence.
Contracts for the sale of goods in Hong Kong are mainly governed by the Sale of
Goods Ordinance (Chapter 26 of the Laws of Hong Kong). In relation to consumer
transactions, certain terms are implied int o sale contracts to strengthen protection to
consumers. These include the implied undertaking that the goods are of merchantable
quality, requiring that the goods should be fit for the purpose(s) for which goods of
that kind are commonly bought, of such standard of appearance and finish, free from
defects (including minor defects), safe, and durable as reasonably expected having
regard to the relevant circumstances.
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Retailers in Hong Kong also owe a duty of care to consumers and may be liable
for damage resulting from defects in goods caused by their negligent acts or for any
fraudulent misrepresentation made in the s ale of goods. Liability may arise if a retailer
disregards the instructions of the manufacturers or suppliers in handling relevant
goods or fails to pass on to the buyers instructions for use and warnings received from
such manufacturers or suppliers. If a retailer knows or reasonably believes that the
goods may be defective or dangerous, it may have to cease to supply such goods and
take basic precautions such as warning the buyers and informing the relevant
manufacturers or suppliers.
Laws and Regulations Relating to Taxation
The Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (the
‘‘IRO’’) is an ordinance for the purposes of imposing taxes on property, earnings, and
profit in Hong Kong. The IRO provides, among others, that persons, which include
corporations, partnerships, trustees, and bodies of persons, carrying on any trade,
profession or business in Hong Kong are chargeable to tax on all profit (excluding
profit arising from the sale of capital assets) arising in or derived from Hong Kong
from such trade, profession, or business.
Under the IRO, a two-tiered profit tax rates regime. Under the two-tiered profit
tax rates regime, the first HK$2 million of profit of the qualifying group entity will be
taxed at 8.25%, and profit above HK$2 million will be taxed at 16.5%. The profit of
group entity not qualifying for the two-tiered profit tax rates regime will continue to be
taxed at a flat rate of 16.5%.
In relation to (i) any tax computation c ontaining incorrect information (the
‘‘Incorrect Information’’); and (ii) the f iling of tax return containing the Incorrect
Information, a person may be subject to th e prosecutions under section 80(2) or 82(1)
of the IRO:
(a) Any person who without reasonable excu se files an incorrect return commits
an offense under section 80(2) of the IRO and is liable on conviction to a fine
at level 3 (i.e. HK$10,000) and a fur ther fine of treble the amount of tax
which has been undercharged as a result of the incorrect return, statement or
information, or would have been so undercharged if the return, statement or
information had been accepted as correct.
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(b) Any person who wilfully with intent to evade or to assist any other person to
evade tax omits from a return any sum which should be included commits an
offense under section 82(1) of the IRO is liable:
(i) on summary conviction to a fine at l evel 3 (i.e. HK$10,000), a further
fine of treble the amount of tax which has been undercharged in
consequence of the offense or which would have been undercharged if
the offense has not been detected and imprisonment for 6 months; and
(ii) on indictment to a fine at level 5 (i.e. HK$50,000), a further fine of
treble the amount of tax which has been undercharged in consequence of
the offense or which would have been undercharged if the offense has
not been detected and imprisonment for 3 years.
Laws and Regulations Relating to Transfer Pricing
In December 2009, the IRD released Departmental Interpretation and Practice
Notes No. 46 (‘‘DIPN 46’’). DIPN 46 provides clarifications and guidance on the
IRD’s views on transfer pricing and how it intends to apply the existing provisions of
the IRO to establish whether related parties are transacting at arm’s length prices. In
general, the practices followed by the IRD are based on the transfer pricing
methodologies recommended by the OECD Transfer Pricing Guidelines.
In April 2009, the IRD released Departmental Interpretation and Practice Notes
No. 45 (‘‘DIPN 45’’). DIPN 45 provides that where double taxation arises as a result of
transfer pricing adjustments made by the tax authorities of another country, a Hong
Kong taxpayer may potentially claim relief under the treaty between Hong Kong and
that country (countries that entered into ta x arrangements with Hong Kong include the
PRC).
Furthermore, the Hong Kong Government has gazetted the Inland Revenue
(Amendment) (No. 6) Ordinance 2018 (the ‘ ‘Amendment Ordinance’’) on July 13, 2018.
The main objectives of the Amendment Ordinance are to codify the transfer pricing
principles and implement certain measures under the Base Erosion and Profit Shifting
(‘‘BEPS’’) package promulgated by the Organization for Economic Co-operation and
Development, such as the transfer pricing documentation requirements. The BEPS
package seeks to counter the exploitation of gaps and mismatches in tax rules by
multinational enterprises to artificially shift profit to low or no-tax locations where
there are little or no economic activity.
Section 50AAF of the IRO now codifies the arm’s-length principle and allows for
an adjustment of a taxpayer’s profit upwards/losses downwards if the taxpayer has
entered into transaction(s) with an associated person, and the pricing of such
transaction(s) differs from that between independent persons and has created a Hong
Kong tax advantage. Section 82A of the IRO stipulates that a person is liable to be
assessed for penalties to additional tax of the amount of tax undercharged resulting
from transfer pricing adjustments, unless it is proved that reasonable efforts have been
made to determine the arm’s length price for the transaction(s).
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OVERVIEW
Our history can be traced back to 2015, whe n Woan Technology, a subsidiary of our
Company, was established in January 201 5 by Mr. Li and Mr. Pan, our co-founders.
Mr. Li and Mr. Pan were schoolmates at Harbin Institute of Technology ( 哈爾濱工業
大學). They are enthusiasts in design and development of innovative robotic devices and
have participated in university innovative desi gn competitions during their academic years,
including the ADI ‘‘Future Innovators’’ University Design Competition in 2009 and had
w o nt h e1 s tp r i z e .T o g e t h e rw i t hM r .L i nH a i z h o u(林海洲), Mr. Liu Guohui ( 劉國輝)a n d
Mr. Liu Yanfei ( 劉延飛) ,w h ow e r ea l s oM r .L ia n dM r .P a n ’ ss c h o o l m a t e so ft h es a m e
cohort from Harbin Institute of Technology ( 哈爾濱工業大學), they become the founding
management of Woan Technology.
In 2017, SwitchBot Bot, our first product marketed under ‘‘SwitchBot’’ brand, was
launched through a crowdfunding campaign, paving the way for ‘‘SwitchBot’’ to become a
global provider of home robotic systems dedicated to building an ecosystem centered
around smart home robotic products.
As a restructuring step in anticipation of Series Pre-A Financing, our Company was
established on October 18, 2018 by Mr. Li, Mr. Pan, Wonder Innovation ESOP and the
then Pre-IPO Investors, and Woan Technology was restructured to become a wholly-owned
subsidiary of our Company. On April 25, 2025 our Company was converted into a joint
stock limited company under the PRC Company Law as Switchbot (Shenzhen) Co., Ltd. ( 臥
安機器人（深圳）股份有限公司), thereby becoming our Company. On October 31, 2025, our
Company has renamed our English corporate name as OneRobotics (Shenzhen) Co., Ltd.
(臥安機器人（深圳）股份有限公司).
As of the Latest Practicable Date, Mr. Li controlled approximately 44.53% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (1) 21.82% beneficially owned by him directly; (2) 8.24% beneficially owned by
Wonder Innovation ESOP, an employee share ownership platform controlled by Mr. Li as
the general partner; and (3) 14.47% beneficially owned by Mr. Pan, in respect of which Mr.
Li has the right to direct voting and other shareholder actions of Mr. Pan pursuant to the
terms of the Acting-in-concert Agreement, whereby Mr. Pan agreed to act in concert with
Mr. Li in relation to all matters requiring the exercise of shareholder rights and director
rights in our Company (where applicable). Upon the Listing and pursuant to the issuance of
new Shares under the Global Offering, Mr. Li will control approximately 40.07% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (i) 19.64% beneficially owned by Mr. Li directly; (ii) 7.41% beneficially owned
by Wonder Innovation E SOP; and (iii) 13.02% beneficially owned by Mr. Pan, assuming
the Over-allotment Option is not exercised. Therefore, Mr. Li, Mr. Pan and Wonder
Innovation ESOP are the Controlling Sharehold er Group as of the Latest Practicable Date
and upon the Listing.
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BUSINESS MILESTONES
The following table sets forth the key milestones in our Group:
Year Milestone Events
2015 — Woan Technology was established
2017 — We had launched finger robot and our first product under
‘‘SwitchBot’’ brand
2018 — Our Company was established and Woan Technology was
reorganized to become our subsidiary
2019 — We had commenced sales under Vendor Central program with
Amazon
2020 — We had launched curtain robot and received multiple industry
awards, including International Design Excellence Awards from
Industrial Designers Society of America
2021 — We had launched lock robot
2022 — SwitchBot JP had been awarded the Grand Prize Best Partner
Award by Amazon
— We had been commissioned by Guangdong Science and Technology
Department ( 廣東省科學技術廳) to establish the Guangdong
Intelligent Networking Home Con trol Engineering Technology
Research Center ( 廣東省智慧網路家居控制工程技術研究中心)
— Our SwitchBot App had surpassed 1,000,000 cumulative registered
users for the first time. The cu mulative number of devices
connected via our SwitchBot App has exceeded 3,000,000
2023 — We had launched SwitchBot K10+, a household robot and the
world’s smallest laser vacuum robot in terms of diameter, which
became one of the best selling smart vacuum cleaner robot on
Amazon Japan
— We had launched SwitchBot S10, a n enhanced mobile robot, which
ranked first in total crowdfunding amount among cleaning robot
products on Kickstarter in 2023
— We have been recognized by China National Intellectual Property
Administration ( 國家知識產權局) as a National Intellectual
Property Advantage Enterprise in the PRC ( 國家知識產權優勢企
業)
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Year Milestone Events
— We had been recognized as a National Specialty and New Little
Giant Enterprise ( 國家專精特新小巨人企業)
2024 — We had been recognized as a National Key Specialized and
Sophisticated ‘‘Little Giant’’ Enterprises ( 國家專精特新重點「小巨
人」企業)
2025 — Our SwitchBot App had surpassed 3,500,000 cumulative registered
users and 10,700,000 cumula tively connected devices
— We had launched SwitchBot AI Hub, a smart home hub integrating
large language models with edge computing
— We have launched Acemate, an AI tennis robot to replicate
human-like rallies. Acemate was selected into TIME Magazine’s
Best Inventions of 2025 List, being the only global representative in
sports robotics among the list.
— We have launched AI companion r obot at IFA Berlin in September
2025 and had received two IFA Innovation awards, namely winner
of ‘‘Best in IFA Next’’ and ‘‘Best in Emerging Tech’’, respectively
CORPORATE DEVELOPMENT AND MAJOR SHAREHOLDING CHANGES
(1) Establishment of Woan Technology and Early Development
Woan Technology was established under the laws of the PRC as a limited liability
company on January 22, 2015. The initial registered capital of Woan Technology was
RMB1 million. The equity interest of Woan Technology was owned as to 33% by Mr. Li;
34% by Mr. Pan, and the remaining equity interest by Mr. Tian Jun ( 田軍)( ‘ ‘Mr. Tian ’’),
the former general manager of Woan Technology. In April 2017, in order to devote more
time in other personal endeavour, Mr. Tian transf erred his entire registered capital in Woan
T e c h n o l o g yt oe a c ho fM r .L ia n dM r .P a n ,r e s pectively at nominal consideration, after
which, he ceased to become a shareholder and general manager of Woan Technology.
Subsequent to the transfer, the equity interest of Woan Technology was owned as to 60%
by Mr. Li and 40% by Mr. Pan.
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(2) Establishment of Wonder Innovation ESOP and subscription of the registered capital of
Woan Technology
In May 2017, Wonder Innovation ESOP was established as our employee share
ownership platform in the PRC to incentivize them to further promote our development.
Wonder Innovation ESOP had subscribed for new registered capital of Woan Technology in
the total amount of RMB138,886, and Mr. Li and Mr. Pan had in aggregate transferred
equity interest in the total amount of registered capital of Woan Technology of RMB69,447
in September 2018 at nominal consideration. See ‘‘Employee Share Ownership Platform’’
below for further details of the emp loyee share ownership platform.
(3) Series Angel Financing in October 2017
In October 2017, Changxing Qifu Honglian Investment Management Partnership
(Limited Partnership) ( 長興啟賦宏聯投資管理合夥企業（有限合夥）) (now known as
Changxing Qifu Honglian Venture Capital Fund Partnership (Limited Partnership) ( 長興
啟賦宏聯創業投資基金合夥企業（有限合夥）) (‘‘Changxing Qifu LP’’), a China-based private
equity and venture capital fund, and Shenzhen Langke Investment Co., Ltd. ( 深圳市朗科投
資有限公司) (‘‘Shenzhen Langke Investment’’) had entered into a capital increase agreement
with Mr. Li, Mr. Pan and Woan Technology to subscribe for new registered capital of
Woan Technology in the total amount of RMB250,000, at the total consideration of RMB4
million, thereby becoming our first Pre-IPO In vestors. For further details of the Series
Angel Financing and investors from Series Angel Financing, please see ‘‘— Pre-IPO
Investments’’.
(4) Establishment of Our Company in October 2018 and Series Pre-A Financing in
December 2018
On October 18, 2018, in anticipation for Series Pre-A Financing, our Company, which
was then known as Woan Technology (Dongguan) Co., Ltd. ( 臥安科技（東莞）有限公司),
was established by the then holders of equity interest of Woan Technology (namely Mr. Li,
Mr. Pan, Wonder Innovation ESOP, Changxing Qifu LP and Shenzhen Langke
Investment), and Ms. Wu Xi ( 吳曦) (‘‘Ms. Wu’’) and Songshan Lake Robot Institute,
participants of Series Pre-A Financing, with an initial registered capital of RMB1,587,298.
In December 2018, Woan Technology was re organized to become a wholly-owned
subsidiary of our Company, with Mr. Li, Mr. Pan and Wonder Innovation ESOP having
transferred their respective equity interest in Woan Technology to our Company at nominal
consideration, and with Changxing Qifu LP and Shenzhen Langke Investment having
transferred their respective equity interest in Woan Technology at the consideration of
RMB2.5 million and RMB1.5 million paid by our Company, which was then repaid to our
Company to pay up their respective registere d capital in our Company, after which, Woan
Technology was reorganized to become a who lly-owned subsidiary of our Company, after
which, our Company had completed Series Pre-A Financing with Ms. Wu and Songshan
Lake Robot Institute, at the total consideration of RMB5 million. Immediately following
the completion of the Series Pre-A Financing , the registered capital of our Company was
RMB1,587,298.
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For further details of Series Pre-A Financing and the background of investors from
Series Pre-A Financing, please see ‘‘— Pre-IPO Investments’’.
(5) Series A Financing in July 2020
In July 2020, we had completed Series A Fina ncing with Yinghu Intelligent, Dongguan
Yunhe, Tianjin Yuntai Innovation Technology Limited Partnership ( 天津雲泰創新技術合夥
企業（有限合夥）) (‘‘Tianjin Yuntai LP’’), and Ms. Wu and Songshan Lake Robot Institute,
our existing shareholders, at the total c onsideration of RMB12 million. Immediately
following the completion of the Series A Financing, the registered capital of our Company
was increased to RMB1,867,409. For further details of Series A Financing and the
background of investors from Series A Financing, please see ‘‘— Pre-IPO Investments’’.
(6) Series A+ Financing in February 2021
In February 2021, we had completed Series A+ Financing with Ventech China Asia
SICAR (‘‘Ventech’’), Nanjing Qingke Let ai Venture Capital Partnership (Limited
Partnership) ( 南京清科樂鈦創業投資合夥企業（有限合夥）) (‘‘Nanjing Qingke Letai LP’’)
and Suzhou Yuanming Venture Capita l Center (Limited Partnership) ( 蘇州源明創業投資中
心（有限合夥）) (‘‘Suzhou Yuanming VC LP’’), at the total consideration of approximately
RMB35.0 million. Immediately following the completion of the Series A+ Financing, the
registered capital of our Company was increased to RMB2,046,476. For further details of
Series A+ Financing and the background of investors from Series A+ Financing, please
see ‘‘— Pre-IPO Investments’’.
(7) Equity Transfers in May 2021 (‘‘Early 2021 Equity Transfers’’) and Capital Increase in
M a y2 0 2 1( ‘ ‘ E a r l y2 0 2 1C a p i t a lI n c r e a s e ’ ’ )
In May 2021, Suzhou Yuanming VC LP had further acquired equity interest of our
Company from Changxing Qifu LP and Shenzhen Langke Investment, in the registered
capital of RMB61,394 and RMB40,930 fo r the considerations of RMB12 million and
RMB8 million, respectively.
In May 2021, Shanghai Gaoling Chenjun Equity Investment Partnership (L.P.) ( 上海高
瓴辰鈞股權投資合夥企業（有限合夥）
) (‘‘Shanghai Chenjun’’) had subscribed for new
registered capital of our Company in the am o u n to fR M B 6 3 , 2 9 3 ,a tt h ec o n s i d e r a t i o no f
RMB13.61 million. For further details of Early 2021 Equity Transfers, the Early 2021
Capital Increase and the background of Shanghai Chenjun, please see ‘‘— Pre-IPO
Investments’’.
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(8) Series B Financing in November 2021
In November 2021, our Company had compl eted Series B Financing with Shanghai
Chenjun, Suzhou Yuanming VC LP, Tianjin Yuntai LP, Yinghu Intelligent, Dongguan
Yunhe, Ms. Wu and Ventech, respectively, at the total consideration of approximately
RMB61.02 million. For further details of Se ries B Financing, please see ‘‘— Pre-IPO
Investments’’.
(9) Series B+ Financing in March 2022
In March 2022, our Company had completed Series B+ Financing with Shenzhen
Fortune Chuanghong Private Equity Invest ment Enterprise (Limited Partnership) ( 深圳市
達晨創鴻私募股權投資企業（有限合夥）) (‘‘Shenzhen Fortune PE LP’’), Shenzhen Fortune
C a p i t a lV e n t u r eC a p i t a lM a n a g e m e n tC o . ,L t d .(深圳市達晨財智創業投資管理有限公司)
(‘‘Shenzhen Fortune Capital VC’’), Guotiao Innovation Private Equity Investment Fund
(Nanchang) Enterprise (Limited Partnership) ( 國調創新私募股權投資基金（南昌）合夥企業
（有限合夥）) (‘‘Guotiao Innovation PE Fund LP’’) and Zhuhai Ansheng Investment Center
(Limited Partnership) ( 珠海安勝投資中心（有限合夥）) (‘‘Zhuhai Ansheng Investment LP’’),
at the consideration of RMB200 million. Immediately following the completion of the
Series B+ Financing, the registered capital of our Company was increased to
RMB2,492,175. For further details of Series B+ Financing and the background of
investors from Series B+ Financing, p lease see ‘‘— Pre-IPO Investments’’.
(10) Equity Transfer in December 2023 (‘‘Dachen Internal Transfer’’)
In December 2023, Shenzhen Caizhi Chuangying Private Equity Investment Enterprise
(Limited Partnership) ( 深圳市財智創贏私募股權投資企業（有限合夥）) (‘‘Shenzhen Caizhi
PE LP’’) had acquired equity interest of our Company from Shenzhen Fortune Capital VC
in the registered capital of RMB2,354 at th e consideration of RMB1.7 million. For further
details of Dachen Internal Transfer and the background of Shenzhen Caizhi PE LP, please
see ‘‘— Pre-IPO Investments’’.
(11) Equity Transfers in March 2025 (‘‘Sensethink Acquisition’’)
In March 2025, Sensethink (BVI) Limited (‘ ‘Sensethink’’) had acquired the entire
equity interest of our Company held by Ms. Wu and Changxing Qifu LP in the registered
capital of RMB101,103 and RMB94,856 at the consideration of approximately RMB24.3
million and approximately RMB22.8 millio n (in USD equivalent), respectively.
Immediately after the Sensethink Acquisition, Ms. Wu and Changxing Qifu LP had
ceased to be the shareholders of our Company.
Sensethink is a company incorporated under t he laws of the British Virgin Islands with
limited liability which principally engages in investment holding. Th ee n t i r ei s s u e ds h a r e
capital of Sensethink is owned by Mr. Kwong U Hoi Andrew ( 鄺宇開) (‘‘Mr. Kwong’’). Mr.
Kwong is also one of the ultimate controlle r of Brizan Ventures V with Professor Ko, a
participant of Series C Financing.
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(12) Conversion into a Joint Stock Company
In April 2025, resolutions were passed by our then Shareholders, being our promoters
at our shareholders’ 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, and (ii) the adoption of Switchbot (Shenzhen) Co., Ltd. ( 臥安機器人（深
圳）股份有限公司)a so u rc o r p o r a t en a m e .
Upon completion of the conversion, the registered capital of our Company became
RMB2,492,175 divided into 2,492,175 Shares with a nominal value of RMB1.00 each, which
were subscribed by all our then Shareholders in proportion to their respective equity
interests in our Company before the conversion. The conversion was completed on April 25,
2025.
(13) Share Transfer in April 2025 (‘‘Shenzhen Wanshan Acquisition’’)
On April 30, 2025, Shenzhen Langke Wanshan Enterprise Management Partnership
(Limited Partnership) ( 深圳市朗科萬山企業管理合夥企業（有限合夥）) (‘‘Shenzhen Wanshan
LP’’) entered into a share transfer agreement with Shenzhen Langke Investment, pursuant
to which Shenzhen Wanshan LP acquired 24,922 Shares at the consideration of RMB10
million. For further details of Shenzhen Wa nshan Acquisition and the background of
Shenzhen Wanshan LP, please see ‘‘— Pre-IPO Investments’’.
(14) Investments by Brizan Ventures V
In May 2025, Brizan Ventures V, a limited pa rtnership controlled by Professor Ko and
Mr. Kwong, had become our Pre-IPO Investors by engaging in the following transactions
with our existing Shareholders and our Company:
(1) On May 21, 2025, Brizan Ventures V had acquired 195,959 Shares from
Sensethink, representing the entire shareholding interest of our Company held
by Sensethink at the consideration of a pproximately RMB47.20 million, being the
same as that for Sensethink Acquisition. Upon completion of the transfer,
Sensethink had ceased to be our Shareholder (‘‘Brizan Internal Transfer’’);
(2) On May 26, 2025, Brizan Ventures V had entered into an investment agreement
with our Company, members of our Group and each of the members of our
Controlling Shareholder Group (‘‘Brizan I nvestment Agreement’’), pursuant to
the terms of which, Brizan Ventures V had agreed to:
(i) acquire 6,250 Shares and 6,250 Shares from Mr. Li and Mr. Pan at the
consideration of RMB10 million and RMB10 million respectively (‘‘Brizan
Acquisition’’); and
(ii) subscribe for 37,500 Shares of o ur Company at the consideration of
RMB60.0 million (in USD equivalent) (the ‘ ‘Series C Financing’’), together
with Brizan Acquisition, the ‘‘Brizan Investments’’).
HISTORY AND CORPORATE STRUCTURE
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On June 3, 2025, the registered capital of our Company had been increased by
RMB37,500 to RMB2,529,675 and Brizan Ventures V had become interested in 245,959
Shares, comprising approximately 9.72% of the total issued share capital of our Company.
For further details of the Brizan Internal Transfer, Brizan Acquisition, Series C
Financing, and the background of Brizan Ventures V, please see ‘‘— Pre-IPO Investments’’
in this prospectus.
(15) Capital Increase through conversion from capital reserve and Share Subdivision
On May 27, 2025, resolutions were passe d by our Shareholders approving, among
others, (i) issuance of 17,470,325 new Shares through conversion from capital reserve of
RMB17,470,325 to each of our Shareholders in proportion to their respective shareholding
interests, to the effect that the registered capital of our Company had been increased to
RMB20,000,000 divided into 20,000,000 Shares with a nominal value of RMB1.00 each; and
(ii) the Share Subdivision, whereby each of our Shares with a nominal value of RMB1.00
each shall be sub-divided into 10 Shares wi th a nominal value of RMB0.10 each, and such
Share Subdivision shall take effect immediately before the Listing, upon which the
registered capital of our Company shall be di vided into 200,000,000 Shares with a nominal
value of RMB0.10 per Share, all of which shall be held by our existing Shareholders as of
the Latest Practicable Date in proportion to th eir respective shareholding interests in our
Company.
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Immediately after completion of the Brizan Investments and assuming the Share
Subdivision had taken place, the shareholding structure of our Company shall be as
follows:
Shareholders
Number of
Shares
Percentage of
Shareholding
%
The Controlling Shareholder Group
Mr. Li 43,648,450 21.82
Mr. Pan 28,934,230 14.47
Wonder Innovation ESOP 16,471,130 8.24
Sub-total 89,053,810 44.53
Other Shareholders
Songshan Lake Robot Institute (Note 1) 13,610,600 6.81
Yinghu Intelligent (Note 1) 8,431,680 4.22
Dongguan Yunhe (Note 1) 3,909,910 1.95
Brizan Ventures V (Note 2) 19,445,900 9.72
Suzhou Yuanming VC LP 16,616,680 8.31
Shenzhen Fortune PE LP 8,757,090 4.38
Shenzhen Fortune Capital VC 2,003,180 1.00
Shenzhen Caizhi PE LP 186,110 0.09
Shanghai Chenjun 8,757,090 4.38
Ventech 4,247,190 2.12
Nanjing Qingke Letai LP 4,044,950 2.02
Guotiao Innovation PE Fund LP 7,662,490 3.83
Tianjin Yuntai LP 5,813,390 2.91
Zhuhai Ansheng Investment LP 3,283,900 1.64
Shenzhen Langke Investment 2,205,660 1.10
Shenzhen Wanshan LP 1,970,370 0.99
Total 200,000,000 100
Notes:
1. Songshan Lake Robot Institute, Yinghu Intellig ent and Dongguan Yunhe are entities ultimately
controlled by Professor Li, our non-executive Director.
2. Brizan Ventures V is an entity u ltimately controlled by Professor Ko, our non-executive Director,
together with Mr. Kwong.
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PRC LEGAL ADVISOR’S CONFIRMATION
As advised by our PRC Legal Advisor, our Co mpany has obtained all other necessary
approvals from competent authorities or made a ll necessary registration or filings with the
relevant local branch of SAMR in respect of the transfers, capital increases and issuance of
Shares set out above in material aspects, and s uch transfers, capital increases and issuance
of Shares were conducted in compliance with the applicable PRC laws and regulations in all
material aspects. In respect of the Brizan Investments, our PRC Legal Advisers are of the
view that there is no legal impediment to obtain or made such necessary approvals or
filings.
OUR PRINCIPAL SUBSIDIARIES
The following table sets forth certain information of each of our principal subsidiaries
as of the Latest Practicable Date.
No. Company
Total Amount of
Registered
Capital/Share
Capital
Principal Business
Activities
Shareholding
Controlled by
Our Company
Date and
Jurisdiction of
Establishment/
Incorporation
1. Woan Technology RMB320,000, 000 Research, production and
sales of home robotic
system products and
offering of related
services
100% January 22, 2015,
the PRC
2. Woan HK HK$200,000 Sales of home robotic
system products and
offering of related
services
100% May 4, 2020,
Hong Kong,
the PRC
3. SwitchBot JP JPY5,000,000 Sales of home robotic
system products and
offering of related
services
100% September 24,
2020, Japan
4. Wonderlabs HK HK$10,000 Sales of home robotic
system products and
offering of related
services
100% March 16, 2018,
Hong Kong,
the PRC
5. SwitchBot US US$4,000 Sales of home robotic
system products and
offering of related
services
100% October 11, 2021,
Delaware,
the United States
ACQUISITION, MERGER AND DISPOSAL
During the Track Record Period and up to the Latest Practicable Date, the Company
had not carried out any major acquisitions, disposals or mergers involving shares or equity
interests in any entities.
HISTORY AND CORPORATE STRUCTURE
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PRE-IPO INVESTMENTS
Principal Terms of the Pre-IPO Investments
To fund our strategic growth and broaden our shareholder base, we have conducted several rounds of Pre-IPO Investments
since the establishment of Woan Technology and our Company. The table below summarizes the principal terms of the Pre-IPO
Investments through contribution to new registered capita l or acquisition of existing equity interest or Shares:
No.
Rounds of Pre-IPO
Investment
Amount of Registered
Capital Subscribed
f o ro ra c q u i r e d
Amount of
Consideration
Involved
Post-money
Valuation Date of Agreements
Date of
Payment in Full
Consideration
Cost per Share
Discount to
the Offer Price
(RMB)
(Note 1)
(RMB)
(approximate)
(Note 2)
(RMB)
(approximate)
(Note 3)
(HK$)
(approximation)
(Note 4)
(approximation)
(Note 5)
1. Series Angel
Financing
250,000 4 million
(Note 6)
20 million October 17, 2017 November 14, 2017 0.22 99.70%
2. Series Pre-A
Financing
198,412 5 million
(Note 7)
40 million December 5, 2018 January 2, 2019 0.34 99.52%
3. Series A Financing 280,111 12 million
(Note 8)
80 million January 8, 2020 April 8, 2020 0.58 99.19%
4. Series A+ Financing 179,067 35.0 million
(Note 9)
400 million
(Note 13)
December 24, 2020 September 14, 2021 2.66 96.30%
5. Early 2021 Equity
Transfers
102,324 20 million N/A March 22, 2021 March 24, 2021 2.66 96.30%
6. Early 2021 Capital
Increase
63,293 13.61 million 454 million April 16, 2021 May 12, 2021 2.93 95.93%
7. Series B Financing 105,498 61.02 million
(Note 10)
1,281.3 million
(Note 14)
November 12, 2021 December 31, 2021 7.88 89.05%
8. Series B+ Financing 276,908 200 million
(Note 11)
1,800 million
(Note 15)
March 23, 2022 April 12, 2022 9.84 86.33%
9. Dachen Internal
Transfer
2,354 1.7 million N/A December 19, 2023 December 27, 2023 9.84 86.33%
10. Sensethink Acquisiti on 195,959 47.10 million
(Note 12)
N/A March 21, 2025 May 21, 2025 3.28 (Note 17) 95.45%
11. Shenzhen Wanshan
Acquisition
24,922 10 million N/A April 30, 2025 May 1, 2025 5.47 (Note 18) 92.41%
12. Brizan Internal
Transfer
195,959 47.10 million
(Note 12)
N/A May 21, 2025 May 21, 2025 3.28 (Note 19) 95.45%
13. Brizan Acquisition 12,500 20 mil lion N/A May 26, 2025 July 2, 2025 21.80 69.72%
14. Series C Financing 37,500 60 million 4,047.5 million
(Note 16)
May 26, 2025 June 30, 2025 21.80 69.72%
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Notes:
1. Except for Series Angel Financing, which referre d to the registered capital of Woan Technology, the
amount of register capital subscribed for or ac quired as shown in the table refers to the amount of
registered capital of our Company immediately bef ore the capital increase through conversion from
capital reserve and the Share Subdivision as resolved in May 2025.
2. The consideration for the various Pre-IPO inves tments by way of capital increases was determined
based on arm’s length ne gotiations between our Company and t he Pre-IPO Investors after taking
into consideration various fact ors including but not limited to, the timing of the investments, the
market value, and the prospects of our business.
3. The post-money valuation is calculated by di viding the total consideration of equity or Share
subscriptions under the relevant round of the Pre -IPO Investment by the percentage of the new
subscribed equity interest in the total registered capital of our Company or shareholding interests of
our Company at the relevant time.
4. The cost per Share presented in the table is arrived at by dividing the total consideration involved in
respect of the relevant rounds of financings with the total number of Shares to be converted from the
registered capital held by the respective investors, a nd is further adjusted by (i) the capitalisation of
RMB17,470,325 from the capital reserve to increase the registered capital to RMB20,000,000, which
are distributed to our existing Shareholders in propo rtion to their respective shareholding interests,
and (ii) assuming that the Share Subdivision on the basis of 10 Shares for every one share of
registered capital, has taken effect. For the p urpose of the table, the consideration amounts
originally denominated in RMB have been converted into Hong Kong dollars using the applicable
exchange rate at the time of the respective transacti ons, and the resulting cost per Share is presented
in HKD.
5. The discount to the Offer Price is calculated b ased on the assumption that the Offer Price is
HK$72.00 per H Share, being the mid-point of th e indicative Offer Price range of HK$63.00 to
HK$81.00 per H Share, and that the Over-allotment Option is not exercised.
6. (1) Changxing Qifu LP had subscribed for new registered capital of Woan Technology in the
amount of RMB156,250 for the consideration of RMB2.5 million; and
(2) Shenzhen Langke Investment had subscribed for new registered capital of Woan Technology
in the amount of RMB93,750 for the consideration of RMB1.5 million.
7. Pursuant to the terms of the investment agreemen t in respect of Series Pre-A Financing, Songshan
Lake Robot Institute and Ms. Wu had subscribed fo r the registered capital of our Company at the
consideration of RMB3.75 million and RMB1.25 million, respectively.
8. (1) Yinghu Intelligent had paid RMB4 million as consideration for new registered capital of our
Company in the amount of RMB93,370.
(2) Dongguan Yunhe had paid RMB2 million as consideration for new registered capital of our
Company in the amount of RMB46,685.
(3) Songshan Lake Robot Institute had paid RMB1 million as consideration for new registered
capital of our Company in the amount of RMB23,343.
(4) Ms. Wu had paid RMB2 million as consideration for new registered capital of our Company
in the amount of RMB46,685.
HISTORY AND CORPORATE STRUCTURE
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(5) Tianjin Yuntai LP had paid RMB3 million as consideration for new registered capital of our
Company in the amount of RMB70,028.
9. (1) Ventech had subscribed for new regist ered capital of our Company in the amount of
RMB51,162 for the consideration of USD1,529,964.35;
(2) Nanjing Qingke Letai LP had subscribed fo r new registered capital of our Company in the
amount of RMB51,162 for the consid eration of RMB10 million; and
(3) Suzhou Yuanming VC LP had subscribed for new registered capital of our Company in the
amount of RMB76,743 for the consideration of RMB15 million.
10. (1) Shanghai Chenjun had subscribed for new re gistered capital of our Company in the amount of
RMB47,470 for the consideration of RMB27,456,427.
(2) Suzhou Yuanming VC LP had subscribed for new registered capital of our Company in the
amount of RMB31,107 for the cons ideration of RMB17,992,143.
(3) Tianjin Yuntai LP had subscribed for new regi stered capital of our Company in the amount of
RMB3,502 for the consideration of RMB2,025,543.
(4) Yinghu Intelligent had subscribed for new re gistered capital of our Company in the amount of
RMB13,277 for the consideration of RMB7,679,356.
(5) Dongguan Yunhe had subscribed for new regist ered capital of our Company in the amount of
RMB2,769 for the consideration of RMB1,601,625.
(6) Ms. Wu had subscribed for new registered capital of our Company in the amount of
RMB4,815 for the consideration of RMB2,784,976.
(7) Ventech subscribed for new registered capi tal of our Company in the amount of RMB2,558 for
the consideration of USD230,943.
11. (1) Shenzhen Fortune PE LP had subscribed for new registered capital of our Company in the
amount of RMB110,763 for the consideration of RMB80 million.
(2) Shenzhen Fortune Capital VC had subscribed for new registered capital of our Company in
the amount of RMB27,691 for the consideration of RMB20 million.
(3) Guotiao Innovation PE Fund LP had subscribed for new registered capital of our Company in
the amount of RMB96,918 for the consideration of RMB70 million.
(4) Zhuhai Ansheng Investment LP had subscribed for new registered capital of our Company in
the amount of RMB41,536 for the consideration of RMB30 million.
12. The amount of consideration in respect of Senset hink Internal Transfer was the same as that for
Sensethink Acquisition as the Sensethink Inter nal Transfer was an internal restructuring of
investment between Sensethink and Brizan Ventures V.
13. The valuation of our Company for Series A+ Fina ncing increased comparing to that of Series A
Financing because of our successful launch of our curtain robot, which gained strong market
traction and significantly enhanced our brand recognition and revenue growth.
HISTORY AND CORPORATE STRUCTURE
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14. The valuation of our Company for the Series B Financing increased compared to that of the Early
2021 Capital Increase, primarily due to the su ccessful launch of our lock robots, our Company’s
rapid sales growth during the period and a signific ant increase in our market share in Japan, our key
market. The favourable stock market sentiment in the PRC at the time also contributed to
heightened investor interest in the smart hardware and home automation sectors.
15. The valuation of our Company for Series B+ Financing increased comparing to that of Series B
Financing because our flagship products includi ng curtain robots, lock robots and smart hubs had
recorded substantial growth in sales volume, r eflecting strong market demand and user adoption.
16. The valuation of our Company for the Series C Financing increased compared to that of the Series
B+ Financing due to: (1) the continued commercial success of our flagship robots, which
maintained strong market momentum and user adopt ion following their award-winning launches;
(2) the growing sales performance of our produc ts and expanding user adoption across global
markets; and (3) the growing application of large -scale AI models and related technologies, which
had created new opportunities for our business in e nhancing product capabilities, improving user
experiences, and driving intelligent a utomation in the smart home sector.
17. Based on the understanding of our Directors, the c onsideration in respect of Sensethink Acquisition
was determined having taken into account the co mmercial negotiations between the parties, the
early-stage nature of the shares being transfe rred and the liquidity preferences of the selling
shareholders.
18. Based on the understanding of our Directors, th e consideration in respect of Shenzhen Wanshan
Acquisition was determined havi ng taken into account the commercial negotiations between the
parties, the early-stage nature of the shares being transferred and the liquidity preferences of the
selling shareholders.
19. Based on the understanding of our Directors, the c onsideration was determined having taken into
account the nature of investment restructuring, a nd thus the transfer was executed at the same cost
per Share as the Sensethink Acquisition for admin istrative and internal reorganization purposes.
Use of Proceeds from the Pre-IPO Investments
As of the Latest Practicable Date, save for proceeds from Series C Financing, all other
proceeds received by us from the Pre-IPO Inv estments which involved subscriptions of
increased registered capital of our Company had been utilized. We utilized the proceeds
from the Pre-IPO Investments for the principal business of our Group, including but not
limited to research and development activitie s, the growth and expansion of our Company’s
business, capital expenditures for factory equipment, and general working capital purposes.
Strategic Benefits from Pre-IPO Investments
At the time of the Pre-IPO Investments, our Directors were of the view that our Group
could benefit from the additional funds provided by the Pre-IPO Investors’ investments in
our Group, insights for industry, network and c onnections of our high profile and reputable
Pre-IPO Investors, advice on business expans ion and strategic direction, upstream and
downstream resources that the Pre-IPO Investors bring to our Company, and the
knowledge, production capacity and experience of the Pre-IPO Investors. Their
investments also demonstrated their confid ence in our Group’s operations and served as
an endorsement of our Group’s performance, strengths and prospects.
HISTORY AND CORPORATE STRUCTURE
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Special Rights of the Pre-IPO Investors
Pursuant to the shareholders’ agreement entered into between our Company, Mr. Li,
Mr. Pan, Wonder Innovation ESOP and our Pre-IPO Investors, the Pre-IPO Investors had
been granted certain special rights, including, among others, right of first refusal and
co-sale, anti-dilution rights, redemption right s, drag-along rights, liquidation preferences,
dividend right, and information rights, among which, the Pre-IPO Investors had been
granted redemption right by the Company (‘‘Company’s Redemption Right’’) and by Mr. Li
a n dM r .P a n( t h e‘ ‘ C SR e d e m p t i o nR i g h t ’ ’ )p u r s u a n tt ot h es h a r e h o l d e r s ’a g r e e m e n t .
On May 26, 2025, our Company, Mr. Li, Mr. Pan and the Pre-IPO Investors had
entered into a supplemental agreement to the shareholders’ agreement (the ‘‘Supplemental
Agreement’’). As advised by our PRC Legal Advisers pursuant to the terms of the
Supplemental Agreement: (1) the Company’ s Redemption Right had been terminated and
had become void ab initio and deemed to have never had any legal effect (i.e. irrevocably
unenforceable); (2) the CS Redemption Right had been suspended prior to the Listing
Application and will be terminated immediat ely before the Listing Date; and (3) all other
special rights, including right of first refusal and co-sale, anti-dilution rights, drag-along
rights, liquidation preferences, dividend right , and information rights, shall be terminated
before the Listing Date. Other than the Company’s Redemption Rights, which had become
void ab initio and deemed to have never had any legal effect, the CS Redemption Right,
which was suspended prior to the Listing App lication and will be terminated immediately
before the Listing Date, and all other special rights, which were terminated prospectively,
were not rendered void ab initio and will cease to apply before the Listing Date.
Prior to the execution of the Supplemental Agreement, only certain information rights,
inspection rights and director nomination rights under the shareholders’ agreement had
been exercised by the Pre-IPO Investors. These rights were exercised in the ordinary course
for governance and information purposes and did not result in any financial obligations,
liabilities or other financial i mplications for the Company.
Throughout the Track Record Period, our Company had not recorded any redemption
liabilities, be it arising from the Company’s Redemption Rights or the CS Redemption
Rights. Neither the Company’s Redemption Right nor the CS Redemption Right had been
enforced by any of the Pre-IPO Investo rs during the Track Record Period,
In respect of the Company’s Redemption Right, as advised by our PRC Legal
Advisers, under the PRC Civil Code ( 《中華人民共和國民法典》), the parties to a contract
have the right to mutually rescind or terminate the agreement in whole or in part, and may,
through express agreement, determine the effective scope and retroactive effect of such
termination, provided that it does not contravene mandatory provisions of law. Where the
parties expressly agree that certain rights or o bligations shall be treated as irrevocably
unenforceable (‘‘自始無效’’), such agreement is valid and leg ally binding between the parties
and operates to extinguish the relevant contra ctual rights retrospectively as if they had
never arisen. For details, see note 28 to the Accountants’ Report set out in Appendix I to
this prospectus.
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In respect of the CS Redemption Right, the CS Redemption Right does not constitute
any obligation of our Company. Furthermore, there had been no separate agreements or
side letters entered into between either Mr. Li or Mr. Pan and the Pre-IPO Investors,
without our Company being a party thereof. No guarantee had been provided by our
Company in respect of the CS Redemption Rig ht. Accordingly, no financial liability had
been recorded by our Company in respect of the CS Redemption Right. For details, see note
35 to the Accountants’ Report set out in Appendix I to this prospectus.
Lock-up Period
Pursuant to the applicable PRC law, all existing Shareholders (including the Pre-IPO
Investors) are subject to the relevant PRC statutory transfer restriction for a period of one
year from the Listing Date.
JOINT SPONSORS’ CONFIRMATION
On the basis that (i) the respective consideration for the Pre-IPO Investments is
expected to be settled no less than 120 clear days before the Listing Date, and (ii) no special
rights of the Pre-IPO Investors will exist afte r the Listing, the Joint Sponsors confirm that
the Pre-IPO Investments are in complianc e with the Chapter 4.2 of the Guide for New
Listing Applicants.
Information regarding Our Pre-IPO Investors
Set out below is the description of our Pre-IPO Investors, which consist of reputable
international and domestic private equity funds and strategic investment corporations. To
the best of our Company’s knowledge, save as otherwise disclosed in this subsection, all the
Pre-IPO Investors are Independent Third Parties.
Songshan Lake Robot Institute, Yi nghu Intelligent and Dongguan Yunhe
Songshan Lake Robot Institute is a limited liability company established under the
laws of the PRC in February 2016 which princ ipally engages in R&D and sales of robots
and intelligent equipment and the provision of c onsultation, planning and related technical
supporting services to incubated enterprises. As of the Latest Practicable Date, the equity
interest of Songshan Lake Robot Institute is ultimately controlled as to 100% by Clear
Water Bay Robotic Investment Limited Company, the shares of which is controlled as to
67.67% by Professor Li, our non-executive Director, as to 12.33% by Professor Ko, our
non-executive Director, and as to 20% by Professor Gan Jie ( 甘潔), an Independent Third
Party.
Yinghu Intelligent is a limited liability co mpany established under the laws of the PRC
in May 2018 which principally engages in the R&D of intelligent product, provision of
technical consulting and technical services, and equity investment. As of the Latest
Practicable Date, the equity interest of Yingh u Intelligent is ultimately controlled as to
100% by Clear Water Bay Startup Fund LP, a limi ted liability partnership with the general
HISTORY AND CORPORATE STRUCTURE
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--- page 193 ---
partner of which being Clear Water Bay Startup Fund GP. The shareholding interest of
Clear Water Bay Startup Fund GP is in turn owned as to 57%, 23% and 20% by Professor
Li, Professor Ko and Professor Gan Jie ( 甘潔), respectively.
Dongguan Yunhe is a limited liability compa ny established under the laws of the PRC
in December 2017 which principally engages in equity and venture capital investment. As of
the Latest Practicable Date, Dongguan Yunhe is ultimately controlled by Clear Water Bay
Startup Fund GP, the partnership interest of which is in turn held as to 57%, 23% and 20%
by Professor Li, Professor Ko and Professor Gan Jie ( 甘潔), respectively.
As of the Latest Practicable Date, Songshan Lake Robot Institute, Yinghu Intelligent
and Dongguan Yunhe held approximately 6.81%, 4.22% and 1.95% of the total issued
share capital of our Company.
Brizan Ventures V
Brizan Ventures V is a limited liability partn ership established under the laws of the
Cayman Islands which principally engages in equity and venture capital investment. The
general partner of Brizan Ventures V is Brizan Ventures GP V Limited (‘‘Brizan Ventures
GP V’’), holding approximately 0.50% of the par tnership interest therein. The shareholding
interests of Brizan Ventures GP V are owned as to 50% by Professor Ko, our non-executive
Director, and as to 50% by Mr. Kwong. Brizan Ventures V has four limited partners, with
Professor Ko holding approximately 47.16% and Brizan Ventures II LP (‘‘Brizan Ventures
II’’) holding approximately 26.45% partnership interest therein, and with the remaining two
limited partners being Independent Third Party holding less than one third of the
partnership interest therein. Brizan Ventures II is a limited partnership established under
the laws of Cayman Islands, with Brizan Ventu res GP II Limited (‘‘Brizan Ventures GP II’’)
being the general partner. The shareholding interests of Brizan Ventures GP II is owned as
to 50% by Professor Ko and as to 50% by Mr. Kwong. Brizan Ventures II has nine limited
partners, with Professor Ko holding approximat ely 6.43% partnership interest therein, and
none of the remaining limited partners hold more than one third of the partnership interest
therein.
As of the Latest Practicable Date, Brizan Ventures V held approximately 9.72% of the
total issued share capital of our Company.
Suzhou Yuanming VC LP
Suzhou Yuanming VC LP is a limited liability partnership established under the laws
of the PRC in October 2019 which principally engages in venture capital investment. Its
general and executive managing partner is Nanjing Yuanxin Management Consulting Co.,
Ltd. ( 南京源芯管理諮詢有限公司) (‘‘Nanjing Yuanxin’’), holding approximately 0.03%
interest therein. Nanjing Yua nxin is a limited liability company established under the laws
of the PRC, the equity interest of which i s ultimately controlled by Mr. Cao Yi ( 曹毅)( ‘ ‘ M r .
Cao’’), the founder of Source Code Capital ( 源碼資本). As of the Latest Practicable Date,
Suzhou Yuanming VC LP has three limited partners, with Nanjing Yuanling Equity
Investment Partnership (Limited Partnership) ( 南京源嶺股權投資合夥企業（有限合夥）)
(‘‘Nanjing Yuanling LP’’) holding approxima tely 44.44% partnership interest and Beijing
HISTORY AND CORPORATE STRUCTURE
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Yuanwei Equity Investment Partnership (Limited Partnership) ( 北京源為股權投資合夥企業
（有限合夥）) (‘‘Beijing Yuanwei LP’’) holding approximately 39.43% partnership interest in
Suzhou Yuanming VC LP. The general and executive managing partner of Nanjing
Yuanling LP is Nanjing Yuanxin, which is cont rolled by Mr. Cao. Nanjing Yuanling LP has
three limited partners, with Nanjing Yuanheng Equity Investment Management Limited
Partnership (Limited Liability) ( 南京源恒股權投資管理合夥企業（有限合夥）) (‘‘Nanjing
Yuanheng’’) holding approximately 69.97% partnership interest therein and the
remaining two limited partners holding n o more than one-third of the partnership
interest therein. Nanjing Yua nheng is a limited liability partn ership established under the
laws of the PRC. Its general and executive man aging partner is Nanjing Yuanxin, which is
controlled by Mr. Cao. Nanjing Yuanheng has 42 limited partners, none of which hold
more than one third of the partnership interest therein. The general and executive managing
partner of Beijing Yuanwei LP is Beijing Yua nxin Investment Management Co., Ltd. ( 北京
源芯投資管理有限公司), a limited liability company established under the laws of the PRC,
the equity interest of which is ultimately controlled by Mr. Cao. Beijing Yuanwei LP has
eight limited partners, with Nanjing Yuanheng holding approximately 79.00% partnership
interest therein and the remaining limited pa rtners holding no more than one third of the
partnership interest therein.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Suzhou Yuanming VC LP held approximately
8.31% of the total issued share capital of our Company.
Shenzhen Fortune Capital Investors (comprisi ng Shenzhen Fortune PE LP, Shenzhen Fortune
Capital VC and Shenzhen Caizhi PE LP)
Shenzhen Fortune Capital VC is a limited lia bility company established under the laws
of the PRC in December 2008 and principally engages in venture capital investment, which
is ultimately owned and controlled by Hunan TV and Broadcast Intermediary Co., Ltd. ( 湖
南電廣傳媒股份有限公司) (000917.SZ).
Shenzhen Fortune PE LP is a limited liability partnership established under the laws of
the PRC in August 2020 and principally engages in equity investment. Its general and
executive managing partner is Shenzhen Fortune Capital VC, holding approximately 4.25%
interest therein. As of the Latest Practicable Date, Shenzhen Fortune PE LP has 49 limited
partners, none of which holds one-third or more of the interest therein.
Shenzhen Caizhi PE LP is a limited liability p artnership established under the laws of
the PRC in June 2020 and principally engages in equity investment. Its general and
executive managing partner is Shenzhen Fortune Capital VC. As of the Latest Practicable
Date, Shenzhen Caizhi PE LP has 30 limited partners, none of which holds one-third or
more of the interest therein. Shenzhen Fortune Capital VC, being the general partner, holds
approximately 0.18% partnership interest in Shenzhen Fortune PE LP.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
HISTORY AND CORPORATE STRUCTURE
–1 8 4–


--- page 195 ---
As of the Latest Practicable Date, Shenzhen Fortune Capital VC, Shenzhen Fortune
PE LP and Shenzhen Caizhi PE LP held approximately 1.00%, 4.38% and 0.09% of the
total issued share capital of our Company.
Shanghai Chenjun
Shanghai Chenjun is a limited liability part nership established under the laws of the
PRC, its general partner is Shanghai Gao Ling Venture Investment Management Co., Ltd.
(上海高瓴創業投資管理有限公司). Shanghai Chenjun is a private equity fund managed by
Zhuhai Gao Ling Private Fund Management Co., Ltd. ( 珠海高瓴私募基金管理有限公司).
Shanghai Chenjun has 22 limited partners, none of which holds one-third or more of the
interest therein.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Shanghai Chenjun held approximately 4.38% of the
total issued share capital of our Company.
Guotiao Innovation PE Fund LP
Guotiao Innovation PE Fund LP is a limited lia bility partnership established under the
laws of the PRC in November 2021 and princip ally engages in private equity and venture
capital investment in the PRC. Its general and executive managing partner is Guotiao
Innovation (Beijing) Private Equ ity Fund Management Co., Ltd. ( 國調創新（北京）私募基金
管理有限公司) (‘‘Guotiao Innovation’’), holding approximately 0.06% interest therein.
Guotiao Innovation a limited liability compa ny established under the laws of the PRC, the
equity interest of which is owned as to 34%, 34% and 32% by Nanchang Merchants
Industrial Investment Co., Ltd. ( 南昌招商產業投資有限公司) (‘‘Nanchang Merchants’’),
Ningbo Meishan Bonded Port Area Jintia nhe Investment Management Co., Ltd. ( 寧波梅山
保稅港區錦甜河投資管理
有限公司) (‘‘Ningbo Jintianhe’’) and Nanchang New Century
Venture Capital Co., Ltd. ( 南昌新世紀創業投資有限責任公司) (‘‘Nanchang New Century
VC’’), respectively. Nanchang Merchants is ultimately controlled by Nanchang High-tech
Industrial Development Zone Management Committee ( 南昌高新技術產業開發區管理委員
會). Ningbo Jintianhe is a wholly-owned subs idiary of China State-owned Enterprise
Structural Adjustment Fund Co., Ltd. ( 中國國有企業結構調整基金股份有限公司), the
controlling shareholder of which is China Chengtong Holdings Group Co., Ltd. ( 中國誠
通控股集團有限公司), which is controlled by the State-owned Assets Supervision and
Administration Commission of the State Council ( 國務院國有資產監督管理委員會).
Nanchang New Century VC is a wholly-owned subsidiary of Nanchang Industrial
Investment Group Co., Ltd. ( 南昌市產業投資
集團有限公司), which is controlled by
Nanchang Municipal People’s Government ( 南昌市人民政府). Guotai Innovation PE
Fund LP has two limited partners, with Jiangxi High Level Personnel Equity Investment
Limited Partnership ( 江西高層次人才股權投資合夥企業（有限合夥）) (‘‘Jiangxi High Level
Personnel LP’’) holding approximately 99.31% of the partnership interest therein. Jiangxi
High Level Personnel LP is a limited liability par tnership established under the laws of the
PRC, its general and executive managing partner is Jiangxi Innovation New Personnel
Investment Management Limited Company ( 江西創新人才投資管理有限公司)( ‘ ‘ J i a n g x i
HISTORY AND CORPORATE STRUCTURE
–1 8 5–


--- page 196 ---
Innovation’’). Jiangxi Innovation is a limited liability company established under the laws
of the PRC, the equity interests of which is controlled as to 33% by China Guoxin Fund
Management Co., Ltd. ( 中國國新基金管理有限公司) (‘‘China Guoxin’’), 34% by Taiping
Guofa Hehe (Beijing) Investment Management Co., Ltd. ( 太平國發禾和（北京）投資管理有
限公司) (‘‘Taiping Guofa’’) and 33% by Ningbo Meishan Bonded Port Area Jintianhe
Investment Management Co., Ltd. ( 寧波梅山保稅港區錦甜河投資管理有限公司)( ‘ ‘ N i n g b o
Jintianhe Investment’’). China Guoxin is a lim ited liability company established under the
laws of the PRC, the equity interest of which is entirely controlled by the State Council of
the PRC ( 中國國務院). Taiping Guofa is a limited liabilit y company established under the
laws of the PRC, the equity interest of which i s owned as to approximately 34.43% by Hehe
Zhongshuo (Beijing) Investme nt Consulting Co., Ltd. ( 禾和眾爍（北京）投資顧問有限公司),
an entity controlled by Zhang Wenwen ( 章文雯), and each of the remaining shareholders
owning less than 30% of the equity interests therein. Ningbo Jintianhe Investment is a
limited liability company, the equity intere st of which is ultimately controlled as to
approximately 30.36% by State-owned Assets Supervision and Administration Commission
of the State Council ( 國務院國有資產監
督管理委員會) and the remaining shareholders
owning less than 30% of the equity interests therein.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Guotiao Innovation PE Fund LP held
approximately 3.83% of the total issued share capital of our Company.
Tianjin Yuntai LP
Tianjin Yuntai LP is a limited liability partnership established under the laws of the
PRC in May 2016 and principally engages in private equity investment. The general and
executive managing partner of Tianjin Yuntai LP is Mr. Wang Xiaolu ( 王曉路), holding
0.01% interest therein. Tianjin Yuntai LP ha s 11 limited partners, none of which holds
one-third or more of the interest therein.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Tianjin Yuntai LP held approximately 2.91% of the
total issued share capital of our Company.
Ventech
Ventech is an investment company in risk capital incorporated under the laws of
Luxembourg in June 2019 and principally engag es in risk capital investment. Ventech is
controlled by Ventech China Lux, a limited lia bility company incorporated under the laws
of Luxembourg which is controlled by Mr. Eric Huet.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
HISTORY AND CORPORATE STRUCTURE
–1 8 6–


--- page 197 ---
As of the Latest Practicable Date, Vente ch held approximately 2.12% of the total
issued share capital of our Company.
Nanjing Qingke Letai LP
Nanjing Qingke Letai LP is a limited liability p artnership established under the laws of
the PRC in August 2020 and principally engages in equity investment. Its general and
executive managing partner is Nanjing Qingke Y intai Investment Management Partnership
(Limited Partnership) ( 南京清科銀鈦投資管理合夥企業（有限合夥）) (‘‘Nanjing Qingke
Yintai LP’’), holding 1% interest therein. As of the Latest Practicable Date, Nanjing
Qingke Letai LP has three limited partners, w ith Nanjing Yintai Investment Management
Partnership (Limited Partnership) ( 南京銀鈦投資管理合夥企業（有限合夥）) (‘‘Nanjing
Yintai LP’’) holding 50% partnership interest therein, and Nanjing Pukou District
Industrial Development Fu nd (Limited Partnership) ( 南京市浦口區產業發展基金（有限合
夥）) (‘‘Nanjing Pukou LP’’) holding 39% interest therein. The general partner of Nanjing
Qingke Yintai LP is Beijing Qingke Chuangyin g Venture Capital Management Co., Ltd. ( 北
京清科創盈創業投資管理有限公司), a limited liability company established under the laws
of the PRC which holds 30% of the partnership interest therein and which is ultimately
controlled by Mr. Ni Zhengdong ( 倪正東). The general partner of Nanjing Yintai LP is
Beijing Qingke Chuangying Venture Capital Management Co., Ltd. ( 北京清科
創盈創業投資
管理有限公司), a limited liability company establis hed under the laws of the PRC which is
also ultimately controlled by Mr. Ni Zhengdong ( 倪正東). Nanjing Yintai LP has nine
limited partners, with Pan Junzhu ( 潘俊竹) holding approximately 50.00% partnership
interest therein and the remaining limited partners holding less than one third of the
partnership interest therein. Na njing Pukou LP is a limited liab ility partnership established
under the laws of the PRC, the general partner of which is Nanjing Yushan Private Equity
Fund Management Co., Ltd. ( 南京雨山私募基金管理有限公司) (‘‘Nanjing Yushan’’), a
limited liability company established under the laws of the PRC which is ultimately
controlled by Nanjing Pukou District Government State-owned Assets Supervision and
Administration Office ( 南京市浦口區政府國有資產監督管理辦公室). Nanjing Yushan is
interested in 1% of the partnership intere st in Nanjing Pukou LP. The remaining 99%
partnership interest is held by Nan jing Pukou District Finance Bureau ( 南京市浦口區財政
局), being the sole limited partner of Nanjing Pukou LP.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Nanjing Qingke Letai LP held approximately 2.02%
of the total issued share capital of our Company.
Zhuhai Ansheng Investment LP
Zhuhai Ansheng Investment LP is a limited lia bility partnership established under the
laws of the PRC in March 2022. Its general and executive managing partner is Mr. Liu Jiaye
(劉佳曄), holding approximately 3.33% interest th erein. As of the Latest Practicable Date,
Zhuhai Ansheng Investment LP has seven limited partners, with Jiangxi Youchen Industrial
Group Co., Ltd. ( 江西友宸實業集團有限
公司) (‘‘Jiangxi Youchen’’) holding approximately
41.67% partnership interest and six other individuals, namely Huang Liping ( 黃麗萍), Tan
HISTORY AND CORPORATE STRUCTURE
–1 8 7–


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Weike ( 譚維克), Yang Hongchang ( 楊鴻長), Wu Xiaohong ( 吳小紅), Duan Yan ( 段艷)a n d
Zhou Qiongying ( 周瓊英), each of which are Independent Third Party. The equity interest
of Jiangxi Youchen is owned as to 99.99% by Mr. Zhou Shiyou ( 周世友).
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Zhuhai An sheng Investment LP held approximately
1.64% of the total issued share capital of our Company.
Shenzhen Langke Investment
Shenzhen Langke Investment is a limited lia bility company established under the laws
of the PRC in December 2014. The equity interest of Shenzhen Langke Investment is owned
as to 98.02% by Wanwuwei (Shenzhen) Venture Capital Center (Limited Partnership) ( 萬物
為（深圳）創業投資中心（有限合夥）) (‘‘Wanwuwei VC LP’’), a limited liability partnership
established in the PRC with Wanwuwei I ntelligence (Shenzhen) Co., Ltd. ( 萬物為智慧產業
（深圳）有限公司) (‘‘Wanwuwei Intelligence’’) being the general partner. Wanwuwei
Intelligence is a limited liability company established under the laws of the PRC, the
equity interest of which is owned as to 99% by Ms. Pu Zuli ( 蒲祖麗). Wanwuwei VC LP has
one limited partner, namely Shenzhen Wanwu Changqing Venture Capital Partnership
(Limited Partnership) ( 深圳市萬物常青創業投資合夥企業（有限合夥
）(‘‘Shenzhen Wanwu
LP’’), holding 90% partnership interest therein. The general partner of Shenzhen Wanwu
LP is Wanwuwei Intelligence, holding 10% partnership interest therein, and Shenzhen
Wanwu LP has one limited partner, namely Ms. Pu Zuli ( 蒲祖麗), holding 90% partnership
interest therein.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Shenzhen Langke Investment held approximately
1.10% of the total issued share capital of our Company.
Shenzhen Wanshan LP
Shenzhen Wanshan LP is a limited liability partnership established under the laws of
the PRC, the general and executive managing partner of which is Mr. Huang Mingrong ( 黃
明榮), holding 98% interest therein. Shenzhen Wanshan LP has two limited partners.
To the best knowledge, information and belief of our Directors, each of the aforesaid
i n d i v i d u a l so re n t i t i e si sa nI n d e p e n d e n tT h i r dP a r t y .
As of the Latest Practicable Date, Shenzhe n Wanshan LP held approximately 0.99% of
the total issued share capital of our Company.
HISTORY AND CORPORATE STRUCTURE
–1 8 8–


--- page 199 ---
ACTING-IN-CONCERT AGREEMENT
On September 8, 2022, Mr. Li and Mr. Pan, being our co-founders who had jointly led
the strategic planning and key decision-making of our Company, had entered into the
Acting-in-concert Agreement with a view to consolidating the strategic control and
long-term vision for the Company’s development , particularly during its critical pre-IPO
and post-IPO growth phases. Pursuant to th e terms of the Acting-in-concert Agreement,
Mr. Pan agreed, for a period of commencing from the date of agreement up to 36 months
after the Listing Date, to act in concert with M r. Li in relation to all matters requiring the
exercise of shareholder rights and director rights in our Company (where applicable).
Specifically, Mr. Pan has undertaken to procure all entities under his control to align
with Mr. Li’s opinions and act consistently wi th Mr. Li when exercising voting rights at
shareholders’ meetings of our Company, including but not limited to matters involving
proposals, nominations, voting (in favour/against/abstain), and other decision-making
rights. Mr. Pan further agreed to execute all resolutions and relevant legal documents
arising from such decisions in a manner consi stent with Mr. Li. Similarly, in respect of his
capacity as a director of the Company (if applicable), Mr. Pan agreed to act in accordance
with Mr. Li’s views when exercising board powe rs, including voting o n board resolutions,
proposing or seconding matters, and executing relevant documents.
The Acting-in-concert Agreement does not contain any express reserved matters or
carve-outs that allow Mr. Pan to deviate from Mr. Li’s views when exercising shareholder
rights or, director powers. Pursuant to the t erms of the agreement, Mr. Pan has undertaken
to act consistently with Mr. Li’s instructions and opinions in relation to all matters
requiring the exercise of voting rights at shareholders’ meetings and, if applicable, board
meetings of the Company, without distinction as to subject matter. As such, Mr. Pan does
not retain contractual discretion under the agreement to vote differently from Mr. Li or to
independently determine his position on any matter covered by the agreement.
Notwithstanding this, Mr. Pan remains subj ect to his fiduciary duties as a Director under
applicable laws and regulations, and as advised by our PRC Legal Advisers, nothing in the
agreement shall operate to override his obli gation to act in accordance with such duties.
The 36-month post-Listing effective period was determined having considered the need
to maintain continuity and stability in the Co mpany’s governance structure and leadership
as it navigates the early years as a publicly listed company. Unless otherwise mutually
agreed between Mr. Li and Mr. Pan, the Acting-in-concert Agreement shall remain binding
during its fixed term and will terminate autom atically upon the expiry of such term. Any
earlier termination would be subject to mutual consent between the parties.
The Acting-in-concert Agree ment is intended to formalise the consensus between Mr.
Li and Mr. Pan in respect of exercising shareholder and director rights prior to and
following the Listing. Upon its expiry or termination (whether upon the end of its fixed
term or otherwise by mutual agreement), Mr. Li and Mr. Pan may independently exercise
their respective voting rights and director powers, and there may no longer be a binding
obligation for them to align their decisions. While this may potentially lead to divergence in
views or voting outcomes on corporate matters, we will continue to be governed by its
HISTORY AND CORPORATE STRUCTURE
–1 8 9–


--- page 200 ---
Articles of Association and the applicable laws and regulations of its place of incorporation
and listing. The Board believes that the expi ry or termination of the Acting-in-concert
Agreement will not have any material adverse impact on our day-to-day operations,
corporate governance structure, or compliance with the Listing Rules.
EMPLOYEE SHARE OWNERSHIP PLATFORM
To incentivize them to further promote ou r development, Wonder Innovation ESOP
was established as our employee share ownership platform in the PRC in May 2017,
through which we have adopted a share ownership scheme (‘‘Share Ownership Scheme’’) to
conditionally award the partnership interest in Wonder Innovation ESOP to the scheme
participants. The Share Ownership Scheme is not subject to the provisions of Chapter 17 of
the Listing Rules.
Mr. Li has been the sole general partner of Wonder Innovation ESOP since the
establishment of Wonder Innovation ESOP. According to the Share Ownership Scheme and
the respective grant agreements, our certain employees were granted options and may
register as the limited partners of Wonder Innovation ESOP upon exercise of the options.
All management and voting powers of the Share Ownership Scheme are exercised by
the sole general partner, Mr. Li, accordin g to the partnership agreement, whereas the
relevant employees as the limited partners of Wonder Innovation ESOP are entitled to the
economic interest.
For further details of the partnership structure of Wonder Innovation ESOP, please
see ‘‘Statutory and General Information — Further Information About our Business —
Employee Share Ownership Platform’’.
H - S H A R EF U L LC I R C U L A T I O N
Our Company has applied for H-Share Full Circulation to convert the Unlisted Shares
into H Shares as per the instructions of our Shareholders. The conversion of Unlisted
Shares into H Shares will involve an aggregate of 200,000,000 Unlisted Shares (assuming
the Share Subdivision has taken place), representing (i) all the issued share capital of our
Company as of the Latest Practicable Date (assuming the Share Subdivision had taken
place); and (ii) approximately 90% of the tot al issued Share capital of our Company upon
completion of the Global Offering (assuming n oe x e r c i s eo ft h eO v e r-allotment Option).
For further details, see ‘‘Share Capital’’ in this prospectus.
HISTORY AND CORPORATE STRUCTURE
–1 9 0–


--- page 201 ---
PUBLIC FLOAT
Immediately upon completion of the Global Offering and the Share Subdivision
(assuming that the Over-allotment Option i s not exercised and that the H-Share Full
Circulation application of our Company is com pleted), our Company will have 222,222,300
H Shares, among which:
(a) 134,451,900 H Shares to be converted from Unlisted Shares pursuant to the
H-Share Full Circulation applicatio n of our Company and listed on the Stock
Exchange (representing approximately 60.50% of our total issued Shares upon
Listing assuming that the Over-allotment Option is not exercised) will not be
counted towards the public float for the purpose of Rule 8.08 of the Listing Rules
after the Listing as such Shares are being held by (i) Mr. Li, Mr. Pan, Wonder
Innovation ESOP, being members of the Controlling Shareholder Group; (ii)
Songshan Lake Robot Institute, Yinghu Intelligent and Dongguan Yunhe, being
entities controlled by Professor Li, our non -executive Director; and (iii) Brizan
Ventures V, one of the ultimate controller being Professor Ko, our non-executive
Director, which are core connected persons of our Company;
(b) 65,548,100 H Shares to be converted from Unlisted Shares pursuant to the
H-Share Full Circulation applicatio n of our Company and listed on the Stock
Exchange (representing approximately 29.50% of our total issued Shares upon
Listing assuming that the Over-allotment Option is not exercised), will be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules after the
Listing as these Shares are not held by pe rsons who are core connected persons of
our Company upon Listing nor are they accustomed to take instructions from our
Company’s core connected persons in relation to the acquisition, disposal, voting
or other disposition of their Shares and their acquisition of Shares were not
financed directly or indirectly by our Company’s core connected persons; and
(c) 22,222,300 H Shares to be issued under the Global Offering (representing
approximately 10.00% of our total issued Shares upon Listing) will be counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules after the
Listing, assuming that (i) the Over-allotment Option is not exercised and (ii) none
of the following persons will take part in the Global Offering: our Company’s core
connected persons, any persons who are accustomed to take instructions from our
Company’s core connected persons in relation to the acquisition, disposal, voting
or other disposition of their Shares, and any person whose acquisition of Shares
were financed directly or indirectly by our Company’s core connected persons.
In light of the above, the public float of our Company will be approximately 39.50%
upon Listing assuming that (i) the Over-allotment Option is not exercised and (ii) none of
the following persons will take part in the Global Offering: our Company’s core connected
persons, any persons who are accustomed to take instructions from our Company’s core
connected persons in relation to their acquisition, disposal, voting or other disposition of
their shares, and any person whose acquisition of Shares were financed directly or indirectly
by our Company’s core connected persons.
HISTORY AND CORPORATE STRUCTURE
–1 9 1–


--- page 202 ---
Based on the indicative Offer Price range of HK$63.0 to HK$81.0 per Offer Share, the
expected market capitalization of the Company’s Shares would exceed HK$6,000,000,000
but not exceeding HK$30, 000,000,000. Pursuant to Rule19A.13A(1) of the Listing Rules, H
Shares representing the higher of: (i) the percentage that would result in the expected
market value of H Shares held by the public to be HK$1,500,000,000 at the time of the
Listing; and (ii) 15%, must be held by the public at the time of the Listing. Accordingly, H
Shares representing over 15% of our Company’s total issued Shares will be held by the
public upon completion of the Global Offering, and the requirement of public float under
Rule 8.08(1) (as amended and replaced by Rule 19A.13A) of the Listing Rules is satisfied.
FREE FLOAT
Rule 19A.13C(1) of the Listing Rules provides that, where a new applicant is a PRC
issuer with no other listed shares at the time of listing, this will normally mean that the
portion of H shares for which listing is sought that are held by the public and not subject to
any disposal restrictions (whether under c ontract, the Listing Rules, applicable laws or
otherwise), at the time of listing, must: (a) represent at least 10% of the total number of
issued shares in the class to which H shares belo ng at the time of listing (excluding treasury
shares), with an expected market value at the time of listing of not less than HK$50,000,000;
or (b) have an expected market value at the time of listing of not less than HK$600,000,000.
Based on an Offer Price of HK$63.0 per H Share, being the low end of Offer Price, the
Company will satisfy the free float requirement under Rule 19A.13C(1) of the Listing Rules.
Pursuant to the applicable PRC law, within t he 12 months following the Listing Date,
all existing Shareholders are not allowed to dispose of any of the Shares held by them.
HISTORY AND CORPORATE STRUCTURE
–1 9 2–


--- page 203 ---
SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY PRIOR TO THE COMPLETION OF THE GLOBAL
OFFERING
The following chart sets forth our Group’s shareholding and corporate structure immediately prior to the completion of the
Global Offering:
Wonder
Innovation
ESOP
14.47%
Mr. Pan
21.82%
Mr. Li
8.24% 6.81% 4.22% 1.95% 9.72% 8.31% 4.38% 1.00% 0.09% 4.38% 3.83% 2.91% 1.10% 0.99% 1.64%
Our Company
Woan Technology (Shenzhen) Co., Ltd.
ʮ̡
(PRC)
Woan (Shenzhen) Software
Technology Co., Ltd
ʮ̡㕙
(PRC)
Woan Technology Limited
ʮ̡㕙 SWITCHBOT PTE. LTD. Ace Robotics Co., Ltd.
(ʮ̡)
(PRC) (Note 4)
Wonderlabs Limited
ʮ̡㕙 SWITCHBOT INC.
100%
100% 100% 75%100%
100% 100% 100% 100%
(Hong Kong)
(Hong Kong)
SWITCHBOT Co., Ltd.
(SWITCHBOT ٟ)
Japan)
(United States)
WONDERLABS, INC.
(United States)
(Singapore)
Guotiao
Innovation
PE Fund LP
Zhuhai
Ansheng
Investment
LP
Shenzhen
Caizhi PE LP
(Note 3)
(Note 2)
(Note 1)
(Note 1)
(Note 3)
(Note 3)
(Note 1)
Shenzhen
Fortune
Capital VC
Shenzhen
Fortune
PE LP
Shanghai
Chenjun
Suzhou
Yuanming
VC LP
Tianjin
Yuntai LP
2.12% 2.02%
Nanjing
Qingke
Letai LP
VentechDongguan
Yunhe
Yinghu
Intelligent
Songshan
Lake Robot
Institute
Shenzhen
Langke
Investment
Shenzhen
Wanshan LP
Brizan
Ventures V
controlling shareholders
entities controlled by the same ultimate controller
Notes:
1. Songshan Lake Robot Institute, Yinghu Intelligent and Dongguan Yunhe a re commonly and ultimately controll ed by Professor Li, our non-executive
Directors.
2. Brizan Ventures V is ultimately controlled by Professo r Ko, our non-executive Director , together with Mr. Kwong.
3. Shenzhen Fortune PE LP, Shenzhen Fortune Capi tal VC and Shenzhen Caizhi PE LP are commonly and u ltimately controlled by Hunan TV and Broadcast
Intermediary Co., Ltd. ( 湖南電廣傳媒股份有限公司) (000917.SZ).
4. Ace Robotics Co., Ltd. ( 艾思機器人（深圳）有限公司) is a joint venture company established under the laws of the PRC. As of the Latest Practicable Date,
Woan Technology controls 75% of the voting rights th erein, comprising 55% equity interest held direct ly and 20% equity interest held through Acemate
(Shenzhen) Enterprise Management Limited Liability Partnership ( 艾思美（深圳）企業管理合夥企業（有限合夥）), a limited liability partnership and an
employee share ownership platform established under the laws of the PRC which is controlled by Woan Technology in the capacity as the general and
executive managing partner. The r emaining 25% equity is held by Mr. Feng, an employee of the Group.
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SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY AFTER THE COMPLETION OF THE GLOBAL
OFFERING
The following chart sets forth our Group’s shareholding and corporate structure immediately after the completion of the
Global Offering (assuming the Over-a llotment Option is not exercised):
Other Public
Shareholders
10%
Our Company
Woan Technology (Shenzhen) Co., Ltd.
ʮ̡
(PRC)
Woan Technology Limited
ʮ̡㕙 SWITCHBOT PTE. LTD.
Wonderlabs Limited
ʮ̡㕙
100%
100% 100%
100% 100% 100% 100%
(Hong Kong)
(Hong Kong)
(Singapore)
Woan (Shenzhen) Software
Technology Co., Ltd
ʮ̡㕙
(PRC)
100%
Wonder
Innovation
ESOP
13.02%
Mr. Pan
19.64%
Mr. Li
7.41% 6.12% 3.79% 1.76% 8.75% 7.48% 3.94% 0.90% 0.08% 3.94% 3.45% 2.62% 0.99%
Guotiao
Innovation
PE Fund LP
0.89%
Shenzhen
Caizhi PE LP
Shenzhen
Fortune
Capital VC
Shenzhen
Fortune
PE LP
Shanghai
Chenjun
Suzhou
Yuanming
VC LP
Tianjin
Yuntai LP
1.91%
Nanjing
Qingke
Letai LP
1.82%
Ventech
Dongguan
Yunhe
Yinghu
Intelligent
Songshan
Lake Robot
Institute
(Note 3)
(Note 2)
(Note 1)
(Note 1)
(Note 3)
(Note 3)
(Note 1)
Shenzhen
Langke
Investment
Shenzhen
Langke
Wanshan
1.48%
Zhuhai
Ansheng
Investment
LP
Brizan
Ventures V
controlling shareholders
WONDERLABS, INC.
(United States)
SWITCHBOT INC
(United States)
SWITCHBOT Co., Ltd.
(SWITCHBOT ٟ)
Japan)
entities controlled by the same ultimate controller
Ace Robotics Co., Ltd.
(ʮ̡)
(PRC) (Note 4)
75%
Notes:
1. Songshan Lake Robot Institute, Yinghu Intelligent and Dongguan Yunhe a re commonly and ultimately controll ed by Professor Li, our non-executive
Directors.
2. Brizan Ventures V is ultimately controlled by Professo r Ko, our non-executive Director , together with Mr. Kwong.
3. Shenzhen Fortune PE LP, Shenzhen Fortune Capi tal VC and Shenzhen Caizhi PE LP are commonly and u ltimately controlled by Hunan TV and Broadcast
Intermediary Co., Ltd. ( 湖南電廣傳媒股份有限公司) (000917.SZ).
4. Ace Robotics Co., Ltd. ( 艾思機器人（深圳）有限公司) is a joint venture company established under the laws of the PRC. As of the Latest Practicable Date,
Woan Technology controls 75% of the voting rights th erein, comprising 55% equity interest held direct ly and 20% equity interest held through Acemate
(Shenzhen) Enterprise Management Limited Liability Partnership ( 艾思美（深圳）企業管理合夥企業（有限合夥）), a limited liability partnership and an
employee share ownership platform established under the laws of the PRC which is controlled by Woan Technology in the capacity as the general and
executive managing partner. The r emaining 25% equity is held by Mr. Feng, an employee of the Group.
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OVERVIEW
Who We Are
We are a global provider of home robotic systems*, with a particular focus on the
markets in Japan, Europe and North America , and are dedicated to building an ecosystem
centered around smart home robotic produc ts. According to the Frost & Sullivan Report,
we ranked first globally among providers of home robotic systems in terms of retail sales in
2024 with a market share of 11.9%, and are a leading global provider of home robotic
systems offering a broad range of home robot ic categories designed for a variety of home
living scenarios. Our offerings primarily comprise: (i) execution-enhanced robots, including
dexterous hand-mimic robots such as lock robots, curtain robots and finger robots,
enhanced mobile robots such as multitasking household robots, and sports robots; (ii)
perception and decision-making systems, in cluding smart hubs, smart sensors and smart
cameras; and (iii) other smart home products and services, such as light and power tools
and smart home appliances. With technical R&D and product innovation as our core
drivers, we leverage our advantages across the industry chain encompassing R&D,
production, and sales to continuously enhance the application and development of
technology in a wide array of home living s cenarios, including home automation,
domestic chores, AI butler, elderly car e, security and energy management, while
continuously expanding the depth of our scenario coverage and enhancing our products’
autonomous learning and decisi on-making capabilities to provi de users with a complete and
enriched smart home living ecosystem. We hav e made significant achievements through our
commitment to the continuous development in the field of home robotic systems, which are
highlighted below**:
Industry
Leader
R&D
Practitioner
Global
Operator
Growth
Driver
A global provider of
home robotic systems with
a particular focus on the markets in
Japan, Europe and North America(1)
Launch and commercialize
finger robots, curtain robots,
fingerprint lock robots, multitasking
household robots and AI tennis
robot(1)
SwitchBot App
3.5 million+
registered users
10.8 million+
connected devices
2022-2024
Revenue CAGR 49.0%
Revenue from DTC channels
CAGR 73.3%
A provider of home robotic systems
with a comprehensive
deployment of home
robotic categories(1)
311 registered patents
56 invention patents
Our products
Sold to 90+ countries/regions
Track Record Period
Available in 2,000+
offline retail stores
2022-2024
Gross profit CAGR 83.1%
2023–2024
Gross profit margin 50.0%+
Ranked FIRST in
Japan’s home robotic
system industry for
3 consecutive years
since 2022(1)
43.4% R&D staff
2022–2024
Average R&D expenses
accounted for approximately
20% of annual revenue
Approximately 55.9%
registered users have linked
≥2 of our products in our
Switchbot App
2023
Adjusted-EBITDA
(non-IFRS measure) turned
positive for the first time
2023–2024
Adjusted-EBITDA
(non-IFRS measure)  YoY
348.6%
Notes:
* Our innovative approach involves applying hom e robotic technology to creatively decompose
robotic functional parts through a distributed stru cture, thereby mimicking human capabilities such
as ‘‘hands’’, ‘‘feet’’, ‘‘eyes’’, ‘‘skin’’ and ‘‘brain’’.
** Unless otherwise stated, all data presented in the diagram are as of the Latest Practicable Date.
(1) According to the Frost & Sullivan Report.
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R&D Practitioner. As a R&D practitioner in the global home robotic system industry,
we have launched multiple products while building strong intellectual property assets and
maintaining significant R&D investments . We introduced and commercialized several
innovative products in the home robotic system industry. We launched the SwitchBot Bot in
2017. In 2020, we introduced SwitchBot Curtain, followed by SwitchBot Lock in 2021, and
SwitchBot S10, an enhanced mobile robot in 2023. In May 2025, we launched Acemate, an
AI tennis robot. As of the Latest Practicable Date, we owned 311 patents globally,
including 56 invention patents that represent our key technological developments. We have
assembled a highly capable R&D team, accounting for 43.4% of our total employees as of
the Latest Practicable Date. Our commitment to innovation is further demonstrated by our
significant R&D investment, with R&D expenses accounting for approximately 20% of our
revenue between 2022 and 2024.
Global Operator. Our rise as a global operator is demonstrated by our extensive
worldwide reach, high user engagement, and strong product adoption across diverse
markets and demographics. Building upo n our technological foundation, we have
developed a comprehensive ecosystem that seamlessly connects our innovative products
with users worldwide. As of the Latest Practicable Date, over 3.5 million users had
registered with our SwitchBot App since its launch, and over 10.8 million devices had been
connected to our SwitchBot App since its launch. Our products are sold to more than 90
countries and regions worldwide during the Tr ack Record Period, with availability in over
2,000 offline retail stores globally as of the Lat est Practicable Date. Approximately 55.9%
of all users who had registered with our SwitchBot App had connected two or more of our
SwitchBot products with the SwitchBot App as of the Latest Practicable Date,
demonstrating strong adoption across our product ecosystem, underscoring our strong
consumer loyalty and brand positioning.
Growth Driver. During the Track Record Period, we achieved strong financial
performance, with steady growth in revenue and gross profit margin. For the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 3 0, 2024 and 2025, our
revenue amounted to RMB274.6 million, RMB457.3 million, RMB609.9 million,
RMB275.0 million and RMB396.3 million, respec tively, representing a CAGR of 49.0%
from 2022 to 2024. Our DTC channels experienced significant growth, with a CAGR of
73.3% from 2022 to 2024. For the years ended December 31, 2022, 2023 and 2024 and the
six months ended June 30, 2024 and 2025 , and our gross profit was RMB94.1 million,
RMB230.5 million, RMB315.6 million, RMB138.8 million and RMB214.8 million,
respectively, representing a CAGR of 83.1 % from 2022 to 2024. Our gross profit margin
has reached 50.4% and 51.7% in 2023 and 2024, respectively. Our adjusted-EBITDA
(non-IFRS measure) has also shown significant improvement, turning from negative
RMB69.1 million for the year ended Decembe r 31, 2022 to RMB5.8 million and RMB26.1
million for the years ended December 31, 2023 and 2024, respectively, and from RMB0.2
million for the six months ended June 30, 2024 to RMB54.1 million for the six months
ended June 30, 2025, demonstrating our enhanced operational efficiency and progress
toward sustainable profitability.
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Our Business and Product Portfolio
Since our inception, we have consistently focused on developing home robotic systems
to address diverse user needs across a variety of home living scenarios. Our comprehensive
product portfolio mainly consists of execution-enhanced robots and perception and
decision-making systems. Our execution-enhanced robots primarily include (i) dexterous
hand-mimic robots that mimic human finger and wrist movements to achieve physical
interaction, including lock robots, curtain robots and finger robots; and (ii) enhanced
mobile robots that mimic human ‘‘foot’’ movement and can perform a variety of composite
functions through different modular product combinations, such as cleaning, air
purification, mobile delivery and dynamic monitoring, even certain sports activities.
Complementing these products, our percep tion and decision-making systems simulate
human sensory and cognitive functions, with perception products such as smart cameras
and smart sensors serving as ‘‘eyes’’ and ‘‘skin,’’ and smart hubs functioning as the ‘‘brain’’
that enables interconnectivity and coordinated control among multiple devices. Through
this integrated product approach, we have created a comprehensive home robotics
ecosystem that brings advanced automation ca pabilities to everyday home environments.
The following diagram illustrates the full lineup of our home robotic system products.
Perception and Decision
Systems
Smart Hubs
Smart Sensors
Smart Cameras
Dexterous Hand-mimic
Robots
Look Robots
Curtain Robots
Finger Robots
Enhanced Mobile Robots
Multitasking Household Robots
*
*
* Indicating products that are expected to be launched or sold soon. Specifically, (i) AI companion robot was officially
launched at IFA Berlin in September 2025; we are currently opt imizing the product, with commercial sales expected to
commence in due course; and (ii) the first model of our humanoid chore robot is currently undergoing testing and
optimization, and is expected to be launched by the end of January 2026. For details of these products, please refer to
the section headed ‘‘— Our Brand and Products — Products Under Development’’ in this prospectus.
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Our Technologies
Through building a product-market fit (P MF)-driven agile development system, we
effectively connect the end-to-end innovation loop of ‘‘technical R&D-product
iteration-market verification ,’’ achieving simultaneous advancement of technical solutions
and product performance.
We have independently developed and mastered three core home robotics technologies:
(i) robot positioning and environment construction technology, which enables
millimeter-level positioning and dynamic e nvironment modeling through multi-sensor
fusion and 3D visual reconstruction, allowing home robotic systems to adapt to complex
layouts and autonomously plan paths; (ii) AI machine vision control technology, which
combines multi-modal large la nguage models, vertical models, and diffusion models to
achieve millisecond-level object recogniti on and real-time feedback via CMOS visual
sensors, widely applied in cleaning and secu rity scenarios; and (iii) distributed neural
control network technology, which features bi o-inspired communication protocols to form
a low-power, self-healing network that ensures coordinated whole-house responses while
automatically adapting to different layout s and device combinations, providing the
technological foundation for a complete smart home ecosystem. At the same time, based
on the feedback from millions of registered users, we continuously optimize the vertical
domain and general-purpose large models for a variety of scenarios. Through a feedback
system, we achieve a virtuous cycle of algorith m iteration and scenario application, creating
a self-improving loop where user feedback collected from interactions or processes is used
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to continuously refine our models, generating better outcomes and more valuable data for
continued improvement (also known as data flywheel effect), which is set out below:
Ecosystem
Home
automation
 Domestic
chores
AI butler Elderly
care
Energy
management
Security
AI Machine Vision Control Technology
(Vision-Language-Action Model)
Realize the perception of objects,
behaviors, scenes, and emotions through
hybrid multimodal large models
Intelligent
decision-making
(language)
Action
execution
(action)
Terminal
perception
(vision)
Distributed Neural Control
Network Technology
Multimodal Large-Model
Centralized Decision
Architecture
Bio-inspired Neural
Communication Protocol
Embodied Intelligence
Control Performance
#VJMEBMPXQPXFS
TFMGIFBMJOHOFUXPSL
DPOOFDUJPOXJUIUIFIFMQPG#JPJOTQJSFE/FVSBM
$PNNVOJDBUJPO1SPUPDPMTUPSFBMJ[FSFBMUJNF
DPMMBCPSBUJWFDPOUSPMPGIPNFSPCPUT
Data Flywheel
Promote rapid and efficient
iteration and optimization
of core technologies
Realize the high-precision, high-dimensional, and
high-adaptability autonomous movement of home robots
One-dimensional positioning
Two-dimensional
mapping
Three-dimensional
construction
Robot Positioning and Environment
Construction Technology
We Have Very Broad Market Opportunities
As user demands show struct ural changes toward compl exity and intelligence, home
robotic system products will gradually replace traditional home robots, achieving
comprehensive intelligent coverage of home living scenarios through system-level
solutions, ultimately driving the holistic h ome intelligent ecosystem to evolve toward
higher dimensions of autonomous learning and autonomous decision-making. According to
the Frost & Sullivan Report, the global home robotic systems market has entered a period
of rapid growth. In addition, the penetration rate of home robotic systems in the global
home robot industry has grown from 1.0% in 2022 to 2.3% in 2024 and is expected to reach
16.2% in 2029. In terms of market size, the g lobal home robotic system industry has
experienced significant growth, which in creased from RMB2.2 billion in 2022 to RMB5.9
billion in 2024, representing a CAGR of approx imately 63.7% for the period. By 2029, its
market size is expected to reach RMB70.7 b illion, representing a CAGR of approximately
64.2% from 2024 to 2029. For details, please refer to the section headed ‘‘Industry
Overview’’ in this prospectus.
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COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiate us
from our competitors:
A leading provider of home robotic systems with deployment in comprehensive home living
scenarios
We have build a strong presence in the development and manufacturing of home
robotic system products. According to the Fr ost & Sullivan Report, we are a company that
has fully deployed the home robotic system pr oducts, enabling intelligent interaction
between multiple products within an ecosystem as of the Latest Practicable Date. According
to the same source, we ranked first globally among providers of home robotic systems in
terms of retail sales in 2024 with a market share of 11.9%. Our mission is to provide smarter
and more convenient living experiences for households through innovative technology.
Home robotic systems, which combine execution-enhanced robots with perception and
decision-making systems, represent a rapidly emerging category in the home robot industry
by integrating artificial int elligence, robotics, and IoT te chnologies. These robots can
perform human-like actions and, through various product combinations, accomplish
complex tasks. By enabling int erconnectivity through perception and decision-making
systems, these robots are capable of handling mul tiple household tasks, thereby establishing
a home robotic ecosystem for smart home living. The global market for home robotic
systems is growing rapidly, driven by increasing demand for intelligent home products and
ecosystem. According to the Frost & Sullivan Report, the market size of the global home
robotic system industry grew from RMB2.2 billion in 2022 to RMB5.9 billion in 2024 and is
projected to reach RMB70.7 billion by 2029, re presenting a CAGR of approximately 64.2%
from 2024 to 2029. Market penetration rose from 1.0% in 2022 to 2.3% in 2024 and is
expected to reach 16.2% by 2029, reflecting gr owing global adoption. These systems are
expected to replace traditional smart home products and we enjoy an early-mover
advantage in this rapidly growing market.
Based on our profound and insightful understanding of smart home living, we have
developed a home robotic system, enabling robot interaction through smart hubs to build a
dedicated ecosystem for home living scenarios. Our execution-enhanced robots are
responsible for completing basic tasks in ho me living scenarios, while our perception and
decision-making systems simulate human p erception and brain functions, monitoring
environmental changes in real-time to achieve task and scenario generalization. With
technological iterations, we have integrated AI and edge computing into our products,
building a multi-level robot task architectur e with autonomous learning capabilities. The
perception and decision-making system, combined with large model analysis and local
training, can quickly respond, anticipate user needs, and coordinate with
execution-enhanced robots to co mplete tasks, giving our home robotic systems the ability
to handle complex home cross-scenario tasks.
We have consistently adhered to ‘‘first principles thinking’’, leveraging our deep insight
into users’ actual pain points and needs in home living, and relying on our independently
developed technology to successfully create multiple industry benchmark products from
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scratch. Our product portfolio is comprised of execution-enhanced robots, which include
dexterous hand-mimic robots and enhanced mobile robots, and perception and
decision-making systems, such as smart hubs, smart sensors and smart cameras. These
products can be applied in home automation, domestic chores, AI butler, elderly care,
security and energy management, achieving seamless coverage of diverse smart home
categories. Certain of our enhanced mobile robots, such as Acemate, can even engage in
sports activities such as tennis. For details, please see ‘‘— Our Brand and Products — Home
Robotic System Products — Execution-enhanced Robots — Enhanced Mobile Robots’’ in
this prospectus. Through our omni-channel sales strategy, we have successfully established
‘‘SwitchBot’’ as a renowned global smart home brand.
The rapid development of artificial intellig ence technologies has further expedited our
pursuit of various development opportunities. Artificial intelligence and edge algorithm
large models enable us to apply more cutting-edge technologies to our products, greatly
enhancing their autonomous learning and deci sion-making capabilit ies to achieve deeper
intelligence. During the Track Record Period, we completed the full category deployment of
our home robotic system by launching an average of 10 new products or upgrades of
existing products each year.
Powering technological innovation thro ugh experienced R&D teams and self-developed
proprietary technologies
Proprietary Technologies. Guided by our vision, we adhere to the principle of product
and innovation-driven development to enhance our proprietary technologies, ensuring these
technologies can be seamlessly applied to our products. We have independently developed
and mastered three core home robotic technologies, including robot positioning and
environment construction technology, AI machine vision control technology, and
distributed neural control network technology, all of which have been successfully
applied to our products.
. For robot positioning and environmental construction technology, we achieved
‘‘high-precision, high-dimensionality, high-adaptability’’ a utonomous mobility
capabilities through multi-sensor fus ion, edge intelligence, and 3D visual
reconstruction. This technology will allow our products to accurately position
themselves in one, two, and three dimensions with high precision, map large
surrounding home environments, and create detailed 3D models of spaces that can
prominently identify features such as glass surfaces and obstacles.
. For AI machine vision control technology, we combined multi-modal large
language models, vertical models, and diffusion models leveraging the perceptual
capabilities of terminal devices equipped with CMOS vision sensors and edge
chips, enabling precise recognition and intelligent feedback. This technology
allows our home robotic systems to first analyze and interpret visual data to
understand their surroundings and the n integrate this information with
positioning and environmental mapping technologies to determine movements
and execute actions with high precision through execution-enhanced robots.
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. For distributed neural c ontrol network technology, we utilized Bio-inspired
Neural Communication Protocols to bu ild low-energy, rapidly self-healing
network connections, achieving real-time collaborative control of various smart
devices throughout the home. This technology features fast response times, high
precision, high control success rates, and low energy consumption, while
automatically adapting to complex and changing home environments, providing
dependable technical support for our home robotic ecosystem.
R&D Leadership and Talents. Our R&D team is led by Mr. PAN Yang ( 潘陽), who
holds a bachelor’s degree from Harbin Institute of Technology and has approximately 14
years’ experience in R&D. We have assembled a highly capable R&D team comprising 278
R&D employees, accounting for 43.4% of our total employees as of the Latest Practicable
Date. Our core team includes professionals with advanced degrees from prestigious
institutions including Harbin Institute of Technology, University of Toronto, and Peking
University, with experience from leading companies and organizations such as Google and
the Centre for Advanced Robotics Technology Innovation at Nanyang Technological
University in Singapore.
Flywheel Effect. Leveraging our proprietary tec hnologies and R&D capabilities, we
create a virtuous cycle where products intera ct with users, generating real-scene feedback
that fuels efficient product iteration and optim ization. This approach e n a b l e su st or a p i d l y
develop new offerings and enhance existing ones to meet evolving market needs, driving
sustainable long-term growth.
Investment in R&D and Achievements. We consistently main tain substantial R&D
investment to introduce new products to the market and enhance our competitive
advantage. For the years ended December 31, 2022, 2023 and 2024 and the six months
ended June 30, 2024 and 2025, our total R&D expenses amounted to RMB61.8 million,
RMB89.2 million, RMB112.0 million, RMB56.7 million and RMB58.7 million,
respectively, reflecting a CAGR of 34.7% from 2022 to 2024. With our deep insights into
user needs and usage scenarios, we are able to effectively transform R&D investments into
product commercialization, enabling us to continuously deliver home robotic system
products that meet user demands while seamlessly integrating into their existing living
environments. During the Track Record Period, almost all of our R&D projects resulted in
commercialization of the underlying products. As of the Latest Practicable Date, we owned
more than 311 global patents, including 56 invention patents, which represented our key
innovations.
Accolades and Recognitions. Since our establishment, we have consistently pursued
R&D innovation. We have been recognized as a National Key Specialized and
Sophisticated ‘‘Little Giant Enterprises ( 國家專精特新重點‘‘小巨人’’企業), a National
High-Tech Enterprise ( 國家高新技術企業) and a Guangdong Provincial Engineering
Technology Research Center for Int elligent Networked Home Control ( 廣東省智能組網家
居控制工程技術研究中心), since 2024, 2023 and 2022, respectively. For further details,
please see the section headed ‘‘— Awards and Recognitions’’ in this prospectus.
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Leveraging our product innovation capability to develop a home robotic system and establish a
comprehensive smart home ecosystem with a diversified product matrix
Compared to general home robots that focus on single-product functionality, we
specialize in developing home robotic system pr oducts within an ecosystem, offering users a
more comprehensive, intelligent, and sys tematic smart home experience. Since our
inception, we have been committed to enh ancing smart home living by developing a
distributed concept that breaks down humanoid robot functions into multiple components
comprising ‘‘hands’’, ‘‘feet’’, ‘‘eyes’’, ‘‘skin’’ and ‘‘brain’’ functions, to perform tasks ranging
from simple to complex. This approach create s an ecosystem capable of replacing a number
of human actions in diverse home living scenarios. We have pursued a clear and
well-defined development roadmap, continuously refining our product offerings and
expanding application scenarios to fulfill and enhance the functionality of our home
robotic systems from the outset. As a result , we became a leading global provider of home
robotic systems offering a broad range of home robotic categories designed for a variety of
home living scenarios as of the Latest Pract icable Date, according to the Frost & Sullivan
Report. Our ecosystem establishes a formidable competitive moat, securing our long-term
growth trajectory and reinforcing our market-leading position.
Driven by creative concepts, we have launched multiple innovative product categories
that generate market trends, with lock robots, curtain robots and finger robots being our
core product categories that have opened and maintained market leading positions in the
Japanese market in terms of retail sales during the Track Record Period. We have
consistently launched products across multiple categories. Our innovation journey
continued with a curtain robot in 2020, followed by a fingerprint lock robot in 2022 and
an automated blinds robot in 2022. Our momentum accelerated in 2023 with the
introduction of the SwitchBot K10+, the world’s smallest laser vacuum robot in terms
of diameter and the SwitchBot S10, an enhan ced mobile robot featuring a self-refilling
humidifier and fully automated mopping capa bilities with direct waterline integration.
Most recently, in 2025, we unveiled the Fusion Platform, an enhanced platform, mounted
on our SwitchBot K20+ Pro, our latest model in our SwitchBot K Series, creating a human
torso equivalent that seamlessly connects multiple distributed execution-enhanced robots.
This allows us to form an enhanced combin ation of ‘‘enhanced mobile robot + Fusion
Platform + embodied robot products’’, ta rgeting complex home living scenarios. In
addition, in May 2025, we launched an AI tennis robot, Acemate. As a result of this rapid
innovation, we have experienced explosive g rowth in our enhanced mobile robot category,
with revenue from this category reaching R MB110.3 million and RMB64.1 million in 2024
and the first half of 2025, respectively.
With continuous technological advancements, we have established a comprehensive
home robotic system product matrix, currentl y covering seven product categories with 47
SPUs. Our product matrix consists of execution-enhanced robots and perception and
decision-making systems, each experiencing significant growth during the Track Record
Period. It took us under eight years to develo p the capability to provide services to users
that cover wide ranging home living scenarios.
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Furthermore, all our home robotic system products can adaptively integrate into
existing home ecosystems without modifying the original home environment, while
performing their functions stably, providing users with great convenience and enhanced
functionality. Meanwhile, through the coordination of multiple products across numerous
scenarios, we have successfully achieved a smart home autonomous operation mode
featuring ‘‘sensitive perception + neural c enter + autonomous learning + predictive
decision-making,’’ thereby constructing a c omplete ecosystem of ‘‘brain + perception +
body + execution’’ and developing a true home robotic system for comprehensive home
living scenarios.
Our commitment to design innovation has earn ed us multiple prestigious recognitions.
Since our inception, we have received numer ous product design awards, showcasing our
strong innovation capabilities i n both product aesthetics and f unctionality. These accolades
include the Good Design Award (for our curtain robot, smart camera, smart power tool and
enhanced mobile robot), the iF Design Award (for our curtain robot, enhanced-mobile
robot and others), and the Red Dot Design Award (for our lock robot, curtain robot, smart
camera, and smart hub). Additionally, we have been honored with the IDEA American
Industrial Design Award, and the Golden Pin Design Award. For further details, please see
the section headed ‘‘— Awards and Recognitions’’ in this prospectus.
Proven brand heritage and strong brand influence, buoyed by omni-channel sales network with
global reach
The SwitchBot brand has undergone long-term market validation, accumulating rich
experience and reputation, forming a unique brand culture and value. Through our
high-quality product offerings and complete product coverage of home robotic system, we
have gained widespread consumer recognition and gradually established a strong brand
influence. Currently, SwitchBot has emerged as a leading global provider of home robotic
systems across all of our target markets, including Japan, Europe and North America,
especially maintaining the No. 1 position in terms of retail sales in the Japanese home
robotic system for three consecutive years since 2022, according to the Frost & Sullivan
Report.
Our strong brand recognition is evidenced by our search engine keyword popularity,
where end consumers are able to directly access our self-operated website by searching for
‘‘SwitchBot’’ online. According to the back end data of our SwitchBot App, approximately
55.9% and 35.7% of all users who had registered with our SwitchBot App as of the Latest
Practicable Date had connected two or more, and three or more, of our SwitchBot products
with the SwitchBot App, respectively. These figures have increased steadily from
approximately 48.2% and 27.7% as of Decemb er 31, 2022, respectively, demonstrating
our strong consumer retention and brand positioning within our expanding smart home
ecosystem.
DTC Channels Demonstrating Strong Growth
Our DTC channels have demonstrated rema rkable growth during the Track Record
Period with revenue growing at a CAGR of 73.3% from 2022 to 2024. Revenue generated
from the DTC channels increased from 36.9% of our total revenue in 2022 to 49.8% of our
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total revenue in 2024. Revenue generated fr om the DTC channels increased from 43.7% of
our total revenue for the six months ended June 30, 2024 to 44.8% of our total revenue for
the six months ended June 30, 2025. This was mainly driven by the revenue growth from our
self-operated website, which increased at a CAGR of 108.2% from 2022 to 2024. Revenue
from our self-operated website increased f rom 7.5% of our total revenue in 2022 to 14.5%
of our total revenue in 2024. Revenue generated from our self-operated website increased
from 13.0% of our total revenue for the six months ended June 30, 2024 to 15.3% of our
total revenue for the six months ended June 30, 2025. The SwitchBot App enables users to
interact with our products in real-time, a ddressing diverse home living needs and
maintaining high user engagement. The cumu lative number of users who had registered
with the Switchbot App had grown rapidly during the Track Record Period and up to the
Latest Practicable Date, increasing from over 1.2 million as of December 31, 2022 to over
3.5 million as of the Latest Practicable Date, driven by our multi-channel user acquisition
strategy that have helped form a loyal SwitchBot community.
The results of our market strategy continue to stand out, showing impressive
achievements in both sales volume and revenue. During the Track Record Period, the
sales volume of our home robotic system products (excluding related accessories) reached
1.8 million units, 2.1 million units, 2.4 million units and 1.2 million units for the years ended
December 31, 2022, 2023 and 2024 and the six m onths ended June 30, 2025, respectively,
while we continuously pivoted toward offering high value and technologically advanced
products. As a result, our revenue has experienced rapid growth with a CAGR of 49.0%
from 2022 to 2024.
Strategic Channel Expansion
We have built a comprehensive omni-channel sales and distribution network that has
enabled us to maximize our market reach and capitalize on diverse revenue streams. Our
sales strategy leverages both e-commerce platforms and physical retail and distribution
presence to establish ‘‘SwitchBot’’ as a leading home robotic system brand in over 90
countries and regions.
On e-commerce platforms, particularly Am azon, many users directly search for
‘‘SwitchBot’’ to access our product links, demonstrating strong brand recognition. With our
expanding market presence, growing brand influence, and strong relationship with
Amazon, we have significantly accelerated ou r sales growth and enhanced our visibility
globally. For the year ended December 31, 2 024, our Amazon channels (both Amazon VC
and Amazon SC) collectively contributed 64.2% of our total revenue.
After years of market cultivation and bran d building, we have established strong and
stable partnerships with a number of renowned retail and distribution giants in our key
markets. These enterprises have stringent quality standards for suppliers, and the fact that
they have chosen to partner with us in this category demonstrates our outstanding brand
power and market influence. As of the Latest Practicable Date, our products were available
f o rs a l ei nm o r et h a n2 , 0 0 0o f f l i n er e t a i ls tores globally, not only helping us deeply
penetrate various local markets but also further expanding our brand awareness.
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Geographic Expansion and Diversification
We commenced the sales of SwitchBot in the Japanese market in 2017, which enabled
us to possess profound insights into local home environments and user needs, allowing us to
quickly establish and solidify our market le ading position therein. Building on the
successful experience and business model we developed in Japan, we subsequently expanded
into the European and North American markets. From 2022 to 2024, our CAGR in terms of
retail value derived from sales in the Japan ese, European, and North American markets
reached 44.7%, 68.1% and 42.5%.
During the Track Record Period, our products were sold in more than 90 countries and
regions globally. For the years ended December 31, 2022, 2023 and 2024 and the six months
ended June 30, 2024 and 2025, our aggregate revenue from the Japanese, European, and
North America markets accounted for 95.5%, 95.6%, 95.0%, 93.7% and 96.6% of our total
revenue, respectively. We provide locally oriented after-sales services, language support,
and customized marketing strategies for different markets, further enhancing our
adaptability and competitiv eness in the global markets.
Our coordinated global sales network has en abled us to build a truly international
presence across diverse geographic markets. Th is widespread market coverage demonstrates
our adaptability to different consumer prefer ences and our ability to successfully scale our
business model internationally while maintaining strong growth across all regions.
A complete and highly synergetic value chain integrating R&D, production and sales, ensuring
operational efficiency
As a global leader in the home robotic syste ms market, we have established a complete
vertically integrated value c hain encompassing R&D, production, and sales in such market.
This integration enables us to fully capital ize on emerging market opportunities through
highly efficient supply chain management wh ile continuously accelerating technological
research and product innovation. Our end-to-end control of the value chain has
significantly improved operational efficien cy and service capabilities, reinforcing our
market leadership and long-term growth potential.
We employ a cross-functional, project-based approach to product development,
forming dedicated teams that integrate R&D, production, and sales personnel, ensuring
seamless collaboration and real-time decision-making throughout the development cycle.
This approach, combined with our vertically in tegrated value chain, has allowed us to fast
track the transformation of ideas and concep ts into commercialized products during the
Track Record Period. We are capable of bringing promising concepts to market in a
relatively short period of time (i.e., three mont hs), significantly outpacing the industry
average of eight to 12 months, according t o Frost & Sullivan Repor t. During product
development, the sales department provides market insights that highlight R&D priorities,
while our product initiation and process management systems convert these insights into
technical specifications. Once developed, products are efficiently sold through our
omni-channel sales and distribution network, creating a cohesive path from product
conceptualization to commercialization. Mo reover, through standardized design and
modular production, we have achieved component universalization, enabling large-batch
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procurement that further reduces our costs of production. Benefiting from the economies of
scale brought by high sales volumes, we have ac hieved significant efficiency improvements
and cost optimization in production and supply chain management. On the sales side, we
interact directly with users, quickly obtaining feedback and accurately understanding their
needs and preferences. This feedback not only drives the iteration and upgrade of our
existing products but also helps us continuously develop new products that satisfy growing
market demands. Our integrated value creation system of ‘‘independent R&D +
independent production + sales reach + product iteration + continuous innovation’’
has created a self-reinforcin g virtuous cycle, enabling us t oa c h i e v es u s t a i n e dg r o w t ha n d
innovation.
From the early stages of development, we have prioritized independent production,
which allows us to seamlessly translate innovative concepts into market-ready products
with greater efficiency and supply chain stabilit y. This model ensures stronger control over
product quality, cost optimizati on, and production flexibility, strengthening our ability to
respond quickly to market demands. At the same time, we firmly control numerous core
technology patents, product designs, and other intellectual property, giving our products
higher added value and pricing autonomy.
Additionally, our supply chain advantages a re reflected in effic ient communication
with suppliers, diversified cooperation models, and cost advantages. This close cooperative
relationship not only enhances the flexibilit y and responsiveness of the supply chain but
also further optimizes our cost structure. Our gross profit margin for the years ended
December 31, 2022, 2023 and 2024 and the si x months ended June 30, 2024 and 2025 was
34.3%, 50.4%, 51.7%, 50.5% and 54.2%, respectively, with our 2023 and 2024 gross profit
margins outperforming the industry average, according to the Frost and Sullivan Report.
Stable and cohesive core management team with years of cooperation and an efficient
organizational structure
We are led by our co-founders and supported by a team of distinguished experts in
home robotic systems. Our core management t eam comprises innovative and energetic
professionals with an average age of approximately 35 years old and an average industry
experience of approximately 12 years, all of whom were graduates of leading global
academic institutions. They bring extensive experience from prestigious technology
companies and unicorn enterpri ses, providing us with comprehensive industry expertise
and deep insights into home robotic system products.
Mr. LI Zhichen ( 李志晨), one of our co-founders and chief executive officer, brings 12
years of experience in the robotic industry. Mr. Li possesses a distinctive approach to
product conceptualization and development. His innovative product philosophy and acute
market awareness led to the development of our home robotic systems for home living
scenarios. Mr. Li’s strategic vision and impl ementation capabilities have enabled us to
consistently deliver market-r ecognized products and achieve sustainable business growth.
Mr. PAN Yang ( 潘陽), one of our co-founders and chief technology officer, currently leads
our product research and development department, ensuring timely development and
delivery of products to the production departm ent. Mr. Pan spearheads the resolution of
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core technical challenges, collaborates with Mr. Li on defining product roadmaps, and
oversees detailed parameters of product design. His technical leadership has been
instrumental to our success.
We also benefit from the guidance and support of distinguished scholars. Professor LI
Zexiang ( 李澤湘) and Professor KO Ping Keung ( 高秉強), both serving as our non-executive
Directors, provide professional advice on product positioning and industry trends.
Professor Li brings extensive expertise in robotics and automation, with his research
earning numerous accolades, including IEE E Fellow status and the 2019 IEEE Robotics
and Automation Award. Professor Ko contri butes invaluable insights as a renowned
electronic engineering expert, with his influen tial research on integrat ed circuit reliability
widely recognized in both academic and industrial circles. He has also won numerous
accolades, including the coveted 2002 IEEE Solid-State Circuit Award. Both professors
have worked at several prestigious universi ties including the Hong Kong University of
Science and Technology and the University of California, Berkeley, through their
professional careers.
Our co-founders and core management team have established technical foundations
and collaborative relationships over many yea rs. In particular, several members of our core
management team, including Mr. Li Zhichen, Mr. Pan Yang, Mr. LIN Haizhou ( 林海洲),
our chief operating officer, and Mr. LIU Guohui ( 劉國輝), our vice president in production
engineering, share a deep connection datin g back to their college years at the Harbin
Institute of Technology and have known each other for more than 17 years. This synergy
has facilitated clear functiona l divisions and an efficient org anizational structure. Under
their leadership, we have mainta ined unwavering focus on delivering premium products and
systematically developing a comprehensive product portfolio spanning the entire home
service ecosystem. We have achieved advance ment in several competitive international
markets, establishing ourselves as a global home robotic system product manufacturer and
service provider.
BUSINESS STRATEGIES
To solidify our market leading position and further propel our business growth, we
intend to pursue the following business strategies:
Enhance R&D capabilities and expand our product portfolio
We are committed to strengthening and accelerating our technological progress in the
home robotic systems market through continuous innovation and strategic R&D
i n v e s t m e n t .W ep l a nt oe s t a b l i s ha nR & Dc e n t e rw i t hd u a lb a s e si nH o n gK o n g( t h e
‘‘Hong Kong Base’’) and mainland China to drive our technology advancement. We plan to
locate the Hong Kong Base near leading innovation hubs such as Hong Kong University of
Science and Technology, focusing on leveraging global talent for cutting-edge embodied
robot control algorithm research. This fac ility will concentrate on VLA algorithms,
imitation learning, reinforcem ent learning, and Sim2Real applications, while exploring new
robotic applications for home scenarios. Through this center, we aim to build
comprehensive datasets of robot operations and create a positive feedback loop between
algorithm iteration and practical applications, forming a data flywheel effect that
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continuously improves our technology. We plan to locate our collaborative base in
mainland China near top-tier academic clusters , focusing on leveraging domestic university
resources, engineering talent, and supply chain collaborations. This facility will deploy
industrial-grade validation equipment to ac celerate technology commercialization, with
emphasis on industrialization and cost-e ffective design research. As of the Latest
Practicable Date, we had completed the site selection and leasing for both our Hong
Kong base and our collaborative base in mai nland China. The total expenditure for
establishing these dual R&D bases is expected to primarily comprise property rental fees,
design and decoration costs, and salaries of the relevant R&D personnel. For further
details, please see ‘‘Future Plans and Use of Proceeds’’ in this prospectus.
We plan to focus our R&D efforts on the following key technologies:
. Advanced robot positioning technology. We plan to enhance our robot positioning
technology with capabilities for three-di mensional map fusion, occupancy grid
mapping, and object motion predictio n. These advancements will enable our
future product categories including humanoid chore robots and AI companion
robot to navigate complex environments and execute tasks with greater precision.
While our existing technology achieves high-precision positioning and
two-dimensional mapping for static and semi-structured environments, our
advanced technology is expected to enable multi-robot collaborative
three-dimensional space recognition and real-time prediction of dynamic object
trajectories, transforming navigation from reactive obstacle avoidance to
proactive path planning in complex household environments.
. Advanced AI machine vision control technology and edge computing technology. We
also plan to advance our AI machine vision control and edge computing
technologies, enabling our products to understand environments more deeply
through object, behavior, scene, and intention perception. By optimizing
vision-language models for local deployment, we aim to apply these
technologies to our current and future products such as SwitchBot AI hubs and
AI companion robot, aiming at supporting over 100 home visual-language tasks
while protecting user privacy through edge computing. Our advanced
development will upgrade environmental understanding from basic object
recognition to intention prediction th rough temporal-sp atial behavioral
modeling, while transitioning from netwo rk-based processing to complete local
edge computing for enhanced operational efficiency.
. Cost-effective robotic grasping/manipulation for household tasks. We plan to create
cost-effective robotic grasping and manipulation technologies for household
tasks, including mechanical arm and hand modules with sophisticated control
algorithms. These technologies will be applied to our humanoid chore robots,
making advanced robotic capabilities m ore accessible for everyday home use.
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In addition, we plan to focus our R&D efforts to enhance and expand our product
portfolio into the following categories:
. VLA model-based humanoid chore robot. We intend to develop a VLA model-based
humanoid chore robot that integrates perception, language understanding, and
action execution to perform various household tasks, including organizing items
and folding clothes. This robot will feature semantic navigation capabilities and
adapt to dynamic environments through s ensor feedback. While our existing VLA
technology provides essential perceptio n-decision capabilities, our advanced
development will enable comprehensiv e household task execution through
semantic mapping and end-to-end task decomposition, transforming natural
language instructions into complete three-dimensional spatial action sequences
for dynamic household environments.
. AI companion robots. We also plan to develop AI companion robots with
enhanced interaction capabilities to serve as lifestyle assistants and entertainment
hubs for homes. These robots will combine advanced natural language processing
with emotion recognition and personalized user interaction models. Designed with
friendly, approachable aesthetics, th ese companion robots will fulfill both
practical assistant functions and emotional companionship roles while serving
as central control points for other SwitchBot devices.
. Enhanced perception and decision-making systems. We plan to develop expanded
ranges of smart hubs, smart sensors and smart cameras to provide more
comprehensive environmental awareness and perception and decision-making
capabilities for our ecosystem. Our ne xt-generation smart hubs will feature
enhanced edge computing capabilities, enabling more sophisticated local
processing of sensor data. We will develop specialized environmental sensors
targeting specific home health concerns and expand our smart camera line with
models offering more advanced computer vision capabilities.
Through these strategic R&D initiatives, w ea i mt os t r e n g t h e no u rp o s i t i o na sal e a d e r
in the home robotic systems market and deliver innovative products that address our
customers’ evolving needs.
Such initiatives will be funded, in part, from the net proceeds of the Global Offering.
For further details, please see ‘‘Future Plan s and Use of Proceeds’’ in this prospectus.
Furthermore, we plan to establish strategic partnerships with leading universities and
research institutions to complement our int ernal R&D capabilities and access specialized
expertise. These collaborations will focus on fundamental research areas aligned with our
long-term technology roadmap, including control algorithms, advanced robotics
technology, human-machine interaction technology, and materials technology. We will
implement various collaboration models, including sponsored research projects and joint
research initiatives.
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Strengthen market position and expand global reach
We are committed to expanding our market presence in established regions while
strategically entering new markets with significant growth potential. Our comprehensive
strategy focuses on increasing product penetration, optimizing sales channels, and building
strong brand recognition across diverse markets. We will implement targeted approaches
tailored to the unique characteristics of each market to maximize our global footprint and
drive sustainable growth.
Increase market penetration and enhance brand awareness
We aim to deepen market penetration of our existing products while strengthening our
brand recognition through a comprehensive approach that enhances marketing
effectiveness, optimizes sales channels, and improves customer engagement. We will
leverage both digital and physical touchpoints to educate end consumers about our
innovative products and solutions and drive adoption across different market segments.
We plan to enhance targeted marketing initiatives across key markets and
demographics by implementing more focused campaigns that address specific user
segments and use scenarios. Our content mark eting will highlight practical applications
of our products in solving everyday problems in home living scenarios, showcasing real user
experiences and testimonials. We plan to create scenario-based short videos demonstrating
our products in high-usage situations such as elderly care and pet-friendly households. Our
brand promotion strategy also includes sponsoring industry exhibitions and technology
summits, and engaging in community activiti es that reinforce our brand associations with
‘‘efficient intelligent living’’ (高效智能生活) and ‘‘life improvement through robotics’’ ( 機器
人改善家庭生活). We will expand our influencer co llaborations beyond technology
specialists to include lifestyle and home securi ty content creators, enhancing credibility
through authentic user testimonials.
In addition, we will systematically enhance our product visibility and consumer
conversion rates across e-commerce platform s where the majority of our sales occur. This
includes optimizing product listings with improved content, enhanced imagery, and more
compelling demonstrations of p roduct functionality and benefits. We will develop advanced
search engine optimization strategies specifically tailored for e-commerce platforms to
ensure our products appear prominently in rel evant search results. We will also implement
more sophisticated advertisi ng campaigns on these platform s, utilizing data analytics to
target high-potential customers with tailored messaging.
To overcome barriers to adoption and strengthen our brand recognition, we will
establish offline experience stores in core c ommercial districts of key cities, enabling
potential customers to interact with our products and receive expert guidance from trained
staff in real time. We will develop comprehensive product education materials and
demonstration programs, including enhanced video tutorials, interactive product guides,
and virtual demonstration experiences that clearly communicate product value. For our
retail partners, we will implement specialized in-store demonstration fixtures and provide
additional training to retail staff to effectively showcase our products’ functions and
features. We will also establish experienc e zones with time-limited promotions in
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partnership with key retailer channels, collabo rate with major retailers covering mainstream
home appliance stores, and develop localized distribution networks in our target markets.
These initiatives will address common barriers to purchase by demystifying home robotic
systems and highlighting simple installation and operation processes.
Furthermore, we plan to boost the number of SwitchBot products per household by
developing targeted cross-selling and upse lling initiatives. Our strategy will include
personalized product recommendations on our SwitchBot App that highlight
complementary products based on customers’ existing purchases, bundle offerings that
provide value incentives for multiple product purchases, and loyalty rewards that encourage
ecosystem expansion. These initiatives will be supported by in-App features that
demonstrate how additional products enhance the overall home living experience.
Likewise, we intend to implement more sophisticated pricing strategies which include
developing tiered pricing structures that pro vide entry-level options for first-time buyers
while offering premium features at higher price points.
Strengthen sales in key markets and expand into new regions
We plan to enhance our market presence in our established markets while strategically
expanding into new regions with significant growth potential. We will tailor our approach
to each market’s unique characteristics, consumer preferences, and competitive landscape
to maximize our impact and drive sustainable growth.
As our most established market, we will focus on deepening our presence in Japan by
leveraging our strong brand recognition and extensive retail network. To consolidate our
market leading position, we plan to strengthen our online channels through increased
advertising investments on platforms such as Amazon, while optimizing our flagship store
operations. We also plan to introduce extend ed warranties and insurance with the aim to
improve customer retention. For offline cha nnel enhancement, we will collaborate with
retailer partners to optimize store layouts, train professional sales staff, and increase
subway advertising in major cities to target commuters and enhance brand visibility. Our
strategy also includes optimizing the supply chain to improve maintenance efficiency and
reduce product return costs. We will expand our product portfolio with offerings
specifically designed for the Japanese market, such as more compact enhanced mobile
robots optimized for smaller homes that are preva lent in the Japanese market. Additionally,
we plan to increase investments in in-store marketing displays, as end consumers frequently
make purchasing decisions while shopping in stores.
For Europe, we intend to pursue a more focuse d expansion strategy, prioritizing key
markets such as Germany and the United Ki ngdom where we have already established
initial footprint and success. We aim to build awareness and establish market leadership
through products tailored to local preferen ces, with initial emphasis on our dexterous
hand-mimic robots before introducing our full product range. Our plans include deploying
targeted advertisements on various online platforms across multiple countries and
enhancing our after-sales service to improve consumer experience. The strategy
encompasses digital campaigns featuring key opinion leaders and specialized media
outlets to build credibility among tech-savvy end consumers.
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We will enhance and expand our presence in the North American market, which
represents our largest potential growth opportunity given its size and end consumers’ strong
adoption of home robotic technologies. This includes intensifying our digital marketing
efforts through online advertisements, enhancing search engine optimization for our
self-operated website, and collaborating with technology influencers for product reviews
and demonstrations. Our approach involves tailoring product offerings to meet the
preferences of end consumers in North America for larger homes and more powerful devices
with multiple functions, while highlight ing our ecosystem integration capabilities.
Our strategy also incorporates distinct channel approaches optimized for each regional
market’s unique characteristics. In Japan, we will continue to emphasize our strong retail
partnerships while expanding DTC initiatives. For Europe, we plan to adapt our approach
to each country’s local retail landscape, with greater emphasis on specialized electronics
retailers and regional e-commerce platforms. In North America, we intend to pursue a
balanced approach across e-commerce platforms, national and specialty retailers, and
mass-market stores, with a particular focus on expanding our Amazon presence and
deepening relationships with key big-box reta ilers. Additionally, we plan to strategically
expand into emerging markets facing aging popu lation challenges and high labor costs, such
as Hong Kong, Singapore and Australia, where our products can address significant social
and economic needs.
Our strategy to strengthen market position and expand global reach will be funded, in
part, from the net proceeds of the Global Offering. For further details, please see ‘‘Future
Plans and Use of Proceeds’’ in this prospectus.
Continue to expand our customer base to attract corporate and institutional customers
We plan to expand our customer base by targeting corporate and institutional
customers in commercial settings such as elderly care facilities, hotels, and service-oriented
establishments where our home robotic system products can enhance operational efficiency
and service quality. We are exploring potent ial corporate and institutional customers,
offering our core products configured as compr ehensive solutions for targeted commercial
applications.
Following successful market penetration, we intend to develop a subscription-based
business model offering solutions where cu stomers will pay recurring fees rather than
purchasing individual products, allowing lower initial capital expenditure while generating
stable revenue streams for us. This approach will leverage synergie s within our product
ecosystem, as corporate customers typically require integrated solutions with multiple
interconnected devices working seamlessly together, unlike end consumers who may
purchase single products for specific needs.
Our subscription model will provide customer s with comprehensive services including,
among others, initial system c onfiguration, regular maintenance, automatic software
updates, hardware upgrades, and dedicated technical support. We believe this strategy will
establish predictable recurring revenue streams to complement our existing consumer sales
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while enabling deeper customer relationshi ps that will provide valuable commercial
application insights to inform our product development roadmap and maximize market
reach across diverse revenue streams.
Pursue strategic acquisitions/investments to enhance our technology ecosystem
In addition to organic growth, we also plan to pursue sustainable growth through
equity investment that complement our existing operations and strengthen our market
position. We will focus on identifying, acquiring and/or investing in companies with
synergies to our business, particularly tho se that are complementary to our proprietary
ecosystem or upstream supplie rs with technical advantages in the robotics value chain. Our
acquisition and/or investment strategy will prioritize targets that offer proprietary core
technologies, strong integration potential, and clear competitive advantages that can
enhance our product offerings and market reach. Through these strategic initiatives, we aim
to accelerate our technological development, expand our produ ct development capabilities,
and create value for our shareholders. As of the Latest Practicable Date, no acquisition or
investment target has been identified. We plan to fund this strategy entirely from our
internal cash resources.
OUR BRAND AND PRODUCTS
Overview
During the Track Record Period and as of t he Latest Practicable Date, we offered a
wide range of products under multiple categori es, primarily consisting of (i) home robotic
system products, which include execution-enhanced robots and perception and
decision-making systems; and (ii) other smart home products and services. Our products
are offered under the brand names SwitchBot and Acemate. Our users can interact with our
products at any time primarily through our SwitchBot App to address their diverse home
living needs, enabling our products to generate effective real-time interactions. As of the
Latest Practicable Date, we had a total of seven product categories of home robotic system
products with 47 SPUs.
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The following table sets forth the revenue, sales volume and ASP by product category for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2025
Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1) Revenue
Sales
Volume ASP (1)
RMB’000 RMB RMB’000 RMB RMB’000 RMB RMB’000 RMB
Home Robotic System Products .......... 229,146 1,800,356 — 416,334 2,116,673 — 546,960 2,402,756 — 348,845 1,217,071 —
Execution-enhanced Robots .............. 1 3 9 , 8 9 6 7 7 1 , 4 0 8 — 2 5 5 , 0 9 1 9 0 7 , 4 8 5 — 347,869 971,085 — 237,735 547,552 —
— D e x t e r o u sH a n d - m i m i cR o b o t s ..... 1 3 9 , 8 9 6 7 7 1 , 4 0 8 — 1 9 8 , 3 4 5 8 7 7 , 6 2 0 — 237,579 918,500 — 173,623 522,973 —
— L o c kr o b o t s ................. 5 8 , 6 8 9 2 5 9 , 8 3 1 2 2 6 7 8 , 5 8 2 2 7 7 , 5 8 9 2 8 3 112,904 334,578 338 102,591 236,610 434
— C u r t a i nr o b o t s............... 4 0 , 6 4 3 1 6 3 , 0 3 0 2 4 9 7 6 , 9 7 3 2 6 0 , 1 5 0 2 9 6 8 2 , 7 8 2 296,485 279 (4) 43,717 135,223 323
— Finger robots ................ 4 0 , 0 5 3 3 4 8 , 5 4 7 1 1 5 4 2 , 2 5 1 3 3 9 , 8 8 1 1 2 4 3 6 , 3 2 9 287,437 126 20,321 151,140 134
— Related accessories (2) .......... 5 1 1 — — 5 3 9 — — 5 , 5 6 4 — — 6 , 9 9 4 — —
— Enhanced Mobile Robots ......... — — — 5 6 , 7 4 6 2 9 , 8 6 5 — 110,290 52,585 — 64,112 24,579 —
— M u l t i t a s k i n gh o u s e h o l dr o b o t s .... — — — 5 4 , 2 0 0 2 9 , 8 6 5 1 , 8 1 5 107,524 52,585 2,045 48,293 24,579 1,965
— Related accessories (2) .......... — — — 2 , 5 4 6 — — 2 , 7 6 6 — — 1 5 , 8 1 9 — —
Perception and Decision-making Systems .... 8 9 , 2 5 0 1 , 0 2 8 , 9 4 8 — 1 6 1 , 2 4 3 1 , 2 0 9 , 1 8 8 — 199,091 1,431,671 — 111,110 669,519 —
— S m a r th u b s ................... 3 2 , 9 0 3 4 0 7 , 8 6 1 8 1 9 5 , 7 6 6 5 2 3 , 8 7 7 1 8 3 115,826 596,102 194 52,834 215,872 245
— S m a r ts e n s o r s .................. 3 3 , 2 2 4 4 8 0 , 4 3 4 6 9 4 1 , 8 7 8 5 7 3 , 5 0 7 7 3 6 1 , 1 2 6 731,007 84 41,336 390,798 106
— S m a r tc a m e r a s................. 2 1 , 5 4 4 1 4 0 , 6 5 3 1 5 3 2 3 , 0 9 4 1 1 1 , 8 0 4 2 0 7 2 1 , 7 9 9 104,562 208 16,551 62,849 263
— Related accessories (2) ............ 1 , 5 7 9 — — 5 0 5 — — 3 4 0 — — 3 8 9 — —
Other Smart Home Products and Services (3) .. 45,451 — — 40,930 — — 62,964 — — 47,449 — —
Total ........................... 274,597 1,800,356 (5) — 457,264 2,116,673 (5) — 609,924 2,402,756 (5) — 396,294 1,217,071 (5) —
Notes:
(1) ASP is calculated by dividing the revenue generated by a product by i ts sales volume. Since our products are sometimes sold in bundles with
discounts, the average selling price may not accurately reflect the aver age selling price of our bundled offering s. The ASPs presented in the above
table for the Track Record Period are generally lo wer than the retail price range of our products as of the Latest Practicable Date. This variance is
primarily attributable to our continuous product i teration during the Track Record Period and up t o the Latest Practicable Date, as we introduced
advanced new models with higher retail prices wh ile phasing out simpler and outdated models.
(2) We believe sales volume and ASP for accessories are not meaningful me trics for analysis because these it ems are primarily consumables or
complementary components sold in high volumes at relatively low-pr ice points, unlike our core products which are sold on a unit basis. The
accessories’ revenue contribution is ancillary to our main product lines, and their purchase patterns are typically driven by replacement cycles or
bundled with primary device purch ases rather than representing di stinct consumer adoption trends.
(3) Other smart home products and services primaril y include the revenue generated from the sales o f smart light tools, smart power tools and smart
home appliances and cloud storage services.
(4) The ASP of our curtain robots decreased in 2024 because we strategically chose to offer more competitive pr oduct pricing while maintaining high
gross profit margins.
(5) The sales volume only reflects the sales volume of our hom e robotic system products, excluding relevant accessories.
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The following table sets forth a breakdown of our revenue by bundled and
non-bundled deal for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Bundled deal . . . 43,438 15.8 115,163 25.2 141,649 23.2 71,910 26.1 105,360 26.6
Non-bundled deal 231,159 84.2 342,101 74.8 468,275 76.8 203,111 73.9 290,934 73.4
Total ........ 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Home Robotic System Products
Execution-enhanced Robots
Execution-enhanced robots primarily mimic human limb movements to achieve
physical interaction, representing the action execution part of the home robotic systems.
Our execution-enhanced robots can perform human-like actions and, through various
product combinations, accomplish more complex functions, taking on basic tasks in home
living scenarios.
According to the Frost & Sulliv an Report, execution-enhance d robots are divided into
two main categories by function: (i) dexterous hand-mimic robots that simulate ‘‘finger’’
and ‘‘wrist’’ movements through pressing, pu lling, and rotating actions, which include lock
robots, curtain robots and finger robots; and (ii) enhanced mobile robots that combine
various functions and mimic human ‘‘foot’’ movement and can perform various composite
functions through different product combinations, such as cleaning (including sweeping and
mopping), air purification, evaporative humidification (automatic water refill), mobile
delivery and dynamic monitoring, as well as certain sports activities such as tennis.
We have strategically designed our product ecosystem to build a comprehensive array
of products that replicate human capabilitie s. Our curtain robot, finger robot, and lock
robot product categories represent ‘‘hand’’ functions, while certain of our enhanced mobile
products, perform ‘‘foot’’ functions, which serve as the foundation for our enhanced mobile
robots and their combinations.
Dexterous Hand-mimic Robots
Lock Robots
Our lock robots offer secure and intelligent h ome access by retrofitting onto existing
deadbolts, allowing users to con vert traditional locks into smart locks without replacing the
entire mechanism. First launched in 2021, we currently offer three models: SwitchBot Lock,
SwitchBot Lock Pro, and SwitchBot Lock Ultra. Our flagship SwitchBot Lock Ultra is
compatible with various door configurations, including different deadbolt types and
European lock variants. When paired with accessories offered by us such as a keypad touch
or a keypad vision, it provides multiple unlock ing methods, including facial recognition,
NFC, and voice commands. Connected to our sma rt hubs, users can monitor access history,
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lock status, and battery levels in real-time t hrough the SwitchBot App. Our flagship model
also incorporates important security features, including auto-locking functionality,
encrypted communications, and real-time tampering alerts to enhance residential security.
As of the Latest Practicable Date, the retail price range of our lock robots was from
approximately RMB462 to approximately RMB1,548 per unit.
Facial recognition Fingerprint ID Auto Unlock Password
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Curtain Robots
Our curtain robots automate window treatments by mimicking human hand
movements. First launched in 2020, we currently offer SwitchBot Curtain and SwitchBot
Blind Tilt. Our latest model, SwitchBot Curtain 3, features simple installation to transform
ordinary curtains into smart ones, compat ible with mainstream curtain tracks and
supporting curtains of various weights. Th e design emphasizes quiet operation for an
unobtrusive user experience. When integrated with our smart hubs, our latest model enables
multiple control options through the SwitchBot App, including opening/closing, percentage
adjustments, and custom schedules. As of the Latest Practicable Date, the retail price range
of our curtain robots was from approximately RMB359 to approximately RMB967 per
unit.
Finger Robots
Our finger robot is a smart button pusher that mimics finger clicking movement to
make existing devices such as coffee machines , air conditioners, and garage doors smarter.
First launched in 2017, it features quick installation and extended battery life. When paired
with our smart hubs, it enables scheduled automatic operations and real-time remote
control through our SwitchBot App, extending the functionality of conventional non-smart
devices. As of the Latest Practicable Date, the retail price range of our finger robots was
from approximately RMB205 to approximately RMB290 per unit.
Enhanced Mobile Robots
Our enhanced mobile robots mimic human ‘‘foot’’ movement and perform a variety of
composite functions through different modular product combinations, including cleaning
(sweeping and mopping), air purif ication, evaporative humidif ication with automatic water
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refill, mobile delivery and dyna mic monitoring, as well as cert ain sports activities. These
robots include multitasking household robots, which comprise SwitchBot K Series and
SwitchBot S Series and sports robots, such as Acemate, an AI tennis robot. As of the Latest
Practicable Date, the retail price range of our SwitchBot K Series and SwitchBot S Series
was from approximately RMB2,564 to approximately RMB7,738 per unit. We commenced
pre-sales of Acemate in May 2025, and the first b a t c hw a so f f i c i a l l ys h i p p e di nt h ef o u r t h
quarter of 2025. As of the Latest Practicable Date, the retail price range of Acemate was
approximately RMB11,515 to RMB17,996 per unit. We adopted a differentiated pricing
strategy, under which more competitive prices we re offered in selected markets to facilitate
rapid market entry.
Multitasking Household Robots
SwitchBot K Series
The SwitchBot K Series emphasizes compat ibility and accessibility. Our bestselling
model, the SwitchBot K10+, features a compact design that enables efficient navigation in
tight spaces and beneath furniture. The nex t generation SwitchBot K10+ Pro delivers
effective suction with extended battery life and a dust collection base that minimizes
maintenance requirements. Currently, we offer SwitchBot K20+ Pro, an advanced model
that further leverages this compact design to work collaboratively with other SwitchBot
products through built-in multifunctional ports and mounts. When paired with accessories
like air purifiers, or fans, it can provide mobile air purification, security monitoring, or
targeted cooling throughout the home, exemplifying our approach to distributed robotic
functionalities.
Vacuum Expert Delivery Expert Self-moving Screen Monitoring Guard Air Cleaning Exper t
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SwitchBot S Series
The SwitchBot S Series provides comprehensive automated cleaning solutions,
embodying our concept of a multitasking household robot. The SwitchBot S Series
features (i) an auto-empty and dry station that automatically empties collected waste and
uses hot air to dry the mop, preventing the growth of mold and bacteria; and (ii) a separate
water station that connects directly to a household’s plumbing to automatically refill the
robot with clean water and drain its used water, significantly reducing the need for manual
intervention. This advanced water management system allows the S10 model to function as
a ‘‘water carrier’’ within a home, enabling it to perform additional tasks such as
automatically refilling our compatible humidi fier. The S10 also performs simultaneous
vacuuming and mopping with automated surfac e detection capabilities. The latest model,
SwitchBot S20, incorporates AI-powered navigation with an advanced camera system for
obstacle recognition and laser technology for pr ecise mapping. It features enhanced suction
power and continuously maintains the cleaning apparatus during operation, automatically
adapting to different floor surfaces by adjusting its cleaning mode. Both models integrate
with our wider ecosystem through the SwitchBot App for customized cleaning schedules
and remote operation.
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Sports Robots
Acemate
In May 2025, we launched Acemate, an AI tennis robot. Acemate is designed to
replicate human-like rallies, enabling an immer sive and interactive practice session without
a human partner or coach. It is equipped with an advanced perception system, featuring 4K
Ultra-HD dual cameras and AI algorithms, to detect a player’s position, racquet speed, and
ball trajectory. This allows for precise 3D tracking and real-time shot analysis with
centimeter-level accuracy and millisecond-leve l reaction time, which it uses to dynamically
plan return shots with various speeds and power. Users can connect to Acemate via mobile
devices using Bluetooth to customize practice sessions through our intuitive app, and one
charge typically allows a user to enjoy up to three hours of uninterrupted, seamless practice.
Acemate’s hardware platform is built for robust performance on various court
surfaces, including hardcourt, clay, and grass, utilizing omnidirectional 4X mecanum
wheels for agile movement. Building on these ca pabilities, we plan to further introduce a
value-added AI Coach service in the future. Thi s service will leverage Acemate’s powerful
dual-camera system to observe and analyze a player’s biomechanics and performance
patterns during practice. The analysis will co ver key player movements, such as degree of
knee flexion, center of gravity movement, and maximum swing distance. The AI Coach will
then analyze and generate personalized performance reports that assess the player’s
progress and provide recommendations to help them improve their form, technique, and
overall skill. We intend to offer this servi ce through a monthly subscription model.
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During Track Record Period, all our execution-enhanced robots are integrated into
our ecosystem and can be controlled via our SwitchBot App. In addition, through our smart
hubs as described below, users can also control their products via major third-party voice
assistants, such as Amazon Alexa, Google Assistant, and Apple Home. With our smart
hubs that are Matter-enabled, users can integrate our products with major third-party
smart home platforms, such as Apple HomeKit. For details of our smart hubs, please refer
to the section headed ‘‘— Perception and Decis ion-making Systems — Smart Hubs’’ in this
section.
Perception and Decision-making Systems
Our perception and decision-making systems simulate human ‘‘brain,’’ ‘‘eye’’, and
‘‘skin’’ functions for household applications, utilizing AI technology to achieve
interconnectivity among various products in home scenarios. Our execution-enhanced
robots are designed to achieve intelligent functionality through integration with perception
and decision-making systems. As the intellig ent control part of our home robotic system,
these perception and decision-making systems constantly monitor changes in users’ home
living environment and make analytical decisions, driving execution-enhanced robots to
complete corresponding tasks. Acting as the ‘‘nervous system’’ of a smart home, these
systems improve environmental interaction through spatial semantic understanding,
enhance risk prevention with integrated safety sensors, and optimize service by
constructing user behavior models to align robot usage with household routines.
According to the Frost & Sullivan Report, per ception and decision-making systems are
divided into perception product s and intelligent hubs. Percep tion products include smart
cameras and smart sensors, serving as human- like ‘‘eyes’’ and ‘‘skin.’’ Intelligent hub
products function as the ‘‘brain’’ of the system, achieving interconnectivity and coordinated
control among multiple devices through communication network technology, large model
technology, and local comput ing capabilities. Below are the details of our key perception
and decision-making system product categories:
Smart Hubs
Our smart hubs, first launched in 2019, function as the central ‘‘brain’’ of our
ecosystem. These devices coordinate the activities of our various robotic products, enabling
them to work together as an integrated system rather than as isolated devices. Our current
lineup includes multiple models.
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The smart hubs utilize multiple wireles s communication standards to connect
SwitchBot products, creating a unified ne twork where information flows seamlessly
between devices. It allows distributed robotic components to share data and coordinate
responses. Through our SwitchBot App, the smart hub enables automated home
management based on environmental conditions, user preferences, and scheduled
routines. For example, the system can automatically activate our enhanced mobile robots
when dust is detected, adjust curtain robots based on sunlight levels, or coordinate lock
robots with user arrival patterns. This intelligent coordination transforms individual robots
into a cohesive home management system that responds to household needs with minimal
user intervention. In May 2025, we launch ed SwitchBot AI Hub which integrates
large-scale, pre-trained language models with edge computing, enabling multi-source
perception and autonomous decision-making in multiple scenarios. As of the Latest
Practicable Date, the retail price range of our smart hubs was from approximately RMB205
to approximately RMB2,515 per unit.
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Smart Sensors
Our smart sensors, functioning as the ‘‘skin’’ of our home robotics ecosystem, detect
environmental changes, including temperat ure, humidity, water leaks, and movement.
When paired with our smart hubs, they input data into our SwitchBot ecosystem to
facilitate decision-making. Our smart senso rs include thermo-hygrometers that monitor
environmental conditions with real-time aler ts and data storage capabilities; water leak
detectors that identify water issues and send remote alerts; contact sensors that monitor
door and window openings; and motion sensors that detect movement with integrated light
sensing for automated lighting responses. As of the Latest Practicable Date, the retail price
range of our smart sensors was from approxi mately RMB86 to approximately RMB583 per
unit.
Temperature and Humidity
Sensor
Contact Sensor Motion Sensor
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Smart Cameras
Our smart cameras, first launched in 2021, function as the ‘‘eye’’ of our home robotics
ecosystem and are essential to visual detection and home security. Our main smart cameras
lineup includes the SwitchBot Outdoor Spotlight Cam with AI-powered detection systems
that distinguish between human and pet movements to minimize false alerts, and the
SwitchBot Pan/Tilt Cam that provides comp rehensive coverage with motion detection
capabilities. Both categories offer real-time two-way communication functionality with
built-in microphones and speakers. As of the Latest Practicable Date, the retail price range
of our smart cameras was from approximatel y RMB195 to approximately RMB967 per
unit.
Other Smart Home Products and Services
In addition to our core home robotic systems, we offer complementary smart home
products that enhance our ecosystem’s functionality. These products include smart light
tools such as the SwitchBot Color Bulb, smart power tools such as the SwitchBot Plug Mini
for remote appliance control and energy monitoring, and smart home appliances such as air
purifiers, humidifiers, and circulator fans that can be mounted on our enhanced mobile
robots.
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We also provide various accessories that ex tend the capabilities of our main product
categories, including cleaning supplies, power solutions, smart home control accessories,
and security add-ons. We offer carefully curated product bundles at discounted prices,
providing integrated solutions for specific home scenarios. Popular combinations include
our curtain robot and smart hub for window automation, and security-focused packages
combining our lock robot wit h keypads and smart sensors.
Moreover, we offer cloud storage services to end consumers who subscribe to our
plans. These services enable end consumers t o utilize digital archiving capabilities for
footage captured by our smart cameras. Our flexible pricing model includes both monthly
and annual subscription options, coupled with tiered support based on the number of
connected devices, allowing us to accommodate the diverse needs of the end consumers. For
the years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025,
we had 1,973, 3,484, 7,227 and 10,459 subscribers of our cloud storage services, respectively.
Products Under Development
We are continuously expanding our product portfolio and technological capabilities.
The following are the key products currently under development which we plan to
launch/sell soon.
AI Companion Robot
The AI companion robot was officially launched at IFA Berlin in September 2025 and
is currently undergoing production optimization. Designed as an autonomous, mobile
companion robot for households, it serves a s a pet-like companion for families seeking
emotional interaction without the burdens associated with keeping live animals. Equipped
with a multi-modal perception system, the robot is capable of understanding and interacting
with its surroundings and users.
Its visual system is designed to recognize users’ facial expressions, identities, gestures,
and body movements, while its auditory system is intended to locate the direction of sound
sources and interpret voice commands. In addition, the robot incorporates tactile sensors to
perceive touch gestures and holding movements.
T h r o u g ha ne m b e d d e de m o t i o n a li n t e r action engine, the robot enables deep,
companion-like interaction by means of dyn amic eye displays, emotionally expressive
vocal outputs, and life-like movements of its h ead, ears, and limbs. The robot’s technical
architecture integrates a perception layer th at utilizes multi-source data from cameras and
LiDAR, a decision-making layer driven by an embedded large model supported by edge
computing, and an execution la yer built upon a biomechanical st ructure designed to deliver
realistic feedback.
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Humanoid Chore Robot
We plan to introduce our first humanoid household robot, the H1, in January 2026.
Designed as a lightweight robot, the H1 is positioned to address complex household chores
that existing home robotic systems are una ble to manage effectively. Key application
scenarios for the H1 are expected to include sorting and organizing laundry, cleaning and
storing tableware after meals, and assisting with meal preparation.
T h eh a r d w a r ep l a t f o r mo ft h eH 1f o c u s e s on a standardized and cost-efficient
architecture and is equipped with our self-developed single-arm manipulator that has seven
degrees of freedom (representing seven inde pendent joint movements). For mobility and
environmental perception, the H1 is equipped with a high-precision mobile chassis that
integrates LiDAR and line laser sensor technologies to enhance movement and
environmental understanding.
By integrating AI-enabled machine vision with robotic positioning and
environmental-mapping technologies, we aim for the H1 to continuously enhance its task
accuracy, operational precision, and cross -scenario generalization capability through
ongoing data acquisition and algorithmic optimization.
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Multi-level Robot Task Architecture Used for Our Products
Hierarchical System Architecture and Processing Layers
Our ecosystem is built on a multi-level robot task architecture that enables
comprehensive deployment of home robotic sy stems across diverse living scenarios. This
architecture follows a hierarchical structure th at processes information from environmental
perception to physical execution.
The foundation of our architecture is the p erception system, serving as the sensory
input for the entire ecosystem. This layer continuously collect real-time data from the home
environment. These devices capture comprehensive information including temperature,
humidity, motion, occupancy, light levels, air quality, sound, and visual data. This rich data
stream provides the essential environmen tal awareness that enables contextual
understanding of the home space.
Building upon this environmental data, the ‘ ‘brain’’ of our system handles high-level
abstraction, reasoning, and decision-making . This central intelligence understands and
imagines scenarios to formulate overarching p lans and generate high-level strategies. By
processing the rich input from the perception layer, the brain component analyzes patterns,
identifies user preferences, and makes predictive judgments about optimal home conditions.
This component orchestrates the overall behavior of the system, determining which devices
should be activated and how they should coordinate to achieve desired outcomes.
The edge computing layer translates these high-level strategies into specific
implementation plans. Utilizing VLA, verti cal AI model, or combinations of both, this
layer is responsible for specific task ex ecution and optimization with the ability to
generalize across various scenarios and envi ronments. It is responsible for generating
intermediate results, optimizing task execution, and managing dynamic changes in the
environment throughout the task execution process, enabling accurate task performance in
both structured and unstructured environments.
Within individual devices, on-device AI executes specific tasks and provides feedback
to higher levels. Leveraging reinforcement lea rning and imitation learning, this component
possesses the ability to generalize to various objects, such as controlling a dexterous hand to
grasp objects. Deployed directly on terminal devices, this layer adapts general instructions
to the specific capabilities of individua l units, ensuring optimal execution while
continuously learning fro m performance outcomes.
At the physical execution level, robot body control algorithms manage the precise
movements of our devices. These algorithms, including SLAM, motion planning, and
motion control, implement traditional robotic functions such as localization and mapping,
path planning and navigation, as well as kinematics and dynamics. These foundational
controls enable our robots to move effectively within specific environments, providing the
physical capabilities that transform digit al instructions into real-world actions.
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This comprehensive multi-level architectu re spans all stages of smart home operation
from sensing to analysis to implementation. Our home robotic systems analyze
environmental data in real-time, achieve cross-device semantic understanding, and
autonomously coordinate intelligent devices to form dynamic operational networks that
adapt to user habits and environmental conditions. This integrated approach enables
sophisticated home automation that truly responds to and anticipates household needs,
redefining the intelligence of living spaces.
The following diagram illustrates the intellig ent interconnectivity of our full range of
products and how they function together across multiple home living scenarios:
Multi-level
Robot Task
Architecture
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Multi-level Robot Task Architecture in Action
Our multi-level robot task architecture enables our home robotic system to function as
a cohesive, intelligent ecosystem that responds to user needs throughout the day. The
following scenarios demonstrate how our integrated architecture processes information
from environmental perception to physical execution in real-world situations.
Morning Routine Enhancement
Our smart sensors and smart cameras detect changes in ambient light and the user’s
sleep patterns via bedside sensors. This information flows to our smart hub, which
recognizes the optimal wake-up conditions based on learned user preferences. The smart
hub then coordinates a sequence of morning activities across all connected devices. The
curtain robots receive instructions to open to 80%, allowing natural light to gently fill the
room while maintaining privacy. Simultaneous ly, finger robots activate the coffee machine
in the kitchen, preparing the user’s prefe rred morning brew. As the user begins their
morning routine, our multitasking household robots deliver breakfast to coincide with the
completion of morning exercises. This orchest rated sequence transforms the often-chaotic
morning routine into a seamless, supportive experience that prepares the user optimally for
the day ahead. The following diagram illustrates how our products enhance user’s morning
routine.
Smart Cameras
Smart
Sensors
Smart
Sensors
24.6
06:58am
53%
ºC
Curtain opening
Curtain Robots
OPEN 80% coffee machine
ON
Breakfast deliver
Context-Driven
Decision
Waking up
Smart Fitness Coach
Finger Robots Multitasking
Household Robots
Multitasking
Household Robots
Activate coffee machine Breakfast delivery Unwind in
the Early Hours
Morning Scenario
  Natural Light Wake-Up
  Breakfast Mode
Smart Hubs
Command Execution
Smart Hubs
AI Computing*
VLM
Smart Sensors
Execution
Perception Decision
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Home Security and Maintenance During Absence
When smart sensors and smart cameras detect that all residents have left the home and
geofencing confirms departure from the vicinity, the smart hub transitions the system to
away mode. The smart hub evaluates home conditions and outstanding maintenance needs,
prioritizing tasks based on urgency and reso urce availability. Smart cameras and smart
sensors activate enhanced security protocols, with continuous outdoor monitoring and
alerts configured for any unusual activity. Inside, multitasking household robots begin a
comprehensive cleaning cycle, using LIDAR SLAM technology combined with visual input
to navigate efficiently through the home, while the smart hub activates mounted air
purifiers to maintain optimal air quality and signals humidifiers to be checked and
replenished as needed to maintain appropriate humidity levels. Throughout the absence, the
system continuously monitors home conditions through the smart hub, maintaining vigilant
security, ensuring the home remains safe, clea n, and comfortable for the residents’ return.
The following diagram illustrates how our perce ption and decision-making systems improve
home security during user’s absence from home.
24/7
Outdoor Monitoring
Smart Cameras
Front Door
Surveillance
Activated
Security Mode Activated
Whole-House Vacuum & Mop
Vacuum & Mop High Water Output
• Security Mode Activated
• Whole-House Cleaning Activation
• Humidifier: Refill RequiredStandard Suction Mop × 2
Add Water to
Humidifier
Context-Driven
Decision
Away Mode
Whole-House
Air Purification
Smart Hubs
Command Execution
Smart Hubs
AI Computing*
Multitasking
Household Robots
Multitasking
Household Robots
Multitasking
Household Robots
Multitasking
Household Robots
Verifying
Home Safety
Whole-House
Air Purification
Whole-House
Cleaning
Add Water to
Humidifier
Leaving Home Scenario
Smart
Sensors
VLM
Smart Sensors
LiDAR SLAM
Execution
Perception Decision
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Personalized Welcome Experience
As the user approaches home, smart sensors and smart cameras alert the smart hub of
their imminent arrival. The smart hub evalu ates current home conditions, time of day,
weather, and learned preferences to create an optimal welcome environment, then
coordinates a sequence of preparatory actions across all connected devices. Lock robots
automatically unlock the front door as the res ident approaches, eliminating the need to
search for keys. Inside, curtain robots adjust to 40% closure, balancing natural light with
privacy as evening approaches. Finger robots turn on essential lighting at appropriate
brightness levels for the time of day. Multitas king household robots deliver everyday items
the user might need upon arrival, based on learned preferences. The entire home
environment adjusts through the smart hub’s orchestration to create the most
comfortable welcome experience, transitioning seamlessly from security mode to a
personalized living space that anticipates the resident’s needs after a day away. The
following diagram illustrates how our perce ption and decision-making systems create
personalized welcome experience when the user returns home.
Auto-Unlock
Lock Robots
Hub
Control
Items Deliver
Curtain Robots Multitasking Household
Robots Finger Robots
Blind Tilt Closing Everyday Items
Delivery
Turn Off
the Light
Control All Home Devices
for Ultimate Comfort
Front Door
Unlock Close 40% Living Room Light
OFF
Returning Home Scenario
Smart Hubs
Command Execution
Smart Hubs
AI Computing*
VLM
Smart Sensors
Geo-Fencing
Execution
Outdoor
Perception Decision
• Items Delivery Required
• Ambiance Optimized For Relaxation
Welcome HomeContext-Driven
Decision
24.6
53%
ºC
31.
60%
ºC
The abovementioned scenarios illustrate how our multi-level architecture creates an
intelligent home environment that responds to an d anticipates household needs, delivering a
level of personalized support previously only possible with human household staff. The
system’s ability to perceive, decide, and execut e across multiple devices creates a cohesive
experience that enhances us ers’ daily living experience.
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Our SwitchBot App
In 2018, we developed and launched our own SwitchBot App, available for iOS and
Android devices. Our SwitchBot App is designed to provide users with a user-friendly and
customized experience to control our home robo tic system products remotely wherever they
have an internet connection. The table below sets forth the cumulative number of users who
had registered with, and the cumulative number of devices that had been connected to, our
SwitchBot App from its initial launch through the dates indicated.
As of December 31,
As of
June 30,
As of
the Latest
Practicable
Date2022 2023 2024 2025
Cumulative number of
SwitchBot App users (1) .... 1 , 2 5 2 , 1 3 8 2 , 004,206 2,806,210 3,151,433 3,564,849
Cumulative number of devices
connected to Switchbot
App
(2) ................ 3 , 0 0 1 , 1 4 0 5 , 387,255 8,147,627 9,375,187 10,889,251
Cumulative number of users
who purchased our
perception and
decision-making systems and
paired with our products via
SwitchBot App
(3) ......... 9 8 8 , 5 8 3 1 , 502,637 2,061,509 2,274,931 2,538,492
Notes:
(1) For the purposes of ‘‘cumulative number of Swi tchBot App users’’, we count a user by reference to
the first SwitchBot App account that successful ly connects a device (each device having a unique
device identifier) to the SwitchBot App. Wher e multiple SwitchBot App accounts subsequently
connect to the same device, only the first account that connected that device is counted as a user and
the later accounts are not counted again.
(2) ‘‘Cumulative number of devices connected to Swit chBot App’’ represents, as at the relevant date, the
total number of distinct devices, identified by t heir unique device identifiers, that have ever been
successfully connected to the SwitchBot App. A device is counted once irrespective of (i) how many
SwitchBot App accounts have connected to it or (ii) how many times it has been disconnected and
re-connected. In addition, certain registered users have connected more than one device to the
SwitchBot App.
(3) For the purposes of ‘‘cumulative number of users who purchased our perception and
decision-making systems and paired with our pr oducts via SwitchBot App’’, we count the first
SwitchBot App account that successfully conn ects at least one perception and decision-making
system product to the SwitchBot App. Where (i) mu ltiple accounts connect to the same perception
and decision-making system product, only the firs t account that connected that product is counted
as one user; and (ii) one account connects multiple p erception and decision-ma king system products,
that account is counted as one user only.
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Our SwitchBot App enables users to achieve centralized control of our home robotic
system products for a comprehensive and inte lligent home living exp erience. Through its
connection with our different products, users can control curtain movements, manage lock
access, monitor environmental conditions (temperature, humidity, and CO
2 levels), create
customized automation scenes, and schedule device operations based on time or
environmental triggers. As of the Latest P racticable Date, all of our main product
categories were compatible with the SwitchBot App.
The SwitchBot App is built on a distributed smart network infrastructure with regional
backend services, incorporating advanced da tabase technologies and data analysis
capabilities. This architecture allows us to pr ocess massive multi-so urce information and
instructions generated by the connected devices on our SwitchBot App in a highly stable,
efficient and secure way. Through a single re gistered SwitchBot account, users can check
the status of multiple devices, control them remotely, and manage shared access for family
members or guests with customizable permission levels. According to the backend data of
our SwitchBot App, approximately 55.9% and 35.7% of all users who had registered with
our SwitchBot App as of the Latest Practicable Date had connected two or more, and three
or more, of our products with the SwitchBot App, respectively. These figures have increased
steadily from approximately 48.2% and 27.7% as of December 31, 2022, respectively,
demonstrating our strong customer retention and increasing product adoption across our
ecosystem. In addition, SwitchBot users can store and analyze historical data (such as
t e m p e r a t u r et r e n d so ra c c e s sl o g s ) ,c r e a t ec u stom scenarios that acti vate multiple devices
simultaneously, and receive push notifications based on user-defined conditions or our data
analysis.
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The SwitchBot App is compatible with third-party voice assistants including Amazon
Alexa and Google Assistant and Apple Home. After connection, users can control
compatible SwitchBot devices hands-free by us ing voice commands to control those devices
activated on the SwitchBot App. Additionally, the SwitchBot App supports integration
with other ecosystems to achieve advanced automation, allowing our products to work
seamlessly with a wide range of third-party devices.
The SwitchBot App also provides a comprehensive feedback mechanism for our users.
Users can communicate with our customer services staff directly through the app’s support
entry or send email inquiries to us regarding our products. Our customer support team
monitors these messages, categorizes feedback, and conveys relevant information to our
R&D teams through our weekly after-sales syn chronization meeting system. This feedback
loop has been instrumental in our product iteration process, allowing us to continuously
improve our offerings based on real user experiences and needs.
Through the SwitchBot App, we also provide firmware updates for our devices,
enhancing their functionality and security over time, as well as troubleshooting guides and
access to detailed product manuals. This comprehensive approach to user support and
product management through the SwitchBot App has contributed significantly to our user
satisfaction and product refinement processes.
PRICING STRATEGY
We adopt a market-oriented pricing strategy that balances competitive positioning
with profitability objectives across our diverse product portfolio and geographic markets.
Our approach considers multiple factors, including customer preferences, cost structures,
business development goals, market maturity, competitive landscapes, and currency
exchange rates. Rather than competing pri marily on price, we position our products
based on their innovative features, quality, and the value they deliver to end consumers. We
regularly forecast market conditions and cos t trends, adjusting our pricing strategy to
maintain target profit margins while remain ing competitive. This disciplined approach
allows us to respond effectively to market changes while safeguarding our profitability.
Our pricing model varies by sales channel and product category. For DTC channels,
including our self-operated website, we maint ain complete pricing control, enabling optimal
margin management. We maintain consistent pricing for our direct sales across different
channels. We offer promotional discounts during holiday seasons. Our DTC channels
generally command higher price points compar ed to the wholesale pricing extended to our
retailers and distributors. For products sold t o retailers and distributors, we establish
pricing guidelines and partner closely with ret ailers and distributors to ensure consistent
market positioning. We offer bulk purchase pricing to our retailers and distributors, which
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is determined through negotiation. In addition, we may offer additional discounts to our
retailers and distributors during promotion al events, the percentage of which is also
determined through negotiation. During the Track Record Period, the range of discounts
are offered to our distributors was approximately 16% to 56%, while the discount range for
retailers was approximately 24% to 75%. The br eadth of these ranges reflects our flexible
and strategic approach to sales and market development. Discounts at the higher end of
these ranges, which are calculated on the basis of maximum discount ratio for every
product, were typically offered in specific, time -limited circumstances, including: (i) major
promotional events and holiday seasons to dri ve significant sales volume; (ii) strategic
initiatives to support new produ ct launches or facilitate entry into new geographic markets,
where greater incentives are used to encourage initial stocking and consumer adoption; and
(iii) end-of-life sales programs to efficientl y clear inventory of older models and make way
for new products. According to the Frost & Sullivan Report, offering a wide range of
discounts to channel partners to address strategic objectives such as promotional
campaigns, market penetration, and inventory management is a common and established
practice within our industry.
Within our product series, pricing reflects t he relative performance capabilities, with
higher-specification models commanding comparatively higher price points. This
performance-based differentiation applies across our product categories, enabling us to
serve diverse customer segments while mainta ining our brand positioning throughout our
ecosystem.
To preserve pricing integrity across distribution channels, we implement contractual
controls with our partners, including sugg ested pricing requirements and incentive
structures that reward adherence to our guidelines. Our incentive structures are primarily
based on the sales performance of our distributors, which include (i) the sales rebates and
price subsidies; and (ii) financial support for marketing and promotional activities. For
distributors who adhere to our pricing guidelines, we may offer sales rebates, price subsidies
and/or discounts, subject to their sales performance. We generally provide rebates through
non-cash mechanisms, such as product-bas ed rewards or making price adjustments in
subsequent purchase orders, to align with our operational and financial policies. In
addition, we may provide funding to distributors to support their marketing and
promotional initiatives, such as exhibitions, trade shows, or advertising campaigns.
Our Core Technologies
We have independently developed three cor eh o m er o b o t i ct e c h n o l o g i e s ,w h i c hs e r v ea s
the foundation of our competitive advantage and have been integrated or are being
integrated into our home robotic system products.
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Robot Positioning and Environment Construction Technology
This technology integrates multi-sensor fusion, edge intelligence, and 3D visual
reconstruction to enable high -precision, high-dimensional, and high-adaptability
autonomous movement in our products:
. One-dimensional positioning: For our product categories such as curtain robots
and lock robots, we utilize multi-senso r fusion combining IMU, encoders, and
magnetic positioning, achieving positioning accuracy of ≤5mm.
. Two-dimensional mapping: We employ LiDAR SLAM with information gain
maximization exploration algorithms, enabling mapping of areas up to 2,000
sq.m., allowing robots to navigate and avoid obstacles precisely in home
environments with a comprehensive obstacle avoidance success rate of 96.3%.
. Three-dimensional construction: Our enhanced mobile robot products combine
LiDAR, computer vision, and edge AI SLAM technologies, incorporating visual
delocalization, posture estimation, multi -camera fusion, and 3D reconstruction,
creating high-precision 3D home models that enable robots to perform household
tasks in three-dimensional space.
This technology will allow our products to a ccurately position themselves in one, two,
and three dimensions with high precision, map large surrounding home environments, and
create detailed spatial 3D models that can c learly identify environmental features.
AI Machine Vision Control Technology (VLA Model)
This technology leverages a VLA model, combining multi-modal large language
models, vertical models, and diffusion models by leveraging the perceptual capabilities of
terminal devices equipped with CMOS vision sen sors to enable accurate visual recognition
and intelligent feedback:
. Terminal perception (vision): Our products feature multi-level visual input
systems optimized for low-power NPUs (<1 TOps), with end-model parameters
of <10MB and response speeds of <50ms.
. Abstraction inte lligence (language): Our large models, with parameters of
≥2000MB, enable advanced reasoning, im agination, and understanding, with
end-to-end response speeds of <1s.
. Action execution (action): We employ a diffusion model-based execution module
with parameters of <1,000MB, achievi ng response times of <100ms, running
directly on devices for precise and efficient action execution.
This technology allows our home robotic systems to first analyze and interpret visual
data to understand their surroundings and then integrate this information with positioning
and environmental data, enabling enhanced mobile robots to move and execute actions with
high precision.
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Distributed Neural Control Network Technology
This technology utilizes Bio-inspired Neur al Communication Protocols to establish
low-power, self-healing netwo rk connections, enabling real -time collaborative control of
multiple devices. It is designed to deliver fast, p recise, and reliable control while adapting to
complex home living environments, providing s olid interconnectivit y capabilities for our
smart home ecosystem.
. Multi-modal Large-Model Centralized Decision Architecture:
o Brain-like control: Our proprietary multi-modal large model integrates
vision, action, and environment data, enabling our smart hubs to act as a
central neural node. It processes cross-modal data streams from sensors,
execution devices, and enhanced mobile robots in real-time (e.g., visual,
tactile, and spatial topology) to generate optimized control instructions; and
o Dynamic autonomous optimization: Leveraging reinforcement learning and
meta-learning frameworks, the system supports autonomous
decision-making between devices, such as automatically learning user
operation habits to adjust execution device actions, or dynamically
adjusting enhanced mobile robots paths for obstacle avoidance.
. Bio-inspired Neural Co mmunication Protocol:
o Adaptive topology networking: This protocol combines BLE, WiFi, and IR to
form a heterogeneous neural network that mimics biological synaptic
dynamic connection mechanisms, supporting decentralized autonomous
device networking; and
o Pulse-based energy control: Using spiking neural network technology, this
significantly reduces communication energy consumption, achieving BLE
terminal standby power consumption of <10 μA while maintaining a
continuous control success rate of ≥99.40% with control latency within
850ms.
. Embodied Intelligence Control Performance:
o Precision motion neural link: Through terminal-side motion control and
biometric algorithms, we achieve high-precision end control, such as curtain
robots movement accuracy of ≤5mm and biometric misidentification rates of
<0.001% for lock robots; and
o Generalization in complex scenarios: Through large model pretraining and
edge-based incremental learning, the system adapts to various complex home
environments, achieving a con trol success rate of >99.40%.
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This technology features fast response times, high precision, high control success rates,
and low energy consumption, while automatically adapting to complex and changing home
environments, providing dependable technical support for our home robotic ecosystem.
RESEARCH AND DEVELOPMENT
Overview
We have established interdi sciplinary R&D capabilities that draw upon diverse fields,
including artificial intelligence, robotic s, computer vision, em bedded systems, cloud
computing, and IoT technologies. Our in -house R&D team strives to expand the
functionalities and use cases of our home robotic system products, accommodating
specific needs of various smart home scenarios.
Our R&D Philosophy
We adhere to a long-term vision of consistently prioritizing R&D innovation as a key
driver of our business growth. Through sustained investments in R&D, we are dedicated to
solving user pain points as the core direction of product development and innovation. Our
multidisciplinary R&D capabilities cover vari ous advanced fields, including robotics, AI,
IoT technology, visual algorithms, motion cont rol, and machine learning, which establish
the foundation for our comprehensive, proprietary core technologies.
Our R&D Team and Core Members
As of the Latest Practicable Date, we had a R&D team of 278 personnel, accounting
for 43.4% of our workforce. Our R&D department is structured into three main divisions,
each specializing in key areas of product development:
. Category department: Responsible for the full product lifecycle, staffed by
hardware product managers who oversee planning, development, and
management of hardware products.
. Platform department: Focuses on software design.
. Research department: Handles product development from technical pre-research
to mass production, ensuring technical feasibility and innovation.
To ensure effective coordination and execution of R&D efforts across these divisions,
we implement a collaborative framework known as the ‘‘Technology Triad.’’ This
framework involves the close collaborati on of the following three key roles, each
contributing specialized expertise to evalu ate and execute R&D outcomes at various stages:
. Technical lead: Oversees technical feasibility, id entifies innovation opportunities,
and monitors progress in solving technical challenges. The technical lead also
assesses the rationality of the current tech nical approach and determines whether
adjustments or optimizations are required for specific technical components.
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. Product manager: Evaluates the alignment of the project with current market
demands and ensures differentiation from competing products. The product
manager also focuses on the completeness of product functionality, user
experience, and software interaction.
. Project manager: Coordinates cross-departmental efforts to ensure project
milestones are achieved within defined timelines while maintaining quality
standards.
This integrated structure and collaborative framework allow us to maintain specialized
expertise while ensuring that our R&D effort s are market-driven, technically sound, and
efficiently executed.
The following table sets forth the details of our core R&D members:
Core R&D Members Profile
Mr. PAN Yang ( 潘陽) Mr. Pan Yang is our co-founder, executive
Director and chief technology officer. He holds
a bachelor’s degree in electronic science and
technology from Harbin Institute of
Technology. Mr. Pan has approximately 14
years’ experience in R&D, and his research
focuses on automation in production and
testing. As our core R&D member, he is
responsible for our product research and
development, addressing key technical
challenges, planning the product roadmap in
collaboration with the team, and defining
technical parameters for products.
Mr. LI Jiangang ( 李建剛) Mr. Li Jiangang is our R&D vice president. He
holds a bachelor’s degree in automation and a
master’s degree in control science and
engineering, both from Harbin Institute of
Technology. Mr. Li has over 10 years’
experience in the development of embedded
system and equipment, and his research
focuses on software and hardware system
architecture and algorithms. He is responsible
for the product’s system architecture and the
development of a general hardware platform.
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Core R&D Members Profile
Mr. ZHENG Minsheng ( 鄭旻晟) Mr. Zheng Minsheng is the head of our R&D
platform department. He obtained a bachelor’s
degree from University of Toronto and a
master’s degree from Ontario College of Art &
Design University. Mr. Zheng has
approximately seven years’ experience in the
product development and platform system
design, and his research focuses on user
interaction and AI data processing.
Mr. LI Jianqiang ( 李建強) Mr. Li Jianqiang is our lead robotics architect.
Mr. Li obtained his bachelor’s degree from
Shanghai Jiao Tong University. He also
obtained a master’s degree in mechanical
engineering from the National University of
Singapore. Before joining us, Mr. Li worked at
the Centre for Advanced Robotics Technology
Innovation in Singapore. Mr. Li’s research
focuses on mobile platforms and machine
vision.
M r .F E N GY i( 馮一) Mr. Feng Yi is our lead AI scientist. Mr. Feng
obtained bachelor’s degree in computer science
from Peking University. Before joining us, Mr.
Feng worked at Google. His research focuses on
dynamic algorithms and software development.
Our R&D efforts have also been greatly st rengthened through the guidance and
support of distinguished scholars. In particular, Professor LI Zexiang ( 李澤湘)a n d
Professor KO Ping Keung ( 高秉強), both serving as our non-executive Directors, frequently
provide professional advice on product positioning and industry trends. They engage in
discussion with our senior management as well as core members of our R&D team to
exchange insights on emerging technologies, v alidate research directions, and optimize our
innovation pipeline. Please refer to ‘‘Directors and Senior Management — Board of
Directors — Non-executive Directors’’ in this prospectus for further details on the
professors.
We retain key management and technical staff with competitive remuneration
packages and welfare benefits. We also inv est in training programs to upskill our key
management and technical staff. In the event of termination of emplo yment requested by a
key staff, we closely communicate with the staff for the reason of departure and feedback
for us. We generally recruit candidates via online recruitment, internal referrals and
employment agencies, among others. With respect to our key R&D personnel, we primarily
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focus on their relevant technical expertise and industry experience. We also value their
self-motivation, growth potential, and te amwork capabilities. The salient terms of
agreements with management and t echnical staff are set out below.
. No conflict: During the employment, the emplo yee shall not engage in any other
job, whether full-time or part-time.
. Ownership of the intellectual property: Any inventions, creations, works, or
non-patented technical achievement s created by employees during their
employment as a result of performing t heir duties or primarily utilizing our
materials and technological conditions, and business information, among other
things, including trade secrets, shall belong to us. We have the right to use or
transfer the aforementioned intellectual property. Employees shall actively
provide all necessary information, ma terials, and research, and take all
necessary actions to assist us in obtaining and exercising the relevant
intellectual property rights.
. Confidentiality: Employees shall undertake not to disclose or use any confidential
information.
. Non-competition and non-solicitation: We reserve the right to unilaterally impose a
non-competition period of up to two y ears following the termination of
employment, with appropriate compensation provided accordingly. During the
term of employment and the non-competition period imposed by us, the employee
shall not engage in any competitive behavior, and they shall not solicit or attempt
to solicit our employees to leave their employment.
. Dispute resolution: The parties shall resolve any issues arising through
negotiation. If such issues remain unresolved, parties may seek arbitration from
the labor arbitration committee at our location.
Our R&D Process and Methodology
Our R&D is primarily divided into two key segments: (i) developing new products,
where we identify user pain points through social media and other channels and innovate
based on these insights; and (ii) iterating on exi sting products, mainly achieved by collecting
user feedback primarily from our SwitchBot App, social media and third-party e-commerce
platforms where we offer our products.
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We approach R&D by evaluating customer requirements, conducting feasibility
analyses, advancing technology, and considering practical use cases. The diagram below
sets out the principal steps which w e generally follow in our R&D process.
Purpose:
Addressing the problem of achieving structural
tooling (firmware support verification) and
hardware compliance on the optimal path
of the best solution
Purpose:
Addressing the problem of what to do,
why to do it and whether we have
the ability to do it
Purpose:
Addressing product compliance issues, ensuring
that all parameters and specifications of
the production fully meet the required standards
and expectations, and finding out and resolving
design and industrial compatibility issues.
Purpose:
Addressing product specific delivery compliance
issues, achieving p1/p2/p3 mass production delivery
targets on time and with high quality according
to the marketing department's distribution
requirements, completing the review of the project
process and the whole project, forming experience
and providing references for future projects
Purpose:
Addressing the delivery maturity issues,
confirming yield rates, supplier
compatibility, tooling fixtures,
process workflows, consistency, etc.
Project Initiation Stage
Project Initiation Review EVT Review Stage
Tooling Decision Review
DVT Review Stage PVT Review Stage
(Transfer to MP Review)
MP Review Stage
EVT DVT PVT MP
Our R&D process mainly includes (i) project initiation stage, (ii) engineering
verification test (‘‘EVT’’) review stage; (iii) de sign verification test (‘‘DVT’’) review stage;
(iv) production verification test (‘‘PVT’’) r eview stage, and (v) mass production (‘‘MP’’)
review stage. The time needed for each stage varies significantly depending on the
complexity of the research project and underlying products, technical challenges
encountered, testing outcomes, and resource allocation priorities.
. Project initiation stage: At this stage, we determine the objectives, rationale, and
feasibility of the project. Typically, product manager mainly delivers a
preliminary research report, a project initiation report and a project control
table, which include market research, competitive analysis, initial product
definition and project developmen t timelines. It generally requires
approximately one to 12 weeks to complete this stage.
. EVT review stage: After passing the project initiation review, R&D enters the
EVT review stage. The goal at this stage is to achieve structural tooling (with
firmware support verifica tion) and ensure hardware compliance. At this stage,
product manager and R&D engineer need to deliver (i) product and software
requirement specifications, which contain technical and functional requirements
of the product; (ii) user experience desi gn; (iii) EVT prototypes, which meet the
certification and verification requirements; (iv) EVT firmware, which meets
specific minimum viable product deliv ery verification; (v) functional app
prototype for basic usability testing and f eature verification; and (vi) industrial
design, refining visual and physical design of the product, ensuring alignment with
user needs and our branding. It usually takes approximately three to 16 weeks to
complete this stage.
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. DVT review stage: Upon completing the previous steps, R&D enters the DVT
review stage. The objective at this stage is to address product compliance issues,
ensuring that all parameters and specifications fully meet the required standards
and expectations, and resolving design and industrial compatibility issues. At this
stage, we need to deliver (i) DVT prototypes, which are fully functional and are
used to validate the product’s design and performance; (ii) full-function firmware,
incorporating all core functionalities a nd integrations to meet product design
specifications; and (iii) a full-function Ap p and a full-function backend, providing
complete features and seamless operation with the firmware. Additionally, this
stage involves product pricing and distrib ution planning. A pro duct finalization
meeting is also held to finalize the product design. It typically requires
approximately two and 20 weeks to complete this stage.
. PVT review stage: The primary aim of the PVT review stage is to address issues
related to the maturity of deliverables. At this stage, we will focus on resolving
issues such as yield rates, supplier com patibility, and process workflows. PVT
prototypes need to be delivered for internal testing and public testing, including
third-party certifications (such as Alex a compatibility testing) and air and sea
freight certifications. This stage gene rally requires approximately two to ten
weeks to complete.
. MP review stage: The primary focus of the MP stage is to address specific delivery
and customization issues. In accordance with the distribution requirements set by
the marketing department, we aim to achieve the goal of mass production delivery
on time and with high quality. This stage also involves reviewing the project to
gather insights and provide references for future projects. At this stage, we need to
deliver (i) products that are ready for mass production and end-users (ii) mass
production materials and firmware, such as manufacturing documentation to
support stable and scalable production ； and (iii) the official version of
SwitchBot App with finalized feature design and tailored user interface for the
new product within such App, which is ready for launch. The MP review stage
usually takes approximately one to eight weeks to complete.
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Our Key R&D Projects
Since our inception, we have independently worked on over 31 R&D projects that
resulted in the development and commercializ ation of our products. The table below sets
forth the details of our key independent R&D projects completed during the Track Record
Period.
No. Project Name
Commencement
Date Completion Date
Project Description/
Product Commercialized
Product-related/
Technology-related
1. AI Companion
Robot Project
January 2025 November 2025 This project developed an AI
companion robot with emotional
companionship functions that can
also serve as a home intelligent
assistant to manage other devices
in the home robotic system through
research on machine learning,
adaptive systems, and natural
language processing technologies.
Product-related
2. Motion Robots
Development
December 2024 September 2025 This project involved research on AI
algorithms to achieve real-time
recognition and the tracking of
specific targets in videos, including
people, objects, and motion
trajectories, and applied these AI
visual tracking technologies to
motion robots.
Technology-related
3. Home Mobile
Intelligent Service
Robot
Development
January 2024 December 2024 This project achieved object
recognition technology,
multi-sensor robot positioning
technology, mechanical arm
grasping technology, and edge
cleaning technology. These
technologies can be applied to our
enhanced mobile robots.
Technology-related
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No. Project Name
Commencement
Date Completion Date
Project Description/
Product Commercialized
Product-related/
Technology-related
4. Home Multi-sensor
Perception
System
Development
March 2024 December 2024 This project achieved multi-source
data fusion display, local
environmental data storage and
intelligent analysis, external sensor
power supply technology, carbon
dioxide sensor calibration system,
and BLE & Matter protocol
interconnection technology. These
t e c h n o l o g i e sc a nb ea p p l i e dt ot h e
perception and control products to
enhance the perception and
decision-making capabilities of the
home robotic systems.
Technology-related
5. Neural Network
Upgrade
Technology
Development for
Home Robotic
System
January 2024 December 2024 This pro ject upgraded the distributed
neural control network technology
and developed real-time data
processing and display, scene
sharing and synchronization,
low-power communication
optimization, cross-platform
development, offline operation
support, and intelligent
reconnection tech nologies. These
t e c h n o l o g i e sc a nb ea p p l i e dt ot h e
products in our home robotic
system, providing smarter, more
efficient, and more convenient
solutions.
Technology-related
6. Integrated
Cleaning Robot
and Mobile
Robot and
Software System
Technology
Development
June 2023 December 2024 This project achieved
multi-functional mobile platform
technology powered by sweeping
robots and multi-functional dust
collection base station technology.
These technologies can be applied
to our enhanced mobile robots.
Technology-related
7. Intelligent
Sweeping and
Mopping Robot
with Multiple
Base Stations and
Multi-sensor
Integration and
Software System
Technology
Development
January 2023 December 2024 Thi s project achieved AI object
recognition, multi-sensor fusion
positioning and laser SLAM,
multiple base station docking
identification, and real-time
self-cleaning design technologies.
These technologies can be applied
to our enhanced mobile robots.
Technology-related
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No. Project Name
Commencement
Date Completion Date
Project Description/
Product Commercialized
Product-related/
Technology-related
8. Intelligent Visual
System
Development
January 2024 December 2024 This project achieved BLE keep-alive
technology, low-latency video
transmission, NFC security
authentication, and lock robots
linkage system control. These
technologies can be applied to our
smart cameras.
Technology-related
9. Home Appliance
Centralized
Control
Intelligent
Terminal and
System
Development
July 2023 May 2024 This project achieved scenario
linkage algorithms, infrared code
learning technology, and BLE
multi-device low-power networking
technology control solutions. These
technologies can be applied to our
smart hubs.
Technology-related
10. Smart Home
System
Development
B a s e do nU s e r
Device Loading
Speed,
Compliance
Security, and
User Experience
Enhancement
February 2023 April 2024 This project achieved core
technology solutions for the home
robotic system in whole-house
dynamic views, multi-condition
scenario triggering, and AI-driven
smart notification system that
prioritizes alerts by importance. It
integrated multiple sensor data,
including temperature, humidity,
and air quality, as well as analysis
of user behavior.
Technology-related
11. Lock Robots and
Control System
Development
B a s e do nS e c u r i t y
Prevention in IoT
Environment
January 2022 November 2022 This project developed dynamic
planning algorithms, battery hot
standby technology, load-adaptive
motor control, low-power
communication, multi-level key
management system, and fault
safety-oriented design technologies.
These technologies can be applied
to our lock robots.
Technology-related
12. Household Robot
Development
B a s e do nL i d a r
and IMU SLAM
January 2022 December 2022 This project developed special grid
map construction technology,
differential chassis scan matching
algorithm, multi-angle obstacle
avoidance control, and lidar and
inertial measurem ent unit fusion
positioning technologies. These
technologies can be applied to our
enhanced mobile robots.
Technology-related
13. Perception
Decision System
Control Rate and
Loading Speed
Optimization
Development
September 2022 December 2022 This project developed device model
abstraction, cloud-based state
caching system, and other
technologies. These technologies
can be applied to our perception
and decision-making system
products.
Technology-related
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The table below sets forth the details of certain of our ongoing key independent R&D
projects as of the Latest Practicable Date.
No. Project Name
Commencement
Date
Expected
Completion Date
Project Description/
Product Commercialized
Product-related/
Technology-related
1. Humanoid Chore
Robot Project
March 2024 January 2026 This project aims to design a
humanoid household robot capable
of performing more execution tasks
in three-dimensional home
environments through the
development of VLA models and
motion control technologies.
Product-related
2 Sports Robot with
Bionic Arm
Development
Project ( 帶仿生機
械臂的運動機器人
研發項目)
June 2025 December 2026 This project aims to develop a sports
robot platform for highly dynamic
environments. It involves
integrating a
multi-degree-of-freedom bionic
mechanical arm onto an
autonomous mobile robot base,
combined with a cross-modal
perception, decision-making, and
control system. The goal is to
enable the robot to use its bionic
arm to accurately and predictively
intercept high-speed moving
objects, such as balls.
Product-related
Our R&D Achievements and Investments
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our research and development expenses amounted to RMB61.8 million,
RMB89.2 million, RMB112.0 million, RMB56.7 million and RMB58.7 million,
respectively, reflecting a CAGR of 34.7% from 2022 to 2024 and accounted for 22.5%,
19.5%, 18.4% and 14.8% of our total revenue in the same periods, respectively. Leveraging
on our R&D capabilities and our insights into user preferences, we consis tently transformed
R&D investments into product commercialization during the Track Record Period,
enabling us to continuously deliver home robotic system products that meet user
demands while seamlessly integrating into their existing living environments.
We have launched multiple new industry product categories through our original
development efforts. We have been recogn ized as a National Key Specialized and
Sophisticated ‘‘Little Giant Enterprises’’ ( 國家專精特新重點‘‘小巨人’’企業), a National
High-Tech Enterprise ( 國家高新技術企業) and a Guangdong Provincial Engineering
Technology Research Center for Int elligent Networked Home Control ( 廣東省智能組網家
居控制工程技術研究中心), since 2024, 2023 and 2022, respectively.
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OUR SALES AND DISTRIBUTION NETWORK
Overview
We have established an omni-channel sales an d distribution network that is tailored to
the respective markets in which our products are sold. We maintain a well-balanced online
and offline sales network because we believe our d iversified offline and online channels play
equally significant roles in our business. Ou r sales and distribution network generally
consists of DTC channels, retailer channels and distribution channels. Under the DTC
channels, we sell products directly to end consumers either via a number of e-commerce
platforms, including Amazon SC, among othe rs, or our self-operated website. Under the
retailer channel, we primarily sell our products to major international and national
retailers, including Amazon VC, which purchase products directly from us and sell them to
end consumers. Under our distribution channel, we mainly sell our products to distributors,
which purchase products from us and subsequently distribute them to sub-distributors,
and/or retailers.
The following table sets forth a breakdown of our revenue by sales channel for the
periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
DTC channels ........ 101,182 36.9 210,965 46.2 303,732 49.8 120,391 43.7 177,469 44.8
— Amazon SC. . . . . 79,817 29.1 120,043 26.3 173,020 28.4 62,732 22.8 90,386 22.8
— Self-operated
w e b s i t e ...... 2 0 , 4 6 0 7 . 5 6 0 , 7 9 3 1 3 . 3 8 8 , 6 8 8 1 4 . 5 3 5 , 8 3 6 1 3 . 0 6 0 , 5 8 8 1 5 . 3
— Other online
marketplaces . . 905 0.3 30,129 6.6 42,024 6.9 21,823 7.9 26,495 6.7
Retailer channels ...... 172,115 62.6 204,783 44.7 244,824 40.1 125,628 45.7 183,008 46.2
— Amazon VC . . . . 145,080 52.8 178,186 38.9 218,634 35.8 112,447 40.9 175,233 44.2
— Other retailers . . . 27,035 9.8 26,597 5.8 26,190 4.3 13,181 4.8 7,775 2.0
Distribution channels .... 1,300 0.5 41,516 9.1 61,368 10.1 29,002 10.6 35,817 9.0
Total ............ 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
We are constantly evaluating our existing channels and exploring new channels to
optimize our sales and distribution network. O ur channel strategy creates complementary
strengths across our distribution ecosyste m: direct-to-consumer channels foster brand
loyalty and provide valuable customer insight s; retail partnerships drive sales volume and
enhance product visibility; while distributor s facilitate geographic e xpansion into markets
where we lack direct presence. This balanced approach allows us to maximize market
coverage while maintaining pricing disciplin e and brand consistency across all consumer
touchpoints. We seek to avoid unhealthy competition among sales channels primarily by
monitoring retail prices and coordinating promotional activities across channels.
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DTC Channels
Our DTC channels generally comprise of a number of e-commerce platforms and our
self-operated website, through which we sel l our products directly to end consumers.
E-Commerce Platforms
During the Track Record Period and as of t he Latest Practicable Date, we sold our
products directly to end consumers through a nu mber of e-commerce platforms, including
Amazon SC and other online marketplaces.
Amazon SC
Among our sales made on e-commerce platforms, a large portion of our revenue was
generated from Amazon SC, which is one of Amazon’s retail seller programs. We
commenced our sales through such program in 2018. We usually use Amazon’s ‘‘Fulfillment
by Amazon’’ service where Amazon ships our products from the warehouses to our end
consumers to fulfill the orders on our behalf. We recognize revenue from retail sales when
control of the products is transferred to our end consumers. Our revenue generated through
Amazon SC amounted to RMB79.8 million, RMB120.0 million, RMB173.0 million,
RMB62.7 million and RMB90.4 million for the y ears ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2024 an d 2025, respectively, representing 29.1%,
26.3%, 28.4%, 22.8% and 22.8%, respectively, of our total revenue in the same periods.
We entered into framework agreements with Amazon in connection with Amazon SC.
For the salient terms of such agreements, please refer to ‘‘— Our Relationship with
Amazon’’ in this section.
Other Online Marketplaces
We enter into agreements with other e-commerce platforms to sell our products
directly to end consumers who place order wit h us through these platforms. These platforms
provide product listings and other support services essential for our operation. In return, we
are typically required to pay a commission, re ferral fee or similar fees to such platforms, at
a rate which is usually calculated as a certain percentage of our sales revenue generated
through our online stores on these platforms. For certain platforms, we may also utilize
their fulfillment services, inc luding inbound and outbound log istics and order fulfillment.
The historical rates of commissions and fees paid by us to other e-commerce platforms
during the Track Record Period ranged from approximately 6% to 16% of the revenue
generated on such platforms, depending on the respective platform policies and our
collaboration history and experience with such platforms. Our revenue generated from
other online marketplaces amounted to R MB0.9 million, RMB30.1 million, RMB42.0
million, RMB21.8 million and RMB26.5 million f or the years ended December 31, 2022,
2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively, representing
0.3%, 6.6%, 6.9%, 7.9% and 6.7%, respectively, of our total revenue for the same periods.
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During the Track Record Period, the agre ements with other e-commerce platforms
(excluding Amazon) typically contained the following principal terms.
. Payment: The platforms collect payments fr om end consumers and remit net
p r o c e e d st ou sa f t e rd e d u c t i n ga p p l i c a b l ef e e s ,s u c ha sc o m m i s s i o n sa n dr e f e r r a l
fees.
. Fulfilment and logistics: We may opt to manage our own inventory, shipping, and
order fulfilment, or we may utilize the fulfilment services provided by these
platforms, who handle storage, packaging, and delivery in exchange for service
fees.
. Returns and customer service: We are generally responsible for customer support,
including handling returns, refunds, and cancellations, in accordance with
platform policies. Returned products may also be processed by us or by
platforms through its fulfillment services.
. Contract term: Agreements are typically open-ended and remain effective until
terminated by either party.
. Commission and fees: We pay the platforms various fees, which may include sales
commissions, referral fees, listing or subs cription fees, transaction processing
charges, and fulfilment-related service fees. Commissions are typically charged as
fixed or variable percentages based on sales or settlement amounts. Certain
e-commerce platforms also offer tiered fee plans tailored to stores of different
scales. Additional fees may be incurred for optional services utilized by us, such as
marketing, logistics, or payment processing services. Certain e-commerce
platforms also impose one-off fixed charges, such as with respect to system
registration.
. Warranty: We usually provide a one-years warranty for the products sold through
these platforms. The platforms usually do not offer separate warranty coverage
themselves.
. Liability exposure: In the event of damage, theft, or loss of products handled
through third-party fulfillment services, t he platforms may provide compensation
for such losses during storage or deliver y, subject to their respective policies.
Specifically, for products processed thr ough fulfillment services provided by the
e-commerce platforms themselves, such platforms are generally liable for losses
incurred during storage and delivery, and end consumers may directly contact the
platform’s customer service for assistan ce. In the event we identify errors in the
storage or logistics process through our internal reviews, we seek recourse from
the platform. If a end consumer contacts us directly regarding logistics
discrepancies, we primarily direct such end consumer to contact the platform
directly for resolution. In cases where we engage third-party logistics providers for
products sold on e-commerce platform s, end consumers generally contact us
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directly to resolve issues, and we subsequently seek recourse from the relevant
logistics provider for such losses. Typically, losses arising from product defects or
our own negligence are generally borne by us.
. Termination: Agreements may generally be terminated by the platforms at their
discretion, including without prior notice in some cases, or by either party to the
agreement with advance written noti ce, subject to the applicable terms.
Self-operated Website
We have launched and have been operating a self-operated website since 2017,
providing end consumers with intuitive product displays and quality shopping experiences,
becoming a new growth engine for online channels. Our revenue generated from the
self-operated website amounted to RMB2 0.5 million, RMB60.8 million, RMB88.7 million,
RMB35.8 million and RMB60.6 million for the y ears ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2024 and 2025, respectively, representing 7.5%,
13.3%, 14.5%, 13.0% and 15.3%, respectively, of our total revenue for the same periods.
The key terms relating to purchasing produc ts on our self-operated website can be found
thereon, which are set out as follows:
. Warranty: Our warranty policy applies to our products that were purchased via
our official self-operated website. All products purchased from our official
self-operated website come with one year w arranty, which is valid within one year
from the date of receipt of item.
. Shipping: One to three business days for us to dispatch orders. Shipping times are
not guaranteed due to factors that are beyond our control, such as political
events, disruption to shipping routes, and changes in climate, among others.
. Limitation of liability: We are not liable for any damage arising from the use of
the service. However, in jurisdictions that do not allow the exclusion or the
limitation of liability for consequential or incidental damages, our liability shall
be limited to the maximum extent permitted by law.
Retailer Channels
Amazon VC
B e s i d e sA m a z o nS C ,w ea l s os e l lo u rp r o d u c t st oA m a z o nv i aA m a z o nV C .W e
commenced our sales through Amazon VC i n 2019. Under Amazon VC, Amazon makes
bulk purchase orders from us and directly fulfills the order to its customers. Our revenue
generated from Amazon VC amounted to RMB145.1 million, RMB178.2 million,
RMB218.6 million, RMB112.4 million and RMB175.2 million for the years ended
December 31, 2022, 2023 and 2024 and the si x months ended June 30, 2024 and 2025,
respectively, representing 52.8%, 38.9%, 35.8%, 40.9% and 44.2%, respectively, of our
total revenue in the same periods.
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We entered into framework agreements with Amazon in connection with Amazon VC.
For the salient terms of such agreements, please refer to ‘‘— Our Relationship with
Amazon’’ in this section.
Other Retailers
Overview
Our retailer network includes national re tailers and electronics specialty retailers
across key global markets. For the years en ded December 31, 2022, 2023, 2024 and the six
months ended June 30, 2025, our products were sold to 69, 81, 54 and 42 retailers,
respectively. The following table sets forth the changes in the number of retailers for the
periods indicated:
As of/For the year ended December 31,
As of/
For the
six months
ended
June 30,
2022 2023 2024 2025
Number at the beginning of
t h ep e r i o d ........... 7 5 6 9 8 1 5 4
Increase
(1) ............ 4 2 4 4 2 0 2 1
Decrease (2) ............ ( 4 8 ) ( 3 2 ) ( 4 7 ) (3) (33)(4)
A tt h ee n do ft h ep e r i o d .. 6 9 8 1 5 4 (3) 42(4)
Notes:
(1) The increase in the number of retailers represen ts those retailers that made purchases from us for the
year/period indicated, but did not purchase from u s for the year/period immediately preceding the
year/period indicated.
(2) The decrease in the number of retailers represen ts those retailers that made purchases from us for
the year/period immediately preceding the year /period indicated, but did not purchase from us for
the year/period indicated. Such retailers may purchase from us in a subsequent year/period.
(3) The number of retailers that we sold our products to decreased from 81 as of December 31, 2023 to
54 as of December 31, 2024, primarily because we optimized our retailer channels in 2024 and ceased
our cooperation with those retailers that had r elatively low transaction volumes with us.
(4) The number of retailers that we sold our products to decreased from 54 as of December 31, 2024 to
42 as of June 30, 2025, primarily because (i) a number of these retailers typically make infrequent
purchases, often placing orders in the second ha lf of the year, and accordingly did not place any
orders during the six months ended June 30, 2025; an d (ii) certain small retailers were deemed by us
to have ceased their business relationship wit h us as they had not placed repeat orders and had
become unresponsive to communications from us . Such cessation was based on our commercial
assessment and was not the result of any fo rmal termination from either party.
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We sell products through retailer channels pr imarily because (i) these channels provide
direct access to end consumers, which enhances the market penetration and brand visibility
of our products; and (ii) the flexibility and br oad coverage of retailer channels allow us to
reach a wider range of targeted end consumers across different regions.
We generally enter into buy-sell relationship with our retailers, where we sell and
transfer ownership of our products directly to them for subsequent resale to end consumers.
National retailers consist primarily of la rge electronics retailers, home centers, and
mass market retailers that operate extensiv e networks of physical stores and online
channels. These national retailers, often our key customers, are strategically important to
our growth as their ongoing demand for our products allows us to develop and execute
long-term plans for product development and market expansion. We collaborate closely
with these major retail partners, providing innovative products based on insights into
consumer needs and preferences in each regional market.
Compared to national retaile rs, electronics specialty retailers typically operate a
smaller number of stores targeting specific market segments, including, among others, home
automation enthusiasts and technology enthusiasts. We have developed the necessary
logistics capabilities, inventory management s ystems, and support services to effectively
engage with retailers of various sizes across our key markets. In Japan, our most developed
retail market, we have established our presen ce in an extensive network of physical retail
locations, providing important visibilit y for our brand. We have been strategically
expanding our retail partnerships in Europe and North America, with particular focus on
our high-value product lines such as enhanced mobile robots.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our revenue generated from other retailers amounted to RMB27.0
million, RMB26.6 million, RMB26.2 millio n, RMB13.2 million and RMB7.8 million,
respectively, representing 9.8%, 5.8%, 4.3 %, 4.8% and 2.0%, respectively, of our total
revenue for the periods.
Contracts with Retailers
During the Track Record Period, the agreements with our retailers typically contained
the following principal terms:
. Term and termination : The agreements generally have a term of one year, which
may be terminated by either party with prior written consent of the other party or
for cause.
. Sales channels: We designate specific geographic areas and/or sales platforms for
retailers. Retailers are typically prohibited from selling our products on
unauthorized platforms or outside their assigned territories.
. Use of name and trademarks: Retailers are permitted to use our name and
trademarks to market our products but must act to protect and promote our good
reputation. Retailers shall not register the trademark related to our trademarks.
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. Pricing: We sell products to retailers at mutually agreed prices, typically specified
in purchase orders or price lists. Retai lers generally follow localized market
pricing systems or manufacture r’s suggested retail price
. Purchase target: Retailers shall reach annual purchase targets. Failure to meet
such targets may entitle us to terminate the agreement with retailers at our sole
discretion.
. Payment terms: Typically, retailers are required to make full payment via
telegraphic transfer before picking up products from our factory. Sometimes we
may also offer a credit period ranging from 30 to 60 days.
Distribution Channels
Distributors
Overview
During the Track Record Period and up to the Latest Practicable Date, we sold a
number of products through distributors. Our distributors, generally purchase products
from us and subsequently resell them to retailers and sub-distributors. For the years ended
December 31, 2022, 2023 and 202 4 and the six months ended June 30, 2024 and 2025, sales
to distributors amounted to RMB1.3 million, RMB41.5 million, RMB61.4 million,
RMB29.0 million and RMB35.8 million, respectively, representing 0.5%, 9.1%, 10.1%,
10.6% and 9.0% of our total sales, respectively.
We sell the products through distributors primarily because:
. Selling products through distributors is a c ommon practice in the industries where
we operate, as advised by Frost & Sullivan. We believe that the cooperation with
distributors provides benefits to us in certain local markets as we can leverage
their expertise and coverage to penetrate these markets quickly and reach a
diverse customer base in these local ma rkets. For example, distributors have
extensive sales network and a deeper understanding of the local market trends and
end consumers’ preferences in the areas w here they operate, which can facilitate
the penetration of the products we sell; and
. Local distributors provide comprehensive market localization support, including
regulatory compliance, cultural adapta tion, consumer insights, logistics
management and targeted marketing strategies, which enhance our market entry
efficiency while reducing operationa l costs and streamlining our internal
processes; and
. Selling products through distributors l imits our exposures to the risks of
developing some of the local markets by ourselves directly, while allowing us to
allocate internal resources more efficiently.
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As of December 31, 2022, 2023, 2024 and June 3 0, 2025, we sold products to three, five,
six and six distributors, respectively. We only enter into contracts directly with our
distributors and generally do not have contractual relationship with any sub-distributors.
The following table sets forth the changes in the number of distributors for the periods
indicated:
As of/For the year ended December 31,
As of/
For the
six months
ended
June 30,
2022 2023 2024 2025
Number at the beginning of
t h ep e r i o d ........... 3356
Increase
(1) ............ — 2 3 3
Decrease (2) ............ — — ( 2 ) ( 3 )
At the end of the period ... 3566
Notes:
(1) The increase in the number of distributors repre sents those distributors that made purchases from us
for the year/period indicated, but did not purch ase from us for the year/period immediately
preceding the year/period indicated.
(2) The decrease in the number of distributors repre sents those distributors that made purchases from
us for the year/period immediately preceding the y ear/period indicated, but did not purchase from
us for the year/period indicated. Such distr ibutors may purchase from us in a subsequent
year/period.
Contracts with Distributors
We generally enter into distribution agreements with our distributors. During the
Track Record Period, the agreements with our distributors typically contained the
following principal terms:
. Term and termination: Typically one year from the effective date of the
distribution agreement. Unless otherwise agreed, neither party may terminate
the agreement without prior written consent of the other party. We maintain the
right to terminate immediately with notice if the distributor breaches the
agreement in a manner that cannot be reasonably cured.
. Distribution channels: We designate specific geographic areas for distributors and
prohibit them from selling or marketing our products to any end user, reseller, or
third party outside their assigned territories.
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. Use of name and trademarks: Distributors are authorized to use our name and
trademarks to market our products and must act to promote our good reputation.
However, distributor shall not register the trademark related to our trademarks.
. Pricing: Distributors determine their own p ricing to resellers based on market
conditions, while we provide manuf acturer’s suggested retail price.
. Purchase quantities: Distribution agreements typically include annual purchase
targets in monetary terms and may grant us the discretion to terminate the
agreement if such targets are not met by the distributors.
. Payment terms: Distributors typically make payments to us via telegraphic
transfer before products are picked up from our manufacturing facilities.
. Non-compete and confidentiality: Both parties agree not to circumvent or attempt
to induce the other party’ clients, vendors, or partners to terminate their
relationship with the other party. Both parties also agree not to disclose
confidential information to third parties, particularly to our competitors.
Sub-distributors
Our distributors are generally not prohibit ed from engaging sub-distributors. During
the Track Record Period, we did not enter into any agreements or otherwise directly
establish relationships with any sub-distributors and we have no control over them. Instead,
we delegate to our distributors the authority to choose their sub-distributors and negotiate
transaction terms directly with them. The distributors who cooperate with us directly are
responsible for managing their respective sub-distributors, including ensuring their
operations remain within the designated distr ibution territory and align with our overall
sales and distribution strategy. If we become aware of any non-compliant operations by a
sub-distributor, we communicate only with the re levant responsible distributor, requesting
such distributor to take rectification measu res. During the Track Record Period and up to
the Latest Practicable Date, we were not aware of any material violation of our sales
policies by our distributors and their sub-distributors or any material claims or
non-compliant incidents involving sub-distributors.
Policies and Management Practices for Retailers and Distributors
Product Return and Replacement Polic ies for Retailers and Distributors
Our relationship with retailers and distrib utors is a buyer and seller relationship as
retailers and distributors typically acquire o wnership of the product s we deliver to them,
and no return, exchange or refund is allowed except for limited circumstances, including the
following:
. We may allow the retailers and distributors to return the products with quality
defects or damage during transportation; and
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. In the event of quality issues, besides shipping replacement products needed in a
timely fashion, we closely work with ret ailers and distributors to resolve them
through mutual agreement. The specifi c arrangements for handling defective
products may vary among retailers and distributors based on individual
circumstances and are determined through commercial discussions between the
parties.
Selection and Assessment of Retailers and Distributors
We follow a strict and targeted selection pro cess to identify retailers and distributors
who can drive brand growth and market expansion. We have a dedicated team that
evaluates each candidate through a combinat ion of business qualification review and
market research. In particular, we assess a retailer’s or distributor’s: (i) expertise in the
home robotic system industry and retail indu stry; (ii) historical sales achievements and
operating scale; (iii) strength, quality, and loc alization of its sales channels, with emphasis
on local market presence and retail execution; (iv) team management and after-sales
support capabilities; and (v) market influenc e and ability to drive brand development. We
aim to partner with retailers and distributors who share our vision, can effectively expand
our market share, and provide an excellent end-user experience.
We apply stringent standards to evaluate our business relationship with existing
retailers and distributors through an annual assessment. In addition to our standard criteria
for a new retailer or distributor, we also asses s its annual purchase target achievement rate.
We may terminate business relationship with our exiting retailers or distributors for breach
of the their agreements with us.
Credit Policies
We normally require our retailers and distr ibutors to settle payment in advance of the
scheduled delivery and we usually only releas e products to our retailers and distributors
after receipt of payment, as we believe requiring pre-payment encourages our retailers and
distributors to retail or distribute our products in a timely fashion and avoid accumulation
of excess inventory. In cases where we grant c redit term, we generally grant credit terms of
up to 60 days to our retailers and distributors. We believe that the extension of credit terms
to certain of our retailers and distributors w ould provide liquidity to and support them in
developing long-term business with us. During the Track Record Period and up to the
Latest Practicable Date, we were not aware of any significant overdue payment in relation
to the credit terms we granted to our retailers and distributors.
Management of Retailers and Distributors
Maintaining a stable network of retailers an d distributors and an effective cooperative
relationship with them is crucial to our ab ility to drive sales results and ensure end
consumers’ satisfaction. We actively manage our retailers and distributors to ensure healthy
and orderly distribution networks, mitigat e cannibalization among retailers and
distributors, avoid channel stuffing and to protect our brand and reputation.
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Set forth below are the key aspects of our management policies and measures
governing our distributors and retailers:
. Report: For retailers and distributors with large procurement scales, we requested
them to report their sales data to us regularly.
. Support for marketing and promotional activities: We assist the retailers
distributors to conduct marketing and promotional activities in their stores
and/or regions, including, among others, brand image improvement and
promotion of products. These marketing and promotional activities are
conducted according to our overall marketing strategies to maintain a unified
brand and product image.
. Contract compliance: Our agreements with retailers and distributors explicitly
prohibit cross-region sales by retailers an d distributors. If a retailer or distributor
breaches such restriction, we have the rig ht to terminate the relevant agreement
and/or sue the retailers and distributor for damages.
. Business integrity: We prioritize business integr ity, especially in sales and
marketing activities conducted by our retailers and distributors. They are
required to comply with all laws, including anti-bribery regulations, and our
agreements strictly prohibit bribery or corruption. If any illegal or fraudulent acts
are identified, we will investigate and may terminate the partnership and seek
compensation for losses. During the Track Record Period and up to the Latest
Practicable Date, we found no violations of business integrity or anti-bribery laws
that significantly impacted our business or operations.
. Site visit and inventory inspection: To monitor the performance of our retailers
and distributors, our internal policy includes requiring our sales representatives to
carry out random site visits at retaile rs and distributors, monitor sales
performance and pricing, as well as mark eting activities of our retailers and
distributors.
While our standard inventory management arrangements generally do not
contractually obligate our retailers and distributors to provide detailed inventory reports,
we achieve the objectives of our inventory management policies to monitor performance
and mitigate inventory risk through the following measures:
(i) Inventory assessment through pre-order communication. For smaller retailers and
distributors, we utilize our standard order and fulfillment process as an
opportunity to assess their inventory position. Typically, before a formal
purchase order is issued, these partners will engage in communications with us
to discuss and finalize key commercial te rms, including product pricing, order
quantity, and delivery schedules. This reg ular engagement provides us with timely
insight into our partners’ purchasing requirements. A partner’s initiative to
negotiate and place a new order generally serves as a practical indicator of
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downstream demand and their current inventory needs. This allows us to assess
their inventory situation in the context of their recent order history, which assists
us in mitigating the risk of overstocking before we fulfill a new order.
(ii) Collaborative sales and promotional support . In line with our goal of mitigating
inventory accumulation, we maintain regular communication with our partners
regarding their sales performance. If we identify a risk of overstocking, we work
with the partner to develop and implement promotional activities to help
accelerate the sell-through of our products.
Given that, (i) to the best knowledge, information, and belief of the Directors, after
making reasonable enquiries with our key retailers and distributors including Amazon VC,
the inventory levels across our key retailers and distributors have remained relatively stable
and commercially reasonable th roughout the Track Record Period; (ii) we effectively assess
the inventory level of our other smaller retail a nd distribution partners through thorough
pre-order communication; and (iii) we provide collaborative support to our partners to
manage their stock levels, the Directors are of the view that our inventory management
policies and the measures used to implement th em are effective in mitigating the risks of
channel stuffing and inventory obsolescence. On the basis of their independent due diligence
work conducted, nothing has come to the attention of the Joint Sponsors which cause them
to cast doubt on the reasonableness of our Directors’ views aforementioned.
Relationship with Our Retailers and Distributors
To the best of our knowledge, all of our retailers and distributors are Independent
Third Parties. The retailers and distributor s are not connected to any of our Company, its
subsidiaries, their shareholders, directors , senior management or any of their respective
associates. To our best knowledge, besides the ordinary course retail arrangement or
distribution arrangement with us, there is no o ther relationship betw een the retailers and
distributors and each of our Company, our subsidiaries, our shareholders, directors or
senior management or any of their respective associates. Our relationship with our retailers
and distributors is in essence a buyer and sell er relationship. They are our customers, and
they do not act on our behalf when dealing with their respective end users, and we have no
management control over their daily operations. Our retailers and distributors place orders
with us when and to the extent they deem appropriate. In general, our relationships with
retailers and distributors have remained stable.
During the Track Record Period and up to the Latest Practicable Date, to the best of
our knowledge there was no material non-compliance with the terms and conditions of our
agreements with our retailers and distribut ors. See the section headed ‘‘Risk Factors —
Risks Relating to Our Business and Industry — Our distributors may have unsatisfactory
performance which is beyond our control and their improper conduct or any changes in
their business relationships with us may adve rsely affect or business, financial conditions
and results of operations’’ in this prospectus for more details.
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Measures to Prevent Channel Stuffing
We believe that our sales correspond to the actual consumer demands and our products
are at a low risk of channel stuffing in our sales and distribution network, primarily because
(i) we generally require full payment before delivering products to our retailers and
distributors; (ii) we generally do not allow returns of products sold to retailers and
distributors, except for pro ducts that are defective; and (iii) while we set annual purchase
targets with certain retailers and distributors in our agreements, we typically adopt a
collaborative approach if such targets are not met, such as providing subsidies or jointly
developing promotional strategies, rather than immediately terminating or threatening to
terminate the relevant agreements with them.
Based on the above measures and the absence of signs of any material abnormalities in
our transactions with major retailers and distributors, all of which are Independent Third
Parties, nothing has come to the attention of our Directors that our sales do not correspond
to the actual consumer demands.
Measures to Prevent Cannibalization
For some geographical regions where our products are sold, we choose a limited
number of qualified retailers and distributors t o resell and distribute to the local retailers,
sub-distributors and end consumers in those regions and prohibit cross-region sales in order
to mitigate the potential cannibalization a mong retailers and distributors. To prevent
cannibalization among our retailers and distributors, we have adopted the following
strategies and internal control policies:
. Channel-specific product configurations: We assign unique model numbers and
packaging designs for specific sales channels to discourage cross-channel sales.
. Product traceability system: We utilize serial number-based mechanisms in
conjunction with retailers and distributor shipment records to trace product
flow throughout our distribution network, allowing us to identify potential
unauthorized cross-selling activities.
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Sales in Different Jurisdictions
During the Track Record Period, our products were sold in more than 90 countries and
regions globally, primarily in Japan, Europe and North America. The table below sets out
the breakdown of our revenue by region for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Japan .............. 168,381 61.4 285,057 62.3 352,408 57.7 167,390 60.9 268,354 67.7
Europe ............. 46,193 16.8 68,737 15.0 130,465 21.4 47,769 17.4 68,055 17.2
G e r m a n y ......... 1 2 , 4 4 3 4 . 5 1 9 , 6 8 5 4 . 3 5 1 , 4 5 0 8 . 4 1 6 , 3 6 4 6 . 0 3 1 , 1 6 1 7 . 9
The United Kingdom . 10,592 3.9 16,341 3.6 20,048 3.3 8,760 3.2 9,844 2.5
Other European
countries . ...... 2 3 , 1 5 8 8 . 4 3 2 , 7 1 1 7 . 1 5 8 , 9 6 7 9 . 7 2 2 , 6 4 5 8 . 2 2 7 , 0 5 0 6 . 8
North America ........ 47,614 17.3 83,482 18.3 96,735 15.9 42,394 15.4 46,176 11.7
The United States . . . 45,101 16.4 78,451 17.2 86,878 14.3 38,687 14.1 40,860 10.3
Other North American
countries . ...... 2 , 5 1 3 0 . 9 5 , 0 3 1 1 . 1 9 , 8 5 7 1 . 6 3 , 7 0 7 1 . 3 5 , 3 1 6 1 . 4
Rest of the world
(1) ..... 12,409 4.5 19,988 4.4 30,316 5.0 17,468 6.3 13,709 3.4
Total .............. 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Note:
(1) Rest of the world include over 40 countries and r egions, including, am ong others, Australia,
Singapore and South Korea, each contributed relati vely insignificant revenue to us during the Track
Record Period.
We develop and manage our extensive sales and distribution network on a
region-by-region basis and adjust our mar keting strategy in different regions. For
example, (i) in Japan, we establish subsidiaries and departments to support customer
needs due to the high emphasis on customer ser vice in the Japanese market; (ii) in Europe,
we primarily sell products through e-commerc e platforms, with a growing focus on offline
retail partnerships.
During the Track Record Period and up to the Latest Practicable Date, none of the
countries and regions where our products were sold was subject to any international
sanctions. Accordingly, we are not subject to an y sanctions-related risk in connection with
our business operations.
PRODUCTION AND WAREHOUSING
Production Methods
We manufacture our products primarily through in-house production at our
self-operated facilities. To a lesser exten t, we outsource the manufacturing of a small
number of products to third-party contract manufacturers. The choice of production
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method is determined after careful consider ation of various factors, including, but not
limited to, the confidential nature of our core technologies, manufacturing costs, technical
complexity, and production capacity.
During the Track Record Period, we implemented a predominantly self-manufacturing
model for our main product categories with est ablished track records and stable sales. This
approach enables us to maintain comprehensive quality control throughout the entire
product lifecycle, from development to manufacturing and sales.
We typically prioritize in-house production for technically complex products that
incorporate our core technologies, such as our home robotic system products. This strategy
safeguards our proprietary technologies and intellectual property. However, when we
launched our enhanced mobile robots in 2022, we strategically outsourced the initial
production to external manufacturers to mitigate initial production risks. Following
favorable market reception and increasing order volumes, we transitioned the production of
these robots in-house in 2023.
For complementary products within our ecosystem that do not heavily leverage our
core technologies, such as circular fans and certain other smart home products, we
collaborate with specialized ex ternal manufacturing partners. For additional information
regarding our manufacturing partnership s, please refer to the section headed ‘‘—
Subcontracting’’ in this section.
Production Process
Our production processes are pr imarily assembly-based. The following table describes
a typical production process involved in our production.
Pre-processing: The pre-processing of raw materials includes activities such
as the assembly of components, cutting of auxiliary
materials, and writing of software. This stage involves
assembling raw materials an d pre-processed components
into semi-finished main units.
Assembling: The assembling processes include assembling raw materials
and pre-processed components into semi-finished main
units.
Testing: Functional testing of the product to ensure that all features
are operating normally.
Packaging: Once the semi-finished main units are assembled, we will
proceed to package them along with their accessories.
Warehouse and delivery: Register the packaged products into the warehouse and ship
them according to customer orders.
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Production Base
As of the Latest Practicable Date, we had one production base, the Guangdong
Huizhou Production Base ( 廣東惠州生產基地), located at Baidizhigu S&T Innovation Park,
No. 263, Chang’an Avenue, Shatian Town, Huiyang District, Huizhou, Guangdong
Province, the PRC, with a gross site area of over 50,000 sq.m.
The Guangdong Huizhou Production Base primarily consists of two workshops: (i) the
large item workshop, which is primarily used for the production of our advanced enhanced
mobile robots, as well as other large products such as humidifiers, utilizing a pallet
conveyor system; and (ii) the small- and mid-s ized item workshop, which is primarily used
for the production of our core home robotic system products with stable sales record,
including our dexterous hand-mimic robots and perception and decision-making systems
utilizing a belt conveyor line layout to facilit ate the transfer of materials and ensure
seamless integration of various processing steps.
To ensure efficient and smooth production processes, we place strong emphasis on the
acquisition of advanced equipm ent and the maintenance of ou r production facilities. We
maintain our production lines and machine s to meet the PRC national standards and
perform inspections of our equipment on a regular basis.
All the machinery and equipment for production are owned by us. We purchased our
production machinery and equipment in the PRC, which not only reduces procurement
costs but also ensures the stability and relia bility of the supply of our equipment. In
addition, by establishing long-term relationships with qualified domestic suppliers, we are
able to receive timely technical support and a fter-sales service, facilitating the smooth
progress of production. We typically engage multiple suppliers for our production
machinery and equipment and do not rely on any single supplier.
We conduct regular inspection of our production machinery and equipment and have
in place maintenance systems for our production machinery and equipment. Maintenance is
carried out by our repair staff, and we engage the repair team of the manufacturer of a
particular machine when necessary. During the Track Record Period and up to the Latest
Practicable Date, we did not experience any material or prolonged interruption to our
production processes due to mach inery or equipment failure.
Production Capacity and Utilization Rate
For the operation of our in-house production, we normally consider not only our
historical and current business volume, but also our anticipation and estimates in the future
development of home robotic system industry, as well as our planned production capacity
to accommodate our expected business growth.
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During the Track Record Period, our production processes were primarily
assembly-based. We offer a wide range of products, each requiring a different assembly
process. The following table sets forth the estimated production capacity, actual production
volume and utilization rate of our producti on workshops for the periods indicated
(1) :
For the years ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Large item workshop:
Production capacity
(units) (2) ........... — (3) 76,000 228,000 (5) 125,000
Production volume (units) — (3) 67,590 180,360 102,886
Utilization rate (%) (4) ... — (3) 88.9 79.1 (5) 82.3
Small-and-mid-sized item
workshop:
Production capacity
(units) (2) ........... 2 , 8 0 0 , 0 0 0 2 , 8 0 0 , 0 0 0 5 , 6 0 0 , 0 0 0 (5) 2,800,000
Production volume (units) 2,488,426 2,383,402 4,105,618 1,964,420
Utilization rate (%)
(4) . . 88.9 85.1 73.3 (5) 70.2
Notes:
(1) For the purpose of statistical consistency, al l our products are calculated based on the volume in
units. We manufacture a wide range of products, e ach with varying production time. Based on our
manufacturing experience, we normally take an average of 1.6 working hours to produce one unit of
product in the large item workshop and an average of 0.2 working hours to produce one unit of
product in the small- and mid-sized item workshop.
(2) In calculating our production capacity, we hav e made certain assumptions and applied certain
formulae as explained below:
Production capacity represents the maximum po ssible units that could be manufactured in our
production base for the year, ass uming there are (i) 275 working days in each year; and (ii) 8 hours
in each working day.
(3) We shifted the production of our enhanced mobi le robots and other large products in-house from
third-party contractors in 2023. As a result, no manufacturing activities for these products took
place in 2022.
(4) The utilization rate is calculated by divid ing the actual production volume by the estimated
production capacity.
(5) In 2024, we relocated our production facilities fr om Shenzhen to Huizhou in response to increasing
demand for our products and space constraints at our original manufacturing facilities. As a result
of this relocation, our production capacity for bot h large items and small- and mid-sized items has
increased, which caused the relevant utilization rates to decrease.
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According to Frost & Sullivan, the home robotic system industry is continuously
expanding, and we strive to capture as many new market opportunities as possible. We seek
to achieve this by continuously developing new types of products and services, and we have
designed our producti on facilities in a manner that provide us with high production
capacities in order to prepare for the constant expansion of our products and services
offerings. Depending on the prevalent market trends and demands, we may reallocate parts
of the production capacities which are yet to be fully utilized for the production of our
existing products to an increasing number of new and high-performing products in the
future.
LOGISTICS, TRANSPORTATION AND INVENTORY MANAGEMENT
Logistics and Transportation
We manage transportation and delivery of f inished products to customers, and engage
third party logistics services providers to provide such services. Our logistics service
providers help us (i) transport raw materials, parts and components between our production
facilities and warehouses, (ii) transport fin ished goods internatio nally, (iii) transport
finished goods to designated warehouses be longing to our customers or our service
providers, such as Amazon, where we will ship inventories to its warehouses and Amazon
will fulfill the orders to our customers on o ur behalf, (iv) handle customs clearance
procedures for our products in designated regions, and (v) pay applicable value-added
taxes, import duties and other related taxes for our imported goods in accordance with local
tax regulations. Our third-party logistics se rvice providers generally maintain their own
operation insurance coverage.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any major disruption to logistics capabilities or any major incidents of loss or
theft during delivery.
Inventory Management
We have established a comprehensive warehousing and inventory management system
to ensure efficient operations and qualit y control. Our warehousing facilities are
strategically located at our Guangdong Huizh ou Production Base, and in certain overseas
locations, with dedicated areas for raw materi als, work-in-progress, and finished goods to
optimize our production processes and inventory management.
We implement rigorous inventory control procedures, including quarterly physical
inventory counts during which production is temporarily halted to ensure accuracy. Our
financial staff supervise the counting process to maintain proper records and
accountability. We have achieved high invent ory accuracy rates through these systematic
controls.
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For efficient inventory management, we ca tegorize our raw materials into Class A
(core components like integrated circuits) and Class B (structural components), each with
specific handling protocols and accuracy req uirements. We maintain detailed monitoring
reports on inventory turnover rates with des ignated personnel responsible for tracking
inventory movement and identifying slow-moving items.
As of December 31, 2022, 2023 and 2024 and J une 30, 2025, our inventories amounted
to RMB83.6 million, RMB82.4 million, RMB163.6 million and RMB202.7 million,
respectively. During the Track Record Period, we maintained healthy inventory turnover
days of 111.9 days, 76.8 days, 82.0 days and 90.5 days for the years ended December 31,
2022, 2023 and 2024 and the six months ended June 30, 2025, respectively.
Our obsolete inventory management system follows a structured approach where
materials unused for over six months are classified as slow-moving, while those unused for
over one year undergo evaluation for potential write-off. All inventory write-offs follow a
formal approval process through our office automation system, requiring appropriate
management authorization.
PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
Procurement
We have established a comprehensive procu rement system to ensure the timely supply
of high-quality materials and components while optimizing costs. Our dedicated
procurement team manages supplier relationships, enforces quality standards, and
implements risk management measures throughout our procurement process.
The key materials, parts and components for our operations primarily include
electronic materials, including semiconducto rs, electric motors, batteries, structural
components such as plastic and metal parts, and packaging materials. During the Track
Record Period, we sourced materials primarily from domestic suppliers. We monitor and
manage raw material price fluctuations by establishing strategic relationships with key
suppliers, analyzing market conditions, and implementing timely price adjustments. During
the Track Record Period, we did not experience any significant delays or shortages in the
supply of materials, parts and components that had a material adverse impact on our
business operations.
We implement a rigorous supplier selection process based on our supplier control
procedures. For new suppliers, we require submission of basic information including
business licenses, qualification certificates, and company profiles through our supplier
information survey forms. Our procurement team conducts preliminary assessments of
potential suppliers by verifying their business credentials through national enterprise credit
information systems, examining their in dustry certifications and compliance with
regulatory requirements, and assessing their production capacity, t echnical capabilities
and financial stability.
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We classify our suppliers into main categories based on material criticality and
business volume. For critical material suppliers handling key components, modules, and
batteries, manufacturers must have a minim um registered capital of RMB5 million, while
distributors and traders must have at least RMB1 million. Structure and electronic
materials suppliers are required to maintai n a minimum registered capital of RMB1 million
for manufacturers and RMB0.5 million for dis tributors and traders. For packaging and
auxiliary material suppliers, manufacturers m ust maintain a minimum registered capital of
RMB0.5 million. Additionally, suppliers of strategic components must maintain ISO9001
quality management certification and obtain specific product certifications as required.
We conduct comprehensive on-site evaluations of suppliers for critical materials and
components. Our evaluation team typically consists of representatives from procurement,
quality control, and technical departments. The evaluation covers multiple aspects
including quality management systems, produ ction capabilities and equipment, technical
expertise and innovation capacity, supply chain management, and financial stability.
Supplier Management
We maintain a systematic supplier performance evaluation system based on our
supplier evaluation forms. Sup pliers are evaluated on multip le criteria including product
quality and consistency, on-time delivery performance, price competitiveness, technical
support and responsive ness, and environmental and so cial responsibility. Based on
evaluation results, suppliers are classified into four categories: s trategic suppliers,
preferred suppliers, standard suppliers and limited suppliers. For underperforming
suppliers, we require corrective action p lans and monitor improvement progress.
Suppliers failing to meet our standards after improvement attempts may be removed
from our approved supplier list.
Our procurement process follows our estab lished procurement control procedures. Our
engineers analyze production requirements based on customer orders and company
forecasts, determining material needs and s ubmitting procureme nt requests. Purchase
orders are created in our enterprise resource planning system, reviewed by procurement
supervisors/managers, and transmitted t o suppliers. Our procurement team selects
appropriate suppliers from our qualified supplier list based on material specifications,
quality requirements, and supplier performance history. For price increases, additional
approvals are required from department heads and finance. Procurement specialists track
order status to ensure on-time delivery. For potential delays, early intervention measures
are implemented to minimize production impacts. Upon delivery, warehouse staff receive
materials while quality control performs incoming inspections according to established
standards. Materials meeting quality requirements are stocked for production use.
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We maintain various payment arrangements with our suppliers based on supplier type
and material criticality. Our standard payment terms include prepayment arrangements for
certain suppliers requiring advance payment, payment upon delivery for specific material
categories, and monthly settlement cycles with a typical credit term of 45 days. Our
payment process follows a structured approa ch. We conduct monthly reconciliation of
delivery records with suppliers. We verify in voices against delivery records and purchase
orders, and process payments based on agreed payment terms.
We believe our systematic procurement and supplier management processes enable us
to maintain a stable supply chain while ensu ring timely availability of high-quality
materials and components for our production needs. During the Track Record Period, we
did not experience any material quality issues or supply disruptions that significantly
impacted our operations.
Contracts with Suppliers
During the Track Record Period, we had entered into framework agreements with
some of our key suppliers for raw materials, parts and components that are commonly used
or applied in our products. The framework agreements generally set out payment terms,
quality requirements, warranty period, and delivery terms. There is generally no minimum
purchase commitment on us. For the majority of our suppliers, we enter into individual
purchase contracts/orders and negotiate the price, quantity and payment terms with them
on a case-by-case basis, in line with normal pra ctice in the industry. The table below sets out
a summary of the typical key terms of our purchase contracts with suppliers:
Details: The purchase orders generally set out the specifications,
quantities and pricing.
Delivery: Unless otherwise specified in the purchase orders, suppliers
are generally responsible for transporting products to
designated locations at their own expense and assume all
transportation risks.
Warranty period: Typically, 24 months, depending on the types of parts
provided, unless otherwise agreed between the parties.
Product liability: If the supplier’s products do not conform to the specified
standards, such supplier shall provide return or replacement
services as required by us within five working days from the
date of receiving our notification and bear all costs
incurred. If the buyer suffers losses due to quality issues
with the supplier’s products or infringement of third-party
intellectual property rights, we shall have the right to
demand compensation from the supplier for all direct and
indirect economic losses resulting therefrom.
Payment terms: Monthly settlement with a payment term of between 30 and
60 days.
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Key Suppliers
During the Track Record Period, our su ppliers primarily included raw material
suppliers and subcontractors. For the years ended December 31, 2022, 2023 and 2024 and
the six months ended June 30, 2025, our purchases from the five largest suppliers in each
year/period during the Tr ack Record Period amounted to RMB74.7 million, RMB58.3
million, RMB70.6 million and RMB60.1 million, accounted for 41.4%, 25.7%, 24.0% and
3 3 . 1 %o fo u rt o t a lc o s to fs a l e sf o rt h er e s p e c tive periods. For the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2025, our purchases from the
largest supplier in each year/period during the Track Record Period amounted to RMB18.3
million, RMB16.3 million, RMB21.8 million and RMB16.4 million, accounted for 10.1%,
7.2%, 7.4% and 9.0% of our total cost of sales for the respective periods.
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The following table sets forth details of our five largest suppliers in each year/period
during the Track Record Period:
For the Year ended December 31, 2022
Rank Supplier Principal Business
Place of
Incorporation
Major Products/
Services Procured
by Us
Year of
Commencement of
Business
Relationship
Typical Credit
Term
Transaction
Amount
As
Percentage of
Our Total
Cost of Sales
Days RMB’000 %
1. Shenzhen Chenmi
Technology
Co., Ltd.* ( 深
圳市辰米科技有
限公司)
The company is primarily
engaged in the design
and manufacture of
structural components
and molds for smart
home products,
consumer electronics
and medical products
Mainland
China
Structural
components
2018 60 18,261 10.1
2. Supplier A The company is primarily
engaged in the design
and manufacture of
indoor cleaning robots
and smart vacuum
cleaners
Mainland
China
Subcontracting
services (whole
product
manufacturing)
2022 Prepayment 15,663 8.7
3. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce (including
retail sales of
consumer products),
cloud computing,
advertising, digital
streaming and artificial
intelligence. It also
provides subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce platform.
United States Logistics and
warehousing
2018 Payment on
delivery
15,541 8.6
4. Beigaozhi
Technology
(Shenzhen) Co.,
Ltd.* ( 北高智科
技（深圳）有限公
司)
The company is primarily
engaged in the
distribution of
electronic materials
Mainland
China
Electronic materials 2020 45 13,948 7.7
5. Supplier B The company is primarily
engaged in the R&D,
production and sales
of micro-drive systems,
precision plastic parts
and precision molds. It
is a public company
traded on the
Shenzhen Stock
Exchange
Mainland
China
Structural
components
(whole product
manufacturing)
2020 30 11,286 6.3
Total 74,699 41.4
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For the Year ended December 31, 2023
Rank Supplier Principal Business
Place of
Incorporation
Major Products/
Services Procured
by Us
Year of
Commencement of
Business
Relationship
Typical Credit
Term
Transaction
Amount
As
Percentage of
Our Total
Cost of Sales
Days RMB’000 %
1. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce (including
retail sales of
consumer products),
cloud computing,
advertising, digital
streaming and artificial
intelligence. It also
provides subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce platform.
United States Logistics and
warehousing
2018 Payment on
delivery
16,337 7.2
2. Supplier C The company is primarily
engaged in the R&D,
manufacture and sales
of IoT smart terminals
and data storage
devices. It is a public
c o m p a n yt r a d e do nt h e
Shenzhen Stock
Exchange
Mainland
China
Subcontracting
services
(production
partner)
2023 45 13,025 5.7
3. Shenzhen Chenmi
Technology
Co., Ltd.* ( 深
圳市辰米科技有
限公司)
The company is primarily
engaged in the design
and manufacture of
structural components
and molds for smart
home products,
consumer electronics
and medical products
Mainland
China
Structural
components
2018 60 10,395 4.6
4. Beigaozhi
Technology
(Shenzhen) Co.,
Ltd.* ( 北高智科
技（深圳）有限公
司)
The company is primarily
engaged in the
distribution of
electronic materials
Mainland
China
Electronic materials 2020 45 9,722 4.3
5. HongKong
Wingsing
International
Limited
The company is primarily
engaged in the
provision of supply
chain service
Hong Kong Logistics 2021 25 to 55 8,797 3.9
Total 58,276 25.7
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For the Year ended December 31, 2024
Rank Supplier Principal Business
Place of
Incorporation
Major Products/
Services Procured
by Us
Year of
Commencement of
Business
Relationship
Typical Credit
Term
Transaction
Amount
As
Percentage of
Our Total
Cost of Sales
Days RMB’000 %
1. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce (including
retail sales of
consumer products),
cloud computing,
advertising, digital
streaming and artificial
intelligence. It also
provides subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce platform.
United States Logistics and
warehousing
2018 Payment on
delivery
21,804 7.4
2. Supplier D The company is primarily
engaged in the
production of smart
products
Mainland
China
Subcontracting
services (whole
product
manufacturing)
2024 60 18,251 6.2
3. Shenzhen Chenmi
Technology
Co., Ltd.* ( 深
圳市辰米科技有
限公司)
The company is primarily
engaged in the design
and manufacture of
structural components
and molds for smart
home products,
consumer electronics
and medical products
Mainland
China
Structural
components
2018 60 11,234 3.8
4. Supplier E The company is primarily
engaged in precision
production and sales
of lightweight metal
structural components
Mainland
China
Structural
components
2023 45 9,953 3.4
5. HongKong
Wingsing
International
Limited
The company is primarily
engaged in the
provision of supply
chain service
Hong Kong Logistics 2021 25 to 55 9,313 3.2
Total 70,554 24.0
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For the six months ended June 30, 2025
Rank Supplier Principal Business
Place of
Incorporation
Major Products/
Services Procured
by Us
Year of
Commencement of
Business
Relationship
Typical Credit
Term
Transaction
Amount
As
Percentage of
Our Total
Cost of Sales
Days RMB’000 %
1 Supplier D The company is primarily
engaged in the
production and
assembly of smart
products
Mainland
China
Subcontracting
services
(production
partner)
2024 60 16,392 9.0
2 Supplier F The company is primarily
engaged in the
production and
assembly of smart
products
Mainland
China
Subcontracting
services (whole
product
manufacturing)
2021 30 10,802 6.0
3 Supplier G The company is primarily
engaged in the
production and
assembly of smart
products
Mainland
China
Subcontracting
services (whole
product
manufacturing)
2023 30 10,298 5.7
4A m a z o n T h e c o m p a n y i s a
multinational
technology company
primarily engaged in
e-commerce (including
retail sales of
consumer products),
cloud computing,
advertising, digital
streaming and artificial
intelligence. It also
provides subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce platform.
United States Logistics and
warehousing
2018 Payment on
delivery
13,090 7.2
5 Supplier H The company is primarily
engaged in the
production and
assembly of smart
products
Mainland
China
Subcontracting
services (whole
product
manufacturing)
2024 30 9,487 5.2
Total 60,068 33.1
To the best knowledge of our Directors, all of our five largest suppliers in each
year/period during the Track Record Period w ere Independent Third Parties. None of our
Directors, their respective close associates, or any Shareholder who, to the knowledge of
our Directors, owns more than 5% of our issued capital, had any interest in these suppliers
during the Track Record Period and up to the Latest Practicable Date.
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SUBCONTRACTING
We engaged certain subcontractors during th e Track Record Period, including both (i)
whole product manufacturers, to which we outsource the entire manufacturing processes of
certain products, and (ii) production partners, to which we outsource certain steps of the
manufacturing processes.
We engage whole product manufacturers primarily to supplement our production
capacities. For example, for certain non-core products, such as smart light bulbs and other
smart home appliances such as vacuum cleaner s that complement our product ecosystem,
over which we do not have sufficient capacity or in consideration of cost efficiency, we may
outsource such products to whole product manufacturers to meet customer demands. In
such cases, we design the product and solutions, formulate quality standards, and retain
ownership of the product’s intellectual property. The whole product manufacturers procure
raw materials based on our specific project requ irements and organize production according
to our standards. We purchase the finished pro ducts from these manufacturers for sale, and
we take measures such as inspections to ensure the product quality meets our standards.
We engage production partners primarily to complete certain non-core manufacturing
steps more cost efficiently, such as (i) surface mount technology process, where we engage
third parties to place electronic materials onto printed circuit boards; (ii) injection molding,
where we engage third parties to use our propr ietary molds to process plastic resin into
components with specified shapes; and (iii) pre- processing, where we engage third parties to
perform partial assembly of wires and com ponents into subassemblies. In such cases, we
typically ship the components or semi-finished products to the facilities of the
subcontractors, who will then complete the outsourced manufacturing steps and ship the
components or products back to us. We also conduct inspections during and after the
production process to ensure that these manufacturing steps meet our standards.
We carefully select subcontractors among a pool of reputable candidates. We evaluate
potential subcontractors in terms of, among ot her aspects, qualifications, technical skills,
product quality, workplace safety, and d elivery commitments. We require our
subcontractors to comply with our internal policies and closely monitor their
performance. In the event of any failure by our subcontractors to meet our internal
policies, we may cease to work with them or cl aim damages. We apply testing to ensure that
the sourced products meet our product specifications, quality standards, and customers’
expectations. We have generally mainta ined long-term relationships with our
subcontractors, and all of our subcontractors are independent third parties.
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The salient terms of the agreements with our representative whole product
manufacturers and production partners are set forth below:
Pricing: Products and parts will be supplied at the prices agreed in
purchase orders.
Delivery: Subcontractors are responsible for transporting products to
designated places and bearing the associated expenses and
costs.
Warranty period: Typically between one year to three years, depending on the
types of products and parts provided, unless otherwise
agreed between the parties.
Product liability: Whole product manufacturers generally indemnify us for
product liability resulting from defects of products
manufactured by them. Production partners generally
indemnify us for product liabilit y resulting from defects of
parts supplied by them.
Payment terms: Generally 45 to 60 days, and including but not limited to
individual arrangements such as partial advance payment
and the balance due upon delivery.
Duration and
termination:
Generally one year to three years, automatically renewed
once for one year to three years, unless terminated by
written notice.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our subco ntracting costs amounted to RMB11.0 million, RMB25.5
million, RMB19.3 million, RMB7.1 million and RMB20.3 million, respectively, which
accounted for 6.1%, 11.3%, 6.5%, 5.2% and 11.2%, respectively, of our total cost of sales
during the same periods. Our Directors confirm that we did not experience any shortage of
subcontractors during the Track Record Period. In addition, we did not receive any
material claims or complaints by our customers in respect of the quality of our products
manufactured or processed by our subcontractors, nor did we experience any material
breach in the provision of services by our subcontractors, which caused a material
disruption to our operation during the Track Record Period.
To the best knowledge and belief of our Directors, after making all reasonable
enquiries, none of our Directors or their close associates or any shareholder who owned
more than 5% of our issued and outstanding share capital as of the Latest Practicable Date
had any interest in any of the subcontractors of us during the Track Record Period. During
the Track Record Period, all subcontrac tors were Independent Third Parties.
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QUALITY CONTROL
We are committed to maintaining high level of quality and safety in our products and
services. We have designed and implemented stringent monitoring and quality control
systems to manage our manufacturing activities. Our quality control system encompasses
all aspects of our operations, including product design and development, sourcing and
procuring of raw material, parts and components, production, packaging, inventory
storage, delivery and after-sales services.
Our products and services are sold worldwide and are subject to different safety
standards and quality requirements depending on the sales destination and/or consumer
destination. We have also adopted the appropriate quality control system and engaged
independent product testing and certification organizations to test and certify our products
and services on the relevant standards of each target market. For example, our products
undergo certification to meet requirements in different markets to ensure compliance with
regional standards. We have also implemente d ISO9001 certification and require suppliers
to provide documentation certifying the non-use of harmful substances.
We have a set of quality control measures covering the raw material and packaging
material supply, product manufacturing, storag e, logistics and sales, to ensure our products
comply with relevant quality standards, laws and regulations. Our quality control measures
primarily consist of the following:
. Quality assurance team: We established a quality assurance team, which is
primarily responsible for establishing , improving and executing our quality
control measures to ensure that our products comply with national and
industry-wide quality standards.
. Quality inspection system: We established a comprehensive inspection system
consisting of (i) on-site inspection, which covers production processes and
manufacturing quality; and (ii) sampling a nd testing, which ensures products meet
our technical specifications and quality standards before delivery to customers.
. Standardized quality control rules: We have implemented comprehensive quality
control procedures covering all stages of production. Our quality control
processes include production line inspect ion with on-site quality checks during
manufacturing to identify and address issues early, finished product inspection
through random sampling and testing after production completion, and
documentation and approval procedures requiring quality verification before
warehouse entry.
. Customers’ feedback on product quality: We closely monitor customer feedback to
identify potential quality issues and implement timely improvements to our
products and manufacturing processes.
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. Supplier quality management: We conduct regular supplier evaluations based on
incoming material quality (requiring h igh pass rates for qualification-free
inspection status), production qualit y, and collaboration. For outsourced
production, we station quality personn el at supplier facilities and conduct
pre-shipment inspections.
. Subcontractor management: Prior to establishing business partnerships with
subcontractors, we conduct qualific ation assessments. For outsourced
production, we implement quality control processes including on-site
inspections at subcontrac tors’ facilities. Our quality assurance team conducts
sampling inspections of appearance, functionality and packaging according to
established standards before shipment. Products must pass these inspections to be
released, with any non-conforming ite ms handled according to our quality
management procedures.
As a result of our adherence to quality control procedures, we did not experience any
material sales returns or any material produc t liability or major legal claims due to product
safety and quality control issues, and we did not have any material product recalls during
the Track Record Period and up to the Latest Practicable Date. Our warranty term is
usually limited to defects or failure of pro ducts or services that do not meet the quality
standards as specified and agreed with our customers. In case of product failure within the
warranty period, we will arrange for repair or replacement of products and/or services
without extra charge. After the warranty period expires, we may provide maintenance and
repair services at a reasonable cost.
AFTER-SALES SERVICE
We believe that high-quality after-sales servi ce is integral to our brand reputation and
customer satisfaction. Our after-sales services have been developed and optimized alongside
our product portfolio growth to ensure users worldwide receive timely, effective, and local
market-oriented support.
In our core Japanese market, we provide service through three primary channels:
App-based contact and messaging, online text chat, and direct phone communication. All
Japanese customer support functions are handled by our internal team to ensure consistent
service quality and direct feedback collection. For our other global markets, including
Europe and North America, we provide a similar multi-channel service approach while
adapting to regional time zone differences. We maintain internal customer support teams
and selectively partner with business process outsourcing providers to ensure timely support
coverage across different time zones.
Our service network employs a network-b ased customer relationship management
system and our self-developed systems that enables us to efficiently record, track, and
manage user relationships. This system allows us to respond to customer needs promptly
and continuously improve user experience based on data-driven insights.
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We offer warranty services that vary by product type and market to comply with local
regulations and industry standards. Produc ts sold through our self-operated website
typically come with a 30-day no-reason return policy. For higher-value robot products,
after remote diagnosis by our R&D team, repai r services are provided by qualified repair
vendors in the respective sales regions. For s maller robot products, we typically resolve
issues through replacement shipping to ensure rapid resolution. For products sold through
Amazon VC, we are generally not responsible fo r product returns. However, under certain
circumstances, such as defective products, Ama zon may request refunds or replacements for
returned items, which may include return shipping costs, in accordance with the relevant
agreement. For products sold through Amazon SC, Amazon handles returns and exchanges,
while we cover the related costs under the Fulfillment by Amazon service.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material product recalls. In addition, during the Track Record Period and
up to the Latest Practicable Date, we have not received any customer complaints that have
materially and adversely affected our business operations. For the years ended December
31, 2022, 2023 and 2024 and the six months e nded June 30, 2024 and 2025, our after-sales
services amounted to RMB5.1 million, RMB13.7 million, RMB17.1 million, RMB6.0
million and RMB12.8 million, respectively. F or the years ended December 31, 2022, 2023
and 2024 and the six months ended June 30, 2025, the total sales of products returned to us
amounted RMB6.4 million, RMB11.6 million, RMB20.0 million and RMB11.9 million,
respectively, representing 2.3%, 2.5%, 3.3% and 3.0%, respectively, of our total revenue.
We believe that our overall return rates wer e generally in line with industry standards
during the Track Record Period.
We have implemented a systematic approach to continuously improve our products
based on after-sales feedback. We hold weekly after-sales synchronization meetings where
customer feedback is collected and discussed. O ur mobile application includes a dedicated
feedback entry point that channels informat ion to us. Customer support representatives
categorize issues before forwarding them to relevant R&D teams, and product managers
actively collect user feedback and communi cate with technical teams to implement
necessary optimizations. In addition, our service policies are regularly updated to align
with target market standards and all after-sal es service team members receive training on
product knowledge and customer communication to ensure consistent service delivery
across regions.
CUSTOMERS
We sell products to end consumers, retaile rs, and distributors. To the best knowledge
of our Directors, all of our five largest customers in each year/period during the Track
Record Period were Independent Third Partie s. None of our Directors, their respective
close associates, or any Shareholder who, to the knowledge of our Directors, owns more
than 5% of our issued capital, had any interest in these customers during the Track Record
P e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
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For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2025, our revenue generated from the five largest customers in each year/period during
the Track Record Period amounted to RMB 164.0 million, RMB229.3 million, RMB289.1
million and RMB211.8 million, accounted for 59.6%, 50.2%, 47.4% and 53.5% of our total
revenue for the respective periods. For the years ended December 31, 2022, 2023 and 2024
and the six months ended June 30, 2025, our revenue generated from the largest customer in
each year/period during the Track Rec ord Period amounted to RMB145.1 million,
RMB178.2 million, RMB218.6 million and RMB175.2 million, accounted for 52.8%,
38.9%, 35.8% and 44.2% of our total revenue for the respective periods.
The following table sets forth the details of our five largest customers in each
year/period during the Track Record Period:
For the Year ended December 31, 2022
Rank Customer Principal Business
Place of
Incorporation
Types of
Products Sold
Year of
Commencement of
Business
Relationship
Typical
Credit Term
Amount of
Revenue
As
Percentage
of Our
Total
Revenue
Days RMB’000 %
1. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce
(including retail
sales of consumer
products), cloud
computing,
advertising, digital
streaming and
artificial
intelligence. It also
provides
subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce
platform.
United States Home robotic
system products
and other smart
home products
2019 90 145,080 52.8
2. Customer A The company is
primarily engaged in
the manufacture of
electronic equipment
Japan Home robotic
system products
and other smart
home products
2020 Prepayment 8,828 3.2
3. Customer B The company is
primarily engaged in
the trading of
electronics
Japan Home robotic
system products
and other smart
home products
2017 15 3,930 1.4
4. Thames
Distribution
B.V.
The company is
primarily engaged in
the provision of
smart home
products and
consumer electronics
Netherlands Home robotic
system products
and other smart
home products
2022 30 3,382 1.2
5. WAKERS
INC.
The company is
primarily engaged in
the provision of
smart home services
South Korea Home robotic
system products
and other smart
home products
2019 Prepayment 2,765 1.0
Total 163,985 59.6
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For the Year ended December 31, 2023
Rank Customer Principal Business
Place of
Incorporation
Types of
Products Sold
Year of
Commencement of
Business
Relationship
Typical
Credit Term
Amount of
Revenue
As
Percentage
of Our
Total
Revenue
Days RMB’000 %
1. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce
(including retail
sales of consumer
products), cloud
computing,
advertising, digital
streaming and
artificial
intelligence. It also
provides
subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce
platform.
United States Home robotic
system products
and other smart
home products
2019 90 178,186 38.9
2. Customer C The company is
engaged in retail
and distribution of
IT products
Japan Home robotic
system products
and other smart
home products
2023 90 36,934 8.1
3. Customer D The company is
primarily engaged in
retail business
Japan Home robotic
system products
and other smart
home products
2023 Prepayment 5,783 1.3
4. FLH Co. Ltd. The company is
primarily engaged in
the provision of
customized smart
home solutions
Taiwan, the
PRC
Home robotic
system products
and other smart
home products
2021 Prepayment 4,379 1.0
5. Customer B The company is
primarily engaged in
the trading of
electronics
Japan Home robotic
system products
and other smart
home products
2017 15 4,008 0.9
Total 229,290 50.2
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For the Year ended December 31, 2024
Rank Customer Principal Business
Place of
Incorporation
Types of
Products Sold
Year of
Commencement of
Business
Relationship
Typical
Credit Term
Amount of
Revenue
As
Percentage
of Our
Total
Revenue
Days RMB’000 %
1. Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce
(including retail
sales of consumer
products), cloud
computing,
advertising, digital
streaming and
artificial
intelligence. It also
provides
subscriptions
services (such as
logistics and
warehousing) to the
participants of its
e-commerce
platform.
United States Home robotic
system products
and other smart
home products
2019 90 218,634 35.8
2. Customer C The company is
engaged in retail
and distribution of
IT products
Japan Home robotic
system products
and other smart
home products
2023 90 45,713 7.5
3. FLH Co. Ltd. The company is
engaged in the
provision of
customized smart
home solutions
Taiwan, the
PRC
Home robotic
system products
and other smart
home products
2021 Prepayment 13,435 2.2
4. Customer D The company is
primarily engaged in
retail business
Japan Home robotic
system products
and other smart
home products
2023 Prepayment 7,330 1.2
5. Customer E The company is
primarily engaged in
the wholesale of
electronics, smart
home devices, and
modern technology
products
Poland Home robotic
system products
and other smart
home products
2022 Prepayment 4,023 0.7
Total 289,135 47.4
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For the six months ended June 30, 2025
Rank Customer Principal Business
Place of
Incorporation
Types of
Products Sold
Year of
Commencement
of Business
Relationship
Typical Credit
Term
Amount of
Revenue
As
Percentage
of Our Total
Revenue
Days RMB’000 %
1 Amazon The company is a
multinational
technology company
primarily engaged in
e-commerce
(including retail sales
of consumer
products), cloud
computing,
advertising, digital
streaming and
artificial intelligence.
It also provides
subscriptions services
(such as logistics and
warehousing) to the
participants of its
e-commerce platform.
United States Home robotic system
products and
other smart home
products
2019 90 175,233 44.2
2 Customer C The company is engaged
in retail and
distribution of IT
products
Japan Home robotic system
products and
other smart home
products
2023 90 25,208 6.4
3 FLH Co.
Ltd.
The company is
primarily engaged in
the provision of
customized smart
home solutions
Taiwan, the
PRC
Home robotic system
products and
other smart home
products
2021 Prepayment 7,849 2.0
4 Customer F The company is
primarily engaged in
the sales and
distribution of
electronic and
electrotechnical
articles
Germany Home robotic system
products and
other smart home
products
2024 Partial prepayment
with the
balance settled
on a 60-day
credit term
2,396 0.6
5 Customer D The company is
primarily engaged in
retail business
Japan Home robotic system
products and
other smart home
products
2023 Prepayment 1,109 0.3
Total 211,795 53.5
Contracts with Customers
During the Track Record Period, we primarily entered into agreements with our
retailers and distributor s. For details of the salient terms of these agreements, please refer to
‘‘— Our Sales and Distribution Network’’ above in this section.
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Our Relationship with Amazon
We have cultivated our relationship with Amazon since 2018. We sell our products
through Amazon SC and Amazon VC. During the Track Record Period, we derived a
significant portion of our revenue from the sales to Amazon under Amazon VC and sales
conducted through online marketplace under Amazon SC. Therefore, Amazon has been and
continues to be an important sales channel for us. For the years ended December 31, 2022,
2023 and 2024 and the six months ended June 30, 2024 and 2025, revenue generated from
the sales through Amazon SC amounted to RMB79.8 million, RMB120.0 million,
RMB173.0 million, RMB62.7 million and RMB9 0.4 million, respectively, representing
29.1%, 26.3%, 28.4%, 22.8% and 22.8%, respectively, of our revenue. As we built our
presence in the market, in June 2019, we we re approached by Amazon to join Amazon VC
in Japan, which led to the establishment of our Amazon VC business relationship. For the
years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, revenue generated from Amazon VC amounted to RMB145.1 million, RMB178.2
million, RMB218.6 million, RMB112.4 m illion and RMB175.2 million, respectively,
representing 52.8%, 38.9%, 35.8%, 40.9% and 44.2%, respectively, of our total revenue.
The increases were mainly due to (i) our continued promotion and marketing efforts which
enhanced brand awareness; (ii) the expansion of our presence on Amazon across
international markets; (iii) the timely introduction of new products on Amazon; and (iv)
the continued enhancement of our home robotics system product lineup through both
upgraded iterations of existing products such as lock robots and smart hubs and
introduction of new product categories, which broadened our market reach and attracted
additional customer segments.
We target the same end users, i.e., Amazon’s online purchasers and shoppers, under
Amazon SC and Amazon VC for our products. Under Amazon SC, we sell products at retail
price to shoppers on Amazon marketplace directly while we use certain services offered by
Amazon. In addition, we also procure certain services from Amazon to support our
operations. These services primarily include f ulfilment and warehouse services as well as
marketing and advertising services related to our sales activities on Amazon, and cloud
computing services to support our overall IT i nfrastructure. For the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, our total
purchases from Amazon for such servi ces amounted to RMB52.7 million, RMB57.9
million, RMB84.3 million, RMB38.7 million a nd RMB44.8 million, respectively. The
details of the key terms of such services are set out below:
. Fulfilment and warehouse services: We utilize the FBA service in connection with
our sales on Amazon under Amazon SC. Under the applicable terms for this
service, Amazon stores our inventory in its fulfilment centers and handles order
picking, packing, shipping, as well as customer service and the processing of
customer returns for orders it fulfils. For these services, we pay Amazon (i)
per-unit fulfilment fees, which are charged when an order is shipped and vary
based on the product’s category, size tier, and shipping weight; and (ii) monthly
inventory storage fees. Our use of this service is also subject to our compliance
with Amazon’s policies on inventory preparation, including those for labeling and
packaging. Pursuant to the applicable policies, we may be eligible for
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reimbursement for inventory that is lost or damaged while under Amazon’s
control, such as when it is in an Amazon fulfilment center or being delivered to a
customer. For the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2024 and 2025, fees relating to the fulfilment and
warehouse services we procured from Amazon amounted to RMB15.5 million,
RMB16.3 million, RMB21.8 million, RMB7.9 million and RMB13.1 million,
respectively, representing approximately 8.6%, 7.2%, 7.4%, 5.8% and 7.2% of
our cost of sales for the respective periods.
. Marketing and advertising services: We use Amazon’s marketing and advertising
services to promote our products on Amaz on. These services comprise various
advertising solutions, such as sponsored product listings, which enhance the
visibility of our products within customer search results and on product detail
pages. By leveraging these tools, we seek to increase traffic to our product listings
and drive sales on the Amazon platform. U nder the applicable terms, we pay fees
based on Amazon’s own measurements of advertising performance, such as the
number of clicks or impressions our advertisements receive, and we must raise any
fee-related claims within 60 days of t he charge. We are responsible for all
activities under our advertising account and must ensure our advertising materials
comply with Amazon’s policies and applicable laws. The terms provide that
Amazon may terminate for convenience with 15 days’ advance notice, and may
suspend or terminate our use of the services immediately for cause, such as for a
material breach. Amazon’s liability to us is limited to the total fees we paid in the
six-month period prior to a claim. Furthermore, we are required to indemnify
Amazon against certain third-party claims a rising from our advertising content or
our use of the service. For the years ended December 31, 2022, 2023 and 2024 and
the six months ended June 30, 2024 and 2025, fees relating to the marketing and
advertising services we procured from Amazon amounted to RMB29.3 million,
RMB28.2 million, RMB39.7 million, RMB18.3 million and RMB25.0 million,
respectively, representing approximately 28.7%, 20.6%, 23.1%, 25.8% and 23.4%
of our selling and distribution expe nses for the respective periods.
. Cloud computing services: We utilize AWS as our primary cloud computing service
provider for our overall IT infrastructur e. Our utilization of AWS focuses on core
services for application management to orchestrate our backend services, scalable
data storage for files such as firmware updates, and managed database operations
for structured data like user profiles. Purs uant to the applicable service terms, fees
are generally charged on a monthly basis based on our usage. Under the terms,
AWS is required to implement reasonable and appropriate security measures. We
a r ea b l et os p e c i f yt h eA W Sr e g i o nw h e r eour content is stored, and AWS will not
access our content or move it from our s elected region except as required for
service provision or by law. We are responsible for the proper configuration of the
services and for the security and backup of our own content. Either party may
terminate the agreement for an uncured material breach. We may terminate for
any reason at any time, while AWS may terminate for convenience with at least 30
days’ notice. AWS’s liability is limited to the fees we paid for the relevant service
in the 12 months prior to a claim, and the terms exclude AWS’s liability for any
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loss of our data or for indirect damages. We are also required to indemnify AWS
for claims arising from our content or our use of the service. For the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, fees incurred for our use of AWS am ounted to RMB7.8 million, RMB13.4
million, RMB22.8 million, RMB12.5 million a nd RMB6.8 million, respectively,
representing approximately 12.6%, 15.0%, 20.4%, 22.0% and 11.6% of our
research and development expenses for the respective periods.
Under Amazon VC, we sell products directly to Amazon at negotiated wholesale
prices, which may be lower than our retail price. We may offer additional discounts during
major promotional events based on our negotiations with Amazon, who then sells our
products to end consumers under its own accounts. We employ a channel separate strategy
to prevent channel competition between our Amazon SC and Amazon VC channels within
the same regional marketplace. Consequen tly, from an end consumer’s perspective, a
specific product is typically offered throu gh either the SC or the VC channel in a given
region, but not concurrently through both.
Our strategic channel selection, when it comes to using either Amazon SC, Amazon VC
or both, is tailored to the specific characteris tics of each market, including its scale and our
brand’s local influence. In Japan, our large st market during the Track Record Period, we
employ a hybrid model utilizing both A mazon SC and Amazon VC channels. We
commenced sales in Japan in 2017, and our e arly market entry has provided us with
profound insights into local consumer preferences and home environments. This has been
instrumental in establishing and solidifying our market leadership. Our strong brand
recognition and market position in Japan affo rd us the strategic flexibility to leverage the
high-margin, high-control Amazon SC channel while also benefiting from the scale and
resource support of the Amazon VC channel. In Australian market where we have a
relatively smaller presence, we utilize onl y the Amazon VC channel, not the Amazon SC
channel. This approach allows us to leverage Amazon’s extensive resources and reduces our
need for local operational investment. For markets with significant growth potential, such
as Europe and North America, we initially focused on the Amazon SC channel over the
Amazon VC channel to retain greater flexibilit y and control over our sales and marketing
strategies. As our business has scaled in the se markets during the Track Record Period,
particularly in Europe, we have adjusted our approach accordingly. In October 2025, we
commenced sales through the Amazon VC chann el in Europe to further capitalize on our
growing revenue base and accelerate market penetration.
From an end consumer’s perspective, purchases made through Amazon VC and
Amazon SC are presented differently on Amazon’s websites. Where our products are sold
through the Amazon VC channel, such as in Australia, the product detail page identifies
Amazon as the seller on the product page. Where our products are sold through the
Amazon SC channel, the product page identifies us, under our brand or storefront name, as
the seller. Accordingly, in Japan, where w e utilize both the Amazon VC and Amazon SC
channels, an end consumer can ascertain the purchasing channel by referring to the seller
information on the product detail page. If it ide ntifies Amazon as the seller, the customer is
purchasing under the Amazon VC channel; whereas if it identifies us, under our brand or
storefront name, as the seller, the customer is purchasing under the Amazon SC channel.
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We have entered into framework agreem ents with Amazon for the SC and VC, the
salient terms of which are set out as follows:
Amazon SC Amazon VC
Credit control and
settlement
arrangement:
Amazon generally remits to us via
direct deposit our available balance
within 14 days after customers’
order delivery and payment receipt
n e to fa n ya p p l i c a b l ef e e s
associated with using services
provided by Amazon.
Amazon typically makes payment via
direct deposit within 60 days after
the end of the month in which the
invoice is issued net of any
applicable fees associated with
using services provided by Amazon.
International logistics
arrangements:
We arrange shipping of products to
Amazon’s Fulfillment Centers. We
retain ownership of the products
until the products are sold and
delivered to the customers. We
generally bear the risk of damage or
loss of the products.
We deliver the products to the
Amazon-designated carrier.
Ownership and risk of damage or
loss for the products shall pass to
Amazon when we deliver the
products to such carrier.
Customs duty: We bear the customs duties imposed
on our products.
Amazon bears the customs duties
imposed on our products.
Fulfillment and
warehouse services:
We typically utilize Amazon’s
fulfillment and warehousing
services, where Amazon ships units
from their warehouses to our
customers on our behalf.
Amazon is responsible for
warehousing and fulfillment
services.
Product return: Our customers can generally return
the purchased products within 30
days of receipt from Amazon.
Under normal circumstances, Amazon
assumes responsibility for product
returns.
According to the Frost & Sullivan Report, the above arrangements and terms under
Amazon SC and Amazon VC are in line with industry norms.
Reasons for Cooperation with Amazon
According to the Frost & Sullivan Report, the favorable nature of internet,
particularly the potential unlimited geogra phic coverage, promptness and inclusivity,
allows e-commerce marketplace to be an incre asingly important sales channel in the smart
home industry and in particular, the home robot industry and home robotic system
industry. We started selling our products th rough online channels in 2017, and have been
placing heavy emphasis on online sales channels ever since then.
According to the Frost & Sullivan Report, the global e-commerce market is dominated
by a few major platforms, with Amazon being the largest in many of our key markets.
According to the Frost & Sullivan Report, i n terms of sales amount in 2024, Amazon
accounted for more than 35%, 15% and 35% of to tal e-commerce sales in the United States,
Europe and Japan, respectively, significantly outperforming other local e-commerce
platforms in each respective market. In North American and European markets, Amazon
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holds a dominant position, making it a critical channel for any brand seeking significant
market penetration. Similarly in Japan, our largest market, Amazon, represents a major
portion of the e-commerce activity.
Vendors of home robots in general and home robotic system products in particular
primarily sell products through Amazon in our key markets. According to the Frost &
Sullivan Report, a significa nt percentage of online sales from the top smart home
appliances are generated from Amazon and Amazon is the largest e-commerce marketplace
in many of our target markets. As such, Amazon is the most critical e-commerce
marketplace for vendors of smart home devices to conduct online retail business.
Amazon’s large and diverse customer base enables business vendors to achieve more
market exposure from those who regularly shop online. According to the Frost & Sullivan
Report, for market players who focus on online sales, Amazon, in most cases, is their
primary online retail channel. Therefore, it is an industry norm for market players like us to
have Amazon as a significant online retail channel. In addition, according to the Frost &
Sullivan Report, Amazon’s well-developed r eview system and user-friendly website
interface help Amazon continuously expand its customer base. Through our relationship
with Amazon, particularly through Amazon VC, we can access premium marketing
resources and have gained valuable market insight and marketing support through our
continuous communications with the representatives from Amazon. As such, we believe we
are able to reach more customers and enhance our brand recognition on Amazon than
through other channels.
Considering the aforementi oned advantages of Amazon, as well as the benefits of
utilizing various services provided by Am azon for our products that are sold on its
platform, we generally use Amazon’s official services. For instance, Amazon’s extensive
warehousing and logistics network enables us t o experience cost efficiencies in logistics,
while the use of FBA service offers advantages in terms of timeliness and cost-effectiveness.
Similarly, compared to other promotional services, utilizing Amazon’s promotional services
for sales on its platform narrows the gap betwee n marketing activities and actual purchase
conversions, which creates a smoother and mo re direct path from advertising efforts to
completed sales, thereby enhancing the efficiency and effectiveness of advertising
expenditures.
While maintaining our strong presence on Amazon, we have been actively diversifying
our sales channels to include our self-operate d website, other e-commerce marketplaces and
retailers and distributors to expand our sale s channels and mitigate reliance on any single
platform. With respect to the services provided by Amazon, as long as our relationship with
Amazon does not materially and adversely change or terminate, we expect to continue to
have access to these services. Meanwhile, for services such as fulfilment and warehouse
services as well as marketing and advertisin g services provided by Amazon, we believe that
we will be able to obtain comparable third-part y alternatives within a reasonable timeframe
and at a reasonable cost.
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Well-established and Mutually Beneficial Relationship with Amazon
We have maintained a stable business relat i o n s h i pw i t hA m a z o nf o ra p p r o x i m a t e l y
seven years, having commenced selling our pr oducts to retail end consumers through
Amazon SC in 2018 and joining Amazon VC in 2019.
Our Directors consider that the interests of our Group and Amazon align.
. To us: W ea r ea b l et oi n c r e a s eo u rs a l e sb yl e v e r a g i n gt h eh i g hu s e rt r a f f i co n
Amazon. When we list our products on Amazon, we have access to a large pool of
consumers, which increases our products’ exposures to end consumers. Besides,
Amazon offers us convenient back-end supports and save our costs and time in
logistics, inventory management and customer services. Thus, we are able to
devote more time and resources in brand building and product development.
Moreover, since Amazon is one of the biggest and most trusted global e-commerce
websites and it operates its online marke tplaces worldwide, collaboration with
Amazon helps us expand our customer reach in different countries. We have been
a top-rated seller on Amazon since 2018, leveraging our high-quality products and
extensive marketplace experience. Our strong track record was recognized when
Amazon awarded us the Best Partner Award, and the Grand Prize Best Partner
Award.
. To Amazon: Amazon provides an open e-commerce marketplace for third-party
vendors/sellers and offers end consumers a broad selection of products. We
believe our innovative home robotic system products help expand and upgrade
Amazon’s product offerings in the smart home category, thereby enhancing their
marketplace appeal to tech-savvy end consumers. In addition, our product quality
and positive customer feedback contribute to Amazon’s reputation for offering
high-quality products to end consumers.
We believe our relationship with Amazon wil l not materially and adversely change or
terminate in the foreseeable future. We have maintained stable relationship with Amazon
since 2018. Our revenue generated from Amazon has been increasing steadily since we
began operations. During our cooperation with Amazon, we have complied with Amazon’s
terms and conditions in all material aspects. During the Track Record Period and up to the
Latest Practicable Date, we did not have any material breach of our agreements with
Amazon, or any suspension or termination of our online stores on Amazon. We endeavor to
ensure compliance with Amazon’s terms and conditions in the future. As such, we do not
foresee any material adverse change in ou r relationship with Amazon. We maintain
transparent and smooth communication channels with Amazon mainly through designated
vendor managers and account managers.
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We believe such communications with Amaz on have enabled us to address issues that
arose from our cooperation with Amazon efficiently and enhanced mutual understanding
between Amazon and us. We were invited to join Amazon VC in 2019. Our products have a
proven track record of sales on Amazon e-commerce marketplace as evidenced by the
significant growth of our sales volume on Amazon during the Track Record Period. We
believe we can maintain steady growth in terms of sales revenue from Amazon, and on the
other hand, we believe Amazon is able to benefit from our technologically advanced and
reliable product offerings, which help enhance their product catalog and appeal to
tech-savvy end consumers. Therefore, we believe our business relationship with Amazon
will remain stable.
Having considered the factors mentioned above, our Directors are of the view that the
likelihood that our relationship with Amazon w ill materially adversely change or terminate
is remote.
Our Directors are of the view that in the unlikely event that our relationship with
Amazon materially adversely changes or terminates, we would be able to cooperate with
other e-commerce marketplaces readily at similar terms, having considered that:
. we have established business relationships with other e-commerce marketplaces
and retailers during the Track Record Period in addition to Amazon. Revenue
generated from channels other than Am azon increased from RMB49.7 million for
the year ended December 31, 2022 to RMB218.3 million for the year ended
December 31, 2024, representing a CAGR of 109.6% between 2022 and 2024.
Similarly, revenue generated from channels other than Amazon increased from
RMB99.8 million for the six months ended June 30, 2024 to RMB130.7 million for
the six months ended June 30, 2025.
. we have been continuously diversifyin g our online sales channels to include
non-Amazon platforms, as well as our own website.
. we have a retail sales and marketing team focusing on expanding our cooperation
with chain retailers and d istributors. According t o the Frost & Sullivan Report,
besides Amazon, online stores of traditional retailers are important online
channels for home robots and home robotic system productors vendors. Since
traditional retailers are continuously developing their online sales channels, they
actively collaborate with home robot brand owners, so that they can enrich their
online product portfolio; and
. our strong design and R&D capabilities ena ble us to constantly launch innovative
products to meet the evolving needs of our customers, making our products highly
attractive to end users.
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Ability to Mitigate Reliance on Amazon a nd Sustainability of Our Business
Mitigation of Reliance on Amazon as a Key Customer and a Sales Channel
Our business grew rapidly during the Tra ck Record Period. According to the Frost &
Sullivan Report, we ranked first in Japan’s h ome robotic system industry in terms of
r e v e n u ei n2 0 2 4 .W i t ha na i mt os u s t a i no u rg r o w t h ,w eh a v et a k e ni n i t i a t i v e st od i v e r s i f y
our sales channels and reduce our reliance on Amazon.
We continuously make efforts to enhance customer loyalty and enlarge our customer
base. Through the years, we believe we have gained credibility and trust from end
consumers and wide market recognition. We believe the popularity and recognition of our
products are due to high quality, our innovative and aesthetic product design, and our
product development capabilitie s. Our products generally have positive customer reviews.
We believe customers who are satisfied with our products are likely to make repeat
purchases from us and recommend our products to other users through word of mouth.
According to the backend data of our SwitchBot App, approximately 55.9% and 35.7% of
all users who had registered with our SwitchBot App as of the Latest Practicable Date had
connected two or more, and three or more, of our products with the SwitchBot App,
respectively. These figures have increased steadily from approximately 48.2% and 27.7% as
of December 31, 2022, respectively, demonstrating our strong customer retention and
increasing product adoption across our ecosystem. We believe our ‘‘SwitchBot’’ brand has
been receiving increasing recognition in the b roader home robot market, in particular in the
home robotic system industry.
To further improve user experience and bring potential business opportunities, we
developed the SwitchBot App, which serves as the central control interface for our
products, allowing users to control and monitor their smart devices. We believe our
SwitchBot App makes our customers’ daily life more convenient, efficient and enjoyable,
which in turn helps enhance the attractiveness of our product offering and expand our user
base. We also attend international trade fairs and participate in renowned international
product design competitions to exhibit our work, collect potential customers’ feedback on
our ideas, and enhance our brand awareness to attract potential customers.
Additionally, although Amazon was our largest sales channel during the Track Record
Period, we are not bound to sell our products exclusively through Amazon. We maintain
flexibility in selecting our sales partners and ar e expanding our sales channels. Starting from
2019, we developed relationships with reno wned chain retailers and other e-commerce
marketplaces. Leveraging our successful e-co mmerce operation experiences, accumulated
logistic service resources and increased huma n and financial resources, we are determined to
further diversify our sales channels, in particular through channels other than Amazon.
We are also expanding our sales channels with a particular focus on increasing sales on
our self-operated website. Our self-operated w ebsite has experienced steady growth during
the Track Record Period, with revenue increasing from RMB20.5 million in 2022 to
RMB88.7 million in 2024, representing a CA GR of 108.2%. Revenue generated from our
self-operated website increased from RMB35 .8 million for the six months ended June 30,
2024 to RMB60.6 million for the six months ended June 30, 2025. Our other online
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marketplaces, which form part of our DTC channels alongside Amazon SC and our
self-operated website, have also experienced rapid growth during the Track Record Period,
with revenue increasing from RMB0.9 million in 2022 to RMB42.0 million in 2024,
representing a CAGR of 581.4%. Revenue generated from these other online marketplaces
increased from RMB21.8 million for the six months ended June 30, 2024 to RMB26.5
million for the six months ended June 30, 2025. We believe well-known brands generally
have greater independence from third-party sales channels. We have continuously improved
our product design by incorporating customers’ feedback to improve customer satisfaction
and to improve our brand recognition. Additionally, we have been working to increase our
sales to other large national retailers other t han Amazon and distributors. During the Track
Record Period, we have successfully developed and expanded our relationship with retailers
in Japan and North America.
If there should be any unforeseen circumstances, under which we are unable to sell
products through Amazon, including suspension of our accounts or withholding our sales
proceeds, we will initiate communication with Amazon through account manager or vendor
manager in a timely manner. At the same time, we will form a working group comprising
our Amazon product manager, legal and compliance officer, chief financial officer and
executive Directors to start internal review on the situation. We will consult with
professional consultant if necessary. A report on clarification or rectification will be
submitted to Amazon to resume trading of ou r accounts or release of our sales proceeds. If
the situation persists and the problem cannot be solved in a reasonable period of time, we
will retrieve our products from Amazon’s warehouse and re-sell the products on
non-Amazon channels. Should Amazon withhold our sales proceeds and such
withholding results in working capital diffi culties, we will seek alternative funding
sources, such as banking facilities, to repl enish our working capital. Leveraging our
successful e-commerce operational experience, a ccumulated logistics service resources, and
increased human and financial resources, we believe that we are capable of redirecting the
sales of products currently sold through Amazon to non-Amazon channels in a timely
manner and under similar terms.
Mitigation of Reliance on Amazon’s Operational Services
We procure a suite of services from Amazon to support our business under Amazon SC
and Amazon VC. The Directors believe that the decision to use these services is
commercially and strategically beneficial. G iven Amazon’s leading market share in global
e-commerce, utilizing its integrated services o ffers significant advan tages. However, the
Directors are of the view that this reliance is manageable and does not pose an undue risk to
the sustainability of our business, as we retain th e flexibility to switch t o alternative service
providers in a timely fashion and at a reasonable cost. We have formulated the following
strategies to mitigate our reliance on t he services we procure from Amazon:
. Fulfilment and warehouse services: In terms of fulfillment and warehouse services
we use for our sales through Amazon, we utilize the FBA service for its
advantages in cost and timeliness stemmi ng from Amazon’s extensive logistics
network. However, we also maintain contact with third-party overseas warehouse
service providers in our major markets. In the event we cease to use FBA service,
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we can utilize these providers and ship pr oducts directly to en d consumers under
the Fulfilled-by-Merchant (FBM) mode l. While the scope of service coverage
offered under the FBA and FBM models is generally comparable, the pricing
structure of FBA is typically more competitive due to the highly integration with
Amazon marketplace. Nevertheless, the FBM model has advantages, including: (i)
we maintain greater control over logistics and inventory management, allowing
for the flexible adjustment of strategi es based on order volume to effectively
optimize costs; (ii) multiple sales channels within the same geographic market can
share supply chain resources, thereby amortizing comprehensive logistics and
warehousing costs; (iii) we are able to autonomously and uniformly manage
returns and exchanges; and (iv) direct engagement with end consumers facilitates
more effective brand management and customer relationship maintenance.
During the Track Record Period, we utilized the FBM model for sales
conducted through our Amazon SC channels.
. Marketing and advertising services: We use Amazon’s on-platform marketing and
advertising services because they are hig hly effective for customer conversion due
to their proximity to the point of sale. Should we need to replace these services, we
are able to obtain comparable or more favorable terms from alternative
advertising providers utilizing off-platf orm marketing and advertising channels
such as search engines and social media mar keting to attract consumers and direct
them to our Amazon product pages via external links. While the operational
mechanics of Amazon’s on-platform ad vertising and off-platform marketing
differ, we believe both are similarly effective in driving customer traffic and
conversion. While Amazon’s on-platform services are designed to capture existing
customer demand and influence purchasing decisions close to the point of sale,
off-platform channels such as search engines and social media are used to build
broader brand awareness and drive new customer traffic to our product listings on
Amazon as opposed to only focusing on potential customers already on the
Amazon platform. As a result, while Am azon’s on-platform advertising can be
effective due to strong user purchase inte nt, off-platform channels can sometimes
provide more cost-efficient ways to reach wider audiences. In addition, we have
experience in successfully managing such off-platform marketing and advertising
activities.
. Cloud computing services: We utilize AWS for our primary cloud infrastructure,
taking into account factors such as its global market position, reliability,
scalability, and comprehensive serv ice offerings, which we believe are
well-suited to support our global operations and the data storage and
processing needs of our products. Furthermore, our integration with the
broader Amazon ecosystem provides operational synergies. We conducted a
thorough assessment of several other large-scale, global cloud service providers
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and are of the view of that, in light of the highly competitive nature of the cloud
computing services market, comparable alt ernatives that can meet our operational
requirements are available. Our assessment concluded the following:
(i) Service quality and coverage: While AWS offers certain advantages in the
breadth of its global node coverage, alternative providers have sufficient
service capabilities and infrastructu re within our core markets, including
Japan, Europe, and North America. T he service stability, data transfer
efficiency, and technical support responsiveness offered by these alternatives
are sufficient to support the operational needs of our existing product
portfolio and systems.
(ii) Commercial terms: Based on our assessment, co mparable services are
available from alternative provider so nc o m m e r c i a lt e r m s ,i np a r t i c u l a r ,
service fees, that are no less favorable than those of our current
arrangements.
(iii) Migration feasibility: Our current use of AWS is concentrated on application
management, data storage, and database operations, all of which are based
on common industry standards and do not present a risk of technical vendor
lock-in. We have assessed the process for migrating to an alternative provider
and estimate that a full migration could be completed at a reasonable cost.
To further minimize any potential di sruption, such a migration could be
e x e c u t e di np h a s e s .
Therefore, our choice to continue using AWS is a strategic decision based on its
leading capabilities in areas such as global edge node depl oyment and multi-region
disaster recovery, which better support our potential future expansion into new and
emerging markets. Given that we are able to switch to alternative providers in a timely
and cost-effective manner in the unlikely event of a service disruption or termination of
the agreement with AWS, our Directors believe that our reliance on AWS is
manageable, commercially driven, and does not pose a material risk to our business
continuity.
Based on the availability of these viable alte rnatives for fulfilment, marketing, and
cloud computing services, our Directors are of the view that our reliance on Amazon’s
services is manageable and does not pose a m aterial risk to the sustainability of our
business.
Sustainability of Our Business
According to the Frost & Sullivan Report, t he outlook for the global home robotic
system industry remains positive, with total market share in terms of retail sales forecasted
to reach approximately RMB70.7 billion by 2 029, representing a CAGR of 64.2% between
2024 and 2029, primarily attributable to the sustainable growth in the demand for
high-quality home automation experience, the continuous technology advance achieved in
the IoT networks and the more mature applications of related technologies that enhance the
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performance of home robots. Our Directors believe that we will be able to leverage our
competitive strengths to capitalize on the increasing market demand for home robotic
system products in particular and home robots in general.
Despite our current reliance on Amazon, in light of (i) our well-established and
mutually beneficial business relationship with Amazon and our proven track record of
well-performing and compliant operations on Amazon; (ii) Amazon’s inclusiveness as an
open e-commerce marketplace; (iii) our flex ibility and efforts in expanding our sales
channels; (iv) our growing customer base and our continuous effort to attract potential
customers; (v) our strong brand image and innovative product portfolio that attracts
interests from customers; and (vi) our capab ility to maintain our business in light of the
positive outlook for the market, our Directors consider that our business is, and will
remain, sustainable.
As disclosed in the section headed ‘‘Busin ess — Our Sales and Distribution Network —
Overview’’ in this prospectus, the breakdown of our Group’s revenue by channel showed
that the portion of the revenue generated f rom Amazon (for both Amazon VC and Amazon
SC) to our Group’s total revenue decreased from approximately 81.9% for the year ended
December 31, 2022 to approximately 64.2% for the year ended December 31, 2024 and
accounted for approximately 67.0% for the six months ended June 30, 2025. Such overall
decreasing trend was recorded during a perio d when our Group’s revenue increased from
RMB274.6 million for the year ended Decemb er 31, 2022 to RMB609.9 million for the year
ended December 31, 2024 and reached RMB396.3 million for the six months ended June 30,
2025. In other words, our Group’s sales through channels other than Amazon had grew at a
faster rate than the rate of increase of our Group’s total revenue. These results have
demonstrated the effectiveness of our plan to mitigate our reliance on Amazon and the
sustainability of our business. Based on the foregoing, our Directors are of the view that our
plan to mitigate our reliance on Amazon, if continues to be carried out effectively, can
reduce our reliance on Amazon and that the sustainability of our business does not unduly
rely on Amazon.
B a s e do n( i )t h er e v i e wo fo u rC o m p a n y ’ sfinancial performance which reflects a
decreasing trend in the percentage of sales derived by Amazon during the Track Record
Period; and (ii) the discussion with the management regarding their plan to reduce our
Company’s reliance on Amazon and the implementation of such plan, nothing has come to
the attention of the Joint Sponsors which cause them to cast doubt on the reasonableness of
our Directors’ view that our Company’s p lan to mitigate its reliance on Amazon, if
continues to be carried out effectively, ca n reduce its reliance on Amazon and that the
sustainability of its business does not unduly rely on Amazon.
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MARKETING AND PROMOTION
Our marketing approach focuses on creating viral, shareable content that leverages our
customers as marketing ambassadors rather than relying primarily on paid media. This
strategy generates organic growth through word-of-mouth and social media engagement,
allowing us to operate with a relatively le an marketing team and budget compared to
competitors of similar scale. We emphasize cr eating memorable content that resonates with
users, highlighting product experience and user stories, and targeting specific communities
and influencers who can amplify our message.
We have a professional sales and marketing team with extensive industry experience
and excellent business development skills. As of the Latest Practicable Date, our operation
and marketing team consisted of 151 personnel. We seek to explore the use cases of our
products through maintaining and building relationships with our existing or new
customers. To achieve this, we adopt multi-faceted marketing initiatives, including
industry exhibitions, digital marketing, content marketing, search engine marketing and
advertising campaigns, among others. For the years ended December 31, 2022, 2023 and
2024 and for the six months ended June 30, 2 024 and 2025, our selling and distribution
expenses were RMB102.1 million, RMB136.7 million, RMB171.9 million, RMB71.0 million
and RMB106.8 million, respectively, represe nting 37.2%, 29.9%, 28.2%, 25.8% and 27.0%
of our revenue for the same periods, respectively.
We have built a strong brand identity emphasizing intelligence and innovation,
simplicity in design and user experience, premium quality, and our interconnected product
ecosystem. We focus our brand building on specific consumer segments rather than broad
mass-market awareness, allowing for more e fficient resource allocation and targeted
messaging. Our target demographics and specific consumer segments primarily comprise
end consumers who are highly interested in innovation, technological advancements, smart
home solutions, and advanced consumer electronics designed to enhance their quality of
life.
Digital channels form the core of our marketing strategy. We maintain an active
presence across social media platforms, partic ularly on visual platforms like Instagram and
YouTube. We create high-quality content showcasing product use cases and benefits,
including videos, user testimonials, and educational content. We also invest in creating and
nurturing user communities, encouraging customers to share their experiences online.
While digital marketing is our primary focus, traditional marketing plays a strategic
role. We maintain relationships with tech and lifestyle media outlets for product reviews
and feature stories. We participate in select ed industry events and trade shows in our key
markets. Through partnerships with premium retailers, we secure in-store placement and
showcase opportunities.
We adapt our marketing strat egies to different regional markets. In Japan, our most
mature market, we employ both digital and traditional approaches, leveraging our strong
brand recognition. For Europe, we employ market-specific adaptations, working with local
media. In North America, we focus primarily on e-commerce channels and influencer
marketing.
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Our promotional strategy includes seasonal promotions aligned with major
e-commerce events and seasonal occasions. We develop specific promotions for
e-commerce platforms, our direct website, and retail partners. Our promotional tactics
include product bundling, limited-time disc ounts, early adopter incentives, referral
programs, and subscription models with promotional pricing.
We measure marketing effectiveness through among others, data-driven approaches,
tracking customer acquisition costs, customer journey attribution, return on investment
analysis, and lifetime value calculations. Our marketing team works closely with operations
and finance to ensure marketing investments align with overall business objectives. For
international influencer campaigns, we implement formal tracking and reporting processes,
with partners providing performance reports including engagement metrics and conversion
data.
OVERLAPPING OF CUSTOMER AND SUPPLIER
To the best knowledge and belief of our Di rectors, for the years ended December 31,
2022, 2023 and 2024 and the six months ended June 30, 2025, we sourced certain services
from Amazon, which was our largest customer in each period during the Track Record
Period. During the Track Record Period, we generated revenue from the sales of our home
robotic system products to Amazon. At th e same time, we used the fulfillment and
warehouse services offered by Amazon in connection with our sales made using its
e-commerce platform, for which we paid the relevant service fees.
As confirmed by our Directors, (i) negotiations of the terms of our sales to and
purchases from the overlapping customer and supplier were conducted on an individual
basis and the sales and purchases were neither inter-connected with nor inter-conditional
upon each other; and (ii) the major terms of transactions with the overlapping customer and
supplier were similar to those with our other cus t o m e r sa n ds u p p l i e r sa n dw e r ei nl i n ew i t h
normal commercial terms.
The table below sets forth the revenue and purchases attributable to Amazon during
the Track Record Period.
For the years ended December 31
For the
six months
ended
June 30,
2022 2023 2024 2025
Revenue (RMB’000). . . . . 145,080 178,186 218,634 175,233
P e r c e n to fo u rt o t a l
revenue (%) ......... 5 2 . 8 3 9 . 0 3 5 . 8 4 4 . 2
Purchases (RMB’000) . . . . 15,541 16,337 21,804 13,090
P e r c e n to fo u rt o t a l
purchase (%) ........ 8 . 2 7 . 7 6 . 0 6 . 3
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COMPETITION
We face competition from a number of companies that provide products similar to
ours. According to the Frost & Sullivan Report, the competition in the global home robotic
system industry has gradually intensified i n recent years. At present, some major market
players have accumulated high levels of financial, technological and marketing resources
and may be able to devote greater resources to the development, promotion, sales and
support of their platforms in offering products and services. We mainly compete with other
providers of home robotic system products in markets where we operate on product price,
quality, industry experience, technology, sale s channel and brand awareness. The key entry
barriers to enter into home robotic system industry include, among others, (i) technical
architecture barriers, (ii) ecosystem constr uction barriers, (iii) product development
barriers, and (iv) brand reputation barriers. For details of such barriers, please refer to
the section headed ‘‘Industry Overview’’ in this prospectus.
According to the Frost & Sullivan Report, the global home robotic system industry is a
rapidly evolving sector with significant growth potential. As of 2024, the market size
reached RMB5.9 billion, and the market size is projected to reach RMB70.7 billion, with a
CAGR of approximately 64.2% from 2024 to 2029.
In this competitive landscape, we hold a unique position as a company that has
achieved comprehensive product deployment of home robotic systems across wide-ranging
home living scenarios as of the Latest Pract icable Date, according to Frost & Sullivan
Report. According to Frost & Sullivan Report, we ranked first globally among providers of
home robotic systems in terms of retail sales in 2024. In addition, we held leading positions
in multiple product categories in terms of re tail sales in 2024. For further details on the
competitive landscape of our industry, please see the section ‘‘Industry Overview’’ in this
prospectus.
Our Directors foresee our competitive strengths will solidify and further enhance our
business with the implementation of our strategies. Please refer to the paragraphs headed
‘‘Competitive Strengths’’ and ‘‘Business Str ategies’’ above in this section for further
information. Coupling with our competitiven ess and the potential increase in demand for
home robotic system products in the global ma rket, particularly in Japan, Europe, and
North America, our Directors believe we w ill be able to maintain our strong market
position notwithstanding the increasing competition we face in the home robotic system
industry.
SEASONALITY
Our financial condition and results of operations are subject to seasonal fluctuations.
We typically carry out more sales and marketing activities before and during holiday
seasons and other traditional festivities in the regions we operate in order to capture more
sales opportunities.
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We typically have increased sales before and during these holiday seasons, festivals and
events. Our sales generally peak during the fourth quarter, driven by major shopping events
including Amazon Big Deal Day, Black Friday, and end-of-year holiday shopping seasons
across our markets.
As a result, for the years ended December 31, 2022, 2023 and 2024, revenue generated
in the fourth quarter accounted for 32.6%, 30.0% and 26.1% of our total annual revenue,
respectively. This seasonality pattern requir es us to carefully manage our inventory levels,
production capacity, and marketing resources to meet anticipated demand during peak
seasons while avoiding excessive in ventory during slower periods.
PATH TO SUSTAINABILITY
We have demonstrated a clear trajectory tow ard sustainable profitability. During the
Track Record Period, we achieved significant financial improvements, with our net losses
narrowing from RMB87.0 million in 2022 to RMB16.4 million in 2023, and further to
RMB3.1 million in 2024. Our adjusted EBITDA (non-IFRS measure) turned positive for
the first time in 2023 and increased to RMB 26.1 million in 2024. Marking a pivotal
milestone in our path to sustainability, we recorded a net profit of RMB27.9 million for the
six months ended June 30, 2025, achi eving profitability for the period.
We believe our path to sustainable profitabilit y is clearly defined and will be primarily
driven by the following factors: (i) steady revenue growth; (ii) continuous gross profit
improvement; (iii) operational leverage t hrough economies of scale that will reduce our
selling and distribution, administrative a nd research and development expenses as a
percentage of our revenue; (iv) improvements of our operating cash flow position; and (v)
our cost optimization and profitability enhancement measures.
Steady Revenue Growth
Our revenue has demonstrated consistent growth throughout the Track Record Period,
increasing from RMB274.6 million in 2022 to RMB457.3 million in 2023, and further to
RMB609.9 million in 2024, representing a CAGR of 49.0% from 2022 to 2024. Our revenue
also increased from RMB275.0 million for the six months ended June 30, 2024 to
RMB396.3 million for the six months ended J une 30, 2025. This significant growth
trajectory has been fueled by our strategic expansion of product categories and enhanced
functionalities, which have garnered i ncreasing consumer acceptance and market
recognition.
We have strategically intensified our R&D investments to broaden our product
portfolio and enhance their capabilities, significantly strengthening our competitive
positioning in the market. Looking forward, we anticipate sustained revenue momentum
driven by two key factors: (i) our accumulate d technological expertise and expanding
product matrix have diversified our revenue streams, establishing a solid foundation for
future growth. As of the Latest Practicable Date, we have been developing more than 10
products covering all of our product categories and we plan to launch approximately 10
products within the next 12 months, including both new products and enhancements to our
existing products. For example, our AI companion robot was officially launched in
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September 2025 and is currently undergoing the production optimization phase; and our
first model of humanoid chore robot is expected to be launched by the end of January 2026;
and (ii) the global home robotic system indus try is experiencing explosive growth.
According to Frost & Sullivan Report, the market is expected to grow with a CAGR of
64.2% from 2024 to 2029. As an established player in this rapidly evolving industry, we are
exceptionally well-positioned to capitalize on substantial market opportunities.
Our omni-channel sales strategy has undergone significant optimization during the
Track Record Period. In 2022, revenue contribution from DTC channels, retailer channels,
and distribution channels represented 36.8%, 62.6%, and 0.5% of our total revenue,
respectively. By 2024, this distribution evolved to 49.8%, 40.1%, and 10.1%, respectively,
reflecting a more balanced and resilient chan nel architecture. The impressive CAGRs
achieved across these channels from 2022 to 2024 : 73.3% for DTC, 19.3% for retail, and
587.1% for distribution, underscore the effe ctiveness of our multi-channel strategy in
driving sustainable growth.
Concurrently, we have systematically strengthened our presence in key markets,
achieving strong revenue CAGRs of 44.7%, 68.1%, and 42.5% in Japan, Europe, and
North America, respectively, from 2022 to 2024. We believe our penetration in these
strategic markets remains in nascent stages, presenting substantial headroom for growth as
we deepen market penetration and expa nd our customer base in these regions.
Rapid Gross Profit Improvement
Our gross profit has experienced strong gr owth, increasing from RMB94.1 million in
2022 to RMB230.5 million in 2023, and further to RMB315.6 million in 2024, representing
an impressive CAGR of 83.1% from 2022 to 2024. Our gross profit increased from
RMB138.8 million for the six months ended June 30, 2024 to RMB214.8 million for the six
months ended June 30, 2025. Our gross profit margin has shown remarkable improvement,
rising from 34.3% in 2022 to 50.4% in 2023, and further to 51.7% in 2024. Our gross profit
margin increased from 50.5% for the six months ended June 30, 2024 to 54.2% for the six
months ended June 30, 2025.
Since 2022, we have consistently enhanced our gross profit margin through strategic
product iterations, innovative new product launches, and systematic cost optimization
initiatives, which led to an improved product mix where higher-margin products constitute
a higher proportion of total revenue, higher ASPs for our key product categories, and
reduced cost of sales. For detailed analysis o f our gross profit margin during the Track
Record Period, please refer to the section h eaded ‘‘Financial Information — Period to
Period Comparison of Results of O perations’’ in this prospectus.
The stabilization of our gross profit margin above 50% in 2023 and 2024 illustrated the
success of our value-oriented product strategy and operational efficiency measures. This
steady gross profit performance provides a solid financial foundation for sustained
profitability and enables conti nued investment in i nnovation and market ex pansion, further
reinforcing our competitive advantages and le adership position in the global home robotic
systems market.
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Operational Leverage Through Economies of Scale
During the Track Record Period, our selling and distribution expenses as a percentage
of revenue generally declined to 37.2%, 29 .9%, 28.2%, 25.8% and 27.0% for the years
ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
respectively, demonstrating improving operational efficiency. As a market leader in a new
and fast-growing market, we needed to invest more heavily in marketing during the early
stages to educate end consumers about our products. However, as our sales revenue
increases, the relative proportion of these rela ted expenses will decline. This positive trend
reflects our strengthening of brand recognition, more efficient marketing strategies, and the
benefits of word-of-mouth recommendations from our growing customer base. We
anticipate this trend to continue as our mark eting campaigns become more targeted and
localized, further optimizing our customer ac quisition costs while maintaining growth in
new markets.
Our administrative expenses as a percen tage of revenue amounted to 7.6%, 5.3%,
5.3%, 5.8% and 7.8% for the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2024 and 2025, respectively. Administrative expenses benefit from
significant economies of scale, as our administrative personnel do not need to grow at the
same rate as our revenue growth, given that administrative expenses mainly consist of
general administrative costs. This stabilization at 5.3% in 2023 and 2024 demonstrates that
we have established an effective operational structure that balances corporate governance
with cost efficiency. We expect to maintain this efficiency while selectively strengthening
our administrative capabilities in key strate gic areas to support sustainable long-term
growth.
Our R&D expenses as a percentage of revenue amounted 22.5%, 19.5%, 18.4%, 20.6%
and 14.8% for the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2024 and 2025, respectively. We h ave achieved progressive improvements in
research and development expense efficiency during the Track Record Period. While we will
continue to maintain R&D investments and sustain R&D spending growth, the proportion
of R&D expenses relative to revenue will continue to decline as we achieve greater
economies of scale. This trend reflects our maturing product portfolio, increasingly efficient
R&D processes, and the growing commercia lization of our existing innovations.
Additionally, as our revenue continues to expand at a faster rate than our research and
development expenses, we anticipate further optimization of this ratio without
compromising our commitment to technological advancement and product innovation.
Our strategic focus remains on balancing p rudent R&D investment with sustainable
growth, ensuring we maintain our competitiv e edge while improving overall profitability.
These three expense categories represent our largest cost components outside of
production costs during the Track Record Period, and their combined proportion of
revenue amounted to 67.3%, 54.7%, 51.9%, 52.2% and 49.6% for the years ended
December 31, 2022, 2023 and 2024 and the si x months ended June 30, 2024 and 2025,
respectively. As our revenue scale continues to expand, economies of scale will gradually
emerge. We expect these three expense categories to maintain their declining trend as a
percentage of revenue, thereby improving our net profit margin.
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Improving Operating Cash Flow Position
We recorded net cash flows used in operating activities of RMB107.0 million and
RMB31.3 million for the years ended Decembe r 31, 2022 and 2024, respectively, and
recorded net cash flows generated from opera ting activities of RMB24.6 million for the year
ended December 31, 2023.
The fluctuations in our operating cash flo w position during the Track Record Period
primarily reflected our operating results a nd working capital movements. In 2022, the
significant cash outflow of RMB107.0 million w as mainly attributable to our loss before tax
of RMB86.9 million. We incurred substantial exp enditures in overseas brand development,
channel expansion, R&D for new products and marketing activities in 2022. Although such
expenditures led to our net cash outflows fro m operating activities during the year, they
were expected to strengthen our brand recognition and enhance our long-term
competitiveness. In 2023, we recorded ne t cash inflows generated from operating
activities as a result of a substantial decrease in our loss before tax from RMB86.9
million in 2022 to RMB16.3 million in 2023, as a res ult of the improved gross profit margin.
This improvement reflected the results of our i nitiatives undertaken in the previous year,
which drove revenue growth in 2023. In 2024, we recorded net cash used in operating
activities of RMB31.3 million, mainly due to i ncreased working capital requirements to
support our business expansion, such as the increase in our inventories to support our
expanding sales activities. For details, please refer to the section headed ‘‘Financial
Information — Liquidity and Capital Resources — Cash Flow Analysis — Net Cash Flows
Used in/Generated from Operating Activities’’ in this prospectus.
Our Cost Optimization and Profitability Enhancement Measures
To enhance our profitability and streng then our liquidity position, we have
implemented the following cost control mea sures: (i) with respect to research and
development, we optimized resource allocation by leveraging shared core technologies
across product lines and we plan to collaborate with academic institutions to access external
research capabilities and talent, thereby impro ving development efficiency; (ii) with respect
to production, we adopted standardized design and modular manufacturing to enable
component commonality and bulk procurement, which enhanced our negotiating power
when purchasing components from our suppliers. We also optimized product architecture
from the design stage to achieve cost re ductions; and (iii) with respect to sales and
marketing, we leverage our established brand recognition and user base to lower customer
acquisition costs, including through our online store within SwitchBot App, which
facilitates direct purchases and repeat orde rs. We further enhanced marketing efficiency
through targeted campaigns supported by our international influencer network and our
historical marketing experience.
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RECENT REGULATIONS IN RELATION T O TARIFFS, EXPORT CONTROLS AND
SANCTIONS
Tariff Policies
The U.S. government has implemented a se ries of executive actions in 2025 that
significantly escalated trade restrictions on Chinese-origin goods, including our home
robotic system products. On February 1, 2 025, a broad 10% tariff was imposed on all
imports from China, effective on February 4, 2025, pursuant to Executive Order 14195
titled ‘‘Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s
Republic of China.’’ On March 3, 2025, this so-c alled fentanyl-relate d tariff was further
raised to 20%. This was followed by Executive Order 14257 on April 2, 2025, entitled
‘‘Regulating Imports with a Reciprocal Tarif f to Rectify Trade Practices that Contribute to
Large and Persistent Annual United States Goods Trade Deficits,’’ which introduced
minimum tariff rates of 10% applicable to im ports from all countries and established a
country-specific tariff regime of additional tar iffs targeting nations with substantial trade
imbalances, including China. Within days, the country-specific tariffs on many Chinese
products were increased to 84%, and then to 125% which, in combination with the 20%
so-called fentanyl tariffs, brought the tar iff rate on most imports from China to 145%. On
May 12, 2025, the United States and China announced a 90-day tariff rollback agreement
following bilateral negotiations in Geneva, whic h rolled back the country-specific tariff to a
baseline of 10% for 90 days. On August 11, 202 5, amidst continued negotiations, the two
sides announced an additional 90-day extension until November 10, 2025. On November 4,
2025, the U.S. government issued an Executive Or der titled ‘‘Modifying Reciprocal Tariff
Rates Consistent with the Economic and Trade Arrangement Between the United States
and the People’s Republic of China,’’ which continued the suspension of the heightened
PRC-specific reciprocal tariffs until November 10, 2026; during this suspension, the 10%
reciprocal tariff on PRC-origin goods remains in effect. On November 7, 2025, the U.S.
government published a Federal Register notice reducing the additional fentanyl-related
tariff under Executive Order 14195 from 20% to 10%, effective November 10, 2025. As a
result, during the suspension period, the combined tariff burden applicable to many
PRC-origin goods, including our products to the extent covered, consists of a 10%
reciprocal tariff plus a 10% fentanyl-related tariff, subject to other applicable duties,
exclusions, and product-specific classifications. For details of (i) the changes in policies
i s s u e db yt h eU . S .i nr e l a t i o nt oi m p o r t sf r o mChina; and (ii) the changes in policies issued
by China in relation to imports of U.S. origin, see ‘‘Regulatory Overview — Laws and
Regulations in Relation to Importation of Goods into the United States — Tariffs.’’ The
U.S. tariff and trade policies are subject to constant changes, influenced by evolving
geopolitical dynamics, economic priorities and regulatory agenda, and such policies may be
amended, expanded, or replaced with little or no advance notice. As of the Latest
Practicable Date, based on the best knowledge, information and belief of the Directors, the
maximum U.S. tariff rate applicable to our core home robotic system products was 63%.
While we do not believe such tariffs will materi ally and adversely affect our business
operations and financial performance, we will closely monitor the developments relating to
such tariffs.
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We believe that the U.S. tariffs imposed on certain of our products are not expected to
have, and have not had during the Track Record Period, any material adverse impact on its
business operations or financial performance, based on the following considerations:
Demonstrated resilience of our business to tariff impact
The resilience of our business to the impact of U.S. tariffs is multifaceted,
demonstrated by our successful global market diversification, market focuses of our key
customers, and distinct product and operational strengths that provide a competitive
buffer.
Successful implementation of our market diversification strategy
We have been consistently implementing a global market expansion strategy, which has
reduced our reliance on the U.S. market and cre ated a diversified global revenue base. The
rapid growth in other countries and regions ha s significantly strengthened our ability to
mitigate potential risks related to the U.S. market.
While revenue from the U.S. market has continued to grow in absolute terms, its
contribution to our overall revenue growth has been relatively limited compared with other
regional markets, as our growth has been primarily driven by faster expansion in Japan and
Europe. The effectiveness of our market diversification strategy is demonstrated by the
following analysis:
. Our total revenue increased by RMB152.6 million, or 33.4%, from RMB457.3
million in 2023 to RMB609.9 million in 20 24. During this period, revenue growth
from the U.S. was RMB8.4 million, increasing from RMB78.5 million in 2023 to
RMB86.9 million in 2024. In contrast, rev enue growth from other countries and
regions reached RMB144.2 million, incr easing from RMB378.8 million in 2023 to
RMB523.0 million in 2024. As such, the U.S. market contributed only 5.5% of
our total revenue growth during this period, while the remaining 94.5% of our
revenue growth was contributed by other countries and regions. In particular, the
amount of revenue growth from other countries and regions only was equivalent
to 166.0% of the total revenue generated from the U.S. in 2024.
. This trend accelerated in the first half of 2025. Our revenue increased by
RMB121.3 million, or 44.1%, from RMB275.0 million for the six months ended
June 30, 2024 to RMB396.3 million for th e six months ended June 30, 2025.
Revenue from the U.S. market contributed RMB2.2 million to this growth,
increasing from RMB38.7 million for the six months ended June 30, 2024 to
RMB40.9 million for the six months ende d June 30, 2025. Meanwhile, revenue
from other countries and regions contr ibuted RMB119.1 million to this growth,
increasing from RMB236.3 million to R MB355.4 million over the same period.
Consequently, the U.S. market’s share of our total revenue growth further
declined to 1.8% for the six months ended June 30, 2025, while the remaining
98.2% of our revenue growth was contributed by other countries and regions. The
growth from other countries and regions was equivalent to 291.5% of the total
revenue generated from the U.S. in the first half of 2025.
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As a result of our successful market diversi fication, for the years ended December 31,
2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, revenue generated
from the sales in the U.S. amounted to RMB45.1 million, RMB78.5 million, RMB86.9
million, RMB38.7 million and RMB40.9 million, respectively, representing 16.4%, 17.2%,
14.2%, 14.1% and 10.3% of our revenue in the s ame periods, respectively. Although our
absolute revenue from the U.S. continued to grow, its consistently declining proportion of
our total revenue demonstrates our success in diversifying our market presence and
reducing our dependence on the U.S. market.
Sales focus of our largest customers in markets outside the U.S.
We estimate that impact on our business and result of operations as a whole caused by
the U.S. tariff incurred by our major customers is limited. For the years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2025, our revenue generated
from the five largest customers in each year/period during the Track Record Period
amounted to RMB164.0 million, RMB229 .3 million, RMB289.1 million and RMB211.8
million, accounted for 59.6%, 50.2%, 47.4% and 53.5% of our total revenue for the
respective periods. For the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2025, our revenue generated from the largest customer amounted to
approximately RMB145.1 million, RMB178 .2 million, RMB218.6 million and RMB175.2
million, accounted for 52.8%, 38.9%, 35.8% and 44.2% of our total revenue for the
respective periods.
To the best of our knowledge, none of our top five customers sold our products to end
consumers exclusively to the United States. On the contrary, our five largest customers in
each year/period during the Track Record Period, including Amazon VC, through which we
sell products to non-U.S. markets such as Japan and Australia, focused their sales
exclusively on countries and regions outside the United States.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material adverse changes in our order volume, pricing, customer payments,
or logistics arrangements, nor had we received any requests from our five largest customers
in each year/period during the Track Record Period to cancel orders or suspend delivery of
our products as a result of the imposition of U.S. tariffs. In addition, as of the Latest
Practicable Date, none of our existing contr acts with our top five customers provided for
price adjustments due to tariffs payable by our customers, and none of our top five
customers had proposed the inclusion of such tariff-driven price adjustment mechanisms.
We believe this strongly reflects that our prod ucts remain competitive in terms of quality
and pricing, and that the U.S. tariffs have not resulted in any material loss of business to
competing suppliers facing similar tariff exposure.
We possess strong product pricing power
Our innovative product designs, continuous upgrades, introduction of new models,
and leading market position collectively giv e us strong pricing power. This is reflected in
our ability to consistently increase the ASPs of our products while simultaneously achieving
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growth in sales volume and maintaining a heal thy gross profit margin across our global
markets. During the Track Record Period, the ASP of our core products have shown a
consistent upward trend.
During the Track Record Period, our total sales volume grew from approximately 1.8
million units in 2022 to 2.4 million units in 2024 . This growth occurred alongside price
increases for our key products as we continued to introduce more technologically advanced
models with more functions. For example, the ASP of our multitasking household robots
increased from RMB1,815 in 2023 to RMB2,045 in 2024, while the ASP of our lock robots
increased from RMB283 in 2023 to RMB338 in 2024, and further to RMB434 for the six
months ended June 30, 2025. This ability to implement price increases without adversely
affecting sales volume growth demonstrates our strong pricing power on a global scale.
We maintained our strong product pricing power in the U.S. market, where we have
demonstrated resilience in the context of inc reased tariffs in 2025. Our business in the U.S.
market continued to grow, which we believe is a strong indicator of our pricing power in
that market.
Our revenue from the U.S. market increas ed from RMB38.7 million in the six months
ended June 30, 2024 to RMB40.9 million in the same period in 2025. This revenue growth
was driven by an increase in sales volume to the U.S. market during the same period even as
the U.S. government drastically increased its tariffs on products manufactured in mainland
China, which grew from approximately 120.8 thousand units for the six months ended June
30, 2024 to approximately 125.5 thousand units for the six months ended June 30, 2025. The
willingness of U.S. importers, distributors, a nd end consumers to increase their purchase
volumes of our products underscores the strong market demand we command in the U.S.
market.
In addition, this growth in the U.S. market for the six months ended June 30, 2025 was
achieved while we maintained or increased the ASP of our key categories as well as key
models sold in that market. For our curtain robots category, we recorded an ASP of
RMB428, RMB392, RMB392 and RMB448 in 2022, 2023, 2024 and for the six months
ended June 30, 2025, respectively, demonstrating an overall upward trend in ASP. In
particular, our SwitchBot Blind Tilt, which is a core product sold in our U.S. market,
recorded an ASP of RMB317, RMB339, RMB345 and RMB382 in 2022, 2023, 2024 and for
the six months ended June 30, 2025, respectively, representing a steady increase over the
Track Record Period. Likewise, our latest curtain robot model, SwitchBot Curtain 3, which
was introduced in the U.S. market in 2023, recorded an ASP of RMB506, RMB514 and
RMB518 in 2023, 2024 and for the six months ended June 30, 2025, respectively. Our finger
robots, another key product model in the U.S. market, recorded an ASP of RMB162,
RMB160, RMB176 and RMB175 in 2022, 2023, 2024 and the six months ended June 30,
2025, respectively, which were relatively stable throughout the Track Record Period. In
addition, our smart hubs category, which serves as the central ‘‘brain’’ of our home robotics
ecosystem, recorded an ASP of RMB221, R MB252, RMB290 and RMB297 in 2022, 2023,
2024 and the six months ended June 30, 2025, respectively, showing a consistent upward
trajectory. The ASP increases for our smart hubs were primarily driven by continuous
product iteration and the introduction o f new, more advanced models with enhanced
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functionalities, which enabled us to command higher price points while remaining
competitive. Taken together, these produ ct category-level and model-specific ASP
developments during the Track Record Period demonstrate that we have been able to
implement measured price adjustments, including for the same models, to help mitigate the
adverse impact of increased tariffs on ou r products while maintaining our market
competitiveness.
First-mover advantage and operational strengths
We believe the potential impact of U.S. tariffs is mitigated by favorable industry trends
that align with our core strategic advantages. The U.S. tariff environment has accelerated a
market shift towards higher-end, innovative products as customers seek to enhance unit
value. Our strategic focus on technological i nnovation and the development of premium
products positions us to capitalize on this trend.
Our market leadership is underpinned b y our strong R&D capabilities and deep
insights into consumer demands, which pro vides us with a significant first-mover
advantage. By creating and commercializing entirely new product categories, we are able
to set initial market prices with minimal competition, which provides a substantial buffer
against potential tariff-related cost increa ses. For example, we successfully launched
Acemate, an AI tennis robot, in May 2025. Designed for immersive, human-like practice,
Acemate created a new market segment. During its launch on Kickstarter, Acemate had
received orders totaling o ver RMB16.0 million, with more than 50% of the orders
originating from the U.S. market. The strong U.S. demand for such an innovative product,
even in a high-tariff environment, demonstrates the competitiveness of our product
offerings. We have consistently integrated new technologies with innovative design concepts
to define new product categories, which in turn strengthens our pricing power and enables
us to maintain price levels sufficient to offset ad ditional costs arising from tariff increases.
Furthermore, our operational flexibility, derived from our vertical integration and
robust supply chain management, enables us to continuously adjust our procurement and
production arrangements to optimize efficien cy and cost in response to unforeseen events,
such as increased U.S. tariffs.
Therefore, we believe the combination of f avorable industry trends, first-mover
advantage and operational flexibility significantly mitigates the potential adverse impact of
U.S. tariffs on our business operati ons and financial performance.
Accordingly, the Directors are of the vie w that the U.S. tariffs have not had and are
not expected to have any material adverse effect on our Group’s business operations or
financial performance. On the basis of the ir independent due dilig ence work conducted,
nothing has come to the attention of the Join t Sponsors which cause them to cast doubt on
the reasonableness of our Dir ectors’ views aforementioned.
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Impact of PRC retaliatory tariffs on our procurement
In addition to the tariffs imposed on exports of our products to the U.S. market, we
have also assessed the potential impact of PRC retaliatory tariff measures on our
procurement of components from U.S.-branded suppliers. During the Track Record Period
and up to the Latest Practicable Date, we sourced only a very limited number of
components through intermediaries in Ch ina from U.S.-branded suppliers, mainly
comprising (i) infrared receiver components and (ii) certain integrated circuits used as
charging and driver chips. These are standardized, commoditized parts that are widely
available from multiple alternative suppliers and brands in the market. For the years ended
December 31, 2022, 2023 and 2024, and the si x months ended June 30, 2025, our aggregate
procurement amount in respect of such U.S. -branded components was approximately
RMB0.6 million, RMB0.9 million, RMB1.9 million and RMB0.7 million, respectively,
representing a de minimis portion of our total procurement costs in each of the same
periods.
The infrared receiver components we procu red are manufactured in Southeast Asia,
and the relevant charging and driver integra ted circuits we procured are fabricated and
packaged in China. Although these components are supplied under U.S. brands, they are
not manufactured in the United States and are not treated as U.S.-origin goods for PRC
customs and tariff purposes. As such, they are not subject to the additional PRC retaliatory
tariff measures that specifically target impo rts of U.S-origin goods. During the Track
Record Period and up to the Latest Practicable Date, we did not incur any elevated tariff
costs attributable to PRC retaliatory tari ffs on U.S.-origin goods in respect of these
components, and we did not experience any material increase in their procurement prices
that was attributable to tariff te nsions between the U.S. and China.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any disruption or delay in the supply of the above U.S.-branded components,
nor were we required to suspend or adjust pr oduction as a result of PRC tariff-related
supply constraints. Our procurement team monitors the supply landscape closely and, in the
event that components currently sourced fr om U.S.-branded suppliers become subject to
adverse PRC tariff changes or supply disruptions (for example, if future PRC measures
were to extend to certain non-U.S. production origins of U.S.-branded components), we
believe, based on publicly available information on similar components, that we would be
able to substitute these components with functionally equivalent products from
non-U.S.-branded suppliers or from alternative production origins without material
technical modifications to our products and without incurring material incremental costs.
In view of (i) the very limited number and immaterial aggregate value of components
currently sourced from U.S.-branded suppliers , (ii) the non-U.S. manuf acturing locations
of such components and the resulting limited direct exposure to PRC retaliatory tariff
measures on U.S.-origin goods, (iii) the absence of tariff-driven cost increases or supply
interruptions during the Track Record Period and up to the Latest Practicable Date, and
(iv) the ready availability of substitute co mponents from alternative suppliers and
production origins, our Directors are of the view that existing and potential PRC
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retaliatory tariff measures affecting the procurement of such U.S.-branded components
have not had, and are not expected to have, any material adverse impact on our Group’s
procurement costs, supply chain stability, bu siness operations or fin ancial performance.
U.S. Export Controls and Sanctions
The U.S. government has implemented a range of export controls and economic
sanctions that restrict transactions involving certain countries, entities, individuals, and
technologies, particularly those deemed critical to national security. These regimes are
principally administered (i) under the Export A dministration Regulations (‘‘EAR’’) by the
U.S. Department of Commerce, Bureau of Industry and Security (‘‘BIS’’), including the BIS
Entity List and other BIS restricted-party lists, and (ii) by the U.S. Department of the
Treasury, Office of Foreign Assets Control (‘‘OFAC’’), including the Specially Designated
Nationals and Blocked Persons List (‘‘SDN List’’). The BIS Entity List and the OFAC SDN
List operate under different legal frameworks and give rise to different types of restrictions.
In general, inclusion on the BIS Entity List results in the imposition of export control
licensing requirements under the EAR on the supply, export, re-export or transfer of certain
U.S.-origin items to the listed party. D ealings with an Entity List party are not
automatically prohibited, but may require a license from BIS and, in some cases, such
license applications may be subject to a presumption of denial. By contrast, persons
designated on the OFAC SDN List are generally subject to comprehensive blocking
measures, namely, U.S. persons are broadly prohibited from engaging in transactions or
dealings with SDNs, and any property or interests in property of SDNs that come within
U.S. jurisdiction must be frozen. In some cases, specified dealings by non-U.S. persons with
SDNs may also give rise to secondary sanctions risk. For ease of reference,
BIS-administered restricted-party lists are collectively referred to as the ‘‘BIS Lists’’, and
OFAC-administered lists are collectiv ely referred to as the ‘‘OFAC Lists’’.
We utilize certain semiconductor chips in our products, among which over 97% of the
semiconductor chips concerned are non-U.S.-branded semiconductors sourced from
non-restricted suppliers. The Directors are of the view that the potential risks related to
U.S. sanctions or export controls on our use of such chips are minimal and that such
regulations are not expected to have a materi al adverse impact on our business. This view is
based on the following considerations:
(i) Our products are designed for household environments and are sold primarily to
ordinary end consumers. The semiconductor chips incorporated in these products
are used for standard functionalities, such as computing, control and seamless
communication across our product ecosystem, rather than for advanced or
sensitive applications such as mi litary, aerospace, or defense.
(ii) As advised by our U.S. Legal Advisers, U.S. export control and sanctions
restrictions administered under the EAR by BIS and by OFAC primarily focus on
limiting access to advanced semiconductors, sensitive technologies, and
transactions involving restricted jurisdi ctions, entities, individuals or end-uses
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for national security reasons. The semiconductors used in our products during the
Track Record Period did not fall within the categories of advanced or sensitive
semiconductors that are subject to heightened export control restrictions.
(iii) During the Track Record Period, we did not procure any products from entities
designated on the OFAC Lists.
(iv) As advised by the U.S. Legal Advisers, none of our major semiconductor
suppliers, nor their identified principal officers, appear on any BIS Lists or OFAC
Lists. During the Track Record Period ,w em a d eo n l yi m m a t e r i a lp u r c h a s e s
(representing less than 0.1% of purchase amount for each year/period) of chips
that were originally manufactured by BI S Lists suppliers. Such purchases were
made through sourcing intermediaries, and we did not have any direct contractual
or commercial relationship with those su ppliers. These suppliers can readily be
replaced with alternative suppliers offering semiconductors of comparable quality
and terms. As of the Latest Practicable Date, we have ceased procuring
semiconductors from the relevant suppliers. As advised by our U.S. Legal
Advisers, our procurement activities do not trigger U.S. export-control
restrictions under the EAR. We will also regularly monitor updates to the BIS
Lists and OFAC Lists, and will promptly adjust our procurement arrangements as
necessary in the event of any changes affecting our suppliers.
(v) As advised by our U.S. Legal Advisers, our consumer products do not involve
military, proliferative or other sensitiv e applications and are not developed using
misappropriated technology that could attract export controls or sanctions. Based
on the nature of our products and the categories of semiconductors used, our
products are not subject to U.S. sanctions laws or export control prohibitions,
and our procurement and distribution activities do not trigger any licensing
requirements under the EAR or OFAC regulations.
(vi) During the Track Record Period, app roximately 3% of the semiconductors we
procured were U.S.-branded chips, whic h were manufactured primarily in Asia.
As advised by our U.S. Legal Advisers, under the EAR, foreign-manufactured
semiconductors may still be subject to U.S. export control jurisdiction if they (i)
contain above de minimis U.S.-controlled content, or (ii) fall within the scope of
the foreign direct product rule. Based on information available to the Directors
and the advice of our U.S. Legal Advisers, the semiconductors used in our
products do not incorporate U.S.-controlled content above EAR thresholds, are
not produced from controlled U.S. technology falling within the EAR’s foreign
direct product rule, and are therefore considered EAR99, a non-restricted export
control classification applicable to items not subject to specific licence
requirements.
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Accordingly, based on the origin, cla ssification and supplier status of our
semiconductors, and on the advice of our U.S . Legal Advisers, the Group’s procurement
and use of such semiconductors do not trigger licensing or prohibition requirements under
the EAR and do not present any material compliance risks or adverse impact on our
procurement processes, operations or financial performance, and the Directors are of the
view that existing U.S. sanctions or export control restrictions have not had, and are not
expected to have, any material adverse effect on our Group’s business operations or
financial performance, and that the risk of fu ture restrictions materially impacting our
business is low. Based on the independent due diligence work conducted, nothing has come
to the attention of the Joint Sponsors which cause them to cast doubt on the reasonableness
of our Directors’ views aforementioned.
Impact of Small Parcel Tariff Policy
In the United States, the ‘‘small parcel tari ff’’ regime generally refers to the de minimis
exemption under Section 321 of the U.S. Tariff Act, which, as advised by our U.S. Legal
Adviser, allows low-value parcels (valued at US$800 or below) shipped directly to U.S.
consumers to enter duty-free. As our products are shipped in bulk to U.S. warehouses and
fulfilled locally to end consumers, such ship ments do not fall within the scope of this de
minimis small-parcel regime. Accordingly, the U.S. small parcel tariff policy has not had
any material impact on our procurement costs, pricing or margins during the Track Record
Period and up to the Latest Practicable Date. The Group will continue to monitor any
changes in U.S. de minimis or import-duty polic ies and adjust its fulfilment arrangements as
appropriate.
During the Track Record Period, we exporte d two product class and other component
to Japan which were subject to, with maximum tariff rate of 5.3%. For the years ended
December 31, 2022, 2023 and 2 024 and the six months ended June 30, 2025, our revenue
contributed by sales of these tariffed product and component to Japan, accounted for
approximately 0.2%, 3.0%, 3.7% and 10.1% of o ur total revenue, respectively. Based on
the best knowledge, information and belief of the Directors, the product and component
that is subject to tariffs and their applicab le rates have remained unchanged during the
Track Record Period.
Based on the best knowledge, information and belief of the Directors, apart from the
U.S. tariffs and the Japanese tariffs as mentioned above, the Group’s products were not
subject to any import restri ctions during the Track Record Period and up to the Latest
Practicable Date.
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OUR EMPLOYEES
As of the Latest Practicable Date, we had a total of 640 employees. As of the same
date, 630 of our employees were located in mainland China, 10 of our employees were
located in Japan. The table below sets forth a breakdown of our employees by function as of
the Latest Practicable Date.
Function
Number of
Employees % of Total
R e s e a r c ha n dd e v e l o p m e n t ..................... 2 7 8 4 3 . 4
Production
(1) .............................. 1 6 1 2 5 . 2
O p e r a t i o na n dm a r k e t i n g ...................... 1 5 1 2 3 . 6
A d m i n i s t r a t i o n ............................. 5 0 7 . 8
Total .................................... 640 100.0
Note:
(1) Including 122 assembly line worke rs and 39 mid-level production staff.
We believe that our success depends in part on our ability to attract, recruit and retain
quality employees. We aim to establish a colla borative work environment that encourages
them to develop their career with us. In addition, we have an effective training system,
including orientation and continuous on-th e-job training, to accelerate the learning
progress and improve the knowledge and skill levels of our workforce. Our orientation
process covers subjects such as corporate culture and policies, work ethics and occupational
safety. Our periodic on-the-job training c overs environmental, health and safety
management systems and mandatory training r equired by applicable laws and regulations.
To sustain our growth, we regularly review our capabilities and adjust our workforce
to ensure we have the right mix of expertise to meet the demand for our products. We offer
employees competitive salaries, and performance-based cash bonuses. We believe that our
reputation, work environment, training system, remuneration package and employee share
incentive plan are advantageous that attract qualified candidates. During the Track Record
Period and up to the Latest Practicable Date, we adopted internet recruitment, social
recruitment, campus recruitment and internal referral by existing employees, among other
recruitment approaches. When considering and selecting qualified employment candidates,
we take into consideration their education background, work experience, relevant expertise
and specific skills, as well as the demand for a nd the objectives of the vacant positions.
As required by the applicable PRC laws and regulations, we participate in various
employee social security plans for our e mployees that are administered by local
governments, including housing, pension, medical insurance, maternity insurance and
unemployment insurance. We also purchase commercial health insurance for some of our
Directors and key personnel, purchase accidental insurance for all of our staff and
purchased comprehensive travel insurance f or our staff during ove rseas business travel.
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Bonuses are generally discretionary and based in part on employee performance and in part
on the overall performance of our business. We also plan to grant share-based incentive
awards to our employees in the future to incentivize their contributions to our growth and
development.
Our employees have not formed any employee union. We believe we maintain a cordial
and fruitful working relationship with our employees, and we have not experienced any
material labor disputes during the Track Record Period and up to the Latest Practicable
Date.
Social Insurance and Housing Provident Fund Contributions
During the Track Record Period and up to the Latest Practicable Date, we did not pay
social insurance and housing provident fund contributions in full for certain full-time
employees based on their actual wages in a ccordance with the applicable PRC laws and
regulations mainly due to their unwillingness to c ooperate. The aggregate shortfall of social
insurance and housing provident fund contri butions amounted to RMB27.5 million during
the Track Record Period. This non-compliance incident was primarily caused by requests
by some of our full-time employees to make contributions to social insurance and housing
provident funds for them based on a lower standard instead of their actual salaries, as they
did not want to bear the full amount of their portion of the relevant contributions.
According to the Social Insurance Law of the PRC ( 《中華人民共和國社會保險法》)a n d
Regulation on the Administrat ion of Housing Provident Fund ( 《住房公積金管理條例》),
social insurance and housing provident fund are divided into the employer’s contributions
and the employee’s contributions. When full payment of social insurance and housing
provident fund is made, both the employer and employee are required to make their
respective contributions. Such contributions from employee’s part are directly deductible
from the employee’s salary on a monthly basis, which will lead to a reduction in the amount
of the salary received by the employee. There fore, some of our employees were unwilling to
make full contributions to social insurance and housing provident fund based on their
actual salaries.
As advised by our PRC Legal Advisers, (i) if we fail to pay social insurance in
accordance with PRC laws and regulations, we may be ordered by the competent PRC
government authority to pay the outstanding balance within a prescribed period of time and
an overdue fine of 0.05% of the total outstanding balance per day from the date of such
failure of payment. If we fail to do so within the prescribed period, we may be subject to an
administrative penalty ranging from one to three times of the total outstanding balance; and
(ii) if we fail to pay the housing provident fu nd in accordance with the Chinese laws and
regulations, the housing provident fund management center may order us to make the
outstanding payment within a prescribed time limit. If the payment is not made within such
time limit, an application may be made to the PRC courts for compulsory enforcement.
During the Track Record Period and u p to the Latest Practicable Date, no
administrative action or penalty had been imposed by the relevant regulatory authorities
with respect to our social insurance and housing provident fund contributions or
registration, nor had we received any order to settle any outstanding amount due. As of
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the Latest Practicable Date, we had not receiv ed any such notification from the relevant
government authorities, which required us to make contributions for the outstanding
amounts for all of our employees in full. Moreover, as of the same date, we were not aware
of any complaint filed by our full-time employees regarding our social security insurance
and housing provident fund policy. As advi sed by our PRC Legal Advisers, based on the
f o r e g o i n g ,a n di na c c o r d a n c ew i t ht h ee x i s t i n gapplicable laws, regulations and policies,
provided that we make full payment within the stipulated deadline, if required by the
relevant authorities, the likelihood that we w ould be subject to material administrative
penalties in the future is remote.
Our Directors believe that such non-comp liance would not have a material adverse
effect on our business and results of operations, considering that (i) pursuant to the Urgent
Notice on Implementing the Spirit of the Executive Meeting of the State Council in
Stabilizing the Collection of Soc ial Security Contributions ( 《關於貫徹落實國務院常務會議
精神切實做好穩定社保費徵收工作的緊急通知》) promulgated on September 21, 2018, it is
prohibited for administrative enforcement authorities to organize a centralized collection of
enterprises’ historical social insurance arrea rs; (ii) as of the Latest Practicable Date, we had
not received any notification from the relevant PRC authorities requiring us to pay for any
amount in addition to what we have paid to the social insurance and housing provident
fund, and during the Track Record Period and up to the Latest Practicable Date, we had
not been subject to any material administrativ e penalties; and (iii) we were neither aware of
any employee complaints filed against us n or involved in any labor disputes with our
employees with respect to the payment of social insurance or housing provident fund during
the Track Record Period and up to the Latest Practicable Date. Based on the relevant
regulatory policies, the confirmations and f acts as stated above, our PRC Legal Advisers
are of the view that, provided that we make ful l payment within the stipulated deadline, if
required by the relevant authorities, the like lihood that we will be subject to any material
penalties due to our failure to provide social insurance premiums and housing provident
fund contributions in full for all of our full-time employees is remote. Based on the
foregoing, our Directors are of the view, and our Reporting Accountants concur, that no
corresponding provision for the aggregate shortfall of the social insurance and housing
provident fund contributions in our historical consolidated financial information would
need to be made.
DATA PRIVACY AND SECURITY
We take data privacy and security seriously and are committed to safeguarding the
privacy of our customers and their personal information. We safeguard our information
technology system, which covers cybersecurity, data security and terminal security, using
various technologies including encryption, anti-virus software and firewall. We
continuously upgrade such technologies to enhance our information security management
and implement strict measures to protect and secure confidentiality of
customer/membership data. For example, we have deployed web application firewall and
bastion hosts, and implemented data encryption technologies and data backup measures.
We have also adopted strict access control mea sures, retained access logs for auditing, and
promptly intercepted and detected abnormal behaviors to prevent data leakage and
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unauthorized access. During the Track Reco rd Period and up to the Latest Practicable
Date, we did not experience any failure or breakdown of our information technology
systems which resulted in a material adverse impact on our overall business operations.
Our business operations involve the collection, use, storage, retention, transfer, and
other processing of personal data. Our end consumers primarily contact us through the
online functions of the SwitchBot App and email. The types of data collected by us include,
where applicable, smart terminal informat ion (such as model and OS version), usage
patterns, device operation logs, and crash/error reports. In addition, as is inherent to the
operation of intelligent IoT devices, our prod ucts and services collect certain data during
normal usage of the products, independent of whether end consumers contact us through
email or SwitchBot App. Such data are collect ed on an automated basis when the products
are in operation and are strictly necessary for t he devices to function as intended, including,
for example, the execution of remote commands via the cloud, the implementation of
automation scenes and status monitoring. The data collected in this context include, where
applicable, usage records such as device on/off and operation logs, device status
information such as battery level and networ k connectivity status, environmental sensor
data such as temperature and humidity, and spatial and navigation-related data required
for route planning and execution for our enhanced mobile robots. While users may actively
provide data when contacting our customer supports, the foregoing device event and usage
data are collected passively in the ordinary course of product operation for the purpose of
enabling and supporting core product functionalities.
We also collect consumer payment information as part of purchase records to complete
the transactions when they make purchases an d provide membership loyalty benefits to
them. The consumer payment information we co llect include billing and transaction details,
contact and shipping information, payment method and channel information and
third-party payment account information. Such consumer payment information is
collected exclusively in respect of purchase s made through our self-operated website. For
these self-operated website tr ansactions, we collect such co nsumer payment information as
part of the purchase records to complete the t ransaction and, where applicable, to provide
membership loyalty benefits to customers. T he actual financial processing in respect of
these transactions is handled by secure independent third-party payment service providers,
and we do not store sensitive financial credentials, such as full credit card numbers, on our
own servers. For sales conducted through third-party e-commerce platforms (such as
Amazon SC and other online marketplaces), whether categorized under our DTC or retailer
channels, as well as through offline retaile rs and distributors, we generally do not collect
consumer payment information. In such cases, t he relevant third-party platform, retailer or
distributor is responsible for the collection and processing of consumer payment
information, and we typically only receive o rder fulfilment-related information such as
recipient name, shipping address and email to the extent necessary for delivery and
after-sales support. The scope of data collected by us is limited to what is necessary for our
operation of the relevant products and services.
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We inform users of our data collection pra ctices through published privacy policy
(available on our self-operated website), an d obtain user consent prior to collecting any
personal data, in accordance with applicable da ta protection laws. Users may also withdraw
their consent or request access to, correction or deletion of their personal data through the
channels provided.
We have implemented certain policies and ru les on customer data protection, such as
operation standards for management of customers’ information documents and operation
standards for the management of computers and software. With the assistance of our PRC
Data Compliance Adviser, and our Japanese Legal Advisers, EU Data Compliance Adviser
and US Legal Advisers, being our external data compliance consultants, we have
formulated a series of policies, including i nformation security management policy, data
compliance management policy, and user data c lassification and grading management
policy. We regularly organize training for employees on personal information protection,
and enter into confidentiality agreements wi th them. We have appointed a data protection
officer to comprehensively oversee our data c ompliance. During the Track Record Period
and up to the Latest Practicable Date, we did not encounter any material customer data
privacy breaches, leakages or disputes.
In addition, when providing services to users, we may from time to time engage
third-party service providers for data processing activities, including, but not limited to,
data storage providers, customer support service providers, independent website building
platforms, and logistics providers. Data shar ed to facilitate these functions includes user
registration and device details, purchase and shipping records, and customer support logs.
However, video content remains end-to-end encrypted to preclude access by both us and
such service providers. We employ a proac tive, multi-layered approach to ensure
third-party compliance with security and data protection requirements, including (i) we
h a v ee n t e r e di n t oD a t aP r o t e c t i o nA g r e e m e n t s( ‘ ‘ D P A s ’ ’ )w i t hs u c ht h i r dp a r t i e s ,w h i c h
require them to process data strictly in accordance with our instructions, comply with
security obligations, implement appropriate s ecurity safeguards, and assist in facilitating
users’ exercise of their rights. In the event of a data breach, we will promptly activate its
emergency response plan, require such third-party service providers to identify the breach’s
cause, implement corrective actions, and notify users in accordance with applicable laws
and regulations; (ii) we maintain a continuous third-party risk management process through
supplier onboarding, risk assessments, and security practice evaluations (e.g., ISO/IEC
27001), with periodic reviews and enhanced s upervision as needed; (iii) we use logging and
auditing mechanisms to track third-party and c ross-regional access, enabling proactive risk
identification through continuous monitoring and periodic reviews; (iv) we apply
encryption, network protection, and syst em security controls throughout the data
lifecycle; (v) we conduct regular testing, rev iews, and vulnerability management to ensure
the effectiveness of third-party systems and tr aceability of security incidents; and (vi) we
minimize and de-identify data shared with third parties, limiting access to only what is
necessary and reducing breach risks. During the Track Record Period and up to the Latest
Practicable Date, we did not experience any material data leakage, data loss, or
unauthorized use of end consumers’ personal information in connection with our use of
such third-party service providers.
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We collect and maintain end consumers’ personal information in accordance with the
relevant laws and regulations on data privacy and security in the jurisdictions where we
operate. With the assistance of our PRC Data C ompliance Adviser, and our Japanese Legal
Advisers, EU Data Compliance Adviser and US Legal Advisers, being our external data
c o m p l i a n c ec o n s u l t a n t s ,w eh a v et a k e nm e a s u res to maintain the confidentiality of such
information to ensure regulatory compliance. Specifically, (i) we collect and use personal
information in compliance with the principles of legality, legitimacy, and minimal necessity.
We have adopted a comprehensive privacy policy that provides data subjects with clear and
transparent disclosure regarding the circumstances, purposes, and categories of personal
information processing. We obtain data subject s’ consent, or rely on other applicable legal
bases, through mechanisms such as pop-up notifications or other appropriate means, in
accordance with applicable data protection laws and regulations; (ii) we have formulated a
data localization storage strategy, and by default store personal information on local sites.
We also follow the shortest necessary storage period and store data for the minimum period
required by our business; (iii) when entrusting third parties to process data, we will enter
into data protection agreements with such thi rd parties, requiring them to fulfill data
protection obligations; (iv) in the case of cros s-border data transfer, we will, in accordance
with the requirements of key jurisdictions, carry out cross-border data impact assessments,
adopt security technical measures, and ensure the security and compliance of cross-border
data flows by signing standard contractual clauses, obtaining data subject’s consent, and
other means; (v) we have established data subject rights response mechanism by specifying
in the privacy policy the rights enjoyed by individuals (such as the right to inform, access,
correct, and delete), and providing rights exercise channels.
While we prioritize a data localization stora ge strategy, defaulting to AWS nodes in the
user’s region, cross-border data transfers occur under certain circumstance including
cross-border onward transfer via third-party platforms or supply chains. Platforms such as
Shopify or logistics management system may tra nsfer data across borders to facilitate order
processing, warehousing, and delivery. To ensure secure and compliant cross-border
transfers, we implement following measures: ( i) contractual safeguards. Data transfers are
governed by standard contractual clauses or internal agreements defining purpose, scope,
and security obligations; (ii) access restrictions . Remote operations are tightly controlled to
prevent unauthorized access, editing, or down loading; (iii) transfer impact assessments.
High-risk transfers are evaluated, and reports retained for governance and compliance; and
(iv) supervision and audit. Internal monitoring tracks cross-border data transfers to ensure
oversight.
We also support users in exercising their rights through the online functions of the
SwitchBot App. Internally, we have a smooth u ser rights exercise processing flow: after
receiving a user request, we verify the user’s identity, refer the relevant issues to the internal
relevant departments (backend team, product team, legal department) for evaluation, and
subsequently provide feedback to the user.
As advised our PRC Data Compliance Adviser, Japanese Legal Advisers, EU Data
C o m p l i a n c eA d v i s e ra n dU SL e g a lA d v i s e r s ,d u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h e
Latest Practicable Date, we have complied w ith applicable laws and regulations in all
material aspects with respect to data security and privacy protection in our major markets,
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namely Japan, Europe, and North America, respectively. Specifically, (i) according to our
PRC Data Compliance Adviser, we have imple mented cybersecurity compliance measures
in accordance with PRC law, with no investigations, enforcement actions, or related
litigation; (ii) according to our Japanese Legal Advisers, SwitchBot JP maintains
documentation and internal policies aligne dw i t hA P P Io b l i g a t i o n s ,w i t hp r a c t i c e s
generally compliant with applicable law; (iii) according to our EU Data Compliance
Adviser, measures have been implemented to ach ieve GDPR-level protection, with personal
data processing largely compliant, reflect ing a structured and systematic privacy and
compliance framework; and (iv) accordin g to our US Legal Advisers, no material
non-compliance was identified. There are no pending or historical claims, investigations,
or enforcement actions concerning consumer privacy, data protection, or breach
notification obligations. During the Track Record Period and up to the Latest
Practicable Date, we did not experience any material data leakage or data loss, nor did
we experience any material unauthorized use of end consumers’ personal information.
As of the Latest Practicable Date, we have not received any cybersecurity, data
security or personal data protection related enquiries from any competent regulatory
authorities.
AWARDS AND RECOGNITIONS
During the Track Record Period, we have received recognition for the quality and
popularity of our products. Some of the significant awards and recognitions we have
received are set forth below.
Award Year Award/Recognition
Awarding Institution/
Authority Entity/Product
2025 Guangdong Province
Famous and Excellent
High-Tech Products ( 廣
東省名優高新技術產品)
Guangdong High-Tech
Enterprise Association
(廣東省高新技術
企業協會)
SwitchBot Curtain
2024 National Key Specialized
and Sophisticated
‘‘Little Giant’’
Enterprises ( 國家專精特
新重點「小巨人」企業)
Ministry of Industry and
Information
Technology of the PRC
(中華人民共和國工業和
信息化部)
Woan Technology
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Award Year Award/Recognition
Awarding Institution/
Authority Entity/Product
2023 New High-Tech
Enterprise
(高新技術企業)
Shenzhen Science and
Technology Innovation
Committee ( 深圳市科技
創新委員會), Shenzhen
Finance Bureau ( 深圳市
財政局) and Shenzhen
Taxation Bureau of the
State Taxation
Administration of the
PRC ( 國家稅務總局深
圳稅務局)
Woan Technology
2023 National Intellectual
Property Advantage
Enterprises ( 國家知識
產權優勢企業)
China National
Intellectual Property
Administration ( 國家知
識產權局)
Woan Technology
2022 Guangdong Intelligent
Networking Home
Control Engineering
Technology Research
Center ( 廣東省智能組網
家居控制工程技術研究
中心)
Guangdong Science and
Technology
Department ( 廣東
省科
學技術廳)
Woan Technology
2025 Best in IFA Next IFA Berlin AI companion robot,
Acemate AI tennis
robot
2025 Best in Emerging Tech IFA Berlin AI companion robot
2025 Best Inventions of 2025 TIME Magazine Acemate AI tennis robot
2022–2023 Red Dot Winner Red Dot GmbH & Co.
KG
Lock robot, curtain robot,
smart camera, smart
hub
2022 Grand Prize Best Partner
Award
Amazon SwitchBot JP
2022–2025 iF Design Award iF International Forum
Design GmbH
Curtain robot, enhanced
mobile robot, smart
hub
2022 International Design
Excellence Awards
Industrial Designers
Society of America
Lock robot
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Award Year Award/Recognition
Awarding Institution/
Authority Entity/Product
2021 Best Partner Award Amazon Woan Technology
2021 Golden Pin Design Award Taiwan Design Research
Institute
Curtain robot
2020–2023 Good Design Award Japan Institute of Design
Promotion
Curtain robot, enhanced
mobile robot, smart
sensor, smart camera,
other smart home
product
INTELLECTUAL PROPERTY
We believe that our intellectual property rights are critical to our continued success
and competitiveness. As of the Latest Practicable Date, our Group had registered (i) 191
trademarks, 307 patents (including 54 inventi on patents), 22 software copyrights, and six
work copyrights in the PRC; (ii) 113 trademark s, four patents (including two invention
patents), and one work copyright in other juris dictions; and (iii) three domain names which
we consider to be material or may be material to our business. See ‘‘Appendix VI —
Statutory and General Information — 2. Further Information about Our Business — B.
Our Intellectual Property Rights’’.
We have taken the following key measures to protect our intellectual property rights,
including: (i) implementing a set of comprehens ive internal policies to establish effective
management over our intellectual property r ights; (ii) timely registration, filing and
application for ownership of our intellectua l properties; (iii) actively tracking the
registration and authorization status of intellectual properties and taking action in timely
manner if any potential conflicts with our intell ectual property rights are identified; and (iv)
clearly stating all rights and obligations regarding the ownership and protection of
intellectual properties in the employment agreements we enter into.
We rely upon a combination of patent, trade secret, copyright and trademark laws,
license agreements, confidentiality procedures, and technical measures to protect
intellectual property used in our businesses. We seek to protect our proprietary
technologies and processes by entering into confidentiality arrangements with our
Directors, senior management and other key personnel. All of our R&D personnel are
required to sign confidentiality and proprietary information agreements. These agreements
require such personnel to assign to us all inventi ons, designs and technologies they develop
during the course of employment with us and to keep our proprietary information
confidential.
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Despite our precautions, third parties may obtain and use our intellectual property
without our consent. Unauthorized use of our intellectual property by third parties and the
expenses incurred in protecting our intellectual property rights from such unauthorized use
may adversely affect our business and resu lts of operations. During the Track Record
P e r i o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e ,w ew e r en o ta w a r eo fa n ym a t e r i a l
infringement of our intellectual properties or any material disputes or claims against us in
relation to the infringement of intellectual properties of third parties arising from our
business.
LICENSES, PERMITS AND APPROVALS
The following table sets out a list of material licenses and permits currently held by us
for our operations:
Entity Name of the License Jurisdiction Issue Date Expiry Date
Woan Technology Record of consignor and
consignor of customs
import and export
goods ( 海關進出口貨物
收發貨人備案)
Mainland Chin a September 29,
2017
–(1)
Woan Technology Internet Content Provider
Registration Record
(ICP 備案)
Mainland China June 22, 2022 – (1)
Our Company Internet Content Provider
Registration Record
(ICP 備案)
Mainland Chin a November 10,
2025
–(1)
Note:
(1) The renewal of this license is not required.
According to our PRC Legal Advisers, w e have obtained all licenses, permits,
approvals and certificates that are material for our business operations in the PRC and such
licenses, permits, approvals and certificates are valid and subsisting.
We have obtained all licenses, permits, appr ovals and certificates that are material for
our business operations in Japan and the United States and such licenses, permits,
approvals and certificates are valid and subsisting.
We are required to renew such licenses, perm its, approvals and certificates from time
to time. We do not expect any material legal obstacles in such renewal once the relevant
documents are submitted as required by t he relevant government authorities.
For details of the laws and regulations of C hina and other major overseas markets that
are applicable to our business operations, please see the section headed ‘‘Regulatory
Overview’’ in this prospectus.
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INSURANCE
As of the Latest Practicable Date, we maintai ned various insurance policies including
product liability insurance covering potential claims arising from product defects or
failures, vehicle insurance for our company-own ed vehicles, and employee-related insurance
including social insurance and commercial health insurance.
We maintain insurance in respect of our operations in China, Japan, Europe and North
America. These insurance policies cover the r isk of damage arising from natural disasters
and certain accidents. Most of our insurance policies are subject to standard deductions,
exclusions and limitations.
We believe that our insurance coverage is ad equate and in line with industry practice.
During the Track Record Period and up to the Latest Practicable Date, we had not made or
been the subject of any material insurance claims.
For more information, please refer to ‘‘Risk Factors — Risks Relating to Our Business
and Industry — Our limited insurance coverage could expose us to significant costs and
business disruption.’’ in this prospectus.
PROPERTIES
As of the Latest Practicable Date, we did not obtain any land use rights certificates or
building ownership certificates. As of the Late st Practicable Date, we leased 18 buildings in
China with a total GFA of approximately 63,823.85 sq.m. and two properties in Japan with
a total GFA of approximately 182.2 sq.m. Th e lease agreements for these properties
generally have a term between two and 10 years. The properties we leased are primarily used
for production, warehouse or office purposes.
As of June 30, 2025, no single property interest that forms part of non-property
activities has a carrying amount of 15%, and no single property interest that forms part of
property activities has a carrying amount of 1%, of our total assets. Therefore, according to
Chapter 5 of the Listing Rules and section 6(2 ) of the Companies (Exemption of Companies
and Prospectuses from Compliance with Provi sions) Notice (Cap. 32L of the Laws of Hong
Kong), this prospectus is exempted from compliance with the requirements of section
342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in
relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance which req uires a valuation report with respect to all
our Group’s interests in land or buildings.
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LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
From time to time, we may become involved in legal proceedings in the ordinary course
of our business. During the Track Record Peri od and up to the Latest Practicable Date, we
had not been and were not a party to any mater ial legal, arbitral or administrative
proceedings, and we were not aware of any pending or threatened legal, arbitral or
administrative proceedings against us or our Directors that could, individually or in the
aggregate, have a material adverse effect on our business, financial condition, and results of
operations.
Legal Compliance
We are subject to various regulatory requirements and guidelines issued by regulatory
authorities in China and other major jurisdictions where our products are sold. During the
Track Record Period and as of the Latest Practicable Date, we did not commit any material
and systemic non-compliance of the laws and regulations, and we did not experience any
material non-compliance incident, which tak en as a whole, in the opinion of our Directors,
is likely to have a material and adverse effe ct on our business, results of operations or
financial condition. As advised by our P RC Legal Advisers, during the Track Record
Period and up to the Latest Practicable Date, we had complied with the relevant laws and
regulations in mainland China in all material respects. Additionally, as advised by our
Japanese Legal Adviser, US Legal Advisers and German and EU Legal Advisers, we have
complied with applicable laws and regulations in the respective key markets in all material
respects during the Track Record Period and up to the Latest Practicable Date.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
Governance Regarding Environmental, Social and Climate-related Risks
We are fully aware of our responsibilities toward the society. As a corporate citizen, we
strive to contribute to higher standards of living, wealth and quality of life wherever we
operate. We demonstrate our corporate citizenship foundations through our strong
commitment to safeguard our environmen t as well as many social responsibility
initiatives. We have various governance measures in place to oversee the implementation
of ESG related policies, which are embedded in our standard operating procedures. We also
plan to issue ESG report annually to disc lose our efforts and achievements in ESG.
Our Board has authorized our Company to establish a three-tier ESG management
organizational structure, consisting of an ESG Management Committee, an ESG
Secretariat, and an ESG Working Group. The ESG Management Committee serves as
the executive responsible body, primarily fo cusing on researching ESG-related legal
matters, identifying and managing ESG-rela ted risks with significant impact, and
evaluating ESG performance. Under t he ESG Management Committee, the ESG
Secretariat is responsible for coordinatin g and advancing ESG issue management, as well
as overseeing ESG-related information disclosure. The ESG Working Group acts as the
specific executing body for ESG tasks, responsible for promoting the implementation and
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realization of ESG issues, and collecting progress performance on ESG topics from various
responsible departments. Each topic is assigned a responsible person from the respective
department heads. We continuously seek opportunities to improve ESG measures, evaluate
business operations and financial conditions, identify ESG-related risks within the business,
and take mitigation measures.
We may be exposed to possible financial losses and non-financial detriments arising
from environmental and climate-related risks. T hese risks include: (i) transition risks, being
the risks arising from compliance with the app licable environmental laws and regulations
and the stringent environmental protection standards; and (ii) physical damages, being the
damages arising from acute weather-related ev ents and longer-term chronic shifts in climate
patterns.
Our production facilities in China are req uired to comply with the environmental
protection and safety laws and regulations promulgated by the relevant PRC government.
See the section headed ‘‘Regulatory Overvie w — Regulations Relating to Environmental
Protection’’ in this prospectus for further in formation. If we fail to comply with any of the
applicable environmental pro tection laws and regulations and standards, we may be subject
to fine or penalty. The laws and regulations on environmental protection may be subject to
updates and any update may increase our cost of compliance and place burden on our
operations. See the section headed ‘‘Risk F actors — Risks Relating to Our Business and
Industry — If we fail to comply wi th various environmental and fire safety related laws and
regulations, we may be subject to fines and penalties.’’ in this prospectus for further
information. Such regulatory developments, together with the existing laws, regulations and
expectations, may have significant impacts on the production activities of us and thus
present transitional risks to us, which may adversely affect our production. Furthermore, if
our Group is in breach of any environmental law and regulations, or faces any accusation of
negligence in environmental p rotection, it will adversely affect our reputation and our
creditability. It may also affect our business pe rformances and reduce our competitiveness
to new investors. Our business opportunities may also be negatively impacted as we may be
disadvantaged by the reputational damage and loss of creditability, as our customers may
be less willing to source from an unsustainable supplier.
On the other hand, we acknowledge the potential impact of the climate change may
have on our business operations, such as global warming, high sea level and chaotic weather
pattern, our business operations could be susceptible to the ‘‘physical damages’’ as a result
of droughts, floods, inclement weather and El Nino phenomenon. These physical damages
could affect our business, financial condition s, results of operation and prospects. We have
backed up our information and data by storing them in a server-based storage system,
which in turn minimizes the potential impact of disruptive climate events and their potential
impact on our business. We also conduct emerg ency drills and training sessions to enhance
our employees’ awareness and abilities to mit igate risks. Additionally, to mitigate the
impact of extreme weather on the supply chain, we have strengthened our research efforts in
the raw materials market, assessed market trends, established appropriate and scientific
safety stock levels, and ensured the smooth operation of our production and operations.
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Our Directors confirm that each of our subs idiaries in China has not been alleged to
have materially violated any environmental or safety laws, nor was any material penalty
imposed on our Group for material violation of the PRC environmental or safety laws
during the Track Record Period and up to the Latest Practicable Date, which would have a
material adverse impact on our business operations and financial performance. Our
Directors further confirm that no major accident resulting in deaths or serious injuries of
o u re m p l o y e e so c c u r r e dd u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h eL a t e s tP r a c t i c a b l e
Date.
Environmental Protection and Monitoring
With a focus on environmental consciousness, we strive to conserve our environment
by using resources responsibly, reducing waste, and maintaining a neutral carbon footprint.
Our production process mainly involves the discharge of wastewater, waste gas, solid
waste and noise, as well as the use of different types of chemical materials. As of the Latest
Practicable Date, we have completed requisite registration in respect of the environmental
protection.
Our Environmental Protection Measure
We regard environmental protection as a n essential corporate responsibility and
therefore place great emphasis on environmental protection measures and promulgate
various internal policies on environmental compliance matters and are committed to
integrating environmental protection technologies into product design and manufacture to
ensure that we operate in compliance with relevant environmental laws and regulations. The
following table sets out our major pollutants, environmental protection measures adopted
and the relevant discharge standard:
Major Pollutants
Major Environmental Protection
Measures Adopted Discharge Standards
Wastewater We may produce domestic
wastewater. Our wastewater
primarily consists of sanitary water
from restrooms at our production
base. Pursuant to the discharge
standard, such wastewater does not
require special treatment, and the
Company manages its wastewater
in compliance with applicable laws
and regulations.
Integrated Wastewater Discharge
Standard
(GB 8978–1996) 《（污水綜合排放標
準》GB8978–1996 ）
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Major Pollutants
Major Environmental Protection
Measures Adopted Discharge Standards
Air pollutants We may produce air particles and
other air pollutants during our
operation. We collect, filter and
process air pollutants produced and
discharge the processed air through
a chimney in accordance with the
local emission control regulations.
We have also installed a monitoring
device at our emission chimney
which is connected with the local
environmental monitoring center
and real time emission data can be
uploaded and monitored by the
provincial environmental authority.
Integrated Emission Standard for Air
Pollutants
(GB 16297–1996) (《大氣污染物綜合
排放標準》
GB 16297–1996)
Solid waste We may produ ce certain types solid
waste during our operation,
primarily including, metal scrap
and domestic waste. We collect
metal scrap produced during our
operation and send them to local
recycling center. For hazardous
waste, we engage qualified
third-party waste treatment agents
to properly process and treat such
waste in accordance with applicable
laws and regulations. As for
domestic waste, we dispose such
waste to local waste treatment
center.
Standard for Pollution Control on the
Non-hazardous I ndustrial Solid
Waste Storage and Landfill
(GB18599–2020) （《一般工業固體廢
物貯存及掩埋污染控制標準》
GB18599–2020 ）
Standard for Pollution Control on
Hazardous Waste Landfill
(GB18598–2019) (《危險廢物填埋污
染控制標準》GB18598–2019)
Standard for Pollution Control on
Hazardous Waste Storage
(GB18597–2023) (《危險廢物貯存污
染控制標準》
GB 18597–2023)
We are committed to enhancing and improving technology and services to fulfil our
social responsibilities to both the community a nd environment. In delivering our products,
we strive to ensure that all products and services are delivered with high quality and in an
environmentally responsible manner.
We believe that our businesses are in complia nce with the applicable national, local
and foreign environmental laws and regulations in all material aspects. As of the Latest
Practicable Date, we are not aware of any material penalties associated with the breach of
any existing environmental law or regulation.
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Our Environmental Protection Performance
To actively respond to the goals of ‘‘Carbon Peaking and Carbon Neutrality’’, we
continue to pay attention to environmental protection and the development of ecological
culture. We have set environmental protection targets to quantify our efforts to protect the
environment and actively monitor our impact on the environment. The table below sets
forth an analysis of the environmental protection performance of our Company in each
year/period of the Track Record Period:
For the year ended December 31,
For the six
months ended
June 30,
2022 2023 2024 2025
Total greenhouse gas (GHG)
emissions and intensity
— Scope 1 : Direct emission ( ton) . 1.4 1.4 4.5 1.9
— Scope 2 : Indirect energy
emission ( ton) ........... 316.2 325.1 714.8 403.0
— Scope 3 : Other indirect emission
(ton) ................. — 2 0 . 1 2 7 . 3 5 . 7
T o t a lG H Ge m i s s i o n s......... 317.6 346.5 746.7 410.6
Intensity of total GHG emissions
(ton/total revenue in RMB
m i l l i o n ) ................. 1 . 2 0 . 8 1 . 2 1 . 0
Electricity consumption
— Electricity consumption ( MWh) 589.4 605.8 1,333.3 752.1
— Electricity Consumption
Intensity ( MWh/Revenue
RMB’ million ) ........... 2 . 1 1 . 8 2 . 6 2 . 6
Water consumption
— Water consumption ( m
3)..... 5 , 054.0 5,025.0 9,176.0 4,961.8
— Water consumption Intensity
(m3/Revenue RMB’ million ) . 18.4 11.0 15.0 12.5
O u rE m i s s i o n sT a r g e t s
We plan to set an emission reduction target using the emissions of greenhouse gases in
2024 in terms of emissions-to-r evenue ratios. We plan to reduce our (i) emission intensity of
greenhouse gases by 5% (with 2024 as the base year and 2029 as the target year) through
initiatives such as adopting paperless office pr actices, encouraging public transportation for
commuting, and transitioning to renewable energy sources; (ii) electricity consumption
intensity by 4% through implementing timely power shutoff for electrical devices and
upgrading to energy-efficient alternatives (with 2024 as the base year and 2029 as the target
year); and (iii) water consumption intensity b y 6% through displaying water conservation
signage, facilitating water recycling, and upgra ding to water-efficient appliances (with 2024
as the base year and 2029 as the target year).
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Supply Chain Management
We adopted strict supplier management policies and procedures. With respect to
supplier management, we have introduced a ser ies of policies and rules. In the process of
selecting our suppliers, the performance and qualifications of suppliers in terms of health,
safety, and environmental protection are also taken into our consideration. If our suppliers
encounter special circumstances related to hea lth, safety, and environmental protection,
such as any incidents or penalties, we will conduct investigations, and take appropriate
management measures based on the investigation results, including but not limited to
providing training and education to our supp liers, rectification within a time limit,
suspension or termination of cooperation. During the Track Record Period and up to the
Latest Practicable Date, we had not identi fied any occurrences where our suppliers
encountered special circumstances related to h ealth, safety, or environmental protection.
Anti-bribery and Anti-corruption
We have zero tolerance for unethical business practices such as bribery, fraud, and
corruption. We conduct regular training and onboarding training for employees, keeping
them updated and informed about anti-corruption laws and regulations and our
corresponding policies. We also have develope d whistleblowing channels, including via
phone and email, encouraging employees to report any violations of discipline and
r e g u l a t i o n si nr e l a t i o nt oc o r r u p t i o na c t i o n sand protect the whistle-blower in accordance
with related internal rules.
During the Track Record Period and up to the Latest Practicable Date, We had not
experienced any material breach of relevant anti-corruption laws and regulations that had a
significant impact on our business operations and financial position. As advised by our
PRC Legal Adviser, we were not involved in any litigation or criminal offences arising from
corruption or bribery issues during the Track Record Period and up to the Latest
Practicable Date.
Occupational Health and Work Safety
In China, we are subject to the PRC laws and regulations on labor, safety and
work-related incidents. In order to minimize the risk of accidents and enhance our
employees’ awareness of health and safety issues , we have (i) assigned responsible specialists
for handling production safety accidents and record keeping; (ii) established guidelines and
manuals relating to operational safety and ha ndling of accidents; (iii) conducted training,
including onboarding and on-the-job training and encouraged our employees to be vigilant
and responsible for their safety and health wh ilst performing their wo rk obligations; (iv)
installed fire safety equipment; and (v) require each department of our manufacture
facilities to keep records of regular safety in spection, safety protection equipment spot
check, safety knowledge training sign-in, hydrogen piping point inspection and equipment
maintenance records.
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Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we did not encounter any material incidents, accidents or complaints that
would materially and adversely affect our business operations. During the Track Record
Period and up to the Latest Practicable Date, our Group did not incur any material
administrative penalties for violations of occupational health and work safety.
Corporate Social Responsibility
We are committed to leveraging our business and technology to create value for
society. We highly value our corporate role in building social value and in leading public
awareness of civic responsibility. Set out below are some of the key actions we have
undertaken to promote positive social impact through our business:
. Empowering vulnerable groups through product innovation: We endeavor to
enhance accessibility and independence for individuals with reduced mobility,
including the elderly and persons with disabilities. Our execution-enhanced
robots, such as our SwitchBot Curtain, SwitchBot Lock, and SwitchBot Bot, are
designed with intuitive interfaces and simp le installation processes, enabling users
to automate everyday household tasks with ease. By empowering vulnerable
groups to manage their living environments more effectively, we also aim to
alleviate the burden on caregivers and c ontribute to a more inclusive society.
. Supporting carbon neutrality through smart energy products: Our ecosystem and
products and designed to optimize energy efficiency within the household. For
example, our smart hubs, when integrated with our smart sensors and
execution-enhanced robot products, allows users to optimize and tailor their
home energy usage based on real-time environmental data and user habits. These
capabilities not only improve efficiency and convenience but also help reduce
overall carbon emissions, supporting global climate goals and the transition to
carbon neutrality.
. Fostering talent through industry-academia collaboration: We actively collaborate
with academic institutions to nurture the next generation of technology
professionals. We serve as an internship base for Shenzhen University,
providing students with practical training opportunities in AI and robotics.
Through this partnership, we contribute to the cultivation of industry-ready talent
and the promotion of cutting-edge technological innovation among young
professionals.
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Employee Care
We adhere to the principles of diversity and inclusion, and we are committed to the
development of an equal and diverse employment environment while continuously
optimizing our staffing structure to maintain our internal and external competitiveness.
The table below sets forth the composition of our total workforce in terms of gender, age
and expertise as of the Latest Practicable Date.
Gender .................... M a l e 2 6 4
Female 376
Age ...................... > 4 5 5
30 ≤ 45 280
≤30 355
Expertise .................. S e n i o rm a n a g e m e n t 7
Mid-level management 43
Staff 590
RISK MANAGEMENT AND INTERNAL CONTROL
Internal Control
We have engaged an internal control consultant (the ‘‘Internal Control Consultant’’),
to perform an internal control assessment of our internal control system within the agreed
scope and to report factual findings on our Gr oup’s entity-level controls and internal
controls of various processes, which covers a reas such as environment of control, risk
assessment, information and communication, internal control, financial reporting and
disclosure controls, sales, accounts receiv able and collection, procurement, accounts
payable and payment, inventory, logistics a nd cost management, management of fixed
assets and intangible assets, human resource s and payroll management, cash and treasury
management, taxation management, project management, general controls of IT system
(including protection of data and privacy), R&D management, insurance management,
production management, health, safety and environment protection and contract
management. The Internal Control Consultant performed procedures in March 2025 and
a follow-up review in May 2025 on the enhancement measures taken by us in response to the
findings and enhancement recommendations from the Internal Control Consultant. After
considering the implementation of the enh ancement measures and the result of such
follow-up review, our Directors are satisfied that our internal control system is adequate
and effective for our current operational environment.
We have adopted various measures and procedures regarding each aspect of our
operations, such as protection of intellect ual property, environmental protection and
occupational health and safety. We provide periodic training on these measures and
procedures to our employees as part of our employee training program. We also regularly
monitor the implementation of those measures and procedures through our internal control
personnel for each stage of the production pro cess. Our Directors (who are responsible for
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overseeing our corporate governance) wit h assistance from our legal advisers, will
periodically review our compliance status wit h all relevant laws and regulations after the
Listing.
Below is a summary of the internal control policies, measures and procedures we have
i m p l e m e n t e do rp l a nt oi m p l e m e n t :
. We have established the Audit Committe e, which shall be responsible to review
and supervise our financial reporting process and internal control system of our
Group, oversee the audit process, risk management process and external audit
functions. For more details, see the section headed ‘‘Directors and Senior
Management — Board Committees — Audit Committee’’ in this prospectus.
. We have engaged Quam Capital Limited as our compliance adviser to provide
advice to our Directors and management team until the end of the first fiscal year
after the Listing regarding matters relating to the Listing Rules. Our compliance
adviser is expected to ensure our use of funding complies with the section headed
‘‘Future Plans and Use of Proceeds’’ in this prospectus after the Listing, as well as
to provide support and advice regarding requirements of relevant regulatory
authorities in a timely fashion.
. We plan to engage law firms to advise us on and keep us abreast with the laws and
regulations in jurisdictions where we have material operation after the Listing. We
will continue to arrange various trainings to be provided by external legal advisers
from time to time when necessary and/or any appropriate accredited institution to
update our Directors, senior management , and relevant employees on the latest
PRC laws and regulations.
Risk Management
We recognize that risk management is critical to the success of our business operation.
Key operational risks faced by us include cha nges in the general market conditions and the
applicable regulatory enviro nment, our ability to offer quality services, our ability to
manage our anticipated growth and to execute on our growth strategies, and our ability to
compete with our competitors. See the section headed ‘‘Risk Factors’’ in this prospectus for
a discussion of various risks and uncertainties we face.
We have established a risk management system consisting of the relevant policies and
procedures that we believe are appropriate for our business operations. Pursuant to our risk
management policy, our key risk management obj ectives include: (i) identifying different
types of risks; (ii) assessing and prioritizing the identified risks; (iii) developing appropriate
risk management strategies for different types of risks; (iv) identifying, monitoring and
managing risks and our risk tolerance level; and (v) execution of risk response measures.
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Our Board oversees and manages the overall risks associated with our business
operations. Moreover, our audit committee will review and supervise our financial
reporting process and internal controls sy stem. The audit committee consists of three
members, namely, Ms. LI Hui ( 李輝), Professor KO Ping Keung ( 高秉強), and Professor
WANG Yong ( 王勇). For qualifications and experie nce of the members of the Audit
Committee, please refer to the section heade d ‘‘Directors and Senior Management’’ in this
prospectus.
IMPACT OF THE COVID-19 PANDEMIC
Since early 2020, the outbreak of the COVID-19 pandemic has brought about
uncertainties and challenges to the global economy. The Directors confirm that the
COVID-19 pandemic did not have a material adverse impact on our business operations
and financial performance during the Track Record Period.
We experienced a temporary increase in logistics costs in 2022 due to pandemic-related
disruptions in global transportation and supply chains. However, the overall impact of
these costs on our financial performance was limited. Our transportation and storage costs
as a percentage of our total revenue were 12.2%, 8.1%, 9.1%, 7.2% and 7.0% for the years
ended December 31, 2022, 2023 and 2024, and t he six months ended June 30, 2024 and 2025,
respectively.
Notwithstanding the challenges posed by the pandemic, particularly during the period
when restrictions were in effect in 2022, our business operations and production remained
largely uninterrupted. During this period, we continued to record strong growth in key
business metrics. In particular, the number of SwitchBot App users increased from 619,315
as of December 31, 2021 to 1,252,138 as of December 31, 2022, representing an increase of
approximately 102.3%. Over the same period, our sales volume increased from 1,381,412
units in 2021 to 2,423,758 units in 2022, representing an increase of approximately 75.5%.
Such strong growth demonstrated the resilience of our business model and the sustained
demand for our products.
Following the lifting of major COVID-19 related restrictions in China and our
overseas markets towards the end of 2022, our business has continued its strong growth
trajectory. Our revenue increased from R MB274.6 million in 2022 to RMB457.3 million in
2023 and further to RMB609.9 million in 2024. This growth trend is also reflected in our
interim results, with revenue increasing fr om RMB275.0 million for the six months ended
June 30, 2024 to RMB396.3 million for th e six months ended June 30, 2025.
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OVERVIEW
As of the Latest Practicable Date, Mr. Li controlled approximately 44.53% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (1) 21.82% beneficially owned by him directly; (2) 8.24% beneficially owned by
Wonder Innovation ESOP, an employee share ownership platform controlled by Mr. Li as
the general partner; and (3) 14.47% beneficially owned by Mr. Pan, in respect of which Mr.
Li has the right to direct voting and other shareholder actions of Mr. Pan pursuant to the
terms of the Acting-in-concert Agreement, whereby Mr. Pan agreed to act in concert with
Mr. Li in relation to all matters requiring the exercise of shareholder rights and director
rights in our Company (where applicable). Upon the Listing and pursuant to the issuance of
new Shares under the Global Offering, Mr. Li will control approximately 40.07% of the
shareholding interests and voting power at the shareholders’ meetings of our Company,
comprising (i) 19.64% beneficially owned by Mr. Li directly; (ii) 7.41% beneficially owned
by Wonder Innovation E SOP; and (iii) 13.02% beneficially owned by Mr. Pan, assuming
the Over-allotment Option is not exercised. Therefore, Mr. Li, Mr. Pan and Wonder
Innovation ESOP are the Controlling Sharehold er Group as of the Latest Practicable Date
and upon the Listing.
NO COMPETITION AND CLEAR DELINEATION OF BUSINESS
Our Controlling Shareholders have confirme d that as of the Latest Practicable Date,
none of them or any of their respective close associates had any interest in a business that
competes or is likely to compete, either direct ly or indirectly, with our business, which is
subject to disclosure pursuant to Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CON TROLLING SHAREHOLDERS
Management Independence
Our business is primarily managed and conducted by our Board and senior
management. Upon the completion of the Listing, our Board will comprise four executive
Directors, two non-executive Directors and three independent non-executive Directors. See
‘‘Directors and Senior Management’’ for more information.
O u rD i r e c t o r sb e l i e v et h a to u rB o a r da n dsenior management is able to manage our
business and function indep endently from our Controllin g Shareholders based on the
following reasons:
(1) each of our Directors is aware of his/her fiduciary duties as a Director of our
Company which require, among other things, that he/she acts for the benefit and
in the best interests of our Company and does not allow any conflict between
his/her duties as a Director and his/her personal interest;
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(2) in the event that there is a potential conflict of interest arising out of any
transaction to be entered into between our Group and our Directors or their
respective associates, the interested Directors shall abstain from voting at the
relevant board meetings of our Company in respect of such transactions and shall
not be counted in the quorum;
(3) we have three independent non-executive Directors, who have extensive
experience in different areas and have been appointed to ensure that the
decisions of our Board are made after due consideration of independent and
impartial opinions. Certain matters of our Company must always be referred to
the independent non-executive Directors for review in accordance with the Listing
Rules, the applicable laws and our Articl es of Association and internal policies;
(4) our daily management and operations are carried out by our senior management
team. Except Mr. Li and Mr. Pan themselves, our senior management team
members are independent from our Cont rolling Shareholders, all of whom have
substantial experience in the industry in which our Company is engaged, and will
therefore be able to make business decisions that are in the best interest of our
Group; and
(5) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders which
would support our independent management. See ‘‘— Corporate Governance.’’
Operation Independence
We have established our own organizatio nal structure comprised of individual
departments, each with specific areas of resp onsibilities. We have also established various
internal controls procedures to facilitate the effective operation of our business. Our Group
is not operationally depende nt on our Controlling Shareholders. Our Company (through
our subsidiaries) holds or enjoys the benefit of all relevant licenses and owns all relevant
intellectual property and R&D facilities n ecessary to carry on our business. We have
sufficient capital, facilities, equipment and em ployees to operate our bu siness independently
from our Controlling Shareholders. We also have independent access to our customers and
suppliers.
Based on the above, our Directors believe that we are capable of carrying on our
business independently of our Controlling Shareholders and their respective close
associates.
Financial Independence
We have an independent financial system. Our Group’s accounting and finance
functions are independent of our Controllin g Shareholders and their respective close
associates. Our Group makes financial decisions according to our own business needs. Our
Group’s major finance operations are handled by our financial management department,
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which operates independently from our Contro lling Shareholders and their close associates.
We do not share any other functions or resourc es with any of our Controlling Shareholders
or their respective close associates.
During the Track Record Period, we prima rily financed our business operations
through either cash generated from our business activities and/or equity financing activities.
As at June 30, 2025, the Group’s borrowing s of approximately RMB98.7 million were
guaranteed by Mr. Li together with the Company. Please see ‘‘Financial Information —
Indebtedness’’ and Note 24 of the Accountant’s Report as set out in Appendix I to this
prospectus. Our Company is in the process of negotiating with the relevant banks and such
guarantees or security provided by Mr. Li are expected to be released in full upon the
Listing. As such, our Directors are of the view that the guarantee does not affect our
financial independence.
Based on the above, our Directors believe that our Group is able to operate with
financial independence from our Controllin g Shareholders and their close associates.
CORPORATE GOVERNANCE
We have put in place sufficient corporate governance measures to manage the conflict
of interest and potential competition from o ur Controlling Shareholders and safeguard the
interest of our Shareholders, including:
(1) where a Shareholders’ meeting is to be h eld for considering proposed transactions
in which our Controlling Shareholders or any of their close associates has a
material interest, our Controlling Share holders will not vote on the resolutions
and shall not be counted in the quorum in the voting;
(2) our Company has established internal control mechanism to identify connected
transactions. After the Listing, our Company will comply with the requirements in
connection with connected transactions under the Listing Rules;
(3) where our Directors reasonably request the advice of independent professionals,
such as independent financial advisors, the appointment of such independent
professional will be made at our Company’s expense;
(4) we have appointed Quam Capital Limited as our compliance advisor to provide
advice and guidance to us in respect of co mpliance with the applicable laws and
regulations, as well as the Listing Rules, including various requirements relating
to corporate governance;
(5) we have established the Audit Committee, Remuneration and Appraisal
Committee and Nomination Committee with written terms of reference in
compliance with the Listing Rules and the Corporate Governance Code;
(6) our Controlling Shareholders will conf irm the status of their non-competing
interest (if any) on an annual basis and to provide all information necessary,
including all relevant financial, oper ational and market information and any
other necessary information as required by our Company; and
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(7) our Company will disclose decisions (with basis), if any, on matters reviewed by
the independent non-executive Directors either in its annual report or by way of
announcements.
Our Directors consider that the above corporate governance measures are sufficient to
manage any potential conflict of interests be tween our Controlling Shareholders and their
respective close associates and our Group and to protect the interests of our Shareholders,
in particular, the minority Shareholders.
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BOARD OF DIRECTORS
Our Board comprises nine Directors, comprising four executive Directors, two
non-executive Directors and three indepen dent non-executive Directors. Our Board is
responsible and has general power for the management and conduct of our business. We
have entered into service contracts and/or letters of appointment with each of our
Directors. Pursuant to the Articles of Association, our Directors are elected and appointed
by our Shareholders at a Shareholders’ meeting for a term of three years, which is renewable
upon re-election and re-appointment.
Members of Our Board
The table below shows certain information in respect of the members of our Board:
Name Age Position/Title
Date of
Joining
Our Group
Date of
Appointment
as Director
Key Role and
Responsibility
Relationship
with other
Directors
and Senior
Management
Executive Directors
Mr. LI Zhichen
(李志晨)
34 Chairman of the
Board,
executive
Director and
chief executive
officer
January 22,
2015
October 18,
2018
Responsible for
the overall
business
development,
management
and strategic
planning of our
Group
N/A
Mr. PAN Yang
(潘陽)
37 Executive
Director and
chief technology
officer
January 22,
2015
October 18,
2018
Responsible for
overseeing
R&D and
operation of
our Group
N/A
Mr. HU Zhidong
(胡治東)
33 Executive
Director and
chief financial
officer
March 18,
2025
April 8, 2025 Responsible for
overseeing the
financial and
investor
relationship
management of
our Group
N/A
Ms. YANG
Minghui ( 楊明輝)
45 Executive
Director and
general counsel
June 11,
2021
April 8, 2025 Responsible for
managing the
legal and
intellectual
property
affairs of our
Group
N/A
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Name Age Position/Title
Date of
Joining
Our Group
Date of
Appointment
as Director
Key Role and
Responsibility
Relationship
with other
Directors
and Senior
Management
Non-executive Directors
Professor LI
Zexiang ( 李澤湘)
64 Non-executive
Director
April 8, 2025 April 8, 2025 Responsible for
providing
professional
and strategic
advice to our
Group
N/A
Professor KO Ping
Keung ( 高秉強)
73 Non-executive
Director
October 18,
2018
October 18,
2018
Responsible for
providing
professional
and strategic
advice to our
Group
N/A
Independent non-executive Directors
Ms. LI Hui
(李輝)
47 Independent
non-executive
Director
December
30, 2025
December
30, 2025
Responsible for
supervising
and providing
independent
opinion to our
Board
N/A
Dr. LEUNG Suk
Wai Winnie
(梁淑慧)
46 Independent
non-executive
Director
December
30, 2025
December
30, 2025
Responsible for
supervising
and providing
independent
opinion to our
Board
N/A
Professor WANG
Yong ( 王勇)
37 Independent
non-executive
Director
December
30, 2025
December
30, 2025
Responsible for
supervising
and providing
independent
opinion to our
Board
N/A
Executive Directors
Mr. LI Zhichen ( 李志晨), aged 34, is our co-founder, the chairman of the Board, the
chief executive officer of our Company and an executive Director. He served as our
Director and the chairman of the Board since October 18, 2018, and will be re-designated as
an executive Director since December 30, 20 25. Mr. Li is primarily responsible for the
overall business development, management and strategic planning of our Group. He holds
various positions in subsidiaries of our Group, including as an executive director and
general manager of Woan Technology since January 2015, a representative director of
SwitchBot JP since September 2020, the sole director of Woan HK since May 2020, a
director of Wonderlabs HK since July 2020 and a director of SwitchBot US since November
2020.
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Mr. Li has over 12 years of experience in the robotics and electrical engineering
technology industry. In August 2012, he worked as an electrical and electronic engineer at
Astralink Technology Pte Ltd, a Singapore-based embedded product and cloud IT
application solution provider. In January 2015, Mr. Li co-founded Woan Technology
and served as its executive director. Please see ‘‘History and Corporate Structure —
Overview’’ for the history of our Group.
Mr. Li graduated at the age of 20 from Harbin Institute of Technology ( 哈爾濱工業大
學) in July 2011 with a bachelor’s degree in elec tronic information engineering. At the age of
21, he further obtained a master’s degree of science in electronics from Nanyang
Technological University ( 南洋理工大學) in July 2012.
Mr. Li was certified as an overseas high-caliber personnel by the Human Resources
and Social Security Administrat ion of Shenzhen Municipality ( 深圳市人力資源和社會保障
局) in April 2021.
Mr. PAN Yang ( 潘陽), aged 37, is our co-founder, our executive Director and the chief
technology officer of our Group. He served as our Director since October 18, 2018, and will
be re-designated as an executive Director since December 30, 2025. He is primarily
responsible for overseeing R&D and operation of our Group.
Mr. Pan has over 13 years of experience in the robotics and information technology.
He commenced his career in the PRC as a field programmable gate arrays (FPGA) engineer
from July 2011 to May 2014 in Sumavision Technologies Co., Ltd. ( 北京數碼視訊科技股份
有限公司) (300079.SZ) and was primarily responsible for FPGA development. During the
period from June 2014 to June 2015, he worked as a FPGA engineer at Shenzhen
Intelliwork Technologies Co. Ltd. ( 深圳市卓訊達科技發展有限公司), a company principally
engaged in the business of R&D and sales of auto mated production and testing equipment,
where he was primarily responsible for product development.
Mr. Pan graduated from Harbi n Institute of Technology ( 哈爾濱工業大學) in July 2011
with a bachelor’s degree in electronic science and technology.
Mr. HU Zhidong ( 胡治東), aged 33, is our executive Director, the chief financial officer
and the joint company secretary of our Company. He joined our Group in March 2025 and
is primarily responsible for ove rseeing the financial and investor relationship management
of our Group. He was appointed as a Director on April 8, 2025 and will be re-designated as
an executive Director since December 30, 2025.
Mr. Hu has over 13 years of experience in the finance and capital market. During the
period from October 2011 to June 2014, he work ed at PricewaterhouseCoopers Zhong Tian
CPA Shenzhen Branch. During the period from June 2014 to June 2016, he worked in the
investment banking department of China Investment Securities Co., Ltd. During the period
from June 2016 to March 2025, he worked in the investment banking department of China
International Capital Corporation, with the last position being vice president.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Hu obtained a bachelor’s degree of business management with major in accounting
from Zhongnan University of Economics and Law ( 中南財經政法大學)i nJ u n e2 0 1 1 ,a n da
bachelor’s degree of commerce in accountin g and accounting technologies from Curtin
University of Technology (now known as Curtin University) in August 2011. He further
obtained a master’s degree of business adminis tration from Cornell University in December
2023, and a master’s degree of business administration from Tsinghua University PBC
School of Finance ( 清華大學五道口金融學院) in January 2024. Mr. Hu obtained a PRC
certified public accountant certificate from the Chinese Institute of Certified Public
Accountants ( 中國註冊會計師協會) in January 2015.
Ms. YANG Minghui ( 楊明輝), aged 45, is our executive Director and the general
counsel of our Company. She joined our Group in June 2021 and is primarily responsible
for legal and intellectual property affairs of our Group. She was a Director on April 8, 2025
and will be re-designated as an executive Director since December 30, 2025.
Ms. Yang has over 11 years of experience in the field of intellectual property industry.
During the period from October 2013 to June 2021, she worked at various positions,
including the manager of the intellectual property department and assistant to general
manager of product R&D department of Shenzhen Genvict Technologies Co., Ltd. ( 深圳市
金溢科技股份有限公司) (002869.SZ) and was primarily resp onsible for intellectual property
protection work.
Ms. Yang obtained a bachelor’s degree and a master’s degree in mechanical
engineering and automation from South China University of Technology ( 華南理工大學)
in July 2003 and June 2006, respectively. Sh e further obtained a master’s degree in
intellectual property legal studies from Chi na University of Political Science and Law ( 中國
政法大學) in January 2023. Ms. Yang obtained a PRC certified engineer certificate from
Shenzhen Municipal Personnel Bureau ( 深圳市人事局) in October 2008, and a legal
professional qualification cer tificate issued by the Ministry of Justice of the PRC in March
2011.
Non-executive Directors
P r o f e s s o rL IZ e x i a n g(李澤湘), PhD, aged 64, is our non-executive Director. He joined
our Group as our Director since April 8, 2025 and will be re-designated as our
non-executive Director since December 30, 2025.
Professor Li is a renowned scholar in robotics and automation with over 36 years of
experience in academia and research. Pr ofessor Li has served as a professor at the
department of electronic and computer engineering of The Hong Kong University of
Science and Technology ( 香港科技大學) since 1992. He established the center for
automation technology at The Hong Kong University of Science and Technology ( 香港科
技大學) in 1998 and has been the key member of the Robotics Institute of the Hong Kong
University of Science and Technology since 2015.
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Professor Li is also an entrepreneur and a venture capitalist in the fields of innovative
technology. In October 1999, he co-founded Googol Technology Co., Ltd. ( 固高科技股份有
限公司) (301510.SZ) (‘‘Googol Technology’’) wit h, among others, Professor Ko, also our
non-executive Director, and has served as the chairman of the board of directors of Googol
Technology since its establishment. Professor Li is the ultimate controller of Songshan Lake
Robot Institute, Yinghu Intelligent and Don gguan Yunhe, our Pre-IPO Investors in Series
Pre-A Financing, Series A Financing and Series B Financing. Please see ‘‘History and
Corporate Structure — Pre-IPO Investments’’ for details.
Professor Li has served in various consultative bodies of the Hong Kong government.
He served as a non-official member of the HKS AR Commission on Strategic Development
(香港特別行政區策略發展委員會) during the period from 2008 to 2017. He also served as a
member of the HKSAR Committee on Innovation, Technology and Re-industrialisation ( 香
港特別行政區創新、科技及再工業化委員會) during the period from April 2017 to April
2021. Professor Li is also serving as a member of the HKSAR Steering Committee of the
Research, Academic and Industry Sectors One-plus Scheme ( 香港特別行政區「產學研1+計
劃」督導委員會) for the term commencing from January 1, 2024 to January 1, 2026.
Professor Li obtained a bachelor’s degree of science in electrical engineering and
economics (with honours) from Carnegie Mellon University in August 1983. He further
obtained a master’s degree in mathematics in May 1985 and received a doctorate in
electrical engineering and computer science from the University of California, Berkeley in
December 1989. He was awarded as a fellow of the Institute of Electrical and Electronics
Engineers in 2008.
Professor KO Ping Keung ( 高秉強), PhD, JP, aged 73, is our non-executive Director.
He was appointed as our Director since October 2018 and will be re-designated as our
non-executive Director since December 30, 2025.
Professor Ko is a renowned scholar in electrical engineering with over 40 years of
experience in academia. During the period from 1995 to 2005, he served as the Dean of the
school of engineering of The Hong Kong University of Science and Technology ( 香港科技大
學), until his retirement in 2005, after which he was granted and awarded with the honorary
title of Emeritus Professor of Electronic and Computer Engineering of The Hong Kong
University of Science and Technology.
Professor Ko is also an entrepreneur and a venture capitalist. In October 1999, he
co-founded Googol Technology with Professor Li, our non-executive Director. He is the
co-founder and general partner of Brizan Ventures LP, a venture capital fund which
invested in China-based start ups and emergi ng enterprises. He is also an investor for
various multinational tech enterprises such as SZ DJI Technology Co., Ltd. ( 深圳市大疆創
新科技有限公司), Smartsens Technology (Shanghai) Co., Ltd. ( 思特威（上海）電子科技股份
有限公司) (688213.SH) and Beken Corporation ( 博通集成電路（上海）股份有限公司)
(603068.SH). Professor Ko is one of the ult imate controller of Brizan Ventures V, our
P r e - I P OI n v e s t o ri nS e r i e sCF i n a n c i n g .H eh a da l s op a r t i c i p a t e di nS e r i e sP r e - AF i n a n c i n g ,
DIRECTORS AND SENIOR MANAGEMENT
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Series A Financing and Series B Financing through Songshan Lake Robot Institute, Yinghu
Intelligent and Dongguan Yunhe. Please see ‘‘H istory and Corporate Structure — Pre-IPO
Investment’’ for details.
Professor Ko has served as an independent non-executive director of Henderson
Investment Limited (HKEX: 0097) and Henderson Land Development Company Limited
(HKEX: 0012) since September 2004, Q Technology (Group) Company Limited (HKEX:
1478) from May 2017 to September 2025 and VTech Holdings Limited (HKEX: 0303) since
January 2018, all of which are Hong Kong listed companies. Professor Ko has also served
as an independent director of Primarius Technologies Co., Ltd. ( 上海概倫電子股份有限公
司) (688206.SH) during the period from October 2023 to February 2025, a director of Beken
Corporation ( 博通集成電路（上海）股份有限公司) (603068.SH) from February 2017 to
August 2025, Smartsens Techn ology (Shanghai) Co., Ltd. ( 思特威（上海）電子科技股份有
限公司) (688213.SH) since December 2020 and Googol Technology (301510.SZ) since June
2021, all of which are PRC listed companies.
Professor Ko has been appointed as a HK SAR justice of peace since June 1997. He
also served in various consultative bodies of the Hong Kong government, including as a
member of the HKSAR University Grants Committee ( 香港特別行政區大學教育資助委員
會) during the period from April 1993 to March 1998, the chairman of HKSAR Research
Grants Council ( 香港特別行政區研究資助局) from January 1994 to July 1999, and a
member of HKSAR Advisory Committe e on the Northern Metropolis ( 香港特別行政區北
部
都會區諮詢委員會) during the period from February 2023 to February 2025.
Professor Ko obtained a bachelor’s degree of science (Honours) from The University
of Hong Kong ( 香港大學) in 1974, and obtained a master’s degree of science degree in
electrical engineering and received a doctorate in electrical engineering from the University
of California, Berkeley in 1978 and 1982 respectively. He was awarded as a fellow of the
Institute of Electrical and Electronics Engineers.
Independent non-executive Directors
Ms. LI Hui ( 李輝), aged 47, is our independent non-executive Director. She joined our
Company as an independent non-executive Director on December 30, 2025.
Ms. Li has over 21 years of experience in the field of auditing, risk management and
internal control. During the period from M arch 2004 to February 2012, she worked as the
deputy director in the enterprise risk management and service department of Deloitte
Touche Tohmatsu Certified Public Accountants LLP in Shanghai, PRC, and was primarily
responsible for risk advisory. During the period from February 2012 to April 2016, she
worked as a partner of Grant Thornton Certified Public Accountants LLP in Shanghai and
worked in the enterprise risk management adv isory department. During the period from
April 2016 to November 2020, she worked as a partner of the Risk Management
Consultancy department of Deloitte China. During the period from December 2020 to April
2023, she worked as a researcher of the CFO line Ant Group ( 螞蟻集團). Since July 2023,
she served as the vice president of Shanghai Niantong Enterprise Consulting Co., Ltd. ( 上海
念桐企業諮詢有限公司).
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Ms. Li obtained a bachelor’s degree of economics with major in accounting from China
Textile University ( 中國紡織大學)(now known as Donghua University ( 東華大學)) in July
1999. She further obtained a master’s degree in management with a major in enterprise
management from Donghua University ( 東華大學) in March 2004. She was admitted as a
member of The Association of Chartered Certified Accountants in July 2005 and as a fellow
in September 2010. She was awarded the professional designation of certified internal
auditor by The Institute of Internal Auditors in November 2004. She also obtained the
qualification of senior economist from Shanghai Professional and Technical Personnel Title
Assessment and Certi fication Committee ( 上海市專業技術人才職稱考核認定委員會)i n
November 2024.
Dr. LEUNG Suk Wai Winnie (梁淑慧), aged 46, is our independent non-executive
Director. She joined our Company as an indepe ndent non-executive Director on December
30, 2025.
Dr. Leung has over 16 years of experience in aerospace engineering, academia and
research. In February 2004, she worked at MDA Space Missions, a Canadian aerospace
technology company, where she was primarily responsible for research and development in
the field of locomotion and navigation for planetary rovers. During the period from
September 2011 to December 2015, she wor ked as a lecturer of the Department of
Mechanical and Automation Engineering o f The Chinese University of Hong Kong ( 香港中
文大學). Since September 2016, she joined The Hong Kong University of Science and
Technology ( 香港科技大學) with her latest position being an associate professor of
engineering education and a senior lecturer in the Faculty of the Division of Integrative
Systems and Design of The Hong Kong University of Science and Technology ( 香港科技大
學).
Dr. Leung is also an entrepreneur. She co-founded miniDSP Limited ( 米納揚聲有限公
司), a Hong Kong-based pro-audio company which delivers digital audio solutions in
application areas spanning conferencing to augmented reality, in April 2011 and serves as a
director since April 2011.
Dr. Leung obtained a bachelor’s degree of applied science in systems design
engineering from University of Waterloo in June 2002. She further obtained a master’s
degree of science in aerospace engineering from the Institute for Aerospace of the
University of Toronto in November 2004, and received a doctorate in electronic and
computer engineering from The Hong Kong University of Science and Technology ( 香港科
技大學
) in November 2010.
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Professor WANG Yong ( 王勇), aged 37, is our independent non-executive Director. He
joined our Company as an independent non-executive Director on December 30, 2025.
Professor Wang has over 12 years of experience in academia and research, specialising
in the field of microelectronics and semiconductor technologies. From August 2012 to June
2016, he served as a research engineer and later a research fellow at Nanyang Technological
University ( 南洋理工大學), his alma mater, in Singapore. From July 2017 to August 2018,
he served as a researcher and project leader at the IHP — Leibniz Institute for High
Performance Microelectronics in Germany. Since August 2018, he has been serving as a
professor and doctoral supervisor at the School of Information and Communication
Engineering of the University of Elect ronic Science and Technology of China ( 電子科技大
學).
Professor Wang obtained a bachelor’s degree in electronic information engineering
from Harbin Institute of Technology ( 哈爾濱工業大學) in July 2010. He further obtained a
master’s degree of engineering in circuits and systems, and received a doctorate of
philosophy in circuits and systems fro m Nanyang Technological University ( 南洋理工大學)
in April 2013 and May 2016, respectively.
DISCLOSURE UNDER RULE 8.10 OF THE LISTING RULES
As of the Latest Practicable Date, Professor Li, our non-executive Director, is (1) a
director, an investor and a substantial shareholder of Narwal Intelligent Innovation
(Shenzhen) Co., Ltd ( 雲鯨智能創新（深圳）有限公司)( ‘ ‘Narwal ’’), which according to
publicly available information, is princ ipally engaged in research, development,
production and sales of robot vacuum cleaner and vacuum mop; and (2) a shareholder
controlling more than 10% of shareholding in terests of SZ DJI Technology Co., Ltd. ( 深圳
市大疆創新科技有限公司)( ‘ ‘DJI’’), which according to publicly available information has
launched robot vacuum cleaner as a new product in August 2025.
Our Directors are of the view that the direc torship held by Professor Li in Narwal and
DJI would not give rise to material competition issue under Rule 8.10 of the Listing Rules
due to the reasons below:
(a) Based on information available to the Company, the business focus of Narwal,
DJI, and that of our Group are distinguishable. Narwal primarily engages in the
robot vacuum cleaner segment and DJI primarily engages in sales and
manufacture of commercial unmanned a erial vehicles (drones) for aerial
photography and videography, whereas our Group offers a broad range of
home robotic system products, including, among others, finger robots, curtain
robots, lock robots and multitasking household robots, which is distinguishable
from Narwal’s. Accordingly, the Directors consider that as of the Latest
Practicable Date, the product offerings of Narwal, DJI and our Group are
distinct and are not substantially overlapping;
DIRECTORS AND SENIOR MANAGEMENT
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(b) Professor Li is a non-executive Dir ector and does not engage in the day-to-day
business operation or management of ou r Company. He is a venture capitalist
who had invested in a wide range of innovative technology enterprises across
different sectors, including our Compan y, Narwal and DJI. Professor Li’s role is
primarily that of a strategic investor an d his involvement at our Board is limited
to high-level oversight. As confirmed by Professor Li, he also does not hold any
executive or operational position in Narwal and he had ceased to be a director of
DJI since February 2023;
(c) Professor Li has confirmed that (1): to the extent he holds directorship position in
or is a substantial shareholder of Narwal, he will abstain from voting on any
resolution as a Director of our Company in respect of matters where a conflict of
interest or duty to prevent so may arise; (2) he would similarly abstain from voting
on any resolution as a director of Narwal in relation to matters which may give
rise to a conflict of interest with our Company. Professor Li is fully aware of his
fiduciary duties as a Director, which inclu de, among other obligations, acting in
good faith in the interests of our Company and avoiding actual or potential
conflicts between his personal interests (including his role with Narwal) and those
of our Company. Where a material interest exists, Professor Li will make full
disclosure and abstain from attending or voting at the relevant Board meetings in
accordance with the requirements under the Listing Rules; and
(d) Professor Li has entered into a letter of appointment with our Company, pursuant
to the terms of which, he has undertaken to observe strict confidentiality in
respect of any confidential or price-sen sitive information of the Group that he
may obtain during his tenure as our non-executive Director. In particular,
Professor Li is required to keep such information confidential and not to disclose
or use it for any purpose other than in the proper discharge of his duties as our
non-executive Director. These confidentiality obligations continue to apply after
the termination of his appointment to the extent such information remains
non-public and confidential.
We have appointed three independent non-executive Directors, comprising one third of
our Board in order to promote the interests of our Company and our Shareholders as a
whole. We have also established relevant corporate governance measures to manage
potential conflicts of interest, including th ose arising from situations similar to that of
Professor Li, where a Director may concurrentl y hold investments or non-executive roles in
other companies operating in related industries. These measures include board-level
protocols, conflict-of-interest declarations, abstention arrangements, and continuous
monitoring to ensure that the interests of our Company and Shareholders are duly
safeguarded.
B a s e do nt h ei n f o r m a t i o na n dr e p r e s e n t a t i o ng i v e nt ot h eJ o i n tS p o n s o r s ,t h ew o r k
done by the Company and the independent d ue diligence work performed by the Joint
Sponsors, nothing has come to the Joint Sponsors’ attention that could cast doubts on the
Directors’ views set out above.
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Saved as disclosed herein, none of our Directors or any of their respective associates
had interests in any other companies as of the Latest Practicable Date that may, directly or
indirectly, compete with our business and would require disclosure under Rule 8.10 of the
Listing Rules.
DISCLOSURE REQUIRED UNDER RULE 13.51(2) OF THE LISTING RULES AND
CONFIRMATION FROM OUR DIRECTORS
Professor Li and Professor Ko were directors of the companies which were
incorporated in Hong Kong or the PRC pr ior to their respective dissolution or
deregistration. Each of Professor Li and Prof essor Ko confirmed th at (1) the companies
were solvent and inactive at the time of their dissolution; (2) none of the dissolved or
deregistered companies were subject to any material investigations, non-compliance,
penalty or other administrative or regulato ry proceedings at the time of their respective
dissolution or deregistration; and that (3) thei r dissolution had not resulted in any liability
or obligation against them.
Professor Ko were directors of the followi ng companies which were established in the
PRC prior to their respective deregistrat ion due to revocation of business licence:
Name of the
deregistered entities
Place of
incorporation/
establishment
Date of
deregistration
(by chronological
order)
Position
held at the
deregistered
entities Status and reasons
Shanghai Bingshilong
Catering Management Co.
Ltd. ( 上海冰室龍餐飲管理
有限公司)
PRC May 21, 2013 Director Revocation of
business licence
(Note 1)
Beijing Fangyi Integrated
Circuit Design Co. Ltd.
(北京方益積成電路設計有
限公司)
PRC December 17,
2018
Director Revocation of
business licence
(Note 2)
Notes:
1. Professor Ko confirmed that Shanghai Bin gshilong Catering Management Co. Ltd. ( 上海冰室龍餐
飲管理有限公司) was solvent when its business licence was revoked and there was no wrongful act
on his part that led to the revocation of its business licence.
2. Professor Ko confirmed that Beijing Fan gyi Integrated Circuit Design Co. Ltd. ( 北京方益積成電路
設計有限公司) was solvent when its business licence was revoked and there was no wrongful act on
his part that led to the revocation of its business licence.
DIRECTORS AND SENIOR MANAGEMENT
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As further confirmed by Professor Ko, the aforesaid companies were revoked because
of inactive business operation and there was no wrongful act on his part leading to the
revocation of business license. None of the aforesaid revoked companies were subject to any
material investigations, non-compliance, pe nalty or other administrative or regulatory
proceedings at the time of their respective deregistration, and their respective deregistration
had not resulted in any liabilit y or obligation against him.
Save as otherwise disclosed above and in this prospectus, each of our Directors
confirms with respect to himself or herself that he/she (i) did not hold other long positions
or short positions in the Shares, underlying Shares, debentures of our Company or any
associated corporation (within the meaning of Part XV of the SFO) as of the Latest
Practicable Date; (ii) had no other relation ship with any Directors, senior management,
substantial shareholders o r Controlling Shareholders of ou r Company as of the Latest
Practicable Date; (iii) did not hold any other directorships in the th ree years prior to the
Latest Practicable Date in any public compan ies of which the securities are listed on any
securities market in Hong Kong and/or overseas; and (iv) there are no other matters
concerning our Director’s appointment that need to be brought to the attention of our
Shareholders and the Stock Exchange or shall be disclosed pursuant to Rules 13.51(2)(h) to
(v) of the Listing Rules.
Each of our Directors has confirmed that he/she obtained the legal advice on May 9,
2025 with regards to the requirements under the L isting Rules that are applicable to him/her
as a director of a listed issuer and the possible consequences of making a false declaration or
giving false information to the Stock Exchange as set out in Rule 3.09D of the Listing Rules
and he/she understood his/her obligat ions as a director of a listed issuer.
Each of our independent non-executive Directors has confirmed (i) his/her
independence with regards to each of the factors as set out in Rule 3.13(1) to (8) of the
Listing Rules, (ii) he or 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 Lates t Practicable Date, and (iii) that there are
no other factors that may affect his/her indepe ndence at the time of his/her appointment.
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SENIOR MANAGEMENT
The senior management of the Group, together with our executive Directors, are
responsible for the day-to-day operations and management of the business of our Group.
Name Age Position
Date of
Appointment and
Joining Our
Group
Key Role and
Responsibility
Relationship
with other
Directors and
Senior
Management
Mr. LI Zhichen
(李志晨)
34 Chairman of the
Board, executive
Director and chief
executive officer
January 22, 2015 Responsible for the
overall business
development,
management and
strategic planning
of our Group
N/A
Mr. PAN Yang
(潘陽)
37 Executive Director
and chief
technology officer
January 22, 2015 Responsible for
overseeing R&D
and operation of
our Group
N/A
Mr. HU Zhidong
(胡治東)
33 Executive Director
and chief financial
officer
March 18, 2025 Responsible for
overseeing financial
and investor
relationship
management of the
Group
N/A
Mr. LIN Haizhou
(林海洲)
35 Chief operating
officer
September 11,
2017
Responsible for
overseeing
operations, sales
and marketing
functions of the
Group
N/A
Mr. MOU Qingqi
(牟慶琦)
33 Chief marketing
officer
May 1, 2019 Responsible for
overseeing brand
development, sales
strategy and
marketing
management
N/A
Mr. LIU Guohui
(劉國輝)
36 Vice president in
production
engineering
August 1, 2017 Responsible for
overseeing supply
chain management
of the Group
N/A
Mr. LIU
Yongliang
(劉永良)
40 Vice president in
human resources
July 1, 2021 Responsible for
overseeing human
resources and
administration
management of our
Group
N/A
For biographical details of Mr. Li, Mr. Pan and Mr. Hu, please see ‘‘— Board of
Directors — Executive Directors’’.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. LIN Haizhou ( 林海洲), aged 35, is our chief operating officer. He joined our
G r o u pi nS e p t e m b e r2 0 1 7a so u rc h i e fo p e r a t i n gofficer and was primarily responsible for
overseeing operations, sales, and marketing functions of the Group. Mr. Lin served as our
Director during the period from February 2021 to April 2025.
Mr. Lin has over 12 years of experience in operational management. From July 2011 to
September 2017, and immediately prior to joining our Group, Mr. Lin worked as an
technical support engineer at Ericsson (China) Communications Co., Ltd. ( 愛立信（中國）通
信有限公司).
Mr. Lin obtained a bachelor’s degree in electronic information engineering from
Harbin Institute of Technology ( 哈爾濱工業大學) in July 2011.
Mr. MOU Qingqi ( 牟慶琦), aged 33, is our chief marketing officer. Mr. Mou joined our
Group as our chief marketing officer since May 2019 and is primarily responsible for
overseeing brand development, sales strategy, and marketing management of our Group.
Mr. Mou served as our Director during the period from March 2022 to April 2025.
Mr. Mou has more than nine years of experience in sales and marketing. During the
period from September 2016 to July 2018, he worked as the marketing director of Shenzhen
Maxus Innovation Technology Co., Ltd. ( 深圳市廣懋創新科技有限公司). During the period
from August 2018 to March 2019 and immediately prior to joining our Group, he worked as
the marketing project manager of Shenzhen OnePlus Technology Co., Ltd. ( 深圳市萬普拉斯
科技有限公司).
Mr. Mou obtained a bachelor’s degree of engineering with a major in electronic
engineering and a minor in business with first class honours from The Hong Kong
University of Science and Technology ( 香港科技大學) in November 2014.
Mr. LIU Guohui ( 劉國輝), aged 36, is the vice president in production engineering of
our Group. He joined our Group as our vice president in production engineering since
August 2017 and was primarily responsible for supply chain management of our Group.
Mr. Liu served as our Director during the period from October 2018 to April 2025.
Mr. Liu has over 14 years of experience in electronic engineering. During the period
from July 2011 to August 2017 and immediately prior to joining our Group, he worked as
an electronic designer at Jiangxi Hongdu Aviation Industry Co., Ltd. ( 江西洪都航空工業股
份有
限公司)(600316.SH) and was primarily responsible for design of flight controller
hardware.
Mr. Liu obtained a bachelor’s degree in automation from Harbin Institute of
Technology ( 哈爾濱工業大學) in July 2011.
Mr. LIU Yongliang ( 劉永良), aged 40, is the vice president in human resources of our
Group. He joined our Group as our vice president in human resources since July 2021 and
was primarily responsible for overseeing huma n resources and administration management
of our Group.
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Mr. Liu has over 14 years of experience in h u m a nr e s o u r c e sa n da d m i n i s t r a t i o n
management. During the period from July 2011 to June 2016, he worked at China Aviation
Technology Shenzhen Co., Ltd. ( 中國航空技術深圳有限公司). During the period from June
2016 to May 2020, he worked as a senior human resources business partner at Shenzhen
G l o b a lE - C o m m e r c eC o . ,L t d .(深圳市環球易購電子商務有限公司), a company principally
engaged in online business-to-consumer reta iling. During the period from June 2020 to June
2021 and immediately prior to joining our Group, he worked as a senior human resources
business partner at Shenzhen Huantai Technology Co., Ltd ( 深圳市歡太科技有限公司),
which is an affiliated company of OPPO Guan gdong Mobile Communications Co., Ltd.
(OPPO 廣東移動通信有限公司) and was primarily responsible for human resources and
operational management.
Mr. Liu obtained a bachelor’s degree in administration management from China
University of Geosciences (Wuhan) ( 中國地質大學（武漢）) in June 2008. He further
obtained a master’s degree in administration management from Xiamen University ( 廈門
大學) in June 2011.
JOINT COMPANY SECRETARIES
Mr. HU Zhidong ( 胡治東) was appointed as our joint company secretary on May 23,
2025. For details of his biography, see ‘‘ Executive Directors’’ in this section.
Mr. CHUNG Ming Fai ( 鍾明輝) is our joint company secretary. He was appointed as
our joint company secretary on May 23, 2025. Mr. Chung is a senior vice president at the
corporate secretarial department of SWCS Corporate Services Group (Hong Kong)
Limited. He has over 20 years of experience in corporate secretary, mergers and
acquisitions, financial reporting and auditing. He has been appointed as company
secretary for various companies listed on the Stock Exchange, including China Resources
Beverage (Holdings) Company Limited (HKEX: 2460), China Resources Building
Materials Technology Holdings Limited (HKEX: 1313) and iMotion Automative
Technology (Suzhou) Co., Ltd. (HKEX: 1274).
Mr. Chung obtained a bachelor’s degree in commerce from The Australian National
University in December 2003. He is a fellow member of the Hong Kong Institute of
Certified Public Accountants a nd a member of CPA Australia.
BOARD COMMITTEES
Our Board delegates certain responsibilities to various committees. In accordance with
the Corporate Governance Code in Appendix C1 to the Listing Rules (the ‘‘Corporate
Governance Code’’), our Company has formed three Board committees, namely the Audit
Committee, the Nomination Committee and the Remuneration and Appraisal Committee.
Audit Committee
We have established the Audit Committee pursuant to Rule 3.21 of the Listing Rules
with written terms of reference in complianc e with paragraph D.3 of Part 2 of the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules. The primary duties of the
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Audit Committee are to review and supervise our financial reporting process and internal
control system of our Group, risk management and internal audit, provide advice and
comments to our Board and perform other dutie s and responsibilities as may be assigned by
our Board.
The Audit Committee consists of three Directors, namely Ms. Li Hui ( 李輝), Professor
Ko Ping Keung ( 高秉強) and Professor Wang Yong ( 王勇) .M s .L iH u i( 李輝)i st h e
chairman of the Audit Committee. She is an independent non-executive Director and
possesses the appropriate professional qualifications or accounting or related financial
management expertise as required under Rule 3.10(2) and Rule 3.21 of the Listing Rules.
Remuneration and Appraisal Committee
We have established the Remuneration and Appraisal Committee pursuant to Rule
3.25 of the Listing Rules with written terms of reference in compliance with paragraph E.1
of Part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules.
The primary duties of the Remuneration and Appraisal Committee are to (i) establish,
review and provide advice to our Board on our policies concerning remuneration of
Directors and senior management officers and on the establishment of a formal and
transparent procedure for developing policies concerning such remuneration, (ii) to
determine the terms of the specific remunerat ion package of each executive Director and
senior management, (iii) to review and appro ve performance-based remuneration by
reference to corporate goals and objectives re solved by our Directors from time to time, and
(iv) to review and approve matters relating to share schemes under Chapter 17 of the Listing
Rules.
The Remuneration and Appraisal Committee consists of four Directors, namely
Professor Wang Yong ( 王勇) ,M s .L iH u i( 李輝), Dr. Leung Suk Wai Winnie ( 梁淑慧), Mr.
Li and Mr. Hu Zhidong ( 胡治東), with Professor Wang Yong ( 王勇) being the chairman.
Nomination Committee
We have established the Nomination Committee pursuant to Rule 3.27A of the Listing
Rules with written terms of reference in compliance with paragraph B.3 of Part 2 of the
Corporate Governance Code as set out in Appendix C1 of the Listing Rules. The primary
duties of the Nomination Committee are to (i) review the structure, size and composition of
our Board on a regular basis and make recommendations regarding any proposed changes
to the composition of our Board, (ii) identify, select or make recommendations to our
Board on the selection of individuals nominate d for directorship, and ensure the diversity of
our Board and (iii) assess the inde pendence of our independent non-executive Directors and
make recommendations on matters relating to the appointment, reappointment and
removal of our Directors and succession planning.
The Nomination Committee consists of three members, namely Mr. Li, Dr. Leung Suk
Wai Winnie ( 梁淑慧) and Professor Wang Yong ( 王勇), with Mr. Li being the chairman the
Nomination Committee.
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Dissolution of the Board of Supervisors of our Company
Pursuant to the Article 121 of the PRC Comp any Law, a joint stock limited company
may, under the articles of association, set up an audit committee composed of directors in
the board of directors, which shall exercise the functions and powers of the board of
supervisors as provided for in the PRC Company Law. A company that has established
such an audit committee is not required to have a board of supervisors or appoint
supervisors.
The shareholders’ general meeting of our Company held on May 27, 2025 approved the
dissolution of the board of supervisors of our Company and the amendments of the Articles
of Association to reflect the dissolution of the board of supervisors. The board of
supervisors shall be dissolved upon the Listing.
Following the dissolution, the Audit Comm ittee shall exercise the functions and
powers of the board of supervisors as set out in the PRC Company Law, including but not
limited to the supervision of the Company’s c ompliance with laws and regulations by
directors and senior management and protection of shareholders’ interests.
BOARD DIVERSITY POLICY
Our Company is dedicated to fortify the effectiveness of our Board and to uphold high
standards of corporate governance through t he adoption of a board diversity policy. Our
Company actively embraces the benefits of h aving a diverse Board, recognising that
cultivating diversity at the Board level is p ivotal in attaining our Company’s strategic
objectives. To do so, our Company will assess numerous factors, including but not limited
to talent, skills, gender, age, cultural and edu cational background, et hnicity, professional
experience, independence, knowledge and leng th of service. Selection for potential Board
candidates will be based on merit and his/her potential contribution to our Board while
taking into consideration our own business m odel and specific needs from time to time. The
ultimate decisions of Board appointments will be based on meritocracy and candidates will
be considered against objective criteria, having due regard to the benefits of diversity on our
Board.
Our Board consists of a balanced blend of kno wledge, skills and experience, including
business management, finance and accounting, robot technology. We have three
independent non-executive Directors who have distinct industry backgrounds,
representing over one-third of our Board members. Further, our Board consists of six
male members and three female members, with age range from 33 to 73 years old. A
thorough assessment of our Board’s membership, structure, and composition has led us to
believe that our Board configuration is well-balanced, with Directors possessing a rich
tapestry of experiences and skills that fortify our operational excellence.
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Continuing our commitment to promoting gender diversity across all levels, our Board
diversity policy advocates for a progress increase in the representation of female members
on the Board post-Listing, whenever feasible, during the selection and recommendation of
suitable candidates for Board appointments . We are also dedicated to fostering gender
diversity in mid to senior staff recruitment to cultivate a pipeline of female senior
management and potential successors to our Board. Striving for an equitable gender
balance in alignment with stakeholder expect ations and global best practices is a key
objective for us. Given the unique backgrounds of our Directors and our specific
operational needs, we are confident that our Board composition post-Listing aligns with the
principles outlined in our board diversity policy.
Our Nomination Committee is responsible for ensuring the diversity of our Board
members. After Listing, our Nomination Co mmittee will periodically review our board
diversity policy to ensure its continued effectiveness, with annual disclosures on the
implementation of our board diversity policy in our corporate governance report.
DIRECTORS’ AND SENIOR MANAGEMENT’S REMUNERATION
Our Directors and members of senior management receive compensation in the form of
fees, salaries, allowances and benefits in kin d, share-based payments, discretionary bonuses
and retirement scheme contributions.
For the years ended December 31, 2022, 2023 and 2024 and the six month ended June
30, 2024 and 2025, the aggregate amount of emolument paid or payable to our Directors (i)
salaries, bonuses, allowances and benefits in kind; (ii) performance-related bonus; (iii)
pension scheme contributions; and (iv) share-based payment expenses, were RMB5.2
million, RMB6.2 million, RMB6.4 million, RMB3.2 million and RMB5.4 million,
respectively.
For the years ended December 31, 2022, 202 3, 2024 and the six month ended June 30,
2024 and 2025, the aggregate amount of emolument paid or payable to the five highest paid
individuals of our Group who are neither Directors nor chief executive were RMB2.7
million, RMB2.9 million, RMB2.9 million, RMB1.5 million and RMB2.2 million,
respectively.
During the Track Record Period, no emolument was paid to, or receivable by, our
Directors or the five highest paid individuals of our Group as an inducement to join or
upon joining our Group or as a compensation for loss of office in the Track Record Period.
Further, none of our Directors had waived any emolument during the same period.
Pursuant to existing arrangements that are currently in force as at the date of this
prospectus, the emolument (including fees, salaries, allowances and benefits in kind,
discretionary bonuses and retirement scheme contributions) and exclusive of share-based
payments payable to our Directors by us for the year ending December 31, 2025 are
estimated to be no more than approximately RMB4 million in aggregate.
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Our Board will review and determine the emoluments and compensation packages of
our Directors and members of senior managem ent. Following the Listing, our Board will
receive recommendations from our Remuneration and Appraisal Committee which will take
into account salaries paid by comparable com panies, time commitment and responsibilities
of our Directors and performance of our Group.
Save as disclosed above, no other emolument had been paid, or are payable, by any
member of our Group to our Directors during the Track Record Period. For additional
information on our Directors’ emoluments during the Track Record Period as well as
information on the highest paid indivi duals, please refer to Notes 8 and 9 in the
Accountants’ Report set out in Appendix I to this prospectus.
COMPLIANCE ADVISOR
Pursuant to Rule 3A.19 of the Listing Rules, we have appointed Quam Capital Limited
as our compliance advisor (the ‘‘Compliance Adviser’’). Pursuant to Rule 3A.23 of the
Listing Rules, the Compliance Adviser will pr ovide advice when consulted by the Company
in relation to the followings:
. before the publication of any regulatory announcement, circular or financial
report;
. 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 procure to use the proceeds from the Global Offering in a manner
different form that detailed in this prospe ctus or where its business activities,
developments or results deviate from any f orecast, estimate, or other information
in this prospectus; and
. where the Stock Exchange makes any inquiry to our Company regarding unusual
movement in the price or trading volume of our Shares under Rule 13.10 of the
Listing Rules.
The term of appointment of the Compliance Adviser shall commence on the Listing
Date and is expected to end on the date on which our Company distributes our annual
report in respect of our financial results for the first full financial year commencing after the
Listing Date.
CORPORATE GOVERNANCE CODE
We aim to achieve high standards of corpo rate governance which are crucial to our
development and safeguard the interests of our Shareholders. To accomplish this, we expect
to comply with the Corporate Governance Code and the associated Listing Rules after the
Listing.
DIRECTORS AND SENIOR MANAGEMENT
–3 5 4–


--- page 365 ---
Pursuant to code provision C.2.1 of Par t 2 of the Corporate Governance Code,
companies listed on the Stock Exchange are expected to comply with, but may choose to
deviate from the requirement that the roles of chairman and chief executive should be
separate and should not be performed by the same individual. We do not have a separate
chairman and chief executive and Mr. Li currently performs these two roles. Our Board
believes that vesting the roles of both the chairman of our Board and chief executive officer
i nt h es a m ep e r s o nh a st h eb e n e f i to f( 1 )e n s uring consistent leadership within our
Company, (2) enabling more effective and efficient overall strategic planning for our
Company, and (3) facilitating the flow of in formation between the management and our
Board. Our Board considers that the balance of power and authority for the present
arrangement will not be impaired and this structure will enable our Company to make and
implement decisions promptly and effectivel y. Our Board will continue to review and
consider splitting the roles of the chairman of our Board and the chief executive officer of
our Company at a time when it is appropriate by taking into account the circumstances of
our Company as a whole.
DIRECTORS AND SENIOR MANAGEMENT
–3 5 5–


--- page 366 ---
To the best of the Directors’ knowledge and information, the following persons will,
immediately following the completion of the Global Offering, have interests or short
positions in our Shares or underlying Shares which would be required to be disclosed to our
Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO or
will, directly or indirectly, be interested in 1 0% or more of the nominal value of any class of
share capital carrying rights to vote in all circumstances at any shareholders’ meeting of our
Company:
As of the
Latest Practicable Date
Immediately following the
Completion of
the Global Offering
and the H-Share Full
Circulation (Assuming the
Over-allotment Option
Is Not Exercised)
Shareholder Nature of Interest
Number of
Unlisted
Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
Number of
H Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
%%
Mr. Li Beneficial owner 4,364,845 21.82% 43,648,450 19.64%
Interest in
controlled
corporation
(Note 2)
1,647,113 8.24% 16,471,130 7.41%
Interest of
person
acting in
concert (Note 3)
2,893,423 14.47% 28,934,230 13.02%
Mr. Pan Beneficial owner 2,893,423 14.47% 28,934,230 13.02%
Interest of person
acting in concert
(Note 3)
4,364,845 21.82% 43,648,450 19.64%
Wonder Innovation
ESOP
Beneficial owner 1,647,113 8.24% 16,471,130 7.41%
SUBSTANTIAL SHAREHOLDERS
–3 5 6–


--- page 367 ---
As of the
Latest Practicable Date
Immediately following the
Completion of
the Global Offering
and the H-Share Full
Circulation (Assuming the
Over-allotment Option
Is Not Exercised)
Shareholder Nature of Interest
Number of
Unlisted
Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
Number of
H Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
%%
Songshan Lake Robot
Institute
Beneficial owner 1,361,060 6.81% 13,610,600 6.12%
Doumiao Technology
Ltd. (‘‘Doumiao Tech’’)
Interest in
controlled
corporation
(Note 4)
1,361,060 6.81% 13,610,600 6.12%
Clear Water Bay Startup
Fund GP (‘‘CWB
Startup GP’’)
Interest in
controlled
corporation
(Note 5, 6)
1,234,159 6.17% 12,341,590 5.55%
Professor Li Interest in
controlled
corporation
(Note 6)
2,595,219 12.98% 25,952,190 11.68%
Brizan Ventures V Beneficial owner 1,944,590 9.72% 19,445,900 8.75%
Professor Ko Interest in
controlled
corporation
(Note 7)
1,944,590 9.72% 19,445,900 8.75%
Mr. Kwong U Hoi
Andrew ( 鄺宇開)
(‘‘Mr. Kwong’’)
Interest in
controlled
corporation
(Note 7)
1,944,590 9.72% 19,445,900 8.75%
SUBSTANTIAL SHAREHOLDERS
–3 5 7–


--- page 368 ---
As of the
Latest Practicable Date
Immediately following the
Completion of
the Global Offering
and the H-Share Full
Circulation (Assuming the
Over-allotment Option
Is Not Exercised)
Shareholder Nature of Interest
Number of
Unlisted
Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
Number of
H Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
%%
Suzhou Yuanming
Venture Capital Center
(Limited Partnership)
(蘇州源明創業投資中心
（有限合夥）)
(‘‘Suzhou Yuanming
VC LP’’)
Beneficial owner 1,661,668 8.31% 16,616,680 7.48%
Nanjing Yuanxin
Management
Consulting Co., Ltd.
(南京源芯管理諮詢
有限公司)( ‘ ‘ N a n j i n g
Yuanxin’’)
Interest in
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
Hangzhou Yiqian
Enterprise
Management
Consulting Co., Ltd.
(杭州毅謙企業管理諮詢
有限公司) (‘‘Hangzhou
Yiqian’’)
Interest in
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
Nanjing Yuanling
Equity Investment
Partnership (Limited
Partnership) ( 南京源嶺
股權投資合夥企業（有
限合夥）)( ‘ ‘ N a n j i n g
Yuanling LP’’)
Interest in
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
SUBSTANTIAL SHAREHOLDERS
–3 5 8–


--- page 369 ---
As of the
Latest Practicable Date
Immediately following the
Completion of
the Global Offering
and the H-Share Full
Circulation (Assuming the
Over-allotment Option
Is Not Exercised)
Shareholder Nature of Interest
Number of
Unlisted
Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
Number of
H Shares
(Note 1)
Approximate
Percentage
of
Shareholding
in the Total
Issued Share
Capital of
Our
Company
%%
Beijing Yuanwei Equity
Investment Partnership
(Limited Partnership)
(北京源為股權投資合夥
企業（有限合夥）)
(‘‘Beijing Yuanwei
LP’’)
Interest in
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
Beijing Yuanxin
Investment
Management Co., Ltd.
(北京源芯投資管理有限
公司) (‘‘Beijing
Yuanxin’’)
Interest in
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
Mr. Cao Yi ( 曹毅)I n t e r e s t i n
controlled
corporation
(Note 8)
1,661,668 8.31% 16,616,680 7.48%
SUBSTANTIAL SHAREHOLDERS
–3 5 9–


--- page 370 ---
Notes:
(1) All interests are long positions.
(2) As of the Latest Practicable Date, Mr. Li act ed as the general partner of Wonder Innovation ESOP.
Under the SFO, Mr. Li is deemed to be interested in the all the Shares held by Wonder Innovation
ESOP.
(3) Mr. Li and Mr. Pan entered into the Acting-in -concert Agreement, pursuant to which Mr. Pan had
undertaken, among other things, to unilaterally follow the voting in structions of Mr. Li to exercise
his voting power and vote unanimously at the Sha reholders’ meeting of our Company for so long as
Mr. Li is a Shareholder of our Company. Therefore, under the SFO, in addition to their respective
direct beneficial interests, each of Mr. Li and Mr. P an is also deemed to be interested in the interest
of the other concert party.
(4) As of the Latest Practicable Date, the equity in terests of Songshan Lake Robot Institute are owned
as to 100% by Clear Water Bay Robotic Technology Investment (HK) Limited (‘‘CWB Robotic
Tech’’), the shares of which in turn are owned as to 100% by Clear Water Bay Robotic Investment
Limited Company (‘‘CWB Robotic Investment’’), and the shares of which are in turn are owned as to
67.67% by Doumiao Tech. The shares of Doumia o Tech are entirely owned by Professor Li.
Accordingly, under the SFO, each of CWB Robotic Tech, CWB Robotic Investment, Doumiao Tech
and Professor Li are deemed to be interested in t he Shares held by Songshan Lake Robot Institute.
(5) As of the Latest Practicable Date: the equity inte rests of Yinghu Intelligent are owned as to 100% by
Yingling Venture Capital (China) Co., Ltd. ( 盈瓴創投（中國）有限公司) (‘‘Yingling VC’’), the equity
interest of which is in turn owned as to 100% by CWB SPV HK Limited ( 清水灣香港盈瓴有限公司)
(‘‘CWB SPV HK’’), the shares of which are in turn owned as to 100% by CWB SP 16 Series-1 LP
(‘‘CWB SP 16’’). CWB SP 16 is a limited partners hip, with CWB Startup GP being the general
partner. The shares of CWB Startup GP are owned as to 57% by Professor Li. Accordingly, under
the SFO, each of Yinghu Intelligent, Yingl ing VC, CWB SPV HK, CWB SP 16, CWB Startup GP
and Professor Li are deemed to be interested in the Shares held by Yinghu Intelligent.
(6) As of the Latest Practicable Date, the equity interests of Dongguan Yunhe are owned as to 100% by
CWB Startup Invest HK Limited ( 清水灣香港創投有限公司) (‘‘CWB Startup HK’’), the shares of
which are owned as to 100% by Clear Water Bay Startup Fund LP (‘‘CWB Startup LP’’). CWB
Startup LP is a limited partnership, with CWB Star tup GP being the general partner and Professor
Li being a limited partner with 57% partnership interest therein. The shares of CWB Startup GP are
owned as to 57% by Professor Li. Accordingly, under the SFO, each of CWB Startup HK, CWB
Startup LP, CWB Startup GP and Professor Li are deemed to be interested in the Shares held by
Dongguan Yunhe.
(7) As of the Latest Practicable Date, Brizan Vent ures GP V Limited is the general partner of Brizan
Ventures V, the shareholding interests of which is owned as to 50% by Professor Ko and 50% by
Mr. Kwong. Accordingly, both Professor Ko and Mr. Kwong are deemed to be interested in the
Shares held by Brizan Ventures V.
SUBSTANTIAL SHAREHOLDERS
–3 6 0–


--- page 371 ---
(8) As of the Latest Practicable Date:
(i) the general and executive managing partne r of Suzhou Yuanming VC LP is Nanjing Yuanxin,
the equity interests of which are owned as to 100% by Nanjing Yuankai Management
Consulting Group Co., Ltd ( 南京源凱管理諮詢集團有限公司) (‘‘Nanjing Yuankai’’), the equity
interests of which are in turn owned as to 100 % by Nanjing Yuanju Technology Co., Ltd. ( 南
京源矩科技有限公司) (‘‘Nanjing Yuanju’’), the equity interests of which are in turn owned as
to approximately 82.18% by Hangzhou Yiqian . The entire equity interests of Hangzhou
Yiqian are owned by Mr. Cao;
(ii) Nanjing Yuanling LP is a limited partner of Suzhou Yuanming VC LP, holding approximately
44.93% partnership interest therein. The gene ral and executive managing partner of Nanjing
Yuanling LP is Nanjing Yuanxin, which is ultimately controlled by Mr. Cao; and
(iii) Beijing Yuanwei LP is a limited partner of Suzhou Yuanming VC LP, holding approximately
38.42% partnership interest therein. The gene ral and executive managing partner of Beijing
Yuanwei LP is Beijing Yuanin, the equity interests of which are owned as to 100% by Lhasa
Yuanchi Investment Management Co., Ltd. ( 拉薩源馳投資管理有限公司) (‘‘Lhasa Yuanchi’’),
the equity interests of which are owned as to 100% by Mr. Cao.
Accordingly, under the SFO, each of Nanjing Y uanxin, Nanjing Yuankai, Nanjing Yuanju,
Hangzhou Yiqian, Nanjing Yuanling LP, Nanjing Yuanxin, Beijing Yuanwei LP, Beijing Yuanxin,
Lhasa Yuanchi and Mr. Cao are deemed to be interested in the Shares held by Suzhou Yuanming
VC LP.
Save as disclosed above and in ‘‘Appendix VI — Statutory and General Information’’
of this prospectus, our Directors are not aware of any person who will, immediately
following the completion of the Global Offe ring (and the offering of any additional H
Shares pursuant to the Over-allotment Option), have an interest or short position in the
Shares or underlying shares of the Company which would be required to be disclosed to the
Company and the Stock Exchange under Divisions 2 and 3 of Part XV of the SFO or will,
directly or indirectly, be interested in 10% or more of the nominal value of any class of
share capital carrying rights to vote in all ci rcumstances at shareholders’ meetings of the
Company or any other members of our Group.
SUBSTANTIAL SHAREHOLDERS
–3 6 1–


--- page 372 ---
THE CORNERSTONE INVESTMENTS
We have entered into cornerstone investment agreements (each a ‘‘Cornerstone
Investment Agreement’’, and together the ‘‘Co rnerstone Investment Agreements’’) with the
cornerstone investors set out below (each a ‘‘Cornerstone Investor’’, and together the
‘‘Cornerstone Investors’’), pursuant to whi ch the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe for such number of Offer Shares (rounded down to
the nearest whole board lot of 100 H Shares) which may be purchased at the Offer Price
with an aggregate amount of approximately HK$700.0 million, calculated based on the
exchange rate set out in the section headed ‘‘ Information about this Prospectus and the
Global Offering — Exchange Rate Conversion’’ in this prospectus (exclusive of brokerage,
SFC transaction levy, AFRC transaction levy and Stock Exchange trading fee) (the
‘‘Cornerstone Investment’’).
Based on the Offer Price of HK$63.0 per Offer Share (being the low end of the
indicative Offer Price), the total number of Offer Shares to be subscribed for by the
Cornerstone Investors would be 11,110,60 0 H Shares, representing (i) approximately
50.00% of the Offer Shares pursuant to the Gl obal Offering and approximately 5.00% of
the total issued share capital of the Company immediately following the completion of the
Global Offering (assuming the Over-allotment Option is not exercised); or (ii)
approximately 43.48% of the Offer Shares pursuant to the Global Offering and
approximately 4.93% of the total issued share capital of the Company immediately
following the completion of the Global Offering (assuming the Over-allotment Option is
exercised in full).
Based on the Offer Price of HK$72.0 per Offer Share, the total number of Offer Shares
to be subscribed for by the Cornerstone Investors would be 9,721,700 H Shares,
representing (i) approximately 43.75% of the Offer Shares pursuant to the Global
Offering and approximately 4.37% of the total issued share capital of the Company
immediately following the completion of the Gl obal Offering (assuming the Over-allotment
Option is not exercised); or (ii) approximately 38.04% of the Offer Shares pursuant to the
Global Offering and approximately 4.31% of t he total issued share capital of the Company
immediately following the completion of the Gl obal Offering (assuming the Over-allotment
Option is exercised in full).
B a s e do nt h eO f f e rP r i c eo fH K $ 8 1 . 0p e r Offer Share (being the high end of the
indicative Offer Price), the total number of Offer Shares to be subscribed for by the
Cornerstone Investors would be 8,641,500 H Sha res, representing (i) approximately 38.89%
of the Offer Shares pursuant to the Global Offering and approximately 3.89% of the total
issued share capital of the Company immediately following the completion of the Global
Offering (assuming the Over-allotment Option is not exercised); or (ii) approximately
33.82% of the Offer Shares pursuant to the Gl obal Offering and approximately 3.83% of
the total issued share capital of the Company immediately following the completion of the
Global Offering (assuming the Over-allo tment Option is exercised in full).
CORNERSTONE INVESTORS
–3 6 2–


--- page 373 ---
The Company is of the view that, (i) the Cornerstone Investment will ensure a
reasonable size of solid commitment at the beginning of the marketing period of the Global
Offering and will provide confidence to the m arket; and (ii) the Cornerstone Investment
demonstrates our Cornerstone Investors’ confidence in the Company and its business
prospect and it will help raise the profile of the Company. The Company became acquainted
with each of the Cornerstone Investors through the business network of the Group or the
Overall Coordinators. The Cornerstone Investment will form part of the International
Offering, and save as otherwise obtained consent from the Stock Exchange, the Cornerstone
Investors and their respective close associat es will not subscribe for any Offer Shares under
the Global Offering other than pursuant to t he Cornerstone Investment Agreements. The
Offer Shares to be subscribed for by the Cornerstone Investors will rank pari passu in all
respects with the fully paid H Shares in issue following the completion of the Global
Offering and to be listed on the Stock Exchange. The Offer Shares to be subscribed for by
the Cornerstone Investors will be counted towards the public float of the Company under
Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the
Cornerstone Investors will become a substantial shareholder of the Company; (ii) none
of the Cornerstone Investors will have any Board representation in the Company solely by
virtue of its cornerstone investment, and (iii) equity interests in the Company being
beneficially owned by the three largest public Shareholders will be less than 50% for the
p u r p o s eo fR u l e8 . 0 8 ( 3 )o ft h eL i s t i n gR u l e s .
To the best knowledge of the Company, (i) each of the Cornerstone Investors is an
Independent Third Party and is not a close associate with any of the existing Shareholders;
(ii) none of the Cornerstone Investors is accustomed to taking instructions from the
Company, the Directors, supe rvisors, chief executive of the Company, the Controlling
Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates in relation to the acquisition, disposal, voting, or other
disposition of H Shares registered in its nam e or otherwise held by it; and (iii) none of the
subscription for the relevant Offer Shares by the Cornerstone Investors is financed by the
Company, the Directors, supe rvisors, chief executive of the Company, the Controlling
Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates for the purpose of subscription of the Offer Shares.
To the best knowledge of the Company and as confirmed by each of the Cornerstone
Investors, they made their own independent decisions to enter into the Cornerstone
Investment Agreements, and their subscriptions under the Cornerstone Investment would
be financed by their own internal resources or (in the case of the Cornerstone Investor
which is funds or investment manager) the assets managed for its investors (save for Wind
Sabre, the subscription of the relevant shares may be financed by external financing from a
prime broker, and without any relevant Shares charged to any third party including the
prime broker as security for such financing). None of the Cornerstone Investors or their
shareholder(s) are listed on any stock exchanges. The Cornerstone Investors have also
confirmed that all necessary approvals have been obtained with respect to the Cornerstone
Investment and that no specific approval from any stock exchange (if relevant) or their
shareholders is required for the Cornerstone Investment. Other than a guaranteed
CORNERSTONE INVESTORS
–3 6 3–


--- page 374 ---
allocation of the relevant Offer Shares at the final Offer Price, the Cornerstone Investors do
not have any preferential rights in the Corne rstone Investment Agreements compared with
other public Shareholders. Other than the Cornerstone Investment Agreements, as
confirmed by each of the Cornerstone Investors, there are no side agreements or
arrangements between us and the Cornerstone I nvestors or any benefit, direct or indirect,
conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other than
a guaranteed allocation of the relevant Offer Shares at the Offer Price.
The total number of Offer Shares to be subscribed for by the Cornerstone Investors
under the Cornerstone Investment may be affected by reallocation of the Offer Shares
between the International Offering and the Hong Kong Public Offering in the event of
over-subscription under the Hong Kong Public Offering, as described in the paragraphs
headed ‘‘Structure of the Global Offering — The Hong Kong Public Offering —
Reallocation’’ in this prospectus. The number of Offer Shares to be acquired by each
Cornerstone Investor may be reduced on a pro rata basis in accordance with the terms of
the Cornerstone Investment Agreements to satisfy the public demands under the Hong
Kong Public Offering, after taking into account the requirements under Practice Note 15 to
the Listing Rules as well as the discretion of the Overall Coordinators (for themselves and
on behalf of the International Underwriters) to exercise the Over-allotment Option. Details
of the actual number of Offer Shares to be allocated to each of the Cornerstone Investors
will be disclosed in the allotment results announcement to be issued by the Company on or
around December 29, 2025.
Pursuant to the Cornerstone Investment Agreements, the Overall Coordinators (for
themselves and on behalf of the International Underwriters) has the discretion to effect a
delayed delivery of the Offer Shares to be sub scribed for by certain Cornerstone Investors
on a date later than the Listing Date, subject to the conditions contained therein. Such
delayed delivery arrangement is in place to facilitate the over-allocation in the International
Offering. There will be no delayed delivery if there is no over-allocation in the International
Offering. There will be no deferred settlement of the Offer Shares to be subscribed by the
Cornerstone Investors. Each of the Cornerstone Investors has agreed to pay for the relevant
Offer Shares that they have subscribed before dealings in the Company’s H Shares
commence on the Stock Exchange, irrespective of whether there is delayed delivery of the H
Shares.
CORNERSTONE INVESTORS
–3 6 4–


--- page 375 ---
THE CORNERSTONE INVESTORS
The table below sets out details of the Cornerstone Investment:
Based on the Offer Price of HK$63.0 (being the low point of the indicative Offer Price
range)
Assuming the Over-Allotment
Option is not exercised
Assuming the Over-Allotment
Option is fully exercised
Cornerstone Investor
Subscription
amount (1)
Number of Offer
Shares to be
acquired (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
HACF, LP US$30,000,000 3,704,500 16.67% 1.67% 14.50% 1.64%
Cithara US$20,000,000 2,469,600 11.11% 1.11% 9.66% 1.09%
Infini US$15,000,000 1,852,200 8.33% 0.83% 7.25% 0.82%
China Orient EIF US$7,000,000 864,300 3.89% 0.39% 3.38% 0.38%
China Orient MSMF US$3,000,000 370,400 1.67% 0.17% 1.45% 0.16%
Wind Sabre US$5,000,000 617,400 2.78% 0.28% 2.42% 0.27%
Yield Royal US$4,980,000 614,900 2.77% 0.28% 2.41% 0.27%
Sage Partners US$3,000,000 370,400 1.67% 0.17% 1.45% 0.16%
Sage Sunshine US$2,000,000 246, 900 1.11% 0.11% 0.97% 0.11%
Total US$89,980,000 11,110,600 50.00% 5.00% 43.48% 4.93%
Based on the Offer Price of HK$72.0 (being the mid point of the indicative Offer Price
range)
Assuming the Over-Allotment
Option is not exercised
Assuming the Over-Allotment
Option is fully exercised
Cornerstone Investor
Subscription
amount (1)
Number of Offer
Shares to be
acquired (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
HACF, LP US$30,000,000 3,241,400 14.59 1.46 12.68 1.44
Cithara US$20,000,000 2,160,900 9.72 0.97 8.45 0.96
Infini US$15,000,000 1,620,700 7.29 0.73 6.34 0.72
China Orient EIF US$7,000,000 756,300 3.40 0.34 2.96 0.34
China Orient MSMF US$3,000,000 324,100 1.46 0.15 1.27 0.14
Wind Sabre US$5,000,000 540,200 2.43 0.24 2.11 0.24
Yield Royal US$4,980,000 538,000 2.42 0.24 2.11 0.24
Sage Partners US$3,000,000 324,100 1.46 0.15 1.27 0.14
Sage Sunshine US$2,000,000 21 6,000 0.97 0.10 0.85 0.10
Total US$89,980,000 9,721,700 43.75 4.37 38.04 4.31
CORNERSTONE INVESTORS
–3 6 5–


--- page 376 ---
Based on the Offer Price of HK$81.0 (being the high end of the indicative Offer Price
range)
Assuming the Over-Allotment
Option is not exercised
Assuming the Over-Allotment
Option is fully exercised
Cornerstone Investor
Subscription
amount (1)
Number of Offer
Shares to be
acquired (2)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
HACF, LP US$30,000,000 2,881,200 12.97% 1.30% 11.27% 1.28%
Cithara US$20,000,000 1,920,800 8.64% 0.86% 7.52% 0.85%
Infini US$15,000,000 1,440,600 6.48% 0.65% 5.64% 0.64%
China Orient EIF US$7,000,000 672,300 3.03% 0.30% 2.63% 0.30%
China Orient MSMF US$3,000,000 288,100 1.30% 0.13% 1.13% 0.13%
Wind Sabre US$5,000,000 480,200 2.16% 0.22% 1.88% 0.21%
Yield Royal US$4,980,000 478,200 2.15% 0.22% 1.87% 0.21%
Sage Partners US$3,000,000 288,100 1.30% 0.13% 1.13% 0.13%
Sage Sunshine US$2,000,000 192, 000 0.86% 0.09% 0.75% 0.09%
Total US$89,980,000 8,641,500 38.89% 3.89% 33.82% 3.83%
Notes:
(1) Calculated based on the exchange rate set out in the section headed ‘‘Information about this
Prospectus and the Global Offering — Exchange Ra te Conversion’’ in this prospectus. The actual
investment amount may vary due to the exchange rate prescribed in the relevant Cornerstone
Investment Agreement.
(2) Rounded down to the nearest whole board lot of 100 H Shares.
(3) Assuming no other changes are made to the issued share capital of our Company between the Latest
P r a c t i c a b l eD a t ea n dt h ed a t eo fe x e r c i s eo fO v e r - a l l o t m e n tO p t i o n .
The information about our Cornerstone Investors set forth below has been provided by
the Cornerstone Investors in connection with the Cornerstone Investment.
HACF, L.P.
HACF, L.P. is a limited partnership formed under the laws of the Cayman Islands and
is managed by HHLR Advisors, Ltd. (‘‘HHLRA’ ’), which is an Independent Third Party.
There is no individual limited partner investor who holds an economic interest of 30% or
more in HACF, L.P.
HHLRA collaborates with industry-defining enterprises, aiming to establish alignment
with sustainable, forward-thinking companies across consumer, industrial, healthcare, and
business services sectors. HHLRA manages capital for global institutions, including
non-profit foundations, endowments, and pensions.
CORNERSTONE INVESTORS
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Cithara
Cithara Global Multi-Strategy SPC — B osideng Industry Investment Fund SP
(‘‘Cithara Fund’’) is an exempted segregated portfolio company incorporated in the
Cayman Islands. The Cithara Fund’s objective i s to deliver risk adjusted absolute return
with a focus on long-term capital preservation. The investment manager of Cithara Fund is
Cithara Investment International Limited (‘‘Cithara’’), a company incorporated in Hong
Kong in 2016 and licensed to conduct Type 4 (advising on securities) and Type 9 (asset
management) of the regulated activities as d efined under the SFO. Cithara is ultimately
wholly owned by Zhang Jun ( 張俊) who is an Independent Third Party. Song Yan, an
Independent Third Party, is the ultimate ben eficial owner of Cithara Fund with more than
30% of beneficial interest. No other ultimat e beneficial owner of Cithara Fund holds 30%
or more of beneficial interest.
Infini
Infini Global Master Fund (‘‘Infini’’) is a multi-strategy discretionary investment fund
with wide investor base, managed by Infini Capital Management Limited ( 無極資本管理有
限公司) (‘‘Infini Capital’’). With dual headquarters in Hong Kong and Abu Dhabi, Infini
Capital is licensed by the SFC and the Abu Dhabi Global Market (ADGM) Financial
Services Regulatory Authorit y (FSRA). Infini Capital is wholly-owned by Infini Capital
Global, a Cayman Island holding company. None of the investor holds 30% or more
interest in Infini Capital Global. None of the investor holds 30% or more interests in the
fund.
China Orient MSMF and China Orient EIF
China Orient International Asset Management Limited (‘‘China Orient International’’)
acts as the investment manager of China Orient Enhanced Income Fund (‘‘China Orient
EIF’’) and China Orient Multi-Strategy Mast er Fund (‘‘China Orient MSMF’’), both being
registered in the Cayman Islands. China Orie nt International Asset Management Limited
was incorporated in Hong Kong with limited li ability and is licensed with the SFC to carry
on business in Type 1 (dealing on securities), Type 4 (advising on securities) and Type 9
(asset management) regulated activities under the SFO. China Orient International Fund
Management Limited, a company incorporated in the Cayman Islands with limited liability,
is the sole management shareholder of China Orient EIF and China Orient MSMF. China
Orient Asset Management (International) Ho lding Limited holds 30% or more interests in
the funds. Both China Orient International Fund Management Limited and China Orient
International Asset Management Limited are wholly-owned subsidiaries of China Orient
Asset Management (International) Holdin g Limited. China Orient Asset Management
(International) Holding Limited is ultimatel y controlled Central Huijin Investment Ltd, a
state-owned investment company, established in December 2003 and mandated to exercise
the rights and the obligations as an investor in major state-owned financial enterprises, on
behalf of the People’s Republic of China.
CORNERSTONE INVESTORS
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Wind Sabre
Wind Sabre Fund SPC on behalf of Wind Sabre Opportunities Fund SP (‘‘Wind
Sabre’’) is a fund established in the Cayman Islands. Wind Sabre Fund SPC is a Segregated
Portfolio Company incorporated in the Caym an Islands with limited liabilities and is an
Independent Third Party, and Wind Sabre Opportunities Fund SP is a segregated portfolio
of Wind Sabre Fund SPC. Wind Sabre Fund SPC is controlled by Wind Sabre Capital
Limited as the investment manager, which is a company incorporated in Hong Kong and
licensed to carry out type 9 (asset management) regulated activities under the SFO in Hong
Kong by the SFC. Well Smart Developments Limited, which is wholly owned by Chow Tai
Fook (Nominee) Limited, an Independent Third Party, is the only investor who holds over
30% interest in the fund. No single ultimate b eneficial owner holds 30% or more interest in
Chow Tai Fook (Nominee) Limited.
Wind Sabre may obtain external financing from a prime broker to finance its
subscription of H Shares. The loan(s), if obtained, will be on normal commercial terms after
arm’s length negotiations. The H Shares to be subscribed for by Wind Sabre will not be
charged to the prime broker as security for such loan(s).
Yield Royal
Yield Royal Investment Holding (Singapore) PTE. LTD. (‘‘ Yield Royal Investment ’’) is
a company incorporated in Singapore. The company is primarily engaged in international
commodity trading and conducts global cap ital market investments. Currently, its
investments span various industries, including TMT, advanced manufacturing, new
economy, and bio-pharmaceuticals, among others. Yield Royal Investment aims to
achieve long-term and stable value returns. Leveraging on Southeast Asia’s unique
geographical advantages, the company will continue to pursue a twin-engine strategy
combining capital support and resource integr ation, empowering high-quality enterprises
from the Asia-Pacific region and mainland China to accelerate their global expansion.
The entire issued share capital of Yield Royal Investment is owned by Gallantlion
Resources Pte. Ltd., a private company limit ed by shares incorporated under the laws of
Singapore, which in turn is wholly owned by Ms. Chang Hongna ( 常紅娜), an Independent
Third Party.
Sage Partners and Sage Sunshine
Sage Partners Master Fund (‘‘Sage Partne rs Master Fund’’) is an exempted company
with limited liability incorporated in the C ayman Islands, and is managed by Sage Partners
Limited, a Hong Kong incorporated SFC Type 9 licensed investment management company
established in 2019. Mr. Wang Fei ( 王斐) is the only ultimate beneficial owner owning more
than 30% of the interest. Sage Partners Maste r Fund is a discretionary fund investing in
emerging technologies with a long-term fundamental-based approach. None of the investors
in Sage Partners Master Fund holds 30% or more of its interest. To the best knowledge of
our Directors, each of Sage Partners Master Fund and its management company is an
Independent Third Party.
CORNERSTONE INVESTORS
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Sage Sunshine 1 Limited (‘‘Sage Sunshine’’) is incorporated in the British Virgin
Islands (BVI) as an investment vehicle to inve st in emerging technologies. The ultimate
beneficial owner is Mr. Wang Fei who is the only person owning more than 30% interest of
Sage Sunshine. To the best knowledge of our Director, Sage Sunshine and its ultimate
beneficial owner are Independent Third Parties.
CLOSING CONDITIONS
The subscription obligation of each of the Cornerstone Investors under the respective
Cornerstone Investment Agreements is subject to , among other things, the following closing
conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as
subsequently waived or varied by agreement of the parties thereto) by no later
than the time and date as specified in these underwriting agreements, and neither
of the aforesaid underwriting agreements having been terminated;
(b) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the H Shares (including the H Shares
subscribed for by each of the Cornerstone Investors) as well as other applicable
waivers and approvals (including waivers and approvals related to the
subscription of the H Shares by each of the Cornerstone Investors), and such
approval, permission or waiver having not been revoked prior to the
commencement of dealings in the H Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the 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
(e) the respective representations, warranties, undertakings, acknowledgements and
confirmations of the Cornerstone Investor under the Cornerstone Investment
Agreement are (as of the date of the respective Cornerstone Investment
Agreement) and will be (as of the Closing (as defined in the respective
Cornerstone Investment Agreement) and the delayed delivery date (as
applicable)) true, accurate and complete in all respects and not misleading and
that there is no breach of such Cornerstone Investment Agreement on the part of
the Cornerstone Investor.
CORNERSTONE INVESTORS
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RESTRICTIONS ON DISPOSALS BY THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or
indirectly, at any time during the period of six months from and including the Listing Date
(the ‘‘Lock-up Period’’), dispose of any of the Offer Shares they have subscribed for
pursuant to the relevant Cornerstone Invest ment Agreement, save for in certain limited
circumstances, such as transfers to any of its wholly-owned subsidiaries who will be bound
by the same obligations of such Cornerston e Investor, including the Lock-up Period
restriction.
CORNERSTONE INVESTORS
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This section presents certain informatio n regarding our share capital prior to and
following the completion of the Global Offering.
IMMEDIATELY BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, our registered and issued share capital was
RMB20,000,000, comprising 20,000,000 Shares with a nominal value of RMB1.00 each.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Share Subdivision, the Global Offering and
the H-Share Full Circulation, our registe red capital will become RMB22,222,230,
comprising 222,222,300 Shares with a nomin al value of RMB0.10 each. 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 to
Total Share
Capital
%
H Shares converted from Unlisted Shares (Note 1) 200,000,000 90.00
H Shares to be issued under the Global Offering 22,222,300 10.00
Total 222,222,300 100.0
Note:
(1) Our Company has applied for H-share Full Circu lation to convert the Unlisted Shares into H Shares
as per the instructions of our Shareholders. The co nversion of Unlisted Shares into H Shares will
involve an aggregate of 200,000,000 Unlisted Sha res (assuming the Share Subdivision has taken
place), representing approximately 90% of th e total issued Share capital of our Company upon
completion of the conversion of Unlisted Shares i nto H Shares and the Global Offering (assuming
no exercise of the Over-allotment Option).
SHARE CAPITAL
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Immediately following completion of the Share Subdivision, the Global Offering and
the H-Share Full Circulation, and assuming that the Over-allotm ent Option is fully
exercised, the share capital of our Company will be as follows:
Description of Shares
Number of
Shares
Approximate
Percentage of
the Enlarged
Issued Share
Capital After
the Global
Offering
%
H Shares converted from Unlisted Shares 200,000,000 88.67
H Shares to be issued under the Global Offering 22,222,300 9.85
H Shares to be issued pursuant to the exercise of
the Over Allotment Option in full 3,333,300 1.48
Total 225,555,600 100
OUR SHARES
Upon completion of the H-Share Full Circulation, the Shares will consist only of H
Shares. H Shares and Unlisted Shares are all ordinary Shares in the share capital of our
Company. Apart from certain qualified domes tic institutional investors in the PRC, the
qualified PRC investors under the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect and oth er 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 legal or
natural PRC persons. Unlisted Shares can only be subscribed for by and traded between
legal or natural PRC persons, qualified foreign in stitutional investors and foreign strategic
investors. H Shares may only be subscribed for and traded in Hong Kong dollars. Unlisted
Shares, on the other hand, may only be subscribed for and transferred in Renminbi.
Unlisted Shares and H Shares are regarded as one class of Shares under our Articles of
Association.
H Shares and Unlisted Shares shall rank pari passu with each other in all respects and,
in particular, will rank equally for dividends or distributions declared, paid or made. All
dividends in respect of the H Shares are to be paid by us in Hong Kong dollars whereas all
dividends in respect of Unlisted Shares are to be paid by us in Renminbi. In addition to
cash, dividends may be distributed in the form of Shares. For holders of H Shares,
dividends in the form of Shares will be distributed in the form of additional H Shares. For
holders of Unlisted Shares, dividends in the form of Shares will be distributed in the form of
additional Unlisted Shares.
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CONVERSION OF UNLISTED SHARES INTO H SHARES
If any of the Unlisted Shares are to be converted, listed and traded as H Shares on the
Stock Exchange, such conversi on, listing and trading will need the filling of the relevant
PRC regulatory authorities, including the CSRC, and the approval of the Stock Exchange.
Register with the CSRC and H-Share Full Circulation Application
In accordance with the Overseas Listing T rial Measures and related guidelines,
H-share listed companies which apply for the conversion of Unlisted Shares into H shares
for and submit listing and circulation on the Stock Exchange shall file with the CSRC
materials on key compliance issues. An unlisted domestic joint stock company may apply
for ‘‘H-Share Full Circulation’’ when apply ing for an overseas initial public offering.
The Company applied for a ‘‘H-Share Full Circulation’’ filing when filing with the
CSRC for an overseas listing on June 8, 2 025, and submitted the filing reports,
authorization documents of the shareholders of Unlisted Shares which applied for the
H-share ‘‘H-Share Full Circulation’’, undertaking on the compliance of share acquisition
and other documents in accordance with the requirements of the CSRC.
The Company has received the filing notice from the CSRC dated December 5, 2025 in
relation to the registration of the overseas listi ng and ‘‘H-Share Full Circulation’’, pursuant
to which (1) the Company was approved to issue no more than the maximum number of H
Shares with a nominal value of RMB0.10 each that may be issued pursuant to the Global
Offering and the Over-allotment Option wit h, which are all ordinary shares, and the
Company may be listed on the Main Board of the Stock Exchange; (2) a total of
200,000,000 Unlisted Shares held by each of our Shareholders as of the Latest Practicable
Date (the ‘‘H-Share Full Circulation Participating Shareholders’’) were approved to be
converted into H Shares, and the relevant Shares may be listed on the Stock Exchange upon
completion of the conversion.
Listing Approval by the Stock Exchange
We have applied to the Listing Committee of the Stock Exchange for the granting of
the listing of, and permission to deal in, (i) our H Shares to be issued pursuant to the Global
Offering (including any H Shares which may be issued pursuant to the exercise of the
Over-allotment Option); and (ii) the H Shares to be converted from 200,000,000 Unlisted
Shares, which is subject to the approval by the Stock Exchange.
We will perform the following procedures for the conversion of the relevant Unlisted
Shares into H Shares after receiving the ap proval of the Stock Exchange: (1) giving
instructions to our H Share Registrar regarding relevant share certifica tes of the converted
H Shares; and (2) enabling the converted H Shares to be accepted as eligible securities by
HKSCC for deposit, clearance and settlement in the CCASS.
SHARE CAPITAL
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TRANSFER OF SHARES ISSUED PRIOR TO THE GLOBAL OFFERING
Under the PRC Company Law, Shares which have been in issue before we publicly
issue Shares may not be transferred within one year from the date of listing on a stock
exchange. Accordingly, Shares issued by our Company prior to the Listing Date shall be
subject to this statutory restriction and not b e transferred within a period of one year from
the Listing Date. Our Directors and members of the senior management of our Company
shall declare their shareholdings in our Company and any changes in their shareholdings.
Shares transferred by our Directors and such 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 Articles of Association may contain other restrictions or conditions on
the transfer of the Shares held by our Directors, members of senior management of our
Company and other Shareholders. For further details, see ‘‘Appendix V — Summary of
Articles of Association.’’
SHAREHOLDERS’ MEETINGS
For details of circumstances under which our Shareholders’ meetings are required, see
‘‘Appendix V — Summary of Articles of Association.’’
SHARE CAPITAL
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You should read the following discussion in conjunction with the consolidated financial
statements and the notes thereto included in the Accountants’ Report in Appendix I to this
prospectus which has been prepared in accordance with IFRS, and the selected historical
financial information and operating data included elsewhere in this prospectus.
The following discussion and analysis contain forward-looking statements that reflect
our current views with respect to future events and financial performance. These statements
are based on our assumptions and analysis in light of our experience and perception of
historical trends, current conditions and expected future development, as well as other
factors we believe are appropriate under the circumstances. However, whether actual
outcomes and developments will meet our expect ations and predictions depends on a number
of risks and uncertainties. In evaluating our business, you should carefully consider the
information provided in the sections headed ‘‘Risk Factors’’ and ‘‘Forward-Looking
Statements’’ and elsewhere in this prospectus.
OVERVIEW
We are a global provider of home robotic systems, with a particular focus on the
markets in Japan, Europe and North America , and are dedicated to building an ecosystem
centered around smart home robotic produc ts. According to the Frost & Sullivan Report,
we ranked first globally among providers of home robotic systems in terms of retail sales in
2024 with a market share of 11.9%, and a leadin g provider of home robotic systems offering
a broad range of home robotic categories designed for a variety of home living scenarios.
Our offerings primarily comprise: (i) executi on-enhanced robots, including dexterous
hand-mimic robots such as lock robots, curtain robots and finger robots, enhanced mobile
robots such as multitasking household robots, and sports robots; (ii) perception and
decision-making systems, including smart hub s, smart sensors and smart cameras; and (iii)
other smart home products and services, such as light and power tools and smart home
appliances. With technical R&D and product innovation as our core drivers, we leverage
our advantages across the industry chain encompassing R&D, production, and sales to
continuously enhance the application and development of home robotic technology in a
wide array of home living scenarios, including home automation, domestic chores, AI
butler, elderly care, security and energy ma nagement, while continuously expanding the
depth of our scenario coverage and enhancing our products’ autonomous learning and
decision-making capabilities to provide us ers with a complete and enriched smart home
living ecosystem.
During the Track Record Period, we have ac hieved significant growth. Our revenue
increased from RMB274.6 million in 2022 to RMB457.3 million in 2023, and further to
RMB609.9 million in 2024, representing a CAGR of 49.0% from 2022 to 2024. Our revenue
increased from RMB275.0 million for the six months ended June 30, 2024 to RMB396.3
million for the six months ended June 30, 2025. O ur gross profit increased from RMB94.1
million in 2022 to RMB230.5 million in 2023 and further to RMB315.6 million in 2024,
representing a CAGR of 83.1% from 2022 to 2024. Our gross profit increased from
RMB138.8 million for the six months ended June 30, 2024 to RMB214.8 million for the six
months ended June 30, 2025. Our gross profit margin has reached 50.4% and 51.7% in 2023
and 2024, respectively. Our net loss positio n has also significantly improved during the
Track Record Period, which decreased from a net loss of RMB87.0 million in 2022 to a net
loss of RMB16.4 million in 2023 and further to a net loss of RMB3.1 million in 2024. We
recorded a net loss of RMB13.6 million and a net profit of RMB27.9 million for the six
months ended June 30, 2024 and 2025, respectively.
FINANCIAL INFORMATION
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FACTORS AFFECTING OUR RESULTS OF OPERATIONS
The following factors are the principal factors that have affected, and which we expect
will continue to affect, our business, financial condition, results of operations and
prospects. The following should be read in conjunction with the section headed ‘‘Risk
Factors’’ in this prospectus and the Accountants’ Report included as Appendix I to this
prospectus.
General economic conditions and consumer spending in our key markets
Our business is influenced by general economic conditions and consumer spending
patterns in our key markets, particularly Japan, Europe and North America, which
accounted for 67.7%, 17.2% and 11.7% of our revenue for the six months ended June 30,
2025, respectively. Our home robotic system p roducts are designed to enhance people’s
quality of life and represent discretionary purchases for end consumers. As such, the
demand for our products is sensitive to macroeconomic conditions, consumer confidence,
their disposable income levels, and their overall spending patterns.
Macroeconomic factors such as GDP growth rates, unemployment levels, inflation,
and changes in disposable income directly influence end consumers’ spending behavior on
non-essential goods, including our home robotic system products. For example, during
periods of economic uncertainty, recession, or reduced consumer confidence, end
consumers may delay or reduce purchases of discretionary items such as our home
robotic system products or other smart home p roducts and services. This could result in
decreased demand for our products, pricing pressure, increased competition, and reduced
profitability. Conversely, favo rable economic conditions, rising disposable income, and
increased consumer interest in smart home a utomation and AI technology can drive the
demand for our products and support premium pricing. Moreover, changes in consumer
spending patterns due to shifts in economic policies, interest rates, or inflation could further
influence the affordability and desirability of our products.
In addition, the development and maturation of home robot industry also depend on a
number of broader economic factors, including technology adoption rates, infrastructure
development, and regulatory support for AI and IoT technologies. Economic downturns
may also affect the purchasing power of our retail partners and distributors, potentially
impacting their inventory levels a nd willingness to carry our products.
Furthermore, economic conditions in different regions may vary significantly, and our
performance may be affected differently across our key markets. For example, economic
conditions in Japan, our largest market, may have a disproportionate impact on our overall
results of operations. Changes in economic policies, interest rates, inflation, employment
levels, and consumer sentiment in any of our key markets could materially affect our
business, financial condition, and results of operations.
FINANCIAL INFORMATION
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Our ability to capture market opportunities with new products and enhance our results of
operations
Our ability to compete successfully in th e home robotic system products market
depends heavily on our capability to conti nuously introduce innovative products and
technologies. During the Track Record Period, our revenue growth was largely driven by
the introduction of new products, including enhanced mobile robots such as our SwitchBot
K10+, which was introduced in 2023 and as of the Latest Practicable Date, was the world’s
smallest laser vacuum robot in terms of product diameter. It became our new growth engine
that drove the sales of enhanced mobile robots since its launch, which increased from
RMB56.7 million in 2023 to RMB110.3 million i n 2024, and from RMB58.2 million for the
six months ended June 30, 2024 to RMB64.1 millio n for the six months ended June 30, 2025.
We have been continuously expanding our product portfolio. However, the
introduction of new product categories may subject us to additional risks and challenges.
As we may not have sufficient experience and r elevant customer data for these new product
categories, it may be difficult for us to anticipate and respond to customer demands and
preferences. We may misjudge customer demands, resulting in excessive inventories and
possible inventory write-downs. We may also experience higher return rates on new product
categories, receive more customer complaints an d face costly product liability claims, which
would harm our brand and reputation as well as our financial performance. Furthermore,
we may not be able to negotiate favorable terms with suppliers for our new products.
We may need to price aggressively to gain m arket share or remain competitive in the
new product categories. It may be difficult fo r us to achieve profitability in new product
categories, and our profit margin, if any, may be lower than we anticipate, which would
adversely affect our overall profitability and results of operations. We cannot assure you
that we will be able to recoup our investments in introducing these new product categories.
Our relationship with Amazon
Our revenue generated through Amazon SC amounted to RMB79.8 million,
RMB120.0 million, RMB173.0 million, RMB62.7 million and RMB90.4 million for the
years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively, representing approximately 29.1%, 26.3%, 28.4%, 22.8% and 22.8% of
our total revenue for the same periods, respectively. Our revenue generated from Amazon
VC amounted to RMB145.1 million, RMB 178.2 million, RMB218.6 million, RMB112.4
million and RMB175.2 million for the years en ded December 31, 2022, 2023 and 2024 and
the six months ended June 30, 2024 and 2025, re spectively, representing approximately
52.8%, 38.9%, 35.8%, 40.9% and 44.2% of our total revenue for the same periods,
respectively. Accordingly, Amazon, through Amazon VC, continues to be our largest
customer and will likely contribute a substantial portion of our total revenue in the
foreseeable future. As such, our profitability, performance and financial results rely on,
among other things, our continued strong business relationship with Amazon.
We have maintained a stable business rel ationship with Amazon since 2018, and our
revenue generated from/through Amazon h as been growing steadily. We believe our
relationship with Amazon will not materially and adversely change or terminate based on
FINANCIAL INFORMATION
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our proven sales track record on Amazon, our compliance with Amazon’s terms and
conditions, and the mutually beneficial nature of our relationship. Please refer to the
section headed ‘‘Business — Customers — Our Relationship with Amazon’’ in this
prospectus for details. However, any deterioration in our relationship with Amazon,
suspension of our accounts, or unfavorable adjustments in Amazon’s policies or fee
structures could materially and adversely affect our business, financial condition and results
of operations.
Our research and development capabilities
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, we incurred research and development expenses of RMB61.8 million,
RMB89.2 million, RMB112.0 million, RMB56.7 million and RMB58.7 million,
respectively, representing 22.5%, 19.5%, 1 8.4%, 20.6% and 14.8% of our total revenue
for the same periods, respectively. Our products are the results of our R&D efforts to
enhance user experience and make the most of our products’ innovative features. We plan
to increase our revenue and profitability by c ontinuing to expand a nd upgrade our product
portfolio and product offerings, and by charging premium prices for certain of our products
with more sophisticated and advanced home robotics technologies.
We have developed three core home robotics technologies, namely, robot positioning
and environment construction technology, AI machine vision control technology, and
distributed neural control network technology. These technologies form the foundation of
our competitive advantage and have been integrated into our home robotic system
products. For details of these core technologies, please refer to the section headed ‘‘Business
— Our Technologies’’ in this prospectus.
However, our R&D efforts may not be successful or yield the anticipated level of
economic benefits. Even if our R&D efforts are successful, we may not be able to apply
these newly developed technologies to products that will be accepted by the market or apply
them in a timely manner to take advantage of the opportunities presented in the market.
Specifically, we face challenges in accurately predicting market demand for our new
products, given factors such as evolving consum er preferences, technological advancements,
and competition. If our new products fail to a chieve widespread market acceptance, the
revenue generated may be insufficient to offset the substantial R&D expenditures incurred
in connection with their development. The level of economic benefit that can be derived
from newly developed technologies or products may also be affected by our research and
development expenses. We may invest substantial amounts in developing new products,
such as hiring additional R&D personnel and e stablishing new R&D centres. Our ability to
recoup investment is also dependent on R&D efficiency. Efficient R&D not only reduces
costs but also accelerates the development and commercialization of new products, allowing
us to capitalize on market opportunities ahead of competitors. If the sales of new products
cannot cover the additional research and development expenses, we may not recoup our
investment as expected. If any of the aforesa id occurs, it may have a material adverse effect
on our business, financial condition, results of operations and future development.
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Effectiveness of our sales and distribution network
The effectiveness of our sales and distribu tion network has been pivotal to our success.
During the Track Record Period, our products were sold in more than 90 countries and
regions globally with Japan, Europe and North America as our key markets. We have
established an omni-channel sales and distribution network that includes DTC channels,
retailer channels and distribution channels. Our DTC channels generally consist of various
e-commerce platforms, including Amazon SC and our self-operated website. Our retailer
channels mainly include major retailers, such as Amazon VC, and specialty retailers, which
purchase products from us directly and sell to end consumers. Our distributor channels
primarily include distributors, which purchase products from us and primarily distribute
them to sub-distributors and retailers.
We have been actively diversifying our sales channels to mitigate reliance on any single
platform. Revenue from channels other than Amazon increased from RMB49.7 million in
2022 to RMB218.3 million in 2024. Revenue gener ated from channels other than Amazon
increased from RMB99.8 million for the si x months ended June 30, 2024 to RMB130.7
million for the six months ended June 30, 2025. We have also been expanding our retail and
distribution partnerships, with our products ava ilable in over 2,000 offline retail stores as of
the Latest Practicable Date.
Our ability to maintain and expand our sales and distribution network is crucial to our
continued growth. Any disruption to our sales channels, loss of key retail partners, or our
inability to effectively manage our distribut ion network could materially and adversely
affect our business performan ce and results of operations. Conversely, our ability to
strengthen relationships with existing partners and establish new distribution channels will
contribute to our future business growth.
Maintaining the trusted brand image of our products
Since our inception, we have built our ‘‘SwitchBot’’ brand leveraging our core
competencies in home robotic systems. Ou r brand has received recognition from end
consumers around the world, evidenced by over 3.5 million cumulative users who had
registered with our SwitchBot App from its la unch until the Latest Practicable Date. Any
loss of trust in our products could harm the value of our brand, which could materially
reduce our revenue and profitability.
Our ability to maintain our position as a t rusted brand for home robotic systems
depends on various factors, such as continue d offering of quality a nd innovative products
to our customers, as well as increasing brand awareness through marketing and brand
promotion activities. We emphasize creating memorable content that resonates with users
and targeting specific communities and i nfluencers who can amplify our message.
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In particular, the maintenance of our reputation and our brand image depends on the
reviews from, and satisfaction of, our end consumers. Any online reviews posted on the
e-commerce marketplace where our products are listed, or user perceptions regarding
defective or unsatisfactory experience of our products, even if factually incorrect or based
on isolated incidents, could damage our reputation, diminish the value of our brand,
undermine the trust and credibility we have es tablished and have a negative impact on our
ability to attract new end consumers or retain our current end consumers.
If we are unable to maintain our reputation, enhance our brand recognition or increase
positive awareness of our products, it may be difficult to maintain and grow our customer
base, and our business and growth prospects m ay be materially and adversely affected.
Currency exchange rate fluctuations
Our consolidated financial results are affected by currency exchange rate fluctuations.
We mainly conduct our operations in the PRC, Japan, Europe, and North America. All of
our products are manufactured in the PRC during the Track Record Period for
international sales. Fluctuations in exchange rates between RMB and other currencies in
which we conduct business could affect our results of operations and financial condition.
Most of our sales are denominated in various currencies, including Japanese yen,
Euros, and US dollars, corresponding to our major markets in Japan, Europe, and North
America. We pay our suppliers mainly in RMB. As most of our cost of sales incurred in
China are denominated in RMB while a signifi cant portion of our revenue is denominated
in foreign currencies, our results of operations are affected by fluctuations of exchange rate
of RMB against foreign currencies. A depre ciation of foreign currencies against RMB
generally has a negative impact on our gross profit while an appreciation of foreign
currencies generally has a positi ve impact on our gross profit.
In addition, our financial information is presented in RMB. We recorded net foreign
exchange losses of RMB3,000, RMB1.6 m illion, RMB6.5 million for the years ended
December 31, 2022, 2023 and 2024, respectively . The increase in foreign exchange losses was
primarily due to the depreciation of Japanese yen against RMB between 2022 and 2024. For
the six months ended June 30, 2025, we recorded net foreign exchange gains of RMB6.1
million, compared to a net foreign exchange loss of RMB10.8 million for the six months
ended June 30, 2024, which was primarily driven by the appreciation of the Japanese yen
against the RMB during the period. As a result of such foreign currency fluctuations, it
could be more difficult to detect underlying trends in our business and results of operations.
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The following table demonstrates the sensitivity as of the end of each period during the
Track Record Period to a reasonably possible change in foreign currency exchange rates,
with all other variables held constant, of our (l oss)/profit before tax (due to changes in the
translated value of monetary assets and liabilities) and our equity.
Increase/
(Decrease)
in Foreign
Currency
Exchange
Rates
Increase/
(Decrease)
in Profit
Before Tax
(Decrease)/
Increase in
Equity
% RMB’000 RMB’000
Year ended December 31, 2022
I fR M Bw e a k e n sa g a i n s tU S D............... 5 1 , 0 1 7 1 , 0 1 7
I fR M Bs t r e n g t h e n sa g a i n s tU S D ............. 5 ( 1 , 0 1 7 ) ( 1 , 0 1 7 )
I fR M Bw e a k e n sa g a i n s tJ P Y ................ 5 2 , 4 5 3 2 , 4 5 3
I fR M Bs t r e n g t h e n sa g a i n s tJ P Y ............. 5 ( 2 , 4 5 3 ) ( 2 , 4 5 3 )
Year ended December 31, 2023
I fR M Bw e a k e n sa g a i n s tU S D............... 5 1 , 1 8 9 1 , 1 8 9
I fR M Bs t r e n g t h e n sa g a i n s tU S D ............. 5 ( 1 , 1 8 9 ) ( 1 , 1 8 9 )
I fR M Bw e a k e n sa g a i n s tJ P Y ................ 5 4 , 9 0 3 4 , 9 0 3
I fR M Bs t r e n g t h e n sa g a i n s tJ P Y ............. 5 ( 4 , 9 0 3 ) ( 4 , 9 0 3 )
Year ended December 31, 2024
I fR M Bw e a k e n sa g a i n s tU S D............... 5 1 , 0 2 5 1 , 0 2 5
I fR M Bs t r e n g t h e n sa g a i n s tU S D ............. 5 ( 1 , 0 2 5 ) ( 1 , 0 2 5 )
I fR M Bw e a k e n sa g a i n s tJ P Y ................ 5 1 , 5 0 3 1 , 5 0 3
I fR M Bs t r e n g t h e n sa g a i n s tJ P Y ............. 5 ( 1 , 5 0 3 ) ( 1 , 5 0 3 )
Six months ended June 30, 2025
I fR M Bw e a k e n sa g a i n s tU S D............... 5 5 , 3 4 5 5 , 3 4 5
I fR M Bs t r e n g t h e n sa g a i n s tU S D ............. 5 ( 5 , 3 4 5 ) ( 5 , 3 4 5 )
I fR M Bw e a k e n sa g a i n s tJ P Y ................ 5 3 , 7 3 5 3 , 6 3 0
I fR M Bs t r e n g t h e n sa g a i n s tJ P Y ............. 5 ( 3 , 7 3 5 ) ( 3 , 8 3 0 )
BASIS OF PREPARATION OF HISTOR ICAL FINANCIAL INFORMATION
The historical financial in formation has been prepared in accordance with IFRS
Accounting Standards, which comprise all standards and interpretations approved by the
International Accounting Standards Board (‘‘IASB’’). All IFRS Accounting Standards
effective for the accounting period commenc ing from January 1, 2025, together with the
relevant transitional provisions, have been adopted by our Group in the preparation of the
historical financial information throughout the Track Record Period.
For ordinary shares issued to pre-IPO inv estors, pursuant to the supplemental
agreements entered into betw een our Company and the pre-IPO Investors in relation to the
termination of certain of special rights granted by our Company, including redemption
rights, which are void ab initio as described in note 28 of the Accountant’s Report as set out
in Appendix I to this prospectus, having taking into account the legal and regulatory
framework of our Company’s jurisdiction and the governing law of the supplementary
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agreements, our Directors considered tha t it is appropriate to present the pre-IPO
Investments as equity throughout the Track Record Period. For the details of financial
impacts, see note 28 of the Accountant’s Report.
The historical financial information has been prepared under the historical cost
convention except for certain financial instr uments which have been measured at fair value
at the end of each year during the Track Record Period.
MATERIAL ACCOUNTING POLICY INFORMATION AND ESTIMATES
We have identified certain accounting polic ies that we believe are most significant to
the preparation of our consolidated financial statements. Some of our material accounting
policy information involve s ubjective assumptions and estimates, as well as complex
judgments by our management relating to accounting items. Our material accounting policy
information are set forth in detail in the Acco untants’ Report included in Appendix I to this
prospectus.
The estimates and associated assumptions a re based on our historical experience and
various other relevant factors that we believe are reasonable under the circumstances, the
results of which form the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
Revenue Recognition
Revenue from Contracts with Customers
Revenue from contracts with customers is recognized when control of goods or services
is transferred to the customers at an amount that reflects the consideration to which our
Group expects to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of
consideration is estimated to which our Grou p will be entitled in exchange for transferring
the goods or services to the customer. The varia ble consideration is estimated at contract
inception and constrained until it is highly pr obable that a significant revenue reversal in
the amount of cumulative revenue recognized will not occur when the associated
uncertainty with the variable consideration is subsequently resolved.
Sales of Goods
Revenue from the sale of goods is recognized at the point in time when control of the
asset is transferred to the customers, generally upon acceptance of the goods as agreed in
the sales contracts.
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Distributors and Retailers. A significant portion of our products is sold to distributors
and retailers, who have discretion over both price and distribution methods for products to
be sold in their designated geographical areas. Revenue is recognized at a point in time
when the goods are delivered and accepted by the distributors and retailers in accordance
with the sales contract.
Volume rebates may be provided to distributors and retailers under certain conditions
as agreed in the sales contract. Rebates are offset against amounts payable by the customer.
To estimate the variable consideration for t he expected future rebates, the most likely
amount is used.
DTC. We sell our products directly to end consumers via e-commence platforms and
self-operated website. Revenue is recognised at a point in time when the goods are delivered
and accepted by the end consumers. We estimate the time of acceptance by the end
consumers based on the actual delivery time, the historical experience on transportation
time required, and the time when online payment is completed.
Cloud Storage Services
Customers subscribe for cloud storage services over a service period. Revenue is
recognized over the subscribed period on a st raight-line basis, because the customer
simultaneously receives and consumes the benefits provided by us.
Rights of Return
For contracts which provide a customer with a right to return the goods within a
specified period, the expected value method i s used to estimate the goods that will not be
returned because this method best predicts the amount of variable consideration to which
we will be entitled. The requirements in IFRS 15 on constraining estimates of variable
consideration are applied in order to determine the amount of variable consideration that
can be included in the transaction price. For goods that are expected to be returned, instead
of revenue, a liability is recognized. A ri ght-of-return asset (and the corresponding
adjustment to cost of sales) is also recogn ized for the right to recover products from a
customer.
Leases
Our 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.
Our Group as a Lessee
Our Group apply a single recognition and measurement approach for all leases, except
for short-term leases and leases of low-value a ssets. Our Group recognizes lease liabilities to
make lease payments and right-of-use assets representing the right to use the underlying
assets.
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Right-of-use Assets
Right-of-use assets are recognized at the com mencement date of the lease (i.e., the date
the underlying asset is availabl e for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and any impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use a ssets includes the amount of lease liabilities
recognized, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Where applicable, the cost of a
right-of-use asset also includes an estimate of c osts to dismantle and remove the underlying
asset or to restore the underlying asset or the si te on which it is located. 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:
B u i l d i n g s........................... 2t o1 0y e a r s
If ownership of the leased asset transfers to our 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.
Lease Liabilities
Lease liabilities are recognized at the com mencement 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 paym ents) less any lease incentives receivable,
v a r i a b l el e a s ep a y m e n t st h a td e p e n do na ni n d e xo rar a t e ,a n da m o u n t se x p e c t e dt ob ep a i d
under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by our Group and payments of penalties
for termination of a lease, if the lease term reflects our Group exercising the option to
terminate the lease. The variable lease payments that do not depend on an index or a rate
are recognized as an expense in the period in which the event or condition that triggers the
payment occurs.
In calculating the present value of lease payments, our Group uses its incremental
borrowing rate at the lease comm encement 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 accretio n of interest and reduced for the lease payments
made. In addition, the carrying amount of le ase 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.
Short-term Leases and Leases of Low-value Assets
We apply the short-term lease recognition e xemption to its short-term leases of office
and employee dormitory (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). We also apply the
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recognition exemption for leases of low-value assets to leases of office equipment that are
considered to be of low value. Lease payments on short-term leases and leases of low-value
assets are recognized as an expense on a straight-line basis over the lease term.
Our Group as a Lessor
When we act as a lessor, we classify at lease inception (or when there is a lease
modification) each of our leases as either an operating lease or a finance lease.
Leases in which our Group does not transfer substantially all the risks and rewards
incidental to ownership of an asset are classified as operating leases. Rental income is
accounted for on a straight-line basis over the lease terms and is included in other income in
profit or loss due to its operating nature. Init ial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and
recognized over the lease term on the same bas is as rental income. Contingent rents are
recognized as revenue in the period in which they are earned.
Leases that transfer substantially all the ri sks and rewards incidental to ownership of
an underlying asset to the lessee are accounted for as finance leases. At the commencement
date, the cost of the leased asset is capitalised at the present value of the lease payments and
related payments (including the initial direct costs), and presented as a receivable at an
amount equal to the net investment in the lease. The finance income on the net investment
in the lease is recognized in profit or loss so as to provide a constant periodic rate of return
over the lease terms.
When our Group is an intermediate lessor, a su blease is classified as a finance lease or
operating lease with reference to the right-of-use asset arising from the head lease. If the
head lease is a short-term lease to which we apply the on-balance sheet recognition
exemption, we classify the sublease as an operating lease.
Income Tax
Income tax comprises current and deferred tax. Income tax relating to items recognized
outside profit or loss is recognized outside profit or loss, either in other comprehensive
income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of each year during the Track Record Period,
taking into consideration inter pretations and practices prev ailing in the countries in which
our Group operates.
Deferred tax is provided, using the liability m ethod, on all temporary differences at the
end of each year during the Track Record Period between the tax bases of assets and
liabilities and their carry ing amounts for financi al reporting purposes.
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Deferred tax liabilities are recognized for a ll taxable temporary differences, except:
. when the deferred tax liability arises fro m the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or
loss and does not give rise to equal taxable and deductible temporary differences;
and
. in respect of taxable temporary differences associated with investments in
subsidiaries, when the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, and the
carry forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognized to the extent that it is probable tha t taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized, except:
. when the deferred tax asset relating to the deductible temporary differences arises
from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does not give rise to equal taxable
and deductible temporary differences; and
. in respect of deductible temporary differences associated with investments in
subsidiaries, deferred tax assets are only recognized to the extent that it is
probable that the temporary differences w ill reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be
utilized.
The carrying amount of deferred tax assets is reviewed at the end of each year during
the Track Record Period and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilized. Unrecognized deferred tax assets are reassessed at the end of each year during the
Track Record Period and are recognized to th e 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 meas ured at the tax rates that are expected to
apply to the period when the asset is realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by the end of each year
during the Track Record Period.
Deferred tax assets and deferred tax liabilit ies are offset if and only if our Group has a
legally enforceable right to set off current ta x assets and current tax liabilities and the
deferred tax assets and deferred tax liabilitie sr e l a t et oi n c o m et a x e sl e v i e db yt h es a m e
taxation authority on either the same taxable entity or different taxable entities which
FINANCIAL INFORMATION
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intend either to settle current tax liabilities a nd assets on a net basis, or to realize the assets
and settle the liabilities simultaneously, in ea ch future period in which significant amounts
of deferred tax liabilities or assets a re expected to be settled or recovered.
Government Grants
Government grants are recognized at their fair value where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied with.
When the grant relates to an expense item, it is recognized as income on a systematic basis
over the periods that the costs, for which it is intended to compensate, are expensed.
Property, Plant and Equipment and Depreciation
Property, plant and equipment, other than construction in progress, are stated at cost
less accumulated depreciation and any impai rment 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 profit or loss in the
period in which it is incurred. In situations where the recognition criteria are satisfied, the
expenditure for a major inspection is capitalized in the carrying amount of the asset as a
replacement. Where significant parts of property, plant and equipment are required to be
replaced at intervals, our Group recognizes su ch 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:
L e a s e h o l di m p r o v e m e n t s................ S h o r t e ro fr e m a i n i n gl e a s et e r m s
and estimated useful lives
F u r n i t u r ea n df i x t u r e s .................. 1 9 . 0 %t o3 3 . 3 %
E l e c t r o n i ce q u i p m e n ta n do t h e r s .......... 1 9 . 0 %t o3 3 . 3 %
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 the end of each year during the Track
Record Period.
An item of property, plant and equipment including any significant part initially
recognized is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss on disposal or retirement recognized in profit or
loss in the year the asset is derecognized is the difference between the net sales proceeds and
the carrying amount of the relevant asset.
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C a s ha n dC a s hE q u i v a l e n t s
Cash and cash equivalents in the statement o f 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 he ld 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 and form an integral part of
our Group’s cash management.
Inventories
Inventories are stated at the lower of cost an d net realizable value. Cost is determined
on weighted average method and, in the case of work in progress and finished goods,
comprises direct materials, direct labor and an appropriate proportion of overheads. Net
realizable value is based on estimated selling prices less any estimated costs to be incurred to
completion and disposal.
Provisions
A provision is recognized when a present ob ligation (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 recognized for a provision is the
present value at the end of each year during Track Record 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 profit or loss.
Our Group provides for warranties in relation to the sale of products for general
repairs of defects occurring during the warranty p eriod. Provisions for these assurance-type
warranties granted by our Group are initially recognized based on sales volume and past
experience of the level of repairs and returns. Th e warranty-related cost is revised annually.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
statement of financial position if there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the assets
and settle the liabilities simultaneously.
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Impairment Testing of Certain Non-financial Assets
In accordance with IAS 36.12, we assess at the end of each reporting period whether
there is any indication that non-current assets (other than inventories, contract assets,
deferred tax assets, and financial assets) may be impaired. If any such indication exists, we
estimate the recoverable amount of the assets.
For the years ended December 31, 2022, 2023, and 2024, we recorded net losses of
RMB87.0 million, RMB16.4 million, and RMB3. 1 million, respectively. Our losses were
mainly due to the fact that home robotic systems industry is an emerging,
technology-intensive sector characterized by significant upfront R&D and market
investment, which in turn mandates continuous research and development and market
promotion. Our home robotic system products have been launched in the market for a
relatively short period of time. Given our prolonged period of overall losses, there are
indications of impairment.
In accordance with IAS 36, we performed impairment tests at each period-end on
non-current assets (primarily including property, plant and equipment, right-of-use assets,
intangible assets, and other non-current assets) that show indications of impairment and
estimate the recoverable amount of the non-current asset. The recoverable amount is
determined for the cash-generating unit to which the asset belongs.
We are primarily engaged in the development, manufacturing, and commercialization
of home robotic system products. We are centrally managed and our activities, including
research and development, procurement, manufacture and production, and sales are all
governed and managed in our main subsidiary Woan Technology, and our Company only
has one operating segment. The non-current assets other than financial assets mainly
include machinery and leased properties. Th e entities that hold these assets are highly
inter-related and cannot be considered to generate cash inflows that are largely independent
of each other. Therefore, non-current assets, ot h e rt h a nf i n a n c i a la s s e t sl o c a t e di nd i f f e r e n t
entities, are all allocated to our Group, which is defined as the cash-generating unit (the
‘‘CGU’’) that generates cash flows that are largely independent for impairment testing.
The recoverable amount of the CGU is determined based on a value in use calculation
using cash flow projections based on financial budgets approved by the management. The
budgeted sales and margins are estimated based on historical information achieved and the
expected market development. The discount rat es used reflect specific risks relating to us.
According to the impairment test results, the recoverable amount of the CGU was larger
than the carrying amount of the non-current assets at the end of each reporting period, thus
no impairment was required.
For the six months ended June 30, 2025, we recorded net profit of RMB27.9 million,
marking a successful transition from a loss-ma king position to profitability. This outcome
demonstrates that the profitability of our core assets has been significantly improved.
Compared with the profit forecast utilized duri ng the 2024 impairment testing, the actual
operating performance has exceeded expectat ions, with no negative deviations observed.
Furthermore, based on the best knowledge, in formation and belief of the Directors, there
have been no significant adverse changes in the market, economic, or technological
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environments, nor in market interest rates aff ecting the industry in 2025. Given the absence
of any indicators of potential asset impairment as of June 30, 2025, and considering that the
2024 year-end impairment test confirmed the asset carrying values were below their
recoverable amounts, we are not required to perform additional impairment tests on these
assets as of June 30, 2025.
R E S U L T SO FO P E R A T I O N S
The table below presents a summary of our consolidated statement of profit or loss and
other comprehensive income for the periods indicated:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue ....................... 274,597 457,264 609,924 275,021 396,294
Cost of sales . . . . . . . . . . . . . . . . . . . . (180,458) (226,726) (294,327) (136,183) (181,541)
Gross profit ..................... 94,139 230,538 315,597 138,838 214,753
Other income and gains . . . . . . . . . . . . . 6,787 8,342 9,111 4,578 10,364
Selling and distribution exp enses. . . . . . . . (102,104) (136,698) (171,894) (70,969) (106,829)
Administrative expenses . . . . . . . . . . . . . (21,006) (24,139) (32,372) (15,936) (30,864)
Research and development expenses. . . . . . (61,761) (89,192) (112,022) (56,737) (58,679)
Impairment losses on financial assets, net . . (136) (798) 151 (120) (490)
Other expenses . . . . . . . . . . . . . . . . . . . (431) (2,100) (6,836) (10,886) (1,964)
Finance costs . . . . . . . . . . . . . . . . . . . . (2,422) (2,240) (4,409) (1,738) (2,165)
(Loss)/profit before tax .............. (86,934) (16,287) (2,674) (12,970) 24,126
Income tax (expense)/credit . . . . . . . . . . . (49) (89) (400) (671) 3,777
(Loss)/profit for the year/period ........ (86,983) (16,376) (3,074) (13,641) 27,903
Attributable to:
Owners of the parent . . . . . . . . . . . . . (86,983) (16,376) (3,074) (13,641) 27,903
For details on the accounting treatment of redemption rights, see ‘‘— Share Capital
and Total Equity’’ in this section and note 28 to the Accountants’ Report set out in
Appendix I to this prospectus.
Non-IFRS Measures
In order to supplement our consolidated financial statements, which are presented in
accordance with IFRS, we also use Adjusted Ne t Loss/(Profit) (a non-IFRS measure) and
adjusted EBITDA (a non-IFRS measure) as addit ional financial measures. We present these
financial measures because they are used by our management to evaluate our financial
performance by eliminating the impact of ce rtain items. We also believe that these
non-IFRS measures provide additional information to investors and others in their
understanding and evaluating our results of operations in the same manner as they help our
management and in comparing financial results across accounting periods and to those of
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our peer companies. However, our presentation of such non-IFRS measures may not be
comparable to similarly titled measures presented by other companies. The use of these
non-IFRS measures has limitations as an analytical tool, and you should not consider this
in isolation from, or as a substitute for analysis of, our results of operations as report under
IFRS.
We define adjusted net (loss)/profit (a non -IFRS measure) as (loss)/profit for the
year/period adjusted for equity-settled shar e-based payment expenses. We define adjusted
EBITDA (a non-IFRS measure) as EBITDA ad justed for equity-settled share-based
payment expenses. Equity-settled share-ba sed payment expenses are non-cash in nature.
The following table sets for the reconciliation of adjust net (loss)/profit for the year/period
(a non-IFRS measure) and adjusted EBITDA (a non-IFRS measure) for the years/periods
indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Loss)/profit for the year . . . . . . . . (86,983) (16,376) (3,074) (13,641) 27,903
Add:
Equity-settled share-based payment
expenses
(1) . . . . . . . . . . . . . . . . 3,378 4,181 4,181 2,091 5,041
L i s t i n ge x p e n s e ............... — — — — 1 1 , 2 6 1
Adjusted net (loss)/profit for the year
(a non-IFRS measure) . . . . . . . . . (83,605) (12,195) 1,107 (11,550) 44,205
Add:
Interest on bank loans . . . . . . . . . . — — 1,275 104 803
Interest on factored trade receivables . 666 749 698 325 398
Interest on lease liabilities . . . . . . . . 1,756 1,491 2,436 1,309 964
Income tax expense/(credit) . . . . . . . 49 89 400 671 (3,777)
Depreciation of property, plant and
equipment . . . . . . . . . . . . . . . . 3,005 5,113 9,589 4,229 5,567
Depreciation of right-of-use assets. . . 10,430 11,451 10,988 5,124 4,594
Amortization of intangible assets . . . 222 676 1,646 822 1,940
Less:
I n t e r e s ti n c o m e ............... 1 , 6 4 7 1 , 5 6 0 2 , 0 5 8 8 6 4 5 5 0
Adjusted EBITDA (a non-IFRS
measure) . . . . . . . . . . . . . . . . . (69,124) 5,814 26,081 170 54,144
Note:
(1) Equity settled share-based payme nt expenses are non-cash in nature.
For the years ended December 31, 2022, 2023, 2024, we recorded net loss of RMB87.0
million, RMB16.4 million, RMB3.1 million, resp ectively. For the six months ended June 30,
2024 and 2025, we recorded net loss of R MB13.6 million and net profit of RMB27.9
million, respectively. Our net losses during th e Track Record Period were primarily due to
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the expenditures in relation to (i) our R&D expenses incurred to enhance our core
technologies and product and se rvices offerings to maintain our established position in
home robotic system industry; ( ii) our selling and distribution expenses incurred to enhance
our brand reputation and expand our cu stomer and end-user base; and (iii) our
administrative expenses. We recorded a ne t loss of RMB13.6 million for the six months
ended June 30, 2024, compared to a net profit o f RMB27.9 million for the six months ended
June 30, 2025. The turnaround to profitabilit y was primarily attribut able to significant
revenue growth as we expand our business operation and improved gross profit margin,
resulting from higher margins of our core products, a favorable shift in our product mix
toward higher-margin products, and the cont inued implementation of cost optimization
measures. The improvement of our loss for the years ended December 31, 2022, 2023 and
2024 and our net profit for the six months ended June 30, 2025 were primarily attributable
to a combination of the following factors:
(i) the increase of the market penetration of our products, as evidenced by the
significant growth in our revenue, which recorded a CAGR of 49.0% from
RMB274.6 million in 2022 to RMB609.9 m illion in 2024. Likewise, our revenue
increased significantly from RMB275.0 million for the six months ended June 30,
2024 to RMB396.3 million for the six months ended June 30, 2025;
(ii) the continuous improvement in the sales of established core home system product
categories, the continuous optimization of our product mix and the successful
launch of new, higher-margin products, wh ich collectively resulted in an increase
in our overall gross profit margin from 34.3% in 2022 to 50.4% in 2023 and
51.7% in 2024, and from 50.5% for the six months ended June 30, 2024 to 54.2%
for the six months ended June 30, 2025;
(iii) our highly effective and efficient mar keting activities, which leveraged our
established brand influence and mature marketing models. This resulted in
improved operating leverage as our revenue grew at a faster pace than our related
expenses. As a result, our selling and distribution expenses as a percentage of
revenue decreased from 37.2% in 2022 to 29.9% in 2023 and 28.2% in 2024, and
was 25.8% and 27.0% for the six months ended June 30, 2024 and 2025,
respectively, while our revenue continued to increase during the same period;
(iv) our disciplined and strategic investment in research and development, which we
believe is crucial for maintaining our t echnological leadership and long-term
growth. Our research and development expenses as a percentage of revenue were
22.5%, 19.5% and 18.4% for the years ended December 31, 2022, 2023 and 2024,
respectively, and 20.6% and 14.8% for the six months ended June 30, 2024 and
2025, respectively, reflecting our prudent approach in selecting projects with
strong commercialization potential an d our ability to successfully translate
technological advancements into revenue growth in a cost-efficient manner;
(v) the optimization of our sales channels with a strategic focus on our higher-margin
DTC channels. The revenue generated from our DTC channels as a percentage of
our total revenue increased from 36.9% in 2022 to 46.2% in 2023 and further to
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49.8% in 2024. Likewise, the revenue generated from our DTC channels as a
percentage of our total revenue increased from 43.7% for the six months ended
June 30, 2024 to 44.8% for the six months ended June 30, 2025. These DTC
channels carried higher gross profit margins compared to our overall gross profit
margin of the same periods, thereby contributing to the improvement in our
overall gross profit and gross profit margin; and
(vi) the strategic market expansion across k ey regions, particularly evidenced by our
rapid growth in Europe, where our revenue grew at a CAGR of 68.1% from
RMB46.2 million in 2022 to RMB130.5 m illion in 2024, and increased from
RMB47.8 million for the six months ended June 30, 2024 to RMB68.1 million for
the six months ended June 30, 2025.
DESCRIPTION OF MAJOR COMPONENTS OF OUR CONSOLIDATED
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Revenue
Revenue by Product
During the Track Record Period, we generated revenue primarily from (i) the sale of
home robotic system products, which include execution-enhanced robots and perception
and decision-making systems; and (ii) other smart home products and services. For the
years ended December 31, 202 2, 2023 and 2024 and six mon ths ended June 30, 2024 and
2025, our revenue was RMB274.6 million, RMB457.3 million, and RMB609.9 million,
RMB275.0 million and RMB396.3 million, respect ively. The following table sets forth a
breakdown of our revenue by product type for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Home Robotic System
Products .......... 229,146 83.4 416,334 91.0 546,960 89.7 251,225 91.4 348,845 88.0
— Execution-enhanced
r o b o t s ....... 1 3 9 , 8 9 6 5 0 . 9 2 5 5 , 0 9 1 5 5 . 7 3 4 7 , 8 6 9 5 7 . 1 1 7 5 , 2 3 9 6 3 . 8 2 3 7 , 7 3 5 6 0 . 0
— Dexterous
hand-mimic
r o b o t s ..... 1 3 9 , 8 9 6 5 0 . 9 1 9 8 , 3 4 5 4 3 . 3 2 3 7 , 5 7 9 3 9 . 0 1 1 7 , 0 7 1 4 2 . 6 1 7 3 , 6 2 3 4 3 . 8
—E n h a n c e dm o b i l e
r o b o t s ..... — — 5 6 , 7 4 6 1 2 . 4 1 1 0 , 2 9 0 1 8 . 1 5 8 , 1 6 8 2 1 . 2 6 4 , 1 1 2 1 6 . 2
— Perception and
decision-making
s y s t e m s ....... 8 9 , 2 5 0 3 2 . 5 1 6 1 , 2 4 3 3 5 . 3 1 9 9 , 0 9 1 3 2 . 6 7 5 , 9 8 6 2 7 . 6 1 1 1 , 1 1 0 2 8 . 0
Other smart home products
and services
(1) ....... 45,451 16.6 40,930 9.0 62,964 10.3 23,796 8.6 47,449 12.0
Total .............. 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Note:
(1) Other smart home products and services primaril y include the revenue generated from the sales of
smart light tools, smart power tools and smart home appliances and other products and services.
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Revenue by Geographic Location
During the Track Record Period, our products were sold in more than 90 countries and
regions globally with Japan, Europe and North America as our key markets. For the years
ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
Japan was our largest market, contributing to 61.4%, 62.3%, 57.7%, 60.9% and 67.7% of
our total revenue, respectively. The following table sets forth a breakdown of our revenue
by geographic location for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Japan .............. 168,381 61.4 285,057 62.3 352,408 57.7 167,390 60.9 268,354 67.7
Europe ............. 46,193 16.8 68,737 15.0 130,465 21.4 47,769 17.4 68,055 17.2
G e r m a n y ......... 1 2 , 4 4 3 4 . 5 1 9 , 6 8 5 4 . 3 5 1 , 4 5 0 8 . 4 1 6 , 3 6 4 6 . 0 3 1 , 1 6 1 7 . 9
The United Kingdom . 10,592 3.9 16,341 3.6 20,048 3.3 8,760 3.2 9,844 2.5
Other European
countries . ...... 2 3 , 1 5 8 8 . 4 3 2 , 7 1 1 7 . 1 5 8 , 9 6 7 9 . 7 2 2 , 6 4 5 8 . 2 2 7 , 0 5 0 6 . 8
North America ........ 47,614 17.3 83,482 18.3 96,735 15.9 42,394 15.4 46,176 11.7
The United States . . . 45,101 16.4 78,451 17.2 86,878 14.3 38,687 14.1 40,860 10.3
Other North American
countries . ...... 2 , 5 1 3 0 . 9 5 , 0 3 1 1 . 1 9 , 8 5 7 1 . 6 3 , 7 0 7 1 . 3 5 , 3 1 6 1 . 4
Rest of the world
(1) ..... 12,409 4.5 19,988 4.4 30,316 5.0 17,468 6.3 13,709 3.4
Total .............. 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Note:
(1) Rest of the world include ov er 40 countries and regions, suc h as Australia, South Korea and
Singapore, each contributed relatively insignif icant revenue to us during the Track Record Period.
TRANSFER PRICING ARRANGEMENTS
We have established wholly-owned subsidiaries in Japan, the United States and Hong
Kong to facilitate our international sales. Our wholly-owned subsidiary in Singapore,
SWITCHBOT PTE. LTD., had not commenced business operations as of the Latest
Practicable Date. During the Track Reco rd Period, Woan Technology, our primary
operational entity, sold finished goods to these overseas subsidiaries in Japan, the United
States and Hong Kong, which subsequently distributed products to customers through
DTC, retail, and distribution channels.
The functional roles of the key operating e ntities within our Group’s value chain are
outlined as follows:
. Woan Technology: it serves as the principal R&D a nd operational entity for our
Group, undertaking key functions such as strategic management, research and
development, procurement, production, and marketing. It bears the
corresponding significant risks, includi ng R&D risk, market risk, and inventory
risk, and is entitled to our Group’s residual profits or losses.
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. SwitchBot JP, SwitchBot US, Wonderlabs US, Wonderlabs HK and Woan HK (the
‘‘International Sales Entities’’): They serve as sales entities within our Group and
are tasked with routine international d istribution and sales functions. They
perform limited functions and bear limited risks, such as limited credit and
currency risks, positioning them as limited-risk distributors.
. Our Company: It serves as an investment holding company.
Transfer Pricing Assessment
Our intra-group transactions are subject to transfer pricing laws in various
jurisdictions, which generally require tha t transactions between related parties be
conducted on terms equivalent to those that would prevail in an arm’s length transaction
between independent parties. To ensure our compliance with the relevant regulations,
including the transfer pricing guidelines issued by the Organisation for Economic
Co-operation and Development (OECD), we engaged Ernst & Young Tax Services
Limited as our independent transfer pricing consultant, or the Independent Transfer Pricing
Consultant, to review our related-party transactions during the Track Record Period.
According to our Independent Transfer Pricing Consultant, the Transactional Net
Margin Method is the most appropriate meth od to test the arm’s length nature of our
intra-group transactions. Under this method, we compare the operating profit margin of
our International Sales Entities, as the tested parties, against the operating profit margins
of independent third-party companies engaged in comparable businesses to determine an
arm’s length range.
Our Independent Transfer Pricing Consultant advised us that for 2022, our Group was
in an early market expansion phase and adopted a high-investment strategy to gain market
share, a common business practice that often results in initial operating losses in the
technology-intensive smart robot industry. Crucially, our Group as a whole also recorded a
net loss in 2022, demonstrating that the losses at our International Sales Entities were a
direct result of this group-wide strategy rather than our transfer pricing arrangements. As
the losses were consistent with our overall business strategy and our subsequent return to
profitability, our Independent Transfer Prici ng Consultant has concluded that the risk of
our transfer pricing arrangements for 2022 b eing challenged by tax authorities is low.
For the years ended December 31, 2023 and 2024, and the six months ended June 30,
2025, our Independent Transfer Pricing Consultant performed benchmarking analyses for
each period. Based on these analyses, the ope rating profit margins of our International
Sales Entities were confirmed to be within the arm’s length range established by reference to
the profit levels of comparable independent companies in the same jurisdictions, which
supports the position that their profitabilit y is commensurate with their limited-risk
functions.
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The table below summarizes the benchma rking analysis, comparing the actual
operating profit margins of our Internation al Sales Entities against the arm’s length
interquartile range of comparable companies for each period during the Track Record
Period:
Period Entity
Comparable
Arm’s Length
Range
(Operating
Profit Margin)
Actual
Operating
Profit Margin Conclusion
2023 . . . . Woan HK –0.71% to
3.63%
0.35% Within Range
Wonderlabs HK –0.71% to
3.63%
0.50% Within Range
SwitchBot JP 1.05% to 5.17% 2.02% Within Range
SwitchBot US/
Wonderlabs US
1
–0.08% to
4.71%
0.87%
(Combined)
Within Range
2024 . . . . Woan HK 0.13% to 3.86% 1.36% Within Range
Wonderlabs HK 0.13% to 3.86% 0.27% Within Range
SwitchBot JP 1.95% to 5.38% 2.49% Within Range
SwitchBot US 0.60% to 4.44% 0.93% Within Range
2025 H1. . Woan HK 0.29% to 5.33% 4.88% Within Range
Wonderlabs HK 0.29% to 5.33% 1.48% Within Range
SwitchBot JP 2.31% to 6.01% 4.95% Within Range
SwitchBot US 1.03% to 4.10% 3.27% Within Range
Note:
(1) The business of Wonderlabs US was integrated into SwitchBot US starting from 2023, contributing
to the high degree of operational synergy and int egration between SwitchBot US and Wonderlabs
US. Consequently, our Independent Transfer Pric ing Consultant conducted a combined analysis for
these entities. The aggregated operating profit ma rgin of our US entities remained within the arm’s
length range. Wonderlabs US has subsequently cea sed active operations since 2024, and is therefore
not included in subsequent analyses.
Based on the analyses above, our Independent Transfer Pricing Consultant is of the
opinion that the profit levels of our International Sales Entities are consistent with their
limited-risk functional profiles and that our Group’s transfer pricing arrangements for the
Track Record Period comply with the arm’s length principle. Accordingly, our Independent
Transfer Pricing Consultant has concluded that our Group’s transfer pricing risk during the
Track Record Period is low.
As of the Latest Practicable Date, to the best of our Directors’ knowledge and belief,
none of our International Sales Entities has received any enquiries or written notices from
relevant tax authorities questioning our transf er pricing policies. In light of the analyses
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performed by our Independent Transfer Pricing Consultant and the absence of any
challenges from the relevant tax authorit ies, our Directors believe that our Group’s
exposure to transfer pricing risk during the Track Record Period is low.
Revenue by Sales Channel
We have established an omni-channel sales an d distribution network that is tailored to
the respective markets in which our products are sold. Our sales and distribution network
generally consists of DTC channels, retailer channels and distribution channels. Under the
DTC channels, we sell products directly to end consumers either via a number of major
e-commerce platforms, including Amazon SC, among others, or our self-operated website.
Under the retailer channels, we primarily se ll our products to national retailers, such as
Amazon VC, and specialty retailers, which pur chase products directly from us and sell them
to end consumers. Under our distribution channel, we mainly sell our products to
distributors, which purchase products from us and primarily distribute them to retailers
and/or sub-distributors.
The following table sets forth a breakdown of our revenue by sales channel for the
periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
DTC Channels ........ 101,182 36.9 210,965 46.2 303,732 49.8 120,391 43.7 177,469 44.8
— A m a z o nS C..... 7 9 , 8 1 7 2 9 . 1 1 2 0 , 0 4 3 2 6 . 3 1 7 3 , 0 2 0 2 8 . 4 6 2 , 7 3 2 2 2 . 8 9 0 , 3 8 6 2 2 . 8
— Self-operated
w e b s i t e ....... 2 0 , 4 6 0 7 . 5 6 0 , 7 9 3 1 3 . 3 8 8 , 6 8 8 1 4 . 5 3 5 , 8 3 6 1 3 . 0 6 0 , 5 8 8 1 5 . 3
— Other online
marketplaces . . . 905 0.3 30,129 6.6 42,024 6.9 21,823 7.9 26,495 6.7
Retailer Channels ...... 172,115 62.6 204,783 44.7 244,824 40.1 125,628 45.7 183,008 46.2
— A m a z o nV C..... 1 4 5 , 0 8 0 5 2 . 8 1 7 8 , 1 8 6 3 8 . 9 2 1 8 , 6 3 4 3 5 . 8 1 1 2 , 4 4 7 4 0 . 9 1 7 5 , 2 3 3 4 4 . 2
— O t h e rr e t a i l e r s .... 2 7 , 0 3 5 9 . 8 2 6 , 5 9 7 5 . 8 2 6 , 1 9 0 4 . 3 1 3 , 1 8 1 4 . 8 7 , 7 7 5 2 . 0
Distribution Channels .... 1,300 0.5 41,516 9.1 61,368 10.1 29,002 10.6 35,817 9.0
Total ............ 274,597 100.0 457,264 100.0 609,924 100.0 275,021 100.0 396,294 100.0
Cost of Sales
Our cost of sales primarily consists of (i) raw materials, which mainly include
components and parts used in manufacturing ou r products; (ii) transportation and storage
costs, which primarily represent the costs for transporting and warehousing of our
products; (iii) labor costs, which primarily consist of the salaries and benefits for personnel
directly involved in our production activities; (iv) outsourcing costs, which consist of
expenses incurred for manufacturing wo rk subcontracted to third parties; (v)
manufacturing expenses, which p rimarily represents factory rentals, utilities, depreciation
of production equipment, and other indirect production costs; and (vi) provision for
inventory impairment. For the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2024 and 2025, our cost of sales was RMB180.5 million, RMB226.7
million, RMB294.3 million, RMB136.2 million and RMB181.5 million, respectively.
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The table below sets forth, for the periods indicated, the components of our cost of
sales and the components as a percentage of total cost of sales.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
R a wm a t e r i a l s ........ 1 0 7 , 8 7 5 5 9 . 9 1 3 2 , 2 3 0 5 8 . 2 1 7 3 , 6 3 2 5 9 . 1 8 9 , 7 1 4 6 5 . 9 1 0 2 , 8 8 5 5 6 . 7
L a b o rc o s t s.......... 1 5 , 5 6 9 8 . 6 1 7 , 1 1 0 7 . 5 2 5 , 9 6 3 8 . 8 8 , 7 4 9 6 . 4 1 7 , 6 2 7 9 . 7
Manufacturing expenses . . 5,494 3.0 7,369 3.3 14,488 4.9 5,110 3.8 7,445 4.1
O u t s o u r c i n gc o s t s...... 1 0 , 9 9 7 6 . 1 2 5 , 5 3 5 1 1 . 3 1 9 , 2 6 5 6 . 5 7 , 0 9 3 5 . 2 2 0 , 3 0 6 1 1 . 2
Transportation and storage
c o s t s ............ 3 3 , 4 6 8 1 8 . 5 3 6 , 8 7 4 1 6 . 3 5 5 , 3 4 0 1 8 . 8 1 9 , 8 0 4 1 4 . 5 2 7 , 5 8 0 1 5 . 2
Provision for inventory
i m p a i r m e n t ........ 7 , 0 5 5 3 . 9 7 , 6 0 8 3 . 4 5 , 6 3 9 1 . 9 5 , 7 1 3 4 . 2 5 , 6 9 8 3 . 1
Total .............. 180,458 100.0 226,726 100.0 294,327 100.0 136,183 100.0 181,541 100.0
Sensitivity Analysis
We set forth below a sensitivity analysis on the effects of (i) the fluctuations in the sales
of our products; and (ii) the fluctuations in the costs of raw materials. The following
sensitivity analysis is for illustrative purposes only, which indicates the potential impact on
our profitability during the Tr ack Record Period if the rele vant variables increased or
decreased to the extent illustrated.
To illustrate the potential effect on our finan cial performance, the sensitivity analysis
below illustrates the potential impact on our profit for the year with a 5% and 10% increase
or decrease in the respective items mentioned above. While none of the hypothetical
fluctuation ratios applied in the sensitivity ana lysis equals the historical fluctuations, we
believe that the application of hypotheti cal fluctuations of 5% and 10% in the items
mentioned above presents a meaningful analysis of the potential impact of these changes to
our profitability. Due to the number of as sumptions applied and involved in the
calculation, the sensitivity analysis below is for illustration purpose only, and the actual
results may differ from the illustrations below.
Hypothetical Fluctuation in the Sales of Our Products
Change in profit before taxation for the +/–5% +/–10%
RMB’000 RMB’000
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 2 ..................... 1 3 , 7 3 0 2 7 , 4 6 0
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 3 ..................... 2 2 , 8 6 3 4 5 , 7 2 6
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 4 ..................... 3 0 , 4 9 6 6 0 , 9 9 2
S i xm o n t h se n d e dJ u n e3 0 ,2 0 2 5 ..................... 1 9 , 8 1 5 3 9 , 6 2 9
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Hypothetical Fluctuation in Procurement Costs of Raw Materials
Change in profit before taxation for the +/–5% +/–10%
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 2 ..................... 7 , 8 4 2 1 5 , 6 8 4
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 3 ..................... 8 , 7 4 9 1 7 , 4 9 8
Y e a re n d e dD e c e m b e r3 1 ,2 0 2 4 ..................... 1 5 , 4 6 0 3 0 , 9 2 0
S i xm o n t h se n d e dJ u n e3 0 ,2 0 2 5 ..................... 9 , 0 0 7 1 8 , 0 1 4
Gross Profit and Gross Profit Margin
Our gross profit was RMB94.1 million, RMB230.5 million, RMB315.6 million,
RMB138.8 million and RMB214 .8 million for the years ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2024 and 2025, respectively. Our gross profit
margin was 34.3%, 50.4%, 51.7%, 50.5% and 54.2%, respectively, for the same periods,
respectively.
Gross Profit and Gross Profit Margin by Product
The table below sets forth our gross profit and gross margin by product type for the
periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Home Robotic System Products .. 85,505 37.3 218,943 52.6 292,589 53.5 128,710 51.2 192,620 55.2
— Execution-enhanced robots . 57,800 41.3 127,545 50.0 175,227 50.4 86,274 49.2 125,499 52.8
— Dexterous hand-mimic
robots. ....... 5 7 , 8 0 0 4 1 . 3 1 0 9 , 5 6 7 5 5 . 2 1 3 5 , 4 9 1 5 7 . 0 6 6 , 8 4 0 5 7 . 1 1 0 4 , 2 0 4 6 0 . 0
— Enhanced mobile robots — — 17,978 31.7 39,736 36.0 19,434 33.4 21,295 33.2
— Perception and
decision-making
systems . . . . . . . . . 27,705 31.0 91,398 56.7 117,362 58.9 42,436 55.8 67,121 60.4
Other smart home products and
services ............. 8,634 19.0 11,595 28.3 23,008 36.5 10,128 42.6 22,133 46.6
Total ................. 94,139 34.3 230,538 50.4 315,597 51.7 138,838 50.5 214,753 54.2
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Gross Profit and Gross Profit Margin by Sales Channel
The following table sets forth a breakdown of our gross profit and gross profit margin
by sales channels for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
DTC channels ....... 61,082 60.4 139,571 66.2 197,640 65.1 80,029 66.5 114,141 64.3
— Amazon SC . . . . 48,185 60.4 84,687 70.5 119,168 68.9 44,379 70.7 60,286 66.7
— Self-operated
w e b s i t e ...... 1 2 , 3 3 9 6 0 . 3 3 8 , 7 0 2 6 3 . 7 5 3 , 8 6 6 6 0 . 7 2 2 , 9 3 7 6 4 . 0 3 7 , 3 0 7 6 1 . 6
— Other online
marketplaces . . 558 61.7 16,182 53.7 24,606 58.6 12,713 58.3 16,548 62.5
Retailer channels ..... 32,643 19.0 76,390 37.3 98,309 40.2 50,535 40.2 87,403 47.8
— Amazon VC . . . . 24,910 17.2 69,786 39.2 88,429 40.4 45,924 40.8 84,385 48.2
— Other retailers . . . 7,733 28.6 6,604 24.8 9,880 37.7 4,611 35.0 3,018 38.8
Distribution channels ... 414 31.8 14,577 35.1 19,648 32.0 8,274 28.5 13,209 36.9
Total ............. 94,139 34.3 230,538 50.4 315,597 51.7 138,838 50.5 214,753 54.2
Other Income and Gains
For the year ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our recorded other inc ome and gains amounted to RMB6.8 million,
RMB8.3 million, RMB9.1 million RMB4.6 million and RMB10.4 million, respectively.
Our other income primarily consists of (i) g overnment grants, which are provided by
local government authorities in connection w ith our research and development efforts,
business achievements, and to support our operations as a specialized and innovative
enterprise; (ii) interest income, which prim arily represents interest earned on our bank
deposits; and (iii) investment income from fina ncial assets at fair value through profit or
loss, which mainly includes retu rns from structured deposits.
Our other gains primarily repr esent (i) fair value gains on fi nancial assets at fair value
through profit or loss, which mainly came from structured deposits and financial
derivatives; (ii) gains on disposal of righ t-of-use assets, which resulted from the early
termination of certain lease agreements as we relocated our operations to better
accommodate our business expan sion; and (iii) gain on sublease of right-of-use assets,
which mainly resulted from the subleasing of certain unused portions of our leased premises
to optimize the use of our assets.
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The following table sets forth the breakdown of our other income and gains for the
periods indicated:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other income
I n t e r e s ti n c o m e ............... 1 , 6 4 7 1 , 5 6 0 2 , 0 5 8 8 6 4 5 5 0
Finance income on the net investment
i nt h es u b l e a s e............. 1 2 2 1 1 5 4 7 5 7 0
Government grants (1) . . . . . . . . . . . 4,955 4,692 4,233 3,072 3,261
Investment income from financial
assets at fair value through profit
o rl o s s .................. — 2 1 1 , 6 7 9 — 3 4 4
O t h e r s .................... 1 6 5 4 9 4 3 0 4 1 8 2 8 1
Gains
Fair value gains on financial assets at
fair value through profit or loss . . 8 — 391 104 —
Gain on sublease of right-of-use assets — 1,554 — — —
Gain on disposal of right-of-use assets — — 292 281 —
Gain on exchange differences, net . . . — — — — 6,058
Total ..................... 6,787 8,342 9,111 4,578 10,364
Note:
(1) We have received government grants related to income that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving immediate financial support to us
with no future related costs are recognized in pr ofit or loss in the period in which they become
receivable.
Selling and Distribution Expenses
Selling and distribution expenses mainly consists of (i) platform commission fees,
w h i c hm a i n l yr e p r e s e n t sf e e sp a i dt oe - c o mmerce platforms such as Amazon for product
sales; (ii) employee benefit expenses, which mainly represents salaries and bonuses for our
sales and marketing personnel ; (iii) advertising, promotio n and business development,
which primarily includes online advertising on e-commerce platforms and social media,
content creation costs and photography expens es; (iv) depreciation and amortization; and
(v) after-sales expenses, which primarily co nsist of warranty service costs and customer
support. For the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2024 and 2025, our selling and dist ribution expenses were RMB102.1 million,
RMB136.7 million, RMB171.9 million, RMB71.0 million and RMB106.8 million,
respectively.
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The following table sets forth the componen ts of our selling and distribution expenses
during the Track Record Period:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
P l a t f o r mc o m m i s s i o nf e e ...... 1 3 , 8 0 3 1 3 . 5 2 3 , 2 8 1 1 7 . 0 3 1 , 4 8 6 1 8 . 3 1 1 , 8 9 5 1 6 . 8 1 5 , 9 5 2 1 4 . 9
Employee benefit expenses . . . . . 22,912 22.5 32,135 23.5 30,955 18.0 13,825 19.5 19,221 18.0
Advertising, promotion and business
d e v e l o p m e n t ........... 5 4 , 3 3 9 5 3 . 2 5 9 , 7 2 1 4 3 . 7 8 2 , 2 3 0 4 7 . 8 3 4 , 8 8 5 4 9 . 1 5 3 , 1 1 6 4 9 . 7
Depreciation and amortization . . . 2,539 2. 5 3,542 2.6 3,266 1.9 1,428 2.0 1,201 1.1
A f t e r - s a l es e r v i c e s .......... 5 , 1 2 1 5 . 0 1 3 , 6 4 6 1 0 . 0 1 7 , 1 0 0 1 0 . 0 6 , 0 3 5 8 . 5 1 2 , 8 3 3 1 2 . 1
Others (1) ............... 3 , 3 9 0 3 . 3 4 , 3 7 3 3 . 2 6 , 8 5 7 4 . 0 2 , 9 0 1 4 . 1 4 , 5 0 6 4 . 2
Total ................. 102,104 100.0 136,698 100.0 171,894 100.0 70,969 100.0 106,829 100.0
Note:
(1) Others primarily include payment collection ha ndling fees, office expenses, property and renovation
expenses and agent service fee.
Administrative Expenses
Our administrative expenses primarily c onsisted of (i) employee benefit expenses
mainly related to the salaries and bonus for our administrative personnel; (ii) professional
service fees, which primarily represent fees for l egal, audit, and consulting services; (iii) tax
charges, which primarily represent stamp duty , property tax and other applicable taxes; (iv)
depreciation and amortization of administrativ e assets; and (v) utilitie s, office and property
management expenses, which primarily consist of office supplies, telecommunications, and
property management fees. For the years ended December 31, 2022, 2023 and 2024 and the
six months ended June 30, 2024 and 2025, our administrative expenses were RMB21.0
million, RMB24.1 million, RMB32.4 million, RMB15.9 million and RMB30.9 million,
respectively.
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The following table sets forth the components of our administrative expenses during
the Track Record Period:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Employee benefit expenses . . . . . 12,482 59.4 15,815 65.5 20,863 64.5 10,221 64.0 12,432 40.3
P r o f e s s i o n a ls e r v i c ef e e s...... 3 , 7 6 5 1 7 . 9 1 , 9 3 8 8 . 0 2 , 5 0 4 7 . 7 1 , 4 9 2 9 . 4 1 4 , 2 5 2 4 6 . 2
T a xc h a r g e s ............. 4 3 6 2 . 1 9 9 3 4 . 1 2 , 6 6 8 8 . 2 1 , 2 3 7 7 . 8 8 4 8 2 . 7
Bank administrative charges . . . . 232 1.1 356 1.5 565 1.7 329 2.1 177 0.6
Depreciation and amortization . . . 1,152 5.5 1,708 7.1 2,262 7.0 1,118 7.0 971 3.1
Utilities, office and property
management expenses . . . . . 2,170 10.3 2,126 8.8 2,292 7.1 1,036 6.5 1,777 5.8
Others
(1) ............... 7 6 9 3 . 7 1 , 2 0 3 5 . 0 1 , 2 1 8 3 . 8 5 0 3 3 . 2 4 0 7 1 . 3
Total ................. 21,006 100.0 24,139 100.0 32,372 100.0 15,936 100.0 30,864 100.0
Note:
(1) Others primarily include miscellaneous expens es such as travel expenses, business entertainment
expenses, insurance expenses and others.
Research and Development Expenses
Our research and development costs primarily consist of (i) employee benefit expenses
mainly related to the salaries and benefits of our research and development personnel; (ii)
service fees, which primarily represents cloud service platform costs, certification testing
fees for product safety and performance, and te chnical consulting services; (iii) materials
and consumables for our R&D activities, particularly for new product development and
ecosystem expansion; and (iv) depreciation and amortization fees mainly related to the
depreciation cost in connection with our R&D activities.
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For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, our research and deve lopment expenses were RMB61.8 million,
RMB89.2 million, RMB112.0 million, RMB56.7 million and RMB58.7 million,
respectively. The following table sets forth a breakdown of our research and development
costs for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Employee benefit expenses . . . . . 41,933 67.9 61,878 69.4 74,596 66.6 37,239 65.7 41,062 69.9
S e r v i c ef e e s............. 1 0 , 2 5 6 1 6 . 6 1 6 , 2 7 6 1 8 . 2 2 5 , 5 5 2 2 2 . 8 1 3 , 4 9 8 2 3 . 8 9 , 6 6 0 1 6 . 5
Material and consumables . . . . . 4,017 6.5 4,477 5.0 5,024 4.5 2,407 4.2 3,741 6.4
Depreciation and amortization . . . 3,546 5. 7 3,751 4.2 3,738 3.3 1,930 3.4 1,775 3.0
Others
(1) ............... 2 , 0 0 9 3 . 3 2 , 8 1 0 3 . 2 3 , 1 1 2 2 . 8 1 , 6 6 3 2 . 9 2 , 4 4 1 4 . 2
Total ................. 61,761 100.0 89,192 100.0 112,022 100.0 56,737 100.0 58,679 100.0
Note :
(1) Others primarily include travel expenses, utilities, and office ex penses directly associated with
research and development activities.
Impairment Losses on Financial Assets, Net
Our net impairment losses on financial assets primarily represent provisions for
expected credit losses on trade receivables and other receivables. For the years ended
December 31, 2022 and 2023 and the six mo nths ended June 30, 2024 and 2025, our net
impairment losses on financial assets we re RMB0.1 million, RMB0.8 million, RMB0.1
million and RMB0.5 million, respectively . For the year ended December 31, 2024, we
recorded reversal on net impairment losse s on financial assets of RMB0.2 million.
FINANCIAL INFORMATION
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Other Expenses
Our other expenses primarily consisted of (i) foreign exchange loss, which incurred
primarily due to the weakening of Japanese yen against the RMB during the Track Record
Period; (ii) non-operating expenses, which mainly represent expenses incurred from the
relocation of facilities and the early terminat ion of lease agreements; (iii) investment losses,
which primarily arose from losses on our foreign exchange forward contracts due to
exchange rate fluctuations; and (iv) losses on financial assets at fair value through profit or
loss, which mainly represents unrealized fair value change of our foreign exchange forward
contracts. For the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2024 and 2025, our other expens es were RMB0.4 million, RMB2.1 million,
RMB6.8 million, RMB10.9 million and RMB2.0 million, respectively. The following table
sets forth a breakdown of our other expenses for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
F o r e i g ne x c h a n g el o s s ....... 3 0 . 7 1 , 6 1 9 7 7 . 1 6 , 4 9 4 9 5 . 0 1 0 , 7 6 6 9 8 . 9 — —
N o n - o p e r a t i n ge x p e n s e s ....... 2 4 5 5 6 . 8 2 8 1 . 3 3 4 2 5 . 0 2 3 0 . 2 — —
I n v e s t m e n tl o s s e s.......... 5 4 1 2 . 6 4 5 3 2 1 . 6 — — 9 7 0 . 9 1 , 1 5 3 5 8 . 7
Losses on financial assets at fair
value through profit or loss. . 129 29.9 — — — — — — 811 41.3
Total ................. 431 100.0 2,100 100.0 6,836 100.0 10,886 100.0 1,964 100.0
Finance Costs
Finance costs mainly consist of (i) interest on lease liabilities arising from the leases of
our offices, warehouses and ma nufacturing facilities; (ii) in terest expense on borrowings
from banks; and (iii) interest on factored trad e receivables, which primarily represent the
financing costs arising from factoring arrangements, including interest expenses and
associated service fees. For the years ended December 31, 2022, 2023 and 2024 and the six
months ended June 30, 2024 and 2025, our fi nance costs were RMB2.4 million, RMB2.2
million, RMB4.4 million, RMB1.7 million and RMB2 .2 million, respectively. The following
table sets forth the breakdown of our finance costs for the periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(Unaudited)
Interest on lease liabilities . . . . . 1,756 72.5 1,491 66.6 2,436 55.3 1,309 75.3 964 44.5
I n t e r e s to nb a n kl o a n s ....... — — — — 1 , 2 7 5 2 8 . 9 1 0 4 6 . 0 8 0 3 3 7 . 1
Interest on factored trade
r e c e i v a b l e s ........... 6 6 6 2 7 . 5 7 4 9 3 3 . 4 6 9 8 1 5 . 8 3 2 5 1 8 . 7 3 9 8 1 8 . 4
Total ................. 2,422 100.0 2,240 100.0 4,409 100.0 1,738 100.0 2,165 100.0
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Income Tax (Expense)/Credit
Income tax (expense)/credit represents cu rrent and deferred income tax expenses. Our
income tax (expense)/credit comprises (i) current tax, which comprises the estimated tax
payable or receivable on the taxable income or lo ss for the year/period; and (ii) deferred tax,
which is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporti ng purposes and the amounts used for taxation
purposes. It is recognized in profit or loss. We are subject to income tax on an entity basis
on the profit arising in or derived from the tax jurisdictions in which we are domiciled and
operate. The determination of current and deferred income taxes was based on the enacted
tax rates in respective tax jurisdictions.
Certain of our subsidiaries located in mai nland China were subject to mainland China
corporate income tax at a rate of 25% on the assessable profit generated during the Track
Record Period. Our subsidiary, Woan Technology is a qualified high and new technology
enterprise and was subject to income tax at a p referential tax rate of 15% during each year
during the Track Record Period. This qualification is subject to review by the relevant tax
authority in the PRC for every three years.
Our subsidiary incorporated in Hong Kong is a qualifying entity under the two-tiered
profits tax rates regime. The first HK$2,000,000 of its assessable profits were taxed at
8.25% and the remaining assessable profits were taxed at 16.5% during each year during the
Track Record Period. Our subsidiary incorporated in Japan is subject to corporate income
taxes, which in aggregate resulted in a combined statutory income tax rates of
approximately 23.2% during each year during the Track Record Period. Our subsidiary
incorporated in the United States is subject to statutory United States federal corporate
income tax at a rate of 21% during each y ear during the Track Record Period.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2024, we recorded income tax expense o f RMB49,000, RMB0.1 million, RMB0.4 million
and RMB0.7 million, respectively. For the six months ended June 30, 2025, we recorded an
income tax credit of RMB3.8 million. The fo llowing table sets forth a breakdown of our
income tax charge for the periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current income tax . . . . . . 49 89 400 671 2,318
D e f e r r e di n c o m et a x ..... — — — — ( 6 , 0 9 5 )
Total tax charge for the year 49 89 400 671 (3,777)
During the Track Record Period and up to the Latest Practicable Date, we had no
disputes or unresolved tax issues with the relevant tax authorities.
FINANCIAL INFORMATION
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PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Revenue
Our revenue increased by 44.1% from RMB275.0 million for the six months ended
June 30, 2024 to RMB396.3 million for the six months ended June 30, 2025. This growth
was primarily attributable to:
(i) the market penetration of our new products and continuous improvement in the
sales of our core product categories. Sp ecifically, revenue from our dexterous
hand-mimic robots increased by 4 8.3% from RMB117.1 million for the six
months ended June 30, 2024 to RMB173.6 million for the six months ended June
30, 2025, mainly driven by the market acceptance of newly launched products
such as the SwitchBot Lock Ultra. Our perception and decision-making systems
experienced a revenue increase of 46.2% from RMB76.0 million for the six
months ended June 30, 2024 to RMB111.1 million for the six months ended June
30, 2025, primarily due to the continued strong sales of new products, such as the
Meter Pro (CO2);
(ii) growth in other smart home products and services, the revenue of which increased
by 99.4% from RMB23.8 million for the six months ended June 30, 2024 to
RMB47.4 million for the six months ended June 30, 2025, driven by the rapid sales
expansion of products such as our battery circulator fan and floor lamp, and an
increase in recurring revenue from cloud storage services as user adoption and
paid subscription rates grew;
(iii) strategic market expansion across ke y regions. Revenue from Japan, our largest
market, grew by 60.3% from RMB167.4 m illion for the six months ended June 30,
2024 to RMB268.4 million for the six mont hs ended June 30, 2025, benefiting
from strong brand recognition and robust growth across local sales channels.
European markets demonst rated growth of 42.5% from RMB47.8 million for the
six months ended June 30, 2024 to RMB 68.1 million for the six months ended
June 30, 2025, driven by market adoption of our integrated smart home
ecosystem, with particularly strong growth of 90.4% in Germany from
RMB16.4 million for the six months en ded June 30, 2024 to RMB31.2 million
for the six months ended June 30, 2025; and
(iv) the continued growth and optimization of our sales channels. Revenue from our
direct sales channels increased by 47.4% from RMB120.4 million for the six
months ended June 30, 2024 to RMB177.5 million for the six months ended June
30, 2025, primarily driven by a 69.1% increase in the sales from our self-operated
website from RMB35.8 million for the six months ended June 30, 2024 to
RMB60.6 million for the six months en ded June 30, 2025. Revenue from our
retailer channels increased by 45.7% from RMB125.6 million for the six months
ended June 30, 2024 to RMB183.0 million f or the six months ended June 30, 2025,
primarily due to a 55.8% growth in our Amazon Vendor Central program from
FINANCIAL INFORMATION
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RMB112.4 million to RMB175.2 million. Reve nue from our distribution channels
grew by 23.5% from RMB29.0 million for the six months ended June 30, 2024 to
RMB35.8 million for the six months ende d June 30, 2025, mainly due to a 37.5%
increase in sales through our key distributor in Japan, which increased from
RMB18.3 million for the six months ended June 30, 2024 to RMB25.2 million for
the six months ended June 30, 2025.
Cost of Sales
Our cost of sales increased by 33.3% from RMB136.2 million for the six months ended
June 30, 2024 to RMB181.5 million for the s ix months ended June 30, 2025, which was
generally in line with our revenue growth during the same period. This increase was
primarily attributable to (i) an increase in o ur outsourcing costs from RMB7.1 million to
RMB20.3 million as we outsourced more produc tion activities to subcontractors to
supplement our production capacity in order to meet fast-growing customer demand and to
facilitate the initial market validation for ou r newly launched products in a cost-effective
manner; (ii) an increase in our raw materials and transportation costs in line with our higher
sales volume; and (iii) an increase in labor costs due to a higher headcount for our
production personnel since the second half of 2024 to support our business expansion.
Gross Profit and Gross Profit Margin
Our gross profit increased by 54.7% from RMB138.8 million for th e six months ended
June 30, 2024 to RMB214.8 million for the s ix months ended June 30, 2025, which was
generally in line with our revenue growth during the same period.
Our gross profit margin increased from 50.5% for the six months ended June 30, 2024
to 54.2% for the six months ended June 30, 2025. This improvement was primarily
attributable to (i) an improvement in the gro ss profit margins of our core products, as the
gross profit margin for our major home roboti c system products increased from 51.2% for
the six months ended June 30, 2024 to 55.2% for the six months ended June 30, 2025. This
increase was primarily driven by gross mar gin improvements for (a) our dexterous
hand-mimic robots, which increased from 57.1% to 60.0% for the same periods. Primarily
due to an increase in the ASP of approximately 32.6% for lock robots and 22.4% for
curtain robots; and (b) our perception and deci sion-making systems, which increased from
55.8% to 60.4% for the same periods, primarily due to an ASP increase of approximately
47.3% for smart sensors and 27.9% for sma rt hubs. Such improvements in ASP were a
result of our strategic focus on more technologically advanced and premium products and
the successful market reception of our newly r eleased, higher-value models, such as the
SwitchBot Lock Ultra and SwitchBot Hub 3. Furthermore, our ASP was positively
impacted by the appreciation of the Japanese Yen against the RMB, our reporting currency,
as Japan is our largest market; (ii) favorable shifts in our product mix, as the revenue
contribution from our higher-margin dexterous hand-mimic robots increased to 43.8% of
our total revenue for the six months ended June 30, 2025, from 42.6% for the same period in
2024, while concurrently, the revenue contribution from our lower-margin enhanced mobile
robots decreased to 16.2% of our total revenue from 21.2% for the same periods, which
further enhanced our overall profitability; and (iii) our continued comprehensive cost
FINANCIAL INFORMATION
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optimization measures, which were implemented throughout the Track Record Period and
contributed to the reduction of our cost of sales and the improvement of our gross profit
margins. For details of our cost optimization measures, please refer to the section headed
‘‘Business — Path to Sustainability — Our Cost Optimization and Profitability
Enhancement Measures’’ in this prospectus.
Other Income and Gains
Our other income and gains increased fro m RMB4.6 million for the six months ended
June 30, 2024 to RMB10.4 million for the six mont hs ended June 30, 2025. This increase was
primarily due to the recognition of a net for eign exchange gain of RMB6.1 million, which
was mainly attributable to the appreciation of the Japanese Yen against the Renminbi
during the period, as a significant portion of our revenue was denominated in Japanese Yen.
Selling and Distribution Expenses
Our selling and distribution expenses in creased from RMB71.0 million for the six
months ended June 30, 2024 to R MB106.8 million for the six months ended June 30, 2025.
This increase was primarily due to (i) an incr ease in advertising, pr omotion and business
development expenses from R MB34.9 million to RMB53.1 million, driven by increased
marketing activities to support our overall re venue growth and promotional campaigns for
new products, such as our AI tennis robot launched in May 2025; (ii) higher after-sales
service fees and platform commission fees in lin e with our increased sales volume. Although
the total amount of our platform commission fees increased, such fees as a percentage of
our sales through DTC channels (excluding our self-operated website) decreased from
14.1% to 13.6% during the same period. This was mainly because we continued to diversify
our DTC sales channels and increase our sales through another e-commerce platform which
offered lower commission rates compared to t he ones offered by Amazon. As such platform
represented an increasing portion of our DTC sales (excluding our self-operated website) in
this period, our platform commission fees as a percentage of our sales through DTC
channels (excluding our self-operated website ) decreased accordingly; and (iii) an increase
in employee benefit expenses attributable to both the expansion of our sales team and
increased compensation for our sales personnel during the period.
Administrative Expenses
Our administrative expenses increased fr om RMB15.9 million for the six months ended
June 30, 2024 to RMB30.9 million for the six mont hs ended June 30, 2025. This increase was
primarily attributable to (i) an increase in pro fessional service fees from RMB1.5 million to
RMB14.3 million, which primarily consisted o f expenses in connection with the proposed
Listing; and (ii) an increase in employee benefi t expenses attributable to the expansion of
our management team to support our business growth and increased compensation for our
administrative staff during the period.
Research and Development Expenses
Our research and development expenses rem ained relatively stable at RMB56.7 million
and RMB58.7 million for the six months ende d June 30, 2024 and 2025, respectively.
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Impairment Losses on Financial Assets, Net
Our impairment losses on financial assets , net increased from RMB0.1 million for the
six months ended June 30, 2024 to RMB0.5 millio n for the six months ended June 30, 2025.
This increase was primarily attributable to hi gher provisions for expected credit losses
recognized on our trade receivables. The growth in our trade receivables balance was in line
with our revenue growth during the period.
Other Expenses
Our other expenses decreased from RMB10.9 million for the six months ended June 30,
2024 to RMB2.0 million for the six months ended June 30, 2025. This decrease was
primarily attributable to the non-recurrenc e of a significant foreign exchange loss of
RMB10.8 million recorded in the first half of 202 4. The expenses for the six months ended
June 30, 2025 were primarily comprised of (i) losses related to certain foreign currency
forward contracts that were settled during th e period; and (ii) losses from the change in fair
value of our outstanding foreign currency forward contracts, both of which were a result of
the appreciation of Japanese yen against RMB during the period.
Finance Costs
Our finance costs increased from RMB1.7 million for the six months ended June 30,
2024 to RMB2.2 million for the six months ended June 30, 2025. This increase was primarily
due to an increase in interest on bank loans from RMB0.1 million for the six months ended
June 30, 2024 to RMB0.8 million for the six mo nths ended June 30, 2025, as we obtained
new long-term bank loans to support our business development, partially offset by a
decrease in interest on lease liabilities fro m RMB1.3 million for the six months ended June
30, 2024 to RMB1.0 million for the six mont hs ended June 30, 2025. The increase was
mainly due to a reduction in rental rates for certain leased properties.
Profit/(Loss) Before Tax
As a result of the foregoing, we recorded a profit before tax of RMB24.1 million for
the six months ended June 30, 2025, as comp ared to a loss before tax of RMB13.0 million
for the six months ended June 30, 2024.
Income Tax
We recorded an income tax credit of RMB3. 8 million for the six months ended June 30,
2025, as compared to an income tax expense of RMB0.7 million for the six months ended
June 30, 2024. We recorded an income tax credit in the first half of 2025 mainly because we
recognized a deferred tax asset of RMB6.1 million during the period. Such deferred tax
asset was attributable to deductible temp orary differences arising mainly from the
elimination of unrealized profits on intercomp any transactions during the consolidation
of our financial statements. This deferred tax credit was partially offset by a current income
tax expense of RMB2.3 million resulting fr om our increased profits during the period.
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Profit/(Loss) for the Period
As a result of the foregoing, we recorded a profit for the period of RMB27.9 million for
the six months ended June 30, 2025, as compared to a loss for the period of RMB13.6
million for the six months ended June 30, 2024.
Year Ended December 31, 2024 Compar ed to Year Ended December 31, 2023
Revenue
Our revenue increased from RMB457.3 m illion for the year ended December 31, 2023
to RMB609.9 million for the year ended Decembe r 31, 2024, representing an increase of
33.4%. This growth was pri marily attributable to:
(i) the market penetration of our recently launched products. The revenue generated
from our enhanced mobile r obots increased by 94.4% from RMB56.7 million in
2023 to RMB110.3 million in 2024, primarily driven by the launch of SwitchBot
K10+ Pro and Switchbot S10;
(ii) continuous improvement in sales of established core home system product
categories, with our dexterous hand-mimic robot products and perception and
decision-making systems experiencing revenue increases of 19.8% and 23.5%,
respectively, due to algorithm optimizat ion and hardware iterations in our core
lock robots and curtain robots, as well as continued adoption of our smart hubs
and smart sensors;
(iii) strategic market expansion across ke y regions. Revenue from Japan increased by
23.6% due to continued market expansion and channel optimization efforts.
European markets demonstrated growth of 89.8% driven by increasing demand
for multiple devices arising from scenario-driven ecosystem integration, resulting
in rapid adoption of our lock robots and smart sensors. Notably, revenue
generated from Germany increased signi ficantly from RMB19.7 million in 2023 to
RMB51.5 million in 2024, representing a growth rate of 161.4%. North America
increased by 15.9% primarily attribut able to our strategic focus on selling
high-value enhanced mobile robots which have gained significant market
acceptance among North American end consumers. Revenue from the rest of
the world increased by 51.7% in markets such as Australia due to our expanded
sales and distribution networks; and
(iv) optimization and expansion of sales channels, with (a) revenue from DTC
channels increasing by 44.0% through enhanced online platform sales and
promotion efforts, which increased our market exposure and brand awareness, (b)
revenue from distribution channels growing steadily through strengthened
partnerships with a key distributor in Japan, and (c) revenue from other online
marketplaces increasing from RMB30.1 million in 2023 to RMB42.0 million in
2024, which was attributable to our collabor ation with a leading local e-commerce
platform in Japan beginning in 2023 that continuously enhanced our product
brand awareness and market penetration in 2024.
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Cost of Sales
Our cost of sales increased by 29.8% from RMB226.7 million for the year ended
December 31, 2023 to RMB294.3 million for th e year ended December 31, 2024, which was
generally in line with our revenue growth during the same period. This increase was
primarily attributable to increased raw material costs, labor costs, manufacturing expenses,
and transportation and storage costs associated with our expanded production activities
and sales volume. Such increase was partially offset by a decrease in our outsourcing costs
from RMB25.5 million for the year ended D ecember 31, 2023 to RMB19.3 million for the
year ended December 31, 2024, which resulted fr om our strategic deci sion to internalize
certain manufacturing activities related to our enhanced mobile robots that were previously
outsourced to third-party contractors. Such sh ift was implemented to optimize production
costs, strengthen quality control, and enhanc e our manufacturing capabilities to better
respond to changing market demands.
Gross Profit and Gross Profit Margin
Our gross profit increased by 36.9% from RMB230.5 million for the year ended
December 31, 2023 to RMB315.6 million for th e year ended December 31, 2024, which was
generally in line with our revenue growth during the same period.
Our gross profit margin increased slightl y from 50.4% for the year ended December 31,
2023 to 51.7% for the year ended December 31, 2024. This improvement was primarily
attributable to favorable shifts in our product mix, with increased revenue contribution
from product categories with enhanced functionalities, higher retail price and improved
profit margins, which was largely driven by t he increased sales of our advanced models of
lock robots and smart hubs throughout 2024, which carried higher gross profit margins.
Other Income and Gains
Our other income and gains increase d from RMB8.3 million for the year ended
December 31, 2023, to RMB9.1 million for th e year ended December 31, 2024, primarily
due to new investment income from financial assets at fair value through profit or loss of
RMB1.7 million, consisting of structured deposits in RMB and foreign
currency-denominated swap and forward contracts.
Selling and Distribution Expenses
Our selling and distribution expenses increased from RMB136.7 million for the year
ended December 31, 2023, to RMB171.9 millio n for the year ended December 31, 2024. This
increase was primarily due to (i) an incr ease in platform commission fees paid to
e-commerce platforms from RMB23.3 million in 2023 to RMB31.5 million in 2024, which
was in line with higher sales volumes. Although the total amount of our platform
commission fees increased, such fees as a p ercentage of our sales through DTC channels
(excluding our self-operated website) decreased from 15.5% in 2023 to 14.6% in 2024. This
was mainly because we continued to diversify our DTC sales channels and increase our sales
through another e-commerce platform in Ja pan which offered lower commission rates
compared to the ones offered by Amazon. As such platform represented an increasing
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portion of our DTC sales (excluding our self-operated website) in 2024, our platform
commission fees as a percentage of our sales through DTC channels (excluding our
self-operated website) decreased accordingly ; (ii) an increase in adve rtising and promotion
expenses from RMB59.7 million in 2023 to RMB82.2 million in 2024 for online marketing
activities and content creation; and (iii) an in crease in after-sales expenses from RMB13.6
million in 2023 to RMB17.1 million in 2024 for wa rranty services and customer support due
to higher sales volume.
Administrative Expenses
Our administrative expenses increas ed from RMB24.1 million for the year ended
December 31, 2023, to RMB32 .4 million for the year ended December 31, 2024. This
increase was mainly attributable to (i) an i ncrease in employee benefit expenses from
RMB15.8 million in 2023 to RMB20.9 million in 2024 as a result of expanded headcount to
support our business growth and correspond ing increases in personnel costs; and (ii) an
increase in tax charges from RMB1.0 million in 2023 to RMB2.7 million in 2024 as a result
of higher surcharges associated with increase d business revenue and improved gross profit
during the same period.
Research and Development Expenses
Our research and developmen t expenses increased from RMB89.2 million for the year
ended December 31, 2023 to RMB 112.0 million for the year end ed December 31, 2024. This
increase was primarily due to our rapid core t echnology advancement and product iteration
and development across our ecosystem, which caused (i) an increase in employee benefit
expenses from RMB61.9 million in 2023 to RMB74.6 million in 2024 as we engaged
additional R&D personnel; and (ii) an incr ease in service fees from RMB16.3 million in
2023 to RMB25.6 million in 2024, mainly for using AWS to support our R&D workflow
from product design and code development to testing and model formation.
Impairment Losses on Financial Assets, Net
For the year ended December 31, 2023, we reco rded net impairment losses on financial
assets of RMB0.8 million, primarily related to provisions for expected credit losses on trade
receivables. For the year ended December 31, 2024, we recorded reversal on net impairment
losses on financial assets of RMB0.2 million, refl ecting the decrease in our trade receivables
balance at year-end compared to the previous year, which resulted in a corresponding
reduction in the provision for expected credit losses.
Other Expenses
Our other expenses increased from RMB2. 1 million for the year ended December 31,
2023, to RMB6.8 million for the year ended December 31, 2024, primarily due to an
increase in foreign exchange losses from R MB1.6 million to RMB6.5 million resulting from
the depreciation of the Japanese yen against RMB during the period. We also incurred
non-operating expenses of RMB0.3 million in 2024, mainly related to the relocation of our
FINANCIAL INFORMATION
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manufacturing facilities from Shenzhen to H uizhou, Guangdong Province, which was
necessary for our production capacity expansio n and resulted in the early termination of the
relevant lease agreement for our previou s manufacturing fac ilities in Shenzhen.
Finance Costs
Our finance costs increased from RMB2.2 million for the year ended December 31,
2023, to RMB4.4 million for the year ended Decem ber 31, 2024, primarily due to (i) interest
on new bank loans of RMB1.3 million as we obt ained additional new bank financing to
support our business development; and (ii) an in crease in interest on lease liabilities from
RMB1.5 million to RMB2.4 million due to expa nsion of our manufacturing facilities.
Loss Before Tax
As a result of the foregoing, our loss before tax decreased significantly from RMB16.3
million for the year ended December 31, 2023 , to RMB2.7 million for the year ended
December 31, 2024.
Income Tax
Our income tax increased from RMB89,000 for the year ended December 31, 2023, to
RMB0.4 million for the year ended December 3 1, 2024. We incurred income tax primarily
due to profits generated by our overseas subsidiaries, despite our overall loss position.
Loss for the Year
As a result of the foregoing, our loss for the year improved significantly from
RMB16.4 million for the year ended Decembe r 31, 2023, to RMB3.1 million for the year
ended December 31, 2024.
Year Ended December 31, 2023 Compar ed to Year Ended December 31, 2022
Revenue
Our revenue increased significantly from RMB274.6 million for the year ended
December 31, 2022 to RMB457.3 million f or the year ended December 31, 2023,
representing an increase of 66.5%. This growth was primarily attributable to:
(i) the launch of new products, particularly our enhanced mobile robots with sales of
RMB56.7 million in 2023, including the la unch of SwitchBot K10+, the world’s
smallest laser vacuum robot in terms of product diameter, which gained rapid
market acceptance.
(ii) continuous improvement in the sales of established core home system product
categories, with our dexterous hand-mimic robot products experiencing a revenue
increase of 41.8% from RMB139.9 million to RMB198.3 million, which included
a significant increase in revenue from curtain robots from RMB40.6 million in
2022 to RMB77.0 million in 2023, mainly dr iven by continuous upgrades to our
core product lines through algorithm optimization and hardware iterations. In
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addition, revenue from our perception and decision-making systems increased by
80.7% to RMB161.2 million, primarily due to the launch of our new and
advanced smart hub products, including the SwitchBot Hub 2 (featuring
additional functions and more powerful performance), which generated
RMB58.0 million in revenue in 2023, alo ng with strong revenue growth from
our smart sensors.
(iii) strategic market expansion across ke y regions. Revenue from Japan increased by
69.3% from RMB168.4 million in 2022 to RMB285.1 million in 2023 due to
reinforcement and expansion of our competitive advantages in the Japanese
market, along with our active diversificat ion of the local sales channels, including
new partnership with a large retailer. European markets demonstrated growth of
48.8% primarily due to our expanded distribution networks and increasing
consumer awareness. North America in creased by 75.3% from RMB47.6 million
in 2022 to RMB83.5 million in 2023 with revenue from the United States growing
from RMB45.1 million in 2022 to RMB78.5 million in 2023, while revenue from
the rest of the world increased by 61.1 % in emerging markets through enhanced
marketing and promotion activities; and
(iv) optimization and expansion of sales channels, with DTC channels revenue
increasing by 108.5% from RMB101.2 mi llion to RMB211.0 million because (a)
we focused on generating and guiding online traffic and potential customers to
our self-operated website, the revenue of which increased by 197.1% from
RMB20.5 million to RMB60.8 million, and ( b) we commenced collaboration with
a leading local e-commerce platform in Ja pan in 2023, resulting in a substantial
increase in revenue from other online marketplaces from RMB0.9 million in 2022
to RMB30.1 million in 2023. Retailer channels grew by 19.0% from RMB172.1
million to RMB204.8 million as we expanded o ur retailer network to include large
retailers in our key markets as mentioned above.
Cost of Sales
Our cost of sales increased by 25.6% from RMB180.5 million for the year ended
December 31, 2022 to RMB226.7 million for the year ended December 31, 2023. This
increase was primarily attributable to (i) an i ncrease in raw material costs, labor costs and
transportation and storage costs in line with higher demand for our products; and (ii) an
increase in outsourcing costs from RMB11 .0 million to RMB25.5 million as we expanded
our manufacturing capacity through third-party manufacturers to meet rapidly growing
demand. However, the increase in cost of sales was at a lower rate compared to our revenue
growth, reflecting our improved cost efficiency and economies of scale.
Gross Profit and Gross Profit Margin
Our gross profit increased significantly by 144.9% from RMB94.1 million for the year
ended December 31, 2022 to RMB230.5 millio n for the year ended December 31, 2023,
which exceeded our revenue growth during the same period.
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Our gross profit margin increased signi ficantly from 34.3% for the year ended
December 31, 2022 to 50.4% for the year ended December 31, 2023. Our gross profit growth
outpaced our revenue growth during the same year as a result of our improved gross profit
margin, which was primarily attributable to:
(i) favorable shifts in our product mix. The revenue contribution from our
higher-margin home robotic system products, which recorded a gross margin of
52.6% in 2023, increased to 91.0% of total revenue for the year ended December
31, 2023 from 83.4% for the year ended December 31, 2022. Concurrently, the
revenue contribution from our lower-margin other smart home products and
services, which recorded a gross margin of 28.3% in 2023, decreased to 9.0% of
total revenue from 16.6% over the same per iod, thereby enhancing the proportion
of higher-margin products within our revenue structure;
(ii) an increase in the gross margin for our core home robotic system products from
37.3% in 2022 to 52.6% in 2023. This was primarily attributable to the
introduction and increased market penetration of our technologically advanced
products throughout 2023, which generally carried higher gross profit margins.
This was reflected in the increased gross profit margin for (a) our dexterous
hand-mimic robots, the gross profit margin of which increased from 41.3% in
2022 to 55.2% in 2023, primarily driven by ASP increases of 25.2% for lock
robots and 18.9% for curtain robots in 2023 compared to 2022. The ASP increase
for lock robots and curtain robots was mainly due to the successive launches of
new products such as SwitchBot Lock Pro and SwitchBot Curtain 3 in 2023 as
well as price adjustments to mitigate fo reign exchange risk arising from the
depreciation of the Japanese Yen; and (b) our perception and decision-making
systems, the gross profit margin of which increased from 31.0% in 2022 to 56.7%
in 2023, primarily due to ASP increases of 125.9% for smart hubs, and 35.3% for
smart cameras in 2023 compared to 2022. The ASP increase for smart hubs
resulted from the launch of the SwitchBot Hub 2 in 2023, which had a
significantly higher ASP compared to previous models due to advanced
technologies and complex functionalitie s, while the increases in ASP for smart
cameras were driven by our strategic moves to raise product selling prices to
enhance product gross margins and mitigate foreign exchange risk; and
(iii) our comprehensive cost optimization ini tiatives. We achieved comprehensive cost
optimization through (a) standardized design, which enabled component
commonality and bulk procurement, thereby further enhancing our negotiating
power when purchasing components from our suppliers power; (b) modular
production, which improved our production efficiency and reduced our labor
costs; and (c) strategic cost management initiatives, pursuant to which we actively
replaced a number of foreign-made components, such as semiconductors, with
those manufactured in mainland China, which led to lower per unit procurement
costs for such components. These measures contributed to our cost of sales
increasing at a lower rate than our revenue growth, reflecting our improved cost
efficiency.
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Other Income and Gains
Our other income and gains increase d from RMB6.8 million for the year ended
December 31, 2022 to RMB8.3 million for the yea r ended December 31, 2023. This increase
was primarily due to an increase in gain on sublease of right-of-use assets of RMB1.6
million, which mainly resulted from the sublea sing of certain unused portions of our leased
premises to optimize the use of our assets.
Selling and Distribution Expenses
Our selling and distribution expenses increased from RMB102.1 million for the year
ended December 31, 2022 to RMB 136.7 million for the year end ed December 31, 2023. This
increase was primarily due to (i) an incr ease in platform commission fees paid to
e-commerce platforms from RMB13.8 million in 2022 to RMB23.3 million in 2023, which
were generally in line with higher sales volume s. Although the total amount of our platform
commission fees increased, such fees as a p ercentage of our sales through DTC channels
(excluding our self-operated website) decreased from 17.1% in 2022 to 15.5% in 2023. This
was mainly because we began to diversify our DTC sales channels in 2023 by selling our
products on another e-commerce platform in Japan which offered lower commission rates
compared to the ones offered by Amazon. As t his platform represented a new and growing
portion of our DTC sales (excluding our self-operated website) in 2023, our platform
commission fees as a percentage of our sales through DTC channels (excluding our
self-operated website) decreased accordingly; (ii) an increase in employee benefit expenses
from RMB22.9 million to RMB32.1 million as we expanded our sales team and paid higher
bonus for our sales team as a result of our strong revenue growth in 2023; (iii) an increase in
after-sales services from RMB5.1 million in 2022 to RMB13.6 million in 2023 due to our
growing customer base and expanded warranty services; and (iv) an increase in advertising,
promotion, and business development expenses from RMB54.3 million in 2022 to RMB59.7
million in 2023 as we intensified our online marketing activities.
Administrative Expenses
Our administrative expenses increas ed from RMB21.0 million for the year ended
December 31, 2022 to RMB24.1 million for the year ended December 31, 2023. This
increase was mainly attributable to (i) an i ncrease in employee benefit expenses from
RMB12.5 million in 2022 to RMB15.8 million in 2023 as a result of expanded headcount to
support our business growth and corresponding increases in personnel costs; (ii) an increase
in tax charges from RMB0.4 million in 2022 to RMB1.0 million in 2023 due to higher
business revenue and improved gross profit ma rgins; and (iii) an increase in depreciation
and amortization from RMB1.2 million in 2022 to RMB1.7 million in 2023 due to office
space expansion necessitated by the growth of our management team, partially offset by a
decrease in professional service fees f rom RMB3.8 million in 2022 to RMB1.9 million in
2023 due to the non-recurrence of one-time financial advisory fees related to strategic
planning consulting services incurred in 2022.
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Research and Development Expenses
Our research and developmen t expenses increased from RMB61.8 million for the year
ended December 31, 2022 to RMB89.2 million f or the year ended Dece mber 31, 2023. This
increase was primarily due to our investment in both core technology advancement and
product development, which caused an increase in employee benefit expenses from
RMB41.9 million in 2022 to RMB61.9 million i n 2023 as we engaged additional R&D
personnel to support both algorithm development and hardware design.
Impairment Losses on Financial Assets, Net
Our net impairment losses on financial ass ets increased from RMB0.1 million for the
year ended December 31, 2022 to RMB0.8 mi llion for the year ended December 31, 2023,
primarily due to increased prov isions for expected credit losse s on trade receivables in line
with our revenue growth and expanded customer base.
Other Expenses
Our other expenses increased from RMB0. 4 million for the year ended December 31,
2022 to RMB2.1 million for the year ended Decem ber 31, 2023, primarily due to an increase
in foreign exchange losses from RMB3,00 0 in 2022 to RMB1.6 million in 2023 resulting
from the depreciation of the Japanese yen against RMB.
Finance Costs
Our finance costs remained relatively stable at RMB2.4 million and RMB2.2 million,
respectively for the year ended December 31, 2022 and 2023.
Loss Before Tax
As a result of the foregoing, our loss before tax decreased significantly from RMB86.9
million for the year ended December 31, 2022 to RMB16.4 million for the year ended
December 31, 2023.
Income Tax
Our income tax increased from RMB49,000 for the year ended December 31, 2022 to
RMB89,000 for the year ended December 31, 2023. We incurred income tax primarily due
to profits generated by our overseas subsidiaries, despite our Group’s overall loss position,
as explained above.
Loss for the Year
As a result of the foregoing, our loss for the year improved significantly from
RMB87.0 million for the year ended December 31, 2022 to RMB16.4 million for the year
ended December 31, 2023.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows Analysis
We have historically met our working cap ital needs primarily through funds from
equity financing, cash flow fr om operating activities, bank loans. Our primary uses of cash
are for our working capital needs and capital expenditures.
Upon the completion of the Global Offering, we expect to meet our working capital
needs primarily through cash flows from op erating activities, bank loans and the net
proceeds to our Company from the Global Offering.
The table below sets forth a summary of our cash flows for the periods indicated:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
N e tc a s hf l o w sg e n e r a t e df r o m /
(used in) operating activities . . (106,994) 24,621 (31,278) (32,804) 29,167
Net cash flows (used in)/generated
from investing activities . . . . . (13,169) (13,743) (90,656) (8,781) 55,114
Net cash flows (used in)/generated
from financing activities . . . . 226,826 (24,411) 60,595 26,485 43,820
Net increase/(decrease) in cash and
c a s he q u i v a l e n t s ......... 1 0 6 , 6 6 3 ( 1 3 , 5 3 3 ) ( 6 1 , 3 3 9 ) ( 1 5 , 1 0 0 ) 1 2 8 , 1 0 1
Cash and cash equivalents at
b e g i n n i n go fy e a r ........ 3 8 , 7 0 6 1 4 5 , 2 6 5 1 3 0 , 1 7 7 1 3 0 , 1 7 7 6 2 , 3 3 7
Effect of foreign exchange rate
c h a n g e s ,n e t ............ ( 1 0 4 ) ( 1 , 5 5 5 ) ( 6 , 5 0 1 ) ( 1 1 , 2 0 1 ) 6 , 6 2 7
Cash and cash equivalents at end
of year, represented by bank
b a l a n c e sa n dc a s h........ 1 4 5 , 2 6 5 1 3 0 , 1 7 7 6 2 , 3 3 7 1 0 3 , 8 7 6 1 9 7 , 0 6 5
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Net Cash Flows Used in/Generated from Operating Activities
During the Track Record Period, our cash flows used in operating activities were
primarily affected by our operating results and changes in working capital.
For the year ended December 31, 2022, our net cash flows used in operating activities
was RMB107.0 million. This net cash outflow was primarily attributable to (i) loss before
tax of RMB86.9 million; (ii) positive total adjus tments before movements in working capital
of RMB25.2 million, primarily reflecting (a) RMB10.4 million of positive adjustments for
depreciation of right-of-use assets; (b) RMB7.1 million of positive adjustments for
write-down of inventories to net realizab le value; and (c) RMB3.4 million of positive
adjustments for equity-settled share-based p ayment expenses; (iii) negative movements in
working capital of RMB46.8 million, primarily reflecting (a) RMB25.9 million increase in
inventories; (b) RMB100.1 million increase i n trade receivables; and (c) RMB6.6 million
increase in prepayments, other receivables and other assets, partially offset by RMB78.6
million decrease in factored trade receivabl es; and (iv) income tax paid of RMB49,000.
For the year ended December 31, 2023, our net cash flows generated from operating
activities was RMB24.6 million. This net cash ou tflow was primarily attributable to (i) loss
before tax of RMB16.3 million; (ii) positive to tal adjustments before movements in working
capital of RMB31.0 million, primarily reflecting (a) RMB11.5 million of positive
adjustments for depreciation of right-of-use assets; (b) RMB7.6 million of positive
adjustments for write-down of inventories t o net realizable value; (c) RMB5.1 million of
positive adjustments for depreciation of property, plant and equipment; and (d) RMB4.2
million of positive adjustments for equity-se ttled share-based payment expenses; (iii)
positive movements in working capital of RMB8.7 million, primarily reflecting (a)
RMB156.9 million of decrease in factored t rade receivables; (b) RMB16.7 million
increase in trade payables; and (iii) RMB 12.6 million increase in other payables and
accruals, partially offset by RMB174.5 million i ncrease in trade recei vables; and (iv) income
tax paid of RMB89,000.
For the year ended December 31, 2024, our net cash flows used in operating activities
was RMB31.3 million. This net cash outflow was p rimarily attributable to (i) loss before tax
of RMB2.7 million; (ii) positive total adjustments before movements in working capital of
RMB38.2 million, primarily reflecting (a) RMB11.0 million of positive adjustments for
depreciation of right-of-use assets; (b) RMB9.6 million of positive adjustments for
depreciation of property, plant and equ ipment; (c) RMB6.5 million of positive
adjustments for foreign exchange diffe rence; and (d) RMB5.6 million of positive
adjustments for write-down of inventori es to net realizable value; (iii) negative
movements in working capital of RMB68.4 million, primarily reflecting (a) RMB86.8
million increase in inventories; (b) RMB172.8 million increase in trade receivables; and (c)
RMB15.7 million decrease in trade payables; p artially offset by RM B189.2 million decrease
in factored trade receivables; and ( iv) income tax paid of RMB0.4 million.
FINANCIAL INFORMATION
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For the six months ended June 30, 2025, our n et cash flows generated from operating
activities was RMB29.2 million. This net cash inf low was primarily attributable to (i) profit
before tax of RMB24.1 million; (ii) positive to tal adjustments before movements in working
capital of RMB20.4 million, primarily reflecting (a) RMB5.7 million of positive
adjustments for write-down of inventories t o net realizable value; (b) RMB5.6 million of
positive adjustments for depreciation of property, plant and equipment; and (c) RMB5.0
million of positive adjustments for equity-se ttled share-based payment expenses; (iii)
negative movements in working capital of RMB15.7 million, primarily reflecting (a)
RMB161.8 million increase in trade receiva bles and (b) RMB44.8 million increase in
inventories, partially offset by (a) RMB108. 9 million increase in trade payables, and (b)
RMB74.2 million decrease in factored trade receivables; and (iv) income tax paid of
RMB0.2 million.
Net Cash Flows Used in/Generated from Investing Activities
During the Track Record Period, our invest ing activities primarily consisted of
purchases of financial assets at fair value through profit or loss, purchases of items of
property, plant and equipment, and purchases of intangible assets.
For the year ended December 31, 2022, our net cash flows used in investing activities
amounted to RMB13.2 million, primarily reflecting (i) RMB7.8 million of purchases of
items of property, plant and equipment; (ii) RMB3.7 million of placement of time deposits;
and (iii) RMB1.5 million of purchases of intangible assets.
For the year ended December 31, 2023, our net cash flows used in investing activities
amounted to RMB13.7 million, primarily reflecting (i) RMB4.9 million of purchases of
intangible assets; (ii) RMB9.5 million of purchases of items of property, plant and
equipment; and (iii) RMB4.3 million of placeme nt of time deposits, partially offset by
RMB4.8 million of withdrawal of time deposits.
For the year ended December 31, 2024, our net cash flows used in investing activities
amounted to RMB90.7 million, primarily refl ecting (i) RMB118.0 million of purchases of
financial assets at fair value through profi t or loss; (ii) RMB17.7 million of purchases of
items of property, plant and equipment; and (iii) RMB22.8 million of placement of
restricted cash, partially offset by (i) RMB65.7 million of disposal of financial assets at fair
value through profit or loss; and (ii) RMB7. 4 million of withdrawal of restricted cash.
For the six months ended June 30, 2025, our net cash flows from investing activities
amounted to RMB55.1 million, primarily refl ecting (i) RMB84.3 million of disposal of
financial assets at fair value through prof it or loss; and (ii) RMB17.5 million of withdrawal
of restricted cash, partially offset by (i) RMB30.0 million of purchase of financial assets at
fair value through profit or loss; (ii) RMB7.5 million of asset acquisition; and (iii) RMB5.6
million of purchases of items of p roperty, plant and equipment.
FINANCIAL INFORMATION
–4 2 1–


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Net Cash Flows Used in/Generat ed from Financing Activities
During the Track Record Period, our financin g activities primarily related to (i) new
bank loans raised; (ii) repayment of bank loans ; (iii) capital contribution by shareholders;
and (iv) principal portion of cap ital element of lease payments.
For the year ended December 31, 2022, our n et cash flows from financing activities
amounted to RMB226.8 million, primarily ref lecting (i) RMB200.0 million of capital
contribution by shareholders from our B+ round financing; and (ii) RMB118.8 million of
new borrowings from factored trade receivabl es, partially offset by (i) RMB78.6 million of
repayment of borrowings from factored tra de receivables; and (ii) RMB11.0 million of
payments of lease liabilities.
For the year ended December 31, 2023, our net cash flows used in financing activities
amounted to RMB24.4 million, primarily reflecting (i) RMB156.9 million of repayment of
borrowings from factored trade receivables ; and (ii) RMB12.6 million of payment of lease
liabilities, partially offset by RMB146.9 million of new borrowings from factored trade
receivables.
For the year ended December 31, 2024, our n et cash flows from financing activities
amounted to RMB60.6 million, primarily reflecting (i) RMB183.5 million of new
borrowings from factored trade receivables ; and (ii) RMB88.1 million of new bank loans,
partially offset by RMB189.2 million of repay ment of borrowings f rom factored trade
receivables.
For the six months ended June 30, 2025, our net cash flows from financing activities
amounted to RMB43.8 million, primarily reflecting (i) RMB73.3 million of new borrowings
from factored trade receivables; (ii) RMB59. 1 million of proceeds from issue of shares; and
(iii) RMB58.0 million of new bank loans, partially offset by (i) RMB74.2 million of
repayment of borrowings from factored t rade receivables; (ii) RMB64.8 million of
repayment of bank loans; and (iii) RMB5.9 million of payments of lease liabilities.
WORKING CAPITAL SUFFICIENCY
During the Track Record Period, we finance our working capital needs primarily
through financing activities. Taking into account the financial resources available to our
Group, including the cash flow from operatin g activities, existing borrowings and the
estimated net proceeds from the Global Offering, our Directors are of the view that, after
due and careful inquiry, our Group has sufficient available working capital for our present
requirements for at least the next 12 months from the date of this prospectus.
FINANCIAL INFORMATION
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DESCRIPTION OF CERTAIN KEY ITEMS FROM OUR CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
Current Assets and Current Liabilities
The table below sets forth the breakdown of our current assets and current liabilities as
at the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current assets
I n v e n t o r i e s ............. 8 3 , 5 8 9 8 2 , 4 3 7 1 6 3 , 6 3 7 2 0 2 , 7 4 6 216,164
Trade receivables ........ 4 5 , 1 0 3 6 2 , 0 9 1 4 5 , 8 1 5 1 3 3 , 0 3 5 6 5 , 6 7 9
Prepayments, deposits and
other receivables ....... 1 6 , 8 7 3 2 2 , 1 2 4 2 2 , 9 8 9 3 0 , 2 2 9 4 6 , 3 6 5
Financial assets at fair value
through profit or loss . . . 8 — 54,391 — 68,000
R e s t r i c t e dc a s h .......... 8 2 4 5 1 0 1 5 , 9 1 7 9 0 0 2 , 8 5 3
T i m ed e p o s i t s ........... 3 , 1 0 3 2 , 5 6 2 2 , 9 0 9 2 , 9 4 7 1 4 , 2 7 2
Cash and cash equivalents . . 145,265 130,177 62,337 197,065 157,072
Total current assets ......... 294,765 299,901 367,995 566,922 570,405
Current liabilities
Trade payables . ......... 2 7 , 6 7 7 4 4 , 3 3 0 2 8 , 5 8 7 1 3 7 , 4 9 2 162,074
C o n t r a c tl i a b i l i t i e s ....... 3 , 2 0 2 3 , 5 5 8 4 , 5 5 3 7 , 6 8 2 2 8 , 8 2 1
Other payables and accruals 20,122 32,674 43,151 66,054 65,152
Financial liabilities at fair
value through profit or loss 129 — 68 420 —
Interest-bearing bank loans . 40,207 30,200 91,250 37,938 10,410
L e a s el i a b i l i t i e s .......... 1 1 , 2 7 0 1 2 , 3 4 4 1 1 , 6 4 1 7 , 9 4 5 1 0 , 5 0 0
P r o v i s i o n .............. 6 , 4 7 9 1 4 , 2 0 0 2 0 , 4 8 7 2 2 , 0 1 1 2 1 , 9 2 2
I n c o m et a xp a y a b l e ....... — — — 2 , 1 0 1 2 , 7 3 7
Total current liabilities ...... 109,086 137,306 199,737 281,643 301,616
Net Current Assets ......... 185,679 162,595 168,258 285,279 268,789
For details on the accounting treatment of redemption rights, see ‘‘— Share Capital
and Total Equity’’ in this section and note 28 to the Accountants’ Report set out in
Appendix I to this prospectus.
FINANCIAL INFORMATION
–4 2 3–


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Our net current assets decreased from R MB185.7 million as of December 31, 2022 to
RMB162.6 million as of December 31, 2023. The decrease in net current assets was
primarily due to the increase in our total curr ent liabilities outpacing the increase in our
total current assets. Our total current liab ilities increased from RMB109.1 million as of
December 31, 2022 to RMB137.3 million as of D ecember 31, 2023, primarily due to (i) an
increase of RMB16.7 million in trade payables, mainly because our procurement from
suppliers increased as our business expanded in 2023; (ii) an increase of RMB12.6 million in
other payables and accruals, resulting from increased payroll payables as we expanded our
operations and enhanced staff compensati on; and (iii) an increase of RMB7.7 million in
provision, mainly due to the growth in our sales volume, partially offset by a decrease in
interest-bearing bank loans of RMB10.0 millio n due to our partial settlement of such bank
loans. Our total current assets increase d from RMB294.8 million as of December 31, 2022
to RMB299.9 million as of December 31, 2023, p rimarily due to an increase of RMB17.0
million in trade receivables, mainly due to our in creased sales volume, partially offset by a
decrease of RMB15.1 million in cash and cash equi valents, resulting from our utilization of
cash resources in response to our rapid busin ess expansion and increased operating
expenses.
Our net current assets increased from RM B162.6 million as of D ecember 31, 2023 to
RMB168.3 million as of December 31, 2024. The inc rease in net current assets was primarily
due to the increase in our total current assets outpacing the increase in our total current
liabilities. Our total current assets incr eased from RMB299.9 million as of December 31,
2023 to RMB368.0 million as of December 31, 2024, primarily due to (i) an increase of
RMB81.2 million in inventories, mainly bec ause we increased our raw materials and
finished goods stock levels in anticipation of continued strong market demand following
our strong sales performance in 2023, and ex panded our product lines with the sales of
several new high-value products such as enhanced mobile robots; (ii) an increase of
RMB54.4 million in financial assets at fair value through profit or loss, primarily
attributable to our investment in structure d deposits issued by qualified banks in the PRC
to optimize our cash management; and (iii) an increase of RMB15.4 million in restricted
cash, which was used as margin for foreign exchange derivatives, partially offset by a
decrease of RMB67.8 million in cash and cash equivalents, mainly due to our expanded
procurement and manufacturing activit ies which increased our working capital
requirements. Our current liabilities inc reased from RMB137.3 million as of December
31, 2023 to RMB199.7 million as of December 31, 2024, primarily due to (i) an increase of
RMB61.1 million in interest-bearing bank loan s, which we obtained primarily to support
our business expansion and working capita l needs; (ii) an increase of RMB10.5 million in
other payables and accruals, primarily due to increased payroll payables and tax payables
related to our business growth; and (iii) an in crease of RMB6.3 million in provision due to
sales growth, partially offset by a decreas e of RMB15.7 million in trade payables, as we
settled certain outstanding invoi ces with suppliers before year-end.
FINANCIAL INFORMATION
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Our net current assets increased from RM B168.3 million as of D ecember 31, 2024 to
RMB285.3 million as of June 30, 2025. The increa se in net current assets was primarily due
to the increase in our total current assets outpacing the increase in our total current
liabilities. Our total current assets incr eased from RMB368.0 million as of December 31,
2024 to RMB566.9 million as of June 30, 2025, primarily due to (i) an increase of
RMB134.7 million in cash and cash equivalent s, primarily due to proceeds received from
our pre-IPO financing activities and increased cash inflows from operations; (ii) an increase
of RMB87.2 million in trade receivables, prima rily due to our increased sales volume from
business expansion; and (iii) an increase of R MB39.1 million in inventories, primarily due
to our increased stock of raw materials and finished goods to support our expanding sales
activities and in anticipation of future gro wth. This was partially offset by a decrease of
RMB54.4 million in financial assets at fair value through profit or loss, primarily due to the
m a t u r i t ya n dr e d e m p t i o no fs t r u c t u r e dd e p o s i t st of u n do u rw o r k i n gc a p i t a ln e e d s ,a n da
decrease of RMB15.0 million in restricted c ash, primarily due to the release of margin
deposits for foreign exchange derivatives. O ur total current liab ilities increased from
RMB199.7 million as of December 31, 2024 t o RMB281.6 million as of June 30, 2025,
primarily due to (i) an increase of RMB108.9 m illion in trade payables, primarily due to our
increased procurement of raw materials and services to support our expanded business
operations; and (ii) an increase of RMB 22.9 million in other payables and accruals,
p r i m a r i l yd u et oa ni n c r e a s ei na c c r u e dp a y r o l land other operating expenses in line with our
business expansion. This was partially offset by a decrease in interest-bearing bank loans of
RMB53.3 million, primarily due to the scheduled repayment of outstanding bank loans.
Our net current assets decreased fro m RMB285.3 million as of June 30, 2025 to
RMB268.8 million as of October 31, 2025. The decrease in net current assets was primarily
due to the increase in our total current liabilitie s outpacing the increase in our total current
assets. Our total current as sets increased from RMB566.9 million as of June 30, 2025 to
RMB570.4 million as of October 31, 2025, primarily due to (i) an increase of RMB16.2
million in prepayments, deposits and other rece ivables, mainly because in the third quarter
of 2025 we made higher prepayments to certa in new suppliers in connection with the
stocking of our newly launched products such as Acemate; (ii) an increase of RMB11.4
million in time deposits, primarily because we a llocated part of our funds into medium- to
long-term U.S. dollar time deposit products in vie w of their relatively higher interest rates;
and (iii) an increase of RMB68.0 million in finan cial assets at fair value through profit or
loss, mainly attributable to our investment in structured deposits issued by qualified banks
in the PRC to optimize our cash management. These increases were partially offset by a
decrease of RMB67.4 million in trade receivable s, primarily because the second quarter is
the peak stocking period for our retailers as th ey prepare for major sales events in the third
quarter, and the relevant receiva bles were subsequently settled. Our total current liabilities
increased from RMB281.6 million as of June 3 0, 2025 to RMB301.6 million as of October
31, 2025, primarily due to (i) an increase of R MB24.6 million in trade and bills payables,
mainly because we began using bank acceptan ce bills with a typical tenure of six months to
settle a portion of our payables from July 2 025; and (ii) an increase of RMB21.1 million in
contract liabilities, mainly due to advances r eceived in connection with the pre-sale of our
new Acemate products and other new products.
FINANCIAL INFORMATION
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Inventories
Our inventory primarily comprises (i) raw mat erials, which mainly include electronic
materials, plastics, and packaging materials ; (ii) work in progress, representing partially
completed products in the manufacturing proce ss; (iii) finished goods, which are completed
products ready for sale; and (iv) goods in transit, which represent products that have been
shipped but not yet delivered to customers. As of December 31, 2022, 2023 and 2024 and
June 30, 2025, our inventory amounted to R MB83.6 million, RMB82.4 million, RMB163.6
million, and RMB202.7 million respectively, representing 28.4%, 27.5%, 44.5% and 35.8%
of our total current assets as of the respective dates.
The following table sets forth, as of the dates indicated, a summary of our balance of
inventories:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
R a wm a t e r i a l s ......... 3 0 , 4 7 5 3 0 , 7 0 0 6 3 , 3 6 6 7 2 , 5 6 7
W o r ki np r o c e s s........ 2 6 4 , 3 8 6 3 , 8 3 7 1 3 , 9 5 7
F i n i s h e dg o o d s ......... 5 0 , 0 3 2 3 7 , 4 2 7 8 7 , 3 5 5 1 1 2 , 4 9 1
G o o d si nt r a n s i t ........ 3 , 0 5 6 9 , 9 2 4 9 , 0 7 9 3 , 7 3 1
Total ................ 83,589 82,437 163,637 202,746
Our inventories remained relatively st able at RMB83.6 million as of December 31,
2022 and RMB82.4 million as of December 31, 2023. Our inventories increased significantly
from RMB82.4 million as of December 31, 202 3 to RMB163.6 million as of December 31,
2024, primarily due to (i) an increase in raw materials from RMB30.7 million to RMB63.4
million to support our expanded product offeri ngs; and (ii) an increase in finished goods
from RMB37.4 million to RMB87.4 million, reflecting our strategic decision to maintain
higher inventory levels for new product laun ches and to meet anticipated demand growth in
2025. Our inventories increased from R MB163.6 million as of December 31, 2024 to
RMB202.7 million as of June 30, 2025, prima rily due to (i) an increase in finished goods
from RMB87.4 million as of December 31, 202 4 to RMB112.5 million as of June 30, 2025,
reflecting our strategic stock-piling for new p roduct launches, such as SwitchBot Hub 3,
and in preparation for major sales events such as the Amazon Prime Day in July 2025; and
(ii) an increase in raw materials from RM B63.4 million to RMB72.6 million to support the
production of these products in anticipation of increased sales.
FINANCIAL INFORMATION
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The following table sets forth the average inventory turnover days for the periods
indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Average inventory turnover
days (1) ............. 1 1 1 . 9 7 6 . 8 8 2 . 0 9 0 . 5
Note:
(1) The average inventory turnover days for a cer tain period is the average of opening and closing
inventory balances divided by revenue and mul tiplied by the number of days in the relevant
year/period.
Our inventory turnover days decreased f rom 111.9 days in 2022 to 76.8 days in 2023,
primarily attributable to the significantly in creased demand for our products during 2023.
Concurrently, we implemented strategic adjus tments to our manufactu ring arrangements to
meet such increased demand, which enabled our inventory levels to remain stable
notwithstanding the aforementioned growth in demand. Our inventory turnover days
increased from 76.8 days in 2023 to 82.0 days in 2024, primarily due to our strategic
decision to increase inventory levels to meet anticipated market demands. This increase was
also influenced by our expansion into new higher-value product categories such as enhanced
mobile robots, which required additional safety stock during the market introductory
phase. Our inventory turnover days increa sed from 82.0 days for the year ended December
31, 2024 to 90.5 days for the six months ended June 30, 2025, primarily due to our strategic
decision to increase our inventory level in preparation for major sales events including
Amazon Prime Day in July 2025. The increase was also attributable to the introduction of
new products, which required higher initial stock levels.
The following table sets out the ageing analysis of the inventories as of December 31,
2022, 2023 and 2024 and June 30, 2025 :
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
W i t h i n1y e a r .......... 7 9 , 8 8 5 7 5 , 9 5 5 1 5 8 , 9 9 9 1 9 2 , 4 2 6
O v e r1y e a r ........... 3 , 7 0 4 6 , 4 8 2 4 , 6 3 8 1 0 , 3 2 0
Total ................ 83,589 82,437 163,637 202,746
FINANCIAL INFORMATION
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The Directors believe that there is no mater ial recoverability issue for inventories for
the years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025.
As of October 31, 2025, RMB1 09.9 million, or 54.2%, of our inventories as of June 30,
2025 had been subsequently sold or utilized.
Trade Receivables
Trade Receivables
Our trade receivables primarily represent amounts due from customers for products
sold through our various sales and distributions channels. The following table sets forth a
breakdown of our trade receivables as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
T r a d er e c e i v a b l e s ....... 4 5 , 1 6 1 6 2 , 7 0 2 4 6 , 2 8 8 1 3 3 , 9 4 0
Less: impairment of trade
receivables ........... ( 5 8 ) ( 6 1 1 ) ( 4 7 3 ) ( 9 0 5 )
Total ................ 45,103 62,091 45,815 133,035
As of December 31, 2022, 2023 and 2024 and June 30, 2025, our trade receivables
(exclusive of impairment of trade receiva bles) amounted to RMB45.2 million, RMB62.7
million, RMB46.3 million and RMB133.9 millio n, respectively. Our trade receivables
(exclusive of impairment of trade receivab les) increased from RMB45.2 million as of
December 31, 2022 to RMB62.7 million as of December 31, 2023, primarily due to our
overall sales growth in 2023. Our trade receiva bles decreased from RMB62.7 million as of
December 31, 2023 to RMB46.3 million as of D ecember 31, 2024, which was primarily
attributable to the earlier placement of orders by our key customers, with the corresponding
receivables being subsequently settled prior to the end of 2024. Our trade receivables
increased from RMB46.3 million as of Decemb er 31, 2024 to RMB133.9 million as of June
30, 2025. The increase was primarily due to a significant growth in the sales to our key
customers, such as Amazon and a key distributor in Japan, which was driven by strong sales
of our sensor and camera products as well as the successful launch of new products in our
lock robots category.
As of December 31, 2022, 2023 and 2024 and J une 30, 2025, our impairment of trade
receivables amounted to R MB58,000, RMB0.6 million, RMB0.5 million and RMB0.9
million, respectively.
FINANCIAL INFORMATION
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Turnover Days and Settlements
The table below sets forth our trade receivables turnover days for the periods
indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade receivables turnover
days (1) ............. 4 3 . 0 4 3 . 0 3 2 . 6 4 1 . 5
Note:
(1) The calculation of trade receivables turnover days is based on the average of the opening balance
and closing balance of trade receivables for the relevant year divided by revenue and multiplied by
the number of days in the relevant year/period.
Our trade terms with its certain customers are on credit, and the credit period is up to
90 days. We seek to maintain strict control over its outstanding receivables and have a
credit control department to m inimise credit risk. Overdue balances are reviewed regularly
by our management. Our trade receivables turnover days remained stable at 43.0 days and
43.0 days, in 2022 and 2023, respectively. Our trade receivables turnover days decreased
from 43.0 days in 2023 to 32.6 days in 2024, primarily because revenue generated from our
DTC channels increased at a faster rate than revenue from our retailer channels. DTC
channels generally require end consumers to settle their payment before shipment of goods,
while we generally grant credit terms to our reta ilers and distributors. Our trade receivables
turnover days increased from 32.6 days in 2024 to 41.5 days for the six months ended June
30, 2025, primarily due to significant growth i n sales to our key retail and distribution
customers, such as Amazon and a key distributor in Japan, to whom we generally extend
credit terms, with a large portion of these sales occurring toward the end of the first half of
2025. All of our trade receivables aged within one year.
Transfer of Trade Receivables
As part of our normal business, we entered into a trade receivable factoring
arrangement (the ‘‘Arrangemen t’’) and transferred certain trade receivables to a bank.
Under the Arrangement, we may be required to reimburse the bank for loss of interest if any
trade debtors have late payment up to 150 days. In the opinion of the directors, We retained
the substantial risks and rewards, which include default risks relating to such factored trade
receivables, and accordingly, it continued to recognize the full carrying amounts of the
factored trade receivables and the associated bank loans.
FINANCIAL INFORMATION
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For the years ended December 31, 2022, 2023 and 2024 and the six months ended June
30, 2025, the aggregate amount of the trade rec eivables transferred under the Arrangement
and the bank loans received associated with the factored trade r eceivables amounted to
RMB118.8 million, RMB146.9 million, RMB183.5 million and RMB73.3 million,
respectively.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, the original carrying value
of the trade receivables transferred under the Arrangement that have not been settled and
the associated bank loans recognized wa s RMB40.2 million, RMB30.2 million, RMB24.5
million and RMB23.6 million, respectively.
As of October 31, 2025, RMB133.6 million, or 99.7%, of our trade receivables as of
June 30, 2025 had been subsequently settled.
Prepayments, Deposits and Other Receivables
Our prepayment, deposits and other receivab les primarily consist of (i) prepayments,
which primarily consist of advance payments to suppliers; (ii) value-added tax recoverable,
which primarily consists of input VAT that can be used to offset output VAT; (iii)
right-of-return assets; (iv) prepaid other taxes; and (v) other receivables and deposits.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, our prepayments, deposits
and other receivables amounted to RMB16 .9 million, RMB22.1 million, RMB23.0 million
and RMB30.2 million, respectively. The follo wing table sets forth the breakdown of our
current prepayments, deposits and other r eceivables as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable 5,650 11,571 9,667 14,968
Prepaid other taxes . . . . . . 891 1,224 — —
Deferred listing expenses . . — — — 1,798
Right-of-return assets . . . . 291 407 728 619
P r e p a y m e n t s ........... 8 , 8 9 5 6 , 9 5 7 1 0 , 2 6 0 8 , 2 3 8
Net investment in the
s u b l e a s e ............ 8 0 4 0 5 3 7 5 3 6 7
Other receivables and
deposit
(1) ............ 1 , 1 2 6 1 , 6 6 9 2 , 0 8 3 4 , 5 2 5
Less: Impairment of other
receivables
and deposit . . . . . . (60) (109) (124) (286)
Total ................ 16,873 22,124 22,989 30,229
FINANCIAL INFORMATION
–4 3 0–


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Note:
(1) Other receivables are unsecured, non-interes t-bearing and are collectable within one year.
Our current portion of prepayments, deposits and other receivables increased from
RMB16.9 million as of December 31, 2022 to RMB22.1 million as of December 31, 2023,
primarily attributable to an increase in valu e-added tax recoverable from RMB5.7 million
to RMB11.6 million during the same period. This increase primarily resulted from a
temporary timing difference wherein Woan Te chnology, our subsidiary in mainland China,
had paid substantial input VAT on increased materials procurement towards the end of
2023, while the corresponding output VAT had not yet been collected as of December 31,
2023 to offset such input VAT. This timing difference is consistent with our business model,
as we primarily export our products overseas; partially offset by a decrease in prepayments
from RMB8.9 million in 2022 to RMB7.0 million in 2023 as a result of our increased shift
toward in-house production, which reduced the need for prepayments to external
subcontractors. Our prepayments, deposits and other receivables increased from
RMB22.1 million as of December 31, 2023 to RMB23.0 million as of December 31, 2024,
primarily attributable to an increase in prep ayments to our suppliers from RMB7.0 million
as of December 31, 2023 to RMB10.3 million a s of December 31, 2024, which was mainly
due to greater year-end stock preparation in anticipation of the continued strong demand
for our products in 2025. Our current portion of prepayments, deposits and other
receivables increased from RMB23.0 millio n as of December 31, 2024 to RMB30.2 million
as of June 30, 2025. This increase was primarily attributable to (i) an increase in
value-added tax recoverable to RMB15.0 millio n, resulting from higher input VAT paid on
increased procurement activities in anticipati on of continued strong sales in 2025, especially
during major promotional events such as Amaz on Prime Day in July; (ii) the recognition of
RMB1.8 million in deferred listing expenses in connection with the proposed Listing; and
(iii) an increase in other receivables and depos its, primarily due to the reclassification of
approximately RMB2.0 million in lease and d ecoration deposits f rom non-current to
current assets, as the underlying lease contracts became due within one year.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, the impairment of other
receivables and deposits remained insign ificant at RMB0.1 million, RMB0.1 million,
RMB0.1 million and RMB0.3 mi llion, respectively.
As of October 31, 2025, RMB15.9 million, or 52 .2%, of our prepayment, deposits and
other receivables as of June 30, 2025 had been subsequently settled.
FINANCIAL INFORMATION
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Financial Assets at Fair Value through Profit or Loss
Our financial assets at fair value through profit or loss primarily consist of investments
in structured deposits and derivative financial instruments such as foreign exchange swap
deposits and foreign exchange forward contracts, issued by qualified banks in the PRC.
After making an investment, we closely monitor the performance and fair value of these
investments on a regular basis.
These financial assets are classified and measured at fair value through profit or loss as
they are not held within the business model with the objective to collect contractual
cashflows nor the business model with the objective of both collecting contractual cashflows
and selling. We recorded financial assets at fair value through profit or loss of RMB8,000,
nil, RMB54.4 million and nil as of December 31, 2022, 2023 and 2024 and June 30, 2025,
respectively. The significant increase in 2024 was due to our investments in structured
deposits issued by qualified banks in the PRC . We had nil financial assets at fair value
through profit or loss as of June 30, 2025 primarily due to the maturity and redemption of
structured deposits to fund our working capital needs.
The following table sets forth a breakdown of our financial assets at fair value through
profit or loss as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits, at fair
v a l u e .............. — — 5 4 , 0 0 0 —
Forward exchange
agreement, at fair value . 8 — 17 —
Forward exchange swap, at
f a i rv a l u e ........... — — 3 7 4 —
T o t a l ................ 8 — 5 4 , 3 9 1 —
After the Listing, our investments in financ ial assets at fair value through profit or loss
will be subject to compliance with Chapter 14 of the Listing Rules.
Background of Entering into Foreign Currency Derivatives
To mitigate the currency risk arising from certain of our bank loans and trade
receivables denominated in foreign currencie ss u c ha sJ a p a n e s ey e n ,w ee n t e ri n t of o r e i g n
currency forward contracts and foreign currency option contracts with qualified banks in
the PRC from time to time. We also enter into fo reign exchange swaps contracts with banks
to mitigate the risk of interest rate fluctua tions arising from our bank loans at floating
interest rates. Please see note 21 to the Accountants’ Report set out in Appendix I to this
prospectus. We do not enter into these transactions for speculative investment purposes.
FINANCIAL INFORMATION
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In a typical foreign currency forward ex change agreement, one party agrees to buy
from another party a certain amount of foreig n currencies on a specific future date at a
predetermined foreign exchange rate, in ord er to reduce the level of risks arising from
foreign exchange fluctuations. In a typical fo reign exchange option, the purchaser obtains
the right, but not the obligation, to exchange currencies at a predetermined rate on or
before a specified date. In a typical foreign ex change swap, two parties agree to exchange a
specific amount in one currency for an equivalent amount in another currency initially, and
then reverse the exchange at a future date at predetermined rates.
Treasury Policy
We have adopted a prudent financial management approach, and we strictly follow our
internal fund management policies.
. Cash Management: We maintain reasonable cash to support our day-to-day
operations and deploy short-term surplus funds in principal-protected bank
financial products to optimize returns while safeguarding liquidity.
. Investment Management: Our investment activities are focused exclusively on
managing foreign exchange risks through the use of forward foreign exchange
contracts and foreign exchange swaps. Our investments are solely for risk
mitigation purposes and not for speculation.
. Governance and Internal Controls: All treasury activities are conducted under our
structured system of internal controls, including clear authorization levels and
segregation of duties, to ensure complia nce with internal control policies and
mitigate financial risks.
By adhering to the aforementioned treasury p rinciples, we have established a liquidity
management framework that is designed to satisfy our capital requirements, uphold
financial stability, manage risk exposures, an d provide sufficient flexibility to respond to
operational needs.
Foreign Exchange Risk Management Policy
We have implemented a comprehensive foreign exchange risk management policy with
respect to foreign exchange forward contracts and/or foreign exchange swap contracts.
Specifically,
. our policy follows risk-neutral principles, prioritizing natural risk mitigation
through operational arrangem ents and settlement methods;
. foreign exchange derivative transactions shall align with our production and
operational activities, and shall be limited to managing actual currency exposure
from our business operations, not for speculation;
. all transactions must be conducted with approved financial institutions that
possess relevant qualifications;
FINANCIAL INFORMATION
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. our finance and security department identifies foreign exchange risk exposures
and develops appropriate strategies, which require senior management approval;
and
. we maintain structured internal contro ls with clear authorization levels and
segregation of duties to ensure proper risk management.
Our approach to foreign exchange risk management is designed to provide protection
against adverse currency m ovements while preserving operational flexibility.
C a s ha n dC a s hE q u i v a l e n t sa n dR e s t r i c t e dC a s ha n dT i m eD e p o s i t s
Cash and Bank Balances
As of December 31, 2022, 2023 and 2024 and June 30, 2025, our cash and bank
balances amounted to RMB145.3 millio n, RMB129.8 million, RMB62.3 million and
RMB197.0 million, respectively. The significa nt increase in our cash and bank balances as
of June 30, 2025 was primarily a ttributable to (i) significant net proceeds from financing
activities, including new long-term bank borrowings and capital contributions from a new
round of equity financing; (ii) increased cash inflows from our operating activities, driven
by business expansion and revenue growth; and ( iii) the reclassification of restricted cash to
cash and bank balances following the maturity of certain derivative contracts as mentioned
below. Our cash and bank balances were primarily denominated in RMB, USD and
Japanese yen. The RMB is not freely convertible into other currencies; however, under the
PRC’s Foreign Exchange Control Regulations and Administration of Settlement, Sale, and
Payment of Foreign Exchange Regulations, We are permitted to exchange RMB for other
currencies through banks authorized to conduct foreign exchange business. Cash at banks
earns interest at floating rates based on daily bank deposit rates. The bank balances and
restricted bank balances are deposited with creditworthy banks with no recent history of
default.
Restricted Cash
We recorded restricted cash of RMB0.8 million, RMB0.5 million, RMB15.9 million
and RMB0.9 million as of December 31, 2022, 2023 and 2024 and June 30, 2025,
respectively. These restricted cash were used as the margin for the foreign exchange
derivatives purchased by us, which will beco me unrestricted after the derivatives reach
maturity. The significant increase in restricted cash as of December 31, 2024 reflected the
increased use of our internal cash resources as the margin for foreign exchange derivatives
towards the end of 2024. The subsequent signif icant decrease in restricted cash as of June
30, 2025 was primarily due to the maturity of th ese foreign exchange derivative contracts
during the period, which resulted in the full release of the corresponding margin deposits
previously held at financial institutions.
FINANCIAL INFORMATION
–4 3 4–


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The following table sets forth our cash and bank balances, restricted cash and time
deposits as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances . . 145,265 129,820 62,263 196,990
T i m ed e p o s i t s .......... 3 , 1 0 3 2 , 9 1 9 2 , 9 8 3 3 , 0 2 2
R e s t r i c t e dc a s h ......... 8 2 4 5 1 0 1 5 , 9 1 7 9 0 0
149,192 133,249 81,163 200,912
Less:
Restricted cash
(1) ...... ( 8 2 4 ) ( 5 1 0 ) ( 1 5 , 9 1 7 ) ( 9 0 0 )
Time deposits with
original maturity over
three months:
—C u r r e n t ......... ( 3 , 1 0 3 ) ( 2 , 5 6 2 ) ( 2 , 9 0 9 ) ( 2 , 9 4 7 )
Cash and cash equivalents .. 145,265 130,177 62,337 197,065
Note:
(1) As of December 31, 2022, 2023 and 2024 and June 30, 2025, the restricted cash of RMB824,000,
RMB510,000, RMB15,917,000 and RMB900,000, respectively, was used as the guarantee deposits
for the foreign exchange derivatives contracts purchased by us which will become unrestricted after
the maturity of derivatives products.
Our Directors confirm that our cash and cash equivalents are maintained at a prudent
level to satisfy the requirements for our daily business operations.
The continued decrease in our cash and bank balances as of December 31, 2022, 2023
and 2024, was mainly due to (i) our investmen ts in inventory expansion to support our
growing business; (ii) increased investments in product research and development; (iii)
allocation of funds to invest in structured deposits to achieve higher returns; and (iv)
i n c r e a s e dr e s t r i c t e db a n kd e p o s i t st os u p p o r to u rf o r e i g ne x c h a n g er i s km a n a g e m e n t
activities.
FINANCIAL INFORMATION
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Trade Payables
Our trade payables primarily consisted of amounts due to suppliers for the purchase of
raw materials and components for our products. The trade payables are
non-interest-bearing and are norma lly settled on terms of 30 to 60 days.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, the trade payables
amounted to RMB27.7 million, RMB44.3 million, RMB28.6 million and RMB137.5
million, respectively. Our trade payables in creased from RMB27.7 million as of December
31, 2022 to RMB44.3 million as of December 31, 2023, primarily attributable to (i)
increased procurement volumes to support ou r business growth; and (ii) the extension of
payment terms with our suppliers due to our enhanced purchasing volume and improved
bargaining position, which resulted in higher trade payables balances at the end of 2024.
Our trade payables decreased from RMB44. 3 million as of December 31, 2023 to RMB28.6
million as of December 31, 2024, primarily due to changes in our procurement pattern,
whereby we concentrated our inventory stock ing activities in the first half of 2024 to
accommodate our manufacturing lead times and internal logistics requirements, which
resulted in the settlement of a significant p ortion of our trade payables to our suppliers
before the end of 2024, which led to a decrease in trade payables as of December 31, 2024.
Our trade payables increase d from RMB28.6 million as of December 31, 2024 to RMB137.5
million as of June 30, 2025, primarily due to a significant and strategic increase in our
procurement of raw materials. This inventory build-up was concentrated in the second
quarter of 2025 in preparation for major promo tional activities, including the Amazon
Prime Day sales event in July. As these purchases were made close to the period end, a
substantial portion of the corresponding payables remained outstanding as of June 30,
2025. This strategic adjustment in procurement timing enabled us to better meet the
anticipated heightened year-end sales demand. For details of these core technologies, please
refer to the section headed ‘‘Business — Seasonality’’ in this prospectus.
The following table sets forth the aging analysis of our trade payables, based on the
transaction date as at the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
W i t h i n1y e a r .......... 2 7 , 5 6 3 4 4 , 0 7 8 2 8 , 2 5 8 1 3 7 , 2 0 8
O v e r1y e a r ........... 1 1 4 2 5 2 3 2 9 2 8 4
Total ................ 27,677 44,330 28,587 137,492
FINANCIAL INFORMATION
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The following table sets forth our tra de and bills payables turnover days for the
periods indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade payables turnover
days (1) ............. 6 0 . 9 5 8 . 0 4 5 . 2 8 3 . 5 (2)
Note:
(1) The calculation of trade payables turnover days is based on the average of the opening balance and
closing balance of trade payables for the relevant y ear/period divided by cost of sales and multiplied
by the number of days in the relevant year/period.
(2) Our trade payables turnover days increased from 45.2 days in 2024 to 83.5 days for the six months
ended June 30, 2025, primarily due to our strategic p rocurement and stocking of large quantities of
raw materials for production toward the end of th e first half of 2025 in preparation for Amazon
Prime Day in July 2025.
Trade payables turnover days indicates the average time we take to make cash
payments to suppliers.
As of October 31, 2025, RMB133.9 million, or 97.4%, of our trade payables as of June
30, 2025 had been subsequently settled.
Other Payables and Accruals
Our other payables and accruals mainly comp rise payroll payables, other tax payables
and other payables. The following tables set forth the breakdown of our other payables and
accruals as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
P a y r o l lp a y a b l e s ........ 1 4 , 7 5 0 2 2 , 7 5 3 2 5 , 1 1 3 1 9 , 8 1 6
Other tax payables . . . . . . 3,135 4,630 7,900 11,195
O t h e rp a y a b l e s ......... 2 , 2 3 7 5 , 2 9 1 1 0 , 1 3 8 1 2 , 1 4 2
Payables for assets
a c q u i s i t i o n .......... — — — 1 6 , 0 8 3
Listing expenses payables . — — — 6,818
Total ................ 20,122 32,674 43,151 66,054
FINANCIAL INFORMATION
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Our other payables and accruals increa sed from RMB20.1 million as of December 31,
2022 to RMB32.7 million as of December 31, 2023, primarily due to (i) an increase in
payroll payables of RMB8.0 million, primarily attributable to our expanded workforce and
higher performance-based bonuses which are normally distributed after year-end; (ii) an
increase in other tax payables of RMB1.5 millio n, primarily resulting from increased tax
obligations corresponding to our business expa nsion; and (iii) an increase in other payables
of RMB3.1 million, primarily related to incre ased accruals for marketing expenses,
recruitment services and other expenses. Our other payables and accruals further increased
from RMB32.7 million as of December 31, 202 3 to RMB43.2 million as of December 31,
2024, primarily due to (i) an increase in payr oll payables of RMB2.4 million, primarily due
to further expansion of our workforce and increased performance bonuses; (ii) an increase
in other tax payables of RMB3.3 million, primar ily resulting from increased tax obligations
corresponding to our business expansion; and (iii) an increase in other payables of RMB4.8
million, reflecting the continued growth in ou r operational scale and associated expenses.
Our other payables and accruals increas ed from RMB43.2 million as of December 31, 2024
to RMB66.1 million as of June 30, 2025, primarily due to (i) the recognition of new payables
related to strategic activities, including ap proximately RMB16.1 million for the acquisition
of certain assets to advance our business expansion and RMB6.8 million for accrued
expenses in connection with the Listing; and (ii) a continued increase in other tax payables
and other operational payables in line with our business growth. This overall increase was
partially offset by a decrease in payroll paya bles, which was mainly attributable to the
settlement of year-end performance bonuses during the first half of 2025.
Other payables are non-interes t-bearing and repayable on demand.
As of October 31, 2025, RMB32.5 million, or 49.1%, of our other payables and
accruals as of June 30, 2025 had been subsequently settled.
Financial Liabilities at Fair Value through Profit or Loss
We recorded financial liabilities at fair v alue through profit or loss of RMB0.1 million,
nil, RMB68,000 and RMB0.4 million as of Dece mber 31, 2022, 2023, an d 2024 and June 30,
2025, respectively.
Contract Liabilities
Contract liabilities mainly represent prepayments received from customers for sales of
goods before the performance obligations are satisfied. A contract liability is recognized
when a payment is received, or a payment is due, whichever is earlier, from a customer
before we transfer the related goods or servi ces. Contract liabilities are recognized as
revenue when we perform under the contract.
FINANCIAL INFORMATION
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The following tables set forth the breakdown of our contract liabilities as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances from customers
S a l e so fg o o d s ......... 3 , 2 0 2 3 , 5 5 8 4 , 5 5 3 7 , 6 8 2
Total ................ 3,202 3,558 4,553 7,682
Our contract liabilities remained relati vely stable at RMB3.2 million as of December
31, 2022 and RMB3.6 million as of December 31, 2 023 despite increased sales in 2023. Our
contract liabilities increas ed from RMB3.6 million as of D ecember 31, 2023 to RMB4.6
million as of December 31, 2024, which was gener ally consistent with the overall trend in
our revenue growth during the same period. Ou r contract liabilities i ncreased from RMB4.6
million as of December 31, 2024 to RMB7.7 million as of June 30, 2025, which was
primarily attributable to a significant in crease in advance payments received from
customers through our self-ope rated website. As our contract liabilities primarily consist
of payments for online orders for which goods have not yet been delivered to and accepted
by customers, the increase in sales volume near the period end resulted in a correspondingly
higher balance of contract liabilities as of June 30, 2025.
Provision
Our provision primarily consists of product warranty provision and refund liabilities.
The following tables set forth the breakdown of our provision as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Product warranty
provision
(1) .......... 5 , 7 6 3 1 2 , 8 2 8 1 8 , 1 7 1 2 0 , 1 1 9
Refund liabilities (2) . . . . . . 716 1,372 2,316 1,892
6,479 14,200 20,487 22,011
Notes:
(1) We generally provide 12–24 months warranti es to our customers on certain of our products for
general repairs of defects occurring during the wa rranty period. The amount of the provision for the
warranties is estimated based on sales volumes and past experience of the level of repairs and
returns. The estimation basis is reviewed on an ongoing basis and revised where appropriate.
FINANCIAL INFORMATION
–4 3 9–


--- page 450 ---
(2) Refund liabilities represent the obligation ari sing from right of return to refund some or all of the
consideration received (or receivable) from a cust omer. We update our estimates of refund liabilities
(and the corresponding change in the transaction price) at the end of each year/period during the
Track Record Period.
Our provision amounted to RMB6.5 m illion, RMB14.2 million, RMB20.5 million and
RMB22.0 million as of December 31, 2022, 202 3 and 2024 and June 30, 2025. The increase
of provision during the Track Record Peri od was primarily due to the growth in our
business operations and the corresponding increase in sales volume. In particular, the
introduction of enhanced mobile robots in 2023 with more sophisticated features
contributed to the higher provision amounts. As we expanded our product portfolio and
customer base, we recognized increased provi sions to account for our warranty obligations
of 12 to 24 months and potential refund liabilit ies, which was estimated based on historical
repair rates, return patterns and sales volumes, in accordance with our policies.
Certain Items of Non-current Asse ts and Non-current Liabilities
Property, Plant and Equipment
Our property, plant and equipment primarily consist of leasehold improvements,
furniture and fixtures, and electronic equipment and others. We had property, plant and
equipment of RMB10.3 million, RMB11.4 m illion, RMB21.7 million and RMB21.8 million
as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively.
The increase in our property, plant and equipment from RMB10.3 million as of
December 31, 2022 to RMB11.4 million as of D ecember 31, 2023 was primarily due to
additions of in machinery and equipment to expand our production capacity, partially
offset by depreciation charges of RMB5.1 millio n. The increase in our property, plant and
equipment from RMB11.4 million as of Dec ember 31, 2023 to RMB21.7 million as of
December 31, 2024 was primarily due to add itions of RMB19.9 million in machinery and
equipment as we expanded our pr oduction capabilities. In part icular, to support the launch
of several new products during the year, we i nvested approximately RMB11.8 million in
new molds for the production of our enhanced mobile robots. These additions were
partially offset by depreciation charge s of RMB9.6 million. Our property, plant and
equipment remained relatively stable at RMB21.7 million and RMB 21.8 million as of
December 31, 2024 and Jun e 30, 2025, respectively.
Right-of-Use Assets
Our right-of-use assets repr esent our rights to use leased properties, primarily
consisting of office spaces, R&D facilities, and manufacturing facilities. As of December
31, 2022, 2023 and 2024 and June 30, 2025, our ri ght-of-use assets amounted to RMB31.0
million, RMB46.9 million, RMB45.8 million and RMB39.3 million, respectively.
FINANCIAL INFORMATION
–4 4 0–


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The increase in our right-of-use assets from RMB31.0 million as of December 31, 2022
to RMB46.9 million as of December 31, 2023 w as primarily due to additions of RMB29.4
million for new lease agreements, including a new 10-year lease for our manufacturing
facilities in Huizhou, Guangdong Province, p artially offset by depreciation charges of
RMB11.5 million. The decrease in our right-of-use assets from RMB46.9 million as of
December 31, 2023 to RMB45.8 million as of D ecember 31, 2024 was primarily due to
depreciation charges of RMB11.0 millio n and a reduction of RMB7.1 million from
terminating our Shenzhen factory leases as we co nsolidated our operations, partially offset
by additions of RMB17.0 million for new lease ag reements, including the expansion of our
manufacturing facilities in Huizhou. The decrea se in our right-of-use assets from RMB45.8
million as of December 31, 2024 to RMB39.3 m illion as of June 30, 2025 was primarily due
to a lease modification, which resulted in a favorable rent reduction for our office premises
as well as depreciation charges.
Intangible Assets
Our intangible assets primarily comprise capitalized R&D expenditures, trademarks
and patents as well as intangible assets we acquire from time to time. As of December 31,
2022, 2023 and 2024 and June 30, 2025, our int angible assets amounted to RMB1.7 million,
RMB5.9 million, RMB9.4 million and RMB31.5 m illion respectively. Our intangible assets
increased from RMB1.7 million as of December 31, 2022 to RMB5.9 million as of
December 31, 2023, primarily due to the continued capitalization of development
expenditures for our R&D projects. Our intangible assets further increased from RMB5.9
million as of December 31, 2023 to RMB9.4 million as of December 31, 2024, primarily due
to (i) the continued capitalization of our development expenditures; and (ii) the acquisition
of certain trademarks to support our R&D projects. Our intangible assets increased
significantly from RMB9.4 million as of D ecember 31, 2024 to RMB31.5 million as of June
30, 2025, primarily due to our acquisition of cer tain intangible assets as described below.
In June 2025, Woan Technology entered i nto an agreement with Yanyuan 45th Jia
Technology Shenzhen Co., Ltd. (‘‘Yanyuan’’ ), an independent third party, pursuant to
which, Woan Technology agreed to acquire certa in assets primarily comprising technologies
and trademarks from Yanyuan. The intangible assets acquired in connection with this
transaction comprised six patent applicat ions and two trademarks, with acquisition
consideration (exclusive of value-adde d tax) of RMB23.5 million and RMB18,000,
respectively. The patent applications acqui red primarily relate to the design of sports
robot component architecture, hardware structure and robot control technologies. Prior to
this acquisition, we have been continuously investing in the research and development of
the underlying technologies required for sports robots, and have possessed the core
technological capabilities, including AI aut onomous decision-makin g, visual algorithm
control, and robot motion control. This acquisition further supplemented our patent
reserves in the component architecture, hardware structure and motion control functions of
sports robots, and will further support the technological development of such robots. Please
refer to note 31 of the Accountant’s Report as set out in Appendix I to this prospectus for
further details.
FINANCIAL INFORMATION
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SHARE CAPITAL AND TOTAL EQUITY
Pursuant to the shareholders subscription agreements entered into prior to Relevant
Periods, on March 23, 2022 and May 26, 2025, our Company issued an aggregate of
1,390,789 ordinary shares (representing the number of shares before capitalisation of
reserves) to the Pre-IPO investors at a total net cash proceed amounted to approximately
RMB389.68 million (collectively the ‘‘Pre- IPO Investments’’). Pursuant to the above
agreements, the Pre-IPO Investors were gran t e db yo u rC o m p a n yw i t hs p e c i a lr i g h t sw h i c h
included redemption rights.
There was no exercise of redemption rights granted by our Company throughout the
Relevant Periods.
On May 26, 2025, our Company and the Pre-IPO Investors subsequently entered into
supplemental agreements, agreeing that the redemption rights granted by our Company to
Pre-IPO investors have been irrecoverably terminated and shall be void ab initio .T a k i n g
into account the legal and regulatory framework of our Company’s jurisdiction and the
governing law of the supplemental agreements, the directors considered that it is
appropriate to present the Pre-IPO Investments as equity throughout the Track Record
Period.
Had the redemption rights granted by our Company to the Pre-IPO Investors been
accounted for as financial liabilities measu red at present value of the redemption amount
prior to entering into the supplemental agreements in May 2025.
(i) the redemption financial liabilities, tota l current liabilities and net deficits would
have been:
As of December 31,
2022 2023 2024
RMB’000 RMB’000 RMB’000
Redemption financial liabilities .... 5 8 8 , 4 7 3 6 7 1 , 4 0 2 8 0 2 , 0 3 4
Total current liabilities . . ........ 6 9 7 , 5 5 9 8 0 8 , 7 0 8 1 , 0 0 1 , 7 7 1
Net current liabilities . . . ........ ( 4 0 2 , 7 9 4 ) ( 5 0 8 , 8 0 7 ) ( 6 3 3 , 7 7 6 )
N e td e f i c i t s .................. ( 3 7 9 , 9 4 7 ) ( 4 7 5 , 0 0 1 ) ( 6 0 4 , 5 2 9 )
FINANCIAL INFORMATION
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(ii) the finance costs associated with the red emption financial liabilities, the net losses
for the year/period, basic and dilutive loss per share would have been:
Year ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Financial costs
associated with the
redemption financial
liabilities .......... 2 1 , 3 4 2 8 2 , 9 2 9 1 3 0 , 6 3 2 5 3 , 4 2 5 6 2 5 , 0 2 9
T o t a ln e tl o s s e s ...... ( 1 0 8 , 3 2 5 ) ( 9 9 , 3 0 5 ) ( 1 3 3 , 7 0 6 ) ( 6 7 , 0 6 6 ) ( 5 9 7 , 1 2 6 )
Basic and dilutive loss
per share (expressed
i nR M B ) .......... ( 0 . 9 6 ) ( 0 . 8 5 ) ( 1 . 1 4 ) ( 0 . 5 7 ) ( 3 . 6 6 )
For details, see note 28 to the Accountants’ Report set out in Appendix I to this
prospectus.
CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period consisted of purchases of
items of property, plant and equipment and intangible assets. Our capital expenditures were
amounted to RMB9.3 million, RMB14.3 m illion, RMB23.2 million and RMB13.2 million
for the year ended December 31, 2022, 2023 and 2024 and the six months ended June 30,
2025, respectively. The table below sets forth the capital expenditures for the periods
indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Purchases of items of
property, plant and
e q u i p m e n t ........... 7 , 7 5 9 9 , 4 6 1 1 7 , 7 1 7 5 , 5 9 1
Purchase of intangible assets 1,527 4,877 5,514 148
A s s e t sa c q u i s i t i o n ....... — — — 7 , 5 0 0
Total ................ 9,286 14,338 23,231 13,239
FINANCIAL INFORMATION
–4 4 3–


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CAPITAL COMMITMENTS
The table below sets forth the capital commitments contracted for during the Track
Record Period but not yet incurred:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided
for
Purchase of items of
property, plant and
e q u i p m e n t ........... 1 , 3 4 4 1 , 3 3 4 2 , 4 2 1 1 , 2 3 5
Capital commitments represent capital expenditure contracted for as of a particular
date but not yet incurred. As of December 31, 2022, 2023 and 2024 and June 30, 2025, our
capital commitments amounted to RMB1.3 million, RMB1.3 million, RMB2.4 million and
RMB1.2 million, respectively.
INDEBTEDNESS
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank loans . . . 40,207 30,200 106,264 98,659 73,150
L e a s el i a b i l i t i e s ............ 3 4 , 8 2 6 5 3 , 1 0 6 5 1 , 9 1 7 4 5 , 1 6 0 6 0 , 8 6 3
Balances due to related parties . 16 16 16 — —
T o t a l ................... 7 5 , 0 4 9 8 3 , 3 2 2 1 5 8 , 1 9 7 1 4 3 , 8 1 9 134,013
Interest-bearing Bank Loans
We recorded interest-bearing bank loans of RMB40.2 million, RMB30.2 million,
RMB106.3 million, RMB98.7 million and RMB73.2 million as of December 31, 2022, 2023
and 2024, June 30, 2025 and October 31, 2025, respectively.
FINANCIAL INFORMATION
–4 4 4–


--- page 455 ---
The table below sets forth a break down of our interest-bearing bank loans as of the
dates indicated:
As of December 31, As of June 30, As of October 31,
2022 2023 2024 2025 2025
Effective
Interest
Rate (%) Maturity RMB’000
Effective
Interest
Rate (%) Maturity RMB’000
Effective
Interest
Rate (%) Maturity RMB’000
Effective
Interest
Rate (%) Maturity RMB’000
Effective
Interest
Rate (%) Maturity RMB’000
Current :
Bank loans —
secured (1) .....
2.90–3.00 January 2025–
April 2025
62,771 — — — — — —
Bank loans — factored
trade receivables (2)
1.08 2023 40,207 0.98 2024 30,200 1.75 2025 24,479 2.26 2025 23,635 — — —
Current portion of
long-term bank
loans — secured
(3)
— — 2.6 December 2024–
September 2025
4,000 2.24–2.60 September 2025–
June 2026
14,303 2.24–2.35 December 2025–
September 2026
10,410
T o t a l—c u r r e n t .... 4 0 , 2 0 7 3 0 , 2 0 0 9 1 , 2 5 0 3 7 , 9 3 8 1 0 , 4 1 0
Non-current :
Bank loans —
secured (3) .....
— — 2.6 August 2026 15,014 2.24–2.60 August 2026–
March 2027
60,721 2.24 December 2026–
October 2027
62,740
Total — non-current . — — 15,014 60,721 62,740
T o t a l .......... 4 0 , 2 0 7 3 0 , 2 0 0 106,264 98,659 73,150
Notes:
(1) The loan is guaranteed by our Company and Mr. Li Zhichen, including (i) RMB38,832,000 that was
guaranteed by our Company as of December 31, 2024 and the guarantee has been released along
with the maturity of the relevant loan during the six months ended June 30, 2025; and (ii)
RMB23,939,000 was guaranteed by our Company and Mr. Li Zhichen as of December 31, 2024 on a
joint and several basis. This guarantee has been re leased along with the maturity of the loan during
the six months ended June 30, 2025.
(2) It represented the liabilities related to the transferred trade receivables under the factoring
arrangement that were not derecognized as of th e end of each year/period during the Track Record
Period. The loan is guaranteed by our Company, Mr. Li Zhichen and Mr. Pan Yang on a joint and
several basis. Such guarantee is expected to be released on or before the Listing.
(3) The loan is guaranteed by our Company and Mr. Li Zhichen on a joint and several basis. Such
guarantee is expected to be released on or before the Listing.
As of October 31, 2025, we had unutili zed banking facilities of RMB289.9 million,
among which RMB146.6 million were committed.
Lease Liabilities
Our lease liabilities primarily relate to the leases of offices, R&D facilities, and
manufacturing sites. During the Track Recor dP e r i o d ,w ee n t e r e di n t oc e r t a i nl o n g - t e r m
lease contracts for buildings which genera lly have lease terms between two to 10 years.
FINANCIAL INFORMATION
–4 4 5–


--- page 456 ---
We recorded lease liabilities of RMB34.8 million, RMB53.1 million, RMB51.9 million,
RMB45.2 million and RMB60.9 million as of December 31, 2022, 2023 and 2024, June 30,
2025 and October 31, 2025, respectively. The following table sets forth a summary of our
lease liabilities as of the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current (1) ................ 1 1 , 2 7 0 1 2 , 3 4 4 1 1 , 6 4 1 7 , 9 4 5 1 0 , 5 0 0
Non-current (2) ............ 2 3 , 5 5 6 4 0 , 7 6 2 4 0 , 2 7 6 3 7 , 2 1 5 5 0 , 3 6 3
Total ................... 34,826 53,106 51,917 45,160 60,863
Notes:
(1) Lease liabilities payable within one year.
(2) Lease liabilities payable wit hin a period of more than one year.
Our lease liabilities increased from RMB34.8 million as of December 31, 2022 to
RMB53.1 million as of December 31, 2023, prima rily due to new lease agreements totaling
RMB29.4 million, including the 10-year manuf acturing facilities lease in Huizhou. Our
lease liabilities decreased from RMB53. 1 million as of December 31, 2023 to RMB51.9
million as of December 31, 2024, primarily due to regular lease payments and early
termination of certain lease agreements a s we consolidated our operations. Our lease
liabilities decreased from RMB51.9 millio n as of December 31, 2024 to RMB45.2 million as
of June 30, 2025, primarily due to (i) regular lease repayment; and (ii) a downward
adjustment of the lease liabilities for our office premises resulting from a lease modification
which reduced our rental for the premises. Our lease liabilities increased from RMB45.2
million as of June 30, 2025, to RMB60.9 million a s of October 31, 2025, primarily because
we entered into one additional lease and extended the terms of certain existing leases during
the period.
Our Directors confirm that as of the Latest P racticable 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 our Group did not experience any difficulty in obtaining bank loans and other
borrowings, default in payment of bank loans and other borrowings or breach of covenants
during the Track Record Period and up to the Latest Practicable Date.
FINANCIAL INFORMATION
–4 4 6–


--- page 457 ---
Statement of Indebtedness
Except as disclosed under the section headed ‘‘— Indebtedness’’, as of October 31,
2025, being the latest practicable date for determining our indebtedness, we did not have
any debt securities or loan capital issued an d outstanding or agreed to be issued, bank
overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable
credits, debentures, mortgages, charges, hire purchases commitments, guarantees or other
material contingent liabilities. Our Director s confirm that there has not been any material
change in our indebtedness and contingent liabilities since October 31, 2025 except as
disclosed under ‘‘— Indebtedness’’ and ‘‘— C ontingent Liabilities’’ in this section.
CONTINGENT LIABILITIES
As at the Latest Practicable Date, we did not have any unrecorded significant
contingent liabilities, guarantees or any litig ation against us. 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 Group
that is likely to have a material and adverse effe ct on our business, financial condition or
results of operations.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
During the Track Record Period, we did not have any material off-balance sheet
arrangements or any variable interest in any unconsolidated entity that provides financing,
liquidity, financial risk or credit support fo r us. In addition, we have not entered into any
derivative contracts that are indexed to our equity interests and classified as owners’ equity.
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
MATERIAL RELATED PARTY TRANSACTIONS
During the Track Record Period, other than the compensation to our key management
personnel, we had certain related party transactions with our key management personnel,
details of which are set out in note 35 to the Accountants’ Report in Appendix I to this
document. Our Directors are of the view that the related party transactions were conducted
at arm’s length and on normal commercial terms and/or that such terms were no less
favorable to us than terms available from Independent Third Parties which are fair and
reasonable and in the interest of our Company and our Shareholders as a whole.
FINANCIAL INFORMATION
–4 4 7–


--- page 458 ---
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as at the dates and for
the periods indicated:
As of/for the year ended December 31,
As of/
for the
six months
ended
June 30,
2022 2023 2024 2025
Profitability ratios
Revenue growth rate (%) (1) N/A 66.5 33.4 44.1
Gross profit growth
rate (%) (2) ........... N / A 1 4 4 . 9 3 6 . 9 5 4 . 7
Gross profit margin (%) (3) . 34.3 50.4 51.7 54.2
Net (loss)/profit margin
(%)(4) .............. ( 3 1 . 7 ) ( 3 . 6 ) ( 0 . 5 ) 7 . 0
Adjusted EBITDA margin
(%) (a non-IFRS
measure)
(5) .......... ( 2 5 . 2 ) 1 . 3 4 . 3 1 3 . 7
Liquidity ratio
Current ratio
(6) ......... 2 . 7 2 . 2 1 . 8 2 . 0
Capital ratio
Gearing ratio (7) ........ 0 . 5 0 . 6 1 . 0 0 . 7
Notes:
(1) Revenue growth rate is calculated based on reve nue growth for the relevant year/period divided by
revenue for the previous year/period and multiplied by 100%.
(2) Gross profit growth rate is calculated based on g ross profit growth for the relevant year/period
divided by gross profit for the previ ous year/period and multiplied by 100%.
(3) Gross profit margin is calculated based on gross profit divided by revenue and multiplied by 100%.
(4) Net loss/profit margin is calculated based on lo ss/profit and total comprehensive income for the
year/period attributable to our equity sharehol ders divided by revenue and multiplied by 100%.
(5) Adjusted EBITDA margin (non-IFRS measure) is calculated based on adjusted EBITDA (non-IFRS
measure) divided by revenue and multiplied by 100%.
(6) Current ratio is calculated based on total current assets divided by total current liabilities as of the
end of the relevant year/period.
(7) Gearing ratio equals total debts at the end of the year/period divided by total equity at the end of
the year/period.
FINANCIAL INFORMATION
–4 4 8–


--- page 459 ---
Profitability Ratios
See ‘‘Results of Operation’’ in this secti on for details on our profitability ratios.
Current Ratio
Our current ratio decreased from 2.7 as of December 31, 2022 to 2.2 as of December
31, 2023, primarily due to (i) an increase in trad e payables; (ii) an increase in other payables
and accruals; and (iii) an increase in provision for product warranties, which collectively
resulted in our current liabilities growing at a faster rate than our current assets. Our
current ratio further decreased from 2.2 as of December 31, 2023 to 1.8 as of December 31,
2024, primarily due to (i) a significant increase in interest-bearing bank loans; (ii) a
substantial decrease in cash and cash equiv alents; and (iii) continued growth in our
provision for product warranties, while our inv entory levels substantially increased. Our
current ratio increased from 1.8 as of December 31, 2024 to 2.0 as of June 30, 2025,
primarily due to (i) an increase in inventories, (ii) an increase in trade receivables; and (iii) a
significant increase in cash and cash equivalents, which collectively resulted in our current
assets growing at a faster rate than our current liabilities.
Gearing Ratio
Our gearing ratio remained relatively stable at 0.5 and 0.6 as of December 31, 2022 and
2023, respectively. Our gearing ratio increased from approximately 0.6 as of December 31,
2023 to approximately 1.0 as of December 31, 2024, primarily due to (i) a substantial
increase in interest-bearing bank loans to fund our business growth; and (ii) relatively stable
total equity. Our gearing ratio decreased fr om approximately 1.0 as of December 31, 2024
to approximately 0.7 as of June 30, 2025, primarily due to our total equity growing at a
faster rate than our total debts as a result of our continued financing activities.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain financial risks including foreign currency risk, credit risk
and liquidity risk in the normal course of busi ness. For further details of our financial risk
management, please refer to the note 38 to the Accountants’ Report set out in Appendix I to
this prospectus.
DIVIDENDS
No dividend was paid or declared by our Company during the Track Record Period.
W ec u r r e n t l yd on o th a v ead i v i d e n dp o l i c y .T h e r ei sn oe x p e c t e do rp r e - d e t e r m i n e d
dividend payout ratio after the Listing. According to the Company Law, a company is only
permitted to distribute after-tax profits afte r it has fully made up for prior years’ losses. As
advised by our PRC Legal Advisers, we are not permitted to pay or declare any dividends
until such accumulated losses have been fully covered. However, we may make up
accumulated losses with capital surplus o r by capital reduction. Once our Company
becomes steadily profitable and achieves pos itive operating cash flow, we will consider
implementing a dividend polic y, which will be subject to a number of factors, including our
revenue and profit, financial position, cash re quirements, business plans, future prospects,
FINANCIAL INFORMATION
–4 4 9–


--- page 460 ---
prevalent market conditions, statutory and re gulatory restrictions, and other factors that
our Board may deem relevant. The payment and the amount of any future dividends will be
at the discretion of our Board. Holders of our Shares will be entitled to receive such
dividends pro rata according to the amounts paid up on our Shares. The dividend policy,
once implemented, will be reviewed by our Board from time to time.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our total listing expenses
(including underwriting commission) will be approximately RMB86.4 million (equivalent to
HK$95.1 million). The estimated listing ex penses of approximately RMB34.2 million are
expected to be charged to our consolidated statements of profit or loss for the year ending
2025, and the remaining listing expenses of ap proximately RMB52.2 million are expected to
be deducted from equity upon Listing. The listing expenses are expected to consist of
RMB55.8 million for underwriting fees, spons or fees and listing application fees, and
RMB30.6 million for non-underwriting-relate d expenses (including fees and expenses of
legal advisors and the reporting accountant of RMB15.8 million and other fees and
expenses of RMB14.8 million).
NO MATERIAL ADVERSE CHANGE
After performing suffici ent due diligence work whic h our Directors consider
appropriate and after due and careful consideration, our Directors confirm that, up to
the date of this prospectus, there has been no material adverse change in our financial or
trading position or prospects since June 30, 202 5, being the date on which our latest audited
consolidated financial statements were prepared, and there is no event since June 30, 2025
which would materially affect the informati on as set out in the Accountants’ Report in
Appendix I to this prospectus.
DISCLOSURE UNDER RULE 13.13 TO 13.19 OF THE LISTING RULES
O u rD i r e c t o r sc o n f i r mt h a t ,a sa tt h eL a test Practicable Date, there was no
circumstance that would give rise to a disclosure requirement under Rules 13.13 to 13.19
of the Listing Rules.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
Please refer to Appendix II ‘‘Unaudited Pro Forma Financial Information’’ to this
document for details.
The unaudited pro forma statement of adjusted consolidated net tangible assets of our
Group has been prepared for illustrative purposes only and because of its hypothetical
nature, it may not provide a true picture of the consolidated net tangible assets of our
Group attributable to owners of our Company had the Global Offering been completed as
at June 30, 2025 or at any future date.
FINANCIAL INFORMATION
–4 5 0–


--- page 461 ---
Consolidated Net
Tangible Assets
Attributable to
Owners of Our
Company as of
June 30, 2025 (1)
Estimated Net
Proceeds from the
Global
Offering (2)(4)
Unaudited Pro
Forma Adjusted
Consolidated Net
Tangible Assets
Attributable to
Owners of Our
Company as of
June 30, 2025
Unaudited Pro Forma
Adjusted Consolidated
Net Tangible Assets
Attributable to Owners
of Our Company per
Share as of
June 30, 2025 (3)(4)
RMB’000 RMB’000 RMB’000 RMB HK$
B a s e do na nO f f e r
Price of HK$63.00
per Share 259,592 1,201,471 1,461,063 6.57 7.23
B a s e do na nO f f e r
Price of HK$72.00
per Share 259,592 1,378,637 1,638,229 7.37 8.11
B a s e do na nO f f e r
Price of HK$81.00
per Share 259,592 1,555,804 1,815,396 8.17 8.99
Notes:
(1) The consolidated net tangible assets of our Gr oup attributable to owners of our Company as of June
30, 2025 were equal to the audited net assets attributable to owners of our Company as of June 30,
2025 of RMB291,101,000 after deducting of intangible assets of RMB31,509,000 as of June 30, 2025
set out in the Accountants’ Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global O ffering are based on the Offer Price of HK$63.00,
HK$72.00 or HK$81.00 per Share, after the deduction of the underwriting fees and other related
expenses payable by our Company (excluding the lis ting expenses that have been charged to profit
or loss during the Track Record Period) and do not take into account any shares which may be
issued upon exercise of the Over-allotment Option.
(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of our
Company per Share is arrived at after adjustment s referred to in the preceding paragraphs and on
the basis that 22,222,300 H Shares will be iss ued pursuant to the Global Offering and 200,000,000
Unlisted Shares will be converted into H Shares assuming the Global Offering have been completed
on June 30, 2025 but takes no account of any Shares which may be allotted and issued pursuant to
the exercise of the Over-allotment Option or an y Shares which may be issued or repurchased by our
Company.
(4) For the purpose of this unaudited pro forma adjuste d consolidated net tangible assets, the estimated
net proceeds from the Global Offering are converted from Hong Kong dollars into RMB at an
exchange rate of HK$1.00 to RMB0.90862 and the unaudited pro forma adjusted consolidated net
tangible assets attributable to owners of our Company per Share is converted from RMB into Hong
Kong dollars at the same exchange rate. No repr esentation is made that RMB amounts have been,
could have been or may be converted to Hong K ong dollars, or vice versa, at that rate.
(5) No adjustment has been made to reflect any trading result or other transactions of our Group
entered into subsequent to June 30, 2025.
(6) No dividend was paid or declared by our Company subsequent to June 30, 2025 and up to the Latest
Practicable Date.
FINANCIAL INFORMATION
–4 5 1–


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FUTURE PLANS
See the section headed ‘‘Business — Our Busin ess Strategies’’ for a detailed description
of our future plans.
USE OF PROCEEDS
We estimate that the net proceeds of the Global Offering, after deducting the estimated
underwriting commissions and other fees and expenses paid and payable by us in
connection with the Global Offe ring, will be approximately HK$1,504.9 million, assuming
an Offer Price of HK$72.0 per H Share (being th e mid-point of the indicative range of the
Offer Price of HK$63.0 to HK$81.0 per H Share), and that the Over-allotment Option is
not exercised.
We intend to use the net proceeds from the Global Offering for the purposes and in the
amounts set out below:
1. Approximately HK$1,000.1 million, repres enting approximately 66.5% of the net
proceeds of the Global Offering will be used to continuously enhance our R&D
capabilities to further develop the key t echnologies relating to and products
within our home robotic systems.
(a) R&D of Key Technologies and Products
Approximately HK$775.1 million, representing approximately 51.5% of the
net proceeds of the Global Offering, will be used to fund the R&D of certain key
technologies and products. Details are set out below:
Key Technologies/
Products R&D Focus
Intended Benefits and
Applications
Estimated
Completion
Time
Estimated
Cost
(HK$ in
million)
Advanced robot
positioning
technology
Development of robot positioning
and environmental perception
capabilities, including: (i) 3D
map fusion technology for
integrating maps created by
multiple robots; (ii) 3D
occupancy grid map
construction for robot 3D
obstacle avoidance; and (iii) 3D
spatial object motion prediction
for anticipating movement in
three-dimensional spaces,
enabling robots to avoid
obstacles in dynamic scenarios.
This technology is intended
to be applied to our
future execution-enhanced
robot categories,
including humanoid chore
robots and AI companion
robots, enabling more
efficient and precise task
handling and movement
in three-dimensional
spaces.
2028 138.5
FUTURE PLANS AND USE OF PROCEEDS
–4 5 2–


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Key Technologies/
Products R&D Focus
Intended Benefits and
Applications
Estimated
Completion
Time
Estimated
Cost
(HK$ in
million)
Advanced AI
machine vision
control
technology and
edge computing
technology
Development of edge computing
and inference capabilities,
including: (i) vision-based object
perception, behavior perception,
scene perception, and intent
perception technologies for
deeper environmental
understanding; (ii) large
language model-based reasoning
and prediction technologies to
enable AI to make decisions
based on anticipated scenarios;
and (iii) optimization and local
deployment of vision-language
models with corresponding
hardware development to
process visual information and
natural language instructions in
home environments and generate
appropriate action triggers.
This technology is intended
to be applied to our
current and future
products, including
SwitchBot AI hubs and
AI companion robots,
enabling local deployment
of vision-language models
that can support over 100
household
vision-language tasks,
while better protecting
user privacy and
improving operational
efficiency through edge
computing.
2028 141.6
VLA (Vision-
Language-
Action)
model-based
humanoid chore
robot
Development of a humanoid chore
robot based on VLA models that
integrate perception, language
understanding, and action
execution in an end-to-end
system. The robot will perceive
its environment through
multimodal sensors and uses
semantic understanding to parse
natural language instructions
into executable tasks. The robot
will support semantic
navigation, enabling it to move
autonomously based on
constructed semantic maps and
make multimodal decisions in
complex scenarios, with
sensor-based closed-loop
feedback for adjusting actions in
dynamic environments.
This technology is intended
to be applied to humanoid
chore robot, enabling
them to complete various
household tasks, such as
organizing items,
delivering objects, and
folding clothes.
2028 359.7
FUTURE PLANS AND USE OF PROCEEDS
–4 5 3–


--- page 464 ---
Key Technologies/
Products R&D Focus
Intended Benefits and
Applications
Estimated
Completion
Time
Estimated
Cost
(HK$ in
million)
Cost-effective
robotic
grasping/
manipulation
for household
tasks
Development of cost-effective
robotic grasping and
manipulation technologies for
household tasks, including: (i)
mechanical arm and dexterous
hand joint module projects
suitable for home scenarios,
involving dual encoders,
frameless torque motors,
gearboxes and control systems;
(ii) motion control algorithms
for mechanical arms, including
parameter identification,
dynamics, kinematics, and
compliant mechanical arm
algorithms; (iii) closed-loop
control algorithms for
mechanical arms based on
cameras and depth sensors,
including feedback algorithms;
and (iv) household task
execution algorithms based on
vision-language-action models,
including Transformer and
Diffusion Policy-based
mechanical arm trajectory
planning, reinforcement
learning-based trajectory
tracking, and dexterous hand
control algorithms.
This technology is intended
to be applied to our
current and future
execution-enhanced robot
products, including
humanoid chore robots
mentioned above, making
them suitable for home
use scenarios while
remaining cost-efficient.
2028 135.3
(b) Establishment of High-Standard R obotic Data Acquisition Facility
Approximately HK$180.4 million, representing approximately 12.0% of the
n e tp r o c e e d so ft h eG l o b a lO f f e r i n g ,w i l lbe used to establish a high-standard
robotic data acquisition factory dedicat ed to the iterative optimization of our
VLA models. This facility will simulate d iversified household environments and
will be used to systematically collect and annotate large-scale, multi-task
real-machine operation data, with a view to building high-quality,
scenario-based datasets, significantly enhancing the genera lization capability
and intelligence level of our robots in executing tasks and providing core data
support for algorithm training. The facilit y is expected to be fully deployed over a
period of approximately three years and will be developed in phases. We expect
the facility to commence initial oper ation by the end of 2026. Upon full
deployment, the facility is expected to su pport simulations of approximately 500
standardized household units and parallel data collection and training by
FUTURE PLANS AND USE OF PROCEEDS
–4 5 4–


--- page 465 ---
approximately 1,000 home robotic systems devices, thereby forming large-scale,
efficient ‘‘data flywheel’’ infrastru cture for the continual iteration and
optimization of our VLA models.
(c) Establishment of New R&D Centers
Approximately HK$44.6 million, repres enting approximately 3.0% of the net
proceeds of the Global Offering, will be used to establish R&D centers in
mainland China and Hong Kong. Specifically, we plan to implement a dual-base
operational model of our R&D centers: (i) the Hong Kong Base: We plan to lease
a property near leading innovation hubs such as Hong Kong University of Science
and Technology. This base will leverage global talent advantages for frontier
embodied robotics control algorithm research, including VLA algorithms,
imitation learning algorithms, reinfor cement learning algorithms, and Sim2Real
technologies. It will also be used to explore new robotic application domains,
develop and implement algorithms for more household scenarios, construct
embodied robot operation datasets, and create a virtuous cycle of algorithm
iteration and scenario application throu gh a self-contained data system, forming a
powerful data flywheel effect; and (ii) the mainland China collaborative base: We
plan to lease a property adjacent to top-tier academic clusters. This base will focus
on utilizing domestic university resources , engineering talents, and supply chain
synergies, with investments directed towa rds the industrialization of artificial
intelligence and low-cost design researc h. This base will deploy industrial-grade
validation equipment to accelerate tech nology commercialization. We expect to
complete the establishment of these R&D bases in mainland China and Hong
Kong before the end of 2026.
2. Approximately HK$297.4 million, representing approximately 19.8% of the net
proceeds of the Global Offering, will be used for the expansion of our sales
channels and geographic coverage and enhance our brand awareness globally.
Specifically, we plan to:
(a) Enhance Our Presence in Certain Existing Key Markets
Approximately HK$129.2 million, repr esenting approximately 8.6% of the
net proceeds of the Global Offering, will be used to expand our sales channels and
market presence in our existing markets, including Japan, Europe, and North
America. For (i) the Japanese market, we intend to strengthen our market leading
position in Japan and increase penetration of our home robotic systems through
(a) enhancing online platforms, including, among others, Amazon, with increased
advertising and optimized flagship s tore operations. We plan to designate
dedicated management teams to improve our operational efficiency, implement
detailed advertising evaluation mechanis ms to optimize advertising performance,
and carry out promotional activities to inc rease brand visibility; (b) introducing
extended warranties and insurance services to improve customer retention; (c)
expanding offline presence through strategic in-store displays and engagement of
offline professional sales staff; and imp lementing targeted subway advertising
FUTURE PLANS AND USE OF PROCEEDS
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campaigns in Tokyo, Osaka and other major cities; and (d) optimizing our supply
chain to improve maintenance efficiency and reduce product return costs; (ii) the
European market, we plan to increase awareness and gain market leadership in
this fast-growing region through (a) th ed e p l o y m e n to ft a r g e t e da d v e r t i s i n g
campaigns on Instagram, YouTube and other platforms to reach specific
demographic groups across multiple coun tries with products tailored to local
preferences; and (b) improving after-sale s service efficiency to enhance customer
experience. We plan to deploy advanced AI-p owered customer service solutions,
integrate enterprise resource planning systems to streamline our operations and
reduce manual processing, and establish localized service teams to improve
response times and enhance the overall customer experience; and (iii) the North
American market, we plan to (a) increase digital advertising on Google and
Facebook platforms; (b) enhance search engine optimization for our self-operated
website to improve visibility and organic traffic; and (c) collaborate with
established technology bloggers for product reviews and demonstrations.
(b) Brand Promotion and Marketing Activities
Approximately HK$76.2 million, repres enting approximately 5.1% of the net
proceeds of the Global Offering, will be used for brand promotion and marketing
activities to raise our brand awareness. Spe cifically, we plan to establish (i) offline
experience stores in strategic commercia l locations so end consumers can obtain
first-hand experience on our products ; (ii) develop scenario-based content
marketing and creating and distributing branded video advertisements; (iii)
sponsor industry exhibitions and localized community events that introduce and
promote the concepts of ‘‘efficient and intelligent life’’ ( 高效智能生活) and ‘‘robots
improving home living’’ ( 機器人改善家庭生活); and (iv) expand influencer
collaborations beyond technology to lifestyle and home security sectors.
With respect to our plan to establish offlin e experience stores, we intend to (i)
leverage our existing retailer channels by adopting a shop-in-shop or in-store
experience zone model. For example, we may set up in-store experience zones
leveraging our current products’ presenc e in retail stores, upgrade the current
display formats, and assign dedicated personnel to provide on-site product
demonstrations and consultations as needed; and (ii) establish standalone flagship
experience stores, which will be staffed with dedicated personnel to oversee their
operations. These flagship stores will serve as benchmarks for nearby
shop-in-shop experience zones, providing a reference model for enhancing
offline retail performance.
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We plan to open 50 to 100 shop-in-shops or in-store experience zones, as well
as two flagship stores within the next one to two years. We plan to open such
shop-in-shops in high-traffic areas or high-sales-rate districts of tier-one cities
across our key markets, including Japan, Europe, and North America.
Additionally, we plan to open our fl agship stores in Tokyo and Osaka in
Japan. Our site selection will generally be based on a comprehensive evaluation of
key criteria, including, among others, ge ographic positioning, alignment with
target customer segments, sales efficiency per square meter, and the capacity to
achieve effective regional market coverage. These stores are intended to be
permanent, assuming operations proceed smoothly.
In terms of the implementation timeline, (i) for flagship stores, we expect to
complete site selection evaluation and design planning between the fourth quarter
of 2025 and the first quarter of 2026, with official operations commencing in 2026;
and (ii) for shop-in-shops or in-store experience zones, we anticipate completing
the related renovation and upgrade work in 2026 and 2027.
(c) Enhancement of Retail and Distribution Channels
Approximately HK$47.4 million, repres enting approximately 3.1% of the net
proceeds of the Global Offering, will be used to enhance our retailer and
distribution channels by launching dedicated experience areas with limited-time
promotions in existing retailer channels a nd expanding partnerships with first-tier
retail and distribution channels to i ncrease mainstream store coverage.
(d) Strengthening Sales in Other Emerging Markets
Approximately HK$44.6 million, repres enting approximately 3.0% of the net
proceeds of the Global Offering, will be used to develop sales in certain emerging
markets such as Hong Kong and Australia, focusing on regions with substantial
middle-class populations, aging demograp hic challenges, and relatively high labor
costs.
3. Repayment of Outstanding Bank Loans
Approximately HK$56.9 million, repres enting approximately 3.8% of the net
proceeds of the Global Offering, will be us ed to repay a portion of our outstanding
term loan with (i) China CITIC Bank bearing an annual interest rate of 2.24%, which
will be due for repayment in installments on December 21, 2025, June 21, 2026,
December 21, 2026 and March 30, 2027; and (ii) Bank of China bearing an annual
interest rate of 2.24%, which will be due in installments on March 21, 2026, September
21, 2026, March 21, 2027, September 21, 2027, September 30, 2027 and December 2,
2027. We believe utilizing the net proceeds to repay these loans will help us save
interest costs, optimize our capital structure, and improve our overall financial
position.
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4. General Working Capital
Approximately HK$150.5 million, representing approximately 10.0% of the net
proceeds of the Global Offering, will be used for general working capital and corporate
purposes.
The above allocation of the proceeds will be adjusted on a pro rata basis in the
event that the Offer Price is fixed below or above the mid-point of the indicative price
range. If the Offer Price is set at HK$81.0 per H Share, which is the high end of our
indicative Offer Price range, the net proceed s from the Global Offering will increase by
approximately HK$195.0 million. If the Offer Price is set at HK$63.0 per H Share,
which is the low end of our indicative Offer Price range, the net proceeds from the
Global Offering will decrease by approx imately HK$195.0 million. In the event that
the Over-allotment Option is exercised in full, we will receive net proceeds of
HK$1,735.9 million (after de ducting the estimated unde rwriting commissions and
other fees and expenses paid and payable by us in connection with the Global Offering
and assuming an Offer Price of HK$72.0 per H Share, being the mid-point of our
indicative Offer Price range).
The net proceeds will be used in the same proportions as disclosed under this
section irrespective of: (i) whether the Offer Price is determined at the highest or lowest
point of the indicative Offer Price range and (ii) whether the Over-allotment Option is
exercised.
To the extent that the net proceeds are not immediately applied to the above
purposes, we will only deposit the net proceeds into short-term interest-bearing
accounts with licensed commercial banks and/or other authorized financial institutions
(as defined under the Securities and Futures Ordinance or applicable laws and
regulations in other jurisdictions). In such event, we will comply with the appropriate
disclosure requirements under the Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Guotai Junan Securities (Hong Kong) Limited
Huatai Financial Holdings (Hong Kong) Limited
China Galaxy International Securities (Hong Kong) Co., Limited
BOCI Asia Limited
Futu Securities International (Hong Kong) Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering initially
2,222,300 Hong Kong Offer Shares (subject to reallocation) for subscription by way of
Hong Kong Public Offering at the Offer Price on and subject to the terms and conditions of
this prospectus.
Subject to various conditions, which include, but without limitation, the Stock
Exchange granting listing of, and permission to deal in, the H Shares in issue and to be
issued as mentioned herein including any add itional H Shares which may be made available
pursuant to any exercise of the Over-allotmen t Option and certain other conditions set out
in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed
severally, but not jointly or jointly and severally to subscribe or procure subscriptions for
their respective applicable proportions of the Hong Kong Offer Shares which are not taken
up under the Hong Kong Public Offering on the terms and conditions of this prospectus and
the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional upon and subject to, among
other things, the International Underwriting Agreement having been signed and becoming
unconditional and not subsequently having been terminated.
Grounds for Termination
The Joint Sponsors and the Overall Coordinators, at their sole and absolute discretion,
may, for themselves and on behalf of the Hong Kong Underwriters, upon giving notice in
writing to our Company, terminate the Hong Kong Underwriting Agreement with
immediate effect if any of the following events occurs at or prior to 8 : 00 a.m. on the
Listing Date:
(1) there has come to the notice of the Joint Sponsors and/or the Overall
Coordinators:
(i). that any statement contained in a ny Offer Documents (as defined in the
Hong Kong Underwriting Agreement), an y letters, filings, correspondences,
communications, documents, responses, undertakings and submissions in
any form, including any amendments, supplements and/or modifications
thereof, made or to be made to the CSR C, relating to or in connection with
the Global Offering pursuant to the applicable rules and requirements of the
UNDERWRITING
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CSRC (the ‘‘CSRC Filings’’) and/or any notices, announcements,
advertisements, communications or o ther documents in connection with the
Global Offering (including any supplement or amendments thereto)
(collectively, the ‘‘Relevant Docum ents’’) was, when it was issued, or has
become, untrue, incorrect, inaccurate, incomplete, misleading or deceptive in
any respect or that any forecast, expression of opinion, intention or
expectation expressed in any of the Relevant Documents is not in the sole
and absolute opinion of the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters), fair and honest and based on
reasonable assumptions, when taken as a whole; or
(ii). that any matter has arisen or has been discovered which would, had it arisen
or been discovered immediately before the date of this prospectus, constitute
a material omission therefrom; or
(iii). any breach of any of the obligations imposed or to be imposed upon any
party to the Hong Kong Underwriting Agreement or the International
Underwriting Agreement (including any supplemental or amendment
thereto, as applicable) (in each case, other than on the part of any of the
Underwriters); or
(iv). any event, act or omission which gives or is likely to give rise to any material
liability of any of our Company, Mr. L i, Mr. Pan and Wonder Innovation
ESOP (the ‘‘Warrantors’’) pursuant to the Hong Kong Underwriting
Agreement; or
(v). any change or development involving a prospective adverse change
constituting or having a material adv erse effect in the assets, liabilities,
general affairs, management, busines s prospects, shareholders’ equity,
profits, losses, results of operations, position or conditions (financial,
trading or otherwise) or performance of our Group, taken as a whole; or
(vi). any breach of, or any event or circumstance rendering untrue or incorrect in
any respect, any of the representat ions, warranties, agreements and
undertakings given by the Warrantors; or
(vii). the approval by the Listing Committee of the listing of, and permission to
deal in, the H Shares (including any additional H Shares that may be issued
upon the exercise of the Over-allotmen t Option) is refused or not granted, or
is qualified (other than subject to customary conditions), on or before the
Listing Date, or if granted, the approval is subsequently withdrawn, qualified
(other than by customary conditions) or withheld; or
(viii). our Company withdraws any of the Relevant Documents or the Global
Offering; or
(ix). any person (other than the Joint Sponsors) has withdrawn or sought to
withdraw its consent to being named in this prospectus or to the issue of any
of this prospectus; or
UNDERWRITING
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(x). a prohibition on our Company for whatever reason from allotting, issuing or
selling the Offer Shares and/or the Ov er-allotment Shares pursuant to the
terms of the Global Offering; or
(xi). that a petition or an order is presented for the winding-up or liquidation of
any a member of our Group (‘‘Group Company’’) or any Group Company
makes any composition or arrangement with its creditors or enters into a
scheme of arrangement or any resolution is passed for the winding-up of any
Group Company or a provisional liquidator, receiver or manager is
appointed to take over all or part of the assets or undertaking of any
Group Company or anything analogous thereto occurs in respect of any
Group Company; or
(xii).a material portion of the orders in th e bookbuilding process or any material
investment commitment by any cornerstone investors after signing of
agreements with such cornerston e investors, have been withdrawn,
terminated or cancelled; or
(xiii). any executive Director is vacating his or her office, is being charged with an
indictable offence or is prohibited by operation of law or otherwise
disqualified from taking part in the management or taking directorship of
a company or there is the commencement by any governmental authority of
any investigation or other action against any executive Director in his or her
capacity as such or any member of our Group or an announcement by any
governmental authority that it intends to commence any such investigation
or take any such action
(2) there shall develop, occur, exist or come into effect:
(i). any local, national, regional, international event or circumstance, or series of
events or circumstances, beyond the rea sonable control of the Underwriters
(including, without limitation, any acts of government or orders of any
courts, strikes, calamity, crisis, lock-outs, fire, explosion, flooding,
earthquake, tsunami, volcanic eruption, civil commotion, acts of war,
outbreak or escalation of hostilities ( whether or not war is declared), acts
of God, acts of terrorism, declaration of a local, regional, national or
international emergency, riot, pub lic disorder, economic sanctions,
outbreaks of diseases, pandemics or epidemics (including, without
limitation, Severe Acute Respiratory Syndrome, avian influenza A (H5N1),
Swine Flu (H1N1), H7N9, Middle East Respiratory Syndrome, coronavirus
or such related or mutated forms) or inte rruption or delay in transportation)
in or affecting the PRC, Hong Kong, Singapore, the United States, the
United Kingdom, the European Union (or any member thereof), Japan, or
any other jurisdiction relevant to any member of our Group (the ‘‘Relevant
Jurisdiction’’); or
UNDERWRITING
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(ii). any change or development involving a prospective change, or any event or
circumstance or series of events or circumstances likely to result in any
change or development involving a prospective change, in any local, regional,
national, international, financial, eco nomic, political, military, industrial,
fiscal, legal regulatory, currency, credit or market conditions, equity
securities or exchange control or any monetary or trading settlement
system or other financial markets (incl uding, without limitation, conditions
in the stock and bond markets, money and foreign exchange markets, the
interbank markets and credit markets) in or affecting any Relevant
Jurisdictions; or
(iii). any moratorium, suspension or restr iction on trading in securities generally
(including, without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on the Stock Exchange, the
New York Stock Exchange, the London Stock Exchange, the NASDAQ
Global Market, the Shanghai Stock Exchange, the Shenzhen Stock
Exchange, the Singapore Stock Exchange and the Tokyo Stock Exchange; or
(iv). any new laws, or any change or development involving a prospective change
in existing laws, or any event or circumstance or series of events or
circumstances likely to result in any change or development involving a
prospective change in the interpretation or application of existing laws by
any court or other competent authority, in each case, in or affecting any
Relevant Jurisdiction; or
(v). any general moratorium on commercial banking activities, or any disruption
in commercial banking activities, foreign exchange trading or securities
settlement or clearance services or procedures or matters, in or affecting any
Relevant Jurisdiction; or
(vi). the imposition of economic sanctions, in whatever form, or the withdrawal of
trading privileges, directly or indirect ly, by, or for, any Relevant Jurisdiction
on our Group; or
(vii).a change or development involving a prospective change in or affecting
taxation or exchange control (or the implementation of any exchange
control), currency exchange rates or foreign investment laws (including,
without limitation, any change in t he system under which the value of the
Hong Kong currency is linked to that of the currency of the United States or
a fluctuation in the exchange rate of the Hong Kong dollar or the Renminbi
against any foreign currency) in or affecting any of the Relevant Jurisdictions
or affecting an investment in the H Shares; or
(viii) . any change or development involving a prospective change in, or a
materialisation of, any of the risk s set out in the section headed ‘‘Risk
Factors’’ in this prospectus; or
UNDERWRITING
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(ix). any litigation or claim of any third party being threatened or instigated
against any Group Company, any of our Controlling Shareholders or any
D i r e c t o r so rs e n i o rm a n a g e m e n to fo u rC o m p a n y ;o r
(x). any contravention by any member of our Group or any Director of any
applicable laws, the Listing Rules or the applicable rules of CSRC; or
(xi). any loss or damage has been sustained by any Group Company (howsoever
caused and whether or not the subject of any insurance or claim against any
person) which is considered by the Overall Coordinators (for themselves and
on behalf of the Hong Kong Underwriters) to be material; or
(xii).the commencement by any governmental, regulatory or political body or
organisation of any action against an executive Director in his or her
capacity as such or an announcement by any governmental, regulatory or
political body or organisation that i t intends to take any such action; or
(xiii) . non-compliance of this prospectus, the CSRC Filings and the other Relevant
Documents or any aspect of the Global Offering with the Listing Rules or
any other laws applicable to the Global Offering; or
(xiv). the issue or requirement to issue by our Company of a supplement or
amendment to this prospectus and/or any other Relevant Documents
pursuant to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Listing Rules or any requirement or request of the Stock
Exchange, the CSRC and/or the SFC; or
(xv). any valid demand by any creditor for repayment or payment of any
indebtedness of any Group Company or in respect of which any Group
Company is liable prior to its stated maturity;
which in each case individually or in aggregate at the sole and absolute opinion of
the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of
the Hong Kong Underwriters):
(i). has or is or will or may or could be expected to have a material adverse effect
on the assets, liabilities, business, gene ral affairs, management, shareholders’
equity, profits, losses, results of o peration, financial, trading or other
condition or position or prospects or risks of our Group as a whole; or
UNDERWRITING
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(ii). has or will or may have a material adv erse effect on the success, marketability
or pricing of the Global Offering or the level of applications under the Hong
Kong Public Offering or the level of interest under the International
Offering; or
(iii). makes or will make or may make it inadvisable, inexpedient or impracticable
for any part of the Hong Kong Underwriting Agreement or the Global
Offering to be performed or implemented or proceeded with as envisaged or
to market the Global Offering or the de livery or distribution of the Offer
Shares on the terms and manner contemplated by the Offering Documents
shall otherwise result in an interruption to or delay thereof; or
(iv). has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance
in accordance with its terms or which prevents the processing of applications
and/or payments pursuant to the Global Offering or pursuant to the
underwriting thereof.
Undertakings to the Stock Exchange Pursuant to the Listing Rules
By Our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock
Exchange that no further Shares or securities c onvertible into our equity securities (whether
or not of a class already listed) may be issued by us or form the subject of any agreement to
such an issue by us within six months from the Lis ting Date (the ‘‘First Six-Month Period’’)
(whether or not such issue of H Shares or securities will be completed within six months
from the commencement of dealing), except pursuant to the Global Offering (including
pursuant to the exercise of the Over-allotment Option), or any of the circumstances
prescribed by Rule 10.08 of the Listing Rules.
By our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of our Controlling Shareholders has
irrevocably and unconditionally undertaken to us and to the Stock Exchange that he or it
shall not and shall procure that the relevant registered holder(s) controlled by him or it shall
not, either directly or indirectly:
(a) in the period commencing on the date by reference to which disclosure of his or its
shareholdings in our Company is made in this prospectus and during the First
Six-Month Period, dispose of, nor enter into any agreement to dispose of or
otherwise create any options, rights, interests or encumbrances in respect of, any
of our securities that he/it is shown to b eneficially own in this prospectus (the
‘‘Relevant Shares’’); or
(b) in the period of a further six months commencing on the date on which First
Six-Month Period expires (the ‘‘Second Six-Month Period’’), dispose of, nor enter
into any agreement to dispose of or otherwise create any options, rights, interests
UNDERWRITING
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or encumbrances in respect of, any of the Relevant Shares if, immediately
following such disposal or upon the exercise or enforcement of such options,
rights, interests or encumbrances, he or it will cease to be a controlling
shareholder (as defined in the Listing Rules) of our Company or a member of a
group of the Controlling Shareholders of our Company or would together with
the other Controlling Shareholders cea se to be controlling shareholders (as
d e f i n e di nt h eL i s t i n gR u l e s ) .
Each of our Controlling Shareholders has further irrevocably and unconditionally
undertaken to us and the Stock Exchange that, within the period commencing on the date
by reference to which disclosure of its/his shareholdings in our Company is made in this
prospectus and ending on the date which is 12 months from the Listing Date, he/it will and
will procure that the relevant registered holder(s) will:
(a) when he or it pledges or charges any securities in our Company beneficially owned
by it/him in favor of an authorized institution (as defined in the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial
loan pursuant to Note (2) to Rule 10.07(2) of the Listing Rules, immediately
inform us in writing of such pledge or charge together with the number of our
securities so pledged or charged; and
(b) when he or it receives indications, either verbal or written, from the pledgee or
chargee that any of our pledged or charge d securities beneficially owned by him or
it will be disposed of, immediately inform us in writing of such indications.
We will also inform the Stock Exchange as soon as we have been informed of the
matters mentioned in the paragraphs (a ) and (b) above by any of our Controlling
Shareholders and subject to the then requirements of the Listing Rules disclose such matters
by way of an announcement which is published in accordance with the Listing Rules as soon
as possible.
Undertakings to the Hong Kong Underwriters
Pursuant to the Hong Kong Underwriting Agreement, our Company and our
Controlling Shareholders hav e undertaken as follows.
Undertakings by Our Company
Except for the offer and sale of the Offer Shares pursuant to the Global Offering
(including pursuant to the Over-allotment Option), during the period commencing on the
date of the Hong Kong Underwriting Agreement and ending on, and including, the date of
the expiry of the First Six-Month Period, our Company has undertaken to each of the Joint
Sponsors, the Joint Sponsor-OCs, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the
UNDERWRITING
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Capital Market Intermediaries not to, without the prior written consent of the Joint
Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and unless in compliance with the 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, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create any pledge, charge, lien, mortgage, option,
restriction, right of first refusal, equita ble right, power of sale, hypothecation,
retention of title, security interest, claim, pre-emption rights, equity interest, third
party rights or interests or rights of the same nature as that of the foregoing or
other encumbrances or security interest of any kind or another type of preferential
arrangement (including without limitatio n, retention arrangement) having similar
effect (‘‘Encumbrance’’) over, or agree to transfer or dispose of or create an
Encumbrance over, either directly or indirectly, conditionally or unconditionally,
any Shares or other securities of Compan y 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 other warrants or
other rights to purchase, any Shares), or deposit any Shares or other securities of
our Company, with a depositary in connection with the issue of depositary
receipts; or repurchase any Shares or other securities of our Company, or
(ii) enter into any swap, derivative or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Shares or
other securities of our Company, or any interest in any of the foregoing
(including, without limitation, any securities convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other
rights to purchase, any Shares or other securities of our Company); or
(iii) enter into any transaction with the sa me economic effect as any transactions
specified in paragraphs (i) or (ii) above; or
(iv) offer to or agree to or announce any inten tion to effect any transaction specified in
paragraphs (i), (ii) or (iii) above,
in each case, whether any of the transactions specified in paragraphs (i), (ii) or (iii)
above is to be settled by delivery of Shares or other securities of Company or shares or
o t h e rs e c u r i t i e so fa n yo t h e rG r o u pC o m p a n y ,a sa p p l i c a b l e ,o ri nc a s ho ro t h e r w i s e
(whether or not the issue of such Shares or other shares or securities will be completed
within the First Six-Month Period);
In the event that, during the Second Six-Month Period, the Company enters into any of
the transactions specified in paragraphs (i), (ii) or (iii) above or offers to or agrees to or
announces any intention to effect any such transaction, Company shall take all reasonable
steps to ensure that it will not create a disorderly or false market in any Shares or other
securities of our Company.
UNDERWRITING
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Undertakings by Our Cont rolling Shareholders
Each of our Controlling Shareholders hereby j ointly and severally undertakes to each
of our Company, the Joint Sponsors, the Joint Sponsor-OCs, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong
Kong Underwriters and the Capital Market Intermediaries that, without the prior written
consent of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf
of the Hong Kong Underwriters):
(1) at any time during the First Six-Month Period, it/he shall not, and shall procure
that the relevant registered holder(s), a ny nominee or trustee holding on trust for
it/him and the companies controlled b y it/him (together, the ‘‘Controlled
Entities’’) shall not, (a) allot, issue, se ll, offer to allot, issue, sell, contract or
agree to allot, issue, sell, mortgage, charge, pledge, hypothecate, lend, grant or sell
any option, warrant, contract or right to allot, issue, sell, or otherwise transfer or
dispose of or create an Encumbrance over, or agree to transfer or dispose of or
create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or other securities of 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 Shares) beneficially owned by it/him directly or indirectly
through its Controlled Entities (the ‘‘R elevant Securities’’), or deposit any
Relevant Securities with a depositary in c onnection with the issue of depositary
receipts; or (b) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Relevant Securities; (c) enter into or effect any transaction with the same
economic effect as any of the transactions r e f e r r e dt oi ns u b - p a ragraphs (a) or (b)
above; or (d) offer to or agree to or announce any intention to enter into or effect
any of the transactions referred to in sub-paragraphs (a), (b) or (c) above, in each
case whether any of the foregoing transactions referred to in sub-paragraphs (a),
(b) or (c) is to be settled by delivery of S h a r e so ra n yo t h e rs e c u r i t i e so fC o m p a n y
or in cash or otherwise (whether or not the issue of such Shares or other securities
will be completed within the First Six-Month Period);
(2) it/he will not at any time during the Second Six-Month Period, enter into any of
the transactions specified in paragraph(1) above or offer to or agree to or
announce any intention to effect any such transaction if, immediately following
any sale, transfer or disposal or upon the exercise or enforcement of any option,
right, interest or Encumbrance pursuant to such transaction, it/he together with
other Controlling Shareholders will cease to be a ‘‘controlling shareholder’’ (as the
term is defined in the Listing Rules) of our Company;
(3) in the event that it/he enters into any of the transactions specified in paragraph (1)
above or offer to or agrees to or announce any intention to effect any such
transaction until the expiry of the Second Six-Month Period, it/he shall take all
reasonable steps to ensure that it/he will not create a disorderly or false market for
any Shares or other securities of our Company; and
UNDERWRITING
–4 6 7–


--- page 478 ---
(4) it/he shall, and shall procure that the re levant registered holder(s) and other
Controlled Entities shall, comply with all t he restrictions and requirements under
the Listing Rules on the sale, transfer o r disposal by it/him or by the registered
holder(s) and/or other Controlled Entities of any Shares or other securities of our
Company.
Indemnity
Each of the Warrantors agreed to jointly and severally indemnify the Joint Sponsors,
the Joint Sponsor-OCs 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 losses arising from their performance of their obligations
under the Hong Kong Underwriting Agreement and any breach by us of the Hong Kong
Underwriting Agreement.
The International Offering
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, among others, the Overall Coordinators, the
Joint Global Coordinators and the International Underwriters. Under the International
Underwriting Agreement, subject to the conditions set forth therein, the International
Underwriters would severally, but not jointly or jointly and severally, agree to procure
purchasers for or failing which to purchase, t he International Offer Shares. It is expected
that the International Underwriting Agreement may be terminated on similar grounds as
the Hong Kong Underwriting Agreement. Potential investors shall be reminded that in the
event that the International Underwritin g Agreement is not entered into, the Global
Offering will not proceed.
Over-allotment Option
Under the International Underwriting Agreement, our Company is expected to grant
to the International Underwriters, exercisable by the Overall Coordinators on behalf of the
International Underwriters, the Over-allotm ent Option, exercisable within 30 days from the
last day for lodging applications under the Hong Kong Public Offering, to require us to
allot and issue up to 3,333,300 additional H Sh ares, representing 15% of the initial size of
the Global Offering, at the same price per Offer Share under the International Offering, to
cover over-allocations in the In ternational Offering, if any.
Stabilization
In connection with the Global Offering, t he Stabilizing Manager, on behalf of the
Underwriters, may, to the extent permitted by applicable laws of Hong Kong or elsewhere,
over-allocate Shares or effect transactions with a view to stabilizing or supporting the
market price of our Shares at a level higher than that which might otherwise prevail for a
limited period after the Listing Date. See the section headed ‘‘Structure of the Global
Offering — Over-allocation and Stabilizatio n’’ in this prospectus for details regarding
stabilization and over-allocation.
UNDERWRITING
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Underwriting Commission and Expenses
The Underwriters and the Capital Market In termediaries will receive an underwriting
commission of 2.25% of the aggregate Offer Price of all the Offer Shares, including Offer
Shares to be issued pursuant to the Over-allo tment Option (the ‘‘Fixed Fees’’). Our
Company may, at our sole and absolute discretion, pay to the Capital Market
Intermediaries an incentive fee up to but not exceeding 2.25% of the Offer Price of all
the Offer Shares (including Offer Shares t o be issued pursuant to the Over-allotment
Option) (the ‘‘Discretionary Fees’’). The ratio of Fixed Fees and Discretionary Fees (if fully
paid) is therefore approximately 50 : 50. For unsubscribed Hong Kong Offer Shares
reallocated to the International Offering, w e will pay an underwriting commission at the
rate applicable to the International Offe ring and such commission will be paid to the
relevant International Underwriters and not the Hong Kong Underwriters.
The aggregate commissions and fees (excluding any discretionary incentive fee),
together with listing fees, SFC transactio n levy, Stock Exchange trading fee and AFRC
transaction levy, legal and other professional fees and printing and other expenses relating
to the Global Offering, are estimated to a mount to approximately RMB86.4 million
(equivalent to HK$95.1 million, and assum ing an Offer Price of HK$72.00, being the
mid-point of the indicative offer price range and assuming that the Over-allotment Option
is not exercised) in total and are payable by us.
Activities by Syndicate Members
We describe below a variety of activities that each of the Underwriters of the Hong
Kong Public Offering and the International Offering, together referred to as ‘‘Syndicate
Members’’, may individually undertake and which do not form part of the underwriting or
the stabilizing process. When engaging in any of these activities, it should be noted that the
Syndicate Members are subject to restrictions, including the following:
(1) under the agreement among the Syndica te Members, all of them (except for the
Stabilizing Manager or its designated aff iliate as the stabilizing manager) 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 m aintaining the market price of any of the
Offer Shares at levels other than those which might otherwise prevail in the open
market; and
(2) all of them must comply with all applicab le laws, including the market misconduct
provisions of the SFO, including the provisions prohibiting insider dealing, false
trading, price rigging and stock market manipulation.
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 accounts of others. In
relation to the H Shares, those activities could include acting as an agent for buyers and
UNDERWRITING
–4 6 9–


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sellers of the H Shares, entering into tran sactions with those buyers and sellers in a
principal capacity, proprietary trading in the H Shares, and entering into over-the-counter
or listed derivative transactions or listed and unlisted securities transactions (including
issuing securities such as derivative warrant s listed on a stock exchange) which have the H
Shares as their or part of their underlying assets. Those activities may require hedging
activity by those entities involving, directly or indirectly, buying and selling the H Shares.
All such activities could occur in Hong Kong and elsewhere in the world and may result in
the Syndicate Members and their affiliates holding long and/or short positions in the H
Shares, in baskets of securities or indices including the H Shares, in units of funds that may
purchase the H Shares, or in derivatives related to any of the foregoing.
In relation to issues by the Syndicate Member s or their affiliates of any listed securities
having the H Shares as their underlying assets, whether on the Stock Exchange or on any
other stock exchange, the rules of the exchange may require the issuer of those securities (or
one of its affiliates or agents) to act as a market maker or liquidity provider in the security,
and this will also result in hedging activity in the H Shares in most cases.
All of these activities may occur both during and after the end of the stabilizing period
described under the section headed ‘‘Structure of the Global Offering — Over-allocation
and Stabilization’’ in this prospectus. These a ctivities may affect the market price or value
of the H Shares, the liquidity or trading volum e in the H Shares, and the volatility of the H
Shares’ share price, and the extent to which this occurs from day to day cannot be
estimated.
Hong Kong Underwriters’ Interests in Our Company
Save for their respective obligations under the Hong Kong Underwriting Agreement
and as disclosed in this prospectus, as of the Latest Practicable Date, none of the Hong
Kong Underwriters has any shareholding interests in our Company or any other member of
our Group or the right or option (whether legally enforceable or not) to subscribe for or
nominate persons to subscribe for securities in our Company or any other member of our
Group.
Following completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain porti on of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
Buyers of Offer Shares sold by the Underwriters may be required to pay stamp taxes
and other charges in accordance with the rel evant laws and practice of the country of
purchase in addition to the Offer Price.
The Joint Sponsors’ Independence
The Joint Sponsors satisfies the independence criteria applicable to sponsors set out in
Rule 3A.07 of the Listing Rules.
UNDERWRITING
–4 7 0–


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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering consists of (subject to reallocation and the
Over-allotment Option):
(i) the Hong Kong Public Offering of 2,222,300 H Shares (subject to reallocation) in
Hong Kong as described below under the sub-section headed ‘‘The Hong Kong
Public Offering’’; and
(ii) the International Offering of 20,000,000 H Shares (subject to reallocation and the
Over-allotment Option) outside the United States in reliance on Regulation S.
You may apply for the Hong Kong Offer Shares or if qualified to do so, indicate an
interest in the International Offer Shares, but you may not apply in both.
The Hong Kong Public Offering is open to members of the public in Hong Kong as
well as institutional and professional investors and other investors in Hong Kong. The
International Offering will involve selective marketing of the International Offer Shares to
institutional and professional investors and other investors expected to have a sizeable
demand for the International Offer Shares in Hong Kong and other jurisdictions outside the
United States in reliance on Regulation S. The I nternational Underwriters are soliciting
from prospective investors indications of interest in acquiring the International Offer
Shares. Prospective investors will be required to specify the number of International Offer
Shares under the International Offering they would be prepared to acquire either at
different prices or at a particular price.
The number of the Hong Kong Offer Shares and the International Offer Shares to be
offered under the Hong Kong Public Offering and the International Offering respectively,
may be subject to reallocation as described below under the sub-section headed ‘‘Pricing
and allocation’’.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for the Offer Shares will be conditional on, among other
things:
(i) the Stock Exchange granting the listing of, and permission to deal in, the H Shares
in issue and to be issued as mentioned herein (including any H Shares which may
be issued pursuant to the exercise of the Over-allotment Option) and such listing
and permission not subsequently having been revoked prior to the commencement
of dealings in the H Shares on the Stock Exchange;
(ii) the Offer Price having been duly determ ined and the execution and delivery of the
International Underwriting Agreement on or around the Price Determination
Date; and
STRUCTURE OF THE GLOBAL OFFERING
–4 7 1–


--- page 482 ---
(iii) the obligations of the Underwriters under the Underwritin g Agreements becoming
unconditional (including, if relevant, as a result of the waiver of any conditions by
the Overall Coordinators (acting f or themselves and on behalf of other
Underwriters) and such obligations not b eing terminated in accordance with the
terms of the respective agreements,
in each case, on or before the dates and times specified in the Underwriting Agreements
(unless and to the extent such conditions are validly waived on or before such dates and
times) and in any event not later than the date that is 30 days after the date of this
prospectus.
The consummation of each of the International Offering and the Hong Kong Public
Offering is conditional upon, among other things, the other becoming unconditional and
not having been terminated in accordance with their respective terms.
If the above conditions are not fulfilled or waived prior to the times and dates
specified, the Global Offering will lapse a nd the Stock Exchange will be notified
immediately. We will publish a notice of the lapse of the Global Offering on the website
of our Company at
www.onero.cn and the Stock Exchange at www.hkexnews.hk on the next
day following such lapse.
In the above situation, we will return all app lication monies to the applicants, without
interest and on the terms set out in ‘‘How to Apply for Hong Kong Offer Shares’’ in this
prospectus. In the meantime, we will hold all application monies in a separate bank account
or separate bank accounts with the receiving banks or other bank(s) licensed under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended).
We expect to dispatch H Share certificat es for the Offer Shares on Monday, December
29, 2025. However, these H Share certificates w ill only become valid evidence of title if (i) the
Global Offering has become unconditional in all respects and (ii) the right of termination as
described in the section headed ‘‘Underwriting’’ in this prospectus has not been exercised,
w h i c hi se x p e c t e dt ob ea t8 : 0 0a . m .( H o n gK o n gt i m e )o nt h eL i s t i n gD a t e .
PRICING AND ALLOCATION
Indicative range of the Offer Price
The Offer Price will not be more than HK$81.0 per Offer Share and is expected to be
not less than HK$63.0 per Offer Share, unless otherwise announced no later than the
morning of the last day for lodging applications under the Hong Kong Public Offering, as
explained below. Prospective investors should be aware that the Offer Price to be determined
on the Price Determination Date may be, but is not expected to be, lower than the indicative
range of the Offer Price stated in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
–4 7 2–


--- page 483 ---
Price Payable on Application
Applicants for Hong Kong Offer Shares are required to pay, on application, the
maximum Offer Price of HK$81.0 for each H ong Kong Offer Share (plus brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy). If the Offer Price
is less than HK$81.0, appropriate refund payments (including brokerage, SFC transaction
levy, Stock Exchange trading fee and AFRC transaction levy attributable to the surplus
application monies) will be made to successful applicants. Further details are set out in the
paragraph headed ‘‘How to Apply for Hong Kong Offer Shares — D. Despatch/Collection
of H Share Certificates and Refund of App lication Monies’’ in this prospectus.
Determining the Offer Price
The International Underwriters are solicitin g from prospective investors indications of
interest in acquiring the International Offer Sha res. Prospective investors will be required to
specify the number of the International Offer Shares they would be prepared to acquire
either at different prices or at a particular pric e. This process, known as ‘‘book-building’’, is
expected to continue up to, but to cease on or around, Wednesday, December 24, 2025 and
in any event, not later than 12 : 00 noon on Wednesday, December 24, 2025.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators
(acting for themselves and on behalf of the other Underwriters) and our Company on the
Price Determination Date. The Price Determination Date is expected to be on or before
Wednesday, December 24, 2025.
If, for any reason, the Overall Coordinators (acting for themselves and on behalf of the
other Underwriters) and our Company are unable to reach agreement on the Offer Price on or
before 12 : 00 noon on Wednesday, December 2 4, 2025, the Global Offering will not proceed
and will lapse.
Reduction in Offer Price range and/or number of Offer Shares
If the Overall Coordinators (acting for themselves and on behalf of the other
Underwriters) consider it appropriate, the indicative Offer Price range and/or the number
of Offer Shares may be reduced below that stated in this prospectus at any time prior to the
morning of the last day for lodging applicat ions under the Hong Kong Public Offering with
the consent of our Company.
In such a case, our Company will, as soon as practicable following the decision to
make any such reduction, and in any event not later than the morning of the last day for
lodging applications under the Hong Kong Public Offering, cause to be published on the
websites of the Stock Exchange at
www.hkexnews.hk and our Company at www.onero.cn an
announcement of the reduction in the indicative Offer Price range and/or number of Offer
Shares. Such notice will also include confirm ation or revision, as appropriate, of the
working capital statement, the use of proceeds and the offering statistics as currently
disclosed in the section headed ‘‘Summary’’ in this prospectus, and any other financial
information which may change as a result of such reduction. Our Company will also, as
soon as practicable following the decision to make such change, issue a supplemental
STRUCTURE OF THE GLOBAL OFFERING
–4 7 3–


--- page 484 ---
prospectus updating investors of the change in the number of Offer Shares being offered
under the Global Offering and/or the Offer Price. The Offer Price, if agreed upon, will be
fixed within such revised Offer Price range. The Global Offering must first be canceled and
subsequently relaunched on FINI pursuant to the supplemental prospectus.
Before submitting applications for Hong Kong Offer Shares, applicants should have
regard to the possibility that a ny announcement of a reduction i n the indicative range of the
Offer Price and/or number of Offer Shares may not be made until the day which is the last
day for lodging applications under the Hong Kong Public Offering. In the absence of any
such notice so published, the number of Offer Shares will not be reduced and/or the Offer
Price, if agreed upon by the Overall Coordinators (for themselves and on behalf of the
Underwriters), and our Company, will under no circumstances be set outside the Offer Price
range as stated in this prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators
(for themselves and on behalf of the Underwriter s) may, at their discretion, reallocate the
number of Offer Shares to be offered in the Hong Kong Public Offering and the
International Offering.
Allocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators.
Allocation of the Offer Shares under the International Offering will be determined by
the Overall Coordinators and will be based on a number of factors including the level and
timing of demand, total size of the relevant investor’s invested assets or equity assets in the
relevant sector and whether or not it is expected that the relevant investor is likely to buy
further, and/or hold or sell Shares after the listing of the H Shares on the Stock Exchange.
Such allocation may be made to professional, institutional and corporate investors and is
intended to result in a distribution of the H Shares on a basis which would lead to the
establishment of a stable shareholder base to the benefit of our Company and our
Shareholders as a whole.
Allocation of the Offer Shares under the Hong Kong Public Offering will be based
solely on the level of applications received under the Hong Kong Public Offering. The basis
of allocation may vary depending on the number of Hong Kong Offer Shares applied for by
applicants. The allocation of Hong Kong Offer Shares could, where appropriate, consist of
balloting, which would mean that some applicants may receive a higher allocation than
others who have applied for the same number of Hong Kong Offer Shares, and those
applicants who are not successful in the b allot may not receive any Hong Kong Offer
Shares.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 485 ---
Announcement of Offer Price and basis of allocations
The final Offer Price, the level of applicat ions in the Hong Kong Public Offering, the
level of indications of interest in the Internat ional Offering, and the basis of allocations of
the Hong Kong Offer Shares are expected to be announced on Monday, December 29, 2025,
on our website www.onero.cn (in English and Chinese) and on the Stock Exchange’s website
www.hkexnews.hk and in a variety of channels in the manner described in the paragraph
headed ‘‘How to Apply for Hong Kong Offer Shares — B. Publication of Results’’ in this
prospectus. You should note that our website and all information contained in our website,
does not form part of this prospectus.
THE HONG KONG PUBLIC OFFERING
The Hong Kong Public Offering is a fully underwritten public offer (subject to
agreement as to pricing and satisfaction or waiver of the other conditions set out in the
Hong Kong Underwriting Agreement including those described in the paragraphs under
‘‘Conditions of the Global Offering’’ above) f or the subscription in Hong Kong of, initially,
2,222,300 Offer Shares at the Offer Price, representing approximately 10% of the initial
number of the Offer Shares (before any exercise of the Over-allotment Option). Subject to
the reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, the Hong Kong Offer Share s will represent approximately 1% of the
enlarged number of our Shares in issue immediately after completion of the Global Offering
but before any exercise of the Over-allotment Option.
For allocation purposes only, the total number of Offer Shares available under the
Hong Kong Public Offering (after taking into account of any reallocation of Hong Kong
Offer Shares and International Offer Shares) is to be divided equally into two pools (with
any odd lot being allocated to pool A):
. Pool A : The Hong Kong Offer Shares in pool A will be allocated on an equitable
basis to applicants who have applied for the Hong Kong Offer Shares with an
aggregated subscription price of HK$5 m illion or less (excluding brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy
payable); and
. Pool B : The Hong Kong Offer Shares in pool B will be allocated on an equitable
basis to applicants who have applied for the Hong Kong Offer Shares with an
aggregate subscription price of more than HK$5 million and up to the value of
pool B (excluding brokerage, SFC transaction levy, Stock Exchange trading fee
and AFRC transaction levy payable).
Investors should be aware that applicat ions in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of
the pools are under-subscribed, the surplus Hong Kong Offer Shares will be transferred to
the other pool to satisfy demand in the pool and be allocated accordingly. For the purpose
of this paragraph only, the ‘‘price’’ for the Offer Shares means the price payable on
application therefor (without regard to the O ffer Price as finally determined). Applicants
can only receive an allocation of Hong Kong Offer Shares from either pool A or pool B but
STRUCTURE OF THE GLOBAL OFFERING
–4 7 5–


--- page 486 ---
not from both pools. Multiple or suspected multiple applications under the Hong Kong
Public Offering and any application for mo re than 1,111,100 Hong Kong Offer Shares,
being approximately 50% of the H Shares initially comprised in the Hong Kong Public
Offering, are liable to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer
Shares from the International Offering to the Hong Kong Public Offering to satisfy valid
applications under the Hong Kong Public Offering. In addition, if the Hong Kong Public
Offering is not fully subscribed, the Overall C oordinators will have the discretion (but shall
not be under any obligation) to reallocate to the International Offering all or any
unsubscribed Hong Kong Offer Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to
the International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate. In the event of reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering in the circumstances where (a)
the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong
Offer Shares are fully subscribed or oversubscribed irrespective of the number of times, or
(b) the International Offer Shares are undersubscribed and the Hong Kong Offer Shares are
fully subscribed or oversubscribed irrespecti ve of the number of times, then up to 1,111,000
Offer Shares may be reallocated from the In ternational Offering to the Hong Kong Public
Offering, so that the total number of Offer Shares available for subscription under the Hong
Kong Public Offering will increase up to 3,333,300 Offer Shares, representing
approximately 15% of the number of Offer Shares initially available under the Global
Offering (before any exercise of the Over-allo tment Option), and the final Offer Price shall
be fixed at the low end of the indicative price range (i.e. HK$63.0 per Offer Share) in
accordance with Chapter 4.14 of the Guide.
Given the initial allocation of the Offer S hares to the Hong Kong Public Offering and
the International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14
of the Guide and the provision of Paragraph 4.2(b) of Practice Note 18 of the Listing Rules,
no mandatory clawback or reallocation mechanism is required to increase the number of
Offer Shares under the Hong Kong Public Offering to a certain percentage of the total
number of Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering
and the International Offering will be discl osed in the results announcement of the Global
Offering, which is expected to be pub lished on Monday, December 29, 2025.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 487 ---
THE INTERNATIONAL OFFERING
The number of the Offer Shares to be initially offered for subscription under the
International Offering will be 20,000,000 Offe r Shares, representing approximately 90% of
the initial number of the Offer Shares (before the exercise of the Over-allotment Option).
Subject to the reallocation of Offer Shares between the International Offering and the Hong
Kong Public Offering, the International Offe r Shares will represent approximately 9% of
the enlarged number of our Shares in issue immediately following the completion of the
Global Offering but before any exercise of the Over-allotment Option.
Pursuant to the International Offering, the International Offer Shares will be
conditionally placed on behalf of us by the International Underwriters or through selling
agents appointed by them. Internationa l Offer Shares will be placed with certain
professional and institutional investors and other investors anticipated to have sizeable
demand for the International Offer Shares in Hong Kong, Europe and other jurisdictions
outside the United States in offshore transa ctions meeting the requirements of, and in
reliance on Regulation S or another exemption from registration requirements under the
U.S. Securities Act. Prospective investors may be required to give an undertaking and
confirmation that they have not applied or taken up any Hong Kong Offer Shares. The
International Offering is subject to the Hong Kong Public Offering becoming
unconditional.
We are expected to grant to the International Underwriters the Over-allotment Option,
exercisable by the Overall Coordinators at any time from the signing of the International
Underwriting Agreement until the 30th day after the last date for the lodging of
applications in the Hong Kong Public Offering, to require us to issue up to 3,333,300
additional H Shares, representing approximately 15% of the initial number of the Offer
Shares. These Shares will be issued at the same price per Share under the International
Offering to cover, among other things, over-allo cations in the International Offering, if any.
An announcement will be made in the event that the Over-allotment Option is exercised.
OVER-ALLOCATION AND STABILIZATION
Stabilization is a practice used by underw riters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the new
securities in the secondary market, during a specified period of time, to retard and, if
possible, prevent any decline in the market pr ice of the securities below the offer price. In
Hong Kong and certain other jurisdictions, activity aimed at reducing the market price is
prohibited, the price at which stabilization i s effected is not permitte d to exceed the offer
price.
In connection with the Global Offering, the Stabilizing Manager, or any person acting
for it, on behalf of the Underwriters, may, to the extent permitted by applicable laws of
Hong Kong or elsewhere, over-allocate or e ffect any other transactions with a view to
stabilizing or maintaining the market price of the H Shares at a level higher than that which
might otherwise prevail in the open market for a limited period after the last day for the
lodging of applications under the Hong Kong Public Offering. Any market purchases of H
Shares will be effected in compliance with all ap plicable laws and regulatory requirements.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 488 ---
However, there is no obligation on the Stabi lizing Manager or any person acting for it to
conduct any such stabilizing activity, whic h if commenced, will be done at the absolute
discretion of the Stabilizing Manager an d may be discontinued at any time. Any such
stabilizing activity is required to be brought to an end within 30 days of the last day for the
lodging of applications under the Hong Kong Public Offering. The number of H Shares that
may be over-allocated will not exceed the num ber of H Shares that may be sold under the
Over-allotment Option, namely 3,333,300 H Shares, which is approximately 15% of the
Offer Shares initially available under the Global Offering.
Stabilizing action will be entered into in accordance with the laws, rules and
regulations in place in Hong Kong and stabilization action permitted in Hong Kong
pursuant to the Securities and Futures (Price Stabilizing) Rules under the SFO includes: (i)
over-allocation for the purpose of preventin g or minimizing any reduction in the market
price of the H Shares; (ii) selling or agreeing t o sell the H Shares so as to establish a short
position in them for the purpose of preventin g or minimizing any reduction in the market
price of the H Shares; (iii) purchasing or subscribing for, or agreeing to purchase or
subscribe for, the H Shares pursuant to the Over-allotment Option in order to close out any
position established under (i) or (ii) above; (iv) purchasing, or agreeing to purchase, any of
the H Shares for the sole purpose of preventing or minimizing any reduction in the market
price of the H Shares; (v) selling or agreeing t o sell any Shares in order to liquidate any
position held as a result of those purchases; and (vi) offering or attempting to do anything
described in (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Offer Shares should note
that:
(i). the Stabilizing Manager, or any person acting for it, may, in connection with the
stabilizing action, maintain a long position in the H Shares;
(ii). there is no certainty regarding the extent to which and the time period for which
the Stabilizing Manager, or any person act ing for it, will maintain such a position;
(iii). liquidation of any such long position by the Stabilizing Manager may have an
adverse impact on the market price of the H Shares;
(iv). no stabilizing action can be taken to s upport the price of the H Shares for longer
than the stabilizing period which will begin on the Listing Date following
announcement of the Offer Price and is e xpected to expire on the 30th day after
the last date for lodging applications under the Hong Kong Public Offering. After
this date, when no further stabilizing a ction may be taken, demand for the H
Shares, and therefore the price of the H Shares, could fall;
(v). the price of the H Shares cannot be assured to stay at or above the Offer Price
either during or after the stabilizing perio d by the taking of any stabilizing action;
and
STRUCTURE OF THE GLOBAL OFFERING
–4 7 8–


--- page 489 ---
(vi). stabilizing bids may be made or tran sactions effected in the course of the
stabilizing action at any price at or below the Offer Price, which means that
stabilizing bids may be made or transacti ons effected at a price below the price
paid by applicants for, or investors in, the H Shares.
Our Company will ensure that a public announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules will be made within seven days of the
expiration of the stabilizing period.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
All necessary arrangements have been made to enable the H Shares to be admitted into
the CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
our Company complies with the stock admission requirements of HKSCC, the H Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the H Shares on the Stock
Exchange or any other date HKSCC choose s. Settlement of transactions between
participants of the Stock Exchange is re quired to take place in CCASS on the second
settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the
HKSCC Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before
8 : 00 a.m. in Hong Kong on Tuesday, December 30, 2025, dealings in Shares on the Stock
Exchange are expected to commence at 9 : 00 a.m. on Tuesday, December 30, 2025.
The H Shares will be traded in board lots of 100 H Shares each and the stock code is
6600.
STRUCTURE OF THE GLOBAL OFFERING
–4 7 9–


--- page 490 ---
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. We will not provide any printed
copies of this prospectus for use by the public.
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.onero.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:
. a r e1 8y e a r so fa g eo ro l d e r ;a n d
. have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules, you cannot apply for any Hong Kong Offer
Shares if you or the person(s) for whose benefit you are applying for:
. are an existing Shareholder or close associates; or
. are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9 : 00 am on Thursday,
December 18, 2025 and end at 12 : 00 noon on Tuesday, December 23, 2025 (Hong Kong
time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 491 ---
To apply for Hong Kong Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service
www.eipo.com.hk Investors who would
like to receive a
physical Share
certificate. Hong Kong
Offer Shares
successfully applied for
will be allotted and
issued in your own
name.
From 9 : 00 am on
Thursday, December
18, 2025 to 11 : 30 a.m.
on Tuesday, December
23, 2025, Hong Kong
time.
The latest time for
completing full
payment of application
monies will be 12 : 00
noon on Tuesday,
December 23, 2025,
Hong Kong time.
HKSCC EIPO channel Your broker or
custodian who is a
HKSCC Participant
will submit an EIPO
application on your
behalf through
HKSCC’s FINI system
in accordance with your
instruction
Investors who would
not like to receive a
physical Share
certificate. Hong Kong
Offer Shares
successfully applied for
will be allotted and
issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated
HKSCC Participant’s
stock account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this
may vary by broker or
custodian.
The White Form eIPO service and the HKSCC EIPO ch annel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to
wait until the last day of the application p eriod 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 a r eg i v e n ,y o us h a l lb ed e e m e d
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 492 ---
For the avoidance of doubt, giving an application instruction under the White
Form eIPO service more than once and obtaining different application reference
numbers without effecting full payment in re spect 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 seve rally) 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.
3 . I n f o r m a t i o nR e q u i r e dt oA p p l y
You must provide the following in formation with your application:
For Individual/Joint Applicants For Corporate Applicants
. Full name(s)
2 a ss h o w no ny o u r
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
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 8 2–


--- page 493 ---
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 provi ded by you follows the requirements as described
in Note 2 below. In particular, where you ca nnot 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) m ust be input in the same order as shown on the
identity document. If an applicant’s identit y document contains both an English and Chinese
name, both English and Chinese names must be u sed. Otherwise, eith er 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 a pplicant 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 subscrib e for Hong Kong Offer Shares. Similarly for
corporate applicants, a LEI number must be u sed if an entity has a LEI certificate.
3. If the applicant is a trustee, the client identifi cation data (‘‘CID’’) of the trustee, as set out
above, will be required. If the applicant is an i nvestment 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 holde rs on FINI is capped at 4 in accordance with
market practice.
5. If you are applying as a nominee, you must provi de: (i) the full name (as shown on the identity
document), the identity document’s issuing count ry or jurisdiction, the identity document
type; and (ii) the identity document number, for e ach of the beneficial owners or, in the case(s)
of joint beneficial owners, fo r each joint beneficial owner.
6. If you do not include this information, the application will be treated as being made for your
benefit. If you are applying as an unlisted com pany and (i) the principal business of that
company is dealing in securities; and (ii) you e xercise 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 e quity 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 capit al of the company (not counting any part of
it which carries no right to participate beyond a specified amount in a distribution of
either profits or capital).
For those applying through HKSCC EIPO channel, and making an application
under a power of attorney, we and the Overall Coordinators, as our agent, have
discretion to consider whether to accept it on any conditions we think fit, including
evidence of the attorney’s authority.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 8 3–


--- page 494 ---
Failing to provide any required information may result in your application being
rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 100 H Shares
Permitted number of
Hong Kong Offer
Shares for application
and amount payable
on application/
successful allotment
: Hong Kong Offer Shares are available for
a p p l i c a t i o ni ns p e c i f i e db o a r dl o ts i z e so n l y .
Please refer to the amount payable associated
with each specified board lot size in the table
below.
The maximum Offer Price is HK$81.0 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.
By instructing your broker or custodian to
apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO
channel, you (and, if you are joint applicants,
each of you jointly and severally) are deemed to
have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee
for the relevant HKSCC participants) to
arrange payment of the final Offer Price,
brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC
transaction levy by debiting the relevant
nominee bank account at the Designated Bank
f o ry o u rb r o k e ro rc u s t o d i a n .
If you are applying through the White Form
eIPO service, you may refer to the table below
for the amount payable for the number of H
Shares you have selected. You must pay the
respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 8 4–


--- page 495 ---
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$
100 8,181.69 2,000 163,633.76 10,000 818,168.86 300,000 24,545,065.50
200 16,363.38 2,500 204,542.21 20,000 1,636,337.70 400,000 32,726,754.00
300 24,545.07 3,000 245,450.65 30,000 2,454,506.56 500,000 40,908,442.50
400 32,726.75 3,500 286,359.10 40,000 3,272,675.40 600,000 49,090,131.00
500 40,908.44 4,000 327,267.55 50,000 4,090,844.26 700,000 57,271,819.50
600 49,090.13 4,500 368,175.98 60,000 4,909,013.10 800,000 65,453,508.00
700 57,271.82 5,000 409,084.43 70,000 5,727,181.96 900,000 73,635,196.50
800 65,453.51 6,000 490,901.31 80,000 6,545,350.80 1,000,000 81,816,885.00
900 73,635.20 7,000 572,718.20 90,000 7,363,519.66 1,111,100
(1) 90,906,740.93
1,000 81,816.89 8,000 654,535.08 100,000 8,181,688.50
1,500 122,725.32 9,000 736,351.96 200,000 16,363,377.00
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange
trading fee and AFRC transaction levy. If your application is successful, brokerage will be
paid to the Exchange Participants (as defined i n the Listing Rules) and the SFC transaction
levy, the Stock Exchange trading fee and AFRC transaction levy are paid to the Stock
Exchange (in the case of the SFC transaction levy, collected by the Stock Exchange on behalf
of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange on
behalf of the AFRC).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your
own benefit, except where you are a nominee and provide the information of the
underlying investor in your application as required under 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 ma de 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 fo r any International Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 8 5–


--- page 496 ---
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us
and/or the Overall Coordinators, as our agents, to execute any documents for
you and to do on your behalf all things necessary to register any Hong Kong
Offer Shares allocated to you in your name or in the name of HKSCC
Nominees as required by the Articles of Association, and (if you are applying
through the HKSCC EIPO channel) to deposit the allotted Hong Kong Offer
Shares directly into CCASS for the credit of your designated HKSCC
participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and
application procedures set out in this prospectus and the designated website
of the White Form eIPO service (or as the case may be, the agreement you
entered into with your broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the
arrangements, undertakings and warranties under the participant agreement
between your broker or custodian and HKSCC and observe the General
Rules of HKSCC and the HKSCC Operational Procedures for giving
application instructions to apply for Hong Kong Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set
out in this prospectus and they do not apply to you, or the person(s) for
whose benefit you have made the application;
(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 Overall Coordinators, 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 497 ---
(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 Hong Kong Share Registrar, HKSCC, HKSCC Nominees, the Stock
Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, for the purposes
under 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, H KSCC 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
m a n n e ra ss p e c i f i e di nt h ep a r a g r a p hheaded ‘‘— 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) Ordin ance, 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 a nd obligations under the terms and
conditions contained in this prospectus;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 8 7–


--- page 498 ---
(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, substa ntial 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 shareholde r(s) or existing shareholder(s) of the
C o m p a n yo ra n yo fi t ss u b s i d i a r i e so ra n yo ft h e i rr e s p e c t i v ec l o s ea s s o c i a t e s
in relation to the acquisition, disposal, voting or other disposition of the H
Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely
on your declarations and representations in deciding whether or not to
allocate any Hong Kong Offer Shares to you and that you may be prosecuted
for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(xvii) declare and represent that this is the onl y 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
–4 8 8–


--- page 499 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successf ully allocated any Hong Kong Offer
Shares through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel :
Website The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )w i t h
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. and Monday,
December 29, 2025 to 12 : 00 midnight
and Sunday, January 4, 2026 (Hong
Kong time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.onero.cn which will provide links
to the abovementioned websites of the
Hong Kong Share Registrar.
No later than 11 : 00 p.m. on Monday,
December 29, 2025 (Hong Kong time).
Telephone +852 2862 8555 — the allocation results
telephone enquiry line provided by the
Hong Kong Share Registrar
between 9 : 00 a.m. and 6 : 00 p.m., on
Tuesday, December 30, 2025,
Wednesday, December 31, 2025,
Friday, January 2, 2026 and Monday,
January 5, 2026 (Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6 : 00 p.m. on Wednesday, December 24, 2025 (Hong Kong
time).
HKSCC participants can log into FINI and review the allotment result from 6 : 00
p.m. on Wednesday, December 24, 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
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--- page 500 ---
Allocation Announcement
We expect to announce the results of the fin al Offer Price, the level of indications
of interest in the International Offering, the level of applications in the Hong Kong
Public Offering and the basis of allocations of Hong Kong Offer Shares on the Stock
Exchange’s website at
www.hkexnews.hk and our website at www.onero.cn by no later
than 11 : 00 p.m. on Monday, December 29, 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 m ade by HKSCC Nominees on your behalf
may be revoked pursuant to Section 44A ( 6 )o ft h eC o m p a n i e s( W i n d i n gU pa n d
Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Shar e 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 Pr ohibited’’ in this section on what
constitutes multiple applications;
. your application instr uction 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
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--- page 501 ---
. the Underwriting Agreements do not become unconditional or are
terminated;
. we or the Overall Coordinators believe that by accepting y our application, it
or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
B a s e do nt h ea r r a n g e m e n t sb e t w e e nH K SCC participants and HKSCC, HKSCC
participants will be required to hold suffici ent 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. I nt h ee x t r e m ee v e n to fm o n e y
settlement failure by a HKSCC Participant ( or its Designated Bank), who is acting on
your behalf in settling payment for your allotted shares, HKSCC will contact the
defaulting HKSCC Participant and its Des i g n a t e dB a n kt od e t e r m i n et h ec a u s eo f
failure and request such defaulting HKSCC Participant to rectify or procure to rectify
the failure.
However, if it is determined that such se ttlement obligation cannot be met, the
affected Hong Kong Offer Shares will be rea llocated to the International Offering.
Hong Kong Offer Shares applied for by you through the broker or custodian may be
affected to the extent of the settlement failure. In the extreme case, you will not be
allocated any Hong Kong Offer Shares due to the money settlement failure by such
HKSCC Participant. None of us, the Relevant Persons, the H Share Registrar and
HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to you due to
the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt
will be issued for sums paid on application.
H Share certificates will only become valid evidence of title at 8 : 00 a.m. on Tuesday,
December 30, 2025 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination des cribed in the section headed ‘‘Underwriting’’
has not been exercised. Investors who trade Shares prior to the receipt of H Share
certificates or the H Share certificates becomin g valid evidence of title do so entirely at their
own risk.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 1–


--- page 502 ---
The right is reserved to retain any H Share cer tificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the re levant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate
(Except in the event of any Severe Weather Signals (as defined below) in force in Hong Kong on the
business day before the Listing Date rendering it im possible for the relevant H Share certificates to be
dispatched to HKSCC in a timely manner, the Compa ny shall procure the H Share Registrar to arrange
for delivery of the supporting documents and H Share certificates in accordance with the contingency
arrangements as agreed between them. You may refer to ‘‘— E. Severe Weather Arrangements’’ in this
section.)
For physical H Share
certificates of
1,000,000 or more
Offer Shares
issued under your
own name
Collection in person at Computershare
Hong Kong Investor Services Limited,
at shops 1712–1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road
East, Wan Chai, Hong Kong.
Time: 9 : 00 a.m. to 1 : 00 p.m. on
Tuesday, December 30, 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 Hong Kong Share
Registrar.
Note: If you do not collect your H
Share certificate(s) p ersonally within
the time above, it/they will be sent to
the address specified in your
application instructions by ordinary
post at your own risk
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.
For physical H Share
certificates of less
than 1,000,000
Offer Shares
issued under your
own name
Your H Share certificate(s) will be sent
to the address specified in your
application instructions by ordinary
post at your own risk
Time: Monday, December 29, 2025
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 2–


--- page 503 ---
White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date Tuesday, December 30, 2025 Subject to the arrangement between
you and your broker or custodian
Responsible party Hong Kong Share Registrar Your broker or custodian
Application monies
paid through
single bank
account
White Form e-Refund payment
instructions to your designated bank
account
Your broker or custodian will arrange
refund to your designated bank account
subject to the arrangement between you
and it
Application monies
paid through
multiple bank
accounts
Refund cheque(s) will be despatched to
the address as specified in your
application instructions by ordinary
post at your own risk
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or c lose on Tuesday, December 23, 2025 if,
there is/are:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. an ‘‘extreme conditions’’ announcement issued after a super typhoon
(‘‘Extreme Conditions’’), (collectively, ‘‘Severe Weather Signals’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Tuesday,
December 23, 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.onero.cn of the revised timetable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 3–


--- page 504 ---
If a Severe Weather Signal is hoisted on Monday, December 29, 2025, the H Share
Registrar will make appropriate arrangements for the delivery of the H Share
certificates to the CCASS Depository’s service counter so that they would be available
for trading on Tuesday, December 30, 2025.
If a Severe Weather Signal is hois ted on Tuesday, December 30, 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 Hong Kong Share
Registrar’s office after the Severe Weather Signal is lowered or cancelled (e.g.
in the afternoon of Tuesday, Decembe r 30, 2025 or on Wednesday, December
31, 2025).
If a Severe Weather Signal is hoisted on Monday, December 29, 2025 :
. for physical H Share certificates of les s 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 Monday, December 2 9, 2025 or on Tuesday, December 30,
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. Se ttlement of transactions between Exchange
Participants (as defined in the Listing Rule s) is required to take place in CCASS on the
second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the 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 arrangem ents may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 4–


--- page 505 ---
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the Hong K ong 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 giv ing 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 Sta tement 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 Hong Kong 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 Regi strar 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 successf ully applied for and/or the despatch of H
Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform
the Company and the H Share Registrar immediately of any inaccuracies in the
personal data supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever
means) for the following purposes:
. processing your application and refund cheque and White Form e-Refund
payment instruction(s), wh ere 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 an d regulations in Hong Kong and
elsewhere;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 5–


--- page 506 ---
. 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 a pplications 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 t o facilitate claims on entitlements;
. and any other incidental or associated purposes relating to the above and/or
to enable the Company and the H Share Registrar to discharge their
obligations to applicants and holders of the H Shares and/or regulators
and/or any other purposes to which applicants and holders of the H Shares
may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the
applicants for and holders of Hong Kong Offer Shares will be kept confidential, but
the Company and the H Share Registrar may, t o 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 and receiving
bank(s);
. HKSCC or HKSCC Nominees, who will use the personal data and may
transfer the personal data to the H Share Registrar for the purposes of
providing its services or facilities or p erforming 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 9 6–


--- page 507 ---
. 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 performan ce of its statutory functions; and
. 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 ac cordance 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 Hong Kong 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
–4 9 7–


--- page 508 ---
The following is the text of a report, prepared for the purpose of incorporation in this
document, received from the independent reporting accountants, Ernst & Young, Certified
Public Accountants, Hong Kong.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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佭␃凖儮⍠㣅ⱛ䘧

㰳
໾সഞϔᑻῧ
Tel 䳏䁅: +852 2846 9888
Faxⳳ: +852 2868 4432
ey.com
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF ONEROBOTICS (SHENZHEN) CO., LTD. GUOTAI JUNAN
CAPITAL LIMITED AND HUATAI FINANCIAL HOLDINGS (HONG KONG)
LIMITED
INTRODUCTION
We report on the historical financial information of OneRobotics (Shenzhen) Co., Ltd.
(the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages I-4 to I-93,
which comprises the consolidat ed statements of profit or loss and other comprehensive
income, statements of changes in equity and s tatements of cash flows of the Group for each
of the years ended 31 December 2022, 2023, 2024 and the six months ended 30 June 2025
(the ‘‘Relevant Periods’’), and the consolidated statements of financial position of the
Group and the statements of financial posi tion of the Company as at 31 December 2022,
2023, 2024 and 30 June 2025 and material accounting policy information and other
explanatory information (together, the ‘‘Histo rical Financial Information’’). The Historical
Financial Information set out on pages I-4 to I-93 forms an integral part of this report,
which has been prepared for inclusion in th e prospectus of the Company dated 18 December
2025 (the ‘‘Prospectus’’) in connection with the initial listing of the shares of the Company
on the Main Board of The Stock Exchange of H ong Kong Limited (the ‘‘Stock Exchange’’).
DIRECTORS’ RESPONSIBILITY FOR THE HISTORICAL FINANCIAL
INFORMATION
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information, and for such
internal control as the directors determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to
fraud or error.
REPORTING ACCOUNTAN TS’ 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 509 ---
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 ac countants consider internal control relevant
to the entity’s preparation of the Historical F inancial Information that gives a true and fair
view in accordance with the basis of preparation set out in note 2.1 to the Historical
Financial Information, in order to design procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Our work also included evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the Historical Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
OPINION
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the
Company as at 31 December 2022, 2023, 2024 and 30 June 2025 and of the financial
performance and cash flows of the Group for each of the Relevant Periods in accordance
with the basis of preparation set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative f inancial information of the Group which
comprises the consolidated statement of pro fit or loss and other comprehensive income,
statement of changes in equity and statement of cash flows for the six months ended 30 June
2024 and other explanatory information (the ‘‘Interim Comparative Financial
Information’’). The directors of the Company are responsible for the preparation of the
Interim Comparative Financial Information in accordance with the basis of preparation set
out in notes 2.1 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Interim Comparative Fin ancial Information based on our review. We
conducted our review in accordance with Hong Kong Standard on Review Engagements
2410 Review of Interim Financial Information Performed by the Independent Auditor of the
Entity issued by the HKICPA. A review consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance
with Hong Kong Standards on Auditing and consequently does not enable us to obtain
assurance that we would become aware of all sign ificant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing
has come to our attention that causes us to believe that the Interim Comparative Financial
Information, for the purposes of the accountants’ report, is not prepared, in all material
respects, in accordance with the basis of preparation set out in notes 2.1 to the Historical
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2–


--- page 510 ---
Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange
and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 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
18 December 2025
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3–


--- page 511 ---
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 pre sented in Renminbi (‘‘RMB’’) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4–


--- page 512 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
REVENUE 5 274,597 457,264 609,924 275,021 396,294
Cost of sales (180,458) (226,726) (294,327) (136,183) (181,541)
Gross profit 94,139 230,538 315,597 138,838 214,753
Other income and gains 5 6,787 8,342 9,111 4,578 10,364
Selling and distribution expenses (102,104) (136,698) (171,894) (70,969) (106,829)
Administrative expenses (21,006) (24,139) (32,372) (15,936) (30,864)
Research and development
expenses (61,761) (89,192) (112,022) (56,737) (58,679)
Impairment losses on financial
assets, net (136) (798) 151 (120) (490)
Other expenses (431) (2,100) (6,836) (10,886) (1,964)
Finance costs 6 (2,422) (2,240) (4,409) (1,738) (2,165)
(LOSS)/PROFIT BEFORE TAX 7 (86,934) (16,287) (2,674) (12,970) 24,126
Income tax (expense)/credit 10 (49) (89) (400) (671) 3,777
(LOSS)/PROFIT FOR THE
YEAR/PERIOD (86,983) (16,376) (3,074) (13,641) 27,903
Attributable to:
Owners of the parent (86,983) (16,376) (3,074) (13,641) 27,903
(86,983) (16,376) (3,074) (13,641) 27,903
(LOSS)/EARNINGS PER SHARE
ATTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE PARENT
Basic and diluted
(RMB per share) 12 (0.76) (0.14) (0.03) (0.12) 0.17
For the details of pre-IPO investments, please refer to note 28 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5–


--- page 513 ---
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’ 000 RMB’000 RMB’000
(Unaudited)
(LOSS)/PROFIT FOR THE YEAR/PERIOD (8 6,983) (16,376) (3,074) (13,641) 27,903
OTHER COMPREHENSIVE (LOSS)/
INCOME
Other comprehensive income that
may be reclassified to profit and
loss in subsequent periods:
Exchange differences on translation
of foreign operations (102) 70 (3) (381) 585
TOTAL COMPREHENSIVE (LOSS)/
INCOME FOR THE YEAR/PERIOD (87,085) (16,306) (3,077) (14,022) 28,488
Attributable to:
Owners of the parent (87,085) (16,306) (3,077) (14,022) 28,488
N o n - c o n t r o l l i n g i n t e r e s t s —————
(87,085) (16,306) (3,077) (14,022) 28,488
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6–


--- page 514 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 13 10,316 11,427 21,701 21,778
Right-of-use asset 15 31,030 46,912 45,788 39,325
Intangible assets 14 1,671 5,872 9,740 31,509
Deferred tax assets 18 — — — 6,095
Prepayments, deposits and
other receivables 20 3,386 10,357 7,308 5,051
Total non-current assets 46,403 74,568 84,537 103,758
CURRENT ASSETS
Inventories 17 83,589 82,437 163,637 202,746
Trade receivables 19 45,103 62,091 45,815 133,035
Prepayments, deposits and other
receivables 20 16,873 22,124 22,989 30,229
Financial assets at fair value through
profit or loss 21 8 — 54,391 —
Restricted cash 22 824 510 15,917 900
Time deposits 22 3,103 2,562 2,909 2,947
Cash and cash equivalents 22 145,265 130,177 62,337 197,065
Total current assets 294,765 299,901 367,995 566,922
CURRENT LIABILITIES
Trade payables 23 27,677 44,330 28,587 137,492
Contract liabilities 2 6 3,202 3,558 4,553 7,682
Other payables and accruals 24 20,122 32,674 43,151 66,054
Financial liabilities at fair value through
profit or loss 21 129 — 68 420
Interest-bearing bank loans 25 40,207 30,200 91,250 37,938
Lease liabilities 15 11,270 12,344 11,641 7,945
Provision 27 6,479 14,200 20,487 22,011
Income tax payable — — — 2,101
Total current liabilities 109,086 137,306 199,737 281,643
NET CURRENT ASSETS 185,679 162,595 168,258 285,279
TOTAL ASSETS LESS CURRENT
LIABILITIES 232,082 237,163 252,795 389,037
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7–


--- page 515 ---
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Interest-bearing bank loans 25 — — 15,014 60,721
Lease liabilities 15 23,556 40,762 40,276 37,215
Total non-current liabili ties 23,556 40,762 55,290 97,936
Net assets 208,526 196,401 197,505 291,101
EQUITY
Equity attribut able to owners
of the parent
Share capital 28 — — — 20,000
Paid-in capital 28 1,483 1,483 1,483 —
Reserves 29 207,043 194,918 196,022 271,101
208,526 196,401 197,505 291,101
Non-controlling interests — — — —
Total equity 208,526 196,401 197,505 291,101
For the details of pre-IPO investments, please refer to note 28 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8–


--- page 516 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Year ended 31 December 2022
Attributable to owners of the parent
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30) (note 29)
As at 1 January 2022 1,205 129,543 5,164 (43,679) — 92,233
Loss for the year — — — (86,983) — (86,983)
Exchange differences on
t r a n s l a t i o n o f f o r e i g n o p e r a t i o n s———— ( 1 0 2 ) ( 1 0 2 )
Total comprehensive loss
for the year — — — (86,983) (102) (87,085)
Share-based payments (note 30) —— 3 , 3 7 8—— 3 , 3 7 8
Capital contribution by
shareholders 278 199,722 — — — 200,000
As at 31 December 2022 1,483 329,265* 8,542* (130,662)* (102)* 208,526
Year ended 31 December 2023
Attributable to owners of the parent
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30) (note 29)
As at 1 January 2023 1,483 329,265 8,542 (130,662) (102) 208,526
Loss for the year — — — (16,376) — (16,376)
Exchange differences on
t r a n s l a t i o n o f f o r e i g n o p e r a t i o n s————7 07 0
Total comprehensive loss
for the year — — — (16,376) 70 (16,306)
Share-based payments (note 30) —— 4 , 1 8 1—— 4 , 1 8 1
As at 31 December 2023 1,483 329,265* 12,723* (147,038)* (32)* 196,401
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9–


--- page 517 ---
Year ended 31 December 2024
Attributable to owners of the parent
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 29) (note 30) (note 29)
As at 1 January 2024 1,483 329,265 12,723 (147,038) (32) 196,401
Loss for the year — — — (3,074) — (3,074)
Exchange differences on
t r a n s l a t i o n o f f o r e i g n o p e r a t i o n s———— ( 3 ) ( 3 )
Total comprehensive loss
for the year — — — (3,074) (3) (3,077)
Share-based payments (note 30) —— 4 , 1 8 1—— 4 , 1 8 1
As at 31 December 2024 1,483 329,265* 16,904* (150,112)* (35)* 197,505
Six months ended 30 June 2025
Attributable to owners of the parent
Share
capital
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 28) (note 28) (note 29) (note 30) (note 29)
As at 1 January 2025 — 1,483 329,265 16,904 (150,112) (35) 197,505
Profit for the period — — — — 27,903 — 27,903
Exchange differences on
translation of foreign
operations — — — — — 585 585
Total comprehensive income
for the period — — — — 27,903 585 28,488
Share-based payments (note 30) — — — 5,041 — — 5,041
Capital contribution by
shareholders — 1,009 — — — — 1,009
Conversion into a joint stock
company 2,492 (2,492) — — — — —
Issue of shares 38 — 59,020 — — — 59,058
Capitalisation of reserves 17,470 — (17,470) — — — —
As at 30 June 2025 20,000 — 370,815* 21,945* (122,209)* 550* 291,101
* The reserve accounts comprised the consolidated reserves of RMB207,043,000, RMB194,918,000,
RMB196,022,000 and RMB271,101,000 the consolid ated statements of fina ncial position as at 31
December 2022, 2023, 2024 and 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 0–


--- page 518 ---
Six months ended 30 June 2024 (Unaudited)
Attributable to owners of the parent
Paid-in
capital
Capital
reserve
Share-based
payment
reserve
Accumulated
losses
Exchange
fluctuation
reserve Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2024 1,483 329,265 12,723 (147,038) (32) 196,401
Loss for the period — — — (13,641) — (13,641)
Exchange differences on
t r a n s l a t i o n o f f o r e i g n o p e r a t i o n s———— ( 3 8 1 ) ( 3 8 1 )
Total comprehensive loss for the
period — — — (13,641) (381) (14,022)
Share-based payments — — 2,091 — — 2,091
As at 30 June 2024 1,483 329,265 14,814 (160,679) (413) 184,470
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 1–


--- page 519 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
(Loss)/profit before tax (86,934) (16,287) (2,674) (12,970) 24,126
Adjustments for:
Finance costs 6 2,422 2,240 4,409 1,738 2,165
Interest income 5 (1,647) (1,560) (2,058) (864) (550)
Finance income on the net
investment in the sublease 5 (12) (21) (154) (75) (70)
Impairment losses on financial
assets, net 7 136 798 (151) 120 490
Write-down of inventories to net
realisable value 7 7,055 7,608 5,639 5,713 5,698
Foreign exchange difference, net 7 3 1,619 6,494 10,766 (6,058)
Equity-settled share-based
payment expenses 30 3,378 4,181 4,181 2,091 5,041
Gain on disposal of right of use
assets 5 — — (292) (281) —
Gain on sublease of right of use
assets 5 — (1,554) — — —
Investment income on financial
assets at fair value through
profit or loss 5 — (21) (1,679) — (344)
Investment loss on financial
liabilities at fair value through
profit or loss 7 54 453 — 97 1,153
Fair value (gains)/losses on
financial assets at fair value
through profit or loss (8) — (391) (104) 391
Fair value losses on financial
liabilities at fair value through
profit or loss 7 129 — — — 420
Depreciation of property, plant
and equipment 7 3,005 5,113 9,589 4,229 5,567
Amortisation of intangible assets 14 222 676 1,646 822 1,940
Depreciation of right-of-use assets 7 10,430 11,451 10,988 5,124 4,594
(61,767) 14,696 35,547 16,406 44,563
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 2–


--- page 520 ---
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Increase in inventories (25,883) (6,456) (86,839) (104,972) (44,807)
Increase in trade receivables (100,127) (174,475) (172,835) (101,036) (161,843)
Decrease in factored trade
receivables 78,623 156,934 189,249 76,283 74,191
(Increase)/decrease in
prepayments, deposits and
other receivables (6,584) (4,629) 22 (9,665) (3,296)
(Decrease)/increase in trade
payables (4,834) 16,653 (15,743) 92,303 108,905
Increase in contract liabilities 2,025 356 995 410 3,129
Increase/(decrease) in other
payables and accruals 9,147 12,552 10,477 (5,526) 6,519
Increase in provision 812 7,721 6,287 2,157 1,524
Cash (used in)/generated from
operations (108,588) 23,352 (32,840) (33,640) 28,885
Interest received 1,643 1,358 1,962 841 499
Income tax paid (49) (89) (400) (5) (217)
Net cash flows (used in)/from
operating activities (106,994) 24,621 (31,278) (32,804) 29,167
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 3–


--- page 521 ---
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’ 000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
INVESTING ACTIVITIES
Interest received 4 202 96 23 51
Purchase of financial assets at fair
value through profit or loss — — (118,000) — (30,000)
Disposal of financial assets at fair
value through profit or loss — 29 65,679 (97) 84,344
Proceeds from financial liabilities
at fair value through profit or
loss — — 68 — 20
Settlement of financial liabilities at
fair value through profit or loss (54) (582) — — (1,241)
Purchases of items of property,
plant and equipment (7,759) (9,461) (17,717) (10,280) (5,591)
Purchases of intangible assets (1,527) (4,877) (5,514) (94) (148)
A s s e t a c q u i s i t i o n 3 1 ———— ( 7 , 5 0 0 )
Proceeds from sublease of
right-of-use assets 86 90 486 286 200
Proceeds from disposal of items of
property, plant and equipment 8 1 — — —
Placement of time deposits (3,718) (4,296) (4,354) (1,440) (2,947)
Withdrawal of time deposits 615 4,837 4,007 2,562 2,909
Placement of restricted cash (1,322) (1,314) (22,837) (6,038) (2,480)
Withdrawal of restricted cash 498 1,628 7,430 6,297 17,497
Net cash flows (used in)/from
investing activities (13,169) (13,743) (90,656) (8,781) 55,114
CASH FLOWS FROM
FINANCING ACTIVITIES
New borrowings from factored
trade receivables 118,830 146,927 183,528 82,879 73,347
New bank loans — — 88,065 28,020 58,024
Interest paid from factored trade
receivables (666) (749) (698) (325) (398)
Interest paid — — (1,275) (104) (803)
Proceeds from issue of shares ———— 5 9 , 0 5 8
Capital contribution by
shareholders 200,000 — — — 1,009
Repayment of borrowings from
factored trade receivables (78,623) (156,934) (189,249) (76,283) (74,191)
Repayment of bank loans — — (6,280) (720) (64,785)
P a y m e n t f o r l i s t i n g e x p e n s e ———— ( 1 , 4 9 7 )
Increase in rental deposit (1,712) (1,038) (643) (658) (89)
Decrease in rental deposit — — 340 — —
Payments of lease liabilities (11,003) (12,617) (13,193) (6,324) (5,855)
Net cash flows from/(used in)
financing activities 226,826 (24,411) 60,595 26,485 43,820
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 4–


--- page 522 ---
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
NET INCREASE/
(DECREASE) IN CASH
AND CASH
EQUIVALENTS 106,663 (13,533) (61,339) (15,100) 128,101
C a s ha n dc a s he q u i v a l e n t sa t
beginning of year/period 38,706 145,265 130,177 130,177 62,337
Effect of foreign exchange rate
changes, net (104) (1,555) (6,501) (11,201) 6,627
CASH AND CASH
EQUIVALENTS AT END
OF YEAR/PERIOD 145,265 130,177 62,337 103,876 197,065
ANALYSIS OF BALANCES
OF CASH AND CASH
EQUIVALENTS
Cash and bank balances 145,265 129,820 62,263 102,359 196,990
Non-pledged time deposits with
original maturity of less than
three months when acquired — 357 74 1,517 75
C a s ha n dc a s he q u i v a l e n t sa s
stated in the consolidated
statements of financial
position 22 145,265 130,177 62,337 103,876 197,065
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 5–


--- page 523 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Investment in a subsidiary 16 56,153 70,335 74,517 79,526
Total non-current asset s 56,153 70,335 74,517 79,526
CURRENT ASSETS
Inventories 17 2,494 930 1,618 874
Trade receivables 19 16,846 23,133 11,067 23,105
Prepayments, deposits and
other receivables 20 160,569 245,193 230,862 249,540
Financial assets at fair value through
profit or loss 21 — — 18,000 —
Cash and cash equivalents 22 98,260 28,993 6,047 62,570
Total current assets 278,169 298,249 267,594 336,089
CURRENT LIABILITIES
Trade payables 23 116 33,109 4,323 5,808
Other payables and accruals 24 142 258 285 5,986
Income tax payable — — — 2
Total current liabilities 258 33,367 4,608 11,796
NET CURRENT ASSETS 277,911 264,882 262,986 324,293
TOTAL ASSETS LESS CURRENT
LIABILITIES 334,064 335,217 337,503 403,819
Net assets 334,064 335,217 337,503 403,819
EQUITY
Share capital 28 — — — 20,000
Paid-in capital 28 1,483 1,483 1,483 —
Reserves 29 332,581 333,734 336,020 383,819
Total equity 334,064 335,217 337,503 403,819
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 6–


--- page 524 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
OneRobotics (Shenzhen) Co., Ltd. (the ‘‘Company’’) w as incorporated as a limited liability in Shenzhen,
People’s Republic of China (the ‘‘PRC’’) on 18 October 2018. It was converted into a joint stock company with
limited liability in April 2025. The registered office address of the Company is Room 1706, Shenzhen Qiancheng
Commercial Center, No. 5, Haicheng Road, Mabu Communi ty, Xixiang Street, Bao’an District, Shenzhen, the
PRC.
During the Relevant Periods, the Company and its subsid iaries (collectively the ‘‘Group’’) was principally
engaged in the design, development, manufacturing an d commercialization of home robotics system products
and other home robot products and accessories.
In the opinion of the directors, Mr. Li Zhichen, Mr. Pan Yang and Wonder Innovation Technology
(Shenzhen) Partnership (Limited Partnership) are a gr oup of the controlling shareholders of the Group as at the
end of the Relevant Periods.
As at the date of this report, the Company had direct and indirect interests in its s ubsidiaries, all of which
are private limited liability companies (or, if incor porated outside Hong Kong, h ave substantially similar
characteristics to a private company incorporated in Hong Kong), the particulars of which are set out below:
Name
Place and date of
registration and place
of operations
Registered share
capital
Percentage of equity
attributable to the Compan y Principal activities
Direct Indirect
Woan Technology (Shenzhen) Co., Ltd.
臥安科技（深圳）有限公司* (note (d))
Mainland China
22 January 2015
RMB32,000,000 100% — Develop, Manufacture and Sale
of home robotics system
products and other home
robot products and
accessories
Woan (Shenzhen) Software Technology Co., Ltd.
臥安（深圳）軟件技術有限公司* (note (a))
Mainland China
10 October 2023
RMB1,000,000 — 100% Develop of system
WOAN TECHNOLOGY LIMITED* (note (b)) Hong Kong
4 May 2020
HKD200,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
SWITCHBOT PTE. LTD.* (note (a)) Singapore
21 November 2022
SGD10,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
WONDERLABS LIMITED (note (c)) Hong Kong
16 March 2018
HKD10,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
SWITCHBOT CO., LTD
SWITCHBOT 株式會社 (note (a))
Japan
24 September 2020
JPY5,000,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
WONDERLABS INC (note (a)) The United States
23 January 2017
US$1,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
SWITCHBOT INC (note (a)) The United States
11 October 2021
US$4,000 — 100% Sale of home robotics system
products and other home
robot products and
accessories
Ace Robot (Shenzhen) Co., Ltd.
艾思機器人（深圳）有限公司* (note (a)(e))
Mainland China
18 June 2025
RMB1,000,000 — 55.20% Develop, Manufacture and Sale
of home robotics system
products and other home
robot products and
accessories
* The English names of these companies registered in the PRC represent the best effort made by the
directors of the Company to translate the Chinese names as these companies have not been
registered with any official English names.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 7–


--- page 525 ---
Notes:
(a) No audited financial statements have been prep ared for these entities for the Relevant Periods as
these entities were not subject to any statutory audit requirements under the relevant rules and
regulations in the jurisdi ctions of incorporation or newly incorporated.
(b) The statutory financial statements of this en tity for the year ended 31 December 2022 prepared in
accordance with the Hong Kong Small and Medium-s ized Entity Financial Reporting Standards
(‘‘SME-FRS’’) issued by the HKICPA, were audited by Lun Man Ho Clement Certified Public
Accountant (Practising ), certified public accountants regist ered in Hong Kong. The statutory
financial statements of this entity for the year ended 31 December 2023 prepared in accordance with
SME-FRS, were audited by Jerry Chow & Co., cer tified public accountants registered in Hong
Kong.
(c) The statutory financial statements of this entity for the years ended 31 August 2022 and 2023
prepared in accordance with SME-FRS issued by the HKICPA, were audited by Honesty CPA &
Co., certified public accountants registered in Hong Kong.
(d) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and
2024 prepared in accordance with China Account ing Standards of Business Enterprises (‘‘PRC
GAAP’’), were audited by Tian Di C ertified Public Accountants LLP ( 深圳天地會計師事務所（特殊
普通合夥）), certified public accountan ts registered in the PRC.
(e) As of the reporting date, the registered capital of this entity has not yet been paid.
2.1 BASIS OF PREPARATION
For ordinary shares issued to pre-IPO investors, pursuant to the supplemental agreements entered into
between the Company and the pre-IPO Investors in rela tion to the termination of certain of special rights
granted by the Company, including redemption rights, which are void ab initio as described in note 28 to this
report, having taking into account the legal and regulat ory framework of the Company’s jurisdiction and the
governing law of the supplementary agreements, the dire ctors considered that it is appropriate to present the
pre-IPO Investments as equity throughout the Relevant Per iods. For the details of financial impacts, see note 28
of this report.
The Historical Financial Information has been prep ared in accordance with IFRS Accounting Standards,
which comprise all standards and interpretations appr oved by the International Accounting Standards Board
(‘‘IASB’’). All IFRS Accounting Standards effective for the accounting period commencing from 1 January
2025, together with the relevant tra nsitional provisions, have been adopt ed by the Group in the preparation of
the Historical Financial Information throughout the Re levant Periods and in the period covered by the Interim
Comparative Financial Information.
The Historical Financial Information has been prep ared under the historical cost convention except for
certain financial instruments which have been measured at fair value at the end of each of the Relevant Periods
and in the period covered by the Interi m Comparative Financial Information.
Basis of consolidation
The Historical Financial Information includes t he financial information of the Company and its
subsidiaries for the Relevant Periods and in the peri od covered by the Interim Comparative Financial
Information. A subsidiary is an entity (including a str uctured entity), directly or indirectly, controlled by
the Company. Control is achieved when the Group is ex posed, or has rights, to variable returns from its
involvement with the investee and has the ability t o affect those returns through its power over the
investee (i.e., existing rights that give the Group the c urrent ability to direct the relevant activities of the
investee).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 8–


--- page 526 ---
Generally, there is a presumption that a majori ty of voting rights results in control. When the
Company has less than a majority of the voting or simi lar rights of an investee, the Group considers all
relevant facts and circumstances in assessing w hether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other c ontractual arrangements; and
(c) the Group’s voting rights a nd potential voting rights.
The financial information of subsidiaries is prep ared for the same reporting period as the Company,
using consistent accounting policies. The results of subsidiaries are consolidated from the date on which
the Group obtains control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the parent of the Group and to the non-controlling inter ests, even if this results in the non-controlling
interests having a deficit balance. All intra-group asse ts and liabilities, equity, i ncome, expenses and cash
flows relating to transactions be tween members of the Group are elim inated in full on consolidation.
The Group reassesses whether or not it controls an in vestee if facts and circumstances indicate that
there are changes to one or more of the three elements of control described above. A change in the
ownership interest of a subsidiary, without a loss of c ontrol, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it dereco gnises the related assets (including goodwill),
liabilities, any non-controlling interest and the excha nge fluctuation reserve; and recognises the fair value
of any investment retained and any resulting surp lus or deficit in profit or loss. The Group’s share of
components previously recognised in other compreh ensive income is reclassified to profit or loss or
retained profits, as appropriate, on the same basis a s would be required if the Group had directly disposed
of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and r evised IFRS Accounting Standards that have been
issued but are not yet effective, in the H istorical Financial Information.
IFRS 18 Presentation and Disclosure in financial statement
2
IFRS 19 and its amendments Subsidiaries without Public Accountability: Disclosures 2
Amendments to IFRS 9
a n dI F R S7
Amendments to the Classification and Measurement of Financial
Instruments 1
Amendments to IFRS 9 and
IFRS 7
Contracts Referencing Nature-dependent Electricity 1
Amendments to IFRS 10
and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture 3
Amendments to IFRS 21 Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements to
IFRS Accounting
Standards — Volume 11
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7
1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting peri ods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 9–


--- page 527 ---
The Group is in the process of making an assessment of the impact of these new and revised IFRS
Accounting Standards upon initial application. So far, the Group considers that these new and revised IFRS
Accounting Standards, except for IFRS 18, may result in changes in accounting policies but are unlikely to have
a significant impact on the Group’s financial performa nce and financial position in the period of initial
application. The application of IFRS 18 is not expected to have material impact on the financial position of the
Group but is expected to affect the presentation of the st atements of profit or loss and other comprehensive
income and statement of cash flows and disclosures in the future financial information. The Group will continue
to assess the impact of IFRS 18 on the Group’s financial information.
2.3 MATERIAL ACCOUNTING POLICIES
Fair value measurement
The Group measures its certain financial instrum ents at fair value at the end of each of the Relevant
Periods. Fair value is the price that would be received t o sell an asset or paid to transfer a liability in an
orderly transaction between marke t 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. Th e principal or the most advantageous market must be
accessible by the Group. The fair value of an asset or a liability is measured us ing the assumptions that
market participants would use when pricing the asset o r liability, assuming that market participants act in
their economic best interest.
A fair value measurement of a non-financial asset ta kes into account a market participant’s ability
to generate economic benefits by using the asset in i ts 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 a ppropriate in the circumstances and for which
sufficient data are available to measure fair value, m aximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is me asured or disclosed in the financial statements are
categorised within the fair value hierarchy, descr ibed 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 acti ve markets for identica l assets or liabilities
Level 2 — based on valuation techniques for which th e 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 th e lowest level input that is significant to the
fair value measurement is unobservable
For assets and liabilities that are recognised in the Historical Financial Information on a recurring
basis, the Group determines whether transfers have o ccurred 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 of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 0–


--- page 528 ---
Impairment of non-financial assets
Where an indication of impairment exists, or whe n annual impairment testing for a non-financial
asset is required (other than inventories, 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 fro m other assets or groups of assets, in which case the
recoverable amount is determined for the cash -generating unit to which the asset belongs.
An impairment loss is recognised only if the carry ing amount of an asset exceeds its recoverable
amount. In assessing value in use, the estimated futu re cash flows are discounted to their present value
using a pre-tax discount rate that reflects current ma rket assessments of the time value of money and the
risks specific to the asset. An impairment loss is char ged to the statement of profit or loss in the period in
which it arises in those expense categories cons istent with the function of the impaired asset.
An assessment is made at the end of each of the Relev ant Periods as to whether there is an indication
that previously recognised impa irment losses may no longer exist or may have decreased. If such an
indication exists, the recoverable a mount 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/amortisa tion) had no impairment loss been recognised for the
asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in
the period in which it arises.
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 o f 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 ent ity and the other entity is an associate of the
third entity;
(v) the entity is a post-employment benefit p lan for the benefit of employees of either the
Group or an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
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(vii) a person identified in (a)(i) has significa nt influence over the entity or is a member of the
key management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of whic h 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 cons truction in progress, are stated at cost less
accumulated depreciation and any impairment l osses. The cost of an item of property, plant and
equipment comprises its purchase price and any dir ectly 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 profit or loss in the period in which it is incurred.
In situations where the recognition criteria are sa tisfied, the expenditure for a major inspection is
capitalised in the carrying amount of the asset as a repla cement. Where significant parts of property, plant
and equipment are required to be replaced at interval s, the Group recognises such parts as individual
assets with specific useful lives an d depreciates them accordingly.
D e p r e c i a t i o ni sc a l c u l a t e do nt h es t r a i g h t - l i n ebasis to write off the cost of each item of property,
plant and equipment to its residual value over its estim ated useful life. The principal annual rates used for
this purpose are as follows:
Leasehold improvements Shorter of remaini ng lease terms and estimated useful lives
Furniture and fixtures 19% to 33.3%
Electronic equipment and
others
19% to 33.3%
Where parts of an item of property, plant and equipm ent 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 r eviewed, and adjusted if appropriate, at least at the
end of each of the Relevant Periods.
An item of property, plant and equipment includi ng 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 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.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The useful lives of
intangible assets are assessed to be either finite o r indefinite. Intangible a ssets with finite lives are
subsequently amortized over the use ful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaire d. The amortisation period and the amortisation
method for an intangible asset wit h a finite useful life are reviewed at least at the end of each of the
Relevant Periods.
Trademark
Purchased trademark is initially recognised and measured at cost. The cost is amortised on the
straight-line basis over its est imated useful life of 7.5–10 years.
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Patent technology
Purchased patent technology is initially recognis ed and measured at cost. The cost is amortised on
the straight-line basis over its estimated useful life of 7.5 years.
Software
Purchased office software is stated at cost les s any impairment losses and is amortised on the
straight-line basis over its estimated useful life of 3 years.
Research and development costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new p roducts is capitalised and deferred only when the
Group can demonstrate the technica l feasibility of completing the i ntangible asset so that it will be
available for use or sale, its inten tion to complete and its ability to use or sell the asset, how the asset will
generate future economic benefits, the availability of resources to complete the project and the ability to
measure reliably the expenditure du ring the development. Product development expenditure which does
not meet these criteria is expensed when incurred.
Deferred development costs are stated at cost less a ny impairment losses and are amortised using the
straight-line basis over the commercial lives of the underlying products not exceeding three years,
commencing from the date when the produc ts are put into commercial production.
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 t o 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 me asurement approach for all leases, except for
short-term leases and leases of low-value assets. T he Group recognises lease l iabilities to make lease
payments and right-of-use assets represent ing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the co m m e n c e m e n td a t eo ft h el e a s e( i . e . ,t h ed a t et h e
underlying asset is available for use ). Right-of-use assets are measur ed at cost, less any accumulated
depreciation and any impairment losses, and adjusted f or any remeasurement of le ase liabilities. The cost
of right-of-use assets includes the amount of lease liabili ties recognised, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Where
applicable, the cost of a right-of-use asset also incl udes an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located. Right-of-use assets are
depreciated on a straight-line basis over the shorter o f the lease terms and the estimated useful lives of the
assets as follows:
Buildings 2t o1 0y e a r s
If ownership of the leased asset transfers to th e Group by the end of the lease term or the cost
reflects the exercise of a purchase opt ion, depreciation is calculated usi ng the estimated useful life of the
asset.
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(b) Lease liabilities
Lease liabilities are recognized at the commencem ent date of the lease at the present value of lease
payments to be made over the lease term. The leas e payments include fixed payments (including
in-substance fixed payments) less any lease incenti ves receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid unde r residual value guarantees. The lease payments
also include the exercise price of a purchase option r easonably certain to be exercised by the Group and
payments of penalties for termination of a lease, if th e lease term reflects the Group exercising the option
to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognized
as an expense in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments , the Group uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabili ties is increased to reflect the accretion of interest
and reduced for the lease payments made. In additi on, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the le ase 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 recognitio n exemption to its short-term leases of office and
employee dormitory (that is those leases that h ave a lease term of 12 months or less from the
commencement date and do not contain a purchase opti on). It also applies the recognition exemption for
leases of low-value assets to leases of office equi pment 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.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease
modification) each of its leases as eithe r an operating lease or a finance lease.
Leases in which the Group does not transfer substa ntially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental income i s accounted for on a straight-line
basis over the lease terms and is included in other in come in profit or loss due to its operating nature.
Initial direct costs incurred in negotiating and arr anging an operating lease a re added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period in which they are earned.
Leases that transfer substantially all the risks an d rewards incidental to ow nership of an underlying
asset to the lessee are accounted for as finance leas es. At the commencement date, the cost of the leased
asset is capitalised at the present value of the lease pa yments and related payments (including the initial
direct costs), and presented as a receivable at an amount equal to the net investment in the lease. The
finance income on the net investment in the lease is r ecognised in profit or loss so as to provide a constant
periodic rate of return over the lease terms.
When the Group is an intermediate lessor, a sublea se is classified as a finance lease or operating
lease with reference to the right-of-use asset arisin g from the head lease. If the head lease is a short-term
lease to which the Group applies the on-balance sheet recognition exemption, the Group classifies the
sublease as an operating lease.
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Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognit ion, as subsequently meas ured 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 si gnificant financing component or for which the
Group has applied the practical expedient of not adjust ing the effect of a significant financing component,
the Group initially measures a financial asset at its f air value plus in the case of a financial asset not at fair
value through profit or loss, tran saction costs. Trade receivables t hat 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 acco rdance with the policies set out for ‘‘Revenue
recognition’’ below.
In order for a financial asset to be classified and m easured at amortized cost or fair value through
other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and
interest (‘‘SPPI’’) on the principal amount outstandi ng. Financial assets with cash flows that are not SPPI
are classified and measured at fair value through p rofit or loss, irrespective of the business model.
The Group’s business model for managing financia l assets refers to how it manages its financial
assets in order to generate cash flows. The business m odel determines whether cash flows will result from
collecting contractual cash flows, selling the financi al assets, or both. Financial assets classified and
measured at amortised cost are held within a busines s model with the objective to hold financial assets in
order to collect contractual cash flows, while financia l assets classified and measured at fair value through
other comprehensive income are held within a busin ess 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 a t fair value through profit or loss.
Purchases or sales of financial assets that requi re delivery of assets within the period generally
established by regulation or convention in the marke tplace 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 t he effective interest method and
are subject to impairment. Gains and losses are recogn ised in the statement of profit or loss when the asset
is derecognised, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss a re carried in the statement of financial position
at fair value with net changes in fair value recognised in profit or loss.
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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) t he 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 a sset, 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 w hat 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 G roup continues to recognise the transferred asset to
the extent of its continuing involvement. In that case , the Group also recognises an associated liability.
The transferred asset and the associated liability a re measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a gu arantee over the transferred asset is measured at
the lower of the original carrying amount of the ass et 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 cred it losses (‘‘ECLs’’) for all debt instruments not
held at fair value through profit or loss. ECLs are bas ed 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 effect ive interest rate. The expected cash flows will include
cash flows from the sale of collateral held or other cre dit enhancements that are integral to the contractual
terms.
General approach
ECLs are recognised in two stages. For credit ex posures 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 sinc e initial recognition, a loss allowance is required for
credit losses expected over the rem aining life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
At each reporting date, the Group assesses whethe r 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 instrume nt 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 wit hout undue cost or effort, including historical and
forward-looking information. The Group considers t hat there has been a significant increase in credit
risk when contractual payments are more than 30 days past due.
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The Group considers a financial asset in defaul t 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 unli kely to receive the outstanding contractual amounts
in full before taking into account any credit enhancem ents held by the Group. A financial asset is written
off when there is no reasonable expectation o f recovering the contractual cash flows.
Financial assets at amortised co st are subject to impairment under the general approach and they
are classified within the following stages for meas urement of ECLs except for trade receivables which
apply the simplified approach as detailed below.
Stage 1 — Financial instruments for which credit ri sk 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 ri sk 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-impa ired at the reporting date (but that are not
purchased or originated credit-impaire d) and for which the loss allowance is
measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant financing component or when the Group
applies the practical expedient of not adjusting the effect of a significant fi nancing component, the Group
applies the simplified approach in calculating ECL s. Under the simplified approach, the Group does not
track changes in credit risk, but instead recogni ses 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 debt ors and the economic environment.
Classification as equity and financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements a nd the definitions of financial liability and equity
instrument.
A financial liability is any liability that is (a) a c ontractual obligation (i) to deliver cash or another
financial asset to another entity; or (ii) to exchange fi nancial assets or financial liabilities with another
entity under conditions that are potentially unfavourab le to the entity; or (b) a contract that will or may
be settled in the entity’s own equity instruments and is: (i) a non derivative for which the entity is or may
be obliged to deliver a variable number of the entity’s ow n equity instruments; or (i i) a derivative that will
or may be settled other than by the exchange of a fix ed amount of cash or another financial asset for a
fixed number of the entity’s own equity instruments.
An equity instrument is any contract that evidences a r esidual interest in the assets of an entity after
deducting all of its liabilities.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recogn ition, as financial liabili ties at fair value through
profit or loss, loans and borrowings, or payables, as appropriate.
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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 payables, other payables and accruals,
interest-bearing bank and other borrowings, financi al liabilities measured at fair value through profit
or loss.
Subsequent measurement
The subsequent measurement of financial liabilit ies depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, loans and borrowings)
After initial recognition, trade payables, other payables and accruals, interest-bearing bank and
other borrowings, are subsequently measured at amor tised cost, using the eff ective 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 interes t rate amortisation process.
Amortised cost is calculated by taking into acc ount any discount or premium on acquisition and fees
or costs that are an integral part of the effective inter est rate. The effective interest rate amortisation is
included in finance costs in profit or loss.
Financial liabilities at fair value through profit and loss
Financial liabilities measured at fair value thr ough profit and loss include derivative financial
instruments.
Financial liabilities are classified as held f or trading if they are incurred for the purpose of
repurchasing in the near term. This category also incl udes derivative financial in struments entered into by
the Group that are not designated as hedging instrum ents in hedge relationships as defined by IFRS 9.
Separated embedded derivatives are also classifi ed as held for trading unless they are designated as
effective hedging instruments. Gains or losses on liabi lities held for trading are recognised in profit or loss.
The net fair value gain or loss recognised in profit or loss does not include any interest charged on these
financial liabilities.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liab ility is discharged or
cancelled, or expires.
When an existing financial liabi lity is replaced by another from the same lender on substantially
different terms, or the terms of an existing liabili ty are substantially modified, such an exchange or
modification is treated as a derecognition of the orig inal liability and a recognition of a new liability, and
the difference between the respective carrying amount s is recognised in the statement of profit or loss and
other comprehensive income.
Offsetting of financial instruments
Financial assets and financial lia bilities are offset and the net am ount is reported in the statement of
financial position if there is a currently enforceabl e legal right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise th e assets and settle the liabilities simultaneously.
APPENDIX I ACCOUNTANTS’ REPORT
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Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on weighted
average method and, in the case of work in progress and finished goods, comprises direct materials, direct
labour and an appropriate proportion of overheads. Net r ealisable value is based on estimated selling
prices less any estimated costs to be i ncurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of f inancial position comprise cash on hand and at
banks, and short-term highly liquid deposits with a ma turity of generally withi n three months that are
readily convertible into known amount s of cash, subject to an insignifi cant risk of changes in value and
held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of c ash flows, cash and cash equivalents comprise
cash on hand and at banks, and short-term deposits as defined above.
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 am ount recognised for a provision is the present
value at the end of the reporting period of the futur e expenditures expected to be required to settle the
obligation. The increase in the discounted presen t value amount arising from the passage of time is
included in finance costs in profit or loss.
The Group provides for warranties in relation to t he sale of products for general repairs of defects
occurring during the warranty period. Provisions fo r 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. 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, ei ther in other comprehensive income or directly in
equity.
Current tax assets and liabilities are measured a t 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 each of the Relevant Periods, takin g into consideration interpretations and practices
prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability met hod, on all temporary differences at the end of each
of the Relevant Periods between the tax bases of ass ets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax liabilities are recognised for a ll taxable temporary differences, except:
. when the deferred tax liabilit y arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business c ombination and, at the time of the transaction,
affects neither the accounting p rofit nor taxable profit or loss and does not give rise to equal
taxable and deductible temporary differences; and
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. in respect of taxable temporary differences asso ciated with investments in subsidiaries, when
the timing of the reversal of the temporary diffe rences 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 carry forward 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
carry forward of unused tax credits and unus ed tax losses can be utilised, except:
. when the deferred tax asset relating to the deduc tible temporary differences arises from the
initial recognition of an asset or liability in a t ransaction that is not a business combination
and, at the time of the transaction, affects nei ther 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 a ssociated with investments in subsidiaries,
deferred tax assets are only recognised to the e xtent that it is probable that the temporary
differences will reverse in the foreseeable fut ure and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred tax assets is re viewed at the end of each of the Relevant Periods
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 or the Relevant Periods and are recogn ised to the extent that it has become probable that
sufficient taxable profit will be avai lable 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 set tled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of each of the Relevant Periods.
Deferred tax assets and deferred tax liabiliti es are offset if and only if the Group has a legally
enforceable right to set off current tax assets and cu rrent tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes le vied by the same taxation authority on either the same
taxable entity or different taxable ent ities which intend either to settle cu rrent tax liabilities and assets on
a net basis, or to realise the assets and settle the liab ilities simultaneously, in each future period in which
significant amounts of deferred t ax liabilities or ass ets are expected to be settled or recovered.
Government grants
Government grants are recognised at their fair val ue where there is reasonable assurance that the
grant will be received and all attaching conditions wi ll be complied with. When the grant relates to an
expense item, it is recognised as income on a systemati c basis over the periods that the costs, for which it is
intended to compensate, are expensed.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is r ecognised when control of goods or services is
transferred to the customers at an amount that reflec ts the consideration to which the Group expects to be
entitled in exchange for those goods or services.
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When the consideration in a contract includes a var iable amount, the amount of consideration is
estimated to which the Group will be entitled in exch ange for transferring the goods or services to the
customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the am ount of cumulative revenue recognised will not occur
when the associated uncertainty with the varia ble consideration is subsequently resolved.
(a) Sale of goods
Revenue from the sale of goods is recognised at the point in time when control of the asset is
transferred to the customers, generally upon accep tance of the goods as agreed in the sales contracts.
Sales of goods — distributors and retailers
A significant part of the Group’s products is sold to distributors and retailers, who have
discretion over both price and d istribution methods for products to be sold in their designated
geographical areas. Revenue is recognised at a point in time when the goods are delivered and
accepted by the distributors and retailer s in accordance with the sales contract.
Volume rebates may be provided to distribut ors and retailers under certain conditions as
agreed in the sales contract. Rebates are offset against amounts payable by the customer. To
estimate the variable consideration for the exp ected future rebates, the most likely amount is
used.
Sales of goods — direct-to-customer (‘‘DTC’’)
The Group sells its products directly to end c ustomers via e-commence platforms and
self-operated website. Revenue is recognised at a point in time when the goods are delivered
and accepted by the end customers. The Group estimates the time of acceptance by the end
customers based on the actual delivery time, th e historical experience on transportation time
required, and the time when online payment is completed.
(b) Cloud storage services
Customers subscribe for cloud storage services over a service period. Revenue is recognised
over the subscribed period on a straight-line basis, because the customer simultaneously receives and
consumes the benefits provided by the Group.
(c) Rights of return
For contracts which provide a customer with a right to return the goods within a specified
period, the expected value method is used to estimate the goods that will not be returned because
this method best predicts the amount of variable c onsideration to which the Group will be entitled.
The requirements in IFRS 15 on constraining est imates of variable consideration are applied in
order to determine the amount of variable consid eration that can be included in the transaction
price. For goods that are expected to be returned, instead of revenue, a liability is recognised. A
right-of-return asset (and the corresponding adjust ment to cost of sales) is also recognised for the
right to recover products from a customer.
Other income
Interest income is recognised on an accrual basis us ing the effective interest method by applying the
rate that exactly discounts the estimated future cas h receipts over the expected life of the financial
instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
APPENDIX I ACCOUNTANTS’ REPORT
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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 th e related goods or services. Contract liabilities are
recognised as revenue when the Group performs under the contract (i.e., transfers control of the related
goods or services to the customer).
Contract costs
Other than the costs which are capitalised as in ventories, property, p lant and equipment and
intangible assets, costs incurred to f ulfil a contract with a customer are capitalised as an asset if all of the
following criteria are met:
(a) The costs relate directly to a contract or to an anticipated contract that the entity can
specifically identify.
(b) The costs generate or enhance resources of the entity that will be used in satisfying (or in
continuing to satisfy) performa nce obligations in the future.
(c) The costs are expected to be recovered.
The capitalised contract costs are amortised a nd charged to the statement of profit or loss on a
systematic basis that is consistent with the transfe r to the customer of the goods or services to which the
asset relates. Other contract costs are expensed as incurred.
Right-of-return assets
A right-of-return asset is recognised for the right to recover the goods expected to be returned by
customers. The asset is measured at the former carrying amount of the goods to be returned, less any
expected costs to recover the goods and any potenti al decreases in the value of the returned goods. The
Group updates the measurement of the asset for any r evisions to the expected level of returns and any
additional decreases in the value of the returned goods.
Refund liabilities
A refund liability is recognised for the obligation to refund some or all of the consideration received
(or receivable) from a customer and is measured at the amount the Group ultimately expects it will have to
return to the customer. The Group updates its esti mates of refund liabilities (and the corresponding
change in the transaction price) at the end of each reporting period.
Share-based payments
The Group operates share award schemes for the purpose of providing incentives and rewards to
eligible participants who contribute to the succes s of the Group’s operations. Employees (including
directors) of the Group receive remuneration in th e form of share-based payments, whereby employees
render services as consideration for equity inst ruments (‘‘equity-settled transactions’’).
The cost of equity-settled transactions with empl oyees is measured by reference to the fair value at
the date on which they are granted. The fair value of sh are award is determined by an external valuer using
probability weighted expected return method and val uation models. Further details are included in note
28 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 2–


--- page 540 ---
The cost of equity-settled transactions is recogn ised in employee benefit expense, together with a
corresponding increase in equity, over the period in wh ich the performance and/or service conditions are
fulfilled. The cumulative expense recognised for e quity-settled transacti ons at the end of each of the
Relevant Periods until the vesting date reflects the ex tent to which the vesting period has expired and the
Group’s best estimate of the number of equity instrument s that will ultimately vest. The charge or credit
to 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 ar e 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 e quity instruments that will ultim ately vest. Market performance
conditions are reflected within the grant date fair value. Any other conditions attached to an award, but
without an associated service re quirement, are considered to be non- vesting conditions. Non-vesting
conditions are reflected in the fai r value of an award and lead to an immediate expensing of an award
unless there are also service a nd/or performance conditions.
For awards that do not ultimately vest because non-market performance a nd/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 i rrespective of whether the market o r non-vesting conditi on is satisfied,
provided that all other performance a nd/or service conditions are satisfied.
Where the terms of an equity-settled award are m odified, as a minimum an expense is recognised as
if the terms had not been modified, if the original te rms 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.
Other employee benefits
Pension scheme
Mainland China
The employees of the Group’s subsidiaries whic h operate in Mainland China are required to
participate in a central pension scheme operated by t he local municipal government. The subsidiaries are
required to contribute a certain percentage of their p ayroll costs to the central pension scheme. The
contributions are charged to profit or loss as they become payable in accordance with the rules of the
central pension scheme. Other than the monthly c ontributions, the Group has no further payment
obligations once the contributions have been paid.
Japan
The Group pays fixed contributi ons into a local separate fund, which is responsible for paying
pensions and other post-retirement benefits to the retired employees. The amounts based on the defined
contribution plans are recognised as liabilities i n the accounting period in which the service has been
rendered by the employees, with a corresponding charge to the profit or loss for the current period.
Housing fund and other social insurances — Mainland China
The Group has participated in defined social s ecurity 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 insur ance and maternity insurance. The Group makes
monthly contributions to the housing fund and other so cial insurances. The contributions are charged to
profit or loss on an accrual basis. The Group’s lia bility in respect of these funds is limited to the
contributions payable in each of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 3–


--- page 541 ---
Borrowing costs
All borrowing costs are expensed in the period in w hich they are incurred. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds.
Events after the reporting period
If the Group receives information after the repor ting period, but prior to the date of authorisation
for issue, about conditions that existed at the end o f the reporting period, it will assess whether the
information affects the amounts that it recognises in it s financial statements. The Group will adjust the
amounts recognised in its financia l statements to reflect any adjusti ng events after the reporting period
and update the disclosures that relate to thos e conditions in light of the new information. For
non-adjusting events after the reporting period, the Group will not change the amounts recognised in its
Historical Financial Information but will disclose the nature of the non- adjusting events and an estimate
of their financial effects, or a statement that such an estimate cannot be made, if applicable.
Foreign currencies
The Historical Financial Information is prese nted in RMB, which is the Company’s functional
currency. Each entity in the Group determines its own functional currency and items included in the
financial statements of each ent ity are measured using that functional currency. Foreign currency
transactions recorded by the entities in the Group are i nitially recorded using their respective functional
currency rates prevailing at the dates of the transac tions. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional c urrency rates of exchange ruling at the end of each of
the Relevant Periods. Differences arising on settlem ent or translation of monetary items are recognised in
the statement of profit or loss.
Non-monetary items that are measured in term s of historical cost in a foreign currency are
translated using the exchange rates at t he dates of the initial transactions.
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 adv ance consideration, the
date of initial transaction is the date on which the G roup initially recognises the non-monetary asset or
non-monetary liability arisi ng from the advance consideration. If th ere are multiple payments or receipts
in advance, the Group determines the transaction date for each payment or receipt of the advance
consideration.
The functional currencies of certain overseas subs idiaries are currencies other than the RMB. As at
the end of the reporting period, the a ssets and liabilities of these entities are translated into RMB at the
exchange rates prevailing at the end of the reporting period and their statements of profit or loss are
translated into RMB at the exchange rates that a pproximate to those prevailing at the dates of the
transactions.
The resulting exchange differences are recognized in other comprehensive income and accumulated
in the exchange fluctuation reserve, except to the extent that the differences are attributable to
non-controlling interests.
For the purpose of the consolidated statement of c ash flows, the cash flows of overseas subsidiaries
are translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently recurring
cash flows of overseas subsidiaries which arise throughout the year are translated into RMB at the
weighted average exchange rates or the year.
APPENDIX I ACCOUNTANTS’ REPORT
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3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Finan cial Information requires management to make
judgements, estimates and assumptions that affect th e reported amounts of revenues, expenses, assets and
liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates c ould result in outcomes that could re quire 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 invol ving estimations, which have the mos t significant effect on the amounts
recognised in the Historical Financial Information:
Development expenses
Expenditure incurred on projects to develop ne w products is capitalised and deferred only
when the Group can demonstrate the technical feasi bility of completing the intangible asset so that
it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how
the asset will generate future economic benefits, t he availability of resources to complete the project
and the ability to measure reliably the expendi ture during the development. Product development
expenditure which does not meet these criteria is e xpensed when incurred. Determining the amounts
of development costs to be capitalised re quires the use of judgements and estimation.
Recognition of income taxes and deferred tax assets
Determining income tax provision involves j udgement on the future tax treatment of certain
transactions and when certain matters relating to the income taxes have not been confirmed by the
local tax bureau. Management evaluates tax implic ations of transactions and tax provisions are set
up accordingly. The tax treatments of such transa ctions are reconsidered periodically to take into
account all changes in tax legislation.
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 l osses can be utilised. Significant management
judgement is required to determine the amount of de ferred tax assets that can be recognised, based
upon the likely timing and level of future taxable profit s together with future tax planning strategies.
Estimation uncertainty
The key assumptions concerning the future and ot her key sources of estimation uncertainty at the
end of each of the Relevant Periods, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are described below.
Provision against obsolete and slow-moving inventories
The Group reviews the condition of its inventori es at the end of each reporting period and makes
provisions against obsolet e and slow-moving inventory items which are identified as no longer suitable for
sale or use based on sales forecasts. Such sales foreca sts are prepared based on agreements or orders on
hand and estimated sales in the foreseeable future bas ed on historical experiences with its customers and
current market conditions of robots industry. Manageme nt estimates the net realizable value for those
obsolete and slow-moving inventories based primar ily on the latest invoice prices and current market
conditions. The estimation is reassessed at the end o f each reporting period. The provision against
obsolete and slow-moving inventories requires the use of judgements and estimates. Where the actual
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 543 ---
outcome or expectation in future is different from the o riginal estimate, such difference will impact on the
carrying value of inventories and the write-down of i nventories recognized in the periods in which such
estimates have been changed.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are
based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by
geography, customer type and rating).
The provision matrix is initially based on the Gr oup’s historical observed default rates. The Group
will calibrate the matrix to adjust th e historical credit loss experienc e with forward-looking information.
For instance, if forecast economic conditions are exp ected to deteriorate over the next year which can lead
to an increased number of defaults in the manufacturing sector, the historical de fault rates are adjusted.
At each reporting date, the historical observe d default rates are updated and changes in the
forward-looking estimates are analysed.
The assessment of the correlation among histor ical 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. T he Group’s historical credit loss experience and
forecast of economic conditions may also not be repres entative of a customer’s actual default in the
future. The information about the ECLs on the Group’ s trade receivables is disclosed in note 18 to the
Historical Financial Information.
Assessment of useful lives of capitalized development expenditures
In assessing the estimated useful lives of capita lized development costs when the products are put
into commercial production, the Group takes into a ccount factors such as expected life span of the
underlying products based on past experience or from a change in the market demand for the products.
The estimation of the useful lives is based on the experience of management.
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest ra te implicit in a lease, and therefore, it uses an
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-u se 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 it needs
to be adjusted to reflect the terms and conditions of th e lease (for example, when leases are not in the
subsidiary’s functional currenc y). The Group estimates the IBR using observable inputs (such as market
interest rates) when available and is required to mak e certain entity-specific estimates (such as the
subsidiary’s stand-alone credit rating).
Impairment of non-financial assets
The Group assesses whether there are any indica tors of impairment for all non-financial assets
(including the right-of-use assets) at the end of eac h of the Relevant Periods. Indefinite life intangible
assets are tested for impairment annually and at other times when su ch an indicator exists. Other
non-financial assets are tested for impairment whe n there are indicators that the carrying amounts may
not be recoverable. An impairment exists when the ca rrying 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 d isposal is based on available data from binding sales
transactions in an arm’s length transaction of simila r assets or observable market prices less incremental
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 544 ---
costs for disposing of the asset. When value in use cal culations are undertaken, management must estimate
the expected future cash flows from the asset or cash-g enerating unit and choose a suitable discount rate in
order to calculate the present value of those cash flows.
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group is not organis ed into business units based on its service and
products and only has one repor table operating segment.
The information reported to the dir ectors, who are the chief operating decision makers, for the purpose of
resource allocation and assessment of performance doe s not contain discrete operating segment financial
information and the directors reviewed the financial r esults of the Group as a whole. Therefore, no further
information about the operating segment is presented.
Geographical information
(a) Revenue from external customers
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Japan 168,381 285,057 352,408 167,390 268,354
Europe 46,193 68,737 130,465 47,769 68,055
North America 47,614 83,482 96,735 42,394 46,176
Others* 12,409 19,988 30,316 17,468 13,709
274,597 457,264 609,924 275,021 396,294
The revenue information above is based on the locations of the customers.
* Others include over 40 countries and regio ns, including Australia, South Korea and
Singapore, of which each contri buted relatively insignificant revenue during the Relevant
Periods and six months ended 30 June 2024.
(b) Non-current assets
Most of the Group’s non-current assets are loca ted in Mainland China. Thus, no geographic
information is presented.
Information about major customers
Revenue from a major customer which accounted for 10% or more of the Group’s revenue during
the Relevant Periods and six months ended 30 June 2024 are set out below:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Customer A 145,080 178,186 218,634 112,447 175,233
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 7–


--- page 545 ---
5. REVENUE, OTHER INCOME AND GAINS
Revenue
An analysis of revenue is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts
with customers 274,597 457, 264 609,924 275,021 396,294
Revenue from contracts with customers
(a) Disaggregated r evenue information
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Types of goods or
services
Execution-enhanced
robots 139,896 255,091 347,869 175,239 237,735
Perception and
decision-making
systems 89,250 161,243 199,091 75,986 111,110
Other smart home
products and
services* 45,451 40,930 62,964 23,796 47,449
274,597 457,264 609,924 275,021 396,294
Timing of revenue
recognition
Goods transferred at a
point in time 274,262 456,460 608,769 274,558 395,134
Services transferred
over time 335 804 1,155 463 1,160
Total revenue from
contracts with
customers 274,597 457,264 609,924 275,021 396,294
* Other smart home products and services primar ily include the revenue generated from the
sales of smart light tools, smart power tool s and smart home appliances and cloud storage
service.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 546 ---
The following table shows the amounts of revenue recognised in the current reporting period that
were included in the contract liabilities at the beginning of the reporting period:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue recognised
that was included in
contract liabilities at
the beginning of the
reporting period:
Sale of products 1,177 3, 202 3,558 3,558 4,317
(b) Performance obligations
Information about the Group’s performan ce obligations is summarised below:
Sale of goods
The performance obligation is satisfied upon delivery and acceptance of products. Payment is
generally due within 2 months from delivery for d istributors and retailers, where payment is
normally settled through on-li ne payment platforms for DTC.
Cloud storage services
The performance obligation is satisfied over t ime. Service contracts are for periods of one year
or less, and are billed based on the time incurred.
As the original expected duration of the contracts from customers of the Group are within one
year or less, the Group applies the practical exp edient of not disclosing the transaction price
allocated to the remaining performance obligation.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 547 ---
Other income and gains
An analysis of other income and gains is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other income
Interest income 1,647 1,560 2,058 864 550
Finance income on the
net investment in the
sublease (note 20) 12 21 154 75 70
Government grants* 4,955 4,692 4,233 3,072 3,261
Investment income
from financial assets
at fair value through
profit or loss — 21 1,679 — 344
Others 165 494 304 182 81
Gains
Fair value gains on
financial assets at
fair value through
profit or loss 8 — 391 104 —
Gain on sublease of
right-of-use assets — 1,554 — — —
Gain on disposal of
right-of-use assets — — 292 281 —
Gain on exchange
differences, net — — — — 6,058
6,787 8,342 9,111 4,578 10,364
* The Group has received government grants related to income that are receivable as
compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related costs are recognised in
profit or loss in the period in which they become receivable.
6. FINANCE COSTS
An analysis of finance costs is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on bank loans — — 1,275 104 803
Interest on factored
trade receivables 666 749 698 325 398
Interest on lease
liabilities 1,756 1,491 2,436 1,309 964
2,422 2,240 4,409 1,738 2,165
For the details of pre-IPO investments, please refer to note 28 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
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7. (LOSS)/PROFIT BEFORE TAX
The Group’s (loss)/profit before tax is a rrived at after charging/(crediting):
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of inventories sold* 180,224 226,377 293,833 135,970 180,967
Cost of services provided 234 349 494 213 574
Research and development
costs:
Deferred expenditure
amortised** 14 222 631 1,177 588 1,416
Current year expenditure 61,761 89,192 112,022 56,737 58,679
Depreciation of property,
plant and equipment** 13 3,005 5,113 9,589 4,229 5,567
Depreciation of right-of-use
assets*** 15 10,430 11,451 10,988 5,124 4,594
Amortisation of intangible
assets excluding deferred
expenditures*** 14 — 45 469 234 524
Foreign exchange losses/
(gains), net**** 3 1,619 6,494 10,766 (6,058)
Lease payments in respect of
short-term leases 15 331 122 88 41 55
Impairment of financial
assets, net:
Impairment/(reversal of
impairment) of trade
receivables 19 24 553 (138) 95 432
Impairment/(reversal of
impairment) of other
receivables 20 112 245 (13) 25 58
Write-down of inventories to
net realisable value***** 7,055 7,608 5,639 5,713 5,698
Fair value loss on financial
assets at fair value
t h r o u g h p r o f i t o r l o s s * * * * ———— 3 9 1
Fair value loss on financial
liabilities at fair value
through profit or loss**** 129 — — — 420
Investment loss on financial
liabilities at fair value
through profit or loss**** 54 453 — 97 1,153
Product warranty
provision****** 27 5,121 13,646 17,100 6,035 12,833
L i s t i n g e x p e n s e ———— 1 1 , 2 6 1
Auditor’s remuneration 12 12 42 — 189
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--- page 549 ---
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Employee benefit expenses
(excluding directors’,
supervisors’ and chief
executive’s remuneration
(note 8) )
— Wages and salaries 82,110 108,200 127,479 57,311 69,372
—P e n s i o ns c h e m e
contributions 4,834 6,096 8,556 5,476 6,480
— Share-based payment
expenses 2,159 2,721 2,721 1,361 3,414
Total 89,103 117,017 138,756 64,148 79,266
* The amounts disclosed for cost of inventories so ld included write-down of inventories to net
realisable value.
** The amortisation of deferred development costs is included in ‘‘Cost of sales’’ in profit or loss.
*** The depreciation of property, plant and equipm ent and right-of-use assets and amortisation of
intangible assets are included in ‘‘Cost of sal es’’, ‘‘Selling and distribution expenses’’,
‘‘Administrative expenses’’ and ‘‘Research a nd development expenses’’ in profit or loss,
respectively.
**** The amounts are included in ‘‘other expenses ’’ or “Other income and gains’’ in profit or loss.
***** The amounts are included in ‘‘c ost of sales’’ in profit or loss.
****** The amounts are included in ‘‘Selling and d istribution expenses’’ in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 550 ---
8. DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVE’S REMUNERATION
Directors’, supervisors’ and chief executive’s rem uneration as recorded during the Relevant Periods and
the six months ended 30 June 2024 is set out below:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Fees — — — — —
Other emoluments:
Salaries, allowances
and benefits in kind 2,530 2,885 3,341 1,658 2,905
Performance related
bonus 1,349 1,691 1,394 678 722
Pension scheme
contributions 143 164 223 100 145
Share-based payment
expenses 1,219 1,460 1,460 730 1,627
5,241 6,200 6,418 3,166 5,399
(a) Independent non-executive directors
There were no emoluments payable to the independent non-executive directors during the Relevant
Periods and the six months ended 30 June 2024.
(b) Directors, supervisors and the chief executive
Year ended 31 December 2022
Salaries,
allowances
and benefits
in kind
Performance
related
bonus
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
M r .L iZ h i c h e n(note (i)) 400 230 23 — 653
Mr. Pan Yang (note (ii)) 398 230 22 — 650
Mr. Liu Guohui (note (ii)) 416 246 23 517 1,202
Mr. Lin Haizhou (note (iii)) 471 286 28 431 1,216
Mr. Mou Qingqi (note (iv)) 338 203 20 77 638
Subtotal 2,023 1,195 116 1,025 4,359
Supervisor
Mr. Liu Yanfei (note (vi)) 507 154 27 194 882
Non-executive directors:
Mr. Ko Ping Keung (note (ii)) —————
Ms. Wang Bei (note (iii)) —————
Ms. Wang Han (note (iv)) —————
Mr. She Yangjie (note (iii)) —————
S u b t o t a l —————
Total 2,530 1,349 143 1,219 5,241
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 551 ---
Year ended 31 December 2023
Salaries,
allowances
and benefits
in kind
Performance
related
bonus
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
M r .L iZ h i c h e n(note (i)) 458 299 26 — 783
Mr. Pan Yang (note (ii)) 463 299 25 — 787
Mr. Liu Guohui (note (ii)) 453 366 26 517 1,362
Mr. Lin Haizhou (note (iii)) 498 329 30 672 1,529
Mr. Mou Qingqi (note (iv)) 469 287 28 77 861
Subtotal 2,341 1,580 135 1,266 5,322
Supervisor
Mr. Liu Yanfei (note (vi)) 544 111 29 194 878
Non-executive directors:
Mr. Ko Ping Keung (note (ii)) —————
Ms. Wang Bei (note (iii)) —————
Ms. Wang Han (note (iv)) —————
Mr. Zhang Xingchen (note (v)) —————
S u b t o t a l —————
Total 2,885 1,691 164 1,460 6,200
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 552 ---
Year ended 31 December 2024
Salaries,
allowances
and benefits
in kind
Performance
related
bonus
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
M r .L iZ h i c h e n(note (i)) 7 0 95 47 0— 8 3 3
Mr. Pan Yang (note (ii)) 528 322 29 — 879
Mr. Liu Guohui (note (ii)) 498 315 29 517 1,359
Mr. Lin Haizhou (note (iii)) 524 330 33 672 1,559
Mr. Mou Qingqi (note (iv)) 494 308 30 77 909
Subtotal 2,753 1,329 191 1,266 5,539
Supervisor
Mr. Liu Yanfei (note (vi)) 5 8 86 53 2 1 9 4 8 7 9
Non-executive directors:
Mr. Ko Ping Keung (note (ii)) —————
Ms. Wang Bei (note (iii)) —————
Ms. Wang Han (note (iv)) —————
Mr. Zhang Xingchen (note (v))
Mr. Weng Deming (note (v)) —————
S u b t o t a l —————
Total 3,341 1,394 223 1,460 6,418
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 553 ---
Six months ended 30 June 2025
Salaries,
allowances
and benefits
in kind
Performance
related
bonus
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
M r .L iZ h i c h e n(note (i)) 4 2 42 03 9— 4 8 3
Mr. Pan Yang (note (ii)) 283 129 14 — 426
Mr. Hu Zhidong (note (vii)) 513 69 9 707 1,298
Ms. Yang Minghui (note (vii)) 2 7 84 61 54 1 3 8 0
Mr. Lin Haizhou (note (iii)) 278 130 15 336 759
Mr. Liu Guohui (note (ii)) 269 127 14 258 668
Subtotal 2,045 521 106 1,342 4,014
Supervisors
Mr. Liu Yanfei (note (vi)) 3 8 64 41 49 7 5 4 1
Mr. Zheng Minsheng (note (viii)) 2 6 15 91 48 1 4 1 5
Mr. Mou Qingqi (note (iv)) 2 1 39 81 1 1 0 7 4 2 9
Mr. Yu Jiali (note (ix)) —————
Subtotal 860 201 39 285 1,385
Non-executive directors:
Mr. Ko Ping Keung (note (ii)) —————
Ms. Wang Bei (note (iii)) —————
Ms. Wang Han (note (iv)) —————
M r .L iZ e x i a n g(note (vii)) —————
Mr. Weng Deming (note (v)) —————
S u b t o t a l —————
Total 2,905 722 145 1,627 5,399
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 6–


--- page 554 ---
Six months ended 30 June 2024 (Unaudited)
Salaries,
allowances
and benefits
in kind
Performance
related
bonus
Pension
scheme
contributions
Share-based
payment
expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors
M r .L iZ h i c h e n(note (i)) 3 2 01 92 7— 3 6 6
Mr. Pan Yang (note (ii)) 267 159 13 — 439
Mr. Liu Guohui (note (ii)) 245 156 14 258 673
Mr. Lin Haizhou (note (iii)) 260 164 16 336 776
Mr. Mou Qingqi (note (iv)) 249 153 15 39 456
Subtotal 1,341 651 85 633 2,710
Supervisor
Mr. Liu Yanfei (note (vi)) 3 1 72 71 59 7 4 5 6
Non-executive directors:
Mr. Ko Ping Keung (note (ii)) —————
Ms. Wang Bei (note (iii)) —————
Ms. Wang Han (note (iv)) —————
Mr. Zhang Xingchen (note (v)) —————
Subtotal —————
Total 1,658 678 100 730 3,166
Notes:
(i) Mr. Li Zhichen was appointed as a director and the chief executive officer of the Company
and the chairman of the Board with effect from October 2018.
(ii) Mr. Pan Yang and Mr. Ko Ping Keung were a ppointed as directors of the Company with
effect from October 2018. Mr. Liu Guohui wa s appointed as a director of the Company with
effect from October 2018 until April 2025.
(iii) Mr. Lin Haizhou was appointed as a director of the Company with effect from February 2021
until April 2025. Ms. Wang Bei was appointed as a director of the Company with effect from
November 2021 until April 2025. Mr. She Yang jie was appointed as a director of the Company
with effect from May 2021 to December 2023.
(iv) Mr. Mou Qingqi and Ms. Wang Han were appoi nted as directors of the Company with effect
from March 2022 until April 2025. Mr. Mou Qingqi was appointed as a supervisor of the
Company with effect from April 2025 until May 2025.
(v) Mr. Zhang Xingchen was appointed as a dir ector of the Company with effect from December
2023 until November 2024. Mr. Weng Deming was appointed as a director of the Company
with effect from November 2024 until April 2025.
(vi) Mr. Liu Yanfei was appointed as a supervisor of the Company with effect from October 2018.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 7–


--- page 555 ---
(vii) Mr. Hu Zhidong, Ms. Yang Minghui and Mr. Li Zexiang were appointed as directors of the
Company with effect from April 2025.
(viii) Mr. Zheng Minsheng was appointed as a supe rvisor of the Company wi th effect from April
2025.
(ix) Mr. Yu Jiali was appointed as a supervisor of the Company with effect from 27 May 2025.
During the Relevant Periods and six months ended 30 June 2024, share awards were granted to
certain directors through share incentive platforms, fu rther details of which are included in the disclosures
in note 30 to the Historical Financia l Information. The fair value of such awarded shares, which has been
recognised in profit or loss, w as determined as at the date of grant and the amount included in the
Historical Financial Information for the Relevant Per iods is included in the above directors’ remuneration
disclosures.
No emoluments were paid by the Company to the dir ectors and supervisors as an inducement to join
or upon joining the Company or as compensation for loss of office during the Relevant Periods and six
months ended 30 June 2024.
Save for the non-executive directors, there was no arrangement under which a director or the chief
executive waived or agreed to waive any remuneration during the Relevant Periods and six months ended
30 June 2024.
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the Relevant Periods and six months ended 30 June 2024 included
three, three, three, three and three directors, resp ectively, details of whose remuneration are set out in note 8
above. Details of the remuneration for the remaining two, two, two, two and two highest paid employees who
are neither a director nor chief executive of the Compa ny during the Relevant Periods and six months ended 30
June 2024 are as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and
benefits in kind 1,046 1,168 1,210 609 673
Performance related bonus 530 573 597 298 266
Pension scheme contributions 65 66 72 35 32
Share-based payment
expenses 1,045 1,045 1,045 523 1,202
2,686 2,852 2,924 1,465 2,173
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 8–


--- page 556 ---
The number of non-director and non-chief executive highest paid employees whose remuneration fell
within the following bands is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Numbers of employees Numbers of employees
(Unaudited)
BELOW HK$1,000,000 — — — 1 1
HK$1,000,001 to
HK$1,500,000 1 1 1 1 —
HK$1,500,001 to
HK$2,000,000 — — — — 1
HK$2,000,001 to
HK$2,500,000 1 1 1 — —
HK$2,500,001 to
HK$3,000,000 — — — — —
22222
During the Relevant Periods and six months e nded 30 June 2024, share awards were granted to two
non-director and non-chief executive highest paid employees in respect of their services to the Group, further
details of which are included in the disclosures in note 3 0 to the Historical Financial Information. The fair value
of such shares, which has been recognised in the state ment of profit or loss over the vesting period, was
determined as at the date of grant and the amount include d in the Historical Financial Information for the
Relevant Periods and six months ended 30 June 2024 is included in the above non-director and non-chief
executive highest paid employees’ remuneration disclosures.
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 provision for corporate income tax in Mainland China is based on the statutory rate of 25% of
the taxable profits determined in accordance with the PRC Corporate Income Tax Law which was
approved and became effective on 1 January 2008.
Woan Technology (Shenzhen) Co., Ltd., a subsidiary of the Group in Mainland China, was
qualified as a high and new technology enterprise and w as subject to income tax at a preferential tax rate
of 15% during the Relevant Periods and six months ended 30 June 2024. This qualification is subject to
review by the relevant governmental authority in the PRC for every three years.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 9–


--- page 557 ---
Hong Kong
The subsidiaries incorporated in Hong Kong are qua lifying entities under the two-tiered profits tax
rates regime, where the first HK$2,000,000 of assessable profits were taxed at 8.25% and the remaining
assessable profits were taxed at 16.5% during the Relevant Periods and six months ended 30 June 2024.
Japan
For the subsidiary in Japan, a qualifying entit y with stated capital no more than JPY100,000,000
was under the two-tiered profits tax rates regime, where the first JPY8,000,000 of assessable profits were
taxed at 15% and the remaining assessable profits are taxed at 23.2%, additionally, there were local
corporate taxes, business taxes, resident taxes, and l ocal corporate special taxes during the Relevant
Periods and six months ended 30 June 2024.
USA
The subsidiaries incorporated in the USA are subject to statutory United States federal corporate
income tax at a rate of 21% during the Relevant Periods and six months ended 30 June 2024, and the US
subsidiaries are also subject to state inc ome tax in corresponding jurisdictions.
The income tax expense of the Group for the Rele vant Periods and six months ended 30 June 2024 is
analysed as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current income tax 49 89 400 671 2,318
Deferred income tax — — — — (6,095)
Total tax charge/
(credit) for the year/
period 49 89 400 671 (3,777)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 0–


--- page 558 ---
A reconciliation of the expected income tax calculate d at the preferential tax rate and (loss)/profit
before income tax, with the actual income tax at the effective tax rate is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
(Loss)/profit before tax (86,934 ) (16,287) (2,674) (12,970) 24,126
Tax charge at the
statutory tax rate of
25% (21,734) (4,072) (669) (3,243) 6,032
Entities subject to
lower statutory
income tax rate 8,929 230 (1,557) (2,900) (4,985)
Adjustments in respect
of current tax of
previous periods — 13 26 26 —
Tax losses utilised from
previous periods (225) (316) (657) (708) (1,620)
Additional deductible
allowance for
qualified research
and development
expenses (7,388) (9,261) (11,817) (6,108) (6,877)
Temporary differences
and tax losses
not recognised 19,913 12,906 14,440 13,258 2,871
Expenses not
deductible for tax 554 589 634 346 802
Tax charge/(credit) at
the Group’s effective
tax rate 49 89 400 671 (3,777)
According to the PRC Corporate Income Tax regulations, Woan Technology (Shenzhen) Co., Ltd.,
a subsidiary of the Group, was entitled to additiona l deduction of 100% of qualified R&D expenses from
taxable income from 2022. The additional deduction percentage was 200% for the amortisation of
capitalised development costs.
11. DIVIDENDS
No dividend was paid or declared by the Company duri ng the Relevant Periods and the six months ended
30 June 2024.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 1–


--- page 559 ---
12. (LOSS)/EARNINGS PER SHARE ATTRIBUT ABLE TO ORDINARY EQUITY HOLDERS OF THE
PARENT
The calculation of the basic (loss) /earnings per share amounts was base d on the (loss)/profit attributable
to ordinary equity holders of the parent and the weighte d average number of ordinary shares in issue during the
Relevant Periods and the six months ended 30 June 2024. The weighted average number of ordinary shares in
issue for the Relevant Periods before the conversion in to a joint stock company was determined by assuming
that the paid-in capital had been fully converted into s hare capital at the same conversion ratio of 1 : 1 as upon
transformation into a joint stock company in April 2025. T he additional shares transferred from capital reserve
in May 2025 were treated as if it had occurred before the beg inning of 2022, the earliest period presented, for the
(loss)/earnings per share calculation.
No adjustment has been made to the basic (loss)/ea rnings per share amounts presented for the Relevant
Periods and the six months ended 30 June 2024 in respect of a dilution as the Group had no potentially dilutive
ordinary shares in issue.
The calculations of basic and diluted ( loss)/earnings per share are based on:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
(Unaudited)
(Loss)/Earnings
(Loss)/Profit attributable to
ordinary equity holders of
the parent, used in the
basic earnings per share
calculation (RMB’000) (86,983) (16,376) (3,074) (13,641) 27,903
Shares
Weighted average number of
ordinary shares in issue
during the year, used in the
basic (loss)/earnings per
share calculation (’000)* 112,274 117,192 117,192 117,192 163,069
* The weighted average number of ordinary shares in i ssue used in the basic (loss)/earnings per share
calculation has been adjusted retr ospectively to reflect the subdivisi on of shares on a one-for-ten basis,
which shall take effect immediately before the listing.
For the details of pre-IPO investments, please refer to note 28 to this report.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 2–


--- page 560 ---
13 PROPERTY, PLANT AND EQUIPMENT
The Group
Furniture
and
fixtures
Electronic
equipment and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost 2,783 2,992 1,668 7,443
Accumulated depreciation (793) (701) (208) (1,702)
Net carrying amount 1,990 2,291 1,460 5,741
At 1 January 2022, net of
accumulated depreciation 1,990 2,291 1,460 5,741
Additions 2,503 3,265 1,820 7,588
Disposals — (8) — (8)
Depreciation provided
during the year (1,094) (1,315) (596) (3,005)
At 31 December 2022, net of
accumulated depreciation 3,399 4,233 2,684 10,316
At 31 December 2022
Cost 5,286 6,246 3,488 15,020
Accumulated depreciation (1,887) (2,013) (804) (4,704)
Net carrying amount 3,399 4,233 2,684 10,316
Furniture
and
fixtures
Electronic
equipment and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost 5,286 6,246 3,488 15,020
Accumulated depreciation (1,887) (2,013) (804) (4,704)
Net carrying amount 3,399 4,233 2,684 10,316
At 1 January 2023, net of
accumulated depreciation 3,399 4,233 2,684 10,316
Additions 560 5,665 — 6,225
Disposals (1) — — (1)
Depreciation provided
during the year (1,552) (2,693) (868) (5,113)
At 31 December 2023, net of
accumulated depreciation 2,406 7,205 1,816 11,427
At 31 December 2023
Cost 5,844 11,912 3,488 21,244
Accumulated depreciation (3,438) (4,707) (1,672) (9,817)
Net carrying amount 2,406 7,205 1,816 11,427
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 3–


--- page 561 ---
Furniture
and
fixtures
Electronic
equipment and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024
Cost 5,844 11,912 3,488 21,244
Accumulated depreciation (3,438) (4,707) (1,672) (9,817)
Net carrying amount 2,406 7,205 1,816 11,427
At 1 January 2024, net of
accumulated depreciation 2,406 7,205 1,816 11,427
Additions 1,142 17,317 1,404 19,863
Disposals — — — —
Depreciation provided
during the year (1,506) (6,928) (1,155) (9,589)
At 31 December 2024, net of
accumulated depreciation 2,042 17,594 2,065 21,701
At 31 December 2024
Cost 6,987 29,228 4,892 41,107
Accumulated depreciation (4,945) (11,634) (2,827) (19,406)
Net carrying amount 2,042 17,594 2,065 21,701
The Group
Furniture
and
fixtures
Electronic
equipment and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
30 June 2025
At 1 January 2025
Cost 6,987 29,228 4,892 41,107
Accumulated depreciation (4,945) (11,634) (2,827) (19,406)
Net carrying amount 2,042 17,594 2,065 21,701
At 1 January 2025, net of
accumulated depreciation 2,042 17,594 2,065 21,701
Additions 883 4,974 — 5,857
Assets acquisition (note 31) —2 2—2 2
Other deduction — — (254) (254)
Depreciation provided during the
period (702) (4,433) (432) (5,567)
Exchange realignment — — 19 19
At 30 June 2025, net of
accumulated depreciation 2,223 18,157 1,398 21,778
At 30 June 2025
Cost 7,870 34,224 4,661 46,755
Accumulated depreciation (5,647) (16,067) (3,263) (24,977)
Net carrying amount 2,223 18,157 1,398 21,778
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 4–


--- page 562 ---
14. INTANGIBLE ASSETS
The Group
Trademark Software
Development
expenditures Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost — 22 366 388
Accumulated amortisation — (22) — (22)
Net carrying amount — — 366 366
At 1 January 2022, net of
accumulated amortisation — — 366 366
Additions — — 1,527 1,527
Amortisation provided
during the year — — (222) (222)
At 31 December 2022, net of
accumulated amortisation — — 1,671 1,671
At 31 December 2022
Cost — 22 1,893 1,915
Accumulated amortisation — (22) (222) (244)
Net carrying amount — — 1,671 1,671
Trademark Software
Development
expenditures Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost — 22 1,893 1,915
Accumulated amortisation — (22) (222) (244)
Net carrying amount — — 1,671 1,671
At 1 January 2023, net of
accumulated amortisation — — 1,671 1,671
Additions 2,990 250 1,637 4,877
Amortisation provided during the
year (25) (20) (631) (676)
At 31 December 2023, net of
accumulated amortisation 2,965 230 2,677 5,872
At 31 December 2023
Cost 2,990 272 3,531 6,793
Accumulated amortisation (25) (42) (854) (921)
Net carrying amount 2,965 230 2,677 5,872
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 5–


--- page 563 ---
Trademark Software
Development
expenditures Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024
Cost 2,990 272 3,531 6,793
Accumulated amortisation (25) (42) (854) (921)
Net carrying amount 2,965 230 2,677 5,872
At 1 January 2024, net of
accumulated amortisation 2,965 230 2,677 5,872
Additions — 185 5,329 5,514
Amortisation provided during the
year (298) (171) (1,177) (1,646)
At 31 December 2024, net of
accumulated amortisation 2,667 244 6,829 9,740
At 31 December 2024
Cost 2,990 457 8,860 12,307
Accumulated amortisation (323) (213) (2,031) (2,567)
Net carrying amount 2,667 244 6,829 9,740
Trademark Software
Patent
technology
Development
expenditures Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 June 2025
At 1 January 2025
Cost 2,990 457 — 8,860 12,307
Accumulated amortisation (323) (213) — (2,031) (2,567)
Net carrying amount 2,667 244 — 6,829 9,740
At 1 January 2025, net of
accumulated amortisation 2,667 244 — 6,829 9,740
Assets acquisition (note 31) 18 — 23,543 — 23,561
Additions — 148 — — 148
Amortisation provided
during the period (150) (115) (259) (1,416) (1,940)
At 30 June 2025, net of
accumulated amortisation 2 ,535 277 23,284 5,413 31,509
At 30 June 2025
Cost 3,008 605 23,543 8,860 36,016
Accumulated amortisation (473) (328) (259) (3,447) (4,507)
Net carrying amount 2,535 277 23,284 5,413 31,509
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 6–


--- page 564 ---
15. LEASES
The Group as a lessee
The Group has lease contracts for various items of buildings. Leases of buildings generally have
lease terms between 2 and 10 years.
(a) Right-of-use assets
The carrying amounts of right-of-use assets and t he movements during the Relevant Periods are as
follows:
The Group
Buildings
Year ended 31 December
Six months
ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount
at 1 January 29,035 31,030 46,912 45,788
Additions 12,425 29,442 16,991 —
Depreciation charge (10,430) (11,451) (10,988) (4,594)
Termination — — (7,071) (1,987)
Sublease of right-of-use
assets — (2,079) — —
Exchange realignment — (30) (56) 118
Carrying amount
at 31 December/30 June 31,030 46,912 45,788 39,325
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 7–


--- page 565 ---
(b) Lease liabilities
The carrying amounts of lease liabilities and th e movements during the Relevant Periods are as
follows:
The Group
Year ended 31 December
Six months
ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount
at 1 January 31,648 34,826 53,106 51,917
Additions 12,425 29,442 16,991 —
Accretion of interest
recognised during the
year/period 1,756 1,491 2,436 964
Termination — — (7,363) (1,987)
Lease payment (11,003) (12,617) (13,193) (5,855)
Exchange realignment — (36) (60) 121
Carrying amount
at 31 December/30 June 34,826 53,106 51,917 45,160
Analysed into:
Current portion 11,270 12,344 11,641 7,945
Non-current portion 23,556 40,762 40,276 37,215
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Year ended 31 December
Six months
ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Lease payments in respect of
short-term leases 331 122 88 55
Interest on lease liabilities 1,756 1,491 2,436 964
Depreciation charge of
right-of-use assets 10,430 11,451 10,988 4,594
Total amount recognised
in profit or loss 12,517 13,064 13,512 5,613
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 8–


--- page 566 ---
(d) The total cash outflow for leases is disclosed in note 32 to the Historical Financial Information.
The Group as a lessor
The Group subleased certain of its Right-of-use a ssets to third parties. As the sublease period is
approximately the same as the lease period of the head l ease, the sublease was classified as a finance lease
under IFRS16.
The Group derecognised the right-of-use asset relating to the head lease that it transfers to the
sublessee and recognised the net investment in the s ublease, resulting a gain f rom the sublease amounted
to RMB1,554,000 recognised for the year ended 31 December 2023.
The net investment in the sublease recognised by the Group is disclosed in note 20 to the Historical
Financial Information.
16. INVESTMENT IN A SUBSIDIARY
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investment cost 56,153 70,335 74,517 79,526
17. INVENTORIES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials 30,475 30,700 63,366 72,567
Work in process 26 4,386 3,837 13,957
Finished goods 50,032 37,427 87,355 112,491
Goods in transit 3,056 9,924 9,079 3,731
83,589 82,437 163,637 202,746
The inventories are net of a write-down of appr oximately RMB11,857,000, RMB14,511,000,
RMB13,481,000 and RMB13,267,000 as at 31 December 2022, 2023, 2024 and 30 June 2025.
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Work in process 2,204 370 — —
Finished goods 290 560 1,310 550
Goods in transit — — 308 324
2,494 930 1,618 874
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 9–


--- page 567 ---
The inventories are net of a write-down of approx imately RMB4,154,000, RMB7 ,265,000, RMB5,255,000
and RMB3,950,000 as at 31 December 2022, 2023, 2024 and 30 June 2025.
18. DEFERRED TAX
The movements in deferred tax liabilities and a ssets during the Relevant Periods are as follows:
Deferred tax assets
The Group
Leases
liabilities
Impairment of
financial
assets
Impairment of
inventories
Unrealized
intercompany
profit Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2021 4,355 — — — — 4,355
Deferred tax credited to profit or
loss during the year 576 — — — — 576
As at 31 December 2022 and
1 January 2023 4,931 — — — — 4,931
Deferred tax credited to profit or
loss during the year 2,344 — — — — 2,344
As at 31 December 2023 and
1 January 2024 7,275 — — — — 7,275
Deferred tax debited to profit or
loss during the year (206) — — — — (206)
As at 31 December 2024 and
1 January 2025 7,069 — — — — 7,069
Deferred tax (debited)/credited to
profit or loss during the period (1,042) 157 225 5,651 47 5,038
As at 30 June 2025 6,027 157 225 5,651 47 12,107
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 0–


--- page 568 ---
Deferred tax liabilities
The Group
Right-of-use
assets
Fair value
adjustments Total assets
RMB’000 RMB’000 RMB’000
As at 1 January 2021 4,355 4,355
Deferred tax charged to profit or loss during the year 575 1 576
As at 31 December 2022 and 1 January 2023 4,930 1 4,931
Deferred tax charged to profit or loss during the year 2,345 (1) 2,344
As at 31 December 2023 and 1 January 2024 7,275 — 7,275
Deferred tax (credited)/charged to profit or loss
during the year (264) 58 (206)
As at 31 December 2024 and 1 January 2025 7,011 58 7,069
Deferred tax credited to profit or loss during the
period (999) (58) (1,057)
As at 30 June 2025 6,012 — 6,012
For presentation purposes, certain deferred tax asse ts and liabilities have been offset in the statement of
financial position. The following is an analysis of the d eferred tax balances of the Group for financial reporting
purposes:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised
in the consolidated statement of
financial position — — — 6,095
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses 165,615 222,653 280,124 281,325
Deductible temporary differences 20,183 32,869 39,388 48,233
185,798 255,522 319,512 329,558
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 1–


--- page 569 ---
The Group has accumulated tax losses in Mainland China of RMB100,182,000, RMB158,151,000,
RMB220,374,000 and RMB233,829, 000 in aggregate as at 31 December 2022, 2023 and 2024 and 30 June 2025,
respectively, which available to offset against future tax able profits of the companies in which the losses were
incurred within the next one to ten years.
The Group also has accumulated tax losses in Hong Kong, the United States and Singapore of
RMB63,856,000, RMB64,066,000, RMB59,750,000 and RMB47,496,000 in aggregate as at 31 December 2022,
2023 and 2024 and 30 June 2025, respectively, that can be carried forward indefinitely to offset against future
taxable profits of the companies in which losses were incurred.
The Group’s accumulated tax losses in Japan of RMB1,577,000 and RMB436,000 as at 31 December 2022
and 2023, respectively. These losses are available to off set against future taxable profits of the companies in
which the losses were incurred within the next one to ten years.
Deferred tax assets have not been recognised in respect of the above items as it is not considered probable
that taxable profits will be available against which the above items can be utilised.
19. TRADE RECEIVABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables 45,161 62,702 46,288 133,940
Less: impairment of trade
receivables 58 611 473 905
Trade receivables, net 45,103 62,091 45,815 133,035
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
Due from subsidiaries 16,846 23,133 11,067 23,105
Less: impairment of trade
r e c e i v a b l e s * ————
Trade receivables, net 16,846 23,133 11,067 23,105
* The Company estimated that the expected loss rate for its trade receivables due from subsidiaries is
minimal.
The Group’s trade terms with its certain customers are on credit, and the credit period is generally within
90 days. The Group seeks to maintain strict control over i ts outstanding receivables and has a credit control
department to minimise credit risk . Overdue balances are reviewed regularly by management. As at 31
December 2022, 2023, 2024 and 30 June 2025, the Group had a concentration of credit risk as 84.81%, 61.88%,
63.56% and 74.07% of trade receivables is related to the l argest customer, respectively. The Group does not
hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are
non-interest-bearing.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 2–


--- page 570 ---
An ageing analysis of the trade receivables as at th e end of each of the Relevant Periods, based on the
revenue recognition date and net of loss allowance, is as follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 45,103 62,091 45,815 133,035
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 16,846 23,133 11,067 23,105
The movements in the loss allowance for impairment of the trade receivables are as follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period 34 58 611 473
Impairment losses, net (note 7) 24 553 (138) 432
At end of year/period 58 611 473 905
An impairment analysis is performed at the end of eac h of Relevant Periods using a provision matrix to
measure expected credit losses. The provision rat es are based on days past due for groupings of various
customer segments with similar loss patterns. The calcu lation reflects the probabili ty-weighted outcome, the
time value of money and reasonable and supportable infor mation that is available a t the reporting date about
past events, current conditions and for ecasts of future economic conditions.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 3–


--- page 571 ---
Set out below is the information about the credit ris k exposure on the Group’s trade receivables using a
provision matrix:
The Group
As at 31 December 2022
Gross carrying
amount
Expected
credit loss rate
Expected
credit loss
RMB’000 RMB’000
Trade receivables aged:
Current 44,876 0.09% 42
Past due:
Within 1 year 282 4.61% 13
Between 1 and 2 years 3 100.00% 3
45,161 0.13% 58
As at 31 December 2023
Gross carrying
amount
Expected
credit loss rate
Expected
credit loss
RMB’000 RMB’000
Trade receivables aged:
Current 60,753 0.61% 369
Past due:
Within 1 year 1,765 3.29% 58
Between 1 and 2 years 184 100.00% 184
62,702 0.97% 611
As at 31 December 2024
Gross carrying
amount
Expected
credit loss rate
Expected
credit loss
RMB’000 RMB’000
Trade receivables aged:
Current 45,081 0.54% 243
Past due:
Within 1 year 997 2.01% 20
Between 1 and 2 years 210 100.00% 210
46,288 1.02% 473
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 4–


--- page 572 ---
As at 30 June 2025
Gross carrying
amount
Expected
credit loss rate
Expected
credit loss
RMB’000 RMB’000
Trade receivables aged:
Current 133,243 0.51% 685
Past due:
Within 1 year 489 2.45% 12
Between 1 and 2 years 61 100.00% 61
Between 2 and 3 years 147 100.00% 147
133,940 0.68% 905
Transfer of trade receivables
As part of its normal business, the Group entered i nto a trade receivable factoring arrangement (the
‘‘Arrangement’’) and transferred certain trade receivables to a bank. Under the Arrangement, the Group
may be required to reimburse the bank for loss of inte rest if any trade debtors have late payment up to 150
days. In the opinion of the directors, the Group has r etained the substantial risks and rewards, which
include default risks relating to such factored trade r eceivables, and accordingly, it continued to recognise
the full carrying amounts of the factored trad e receivables and the associated bank loans.
For the years ended 31 December 2022, 2023, 2024 and the six months ended 30 June 2025, the
aggregate amount of the trade receivables transferr ed under the Arrangement and the bank loans received
associated with the factored trade receivab les amounted to RMB118,830,000, RMB146,927,000,
RMB183,528,000 and RMB73,347,000 respectively. As at 31 December 2022, 2023, 2024 and 30 June
2025, the original carrying value of the trade receivables transferred under the Arrangement that have not
been settled and the associated bank loans r ecognised was RMB40,207,000, RMB30,200,000,
RMB24,479,000 and RMB23,635,000, respectively.
As the Group recognises the associated bank loan s for the factored trade receivables, the cash
receipts from the banks for the transferred trade recei vables are presented as cash inflow from financing
activities in the statement of cash flows. When the c ustomers settle trade receivables, cash payment is
initially made to the Group and simul taneously transferred to the banks. Therefore, the cash settlement is
presented as both cash inflow from ope rating activities and cash outflow used in financing activities in the
same amount in the statement of cash flows.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 5–


--- page 573 ---
20. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable 5,650 11,571 9,667 14,968
Prepaid other taxes 891 1,224 — —
Deferred listing expenses — — — 1,798
Right-of-return assets 291 407 728 619
Prepayments 8,895 6,957 10,260 8,238
Net investment in the sublease
(note) 80 405 375 367
Other receivables and deposit 1,126 1,669 2,083 4,525
Less: Impairment of other
receivables and deposit (60) (109) (124) (286)
16,873 22,124 22,989 30,229
Non-Current
Other receivables and deposits 3,238 3,930 3,688 1,715
Net investment in the sublease
(note) 147 3,386 3,084 2,962
Prepayments for property, plant
and equipment 171 3,407 874 608
Less: Impairment of other
receivables and deposit (170) (366) (338) (234)
3,386 10,357 7,308 5,051
Note: The movements of net investment in the sublea se during the Relevant Periods are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at 1
January 301 227 3,791 3,459
Additions — 3,633 — —
Accretion of interests (note
5) 12 21 154 70
Cash receipts (86) (90) (486) (200)
Carrying amount at 31
December/30 June 227 3,791 3,459 3,329
Analysed into:
Current portion 80 405 375 367
Non-current portion 147 3,386 3,084 2,962
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 6–


--- page 574 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable 3,086 8,965 8,256 8,237
Deferred listing expenses — — — 1,798
Prepayments 4,263 1,003 78 192
Due from subsidiaries 153,218 235,218 222,522 239,309
Other receivables and deposit 2 7 6 5
Less: Impairment of other
receivables and deposit * * * (1)
160,569 245,193 230,862 249,540
*L e s s t h a n R M B 1 , 0 0 0
The Company estimated that the expected loss rate for its other receivables due from subsidiaries is
minimal.
Other receivables are unsecured, non-interest -bearing and are collectable within one year.
As at 31 December 2022, 2023, 2024 and 30 June 2025, the impairment of the other receivables and
deposits were measured based on 12-month expected credit loss if they are not past due and there is no
information indicating that the financial assets had a sign ificant increase in credit risk since initial recognition.
Otherwise, they were measured base d on lifetime expected credit loss.
The movements in the loss allowance for impai rment of other receivables are as follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period 118 230 475 462
Impairment losses, net (note 7) 112 245 (13) 58
At the end of the year/period 230 475 462 520
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 7–


--- page 575 ---
21. FINANCIAL ASSETS/LIA BILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
The Group
Financial assets at fair value through profit or loss
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Structure deposits, at fair value — — 54,000 —
Forward exchange agreement, at
fair value 8 — 17 —
Foreign exchange swap, at fair
value — — 374 —
8 — 54,391 —
Financial liabilities at fair value through profit or loss
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Forward exchange agreement, at
fair value 129 — — 33
Foreign exchange options, at fair
value — — 68 387
129 — 68 420
For the details of pre-IPO investments, please refer to note 28 to this report.
The Company
Financial assets at fair value through profit or loss
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Structure deposits, at fair value — — 18,000 —
The structured deposits issued by banks in Mainland China are classified and measured at fair value
through profit or loss as their contractual cash flows are not solely payments of principal and interest.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 8–


--- page 576 ---
22. CASH AND CASH EQUIVALENTS AND R ESTRICTED CASH AND TIME DEPOSITS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances 145,265 129,820 62,263 196,990
Time deposits 3,103 2,919 2,983 3,022
Restricted cash 824 510 15,917 900
149,192 133,249 81,163 200,912
Less:
Restricted cash* (824) (510) (15,917) (900)
Time deposits with original
maturity over three months:
— Current (3,103) (2,562) (2,909) (2,947)
Cash and cash equivalents 145,265 130,177 62,337 197,065
Denominated in:
RMB 101,657 10,062 18,834 60,328
USD 19,089 22,828 20,824 99,072
JPY 23,642 97,146 38,462 38,674
EUR 2,476 1,950 2,051 1,471
CAD 696 384 391 495
GBP 1,224 612 260 653
Others 408 267 341 219
149,192 133,249 81,163 200,912
The RMB is not freely convertible into other curren cies, however, under Mainland China’s Foreign
Exchange Control Regulations and A dministration of Settlement, Sale and Payment of Foreign Exchange
Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to
conduct foreign exchange business.
Cash at banks earns interest at floating rates base d on daily bank deposit rate s. The bank balances and
restricted cash balances are deposited with cred itworthy banks with no recent history of default.
* As at 31 December 2022, 2023, 2024 and 30 June 2025, the restricted cash of RMB824,000,
RMB510,000, RMB15,917,000 and RMB900,000, respectively, was used as the guarantee deposits
for the foreign exchange derivatives contra cts purchased by the Group which will become
unrestricted after the matur ity of derivatives products.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 9–


--- page 577 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances 98,260 28,993 6,047 62,570
98,260 28,993 6,047 62,570
Cash and cash equivalents 98,260 28,993 6,047 62,570
Denominated in
RMB 98,260 6,005 4,827 1,985
USD * 1,068 121 60,585
JPY * 21,920 1,099 *
98,260 28,993 6,047 62,570
* Less than RMB1,000
23. TRADE PAYABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 27,677 44,330 28,587 137,492
An ageing analysis of the trade payables as at the end of each of the Relevant Periods, based on the invoice
d a t e ,i sa sf o l l o w s :
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 27,563 44,078 28,258 137,208
Over 1 year 114 252 329 284
27,677 44,330 28,587 137,492
The trade payables are non-interest-bearing and a re normally settled on terms on 1–2 months terms.
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 116 493 3,189 5,733
Due to subsidiaries — 32,616 1,134 75
116 33,109 4,323 5,808
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 0–


--- page 578 ---
An ageing analysis of the trade payables as at the end of each of the Relevant Periods, based on the invoice
d a t e ,i sa sf o l l o w s :
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 116 33,109 3,107 5,708
Over 1 year — — 1,216 100
116 33,109 4,323 5,808
24. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payables 14,750 22,753 25,113 19,816
Other tax payables 3,135 4,630 7,900 11,195
Payables for assets acquisition
(note 31) — — — 16,083
Listing expenses payables — — — 6,818
Other payables 2,237 5,291 10,138 12,142
20,122 32,674 43,151 66,054
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payables 123 236 236 90
Other tax payables 2 4 6 —
Listing expenses payables — — — 4,534
Other payables 17 18 16 15
Due to subsidiaries — — 27 1,347
142 258 285 5,986
Other payables are non-interest-bearing and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 1–


--- page 579 ---
25. INTEREST-BEARI NG BANK LOANS
The Group
At 31 December As at 30 June
2022 2023 2024 2025
Effective
interest
rate (%)
Maturity RMB’000 Effective
interest
rate (%)
Maturity RMB’000 Effective
interest
rate (%)
Maturity RMB’000 Effective
interest
rate (%)
Maturity RMB’000
Current
Bank loans — secured* — — — — — — 2.90–3.00 2025 62,771 — — —
Bank loans — factored trade receivables** 1.08 2023 40,2 07 0.98 2024 30,200 1.75 2025 24,479 2.26 2025 23,635
Current portion of long term bank loans —
secured***
— — 2.6 2025 4,000 2.24–2.6 2026 14,303
Total — current 40,207 30,200 91,250 37,938
Non-current
Bank loans — secured*** — — 2.6 2026 15,014 2.24–2.6 2027 60,721
Total — non-current — — 15,014 60,721
Total 40,207 30,200 106,264 98,659* The loan, amounting to RMB23,939,000, was gua ranteed by the Company and Mr. LI Zhichen as at
31 December 2024. And the loan, amounting to RMB38,832,000, was guaranteed by the Company
as at 31 December 2024. This guarantee has been rele ased along with the maturity of the loan during
the six months ended 30 June 2025 (note 35).
** It represented the liabilities related to the t ransferred trade receivables under the factoring
arrangement that were not derecognised as at the e nd of the Relevant Periods (note 19). The loan is
guaranteed by the Company, Mr. LI Zhichen and Mr. PAN Yang (note 35). Such guarantee is
expected to be released on or before the Listing.
*** The loan was guaranteed by the Company and Mr. LI Zhichen as at 31 December 2024 and 30 June
2025 (note 35). Such guarantee is expected to be released on or before the Listing.
26. CONTRACT LIABILITIES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances from customers
Sale of goods 3,202 3,558 4,553 7,682
Analysed for reporting purposes
as:
Current liabilities 3 ,202 3,558 4,553 7,682
3,202 3,558 4,553 7,682
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 2–


--- page 580 ---
27. PROVISION
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Product warranty provision (a) 5,763 12,828 18,171 20,119
Refund liabilities (b) 716 1,372 2,316 1,892
6,479 14,200 20,487 22,011
(a) The Group generally provides 12–24 months warr anties to its customers on certain of its products
for general repairs of defects occurring during the warranty period. The amount of the provision for
the warranties is estimated based on sales volume s and past experience of the level of repairs and
returns. The estimation basis is reviewed on an ongoing basis and revised where appropriate.
Product warranty
provision
RMB’000
At 1 January 2022 4,325
Additional provision (note 7) 5,121
Amounts utilised during the year (3,683)
At 31 December 2022 and 1 January 2023 5,763
At 1 January 2023 5,763
Additional provision (note 7) 13,646
Amounts utilised during the year (6,581)
At 31 December 2023 and 1 January 2024 12,828
At 1 January 2024 12,828
Additional provision (note 7) 17,100
Amounts utilised during the year (11,757)
At 31 December 2024 18,171
At 1 January 2025 18,171
Additional provision (note 7) 12,833
Amounts utilised during the period (10,885)
At 30 June 2025 20,119
(b) Refund liabilities represented the obligation a rising from right of return to refund some or all of the
consideration received (or receivable) from a cu stomer. The Group updates its estimates of refund
liabilities (and the corresponding change in the t ransaction price) at the end of each of Relevant
Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 3–


--- page 581 ---
28. SHARE CAPITAL/PAID-IN CAPITAL
The Group and the Company
Share Capital
A summary of movements in the share capital is as follows:
Number of
shares in issue Share capital
(in thousand) RMB’000
As at 1 January 2025 — —
Issue of ordinary shares upon conversion into
a joint stock company of RMB1 each** 2,492 2,492
Issue of shares (RMB1 each)*** 38 38
Capitalisation of reserves (RMB1 each)**** 17,470 17,470
As at 30 June 2025 20,000 20,000
Paid-in Capital
RMB’000
As at 1 January 2022 1,205
Capital contribution by shareholders* 278
As at 31 December 2022 and 2023 and 2024 1,483
As at 1 January 2025 1,483
Capital contribution by shareholders* 1,009
Conversion into a joint stock company** (2,492)
As at 30 June 2025 —
* During the year ended 31 December 2022, the Company received capital contribution of
RMB200,000,000 from four investors. The capital c ontribution increased the paid-in capital and
capital reserve by RMB278,000 and RMB199,722,000, respectively. During the six months ended 30
June 2025, the Company received the subscribed ca pital of RMB1,009,000 due from the controlling
shareholders of the Group.
** In April 2025, the Company converted into a join t stock company with limited liability under the
Company Law of the PRC. The net assets of the Company as of the conversion base date, including
the paid-in capital, capital reserves and accumula ted losses, were converted into 2,492,000 ordinary
shares of RMB1.00 each. The excess of the net assets converted over the nominal value of the
ordinary shares was credited to t he Company’s capital reserve.
*** During the six months ended 30 June 2025, th e Company received capital contribution of
RMB59,058,000 from an investor, which incre ased the share capital and capital reserve by
RMB38,000 and RMB59,020,000, respectively.
**** During the six months ended 30 June 2025, the Company issued 17,470,325 new shares through
conversion from capital reserve of RMB17,470,00 0 to each of the shareholders in proportion to their
respective shareholding interests.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 4–


--- page 582 ---
On May 27, 2025, resolution was passed by the sh areholders approving, among others, the share
subdivision, whereby each of the shares with a nominal value of RMB1.00 each shall be sub-divided into 10
shares with a nominal value of RMB0.10 each, and such sha re subdivision shall take e ffect immediately before
the listing, upon which the registered capital of the Co mpany shall be divided into 200,000,000 shares with a
nominal value of RMB0.10 per share.
Pursuant to the shareholders subscription agreements entered into prior to Relevant Periods, on 23 March
2022 and 26 May 2025, the Company issued an aggregate of 1 ,390,789 ordinary shares (representing the number
of shares before capitalisation of reserves) to the Pre-IPO investors at a total net cash proceed amounted to
approximately RMB389.68 million (collectively the ‘‘ Pre-IPO Investments ’’). Pursuant to the above agreements,
the Pre-IPO Investors were granted by the Company wi th special rights which included redemption rights.
There was no exercise of redemption rights grante d by the Company throughout the Relevant Periods.
On 26 May 2025, the Company and the Pre-IPO Inves tors subsequently entered into supplemental
agreements, agreeing that the redemption rights gra nted by the Company to Pre-IPO investors have been
irrecoverably terminated and shall be void ab initio . Taking into account the legal and regulatory framework of
the Company’s jurisdiction and the governing law of th e supplemental agreements, the directors considered that
it is appropriate to present the Pre-IPO Investm ents as equity throughout the Relevant Periods.
Had the redemption rights granted by the Company to the Pre-IPO Investors been accounted for as
financial liabilities measured at pr esent value of the redemption amount prior to entering into the supplemental
agreements in May 2025.
(i) the redemption financial liabi lities, total current liabilities and net deficits would have been:
As at 31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Redemption financial liab ilities 588,473 671,402 802,034
Total current liabilit ies 697,559 808,708 1,001,771
Net current liabilities ( 402,794) (508,807) (633,776)
Net deficits (379,947) (475,001) (604,529)
(ii) the finance costs associated with the redempti on financial liabilities, the net losses for the
year/period, basic and dilutive loss per share would have been:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Financial costs associated
with the redemption
financial liabilities 21,342 82,929 130,632 53,425 625,029
Total net losses (108,325) (99,305) (133,706) (67,066) (597,126)
Basic and dilutive loss per
share (expressed in
RMB) (0.96) (0.85) (1.14) (0.57) (3.66)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 5–


--- page 583 ---
29. RESERVES
The Group
The amounts of the Group’s reserves and the movem ents therein for the Relevant Periods are
presented in the consolidated statements of changes in equity.
(i) Capital reserve
Capital reserve of the Group represents the diffe rence between the value of the paid-up capital and
the consideration received.
(ii) Share-based payment reserve
The share-based payment reserve of the Group repr esents the share-based compensation reserve due
to equity-settled share-based payment transact ions, details of which were set out in note 30 to the
Historical Financial Information.
(iii) Exchange fluctuation reserve
The exchange fluctuation reserve of the Group re presents exchange differences arising from the
translation of financial statements of foreign operations.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 6–


--- page 584 ---
The Company
The amounts of the Company’s reserves and the mov ements therein for the Relevant Periods are
presented as follows:
Capital reserve
Share-based
payment
reserve
Accumulated
loss Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 129,543 5,164 (1,985) 132,722
Loss for the year — — (3,241) (3,241)
Total comprehensive loss for
the year — — (3,241) (3,241)
Capital contribution by
shareholders 199,722 — — 199,722
Share-based payments — 3,378 — 3,378
At 31 December 2022 329,265 8,542 (5,226) 332,581
At 1 January 2023 329,265 8,542 (5,226) 332,581
Loss for the year — — (3,028) (3,028)
Total comprehensive loss for
the year — — (3,028) (3,028)
Share-based payments — 4,181 — 4,181
At 31 December 2023 329,265 12,723 (8,254) 333,734
At 1 January 2024 329,265 12,723 (8,254) 333,734
Loss for the year — — (1,895) (1,895)
Total comprehensive loss for
the year — — (1,895) (1,895)
Share-based payments — 4,181 — 4,181
At 31 December 2024 329,265 16,904 (10,149) 336,020
At 1 January 2025 329,265 16,904 (10,149) 336,020
Profit for the period — — 1,233 1,233
Total comprehensive income
for the period — — 1,233 1,233
Share-based payments — 5,016 — 5,016
Issue of shares 59,020 — — 59,020
Capitalisation of reserves (17,470) — — (17,470)
At 30 June 2025 370,815 21,920 (8,916) 383,819
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 7–


--- page 585 ---
30. SHARE-BASED PAYMENTS
The Group approved a Share Option Scheme in 2019 i n order to recognise the contributions of the
employees to the growth and development of t he Group. Wonder Innovation Technology (Shenzhen)
Partnership Enterprise (Limited Partnership) (‘‘Wonde r Innovation’’) was established and designated as the
share incentive platform to grant the awards to the eli gible participants. The Group has no control over Wonder
Innovation.
In September 2018, Wonder Innovation subscribed for 138,886 shares of the Company at a consideration
of RMB138,886, Wonder Innovation also acquired 41, 668 shares and 27,779 shares of the Company from Li
Zhichen and Pan Yang , respectively, at RMB1.00. On 20 December 2019, 1 July 2021, 31 August 2022, 31
January 2025, and 18 March 2025, the Group granted 147,619, 12,659, 18,389, 17,639 and 17,313 share options,
respectively, which will be vested in instalments over the next four years. The vesting of share options is also
subject to the IPO Condition. The IPO Condition would be s atisfied when the ordinary shares of the Company
are successfully listed on a recognised stock exchang e. The exercise prices of share options ranged from
RMB0.00 to RMB722.26 per share.
The fair values of the share option granted were esti mated as at the grant date by using the Black-Scholes
option pricing model. The following table lis ts the key inputs to the fair value model used:
20 December 1 July 31 August 31 January 18 March
2019 2021 2022 2025 2025
Risk-free interest rate
(%) 3.10 2.40–2.91 1.73–2.38 1.24–1.40 1.55–1.64
Volatility (%) N/A 39.80 38.39 42.37 42.64
The share options granted and outstanding dur ing the Relevant Periods are as follows:
Weighted average
exercise price
Number of share
options *
RMB per share
At 1 January 2022 0.08 156,706
Granted during the year 46.03 18,389
At 31 December 2022 4.91 175,095
At 1 January 2023 4.91 175,095
Forfeited during the year 150.57 1,020
At 31 December 2023 and 2024 4.05 174,075
At 1 January 2025 4.05 174,075
Granted during the period 363.99 34,952
Forfeited during the period 287.50 900
At 30 June 2025 63.27 208,127
* The number of share options refer to the sh ares before capitalis ation of reserves.
The aforesaid transactions have been accounted fo r as share-based payment transactions. During the
years ended 31 December 2022, 2023, 2024 and the six months ended 30 June 2024 and 2025, the Group
recognised share award expenses of RMB3,378, 000, RMB4,181,000, RMB4,181,000, RMB2,091,000 and
RMB5,041,000 respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 8–


--- page 586 ---
31. ASSETS ACQUISITION
In June 2025, Woan Technology (Shenzhen) Co., Ltd. (‘‘Woan’’), a wholly-owned subsidiary of the
Group, entered into the agreement with Yanyuan 45th Jia Technology Shenzhen Co., Ltd. (‘‘Yanyuan’’), an
independent third party of the Group, pursuant to whi ch, Woan agreed to acquire target assets including
trademarks, patent technology, and electronic equipm ent from Yanyuan for a total consideration of RMB25
million. Of the total consideration, RMB7.5 million a nd RMB7.5 million were paid to Yanyan in June 2025 and
August 2025 respectively, and the remaining consider ation of RMB10 million (including value-added tax) is
expected to settle in September 2025.
As at 30 June 2025, the closing conditions as set out in the agreement has been satisfied, the physical assets
and all relevant materials related to the target assets have been delivered and accepted by Woan, and application
for the transfer of trademarks and patent technol ogy to Woan has been submitted and accepted by the
competent authorities. In the opinion of the directo rs, the Group has obtained control of the assets and
recognised the intangible assets and property, pl ant and equipment of RMB23,561,000 and RMB22,000
(excluding value-added tax), respectively, based on the al located consideration in proportion to the respective
fair value of each asset.
32. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2022, 2023, 2024 and the six months ended 30 June 2024 and
2025, the Group had non-cash additions to right-of-us e assets and lease liabilities of RMB12,425,000,
RMB29,442,000, RMB16,991,000 and RMB16,981,000, and nil respectively, in respect of lease
arrangements for buildings premises.
During the year ended 31 December 2023, the Group subleased some of its right-of-use assets to a
third party which was classified as a finance lease. Th e Group derecognised the right-of-use assets in the
amount of RMB3,633,000 and recognized the net investment in the sublease in the amount of
RMB2,079,000, resulting a gain on the sublease of RMB1,554,000.
(b) Changes in liabilities arising from financing activities
The table below details changes in the Group’s liabili ties arising from financing activities, including
both cash and non-cash changes. Liabilities arising fro m financing activities are those for which cash flows
were, or future cash flows will be, classified in the Group’s consolidated statement of cash flows as cash
flows from financing activities.
Interest
bearing bank
borrowings
from factored
trade
receivables
Interest
bearing bank
loans
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 — — 31,648 31,648
Changes from financing cash
flow 39,541 — (11,003) 28,538
New Lease — — 12,425 12,425
Accretion of interest 666 — 1,756 2,422
At 31 December 2022 and
1 January 2023 40,207 — 34,826 75,033
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 9–


--- page 587 ---
Interest
bearing bank
borrowings
from factored
trade
receivables
Interest
bearing bank
loans
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
Changes from financing cash
flow (10,756) — (12,617) (23,373)
New Lease — — 29,442 29,442
Accretion of interest 749 — 1,491 2,240
Foreign exchange movement — — (36) (36)
At 31 December 2023 and
1 January 2024 30,200 — 53,106 83,306
Changes from financing cash
flow (6,419) 80,510 (13,193) 60,898
New Lease — — 16,991 16,991
Termination — — (7,363) (7,363)
Accretion of interest 698 1,275 2,436 4,409
Foreign exchange movement — — (60) (60)
At 31 December 2024 24,479 81,785 51,917 158,181
At 31 December 2024 and
1 January 2025 24,479 81,785 51,917 158,181
Changes from financing cash
flow (1,242) (7,564) (5,855) (14,661)
N e w L e a s e ————
Termination — — (1,987) (1,987)
Accretion of interest 398 803 964 2,165
Foreign exchange movement — — 121 121
At 30 June 2025 23,635 75,024 45,160 143,819
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 0–


--- page 588 ---
Interest
bearing bank
borrowings
from factored
trade
receivables
Interest
bearing bank
loans
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2023 and
1 January 2024 30,200 — 53,106 83,306
Changes from financing cash
flow (unaudited) 6,271 27,196 (6,324) 27,143
New Lease (unaudited) — — 16,981 16,981
Termination (unaudited) — — (6,851) (6,851)
Accretion of interest
(unaudited) 325 104 1,309 1,738
Foreign exchange movement
(unaudited) — — (188) (188)
At 30 June 2024 (unaudited) 36,796 27,300 58,033 122,129
(c) Total cash outflow for leases
The total cash outflow for leases included in the cons olidated statements of cash flows is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Within operating
activities 331 122 88 41 55
Within financing activities 11,003 12,617 13,193 6,324 5,855
11,334 12,739 13,281 6,365 5,910
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 1–


--- page 589 ---
33. PLEDGE OF ASSETS
Details of the Group’s restricted cash and factored trade receivables are included in note 22 and note 19 to
the Historical Financial Information.
34. COMMITMENTS
The Group had the following capital commitments at the end of each of the Relevant Periods.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Purchase of items of property,
plant and equipment 1,344 1,334 2,421 1,235
35. RELATED PARTY TRANSACTIONS
The Directors are of the view that the following are re lated parties that have material transactions or
balances with the Group during the Relevant Periods and six months ended 30 June 2024.
(a) Name and relationships of the related parties
Name Relationship
Mr. Li Zhichen Director
Mr. Liu Yanfei Director
(b) Outstanding balances with related parties:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due to related
parties:
Mr. Liu Yanfei* 4 5 5 —
M r .L iZ h i c h e n * 1 2 1 1 1 1 —
16 16 16 —
* Non-trade in nature, included in ‘‘Other payable s and accruals’’ in the consolidated statement
of financial position.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 2–


--- page 590 ---
(c) Guarantee provided by related parties:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Mr. LI Zhichen 34,823 30,200 67,432 98,659
Mr. PAN Yang 34,823 30,200 24,479 23,635
The above guarantees were provided free of charge wi th the duration period from 2022 to 2027. And the
guarantees provided by related parties are exp ected to be released on or before the listing.
Redemption rights of the Pre-IPO investors granted by the Mr. LI Zhichen and Mr. PAN Yang
According to the share subscription agreements and supplemental agreement entered into by
the Company and the shareholders from October 2017 to May 2025, the Pre-IPO investors were
granted the redemption right by Mr. LI Zhichen and Mr. PAN Yang. Pursuant to another
supplemental agreement entered into by the Company and the shareholders in May 2025, the
redemption rights granted by the Mr. LI Zhichen and Mr. PAN Yang will be terminated
immediately befor e the listing date.
The Company has not provided any form of guarantee in connection with any potential failure
of the Mr. LI Zhichen and Mr. PAN Yang to fulfill his obligations relating to the redemption rights
granted by Mr. LI Zhichen and Mr. PAN Yang. Acco rdingly, as the redemption rights by Mr. LI
Zhichen and Mr. PAN Yang do not constitute any obl igation of the Company, no financial liability
regarding such rights were recorded by the Company during the Relevant Periods.
For the details of pre-IPO investments , please refer to note 28 to this report.
(d) Compensation of key management personnel of the Group
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and
benefits in kind 2,529 2,901 3,338 1,640 3,058
Performance related bonus 1,517 1,929 1,688 832 738
Pension scheme
contributions 149 169 228 102 185
Equity-settled share-based
payment expenses 1,106 1,347 1,347 674 1,627
5,301 6,346 6,601 3,248 5,608
Further details of directors’ and the chief executive’s remuneration are included in note 8 to the Historical
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 3–


--- page 591 ---
36. FINANCIAL INSTR UMENTS BY CATEGORY
The carrying amounts of each of the categories of fi nancial instruments as at the end of each of the
Relevant Periods were as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Financial assets at fair value
through profit and loss:
Structured deposits and
Derivative financial
instruments 8 — 54,391 —
Financial assets at amortised cost:
Trade receivables 45,103 62,091 45,815 133,035
Financial assets included in
deposit and
other receivables 4,361 8,915 8,768 9,049
Restricted cash 824 510 15,917 900
Time deposits 3,103 2,562 2,909 2,947
Cash and cash equivalents 145,265 130,177 62,337 197,065
198,656 204,255 135,746 342,996
Financial liabilities
Financial liabilities at fair value
through
profit and loss:
Derivative financial instruments 129 — 68 420
Financial liabilities at amortised
cost:
Trade payables 27,677 44,330 28,587 137,492
Financial liabilities included in
other payables and accruals 2,237 5,291 10,138 35,043
Lease liabilities 34,826 53,106 51,917 45,160
Interest-bearing bank loans 40,207 30,200 106,264 98,659
104,947 132,927 196,906 316,354
For the details of pre-IPO investments, please refer to note 28 to this report.
37. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
All the carrying amounts of the Group’s financial inst ruments approximate to their fair values due to the
short-term maturities of these instruments.
The Group’s finance department is responsible for det ermining the policies and procedures for the fair
value measurement of financial instruments. At the end of each of the Relevant Periods, the finance department
analysed the movements in the values of financial inst ruments and determined the major inputs applied in the
valuation. The valuation is reviewed and approved by the f inance manager. The valuation process and results
are discussed with the directors of the Compa ny once a year for annual financial reporting.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 4–


--- page 592 ---
The fair values of the financial assets and liabilit ies are included at the amount at which the instrument
could be exchanged in a current transa ction between willing parties, other than in a forced or liquidation sale.
The fair values of the financial assets and financial l iabilities at fair value through profit and loss have
been calculated by discounting the expected future cash fl ows using rates currently a vailable for instruments
with similar terms, credit risk and remaining maturities.
Fair value hierarchy
Financial assets:
As at 31 December 2022
Fair value measurement using
Quoted
prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instruments — 8 — 8
As at 31 December 2024
Fair value measurement using
Quoted
prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Structured deposits and Derivative
financial instruments — 54,391 — 54,391
Financial liabilities:
As at 31 December 2022
Fair value measurement using
Quoted
prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instruments — 129 — 129
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 5–


--- page 593 ---
As at 31 December 2024
Fair value measurement using
Quoted
prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instruments — 68 — 68
As at 30 June 2025
Fair value measurement using
Quoted
prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instruments — 420 — 420
38. FINANCIAL RISK MANAGEMEN T OBJECTIVES AND POLICIES
The Group’s principal financial instruments comp rise interest-bearing bank and other borrowings,
financial assets at fair value through profit or loss and cash and short-term deposits. The main purpose of these
financial instruments is to raise finance for the Gr oup’s operations. The Group has various other financial
assets and liabilities such as trade receivables and trade payables, wh ich arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. The board of directors rev iews 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 marke t interest rates relates primarily to the Group’s
short-term and long-term borrowings. The Group’s polic y is to manage its interest cost using a mix of fixed and
variable rate debts. The Group’s policy i s to maintain certain of its interest- bearing bank borrowings at floating
interest rates. At 31 December 2024 and 30 June 2025, approximately 100% of the Group’s long-term
interest-bearing borrowings bore interest at floating r ates. The Group currently does not enter into any hedging
instrument for both of the fair value interest rate risk and cash flow interest rate risk.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 6–


--- page 594 ---
The following table demonstrates the sensitivity to a r easonably possible change in interest rates, with all
other variables held constant, of the Group’s profit bef ore tax (through the impact on floating rate borrowings)
and the Group’s equity.
Increase/
(decrease) in
basis points
Increase/
(decrease)
in profit
before tax
Increase/
(decrease)
in equity*
RMB’000 RMB’000
Year ended 31 December 2022
JPY 50/(50) (201)/201 —
Year ended 31 December 2023
JPY 50/(50) (151)/151 —
Year ended 31 December 2024
RMB 50/(50) (409)/409 —
JPY 50/(50) (122)/122 —
Six months ended 30 June 2025
RMB 50/(50) (147)/147 —
JPY 50/(50) (118)/118 —
* Excluding retained profits
Foreign currency risk
Foreign currency risk is the risk of loss resulting f rom changes in foreign currency exchange rates.
Fluctuations in exchange rates bet ween RMB and other currencies in which the Group conducts business may
affect the Group’s financial condition and results of operations.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 7–


--- page 595 ---
The following table demonstrates the sensitivity at th e end of each of the Relevant Periods to a reasonably
possible change in foreign currency exchange rates, with all other variables held constant, of the Group’s
(loss)/profit before tax (due to changes in the transl ated value of monetary assets and liabilities) and the
Group’s equity.
Increase/
(decrease) in
foreign
currency
exchange rates
Increase/
(decrease) in
profit before
tax
(Decrease)/
increase in
equity
% RMB’000 RMB’000
Year ended 31 December 2022
If RMB weakens against the USD 5 1,017 1,017
If RMB strengthens against the USD 5 (1,017) (1,017)
If RMB weakens against the JPY 5 2,453 2,453
If RMB strengthens against the JPY 5 (2,453) (2,453)
Year ended 31 December 2023
If RMB weakens against the USD 5 1,189 1,189
If RMB strengthens against the USD 5 (1,189) (1,189)
If RMB weakens against the JPY 5 4,903 4,903
If RMB strengthens against the JPY 5 (4,903) (4,903)
Year ended 31 December 2024
If RMB weakens against the USD 5 1,025 1,025
If RMB strengthens against the USD 5 (1,025) (1,025)
If RMB weakens against the JPY 5 1,503 1,503
If RMB strengthens against the JPY 5 (1,503) (1,503)
Six months ended 30 June 2025
If RMB weakens against the USD 5 5,345 5,345
If RMB strengthens against the USD 5 (5,345) (5,345)
If RMB weakens against the JPY 5 3,735 3,630
If RMB strengthens against the JPY 5 (3,735) (3,830)
Credit risk
The Group trades only with recognised and creditw orthy parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances
are monitored on an ongoing basis and the Group’s exposur e to bad debts is not signif icant. The credit risk of
the Group’s other financial assets, which comprise cash an d cash equivalents, time deposits, restricted cash and
financial assets included in prepayments, deposits and other receivables, arises from default of the counterparty,
with a maximum exposure equal to the ca rrying amounts of the se instruments.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 8–


--- page 596 ---
Maximum exposure and year-end staging
The tables below show the credit quality and the ma ximum exposure to credit risk based on the Group’s
credit policy, which is mainly based on past due informat ion unless other information is available without undue
cost or effort, and year-end staging classificati on as at the end of each of the Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2022
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables — — — 45,161 45,161
Financial assets included
in deposits and other
receivables 4,591 — — — 4,591
Restricted cash 824 — — — 824
Time deposits 3,103 — — — 3,103
Cash and cash equivalents 145,265 — — — 145,265
153,783 — — 45,161 198,944
As at 31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables — — — 62,702 62,702
Financial assets included
in deposits and other
receivables 9,390 — — — 9,390
Restricted cash 510 — — — 510
Time deposits 2,562 — — — 2,562
Cash and cash equivalents 130,177 — — — 130,177
142,639 — — 62,702 205,341
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 9–


--- page 597 ---
As at 31 December 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables — — — 46,288 46,288
Financial assets included
in deposits and other
receivables* 9,230 — — — 9,230
Restricted cash 15,917 — — — 15,917
Time deposits 2,909 — — — 2,909
Cash and cash equivalents 62,337 — — — 62,337
90,393 — — 46,288 136,681
As at 30 June 2025
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables — — — 133,940 133,940
Financial assets included
in deposits and other
receivables* 9,569 — — — 9,569
Restricted cash 900 — — — 900
Time deposits 2,947 — — — 2,947
Cash and cash equivalents 197,065 — — — 197,065
210,481 — — 133,940 344,421
* The credit quality of the financi al assets included in prepayments, deposits and other receivables
is considered to be ‘‘normal’’ when they are not past due and there is no information indicating
that the financial assets had a significant increase in credit risk since initial recognition.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 0–


--- page 598 ---
Liquidity risk
The Group monitors its risk to a shortage of funds us ing a recurring liquidity planning tool. This tool
considers the maturity of both its financial instrumen ts and financial assets (e.g., trade receivables) and
projected cash flows from operations . The maturity profile of the Group’s financial liabilities as at the end of
each of the Relevant Periods, based on the cont ractual undiscounted payments, is as follows:
As at 31 December 2022
Less than
12 months
or on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade payables 27,677 — 27,677
Financial liabilities at fair value through
profit and loss 124 — 124
Financial liabilities included in
other payables and accruals 2,237 — 2,237
Lease liabilities 12,660 24,746 37,406
Interest-bearing bank loans 40,632 — 40,632
83,330 24,746 108,076
As at 31 December 2023
Less than
12 months
or on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade payables 44,330 — 44,330
Financial liabilities included in
other payables and accruals 5,291 — 5,291
Lease liabilities 15,929 45,419 61,348
Interest-bearing bank loans 30,498 — 30,498
96,048 45,419 141,467
As at 31 December 2024
Less than
12 months
or on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade payables 28,587 — 28,587
Financial liabilities at fair value through
profit and loss 68 — 68
Financial liabilities included in
other payables and accruals 10,138 — 10,138
Lease liabilities 13,512 47,010 60,522
Interest-bearing bank loans 93,643 15,479 109,122
145,948 62,489 208,437
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 1–


--- page 599 ---
As at 30 June 2025
Less than
12 months
or on demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade payables 137,492 — 137,492
Financial liabilities at fair value through
profit and loss 420 — 420
Financial liabilities included in
other payables and accruals 35,043 — 35,043
Lease liabilities 9,569 43,211 52,780
Interest-bearing bank loans 38,814 62,128 100,942
221,338 105,339 326,677
Capital management
The primary objectives of the Group’s capital man agement are to safeguard the Group’s ability to
continue as a going concern and to maintain healthy cap ital 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 and the risk characteristic s of the underlying assets. To maintain o r adjust the capital structure, the
Group may adjust the dividend payment to shareholders, re turn capital to shareholders or issue new shares. The
Group is not subject to any externally imposed capital r equirements. No changes were made in the objectives,
policies or processes for managing capital during the Relevant Periods.
The asset-liability ratios as at the end of each of the Relevant Periods are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total assets 341,168 374,469 452,532 670,680
Total liabilities 132,642 178,068 255,027 379,579
Asset-liability ratio* 39% 48% 56% 57%
* Asset-liability ratio is calculated by dividing total liabilities by total assets.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 2–


--- page 600 ---
39. EVENTS AFTER THE REPORTING PERIOD
There is no significant subsequent event undertaken by the Company after 30 June 2025.
40. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of its subsidiaries
in respect of any period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 3–


--- page 601 ---
The following information does not form part of the Accountants’ Report from Ernst &
Young, Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as
set out in Appendix I to this prospectus, and is included herein for information purposes only.
The unaudited pro forma financial information should be read in conjunction with the
‘‘Financial Information’’ section in this prospectus and the Accountants’ Report set out in
Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEME NT OF ADJUSTED CONSOLIDATED
NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible
assets of the Group 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 is
to illustrate the effect of the Global Offering on the consolidated net tangible assets of the
Group attributable to owners of the Company as at 30 June 2025 as if the Global Offering
had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group has been prepared for illustrative purposes only and because of its hypothetical
nature, it may not provide a true picture of the consolidated net tangible assets of the
Group attributable to owners of the Company had the Global Offering been completed as
at 30 June 2025 or at any future date.
Consolidated net
tangible assets
attributable to
owners of the
Company as at
30 June 2025
Estimated net
proceeds from the
Global Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
owners of the
Company as at
30 June 2025
Unaudited pro forma
adjusted consolidated
net tangible assets
attributable to owners
of the Company per
Share as at
30 June 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2, 4) (Note 3) (Note 4)
B a s e do na nO f f e r
Price of HK$63.00
per Share 259,592 1,201,471 1,461,063 6.57 7.23
B a s e do na nO f f e r
Price of HK$72.00
per Share 259,592 1,378,637 1,638,229 7.37 8.11
B a s e do na nO f f e r
Price of HK$81.00
per Share 259,592 1,555,804 1,815,396 8.17 8.99
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 602 ---
Notes:
(1) The consolidated net tangible assets of the Gr oup attributable to owne rs of the Company as at 30
June 2025 were equal to the audited net assets attr ibutable to owners of the Company as at 30 June
2025 of RMB291,101,000 after deducting of intangible assets of RMB31,509,000 as of 30 June 2025
set out in the Accountants’ Report i n Appendix I in this prospectus.
(2) The estimated net proceeds from the Global O ffering are based on the Offer Price of HK$63.00,
HK$72.00 or HK$81.00 per Share, after the deduction of the underwriting fees and other related
expenses payable by the Company (excluding the lis ting expenses that have been charged to profit or
loss during the Track Record Period) and do not take into account any shares which may be issued
upon exercise of the Over-allotment Option.
(3) The unaudited pro forma adjusted consolidated net tangible assets attri butable to owners of the
Company per Share is arrived at after adjustment s referred to in the preceding paragraphs and on
the basis that 22,222,300 H Shares will be iss ued pursuant to the Global Offering and 200,000,000
Unlisted Shares will be converted into H Shares assuming the Global Offering have been completed
on 30 June 2025 but takes no account of 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.
(4) For the purpose of this unaudited pro forma adjuste d consolidated net tangible assets, the estimated
net proceeds from the Global Offering are converted from Hong Kong dollars into Renminbi
(‘‘RMB’’) at an exchange rate of HK$1.00 to RMB0.90862 and the unaudited pro forma adjusted
consolidated net tangible assets attributable to owners of the Company per Share is converted from
RMB into Hong Kong dollars at the same exchange rate. No representation is made that RMB
amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at
that rate.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group
entered into subsequent to 30 June 2025.
(6) No dividend was paid or declared by the Company subsequent to 30 June 2025 and up to the Latest
Practicable Date.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 603 ---
B. INDEPENDENT REPORTING ACCOU NTANTS’ ASSURANCE REPORT ON
THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL
INFORMATION
The following is the text of a report receive d from our reporting accountants, Ernst &
Young, Certified Public Accountants, Hong Kong, prepared for the purpose of incorporation
in this prospectus, in respect of the unaudited pro forma financial information of the Group.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
᠔
佭␃凖儮⍠㣅ⱛ䘧

㰳
໾সഞϔᑻῧ
Tel 䳏䁅: +852 2846 9888
Faxⳳ: +852 2868 4432
ey.com
To the Directors of OneRobotics (Shenzhen) Co., Ltd.
We have completed our assurance engag ement to report on the compilation of
unaudited pro forma financial informatio n of OneRobotics (Shenzhen) 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 unaudited
pro forma financial information consists of the unaudited pro forma consolidated net
tangible assets as at 30 June 2025, and related notes as set out on pages II-1 and II-2 of the
prospectus dated 18 December 2025 issued by the Company (the ‘‘ Unaudited Pro Forma
Financial Information ’’). The applicable criteria on the b asis of which the Directors have
compiled the Pro Forma Financial Information are described in Appendix II(A) to the
prospectus.
The Unaudited Pro Forma Financial Inform ation has been compiled by the Directors
to illustrate the impact of the global offeri ng of shares of the Company on the Group’s
financial position as at 30 June 2025 as if the transaction had taken place at 30 June 2025.
As part of this process, information about the Group’s financial position has been extracted
by the Directors from the Group’s financial statements for the period ended 30 June 2025,
on which an accountants’ report has been published.
Directors’ responsibility for the Una udited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the ‘‘ Listing Rules ’’) and with
reference to Accounting Guideline (‘‘ AG’’) 7 Preparation of Pro Forma Financial
Information for Inclusio n 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
–I I - 3–


--- page 604 ---
Our firm applies Hong Kong Sta ndard 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 stan dards and applicable legal and regulatory
requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Unaudited Pro Forma F inancial Information and to report our
opinion to you. We do not accept a ny responsibility for any reports previously given by us
on any financial information used in the comp ilation of the Unaudited Pro Forma Financial
I n f o r m a t i o nb e y o n dt h a to w e dt ot h o s et ow h om those reports were addressed by us at the
dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the Unaudited Pro Forma Financial
I n f o r m a t i o ni na c c o r d a n c ew i t hp a r a g r a p h4 . 2 9o ft h eL i s t i n gR u l e sa n dw i t hr e f e r e n c et o
AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited
Pro Forma Financial Information, nor have we, in the course of this engagement,
performed an audit or review of the financial information used in compiling the 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 o ffering 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 Unaudited Pro Forma
Financial Information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess wh ether the applicable criteria used by the
Directors in the compilation of the Unaudited Pro Forma Financial Information provide a
reasonable basis for presenting the signifi cant effects directly attributable to the
t r a n s a c t i o n ,a n dt oo b t a i ns u f f i c i e nt appropriate evidence about whether:
. the related pro forma adjustments give app ropriate effect to those criteria; and
. the Unaudited Pro Forma Financial Information reflects the proper application
of those adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 4–


--- page 605 ---
The procedures selected depend on the repor ting accountants’ judgment, having regard
to the reporting accountants’ understanding of the nature of the Group, the transaction in
respect of which the Unaudited Pro Forma Financial Information has been compiled, and
other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro
Forma Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on
the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
Certified Public Accountants
Hong Kong
18 December 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 606 ---
TAXATION OF SECURITY HOLDERS
Income tax and capital gains tax of holders of the H shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of the H shares are resident or
otherwise subject to tax. The following summar y of certain relevant taxation provisions is
based on current laws and practices, and has not taken in to account the expected change or
amendment to the relevant laws or policies and does not constitute any opinion or advice.
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 regulation. Accordingly, you should
consult your own tax adviser regarding the tax consequences of an investment in the H
shares. The discussion is based upon laws and relevant interpretations in effect as of the
date of this document, all of which are subject to change or adjustment and may have
retrospective effect.
This discussion does not address any aspects of PRC taxation other than income tax,
capital gains tax and profits tax, sales tax, value-added tax, stamp duty and estate duty.
Prospective investors are urged to consult their financial advisers regarding the PRC and
other tax consequences of owning and disposing of the H shares.
TAXATION IN MAINLAND CHINA
Tax on Dividends
Individual Investors
According to the Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅
法》) (the ‘‘IIT Law’’), latest amended by the SCNPC on August 31, 2018 and effective on
January 1, 2019, and the Implementation Rules of the Individual Income Tax Law of the
People’s Republic of China ( 《中華人民共和國個人所得稅法實施條例》)a m e n d e db yt h e
State Council on December 18, 2018 and effect ive on January 1, 2019, dividends paid by
PRC companies to individual investors are ordinarily subject to a withholding income tax
levied at a flat rate of 20%. Meanwhile, according to Notice on Issues Relating to
Differentiated Individual Income Tax Policies for Dividends and Bonuses of Listed
Companies (《關於上市公司股息紅利差別化個人所得稅政策有關問題的通知》) issued by the
MOF, the STA and the CSRC on September 7, 2015 and effective on September 8, 2015, for
shares of listed companies obtained by individuals via public offerings and market transfer
and held for more than one year, the income from dividends and bonuses thereof shall
temporarily be exempt from individual income tax. For shares of listed companies obtained
by individuals via public offerings and market transfer and held for less than one month
(including one month), the income from dividends and bonuses thereof shall be fully
included in the individual’s taxable income amount; where the shares are held for a period
from one month up to one year (including one year), 50% of the income from dividends and
bonuses therefrom shall temporally be included in the individual’s taxable income amount;
the aforesaid income shall be subject to individual income tax based on 20% tax rate on a
unified basis.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 1–


--- page 607 ---
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
E v a s i o nw i t hr e s p e c tt oT a x e so nI n c o m e(《內地和香港特別行政區關於對所得避免雙重徵稅
和防止偷漏稅的安排》) (the ‘‘Arrangement for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income’’), signed by the Mainland of
China and the Hong Kong Special Administrative Region on August 21, 2006, the PRC
government may impose tax on dividends paid by a PRC company to a Hong Kong resident
(including natural person and legal entity), but such tax shall not exceed 10% of the total
amount of dividends payable. If a Hong Kong resident directly holds 25% or more of the
equity interests in a PRC company and the Hong Kong resident is the beneficial owner of
the dividends and meets other conditions, s uch tax shall not exceed 5% of the total amount
of dividends payable by the PRC company. Th e Fifth Protocol to the Arrangement between
the Mainland China 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
(《國家稅務總局關於〈內地和香港特別行政區關於對所得避免雙重徵稅和防止偷漏稅的安排〉
第五議定書》) (the ‘‘Fifth Protocol’’), issued by the STA and effective on December 6, 2019
provides that such provisions shall not apply to arrangements or transactions made for one
of the primary purposes of obtaining such tax benefits.
Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the PRC ( 《中華人民共
和國企業所得稅
法》) (the ‘‘EIT Law’’) promulgated by the SCNPC, latest amended and became effective on
December 29, 2018, and the Implementation Re gulations for the Enterprise Income Tax
L a wo ft h eP R C( 《中華人民共和國企業所得稅法實施條例》) promulgated by the State
Council, last amended and became effective o n April 23, 2019, a non-resident enterprise is
subject to a 10% enterprise income tax on PRC-sourced income, including dividends paid
by a PRC resident enterprise that issues and lis ts shares in Hong Kong, if such non-resident
enterprise does not have an establishment or place of business in the PRC or has an
establishment or place of business in the PRC but the PRC-sourced income is not actually
connected with such establishment or place of business in the PRC. The aforesaid income
tax payable by non-resident enterprises shall be withheld at source, and the payer shall be
the withholding agent, and the tax shall be withheld by the withholding agent from the
payment or due payment every time it is paid or due. Such tax may be reduced or exempted
pursuant to an applicable treaty for t he avoidance of double taxation.
Pursuant to the Notice on the Issues Concer ning Withholding the Enterprise Income
Tax on the Dividends Paid by Chinese Resident Enterprises to H Share Holders Which Are
Overseas Non-resident Enterprises ( 《關於中國居民企業向境外H股非居民企業股東派發股息
代扣代繳企業所得稅有關問題的通知》) issued by the STA and effective on November 6,
2008, a PRC resident enterprise is required to withhold enterprise income tax at a rate of
10% on dividends paid to non-PRC resident enterprise holders of H Shares which are
derived out of profit generated since 2008.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 2–


--- page 608 ---
According to the Arrangement for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income ( 《對所得避免雙重徵稅和防止
偷漏稅的安排》), issued by the STA and effective on December 12, 2006, the PRC
government may impose tax on dividends paid by a PRC company to a Hong Kong resident
(including natural person and legal entity), but such tax shall not exceed 10% of the total
dividends payable by the PRC company. If a Hong Kong resident directly holds 25% or
more of equity interest in a PRC company and the Hong Kong resident is the beneficial
owner of the dividends and meets other conditions, such tax shall not exceed 5% of the total
dividends payable by the PRC company. The Fifth Protocol provides that such provisions
shall not apply to arrangements or transactions made for one of the primary purposes of
obtaining such tax benefits.
Tax Treaties
Non-resident investors residing in jurisdi ctions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a
reduction of the Chinese corporate income tax imposed on the dividends received from PRC
companies. Non-resident enterp rises entitled to preferential t ax rates in accordance with the
relevant taxation treaties or arrangements are required to apply to the Chinese tax
authorities for a refund of the corporate income tax in excess of the agreed tax rate, and the
refund application is subject to approval by the Chinese tax authorities.
Pursuant to the Administrative Measures on Entitlement of Non-resident Taxpayers to
Preferential Treatment under Tax Treaties ( 《非居民納稅人享受協定待遇管理辦法》), which
was promulgated by the STA on October 14, 2019 and became effective on January 1, 2020,
non-resident taxpayers are entitled to prefer ential treatment under the tax treaties through
self-determination, self-declaration and keep ing and documenting relevant information for
inspection. Where a non-resident taxpayer self-assesses and concludes that it satisfies the
criteria for claiming treaty benefits, it may enjoy treaty benefits at the time of tax
declaration or at the time of withholding d eclaration through a withholding agent,
simultaneously gather and retain the relevant materials pursuant to the regulations for
future inspection, and be subject to subsequent administration by tax authorities.
Tax on Gains from Share Transfer
VAT and Local Surcharges
Pursuant to the Notice on Fully Implementi ng the Pilot Reform for the Transition
from Business Tax to Value-added Tax ( 《關於全面推開營業稅改徵增值稅試點的通知》) (the
‘‘Circular 36’’), which was implemented on M ay 1, 2016, entities and individuals engaged in
the services sale in the PRC are subject to VAT and ‘‘engaged in the services sale in the
PRC’’ means that the seller or buyer of the ta xable services is located in the PRC. Circular
36 also provides that transfer of financial products, including transfer of the ownership of
marketable securities, shall be subject to V AT at 6% on the taxable revenue (which is the
balance of sales price upon deduction of purchase price), for a general or a foreign VAT
taxpayer. However, individuals who transfer financial products are exempt from VAT.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 3–


--- page 609 ---
According to the provisions above, upon the sale or disposal of H shares, the holders
a r ee x e m p tf r o mV A Ti nt h eP R Ci ft h e ya r en o n - resident individuals; in case the holders
are non-resident enterprises, they may not be subject to the VAT in the PRC if the
purchasers of the H shares are individuals or entities located outside of the PRC whereas
the holders may be subject to the VAT in the PRC if the purchasers of the H shares are
individuals or entities located in the PRC.
Income tax
Individual Investors
According to the IIT Law and its implemen tation rules, individuals are subject to
individual income tax at the rate of 20% on gains realized on the sale of equity interests in
PRC resident enterprises. Under the Circular of the MOF and STA on Declaring that
Individual Income Tax Continues to Be Exempted over Individual Income Tax from
Transfer of Shares (Cai Shui Zi [1998] No.61) ( 《財政部、國家稅務總局關於個人轉讓股票所
得繼續暫免徵收個人所得稅的通知》(the ‘‘Circular 61’’) issued by the MOF and STA on
March 30, 1998, from January 1, 1997, gains of individuals from the transfer of shares of
listed companies continue to be exempted from individual income tax. According to
Announcement about the Catalog of Preferential Individual Income Tax Policies with
Continued Effect ( 《財政部、國家稅務總局關於繼續有效的個人所得稅優惠政策目錄的公
告》) issued by the MOF and STA on December 29, 2018, the Circular 61 will continue to
be effective.
Enterprise Investors
In accordance with the EIT Law and its implementation rules, a non-resident
enterprise is generally subject to corporate income tax at the rate of a 10% on PRC-sourced
income, including gains derived from the dis posal of equity interests in a PRC resident
enterprise, if it does not have an establishment or premise in the PRC or has an
establishment or premise in the PRC but its PRC-sourced income has no real connection
with such establishment or premise. Such inc ome tax payable for non-resident enterprises
are 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. Such tax may be reduced or
exempted pursuant to relevant tax treaties or agreements on avoidance of double taxation.
Taxation Policy of Shanghai-Hong Kong Stock Connect
Under the Notice of the Ministry of Finance , the State Administration of Taxation and
the China Securities Regulatory Commissi on on the Tax Policies Related to the Pilot
Program of the Shanghai-Hong Kong Stock Connect (Cai Shui [2014] No. 81) ( 《財政部、國
家
稅務總局、中國證券監督管理委員會關於滬港股票市場交易互聯互通機制試點有關稅收政
策的通知》) which was issued on October 31,2014 and came into effect on November 17,
2014, for dividends and bonus obtained by mainland individual investors investing in H
shares listed on the Stock Exchange through Shanghai-Hong Kong Stock Connect, the
H-share companies shall apply to the CSDC for provision by CSDC to the H-share
companies register of individual investors in Mainland China, and the H-share companies
shall withhold individual income tax at the rate of 20%. Income from share dividend
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 4–


--- page 610 ---
derived by Mainland China corporate investors from investment in shares listed on the
Stock Exchange through the Shanghai-Hong Kong Stock Connect shall be included in their
total income and be subject to enterprise inco me tax pursuant to the law. Income from share
dividend derived by a Mainland China resident enterprise for holding H shares over 12
consecutive months shall be exempted from enterprise income tax pursuant to the law. The
H shares company is not required to withhold income tax on share dividend for its
Mainland China corporate investors, and the corporate investors shall make declaration
and payment for the tax payable amount voluntarily. Pursuant to the Announcement on
Continuing the Implementation of the Individual Income Tax Policies Concerning the
Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect and the
Mutual Recognition of Funds betw een Mainland China and Hong Kong ( 《關於延續實施滬
港、深港股票市場交易互聯互通機制和內地與香港基金互認有關個人所得稅政策的公告》)
which promulgated on August 21, 2023 and im plemented on the same date, the transfer
spread income derived by mainland individual investors from investing in shares listed on
the Stock Exchange through Shanghai-Hong Kong Stock Connect shall continue to be
exempted from individual income tax until December 31, 2027.
Taxation Policy of Shenzhen-Hong Kong Stock Connect
Under the Notice on the Tax Policies Related to the Pilot Program of the
Shenzhen-Hong Kong Stock Connect (Cai Shui [2016] No.127) ( 《關於深港股票市場交易
互聯互通機制試點有關稅收政策的通知》) which was promulgated on November 5, 2016 and
came into effect on December 5, 2016, for dividends and bonus income obtained by
mainland individual investors investing in H shares listed on the Stock Exchange through
Shenzhen-Hong Kong Stock Connect, the H-share companies shall apply to CSDC for
provision by CSDC to the H-share companies register of individual investors in Mainland
China, and individual income tax shall be withheld by H-share companies at the tax rate of
20%.
Income from dividends and bonuses derived by a corporate investor in Mainland
China from investment in shares listed on the Stock Exchange through Shenzhen-Hong
Kong Stock Connect shall be included in the total income amount, and subject to enterprise
income tax pursuant to the law. Income from dividends and bonuses derived by a Mainland
China resident enterprise for H shares held for 12 months consecutively shall be exempted
from enterprise income tax pursuant to the law. The H shares company shall not withhold
income tax on dividends and bonuses for cor porate investors in Mainland China, and the
tax payable amount shall be declared and paid by the corporate investor.
Pursuant to the Announcement on Continuing the Implementation of the Individual
Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect and t he Mutual Recognition of Funds between
Mainland China and Hong Kong ( 《關於延續實施滬港、深港股票市場交易互聯互通機制和
內地與香港基金互認有關個人所得稅政策的公告》) which promulgated on August 21, 2023
and implemented on the same date, the transfer spread income derived by mainland
individual investors from investing in shares listed on the Stock Exchange through
Shenzhen-Hong Kong Stock Connect shall continue to be exempted from individual income
tax until December 31, 2027.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
–I I I - 5–


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Stamp Duty
A c c o r d i n gt ot h eS t a m pD u t yL a wo ft h eP R C(《中華人民共和國印花稅法》), which
was promulgated on June 10, 2021 and came into effect on July 1, 2022, PRC stamp duty
only applies to specific taxable document executed or received within the PRC, having
legally binding force in the PRC and protected under the PRC laws, thus the requirements
of the stamp duty imposed on the transfer of sha res of PRC listed companies shall not apply
to the acquisition and disposal of H Shares by non-PRC investors outside of the PRC.
Estate Duty
As of the date of this document, no estate duty has been levied in the PRC under the
PRC laws.
MAJOR TAXATION OF OUR COMPANY IN THE PRC
Enterprise Income Tax
A c c o r d i n gt ot h eE I TL a wa n di t si m p l e m e n t a t ion rules, all the domestic enterprises in
China (including foreign-invested enterprise s) shall be subject to enterprise income tax at
the uniform tax rate of 25%.
According to the Notice of the Ministry of Finance and the State Taxation
Administration of the Preferential Enterprise Income Tax Policies for the Qianhai
Shenzhen-Hong Kong Modern Service Industry Cooperation Zone ( 財政部稅務總局關於
延續深圳前海深港現代服務業合作區企業所得稅優惠政策的通知) dated May 27, 2021, and
will be effective until December 31, 2025, enterprises that meet the conditions and are
located in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone
are subject to a reduced corporate income tax rate of 15%. To enjoy the aforementioned
preferential policies, enterprises must meet the conditions of having their main business as
the industrial projects specified in the Cor porate Income Tax Preferential Directory in
Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone (2021 Edition)
(前海深港現代服務業合作區企業所得稅優惠目錄（2021 版）), and their main business
revenue must account for more than 60% of the total revenue. Cross-border logistics
business is classified as the first category of in dustrial projects ‘‘modern logistics industry’’
in the Corporate Income Tax Preferential Directory in Qianhai Shenzhen-Hongkong
Modern Service Industry Cooperation Zone (2021 Edition) ( 前
海深港現代服務業合作區企
業所得稅優惠目錄（2021 版）) and is eligible for a 15% income tax preference.
Value-added Tax
Pursuant to the Provisional Regulations on Value-added Tax of the PRC ( 《中華人民共
和國增值稅暫行條例》) promulgated by the State Council, last amended and became
effective on November 19, 2017 and the Im plementation Rules for the Provisional
Regulations on Value-added Tax of the PRC ( 《中華人民共和國增值稅暫行條例實施細則》)
promulgated by the MOF on December 25, 1993, latest amended on October 28, 2011 and
became effective on November 1, 2011, all entities or individuals in the PRC engaging in the
sale of goods or processing, repair and assembly services, sale of services, intangible assets,
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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immovables and importation of goods in the PRC shall be taxpayers of Value-added Tax
( t h e‘ ‘ V A T ’ ’ )a n ds h a l lp a yV A T .T h er a t eo fV A Tf o rs a l eo fg o o d si s1 7 %u n l e s so t h e r w i s e
specified, such as the rate of VAT for sale of transportation is 11%, the rate for sale of
service is 6% unless otherwise specified.
In accordance with Notice of the Ministry o f Finance and the State Administration of
Taxation on the Adjustment to VAT Rates ( 《財政部、稅務總局關於調整增值稅稅率的通
知》), which became effective on May 1, 2018, the deduction rates of 17% or 11% applicable
to the taxpayers who have VAT taxable sales activities or imported goods are adjusted to
16% or 10%.
According to Announcement on Polic ies for Deepening the VAT Reform ( 《關於深化增
值稅改革有關政策的公告》) promulgated by the MOF, the STA and the General
Administration of Customs on March 20, 2019 and became effective from April 1, 2019,
for general VAT payers’ sales a ctivities or imports that are subject to VAT at an existing
applicable rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9%
respectively.
On December 25, 2024, the SCNPC promulgated the VAT Law of the PRC ( 《中華人民
共和國增值稅法》), which will come into effective o n January 1, 2026, and replace the
Provisional Regulations on Value-added Tax of the PRC.
TRANSFER PRICING
Pursuant to the Law of the People’s Republic of China on the Administration of Tax
Collection ( 《中華人民共和國稅收徵收管理法》) ,w h i c hw a sp r o m u l g a t e do nS e p t e m b e r4 ,
1992 by the SCNPC and last amended on April 24, 2015, and its implement rules, and the
EIT Law and its implement rules, related party transactions should comply with the arm’s
length principle. In the event that the relat ed party transactions fail to comply with the
arm’s length principle resultin g in the reduction of the enterprise’s taxable income, the tax
authority has power to make adjustments with reasonable methods within ten years from
the tax paying year that the non-compliant re lated party transaction had occurred.
Based on the Announcement of the State Administration of Taxation on Matters
Relating to the Improvement of Affiliated Declaration and Contemporaneous Document
Management ( 《 國 家 稅
務 總 局 關 於 完 善 關 聯 申 報 和同 期 資 料 管 理 有 關 事 項 的 公 告 》),
promulgated and became effective on June 29, 2016, enterprises, which have related-party
transactions with volume exceeding certain th reshold shall prepare their contemporaneous
documentation of related-party transactions per tax year and submit to the tax authority if
required.
FOREIGN EXCHANGE ADMINISTRATION IN THE PRC
The lawful currency of the PRC is the Renminbi. The State Administration of Foreign
Exchange (the ‘‘SAFE’’), authorized by the PBOC, is empowered with the functions of
administering all matters relating to foreign e xchange, including the enforcement of foreign
exchange regulations.
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Pursuant to the Regulations of the People’s Republic of China on Foreign Exchange
Control ( 《中華人民共和國外匯管理條例》) amended by the State Council and became
effective on August 5, 2008, all internationa l payments and transfers are classified into
current account items and capital account items. The PRC does not impose restrictions on
international payments and transfers under current account items. Foreign exchange
income from the current account of PRC enterprises may be retained or sold to financial
institutions engaged in the settlement and sale of foreign exchange in accordance with
relevant provisions of the State. The retention or sale of foreign exchange receipts under
capital accounts to financial institutions eng aging in settlement and sale of foreign exchange
shall be subject to the approval of foreign exchange administrative authorities, unless
otherwise stipulated by the State.
Pursuant to the Regulations for the Adminis tration of Settlement, Sale and Payment of
Foreign Exchange ( 《結匯、售匯及付匯管理規定》) promulgated by the PBOC on June 20,
1996 and became effective on July 1, 1996, the r emaining restrictions on convertibility of
foreign exchange in respect of current account items are abolished while the existing
restrictions on foreign exchange transactions in respect of capital account items are
retained.
According to relevant laws and regulations of the PRC, PRC enterprises (including
foreign-invested enterprises) which require foreign exchange for transactions relating to
current account items, may, without the approval of SAFE, effect payment from their
foreign exchange accounts at the designated foreign exchange banks, on the strength of
valid receipts and proof of transactions. Foreign-invested enterprise that need to distribute
profits to their shareholders in foreign exchange and Chinese enterprise that need to pay
fixed dividends in foreign exchange in accordance with the requirements shall pay from its
foreign exchange account or pay at the designated foreign exchange bank by a resolution of
the board of directors on the distribution of profits.
According to the Decision of the State Co uncil on Canceling and Adjusting a Group of
Administrative Approval Items and Other Matters ( 《國務院關於取消和調整一批行政審批項
目等事項的決定》) promulgated by the State Council and effective on October 23, 2014, the
administrative approval of the SAFE and its branches on matters concerning the
repatriation and settlement of foreign exchan ge of overseas-raised funds through overseas
listing has been canceled.
According to the Notice of the State Admi nistration of Foreign Exchange on Issues
Relating to Foreign Exchange Contro l Pertaining to Overseas Listing ( 《國家外匯管理局關
於境
外上市外匯管理有關問題的通知》) promulgated by the SAFE on December 26, 2014, a
domestic company shall complete registrati on formalities for overseas listing with the
SAFE’s local branch at its place of registration within 15 working days from completion of
issuance for its overseas listing. Funds raise d from overseas listing of a domestic company
may be repatriated to China or deposited overseas, and the usage of funds shall be
consistent with the relevant contents set out in the prospectus document or disclosure
documents such as the corporate bonds offering documentation, shareholders’ circular and
the board of directors or shareholders’ meeting resolution.
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--- page 614 ---
According to the Notice of the State Administration of Foreign Exchange on Policies
for Reforming and Regulating the Control over Foreign Exchange Settlement under
the Capital Account ( 《國家外匯管理局關於改革和規範資本項目結匯管理政策的通知》)
promulgated by the SAFE on June 9, 2016, domestic institutions may settle their foreign
exchange receipts under the capital account (including repatriated funds raised through
overseas listing) entitled to discretionary se ttlement according to re levant policies with
banks as actually needed for business operation. Domestic institutions may, at their
discretion, settle up to 100% of their foreign exchange receipts under the capital account for
the time being. The SAFE may adjust the aforesaid proportion in due time in light of the
balance of payment.
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This appendix contains a summary of the laws and regulations relating to companies and
securities in the PRC. The primary purpose of this summary is to provide potential investors
with an overview of the principal laws and regulations applicable to us and is not intended to
cover all information important to potential investors. For a discussion of the laws and
regulations that specifically govern our business, please refer to the ‘‘Regulatory Overview’’.
PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the PRC ( 《中華人民共和國憲
法》) (the ‘‘Constitution’’)), which was adopted on December 4, 1982 and last amended on
March 11, 2018. The PRC legal system is made up of written laws, administrative
regulations, local regulations, autonomous re gulations, separate regulations, rules and
regulations of State Council departments, rules and regulations of local governments, laws
of special administrative regions, internatio nal treaties of which the PRC government is a
signatory and other regulatory documents. Court judgments do not constitute legally
binding precedents, although they are used for the purposes of judicial reference and
guidance.
The National People’s Congress (the ‘‘NPC’’) and its Standing Committee are
empowered to exercise the legislative power of the State in accordance with the
Constitution and the PRC Legislation Law ( 《中華人民共和國立法法》, the ‘‘Legislation
Law’’), which was adopted on July 1, 2000 and last amended on March 13, 2023. The NPC
has the power to formulate and amend basic laws governing state organs, civil, criminal and
other matters. The Standing Committee of the NPC formulates and amends laws other than
those required to be enacted by the NPC and t o supplement and amend parts of the laws
enacted by the NPC during the adjournment of the NPC, provided that such supplements
and amendments are not in conflict wit h the basic principles of such laws.
The State Council is the highest organ of the PRC administration and has the power to
formulate administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may formulate local regulations based on the specific
circumstances and actual requirements of their own respective administrative areas,
provided that such local regulations do not contravene any provision of the Constitution,
laws or administrative regulations.
The ministries and commissions of the State Council, People’s Bank of China,
National Audit Office, the subordinate institu tions with administrative functions directly
under the State Council and the institutions required by the law may formulate
departmental regulations within the jurisdiction of their respective departments based on
the laws and administrative regulations, and the decisions and orders of the State Council.
The people’s governments of the provinces, autonomous regions, municipalities and cities
or autonomous prefectures divided into districts may formulate rules and regulations based
on the laws, administrative regulations and loc al regulations of such provinces, autonomous
regions and municipalities. According to the Constitution and the Legislation Law, the
power to interpret laws is vested in the Standing Committee of the NPC.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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According to the Resolution of the Stand ing Committee of the National People’s
Congress Providing an Improved Interpretation of the Law ( 《全國人民代表大會常務委員會
關於加強法律解釋工作的決議》) implemented on June 10, 1981, the Supreme People’s Court
of the PRC has the power to give interpretation on issues related to the application of laws
in a court trial, and issues related to the app lication of laws in a prosecution process of a
procuratorate should be interpreted by the Supreme People’s Procuratorate. If there is any
disagreement in principle between Supreme People’s Court’s interpretations and Supreme
People’s Procuratorate’s inte rpretations, such issues shall be reported to the Standing
Committee of the NPC for interpretation or judgment. The other issues related to laws
other than the abovementioned should be interpreted by the State Council and the
competent authorities. The State Council and i ts ministries and commissions are also vested
with the power to give interpretations of the adm inistrative regulations and departmental
rules which they have promulgated. At the regional level, the power to interpret regional
laws is vested in the regional legislative and a dministrative authori ties which promulgate
such laws.
PRC JUDICIAL SYSTEM
Under the Constitution and the PRC Law on the Organization of the People’s Courts
(2018 revision) ( 《中華人民共和國人民法院組織法（2018 年修訂）》), the PRC judicial system
is made up of the Supreme People’s Court, the local people’s courts and special people’s
courts.
The local people’s courts are comprised of the primary people’s courts, the
intermediate people’s courts and the higher people’s courts. The higher people’s courts
supervise the primary and intermediate people’s courts. The Supreme People’s Court is the
highest judicial body in the PRC. It supervises the judicial administration of the people’s
courts at all levels.
A people’s court takes the rule of the seco nd instance as the final rule. A party may
appeal against the judgment or ruling of the first instance of a local people’s court. The
people’s procuratorate may present a protest to the people’s court at the next higher level in
accordance with the procedures stipulated by the laws. In the absence of any appeal by the
parties and any protest by the people’s procuratorate within the stipulated period, the
judgments or rulings of the people’s court are final. Judgments or rulings of the second
instance of the intermediate people’s courts, the higher people’s courts and the Supreme
People’s Court, and judgments or rulings of the first instance of the Supreme People’s Court
are final. However, if the Supreme People’s Court finds some definite errors in a legally
effective judgment, ruling or c onciliation statement of the pe ople’s court at any level, or if
the people’s court at a higher level finds such e rrors in a legally effective judgment, ruling or
conciliation statement of the people’s court a t a lower level, it has the authority to review
the case itself or to direct the lower-level people’s court to conduct a retrial. If the chief
judge of all levels of people’s courts finds s ome definite errors in a legally effective
judgment, ruling or conciliation statement, an d considers a retrial is preferred, such case
shall be submitted to the judicial committe e of the people’s court at the same level for
discussion and decision.
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T h eP R CC i v i lP r o c e d u r eL a w(《中華人民共和國民事訴訟法》) (the ‘‘Civil Procedure
Law’’), which was adopted in 1991 and last a mended in 2023, and took effect on January 1,
2024, sets forth the criteria for instituting a c ivil action, the jurisdiction of the people’s
courts, the procedures to be followed for conducting a civil action and the procedures for
enforcement of a civil judgment or order. All pa rties to a civil action conducted within the
PRC must comply with the Civil Procedure Law. Generally, a civil case is initially heard by
the court located in the defendant’s place of domicile. The court of jurisdiction in respect of
a civil action may also be chosen by explicit agreement among the parties to a contract,
provided that the people’s court having jurisdiction should be located at places
substantially connected with the disputes, such as the plaintiff’s or the defendant’s place
of domicile, the place where the contract is executed or signed or the place where the object
of the action is located, provided that the provisions regarding the level of jurisdiction and
exclusive jurisdiction shall not be violated.
A foreign individual, a person without nationality, a foreign enterprise or a foreign
organization is given the same lit igation rights and obligations as a citizen, a legal person or
other organizations of the PRC when initiating actions or defending against litigations at a
PRC court. Should a foreign court limit the litig ation rights of PRC citizens or enterprises,
the PRC court may apply the same limitations to the citizens and enterprises of such foreign
country. A foreign individual, a p erson without nationality, a fo reign enterprise or a foreign
organization must engage a PRC lawyer in case he or it needs to engage a lawyer for the
purpose of initiating actions or defending against litigations at a PRC court. In accordance
with the international treaties to which the People’s Republic of China is a signatory or
participant or according to the principle of reciprocity, a people’s court and a foreign court
may request each other to serve documents, conduct investigation and collect evidence and
conduct other actions on its behalf. All parties to a civil action shall perform the legally
effective judgments and rulings. If any party t o a civil action refuses to abide by a judgment
or ruling made by a people’s court or an award made by an arbitration tribunal in the PRC,
the other party may apply to the people’s court for the enforcement of the same subject to
application for postponed enforcement or revocation. If a party fails to satisfy within the
stipulated period a judgment which the court has granted an enforcement approval, the
court may, upon the application of the other party, mandatorily enforce the judgment on
the party.
Where a party applies for enforcement of a judgment or ruling made by a people’s
court, and the opposite party or his property is not within the territory of the PRC, the
applicant may directly apply to a foreign court with jurisdiction for recognition and
enforcement of the judgment or ruling, or ap ply to a foreign court with jurisdiction or
recognition in accordance with the internat ional treaties that China has concluded or
acceded to or on a reciprocal basis. A foreig n judgment or ruling may also be recognized
and enforced by the people’s court in accordan ce with the PRC enforcement procedures if
the PRC has entered into, or acceded to, international treaties with the relevant foreign
country, which provided for such recognition and enforcement, or if the judgment or ruling
satisfies the court’s examination according to the principle of reciprocity, unless the
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people’s court considers that the recognition or enforcement of such judgment or ruling
would violate the basic legal principles of the PRC, its sovereignty or national security, or
against the social and public interests.
THE COMPANY LAW, THE INTERIM ME ASURES FOR THE ADMINISTRATION
OF OVERSEAS SECURITIES OFFERING AND LISTING BY DOMESTIC
ENTERPRISE AND THE GUIDELINES FOR THE ARTICLES OF ASSOCIATION OF
LISTED COMPANIES
A joint stock limited company which was incorporated in the PRC and seeking a listing
on the Stock Exchange is mainly subject to the following laws and regulations in the PRC:
. The Company Law which was promulgat ed by the SCNPC on December 29, 1993,
came into effect on July 1, 1994, amended or revised on December 25, 1999,
August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and
December 29, 2023, and the latest revised Company Law has been implemented on
July 1, 2024;
. The Interim Measures for the Administration of Overseas Securities Offering and
Listing by Domestic Enterprises (the ‘‘Overseas Listing Trial Measures’’) and the
Applicable Guidelines under Regulatory Rules for Overseas Issuance which were
promulgated by the CSRC on February 17, 2023, came into effect on March 31,
2023, applicable to the overseas share offering and listing of domestic joint stock
limited companies. If a domestic company directly issues and lists securities in an
overseas market, it shall formulate articles of association with reference to the
provisions of the CSRC’s ‘‘Guidelines for the Articles of Association of Listed
Companies’’ (《上市公司章程指引》), which was promulgated by the CSRC on
March 16, 2006, with the latest revised version promulgated and implemented on
March 28, 2025.
Set out below is a summary of the major provisions of the Company Law, the Overseas
Listing Trial Measures and Guidelines for Art icles of Association of Listed Companies.
General
A ‘‘joint stock limited company’’ (or ‘‘comp any’’) refers to a corporate legal person
incorporated in China under the Company Law with its registered capital divided by stocks.
The liability of the company for its own debts is limited to all the properties it owns and the
liability of its shareholders for the company is limited to the extent of the shares they
subscribe for.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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Incorporation
A joint stock limited company may be incorporated by promotion or public offering.
A joint stock limited company may be incorporated by a minimum of one but not more
than 200 promoters, and at least half of the pr omoters must have residence within the PRC.
The promoters of the offering and estab lishment of a joint stock company must
convene an establishment meeting within 30 d ays after the issued shares have been fully
paid up, and must give notice to all subscribers or make an announcement of the date of the
establishment meeting 15 days before the meet ing. The establishment meeting shall only be
held with the presence of subscribers representing a majority of voting rights. At the
establishment meeting, matters including the adoption of articles of association and the
election of members of the board of directors and members of the board of supervisors of
the company will be dealt with. All resolutions of the establishment meeting require the
approval of subscribers with a majority voting rights present at the meeting. The convening
and voting procedures of the founding meeting o f a joint stock company established by way
of promotion shall be stipulated by the articles of association or the promoters’ agreement.
Within 30 days after the conclusion of the establishment meeting, the board of
directors must apply to the registration authori ty for registration of the establishment of the
joint stock limited company. A company is fo rmally established, and has the status of a
legal person, after the business license has been i ssued by the relevant registration authority.
When the shareholders engage in civil activ ities for the establishment of the company,
the legal consequences shall be borne by the company. If a shareholder at the time of
establishment causes damage to others due to the performance of the company’s
establishment duties, the company or the no-fault shareholder may recover compensation
from the at-fault shareholder after assu ming the liability for compensation.
Share capital
The promoters of a company can make capital contributions in cash or in kind, which
c a nb ev a l u e di nc u r r e n c ya n dt r a n s f e r a b l eaccording to law such as intellectual property
rights, land use rights, equity, claims and other non-monetary property based on their
appraised value. If capital contribution is made other than in cash, valuation and
verification of the property contributed must be carried out.
Allotment and issue of shares
All issue of shares of a joint stock limited company shall be based on the principles of
equality and fairness. The same class of shares must carry equal rights. Shares issued at the
same time and within the same class must be issued on the same conditions and at the same
price. It may issue shares at par value or at a premium, but it may not issue shares below the
par value.
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Under the Overseas Listing Trial Measures, if a domestic enterprise issues shares
overseas, it may raise funds and dividend distributions in foreign currency or Renminbi.
To issue shares overseas, the domestic e nterprise shall report the application
documents for issuance and listing to the C SRC for record-filing within three working
days after submission of the application documents for issuance and listing overseas.
Transfer of Shares
The transfer of shares by shareholders should be conducted via the legally established
stock exchange or in accordance with other methods as stipulated by the State Council.
Transfer of shares by a shareholder shall be made by means of an endorsement or by other
means stipulated by applicable laws and regulations. Company shall register the name of
the transferee in the register of shareholders after such transfer.
Shares issued by a company before its public offering of shares shall not be transferred
within one year of the date on which the company’s stock is listed for trading on a stock
exchange. Directors, supervisors and senior management of a company shall not transfer
over 25% of the shares held by each of them in the company each year during their term of
office determined upon taking office and shall not transfer any share of the company held
by each of them within one year after the listing date. There is no restriction under the
Company Law as to the percentage of shareholding a single shareholder may hold in a
company.
Registered shares
The shares issued by a company shall be registered shares. Where the stock is in paper
form, the following main items shall be stated:
(1) company name;
(2) the date of establishment of the company or the time of issuance of shares; and
(3) the type of shares, the par value and the number of shares represented, and the
number of shares represented by the shares issued without par value.
If the stock is in paper form, the serial number of the stock shall also be indicated,
signed by the legal representative, and stam ped by the company. If the promoter’s shares
are in paper form, the words ‘‘promoter’s shares’’ shall be indicated.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
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Increase of share capital
According to the Company Law, when the joint stock limited company issues new
shares, resolutions shall be passed by a shareholders’ meeting, approving the class and
number of the new shares, the issue price of the new shares, the commencement and end of
the new share issuance, the class and amount of new shares to be issued to existing
shareholders and the amount of capital obtained from the issuance of non-par value shares
that is not included in the registered capital. After the new share issuance has been paid up,
the change shall be registered with the c ompany registration authorities and an
announcement shall be made. A company conducting a public offering of shares shall
register the offering with the securities regu latory authority under the State Council and
publish a prospectus. After the issued shares have been fully subscribed and paid for, the
company shall issue a public announcement.
When a joint stock company issues new shares for the purpose of increasing the
registered capital, the shareholders shall not enjoy the preemptive right of subscription,
unless the articles of association of the company provide otherwise or the shareholders’
meeting decides that the shareholders shall enjoy the preemptive right of subscription.
Reduction of share capital
A company may reduce its registered capital in accordance with the following
procedures prescribed by the Company Law:
(1) it shall prepare a balance sheet and a property list;
(2) the reduction of registered capital sh all be approved by a shareholders’ meeting;
(3) it shall inform its creditors of the reduc tion in capital within 10 days and publish
an announcement of the reduction in the newspaper within 30 days or the
National Enterprise Credit Information Publicity System after the resolution
approving the reduction has been passed;
(4) creditors may within 30 days after rece iving the notice, or within 45 days of the
public announcement if no notice has been received, require the company to pay
its debts or provide guarantees covering the debts;
(5) it shall apply to the relevant administration of registration for the registration of
the reduction in registered capital.
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Repurchase of shares
According to the Company Law, a joint sto ck limited company may not purchase its
shares other than for one of the following purposes: (i) to reduce its registered capital; (ii) to
merge with another company that holds its sha res; (iii) to grant its shares for carrying out
an employee stock ownership plan or equity incentive plan; (iv) to purchase its shares from
shareholders who are against the resolution regarding the merger or division with other
companies at a shareholders’ meeting; (v) use of shares for conversion of convertible
corporate bonds issued by a listed company; and (vi) the share buyback is necessary for a
listed company to maintain its company value and protect its shareholders’ interest.
The purchase of shares on the grounds set out in (i) and (ii) above shall require
approval by way of a resolution passed by the shareholders’ meeting. For a company’s share
buyback under any of the circumstances sti pulated in (iii), (v) or (vi) of the preceding
paragraph shall be subject to a resolution of a meeting of the board of directors with
two-thirds or more of the directors present, as stipulated in the articles of association or
authorized by the shareholders’ meeting.
Following the purchase of shares in accordance with (i) above, such shares shall be
canceled within 10 days from the date of purchase. The shares shall be assigned or
deregistered within six months if the share buyback is made under the circumstances
stipulated in either (ii) or (iv). The shares held in total by a company after a share buyback
under any of the circumstances stipulated in (iii), (v) or (vi) shall not exceed 10% of the
company’s total outstanding shares, and shall be assigned or deregistered within three
years.
Listed companies making a share buyback shall perform their obligation of
information disclosure according to the pr ovisions of the Securities Law. If the share
buyback is made under any of the c ircumstances stipulated in ( iii), (v) or (vi) hereof, public
centralized tradin g shall be adopted.
Shareholders
Under the Company Law, the rights of holders of ordinary shares of a joint stock
limited company include:
(1) the right to attend or appoint a proxy to attend shareholders’ meetings and to vote
thereat;
(2) the right to transfer shares in accordance with laws, administrative regulations
and provisions of the articles of association;
(3) the right to inspect and copy the company’ s articles of association, share register,
minutes of shareholder’s meetings, resolutions of meetings of the board of
directors, resolutions of meetings of the board of supervisors and financial and
accounting reports and to make proposals or enquiries on the company’s
operations;
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--- page 623 ---
(4) the right to bring an action in the people’s court to rescind resolutions passed by
shareholder’s meetings and board of directors where the articles of association is
violated by the above resolutions;
(5) the right to receive dividends and other types of interest distributed in proportion
to the number of shares held, unless the art icles of association provide otherwise;
(6) in the event of the termination or liquidation of the company, the right to
participate in the distribution of residual properties of the company in proportion
to the number of shares held; and
(7) other rights granted by laws, administrative regulations, other regulatory
documents and the company’s articles of association.
The obligations of a shareholder include the obligation to abide by the company’s
articles of association, to pay the subscription moneys in respect of the shares subscribed
for and in accordance with the form of making c apital contributions, to be liable for the
company’s debts and liabilities to the extent of the amount of his or her subscribed shares
and any other shareholders’ obligation specified in the company’s articles of association.
Any shareholder causing losses to the company or other shareholders by abusing a
shareholder’s rights shall assume comp ensatory liability according to the law.
Any shareholder causes serious damage to the interests of creditors of the company by
abusing the company’s independent corporate status and a shareholder’s limited liability to
evade debts shall be jointly and severa lly liable for the debts of the company.
Shareholders’ meetings
The shareholders’ meeting is the governing authority of the company, which exercises
its powers in accordance with the Company Law.
Under the Company Law, the shareholders’ meeting exercises the following principal
powers:
(1) to elect or remove the directors and supervisors (other than the representative
supervisors of the employees of the company) and to decide on matters relating to
the remuneration of directors and supervisors;
(2) to examine and approve reports of the board of directors;
(3) to examine and approve reports of the board of supervisors;
(4) to examine and approve the company’s pro posals for profit distribution plans and
loss recovery plans;
(5) to decide on any increase or reduction of the company’s registered capital;
(6) to decide on the issue of bonds by the company;
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--- page 624 ---
(7) to decide on issues such as merger, div ision, dissolution, liquidation of the
company, change of corporate form of the company and other matters;
(8) to amend the articles of association; and
(9) other powers as provided for in the articles of association.
Shareholders’ meetings are required to be held once every year. Under the Company
Law, an extraordinary meeting is require d to be held within two months after the
occurrence of any of the following:
(1) the number of directors is less than the number stipulated by the law or less than
two thirds of the number specified in the articles of association;
(2) the aggregate losses of the company which are not recovered reach one-third of
the company’s total share capital;
(3) when shareholders alone or in aggregate holding 10% or more of the company’s
shares request the convening of an extraordinary meeting;
(4) whenever the board of directors deems necessary;
(5) when the board of supervisors so requests; or
(6) other circumstances as provided for in the articles of associations.
Under the Company Law, shareholders’ meetings shall be convened by the board of
directors, and presided over by the chairman of the board of directors. In the event that the
chairman is incapable of performing or does not perform his duties, the meeting shall be
presided over by the vice chairman. In the e vent that the vice chairman is incapable of
performing or not performing his duties, a director nominated by more than half of
directors shall preside over the meeting.
Where the board of directors is incapable of performing or not performing its duties of
convening the shareholders’ meeting, the boa rd of supervisors shall convene and preside
over such meeting in a timely manner. In case th e board of supervisors fails to convene and
preside over such meeting, shareholders alone or in aggregate holding more than 10% of the
company’s shares for 90 days consecutively may unilaterally convene and preside over such
meeting.
Under the Company Law, notice of shareholders’ meeting shall state the time and
venue of and matters to be considered at the meeting and shall be given to all shareholders
20 days before the meeting. Notice of extraordinary meetings shall be given to all
shareholders 15 days prior to the meeting.
There is no specific provision in the Company Law regarding the number of
shareholders constituting a quorum in a shareholders’ meeting.
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--- page 625 ---
Under the Company Law, shareholders present at shareholders’ meeting have one vote
for each share they hold, except for shareholders of non-ordinary shares. However, shares
held by the company do not carry voting rights.
Pursuant to the provisions of the articles of association or a resolution of the
shareholders’ meeting, the accumulative voting system may be adopted for the election of
directors and supervisors at the shareholders’ meeting. Under the accumulative voting
system, each share shall be entitled to vote equivalent to the number of directors or
supervisors to be elected at the shareholders’ meeting and shareholders may consolidate
their voting rights when casting a vote. Pursuant to the Company Law, resolutions of the
shareholders’ meeting shall be adopted by more than half of the voting rights held by the
shareholders present at the meeting. However, resolutions of the shareholders’ meeting
regarding the following matters shall be adopted by more than two-thirds of the voting
rights held by the shareholders present at the meeting: (i) amendments to the articles of
association; (ii) the increase or decrease of re gistered capital; (iii) the merger, division,
dissolution, liquidation or change in the form of the company, by way of an ordinary
resolution, to be of a nature which may have a material impact on the company and should
be adopted by a special resolution.
Under the Company Law, meeting minutes shall be prepared in respect of decisions on
matters discussed at the shareholders’ meeting. The host of the meeting and directors
attending the meeting shall sign to endorse such minutes. The minutes shall be kept together
with the shareholders’ attendance register and the proxy forms.
Board of directors
Under the Company Law, a joint stock limited company shall have a board of
directors, which shall consist of three or more members. Members of the board of directors
may include representatives of the employees of the company, who shall be democratically
elected by the company’s staff at the staff repr esentative assembly, general staff meeting or
otherwise. The term of a director shall be stipulated in the articles of association, but no
term of office shall last for more than three years. Directors may serve consecutive terms if
re-elected. A director shall continue to per form his duties in accordance with the laws,
administrative regulations and articles of association until a duly re-elected director takes
office, if re-election is not conducted in a timely manner upon the expiry of his term of
office, or if the resignation of directors results in the number of directors being less than the
quorum.
Under the Company Law, the board of directors mainly exercises the following
powers:
(1) to convene the shareholders’ meetings and report on its work to the shareholders’
meetings;
(2) to implement the resolutions passed in shareholders’ meetings;
(3) to decide on the company’s business plans and investment proposals;
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--- page 626 ---
(4) to formulate the company’s profit distribution proposals and loss recovery
proposals;
(5) to formulate proposals for the increase or reduction of the company’s registered
capital and the issuance of corporate bonds;
(6) to prepare plans for the merger, division, dissolution and change in the form of
the company;
(7) to decide on the set-up of internal management organization of the company;
(8) to decide on appointment or dismissal of company managers and their
remuneration, and decide on appointment or dismissal of deputy managers and
person in charge of finance of the company based on the nomination by the
managers;
(9) to formulate the company’s basic management system; and
(10) to exercise any other power under the a rticles of association or granted by the
shareholders’ meeting.
Board meetings
Under the Company Law, meetings of the board of directors of a joint stock limited
company shall be convened at least twice a year. Notice of meeting shall be given to all
directors and supervisors 10 days before th e meeting. Interim board meetings may be
proposed to be convened by shareholders representing more than 10% of voting rights or
more than one-third of the directors or board of supervisors. The chairman shall convene
and preside over such meeting within 10 days a fter receiving such proposal. Meetings of the
board of directors shall be held only if half or more of the directors are present. Resolutions
of the board of directors shall be passed by more than half of all directors. Each director
shall have one vote for resolutions to be approve d by the board of directors. Directors shall
attend board meetings in person.
If a director is unable to attend a board meeting, he/she may appoint another director
by a written power of attorney specifying the scope of the authorization to attend the
meeting on his/her behalf. If a resolution of the board of directors violates the laws,
administrative regulations or the articles of association, resolutions of shareholders’
meeting and as a result of which the company sustains serious losses, the directors
participating in the resolution are liable to compensate the company. However, if it can be
proved that a director expressly objected to the resolution when the resolution was voted
on, and that such objection was recorded in the minutes of the meeting, such director may
be released from that liability.
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--- page 627 ---
Qualification of directors
The Company Law provides that the following persons may not serve as a director:
(1) a person who is unable or has limited ab ility to undertake any civil liabilities;
(2) a person who has been convicted of an offense of bribery, corruption,
embezzlement or misappropriation of property, or the destruction of socialist
market economy order; or who has been deprived of his political rights due to his
crimes, in each case where less than five years have elapsed since the date of
completion of the sentence, or in the case of a suspended sentence, two years have
not elapsed since the probation period was completed;
(3) a person who has been a former director, factory manager or manager of a
company or an enterprise that has entered into insolvent liquidation and who was
personally liable for the insolvency of such company or enterprise, where less than
three years have elapsed since the date of the completion of the bankruptcy and
liquidation of the company or enterprise;
(4) a person who has been a legal representative of a company or an enterprise that
has had its business license revoked due to violations of the law and has been
ordered to close down by law and the pe rson was personally responsible, where
less than three years have elapsed since th e date of revocation of business license
or shutdown order; or
(5) a person identified as a subject of enforcement for breach of trust by the people’s
court for failure to repay a significant amount of overdue debts.
In addition, pursuant to the Guidelines fo r the Articles of Association of Listed
Companies, where a director of a company is a natural person who has been subject to a
securities market entry prohibition measure imposed by the CSRC, he/she shall not be able
to act as a company director until the period of such measure has expired.
Chairman of the board
Under the Company Law, the board of directors shall appoint a chairman and may
appoint a vice chairman. The chairman and th e vice chairman are elected with approval of
more than half of all the directors. The chairman shall convene and preside over board
meetings and examine the implementation of board resolutions. The vice chairman shall
assist the work of the chairman. In the event that the chairman is incapable of performing
or not performing his/her duties, the duties shall be performed by the vice chairman. In the
event that the vice chairman is incapable of performing or not performing his/her duties, a
director nominated by more than half of the directors shall perform his/her duties.
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--- page 628 ---
Board of supervisors
A joint stock limited company may have a board of supervisors composed of not less
than three members. The board of supervisors is made up of representatives of the
shareholders and an appropriate proportion of representatives of the employees of the
company. The actual proportion shall be stipulated in the articles of association, provided
that the proportion of representatives of the employees shall not be less than one third of
the supervisors. Representatives of the employees of the company in the board of
supervisors shall be democratically elected by the employees at the employees’
representative assembly, employees’ general meeting or otherwise.
The directors and senior management may not act concurrently as supervisors.
The board of supervisors shall appoint a chairman and may appoint a vice chairman.
The chairman and the vice chairman of the board of supervisors are elected with approval
of more than half of all the supervisors. The chairman of the board of supervisors shall
convene and preside over the meetings of the board of supervisors. In the event that the
chairman of the board of supervisors is incapable of performing or not performing his/her
duties, the vice chairman of the board of supervisors shall convene and preside over the
meetings of the board of supervisors. In the event that the vice chairman of the board of
supervisors is incapable of performing or not performing his/her duties, a supervisor
nominated by more than half of the supervisors shall convene and preside over the meetings
of the board of supervisors.
Each term of office of a supervisor is three years and he or she may serve consecutive
terms if re-elected. A supervisor shall continue to perform his/her duties in accordance with
the laws, administrative regulations and articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of
his/her term of office, or if the resignation of supervisors results in the number of
supervisors being less than the quorum.
The board of supervisors of a company shall hold at least one meeting every six
months. According to the Company Law, a resolution of the board of supervisors shall be
passed by more than half of all the supervisors. The board of supervisors exercises the
following powers:
(1) to review the company’s financial position;
(2) to supervise the directors and senior management in their performance of their
duties and to propose the removal of directors and senior management who have
violated laws, administrative regulat ions, the articles of association or the
resolutions of shareholders’ meeting;
(3) when the acts of directors and senior management are detrimental to the
company’s interests, to require correction of those acts;
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--- page 629 ---
(4) to propose the convening of extraordin ary shareholders’ meetings and to convene
and preside over shareholders’ meetings when the board of directors fails to
perform the duty of convening and presiding over shareholders’ meeting under the
Company Law;
(5) to initiate proposals for resolutions to shareholders’ meeting;
(6) to initiate proceedings against directors and senior management officers pursuant
to the relevant provisions of the Company Law; and
(7) other powers specified in the articles of association.
Supervisors may attend board meetings and make enquiries or proposals in respect of
board resolutions. The board of supervisors may initiate investigations into any
irregularities identified in the operati on of the company and, where necessary, may
engage an accounting firm to assist th eir work at the company’s expense.
The Company may in accordance with the provisions of its articles of association, set
up an audit committee consisting of directors in the board of directors to exercise the
powers and functions of the board of supervisors provided in the PRC Company Law, and
may exempt from the requirements of having a board of supervisors or supervisors.
According to the Guidelines for the Articles of Association of Listed Companies last
amended on March 28, 2025, a listed company should set up audit committee to exercise the
powers and functions of the board of supervisors provided in the PRC Company Law.
Manager and senior management
Under the Company Law, a company shall have a manager who shall be appointed or
removed by the board of directors. The manager shall report to the board of directors and
exercise functions and powers as specified in the articles of association or as authorized by
the board of directors.
The manager shall attend meetings of the board of directors as a non-voting attendee.
According to the Company Law, senior management refers to the manager, deputy
manager(s), person-in-charge of finance, bo ard secretary (in case of a listed company) of a
company and other personnel as stipul ated in the articles of association.
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--- page 630 ---
Duties of directors, supervisors and senior management
Directors, supervisors and senior management of the company are required under the
Company Law to comply with the relevant laws, regulations and the articles of association,
and have duty of loyalty and duty of diligence to the company. Directors, supervisors and
senior management are prohibited from abusing their powers to accept bribes or other
unlawful income and from misappropriating of the company’s properties. Directors,
supervisors and senior management are prohibited from:
(1) embezzling company property, misa ppropriation of the company’s capital;
(2) depositing the company’s capital into accounts under his own name or the name
of other individuals;
(3) accepting commissions paid by a third party for transactions conducted with the
company;
(4) unauthorized divulgence of confidential business information of the company; or
(5) other acts in violation of their duty of loyalty to the company.
A director, supervisor or senior management who contravenes any law, administrative
regulation or the company’s articles of asso ciation in the performance of his/her duties
resulting in any loss to the company shall be personally liable to the company.
Pursuant to the Guidelines for the Articles of Association of Listed Companies, senior
management officers of a company shall faithfully perform their duties and safe guard the
best interests of the company and all its shareholders. Senior management of a company
shall be liable for compensation in accordance with the law if they fail to faithfully perform
their duties or breach their duty of good faith and cause damage to the interests of the
company and holders of public shares.
Merger and Division
Where companies are combined, the parties to the combination shall enter into an
agreement on the combination, and prepare balance sheets and lists of property. Each
company shall, within ten days of adoption of a resolution regarding the combination,
notify the creditors, and within 30 days, issue an announcement in a newspaper or the
National Enterprise Credit Information Pub licity System. The creditors may, within 30
days of receipt of the notice or within 45 days of issuance of the announcement if they fail to
receive the notice, require the company to rep ay debts or provide corresponding security.
Where companies are combined, the surviving company or the newly formed company
shall succeed to the claims and debts of the par ties to the combination Where a company is
divided, the property of the company shall be divided accordingly.
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--- page 631 ---
Where a company is divided, the company s hall prepare a balance sheet and list of
property. The company shall, within ten days of adoption of a resolution regarding the
division, notify the creditors, and within 30 days, issue an announcement in a newspaper or
the National Enterprise Credit Information Publicity System.
The companies after division are jointl y and severally liable for the debts of the
company before division, unless a written a greement reached before division by the
company and the creditors on debt repayment provides otherwise.
Finance and accounting
Under the Company Law, a company shall establish financial and accounting systems
according to laws, administrative regulations and the regulations of the competent financial
department of the State Council and shall at the end of each financial year prepare a
financial and accounting report which shall be audited by an accounting firm as required by
law. The company’s financial and accounting report shall be prepared in accordance with
provisions of the laws, administrative regulations and the regulations of the financial
department of the State Council.
Pursuant to the Company Law, the compan y’s financial reports shall be made
available for shareholders’ inspection at the company 20 days before the convening of an
annual general meeting. A joint stock limited co mpany that has publicly offered shares shall
publish its financial and accounting reports.
When distributing each year’s after-tax profits, it shall set aside 10% of its after-tax
profits into a statutory common reserve fund (except where the fund has reached over 50%
of its registered capital). If its statutory common reserve fund is not sufficient to make up
losses of the previous years, profits of the current year shall be applied to make up losses
before allocation is made to the statutory common reserve fund pursuant to the above
provisions. After allocation of the statutory common reserve f und from after-tax profits, it
may, upon a resolution passed at the shareholde rs’ meeting, allocate discretionary common
reserve fund from after-tax profits. The remai ning after-tax profits after making up losses
and allocation of common reserve fund shall be distributed in proportion to the number of
shares held by the shareholders, unless otherw ise stipulated in the company’s articles of
association. Shares held by the Company shall not be entitled to any distribution of profit.
The Company’s reserve fund shall be applied to make up losses of the company,
expand its business operations or be converted to increase the registered capital of the
company. Where the reserve of a company is u sed for making up losses, the discretionary
reserve and statutory reserve shall be firstly used. If losses still cannot be made up, the
capital reserve can be used in accordance with relevant regulations. Upon the conversion of
statutory common reserve fund into capital, the balance of the statutory common reserve
fund shall not be less than 25% of the registered capital of the company before such
conversion.
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--- page 632 ---
The Company shall have no other accounting books except the statutory accounting
books. Its assets shall not be deposited in any accounts opened in the name of any
individual.
Appointment and dismissal of accounting firms
Pursuant to the Company Law, the appointment or dismissal of accounting firms
responsible for the auditing of the company shall be determined by shareholders’ meeting,
board of directors or board of supervisors in accordance with provisions of articles of
association. The accounting firm should be allowed to make representations when the
shareholders’ meeting, board of directors or board of supervisors conducts a vote on the
dismissal of the accounting firm. The company should provide true and complete
accounting evidences, accounting books, financial and accounting reports and other
accounting information to the accounting firm it employs without any refusal, withholding
and misrepresentation.
Pursuant to the Guidelines for the Articles of Association of Listed Companies, the
company engages an accounting firm that complies with the provisions of the Securities
Law to carryout audit of accounting statements , verification of net assets and other related
advisory services for a period of one year, which is renewable.
Distribution of profits
According to the Company Law, a company shall not distribute profits before losses
are covered and the statutory common reserve is drawn.
Dissolution and liquidation
According to the Company Law, a company shall be dissolved by any reasons of the
following: (i) the term of its operations set down in the articles of association has expired or
other events of dissolution specified in the articles of association have occurred; (ii) the
shareholders’ meeting have resolved to dissol ve the company; (iii) the company is dissolved
by reason of merger or division; (iv) the business license is revoked; the company is ordered
to close down or be dissolved in accordance wi th the laws; or (v) the company is dissolved
by the people’s court in response to the request of shareholders holding shares that
represent more than 10% of the voting rights of all its shareholders, on the grounds that the
operation and management of the company has suffered serious difficulties that cannot be
resolved through other means, rendering ongoing existence of the company a cause for
significant losses to the shareholders.
In the event of (i) or (ii) above and has not distributed assets to its shareholders, it may
continue its existence by amending its articles of association or by resolution of the
shareholders’ meeting. The amendment of the articles of association in accordance with
provisions set out above shall require approval of more than two thirds of voting rights of
shareholders attending a s hareholders’ meeting.
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--- page 633 ---
Where the company is dissolved in the circumstances described in subparagraphs (i),
(ii), (iv), or (v) above, a liquidation group shall be established and the liquidation process
shall commence within 15 days after the occurrence of an event of dissolution. The
liquidation team shall be composed of directo rs, unless it is otherwise stipulated by the
company’s articles of association or appointed by resolution of the shareholders’ meeting. If
a liquidation group is not established within the stipulated period, the company’s creditors
may file an application with a people’s cour t to appoint relevant personnel to form a
liquidation committee to administer the liquidation.
The liquidation group shall exercise the following powers during the liquidation
period:
(1) to sort out the company’s assets and to p repare a statement of financial position
and an inventory of assets, respectively;
(2) to notify creditors through notice or public announcement;
(3) to deal with the company’s outstanding businesses related to liquidation;
(4) to pay any tax overdue as well as tax amounts arising from the process of
liquidation;
(5) to settle claims and liabilities;
(6) to handle the company’s remaining asse ts after its debts have been paid off; and
(7) to represent the company in civil lawsuits.
The liquidation group shall notify the company’s creditors within 10 days after its
establishment and make a public announcement through a newspaper or the National
Enterprise Credit Information Publicity Sys tem. A creditor shall lodge his claim with the
liquidation group within 30 days after receiving notification, or within 45 days of the public
notice if he did not receive any notification. A creditor shall state all matters relevant to his
creditor rights in making his claim and furnish evidence. The liquidation group shall
register such creditor rights. The liquidati on group shall not make any debt settlement to
creditors during the period of claim.
Upon liquidation of properties and the preparation of the required statement of
financial position and inventory of assets, the liquidation group shall draw up a liquidation
plan to be submitted to the shareholders’ meeting or people’s court for confirmation. The
company’s remaining assets after payment of liquidation expenses, wages, social insurance
expenses and statutory compensation, outstanding taxes and debts shall be distributed to
shareholders according to their shareholding proportion. The company shall continue to
exist during the liquidation period, although it can only engage in any operating activities
that are related to the liquidation. The compan y’s properties shall not be distributed to the
shareholders before repayments are made in a ccordance with the requirements described
above.
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--- page 634 ---
Upon liquidation of the company’s properties and the preparation of the required
statement of financial position and inventory of assets, if the liquidation group becomes
aware that the company does not have sufficien t assets to cover its liabilities, it must apply
to the people’s court for a declaration for bankruptcy. Following such declaration, the
liquidation group shall hand over liquidation affairs to the administrator designated by the
people’s court.
Upon completion of the liquidation, the liquidation group shall submit a liquidation
report to the shareholders’ meeting or the people’s court for verification. Thereafter, the
report shall be submitted to the registration authority of the company in order to cancel the
company’s registration, and a public notice of its termination shall be issued. Members of
the liquidation group shall fulfill liquidati on responsibilities with a duty of loyalty and
diligence.
Any member of the liquidation group who negl ects their liquidation responsibilities
and causes losses to the company shall be liable for compensation; if losses are caused to
any creditor due to intent or gross negligence, such member shall be liable for
compensation.
If a company does not incur any debt during its existence, or has paid off all its debts,
it may, upon the commitment of all shareholders, cancel the company registration through
simplified procedures in accordance with regulations.
Amendments to articles of association
Pursuant to Company Law, the resolution of a shareholders’ meeting regarding any
amendment to a company’s articles of association requires affirmative votes by at least
two-thirds of the votes held by shareholders attending the meeting.
According to the Guidelines for the Articles of Association of Listed Companies, if the
amendments to the articles of association a pproved by the resolution of the meeting of
shareholders are subject to approval by the competent authority, they must be reported to
the competent authority for approval; if they involve company registration matters, the
modification registrations hall be handled according to law. Where the amendments to the
articles of association belong to information required to be disclosed by laws and
regulations, such amendments shall be ann ounced in accordance with the regulations.
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--- page 635 ---
SECURITIES LAW AND REGULATIONS
The PRC has promulgated a number of regulations that relate to the issue and trading
of shares and disclosure of information. In October 1992, the State Council established the
Securities Committee and the CSRC. The Securities Committee is responsible for
coordinating the drafting of securities regulations, formulating securities-related policies,
planning the development of securities markets, directing, coordinating and supervising all
securities related institutions in the PRC and administering the CSRC. The CSRC is the
regulatory arm of the Securities Committee and is responsible for the drafting of regulatory
provisions of securities markets, supervising securities companies, regulating public offers
of securities by PRC companies in the PRC or overseas, regulating the trading of securities,
compiling securities related statistics and und ertaking relevant research and analysis. In
April 1998, the State Council consolidated the two departments and reformed the CSRC.
The Interim Provisional Regulations on the Administration of Share Issuance and
Trading ( 《股票發行與交易管理暫行條例》) deals with the application and approval
procedures for public offerings of equity securities, trading in equity securities, the
acquisition of listed companies, deposit, clearin g and transfer of listed equity securities, the
disclosure of information with respect to a lis ted company, investigation, penalties and
dispute settlement.
The PRC Securities Law took effect on Ju ly 1, 1999 and was revised or amended on
August 28, 2004, October 27, 2005, June 29, 2013, August 31, 2014 a nd December 28, 2019,
respectively. This is the first national securities law in the PRC, which regulating, among
other things, the issue and trading of securities, takeovers by listed companies, securities
exchanges, securities companies and the dutie s and responsibilities of the State Council’s
securities supervisory and regulatory author ities. The PRC Securities Law comprehensively
regulates activities in the PRC securities ma rket. Article 224 of the PRC Securities Law
provides that domestic enterprises shall comp ly with the relevant provisions of the State
Council to list its shares outside the PRC. Currently, the issue and trading of foreign issued
shares (including H shares) are mainly governed by the rules and regulations promulgated
by the State Council and the CSRC.
According to the Overseas Listing Trial Measures, the domestic enterprise shall report
the application documents for issuance and listing to the CSRC for record-filing within
three working days after submission of the application documents for issuance and listing
overseas. The remittance and cross-border flow of funds related to overseas issuance and
listing of domestic companies shall comply with national regulations on cross-border
investment and financing, foreign exchange management, and cross-border RMB
management.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARDS
The Arbitration Law of the PRC ( 《中華人民共和國仲裁法》) (the ‘‘Arbitration Law’’)
was passed by the SCNPC on August 31, 1994, became effective on September 1, 1995 and
was amended on August 27, 2009 and September 1, 2017. Under the Arbitration Law, an
arbitration committee may, before the promulgation by the PRC Arbitration Association of
arbitration regulations, formulate interi m arbitration rules in accordance with the
Arbitration Law and the Civil Procedure Law. Where the parties have by agreement
provided arbitration as the method for dispute resolution, the people’s court will refuse to
handle the case except when the arbitration agreement is declared invalid.
Under the Arbitration Law and the Civil Procedure Law, an arbitral award is final and
binding on the parties. If a party fails to comp ly with an award, the other party to the award
may apply to the people’s court for enforcement. A people’s court may refuse to enforce an
arbitral award made by an arbitration commission if there is any irregularity on the
procedures or composition of arbitrators specified by law or the award exceeds the scope of
the arbitration agreement or is outside the jur isdiction of the arbitration commission.
A party seeking to enforce an arbitral award of PRC arbitration panel against a party
who, or whose property, is not within the PRC, may apply to a foreign court with
jurisdiction over the case for enforcement. Similarly, an arbitral award made by a foreign
arbitration body may be recognized and enforced by the PRC courts in accordance with the
principles of reciprocity or any international treaty concluded or acceded to by the PRC.
The PRC acceded to the Convention on the R ecognition and Enforcement of Foreign
Arbitral Awards (the ‘‘New York Convention’’) adopted on June 10, 1958 pursuant to a
resolution of the SCNPC passed on December 2, 1986. The New York Convention provides
that all arbitral awards made in a state which is a party to the New York Convention shall
be recognized and enforced by all other parties to the New York Convention, subject to
their right to refuse enforcement under certain circumstances, including where the
enforcement of the arbitral award is against the public policy of the state to which the
application for enforcement is made. It was declared by the SCNPC simultaneously with the
accession of the PRC that (i) the PRC will only recognize and enforce foreign arbitral
awards on the principle of reciprocity and (ii) the PRC will only apply the New York
Convention in disputes considered under PRC laws to arise from contractual and
non-contractual mercantile legal relations.
An arrangement was reached between Hong Kong and the Supreme People’s Court for
the mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s Court
adopted the Arrangement on Mutual Enforcem ent of Arbitral Awards between Mainland
China and Hong Kong ( 《關於內地與香港特別行政區相互執行仲裁裁決的安排》), which
became effective on February 1, 2000, an d Supplementary Arrangements of Supreme
People’s Court on Reciprocal Enforcement of Arbitration Awards between the Mainland
and the Hong Kong Special Administrative Region ( 《關於內地與香港特別行政區相互執行
仲裁裁決的補充安排》), which promulgated on November 26, 2020. In accordance with
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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–I V - 2 2–


--- page 637 ---
these arrangements, awards made by PRC arbitral authorities under the Arbitration Law
can be enforced in Hong Kong, and Hong Kong arbitration awards are also enforceable in
the PRC.
Judicial judgment and its enforcement
Pursuant to the Arrangements for Recip rocal Recognition and Enforcement of
Judgments in Civil and Commercial Cases between Courts of the Mainland and Hong Kong
Special Administrative Region ( 《最高人民法院關於內地與香港特別行政區法院相互認可和
執行民商事案件判決的安排》) which is promulgated by the Supreme People’s Court on
January 25, 2024 and implemented on January 29, 2024, except for judgments in civil and
commercial cases that are not applicable unde r Article 3 of this Arrangements, judgments
that can be recognized and enforced in both places are those made by mainland and Hong
Kong SAR courts on or after January 29, 2024. The mutually recognized and enforced
judgments include monetary judgments and non-monetary judgments.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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This appendix contains the summary of the principal provisions of the Articles of
Association adopted by the Company on May 19, 2025 and will take effect on the date of the
H-Shares being listing on the Stock Exchange. The main purpose of this appendix is to provide
an overview of the Company’s Articles of Association for potential listing, so it may not
contain all the information that is important to potential listing.
SHARES AND REGISTERED CAPITAL
1 Insurance of Shares
The shares of the Company shall take the form of stocks.
The Company may take the form of overseas depositary receipt or other derivative
form of share certificate to issue overseas listed foreign shares in accordance with laws and
securities registration and depository practice of the place where the Company’s shares are
listed. Where the share capital of the Company includes shares that do not carry voting
rights, the words ‘‘non-voting’’ must appear on the name of such shares. Where the share
capital includes shares with different voting rights, the name of each class of shares, other
than those with the most favorable voting right s, must include the words ‘‘restricted voting
right’’ or ‘‘limited voting right’’.
Shares of the same class issued at the same t ime shall have the same issuance conditions
and price per share; all subscribers shall pay the same price per share for shares they
subscribed for.
The shares issued by the Company are all stocks with par value, and the par value of
each share is RMB0.1.
The shares issued by the Company and listed on the Stock Exchange be referred to as
‘‘H shares’’, the par value of which are denominated in Renminbi, and which are subscribed
for and traded in Renminbi and Hong Kong dollars. H shares issued by the Company are
mainly deposited with the custodian company under the Hong Kong Securities Clearing
Company Limited.
The shares issued by the Company but not listed or traded in any overseas stock
exchange shall be referred to as ‘‘Unlisted Shares’’ (including unlisted shares held by
shareholders of the Company prior to overseas listed and unlisted shares issued in the PRC
after overseas listed). Unlisted Shares issued by the Company shall be collectively deposited
with China Securities Depository and Clearing Co., Ltd.
With the approval from the Stock Exchange and filing with the China Securities
Regulatory Commission, the shareholders of Unlisted Shares of the Company may apply to
convert the Unlisted Shares into H shares and have such shares listed on the Stock
Exchange.
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OF THE COMPANY
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2 Increase, Decrease and Repurchase of Shares
The Company, based on its operational and development needs, may adopt the
following methods to increase registered capital upon the resolution of the meeting of
shareholders in accordance with laws, regulat ions, and the securities regulatory rules of the
place where the company’s shares are listed:
(I) offering of shares to unspecified investors;
(II) placement of shares to specific investors;
(III) distributing bonus shares to its existing shareholders;
(IV) convert capital reserves into share capital; and
(V) other methods permitted by laws, administ rative regulations, s ecurities regulatory
rules of the place where the company’s shares are listed, and approved by the
China Securities Regulatory Commission.
The Company may reduce its registered capital. The reduction in registered capital
shall be made in accordance with the procedures set out in the Company Law, the Listing
Rules, the Articles of Association of the Co mpany and other relevant regulations.
The Company shall not repurchase its shares, except under any of the following
circumstances:
(I) Reducing the Company’s registered capital;
(II) Merge with another company which holds the shares of the Company;
(III) For the purpose of setting up Employee Stock Ownership Plan or equity incentive
scheme;
(IV) Acquiring shares held by Shareholders, who vote against any resolution proposed
in any general meeting on the merger or division of the Company, upon their
request;
(V) Conversion of shares into the convertible bonds to be issued by the Company;
(VI) Being necessary for the Company to maintain its corporate value and the equity of
shareholders;
(VII) Other circumstance permitted by laws, administrative regulations and the listing
rules of the stock exchange of the place where the Company’s shares are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 640 ---
If the relevant laws, administrative regulati ons, departmental rules, other regulatory
documents and the relevant requirements of the securities regulatory authority of the place
where the Company’s shares are listed otherwise have provisions in respect of matters
related to the aforesaid share repurchase, such provisions shall prevail.
3 Transfer of Shares
Shares of the Company shall be transferred in accordance with the laws and
regulations.
Shares issued by the Company prior to its public offering shall not be transferred
within 1 year as of the date on which the shares are listed and traded in the stock exchange.
The directors and senior management of the Company shall declare, to the Company,
the information on their holdings of the shares of the Company and the changes thereto.
During the term of office determined upon tak ing office, the shares of the same class they
transfer each year shall not exceed 25% of the total number of shares of the company they
hold. The shares that they hold in the Company shall not be transferred within 1 year of the
date on which the shares of the Company are listed and traded. The aforesaid persons shall
not transfer their shares of the Company within half a year from the date of their
resignation.
SHAREHOLDERS MEETINGS
4 Shares Certificate and Register of Shareholders
The Company shall maintain a register of shareholders based on the vouchers provided
by securities depository and clearing institutions. The register of shareholders shall be the
sufficient evidence proving the shareholders’ holding of the Company’s shares.
Register of members for shareholders of Unlisted Shares are subject to the records
under the security record system of China Secu rities Depository and Clearing Corporation
Limited. Register of members for shareholders of H shares are subject to the information
provided by the custodian company under Hong Kong Securities Clearing Company
Limited.
5 Shareholders
The shareholders of the Company shall have the following rights:
(I) to receive dividends and other profit distribution in proportion to the number of
shares held by them;
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OF THE COMPANY
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--- page 641 ---
(II) to propose, convene, preside over, attend in person or appoint a proxy to attend
and vote on his/her behalf at shareholders’ meeting in accordance with laws,
except where a shareholder is required b y the securities regulatory rules of the
place where the Company’s shares are listed to abstain from voting on specific
matters;
(III) to supervise and to put forward proposals and make enquires relating to the
operation of the Company;
(IV) to transfer, donate or pledge their shares in accordance with relevant laws,
administrative regulations and the Articles of Association;
(V) to inspect and to copy the Articles of Association, register of shareholders
(including register of shareholders of H Shares), minutes of the shareholders’
meeting, resolutions of Board meetings and financial reports, to inspect the
Company’s accounting books and vouchers for shareholders meeting statutory
requirements;
(VI) in the event of the termination or liquidation of the Company, to participate in
the distribution of remaining assets of the Company according to the number of
shares held by them;
(VII) for shareholders who dissent to a resolution for the merger or demerger of the
Company, to demand the Company to acquire their shares;
(VIII) other rights conferred by laws, administrat ive regulations, departmental rules and
the Articles of Association.
The shareholders of ordinary shares of the Company shall have the following
obligations:
(I) to abide by laws, administrative regul ations and the Articles of Association;
(II) to pay subscription monies according to the number of shares subscribed and the
method of subscription;
(III) not to make divestment unless in the circumstances stipulated by laws and
regulations;
(IV) not to abuse the rights of shareholders to prejudice the interests of the Company
or other shareholders; not to abuse the Company’s independent status as legal
person and the limited liability of share holders to prejudice the interests of the
Company’s creditors;
(V) other obligations imposed by laws, admini strative regulations and the Articles of
Association.
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OF THE COMPANY
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--- page 642 ---
Shareholders shall be liable for compensation pursuant to applicable laws for losses
caused to the Company or other shareholders due to their abuse of shareholder’s rights.
Shareholders shall be jointly accountable for the Company’s liabilities where they abuse the
Company’s independent status as legal perso n and limited liability as a shareholder to evade
debts, or seriously prejudice the interests of the Company’s creditors.
6 General Provisions of Shareholder’s Meetings
The shareholders’ meeting is the governing authority of the Company, and shall
exercise the following functions and powers in accordance with the law:
(I) to elect and change the directors and determine the remuneration of the directors;
(II) to examine and approve report submitted by the Board;
(III) to examine and approve the profit distribution plan and the plan for making up
accrued losses of the Company;
(IV) to resolve on the increase or reduction in the registered capital of the Company;
(V) to resolve on the issue of bonds by the Company;
(VI) to resolve on such matters as the merger, division, dissolution, liquidation and
change of company form;
(VII) to amend the Articles of Association;
(VIII) to resolve on the Company’s appointment, dismissals of accounting firms engaged
for the company’s audit services;
(IX) to examine and approve guarantees under Article 45 of Articles of Association;
(X) to examine and approve connected transactions under Article 46 of Articles of
Association;
(XI) to examine any acquisition or disposal of any material asset whose asset value
exceeds 30% of the latest audited total assets of the Company for one year;
(XII) to examine and approve any change in the use of proceeds from funds raised;
(XIII) to examine share incentive schemes and employee stock ownership plan;
(XIV) any other matters required by laws, administrative regulations, departmental
rules, listing rules of the stock exchange w here the Company’s shares are listed or
the Articles of Association to be resolved at the shareholders’ meeting.
The shareholders’ meeting can authorize the Board to resolve on issuance of corporate
bonds.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 643 ---
Shareholders’ meetings include annual meetings and extraordinary meetings. Annual
meetings shall be held once every year within six months after the end of each financial year.
The Company shall hold an extraordinary meeting within two months upon the
occurrence of any of the following events:
(I) when the number of directors is less than the number prescribed by the Company
Law or less than two thirds of the number prescribed by the Articles of
Association;
(II) when the accumulated losses of the Company amount to one third of the total
amount of its share capital;
(III) upon the requisition in writing of shareholders individually or collectively holding
10% or more of shares of the Company (on a one share one vote basis);
(IV) whenever the Board deems necessary;
(V) when the audit committee proposes to convene the meeting;
(VI) when two or more of independent non-executive directors propose to convene the
meeting;
(VII) other circumstances stipulated by laws, administrative regulations, departmental
rules, the listing rules of the stock excha nge where the Company’s shares are listed
or the Articles of Association.
7 Convening of Meetings
The shareholders’ meeting shall be convened by the Board. The publication of the
notice of the shareholders’ meeting (includ ing the supplementary notice) shall follow
relevant laws and regulations and the securities regulatory rules of the place where the
Company’s shares are listed.
With the affirmative vote of more than half of all independent non-executive directors,
independent non-executive directors are entitled to propose to the Board for convening an
extraordinary meeting. In response to such proposal of the independent non-executive
directors to convene an extraordinary meeting, the Board shall, within ten days after
receiving such proposal, provide a response in writing to indicate whether or not the Board
agrees to convene such extraordinary meeting pursuant to the laws, administrative
regulations and the Articles of Association. Where the Board agrees to convene such
extraordinary meeting, a notice to convene such shareholders’ meeting shall be issued
within five days after the passing of the relevant resolution by the Board. Where the Board
disagrees to convene such extraordinary meeting, the Board shall give reasons for such
decision, which shall also be announced. T he preceding rule shall be obeyed unless
otherwise stipulated in the laws, administrative regulations, departmental rules or listing
rules of the stock exchange where the shares of the Company are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 644 ---
The audit committee has the right to propose the Board to convene extraordinary
meetings and such proposal shall be made by way of written request(s). The Board shall
reply in writing regarding the acceptance or refusal to convene an extraordinary meeting
within ten days upon receiving the written pro posal in accordance with the requirements of
the laws, administrative regulation s and the Articles of Association.
Shareholders separately or aggregately holding 10% or more of the Company’s voting
shares have the right to propose the Board to convene an extraordinary meeting by way of
written request(s). The Board shall reply in wr iting regarding the acceptance or refusal to
convene an extraordinary meeting within ten days upon receiving the request in accordance
with the requirements of the laws, administrative regulations and the Articles of
Association. If the Board agrees to convene the extraordinary meeting, notice convening
the meeting shall be issued within five days after the Board resolved to do so.
If the Board makes alterations to the origina lp r o p o s a li nt h en o t i c e ,c o n s e n th a st ob e
obtained from the related shareholders.
If the Board does not agree to convene the extraordinary meeting or does not reply
within ten days upon receiving the request, shar eholders separately or aggregately holding
10% or more of the Company’s issued shares h ave the right to propose the audit committee
to convene an extraordinary meeting by way of written request(s).
If the audit committee agrees to convene the ex traordinary meeting, notice convening
the extraordinary general meeting shall be issued within five days upon receiving the
request. Should there be alterations to the original requests in the notice, consent has to be
obtained from the related shareholders.
If the audit committee does not issue notice of the shareholders’ meeting within the
required period, it will be considered as not going to convene and preside over the meeting,
and shareholders separately or aggregately holding 10% or more of the shares of the
Company for ninety or more consecutive days have the right to convene and preside over
the meeting on their own. The preceding rule shall be obeyed unless otherwise stipulated in
the laws, administrative regulations, depa rtmental rules or listing rules of the stock
exchange where the shares of the Company are listed.
8 Proposals and Notices of Shareholder’s Meetings
When the Company convenes the shareholders’ meeting, the Board, the audit
committee or shareholders individually or aggregately holding 1% or more of the total
shares of the Company shall have the right to propose motions.
Shareholders separately or aggregately holding 1% or more of the shares of the
Company may propose extraordinary motions to the convener in writing ten days before the
convening of such shareholders’ meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
–V - 7–


--- page 645 ---
The convener shall issue supplementary notice of the shareholders’ meeting to
announce the content of the extraordinary m otions within two days after receiving the
proposed motions and submit such motions for deliberation at the shareholders’ meeting,
unless the extraordinary motions violate laws, administrative regulations or the Articles of
Association, or fall outside the scope of authority of the shareholders’ meeting.
Unless otherwise required by the preceding paragraph, the convener shall not amend
the proposals listed in the aforesaid notice or add any new proposals subsequent to the
dispatch of a notice of the shareholders’ meeting. Where an annual meeting is convened by
the Company, it shall issue a written notice 21 days prior to the meeting to notify all the
registered shareholders of the matters proposed to be considered as well as the date and
place of the meeting. An extraordinary meeting shall be notified to the shareholders at least
15 days prior to the meeting. In relation to the publication of the notice under this Article,
the date of publication of notice represents the date that the Company or the share registrar
as engaged by the Company delivers the relevant notice at the post office for posting. When
calculating the number of days for the issuance of notices, the intended day of the meeting
shall be excluded.
9 Holding of Shareholder’s Meetings
All the shareholders or their proxies reco rded in the register of shareholders on the
record date are entitled to attend the shareholde rs’ meeting, and shall exercise their voting
rights pursuant to the laws, regulations and the Articles of Association. Any shareholder
entitled to attend and vote at a shareholders’ meeting shall be entitled to appoint one or
more persons (whether or not a shareholder) as his/her proxy to attend and vote instead of
him/her.
An individual shareholder who attends the shareholders’ meeting in person shall
present his/her identification card or other valid identification documents or certificates
that can verify his/her identity. Where a proxy is appointed to attend the meeting, the proxy
shall produce his/her own valid identification documents and the power of attorney.
A corporate shareholder shall attend the mee ting by its legal representative or a proxy
appointed by the legal representative. The legal representative who attends the
shareholders’ meeting shall present his/her id entification card and valid certification
documents which can prove his/her authority to act as the legal representative. Where a
proxy is appointed to attend the meeting, the proxy shall present his/her own identity card
and the written power of attorney issued in accordance with the law by the legal
representative of the corporate shareholder.
A shareholder shall appoint his/her proxy by an instrument in writing. Such instrument
shall be made under the hand of the appointer or his/her attorney duly authorized in
writing. If the appointer is a legal person, then the instrument shall be signed under a legal
person’s seal or under the hand of the directors or a person duly authorized in writing.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 646 ---
The power of attorney issued by shareholde rs to authorize other persons to attend the
shareholders’ meeting on their behalf shall clearly state the following:
(I) The name or designation of the principal, class and quantity of the Company
shares held;
( I I ) T h en a m eo rd e s i g n a t i o no ft h ep r o x y ;
(III) The specific instructions of the shareh older, including directions to vote for,
against or abstain from voting respectively on each proposal of consideration
listed on the agenda of the shareholders’ meeting;
(IV) The signing date and the period of validity of the proxy form;
(V) signature (or seal) of the appointing shareholder; if the appointing shareholder is
a body corporate, the document shall be affixed with the legal person’s seal or be
signed by its director or an attorney duly authorised;
(VI) Specifying the number of shares held by the principal represented by such proxy;
(VII) If more than one proxy is appointed, the instrument shall specify the number of
shares held by the principal repres ented by each proxy respectively.
The shareholders’ meeting shall be chaired by the chairperson of the board. In the
event the chairperson of the board is unable to perform his/her duties or fails to perform
his/her duties for any reason, the shareholders’ meeting shall be chaired by the vice
chairperson (and in case of two or more vice chairpersons in the Company, the vice
chairperson designated by more than half of d irectors shall preside over the meeting).
Where the position of vice chairman does not exist, or where the vice chairperson is unable
to perform his/her duties or fails to perform his /her duties, the shareholders’ meeting shall
be chaired by a director jointly nominated by no less than half of the directors.
A shareholders’ meeting convened by the audit committee shall be chaired by the
chairperson of the audit committee. In the event the chairperson of the audit committee is
unable to perform his/her duties or he/she fails to perform his/her duties, a member of audit
committee jointly designated by more than half of the members of audit committee shall
preside over the meeting.
A shareholders’ meeting convened by shareholders shall be chaired by the
representative nominated by the convener of such meeting.
In convening any shareholders’ meeting, if t he chairperson of the meeting has violated
any rules of meeting such that the meeting m ay not proceed further, with the consent of
shareholders representing more than half of the voting rights present at such meeting, the
meeting may designate a person to chair the meeting so that the meeting may proceed
further.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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10 Voting and Resolutions at the Meetings
Resolutions of shareholders’ meetings in clude ordinary resolutions and special
resolutions. An ordinary resolution shall be passed by shareholder in attendance holding
half or more of the voting rights. A special resolution shall be passed by shareholders in
attendance holding two-thirds or more of the voting rights.
The following matters shall be approved by an ordinary resolution of a shareholders’
meeting:
(I) work reports of the Board;
(II) proposals formulated by the Board for distribution of profits and for making up
accrued losses;
(III) election and removal of members of the Board not being representatives of the
employees, as well as the determination of their remuneration and the method of
its payment;
(IV) balance sheet, income statement and other financial statements of the Company;
(V) annual report of the Company;
(VI) to hire and terminate the accounting firm of the Company and the remuneration
of accounting firm hired;
(VII) issuance of bonds or other securities;
(VIII) to consider and approve the guarantees stipulated in Article 45 and the related
transactions stipulated in Article 46 of the Articles of Association;
(IX) such matters other than those required to be passed by special resolutions under
the laws and administrative regulations and the listing rules of the stock exchange
on which the Company’s shares are listed or the Articles of Association.
For the purpose of the Articles of Association, the ‘‘shareholder(s)’’ includes those who
attend the shareholders’ meeting through proxies.
The following matters shall be approved b y special resolution of a shareholders’
meeting:
(I) the increase or reduction of the registered capital and issuance of any class of
s h a r e s ,w a r r a n t so ro t h e rs i m i l a rs e c u r i t i e sb yt h eC o m p a n y ;
(II) the separation, division, merger, di ssolution and liquidation or change in the
corporate form of the Company;
(III) any amendment of this Articles of Association;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 648 ---
(IV) purchase or disposal of material assets or the provision of guarantee to third
parties within one year with the amount exceeding 30% of the total assets of the
Company;
(V) share incentive scheme;
(VI) other matters which are stipulated by th e laws, administrative regulations, the
listing rules of the stock exchange on which the Company’s shares are listed or the
Articles of Association, and which are resolved by way of an ordinary resolution
to have a material impact on the Company and therefore shall be adopted by
special resolutions.
Except for when company is in crisis, the Company shall not, without prior approval at
as h a r e h o l d e r s ’m e e t i n gb yas p e c i a lr e s o l u t ion, enter into any contract with any person
other than a director, senior management whereby the administration of the whole or any
substantial part of the business of the Company is to be handed over to such person.
THE BOARD OF DIRECTORS
11 Directors
Directors include executive directors and no n-executive directors. Executive director
refers to a director who participates in the daily operations and management of the
Company or its controlling subsidiary; Non-ex ecutive directors refer to directors who do
not participate in the daily operations and ma nagement of the Compa ny or its controlling
subsidiaries. Non-executive directors inc lude independent non-executive directors.
The Board of directors shall include one employee representative. Such representative
shall be democratically elected by the company’s employees through the employees’
congress, general staff meeting, or other forms of democratic election, which shall not
require approval by the shareholders’ meeting.
The Company shall not engage personnel who do not meet the qualifications to serve
as directors, and shall not authorize personnel who do not meet the qualifications to
actually exercise their duties in violation of regulations.
Directors shall be elected or replaced by the shareholders’ meeting and may be
removed from office by the shareholders’ meet ing prior to the expiration of their term.
Directors serve for a term of three years, whose term is renewable upon re-election, unless
otherwise required by the laws, regulations, the Articles of Association and the listing rules
of the stock exchange where the Company’s shares are listed. The senior management
member of the Company may hold the post of director concurrently, provided that the
number of directors who also hold the post of the senior management member shall not
exceed half of the total number of the direct ors of the Company. If the Board appoints a
new director to fill a casual vacancy or as an addition to the Board, the appointed director
shall be subject to election by shareholders at the first shareholders’ meeting after the
appointment and shall be eligible for re-election.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 649 ---
Directors shall observe the laws, admin istrative regulations, the Articles of
Association, and the listing rules of the stock exchange where the Company’s shares are
listed. Directors shall undertake fiduciary duties and shall take proactive measures to avoid
conflicts of interest between themselves and the Company, and shall refrain from using their
position to seek improper gains. Directors shall undertake the following fiduciary duties to
the Company that they should:
(I) not to expropriate the assets of the Company, and not to misappropriate the funds
of the Company;
(II) not to open any account in their own names or in others’ names for the purpose of
depositing any of the Company’s funds;
(III) not to solicit or accept bribes or oth er illegal gains through abuse of official
powers;
(IV) not to conclude any contract or conduct transactions with the Company directly
or indirectly without reporting to the Board or shareholders’ meeting and
obtaining approval of the board of directors or the meeting in accordance with the
Articles of Association. The provisions o f the previous paragraph shall apply to
t h ec l o s er e l a t i v e so ft h ed i r e c t o r so rs e n i o rm a n a g e m e n t ,e n t e r p r i s e sd i r e c t l yo r
indirectly controlled by the directors or senior management or their close
relatives, and related persons with other associations with the directors or senior
management when entering into contracts or transactions with the Company;
(V) not to take advantage of their positions to seek business opportunities for the
benefits of themselves or others that s hould belong to the Company. However,
this does not apply in the following cases: (i) the business opportunity is reported
to the board of directors or shareholders’ meeting and is approved by a resolution,
or (ii) the Company is legally prohibited from utilizing the business opportunity
according to laws, administrative regula tions, or the Articles of Association.
(VI) Directors shall not engage in or operate a business that competes with the
Company’s business, either personally or on behalf of others, unless the business
opportunity has been reported to and approved by the board of directors or
shareholders’ meeting in accordance w ith the provisions of the Articles of
Association.
(VII) not to keep as their own, the commission for transaction with the Company;
(VIII) not to disclose secret of the Company without authorization;
(IX) not to use their related-party relationships to damage the interests of the
Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 650 ---
(X) to fulfill other fiduciary duties stipulat ed by the laws, administrative regulations,
departmental rules, the Articles of Associ ation and the listing rules of the stock
exchange where the Company’s shares are listed.
Any income obtained by directors in violation of any of the provisions of this Article
shall belong to the Company.
The director shall be accountable to compensate the Company against any loss
incurred. The directors shall, both collectivel y and individually, fulfill fiduciary duties and
duties of skill, care, and diligence to a standa rd at least commensurate with the standard
established by Hong Kong law. Every director must, in the performance of his/her duties as
a director:
(I) to act honestly in good faith in the interests of the Company as a whole;
(II) to act for proper purpose;
(III) to be accountable to the Company for t he application or misapplication of its
assets;
(IV) to avoid actual and potential conflicts of interest and duty;
(V) to disclose fully and fairly his/her in terests in contracts with the Company;
(VI) to apply such degree of skill, care and d iligence as may reasonably be expected of
a person of his/her knowledge and experience and holding his/her office as a
director of the Company;
(VII) to exercise the rights conferred by the Company with due discretion, care and
diligence to ensure that the business ope rations of the Company comply with PRC
laws, administrative regulations and a ll the PRC economic policies and are not
beyond the business scope specified in the business license of the Company;
(VIII) to treat all shareholders fairly;
(IX) to acquire the knowledge of the bus iness operation and management of the
Company on a timely basis;
(X) to sign the written confirmation of regular reports of the Company and ensure the
truthfulness, accuracy and completeness of the information disclosed by the
Company;
(XI) to honestly inform the audit commit tee with the relevant circumstances and
information, not to prevent the audit comm ittee from exercising their functions
and powers;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 651 ---
(XII) to fulfill other obligations of diligence stipulated by the laws, administrative
regulations, departmental rules, the Artic les of Association and the listing rules of
the stock exchange where the C o m p a n y ’ ss h a r e sa r el i s t e d .
12 Board of Directors
The company has a board of directors.
The Board shall consist of 9 directors, including 3 independent non-executive directors
and accounting for at least one-third of the members of the Board. At least one independent
non-executive director shall have appropriate professional qualifications, and one
independent non-executive director shall reside in Hong Kong.
The Board shall exercise the following duties and powers:
(I) to convene shareholders’ meetings and report its work to the shareholders’
meeting;
(II) to implement the resolutions of shareholders’ meetings;
(III) to decide on the Company’s business plans and investment plans;
(IV) to formulate the Company’s profit distribution plans and plans on making up of
losses;
(V) to formulate plans for increase or reduction of the registered capital of the
Company and issue of bonds or other securities of the Company and listing plans;
(VI) to formulate plans for merger, division , dissolution and alteration of corporate
form;
(VII) to formulate plans for significant asset a cquisition and selling and repurchase of
shares of the Company;
(VIII) to decide on, among others, external investments, acquisition and disposal of
assets, pledge of assets, external guarantees, entrusted wealth management,
connected transactions and external donations of the Company within the
authorization of the shareholders’ meeting;
(IX) to determine the establishment of the Company’s internal management structure;
(X) to decide the establishment of committees of the Board; appoint or dismiss
chairman (convenor) of th e committees of the Board;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 652 ---
(XI) to decide on the appointment or dismissal of the general manager and other senior
management members of the Company according to the nomination of the
chairman and matters concerning their r emuneration, punishment and reward,
and according to the nomination by the general manager, to decide on the
appointment or dismissal of deputy general managers, chief financial officer and
other senior management members of the Company and matters concerning their
remuneration, punishment and reward;
(XII) to formulate basic management policies of the Company;
(XIII) to formulate proposals for amendment to the Articles of Association;
(XIV) to formulate proposals to adopt share incentive plan of the Company;
(XV) to manage information disclosure of the Company;
(XVI) to submit proposals to the shareholders’ meeting on the engagement or
replacement of the accounting firm providing audit services to the Company;
(XVII) to receive reports from and inspect the work of the general manager;
(XVIII) to decide material matters and administr ative matters other than those matters
required to be decided by the shareholders’ meeting of the Company in
accordance with laws, administrative r egulations, departmental rules, the
Article of Association and the listing rules of the stock exchange where the
Company’s shares are listed;
(XIX) other functions and powers provided for in laws, administrative regulations,
departmental rules, the listing rules of the stock exchange where the Company’s
shares are listed and the Article of Association, and conferred at shareholders’
meetings.
The above matters of authority exercised by the Board or any transaction or
arrangement of the Company which shall be considered and approved at the shareholders’
meeting according to the listing rules of the stock exchange where the Company’s shares are
listed, shall be submitted to the shareholders’ meeting for consideration and approval.
Except for the board resolutions in respect of the matters specified in paragraphs (V),
(VI) and (XIII) which shall be passed by more than two-thirds of the directors, the board
resolutions in respect of all other matters may be passed by more than one half of the
directors.
The Board shall have one chairman and may have vice chairman, who shall be elected
by a majority of all directors. The chairman shall perform the following functions:
(I) to preside over the shareholders’ meetings and convening and presiding over
meetings of the Board;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 653 ---
(II) to oversee and inspect the execution of the resolutions of the Board;
(III) other functions and powers provided f or in laws, administrative regulations,
departmental rules, the Article of Association and the listing rules of the stock
exchange where the Company’s shares are listed, and conferred by the Board.
The Board meetings include regular meetings and extraordinary meetings.
The Board shall hold at least four meetings per annum, which shall be convened by the
chairman, and all the directors shall be notified in writing at least 14 days before the regular
meeting and 10 days before the extraordinary meeting.
Unless or otherwise provided in other articles herein, a Board meeting can be held only
if more than half of the directors are present. Resolutions of the Board must be passed by
more than half of all directors. In respect of resolutions of the Board, each director shall
have one vote.
13 Special Committees of the Board of Directors
The Board of the Company shall establish the audit committee, the nomination
committee and the remuneration and appraisal committee and shall, as needed, establish
relevant special committees such as the strat egy committee. Each special committee shall be
accountable to the Board and perform the duties prescribed by the Articles of Association
and the Board. Any proposals of the special committee shall be submitted to the Board for
consideration and approval. All member of th e special committees shall be directors, among
which, the majority of the members of the audit committee, the nomination committee and
the remuneration and appraisal committee shall be independent directors who also convene
the meeting of such committees. The convener of the audit committee shall be an accounting
professional. The Board is responsible for formulating working rules, to standardize the
operation of the special committees.
The audit committee shall exercise the powers and functions of the board of
supervisors provided in the PRC Company Law. The audit committee shall be
responsible for reviewing the Company’s f inancial information and disclosures,
overseeing and evaluating internal and external audits, and monitoring internal controls.
The following matters shall be submitted to the Board of Directors for deliberation only
after obtaining approval by more than half of the audit committee members:
(I) to disclose financial accounting reports , financial information in periodic reports
and internal control evaluation reports;
(II) to appoint or dismiss an accounting firm that undertakes the audit business of the
Company;
(III) to appoint or dismiss the Company’s chief financial officer;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 654 ---
(IV) to change accounting policies or estimates, or to correct material accounting
errors, except when resu lting from changes in accounting standards;
(V) other matters stipulated by laws, administrative regulations, provisions of the
CSRC, and the Company’s Articles of Association.
The nomination committee shall be responsib le for formulating selection criteria and
procedures for Directors and senior management, conducting reviews and assessments of
candidates for Director and senior management positions, and submitting the following
matters to the Board of Directors for deliberation:
(I) to nominate or dismiss Directors;
(II) to appoint or dismiss the senior management personnel;
(III) other matters stipulated by laws, admin istrative regulations, provisions of the
CSRC, and the Company’s Articles of Association.
The remuneration and appraisal committee shall be responsible for formulating
appraisal standards and conducting apprai sals for Directors and senior management,
developing and reviewing remuneration policies and schemes for Directors and senior
management, including remuneration determination mechanisms, decision-making
processes, payment, withholding, and clawback arrangements, and submitting the
following matters to the Board of Directors for deliberation:
(I) remuneration of Directors and senior management;
(II) to formulate or to modify equity incen tive plans or employee stock ownership
plans, including the granting of entitlements to incentive recipients and the
fulfillment of conditions for exercising entitlements;
(III) to arrange shareholding plans for Dir ectors and senior management in proposed
spin-off subsidiaries;
(IV) other matters stipulated by laws, administrative regulations, provisions of the
CSRC, and the Company’s Articles of Association.
SENIOR MANAGEMENT
14 General Manager and Other Senior Management Officers
The Company has one general manager and may appoint deputy general manager to
assist the general manager; and one chief fin ancial officer. The general manager, deputy
general managers and chief financial officer shall be appointed or dismissed by the Board.
The general manager, the deputy general manage rs and the chief financial officer, as well as
other persons expressly appointed by the Board as other senior management personnel of
the Company are senior managem ent officers of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 655 ---
The term of office of the general manager shall be three years, renewable upon
reappointment. The general manager may resi gn before his or her term of office expires.
The procedure and rules for such resignation sha ll be specified in the labor contract between
the general manager and the Company. If the general manager is unable to fulfil his or her
duty for any special reason, the Board shall designate one deputy general manager to act on
his or her behalf. Directors may concurrently serve as general manager or other senior
management officers.
The general manager shall be responsible for the Board and exercise the following
functions and powers:
(I) to be in charge of the production, operation and management of the Company, to
organize the implementation of the resolutions of the Board, and to report his or
her works to the Board;
(II) to organize the implementation of the Company’s annual business plans and
investment plans;
(III) to draft plans for the establishment of the Company’s internal management
organization;
(IV) to draft the Company’s basic management system;
(V) to formulate the Company’s specific regulations;
(VI) to propose the appointment or dismissal of the Company’s chief financial officer
or other senior management officers;
(VII) to decide the appointment or dismissal of management personnel other than those
required to be appointed or dismissed by the Board;
(VIII) such other functions and powers conferred by the Articles of Association and the
Board.
FINANCIAL ACCOUNTING SYSTEM AND PROFIT DISTRIBUTION AND
AUDITING
15 Financial Accounting System
The company shall establish its financial and accounting systems in accordance with
laws, administrative regulations and PRC acco unting standards formulated by the financial
regulatory department of the State Council.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 656 ---
16 Profit Distribution
Where the Company distributes its after-tax p rofits of the current year, it shall allocate
10% of the profits after tax as the Company’s statutory common reserve, provided that no
allocation is required if the accumulated statutory common reserve represents no less than
50% of the registered capital of the Company. Where the statutory common reserve fund of
the Company is not sufficient to cover the Company’s loss from the previous year, the
current year profits shall be used to cover such loss before allocation is made to the
statutory common reserve fund pursuant to the previous paragraph. After allocation to the
statutory common reserve fund has been made from the after-tax profits of the Company,
the discretionary surplus reserve of any amount fund may be allocated from the after-tax
profits upon approval by shareholders’ meeting. Any profit after taxation and after making
up losses and making appropriation to the statutory surplus reserve shall be distributed by
the Company to shareholders in proportion to their shareholdings, unless these Articles of
Association provide that distributions are to be made otherwise than proportionally. Where
the shareholders’ meeting distributes profits to shareholders in violation of the Company
law, the shareholders shall return to the C ompany the profit distributed. Where such
distribution causes losses to the Company, the shareholders, the responsible directors and
senior management shall be liable for compensation. The Company shall not participate in
profit distribution in respect of shares held under its name.
The Company’s common reserves shall b e used for making up accrued losses,
expanding the business operations or increasing the registered capital of the Company.
When covering the Company’s losses with the Company’s common reserves, the
discretionary surplus reserve and statuto ry common reserve shall be used first. If the
losses still cannot be fully covered, the capit al reserve may be utilized in accordance with
applicable regulations. When the statutory common reserve is converted into capital, the
balance of such reserve shall not be less than 25% of the registered capital prior to the
conversion.
APPOINTMENT OF AN ACCOUNTING FIRM
17 Appointment of Accounting Firm
The Company shall appoint an independent accounting firm which satisfies the
Securities Law and the relevant PRC state regulation, audit the annual financial report of
the Company, and verify other financial reports of the Company. The term of appointment
is one year and is renewable. The appointment and dismissal of an accounting firm shall be
made only by a shareholders’ meeting, and no accounting firm should be appointed by the
Board prior to the decision o f shareholders’ meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 657 ---
18 Merger, Division, Capital Increase and Capital Reduction
In the case of merger, the Company may take the form of merger by absorption or
merger by new establishment. In the case of mergers by absorption, a company absorbs
other companies and the absorbed company is dissolved. In the case of mergers by new
establishment, two or more companies combine together for the establishment of a new one,
and the pre-merger companies are dissolved.
To split the Company, the properties thereof shall be divided accordingly. To split the
Company, each party to the split-up shall conclude an agreement with each other and
balance sheets and checklists of properties shall be worked out. The Company shall, within
10 days after the decision of split-up is made, inform the creditors and make a public
announcement on newspapers recognized by the stock exchange where the Company’s
shares are listed or the state enterprise credi t information publicity system within 30 days,
in accordance with the Company Law.
Where the Company reduce its registered capital, it shall work out balance sheets and
checklists of properties. The Company shall, within ten days after the resolution of the
shareholders’ meeting to reduce the registered capital, notify the creditors and make a
public announcement on newspapers reco gnized by the stock exchange where the
Company’s shares are listed or the state ente rprise credit informat ion publicity system
within 30 days. The creditors shall, within 30 days after receiving the notice or within 45
days after the issuance of the public announcement if it fails to receive the notice, be entitled
to demand the Company to pay off the debts or to provide respective guaranties. When
reducing registered capital, the Company shall proportionally reduce shareholders’ capital
contributions or shares according to their respective shareholding percentages, unless
otherwise provided by law or these Articles of Association. Where, in the process of merger
or split-up of the Company, any of the registered items is changed, the Company shall go
through the registration for change wit h the company registration authority.
Where the Company is dissolved, it shall be deregistered according to law. If a new
company is established, it shall go through the procedures for company establishment
abiding by law. In the case of increasing or reducing its registered capital, the Company
shall go through registration of change with the company registration authority abiding by
law.
19 Dissolution and Liquidation
The Company may be dissolved under one of the following circumstances:
(I) the term of business operation as prescribed by the Articles expires or any of the
situations for dissolution pr escribed in the Articles occurs;
(II) the shareholders’ meeting has adop ted a special resolution for dissolution;
(III) it is necessary to be dissolved due to merger or split-up of the Company;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
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--- page 658 ---
(IV) the business license of the Company is revoked, or the Company is ordered to
c l o s ed o w no ri sc l o s e dd o w ni na c c o r d a n c ew i t hl a w s ;o r
(V) the Company meets any serious difficulty in its operations or management so that
the interests of the shareholders will face material loss if the Company continues
to exist and the difficulty cannot be solved by any other means, the shareholders
who hold ten percent or more of the voting rights may plead the people’s court to
dissolve the Company.
The liquidation committee shall notify the creditors within ten days of and make
announcements on newspapers recognized by the stock exchange where the Company’s
shares are listed or the state enterprise credit i nformation publicity system within 60 days of
the date of its establishment. A creditor shall, within 30 days of receipt of the notice, or in
the case of failure to receive the notice, wi thin 45 days of the date of the announcement,
claim its rights to the liquidation committee. In claiming its rights, the creditor shall explain
the relevant issues on the creditor’s rights a nd provide evidential materials in respect
thereof. The liquidation committee shall register the creditors’ rights. While claiming of
creditors’ rights, the liquidation committee shall not make any repayment to creditors.
After paying off the liquidation expens es, wages of employees, social insurance
premiums and legal indemnities, the outstanding taxes and the debts of the Company, the
remaining assets may be distributed according to the proportion of shares held by the
shareholders.
20 Amendments to the Articles of Association
The Company may amend the Articles in accordance with the requirements of law,
administrative regulations, the Articles o f Association and listing rules of the stock
exchange where the Company’s shares are listed. Amendments to the matters of the Articles
of Association adopted by a resolution of the shareholders’ meeting which are subject to
approval from relevant competent authority shall be submitted to the competent approval
authority for approval; if there is any change relating to the registered particulars of the
Company, application shall be made for chang e in registration in accordance with the law.
The Board shall amend the Articles of Associat ion in accordance with the resolution of the
shareholders’ meeting and the comments of the relevant competent authority.
NOTICE AND ANNOUNCEMENT
21 Notice
The notice of the Company shall be issued in the following form:
(I) Personal delivery;
(II) Mail;
(III) Facsimile or e-mail;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
–V - 2 1–


--- page 659 ---
(IV) Subject to laws, regulations and listing rules of the stock exchange where the
Company’s shares are listed, by publishing them on the website of the Company
and the website designated by the stock exchange;
(V) Announcement;
(VI) Other forms agreed in advance by the Company or the recipients, or approved by
the recipients upon the receipt of the notice; or
(VII) Other forms approved by relevant regulatory authority where the Company’s
shares are listed or stipulated by the Articles of Association.
Notwithstanding the provisions of the Articles, subject to the relevant provisions of the
stock exchange where the Company’s shares are listed, the Company has the right to
publish the corporate communication in the f orm of notice provided for in paragraph 1 (4)
of this Article in lieu of sending paper documents to each H-share shareholder either by
personal delivery or mail. Such corporate communications shall mean any document issued
or to be issued by the Company for the reference or action of shareholders, including but
not limited to annual reports (including annual f inancial reports), interim reports (including
interim financial reports), board reports (together with balance sheets and profit and loss
statements), shareholders’ meeting notices, circulars, and other communications
documents.
22 Announcement
The Company has designated the official website of the Stock Exchange of Hong Kong
Limited as the media for publication of the Company’s announcements and other required
disclosure of information.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
OF THE COMPANY
–V - 2 2–


--- page 660 ---
1. FURTHER INFORMATION ABOUT OUR COMPANY
A. Incorporation of our Company
Our Company was established as a limited liability company under the laws of the
PRC on October 18, 2018 and was converted into a joint stock company with limited
liability on April 25, 2025. Our head office and principal place of business in the PRC
is at Room 1706, Qiancheng Commercial Center, No. 5 Haicheng Road, Mabu
Community, Xixiang Street, Bao’a n District, Shenzhen, the PRC.
We have established a place of business in Hong Kong at 40/F, Dah Sing
Financial Centre, 248 Queen’s Road East, Wan Chai, Hong Kong, and was registered
with the Registrar of Companies in Hong Kong as a non-Hong Kong company under
Part 16 of the Companies Ordinance on July 30, 2025. Mr. Chung Ming Fai ( 鍾明輝),
our joint company secretary, is the authorized representative of our Company for the
acceptance of service of process and notices on behalf of our Company in Hong Kong
under Part 16 of the Companies Ordinance. The address for service of process on our
Company in Hong Kong is the same as its principal place of business in Hong Kong as
set out above.
As our Company was established in the PRC, we are subject to the relevant laws
and regulations of the PRC. An overview of the relevant aspects of laws and
regulations of the PRC is set out in ‘‘Regulatory Overview’’ in and Appendix IV to this
prospectus. A summary of our Articles of Association is set out in Appendix V to this
prospectus.
B. Changes in the Share Capital of our Company
The following changes in the share capital of our Group took place during the two
years immediately preceding the date of this prospectus:
(a) On April 8, 2025, resolutions were passed by our then Shareholders, being
our promoters at our shareholders’ meeting approving, among other matters,
the conversion of our Company from a limited liability company into a joint
stock limited company under the laws of the PRC.
(b) On June 3, 2025, 37,500 new Shares were issued to Brizan Ventures V, upon
completion of which, the registered capital of our Company had been
increased from RMB2,492,175 divided into 2,492,175 Shares with a nominal
value of RMB1.00 each, to RMB2,529,675 divided into 2,529,675 Shares with
a nominal value of RMB1.00 each.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1–


--- page 661 ---
(c) On May 27, 2025, resolutions were passed by our Shareholders approving,
among others, (1) the issuance of 17,470,325 new Shares through conversion
from capital reserve of RMB17,470,325 to each of our Shareholders in
proportion to their respective shareho lding interests, to the effect that the
registered capital of our Company had been increased from RMB2,529,675
divided into 2,529,675 Shares with a nominal value of RMB1.00 each, to
RMB20,000,000 divided into 20,000,000 Shares with a nominal value of
RMB1.00 each; and (2) the Share Subdivision, whereby each of our Shares
with a nominal value of RMB1.00 each shall be sub-divided into 10 Shares
with a nominal value of RMB0.10 each, and such Share Subdivision shall
take effect immediately before the Listing, upon which the registered capital
of our Company shall be RMB20,000,000 divided into 200,000,000 Shares
with a nominal value of RMB0.10 per Share, which will be held by all our
then Shareholders in proportion to their respective shareholding interests in
our Company.
(d) Immediately following the completion of the Share Subdivision, the Global
Offering and the H-Share Full Circulation, assuming that the Over-allotment
Option is not exercised, our registered share capital will be increased to
RMB22,222,230 divided into 222,222,300 H Shares.
(e) Immediately following the completion of the Share Subdivision, the Global
Offering and the H-share Full Circulation, assuming that the Over-allotment
Option is fully exercised, our registe red share capital will be increased to
RMB22,555,600 divided into 225,555,600 H Shares.
For further details, see ‘‘History and Corporate Structure’’ in this prospectus.
Save as disclosed above, there has been no a lteration in the share capital within two
years immediately preceding the date of this prospectus.
C. Resolutions Passed by Our Shareholders’ Meeting in relation to the Global Offering
At the shareholders’ meet ing held on May 27, 2025 the following resolutions,
among others, were duly passed:
(a) adoption and implementation of the Share Subdivision immediately prior to
the Listing and the issuance by our Company of the H Shares of nominal
value of RMB0.10 each and such H Shares being listed on the Stock
Exchange;
(b) the number of H Shares to be issued shall not be more than 25% of the total
issued share capital of our Company as enlarged by the Global Offering, and
the grant to the International Underwriters (or their representatives) of the
Over-allotment Option of not more than 15% of the number of H Shares to
be issued pursuant to the Global Offering;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2–


--- page 662 ---
(c) the application to the CSRC for the H-share Full Circulation, whereby such
U n l i s t e dS h a r e sm a yb ec o n v e r t e di n t oHS h a r e sa n dl i s t e df o rt r a d i n go nt h e
Main Board of the Stock Exchange concurrently with the H Share to be
issued under the Global Offering;
(d) subject to the completion of the Global Offering, the adoption of the Articles
of Association which shall become effective on the Listing Date, and
a u t h o r i z a t i o nt ot h eB o a r dt oa m e n dt h eA r t i c l e so fA s s o c i a t i o nf o rt h e
purpose of the Listing; and
(e) authorization of the Board to handle all matters relating to, among other
things, the Global Offering, the issue and listing of the H Shares.
D. Restriction on Share Repurchases
For details of the restrictions on share repurchases by our Company, see
‘‘Appendix V — Summary of Articles of Association of the Company’’ in this
prospectus.
2. FURTHER INFORMATION ABOUT OUR BUSINESS
A. Summary of our Material Contracts
We have entered into the following contracts (not being contracts entered into in
the ordinary course of business) within the two years immediately preceding the date of
this prospectus that are or may be material:
(a) the shareholders’ agreement dated May 26, 2025 entered into between the
Company, the Controlling Shareholder Group, 東莞松山湖國際機器人研究院
有限公司, 盈湖智能科技有限公司, 東莞蘊和股權投資有限公司,B r i z a nV e n t u r e s
VL P , 天津雲泰創新技術合夥企業（有限合夥）, VENTECH CHINA ASIA
SICAR, 南京清科樂鈦創業投資合夥企業（有限合夥）, 蘇
州源明創業投資中心
（有限合夥）, 上海高瓴辰鈞股權投資合夥企業（有限合夥）, 深圳市達晨創鴻私募
股權投資企業（有限合夥）, 深圳市達晨財智創業投資管理有限公司, 深圳市朗科
投資有限公司, 深圳市朗科萬山企業管理合夥企業（有限合夥）, 國調創新私募股
權投資基金（南昌）合夥企業（有限合夥）, 珠海安勝投資中心（有限合夥）, 深圳市
財智創贏私募股權投資企業（有限合夥）, pursuant to which shareholders’
rights were agreed among the parties;
(b) the investment agreement dated Ma y 26, 2025 entered into between the
Company, 臥安科技（深圳）有限公司, 臥安（深圳）軟件技術有限公司,W o a n
Techonolgoy Limited, SwitchBot P TE. Ltd., Wonderlabs Limited,
Wonderlabs, Inc., SwitchBot 株式會社，SWITCHBOT, Inc. and Brizan
Ventures V LP, Mr. Li, Mr. Pan and Wonder Innovation ESOP, pursuant to
w h i c hB r i z a nV e n t u r e sVL Pa g r e e dt o( i )p u r c h a s ea n dM r .L ia g r e e dt os e l l
6,250 shares of the Company at a consideration of RMB10,000,000; (ii)
purchase and Mr. Pan agreed to sell 6,250 shares of the Company at a
consideration of RMB10,000,000; and (iii) subscribe for additional registered
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 3–


--- page 663 ---
capital of RMB37,500 of the Company at a consideration of
RMB60,000,000, with the remaining included in the capital reserve of the
Company;
(c) the termination agreement dated M ay 26, 2025 entered into between the
Company, the Controlling Shareho lder Group, Brizan Ventures V LP, 東莞
松山湖國際機器人研究院有限公司, 盈湖智能科技有限公司, 東莞蘊和股權投
資有限公司, 天津雲泰創新技術合夥企業（有限合夥）, VENTECH CHINA
ASIA SICAR, 南京清科樂鈦創業投資合夥企業（有限合夥）, 蘇州源明創業投
資中心（有
限合夥）, 上海高瓴辰鈞股權投資合夥企業（有限合夥）, 深圳市達晨
創鴻私募股權投資企業（有限合夥）, 深圳市達晨財智創業投資管理有限公司,
深圳市朗科投資有限公司, 深圳市朗科萬山企業管理合夥企業（有限合夥）, 國
調創新私募股權投資基金（南昌）合夥企業（有限合夥）, 珠海安勝投資中心（有
限合夥）and 深圳市財智創贏私募股權投資企業（有限合夥） in respect of
termination or suspension of special rights;
(d) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, HACF, L.P., Guotai Junan Capital Limited, Huatai
Financial Holdings (Hong Kong) Limited and Guotai Junan Securities
(Hong Kong) Limited, with respect to a subscription of Shares at the Offer
Price in the aggregate amount of the Hong Kong dollar equivalent to
US$30,000,000;
(e) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Cithara Global Multi-Strategy SPC — Bosideng
Industry Investment Fund SP, Guota i Junan Capital Limited, Huatai
Financial Holdings (Hong Kong) Limited and Guotai Junan Securities
(Hong Kong) Limited, with respect to a subscription of Shares at the Offer
Price in the aggregate amount of the Hong Kong dollar equivalent to
US$20,000,000;
(f) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Infini Global Master Fund, Guotai Junan Capital
Limited, Huatai Financial Holdings (Hong Kong) Limited and Guotai Junan
Securities (Hong Kong) Limited, with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
to US$15,000,000;
(g) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, China Orient International Asset Management
Limited — China Orient Enhanced Income Fund, Guotai Junan Capital
Limited, Huatai Financial Holdings (Hong Kong) Limited and Guotai Junan
Securities (Hong Kong) Limited, with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
to US$7,000,000;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 4–


--- page 664 ---
(h) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, China Orient International Asset Management
Limited — China Orient Multi-Strategy Master Fund, Guotai Junan
Capital Limited, Huatai Financial Holdings (Hong Kong) Limited and
Guotai Junan Securities (Hong Kong) Lim ited, with respect to a subscription
of Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent to US$3,000,000;
(i) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Wind Sabre Fund SPC acting on behalf and for the
account of Wind Sabre Opportunities Fund SP, Guotai Junan Capital
Limited, Huatai Financial Holdings (Hong Kong) Limited and Guotai Junan
Securities (Hong Kong) Limited, with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
to US$5,000,000;
(j) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Yield Royal Investment Holding (Singapore) Pte. Ltd.,
Guotai Junan Capital Limited, Huatai Financial Holdings (Hong Kong)
Limited and Guotai Junan Securities (Hong Kong) Limited, with respect to a
subscription of Shares at the Offer Price in the aggregate amount of the Hong
Kong dollar equivalent to US$4,980,000;
(k) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Sage Partners Master Fund, Guotai Junan Capital
Limited, Huatai Financial Holdings (Hong Kong) Limited and Guotai Junan
Securities (Hong Kong) Limited, with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
to US$3,000,000;
(l) a cornerstone investment agreement dated December 16, 2025 entered into
among our Company, Sage Sunshine 1 Limited, Guotai Junan Capital
Limited, Huatai Financial Holdings (Hong Kong) Limited and Guotai Junan
Securities (Hong Kong) Limited, with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent
to US$2,000,000; and
(m) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 5–


--- page 665 ---
B. Our Intellectual Property Rights
As of the Latest Practicable Date, our Company has registered, or has applied for
the registration of the following intellectua l property rights which were material to our
Group’s business.
Trademarks
As of the Latest Practicable Date, we have registered the following
trademarks which we considered to be material to our business:
No. Trademark Owner
Place of
registration Class Registration no. Expiry date
1.
 Woan Technology The PRC 9 67105715 April 27, 2033
2.
 Woan Technology The PRC 9 79530275 January 27,
2035
3.
 Woan Technology The PRC 7 75755486 July 13, 2034
4.
 Woan Technology The PRC 11 65184145 November 27,
2032
5.
 Woan Technology Hong Kong 9 306173721 February 20,
2033
6.
 Woan Technology Hong Kong 7 305860765 January 16,
2032
7.
 Woan Technology The United
States
9 7376350 May 7, 2034
8.
 Woan Technology Japan 9 1658350 March 21, 2032
9.
 Woan Technology Japan 7 6577817 June 24, 2032
10.
 Woan Technology The United
States
7 6943437 January 3, 2033
11.
 Woan Technology The European
Union
9 1658350 March 21, 2032
12.
 Woan Technology The European
Union
7 018689523 April 20, 2032
13.
 Woan Technology The Republic
of Korea
9 40-2345690 April 15, 2035
14.
 Woan Technology The Republic
of Korea
7 40-2013016 April 26, 2033
15.
 Woan Technology The United
Kingdom
9 WO0000001658350 March 21, 2032
16.
 Woan Technology The United
Kingdom
7 UK00003779112 April 20, 2032
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 6–


--- page 666 ---
Patent
As of the Latest Practicable Date, we have registered the following patents
which we considered to be material to our business:
No. Patent description Owner
Place of
registration Registration no. Patent type Grant date
1. Smart Switch Control
Device and Smart Switch
Control Method ( 開關智
能控制裝置以及開關智能
控制方法)
Woan
Technology
The PRC 2018800783084 Invention August 26, 2022
2. Low Power Bluetooth
Communication Method,
Electronic Device,
Network, and Storage
Medium ( 低功耗藍牙通信
方法、電子設備、網絡和
存儲介質)
Woan
Technology
The PRC 2018800919154 Invention June 27, 2023
3. Mapping Method for
Embodied Robots,
Embodied Robot System
and Control Device ( 具身
機器人建圖方法、具身機
器人系統及控制設備)
Woan
Technology
The PRC 2025105810130 Invention July 8, 2025
4. Cleaning Path Planning
Method, Cleaning Robot,
and Medium ( 清潔路徑規
劃方法、清潔機器人
及介
質)
Woan
Technology
The PRC 202411036125X Invention November 15,
2024
5. Smart Home Device and
Training Method and
A p p l i c a t i o nM e t h o df o r
Its Control Model ( 智能
家居設備及其控制模型的
訓練方法和應用方法)
Woan
Technology
The PRC 2024114182795 Invention January 28,
2025
6. Cleaning Robot and Its
Task Self-Learning
Method and Control
Method ( 清潔機器人及其
任務自學習方法和控制方
法)
Woan
Technology
The PRC 2024114182808 Invention February 28,
2025
7 Positioning Method,
Apparatus, Embodied
Robot and Storage
Medium for Embodied
Robots
(具身機器人的定
位方法、裝置、具身機器
人和存儲介質)
Woan
Technology
The PRC 2025102945403 Invention May 13, 2025
8 Map Construction Method
for Control System of
Embodied Robots,
Embodied Robot, and
Medium ( 具身機器人控制
系統的地圖構建方法、具
身機器人及介質)
Woan
Technology
The PRC 2025102993750 Invention July 22, 2025
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 7–


--- page 667 ---
No. Patent description Owner
Place of
registration Registration no. Patent type Grant date
9 Embodied Robot and Its
Obstacle Avoidance
Control Method,
Apparatus and Program
Product
(具身機器人及其
避障控制方法、裝置及程
序產品)
Woan
Technology
The PRC 2025103096610 Invention May 30, 2025
10 Collaborative working
methods, systems, and
embodied robots
(具身機器人的協同工作方
法、系統和具身機器人)
Woan
Technology
The PRC 2025109212530 Invention September 9,
2025
Domain name
As of the Latest Practicable Date, we have registered the following domain
name which we considered to be material to our business:
No. Domain name Owner Expiry date
1. switch-bot.com Woan Technology September 18, 2026
2. switchbot.jp SwitchBot JP April 30, 2027
3. onero.cn Our Company October 29,
2026
Software copyright
As of the Latest Practicable Date, we h ave registered the following software
copyrights which we considered to be material to our business:
No. Name of copyright Owner
Place of
registration Registration no. Grant date
1. SwitchBot Device
Control Software
(iOS Version)
(SwitchBot 設備控制
軟件（IOS版）)
Woan
Technology
The PRC 2021SR0855944 June 8, 2021
2. SwitchBot Device
Control Software
(Android Version)
(SwitchBot 設備控制
軟件（Android 版）)
Woan
Technology
The PRC 2021SR0856050 June 8, 2021
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 8–


--- page 668 ---
C. Employee Share Ownership Platform
Wonder Innovation ESOP operates as a share option scheme. Pursuant to the
rules governing Wonder Innovation ESOP, eligible participants of the share option
scheme include: (1) employees who have entered into employment contracts with the
Company or its subsidiaries during the validity period of the scheme; (2) consultants
who have entered into consultancy ser vice agreements with the Company or its
subsidiaries during the validity period of t he scheme; (3) individuals identified by the
Company as having an important role or significant impact on the operations,
management, product development, business performance, or future development of
the Company or its subsidiaries during the validity period of the scheme. By exercising
the options, the relevant participants are entitled to become a limited partner of
Wonder Innovation ESOP and indirectly become interested in the shareholding
interests of the Company through Wonder Innovation ESOP.
As of the Latest Practicable Date, 208,333,000 options had been granted by
Wonder Innovation ESOP to the eligible participants, with 1,000 options convertible
into RMB1 registered capital of Wonder Innovation ESOP (‘‘ Relevant Options ’’).
Assuming that all options granted are to be exercised, the registered capital of Wonder
Innovation ESOP shall be i ncreased to RMB208,333.
As of the Latest Practicable Date, the registered capital of Wonder Innovation
ESOP, our employee share ownership platform, RMB131,260 the partnership structure
of which is as follows:
Name Position Capacity
Registered
capital
Approximate
percentage of
partnership
interests (as of
the Latest
Practicable
Date)
(Note 1)
Partnership
interests
entitlement
(assuming the
Relevant
Options are
fully exercised)
Approximate
percentage of
partnership
interest
(assuming the
Relevant
Options are
fully exercised)
(Note 2)
Mr. Li Chairman of the Board
and chief executive
officer
General partner 21,900 16.68% 1 0.00%
Mr. LIN Haizhou
(林海洲)
Chief operating officer Limited partner 23,809 18.14% 34,487 16.55%
Mr. LIU Guohui
(劉國輝)
Vice president in
production
engineering
Limited partner 55,392 42.20% 63,491 30.48%
Mr. MOU Qingqi
(牟慶琦)
Chief marketing officer Limited partner 4,762 3.63% 10,551 5.06%
Other eligible
participants
Existing employees Limited partner 25,397
(Note 3)
19.35% 99,803
(Note 4)
47.90%
Total: 131,260 100% 208,333 100%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 9–


--- page 669 ---
Note:
1. Calculated by dividing the reg istered capital subscribed by the relevant limited partner over
the total registered capital of Wonder Innovat ion ESOP as of the Latest Practicable Date,
being RMB131,260.
2. Calculated by dividing the registered capit al that may be subscribed by the relevant limited
partner (assuming the Relevant Options are fully exercised) over the total registered capital of
Wonder Innovation ESOP, assuming all the Relevant Options are fully exercised, being
RMB208,333.
3. Comprising four limited partner sa so ft h eL a t e s tP r a c t i c a b l eD a t e .
4. As of the Latest Practicable Date, options ha ve been granted to 139 eligible participants.
3. FURTHER INFORMATION ABOUT OUR DIRECTORS, CHIEF EXECUTIVES
AND SUBSTANTIAL SHAREHOLDERS
A. Particulars of Directors’ Contracts
(a) Executive Directors
Each of our executive Directors has entered into a service contract with us
pursuant to which they agreed to act as executive Directors for a term of three
years commencing from April 8, 2025 and with effect from the Listing Date
(subject always to re-election as and when required under the Articles of
Association). Either party has the right t o give not less than three months’ written
notice to terminate the agreement.
(b) Non-executive Directors and independent non-executive Directors
Each of our non-executive Directors has entered into an appointment letter
with our Company on December 15, 2025. The initial term for their appointment
letters shall be for a term of three years commencing from the date of the service
contract with effect from the Listing Date (subject always to re-election as and
when required under the Articles of Association). Either party has the right to
give not less than one months’ written notice to terminate the agreement.
Each of our independent non-executive Directors has entered into an
appointment letter with our Company on December 15, 2025. The initial term
for their appointment letters shall be for a term of three years commencing from
the date of the appointment letter with effect from the Listing Date (subject
always to re-election as and when required under the Articles of Association).
Either party has the right to give not less than one months’ written notice to
terminate the agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 0–


--- page 670 ---
Save as disclosed above, none of the Di rectors has entered, or has proposed
to enter, a service contract with any member of the Group (other than contracts
expiring or determinable by the employer within one year without the payment of
compensation (other than statutory compensation)).
B. Remuneration of Directors
The aggregate amounts of remuneration (including (i) salaries, bonuses,
allowances and benefits in kind; (ii) perfor mance-related bonus; (iii) pension scheme
contributions; and (iv) share-based payment expenses) paid to our Directors for the
year ended December 31, 2022, 2023, 2024 and the six months ended June 30, 2024, and
2025 were RMB5.2 million, RMB6.2 million, RMB6.4 million, RMB3.2 million and
RMB5.4 million, respectively. None of our D irectors had waived any remuneration
during the same period. Save as disclosed above, no other payments have been made or
are payable in respect of the three years ended December 31, 2024 by any member of
our Group to any of our Directors.
During the Track Record Period, no remuneration was paid to our Directors as an
inducement to join, or upon joining, our Group. No compensation was paid to, or
receivable by, our Directors for the Track Record Period for the loss of office as
director of any member of our Group or of any other office in connection with the
management of the affairs of any member of our Group.
Under the arrangements currently in force, we estimate the aggregate
remuneration, excluding discretionary bonus and share-based payment, of our
Directors for the year ending December 3 1, 2025 to be approximately RMB4 million.
4. DISCLOSURE OF INTERESTS
A. Disclosure of Interests of Directo rs and Chief Executive of our Company
Save as disclosed below, immediately following the completion of the Global
Offering and the H-Share Full Circulation (a ssuming that the Over-allotment Option is
not exercised), none of our Directors has any interest and/or short position in the
Shares, underlying Shares and debentures of our Company or our associated
corporations (within the meaning of Part XV of the SFO) which will be required to
be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of
Part XV of the SFO (including interest or short position which they were taken or
deemed to have under such provisions of the SFO) or which will be required, pursuant
t os e c t i o n3 5 2o ft h eS F O ,t ob ee n t e r e di nt h eregister referred to therein, or which will
be required, pursuant to the Model Code for Securities Transactions by Directors of
Listed Issuers as set out in Appendix C3 to the Listing Rules to be notified to our
Company, once the H Shares are listed on the Stock Exchange.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 1–


--- page 671 ---
As of the
Latest Practicable Date
Immediately following the
completion of the Global
Offering and the H-Share
Full Circulation (assuming
the Over-allotment Option
is not exercised)
Name of
Director
Our Company/
associated
company
Capacity/Nature
of interest
Number of
Unlisted
Shares
(Note 1)
Approximate
percentage of
shareholding
in the total
issued share
capital of our
Company
Number of
HS h a r e s
(Note 1)
Approximate
percentage of
shareholding
in the total
issued share
capital of our
Company
%%
Mr. Li Our Company Beneficial owner 4,364,845 21.82% 43,648,450 19.64%
Interest in controlled
corporation
(Note 2)
1,647,113 8.24% 16,471,130 13.02%
Interest of person
acting in concert
(Note 3)
2,893,423 14.47% 28,934,230 7.41%
Mr. Pan Our Company Beneficial owner 2,893,423 14.47% 28,934,230 13.02%
Interest of person
acting in concert
(Note 3)
4,364,845 21.82% 43,648,450 19.64%
Professor
Li
Our Company Interest in controlled
corporations
(Note 4)
2,595,219 12.98% 25,952,190 11.68%
Professor
Ko
Our Company Interest in controlled
corporation
(Note 5)
1,944,590 9.72% 19,445,900 8.75%
Notes:
1. All interests are long positions.
2. As of the Latest Practicable Date, Mr. Li acted as the sole general partner and the executive
managing partner of Wonder Innovation E SOP. Under the SFO, Mr. Li is deemed to be
interested in all the Shares held by Wonder Innovation ESOP.
3. On September 8, 2022, Mr. Li and Mr. Pan entered into the Acting-in-concert Agreement,
pursuant to which Mr. Pan has undertaken, among other things, to unilaterally follow the
voting instructions of Mr. Li to exercise h is voting power and vote unanimously at the
Shareholders’ meeting of our Company for so long as Mr. Li is a Shareholder of our
Company. Therefore, under the SFO, in addition to their respective direct beneficial interests,
each of Mr. Li and Mr. Pan is also deemed to be interested in the interest of the other concert
party.
4. As of the Latest Practicable Date, Professor Ko was deemed to be interested in the Shares held
by Brizan Ventures V under the SFO.
5. As of the Latest Practicable Date, Professor Li was deemed to be interested in the Shares held
by Songshan Lake Robot Institute, Yinghu In telligent and Dongguan Yunhe under the SFO.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 2–


--- page 672 ---
Up to the Latest Practicable Date, none of our Directors or their respective
spouses and children under 18 years of age had been granted by our Company or had
exercised any rights to subscribe for shares or debentures of our Company or any of its
associated corporations.
B. Substantial Shareholders
Save as disclosed below and in ‘‘Substantial Shareholders’’ in this prospectus, our
Directors or chief executive are not aware of any other person, not being a Director or
chief executive of our Company, who has an interest or short position in the Shares
and underlying Shares of our Company, which following the completion of the Global
Offering, would fall to be disclosed to our Company under the provisions of Divisions
2 an 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or
more of the issued voting Shares of our Company or any member of our Group.
C. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors or the chief executive of our Company has any interest
or short position in the Shares, underlying shares or debentures of our
Company or any of its associated corporation (within the meaning of the
SFO) which will have to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO or which will be
required, pursuant to section 352 of the SFO, to be entered in the register
referred to therein, or which will be required to be notified to our Company
and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers once our H Shares are listed;
(b) none of our Directors or any of the experts referred to under paragraph
headed ‘‘— 5. Other Information — H. Qualification of experts’’ in this
appendix has any direct or indirect interest in the promotion of our
Company, or in any assets which have within the two years immediately
preceding the date of this prospectus been acquired or disposed of by or
leased to any member of our Group, or are proposed to be acquired or
disposed of by or leased to any member of our Group;
(c) none of our Directors is materially inte rested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of our Group;
(d) none of our Directors has any existing or proposed service contracts with any
member of our Group (excluding contracts expiring or determinable by the
employer within one year without payment of compensation (other than
statutory compensation));
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 3–


--- page 673 ---
(e) taking no account of any Shares which may be taken up under the Global
Offering, so far as is known to our Directors or chief executive of our
Company, no person (not being a Director or chief executive of our
Company) who will, immediately following the completion of the Global
Offering, have an interest or short position in the Shares or underlying shares
of our Company which would fall to be disclosed to our Company under the
provisions of Divisions 2 and 3 of Part XV of SFO or be interested, directly
or indirectly, in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of any
member of our Group; and
(f) so far as is known to our Directors, none of our Directors, their respective
close associates (as defined under the Listing Rules) or our Shareholders who
are interested in more than 5% of the issued share capital of our Company
has any interest in the five largest cust omers or the five largest suppliers of
our Group in each year/period during the Track Record Period.
5. OTHER INFORMATION
A. Agency Fees or commissions paid or payable
Save as disclosed in ‘‘Underwriting’’ in this prospectus, no commissions,
discounts, agency fee, brokerages or other special terms in connection with the issue
or sale of any capital of our Company or any of our subsidiaries have been granted
within two years immediately preceding the issue of this prospectus.
B. Estate Duty
Our Directors have been advised that no mat erial liability for estate duty under
the PRC laws is likely to fall on our Company or its subsidiaries.
C. Litigation
As of the Latest Practicable Date, no member of our Group was engaged in any
outstanding material litigation or arbit ration which may have material and adverse
effect on the Global Offering and, so far as our Directors are aware, no litigation or
claim of material importance is pending or threatened by or against any member of our
Group.
D. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing
Committee for the listing of, and permission to deal in, our H Shares. The Joint
Sponsors satisfy the independence criteria applicable to sponsors set out in Rule 3A.07
of the Listing Rules.
The Joint Sponsors will be paid by our Company a total fee of HK$6 million to
act as the sponsors in connection with the Listing.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 4–


--- page 674 ---
E. Compliance Advisor
Our Company has appointed Quam Capital Limited as the compliance advisor
upon the Listing in compliance with Rule 3A.19 of the Listing Rules.
F. Preliminary Expenses
We have not incurred any material preliminary expenses.
G. Promoters
See ‘‘History and Corporate Structure — Corporate Development and Major
Shareholding Changes’’ in this prospectus for details of our promoters.
Save as disclosed in this prospectus, within the two years immediately preceding
the date of this prospectus, no cash, securities or other benefit has been paid, allotted
or given nor is any proposed to be paid, allotted or given to any promoters in
connection with the Global Offering and the related transactions described in this
prospectus.
H. Qualification of Experts
The qualifications of the experts, as defined under the Listing Rules, who have
given opinions in this prospectus, are as follows:
Name Qualification
Guotai Junan Capital
Limited
Licensed corporation to conduct Type 6 (advising on
corporate finance) regulated activity as defined under
the SFO
Huatai Financial
Holdings (Hong
Kong) Limited
Licensed corporation to conduct Type 1 (dealing in
securities), Type 2 (dealing in futures contracts), Type 3
(leveraged foreign exchange trading), Type 4 (advising
on securities), Type 6 (advising on corporate finance),
Type 7 (providing automated trading services) and
Type 9 (asset management) of t he regulated activities
under SFO
Ernst & Young Certified public accountants; Public Interest Entity
Auditor registered in accordance with the Financial
Reporting Council Ordinance (Chapter 588 of the Laws
of Hong Kong)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 5–


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Name Qualification
Jingtian & Gongcheng Company’s PRC Legal Advisers and the legal adviser
of our Company as to PRC data compliance matters
TMI Associates The legal adviser of our Company as to Japanese law
The Law Office of
Mark A Kerstein
The legal adviser of our Company as to US law
Ro¨ dl & Partner The legal adviser of our Company as to German and
European Union law
Studio Legale De Berti
Jacchia Franchini
Forlani
The legal adviser of our Company as to European
Union data compliance matters
Holman Fenwick
Willan LLP
The legal adviser of our Company as to U.S. Outbound
Investment Rule
Frost & Sullivan
(Beijing) Inc.,
Shanghai Branch Co.
Industry consultant
I. Consents of Experts
Each of the experts named in paragraph H above has given and has not withdrawn
its written consent to the issue of this prospectus with the inclusion of its report and/or
letter and/or opinion and/or the references to its name included herein in the form and
context in which it is respectively included.
Save as disclosed in this prospectus, none of the experts named above has any
shareholding interests in any member of our Group or the right (whether legally
enforceable or not) to subscribe for or to nominate persons to subscribe.
J. Taxation of Holders of H Shares
Dealings in H Shares registered on our Co mpany’s H Shares register of members
will be subject to Hong Kong stamp duty, the current rate charged on each purchaser
and seller is 0.10% of the consideration or, if higher, the value of the H Shares being
sold or transferred. Intending holders of H Shares are recommended to consult their
professional advisers if they are in any doubt as to the taxation implications of
subscribing for, purchasing, holding or disposing of or dealing in H Shares. It is
emphasised that none of our Company, Directors or the other parties involved in the
Global Offering can accept responsibility fo r any tax effect on, or liabilities of, holders
of H Shares resulting from their subscription for, purchase, holding or disposal of or
dealing in H Shares.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 6–


--- page 676 ---
K. No Material and Adverse Change
Our Directors confirm that there has been no material and adverse change in the
financial or trading position of our Group since June 30, 2025 (being the date to which
the latest audited consolidated financial statements of our Group were prepared),
except as otherwise disclosed in this prospectus.
L. Binding Effect
This prospectus shall have the effect, if an application is made in pursuant hereof,
of rendering all persons concerned bound by all the provisions (other than the penal
provisions) of sections 44A and 44B of the Hong Kong Companies (Winding Up and
Miscellaneous Provisions) Ordinance so far as applicable.
M. Related Party Transactions
Our Group entered into certain related p arty transactions within the two years
immediately preceding the date of this prospectus as mentioned in Note 35 of the
Accountants’ Report as set out in Appendix I to this prospectus.
N. Restriction on Share Repurchases
For details of the restrictions on share repurchases by our Company, see
‘‘Appendix V — Summary of Articles of Association of the Company’’ in this
prospectus.
O. Miscellaneous
Save as disclosed in this prospectus:
(a) within the two years immediately preceding the date of this prospectus:
(i) no share or loan capital of our Group has been issued or agreed to be
issued or is proposed to be fully or partly paid either for cash or a
consideration other than cash;
(ii) no share or loan capital of our Group is under option or is agreed
conditionally or unconditionally to be put under option;
(iii) no commissions, discounts, brokerages or other special terms have been
g r a n t e do ra g r e e dt ob eg r a n t e di nc o n n e c t i o nw i t ht h ei s s u eo rs a l eo f
any share of our Group; and
(iv) no commission has been paid or is payable for subscription, agreeing to
subscribe, procuring subscription or agreeing to procure subscription
f o ra n ys h a r ei no rd e b e n t u r e so fo u rC o m p a n y ;
(b) there are no founder, management or deferred shares or any debentures in
our Group;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 7–


--- page 677 ---
(c) there has not been any interruption in the business of our Group which may
have or has had a significant effect on the financial position of our Group in
the 12 months preceding the date of this prospectus;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) no part of the equity and debt securities of our Company, if any, is currently
listed on or dealt in on any other stock exchange or trading system nor is any
listing or permission to list on any stock exchange other than the Stock
Exchange is currently being or agreed to be sought;
(f) there is no arrangement under which future dividends are waived or agreed to
be waived;
(g) none of our equity and debt securiti es is listed or dealt with in any other
stock exchange nor is any listing or permission to deal being or proposed to
be sought; and
(h) all necessary arrangements have been made to enable the H shares to be
admitted into CCASS for clearing and settlement.
P. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately, in reliance upon the exemption provided by section 4 of the
Companies (Exemption of Companies and Prospectuses from Compliance with
Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 8–


--- page 678 ---
1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG
KONG
The documents attached to a copy of this pro spectus and delivered to the Registrar of
Companies in Hong Kong for registration were: (a) the written consents referred to in
‘‘Appendix VI — Statutory and General Information — 5. Other information — I. Consents
of experts’’ in this prospectus; and (b) copies of each of the material contracts referred to
‘‘Appendix VI — Statutory and General Information — 2. Further information about our
business — A. Summary of our material contracts’’ in this prospectus.
2. DOCUMENTS ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at
www.hkexnews.hk and our website at www.onero.cn during a period of 14
days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report of our Group from Ernst & Young, the text of which is
set out in Appendix I;
(c) the report on the unaudited pro forma financial information of our Group from
Ernst & Young, the text of which is set out in Appendix II to this prospectus;
(d) the audited consolidated financial statements of our Company for the financial
years ended December 31, 2022, 2023 and 2024 and the six months ended June 30,
2025;
(e) the PRC legal opinion issued by Jingtian & Gongcheng, our legal adviser on PRC
law in respect of certain general corporate matters of our Group and the property
interests of our Group;
(f) the legal memorandum issued by Jingtian & Gongcheng, our legal advisers on
PRC data compliance matters, in respect of data compliance matters;
(g) the Japanese legal opinion issued by TMI Associates, our legal adviser on
Japanese law in respect of legal and compliance matters;
(h) the Japanese legal memorandum issued by TMI Associates, our legal adviser on
Japanese law in respect of data compliance matters;
(i) the US legal opinion issued by The Law Office of Mark A Kerstein, our legal
adviser on US law in respect of legal and compliance matters;
(j) the German and European Union legal opinion issued by Ro ¨ dl & Partner, our
legal adviser on German and European Union law in respect of legal and
compliance matters;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
–V I I - 1–


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(k) the European Union legal opinion issued by Studio Legale De Berti Jacchia
Franchini Forlani, our legal adviser on European Union law in respect of data
compliance matters;
(l) the legal opinion issued by Holman Fe nwick Willan LLP, our legal advisers as to
U.S. Outbound Investment Rule;
(m) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch
Co., our industry research consultant, from which information in ‘‘Industry
Overview’’ in this prospectus is extracted;
(n) the PRC Company Law, the PRC Securities Law and the Trial Administrative
Measures of Overseas Securities Offering and Listing by Domestic Companies
together with their unoffici al English translations;
(o) the written consents referred to in ‘‘Appendix VI — Statutory and General
Information — 5. Other information — H. Consents of Experts’’ in this
prospectus;
(p) the material contracts referred to in ‘‘Appendix VI — Statutory and General
Information — 2. Further information about our business — A. Summary of our
material contracts’’ in this prospectus; and
(q) the service contracts and letters of ap pointment with our Directors (as the case
may be) referred to in ‘‘Appendix VI — S tatutory and General information — 3.
Further information about our Directors, Chief Executives and Substantial
Shareholders — A. Particulars of Directors’ Contracts’’ in this prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
–V I I - 2–


--- page 680 ---
OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
OneRobotics (Shenzhen) Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’s Republic of China with limited liability )
Stock Code: 6600
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order )
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