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GLOBAL OFFERING
Stock Code: 6613
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
(A joint stock company incorporated in the People's Republic of China with limited liability)
藍思科技股份有限公司
Lens Technology Co., Ltd.
藍思科技股份有限公司
Lens Technology Co., Ltd.
藍思科技股份有限公司
Lens Technology Co., Ltd.


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IMPORTANT: If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.
Lens Technology Co., Ltd.
藍 思 科 技 股 份 有 限 公 司
(A joint stock company incorporated in the People ’s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under
the Global Offering
: 262,256,800 H Shares (subject to the Offer
Size Adjustment Option and the Over-
allotment Option)
Number of Hong Kong Offer Shares : 28,848,400 H Shares (subject to reallocation)
Number of International Offer Shares : 233,408,400 H Shares (subject to reallocation,
the Offer Size Adjustment Option and the
Over-allotment Option)
Maximum Offer Price : HK$18.18 per H Share plus brokerage of
1.0%, SFC transaction levy of 0.0027%,
Hong Kong Stock Exchange trading fee of
0.00565% and AFRC transaction levy of
0.00015% (payable in full on application in
Hong Kong dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock Code : 6613
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this Prospectus, make no representation as to
its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any p art of the contents of this Prospectus.
A copy of this Prospectus, having attached thereto the documents specified in ‘‘Appendix V — Documents Delivered to the Registrar of Companies in Hong Kong and Available on Display, ’’ has been registered by the Registrar of
Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of
Companies in Hong Kong take no responsibility as to the contents of this Prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters), and the Company on the Price Determination Date, which is expected to be on or
before Monday, July 7, 2025 (Hong Kong time) and, in any event, not later than 12:00 noon on Monday, July 7, 2025 (Hong Kong time). The Offer Price will not be more than HK$18.18 per Offer Share and is currently expected to
be not less than HK$17.38 per Offer Share, unless otherwise announced. If, for any reason, the Offer Price is not agreed by 12:00 noon on Monday, July 7, 2 025 (Hong Kong time) between the Overall Coordinators (for themselves
and on behalf of the Underwriters) and the Company, the Global Offering will not proceed and will lapse.
Applicants for Hong Kong Offer Shares may be required to pay, on applicatio n (subject to application channels), the maximum Offer Price of HK$18.18 fo r each Hong Kong Offer Share together with brokerage fee of 1.0%, SFC
transaction levy of 0.0027%, Hong Kong Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%, subject to refund if the Offer Pri ce as finally determined is less than HK$18.18.
The Overall Coordinators, on behalf of the Underwriters, may, where considered appropriate and with the Company ’s consent, reduce the number of Offer Shares being offered under the Global Offering and/or the
indicative Offer Price range below that stated in this Prospectus (which is HK$17.38 to HK$18.18) at any time prior to the morning of the last day for lod ging applications under the Hong Kong Public Offering. In such
case, notices of the reduction in the number of Offer Shares being offered unde r the Global Offering and/or the indicative Offer Price range will be pub lished on the website of the Hong Kong Stock Exchange at
www.hkexnews.hk and on the website of the Company at www.hnlens.com as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodg ing
applications under the Hong Kong Public Offering. See ‘‘Structure of the Global Offering ’’and ‘‘How to Apply for Hong Kong Offer Shares ’’sections for further details.
Prospective investors of the Hong Kong Offer Shares should note that the obl igations of the Hong Kong Underwriters under the Hong Kong Underwriting Ag reement are subject to termination by Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date. See ‘‘Underwriting ’’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, sold, pledged or transferred within the United States, except in
transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act. The Offer Shares may be offered, sold or delive red (a) in the United States solely to QIBs in reliance on Rule 144A or another
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act or (b) outside the United States in offsho re transactions in reliance on Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this Prospectus to the p ublic in relation to the Hong Kong Public Offering.
This Prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.hnlens.com . If you require a printed copy of this Prospectus, you may download and print from the
website addresses above.
June 30, 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 the Prospectus in relation to the Hong Kong Public
Offering.
This prospectus is available at the webs ite of the Hong Kong Stock Exchange at
www.hkexnews.hk under the ‘‘HKEXnews > New Listings > New Listing Information ’’section,
and our website at www.hnlens.com . You may download and print from these website addresses
if you want a printed copy of the Prospectus.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via 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 ’sF I N Is y s t e mt o
apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels t o accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of the 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 the Prospectus is available online at the website addresses stated
above.
IMPORTANT


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Your application through the White Form eIPO service or the HKSCC EIPO channel must
be made for a minimum of 200 Hong Kong Offer Shares and in multiples of that number of Hong
Kong Offer Shares as set out in the table below. No application for any other number of Hong
Kong Offer Shares will be considered and such an application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the table below
for the amount payable for the number of Shares you have selected. You must pay the respective
amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian may
require you to pre-fund your application in such amount as determined by the broker or custodian,
based on the applicable laws and regulations in Hong Kong. You are responsible for complying
with any such pre-funding requ irement imposed by your broker or custodian with respect to the
Hong Kong Offer Shares you applied for.
Lens Technology Co., Ltd.
(HK$18.18 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED
FOR AND PAYMENTS
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
HK$ HK$ HK$ HK$
200 3,672.68
400 7,345.34
600 11,018.01
800 14,690.67
1,000 18,363.35
1,200 22,036.01
1,400 25,708.69
1,600 29,381.35
1,800 33,054.02
2,000 36,726.68
3,000 55,090.03
4,000 73,453.38
5,000 91,816.73
6,000 110,180.07
7,000 128,543.42
8,000 146,906.77
9,000 165,270.11
10,000 183,633.45
20,000 367,266.91
30,000 550,900.37
40,000 734,533.81
50,000 918,167.26
100,000 1,836,334.54
150,000 2,754,501.80
200,000 3,672,669.05
250,000 4,590,836.33
500,000 9,181,672.66
750,000 13,772,508.98
1,000,000 18,363,345.30
1,500,000 27,545,017.96
2,000,000 36,726,690.60
2,500,000 45,908,363.26
3,000,000 55,090,035.90
4,000,000 73,453,381.20
5,000,000 91,816,726.50
6,000,000 110,180,071.80
8,000,000 146,906,762.40
10,000,000 183,633,453.00
12,000,000 220,360,143.60
14,424,200
(1) 264,876,565.28
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC tran saction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined in
the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are paid
to the Stock Exchange (in the case of the SFC transactio n 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).
IMPORTANT


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If there is any change to the following ex pected timetable of the Hong Kong Public
Offering, we will issue an announcement to be published on the Company ’sw e b s i t ea t https://
www.hnlens.com/ and the website of the Hong Kong Stock Exchange at www.hkexnews.hk .
H o n g K o n g P u b l i c O f f e r i n g c o m m e n c e s................................. 9 : 0 0 a . m . o n M o n d a y ,
June 30, 2025
Latest time to complete electronic applications under
the White Form eIPO service through the
designated website at www.eipo.com.hk (2) ............................. 1 1 : 3 0 a . m . o n F r i d a y ,
July 4, 2025
Application lists open (3) ................................................ 1 1 : 4 5 a . m . o n F r i d a y ,
July 4, 2025
Latest time to (a) completing payment for White Form eIPO
applications by effecting Internet banking transfers(s)
or PPS payment transfer(s) and (b) giving electronic
application instructions t o H K S C C .................................. 1 2 : 0 0 n o o n o n F r i d a y ,
July 4, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to give electronic
application instructions via HKSCC ’s FINI system to apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO channel, you are advised to contact your broker or
custodian for the earliest and latest time for giving such instructions which may be different from
the latest time as stated above, as t his may vary by broker or custodian.
Application lists close
(3) ............................................... 1 2 : 0 0 n o o n o n F r i d a y ,
July 4, 2025
Expected Price Determination Date (5) ............................... b y 1 2 : 0 0 n o o n o n M o n d a y ,
July 7, 2025
Announcement of the final Offer Price, the level of
indications of interest in the International Offering,
the level of applications in the Hong Kong Public Offering
and the basis of allocation of the Hong Kong Offer Shares
to be published on the website of the Hong Kong Stock Exchange
at
www.hkexnews.hk and the Company ’sw e b s i t e
at https://www.hnlens.com/ a t o r b e f o r e ............................. 1 1 : 0 0 p . m . o n T u e s d a y ,
July 8, 2025
EXPECTED TIMETABLE (1)
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Announcement of results of allocations in the Hong Kong
Public Offering (includi ng successful applicants ’
identification document numbers, where appropriate)
to be available through a variety of channels
(as described in the section headed ‘‘How to Apply for
Hong Kong Offer Shares — B. Publication of Results ’’
in this Prospectus, including:
. in the announcement to be posted on our website and the
website of the Hong Kong Stock Exchange at
www.hnlens.com and www.hkexnews.hk ,
r e s p e c t i v e l y ,a to rb e f o r e ................................ 1 1 : 0 0p . m .o nT u e s d a y ,
July 8, 2025
. from ‘‘Allotment Results ’’page at the designated results of
allocations website at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a ‘‘search by ID ’’f u n c t i o no na2 4 - h o u rb a s i sf r o m................1 1 : 0 0p . m .o n
Tuesday, July 8, 2025 to
12:00 midnight on
Monday, July 14, 2025
. from the allocation results telephone enquiry line
by calling +852 2862 8555 between
9 : 0 0a . m .a n d6 : 0 0p . m .o n ............................W e d n e s d a y ,J u l y9 ,2 0 2 5 ,
Thursday, July 10, 2025,
Friday, July 11, 2025 and
Monday, July 14, 2025
H Share certificates in respect of wholly or partially successful
applications to be dispatched or deposited into CCASS on
or before (6)(9) ........................................................T u e s d a y , J u l y 8 , 2 0 2 5
White Form e-Refund payment instructions/refund
checks in respect of wholly or part ially successful applications if
the final Offer Price per Offer Share is less than the maximum
Offer Price per Offer Share initially paid on application
(if applicable) or wholly or part ially unsuccessful applications
to be dispatched/collected on or before
(8)(9) .......................... W e d n e s d a y , J u l y 9 , 2 0 2 5
Dealings in H Shares on the Hong Kong Stock Exchange expected to
c o m m e n c e d a t ............................................................... 9 : 0 0 a . m . o n
Wednesday, July 9, 2025
EXPECTED TIMETABLE (1)
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Notes:
(1) All times and dates refer to Hong Kong local times and dates.
(2) You will not be permitted to submit your application under the White Form eIPO service through the designated
website at
www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already
submitted your application and obtained an application ref erence number from the designated website prior to 11:30
a.m., you will be permitted to continue the application p rocess (by completing payment of the application monies)
until 12:00 noon on the last day for submitting applications, when the application lists close.
(3) If there is/are a tropical cyclone warning si gnal number 8 or above, Extreme Conditions and/or a ‘‘black ’’ rainstorm
warning at any time between 9:00 a.m. and 12:00 noon on Fr iday, July 4, 2025, the application lists will not open
or close on that day. For further details, please see ‘‘How to Apply for Hong Kong Offer Shares — E. Severe
Weather Arrangements ’’of this Prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by i nstructing your broker or custodian to give electronic
application instructions to HKSCC to apply on your behalf via HKSCC EIPO channel should refer to ‘‘How to
Apply for Hong Kong Offer Shares – A. Application for Hong Kong Offer Shares — 2. Application Channels ’’ of
this Prospectus.
(5) The Price Determination Date is expected to be on o r before Monday, July 7, 2025. If, for any reason, the Offer
Price is not agreed between the Overall Coordinators (fo r themselves and on behalf of the Underwriters) and us by
12:00 noon on Monday, July 7, 2025, the Global offering will not proceed and will lapse.
(6) The H Share certificates are expected to be issued on Tu esday, July 8, 2025 but will only become valid evidence of
title provided that the Global Offering has become uncond itional in all respects and neither of the Underwriting
Agreements has been terminated in accordance with its terms, which is scheduled to be at around 8:00 a.m. on
Wednesday, July 9, 2025. Investors who trade H Shares on th e basis of publicly available allocation details before
the receipt of the H Share certificates and before they become valid do so entirely of their own risk.
(7) None of the website or any of the information contained on the websites forms part of this Prospectus.
(8) White Form e-Refund payment instructions /refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and in respect of wholly or partially successful
applicants if the Offer Price is less than the price payable per Offer Share on application. Part of the applicant ’s
identification document number, or, if t he application is made by joint applicants, part of the identification document
number of the first-named applicant, provided by the app licant(s) may be printed on the refund check, if any. Such
data would also be transferred to a third party for refund purposes. Banks may require verification of an applicant ’s
identification document number before encashment of t he refund check. Inaccurate completion of an applicant ’s
identification document number may invalidate or delay encashment of the refund check.
(9) Applicants being individuals who are eligible for pers onal collection may not authorize any other person to collect
on their behalf. If you are a corporate applicant which is eligible for personal collection, your authorized
representative must bear a letter of authorization from your corporation stamped with your corporation ’s chop. Both
individuals and authorized representatives must produce evi dence 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.
EXPECTED TIMETABLE (1)
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Applicants who have applied through the White Form eIPO service and paid their applications monies through
single bank accounts may have refund monies (if any) dispatched to the bank account in the form of White Form e-
Refund payment instructions. Applicants who have applied through the White Form eIPO service and paid their
application monies through multiple bank accounts may h ave refund monies (if any) dispatched to the address as
specified in their application instructions in the form of r efund checks in favor of the applicant (or, in the case of
joint applications, the first-named applicant) by ordinary post at their own risk.
Any uncollected H Share certificates and/or refund cheques will be dispatched by ordinary post, at the applicants ’
risk, to the addresses specified in the relevant applications.
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 ’’.
The above expected timetable is a summary only. You should read carefully the sections
headed ‘‘Underwriting ’’, ‘‘Structure of the Global Offering ’’ and ‘‘How to Apply for Hong Kong
Offer Shares ’’ of this Prospectus for details relating to the structure of the Global Offering,
procedures on the applications for Hong Kong Offer Shares and the expected timetable, including
conditions, effect of bad weather and the dispa tch of refund cheques and Share certificates.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
This Prospectus is issued by us solely in connection with the Hong Kong Public Offering
and does not constitute an offer to sell or a soli citation of an offer to buy any security other
than the Hong Kong Offer Shares offered by this Prospectus pursuant to the Hong Kong
Public Offering. This Prospectus may not be used for the purpose of, and does not constitute,
a no f f e ro ras o l i c i t a t i o no fa no f f e rt os u b s c r i b ef o ro rb u ya n ys e c u r i t yi na n yo t h e r
jurisdiction or in any other circumstances . No action has been taken to permit a public
offering of the Offer Shares or the distribution of this Prospectus in an y jurisdiction other
than Hong Kong. The distribution of this Pros pectus and the offering and sale of the Offer
Shares in other jurisdictions are subject t o 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 Prosp ectus. Any information or representation not
made in this Prospectus must not be relied on by you as having been authorized by us, the
Sole Sponsor, the Overall Coordinators, the Joi nt Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Un derwriters, the Capital Market Intermediaries, any of our or
their respective directors, officers, employees, a gents, advisers or representatives, or any other
person or party involved in the Global Offering.
Page
Expected Timetable ............................................................. i
Contents ........................................................................ v
Summary ....................................................................... 1
Definitions ...................................................................... 2 9
Glossary of Technical Terms ..................................................... 4 2
Forward-Looking Statements .................................................... 4 3
Risk Factors .................................................................... 4 5
Information about this Prospectus and the Global Offering ....................... 7 4
Directors, Supervisors and Parties Involved in the Global Offering ................ 7 9
CONTENTS
– v –


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Page
Corporate Information .......................................................... 8 7
History, Development and Corporate Structure ................................... 9 0
Industry Overview .............................................................. 1 0 1
Regulatory Overview ............................................................ 1 1 8
Business ........................................................................ 1 3 9
Financial Information ........................................................... 2 1 6
Share Capital ................................................................... 2 6 4
Cornerstone Investors ........................................................... 2 6 7
Substantial Shareholders ........................................................ 2 7 7
Relationship with Our Con trolling Shareholders .................................. 2 7 9
Directors, Supervisors and Senior Management ................................... 2 8 4
Future Plans and Use of Proceeds ................................................ 2 9 9
Waivers from Strict Compliance with the Hong Kong Listing Rules ............... 3 0 3
Underwriting ................................................................... 3 1 7
Structure of the Global Offering ................................................. 3 3 0
H o wt oA p p l yf o rH o n gK o n gO f f e rS h a r e s....................................... 3 4 3
Appendix I — Accountants ’ Report ......................................... I - 1
Appendix IA — Report on Review of Condensed Consolidated
Financial Statements ....................................... I A - 1
Appendix II — Unaudited Pro Forma Financial Information .................. II-1
Appendix III — Summary of the Articles of Association ....................... III-1
Appendix IV — Statutory and General Information ........................... I V - 1
Appendix V — Documents Delivered to the Registrar of Companies
in Hong Kong and Available on Display .................... V - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this
Prospectus. As it is a summary, it does not contain all the information that may be important
to you and is qualified in its entirety by, and should be in conjunction with, the full text of this
Prospectus. You should read the entire Prospectus 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 H Shares are set out in ‘‘Risk Factors ’’in this Prospectus. You should read
that section carefully before yo u decide to invest in the H Shares.
OVERVIEW
Who We Are
We are an industry-leading integrated one-sto p precision manufacturing solution provider. We
are focused on technological innovation and em powered by smart manufacturing. In terms of
revenue in 2024, we are a global leading player in pre cision structural parts a nd modules integrated
solutions for both consumer electronics and smart ve hicles interaction systems with market shares
of 13.0% and 20.9%, respectively. We have accumu lated strong expertise and capabilities in
consumer electronics and smart vehicles, with robus t and comprehensive platf orm-based capabilities
that include talent, technology, supply and smart manufacturing. This empowers us to expand into
new business areas and seize future growth opportunities, and lays the foundation for being one of
the first companies in the industry to undertak e large-scale production of key components and
complete device assembly for humanoid robo ts and AI glasses/XR head-mount displays.
The following are our business highlights:
The world's first touch-
enabled smartphones with
full-sized screen
Cover glass core supplier
Industry-first single-piece
flow production
Integrating multiple
processes into a continuous
production line
RMB69.9 billion
Revenue for 2024
at CAGR of 22.3%2 from
2022 to 2024
The world’s first premium
smart electric vehicle
Central control screens and
intelligent B-pillars supplier
Full material coverage
Glass, metal, sapphire,
ceramic, plastic, leather,
silicon, glass fiber, carbon
fiber and more
Humanoid robots
One of the first companies to
undertake mass production
and complete device
assembly1
Integrated one-stop
precision manufacturing
Achieving full industry value
chain vertical integration
for smart devices
RMB5.0 billion4
Cumulative cash dividend and
repurchase payout ratio from
2022 to 20245 – 54.5%
IoT and smart systems
IoT building the production
system with key
manufacturing processes
fully intelligent
RMB7.2 billion
Cumulative R&D spending
from 2022 to 2024
AI glasses
RMB3.7 billion
Net profit for 2024
at CAGR of 20.8%3 from
2022 to 2024
Pioneering
contributions
Smart
manufacturing
Financial
performance
One of the first companies to
undertake mass production
and complete device
assembly1
Note 1: Source from the Frost & Sullivan Report;
Note 2: (Revenue in 2024/Revenue in 2022)^(1/2)-1
Note 3: (Net profit in 2024/Net profit in 2022)^(1/2)-1
Note 4: Total dividends in respect of 2022 to 2024 (including repurchase of shares in 2022)
Note 5: Cumulative cash dividend and repurchase payout ratio from 2022 to 2024 = Total dividends in respect of
2022 to 2024 (including repurchase of shares in 2022)/Total net profit attributable to shareholders of the
Group from 2022 to 2024
SUMMARY
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Since the 2000s, led by our Chairman, Ms. Chau, we have been at the forefront of the
development and application of new materials such as glass, sapphire and ceramics in consumer
electronics under the guidance of our ‘‘four new ’’strategy — new materials, new technologies, new
equipment and new fields. In 2007, we were the fi rst in the industry to apply glass to the world ’s
first touch-enabled smartphone wi th full-sized screen, establishin g the mainstream technology for
functional panels on smart devices. To date, thro ugh our accumulated expertise in materials science
— including glass, metal, sapphi re, ceramics, plastics, leath er, glass fiber and carbon fiber — we
have achieved full vertical integration along th e smart devices industry value chain. This spans
from raw materials and structural part production to functional module lamination and complete
device assembly. We have established long-term str ategic relationships with global leading brands
in consumer electronics and sma rt vehicles and are deeply involved in the development and
production of their products two to three years a head of the product launches. In addition, we
proactively expand into broad and high-growth- potential areas and extend horizontally into
diversified markets such as smart retail devices, i ndustrial applications, humanoid robots and AI
glasses/XR head-mount displays, creating a mult i-faceted presence in various emerging markets.
Vast market
coverage with
great growth
potential
Consumer electronics
Smartphones Computers
Smart
wearables
Central control
screens
Instrument
panels
Intelligent B-pillars
and C-pillars
AI glasses/XR
head-mount displays
Smart retail
devices
Industrial and
humanoid
robots
Multi-functional
glasses
Technology
Platform
Talent
Platform
Supply
Platform
Smart Manufacturing
Platform
Smart vehicle Emerging areas
Vertical
integration in
industry value
chain
Comprehensive
platform-based
capabilities
Complete
device
assembly
One-stop
product
solution
Full material
coverage
Self-developed
automated
equipment
Product
R&D designOur Solutions
Consumer Electronics: We provide various structural parts and functional modules including
cover glass, metal mid-frames, touch modules, dis play modules, thermal mod ules, antenna modules,
biometric recognition modules and wireless chargi ng modules as well as complete device assembly
for consumer electronics such as smartphones, co mputers and smart wearables. Our customized
solutions cover a variety of materia ls, including glass, metal, sapphi re, ceramics, plastics, leather,
silicone, glass fiber and carbon fiber.
SUMMARY
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Smart Vehicle: We develop and produce a wide range of automotive electronics products and
structural parts for the smart cockpit. We offer in novative solutions to customers, including glass
and components for automotive electronics such as central control screens and instrument panels,
intelligent B-pillars and C-pillars and multi-func tional glasses for side windows, windshields and
sunroofs.
Other Emerging Smart Devices Markets: We have expanded into various markets, including
humanoid robots, AI glasses/XR head-mount displays and smart retail devices. We collaborate with
leading humanoid robot companies, providing ma ss production of core components and complete
device assembly. In the AI glasses/XR head-mount d isplays market, we offer a full-chain service
covering functional modules and complete devic e assembly. In addition, we have also jointly
launched ‘‘T a pt oP a y ’’ smart retail devices with a leading company in the third-party payment
industry.
Our Platform-Based Capabilities
We possess robust and comprehensive platform- based capabilities, encompassing talent,
technology, supply and smart manufacturing. As for the talent platform, we have cultivated a large
number of R&D experts who combine theoretica l innovation with excellent craftsmanship and
practical skills. Moreover, we are capable of qu ickly assembling teams across various areas and
industries to meet our evolving business requirements. Our technology platform embodies the
ability to transfer technologies across different areas, leveraging proven technologies in mature
areas to empower new end uses. Our supply platform is built upon the capability to produce raw
materials ourselves and have access to abundant up stream resources, which enable the rapid mass
production of a wide range of products and the efficient fulfillment of customers ’ diverse
requirements. Our smart manufacturing platfor m stems from years of accumulated experience in
equipment development which enables us to make adjustments based on the modules and designs of
existing equipment and effi ciently develop production lines for new products.
Vertical Integration
Our business operations cover everything from p roduction of raw materials and structural part
production such as cover glass and metal mid-fra mes, to functional modu le lamination such as
display modules, fingerprint m odules, camera modules and wireless charging modules, as well as
complete device assembly of smart devices. We have achieved comprehensive coverage of raw
materials through technical capabilities for a vari ety of functional materia ls. More specifically, we
are one of the few solution providers in the global consumer electronics supply chain with
advanced processing capabilities in both glas s and metal. We offer our customers vertically
integrated one-stop solutions, covering everything from design to mass production.
Global Footprint
We have nine production and R&D centers both dom estically and internationally, including a
production center in Southeast Asia and overseas offices in Hong Kong, the United States, Japan
and South Korea, ensuring extensive coverag e of domestic and international markets. By
strategically positioning ourselves close to our c ustomers, we optimize supply chains and logistics
costs, enabling us to respond quickly to customer demands.
SUMMARY
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RESEARCH AND DEVELOPMENT
Given the highly customized nature of our solu tions, our product R&D are primarily done in
cooperation with our customers for specif ic projects according to the customers ’ customization
requirements and end product designs. Our custom ers usually approach us at the beginning of the
product development cycle of the end products, and we work with them closely to design and
develop customized structural parts or functiona l modules pursuant to their specifications and the
design of the end products in which the structur al parts and functional modules will be used.
In addition to the research and development of specific projects and products, we also
undertake innovative R&D initiatives that focus on new materials, new technologies, new
equipment and new fields. Our innovative R&D has resulted in various technological
breakthroughs and upgrades that enabled the cont inuous iteration and adv ancement of consumer
electronics, such as CNC processing for glass, ion-exchange strength ened glass, coating techniques,
high-adhesion ultra-thin ink, polishing techniques, s praying techniques and yellow-light processing.
OUR CUSTOMERS AND SUPPLIERS
Our customers are mainly global brands in th e consumer electronics and smart vehicles
industries.
During the Track Record Period, we did not engage any distributors, and all our products and
services were sold or provided by us to our customers directly. We intend to continue to engage in
direct sales only without the us e of distributors given the nature of our long-term strategic
relationships with our customers.
In 2022, 2023 and 2024, sales to our five largest customers amounted to RMB38,878.3
million, RMB45,282.2 million and RMB56,707.4 m illion, accounting for 83.3%, 83.1% and 81.1%
of our total revenue in the respective periods. In 2022, 2023 and 2024, sales to our largest
customer, who was also our largest supp lier during the Track Record Period ( ‘‘Customer/Supplier
A’’), amounted to RMB33,136.2 million, RMB31,512.3 million and RMB34,566.5 million,
accounting for 71.0%, 57.8% and 49.5% of our total revenue in the respective periods.
Our suppliers are mainly suppliers of raw materials and equipment. We have established and
maintain stable and long-term relationships with these major suppliers.
In 2022, 2023 and 2024, purchase of raw materials from our five largest suppliers amounted to
RMB9,033.5 million, RMB17,224.6 million and RMB26,064.7 million, accounting for 23.7%,
37.4% and 43.6% of our total cost of sales in the respective periods. In 2022, 2023 and 2024,
purchases from our largest supplier, Customer/ Supplier A, amounted to RMB6,198.4 million,
RMB7,665.7 million and RMB14,372.7 million, accounting for 16.2%, 16.7% and 24.1% of our
total cost of sales in the respective periods.
See ‘‘Business — Our Customers — Our Top Five Customers ’’ and ‘‘Business — Raw
Materials and Supply Chain — Top Five Suppliers ’’for further details.
SUMMARY
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Relationship with our largest customer during the Track Record Period
Customer/Supplier A was our largest customer throughout the Track Record Period. Sales to
Customer/Supplier A accounted for 71.0%, 57.8% and 49.5% of our revenue for 2022, 2023 and
2024, respectively. Customer/Supplier A is a Nasdaq-l isted multinational corporation headquartered
in the U.S. and established in 1976, which princ ipally engages in the design, manufacturing and
marketing of consumer electronics as well as sales of related services.
Our strategic and mutually beneficial relati onship with Customer/Supplier A started almost
two decades ago when Customer/Supplier A was developing the industry ’s first touch-enabled
smartphone with full-sized screen. Over the past 19 years, we were closely involved in the product
development phase of Customer/Supplier A ’s product iterations, offering crucial technological
solutions to facilitate its design ideas and functionality requirements.
Customer/Supplier A requires its suppliers, including us, to purchase raw materials and
components used in products manufactured for it fro m Customer/Supplier A itself in order to exert
overall control of the procurement process and to better control the cost and quality of raw
materials. This is commonly referred to in the indu stry as the buy-and-sell model. Our sales to and
purchases from Customer/Supplier A were conduc ted in the ordinary course of business and on
commercial terms negotiated on an arm ’s length basis. As a result, in addition to being our largest
customer, Customer/Supplier A was also our largest supplier in 2022 and 2023 and our second
largest supplier in 2024. Purchases from Custo mer/Supplier A accounted for 16.2%, 16.7% and
14.5% of our total cost of sales for 2022, 2023 and 2024.
See ‘‘Business — Our Customers — Relationship with Customer/Supplier A ’’ for further
details.
PRODUCTION AND MANUFACTURING
We produce all our products ourselves in our nine production centers to ensure that we
consistently deliver high-quality p roducts on time to meet our customers ’ demands. As of December
31, 2024, we had nine production centers located in China, Vietnam and Mexico.
Technology is the core of our competitivenes s in production. We ha ve integrated smart
manufacturing into various aspects of our prod uction, significantly improving our production
efficiency and product yields . We were one of the earliest companies to develop and implement
automated equipment and industrial robots in production processes, which significantly increases
efficiency, precision and consi stency in production. We have also implemented an intelligent
warehousing system that helped to improve our war ehousing, logistics and inventory management
capabilities. Furthermore, we have been developi ng industrial robots for our production centers. For
example, the four-axis, six-axis, parallel robots , humanoid robots, AOI visual inspection robots,
AGV tuggers developed and manufactured by us not only outperforms conventional equipment in
the market in terms of overall performance, efficie ncy, degree of automation, energy consumption
and cost, but also ensures high product quality and consistency.
As a result of our advanced technologies and e quipment, during the Track Record Period, the
product yields for our structural parts, functi onal modules and complete device assembly were all
above industry average.
SUMMARY
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COMPETITIVE STRENGTHS
We believe the following competitive strengths have contributed to our success and will
continue to drive our future growth:
. Global leader in integrated one-stop preci sion manufacturing, with leading positions
across multiple industries
. Focused on technological innovation and c ommitted to research and development, we
drive the evolution of advanced materials and technology
. Long-term strategic collaborations with global leading customers to lead and pioneer
developments within the industry
. Comprehensive platform-based strategy and ve rtical integration along the full industry
value chain to identify and capture market opportunities
. Industry-first automated smart manufacturin g equipment and highly advanced data-driven
manufacturing system
. Dedicated founder and experienced senior management team that guided our rise to a
global leadership in smart manufacturing
OUR STRATEGIES
We will pursue the following strategies to drive further growth:
. Expand our global footprint through strategic expansion and optimization of production
capacity
. Enrich product and service portfolio to meet diversified customer needs
. Continue to enhance our smart manufacturing system to improve production efficiency
and promote green manufacturing
. Further invest in research and development to solidify our technological leadership
. Facilitate growth through potential indus try value chain integration and strategic
acquisitions
COMPETITION
We operate in a highly competitive market, and we compete with other providers in the global
precision manufacturing industry. Our ability to ma intain and grow our market share depends on us
competing effectively against our competitors. T he competitive landscape is shaped by multiple
factors, including the growth of our customers a nd their respective industries, advancements in
technology, emergence of new materials or technology, production capacity, regulatory changes and
general economic conditions.
SUMMARY
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SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables sets forth summary financial data from our consolidated financial
information during the Track Record Period. The summary financial data set forth below should be
read together with, and is qualified in its entire ty by reference to, the consolidated financial
statements as set out in the Accountants ’ Report in Appendix I to this Prospectus, including the
related notes. Our consolidated financial infor mation was prepared in accordance with the IFRS
Accounting Standards.
Results Of Operations
2022 2023 2024
RMB
% of total
revenue RMB
%o ft o t a l
revenue RMB
% of total
revenue
(in thousands, except for percentages)
Revenue
C o n t r a c t sw i t hc u s t o m e r s ..... 4 6 , 6 0 3 , 2 2 5 9 9 . 8 % 5 4 , 364,061 99.8% 69,756,758 99.8%
L e a s e s................. 9 5 , 3 2 1 0 . 2 % 126,673 0.2% 140,018 0.2%
Total revenue ............ 46,698,546 100.0% 54,490,734 100.0% 69,896,776 100.0%
C o s to fs a l e s............. ( 3 8 , 1 5 1 , 6 3 0 ) ( 8 1 . 7 % ) ( 4 5 , 998,870) (84.4%) (59,713,283) (85.4%)
Gross profit ............... 8,546,916 18.3% 8,491,864 15.6% 10,183,493 14.6%
O t h e ri n c o m e ............. 6 7 8 , 5 7 6 1 . 5 % 1 , 017,209 1.9% 567,024 0.8%
Reversal of impairment losses
(impairment lo sses recognised)
under expected credit loss
(‘‘ECL ’’)m o d e l ,n e t ...... 4 3 , 9 6 2 0 . 1 % 1 , 2 5 9 0 . 0 % ( 3 3 , 8 5 9 ) 0 . 0 %
O t h e rg a i n sa n dl o s s e s ,n e t.... 3 2 1 , 0 1 2 0 . 7 % 218,657 0.4% 384,380 0.5%
S e l l i n ge x p e n s e s ........... ( 7 0 8 , 8 4 9 ) ( 1 . 5 % ) ( 674,057) (1.2%) (705,599) (1.0%)
A d m i n i s t r a t i v ee x p e n s e s...... ( 3 , 2 3 9 , 4 9 0 ) ( 6 . 9 % ) ( 2 , 910,299) (5.3%) (3,368,955) (4.8%)
Research and development
e x p e n s e s.............. ( 2 , 1 0 4 , 9 7 6 ) ( 4 . 5 % ) ( 2 , 316,619) (4.3%) (2,784,813) (4.0%)
O t h e re x p e n s e s ............ ( 1 0 , 0 3 2 ) 0 . 0 % ( 6 , 8 4 8 ) 0 . 0 % ( 8 , 2 1 6 ) 0 . 0 %
Share of results of investments
accounted for using the equity
m e t h o d............... 3 , 9 8 7 0 . 0 % ( 5 7 , 2 9 1 ) ( 0 . 1 % ) 3 , 8 9 9 0 . 0 %
F i n a n c ec o s t s ............. ( 6 1 6 , 2 1 6 ) ( 1 . 3 % ) ( 509,986) (0.9%) (388,438) (0.6%)
Profit before tax ............ 2,914,890 6.2% 3,253,889 6.0% 3,848,916 5.5%
I n c o m et a xe x p e n s e .......... ( 3 9 5 , 0 6 9 ) ( 0 . 8 % ) ( 212,062) (0.4%) (172,061) (0.2%)
Profit for the year .......... 2,519,821 5.4% 3,041,827 5.6% 3,676,855 5.3%
Profit for the year attributable to:
O w n e r so ft h eC o m p a n y ...... 2 , 4 4 8 , 0 3 7 5 . 2 % 3 , 021,342 5.6% 3,623,901 5.2%
N o n - c o n t r o l l i n gi n t e r e s t s ...... 7 1 , 7 8 4 0 . 2 % 2 0 , 4 8 5 0 . 0 % 5 2 , 9 5 4 0 . 1 %
SUMMARY
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Non-IFRS Measure
To supplement our consolidated financial sta tements that are presented in accordance with
IFRS, we also use adjusted profit for the year (a non-IFRS measure) and adjusted net margin (a
non-IFRS measure), as additional financial meas ures, which are not required by, or presented in
accordance with IFRS. We believe that these non-IFRS measures facilitate comparisons of operating
performance from period to period by eliminating po tential impact of certain items. We believe that
these measures provide useful information to inves tors and others in understanding and evaluating
our consolidated financial statements in the sam e manner as they help our management. However,
our presentation of adjusted profit for the year (a non-IFRS measure) and adjusted net margin (a
non-IFRS measure) may not be comparable to similar item measures presented by other companies.
The use of these non-IFRS measures has limitat ions as an analytical tool, and you should not
consider them in isolation from, or as substitu te for analysis of, our consolidated financial
statements or financial conditi on as reported under IFRS. We define adjusted profit for the year (a
non-IFRS measure) as profit/(loss) for the year ad justed for share-based compensations (a non-cash
item). We define adjusted net margin (a non-IFRS measure) as adjusted profit for the year (a non-
IFRS measure) as a percentage of our total revenue.
2022 2023 2024
(in RMB thousands)
Profit for the year .............. 2,519,821 3,041,827 3,676,855
Add:
S h a r e - b a s e dc o m p e n s a t i o n......... — 54,260 161,375
Adjusted profit for the year
(a non-IFRS measure) ......... 2,519,821 3,096,087 3,838,230
Adjusted net margin (a non-IFRS
measure) ................... 5.4% 5.7% 5.5%
In 2024, we recorded an adjusted profit for the year (a non-IFRS measure) of RMB3,838.2
million and an adjusted net margin (a non-IFRS measure) of 5.5%, as compared with an adjusted
profit for the year (a non-IFRS measure) of RMB3,096.1 million and an adjusted net margin (a non-
IFRS measure) of 5.7% in 2023, primarily due to growth in our smartphones and computers related
revenue.
See ‘‘Financial Information — Non-IFRS Measure. ’’
SUMMARY
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Revenue
During the Track Record Period, we mainly gene rated revenue from the provision of precision
manufacturing solutions for a wide variety of end us es, including smartphones and computers, smart
vehicles and cockpits, intelligent head-mounted displays and smart wearables and other smart
devices. These solutions include structural parts, functional modules and co mplete device assembly.
By product end use
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Smartphones and computers
Structural parts and functional
modules . . . . . . . . . . . . . 37,710,398 80.7% 36,868,430 67.7% 43,234,267 61.9%
Complete device assembly . . . 503,413 1.1% 8,032,202 14.7% 14,519,902 20.7%
Subtotal . . . . . . . . . . . . . . . 38,213,811 81.8% 44,900,632 82.4% 57,754,169 82.6%
Smart vehicles and cockpits . . . 3,583,820 7.7% 4,998,464 9.2% 5,934,795 8.5%
Intelligent head-mounted
displays and smart wearables . 3,538,691 7.6% 3,103,753 5.7% 3,488,408 5.0%
Other smart devices . . . . . . . . 171,817 0.4% 164,872 0.3% 1,408,378 2.0%
Others
( 1 ) .................. 1,190,407 2.5% 1,323,013 2.4% 1,311,026 1.9%
Total .................. 46,698,546 100% 54,490,734 100% 69,896,776 100%
Note:
(1) Others mainly include revenue generated from sales of scraps and materials, processing fee, leases and others.
Our revenue increased by 16.7% from RMB46,698. 5 million in 2022 to RMB54,490.7 million
in 2023, and further increased by 28.3% to RMB69,896.8 million in 2024, primarily due to an
increase in smartphones and computers related revenue, and we expect this to continue to be a
major contributor to our total revenue going forward.
SUMMARY
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By region
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Offshore
Special supervision territory
in China . . . . . . . . . . . . . 28,896,418 61.9% 24,822,418 45.6% 27,496,661 39.3%
Vietnam . . . . . . . . . . . . . . . 4,871,324 10.4% 5,420,199 9.9% 4,882,063 7.0%
Asia (excluding mainland
China and Vietnam) . . . . . 2,811,336 6.0% 4,187,813 7.7% 6,079,024 8.7%
North America (1) . . . . . . . . . 1,544,346 3.3% 2,008,840 3.7% 2,036,548 2.9%
Others (2) . . . . . . . . . . . . . . 143,019 0.3% 367,288 0.6% 484,087 0.7%
38,266,443 81.9% 36,806,558 67.5% 40,978,383 58.6%
Mainland China (excluding
special supervision territory) . 8,432,103 18.1% 17,684,176 32.5% 28,918,393 41.4%
Total .................. 46,698,546 100.0% 54,490,734 100.0% 69,896,776 100.0%
Notes:
(1) North America includes revenue generate d from the United States, Canada and Mexico.
(2) Others mainly include revenues generated from Germany, Bulgaria and Serbia.
During the Track Record Period, our revenue from South Korea amounted to RMB51.3
million, RMB460.2 million and RMB1,362.7 mi llion, accounting for 0.1%, 0.8% and 1.9% of our
total revenue for the respective years.
SUMMARY
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Procurement
By region
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Mainland China . . . . . . . . . . . 23,653,974 79.3% 31,187,834 83.9% 43,035,898 85.1%
South Korea . . . . . . . . . . . . . 1,709,395 5.7% 1,785,738 4.8% 2,506,326 5.0%
J a p a n.................. 1 , 3 5 6 , 8 2 1 4 . 5 % 1 , 3 9 5 , 6 8 4 3 . 8 % 1 , 5 7 7 , 0 3 5 3 . 1 %
Vietnam . . . . . . . . . . . . . . . . 200,806 0.7% 702,346 1.9% 1,306,678 2.6%
T a i w a n................. 8 5 1 , 7 4 5 2 . 9 % 1 , 0 5 3 , 5 6 9 2 . 8 % 1 , 2 4 7 , 6 1 6 2 . 5 %
Others (1) . . . . . . . . . . . . . . . . 2,060,787 6.9% 1,049,494 2.8% 909,721 1.7%
Total .................. 29,833,528 100.0% 37,174,665 100.0% 50,583,274 100.0%
Note:
(1) Others mainly include procurement fro m the United States, Thailand and Germany.
Gross profit and gross profit margin
2022 2023 2024
Gross
profit
Gross
margin 1
Gross
profit
Gross
margin
Gross
profit
Gross
margin
(in RMB thousands, except for percentages)
Smartphones and computers
Structural parts and
functional modules . . . . . 6,554,143 17.4% 6,338,393 17.2% 7,767,219 18.0%
Complete device assembly . . (8,222) (1.6%) 207,245 2.6% 183,251 1.3%
Subtotal . . . . . . . . . . . . . . 6,545,921 17.1% 6,545,638 14.6% 7,950,470 13.8%
Smart vehicles and cockpits . . 698,364 19.5% 734,791 14.7% 518,202 8.7%
Intelligent head-mounted
displays and smart
wearables . . . . . . . . . . . . . 559,927 15.8% 433,417 14.0% 636,531 18.2%
Other smart devices . . . . . . . . 20,290 11.8% 10,781 6.5% 270,069 19.2%
Others . . . . . . . . . . . . . . . . 722,414 60.7% 767,237 58.0% 808,221 61.6%
Total/Overall (1) .......... 8,546,916 18.3% 8,491,864 15.6% 10,183,493 14.6%
Note:
(1) The overall gross profit margin is calculated as gross pr ofit for the year divided by revenue for the corresponding
year and multiplied by 100%.
SUMMARY
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Our gross profit decreased by 0.6% from RMB8, 546.9 million in 2022 t o RMB8,491.9 million
in 2023, primarily due to a decrease in our intellig ent head-mounted displays and smart wearables
related gross profit, as a result of a decrease in intelligent head-mounted displays and smart
wearables related revenue and since we started to produce intelligent head-mounted displays and
smart wearables products at our new production c enter, which resulted in higher per-unit
depreciation and amortization costs which drove down our intelligent head-mounted displays and
smart wearables related gross profit. Our gross pr ofit increased by 19.9% from RMB8,491.9 million
in 2023 to RMB10,183.5 million in 2024, primarily due to an increase in smartphones and
computers related gross profit, as a result of the ramp up of our complete device assembly business
and the continued growth of our structural part s and functional modules business which increased
our smartphones and computers related revenue.
Our gross margin decreased from 18.3% in 2022 to 15.6% in 2023, and further decreased to
14.6% in 2024, primarily due to (i) an increase in revenue contribution from the buy-and-sell model
under complete device assembly which had a lowe r gross margin compared to our other businesses
since under the buy-and-sell model, we purchas ed certain raw materials and components for the
device from our customer and sold the completed d evice to our customer, and the sales price of the
completed device is recorded as our revenue on a g ross basis. As such, complete devices sold under
the buy-and-sell model are associated with much higher selling prices but lower gross profit
margin, and (ii) a decrease in our smart vehicles and cockpits related gross margin primarily
because (a) in 2024, we produced an increased porti on of structural parts and functional modules
for smart vehicles and cockpits in our overseas pro duction facilities that led to higher transportation
costs and raw material costs for products produced in t hose facilities. Increasing the utilization of
our overseas production facilities is part of our e fforts in expanding our global footprint to respond
quickly to customer demand, and (b) in 2023, our increased investment in new production facilities
resulted in higher equipment depreciation and amor tization costs as these production facilities were
r a m p i n gu pi n2 0 2 3 .
See ‘‘Financial Information — Year-on-Year Comparison of Results of Operations. ’’
Profit for the year
As a result of the cumulative effects of the changes in our revenue, cost of sales and various
expenses, our profit for the year increased by 20.7% from RMB2,519.8 million in 2022 to
RMB3,041.8 million in 2023, and further increased by 20.9% to RMB3,676.9 million in 2024.
SUMMARY
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Summary of consolidated statements of financial position
As of December 31,
2022 2023 2024
(in RMB thousands)
T o t a ln o n - c u r r e n ta s s e t s ................. 4 9 , 7 3 4 , 4 5 3 4 9 , 3 8 9 , 0 6 5 5 0 , 2 4 3 , 2 6 6
T o t a lc u r r e n ta s s e t s .................... 2 8 , 6 1 1 , 3 1 9 2 8 , 0 8 0 , 6 7 6 3 0 , 7 7 2 , 7 8 1
Total assets ......................... 78,345,772 77,469,741 81,016,047
T o t a ln o n - c u r r e n tl i a b i l i t i e s............... 1 1 , 7 9 7 , 4 6 8 1 1 , 8 9 1 , 7 9 8 9 , 1 0 4 , 9 7 6
T o t a lc u r r e n tl i a b i l i t i e s .................. 2 2 , 1 6 7 , 0 6 1 1 9 , 0 5 6 , 3 1 6 2 3 , 0 6 5 , 1 6 1
Total liabilities ....................... 33,964,529 30,948,114 32,170,137
Net current assets ..................... 6,444,258 9,024,360 7,707,620
Equity
S h a r ec a p i t a l......................... 4 , 9 7 3 , 4 8 0 4 , 9 8 3 , 2 2 8 4 , 9 8 2 , 8 7 9
R e s e r v e s............................ 3 9 , 1 9 8 , 5 1 3 4 1 , 3 5 5 , 7 5 7 4 3 , 6 7 3 , 7 6 2
Equity attributable to owners of the Company . . 44,171,993 46,338,985 48,656,641
N o n - c o n t r o l l i n gi n t e r e s t s................. 2 0 9 , 2 5 0 1 8 2 , 6 4 2 1 8 9 , 2 6 9
Total equity ......................... 44,381,243 46,521,627 48,845,910
Our net current assets increased from RMB6, 444.3 million as of December 31, 2022 to
RMB9,024.4 million as of December 31, 2023, primarily due to an increase in trade and bills
receivables and prepayments and other receivables, and a decrease in borrowings.
Our net current assets decreased from RMB9,024.4 million as of December 31, 2023 to
RMB7,707.6 million as of December 31, 2024, pri marily due to an increase in trade and other
payables and borrowings, and a decrease in bills receivables at FVTOCI and income tax
recoverable, partially offset by a decrease in inc ome tax payable and increase in inventories and
trade and bills receivables.
Our net assets, being the total equity, increas ed from RMB42,798.9 million as of January 1,
2022 to RMB44,381.2 mill ion as of December 31, 2022, primaril y due to our profit of RMB2,519.8
m i l l i o ni n2 0 2 2 ,p a r t i a l l yo f f s e tby a distribution of RMB523.7 million and repurchase of shares of
RMB500.0 million. Our net assets increased to RMB46,521.6 million as of December 31, 2023,
primarily due to our profit of RMB3,041.8 million in 2023, partially offset by our distribution of
RMB1,033.3 million. Our net assets further inc reased to RMB48,845.9 million as of December 31,
2024, primarily because of our profit of RMB3,676 .9 million in 2024, pa rtially offset by our
distribution of RMB1,528.5 million.
See ‘‘Consolidated Statements of Financial Position of the Group ’’ in ‘‘Appendix I —
Accountants ’ Report. ’’
SUMMARY
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Summary of consolidated statements of cash flows
2022 2023 2024
(in RMB thousands)
Operating cash flows before movements in
w o r k i n gc a p i t a l........................ 7 , 4 7 1 , 2 4 6 8 , 341,908 9,154,875
Changes in working capital (1) ................ 1 , 7 2 0 , 1 0 3 1 , 178,331 1,904,672
I n c o m et a xp a i d ......................... ( 1 5 4 , 4 0 2 ) ( 427,988) (414,224)
Interest Received ........................ 1 4 3 , 5 8 6 207,947 243,518
N e tc a s hf r o mo p e r a t i n ga c t i v i t i e s............. 9 , 1 8 0 , 5 3 3 9 , 300,198 10,888,841
N e tc a s hu s e di ni n v e s t i n ga c t i v i t i e s ........... ( 5 , 5 7 6 , 6 9 5 ) ( 5 , 367,384) (6,050,290)
N e tc a s hu s e di nf i n a n c i n ga c t i v i t i e s ........... ( 2 , 4 1 6 , 3 1 6 ) ( 5 , 136,912) (4,454,405)
Net increase (decrease) in cash and cash
equivalents .......................... 1,187,522 (1,204,098) 384,146
Cash and cash equivalents at beginning of
t h ey e a r ............................. 1 0 , 2 1 6 , 3 3 9 1 1 , 682,255 10,493,519
E f f e c to ff o r e i g ne x c h a n g er a t ec h a n g e s......... 2 7 8 , 3 9 4 1 5 , 3 6 2 5 9 , 1 3 9
Cash and cash equivalents at ending of
the year ............................. 11,682,255 10,493,519 10,936,804
Note:
(1) Changes in working capitals represents changes in worki ng capital items, including i nventories, trade and bills
receivables, bills receivables at FVTOCI, prepayments and other receivables, restricted banks deposits, trade and
other payables, contract liabilities, deferred income and provision.
In 2022, 2023 and 2024, we recorded net cash from operating activities of RMB9,180.5
million, RMB9,300.2 million and RMB10,888.8 mill ion, respectively, primarily due to the profits
we generated in each of the respective years, w hich in turn was due to our successful business
expansion.
See ‘‘Financial Information — Cash Flows. ’’
SUMMARY
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Key financial ratios
For the year ended/as of December 31,
2022 2023 2024
Gross margin (1) ....................... 1 8 . 3 % 1 5 . 6 % 1 4 . 6 %
Net profit margin (2) .................... 5 . 4 % 5 . 6 % 5 . 3 %
Return on assets (3) ..................... 3 . 3 % 3 . 9 % 4 . 6 %
Return on equity (4) ..................... 5 . 8 % 6 . 7 % 7 . 7 %
Current ratio (5) ....................... 1 . 3 1 . 5 1 . 3
Quick ratio (6) ......................... 1 . 0 1 . 1 1 . 0
Gearing ratio (7) ....................... 4 2 . 7 % 3 2 . 8 % 2 9 . 3 %
Notes:
(1) Gross margin is calculated as gross profit for the year divided by revenue for the corresponding year and multiplied
by 100%.
(2) Net profit margin is calculated as net profit for the year divided by revenue for the corresponding year and
multiplied by 100%.
(3) Return on assets is calculated as net profit for the year divided by the average total assets and multiplied by 100%.
Average total assets is the sum of the balance of total ass ets at the beginning and at the end of the year, divided by
two.
(4) Return on equity is calculated as net profit for the year divided by the average total equity and multiplied by 100%.
Average total equity is the sum of the balance of total equity at the beginning and at the end of the year, divided by
two.
(5) Current ratio is calculated as total current assets as at the end of the year divided by total current liabilities as at the
end of the corresponding year.
(6) Quick ratio is calculated as total current assets less inve ntories as at the end of the year and divided by total current
liabilities as at the end of the corresponding year.
(7) Gearing ratio is calculated as the total bank loans as at the end of the year divided by total equity as at the end of
the corresponding year and multiplied by 100%.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, the equity interest of our Company was controlled directly
as to approximately 56.28% by Lens Technology (HK), 5.78% by Changsha Qunxin and 0.07% by
Mr. Cheng. 100% equity interest of Lens Technology (HK) was directly held by Ms. Chau and
Changsha Qunxin was directly held as to 97.90% by Ms. Chau and 2.10% by Mr. Cheng. Ms. Chau
and Mr. Cheng are spouses.
Accordingly, immediately following the completion of the Global Offering (assuming the
Offer Size Adjustment Option and the Over-allot ment Option are not exercised), Ms. Chau, Mr.
Cheng, Lens Technology (HK) and Changsha Qunx in will control in aggregate approximately
59.03% of the total issued share capital of our Company and be entitled to exercise more than 30%
SUMMARY
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of the voting power at general meetings of our Company. As such, Ms. Chau, Mr. Cheng, Lens
Technology (HK) and Changsha Qunxin will together constitute a group of Controlling
Shareholders upon Listing under the Hong Kong Listing Rules.
For more details, see ‘‘Relationship with Our Controlling Shareholders. ’’
RISK FACTORS
We face risks including those set out in the section headed ‘‘Risk Factors. ’’ As different
investors may have different interp retations and criteria when determining the significance of risks,
you should read the ‘‘Risk Factors ’’ section in its entirety before you decide to invest in our H
Shares. Some of the major risks that we face include:
. We generate the majority of our revenue f rom a limited number of key customers, the
loss of whom may cause significant fluctuations or declines in our sales
. We purchase our major raw materials fro m a selected number of key suppliers
. Our growth and profitability depend on general economic conditions and the level of
consumer spending
. Our future success depends on our ability to successfu lly produce new products and
effectively manage our growth
. Our research and development efforts are not guaranteed to yield the results we
anticipate
. If our production capacity is not adequate, our capability to satisfy customer demand
could be hindered
FUTURE PLANS AND USE OF PROCEEDS
Assuming an Offer Price of HK$17.78 per H Share (being the midpoint of the range of the
Offer Price stated in this Prospectus), we estimate that we will receive net proceeds of
approximately HK$4,590 million from the Globa l Offering after deducting the underwriting
commissions and other estimated expenses in conn ection with the Global Offering (assuming the
Over-allotment Option and the Offer Size Adjustm ent Option are not exercised). We intend to use
our proceeds for the purposes and in the amounts set forth below.
. Approximately 48%, or HK$2,203 million, will be used to expand our product and
service portfolio and explore additional end uses for our products;
. Approximately 28%, or HK$1,285 million, will be used to expand our global presence,
increase our production capacity globally and enhance our global delivery capabilities;
. Approximately 14%, or HK$643 million, will be used to advance our vertical integration
in smart manufacturing; and
SUMMARY
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. Approximately 10%, or HK$459 million, will be used for working capital and other
general corporate purposes.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that (i) the Global Offering
has been completed and 262,256,800 H Shares are ne wly issued in the Global Offering, (ii) the
Over-allotment Option and the Offer Size Adj ustment Option are not exercised, and (iii)
5,245,028,971 Shares are issued and outstanding following the completion of the Global Offering:
B a s e do na nO f f e rP r i c e
of HK$17.38 per
H Share
B a s e do na nO f f e rP r i c e
of HK$18.18 per
HS h a r e
Market capitalization of our H Shares (1) . . . HK$4,558 million HK$4,768 million
Market capitalization of our Shares upon
the completion of the Global Offering (2) . . HK$121,731 million HK$121,941 million
Unaudited pro forma adjusted consolidated
net tangible assets per Share (3) ........ H K $10.07 (RMB9.19) HK$10.11 (RMB9.23)
Notes:
(1) The calculation of market capitalization of our H s hares is based on 262,256,800 H Shares expected to be
issued immediately following the completion of the Gl obal Offering (assuming the Over-allotment Option and
the Offer Size Adjustment Option are not exercised). For details, see ‘‘Share Capital — Upon Completion of
the Global Offering ’’in this Prospectus.
(2) The calculation of market capitalization of our Shares is based on 262,256,800 H shares will be in issue
immediately after the completion of the Global Offeri ng, the total share capital of 4,982,772,171 A Shares as
of the Latest Practicable Date and excluding 23,817,167 treasury shares, with an average closing price of
RMB21.58 during the five trading days of A Shares i mmediately preceding the Latest Practicable Date
(assuming the Over-allotment Option and the Off er Size Adjustment Option are not exercised).
(3) The unaudited pro forma adjusted consolidated net tan gible assets per Share is arrived at after the adjustments
referred to in the section headed ‘‘Unaudited Pro Forma Financial Information ’’ in Appendix II to this
Prospectus and based on 5,216,614,413 Shares, compri sing 4,954,357,613 Shares in issue as at 31 December
2024 excluding 23,817,167 Shares held by the Company in t reasury and 4,704,491 restricted shares which are
contingently returnable as at 31 December 2024 as detailed in note 36 of the Accountants ’ Report and
262,256,800 H Shares to be issued, assuming the Global O ffering had been comple ted on 31 December 2024.
It does not take into account (i) any Shares which may b e allotted and issued upon the exercise of the Over-
allotment Option and the Offer Size Adjustment Opti on, (ii) any Shares which may be issued by the Company
pursuant to the exercise of options or the vesting of restr icted shares or other awards that have been or may be
granted from time to time under the share scheme, or (iii) any Shares which may be issued or repurchased by
the Company pursuant to the general mandates.
(4) No adjustment has been made to the unaudited pro form a adjusted consolidated net tangible assets per Share
to reflect any trading results or other transactions of our Group entered into subsequent to December 31,
2024.
SUMMARY
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In particular, the unaudited pro forma adjusted conso lidated net tangible assets of the Group attributable to
owners of the Company as shown on Page II-1 has not taken into account payment of dividends of
RMB1,983,582,000 which was approved by the Share holders at the general meeting on 18 April 2025.
The unaudited pro forma adjusted consolidated net tangi ble assets of the Group attributable to owners of the
Company as at 31 December 2024 per Share would ha ve been RMB8.81 (equivalent to HK$9.65) and
RMB8.85 (equivalent to HK$9.69) per Share base d on the Offer Price of HK$17.38 and HK$18.18,
respectively, if the dividend had been taken into account as at 31 December 2024.
For the calculation of the unaudited pro forma ad justed consolidated net tangible assets per
Share, see the section headed ‘‘Unaudited Pro Forma Financial Information ’’ in Appendix II to this
Prospectus.
LISTING EXPENSES
Our listing expenses are est imated to be approximately HK$73.3 million (including
underwriting commission), accounting for 1.6 % of the gross proceeds of the Global Offering
(assuming an Offer Price of HK$17.78 per H Share , being the mid-point of the Offer Price range
stated in this Prospectus, and no exercise of the Over-allotment Option or the Offer Size
Adjustment Option). Among our listing expens es, approximately HK$69.7 million is directly
attributable to the issuance of H Shares and will be charged to equity upon completion of the
Listing, and approximately HK$0.0 million has b een charged to our consolidated statements of
profit or loss and other comprehensive income. The listing expenses we incurred during the Track
Record Period and expect to incur would consist o f approximately HK$37.3 million underwriting
related expenses and fees (including but not limi ted to commissions and fees), approximately
HK$35.6 million non-underwriting-related expe nses and fees of the Sole Sponsor, legal advisors
and reporting accountant and approximately HK$0.4 m illion for other non-underwriting-related fees
and expenses.
DIVIDEND POLICY
In 2022, 2023 and 2024, our Company declared dividends of RMB493.1 million, RMB986.2
million and RMB1,482.2 million, all of which had been paid in full.
We do not have a fixed dividend distribution ratio. PRC laws require that dividends be paid
only out of our distributable profits. Distributable profits are our after-tax profits, less
appropriations to statutory and other reserve s that we are required to make. For details of our
dividend policy, see ‘‘Financial Information — Dividend Policy. ’’ Pursuant to our Articles of
Association, our Board may declare dividends in the future after taking into account our results of
operations, financial conditions , cash requirements and availability, and other factors as it may
deem relevant at such time. Any declaration and payment as well as the amount of dividends will
be subject to our constitutional documents, appli cable PRC laws and approval by our Shareholders.
SUMMARY
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RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE
Dividends Distribution
A dividend of RMB1,983.6 million was approved by the Shareholders at the general meeting
on 18 April, 2025 and was paid in cash on June 18, 2025.
Tariffs Imposed by the United States
In February 2025, the president of the United States imposed 20% tariffs (the ‘‘fentanyl
tariffs ’’) on Chinese goods. On April 2, 2025, the president of the United States imposed a 10%
across-the-board tariff on all imports from the U.S. ’s trading partners, along with additional
country-specific tariffs for various countries (the ‘‘Reciprocal Tariffs ’’, as adjusted from time to
time, and, together with the above-mentioned tariffs, the ‘‘Additional US Tariffs ’’). On April 9,
2025, it was announced that the Reciprocal Tariffs would be paused for 90 days for all countries
but China. On April 10, 2025, the Reciprocal Tariffs on China were raised to 125%. Certain
consumer electronics, includi ng smartphones and computers, are exempt from the Reciprocal
Tariffs. The United States and China are engagin g in trade discussions, and on May 12, 2025, the
United States stated that they would lower the R eciprocal Tariffs on China to 10% for 90 days. The
fentanyl tariffs still remain in place. Therefore, the total Additional US Tariffs on China would be
30% while the Reciprocal Tariffs are lowered during the 90 days.
On May 28, 2025, the U.S. Court of Internationa l Trade ruled that the Additional US Tariffs
exceeded the president ’s legal authority. However, that decision is being appealed. The international
tariff policies are rapidly evolving, and the final outcome, including whether the Current US Tariffs
can be implemented as proposed, is highly uncertain.
We believe that the Additional US Tariffs, inc luding the corresponding tariff policies
introduced by other countries, assuming they are enforced as proposed, will not have a material and
adverse impact on our business and results of oper ations, on the bases that (i) we make very limited
direct exports to the United States, and therefor e has insignificant direct exposure to the tariffs
imposed by the United States; (ii) brand compan ies, including our customers, who import the end
products incorporating our products in the United States, are responsible for the tariffs; (iii)
changing industry landscape mitigate the risk expos ure of leading industry players regarding the
Additional US Tariffs; and (iv) we have also take n active measures to mitigate our risks (the
‘‘Directors ’ Views on the Additional US Tariffs ’’).
Having considered the above Directors ’ Views on the Additional US Tariffs and based on the
due diligence work performed by the Sole Sponsor , nothing has come to the attention of the Sole
Sponsor that would reasonably cause it to cast doubt on the Directors ’ Views on the Additional US
Tariffs in any material respect.
. We make very limited direct exports to the United States
In 2024, we generated 58.6% of our revenue offshore, including 39.3% in special
supervision territory in China, 8.7% in Asia (e xcluding mainland China and Vietnam), 7.0% in
Vietnam and 2.9% in North America (within w hich, 2.7% was from the United States). We
SUMMARY
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were advised by our legal advisers on United St ates tariffs that only direct export by us into
the United States are subject to United States tariffs, including the Additional US Tariffs. We
were further advised by our PRC Legal Advisor t hat the customers who took delivery of our
products in the special supervision territory , which is physically lo cated in China, are fully
responsible for the subsequent tariffs imposed by the export destination selected by such
customers, including the Additional US Tariffs.
. Reason for limited direct sales in the United States
For our complete device assembly, which accounted for 20.7% of our revenue in
2024, we sell the assembled device to our customer in China, who currently has no direct
sales in the United States. As such, the tar iffs imposed by the United States currently
have no impact on this part of our business.
For our structural parts and functional modules, we rarely export our products
directly to the United States. Rather, our products are further processed by other
manufacturers and then assembled into various types of end products such as
smartphones, and it is the assembled end products that are imported into the United
States by our customers. Therefore, our products are usually shipped to other
manufacturers for further processing or assemb ling. Since most large-scale manufacturers
for leading consumer electronics brands are located outside of the United States, our
products are rarely exported directly to the United States. As such, despite the fact that a
number of our major customers are headquarte red in the United States, our direct sales to
the United States accounted for an insignif icant portion of our revenue during the Track
Record Period.
. Direct export to the United States
In 2022, 2023 and 2024, our direct sales to the United States amounted to
RMB1,468.9 million, RMB1,896.1 million and RMB1,908.0 million, which only
accounted for 3.1%, 3.5% and 2.7% of our tota l revenue for the respective years. These
direct sales represent products delivered by us directly to locations within the United
States. Within these direct sales to the United States in 2022, 2023 and 2024, only 4.1%,
1.7%, 2.0%, in terms of revenue, represent products manufactured in China, while the
rest represents products manufactured in our overseas production centers. In other words,
our direct sales of products manufactured in China to the United States in 2022, 2023
and 2024 only accounted for 0.1%, 0.1%, 0.1% of our total revenue for the respective
years. The rest of the products we directly exported to the United States were
manufactured in Vietnam and Mexico. Mexic o is not subject to the Reciprocal Tariffs,
and goods imported from Mexico to the United States are generally subject to tariffs of
25%. While Vietnam is subject to tariffs of 55% , including a 10% across-the-board tariff
and 45% Reciprocal Tariffs (which is on paus e as of the Latest Practicable Date), it is
reported that Vietnam is negotiating a fav orable tariff arrangement with the United
States. In addition, we are planning to set up production centers in Thailand, which is
SUMMARY
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--- page 31 ---
currently subject to tariffs of 46%, including a 10% across-the-board tariff and 36%
Reciprocal Tariffs (which is on pause as of t he Latest Practicable Date). It is reported
that Thailand is also negotiating a favorabl e tariff arrangement with the United States.
Given that our revenue contribution from direct sales to the United States is very
limited, even if we experience a decrease in our direct sales to the United States as a
result of the Additional US Tariffs, it will not result in a material and adverse change in
our business and results of operations as a whole.
The table below compares the production costs and U.S. tariffs for the following
countries.
Mainland China Vietnam Thailand Mexico
Production costs
Land acquisition costs . Medium Low Low Medium
Construction costs . . . Medium Low Low Medium
L a b o rc o s t s ........ M e d i u m L o w M e d i u m M e d i u m
L o g i s t i c sc o s t s...... H i g h M e d i u m M e d i u m H i g h
Regulatory and
administrative costs .
Medium Low Medium Medium
Average monthly
s a l a r y ..........
RMB5,789 RMB2,220 RMB3,400 RMB4,500
R e c i p r o c a lT a r i f f s ..... 1 2 5 %
1 45%2 36%2 N/A
Notes:
1. Lowered to 10% for 90 days from May 12, 2025
2. Paused for 90 days from April 9, 2025
In view of the production cost analys is and leading consumer electronics
companies ’ plan to diversify their global supply chain, we believe that establishing
production facilities in these countries is in line with our best commercial interests.
. Applicable United States tariffs on our pr oducts that are imported directly into the
United States
In 2024, we generated 61.9% of our revenue from structural parts and functional
modules for smartphones and computers, 20.7% from complete device assembly for
smartphones and computers, 8.5% from s mart vehicles and cockpits, 5.0% from
intelligent head-mounted displays and sma rt wearables and 2.0% from other smart
devices.
SUMMARY
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After consulting with our legal advisor on tariffs, we believe that, assuming the
Additional US Tariffs are enforced as propo sed, their impact on our main businesses as
of the Latest Practicable Date would be as fol lows. The table below indicates the impact
if our products are imported directly into the United States. However, as discussed
below, since our products need to be further processed and assembled into final products,
our products are rarely imported directly into the United States. 70.4% of our products
directly exported to the United States in 2024 was exempted from the Additional US
Tariffs.
Imported Directly into the United States from the PRC
Business line
Revenue
contribution
in 2024
General Rates
under the HTSUS
before the
Additional
U.S. Tariff 1
Applicable Additional U.S.
Tariffs and potential
impact as of the Latest
Practicable Date
Overall U.S. tariff
rate as of the Latest
Practicable Date
Smartphones and
computers
Structural parts and
functional modules .
61.9% Ranges between 0%
to 20% 2
Subject to 20% Fentanyl
Tariffs and exempt from
reciprocal tariffs
Ranges between 20%
to 40%
3
Complete device
a s s e m b l y ........
20.7% Not applicable since
no export to the
U.S.
No impact since no export
to the U.S.
Not applicable
Smart vehicles and
cockpits . . . . . . . .
8.5% Ranges between 0%
to 4.5%
2
Subject to 20% Fentanyl
Tariffs and some
subcategories exempt
from 10% reciprocal
tariffs
3
Ranges between 20%
to 32.5% 3
Intelligent head-
mounted displays
and smart wearables
5.0% Ranges between 0%
to 35%
2
Subject to 20% Fentanyl
Tariffs and 10%
reciprocal tariffs
Ranges between 30%
to 65%
Other smart devices . . . 2.0% 0% Subject to 20% Fentanyl
Tariffs and 10%
reciprocal tariffs
30%
Notes:
1. The table does not reflect any special tariffs already in force, such as antidumping or
countervailing duties and duties applicable under Section 232 of the Trade Expansion Act of
1962 or Section 301 of the Trade Act of 1974. These Harmonized Tariff Schedule of the United
States ( ‘‘HTSUS ’’) codes and the applicable tariff rates are provided purely based on the Chinese
HS codes and their corresponding description. These do not include all our products. Rather,
only our products directly exported to the Unite d States with Chinese HS codes are included
here.
2. Applicable rates depend on the physical characteristics, composition, use and function of the
specific product.
SUMMARY
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3. To the extent these products fall into the HTSUS codes that are exempt from the Fentanyl Tariffs
and Reciprocal Tariffs. During the Track Record Period, we exported certain products, such as
phone cases, to the United States that would not be exempt from the Fentanyl Tariffs or the
Reciprocal Tariffs.
. Sales in special supervision territory
During the Track Record Period, most of our exported products were delivered in
special supervision territory in China for further processing or assembling by other
manufacturers. In particular, in 2022, 2023 and 2024, 75.5%, 67.4% and 67.1% of our
offshore revenue was recorded fro m sales to special supervision territory. These include
sales to our major customers head quartered in the United States.
Special supervision territory are special cu stoms supervision zones in China that are
approved by the State Council of the PRC with specific tax and regulatory policies.
Products exported by us through the special supervision territory mainly include
protective screens and back covers for mobile phones, touch sensor screens and vehicle
central control screens. These products are p rimarily delivered to downstream customers.
These products entering the special super vision territory from places other than the
special supervision territory in China are treated as exports and thus eligible for export
tax rebates. As advised by our PRC Legal Advisor, under the PRC regulations, most
exported goods are exempt from export tariffs, with the applicable export tariff rate being
zero. Products exported by us into the special supervision territory qualify for this 0%
tariff treatment. Our customs-related obligati ons, liabilities or responsibilities are fully
released and discharged upon completion of delivery within the special supervision
territory in China. All subsequent customs-re lated obligations, including any tariffs
imposed by the United States if the custome r determines to import their products to the
united States, shall become the sole res ponsibility of the downstream customers.
Materials imported by us through the special supervision territory mainly include
raw glass panels, polishing pads, abrasive ski ns and liquid crystal display panels. These
materials entering and stored in the special supervision territory from overseas are not
treated as import and thus exempt from impor t tax. The import tax liability shall only
attach to and become payable upon such materials ’ import from the special supervision
territory into other place other than the special supervision territory in China.
Materials imported through the special supe rvision territory into places other than
the special supervision territory in China shall have their import tariff rates determined
according to the rules of origin principle, m eaning tariff rates are based on the source
country or region of such materials. For mat erials entering the special supervision
territory from overseas, which are further pr ocessed into finished or semi-finished
products within the special supervision te rritory before entering places other than the
special supervision territory in China, the imp ort tariff rates shall be determined based on
the final state of the processed products, wh ich may differ from the tariff rates applicable
to original materials imported directly into the special supervision territory.
SUMMARY
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. Our customers, who import the end products incorporating our products, are
responsible for the tariffs
As explained above, we rarely export our products directly from China to the United
States, and our customers, who import the en d products into the United States, including
through special supervision territory in Chin a, are responsible to pay any tariffs imposed by
the United States for importing goods into the United States.
While a tariff on the end product may filter upstream or downstream, none of our current
contracts with our customers allow for price adjustment due to tariffs payable by our
customers. Back in 2018 and 2019, amid the trade negotiation between the United States and
China and the threatened tariffs, none of our customers proposed such tariff-driven price
adjustment mechanism. As of the Latest Practicable Date, we had not experienced any material
adverse changes in our order volume, price, cust omer payment or logisti cs arrangements, nor
have we received any requests to cancel orders or suspend delivery of our products because of
the imposition of Additional US Tariffs. While this can change in the future, the factors we
discuss here can effectively mitigate the uncertainty.
To the best of our knowledge, as of the Latest Practicable Date, none of our top
customers sell their products exclusively to the United States since our top customers during
the Track Record Period were leading consumer electronics brands with diversified worldwide
sales. These leading consumer electronics brands can choose to only import enough products
into the U.S. to satisfy the U.S. market dema nd, while products they sell in other countries
can be shipped from the manufacturers, includi ng those located in China, to the relevant
countries directly without cros sing the U.S. border and therefore triggering U.S. tariffs.
Therefore, only a small portion of our products are indirectly imported into the U.S.
According to our estimation, approximately 17%, 14% and 11% of our products in terms of
revenue were imported into the United States as part of end products in 2022, 2023 and 2024.
These percentages are calculated by m ultiplying our top U.S. customers ’ percentages of
product sales within the United States with the percentages of our sales to these customers.
The percentages of our top U.S. customers ’ product sales within the United States are
provided by Frost & Sullivan based on these customers ’ public filings and industry expert
interviews. Within these indirect imports int o the United States, based on our estimates, a
substantial portion of these products are, or can be, imported into the United States from
countries other than China since most large-s cale manufacturing companies who supply to the
leading consumer electronics brands maintain diversified global supply chains and can swiftly
relocate their production to countries that enjoy favorable tariffs arrangements in response to
tariffs developments. As such, even if a tariff-d riven price adjustment mechanism is agreed
upon by us and our customers, only a limited portion of our sales will be impacted even if the
proportion of products being imported into the United States from China by our customers
remains at the level in 2024.
SUMMARY
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. Changing industry landscape
The Additional US Tariffs ha ve accelerated both the regional reorganization of supply
chains and the advancement of higher-end product offerings in the precision manufacturing
industry. In terms of upstream suppliers, leading suppliers in the industry are planning to
move part of their production capacity to tar iff-friendly countries. In terms of downstream
customers, faced with cost pressures, customer s increasingly demand premium and customized
products to increase unit value of products, whi ch in turn requires manufacturers to accelerate
technological breakthroughs and innovation. Therefore, industry leading manufacturers are
uniquely positioned to navigate the evolving tr ade landscape with greater agility thanks to
their technological edge, vertical integration c apabilities and global layout, and the impact of
the Current US Tariffs on leading manufacturers are relatively muted.
. Our Active measures to mitigate risk
Despite our assessment detailed above, we are also taking active measures to mitigate the
risks from the changing tariff and inter national trade landscape, including:
. Diversifying our customer base
As a result of our efforts in pursuing opportunities in high-growth end markets and
vertical integration, our revenue from sales inside mainland Chin a (excluding special
supervision territory) as a percentage of our total revenue has increased from 18.1% in
2022 to 32.5% in 2023 and further to 41.4% in 2024. This is primarily due to the
successful ramp-up of our complete device assembly business, whereby we sell
assembled end product to a Chinese custome r. Also, to our best knowledge, a lot of our
customers in emerging end uses such as smart retail, humanoid robots and AR/XR
glasses are based in China with limited sale s to the United States. We are also expanding
our business in other emerging end uses such as smart home. As we continue our efforts
in this aspect, we expect the value of our products being indirectly imported to the
United States to further decrease from 11% in 2024.
. Expanding our production capacity outside of China
We plan to expand and optimize our produc tion capacity globally by setting up new
production centers at strategic locations that are close to our key customers. In particular,
we plan to allocate approximately 28% of the net proceeds from the Global Offering to
set up production lines in Vietnam and Thailand for our structural parts for smart
devices, including smartphones and comput ers products, as well as smart vehicles and
cockpit products. See ‘‘Future Plans and Use of Proceeds ’’ for further details. Both
Vietnam and Thailand have favorable conditions such as competitive labor costs,
relatively skilled workforce and establi shed consumer electro nics manufacturing
industries. Furthermore, it is reported that both these countries are negotiating a
favorable tariff arrangement with the United States. The major raw materials used in our
production, primarily glass, can be importe d into these countries without practical
difficulties or material tariffs.
SUMMARY
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Therefore, we believe that it is feasible to expand our production in these countries
or to relocate part of our production within China to these countries to address the
Additional U.S. Tariffs without significantl y impacting our overall profitability or
business operations.
. Diversifying our supply chain
In response to the Additional U.S. Tari ff, China also imposed a 125% tariff on
American goods. On May 12, 2025, China stated that its reciprocal tariffs on the United
States would be lowered to 10% for 90 days. During the Track Record Period, we
imported certain American goods, including equipment and raw materials. The value of
American goods we imported that were subject to tariffs in 2022, 2023 and 2024
amounted to US$17.0 million, US$12.0 mil lion and US$12.6 million, representing less
than 0.5% of our total cost of sales in each of these years. As of the Latest Practicable
Date, as the American goods we imported are primarily delivered in special supervision
territory, we were not requested to pay tariffs. Going forward, if we are required to pay
the prohibitive tariff, we plan to actively diversify our supply chain. We believe that
these equipment or raw materials are availabl e from sources other than the United States,
and we do not foresee any difficulty in procuring these equipment and raw materials
outside of the United Stat es at reasonable costs.
Unaudited Financial Information for the Three Months Ended March 31, 2025
We are a public company listed on the Shenzhen Stock Exchange and we have disclosed
unaudited key financial information prepared under PRC GAAP as at and for the three months
ended March 31, 2025 pursuant to the relevant PRC securities laws and regulations. We have
included our unaudited interim condensed cons olidated financial information prepared in
accordance with IAS34, Interim Financial Reporting as at the for the three months ended March
31, 2025 in Appendix IA to this prospectus. Our unaudited interim condensed consolidated
financial information as at and for the three months ended March 31, 2025 has been reviewed by
our reporting accountant in accordance with International Standard on Review Engagements 2410,
Review of Interim Financial Info rmation Performed by the Independent Auditor of the Entity.
Revenue
Our revenue increased by 10.1% from RMB15,4 98.3 million for the three months ended
March 31, 2024 to RMB17,063.2 million for the three months ended March 31, 2025, as a result of
the growth in our smartphones and computers bus iness, mainly driven by demand for structural
parts and functional modules for new products of our customers, as well as the continued growth of
our complete device assembly.
Cost of sales
Our cost of sales increased by 8.9% from RMB13,850.8 million for the three months ended
March 31, 2024 to RMB15,079.2 million for the three months ended March 31, 2025, generally in
line with the growth of our revenue.
SUMMARY
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Gross profit
Our gross profit increased by 20.4% from RMB1,647.4 million for the three months ended
March 31, 2024 to RMB1,984.0 million for the th ree months ended March 31, 2025, and our gross
profit margin grew slightly from 10.6% for the three months ended March 31, 2024 to 11.6% for
the three months ended March 31, 2025.
Research and development expenses
Our research and development expenses incre ased by 37.7% from RMB574.6 million for the
three months ended March 31, 2024 to RMB791.4 million for the three months ended March 31,
2025. As a percentage of revenue, our research and development expenses increased from 3.7% for
the three months ended March 31, 2024 to 4.6% for the three months ended March 31, 2025. This
is due to increased investments in new projects, new products and emerging areas.
Profit for the period
As a result of the foregoing, our profit for the period increased by 43.8% from RMB315.7
million for the three months ended March 31, 2024 to RMB453.9 million for the three months
ended March 31, 2025. As a percentage of our revenue, our profit for the period increased from
2.0% for the three months ended March 31, 2024 to 2.7% for the three months ended March 31,
2025.
Assets and liabilities
Our total assets remained relatively stable at RMB81,016.0 million as of December 31, 2024
and RMB79,142.1 million as of March 31, 2025. Our total liabilities decreased 7.3% from
RMB32,170.1 million as of December 31, 2024 to RMB29,831.6 million as of March 31, 2025,
primarily due to a decrease in our trade and other payables as we settled these amounts.
Cash flows
We recorded net cash from operating activit ies of RMB2,630.4 million, net cash used in
investing activities of RMB3,124.8 million and net cash used in financing activities of RMB620.0
million for the three months ended March 31, 2025.
No Material Adverse Change
Our Directors confirmed that, as of the date of this Prospectus, there has been no material
adverse change in our financial or trading position or prospects since December 31, 2024, being the
end date of the periods reported in the Accountants ’ Report included in Appendix I to this
Prospectus, and there has been no event since D ecember 31, 2024 that would materially affect the
information as set out in the Accountants ’ Report in Appendix I to this Prospectus.
SUMMARY
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IMPACT OF COVID-19 PANDEMIC
Despite the macroeconomic challenges posed by the COVID-19 pandemic, our business
operations and financial condition remained st able during the Track Record Period and were not
materially and adversely impacted by the COVID- 19 pandemic. Our supply chain remained stable
and was operating without material constraint d uring the Track Record Period. In addition, we
continued to observe healthy demand across our cu stomer base, with no material shift in consumer
purchasing behavior that can be directly attributed to the COVID-19 pandemic. During the Track
Record Period, inventory levels and order flows remain stable and have fluctuated only in the
ordinary course of business, and we have not enco untered any significant cancellations, deferments
or abnormal pricing pressures linked to f actors related to the COVID-19 pandemic.
SUMMARY
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In this Prospectus, unless the context oth erwise requires, the following terms and
expressions shall have the mea nings set out below. Certain other terms are explained in
‘‘Glossary of Technical Terms. ’’
‘‘2023 Restricted Share
Incentive Plan ’’
the restricted share incentive p lan adopted by the Shareholders
on August 18, 2023, which permits the grant of restricted
shares to eligible participants
‘‘A Share(s) ’’ ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which are listed on the Shenzhen
Stock Exchange and traded in Renminbi
‘‘Accountants ’ Report ’’ the accountants ’ report of our Company, the text of which is
set out in Appendix I to this Prospectus
‘‘affiliate(s) ’’ with respect to any specified person, any other person, directly
or indirectly, controlling or controlled by or under direct or
indirect common control with such specified person
‘‘AFRC ’’ Accounting and Financial Reporting Council
‘‘Articles ’’or ‘‘Articles of
Association ’’
the articles of association of our Company with effect upon the
Listing Date (as amended from time to time), a summary of
which is set out in Appendix III to this Prospectus
‘‘associate(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Audit Committee ’’ the audit committee of the Board
‘‘Board ’’or ‘‘Board of
Directors ’’
the board of Directors of the Company
‘‘Business Day ’’ a day on which banks in Hong Kong are generally open for
normal business to the public and which is not a Saturday,
Sunday or public holiday in Hong Kong
‘‘Capital Market
Intermediary(ies) ’’or
‘‘CMI(s) ’’
the capital market intermediaries participating in the Global
Offering and has the meaning ascribed thereto under the Hong
Kong Listing Rules
‘‘CCASS ’’ the Central Clearing and Settlement System established and
operated by HKSCC
DEFINITIONS
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‘‘Changsha Qunxin ’’ Changsha Qunxin Investment Consulting Company Limited*
(長沙群欣投資諮詢有限公司), a limited liability company
established in PRC on March 18, 2011, and one of our
Controlling Shareholders
‘‘China ’’, ‘‘mainland China ’’or
‘‘the PRC ’’
the People ’s Republic of China, unless the context requires
otherwise, excluding, for the purposes of this Prospectus only,
the regions of Hong Kong, Macau and Taiwan of the People ’s
Republic of China
‘‘close associate(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Companies Ordinance ’’ the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
‘‘Companies (Winding Up and
Miscellaneou s Provisions)
Ordinance ’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as
amended, supplemented or otherwise modified from time to
time
‘‘Company ’’, ‘‘our Company ’’or
‘‘Lens Technology ’’
Lens Technology Co., Ltd. ( 藍思科技股份有限公司), a limited
liability company establis hed in the PRC on December 21,
2006, formerly known as Lens Technology (Hunan) Company
Limited* ( 藍思科技(湖南)有限公司)
‘‘Compliance Advisor ’’
Gram Capital Limited
‘‘connected person(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘connected transaction(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Controlling Shareholder(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules and refers to Ms. Chau, Mr. Cheng, Lens Technology
(HK) and Changsha Qunxin
‘‘core connected person(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Corporate Governance Code ’’ the Corporate Governance Code set out in Appendix C1 to the
Hong Kong Listing Rules
DEFINITIONS
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‘‘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 ( 中國證券監督管理
委員會)
‘‘Director(s) ’’or
‘‘our Director(s) ’’
the director(s) of our Company
‘‘EIT’’ enterprise income tax
‘‘EIT Law ’’ the PRC Enterprise Income Tax Law ( 《中華人民共和國企業所
得稅法》)
‘‘ESG’’ Environmental, Social and Governance
‘‘Exchange Participant ’’ a person (a) who, in accordance with the Hong Kong Listing
Rules, may trade on or through the Hong Kong Stock
Exchange; and (b) whose name is entered in a list, register or
roll kept by the Hong Kong Stock Exchange as a person who
may trade on or through the Hong Kong Stock Exchange
‘‘Extreme Conditions ’’ extreme conditions as announced by the government of Hong
Kong in the case where a super typhoon or other natural
disaster of a substantial scale serious affects the working
public ’s ability to resume work or brings safely concern for a
prolonged period
‘‘FINI ’’ ‘‘ Fast Interface for New Issuance, ’’ the online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and processing of
specified information on subscrip tion in and settlement for the
Listing
‘‘Frost & Sullivan
’’ Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent market research and consulting company
‘‘General Rules of HKSCC ’’ General Rules of HKSCC published by the Hong Kong Stock
Exchange and as amended from time to time
‘‘Global Offering ’’ the Hong Kong Public Offering and the International Offering
‘‘Group ’’, ‘‘our Group ’’,
‘‘our’’, ‘‘we’’,o r ‘‘us’’
our Company and its subsidiaries, or any one of them as the
context may require, and where the context requires, the
businesses operated by our Comp any and/or its subsidiaries
and their predecessors (if any)
DEFINITIONS
– 31 –


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‘‘Guide ’’or ‘‘Guide for
New Listing Applicants ’’
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024, as
amended, supplemented or otherwise modified from time to
time
‘‘HS h a r e ( s )’’ listed ordinary share(s) in the share capital of our Company
with a nominal value of RMB1.00 each, which are to be
subscribed for and traded in Hong Kong dollars and to be
listed on the Hong Kong Stock Exchange
‘‘HS h a r eR e g i s t r a r’’ Computershare Hong Kong Investor Services Limited
‘‘HKSCC ’’ Hong Kong Securities Clearing Company Limited, a wholly-
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
‘‘HKSCC EIPO ’’ the application for Hong Kong Offer Shares to be issued in the
name of HKSCC Nominees and deposited directly into CCASS
to be credited to your designated HKSCC Participant ’ss t o c k
account through causing HKSCC Nominees to apply on your
behalf, including by instructing your broker or custodian who
is a HKSCC Participant to giv e electronic application
instructions via HKSCC ’s FINI system to apply for Hong
Kong Offer Shares on your behalf
‘‘HKSCC Operational
Procedures ’’
the operational procedures of HKSCC, containing the
practices, procedures and admini strative or other requirements
relating to HKSCC ’s services and the operation and functions
of the CCASS, FINI or any other platform, facility or system
established, operated and/or otherwise provided by or through
HKSCC, as from time to time in force
‘‘HKSCC Participant ’’ a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
‘‘HKSCC Nominees ’’ HKSCC Nominees Limited, a wholly-owned subsidiary of
HKSCC
‘‘Hong Kong ’’or ‘‘HK’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong dollars ’’or ‘‘HK$’’ Hong Kong dollars and cents respectively, the lawful currency
of Hong Kong
DEFINITIONS
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‘‘Hong Kong Offer Shares ’’ 28,848,400 H Shares (subject to r eallocation as described in
the section headed ‘‘Structure of the Global Offering ’’)i n i t i a l l y
offered by our Company for subscription at the Offer Price
pursuant to the Hong Kong Public Offering
‘‘Hong Kong Public Offering ’’ the offering of the Hong Kong Offer Shares for subscription
by the public in Hong Kong at the Offer Price (plus brokerage,
SFC transaction levy, AFRC transaction levy and Hong Kong
Stock Exchange trading fee), on and subject to the terms and
conditions described in ‘‘Structure of the Global Offering —
The Hong Kong Public Offering ’’
‘‘Hong Kong Stock Exchange ’’ The Stock Exchange of Hong Kong Limited, a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited
‘‘Hong Kong Underwriters ’’ the underwriters of the Hong Kong Public Offering listed in
the section headed ‘‘Underwriting — Hong Kong
Underwriters ’’
‘‘Hong Kong Underwriting
Agreement ’’
the underwriting agreement dated June 27, 2025 relating to the
Hong Kong Public Offering entered into by, among others, our
Company, the Sole Sponsor, the Overall Coordinators and the
Hong Kong Underwriters, as further described in the section
headed ‘‘Underwriting — Underwriting Arrangements and
Expenses — Hong Kong Public Offering — Hong Kong
Underwriting Agreement ’’
‘‘IFRS ’’ the IFRS Accounting Standards, which include standards,
amendments and interpretations promulgated by IASB and the
International Accounting Standards (IAS) and interpretations
issued by the International Accounting Standards Committee
(IASC)
‘‘IIT Law ’’ the Individual Income Tax Law of the PRC ( 《中華人民共和國
個人所得稅法》)
‘‘Independent Third Party(ies) ’’ any person(s) or entity(ies) who is not a connected person of
the Company within the meaning of the Hong Kong Listing
Rules
DEFINITIONS
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‘‘International Offer Shares ’’ the 233,408,400 H Shares offered by our Company pursuant to
the International Offering together with any additional H
Shares which may be allotted and issued by our Company
pursuant to the exercise of the O ffer Size Adjustment Option
and the Over-allotment Option (subject to reallocation as
described in the section headed ‘‘Structure of the Global
Offering ’’)
‘‘International Offering ’’ the conditional placing of the International Offer Shares by the
International Underwriters at t he Offer Price outside the United
States in offshore transactions in reliance on Regulation S and
i nt h eU n i t e dS t a t e st oQ I B so n l yi nr e l i a n c eo nR u l e1 4 4 Ao r
any other available exemption from the registration
requirements under the U.S. Securities Act, in each case on
and subject to the terms and conditions of the International
Underwriting Agreement, as further described in the section
headed ‘‘Underwriting — International Offering ’’
‘‘International Underwriters ’’ the group of international underwriters who are expected to
enter into the International Underwriting Agreement to
underwrite the International Offering
‘‘International Underwriting
Agreement ’’
the underwriting agreement relating to the International
Offering expected to be entered into on or about July 7, 2025
by our Company and the International Underwriters, as further
described in the section headed ‘‘Underwriting — International
Offering ’’
‘‘Joint Bookrunners ’’ the joint bookrunners as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’
‘‘Joint Global Coordinators ’’ the joint global coordinators as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’
‘‘Joint Lead Managers ’’ the joint lead managers as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’
‘‘Latest Practicable Date ’’ June 21, 2025, being the latest practicable date for the purpose
of ascertaining certain information contained in this Prospectus
prior to its publication
DEFINITIONS
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‘‘Lens Technology (HK) ’’ Lens Technology (HK) Co., Limited ( 藍思科技(香港)股份有
限公司), a limited liability company established in Hong Kong
on October 29, 2004, and one of our Controlling Shareholders
‘‘Lens Changsha ’’ Lens Technology (Changsha) Company Limited* ( 藍思科
技(長沙)有限公司), a limited liability company incorporated
under the laws of the PRC on January 26, 2011, and a wholly-
owned subsidiary of the Company
‘‘Lens Dongguan ’’ Lens Technology (Dongguan) Company Limited* ( 藍思科
技(東莞)有限公司), a limited liability company incorporated
under the laws of the PRC on July 6, 2010, and a wholly-
owned subsidiary of the Company
‘‘Lens Hualian ’’ Hunan Lens Hualian Precious Ceramics Company Limited*
(湖南藍思華聯精瓷有限公司), a limited liability company
incorporated under the laws of the PRC on June 13, 2012, and
a subsidiary of the Company
‘‘Lens Intelligent Control ’’ Lens Intelligent Control (Changsha) Company Limited* ( 藍思
智控(長沙)有限公司), a limited liability company incorporated
under the laws of the PRC on March 18, 2017, and a wholly-
owned subsidiary of the Company
‘‘Lens Intelligent Robot ’’ Lens Intelligent Robot (Cha ngsha) Company Limited* (
藍思智
能機器人(長沙)有限公司), a limited liability company
incorporated under the laws of the PRC on July 22, 2016, and
a subsidiary of the Company
‘‘Lens International ’’ Lens International (HK) Ltd., a limited liability company
established in Hong Kong on November 5, 2010, and a
wholly-owned subsidiary of the Company
‘‘Lens Shenzhen ’’ Shenzhen Lens Technology Company Limited* ( 深圳市藍思科
技有限公司), a limited liability company incorporated under
the laws of the PRC on September 18, 2003, and a wholly-
owned subsidiary of the Company
DEFINITIONS
– 35 –


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‘‘Lens System Integration ’’ Lens System Integration Company Limited* ( 藍思系統集成有
限公司), a limited liability company incorporated under the
laws of the PRC on March 22, 2019, and a wholly-owned
subsidiary of the Company
‘‘Lens Taizhou ’’ Lens Precision (Taizhou) Company Limited* ( 藍思精密(泰州)
有限公司), a limited liability company incorporated under the
laws of the PRC on May 3, 2016, and a wholly-owned
subsidiary of the Company
‘‘Lens Vietnam ’’ Lens Technology (Vietnam) Company Limited, a single-
member limited liability company established in Vietnam on
June 12, 2017, and a wholly-owned subsidiary of the Company
‘‘Lens Xiangtan ’’ Lens Technology (Xiangtan) Company Limited* ( 藍思科技(湘
潭)有限公司), a limited liability company incorporated under
the laws of the PRC on July 23, 2012, and a wholly-owned
subsidiary of the Company
‘‘Listing ’’ listing of the H Shares on the Main Board of the Hong Kong
Stock Exchange
‘‘Listing Committee ’’ the Listing Committee of the Hong Kong Stock Exchange
‘‘Listing Date ’’ the date, expected to be on or about Wednesday, July 9, 2025,
on which our H Shares are listed and from which dealings
therein are permitted to take place on the Hong Kong Stock
Exchange
‘‘Listing Rules ’’or ‘‘Hong Kong
Listing Rules ’’
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended, supplemented
or otherwise modified from time to time
‘‘Macau ’’ the Macau Special Administ rative Region of the PRC
‘‘Main Board ’’ the stock exchange (excluding the option market) operated by
the Hong Kong Stock Exchange which is independent from
and operates in parallel with the GEM of the Hong Kong
Stock Exchange
‘‘MOF’’
Ministry of Finance of the PRC ( 中華人民共和國財政部)
‘‘Mr. Cheng ’’ Mr. Cheng Chun Lung ( 鄭俊龍), the vice chairman of the
Board, an executive Director, one of our Controlling
Shareholders and the spouse of Ms. Chau
DEFINITIONS
– 36 –


--- page 47 ---
‘‘MIIT ’’ Ministry of Industry and Information Technology ( 中華人民共
和國工業和信息化部)
‘‘Ms. Chau ’’ Ms. Chau Kwan Fei ( 周群飛), the chairman of the Board, an
executive Director, the general manager of our Company, one
of our Controlling Shareholders and the spouse of Mr. Cheng
‘‘Nomination Committee ’’ the nomination committee of the Board
‘‘NPC’’ the National People ’s Congress of the PRC ( 中華人民共和國
全國人民代表大會)
‘‘Offer Price ’’ the final offer price per Offer Share (exclusive of brokerage of
1%, SFC transaction levy of 0.0027%, Hong Kong Stock
Exchange trading fee of 0.00565% and AFRC transaction levy
of 0.00015%) at which the Offer Shares are to be subscribed
for and issued pursuant to the Global Offering as described in
the section headed ‘‘Structure of the Global Offering ’’
‘‘Offer Share(s) ’’ the Hong Kong Offer Share(s) and the International Offer
Share(s), together with, where relevant, any additional H
Shares which may be allotted and issued pursuant to the
exercise of the Offer Size Adjustment Option and/or the Over-
allotment Option
‘‘Offer Size Adjustment Option ’’ the option expected to be granted by our Company under the
International Underwriting Ag reement to the International
Underwriters, exercisable by the Overall Coordinators (for
themselves and on behalf of the International Underwriters),
pursuant to which the Company may allot and issue up to an
aggregate of 39,338,400 additional H Shares (representing in
aggregate approximately 15.0% of the Offer Shares initially
being offered under the Global Offering assuming the Over-
allotment Option is not exercised) at the Offer Price, to cover
any excess market demand in the International Offering
(without being subject to any reallocation mechanism), as
described in ‘‘Structure of the Global Offering — Offer Size
Adjustment Option ’’
DEFINITIONS
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--- page 48 ---
‘‘Over-allotment Option ’’ the option expected to be granted by us to the International
Underwriters, exercisable by the Overall Coordinators (on
behalf of the International Underwriters) pursuant to the
International Underwriting Agreement, to require our Company
to allot and issue up to an aggregate of 39,338,400 additional H
Shares (representing approxima tely 15.0% of the Offer Shares
initially available under the Gl obal Offering assuming the Offer
Size Adjustment Option is not exercised at all) or up to an
aggregate of 45,239,200 additional H Shares (representing
approximately 15.0% of the Offer Shares being offered under
the Global Offering assuming the Offer Size Adjustment Option
is exercised in full), at the Offe r Price to, among other things,
cover over-allocations in the International Offering, if any,
further details of which are de s c r i b e di nt h es e c t i o nh e a d e d
‘‘Structure of the Global Offering ’’in this Prospectus
‘‘Overall Coordinators ’’ the overall coordinators as named in the section headed
‘‘Directors, Supervisors and Parties Involved in the Global
Offering ’’
‘‘Overseas Listing Trial
Measures ’’
The Trial Administrative Measures of Overseas Securities
Offering and Listing by Do mestic Companies and five
supporting guidelines ( 《境內企業境外發行證券和上市管理試
行辦法》及五項配套指引)p r o m u l g a t e db yt h eC S R Co n
February 17, 2023 and became effective on March 31, 2023
‘‘PBOC ’’ the People ’s Bank of China ( 中國人民銀行), the central bank
of the PRC
‘‘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
‘‘PRC GAAP ’’ generally accepted accounting principles of the PRC
‘‘PRC Legal Advisor ’’ Sundial Law Firm, the PRC legal advisor to our Company
‘‘PRC Securities Law ’’ the Securities Law of the PRC ( 中華人民共和國證券法), as
amended, supplemented or otherwise modified from time to
time
DEFINITIONS
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--- page 49 ---
‘‘Price Determination Date ’’ the date, expected to be on or before Monday, July 7, 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 Monday, July 7,
2025
‘‘Prospectus ’’ this Prospectus being issued in connection with the Hong
Kong Public Offering
‘‘QIBs ’’ qualified institutional buyers within the meaning of Rule 144A
under the U.S. Securities Act
‘‘Regulation S ’’ Regulation S under the U.S. Securities Act
‘‘Remuneration and
Appraisal Committee ’’
the remuneration and apprai sal committee of the Board
‘‘RMB’’or ‘‘Renminbi ’’ Renminbi, the lawful currency of the PRC
‘‘Rule 144A ’’ Rule 144A under the U.S. Securities Act
‘‘SAFE ’’ the State Administration of Foreign Exchange of the PRC
(中華人民共和國外匯管理局)
‘‘SAMR ’’ the State Administration for Market Regulation of the PRC
(中華人民共和國國家市場監督管理總局)
‘‘SAT’’ the State Administration of Taxation of the PRC ( 中華人民共
和國國家稅務總局)
‘‘Securities and Futures
Commission ’’
or ‘‘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) in the capital of our Company with a nominal
value of RMB1.00 each, including H Shares and A Shares
‘‘Shareholder(s) ’’ holder(s) of the Share(s)
DEFINITIONS
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‘‘Shenzhen Lens Wang ’’ Shenzhen Lens Wang Supply Chain Management Company
Limited* ( 深圳市藍思旺供應鏈管理有限公司), a limited
liability company incorporated under the laws of the PRC on
June 17, 2022, and a wholly-owned subsidiary of the Company
‘‘Sole Sponsor ’’ CITIC Securities (Hong Kong) Limited
‘‘Stabilizing Manager ’’ CLSA Limited
‘‘State Council ’’ the State Council of the PRC ( 中華人民共和國國務院)
‘‘Strategy Committee ’’ the strategy committee of the Board
‘‘subsidiary(ies) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘substantial shareholder(s) ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Supervisor(s) ’’ member(s) of the Supervisory Committee
‘‘Supervisory Committee ’’ the supervisory committee of our Company
‘‘Takeovers Code ’’or
‘‘Hong Kong Takeovers
Code ’’
the Codes on Takeovers and Mergers and Share Buy- backs
issued by the SFC, as amended, supplemented or otherwise
modified from time to time
‘‘Track Record Period ’’ the financial years ended December 31, 2022, 2023 and 2024
‘‘treasury shares ’’ has the meaning ascribed thereto under the Hong Kong Listing
Rules
‘‘Type I Restricted Shares ’’ A Share(s) newly issued by the Company and granted to
grantees pursuant to the 2023 Restricted Share Incentive Plan
‘‘Type II Restricted Shares ’’ A share(s) repurchased from secondary market and granted to
grantees pursuant to the 2023 Restricted Share Incentive Plan
‘‘Underwriters ’’ the Hong Kong Underwriters and the International
Underwriters
‘‘Underwriting Agreements ’’ the Hong Kong Underwriting Agreement and/or the
International Underwriting Agreement, as the context may
require
DEFINITIONS
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‘‘United States ’’or ‘‘U.S. ’’ the United States of America, its territories and possessions,
any State of the United States, and the District of Columbia
‘‘U.S. dollar(s) ’’, ‘‘US$’’or
‘‘USD’’
United States dollar, the lawful currency of the United States
‘‘U.S. Securities Act ’’ The U.S. Securities Act of 1933, as amended, supplemented or
otherwise modified from time to time, and the rules and
regulations promulgated thereunder
‘‘VAT’’ value-added tax
‘‘White Form eIPO ’’ the application process for Hong Kong Offer Shares with
applications issued in applicant ’s own name and submitted
online through the designated website of the White Form
eIPO Service Provider at www.eipo.com.hk
‘‘White Form eIPO Service
Provider ’’
Computershare Hong Kong Investor Services Limited
‘‘%’’ per cent
For ease of reference, the names of PRC laws and regulations, governmental authorities,
institutions, nature persons or other entities (incl uding our subsidiaries) h a v eb e e ni n c l u d e di nt h i s
Prospectus in both the Chinese and English langua ges and in the event of any inconsistency, the
Chinese versions shall prevail.
Unless otherwise stated, 23,817,167 repurcha sed A Shares which are held as treasury shares
by the Company as of the Latest Practicable Date have been included in the total number of issued
shares of the Company as of the Latest Practicab le Date and immediately a fter completion of the
Global Offering. For details of the repurchased A Shares, see ‘‘History, Development and Corporate
Structure — Our Corporate Structure Immediately prior to the Completion of the Global Offering ’’
and ‘‘Substantial Shareholders. ’’
* For identification purpose only
DEFINITIONS
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This glossary contains explanations of certa in technical terms used in this Prospectus in
connection with the Company and our business. Such terminology and meanings may not
correspond to standard industry meanings or usages of those terms.
‘‘AI’’ artificial intelligence
‘‘AI-enabled device ’’ a device capable of achieving intelligent functions and user
interactions through AI technologies such as machine learning,
deep learning, and natural language processing
‘‘AGV’’ automated guided vehicle
‘‘AR’’ augmented reality
‘‘AOI’’ automated optical inspection
‘‘AGV’’ automated guided vehicles
‘‘CNC’’ computer numerical control
‘‘CPI’’ colorless pol yimide film
‘‘DCU’’ device control unit
‘‘HUD’’ head-up display
‘‘IoT’’ internet of things
‘‘IVI’’ in-vehicle infotainment
‘‘NFC’’ near-field communication
‘‘other smart devices ’’ smart devices in emerging end markets such as humanoid
robots and smart retail devices
‘‘PCB’’ printed circuit board
‘‘PCBA ’’ printed circuit board assembly
‘‘UTG’’ ultra-thin glass
‘‘UV’’ ultraviolet
‘‘VTG’’ variable thin glass
‘‘VR’’ virtual reality
‘‘XR’’ extended reality
GLOSSARY OF TECHNICAL TERMS
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We have included in this Prospectus forward-looking statements. Statements that are not
historical facts, including but no t limited to statements about our in tentions, beliefs, expectations or
predictions for the future, are forward-looking sta tements. When used in this Prospectus, the words
‘‘aim’’, ‘‘anticipate ’’, ‘‘believe ’’, ‘‘could ’’, ‘‘expect ’’, ‘‘intend ’’, ‘‘project ’’, ‘‘seek ’’, ‘‘should ’’,
‘‘will ’’, ‘‘would ’’, ‘‘vision ’’, ‘‘target ’’, ‘‘schedule ’’, and the negative of these words and other
similar expressions, as they relate to us or our management, are intended to identify forward-
looking statements. Such statements reflect the c urrent views of our management with respect to
future events, operations, liquidity and capital r esources, some of which may not materialize or may
change. These statements are subject to certain risk s, uncertainties and assumptions, including the
risk factors as described in this Prospectus, s ome of which are beyond our control and may cause
our actual results, performance or achievements, or industry results, to be materially different from
any future results, performance or achieveme nts expressed or implied by the forward-looking
statements. You are strongly cautioned that relia nce on any forward-looking statements involves
known and unknown risks and uncertainties. The risks and uncertainties facing us which could
affect the accuracy of forward-looking statement s include, but are not limited to, the following:
. our operations and business prospects;
. our ability to maintain relationship with, and the actions and developments affecting, our
customers and suppliers;
. future developments, trends and conditions in the industries and markets in which we
operate or plan to operate;
. general economic, political and business cond itions in the markets in which we operate;
. changes to the regulatory environment in the industries and markets in which we operate;
. our ability to maintain our market position;
. the actions and developments of our competitors;
. our ability to effectively contain costs and optimize pricing;
. the ability of third parties to perform in accordance with contractual terms and
specifications;
. our ability to retain senior management and key personnel and recruit qualified staff;
. our business strategies and plans to achieve these strategies;
. the effectiveness of our quality control systems;
FORWARD-LOOKING STATEMENTS
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. change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends; including those pertaining to the
PRC and the industry and markets in which we operate; and
. capital market developments.
By their nature, certain disclosures relating t o these and other risks are only estimates and
should one or more of these uncertainties or risk s, among others, materialize, actual results may
vary materially from those estima ted, anticipated or projected, a s well as from historical results.
Specifically but without limitation, sales could de crease, costs could increase, capital costs could
increase, capital investment could be delayed an d anticipated improvements in performance might
not be fully realized.
Subject to the requirements of applicable laws, rules and regulations, we do not have any or
undertake no obligation to update or otherwise revise the forward-looking statements in this
Prospectus, whether as a result of new informatio n, future events or otherwise. As a result of these
and other risks, uncertainties and assumptions , the forward-looking events and circumstances
discussed in this Prospectus might not occur in the way we expect or at all. Accordingly, you
should not place undue reliance on any forward- looking information. All forward-looking
statements in this Prospectus are qualified by reference to the cautionary statements in this section
as well as the risks and uncertainties discussed in the section headed ‘‘Risk Factors. ’’
In this Prospectus, statements of or references to our intentions or those of our Directors were
made as of the date of this Prospectus. Any such information may change in light of future
developments.
FORWARD-LOOKING STATEMENTS
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You should carefully consider all of the info rmation in this Prospectus, including the
risks and uncertainties described below, bef ore making an investment in our H Shares. The
following is a description of what we consider to be our material risks. Any of the following
risks could have a material adverse effect on ou r business, financial condition and results of
operations. In any such case, the market pric e of our H Shares could decline, and you may
lose all or part of your investment. These facto rs are contingencies th at 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 the
section headed ‘‘Forward-Looking Statements ’’in this Prospectus.
RISKS RELATING TO OUR BUSINESS OPERATIONS
We generate the majority of our revenue from a limited number of key customers.
We generate a substantial portion of our revenue from a limited number of key customers. In
2022, 2023 and 2024, revenue from our five larges t customers amounted t o RMB38,878.3 million,
RMB45,282.2 million and RMB56,707.4 million, accounting for 83.3%, 83.1% and 81.1% of our
revenue in the respective year, and sales to our larg est customer, Customer/Supplier A, amounted to
RMB33,136.2 million, RMB31, 512.3 million and RMB34,566.5 million, accounting for 71.0%,
57.8% and 49.5% of our revenue in the respective year.
If these key customers do not continue to transact with us on scales or terms similar to
historical levels, our business, financial condi tion and results of operations will be negatively
affected. In particular, these key customers ’ products are characterized by rapidly evolving
technologies that innovate product features or ad option of new or alternative technologies each time
a new product is introduced or an existing product is upgraded. In addition, we enter into
framework agreements with these customers, a nd the agreements do not specify the number of
products these customers will purchase from u s in any given year or contain minimum purchase
requirements. Product sales are confirmed with pur chase orders rather than framework agreements,
and the quantities stated in these purchase orders can be amended unilaterally by our customers
before we accept the purchase orders. The loss of or reduction in any key customer ’s business as a
result of our inability to meet the product specifi cations, to adopt new technologies, our exclusion
from a key product development cycle or for any other reason may materially and adversely affect
our results of operations.
Moreover, against the backdrop of geopolitical te nsion and the uncertainties surrounding the
international trade, many brand companies are in the process of diversifying their supply chain
away from China. For example, Customer/Suppli er A is reported to move its complete device
assembly service to countries such as Vietnam a nd India. There can be no assurance that this
customer will not decrease their purchase order from us due to transportation cost or other
considerations. See ‘‘Business — Our Customers — Our Top Five Customers ’’ for further details.
Furthermore, we may be required to make substan tial capital investment outside of China, which
RISK FACTORS
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entails additional risk as detailed in ‘‘ — Our business is subject to legal, regulatory, political,
economic, commercial and other risks associa ted with conducting operations in various
jurisdictions. ’’
If (i) there is any reduction, delay or cancellation of orders from one or more of our key
customers due to a reduction in their product sale s or for any other reason, (ii) one or more of our
key customers select our competitors ’ products; (iii) we lose one or more of our key customers and
are not able to obtain additional or alternative cus tomers that can replace the lost sales volume and
profit or (iv) any of our key customers fails to mak e timely payment for our products, our financial
condition and results of operations may experience material fluctuations and our sales may decline.
Even though we have a diverse and large customer base, given the significant order volume of
our key customers, we anticipate that we may contin ue to generate a substantial part of our revenue
from a limited number of key customers in the forese eable future. If our relationships with these
customer are not sustained or do not develop, we may not be able to continue to generate revenue
and profit from these customers on scales that are comparative to historical levels, or at all.
We may be subject to the risks associated with international trade policies, export controls
and economic sanctions, geopoliti cs and trade protection measures.
We operate within a global supply chain and our products were sold globally as part of
various end products. As such, we face risks associa ted with international trade regulations and
geopolitical developments.
Recent trade tensions, such as the ongoing U.S.-C hina trade dispute, have led to high tariffs,
export controls and other restrictive measures tar geting high-technology goods, semiconductors and
electronics. Regarding tariffs, in February 2025, the president of the United States imposed 20%
tariffs (the ‘‘fentanyl tariffs ’’) on Chinese goods. On April 2, 2025, the president of the United
States imposed a 10% across-the-board tariff on all imports from the U.S. ’s trading partners, along
with additional country-specific t ariffs for various countries (the ‘‘Reciprocal Tariffs ’’,a sa d j u s t e d
from time to time, and, together with the above-mentioned tariffs, the ‘‘Additional US Tariffs ’’).
The United States and China are engaging in trad e discussions, and on May 12, 2025, the United
States stated that they would lower the Recipr ocal Tariffs on China to 10% for 90 days. The
fentanyl tariffs still remain in place. Therefore, the total Additional US Tariffs on China would be
30% while the Reciprocal Tariffs are lowered during the 90 days. On May 28, 2025, the U.S. Court
of International Trade ruled that the Addi tional US Tariffs exceeded the president ’s legal authority.
However, that decision is being appealed. The intern ational tariff policies are rapidly evolving, and
the final outcome, including whether the Curre nt US Tariffs can be implemented as proposed, is
highly uncertain. The Additional US Tariffs may increase the price of the end products imported to
the U.S. market and reduce their competitiveness. Our customers who import the products may wish
to pass the additional tariff on to us, their other suppliers or their customers. Even if the tariff is not
passed on to us, the reduced competitiveness of our customers ’ end products could lead to
reduction or cancellation of their purchase orders from us.
RISK FACTORS
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Regarding U.S. export controls, in October 2022, the Bureau of Industry and Security ( ‘‘BIS’’)
issued an interim final rule (the ‘‘BIS October 2022 IFR ’’) to limit China ’s access to advanced
computing integrated circuits, supercompute rs and advanced semiconductor manufacturing. In
October 2023, the BIS released another interim final rule (the ‘‘BIS October 2023 IFR ’’)t h a t
updated and expanded the restrictions from the BIS October 2022 IFR (together with the BIS ’s
April 2024 interim final rule, the ‘‘BIS 2022/23 IFRs ’’). Among other measures, the BIS 2022/23
IFRs added certain advanced and high-performan ce computing integrated circuits and related
computer commodities to the Commerce Cont rol List, imposing new or expanded license
requirements for items subject to the U.S. Export Administration Regulations ( ‘‘EAR’’) intended
for use in developing or producing supercomputers, advanced node integrated circuits, and
advanced semiconductor manufacturing equipment in certain jurisdictions, including China. Most
recently, in December 2024, the BIS i ssued an interim final rule (the ‘‘BIS December 2024 IFR ’’)
to further limit China ’s access to advanced computing integrated circuits and advanced
semiconductor manufacturing equipment.
In addition to the restrictions introduced above, the BIS also maintains lists of individuals and
entities subject to enhanced expo rt control restrictions. One such list, the Entity List, includes
foreign persons on whom specific trade restrict ions are imposed, such as businesses, research
institutions, government and private organizati ons, individuals, and other legal entities. In recent
years, the United States has added an increasing n umber of entities, including several hundreds in
China, to the Entity List and other restricted or prohibited parties ’ lists. Due to the sudden and
unpredictable nature of these decisions, it is chal lenging to foresee developments in this area. The
United States has recently strengthened export c ontrol and economic sanctions on China, including
adding certain PRC entities or individuals onto Ent ity List and other sanctions lists that limit their
access to certain U.S.-origin goods, software, and technologies, items that contain certain portions
of U.S.-origin goods, software or technologies, and foreign direct products o f certain U.S.-origin
software, technologies or equipment.
These policies have introduced uncertainties to global supply chains, li mited access to critical
raw materials and components, and increased pr oduction and compliance costs for companies
operating in affected industries. For instance, rest rictions on the export of specific technologies or
materials to certain regions could disrupt our ability to procure key inputs or supply solutions to
customers in affected markets, causi ng operational delays or interruptions. If these trade restrictions
or geopolitical tensions escalate, we may face additional risks such as reduced access to key
markets, strained customer relationsh ips and loss of market opportunities.
Increased compliance costs and operational ch allenges arising from adhering to complex
export control regulations and sanctions could s till strain our resources. Tariffs, quotas and local
content rules may further raise production costs, i mpacting the profitability and competitiveness of
our solutions. As the Entity List and other sanc tions and export control laws and regulations,
including the EAR ’s De Minimis Rule and the Foreign Direct Product Rules, continue to evolve,
future sanctions and export controls may signifi cantly impact our business relationships with some
of the key customers or suppliers. If we fail to pro mptly secure alternative customers or sources of
supply on acceptable terms, our business may be ma terially and adversely affected. In addition,
dealing with customers or suppliers that are s ubject to export control or sanctions may pose
RISK FACTORS
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significant risks to our business. These risks incl ude potential disruptions in our supply chain, legal
and regulatory compliance challenges, and the poss ibility of financial penalties. We have no control
over the countries, regions, or destinations to whi ch the customers will sell and/or export their end
products. If the export sales of the customers ’ end solutions are restric ted, prohibited or made
subject to any export controls or economic sancti ons imposed by any jurisdictions, the customers ’
demand in our solutions may decline, and, as a resul t, our business, financial condition and results
of operations may be materially and adversely affected.
Our revenue and cost of sales are subject to foreign exchange fluctuations.
Certain of our trade receivables and trade paya bles, as well as a substantial portion of our
revenue and cost of sales, are denominated in curre ncies other than the functional currency of our
Group, being RMB, which exposes our Group to foreign exchange risks. In 2022, 2023 and 2024,
our non-RMB denominated revenue accounted for 81.9%, 67.5% and 58.6% of our total revenue,
respectively, with US dollars denominated reve nue accounting for 80.4%, 65.9% and 57.5% of our
total revenue. Meanwhile, our non-RMB denominat ed procurement accounted for 60.1%, 54.3% and
46.6% of our total cost of sales, with US dollars denominated procurement accounting for 35.5%,
34.6% and 31.5% of our total cost of sales. Any significant fluctuations in the exchange rates
between foreign currencies and RMB may material ly and adversely affect our results of operations.
Specifically, if the RMB strengthened 10% aga inst the U.S. dollar, we would have recorded
RMB551.2 million, RMB586.9 million and RMB854.9 million less of profit for the year in 2022,
2023 and 2024. In particular, Renminbi has experienced volatility against the U.S. dollar, driven by
a combination of macroeconomic f actors, geopolitical tensions and divergent monetary policies
between China and the United States. After the im position of the recent additional tariffs on exports
from China to the U.S. starting in April 2025 (the ‘‘New Tariffs ’’), the Renminbi has fluctuated
significantly against the U.S. dollar and any fut ure appreciation of the Renminbi against the U.S.
dollar would make our products more expensive i n U.S. dollar terms, thereby reducing our price
competitiveness and demand. Conv ersely, a significant depreciation could inflate the cost of
imported materials or capital eq uipment denominated in foreign c urrencies, impacting our cost
structure. In addition, potential changes in U.S. monetary policy, may lead to a stronger U.S. dollar.
This could further amplify exchange rate volatilit y, create capital outflow pressures in other markets
including China, and affect investor sentiment o r funding costs for Chinese companies operating
internationally.
In 2022, 2023 and 2024, we incurred net foreign exchange gains of RMB231.5 million,
RMB59.5 million and RMB193.2 million. We cannot predict the impact of future exchange rate
fluctuations on our results of operations, and we cannot assure you that we will not incur any net
exchange loss in the future. While we have activ ely managed our currency risks, such measures
may not be effective or economically feasible under al l circumstances. For further details on foreign
currency risk exposures and related sensitivity te st, see Note 41 of Appendix I to this Prospectus.
RISK FACTORS
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We purchase our major raw materials from a selected number of key suppliers.
Procurement of our major raw materials is essen tial to our operations. Glass, in particular,
accounted for a substantial portion of our raw mat erial purchases during the Track Record Period.
In 2022, 2023 and 2024, purchase of raw materials from our five largest suppliers were
RMB9,033.5 million, RMB17,224.6 million and RM B26,064.7 million, representing 23.7%, 37.4%
and 43.6% of our total cost of sales in the respective periods. In addition, purchases from our
largest supplier were RMB6,198. 4 million, RMB7,665.7 million and RMB14,372.7 million in 2022,
2023 and 2024, representing 16.2%, 16.7% and 24.1% of our total cost of sales in the respective
periods. See ‘‘Business — Raw Materials and Supply Chain ’’ for further details. Any deterioration
in or termination of our relationship with these key suppliers or interruptions in their operations
could adversely affect our supply chain and production capabilities.
The stability of our key suppliers ’ operations and strategies is subject to a number of factors
beyond our control, and we cannot assure you that our suppliers ’ management measures would
prevent supply chain disruptions. Disruptions to our key suppliers ’ financial or operational health,
changes in business priorities, or external factor s such as geopolitical tensions, regulatory changes
or market conditions may impact their ability to supply materials. If we fail to procure such raw
materials in a timely manner or on reasonable term s, our product quality, production capacity and
profit margins could be adversely affected. Iden tifying qualified alternative suppliers is a time-
consuming and costly process, with no guaran tee of success. Any delays or inefficiencies in
securing alternatives could lead t o production interruptions, incr eased costs or failure to fulfill
customer orders, adversely affecting our reputation and market competitiveness.
Our growth and profitability depend on general economic conditions and the level of
consumer spending.
Our results of operations depend significantl y on general economic conditions and consumer
spending. Consumer spending is affected by a number of economic and other factors beyond our
control, such as interest rates, conditions in the r eal estate and mortgage markets, unemployment
rates, labor and healthcare costs , access to credit, consumer confid ence, and other macroeconomic
factors affecting the spending behaviour of cons umers. Economic uncertainty and other related
factors may exacerbate negative trends in consume r spending and may cause consumers to postpone
or refrain from purchasing consumer electronics or smart vehicles, which in turn will negatively
affect our customers ’ demands for our products and therefore adversely affect our business, results
of operations and financial condition.
Similarly, our operating results are affected by cyclicality, eith er directly or indirectly, in the
various industries we serve including consumer el ectronics and smart vehicles. These industries are
highly competitive and to a large extent driven by end-user markets. Fluctuations in price and
demand within these industries could lead to reduced sales and declining prices for the end
products, which will in turn affect our revenue and profit margins. As a result of the foregoing
factors, we may experience fluctuations in our re sults of operations and financial performance.
RISK FACTORS
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Specifically, many of our customers in the consum er electronics and smart vehicles industries
face intense competition and constant pressur e to cut the selling prices of their end products.
Accordingly, many of our customers expect ongoing production cost reductions and increased
production efficiencies. If we are not able to m eet such expectations, our business, financial
condition, results of operations and growth prospects will be adversely affected.
Our future success depends on our ability to succes sfully produce new products and effectively
manage our growth.
Our product development efforts are customized pursuant to the requests of our customers as
we often develop new end products together with our customers. Our future success will depend in
part on our ability to develop and market produ cts and manufacturing processes which meet
changing customer needs and to successfully resp ond to technological changes in manufacturing
processes in a cost-effective and timely way. Ma ny of our products have relatively short product
life cycles due to frequent new product launches b y our customers, rapidly changing technologies
and evolving industry standards. In addition, we may devote resources with our customers in the
research and development of new end products that do not enter into markets due to changes in
market trends, and we cannot assure you that we and our customers will successfully develop new
end products through our research and developmen t efforts. We also cannot assure you that we will
be able to keep pace with technological changes t a k i n gp l a c ei nt h em a r k e t .F a i l u r et od os oo r
delay in reacting to the technological changes could have a material and adverse effect on our
business and results of operations.
In order to grow our business, we need to maintain and expand our relationships with our
customers, suppliers and other third parties and establish new business relationships. We will also
be required to improve our existing or implement additional operational and financial systems,
procedures and controls and increase productio n capacity and output. We cannot assure you that our
current and planned operations, personnel, syste ms, internal procedures and controls will be
adequate to support our future growth. In addition, the success of our growth strategies depends on
a number of internal and external factors, such as market acceptance of our products, raw material
costs, our ability to increase pro duction capacity and output and our ability to develop and sell new
products. If we are unable to manage our growth effectively, we may not be able to take advantage
of market opportunities, execute our business str ategies or respond to competitive pressures.
Our research and development efforts are not gua ranteed to yield the results we anticipate.
In order to maintain our competitive position and continue to grow our business, we need to
continuously develop and introduce innovative pro ducts for our existing and potential customers.
The markets of consumer electronics and smart vehicles are characterized by continuous
technological developments and innovation to addr ess increasingly complex and diverse consumer
needs. Accordingly, we emphasize our resear ch and development activities, which require
considerable human resources and capital inves tment. In 2022, 2023 and 2024, our research and
development expenses amounted to RMB2,105.0 million, RMB2,316.6 million and RMB2,784.8
million, accounting for 4.5%, 4.3% and 4.0% of our revenue in the respective years. The year-over-
year increases in our research and development expenses during the Track Record Period were
RISK FACTORS
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primarily due to our strengthened research and dev elopment efforts to keep up with the latest trends
and technologies in our market. However, we canno t assure you that these efforts will be successful
or produce our anticipated results.
Even if our research and development efforts a re successful, we may not be able to apply the
technologies we developed to introduce new pro ducts or upgrade production processes in time to
capture the first-mover advantage, or at all.
If our production capacity is not adequate, our capability to satisfy customer demand could be
hindered.
If our production capacity is not adequate to meet the overall market demand for our products,
especially if we experience increased demand fo r our products as we grow our customer base and
expand our product offerings, our ability to deliver products to our customers on a timely basis will
be affected. Similarly, if we are not able to meet the overall demand for our products or demand for
any of our specific products in particular, especially if the production in any of our production
centers is disrupted in the future or during periods when we experience high demand for some or all
of our products, our ability to satisfy our customers ’ demands will be affected. Under these
circumstances, our business, fina ncial condition and results of operations may be materially and
adversely affected. In the future, as our busine ss grows, we may need to expand our production
capacity through various measures, including th e construction of new production centers. We
cannot assure you that our new premises will be ready in time or our production capacity will
otherwise be successfully expanded. A number of factors could delay our expansion plans or
increase our costs, including (i) failure to raise s ufficient funds to establish and maintain working
capital to operate our business at the new premis es, (ii) failure to obtain environmental and
regulatory approvals, permits or licenses from t he relevant government authorities in a timely
manner, (iii) failure to find new sites for our prod uction centers, (iv) shortage or late delivery of
building materials and production equipment r esulting in late delivery of the premises for
occupancy and use, (v) various factors affecting cons truction progress and resulting in late delivery
of the premises for occupancy and use and (vi) technological changes, capacity expansion or other
changes to our plans for the new premises nece ssitated by changes in market conditions.
Failure to expand our production capacity c ould hinder our capacity to satisfy customer
demand and growth prospects. Furthermore, if market demand declines in the future, we may not be
able to recoup the costs incurred for the constr uction of new premises and the maintenance of
expanded production capacity. A delay in or cancellation of our expansion plans could also subject
us to disputes with various counterparties, incl uding general contractors and sub-contractors,
equipment suppliers, financiers and relevant government authorities. As a result, our business,
financial condition, results of operations and p rospects may be materially and adversely affected.
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If we experience operational disruption or machi nery breakdown in our production facilities,
our inventory level and production schedule may be adversely affected.
Our success and reputation depen d on our ability to deliver quali ty products to our customers
o nt i m ea n di nr e q u i r e dq u a n t i t i e s ,w h i c hi nt u r nrelies on the proper and reliable functioning of our
production processes. Our production processes rely on the stable operation of our production
facilities, particularly machin ery and equipment for key processes. Any operational disruption or
machinery breakdown could direct ly impact our production schedules and stock levels, hindering
our ability to meet customer orders in a timely m anner, thus affecting c ustomer satisfaction.
Operational disruptions or machinery breakdo wns in our production facilities may arise from
unexpected incidents or catastrophic events, including natural disas ters, fires, technical or
mechanical failures, power shortages, explosi ons, labor strikes, epidemics, loss of licenses,
certifications or permits, changes in governmental p lanning for the underlying land, and regulatory
developments. Additionally, instability or shorta ges in electricity supply could halt production
activities, causing delays in fulfilling customer or ders. In the event of such disruptions, maintaining
production volumes and ensuring sufficient stock levels to meet customer demands could be
challenging. Identifying and securing alternat ive facilities or machinery in a timely and cost-
effective manner may not always be feasible. Delays in resuming normal operations could also
affect the quality and schedule of product deliveri es, potentially impactin g customer satisfaction
and damaging our reputation. Any prolonged suspension of operations or significant disruptions in
our production processes could materially and adversely affect our business operations.
If we experience increases in labor costs, shortag e of labor or deterioration in labor relations,
our production costs may be affected.
Labor costs have been fluctuating and may rise in the future. Our staff costs accounted for
28.0%, 21.7% and 19.3% of our total revenue in 2022, 2023 and 2024. Labor cost increases may
cause our production costs to increase, and we may not be able to pass on such increase to our
customers. We also cannot assure you that we wil l not experience any shortage of labor. Any such
shortage could hinder our ability to maintain our production schedules and maintain or expand our
business operations, which could materially and adve rsely affect our business, financial condition,
results of operations and prospects.
We seek to maintain favorable labor relations with our employees as we believe that our long-
term growth depends on the expertise, experience and development of our employees. For details of
our employee training e fforts and welfare, see ‘‘Business — Employees. ’’ However, we cannot
assure you that we will not have any labor disputes in the future. Any deterioration of our labor
relations could result in disputes, strikes, claim s, legal proceedings and reputational damage, labor
shortages that disrupt our business operations, as well as loss of experience, know-how and trade
secrets.
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Future operating results depend upon our abil ity to obtain raw materials in sufficient
quantities on commercial ly reasonable terms from t hird-party suppliers.
Raw materials are the largest component of our total cost of sales. The raw materials that we
mainly use in the manufacturing of our products are glass, metal, ceramics and sapphire. We
procure certain of these raw materials from third-p arty suppliers. The prices of these materials are
susceptible to significant fluct uations due to supply and demand trends in the commodities markets,
transportation costs, government regulations and t ariffs, geopolitical events, changes in currency
exchange rates, price controls, the economic cl imate and other unforeseen circumstances. Our
supply agreements for raw materials may allow pri cing adjustments depending on the contract. Our
results of operations could be adversely affected if we are unable to obtain adequate supplies of
high quality raw materials in a timely manner at r easonable prices, or if there are significant
increases in the costs of raw materials that we could not pass on in full to our customers.
We rely on the timely supply of raw materials in order to carry out our production plans as
scheduled. Any delays or disruptions in such supplies from our suppliers may have a material and
a d v e r s ei m p a c to no u ra b i l i t yt om e e to u rc u s t o m e r s’ demands for our products on time. In addition,
any natural or man-made disasters or other unantic ipated catastrophic eve nts, including adverse
weather, fires, technical or mechanical difficulties, storms, explosions, earthquakes, strikes, acts of
terrorism, wars and outbreaks of pandemics could i mpair the operations of our suppliers and impede
our ability to manufacture and deliver our products to our customers in a timely manner.
Many raw materials, including those that are available from multiple sources, are at times
subject to industry-wide shortages and significa nt commodity pricing fluctuations. We cannot assure
you that we will be able to extend or renew the agreements that we have entered into for the supply
of raw materials on similar terms, or at all. The e ffects of global or regional economic conditions
on our suppliers could also affect our ability to obtain raw materials, and we remain subject to
significant risks of supply shortages and price inc reases, which may adversely affect our business,
results of operations and financial condition.
If we are not able to fully comply with prese nt or future environmental, safety and
occupational health laws and regulations, our business, financial condition and results of
operations may be adversely affected.
Our business is subject to certain laws and regu lations relating to environmental, safety and
occupational heal th matters. See ‘‘Business — Environmental, Social and Corporate Governance. ’’
Under these laws and regulations, we are required to maintain safe production conditions and
protect the occupational health of our employees. However, we cannot assure you that we will not
experience any material accident s or worker injuries in the course of our production process in the
future, or that our risk management measures coul d effectively mitigate the relevant risks and help
us navigate the complex and evolving regulatory environment. Changes in existing ESG-related
laws and regulations or the promu lgation of new ESG-related laws and regulations may increase our
compliance costs, and if we fail to comply with such ESG-related laws and regulations, our
business, results of operations and financi al performance may be adversely affected.
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In addition, our production process produces h azardous wastes, such as heavy metals, and
pollutants, such as wastewater. The disposal of h azardous waste and the discharge of pollutants
from our production operations into the environmen t may give rise to liabilities that may require us
to incur costs to remedy such discharge. We cannot assure you that all situations that will give rise
to material environmental liabilities will be di scovered, or any environmental laws adopted in the
future will not materially increase our operating costs and other expenses. Should the authorities
impose stricter environmental protection standards and regulations in the future, we cannot assure
you that we will be able to comply with such new regulations at reasonable costs, or at all. Any
increase in production costs resulting from the implementation of additional environmental
protection measures or failure to comply with new environmental laws or regulations may have a
material adverse effect on our business, fina ncial condition or results of operations.
If our products do not meet our customers ’ quality standards, our business and financial
condition may be negatively impacted.
If we are unable to provide products that meet our customers ’ demands on a timely basis, our
relationships with our customers will be negativ ely impacted, and, if we are unable to repair these
relationships by increasing our customers ’ confidence in us, we may lose our customers.
Furthermore, our customers conduct quality ch eck and inspection of our structural parts and
modules when they receive these products, and t hey can return or exchange products that do not
meet their quality standards. If we experience a h igh level of product returns or exchanges, our
business and financial condition may be negative ly impacted. Similarly, for our complete device
assembly where we offer a warranty period, if we receive a large number of warranty claims, our
business and financial condition may be negatively impacted.
We face intense competition in the glo bal precision manufa cturing industry.
The global precision manufacturing industry i n which we operate are highly competitive and
include hundreds of companies with widely varying levels of engineering expertise and
sophistication, some of which have achieved subst antial market shares. General competition in our
industries is characterized by price compe tition and rapid technological changes.
We compete with different companies, depending upon the type of product and geographic
area. Some of our competitors may have longer operat ing histories, greater name recognition, larger
customer bases and greater financial, sales and marketing, production, distribution, technical and
other resources and experience than we do. Our competitors ’ greater size in some cases may
provide them with a competitive advantage with r espect to production costs due to economies of
scale and their ability to purchase raw materials and utilities at lower prices. In addition, our
competitors may be able to devote greater re sources to the research and development of
technologies, processes and products that are mo re effective than ours. They may also adapt more
quickly to new or emerging technologies and cha nges in customer demand and requirements. Our
failure to maintain our competitive position wit h respect to technological advances, to adapt to
changing market conditions or to otherwise compete successfully with existing or new competitors
may have a material and adverse effect on our busi ness, financial condition and results of
operations.
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Investment in new business strategies, acquis itions and other forms of business integration
could disrupt our ongoing business and present risks not originally contemplated, and we may
be unable to realize the anticipated benefits, synergies, cost savings or efficiencies from
acquisitions.
We have invested, and may invest in the future , in new business strateg ies or acquisitions.
Endeavors of such kinds are inherently risky, an d future ventures of such nature may involve
significant risks and uncertainties, including di straction of our management from current business
operations, greater than expected liabilities and expenses, inadequate return of capital and
unidentified issues not dis covered in our due diligence.
We may incur significant acquisition, administr ative and other costs in connection with such
transactions, including costs related to the int egration of acquired businesses. These costs may
include unanticipated costs or expe nses, including post-closing asse t impairment charges and legal,
regulatory or contractual costs. In addition, upon c o m p l e t i o no fa ni n v e s t ment or acquisition, we
may allocate significant resources to the integra tion of the acquired business into our existing
business to realize synergetic benefits. The integration process involves certain risks and
uncertainties, some of which are outside our control, and we cannot assure you that we will be
able to realize the anticipated benefits, synerg ies, cost savings or efficiencies. We may also
experience difficulties integrating any investmen ts, acquisitions or partne rships into our existing
business and operations.
Our expansion into new products and servi ces may not yield the intended results.
Our future success also depends on our ability to expand into new markets by developing new
product lines and services or developing new materials to upgrade our existing products. Expanding
i n t on e wp r o d u c tl i n e sa n dm a t e r i a l sr e q u i r e su sto commit substantial resources to research and
develop the technologies required to manufacture these new products and make substantial capital
expenditures in new manufacturing facilities and equipment. The manufacturing of new and
technologically advanced products involves a com plex and uncertain process requiring high levels
of innovation and highly skilled engineering and development personnel, as well as the accurate
anticipation of technological and market trends. We cannot assure you that we will be able to
identify, develop, manufacture and market new pr oducts successfully, if at all, or on a timely basis.
We also may not be able to develop the underlying core technologies necessary to manufacture
these new products and enhancements. In addition, we cannot assure you that the developed and
marketed products will be well received by custome rs. If we fail to successfully develop and market
these new products, our future revenue growth may not meet our expectations.
Furthermore, we are planning to increase our pr oduction capacity by setting up additional
production lines or upgrading our existing production lines. For details, see ‘‘Future Plans and Use
of Proceeds. ’’ In connection with such planned increase in our production capacity, we may incur
higher depreciation and amortisation expenses fro m property, plant and equipment in the future. In
addition, we cannot assure you that there will be sufficient market demand for our products to fully
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utilize our increased production capacity. If our in creased production capacity is not fully utilized,
or if we incur higher-than-expected depreciation and amortisation expenses, our business operations
and financial condition may be adversely impacted.
Failure to collect our trade recei vables or other receivables in a t imely manner may adversely
affect our liquidity.
We may not be able to collect our trade receivables in a timely manner, and we may face
difficulty collecting receivables for reasons b eyond our control, such as customers delaying
payment past the relevant credit periods granted or being unable to pay us when payments are due.
We had total trade receivables with gross carry ing amount of RMB9,153.5 million, RMB9,436.9
million and RMB11,006.5 million as of December 31, 2022, 2023 and 2024, of which 5.2%, 4.7%
and 3.6% were past due. In addition, we had other receivables of RMB140.6 million, RMB151.1
million and RMB141.2 million as of December 3 1, 2022, 2023 and 2024. Our other receivables
primarily represent deposits, intercompany trans actions, receivable on employee security benefits
and lease receivables and are also subject to potent ial impairment. Any significant delay or default
in our collection of trade receivables or other r eceivables may impose pressure on our cash flow
and working capital and reduce the pool of available financial resources relative to our expectations
and expenditure plans, which in turn could have a mat erial adverse effect on our business, financial
condition and results of operations.
We may require additional funding to finance our operations, which may not be available on
terms acceptable to us.
We believe that our current cash and cash equi valents and the anticipated cash flows from
operations will be sufficient t o meet our anticipated cash needs for the next 12 months. We may,
however, require additional cash resources to finance our continued growth or other future
developments, including any investments or ac quisitions we may decide to pursue. To the extent
that our funding requirements exceed our financial r esources, we will be required to seek additional
financing or to defer planned expenditures. We may not be able to obtain additional funds on terms
acceptable to us, or at all. In addition, our ability to raise additional funds in the future is subject to
a variety of uncertainties, including our future fi nancial condition, results of operations, general
market conditions for capital raising and debt fina ncing activities and economic, political and other
conditions in the markets in which we operate.
Furthermore, if we raise additional funds by i ncurring debt, we may be subject to various
covenants under the relevant debt instruments. Servicing such debt obligations could also be
burdensome to our operations. If we fail to service our debt obligations or are unable to comply
with any of these covenants, we could be in defau lt under such debt obligations and our liquidity
and financial condition cou ld be adversely affected.
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Any impairment of goodwill could have a materi al adverse effect on our results of operations.
As of December 31, 2024, our goodwill amounted to RMB2,970.1 million. We test the
goodwill and intangible assets for impairment on an annual basis and when events occur or
circumstances change that indicate that the fai r value of the reporting unit may be below its
carrying amount. Fair value determinations requi re considerable judgment and are sensitive to
inherent uncertainties and changes in estimates an d assumptions regarding revenue growth rates,
capital expenditures, working capital requirement s, tax rates, benefits associated with a taxable
transaction and synergies available to market parti cipants. Declines in market conditions, a trend of
weaker than anticipated financial performance of ou r reporting units, a decline in our share price for
a sustained period of time or an increase in the ma rket-based weighted average cost of capital,
among other factors, are indicators that the carrying value of our goodwill may be impaired. Any
impairment of our goodwill could have a material adverse effect on our results of operations.
We received government grants and preferenti al tax treatment during the Track Record
Period, and any discontinuati on of government grants or preferential tax treatment or any
change in the relevant policies may adversely a ffect our financial performance and results of
operations.
We received government grants and preferential t ax treatment under relevant preferential tax
policies during the Track Record Period. In 2022, 2023 and 2024, several of our subsidiaries were
accredited as ‘‘High New Tech Enterprise ’’ during the Track Record Period and were therefore
entitled to a preferential income tax rate of 15%. In 2022, 2023 and 2024, we recognized income
from government grants of RMB492.5 million , RMB759.0 million and RMB224.8 million.
We may not be able to continue to enjoy similar government grants and preferential tax
treatment in the future as they are non-recurri ng in nature. The discontinuation of any of our
government grants or current tax treatments could adversely impact our net income and materially
increase our tax obligations. Government gran ts and preferential tax treatments are subject to
review of authorities and may be adjusted or r evoked at any time in the future. We cannot
guarantee that government grants and preferential tax treatments to which we and certain of our
subsidiaries are currently entitled would be su ccessfully renewed. There can be no assurance that
the local tax authorities will not, in the future, c hange their position and discontinue any of our
current tax treatments, potentially with retrospective effect.
There is uncertainty about the applicability or recoverability of our deferred tax assets, which
may affect our financial position in the future.
We had deferred tax assets of RMB1,251.8 mil lion, RMB1,187.2 million and RMB1,387.2
million as of December 31, 2022, 2023 and 2024. We recognise deferred tax assets for all
deductible temporary differences, the carry forward of any unused tax credits and any unused tax
losses to the extent that our management determin es that it is probable that we will generate future
taxable profit against which such deferred tax assets can be utilised. See Note 4 to the Accountant ’s
Report set out in Appendix I for further details o n our accounting policy with respect to deferred
tax assets and on the movements of our deferred t ax assets during the Track Record Period. Such
determination requires significant judgment fro m our management on the tax treatments of certain
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transactions as well as assessment on the probabili ty, timing and adequacy of future taxable profits
for the deferred tax assets to be recovered. If such judgments turn out to be imprecise, we may need
to adjust our tax provisions accordingly. In additi on, when we utilise deferred tax assets against our
future taxable profit, we charge them to our income statement accordingly, which in turn would
decrease our profit for the year for such future period. Furthermore, we cannot predict any future
movements in our deferred tax assets and to what extent they may affect our financial position in
the future. Any of these events may have a material adverse effect on our business, financial
condition and results of operations.
Our patents and other non-patent ed intellectual properties ar e valuable assets, and if we are
unable to protect them from infringemen t, our business prospects may be harmed.
Our success will depend in part on our ability to obtain and maintain trade secrets and patent
protection for our technologies, processes and products as well as to successfully enforce our
intellectual property rights and to defend our intelle ctual properties against third-party challenges.
In the event that our issued patents and patent appl ications do not adequately provide coverage for
our technologies, processes or products, we would not be able to exclude others from developing or
utilizing these technologies, processes and products. Furthermore, the degree of future protection of
our proprietary rights is uncertain because leg al means may not adequately protect our rights or
permit us to gain or keep our competitive advantage.
As our technologies and production methods or processes involve unpatented, proprietary
technologies, processes, know-how or data, we p rimarily rely on trade s ecret protection and
agreements to safeguard our interests. However, t rade secrets are difficult to protect. While we use
reasonable efforts to protect our trade secrets, in cluding requiring our employees and suppliers who
may have access to trade secrets to enter into co nfidentiality agreements or other agreements
including confidentiality provisions with us, such persons may unintentionally or willfully disclose
our information to competitors. In addition, confidentiality agreements or other agreements
including confidentiality provi sions may not be enforceable or provide an adequate remedy in the
event of unauthorized use or disclosure. It may be difficult to prove or enforce a claim that a third
party had illegally obtained and used our tra de secrets. In addition , our competitors may
independently develop technologies that are e quivalent to our trade secrets, in which case, we
would not be entitled to enforce our trade s ecrets and our business could be harmed.
We may encounter future litigation by third pa rties based on claims that our technologies,
processes or products infringe the intellect ual property rights of others or that we have
misappropriated the trade secrets of others. We ma y also initiate lawsuits to defend the ownership
of our inventions and our trade secrets. It is difficult, if not impossible, to predict how such
disputes would be resolved. Litigation relating to intellectual property rights is costly and diverts
technical and management personnel from their norm al responsibilities. Furthermore, we may not
be able to prevail in any such litigation or proceedi ng. A determination in an intellectual property
litigation or proceeding that results in a finding of non-infringement by others to our intellectual
property or an invalidation of our patents may result in the use by competitors of our technologies
or processes and sale by competitors of p roducts that resemble our products.
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Any failure or perceived failure to comply with data privacy and security laws could subject
us to potential liabilities.
We collect and store business and transaction d ata generated during or in connection with our
business operations, including o ur business and transactions wi th our customers, suppliers and
business partners. The secure maintenance of suc h data is critical. We process data in compliance
with the applicable legal requirements to ensur e data security. Our operations are subject to a
variety of laws and regulations concerning data privacy and security. Failure to comply with the
increasing number of data protection laws in the PRC, as well as the data security and privacy laws
in other jurisdictions where we operate, could r esult in significant reputational damage and
adversely affect our business performance. To ensu re compliance with evolving data privacy laws,
regulations and standards, it will be necessary to maintain robust internal control and risk
management policies, which will require substa ntial commitment of resources and efforts. The
unauthorized access, loss, or misu se of data could lead to increased security costs, damage to our
reputation, regulatory proceedings, litigation , fines, investigations, remediation efforts,
indemnification expenditures, and disruptions to our business activities. Such incidents may also
result in additional costs asso ciated with defending against legal claims. Concerns from our
customers, employees, and third parties, even i f unfounded, may also have a detrimental impact on
our reputation and operations.
Our business depends substantially on the continuing efforts of our senior management, and
our ability to attract and retain key employees .
Our future success depends substantially on the continued services of our senior management.
If one or more members of our senior management are unable or unwilling to continue serving in
their present positions, we may not be able to re place them readily, if at all. As a result, our
business may be severely disrupted, and we may incur additional expenses to recruit and retain new
officers. In addition, if any member of our senior management joins a competitor or forms a
competing company, we may lose some of our custom ers and more importantly, our trade secrets.
We protect our trade secrets by entering into confi dentiality agreements, which contain the non-
competition clauses, with each member of our se nior management. However, we cannot assure you
that, if any disputes arise between our senior man agement and us, these confidentiality clauses
could be adequately enforced in our favour.
Our success also depends to a significant e xtent on the skills and efforts of our key
managerial, technical and other employees and upon our ability to continue to attract, retain and
motivate qualified personnel. We compete with oth er manufacturing companies for technical and
other skilled employees, and the competition fo r such employees is intense. We cannot assure you
that we will be able to continue to attract and retain qualified employees essential to our growth.
The loss of the services of these key employees or the inability to attract or retain qualified
employees could have a material adverse effect on us.
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Our business may be impacted by political events, war, terrorism, public health issues, natural
disasters and other business interruptions.
War, terrorism, geopolitical uncertainties, public health issues and other business interruptions
could cause damage or disruption to international commerce and the global economy, and thus
could have a material adverse effect on us, our customers and suppliers. Our business operations
are subject to interruption by, among others, natura l disasters, whether as a result of climate change
or otherwise, fire, power shortages and other indus trial accidents, terroris t attacks and other hostile
acts, labor disputes, public health issues, demonstrations or strikes, and other events beyond our
control. Such events could decrease demand for our products, make it difficult or impossible for us
to make and deliver products to our customers , or to receive materials from our suppliers, and
create delays and inefficiencies in our supply chain. In the event of a natural disaster or major
public health issue, we could incur significant losses, require substantial recovery time and
experience significant expenditures in order to resume operations.
During the Track Record Period, we sold certa in products to a customer on the Entity List.
During the Track Record Period, we sold produ cts including back covers and middle frames
for smartphones and other consumer electronics to a certain customer on the U.S. Bureau of
Industry and Security ’s Entity List (the ‘‘Entity List ’’). Items subject to the EAR are restricted from
being supplied to this customer without a li cense. Under the EAR, a non-U.S.-produced item is
s u b j e c tt ot h eE A Ri fi tm e e t st h e ‘‘De minimis ’’ Rule, where U.S.-origin controlled items
incorporated or bundled exceed a certain ratio, or the Foreign Direct Product Rule, where certain
U.S.-controlled software or technologies are used during the production process.
During the Track Record Period and up to the La test Practicable Date, all the products we
provided to this customer were manufactured in China and did not meet the ‘‘De minimis ’’ Rule or
the Foreign Direct Product Rule. Therefore, after consulting with our legal advisor on this issue, we
believe that the products we sold to this customer during the Track Record Period were not subject
to the EAR and we can sell these products to this cus tomer without any U.S. export control license.
Our sales may be influenced by seasonality.
Our results of operations are affected by seas onal fluctuations in the demand for consumer
electronics and smart vehicles, whi ch in turn influence our customers ’ demands for our products.
We usually experience higher sales volume in the fourth quarter of a year due to increased
shopping activities during the holiday season. Accordingly, various aspects of our operations,
including sales, production utilization, working capital and operating cash flows, are exposed to the
risks associated with seasonal fluctuations in the demand for our products, and our quarterly or half
year results may not reflect our full year results.
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Our business is subject to legal, regulatory, po litical, economic, commercial and other risks
associated with conducting operations in various jurisdictions.
We derive a significant portion of our reve nue overseas. Accordingly, we have faced and
continue to face numerous risks, including legal, re gulatory, political, economic, commercial and
other risks associated with conducting operati ons in various jurisdictions, any of which could
negatively affect our financial perform ance. These risks include the following:
. legal, regulatory, political, economic and commercial instability and uncertainty;
. changes in foreign tax rules, regulations an d other requirements, such as changes in tax
rates and statutory and judicial interpretations of tax laws;
. changes in international trade policies and regulations including those in relation to
economic sanctions, export controls, and imp ort restrictions, as well in trade barriers
such as imposition of tariffs;
. difficulty in coping with possible conflict of laws resulting from import/export controls
measures of different jurisdictions where we operate;
. changes in foreign country regulatory requi rements, including data privacy laws;
. complexities relating to compliance with foreign anti-bribery, anti-corruption and anti-
money laundering regulations and antitrust laws;
. difficulty in obtaining or enforcing intellectual property rights;
. difficulty in enforcing agreements and colle cting overdue receivables through local legal
systems;
. changes in geopolitical situations especially those in jurisdictions where we do business;
. strict foreign exchange controls and cash repatriation restrictions;
. inflation and/or deflation, and changes in interest rates;
. trade customer insolvency and the inability to collect accounts receivable;
. misconduct by our customers beyond our contr ol, including but not limited to breaching
the agreements with them and laws and regula tions of various jurisdictions that are
applicable to them;
. labor disputes and work stoppages at our operations and suppliers; and
. increased costs associated with maintaining the ability to understand local markets and
follow their trends.
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In addition, as we operate in many different juri sdictions, we have conducted cross-border
related party transactions in our ordinary cour se of business, which may result in an increased
likelihood of tax audits, possibly leading to challenges in relation to, amongst other things, tax
residence, permanent establi shment and transfer pricing.
Our insurance coverage may not cover all losses.
We maintain different types of insurance polici es to cover our operations, including product
liability and employer liability. However, there may be circumstances under which certain types of
losses, damages and liabilities are not covered by our insurance policies. If we were to incur
substantial losses and liabilities that are not c overed by our insurance policies, we could suffer
significant costs and diversion of our resources , which could have a material and adverse effect on
our business, financial condition and results of operations.
Failure to detect or prevent fraudulent or ill egal activities or other misconduct by our
employees, customers, suppliers or other bus iness partners may materially and adversely
affect our business.
We are exposed to risks of fraudulent or illegal activities or other misconduct by our
employees, customers, suppliers or other busine ss partners in the course of our business operations.
Such misconduct could include fraud, corruption, br ibery, collusion or other violations of applicable
laws, including anti-corruption and anti-bribery la ws, which could expose us to liabilities, fines and
penalties imposed by government authorities, as we ll as significant reputational damage. We cannot
assure you that our measures in place to monitor an d prevent such misconduct would be effective at
all times in identifying or mitigating all potential r isks. Instances of misconduct may still occur, and
any undetected or unresolved incidents could l ead to adverse consequences, such as financial
losses, legal liabilities or disruptions to our operations.
Furthermore, any publicized instances of frau dulent or illegal activiti es associated with our
employees or business partners could harm our rep utation, reducing custom er and partner trust in
our business. If such misconduct involves our empl oyees, we could also face liabilities to third
parties and penalties imposed by authorities. Accordingly, any failure to detect and prevent
fraudulent or illegal activities or other miscondu ct by our employees, customers, suppliers or other
business partners could materially and adversely a ffect our business, financ ial condition and results
of operations.
Our risk management and internal control systems may not be adequate or effective.
We have established risk management and in ternal control systems in relation to our
operations. However, due to the inherent limit ations in the design and implementation of risk
management and internal control systems, includi ng the identification and evaluation of risks,
internal control variables and the communication of information, we cannot assure you that such
systems will be able to identify, mitiga te and manage all our exposure to risks.
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Our risk management and internal contro ls also depend on the proficiency of and
implementation by our employees. We cannot assur e you that such implementation will not involve
any human error or mistakes, which may material ly and adversely affect our business, financial
condition and results of operations.
Our operations rely on complex information technology systems and networks, and our
business and reputation may be impacted by info rmation technology system failures, network
disruptions or cybersecurity breaches.
We rely extensively on information technology systems to manage and operate our business,
some of which are supported by third party vendor s including cloud-based systems and managed
service providers. If these systems fail to func tion properly, experience security breaches or
disruptions or do not provide the anticipated benefi ts, our ability to manage our operations could be
impaired, which could have a material adverse impact on our results of operations and financial
condition.
We may be subject to information technology system failures or network disruptions caused
by natural disasters, accidents, power disruptions , telecommunications fail ures, acts of terrorism or
war, computer viruses, physical or electronic br eak-ins, or other events or disruptions. System
redundancy and other continuity measures may b e ineffective or inadequate, and our business
continuity and disaster recovery planning may not b e sufficient for all eventualities. Such failures
or disruptions could adversely impact our busin ess by, among other things, preventing access to our
internet services, interfering with customer tran sactions or impeding the assembling and shipping of
our products. These events could ma terially and adversely affect our r eputation, financial condition
and operating results.
Our information technology systems may be subj ect to computer viruses or other malicious
codes, unauthorized access attem pts, phishing and other cybera ttacks. We continue to assess
potential threats and make investments seeking t o address and prevent these threats, including
monitoring and upgrading our networks and syste ms and conducting employee trainings. However,
because the techniques used in these cyberattack s change frequently and may be difficult to detect
for periods of time, we may face difficulties in ant icipating and implementing adequate preventative
measures. To date, we have not been materially affected by cyberattacks; however, we cannot
guarantee that our security efforts will prevent breaches or breakdowns to our databases or systems.
If the information technology systems, networks or service providers we rely upon fail to function
properly or if we suffer a loss, significant unava ilability of or disclosure of our business or
stakeholder information and our business continuit y plans do not effectively address these failures
on a timely basis, we may be exposed to reputati onal, competitive and business harm as well as
litigation and regulator y action, including administrativ e fines. The costs and operational
consequences of responding to breaches and imp lementing remediation measures could be
significant.
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Delivery delays, poor handling by third party log istics service providers or disruptions in the
transportation network may ad versely affect our business.
We use third party logistics service providers to deliver certain of our products to our
customers. Disputes with or terminations of our cont ractual relationships with our logistics service
providers could result in delayed delivery of products or increased costs. We may not be able to
continue or extend relationships with our current lo gistics service providers on terms acceptable to
us or establish relationships with new logistics service providers to ensure accurate, timely and
cost-efficient delivery services. If we are unabl e to maintain or develop good relationships with
logistics service providers, it may inhibit our abil ity to offer products in sufficient quantities, on a
timely basis, or at prices acceptable to our customers. If there is any breakdown in our relationships
with our preferred logistics service providers, w e may suffer business interruptions that could
materially and adversely affect our business, financ ial condition and results of operations. As we do
not have any direct control over these logistics ser vice providers, we cannot guarantee their quality
of services. If there is any delay in delivery , damage to products or any other issue due to
transportation shortages, natural disasters, lab our strikes or other factors, we may lose customers
and sales and our reputation may be tarnished. In addition, our suppliers sometimes deliver
materials to us through third party logistics servi ce providers. Delays in delivery could adversely
impact our suppliers ’ ability to timely deliver materials to us, and our ability to deliver to our
customers.
Unfavorable results of legal and regulatory pro ceedings could adversely affect our business
and financial condition and performance.
We may be subject to a variety of litigation and legal compliance risks. Unfavorable outcomes
regarding these assessments could have a material a dverse effect on our financial statements in any
particular reporting period. Results of legal an d regulatory proceedings cannot be predicted with
certainty and for some matters, such as class actio ns, no insurance is cost-effectively available.
Regardless of merit, legal and regulatory proceedi ngs may be time-consuming, costly and disruptive
to our operations and could divert the attention of our management and key personnel from our
business operations. Such proceed ings could also generate significant adverse publicity and have a
negative impact on our reputation, regardle ss of the existence or amount of liability.
We have awarded and may continue to award equity instruments under equity incentive
plans, which may cause shareholding dilution to our Shareholders and result in increased
share-based compensations.
We adopted a series of share incentive schemes since our incorporation. See ‘‘Appendix IV —
Statutory and General Information — The Share Incentive Scheme. ’’ In 2023 and 2024, we
recorded share-based compensations of RMB54. 3 million and RMB161.4 million, respectively. To
further incentivize our employees, we may adopt o ther equity incentive plans and award additional
equity incentives in the future. Issuance of Shares with respect to our equity incentive plan may
dilute the shareholding of our ex isting Shareholders and inc ur substantial share-based
compensations that could have a material and adverse impact on our results of operations.
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RISKS RELATING TO THE JURISDICTIONS IN WHICH WE OPERATE
It may be complex to effect service of process upon us or our management or to enforce
against them or us any judgments obtained from foreign courts.
We are a company incorporated under the PRC l aws and a majority of our assets are located
in mainland China. In addition, most of our Director s, Supervisors and senior management reside in
mainland China. As a result, it may be complex for investors to effect service of process outside of
mainland China upon us, our Directors, Supervisor s or senior management or to enforce judgments
obtained against us in courts outside mainland Ch ina. A judgment of a court of another jurisdiction
may be reciprocally recognized or enforced in main land China only if the jurisdiction has a treaty
with mainland China or if the jurisdiction has b een otherwise deemed by the courts of mainland
China to satisfy the requirements for reciprocal recognition, subject to the satisfaction of other
requirements. However, mainland China is not a p arty to treaties providing for the reciprocal
enforcement of judgments of courts with certain f oreign countries such as the United States, and
enforcement in mainland China of judgments of a cou rt in these jurisdictions may consequently be
difficult or impossible. On January 14, 2019, the Supreme People ’s Court and the Department of
Justice under the Government of the Hong Kong Special Administrative Region signed the
Arrangement on Reciprocal Recognition and Enf orcement of Judgments in Civil and Commercial
Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region ( 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)( t h e ‘‘2019 Arrangement ’’),
which became effective on January 29, 2024. The 2019 Arrangement regulates, among others, the
scope and particulars of judgments, the procedur es and methods of the application for recognition
or enforcement, the review of the jurisdiction of the court that issued the original judgment, the
circumstances where the recognition and enfo rcement of a judgment shall be refused, and the
approaches towards remedies for the reciprocal r ecognition and enforcemen t of judgments in civil
and commercial matters between the courts in mainland China and those in Hong Kong. However,
the 2008 Arrangement will remain applicable to a ‘‘choice of court agreement in writing ’’ within
the meaning of 2008 Arrangement which is made before the effective date of 2019 Arrangement.
Uncertainties embedded in the legal systems of certain geographic markets where we operate
could affect our business, financial c ondition and results of operations.
Legal systems of the geographic markets where we operate vary significantly from jurisdiction
to jurisdiction. Some jurisdictions have a civil law system based on written statutes and others are
b a s e do nc o m m o nl a w .U n l i k et h ec o m m o nl a ws y s tem, prior court decisions under the civil law
system may be cited for reference but have limited precedential value.
The legal systems of some geographic markets where we operate are evolving. Laws and
regulations that are recently enacted may not suffici ently cover all aspects of economic activities in
such markets. In particular, the interpretation an d enforcement of these laws and regulations may be
subject to future implementations, and the appli cation of some of these laws and regulations to our
businesses may need further clarification. Sinc e local administrative and court authorities are
authorized to interpret and implement statutory pr ovisions and contractual terms. Local courts may
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have discretion to reject enforcement of foreign awards or arbitration awards which may affect our
judgment on the relevance of legal requirements an d our ability to enforce our contractual rights or
claims.
Furthermore, there are other circumstances where key regulatory definitions may not be
entirely precise or clear, or where interpretati ons that are adopted by regulators are inconsistent
with interpretations adopted by a court in analogous cases. As a result, we may not be aware of our
violation of certain policies or rules until sometime after the violation. In addition, administrative
and court proceedings in certain of our geographic markets may be protracted, resulting in
substantial costs and diversion of resources and management attention.
It is possible that a number of laws and regulations may be adopted or construed to be
applicable to us in our geographic markets and e lsewhere that could affect our businesses and
operations. Scrutiny and regulations of the indust ries in which we operate may further increase, and
we may be required to devote additional legal and ot her resources to addressing these regulations.
Changes in current laws or regulations or the imposition of new laws and regulations in our
geographic markets may slow the growth of our i ndustries and affect our business, financial
condition and results of operations.
We are a mainland China enterprise and we are subject to mainland China tax on our global
income and any gains on the sales of H Shares and dividends on the H Shares may be subject
to mainland China income taxes.
Under the PRC EIT Law and its implementation r ules, subject to any applicable tax treaty or
similar arrangement between mainland China and a non-mainland China investor ’s jurisdiction of
residence that provides for a different income ta x arrangement, mainland China withholding tax at
the rate of 10% is normally applicable to dividends from mainland China sources payable to
investors that are non-mainland China resident ent erprises, which do not have an establishment or
place of business in mainland China, or which have an establishment o r place of business in
mainland China if the relevant income is not effect ively connected with such establishment or place
of business. Any gains realized on the transfer of shares by such investors are subject to a 10%
mainland China income tax rate if such gains are regarded as income from sources within mainland
China unless a treaty or similar arrangement provides otherwise.
Under the PRC Individual Income Tax Law ( 《中華人民共和國個人所得稅法》)a n di t s
implementation rules, dividends from sources within mainland China paid to foreign individual
investors who are not mainland China residents are generally subject to a mainland China
withholding tax at a rate of 20% and gains from mai nland China sources realized by such investors
on the transfer of shares are generally subject to a 20% mainland China income tax rate, in each
case, subject to any reduction or exemption set for th in applicable tax treaties and laws in mainland
China. Pursuant to the Circular on Questions C oncerning the Collection of Individual Income Tax
Following the Repeal of Guo Shui Fa [1993] No. 045 ( 《關於國稅發[1993]045 號文件廢止後有關個
人所得稅徵管問題的通
知》) (Guo Shui Han [2011] No. 348) ( 國稅函[2011]348 號) dated June 28,
2011, issued by the SAT, dividends paid to non-mainland China resident individual holders of H
Shares are generally subject to individual income tax of mainland China at the withholding tax rate
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of 10%, in which the non-mainland China resident individual holder of H Shares resides as well as
the tax arrangement between mainland China and Hong Kong. Non-mainland China resident
individual holders who reside in jurisdictions th at have not entered into tax treaties with mainland
China are subject to a 20% withholding tax on dividends received from us. However, pursuant to
the Circular Declaring that Individual Income Tax Continues to be Exempted over Income of
Individuals from 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》)
issued by the MOF of mainland China and the SAT on March 30, 1998, gains of individuals
derived from the transfer of listed shares of enterprises may be exempt from individual income tax.
In addition, on December 31, 2009, the MOF, the SAT and the CSRC jointly issued the Circular on
Relevant Issues Concerning the Collection of I ndividual Income Tax over the Income Received by
Individuals from Transfer of Listed S hares Subject to Sales Limitation ( 《關於個人轉讓上市公司限
售股所得徵收個人所得稅有關問題的通知》) (Cai Shui [2009] No. 167) which states that
individuals ’ income from the transfer of listed shares on ce rtain domestic exchanges shall continue
to be exempted from individual income tax, except f or the relevant shares which are subject to sales
restrictions as defined in the Supplementary Circu lar on Relevant Issues Concerning the Collection
of Individual Income Tax over the Income Receiv ed by Individuals from Transfer of the Listed
Shares Subject to Sales Limitations ( 《關於個人轉讓上市公司限售股所得徵收個人所
得稅有關問題
的補充通知》) (Cai Shui [2010] No. 70). As of December 31, 2024, the aforesaid provision has not
expressly provided that individual income tax sh all be collected from non-mainland China resident
individuals on the sale of shares of mainland China resident enterprises l isted on overseas stock
exchanges.
If mainland China income tax is imposed on gain s realized from the transfer of our H Shares
or on dividends paid to our non-mainland China resident investors, the value of your investment in
our H Shares may be affected. Furthermore, our Shar eholders whose jurisdict ions of residence have
tax treaties or arrangements with mainland China may not qualify for benefits under such tax
treaties or arrangements.
Failure to comply with the PRC Social Insurance Law and the Regulation on the
Administration of Housing Provident Fund s or other PRC labor related regulations may
subject us to fines and other legal or administrative sanctions.
Companies operating in the PRC have to participate in various employee benefit plans
required by the government, including certain social insurance, housing provident funds and other
welfare-oriented payment obligations. The requ irement and implementation of employee benefit
plans may vary considering the different levels of economic development in different locations in
the PRC, and the relevant government authorit ies may examine whether an employer has made
adequate payments of the requisite employee benefit payments, employers who fail to make
adequate payments as required may be subject to la te payment fees, fines and/or other penalties.
There is no assurance that our current practice will at all times be deemed in full compliance with
relevant laws and regulations by government authorities. During the Track Record Period, there are
instances where social insurance and housing provident fund contributions for some of our
employees were not fully based on their actual salary levels. See ‘‘Business — Non-compliance
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Incidents — Social Insurance and Housing Provident Funds. ’’ As a result of such non-compliance,
we may be required to pay any shortfall in social in surance contributions within a prescribed time
period and to pay penalties if we fail to do so.
In addition, as the interpretation and impleme ntation of the Labor Contract Law, the Social
Insurance Law and other labor related regulations are evolving, we cannot assure you that our
employment practice are, or will in the future be, fully in compliance with labor-related laws and
regulations in the PRC, which may subject us to labor disputes or government investigations, we
cannot assure that such risks we may be exposed to will not have any adverse effect on our
reputation, business, results of ope rations and financial condition or otherwise divert our resources
in handling any lawsuits, legal proceedings or complaints.
We had certain non-compliance incidents relating to employees ’ overtime work during the
Track Record Period.
During the Track Record Period, certain of our employees ’ overtime hours exceeded the
legally prescribed number of hours under PRC laws and regulations. According to PRC laws and
regulations, employees ’ daily working hours shall not exceed eight hours, and the average weekly
working hours shall not exceed 44 hours. If it is ne cessary to extend working hours due to special
circumstances, the extension shall not exceed th ree hours per day, provided that the health of the
employees is ensured. Additionally, the tot al extension shall not exceed 36 hours per month.
Therefore, under PRC laws and regulations, where an extension of working hours is required due to
special circumstances, working hours shall n ot exceed 11 hours per day or 210 hours per month.
According to PRC laws and regulations, in the case of overtime work exceeding the legally
prescribed number of hours, the Labor and Social Security Administrative Department will give the
employer a warning and order it to make rectific ations within a prescribed time period and may
impose a fine of more than RMB100 but less than RMB500 for each employee who is affected. We
had not received any warnings or orders from the Labor and Social Security Administrative
Department for rectifications or f i n e si nr e l a t i o nt oo v e r t i m ew o r kd u r i n gt h eT r a c kR e c o r dP e r i o d
and up to the Latest Practicable Date. As such, as advised by our PRC Legal Advisor, we believe
that the risk of us being subject to fines for employee ’s overtime work during the Track Record
Period is low, and the overtime incidents do not ha ve any material impact on our business, results
of operations or financial condition. However, we cannot assure you that we will not be subject to
any fines, penalties or litigation in relation to these incidents in the future. For illustration purposes,
based on the number of our employees as of D ecember 31, 2024, assuming all our employees
engaged in overtime work exceeding the legal pre scribed number of hours, the potential fine we
may face for such overtime work ranges bet ween RMB13.6 million and RMB68.2 million,
accounting for approximately 0.4% and 1.9% of our profit for the year in 2024.
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RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of mainland China and
Hong Kong.
As our A Shares are listed on the Shenzhen Stock Exchange and our H Shares will be listed
on the Main Board in Hong Kong, we will be requi red to comply with the listing rules (where
applicable) and other regulatory regimes of both ju risdictions, unless an exemption is available or a
waiver has been obtained. Accordingly, we ma y incur additional costs and resources in
continuously complying with all sets of l isting rules in the two jurisdictions.
The characteristics of the A Share and H Share markets may differ.
Our A Shares are listed and traded on the Shenz hen Stock Exchange. Following the Global
Offering, our A Shares will continue to be traded on the Shenzhen Stock Exchange and our H
Shares will be traded on the Hong Kong Stock Ex change. Under current laws and regulations of
mainland China, without the approval from the relevant regulatory authorities, our H Shares and A
Shares are neither interchangeable nor fungible , and there is no trading or settlement between the H
Share and A Share markets. With different trading characteristics, the H Share and A Share markets
have divergent trading volumes, liquidity and invest or bases, as well as different levels of retail and
institutional investor participation. As a resu lt, the trading performance of our H Shares and A
Shares may not be comparable. Nonetheless, f luctuations in the price of our A Shares may
adversely affect the price of our H Shares, and vice versa. Due to the different characteristics of the
H Share and A Share markets, the historical prices of our A Shares may not be indicative of the
performance of our H Shares. You should therefore not place undue reliance on the trading history
of our A Shares when evaluating the investment decision in our H Shares.
There has been no prior public market for our H Shares, and an active trading market for
our H Shares may not develop or be sustained.
Prior to the Global Offering, there was no public market for our H Shares. We cannot assure
you that a public market for our H Shares with adequate liquidity and trading volume will develop
and be sustained following the completion of the Global Offering. In addition, the Offer Price of
our H Shares is expected to be fixed by agreem ent between the Overall Coordinators (for
themselves and on behalf of the Underwriters) a nd us and may not be an indication of the market
price of our H Shares following the completion o f the Global Offering. If an active public market
for our H Shares does not develop following the completion of the Global Offering, the market
price and liquidity of our H Shares may be materially and adversely affected.
The price and trading volume of our H Shares may b e volatile, which could lead to substantial
losses to investors.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of the
securities in Hong Kong and elsewhere in the world. The Hong Kong Stock Exchange and other
securities markets have, from time to time, expe rienced significant price and trading volume
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volatility that are not related to the operating pe rformance of any particular company. The business
and performance and the market price of the shares of other companies engaging in similar business
may also affect the price and trading volume of our H Shares. In addition to market and industry
factors, the price and trading volume of our H Shar es may be highly volatile for specific business
reasons, such as fluctuations in our revenue, earnings, cash flows, investments, expenditures,
regulatory developments, relationships with our cus tomers and suppliers, movements or activities of
key personnel, or actions taken by competitors. Mo reover, shares of other companies listed on the
Hong Kong Stock Exchange have experienced price volatility in the past, and it is possible that our
H Shares may be subject to changes in price not directly related to our performance.
Future sales or perceived sales of substantia la m o u n t so fo u rHS h a r e si nt h ep u b l i cm a r k e t
could have a material adverse e ffect on the prevailing market price of our H Shares and our
ability to raise additional capital in the future , or may result in dilution of your shareholding.
The market price of our H Shares and our abilit y to raise equity capital in the future at a time
and price that we deem appropriate could be negat ively impacted 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,
especially by our Directors, executive officers and Controlling Shareholders, or the issuance of new
shares or other securities, or the perception that su ch sales or issuances may occur. In addition, our
Shareholders may experience dilution in their hol dings if we issue more securities in the future.
Furthermore, we may issue Shares pursuant to any future share option incentive schemes, which
would further dilute our Shareholders ’ interests in our Company. New shares or share-linked
securities issued by us may also confer rights and p rivileges that take priority over those conferred
by the H Shares. Shares held by our Controlling Sha reholders are subject to c ertain lock-up periods
beginning on the date on which trading in our Shares commences on the Hong Kong Stock
Exchange. While we currently are not aware of any intention of such persons to dispose of
significant amounts of their Shares after the exp iry of the lock-up periods, we cannot assure you
that they will not dispose of any Shares they own now or may own in the future. Market sale of
Shares by such Shareholders and the availability of these Shares for future sale may have a negative
impact on the market price of our Shares.
The interests of our Control ling Shareholders may not align with the interests of the
Shareholders as a whole.
Immediately following the completion of the Gl obal Offering, the Controlling Shareholders
will, directly and indirectly, hold approximately 59.03% of the total issued share capital in issue
(assuming the Over-allotment Option and the Offe r Size Adjustment Option are not exercised). The
Controlling Shareholders will, through their votin g power at the general meetings, have significant
influence over our business and affairs, including decisions in respect of mergers or other business
combinations, acquisition of assets, issuance of add itional Shares or other equity or debt securities,
timing and amount of dividend payments and am endments to the Articles of Association. The
Controlling Shareholders may not act in the best int erests of our minority Shareholders. In addition,
without the approval of the Controlling Sharehol ders, we could be prevented from entering into
transactions that could be beneficial to us or the Shareholders as a whole. This concentration of
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ownership may also discourage, delay or prevent a change in control of us, which could deprive the
Shareholders of an opportunity to receive a premium for the Shares as part of a sale of the
Company and may significantly reduce the price of the Shares.
Our historical dividends may not be indicative of our future dividend policy, and we cannot
assure you whether and when we will pay dividends in the future.
We have declared dividends in the past. However, we cannot assure you that dividends of any
amount will be declared or distributed by us in any year in the future. Under the applicable laws
and regulations of mainland China, the payment of dividends may be subject to certain limitations,
and the calculation of our profit under the Accounting Standards for Business Enterprises may
differ in certain respects from the calculation under IFRS. The declaration, payment and amount of
any future dividends are at the discretion of our Dir ectors, after taking into account various factors,
including our results of operations, cash flows, cap ital expenditure requirements, market conditions,
our strategic plans and prospects for business dev elopment, regulatory restrictions on the payment
of dividends and other factors as our Directors m ay deem relevant, and subject to the approval at
Shareholders ’ meeting. Any declaration and payment a s well as the amount of dividends will be
subject to our constitutional doc uments and the applicable laws an d regulations of mainland China.
See ‘‘Financial Information — Dividend Policy ’’ for further details. No di vidend shall be declared
or payable except out of our profits and reserves lawfully available for distribution. Our historical
dividends should not be taken as indicati ve of our dividend policy in the future.
Under the existing foreign exchange regulations of mainland China, payments of current
account items, including profit distributions, inter est payments and trade and service-related foreign
exchange transactions, can be made in foreign currencies without prior SAFE approval by
complying with certain procedural requiremen ts. However, approval from or registration with
competent government aut horities is required where RMB is to be converted into foreign currency
and remitted out of mainland China to pay capi tal expenses such as the repayment of loans
denominated in foreign currencies. If the forei gn exchange control system prevents us from
obtaining sufficient foreign currencies to satis fy our foreign currency demands, we may not be able
to pay dividends in foreign currencies to our Shareholders. Further, we cannot assure you that new
regulations will not be promulgated in the future tha t would have the effect of further restricting the
remittance of RMB into or out of mainland China.
We are exposed to risks associated with th e potential spin-off of Lens Taizhou.
We are exposed to risks associated with the potential spin-off of Lens Taizhou. We have
applied for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with
the requirements in paragraph 3(b) of Practice Note 15 to the Hong Kong Listing Rules such that
we are able to spin-off Lens Taizhou for listing wit hin three years of the Listing. While we did not
have any specific plans with respect to the tim ing, the listing venue, or other details of any
potential spin-off listing as of the Latest Pr acticable Date, we continue to explore the ongoing
financing requirements for our businesses and ma y consider a spin-off listing of Lens Taizhou
within the three year period subsequent to the Listing. As we did not have any specific spin-off
plan as of the Latest Practicable Date, there is no material omission of any information relating to
RISK FACTORS
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any possible spin-off in this Prospectus. We cannot assure you that any spin-off will ultimately be
consummated, whether within the three-year period after the Listing or otherwise, and any such
spin-off will be subject to, among other thi ngs, market conditions and Shareholders ’ a p p r o v a la tt h e
time. In the event that we proceed with the spin-off of Lens Taizhou, the Company ’s interest in
Lens Taizhou (and its corresponding contribution to the financial results of our Group) will be
reduced accordingly. See ‘‘Waivers from Strict Compliance with the Hong Kong Listing Rules —
Waiver in respect of Strict Compliance with Pract ice Note 15 and the Three-year Restriction on
Spin-offs. ’’
You should not place any reliance on any inform ation released by us in connection with the
listing of our A Shares on the Shenzhen Stock Exchange.
As our A Shares are listed on the Shenzhen Stock Exchange, we have been subject to periodic
reporting and other information disclosure requi rements in mainland China . As a result, from time
to time, we publicly release information relat ing to us on the Shenzhen Stock Exchange or other
media outlets designated by the CSRC. However, the information announced by us in connection
with our A Shares listing is based on regulatory requi rements of the securities authorities, industry
standards and market practices in mainland China, which are different from those applicable to the
Global Offering. The presentation of financial a nd operational information for the Track Record
Period disclosed on the Shenzhen Stock Excha nge or other media outlets may not be directly
comparable to the financial and operational information contained in this Prospectus. As a result,
prospective investors in our H Shar es should be reminded that, in mak ing their investment decisions
as to whether to purchase our H Shares, they should rely only on the financial, operating and other
information included in this Prospectus. By applying to purchase our H Shares in the Global
Offering, you will be deemed to have agreed that you will not rely on any information other than
that contained in this Prospectus and any form al announcements made by us in Hong Kong with
respect to the Global Offering.
You should read the entire Prospectus carefull y and only rely on the information included in
this Prospectus to make your investment decis ion, and we strongly caution you not to rely on
any information contained in press articles or other media coverage relating to us, our Shares
or the Global Offering.
We strongly caution our investors not to rely on an y information contained in press articles or
other media regarding us, our Shares and the Global Offering. Prior to the publication of this
Prospectus, there may be press and media coverage regarding the Global Offering and us. Such
press and media coverage may include references to certain information that does not appear in this
Prospectus, including certain oper ating and financial information and projections, valuations and
other information. We have not authorized the disclosure of any such information in the press or
media and do not accept any responsibility for any such press or media coverage or the accuracy or
completeness of any such information or public ation. We make no representation as to the
appropriateness, accuracy, completeness or reliabi lity of any such information or publication. To the
extent that any such information is inconsistent or conflicts with the information contained in this
Prospectus, we disclaim responsibility for it and our investors should not rely on such information.
RISK FACTORS
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Certain facts, forecast and other statistics in this Prospectus obtained from publicly available
sources have not been independently verified and may not be reliable.
Certain facts, forecast and other statistic s in this Prospectus are derived from various
government and official resources. However, our Directors cannot guarantee the quality or
reliability of such source materials. We belie ve that the sources of the said information are
appropriate sources for such information and have taken reasonable care in extracting and
reproducing such information. We have no reason to believe that such information is false or
misleading or that any fact has been omitted that would render such information false or
misleading. Nevertheless, information from offici al government sources has not been independently
verified by us, the Sole Sponsor, the Overall Coord inators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital M arket Intermediaries, the Underwriters or any
of their respective affiliates or advisers and, therefore, we make no representation as to the accuracy
of such facts and statistics. Further, we cannot assure our investors that they are stated or compiled
on the same basis or with the same degree of accuracy as similar statistics presented elsewhere. In
all cases, our investors should consider car efully how much weight or importance should be
attached to or placed on such facts or statistics.
Forward-looking statements contained in this Prospectus are subject to risks and
uncertainties.
This Prospectus contains forward-looking stat ements with respect to our business strategies,
operating efficiencies, competiti ve positions, growth opportunities for existing operations, plans and
objectives of management, certain pro forma information and other matters. The words ‘‘aim’’,
‘‘anticipate ’’, ‘‘believe ’’, ‘‘could ’’, ‘‘predict ’’, ‘‘potential ’’, ‘‘continue ’’, ‘‘expect ’’, ‘‘intend ’’, ‘‘may’’,
‘‘might ’’, ‘‘plan ’’, ‘‘seek ’’, ‘‘will ’’, ‘‘would ’’, ‘‘should ’’ and the negative of these terms and other
similar expressions identify a number of these forw ard-looking statements. These forward-looking
statements, including, amongst o thers, those relating to our futu re business prospects, capital
expenditure, cash flows, working capital, liquidi ty and capital resources a re necessarily estimates
reflecting the best judgment of our Directors and management and involve a number of risks and
uncertainties that could cause actual results t o differ materially from those suggested by the
forward-looking statements. As a consequence, these forward-looking statements should be
considered in light of various important factors, including those set out in this section.
Accordingly, such statements are not a guarant ee of future performance and investors should not
place undue reliance.
RISK FACTORS
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DIRECTORS ’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (in cluding any proposed Director who is named as
such in this Prospectus) collectively and individua lly accept full responsibili ty, includes particulars
given in compliance with the Hong Kong Listing Rules, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance and the Sec urities and Futures (Stock Market Listing) Rules
(Chapter 571V of the Laws of Hong Kong) for the pur pose of giving information to the public with
regard to our Group. Our Directors, having made all reasonable enquiries, confirm that to the best
of their knowledge and belief, the i nformation contained in this prospectus is accurate and complete
in all material respects and not misleading or decep tive, and there are no other matters the omission
of which would make any statement herein or this prospectus misleading.
CSRC FILING
We have filed the required documents with the CSRC, and we have received a filing notice
from the CSRC dated June 16, 2025, confirming our completion of the filing procedures pursuant
to the new filing regime introduced by the new regulations on filing for the Global Offering and the
application for listing of the H Shares on the Hong Kong Stock Exchange.
UNDERWRITING AND INFORMATIO N ON THE GLOBAL OFFERING
This Prospectus is published solely in connection with the Hong Kong Public Offering. For
applications under the Hong Kong Public Offering, this Prospectus contains the terms and
conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong
Public Offering of 28,848,400 H Sha res initially offered and the International Offering of
233,408,400 H Shares initially offered (subject , in each case, to reallocation and the Offer Size
Adjustment Option on the basis under the section headed ‘‘Structure of the Global Offering ’’in this
Prospectus) and, in case of the International Offe ring, to any exercise of the Offer Size Adjustment
Option and the Over-allotment Option.
The Listing of our H Shares on the Hong Kong Stock Exchange is sponsored by the Sole
Sponsor and the Global Offering is managed by the Overall Coordinators. Pursuant to the Hong
Kong Underwriting Agreement, the Hong Kong Public Offering is fully underwritten by the Hong
Kong Underwriters subject to the Offer Price be ing agreed between the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and us. The International Offering is
expected to be fully underwritten by the International Underwriters pursuant to the terms of the
International Underwriting Agreement which is expected to be entered into on or about the Price
Determination Date, subject to agreement on the O ffer Price. Further details of the Underwriters
and the underwriting arrangements are set out in the section headed ‘‘Underwriting ’’ in this
Prospectus.
The Offer Shares are offered solely on the basis of the information contained and
representations made in this Prospectus and on the terms and subject to the conditions set out
herein and therein. No person is authorized to give any information in connection with the Global
Offering or to make any representation not cont ained in this Prospectus, and any information or
representation not contained herein must not be relied upon as having been authorized by the
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Company, the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Joint Lead
Managers, the Joint Bookrunners, the Capital Mar ket Intermediaries, the Underwriters, any of our
or their affiliates or any of their respective direc tors, officers, employees, advisers, agents or
representatives, or any other persons or parties involved in the Global Offering.
Neither the delivery of this Prospectus nor any subscription or acquisition made under it shall,
under any circumstances, create any implication that there has been no change in our affairs since
the date of this Prospectus or that the information in this Prospectus is correct as of any subsequent
time.
Details of the structure of the Global Offering (i ncluding its conditions) and the arrangements
relating to the Offer Size Adjustment Option, the O ver-allotment Option and stabilization, are set
out in the sections headed ‘‘Structure of the Global Offering ’’ and ‘‘Underwriting ’’ in this
Prospectus, and the procedures for applying for the Hong Kong Offer Shares are set out in ‘‘How to
Apply for Hong Kong Offer Shares ’’of this Prospectus.
DETERMINATION OF THE OFFER PRICE
The Offer Shares are being offered at the Offer P rice which will be determined by the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and us on or before
Monday, July 7, 2025, and in any event no later than 12:00 noon on Monday, July 7, 2025. If the
Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and our
Company are unable to reach an agreement on the Offer Price by such time and date, the Global
Offering will not proceed.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering will
be required to confirm, or be deemed by his acquisition of the Hong Kong Offer Shares to confirm,
that he/she is aware of the restrictions on offers and sales of the Hong Kong Offer Shares in this
Prospectus.
No action has been taken to permit a public offe ring of the Offer Shares in any jurisdiction
other than Hong Kong, or the distribution of this Prospectus in any jurisdiction other than Hong
Kong. Accordingly, this Prospectus may not be used for the purpose of, and does not constitute, an
offer or invitation for subscription in any jurisdiction or in any circumstances in which such an
offer or invitation for subscription is not authorized or to any person to whom it is unlawful to
make such an offer or invitation for subscripti on. The distribution of this Prospectus and the
offering and sale of the Offer Shares in other jurisd ictions are subject to rest rictions and may not be
made except as permitted under the applicable secu rities laws of such jurisdictions pursuant to
registration with or authorization by the relevant securities regulatory authorities or an exemption
therefrom. In particular, the Hong Kong Offer Shares have not been publicly offered, directly or
indirectly, in the PRC or the United States.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any H
Shares which may be issued pursuant to the exercise of the Offer Size Adjustment Option and the
Over-allotment Option). Dealings in the H Shar es on the Hong Kong Stock Exchange are expected
to commence on Wednesday, July 9, 2025. Except for the A Shares that have been listed on the
Shenzhen Stock Exchange and our pending application to the Hong Kong Stock Exchange for the
l i s t i n go f ,a n dp e r m i s s i o nt od e a li n ,t h eHS h a r e s ,no part of our share or debt securities is listed
on or dealt in on the Hong Kong Stock Exchange o r any other stock exchange and no such listing
or permission to list is being or proposed to be sought in the near future.
The H Shares will be traded in board lot of 200 H Shares. The stock code of the H Shares is
6613.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of, and
permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before the
expiration of three weeks from the date of the closing of the application lists, or such longer period
(not exceeding six weeks) as may, within the said t hree weeks, be notified to the Company by or on
behalf of the Hong Kong Stock Exchange.
H SHARES WILL BE ELIGIBL E FOR ADMISSION INTO CCASS
Subject to the granting of listing of, and permission to deal in, our H Shares on the Hong
Kong Stock Exchange and our compliance with the s tock admission require ments of HKSCC, our H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencemen t of dealings in our H Shares on the Hong Kong
Stock Exchange or any other date as HKSCC chooses. Settlement of any transactions between
participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second
settlement day after any trading day. All activi ties under CCASS are subject to the General Rules
of HKSCC and the HKSCC Operational Procedures in effect from time to time. Investors should
seek the advice of their stockbroker or other professional advisers for details of the settlement
arrangements as such arrangements may affect their rights and interests. All necessary arrangements
have been made for our H Shares to be admitted into CCASS.
H SHARE REGISTER OF MEMBERS AND HONG KONG STAMP DUTY
All of the H Shares issued pursuant to applications made in the Hong Kong Public 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 Invest or Services Limited. Our principal register of
members will be maintained by us at our head office in the PRC.
Dealings in the H Shares registered in our H Share register will be subject to Hong Kong
stamp duty.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Unless otherwise determined by our Board, di vidends will be paid to Shareholders whose
names are listed on our H Share register of members in Hong Kong, by ordinary post, at the
Shareholders ’ risk in Hong Kong dollars to the registered address of each Shareholder.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers as to the taxation implications of subscribing for, purchasing, holding or disposal of, and/
or dealing in the H Shares or exercising rights attached to them. It is emphasized that none of us,
the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Int ermediaries, the Underwriters, any of their
respective directors, officers, employees, agents o r representatives or any other person or party
involved in the Global Offering accepts responsibili ty for any tax effects on, or liabilities of, any
person resulting from the subscription, purchase, holding, disposal of, or dealing in, the H Shares or
exercising any rights attached to them.
OFFER SIZE ADJUSTMENT OPTION, OVER-ALLOTMENT OPTION AND
STABILIZATION
Details of the arrangements relating to the Offer Size Adjustment Option, the Over-allotment
Option and stabilization are se t out under the sections headed ‘‘Underwriting ’’and ‘‘Structure of the
Global Offering ’’in this Prospectus.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in ‘‘How to Apply for
the Hong Kong Offer Shares ’’in this Prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering, including its conditions, are set out in
‘‘Structure of the Global Offering ’’in this Prospectus.
LANGUAGE
If there is any inconsistency between this Pr ospectus and the Chinese translation of this
Prospectus, the English version of this Prospectus shall prevail. However, the translated English
names of PRC nationals, entities, departments, faci lities, certificates, titles, laws, regulations
(including the Company ’s subsidiaries) and the like include d in this Prospectus and for which no
official English translation exis ts are unofficial translations for y our reference only. If there is any
inconsistency, the Chinese name prevails.
ROUNDING
Certain amounts and percentage figures, such as share ownership and operating data, included
in this Prospectus may have been subject to rounding adjustments, or have been rounded to one or
two decimal places. Accordingly, fi gures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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EXCHANGE RATE CONVERSION
Solely for your convenience, this Prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars. Unless otherwise specified, this
Prospectus contains certain translations for conve nience purposes at the fo llowing rates: Renminbi
into Hong Kong dollars at the rate of HK$1.00 to RMB0.9133, Renminbi into U.S. dollars at the
rate of US$1.00 to RMB7.1695 and Hong Kong dol lars into U.S. dollars at the rate of US$1.00 to
HK$7.8501. No representation is made that any amounts in RMB or Hong Kong dollars 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 89 ---
DIRECTORS
Name Address Nationality
Executive Directors
Ms. Chau Kwan Fei
(周群飛)
Building 1, West Side of
Lens Technology South Garden, Dongyang Town
Liuyang, Hunan Province
the PRC
Chinese
Mr. Cheng Chun Lung
(鄭俊龍)
Building 1, West Side of
Lens Technology South Garden, Dongyang Town
Liuyang, Hunan Province
the PRC
Chinese
Mr. Rao Qiaobing
(饒橋兵)
Building 5, Lens Technology Living Zone
Huanghua Town, Changsha County
Changsha, Hunan Province
the PRC
Chinese
Independent Non-executive Directors
Ms. Wan Wei ( 萬煒) Room 2504, Building C4, Unit 1, Poly West Coast
N o .2 2 8 ,Y i n b e n g l i n gS t r e e t
Changsha, Hunan Province
the PRC
Chinese
Mr. Liu Yue ( 劉岳) Room 104, Building 8, Block A, Phase 1, Bafang
District
Wangyue Street, Yuelu District
Changsha, Hunan Province
the PRC
Chinese
M r .T i a nH o n g(田宏) House 6, 15th Street, Hong Lok Yuen
Tai Po District
New Territories
Hong Kong
United States
Mr. Xie Zhiming
(謝志明)
Room 506, Unit 3, Block 6, Phase 2
Sunshine 100 International New City
Changsha, Hunan Province
the PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 90 ---
SUPERVISORS
Name Address Nationality
Mr. Tang Jun ( 唐軍) Room 2904, Building 29, Zone 5, Genting Meixi
Lake
Changsha, Hunan Province
the PRC
Chinese
Mr. Chen Xiaoqun
(陳小群)
Room 503, Building 4, Tianxi Bay, Changsha Bi
Gui Yuan
No. 325, Xing Sha Avenue, Changsha County
Changsha, Hunan Province
the PRC
Chinese
Ms. Zhou Xinyi
(周新益)
Building 4, West Side of
Lens Technology South Garden, Dongyang Town
Liuyang, Hunan Province
the PRC
Chinese
For further details, see ‘‘Directors, Supervisors and Senior Management. ’’
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 91 ---
Sole Sponsor CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Sponsor-Overall Coordinator CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Overall Coordinators CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen ’s Road Central
Central
Hong Kong
Joint Global Coordinators CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen ’s Road Central
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Joint Bookrunners CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen ’s Road Central
Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
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
AVICT Global Asset Management Limited
Units 6704B – 6A, Level 67
International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
Joint Lead Managers CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen ’s Road Central
Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
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
AVICT Global Asset Management Limited
Units 6704B −6A, Level 67
International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
Capital Market Intermediaries CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen ’s Road Central
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
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
AVICT Global Asset Management Limited
Units 6704B – 6A, Level 67
International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
Legal Advisers to the Company As to Hong Kong and U.S. laws:
Freshfields
55th Floor, One Island East
Taikoo Place, Quarry Bay
Hong Kong
As to PRC law:
Sundial Law Firm
11– 12/F., Taiping Finance Tower
6001 Yitian Road
Futian District, Shenzhen
the PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 95 ---
Legal Advisers to the Sole Sponsor and
the Underwriters
As to Hong Kong and U.S. laws:
Paul Hastings
22/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
As to PRC law:
King & Wood Mallesons
18th Floor, East Tower
World Financial Center
No. 1 Dongsanhuan Zhonglu
Chaoyang District
Beijing
the PRC
Auditor and Reporting Accountants Deloitte Touche Tohmatsu
Certified Public Accountants
Registered Public Interest Entity Auditor
35/F, One Pacific Place
88 Queensway
Hong Kong
Industry Consultant Frost & Sulliva n (Beijing) Inc., Shanghai Branch
Co.
Room 2504
Wheelock Square
No. 1717 West Nanjing Road
Shanghai
the PRC
Receiving Banks China CITIC Bank International Limited
80 Floor, Internati onal Commerce Centre
1 Austin Road West, Kowloon
Hong Kong
Bank of Communications Co., Ltd. Hong Kong
Branch
Unit B B/F & G/F, Unit C G/F, 1 −3/F
16/F Room 01 & 18/F, Wheelock House
20 Pedder Street
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Agricultural Bank of China Limited Hong Kong
Branch
25/F., Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 97 ---
Registered Office and Head Office Liuyang Biomedical Park
Liuyang
Hunan Province
the PRC
Place of Business in Hong Kong
Registered under Part 16 of
the Companies Ordinance
Unit A, 7/F, MG Tower
133 Hoi Bun Road, Kwun Tong
Kowloon
Hong Kong
Joint Company Secretaries Mr. Jiang Nan ( 江南)
Building 5, Lens Technology Living Zone
Huanghua Town, Changsha County
Changsha, Hunan Province
the PRC
Ms. Yu Wing Sze ( 余詠詩)
(an associate member of both The Hong Kong
Chartered Governance Institute and The Chartered
Governance Institute in the United Kingdom)
31/F, Tower Two
Times Square
1 Matheson Street
Causeway Bay
Hong Kong
Authorised Representatives Ms. Chau Kwan Fei ( 周群飛)
Building 1
West Side of Lens Technology South Garden
Dongyang Town, Liuyang, Hunan Province
the PRC
Ms. Yu Wing Sze ( 余詠詩)
31/F, Tower Two
Times Square
1 Matheson Street
Causeway Bay
Hong Kong
Audit Committee Mr. Xie Zhiming ( 謝志明) (Chairman)
Ms. Wan Wei ( 萬煒)
Mr. Liu Yue ( 劉岳)
CORPORATE INFORMATION
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Nomination Committee Ms. Wan Wei ( 萬煒) (Chairman)
Mr. Liu Yue ( 劉岳)
Mr. Cheng Chun Lung ( 鄭俊龍)
Remuneration and Appraisal
Committee
Mr. Xie Zhiming ( 謝志明) (Chairman)
Mr. Liu Yue ( 劉岳)
Mr. Cheng Chun Lung ( 鄭俊龍)
Strategy Committee Ms. Chau Kwan Fei ( 周群飛) (Chairman)
Mr. Tian Hong ( 田宏)
Ms. Wan Wei ( 萬煒)
Compliance Advisor Gram Capital Limited
Room 1209
12/F, Nan Fung Tower
88 Connaught Road Central/
173 Des Voeux Road Central
Central
Hong Kong
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shop 1712 –1716, 17th Floor
Hopewell Centre
183 Queen ’sR o a dE a s t
Wan Chai
Hong Kong
Principal Banks Bank of China
Liuyang Economic and Tech nological Development
Zone Branch
No. 156, Jianshou Avenue
Liuyang, Changsha, Hunan Province
the PRC
The Export-Import Bank of China
Hunan Branch
Building 5, Huayuan Huazhongxin, No. 36
Section 2, Xiangjiang Middle Road
Tianxin District, Changsha, Hunan Province
the PRC
CORPORATE INFORMATION
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Company ’sW e b s i t e www.hnlens.com
(A copy of this Prospectus is available on the
Company ’s website. Except for the information
contained in this Prospectus, none of the other
information contained on the Company ’s website forms
part of this Prospectus)
CORPORATE INFORMATION
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--- page 100 ---
OVERVIEW
The history of our Group traces back to 2003, when our co-founders, Ms. Chau and Mr.
Cheng established Lens Shenzhen. On December 2 1, 2006, the predecessor of our Company, Lens
Technology (Hunan) Company Limited* ( 藍思科技（湖南）有限公司), was established as a limited
liability company in Liuyang, Hunan Province. On June 29, 2011, our Company was converted into
a joint stock company with limited liability and renamed as Lens Technology Co., Ltd. ( 藍思科技
股份有限公司). Since March 18, 2015, our A Shares have been listed on the Shenzhen Stock
Exchange (stock code: 300433.SZ).
Since the establishment of Lens Shenzhen, our Group has been engaged in the research and
development, production, and sales of glass machin ing and relevant products. After over 20 years
of development, we have become an industry-leadin g integrated one-stop precision manufacturing
solution provider. We are focused on technol ogical innovation and empowered by smart
manufacturing. In terms of revenue in 2024, we are a global leading player in precision structural
parts and modules integrated solutions for both cons umer electronics and smart vehicles interaction
systems. We have accumulated stro ng expertise and capabilities in consumer electronics and smart
vehicles, with robust and comprehensive platform-b ased capabilities that include talent, technology,
supply and smart manufacturing.
KEY CORPORATE AND BUSINESS DEVELOPMENT MILESTONES
The following is a summary of our Group ’s key corporate and business development
milestones:
Year Milestone
2003 . . . Lens Shenzhen was established
2004 . . . We cooperated with global leading consumer electronics brands and provided
mobile phone cover glass and camera protective glass for the world ’sf i r s tm o b i l e
phone series that sold over 100 million units
2006 . . . Lens Technology was established in Hunan province and served as our primary
R&D and production center
2007 . . . Provided cover glass for the world ’s first touch-enabled smartphones with full-
sized screen
2010 . . . We began automating and upgrading our production facilities, and began
independently developing and processing sapphire materials to enable large-scale
production and explore its applications in consumer electronics
2011 . . . We worked with customers on 3D curved glass development, obtained key
technology on 3D curved glass and achieved mass production
2012 . . . Lens Hualian was established to drive precision ceramics production and
application
2015 . . . Our A Shares were listed on the Shenzhen Stock Exchange (stock code
300433.SZ)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 101 ---
Year Milestone
2016 . . . We started to engage in the research, development and manufacturing of
intelligent robots and industrial robo ts, and we accelerated the upgrading of our
automated production equipment
2017 . . . Lens Vietnam was established, repre senting the beginning of our global production
layout
2018 . . . We pioneered the application of function modules, 3D glass and intelligent B-
pillars to the world ’s first premium smart electric vehicle, and began cooperating
with global well-known automotive brands for the development and manufacturing
of smart cockpit products
2019 . . . Lens System Integration was establishe d to advance the intelligent transformation
of the smart manufacturing system
2020 . . . Lens Taizhou was established through a cquisition and integration, significantly
increasing our production capacity of precision metal and expanding our business
scale
2021 . . . Lens Xiangtan invested in the construction of the first phase of the smart device
manufacturing project, entering the complete devise assembly business, and
leveraging strengths in key areas such as glass, metal, and modules to drive
vertical integration
We were recognized as a ‘‘National Corporate Technology Center ’’by the relevant
ministries, including the National Development and Reform Commission and the
Ministry of Science and Technology
2023 . . . We were added to the Ministry of Industry and Information Technology ’s ‘‘Green
Manufacturing List ’’
Our Innovation Research Institute was established to focus on research and
development of key products, technologi es and bottlenecks in the industry based
on market trends and demands
2024 . . . We expanded our business to smart retail devices and, empowered by our vertical
integration along the industry value ch ain, quickly delivered our smart retail
devices products
2025 . . . We were deeply involved in the research, development and production of key
components and modules for humanoid robots, successful ly delivering our first
batch of humanoid robots; we also started providing solutions for AI glasses,
achieving full-chain coverage from functional modules to complete device
assembly
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OUR MAJOR SUBSIDIARIES
As of the Latest Practicable Date, we conducted our business operations through 30
subsidiaries. The following table sets forth the detailed information of the major subsidiaries of our
Company that made a material contribution to our results of operations during the Track Record
Period:
Name of subsidiary
Place of
incorporation/
establishment
Date of
incorporation/
establishment
Equity interest
attributable to
our Group Principal activities
(%)
L e n sS h e n z h e n ...... P R C S e p t e m b e r1 8 , 2003 100% Sales of products and R&D
L e n sC h a n g s h a ...... P R C J a n u a r y2 6 , 2011 100% R&D of metal surface treatment
and heat treatment
technologies, and
manufacture and sales of
products
L e n sX i a n g t a n....... P R C J u l y2 3 ,2 0 1 2 1 0 0 % R & D ,p r oduction, assembly and
sales of electronic products
and spare parts business
Shenzhen Lens Wang . . PRC June 17, 2022 100% Supply chain management
Lens Dongguan ...... P R C J u l y6 , 2010 100% R&D, production and sales of
window protection screens
Lens Intelligent
C o n t r o l..........
PRC March 18, 2017 100% Manufacture of electronic
components
L e n sT a i z h o u ....... P R C M a y3 ,2 0 1 6 1 0 0 % R & D ,p r oduction and sales of
components of mobile phone
back covers, and research and
sales of other metal products
Lens Intelligent Robot . PRC July 22, 2016 60% R&D of intelligent equipment
and robot
Lens System
I n t e g r a t i o n .......
PRC March 22, 2019 100% Provision of information system
R&D and integration
services, including the
industrial Internet
L e n sI n t e r n a t i o n a l .... H o n gK o n g N o v e m b e r5 , 2010 100% Trade and investment
L e n sV i e t n a m ....... V i e t n a m J u n e1 2 , 2017 100% Production of electronic
components and maintenance
of electronic and optical
equipment
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CORPORATE DEVELOPMENT AND MAJOR SHAREHOLDING CHANGES
Incorporation of Our Company in December 2006
In December 2006, our Company was established with an initial registered share capital of
USD6.0 million contributed by Lens Technolog y (HK), one of our Controlling Shareholders. The
shareholding structure of our Company as of the date of its establishment was as follows:
Name of the Shareholder
Registered
share capital
Approximate
percentage of
shareholding
(USD) (%)
L e n sT e c h n o l o g y( H K )........................ 6 , 0 0 0 , 0 0 0 100.00
Total .................................... 6,000,000 100.00
Conversion into a Joint Stock Company
Upon completion of several rounds of capital increase and share transfer, the registered capital
of our Company reached RMB600,000,000. In June 2011, our Company was converted into a joint
stock company with limited liability and was renamed as Lens Technology Co., Ltd. ( 藍思科技股份
有限公司).
After the conversion, the shareholding structure of our Company was as follows:
Name of the Shareholder
Number of
Shares held
Approximate
percentage of
shareholding
(%)
L e n sT e c h n o l o g y( H K )........................ 5 4 6 , 6 6 0 , 0 0 0 9 1 . 1 1
Changsha Qunxin ........................... 5 3 , 3 4 0 , 0 0 0 8 . 8 9
Total .................................... 600,000,000 100.00
Capital Increase in 2011
In September 2011, the registered capital of our Company was further increased to
RMB606,000,000 through subscription by 35 individuals who were employees of the Group. The
consideration for the share subscr iption was determined based on arm ’s length negotiations among
the relevant parties after taking into account, among others, our then audited net book value and the
business operations and financial prospects of our Group.
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After the aforesaid transfers and capital increas es, the shareholding structure of our Company
w a sa sf o l l o w s :
Name of the Shareholder
Number of
Shares held
Approximate
percentage of
shareholding
(%)
L e n sT e c h n o l o g y( H K )........................ 5 4 6 , 6 6 0 , 0 0 0 9 0 . 2 1
Changsha Qunxin ........................... 5 3 , 3 4 0 , 0 0 0 8 . 8 0
O t h e ri n d i v i d u a lS h a r e h o l d e r s ................... 6 , 0 0 0 , 0 0 0 0 . 9 9
Total .................................... 606,000,000 100.00
Listing on the Shenzhen Stock Exchange in March 2015
As approved by the CSRC, our Company complet ed the initial public offering and listing of
our A Shares on the Shenzhen Stock Exchange (stock code: 300433.SZ) in March 2015 (the ‘‘A
Share Listing ’’), pursuant to which a total of 67,360,000 new A Shares were issued. Immediately
following the A Share Listing, our registered s hare capital was increased to RMB673,360,000, and
the shareholding structure of our Company was as follows:
Name of the Shareholder
Number of
A Shares held
Approximate
percentage of
shareholding
(%)
L e n sT e c h n o l o g y( H K )........................ 5 4 6 , 6 6 0 , 0 0 0 8 1 . 1 8
Changsha Qunxin ........................... 5 3 , 3 4 0 , 0 0 0 7 . 9 2
O t h e rAS h a r e h o l d e r s......................... 7 3 , 3 6 0 , 0 0 0 1 0 . 9 0
Total .................................... 673,360,000 100.00
Private Placement of A Shares in 2016
In April 2016, our Company conducted a private placement of A Shares (the ‘‘2016 A Share
Placement ’’) to expand our sapphire production and 3D curved glass manufacturing capabilities.
Pursuant to the 2016 A Share Placement, 53,840,9 24 new A Shares were issued and the offer price
was RMB58.84 per A Share, which was determine d based on various factors, including, among
other things, the average trading price of our A S hares of the 20 trading days prior to the pricing
date and the indicative investment interest of potential investors. The 53,840,924 new A Shares
were eventually placed to three inst itutional investors who were Independent Third Parties, raising
net proceeds of approximately RMB3,111.85 mi llion, which have been fully utilized as of
December 31, 2024. Immediately following the co mpletion of the 2016 A Share Placement, our
registered share capital was increased to RMB727,200,924 in April 2016.
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Issuance of 2017 Convertible Bonds, Conversion and Redemption
In December 2017, the Company conducted a p ublic issuance of convertible bonds (the ‘‘2017
Convertible Bonds ’’) in the principal amount of RMB4.8 billion with a maturity period of six
years to invest in, among others, projects for protective glass on the exterior of consumer
electronics products. The 2017 Convertible Bonds were listed on the Shenzhen Stock Exchange on
January 17, 2018 (bond code: 123003.SZ). The conversion period of the 2017 Convertible Bonds
was from the first trading day after six months fro m the completion date of the issuance of the 2017
Convertible Bonds to the maturity date of the 2017 Convertible Bonds. The initial conversion price
of the 2017 Convertible Bonds was RMB36.59 per S hare, which was determined after taking into
account, among other things, the average trading price prior to the date of the offering circular of
the 2017 Convertible Bonds and was subject to th e adjustment mechanism as disclosed in the
offering circular.
On December 26, 2019, the Board resolved to ex ercise its conditional redemption rights to
redeem all the outstanding 2017 Convertible Bonds a t that time at face value plus accrued interests
and all the then outstanding 2017 Convertible Bonds were converted into A Shares. The 2017
Convertible Bonds were delisted from the Shenzhen Stock Exchange on February 19, 2020.
Immediately following the conversion, redempti on and delisting of the 2017 Convertible Bonds, a
total of 457,109,407 A Shares were converted from the 2017 Convertible Bonds and the Company ’s
registered share capital was increased to RMB4,383,857,357 in February 2020.
Private Placement of A Shares in 2020
In December 2020, our Company conducted a private placement of A Shares (the ‘‘2020 A
Share Placement ’’) to, among others, invest in the touch f unction panel construction project.
Pursuant to the 2020 A Share Placement, a total of 589,622,641 new A Shares were issued and the
offer price was RMB25.44 per Share, which was det ermined based on variou s factors, including,
among other things, the average trading price of our A Shares of the 20 trading days prior to the
pricing date and the indicative investment inter est of potential investors. The 589,622,641 new A
Shares were eventually placed to 14 investors wh o are Independent Third Parties, raising net
proceeds of approximately RMB14,909.15 milli on, out of which we have utilized approximately
RMB11,629.43 million as of Decem ber 31, 2024. Immediately following the completion of the
2020 A Share Placement, our registered share capital was increased to RMB4,973,479,998 in
December 2020.
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
Acquisition and Establishment of Lens Taizhou
On August 18, 2020, the Company, Lens Inter national, Lyra International Co., Ltd. ( ‘‘Lyra
International ’’) and Catcher Technology Co., Ltd. ( 可成科技股份有限公司)( ‘‘Catcher
Technology ’’), entered into a share purchase agreement , pursuant to which, Lens International
agreed to purchase 100% equity interests in each of Kesheng Technology (Taizhou) Company
Limited ( 可勝科技(泰州)有限公司
)( ‘‘Kesheng Taizhou ’’) and Keli Technology (Taizhou)
Company Limited ( 可利科技(泰州)有限公司)( ‘‘Keli Taizhou ’’, together with Kesheng Taizhou,
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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the ‘‘Target Companies ’’) held by Lyra International at the consideration of RMB9.9 billion (the
‘‘Acquisition ’’). Each of Kesheng Taizhou and Keli Taizh ou was engaged in research and sales of
metal products. The Acquisition was expected to create synergies between our then existing
operations and those of the Target Compani es, enhancing our overall efficiency and
competitiveness. The consideration of th e Acquisition was determined based on arm ’sl e n g t h
negotiation among the Company, Lens Internationa l, Lyra International and Catcher Technology,
taking into account the latest audit ed financial results of each of Kesheng Taizhou and Keli Taizhou
and with reference to valuation of other comparable companies. Each of Lyra International and
Catcher Technology was an Independent Third Party.
As of December 31, 2020, the Acquisition was completed. On February 3, 2021, Kesheng
Taizhou was renamed as Lens Wang Precision (Taizhou) Company Limited ( 藍思旺(精密)泰州有限
公司), and Keli Taizhou was renamed as Lens Precision (Taizhou ) Company Limited ( 藍思精密(泰
州)有限公司).
Other Major Acquisitions, Disposals and Mergers
We did not carry out any major acquisitions, disposals or mergers 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 .
OUR LISTING ON THE SHENZHEN STO CK EXCHANGE AND REASONS FOR THE
LISTING ON THE HONG KONG STOCK EXCHANGE
Since 2015, the A Shares of our Company have been listed on the Shenzhen Stock Exchange.
As of the Latest Practicable Date, our Direct ors confirmed that we had no instances of non-
compliance with the rules of the Shenzhen Stock Ex change and other applicable securities laws and
regulations of the PRC in any material respects, and, to the best knowledge of our Directors having
made all reasonable enquiries, there was no materia l matter that should be brought to the investors ’
attention in relation to our compliance record on the Shenzhen Stock Exchange. Our PRC Legal
Advisor advised us that during the Track Record Period and up to the Latest Practicable Date, we
have not been subject to any material administrati ve penalties or regulatory measures imposed by
PRC securities regulatory authorities and we have complied with the relevant laws and regulations
on A share listings applicable to us in all materia l respects. Based on the independent due diligence
conducted by the Sole Sponsor, nothing has come to the Sole Sponsor ’s attention that would cause
them to disagree with our Directors ’ confirmation with regard to the compliance records of the
Company on the Shenzhen Stock Exchange.
Our Company seek its H Shares to be listed on the Hong Kong Stock Exchange in order to
further promote the Company ’s internationalization strategy, enhance the Company ’s international
brand image, strengthen the Company ’s core competitiveness, and enhance the Company ’s
operational and management standards. See ‘‘Business — Our Strategies
’’ and ‘‘Future Plans and
Use of Proceeds ’’for more details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 107 ---
PUBLIC FLOAT
So far as our Directors are aware and to the best knowledge of our Directors, immediately
following the completion of the Global Offering, 23,817,167 A Shares held by the Company as
treasury shares and the Shares held by our core connected persons will not be counted towards the
public float for the purpose of Rule 8.08 of the Hong Kong Listing Rules. Shares held by our core
connected persons immediately following the com pletion of the Global Offering include: (i) a total
of 3,092,535,433 A Shares held by Lens Technology (HK) and Changsha Qunxin, both of which
are our Controlling Shareholders, (ii) 3,347,879 A Shares held by Mr. Cheng and 2,793,741 A
Shares held by Mr. Rao Qiaobing, both of whom are our Directors, and (iii) 1,446,225 A Shares
held by Ms. Zhou Xinyi, 368,239 A Shares held by Mr. Chen Xiaoqun and 256,279 A Shares held
by Mr. Tang Jun, all of whom are our Supervisors.
To the best knowledge of our Directors, immediat ely following the completion of the Global
Offering (assuming the Over-a llotment Option and the Offer Size Adjustment Option are not
exercised and no changes are made to the issued s hare capital of the Company between the Latest
Practicable Date and the Listing Date except for the Global Offering), over 25% of our total issued
Shares (excluding 23,817,167 A Shares repurchased and held in the Company ’s stock repurchase
account as treasury shares) will be counted towar ds the public float for the purpose of Rule 8.08 of
the Hong Kong Listing Rules. Given that no new Shares will be issued under the 2023 Restricted
Share Incentive Plan, the 2023 Restricted Share Incentive Plan will not impact the public float of
the Company upon the Listing.
The Company has applied, and the Hong Kong Stock Exchange has granted a waiver from
strict compliance with Rule 8.08(1)(b) of the Hong Kong Listing Rules to allow the minimum
percentage of the H Shares of the Company to be held by the public from time to time shall be no
less than 5.00% of the Company ’s total issued share capital (or s uch higher percentage upon the
completion of any exercise of the Over-allotment Option and/or the Offer Size Adjustment Option).
For details, see ‘‘Waivers from Strict Compliance with the Hong Kong Listing Rules — Waiver in
respect of Minimum Public Float of H Shares. ’’
2023 RESTRICTED SHARE INCENTIVE PLAN
Our Company adopted the 2023 Restricted Share Incentive Plan on August 18, 2023. The
purpose of the 2023 Restricted Share Incentive Plan is to improve our Group ’s incentive mechanism
and to attract and retain talents to achieve a sus tained and healthy development of our Group in
order to realize our Group ’s long-term objectives. See ‘‘Appendix IV — Statutory and General
Information — Share Incentive Scheme — 2023 Restricted Share Incentive Plan ’’of this Prospectus
for details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 108 ---
OUR CORPORATE STRUCTURE IMMEDIAT ELY PRIOR TO THE COMPLETION OF
THE GLOBAL OFFERING
The following chart illustrates our corporate an d shareholding structure immediately prior to
the Global Offering:
100% 97.90% 2.10%
56.28%
84.34%
57.33%
2.17%
33.24%
15.66%
18.10%
24.57%
97.83%
66.76%
100%
5.78%
100%
25%
75% 100% 60%100%
100%
100%
0.07% 37.87%
Ms. Chau(1)
Lens
International
Lens Wang
Technology
(Shenzhen)
Company
Limited*
(Ҧ
(ଉέ)ʮ̡)
Lens
Shenzhen
Shenzhen
Lens Wang
Lens System
Integration
Lens Intelligent
Robot(3)
Lens
Dongguan
Other
subsidiaries(4)
Lens Technology
(HK)(1)
Lens
Changsha
Lens
Xiangtan
Lens
Taizhou
Lens Intelligent
Control
Lens
Vietnam
Changsha
Qunxin(1)
Mr. Cheng(1)
Our Company(2)
Other A Shareholders(2)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 109 ---
Notes:
(1) As of the Latest Practicable Date, our Company was directly and indirectly (through Lens Technology (HK)
and Changsha Qunxin) held as to approximately 62.13% by Ms. Chau and Mr. Cheng. Ms. Chau and Mr.
Cheng are spouses. Lens Technology (HK) was wholly owned by Ms. Chau and Changsha Qunxin was owned
as to 97.90% by Ms. Chau and 2.10% by Mr. Cheng. Accordingly, Ms. Chau, Mr. Cheng, Lens Technology
(HK) and Changsha Qunxin constitute a group of Controlling Shareholders (as defined under the Hong Kong
Listing Rules) before the Listing. For details of the background of Ms. Chau, Mr. Cheng, Lens Technology
(HK) and Changsha Qunxin, see ‘‘Directors, Supervisors and Senior Management ’’ and ‘‘Relationship with
Our Controlling Shareholders. ’’
(2) As of the Latest Practicable Date, 23,817,167 A Share s were held by the Company as treasury shares, which
did not carry any Shareholders ’ rights, including but not limited to voting rights at the Shareholders ’ meeting
and dividend rights.
(3) As of the Latest Practicable Date, Lens Intelligent Robot was owned as to 60% by our Company, 20% by Mr.
Qiu Huisheng, 15% by Mr. Gou Hua, 3% by Mr. Huang Weijian and 2% by Mr. Chen Quanqiang. The four
individual shareholders of Lens Intellig ent Robot were Independent Third Parties.
(4) As of the Latest Practicable Date, other subsidiaries in clude (i) 15 wholly-owned subsidiaries established in
the PRC, Japan, the United States, Mexico and Singa pore, (ii) Lens Hualian, which was owned as to 51% by
our Company and 49% by Hunan Hua lian Ceramics Co., Ltd.* ( 湖南華聯瓷業股份有限公司), an Independent
Third Party, respectively, (iii) Changsha Yong ’an New Material Company Limited* ( 長沙永安新材料有限公
司), which was owned as to 51% by our Company and 49% by Shenzhen Yong ’an Precious Chemical
Industry Company Limited* ( 深圳市永安精細化工有限公司), an Independent Third Party, respectively and
(iv) Fortiter Technology Co., Ltd., which was owned as to 98.06% by our Company, 0.97% by Mr. Chen
Yunhua, one of our senior manageme nt, and 0.97% by Mr. Tan Hong Chie n, an Independent Third Party,
respectively. For further details of the subsidiaries of our Company, see Note 44 to ‘‘Appendix I —
Accountants ’ Report ’’ of this Prospectus.
(5) Certain percentage figures included in the a bove chart have been subject to rounding adjustments.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OUR CORPORATE STRUCTURE IMMEDIATEL Y FOLLOWING THE COMPLETION OF
THE GLOBAL OFFERING
The following chart illustrates our corporate and shareholding structure immediately following
the completion of the Global Offering, assuming the Over-allotment Option and the Offer Size
Adjustment Option are not exercised:
100% 97.90% 2.10%
53.47%
84.34%
57.33%
2.17%
33.24%
15.66%
18.10%
24.57%
97.83%
66.76%
100%
5.49%
100%
25%
75% 100% 60%100%
100%
100%
0.06% 35.97% 5.00%
Ms. Chau(1)
Lens
International
Lens Wang
Technology
(Shenzhen)
Company
Limited*
(Ҧ
(ଉέ)ʮ̡)
Lens
Shenzhen
Shenzhen
Lens Wang
Lens System
Integration
Lens Intelligent
Robot(2)
Lens
Dongguan
Other
subsidiaries(3)
Lens Technology
(HK)(1)
Lens
Changsha
Lens
Xiangtan
Lens
Taizhou
Lens Intelligent
Control
Lens
Vietnam
Changsha
Qunxin(1)
  Mr. Cheng(1)
Our Company(2)
Other A Shareholders(2) H Shareholders
Note: See notes (1) to (5) of ‘‘ — Our Corporate Structure Immediately Prior to the Completion of the Global
Offering ’’ above for details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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The information and statistics set out in this section and other sections of this prospectus
were extracted from the Frost & Sullivan Report, which was commissioned by us, and from
various official government publications and othe r publicly available publications. We engaged
Frost & Sullivan to prepare the Frost & Sulliva n Report, an independent industry report, in
connection with the Global Offering. We believe that the sources of this information are
appropriate sources for such information and have taken reasonable care in extracting and
reproducing such information. We have no reaso n to believe that such information is false or
misleading or that any fact has been omitted that would render such information false or
misleading. The information from official go vernment sources has not been independently
verified by us, the Sole Sponsor, Overall Coordinators, Joint Global Coordinators, Joint
Bookrunners, Joint Lead Managers, Underwriters , Capital Market Intermediaries, and any of
their respective directors and advisors, or any other persons or parties involved in the Global
Offering, and no representation is given as to its accuracy.
GLOBAL OVERVIEW OF THE PRECISION MANUFACTURING INDUSTRY
Definition
The precision manufacturing industry refers to an industry that uses precision machining
techniques, rapid prototyping technologies, aut omatic control technologies and other related
technologies to design, produce, process, assemble and sell structural parts, functional modules and
complete devices that are complex and of high precision.
Precision manufacturing plays a crucial role in promoting product innovation and
implementation. As a platform for turning product concepts into reality, precision manufacturing in
the industrial chain undertakes the key task of tr ansforming complex designs into high-quality,
mass-producible products. For example, cutting-e dge products like foldable smartphones rely on the
technical support from state-of-the -art manufacturers. Nowadays, leading precision manufacturing
companies have transformed from traditional pr oduct manufacturers to comprehensive solution
providers, capable of providing support for the entire product design and manufacturing process
from conceptual design to delivery of the end product. As important players in the industry value
chain, precision manufacturers support their cust omers in maintaining a c ompetitive edge amid
rapid technological advancements, facilitatin g swift product iteration and optimization.
INDUSTRY OVERVIEW
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Industry Value Chain Analysis of the Precision Manufacturing Industry
Industry Value Chain of the Precision Manufacturing Industry
ĊĊ
Glass
Smartphones Tablets Laptops Smart Vehicles Smart Payment
Devices
Intelligent Robots Others
Smart Wearables AI glasses/
XR head-mount displays
Raw Material
Suppliers
PCBA Suppliers
Precision Structural
Parts Suppliers
Functional
Modules Suppliers
Production
Equipment Suppliers
Metal Plastics
SapphireCeramics Others Others
Processing EquipmentCutting and
Molding Equipment
Surface Treatment
Equipment
Assembly and
Bonding Equipment
Testing and
Inspection Equipment
Complete
Device
Assembly
Consumer Electronics
Source: Industry expert interviews, Frost & Sullivan
The upstream of the precision manufacturing ind ustry value chain consists of raw material and
production equipment suppliers, which provide ma terials such as glass, metal and ceramics, as well
as equipment for cutting, proces sing and inspection, to mid-stream manufacturers. Leading
companies enhance efficiency, reduce costs and shor ten delivery cycles by strategically deploying
raw materials and smart manufacturing equipme nt, including independently researching and
developing or investing in high-precision indus trial robots and smart manufacturing equipment.
Mid-stream manufacturers are re sponsible for processing high-precision structural parts and
functional modules, and providing PCBA and complete device assembly. The downstream
application fields of the precision manufacturi ng industry include cons umer electronics, smart
vehicles, smart retail devices, intelligent robots and others.
Leading precision manufacturing solution pro viders collaborate closely with customers in
product design, research and development, manuf acturing and other aspects. They offer tailor-made
solutions according to customer needs and gradually achieve vertical coverage of the entire industry
value chain, thus forming a one-stop precision ma nufacturing platform. Additionally, in terms of
product design, leading precision manufacturing sol ution providers proactively propose conceptual
designs for customers to evaluate and select from . This way, manufacturing solution providers can
continuously deepen long-term strat egic partnerships with customers.
INDUSTRY OVERVIEW
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Analysis of the Development Trends of the G lobal Precision Manufacturing Industry
The development trends of the global precision manufacturing industry mainly include the
following:
. High-precision Devel opment and Application of Multiple Materials
The precision manufacturing industry is chara cterized by high precisi on, high efficiency,
automation and non-standard customization, and involves various materials such as glass,
metal and polymers. The demand for high-performance structural parts and functional modules
in markets such as consumer electronics, smart vehicles and intelligent robots continues to
grow steadily, with increasing demands for h igher degrees of stability, reliability and
innovation. Leading enterprises enhance product precision and competitiveness through
advanced processing techniques, highly reliab le processes and innovative materials, driving
the industry towards ultra-high precisi on, high performance and high value-add.
. Empowering Production E fficiency through Industr ial Smart Manufacturing
Precision manufacturing optimizes production processes, improves efficiency and reduces
costs by leveraging industrial robots, automated equipment and the industrial internet. The
automated processing and precise control of int elligent equipment reduce human errors and
energy consumption, while technologies such as big data, cloud computing and AI enhance
data collection, analysis and reverse control, im proving production yield and transforming the
production chain. Leading enterprises integrate intelligent manufacturing to build highly
standardized and automated production systems, thereby achieving efficient production and
assembly and driving the industry towards m ore efficient and intelligent development.
. Global Footprint Development
Precision manufacturing companies are accele rating their global footprint to meet the
global demands of customers in industries such as consumer electronics and smart vehicles.
Industry leaders establish production base s at home and abroad, optimizing supply chain
coordination, expanding their market share with technological and efficiency advantages and
getting closer to customers to reduce delivery cycles and logistics costs, while also leveraging
local policies and resources to enhance competiti veness. In addition, precision manufacturing
companies jointly build global R&D centers with strategic customers to obtain cutting-edge
technologies and to meet diverse market demands. Global footprint not only improves
production efficiency but also enhances market adaptability and R&D capabilities, facilitating
the continuous development o f their global business.
INDUSTRY OVERVIEW
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OVERVIEW OF GLOBAL CONSUMER ELEC TRONICS PRECISION MANUFACTURING
INDUSTRY
Overview of Global Consumer El ectronics Products Industry
Consumer electronics refer to smart e lectronic products used in consumers ’ daily lives,
including smartphones, tablets, laptops, smart w earables and AI glasses/XR head-mount displays.
These products typically feature touch interactio n with users, multimedia integration and software
ecosystem synergy. In 2024, global shipment vol ume of consumer electron ics has reached 1,810.8
million units, with the global shipment volume o f smartphones reaching 1,238.8 million units.
Driven by high demand for AI glasses, the global shipment volume of AI glasses in 2024
experienced a significant year-on-year increase of over 200%, exceeding 2.0 million units. It is
anticipated that the integration of innovative consumer electronics product designs and AI
applications will accelerate furth er iterations of these products.
Shipment Volume of Global Consumer Electronics, 2020, 2024, 2025E & 2029E
Product Type 2020 2024 2025E 2029E
CAGR
2020 –2024
CAGR
2025E –2029E
(Million
Units)
(Million
Units)
(Million
Units)
(Million
Units)
S m a r t p h o n e s........ 1 , 2 9 2 . 2 1 , 2 3 8 . 8 1 , 2 9 5 . 8 1 , 4 6 3 . 9 –1.0% 3.1%
T a b l e t s ............ 1 6 4 . 0 1 4 0 . 1 1 5 1 . 0 1 8 0 . 0 –3.9% 4.5%
L a p t o p s ........... 3 0 3 . 9 2 6 2 . 7 2 6 8 . 0 3 0 5 . 1 –3.6% 3.3%
Smart wearables . . . . . 110.9 159.7 171.8 240.4 9.5% 8.8%
AI glasses/XR
head-mount displays . 6.8 9.6 18.2 106.3 8.9% 55.5%
Total ............. 1,877.8 1,810.9 1,904.8 2,295.7 –0.9% 4.8%
Source: Interviews with industry experts, Frost & Sullivan
Definition
Consumer electronics precision structural parts and modules integrated solutions refers to the
one-stop solution for the design, manufacturing a nd related services of structural parts (mainly
including front, back protective covers and m id-frames) and functional modules for consumer
electronics. To better meet the needs of downstr eam customers, leading providers of consumer
electronics precision structural parts and module s integrated solutions typically engage in the
product development process years before product releases. Industry participants and downstream
customers often have strong ties, resul ting in generally saturated orders.
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Market Size Analysis of Global Consumer Electronics Precision Structur al Parts and Modules
Integrated Solutions Industry
Precision structural parts and modules for c onsumer electronics play a vital role in the
functionality, intelligence and usability of c onsumer electronics. Among them, smartphones
represent the largest segment. By 2029, the marke t size of global consumer electronics precision
structural parts and modules integrated soluti ons industry for smartphones is expected to reach
US$50.9 billion. In addition, fueled by ongoing adv ancements in AI technology and the increasing
number of AI glasses introduced by diverse brands, the global market size of consumer electronics
precision structural parts and modules integrated solutions for AI glasses/XR head-mount displays
is expected to reach US$1.7 billion by 20 29, with a significant CAGR of 53.4% from 2025.
Market Size of Global Consumer Electronics Precision Structural Parts and Modules
Integrated Solutions Industry by Application, 2020 –2029E
72.4
67.3 66.0 63.1 66.3
73.8 77.4 80.5 83.6
70.4
3.6
13.9
6.4
6.6 6.6 5.7 5.5 5.8 6.1 6.4 6.6 6.8
43.2
44.9
39.7
39.6 42.5
45.1
46.9 48.5 49.9 50.9
16.4 14.6 12.8 13.3 13.9 14.5 15.5 16.3 17.2
4.3 5.0 4.8 4.9 5.2 5.6 6.1 6.5 6.9
0
10
20
30
40
50
60
70
80
90
0.1 0.2 0.1 0.1 0.2 0.3 0.6 0.9 1.71.3
CAGR 2020–2024 CAGR 2025E–2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
-0.5% 3.1%
-3.8% 4.0%
-1.2% 5.5%
8.0% 7.1%
13.1% 53.4%
-0.4% 4.4%
US$ Billion
Smartphones
Tablets
Laptops
Smart wearables
AI glasses/XR head-mount displays
Total
Source: Interviews with industry experts, Frost & Sullivan
Market Drivers and Development Trends of Global Consumer Electronics Precision Structural
Parts and Modules integrated solutions Industry
The market drivers and development trends for the global consumer electronics precision
structural parts and modules integrated solutions industry include the following:
. Recovery of the Consumer Electronics Indu stry and the Application of Foldable
Screens and AI Technologies
In January 2025, Ministry of Commerce, the PRC, and four other ministries jointly
issued the ‘‘Implementation Plan for Subsidies for New Purchases of Mobile Phones, Tablets,
and Smart Watches (Bands)) ( 《手機、平板、智能手表(手環)購新補貼實施方案》), proposing
that individual consumers can enjoy subsidie s when purchasing new mobile phones, tablets,
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and smart watches (bands). This plan, based on ad apting to the new situation and trends in the
consumer market, vigorously boosts consumption and creates new growth points, thereby
promoting the further recovery of the consumer electronics industry.
The recovery of the global consumer electroni cs industry and growth of the AI industry
has brought new business opportunities for the gl obal consumer electronics precision structural
parts and modules integrated solutions indus try. The market size of global AI industry grew
from approximately US$0.2 trillion in 2020 to about US$0.6 trillion in 2024, and is expected
to exceed US$3.0 trillion by 2029, with a CAGR of 37.8% from 2024 to 2029. The
development and application of AI technology will further drive the growth of the global
consumer electronics industry, particularly in areas such as smartphones, laptops, and AI
glasses/XR head-mount displays.
As foldable screen technology becomes mor e widespread and AI functionalities advance,
smartphone designs are shifting toward great er personalization and high-end features. The
global shipment of foldable smartphones is exp ected to grow rapidly from 23.8 million units
in 2024 to 69.7 million units in 2029, with a CAGR of 24.0%. The rapid advancement of
foldable smartphones has driven a substan tial growth in screen quantity per device,
progressing from single-screen designs to dual- screen and even triple-screen. This evolution
has not only enhanced the per-device value contribution from structural parts suppliers, but
has also significantly elevated the unit value of individual screen compared to traditional rigid
glass displays, owing to the adoption of innovati ve materials such as ultra-thin flexible glass
(UTG). For leading enterprises mastering cor e foldable screen technologies, with their deep
accumulation of UTG technology, comprehensiv e patent layout and mature mass production
capabilities, they have established a significant first-mover advantage in the flexible display
sector. This advantage is not only reflected in th e period of product iteration but also formed
continuous leadership in the industry. Additionally, the rapid development of AI technology is
accelerating smartphone replacement cycles. Global shipment volume of AI smartphones is
expected to grow from 235.0 million units in 2024 to 1,069.8 million units in 2029, with a
CAGR of 35.4%. At the same time, the market share of high-end smartphones (priced over
US$600) is expected to increase from 27.2% in 2024 to 33.0% in 2029, further contributing to
the increase in the average unit price in global smartphones, as well as to the increase in the
price of related structural parts and modules.
With the application of AI technology, laptops are becoming increasingly intelligized,
which also elevated demands for their exterior protection to combine both protective
functionality and a sense of technological sophis tication. Compared to other materials, glass,
as the material for the screen cover for laptop s has higher hardness and scratch resistance,
along with better transparency and display eff ects. Additionally, other laptop components,
such as keyboards and touchpads, are expected to integrate glass materials, bringing better
user experiences and providing better protection.
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AI glasses are smart eyewears that integrate AI technology for enhanced functionality
and present a more intelligent, interactive user experience. These glasses support features such
as voice interaction, visual AI assistance an d wireless connectivity, allowing users to
seamlessly access information and perform tasks in real time. As AI glasses become more
sophisticated and widely adopted, the deman d for high-quality, durable and precisely
manufactured structural parts and modules c ontinues to increase. Leading enterprises,
leveraging their vertical integration capabilit ies in multiple key components of AI glasses, can
quickly respond to the iterative demands of terminal products. Moreover, in the innovative
field of AI glasses, which integrates optical disp lay and human-computer interaction, they can
build a technological moat, directly translat ing into market dominance in terms of product
yield, cost control and product innovation.
. Breakthroughs in Emerging T echnologies and Materials
With the rapid iteration of consumer electronics, emerging technologies and materials are
continuously driving innovations in the consumer electronics precision structural parts and
modules integrated solutions industry. For example, leading companies are continuously
exploring the development of emerging technologies, including advanced anti-fingerprint
coating technology, specialized chemical temper ing processes and ultra-thin, high-adhesive ink
applications. In the area of emerging materi als, UTG, equipped with multiple performance
advantages, has gradually rep laced colorless polyimide (C PI) materials and become the
mainstream choice for foldable smartphone f lexible covers. Leading companies are also
developing the next generation of foldable ultra-thin glass technology-variable thin glass
(VTG). Compared to UTG, VTG provides highe r strength, impact re sistance and scratch
resistance while maintaining the same light tr ansmittance and excellent bending performance.
In terms of materials deployed in smartphone ’s mid-frames, leading solut ion providers possess
mature die-casting or CNC methods for alum inum alloy mid-frame production process,
achieving high product yields, relatively lo w costs, light weight and excellent thermal
conductivity. Additionally, sapphire, known for i ts high strength and scr atch resistance, has
been used in smartphone camera covers and smartw atches and provides better protection while
enhancing the product ’s aesthetics and user experience.
. Integration of Smart Manufacturing and Automation
Smart manufacturing hardware and automat ion technologies are driving the global
consumer electronics precision structural part s and modules integrated solutions industry
toward a new stage. Through the integration of industrial robots, smart equipment, smart
detection systems, automated production lines a nd the industrial internet, solution providers
have significantly improved production efficiency and product quality while reducing costs
and ensuring product consistency. Leading solution providers have developed automation
equipment and industrial robots in-house, usi ng artificial intelligence, big data and cloud
computing technologies to achieve seamless in tegration of software and hardware in the
production process, ensuring high precision and stability of the products while meeting
customers ’ customized production line needs. Meanwh ile, the application of smart detection
systems enables data monitoring and quality t raceability across all stages of production,
effectively reducing the loss within factory sys tems and facilitating the progress of industry
value chain integration.
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Competitive Landscape of Global Consumer Electronics Precision Structural Parts and
Modules Integrated Solutions Industry
In 2024, the market size of the global consumer el ectronics precision structural parts and
modules integrated solutions industry reached US $66.3 billion. The top five participants in the
market accounted for 40.0% of the total market share, indicating a relatively concentrated market.
Among them, our revenue in 2024 reached US$8.6 billion, ranking the first among the global
consumer electronics precision structural parts an d modules integrated solutions providers, with a
market share of 13.0%.
Global Top 5 Consumer Electronics Prec ision Structural P arts and Modules
Integrated Solutions Providers by Sales Revenue, 2024
1
2
3
4
5
13.0%
12.1%
5.7%
5.6%
3.6%
40.0%
8.6
8.0
3.8
3.7
2.4
Ranking Company Revenue (US$ Billion) Market Share
Our Group
Company A
Company B
Company C
Company D
Subtotal
Source: Interviews with industry experts, Frost & Sullivan
Notes:
(1) Company A was founded in 1974 and is listed on the Taiwan Stock Exchange, providing design and
manufacturing of structural parts and related functi onal modules for consumer electronics, among others.
(2) Company B is an unlisted company founded in 1989, fo cusing on the design and manufacturing of structural
parts and modules for consumer electronics.
(3) Company C was founded in 2007 and is listed on the H ong Kong Stock Exchange, mainly engaging in design
and manufacturing of structural parts for consumer electronics and smart vehicles interaction systems.
(4) Company D was founded in 2004 and is listed on the Shenzhen Stock Exchange, focusing on design and
manufacturing of structural parts, especially laptops.
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OVERVIEW OF GLOBAL SMART VEHICL ES INTERACTION SYSTEMS INTEGRATED
SOLUTIONS INDUSTRY
Overview of Smart Vehicles Industry
In recent years, driven by policy support and t echnological advancements, the global smart
vehicles market has grown rapidly, which in turn a ccelerated the development of electrification and
autonomous driving. The ‘‘Intelligent Transformation of Both ICE Vehicles and Electric Vehicles
Strategy ’’ has become an industry trend, and vehicle interaction systems are becoming increasingly
intelligent to meet consumers ’ growing demand for an enhanced driving experience. The global
sales volume of smart vehicles is expected to in crease from 73.2 million units in 2025 to 92.1
million units in 2029, with a CAGR of 5.9% from 2025 to 2029.
Sales Volume of Global Smart Vehicles, 2020 –2029E
41.2
50.3 52.4
59.7
66.2
78.3 83.4 87.9 92.1
73.2
0
10
20
30
40
50
60
70
80
90
100
CAGR2020–2024 CAGR2025E–2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
12.6% 5.9%Million Units Global Smart Vehicles Sales V olume
Source: Association of Automobile Manufacturers, Frost & Sullivan
Definition
The smart vehicles interaction systems integr ated solutions refers to a one-stop solution
encompassing the design, manufacturing and integr ation of core exterior structural parts and related
functional modules for smart vehicles interacti on systems. These systems include central control
screens, intelligent B-pillar, intelligent ins trument panel, HUD and streaming rearview mirror. In
addition, with the advancement of technology, multi-functional glass applied in windows and
windshields has gradually been used in smart vehic les. This type of glass offers various intelligent
and functional services, providing users with a bet ter interactive experience, making it an important
structural part of smart vehicles. Providers of smart v ehicles interaction systems integrated solutions
integrate material innovation, precision manufact uring and other capabilities to deliver high-
performance and highly reliable int eraction systems integ rated solutions for automakers, enhancing
smart vehicles in terms of safety, convenience and user experience.
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Market Size Analysis of Global Smart Vehicle s Interaction Systems Integrated Solutions
Industry
Driven by increasing demand for smart cockp its, autonomous driving technology and in-
vehicle intelligence technology, the market for sm art vehicles interaction systems integrated
solutions is expanding rapidly. As display technol ogy, multi-functional glass and sensing systems
continue to evolve, the demand for integrated sol utions is steadily increasing. Smart vehicles
interaction systems integrated solutions suppli ers need to offer comprehensive services from one-
stop design to manufacturing to gain an edge in t he competitive market. In the future, innovative
technologies, high-quality services and strong R&D capabilities will become key factors driving the
market. The global market size for smart vehicles interaction systems integrated solutions grew
from US$1.9 billion in 2020 to US$4.0 billion in 2024 and is expected to reach US$9.3 billion by
2029, with a CAGR of 18.2% from 2025 to 2029.
Market Size of Global Smart Vehicle Interaction Systems
Integrated Solutions Industry, 2020 –2029E
1.9 2.3
2.9 3.4
4.0
5.6
6.7
7.9
9.3
4.8
0
1
2
3
4
5
6
7
8
9
10
CAGR2020–2024 CAGR2025E–2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
20.7% 18.2%US$ Billion Global Smart Vehicle Interaction Systems
Integrated Solutions Industry
Source: Interviews with industry experts, Frost & Sullivan
As intelligent technologies become more widely adopted in the automotive industry, vehicle
owners are increasingly expecting smart interact ive experience. By 2029, the penetration rates for
central control screens, intelligent instrument p anels, HUD, streaming med ia rearview mirrors and
intelligent B-pillar are expected to reach 98.5%, 65.0%, 50.0%, 25.0% and 29.0%, respectively. The
increased penetration of these core interactio n systems in vehicles will further drive the
development of the global smart vehicles intera ction systems integrated solutions industry.
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Global Penetration Rate of Key Smart Vehicles Interaction Systems,
2020, 2024 & 2029E
Interaction System 2020 2024 2029E
C e n t r a lC o n t r o lS c r e e n s ................ 7 0 . 0 % 9 0 . 0 % 9 8 . 5 %
I n t e l l i g e n tI n s t r u m e n tP a n e l s............. 1 2 . 0 % 4 0 . 0 % 6 5 . 0 %
H U D............................. 4 . 2 % 1 1 . 0 % 5 0 . 0 %
S t r e a m i n gM e d i aR e a r v i e wM i r r o r......... 0 . 7 % 4 . 0 % 2 5 . 0 %
I n t e l l i g e n tB - p i l l a r.................... 0 . 8 % 1 5 . 0 % 2 9 . 0 %
Source: Interviews with industry experts, Frost & Sullivan
Market Drivers and Development Trends of Gl obal Smart Vehicles Interaction Systems
Integrated Solutions Industry
The driving factors and development trends for the global smart vehicles interaction systems
integrated solutions industry include the following:
. Demand for Automotive Intelligence Driving Growth
With continuous breakthroughs in autonomous driving technology, the penetration of
smart cockpits has been steadily increasing, an d user-vehicle interaction systems are evolving
towards higher degrees of personalization, conv enience and multimodality. Additionally, the
development of smart connectivity technology ha s accelerated the interco nnection of real-time
automotive information. For example, intellig ent cockpits are evolving towards multi-screen
collaboration and multimodal interaction. Speci fically, multi-screen co llaboration technology
improves information sharing and operational convenience, which in turn is expected to drive
greater demand for automotive interface manuf acturers involved in multi-screen integration
and interaction solutions. Meanwhile, favorabl e policies are creating new growth opportunities
for intelligent vehicle component suppliers. For instance, the ‘‘Strategy for Innovation and
Development of Intelligent Vehicles ’’ (《智能汽車創新發展戰略》), released in 2020, sets the
long-term goal of establishing a comprehensive intelligent vehicle system between 2035 and
2050, while encouraging breakthroughs in core tech nologies related to intelligent vehicles. In
2024, five ministries including the Ministry of Industry and Information Technology (MIIT)
jointly issued the ‘‘Notice on Launching the Pilot Program for Integrated Vehicle-Road-Cloud
Applications in Intelligent Connected Vehicles" （《關於開展智能網聯汽車‘‘車路雲一體化’’應
用試點工作的通知》）, aiming to accelerate technological i nnovation and industrialization in
the intelligent connected vehicle sector. These initiatives are expected to drive demand for
relevant auto parts manufacturers. Therefore, driven by both policy support and technological
innovation, automotive intelligence will cont inue to deepen, further driving the growing
market demand for smart vehicles inter action systems integrated solutions.
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. Advancements in Glass Technology
The progress and innovation of structural parts like glass are key factors driving the
growth of the smart vehicles interaction systems integrated solutions market. The internal
display interfaces of vehicles are continuousl y evolving towards larger screens, touch
interfaces, curved surfaces and transparency. The widespread adoption of in-vehicle touch
screens and HUDs is making automotive interfa ces increasingly tec hnology-oriented,
enhancing the driving experience. At the same t ime, the application of multi-functional glass
in side windows, windshields and sunroofs i s rapidly expanding. Glass applied in side
windows and sunroofs not only maintain traditional transparency functions but also offer a
variety of intelligent and functional services to improve the interactive experience, such as
automatic adjustment of light transmittance based on light changes, UV protection, heat
insulation, water resistance, anti-fog, con ductivity and image projection. These features
integrate with in-vehicle displ ay information, offering owners a more comfortable, safe and
efficient experience. Companies with establis hed experience in advanced glass manufacturing
and early deployment in these cutting-edge automotive glass technologies are well-positioned
to gain a competitive edge. Their ability to meet the evolving needs of intelligent vehicles and
provide integrated functional glass solutions will be a key differentiator in the increasingly
technology-driven automotive supply chain.
. Requirements for Safety and Convenience
As autonomous driving technology develops, the safety and convenience requirements
for in-vehicle and vehicle-body interaction systems are continuously increasing. For example,
the intelligent B-pillar in vehicles can be in tegrated with sensing modules to facilitate
functions like recognizing owners and unlocking vehicles. With a key card or an electronic
device, vehicles can be conveniently unlocked and turned on, which improves vehicle safety
and ease of use. Additionally, the camera modul es integrated into the intelligent B-pillar can
be used for monitoring of the surrounding environment and driving assistance systems,
enabling the detection of obstacles or pedestri ans around the vehicle and supporting features
such as automatic parking, blind spot monitori ng and lane-keeping, thereby enhancing driving
safety and convenience.
. Deeper Collaboration between OEMs and Suppliers
As the smart vehicles industry value chain deepens, collaboration between original
equipment manufacturers (OEMs ) and suppliers is transitioni ng from traditional, single-
product supply to deeper collaborative innovation. OEMs ’ demand for structural parts and
modules is gradually emphasizing whether suppli ers can provide comprehensive and integrated
system solutions. This collaborative model not only creates more market opportunities for
smart vehicles interaction systems integrated so lutions providers but also drives the integration
and innovation of industry technologies, pro mpting upstream and downstream supply chain
companies to break through technological bot tlenecks together and improve the overall
performance and user experience of intelligent interaction systems.
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Competitive Landscape of Global Smart Vehicle s Interaction Systems Integrated Solutions
Industry
In 2024, the global market size for smart vehicle s interaction systems integrated solutions
industry is expected to reach approx imately US$4.0 billion. The top f ive participants accounted for
55.7% of the market share, with our Group generating US$0.8 billion in revenue in 2024, ranking
the first in the industry, and holding a market share of 20.9%.
Top 5 Rankings in the Global Smart Vehicles Interaction Systems
Integrated Solutions Industry, 2024
1
2
3
4
5
20.9%
17.6%
7.7%
5.3%
4.2%
55.7%
0.8
0.7
0.3
0.2
0.2
Ranking Company Revenue (US$ Billion) Market Share
Our Group
Company C
Company E
Company F
Company G
Subtotal
Source: Interviews with industry experts, Frost & Sullivan
Notes:
(1) Company C was founded in 2007 and is listed on the Ho ng Kong Stock Exchange, specializing in designing
and manufacturing structural parts and associate d functional modules for consumer electronics and smart
vehicles.
(2) Company E was founded in 2000 and is listed on the Shenzhen Stock Exchange, focusing on the production
and manufacturing of structural parts and functiona l modules for automotive and consumer electronics.
(3) Company F was founded in 1997 and is listed on the Shenzhen Stock Exchange, focusing on design and
manufacturing of structural parts and module s, including LCD modules and touch screens.
(4) Company G was founded in 1991 and is listed on the Hong Kong Stock Exchange, providing design and
manufacturing of structural parts (mainly including LCD monitors and components, touch screens and touch
modules) and related functional modules fo r automotive and consumer electronics.
OVERVIEW OF GLOBAL SMART RETAIL INDUSTRY
Smart retail devices and electronic price tags are core devices in the smart retail market,
driving the integration of online and offline ret ail activities and the enhancement of consumer
experience. Smart retail devices integrate adva nced technologies and support multiple payment
methods. They can achieve real-t ime transactions and data transmi ssion through the Internet or
mobile networks. The hardware devices feature mul ti-functional integration, high performance and
high security, and are mostly made of tempered gl ass, metal and plastic. In July 2024, a leading
third-party payment platform (with a market shar e of over 30% in third-party payment industry in
China) launched the ‘‘Tap-to-Pay ’’ payment mode. The ‘‘Tap-to-Pay ’’ payment device adopts an
integrated design, with a 3D glass cover plate a nd metal exterior, ensuring the stability and
performance of the device. Electronic price tags re place traditional paper labels through e-paper
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display technology, updating product informati on in real time and supporting remote control and
batch modification. They are widely used in super markets, shopping malls, convenience stores and
other places, improving the effici ency of product information updates and the shopping experience
of customers.
Under the wave of digitalization and the conti nuous development of technologies for smart
retail devices, consumers ’ dependence on smart retail devices is increasing. Innovative payment
devices like ‘‘Tap-to-Pay ’’ are becoming widely popular due to their convenience. With the
continuous progress of global smart retail devices and NFC technologies, the market for smart retail
devices will continue to grow. The global market s ize of smart retail devices, in terms of the ex-
factory price, is expected to increase from US$2.9 billion in 2025 to US$4.4 billion in 2029, with a
CAGR of 11.0%. The global market size of electronic price tags, in terms of the ex-factory price, is
expected to increase from US$1.6 billion in 2025 to US$2.7 billion in 2029, with a CAGR of
13.4%. Precision manufacturers play a crucial r ole in the smart retail devices market and the
electronic price tags industry value chain. In pa rticular, precision manufacturers with strong
technical accumulation and large -scale production capabilities can leverage their strong innovation
capabilities to provide high-quality a nd low-cost customized solutions.
OVERVIEW OF GLOBAL INT ELLIGENT ROBOT INDUSTRY
Intelligent robots can be categorized into indu strial robots and service robots, with humanoid
robots being a new type of service robot. An industrial robot is a multi-purpose mechanical arm
that can be automatically controlled and program med, typically possessing the capability for
programming on three or more axes. These robot s are mainly used in industrial applications. A
humanoid robot is a robot that is designed to resemble the human form in both shape and size and
is capable of mimicking human movements, ex pressions, interactions and locomotion.
The global intelligent robots market size,
2020 –2029E
The global humanoid robots market size,
2025E –2029E
60.2
32.0
70.6
123.9
18.1
13.9
23.0
25.5
42.7
37.2
45.1
81.2
0
20
40
80
60
100
120
140
CAGR
2020–2024
CAGR
2025–2029E
2020 2024 2025E 2029E
US$ Billion
13.4% 13.7%
19.7% 15.8%
17.1% 15.1%
Industrial robots
Service robots
Total
6.4
4.0
2.3
9.5
12.9
0
2
4
8
6
10
12
14
54.4%
2025E 2026E 2027E 2028E 2029E
US$ Billion
CAGR
2025–2029E
Humanoid robots market
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The global market size of intelligent robot s increased from US$32.0 billion in 2020 to
US$60.2 billion in 2024, with a CAGR of 17.1%, and it is expected to reach US$123.9 billion by
2029. As an important segment of service robots, humanoid robots have become the market focus
in recent years. The market size of humanoid robots is expected to grow from US$2.3 billion in
2025 to US$12.9 billion in 2029, with a CAGR of 54.4%.
With the acceleration of the indu strialization of humanoid robots, their core components such
as structural parts and functional modules, inclu ding joint modules, dexterous hands and trunks,
tend to be outsourced to highly qualified supplie rs due to high technical barriers and complex
processing requirements. These suppliers achieve modular production of high-precision structural
parts through technological research and development. This can not only reduce the cost of
humanoid robots but also improve supply chain efficiency and drive the industry to evolve towards
standardization and modularization. Relying on pro fessional production experience and large-scale
manufacturing capabilities, leading companies in structural parts and functional modules are
expected to enter the complete device assembly ma rket of humanoid robots and provide full-chain
solutions from components to end products.
ENTRY BARRIERS ANALYSIS OF GLOBAL PRECISION MANUFACTURING INDUSTRY
The major entry barriers in the global prec ision manufacturing industry include:
. Customer and Supplier Relationship Barriers
The success of precision manufacturers rel ies heavily on stable customer and supplier
relationships. In the precision manufacturing i ndustry, customers have strict certification
processes for suppliers, and the verification p eriod is lengthy. As a result, customers tend to
maintain stable relationships with long-term partners, and the track record of cooperation with
downstream partners in production and R&D is cr ucial for precision manufacturers to secure
orders. Additionally, customers typically priori tize manufacturer reputation and track record.
Large, well-established manufacturers with str ong technical expertise and quality assurance are
often the preferred choice. Existing companie s, having accumulated years of experience, have
built a reputation of being reliable and earned customers ’ trust. In contrast, new entrants must
invest significant time and resources to achie ve a similar level of market recognition. In
addition, precision manufacturers without long- term relationships with upstream suppliers may
face greater challenges in ensuring the pro curement of high-quality raw materials and
maintaining stable supply. These factors co llectively heighten market entry barriers and
sustain the competitive advanta ges of leading industry players.
. Solution Customization Barriers
The precision manufacturing industry often i nvolves highly customized products, with
customers having stringent quality and technica l requirements. Suppliers must offer highly
customized designs, materials and manufacturin g solutions for each generation of products. In
addition, the abi lity to provide comprehensive service s-from concept design, production to
delivery of end products-is an important select ion criterion for custo mers. Leading companies
possess vertically-integrated capabilities along the full industry value chain, enabling them to
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quickly and efficiently respond to customers ’ diverse needs. New entrants, lacking relevant
experience and flexible service capabil ities, face difficulty meeting customers ’ high standards
for customized solutions.
. Technology Inno vation Barriers
Precision manufacturing is a technology-intensive industry. With rapid technological
advancements, the demand for advanced manufacturing and intelligent technologies is
increasing, requiring companies to have multidis ciplinary technical expertise. Some leading
companies in the precision manufacturing industry own numerous patents and unique
production processes. Furthermore, some leadin g companies collaborate w ith strategic clients
to establish R&D centers worldwide. This gl obal R&D network allows them to quickly access
cutting-edge technological insights and enhanc e their innovation capabilities. New entrants
must overcome these technological resear ch and development barriers, and without
breakthroughs in innovation, it is challenging for them to catch up technologically.
. Production and Capital Barriers
Precision manufacturin g demands highly stable producti on capacities. Leading companies
achieve this by being the first to develop an d widely implement automated intelligent
equipment, integrating industrial internet a nd AI technologies to build efficient, smart
production systems. This enables the automati on, digitization and intelligent upgrade of the
entire production process, sign ificantly enhancing operational efficiency and product quality,
while achieving the goals of efficient production and rapid delivery. In contrast, new entrants
must invest substantial resources to establish supply chain management and production
systems, making it difficult for them to quickly at tain sufficient production capacity and stable
production lines. Additionally, large companies benefit from economies of scale, effectively
reducing the production cost per unit, which is hard for new entrants to match in the short
term. Moreover, the capital-intensive investme nt required in the indust ry creates a significant
entry barrier. This includes expenses for pr oduction equipment, factory construction and
research and development. Therefore, new entrants face significant financial pressure.
PRICE TREND ANALYSIS OF RAW MATERIAL
The main raw materials for precisi on structural parts are glass substrates, aluminum alloys,
zirconium dioxide and polycarbonate. Glass subs trate is a special glass material used in the
manufacturing of high-end electronic and optoelect ronic devices. It usually features high flatness, a
low coefficient of expansion, high light transmitt ance and excellent chemi cal stability. Aluminum
alloys are widely used in the production of metal outer frames and are commonly used for precision
structural parts in consumer electronics. Zir conium dioxide is an important raw material for
precision ceramic structural parts. They are non-c onductive and will not block signals, making their
application in consumer electronics increasin gly widespread. In the past three years, due to
technological advancements and growing down stream demand, the prices of glass substrate
continued to rise. The prices of aluminum alloy and zirconium dioxide remained relatively stable,
while polycarbonate prices showed a declining trend.
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Precision Structural Parts Raw Material Price Trends, 2020 –2024
0
400
200
600
800
7. 2 %
2020 2021 2022 2023 2024
RMB/square meter
Glass substrate
CAGR
2020–2024
0
15
10
5
20
25
8.3%
2020 2021 2022 2023 2024
RMB’000/ton
2020–2024Aluminum alloy
CAGR
0
40
30
20
10
50
60
-0.4%
2020 2021 2022 2023 2024
RMB’000/ton
2020–2024Zirconium dioxide
CAGR
0
15
10
5
20
25
-7 .0%
2020 2021 2022 2023 2024
RMB’000/ton
2020–2024Polycarbonate
CAGR
Source: Interviews with industry experts, Frost & Sullivan
SOURCE OF INFORMATION
We commissioned Frost & Sullivan to conduct market research on global precision
manufacturing industry and prepare the Frost & Sullivan Report. Frost & Sullivan is an
independent global consulting firm founded in 1961 in New York that offers industry research and
market strategies. We have contracted to pay RMB 600,000 to Frost & Sullivan for compiling the
Frost & Sullivan Report.
In preparing the Frost & Sullivan Report, F rost & Sullivan conducted detailed primary
research which involved discussing the status of the industry with certain leading industry
participants and conducting interviews with rele vant parties. Frost & Sullivan also conducted
secondary research which involved reviewing com pany reports, independent research reports and
data based on its own research database. Frost & Sullivan obtained the figures for the estimated
total market size from historical data analysis pl otted against macroeconomic data and considered
the key industry drivers. Its market engineeri ng forecasting methodology integrates several
forecasting techniques with the market engineer ing measurement-based system and relies on the
expertise of the analyst team in integrating critical market elements investigated during the research
phase of the project. These elements primarily i nclude forecasting methodology based on expert
opinions, integration of market drivers and rest raints, market challenges, market engineering
measurement trends and econometric variables.
The Frost & Sullivan Report is compiled based on the following assumptions: (i) the social,
economic and political environment around the glob e and within mainland China is likely to remain
stable in the forecast period; and (ii) related key industry drivers are likely to drive the market in
the forecast period.
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OVERVIEW OF THE LAWS AND REGULATIONS IN THE PRC
I. Laws and Regulations Relating to Foreign Investment
The establishment, operation and management o f corporate entities in the PRC are governed
by the PRC Company Law ( 《中華人民共和國公司法》), which was promulgated by the Standing
Committee of the National People ’s Congress of the PRC (the ‘‘SCNPC ’’) on December 29, 1993
and came into effect on July 1, 1994. The PRC Company Law was subsequently amended in 1999,
2004, 2005, 2013, 2018 and 2023. The latest amended PRC Company Law became effective on
July 1, 2024. The PRC Company Law generally governs two types of companies — limited liability
companies and joint stock limited companies. B oth types of companies have the status of legal
persons, and the shareholders of a limited liabi lity company is liable to the company to the extent
of the amount of capital contributions they have made; while the shareholders of a joint stock
limited company is liable to the company to the ext ent of shares they have subscribed for. The PRC
Company Law also applies to foreign-invested co mpanies. Where laws on foreign investment have
other stipulations, such stipulations shall prevail.
On December 30, 2019, the Ministry of Commerce of the PRC (the ‘‘MOFCOM ’’)a n dt h e
State Administration for Market Regulation (the ‘‘SAMR ’’) promulgated the Measures for the
Reporting of Foreign Investment Information ( 《外商投資信息報告辦法》) which came into effect on
January 1, 2020. Where foreign investors carry out investment activities directly or indirectly
within the PRC, foreign investors or foreign-inves ted companies shall report investment information
to commerce departments. On September 6, 2024 , MOFCOM and the National Development and
Reform Commi ssion (the ‘‘NDRC ’’) promulgated the Special Admini strative Measures (Negative
List) for Foreign Investment Access (Edition 2024) ( 《外商投資准入特別管理措施(負面清單)(2024
年版)》)( t h e ‘‘Negative List (2024) ’’),which became effective on November 1, 2024. Fields that are
not included in the Negative List (2024) shall be regulated according to the principle of equal
treatment of domestic and foreign investments.
On March 15, 2019, the NPC promulgated the Foreign Investment Law ( 《中華人民共和國外
商投資法》), and on December 26, 2019, the State Counci l promulgated the Implementing Rules of
the Foreign Investment Law ( 《中華人民共和國外商投資法實施條例》)( t h e ‘‘Implementing
Rules ’’), to further clarify and elaborate the relevant provisions of the Foreign Investment Law.
The Foreign Investment Law and the Implementing Rules both took effect on January 1, 2020 and
replaced the Sino-foreign Equity Joint Venture Enterprise Law ( 《中華人民共和國中外合資經營企
業法》), the Sino-foreign Cooperative Joint Venture Enterprise Law ( 《中華人民共和國中外合作經
營企業法》) and the Wholly Foreign-owned Enterprise Law ( 《中華人民共和國外資企業法》).
Pursuant to the Foreign Investment Law, ‘‘foreign investments ’’ refer to investment activities
conducted by foreign investors (including forei gn natural persons, foreign enterprises or other
foreign organizations) directly or indirectly in the PRC, which include any of the following
circumstances: (i) foreign investors setting up f oreign-invested enterprises in the PRC solely or
jointly with other investors, (ii) foreign invest ors obtaining shares, equity interests, property
portions or other similar rights and interests of en terprises within the PRC, (iii) foreign investors
investing in new projects in the PRC solely or joint ly with other investors, and (iv) investment of
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other methods as specified in laws, administrative regulations, or as stipulated by the State Council.
The Implementing Rules further provide that fore ign-invested enterprises that invest in the PRC
s h a l la l s ob eg o v e r n e db yt h eF o r e i g nI n vestment Law and the Implementing Rules.
Pursuant to the Administrative Measures for Outbound Investment ( 《境外投資管理辦法》)
promulgated by the MOFCOM on September 6, 2 014 and implemented on October 6, 2014, the
MOFCOM and provincial competent commerce auth orities shall carry out administration either by
record-filing or approval, depending on diffe rent circumstances of outbound investment by
enterprises. Outbound investment by enterprises t hat involves sensitive countries and regions or
sensitive industries shall be subject to admini stration by approval. Outbound investment by
enterprises that falls in any other circumstances sh all be subject to administration by record-filing.
Pursuant to the Administrative Measures f or Outbound Investment of Enterprises ( 《企業境外
投資管理辦法》) promulgated by the NDRC on December 26, 2017 and implemented on March 1,
2018, a domestic enterprise, or the investor, making an outbound investment shall obtain approval
or conduct record-filing for outbound investment projects, report relevant information, and
cooperate with the supervision and inspection. Se nsitive projects carried out by investors directly
or through overseas enterprises controlled by th em shall be subject to approval, specifically,
including projects involving sensitive countries a nd regions and sensitive i ndustries; non-sensitive
projects directly carried out by investors, namely , non-sensitive projects involving investors ’ direct
contribution of assets or rights and interests or pr ovision of financing or guarantee shall be subject
to record-filing.
II. Laws and Regulations Relating to Import and Export of Goods
A c c o r d i n gt ot h eF o r e i g nT r a d eL a wo ft h eP R C( 《中華人民共和國對外貿易法》)( t h e
‘‘Foreign Trade Law ’’), promulgated by the SCNPC on May 12, 1994 and amended on December
30, 2022, since December 30, 2022, no registration of foreign trade operators is required. The PRC
government allows the free import and export of go ods and technologies, unless otherwise provided
by laws and administrative regulations. Before D ecember 30, 2022, a foreign trade operator who is
engaged in the import and export of goods or technol ogies shall process the filing and registration
with the foreign trade authority under the State Co uncil or its entrusted agen cies, unless otherwise
provided by the laws, administrative regulations and requirements of the foreign trade authority
under the State Council. Where a foreign trade operator fails to do so, Customs shall not handle the
formalities for declaration and clearance of the goods imported or exported by the operator.
Pursuant to the Customs Law of the PRC ( 《中華人民共和國海關法》) promulgated by the
SCNPC on January 22, 1987 and last amended on April 29, 2021 and effective on the same date,
the Customs of the People ’s Republic of China is the entry and exit customs supervision and
administration authority of PRC. According to the r elevant laws and administ rative regulations, the
Customs supervises the transporta tion vehicles, goods, luggage, pos tal articles and other articles
entering and leaving the country, collects custo ms duties and other taxes and fees, prevents and
counters smuggling, compiles customs statist ics and handles other customs operations.
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Pursuant to the Regulations of PRC Customs on Ad ministration of Record ation of Declaration
Entities ( 《中華人民共和國海關報關單位備案管理規定》), promulgated by the General
Administration of Customs on November 19, 2021, and effective as of January 1, 2022, customs
declaration entities are defined as consignees and consignors of import and export goods, as well as
customs declaration enterprises registered with customs. To apply for recordation, consignees,
consignors, and customs declaration enterprises must first obtain market entity qualification.
Additionally, consignees and consignors of import and export goods must also complete foreign
trade operator recordation. The recordation of cust oms declaration entities is valid indefinitely,
whereas temporary recordation is valid for one year and may be renewed upon expiration through
reapplication.
III. Laws and Regulations Re lating to Safe Production
The Work Safety Law of the People ’s Republic of China （《中華人民共和國安全生產法》）
was promulgated by the SCNPC on June 29, 2002, which was implemented on November 1, 2002
and latest revised on June 10, 2021. Production and business entities shall abide by this Law and
other laws and regulations concerning work safet y, strengthen work safety management, establish
and improve a work safety responsibility sys tem and work safety rules and systems for all
employees, increase efforts to guarantee the inp ut of funds, materials, tec hnology, and personnel in
work safety, improve work safety conditions, str engthen standardization and informatization of
work safety, construct a dual prevention mechanis m consisting of graded management and control
of safety risks and examination and control of pot ential risks, improve the risk prevention and
resolution mechanism, raise work safety level s, and ensure work safety. The law stipulates
provisions on guarantee of safety by productio n and business operation entities, rights and
obligations of employees relating to work safety , supervision and administration of work safety,
emergency rescue, investigation, and handling of w ork safety accidents and legal responsibilities.
Pursuant to the Measures for the Administration of the ‘‘Three Simultaneities ’’ System for
Safety Facilities in Construction Projects ( 《建設專案安全設施‘‘三同時’’監督
管理辦法》),
promulgated by the former State Administration o f Work Safety (now restructured as the Ministry
of Emergency Management) on December 14, 201 0 and amended on April 2, 2015, the safety
facilities in any newly constructed, reconstructed, or expanded construction project shall be
designed, constructed, and commissioned simult aneously with the principal part of the project.
Project entities are obligated to conduct safety c ondition demonstration and pre-assessment for
construction projects, prepare specialized safe ty facility design documentation, submit such
documentation to the competent work safety regul atory authority for review or record-filing, and
complete safety facility acceptance procedure s along with preparing inspection reports in
accordance with regulatory requirements.
IV. Laws and Regulations Relating to Hazar dous Chemicals and Precursor Chemicals
Pursuant to the Regulations on the Safet y Management of Hazardous Chemicals ( 《危險化學品
安全管理條例》), initially promulgated on January 26, 2002 and subsequently amended on March 2,
2011 and December 7, 2013, it is strictly prohibi ted for any entity or individual to engage in the
production, storage, use, operation, transport ation, or any other business activities involving
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hazardous chemicals without obtaini ng proper authorization. Entiti es storing hazardous chemicals
must implement comprehensive safe ty measures, including the installation of prominent signage on
transportation pipelines, regular inspection and testing of pipeline integrity, and the display of clear
safety warning signs in all work areas, safety facilities, and equipment installations. Such entities
are required to establish, maintain, and regularly upgrade their safety facilities and equipment in
compliance with national and industry standards, ta king into account the specific classification and
hazard characteristics of the stored chemicals. En tities storing highly toxic chemicals or hazardous
chemicals that constitute a significant hazard s ource must report detailed information including
storage quantities, precise locations, and desi gnated management personnel to both the work safety
supervision department and the public security agency at the county-level local government. Any
enterprise engaged in the production of chemicals l isted in the Catalogue of Hazardous Chemicals
must obtain a Hazardous Chemicals Work Safety P ermit in accordance with the Regulation on
Work Safety Permits prior to commencing production activities.
Pursuant to the Regulation on the Admi nistration of Precursor Chemicals ( 《易制毒化學品管理
條例》), promulgated on August 26, 2005 and subsequently amended on July 29, 2014, February 6,
2016, and September 18, 2018, the State implements a category-based management and licensing
system governing the production, operation, purchase, transportation, import, and export of
precursor chemicals. Precursor chemicals are cla ssified into three categories, with Category I
comprising major substances us ed in drug production, while Categories II and III encompass
chemical auxiliary substances utilized in drug manufacturing. For pharmaceutical precursor
chemicals falling under Category I, entities purch asing precursor chemicals must obtain a purchase
license through examination and approval by the medical products administration of the provincial-
level people ’s government, autonomous region, or municipality directly under the Central
Government where entities operate; for non-phar maceutical precursor chemicals classified under
Category I, entities purchasing precursor chem icals are required to secure a purchase license
following examination and approval by the public security organ of the provincial-level people ’s
government, autonomous region, or municipal ity directly under the Central Government where
entities operate; for precursor ch emicals categorized under Categ ory II or III, entities purchasing
precursor chemicals must report the specific vari eties and required quantities to the public security
organ of the local people ’s government at or above the county level for registration prior to
procurement.
According to the Measures for the Administration of Public Security Control over Explosive
Precursor Chemicals ( 《易制爆危險化學品治安管理辦法》) issued by the Ministry of Public Security
on July 6, 2019, enterprises that have legally obtained the Work Safety License for Hazardous
Chemicals, the Safe Use License for Hazardous Che micals, or the Business License for Hazardous
Chemicals may purchase explosive precursor chemic als by presenting the corresponding licenses.
V. Laws and Regulations Relating to Product Quality
Pursuant to the provisions of the Product Quality Law of the PRC ( 《中華人民
共和國產品質量
法》) promulgated on February 22, 1993 and amended on July 8, 2000, August 27, 2009 and
December 29, 2018 respectively, all producers and sellers who engage in production and sales
activities in the PRC shall establish and improve th e internal product quality management system,
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and strictly implement position-based quality regul ations, quality responsib ilities and corresponding
assessment measures. Where any producer or seller violates the responsibi lities and obligations of
the Product Quality Law, and cause losses or pers onal or property damages to consumers, it shall
be liable for compensation. The co mpetent authority may take admin istrative penalties against any
illegal acts, such as ordering to suspend produ ction, confiscating illegally produced or sold
products, imposing a fine, confiscating illegal gains (if any), and revoking the business licence in
case of a serious violation. If a crime is constituted, it shall be investigated for criminal liabilities in
accordance with the law.
VI. Laws and Regulations Relating to Environmental Protection
1. Environmental Protection Law
The Environmental Protection Law of the PRC ( 《中華人民共和國環境保護法》)w a s
promulgated and came into effect on Decembe r 26, 1989, and was most recently amended on
April 24, 2014. The Environmental Protection L aw was established to protect and improve
both the living and ecological environments, prevent and control pollution and other public
hazards, and safeguard public health.
According to the provisions of the Environmental Protection Law, in addition to other
relevant laws and regulations of the PRC, the Mi nistry of Environmental Protection and its
local counterparts are responsible for administeri ng and supervising environmental protection
matters. Pursuant to the Environmental Prote ction Law, construction projects that have
environmental impact shall be subject to an environ mental impact assessme nt. Installations for
the prevention and control of pollution in cons truction projects must be designed, built and
commissioned together with the p rincipal construction plan of the project. Such installations
shall not be dismantled or left idle without a uthorisation from the relevant government
agencies.
2. Construction Project Environmental Protection
According to the Environmental I mpact Assessment Law of the PRC ( 《中華人民共和國
環境影響評價法》), which was promulgated by the SCNPC on December 29, 2018 and came
into effect on the same day, the Regulation on the Administration of Environmental Protection
of Construction Projects ( 《建設項目環境保護管理條例》) ,w h i c hw a sa m e n d e db yt h eS t a t e
Council on July 16, 2017 and came into effect on October 1, 2017, and the Interim Measures
for Environmental Protection Acceptance I nspection Upon Completion of Construction
Projects ( 《建設項目竣工環境保護驗收暫行辦法》), which was promulgated by the former
Ministry of Environmental Protection on November 20, 2017 and came into effect on the same
day, the PRC implements an environmental i mpact assessment system for construction
projects. Prior to the commencement of a construc tion project, the construction entity must
submit an environmental impact report, an envi ronmental impact statement for approval, or an
environmental impact registration form for r ecord-filing, as required by the competent
environmental protection admin istrative department under the State Council. Furthermore,
upon completion of a construction project fo r which an environmental impact report or
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statement has been prepared, the construction entity must conduct an acceptance inspection of
the supporting environmental protection faci lities in accordance with the standards and
procedures prescribed by the competent environm ental protection administrative department
under the State Council, and prepare an acceptanc e report. For projects c onstructed or put into
operation in phases, the corresponding environmental protection facilities must undergo
phased acceptance inspections. The constructi on project may only be put into production or
use after the supporting environmental prot ection facilities have passed the acceptance
inspection. Facilities that have not under gone or failed the acceptance inspection are
prohibited from being put into production or use.
3. Prevention and Control of Va rious Types of Pollution
The Law on Prevention and Control of Water Pollution of the PRC ( 《中華人民共和國水
污染防治法》), as promulgated on May 11, 1984 and last amended on June 27, 2017, the Law
on Prevention and Control of Atmospheric Pollution of the PRC ( 《中華人民共和國大氣污染
防治法》), as promulgated on September 5, 1987 and last amended on October 26, 2018, the
Law on Prevention and Control of Envir onmental Noise Pollution of the PRC ( 《中華人民共和
國噪聲污染防治法》), which was promulgated on December 24, 2021, and the Law on the
Prevention and Control of Environmental Pollution by Solid Wastes of the PRC ( 《中華人民共
和國固體廢物污染環境防治法》), which was promulgated on October 30, 1995 and last
amended on April 29, 2020, prescribe the requirements for the prevention and control of water
pollution, atmospheric pollution, noise pollution and solid waste respectively.
Pursuant to the Administrative Measures for Pollutant Discharge Licensing ( 《排污許可管
理辦法》), which was promulgated on April 1, 2024 and implemented on July 1, 2024, and the
Regulations on the Administration of Pollution Discharge Permits ( 《排污許可管理條例》)
promulgated by the State Council on January 24, 2021 and took effect on March 1, 2021,
enterprises, public institutions and other pro ducers and operators under the administration of
discharge permits shall apply for and obtain a pollutant discharge license and discharge
pollutants in accordance with the provisions of t he discharge permit. Any enterprise that fails
to obtain a pollutant discharge license as required shall not discharge pollutants.
VII. Laws and Regulations Relating to Fire Prevention
The Fire Prevention Law of the PRC ( 《中華人民共和國消防法》)( t h e ‘‘Fire Prevention
Law’’) was issued by the SCNPC on April 29, 1998, became effective on September 1, 1998 and
was last amended and implemented on April 29, 2021. According to the Fire Prevention Law, for
special construction projects stipulated by the ho using and urban-rural development authority of the
State Council, the developer shall submit the fir e safety design documents to the housing and
urban-rural development authority for examinatio n, while for construction projects other than those
stipulated as special developmen t projects, the developer shall, at the time of applying for the
construction permit or approval for work commencement report, provide the fire safety design
drawings and technical materials which satisfy t he construction needs. Pursuant to the Fire
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Prevention Law, the construction project that fails to complete as-built acceptance check on fire
prevention shall be ordered by the competent government authorities to close and shall be fined not
less than RMB30,000 but not more than RMB300,000.
According to Interim Regulations on Administ ration of Examination and Acceptance of Fire
Prevention Design of Construction Projects ( 《建設工程消防設計審查驗收管理暫行規定》)i s s u e d
by the Ministry of Housing and Urban-Rural Development of the PRC on April 1, 2020, last
amended on August 21, 2023 and effective on October 30, 2023, an examination system for fire
prevention design and acceptance only applies t o special construction projects, and for other
projects, a record-filing and spot check system would be applied.
VIII. Laws and Regulations Relating to Employment and Labour Security
1. Labour Law and Labour Contracts
According to the Labour Law of the PRC ( 《中華人民共和國勞動法》) promulgated on
July 5, 1994 and amended on August 27, 2009 and December 29, 2018, enterprises shall
establish and improve their system of work place safety and sanitation, strictly comply with
state rules and standards on workplace safety, and provide employees with training on labor
safety and sanitation. Labour safety and sanitation facilities shall comply with statutory
standards. Enterprises and institutions shal l provide employees with a safe workplace and
sanitation conditions which are in compliance with relevant laws and regulations of labour
protection.
T h eL a b o u rC o n t r a c tL a wo ft h eP R C(《中華人民共和國勞動合同法》)p r o m u l g a t e do n
June 29, 2007 and amended on December 28, 201 2, and the Implementation Rules of the
Labour Contract Law of the PRC ( 《中華人民共和國勞動合同法實施條例》) promulgated on
18 September 2008 set out specific provisions in relation to the execution, the terms and the
termination of a labour contract and the ri ghts and obligations of the employees and
employers, respectively. At the time of hirin g, the employers shall truthfully inform the
employees the scope of work, working conditio ns, working place, occupational hazards, work
safety, salary and other matters which the employees request to be informed about.
2. Despatched Workers
According to the Interim Pro visions on Labour Despatch ( 《勞務派遣暫行規定》)i s s u e d
on January 24, 2014 and implemented on March 1, 2014 by the Ministry of Human Resources
and Social Security, employers may only use desp atched workers for temporary, ancillary or
substitute positions. The aforementioned tempor ary positions shall mean positions lasting for
no more than six months; ancillary positions sha ll mean positions of non-major business that
serve positions of major business; and substitu te positions shall mean positions that can be
substituted by other workers for a certain period of time during which the workers who
originally held such positions are unable to wor k as a result of full-time study, being on leave
or other reasons. According to the Interim Provisions on Labour Despatch, the employers
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should strictly control the number of despatc hed workers, and the number of the despatched
workers shall not exceed 10% of the total amount o f their employees (incl uding the aggregate
number of employees and despatched workers).
Pursuant to the Interim Provision on Labour Despatch, the Labour Contract Law of the
PRC and the Implementation Rules for the Labour Contract Law of the PRC, employers
failing to comply with the relevant labour dispa tch requirements shall be ordered by labour
administrative authorities to r ectify the non-compliance within a specified period. Failure to
rectify within the stipulated period may resu lt in a penalty of RMB5,000 to RMB10,000 per
dispatched worker exceeding the 10% threshold.
3. Social Insurance and Housing Fund
According to the Social Insurance Law of the People ’s Republic of China ( 《中華人民共
和國社會保險法》), last amended by the SCNPC and effective as of December 29, 2018, and
the Regulation on the Administration of Housing Provident Fund ( 《住房公積金管理條例》),
last amended by the State Council and effective as of March 24, 2019, as well as other
relevant laws and regulations, employers in PRC are obligated to provide employees with
welfare schemes covering basi c pension insurance, basic medical insurance, unemployment
insurance, maternity insurance, work-related injury insurance, and housing provident fund.
In addition, any employer that fails to make c ontributions to the aforementioned social
insurance and housing provident fund as required may be ordered to pay the outstanding
contributions within a prescribed time limit . If the employer fails to comply within the
specified period, a fine may be imposed. For overdue contributions, the people ’s court may
enforce collection.
4. Prevention and Control of Occupational Diseases
Pursuant to the Law of the People ’s Republic of China on the Prevention and Control of
Occupational Diseases ( 《中華人民共和國職業病防治法》), promulgated on October 27, 2001
and subsequently amended on December 31, 2011, July 2, 2016, November 4, 2017, and
December 29, 2018, employers are obligated to provide work environ ments and conditions
that comply with national occupational health standards and requirem ents. Employers must
implement measures to ensure occupational hea lth protection for workers, establish and
improve responsibility systems for occupation al disease prevention and control, strengthen
management in this area, enhance prevention an d control capabilities, a nd assume liability for
any occupational disease-related harm. Empl oyers whose workplaces contain occupational
disease hazard factors listed in the official catalogue must declare such hazardous items to
local health administrative departments a nd accept supervision. For new construction,
expansion, reconstruction projects, or techni cal transformation/technology introduction
projects that may generate occupational haza rds, the construction entity must conduct
occupational hazard pre-assessments during the f easibility study stage. The construction entity
shall incorporate necessary expenses for occu pational disease protection facilities into the
project budget and ensure simultaneous desig n, construction, and commissioning of such
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facilities with the main project . Prior to project completion acce ptance, the construction entity
must evaluate the effectiveness of occupatio nal hazard control measures. For occupational
disease protection facilities in constructi on projects (excluding those for radioactive
occupational disease hazards in medical institut ions), the construction entity must organize
official acceptance inspections; the project may only commence operations after passing such
acceptance procedures.
IX. Laws and Regulations Relating t o Intellectual Property Rights
1. Patent
The Patent Law of the People ’s Republic of China ( 《中華人民共和國專利法》)
promulgated by the SCNPC on March 12, 1984, most recently amended on October 17, 2020
and effective on June 1, 2021, and its implementation rules ( 《中華人民共和國專利法實施細
則》), which were promulgated by the State Co uncil on June 15, 2001 and most recently
amended by the State Council on December 11, 2023 and effective on January 20, 2024,
provide for three types of patents: ‘‘invention ’’, ‘‘utility model ’’ and ‘‘design ’’. ‘‘Invention ’’
refers to any new technical solution in relation to a product, or a process or improvement
thereof; ‘‘utility model ’’refers to any new technical solution relating to the shape, structure, or
their combination, of a product, wh ich is suitable for practical use; ‘‘design ’’ refers to a new
design that is aesthetic and suitable for industria l application for the overall or partial shape,
pattern or its combination of products, as well as the combination of color, shape and pattern.
The validity period of patent for an ‘‘invention ’’ is 20 years, while the validity period of
patent for a ‘‘utility model ’’ is 10 years and that of a ‘‘design ’’ is 15 years, from the date of
application.
2.
Trademark
Registered trademarks are protected under the Trademark Law of the PRC ( 《中華人民共
和國商標法》) promulgated on August 23, 1982 and most recently amended on April 23, 2019,
and the Implementation Rules of the Trademark Law of the PRC ( 《中華人民共和國商標法實
施條例》) last amended by the State Council on April 29, 2014 and came into effect on May 1,
2014. Where registration is sought for a tradem ark that is identical or similar to another
trademark which has already been registered or given preliminary exam ination and approval
for use in the same or similar category of com modities or services , the application for
registration of this trademark may be rejected . Trademark registrations are effective for 10
years which may be renewed for consecutive 10-year periods upon request by the trademark
owner, unless otherwise revoked.
3. Copyright
According to the Copyright Law of the People ’s Republic of China ( 《中華人民共和國著
作權法》), last amended by the SCNPC on November 11, 2020, and effective as of June 1,
2021, works of Chinese citizens, legal persons, o r unincorporated organizations-defined as
intellectual achievements in the fields of literature, art, and science that are original and can
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be expressed in a certain form, whether published or not-are entitled to copyright protection in
accordance with the law. Copyright encompas ses a series of personal and property rights,
including but not limited to the right of publication, the right of authorship, the right of
modification, the right to protect the integrity of the work, and the right of reproduction.
Pursuant to the Measures for the Compu ter Software Copyright Registration ( 《計算機軟
件著作權登記辦法》), promulgated by the National Copyright Administration on February 20,
2002, and the Regulations on the Protection of Computer Software ( 《計算機軟件保護條例》),
amended by the State Council on January 30, 2013, and effective as of March 1, 2013, the
National Copyright Administration is the compet ent governmental authority responsible for the
nationwide administration of software copyright registration. The China Copyright Protection
Center is designated as the software registration authority, which shall issue registration
certificates to computer software copyright a pplicants in accordance with the Measures for the
Computer Software Copyright Registration an d the Regulations on the Protection of Computer
Software.
4. Domain Name
Pursuant to the Measures for the Admin istration of Internet Domain Names ( 《互聯網域
名管理辦法》), promulgated by the Ministry of Industry and Information Technology (the
‘‘MIIT ’’) on August 24, 2017 and effective on November 1, 2017, the MIIT supervises and
administers domain services na tionwide. The principle of ‘‘first come, first serve ’’ is followed
for the domain name registration service. Appli cants of domain name registration shall provide
the domain name registration authority with tru e, accurate and complete information about the
identity of the domain name holder for registrati on purpose, and sign a registration agreement
with it. After completing the domain name regis tration, the applicant becomes the holder of
the domain name registered by him/her/it.
X. Laws and Regulations Relating to Tax
1. Enterprise Income Tax
According to the PRC Enterprise Income Tax Law ( 《中華人民共和國企業所得稅法》),
promulgated by the NPC on March 16, 2007, m ost recently amended on December 29, 2018
and effective on the same date, and the Enterprise Income Tax Implementation Regulations
(《中華人民共和國企業所得稅法實施條例》), promulgated by the State Council on December
6, 2007, most recently amended on December 6, 2024 and effective on January 20, 2025,
enterprises are divided into resident enterprises and non-resident enterprises. Resident
enterprises are enterprises which are set up in the PRC in accordance with the law, or which
are set up in accordance with the law of a foreign country (region) whose actual
administration institution is in the PRC. Non-re sident enterprises are en terprises which are set
up in accordance with the law of a foreign country (region) and whose actual administrative
institution is not in the PRC, but which have i nstitutions or establishments in the PRC, or
have no such institutions or establishments but have income generated from inside China.
Resident enterprises are subject to a unifo rm 25% enterprise income tax rate on their
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worldwide income. The enterprise income tax ra te is reduced to 20% for qualifying small low-
profit enterprises. The high-tech enterprises that need full support from the PRC ’s government
will enjoy a 15% preferential tax rate for Enterprise Income Tax.
2. Value-Added Tax
Pursuant to the Provisional Regulations on Value-Added Tax of the People ’s Republic of
China (《中華人民共和國增值稅暫行條例》), which was promulgated by the State Council on
December 13, 1993, most recently amended on November 19, 2017 and effective on the same
date, and the Detailed Rules for the Implementation of the Interim Regulations of the People ’s
Republic of China on Value-added Tax ( 《中華人民共和國增值稅暫行條例實施細則》), which
was promulgated by the Ministry of Finance on December 25, 1993 most recently amended on
October 28, 2011, and effective on November 1, 2011, all entities and individuals engaged in
sale of goods or provision of processing, repair and maintenance services or importation of
goods in mainland China are subject to the Value-Added Tax (the ‘‘VAT’’). Unless otherwise
specified in the above-mentioned r egulations, the VAT rate is generally 17% in respect of the
sale or importation of goods by taxpayers.
Pursuant to the Notice on the Adjustment to VAT Rates ( 《關於調整增值稅稅率的通
知》), promulgated by the Ministry of Finance (the ‘‘MOF’’) and the State Administration of
Tax (the ‘‘SAT’’) on April 4, 2018, and became effective as of May 1, 2018, the VAT rates of
17% and 11% applicable to the taxpayers who have VAT taxable sales activities or imported
goods are adjusted to 16% and 10%, respectively.
Pursuant to the Announcement on Relevant Policies for Deepening VAT Reform ( 《關於
深化增值稅改革有關政策的公告》), promulgated by the MOF, the SAT and the General
Administration of Customs on March 20, 201 9 and became effective on April 1, 2019, the
VAT rates of 16% and 10% applicable to the taxpa yers who have VAT taxable sales activities
or imported goods are adjusted to 13% and 9%, respectively.
XI. Laws and Regulations Relating to Foreign Exchange
According to the Foreign Exchange Administration Regulations of the PRC ( 《中華人民共和國
外匯管理條例》)( t h e ‘‘Foreign Exchange Admini stration Regulations ’’), which was promulgated
by the State Council on January 29, 1996 and came into effect since April 1, 1996, the Foreign
Exchange Administration Regulations classify all i nternational payments and transfers into current
items and capital items. Most of the current it ems are not subject to the approval of foreign
exchange administration agencies, while capital items are su bject to such approval. The Foreign
Exchange Administration Regulations were sub sequently amended on January 14, 1997 and August
1, 2008, and came into effect on August 5, 2008. The latest amendment to the Foreign Exchange
Administration Regulations clearly states th at the PRC will not impose any restriction on
international current payments and transfers.
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Pursuant to the provisions of the Notice of the State Administration of Foreign Exchange on
Issues Concerning the Foreign Exchange Administration of 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》) issued on December 26, 2014, where a joint stock limited
company incorporated in the PRC issues shares overseas and is publicly listed and outstanding on
overseas exchanges upon the approval by the CSRC, it shall, within 15 business days after the date
of the end of its overseas listing issuance, register the overseas listing with the Administration of
Foreign Exchange at the place of its establishmen t, and present its certificate of overseas listing to
open a ‘‘special account for overseas listing of domestic company ’’ at a local bank to handle the
exchange, remittance and transfer of funds for th e business concerned. The proceeds raised by the
domestic companies through overseas listing may be remitted to the domestic account or deposited
in an overseas account, provided that the use of the proceeds shall be consistent with the content of
the document and other public disclosure documents.
Meantime, where a domestic shareholder of a do mestic company intends to decrease his/her
overseas listed shares in accordance with relevant regulations following the overseas listing of the
domestic company, such domestic shareholder s hall register with the State Administration of
Foreign Exchange (the ‘‘SAFE ’’) branch in the place of domicile of the shareholder within 20
working days after the decrease of shares to obtain t he business registration certificate; where a
domestic shareholder of the domestic company inte nds to increase his/her overseas listed shares in
accordance with relevant regulations, the sharehol der shall, after obtaining the approval, filing, or
no-objection letter from the relevant regulatory aut horities regarding the increase in shareholdings
(except where such documents are not required und er applicable regulati ons), register with the
SAFE branch in the place of domicile of the shar eholder within 20 working days before the
increase of shares to obtain the bus iness registration certificate.
According to the Guidelines on Foreign Exchang e Business for Capital Items (2024 Edition)
(《資本項目外匯業務指引(2024 年版)》) issued by SAFE on April 3, 2024, in principle, the funds
raised by overseas listings of domestic compani es should be repatriated to China in a timely
manner, and can be repatriated in RMB or foreign currency. The use of funds shall be consistent
with the relevant contents listed in the document or c orporate bond offering documents, shareholder
circulars, resolutions of the board of directors or shareholders ’ meeting and other publicly disclosed
documents. Domestic companies using the funds r aised from overseas listings to carry out overseas
direct investment, overseas securities investme nt, overseas lending and other businesses shall
comply with the relevant foreign ex change management regulations.
XII. Laws and Regulations Relating to Ov erseas Securities Offering and Listings
1. Overseas Securities Offering and Listings
On February 17, 2023, China Securities Regulatory Commission (the ‘‘CSRC ’’) released
several regulations regarding the management of filings for overseas offerings and listings by
domestic companies, including the Trial Adm inistrative 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》)( t h e ‘‘Trial Measures ’’) together with 5 supporting guidelines (together with the Trial
Measures, collectively referred to as the ‘‘New Regulations on Filing ’’), which was
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implemented on March 31, 2023. Under New Regulations on Filing, an enterprise within the
PRC that directly or indirectly issues securiti es overseas or lists and deals in its securities
overseas shall comply with the laws, administrat ive regulations and relevant national rules on
foreign investment, state-owned assets man agement, industrial supervision, overseas
investment, cyber security, and data security etc., and shall not disturb the domestic market
order or do harm to national interests, social p ublic interests, and the legitimate rights and
interests of domestic investors.
An issuer seeking an overseas initial public offering or listing shall, within 3 working
days after submitting the issuance and listing application documents overseas, file a
registration with the CSRC and submit the filin g report, legal opinions, and other relevant
documents, ensuring a true, accurate, and comple te description of shareholder information.
Once the filing documents are complete and comply with the stipulated requirements, the
CSRC will, within 20 working days of receiving such documents, conclude the review
procedure and publish the filing results on its o fficial website. If the filing documents are
incomplete or do not conform to the stipulated requirements, the CSRC will, within 5 working
days of receiving the filing doc uments, request supplementary materials. The issuer shall
provide the additional documents within 30 working days. During the review of the filing
documents, the issuer may encounter circumsta nces that are prohibited under the regulations
governing overseas offerings and listings . In such cases, the CSRC may seek opinions from
the relevant competent authorities of the State Council.
2. Confidentiality and Archives Administration
On February 24, 2023, the CSRC and other three relevant government authorities jointly
promulgated the Provisions on Strengthening the Confidentiality and Archives Administration
of Overseas Securities Issuance an d Listing by Domestic Enterprises ( 《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》)( t h e ‘‘Provision on Confidentiality ’’),
which was implemented on March 31, 2023. Pursuant to the Provision on Confidentiality,
where a domestic enterprise provides or public ly discloses any document or material that
involves state secrets and working secrets o f state agencies to the relevant securities
companies, securities service institutions, ove rseas regulatory authorities and other entities and
individuals, it shall report to the competent department with the examination and approval
authority for approval in accordance with the l aw, and submit to the secrecy administration
department of the same level for filing. The wor king papers formed within the territory of the
PRC by the securities companies and securities service agencies that provide corresponding
services for the overseas issuan ce and listing of domestic enterprises shall be kept within the
territory of the PRC, and cross-border transfer shall go through the examination and approval
formalities in accordance with the relevant provisions of the State.
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U.S. OUTBOUND INVESTMENT RULE
On October 28, 2024, the U.S. Department of the Treasury ( ‘‘Treasury ’’) Office of Investment
Security published a final rule ( ‘‘OIR’’) establishing new regulatory controls on certain technology-
related investments by U.S. persons in or related to the People ’s Republic of China, Hong Kong
and Macau ( ‘‘countries of concern ’’).
The OIR, which became effective on January 2, 2025, implements Executive Order 14105
(‘‘Order ’’) ‘‘Addressing United States Investments in C ertain National Security Technologies and
Products in Countries of Concern ’’(August 9, 2023).
Overview
The OIR applies to U.S. persons engaging in a ‘‘covered transaction ’’ involving a ‘‘covered
foreign person. ’’ A covered foreign person is a ‘‘person of a country of concern ’’ that engages in
certain ‘‘covered activities. ’’ Depending on the nature of the ‘‘covered activity, ’’ ac o v e r e d
transaction may be prohibited (p rohibited transactions) or may require notification to Treasury
(notifiable transactions).
Covered activity is activities referred to in the definition of ‘‘prohibited transactions ’’ and
‘‘notifiable transactions ’’ and includes research, development, or manufacturing involving ‘‘covered
national security tec hnologies and products, ’’ which are sensitive technologies and products in the
semiconductors and microelectronics, quantum in formation technologies, and AI sectors that have
military, intelligence, surveill ance, or cyber-enabled capabilities.
Generally, activities and technology that are deemed to present the most acute national
security concerns are prohibited, while other de signated activities are subject to notification
requirements.
The OIR also prescribes ‘‘excepted transactions ’’ which are exceptions to ‘‘covered
transactions ’’ and provides for a mechanism for the Secretary of Treasury to exempt certain
covered transactions from the OIR on a case-by-case basis.
U.S. Persons
Under the OIR, a ‘‘U.S. person ’’is:
. a United States citizen or a lawful per manent resident, wherever located;
. an entity organized under the laws of the Un ited States or any jurisdiction within the
United States (including foreign branches o f any such entity), wherever doing business;
or
. any person physically present in the United States.
U.S. persons are required to take ‘‘all reasonable steps ’’ to ensure their ‘‘controlled foreign
entities ’’also comply with the OIR.
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Covered Transaction
The term ‘‘covered transaction ’’in the OIR includes:
. acquiring equity and contingent equity interests in a covered foreign person;
. providing debt financing to a covered foreign person that affords or will afford the
lending party an interest in profits of the covered foreign person, the right to appoint
members of the board of directors of the cove red foreign person, or other comparable
financial or governance rights characteris tic of an equity investment but not typical of a
loan;
. acquisition, leasing, or other development of operations, land, property, or other assets in
a country of concern that will result in assisting with the establishment of a covered
foreign person;
. conversion of a contingent equity interest into an equity interest in a covered foreign
person, where the contingent equity interest was acquired on or after January 2, 2025;
. entering into a joint venture with a covered for eign person to engage in certain activities;
or
. passive investment in a non-U.S. investment fund that engages in a covered transaction.
Covered Activities
‘‘Covered activity ’’ means any of the activities referre d to in the definition of prohibited
transactions and notifiable transactions. The cha rt below sets out activities of the covered foreign
person or joint venture relevant to each prohibited transactions or notifiable transactions.
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Notifiable transactions are subject to a 30-da y post-closing notification to Treasury.
Prohibited Transactions Notifiable Transactions
Semiconductor and
Microelectronics
A covered transaction in which the
covered foreign person: Develop or
produce any electronic design
automated software for the design
of integrated circuits ( ‘‘ICs’’)o r
advanced packaging;
Develop or produce (1) front-end
semiconductor fabrication
equipment designed for performing
volume fabrication of ICs; (2)
equipment for performing volume
advanced packaging; or (3)
commodity, material, software or
technology designed exclusively
for use in or with extreme
ultraviolet lithography fabrication
equipment;
A covered transaction in
which the covered foreign
person:
Design, fabricate or package
any IC that does not meet the
prohibited transaction
parameters.
Design ICs that meet or exceed
certain performan ce parameters or
that are designed for operation at
certain temperatures;
Fabricate ICs that meet specified
criteria; Package ICs using
advanced packaging techniques; or
Design, sell or produce
supercomputers enabled by
advanced ICs that can perform at
certain thresholds.
Quantum Information
Technologies
Develop quantum computers or the
critical components required to
produce quantum computers, such
as dilution refrigerators or two-
stage pulse tube cryocoolers;
None.
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Prohibited Transactions Notifiable Transactions
Develop or produce quantum
sensing platforms designed for, or
intended to be used for, military,
government intelligence, or mass-
surveillance end uses; or
Develop or produce quantum
networks or communication
systems designed for, or intended
to be used for, networking to scale
up capabilities of quantum
computers, secure communications,
or any other application that has
any military, government
intelligence, or mass-surveillance
end use.
AI Systems Develop AI systems exclusively
designed for, or intended to be
used for, military, government
intelligence, or mass surveillance
end uses; or
Develop AI systems trained using
a specified quantity of computing
(10^25 computational operations
generally or 10^24 computational
operations using primarily
biological sequence data.)
Develop AI systems that are
designed for military,
government intelligence, or
mass surveillance end uses
(but not exclusively);
Develop AI systems intended
to be used for cybersecurity
applications, digital forensics
tools, penetration testing
tools, or the control of
robotics systems; or
Develop AI systems trained
using a quantity of computing
power greater than 10^23
computational operations.
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Prohibited Transactions Notifiable Transactions
Sanctioned Persons A covered transaction in which the
covered foreign person engage in a
covered activity (including a
notifiable transaction) and is:
Included on the BIS ’ Entity List or
Military End User List;
A ‘‘Military Intelligence End-
User ’’as defined by the BIS;
Included on the Department of the
Treasury ’s list of Specially
Designated Nationals and Blocked
Persons (SDN List), or is an entity
in which one or more individuals
or entities included on the SDN
List, individually or in the
aggregate, directly or indirectly,
own a 50 percent or greater
interest;
Included on the Department of the
Treasury ’s list of Non-SDN
Chinese Military-Industrial
Complex Companies (NS-CMIC
List); or
Designated as a foreign terrorist
organization by the Secretary of
State under 8 U.S.C. § 1189.
Covered Foreign Persons
A ‘‘covered foreign person ’’is:
. a person of a country of concern who engages in a covered activity; or
. a person that has a voting interest, equity in terest, board seat, or contractual power to
direct or cause the direction of the managem ent or policies in a person of a country of
concern where more than 50% of one of several key financial metrics of the entity is
attributable to such a person of a country of concern; and
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. a person of a country of concern that participates in a joint venture with a U.S. person
that engages in activities subject to the prohibition or notification requirements.
A person of a country of concern means:
. an individual who is a citizen or permanent r esident of a country of concern (and not a
U.S. citizen or permanent resident of the United States);
. an entity that is organized under the laws of a country of concern, headquartered in,
incorporated in, or with a principal place of business in a country of concern;
. the government of a country of concern including any political subdivision, political
party, agency, or instrumentality thereof; any person acting for or on behalf of the
government of a country of concern; or any entity with respect to which the government
of a country of concern holds individually or in t he aggregate, directly or indirectly, 50
p e r c e n to rm o r eo ft h ee n t i t y’s outstanding voting interest, voting power of the board, or
equity interest, or otherwise possesses the power to direct or cause the direction of the
management and policies of such entity (whether through the ownership of voting
securities, by contract, or otherwise);
. an entity in which in any of the aforementioned categories of persons hold at least 50
percent of any of the following interests of s uch entity: outstanding voting interest,
voting power of the board, or equity interest; or
. any entity in which one or more persons identified in the preceding paragraph,
individually or in the aggregate, directly or in directly, holds at least 50 percent of any of
the following interests of such entity: outst anding voting interest, voting power of the
board, or equity interest.
The Order identifies the PRC, along with the Special Administrative Regions of Hong Kong
and Macau, as a ‘‘country of concern. ’’
Penalties
Conduct that violates the OIR includes:
. taking any prohibited action;
. failing to take any required action required within the timeframe and in the manner
specified;
. making materially false or misleading rep resentations to Treasury, or falsifying,
concealing or omitting any material fact, wh en submitting any required information; or
. evading or avoiding any of the prohibitions.
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Maximum civil penalty that may be imposed for violations of the OIR is the greater of twice
the amount of the transaction that is the basis for the violation or $250,000 (or $368,136 as of
January 12, 2024, adjusted for inflation). A willful violation of the OIR may result in criminal
penalties of up to $1,000,000 and 20 years imprisonment.
Excepted Transaction
The OIR provides for several ‘‘excepted transactions ’’ that are not subject to the notification
or prohibition requirements of the OIR. Excepte d transactions include a n investment by a U.S.
person in publicly traded securities. Investment s in publicly traded securities on both U.S. and non-
U.S. exchanges (e.g., HKEX) are typically consider ed excepted transactions, so long as they do not
afford the U.S. person rights beyond standard minority shareholder protections with respect to the
covered foreign person.
The Treasury, however, emphasizes that a U.S. person ’s acquisition of an equity interest in a
covered foreign person that is not yet publicly tra ded for the purpose of facilitating an IPO, such as
a purchase with the intent to create a market for the security or to resell the security on a secondary
market (e.g., as part of an underwriting arrangement), is a covered transaction.
In other words, after a covered foreign person is listed on the HKEX, U.S. persons ’
subsequent acquisition of its equity and equ ity interests are typically excepted from ‘‘covered
transactions ’’.
Other excepted transactions include investment s in securities issued by investment companies
such as index funds, mutual funds, or exchange traded funds.
Certain investments made as a limited partner in a venture capital, private equity fund, fund of
funds, or other pooled investment funds are excepted if the limited partner ’s committed capital is
not more than $2 million, aggregated across invest ments and co-investment vehicles of the fund; or
the limited partner received a binding contract ual assurance that its capital will not be used to
engage in a prohibited or notifiable transaction.
However, an investment is not an excepted transaction if it affords the U.S. person rights
beyond standard minority shareholder protecti ons with respect to the covered foreign person.
Even for excepted transactions, U.S. persons ma y still be required to conduct due diligence to
ensure compliance with the OIR.
The OIR separately provides for a ‘‘national interest exemption, ’’ pursuant to which the
Secretary of the Treasury, in consultation with the Secretaries of Commerce and State, and the
heads of relevant agencies, as appropriate, may exempt a transaction from the prohibition or
notification requirement on the basis that the transaction would be in the national interest of the
United States.
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A U.S. person may request that Treasury review a potential transaction under the national
interest exemption on behalf of itself or on behal f of its controlled foreign entity. Such a review
will be based on the totality of all relevant facts and circumstances, and it is anticipated that an
exemption will only be granted in exceptional circumstances.
Therefore, we are not a covered foreign pers on, and covered transactions in the OIR do not
apply to us. Accordingly, after consulting with our legal advisor on this matter, we believe that the
OIR would not impact our business or the Global Offering.
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OVERVIEW
Who We Are
We are an industry-leading integrated one-sto p precision manufacturing solution provider. We
are focused on technological innovation and em powered by smart manufacturing. In terms of
revenue in 2024, we are a global leading player in pre cision structural parts a nd modules integrated
solutions for both consumer electronics and smart ve hicles interaction systems with market shares
of 13.0% and 20.9%, respectively. We have accumu lated strong expertise and capabilities in
consumer electronics and smart vehicles, with robus t and comprehensive platf orm-based capabilities
that include talent, technology, supply and smart manufacturing. This empowers us to expand into
new business areas and seize future growth opportunities, and lays the foundation for being one of
the first companies in the industry to undertak e large-scale production of key components and
complete device assembly for humanoid robo ts and AI glasses/XR head-mount displays.
The following are our business highlights:
The world's first touch-
enabled smartphones with
full-sized screen
Cover glass core supplier
Industry-first single-piece
flow production
Integrating multiple
processes into a continuous
production line
RMB69.9 billion
Revenue for 2024
at CAGR of 22.3%2 from
2022 to 2024
The world’s first premium
smart electric vehicle
Central control screens and
intelligent B-pillars supplier
Full material coverage
Glass, metal, sapphire,
ceramic, plastic, leather,
silicon, glass fiber, carbon
fiber and more
Humanoid robots
One of the first companies to
undertake mass production
and complete device
assembly1
Integrated one-stop
precision manufacturing
Achieving full industry value
chain vertical integration
for smart devices
RMB5.0 billion4
Cumulative cash dividend and
repurchase payout ratio from
2022 to 20245 – 54.5%
IoT and smart systems
IoT building the production
system with key
manufacturing processes
fully intelligent
RMB7.2 billion
Cumulative R&D spending
from 2022 to 2024
AI glasses
RMB3.7 billion
Net profit for 2024
at CAGR of 20.8%3 from
2022 to 2024
Pioneering
contributions
Smart
manufacturing
Financial
performance
One of the first companies to
undertake mass production
and complete device
assembly1
Note 1: Source from the Frost & Sullivan Report;
Note 2: (Revenue in 2024/Revenue in 2022)^(1/2)-1
Note 3: (Net profit in 2024/Net profit in 2022)^(1/2)-1
Note 4: Total dividends in respect of 2022 to 2024 (including repurchase of shares in 2022)
Note 5: Cumulative cash dividend and repurchase payout ratio from 2022 to 2024 = Total dividends in respect of
2022 to 2024 (including repurchase of shares in 2022)/Total net profit attributable to shareholders of the
Group from 2022 to 2024
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Since the 2000s, led by our Chairman, Ms. Chau, we have been at the forefront of the
development and application of new materials such as glass, sapphire and ceramics in consumer
electronics under the guidance of our ‘‘four new ’’strategy — new materials, new technologies, new
equipment and new fields. In 2007, we were the fi rst in the industry to apply glass to the world ’s
first touch-enabled smartphone wi th full-sized screen, establishin g the mainstream technology for
functional panels on smart devices. To date, thro ugh our accumulated expertise in materials science
— including glass, metal, sapphi re, ceramics, plastics, leath er, glass fiber and carbon fiber — we
have achieved full vertical integration along th e smart devices industry value chain. This spans
from raw materials and structural part production to functional module lamination and complete
device assembly. We have established long-term str ategic relationships with global leading brands
in consumer electronics and sma rt vehicles and are deeply involved in the development and
production of their products two to three years a head of the product launches. In addition, we
proactively expand into broad and high-growth- potential areas and extend horizontally into
diversified markets such as smart retail devices, i ndustrial applications, humanoid robots and AI
glasses/XR head-mount displays, creating a mult i-faceted presence in various emerging markets.
Vast market
coverage with
great growth
potential
Consumer electronics
Smartphones Computers
Smart
wearables
Central control
screens
Instrument
panels
Intelligent B-pillars
and C-pillars
AI glasses/XR
head-mount displays
Smart retail
devices
Industrial and
humanoid
robots
Multi-functional
glasses
Technology
Platform
Talent
Platform
Supply
Platform
Smart Manufacturing
Platform
Smart vehicle Emerging areas
Vertical
integration in
industry value
chain
Comprehensive
platform-based
capabilities
Complete
device
assembly
One-stop
product
solution
Full material
coverage
Self-developed
automated
equipment
Product
R&D design
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Our Solutions
Consumer Electronics: We provide various structural parts and functional modules including
cover glass, metal mid-frames, touch modules, dis play modules, thermal mod ules, antenna modules,
biometric recognition modules and wireless chargi ng modules as well as complete device assembly
for consumer electronics such as smartphones, co mputers and smart wearables. Our customized
solutions cover a variety of materia ls, including glass, metal, sapphi re, ceramics, plastics, leather,
silicone, glass fiber and carbon fiber.
Smart Vehicle: We develop and produce a wide range of automotive electronics products and
structural parts for the smart cockpit. We offer in novative solutions to customers, including glass
and components for automotive electronics such as central control screens and instrument panels,
intelligent B-pillars and C-pillars and multi-func tional glasses for side windows, windshields and
sunroofs.
Other Emerging Smart Devices Markets: We have expanded into various markets, including
humanoid robots, AI glasses/XR head-mount displays and smart retail devices. We collaborate with
leading humanoid robot companies, providing ma ss production of core components and complete
device assembly. In the AI glasses/XR head-mount displays market, we offer a variety of products
and services covering functional modules and complete device assembly. In addition, we have also
jointly launched ‘‘T a pt oP a y ’’ smart retail devices with a leading company in the third-party
payment industry.
Our Platform-Based Capabilities
We possess robust and comprehensive platform- based capabilities, encompassing talent,
technology, supply and smart manufacturing. As for the talent platform, we have cultivated a large
number of R&D expert teams who combine theoretical innovation with excellent craftsmanship and
practical skills. Moreover, we are capable of qu ickly assembling teams across various areas and
industries to meet our evolving business requirements. Our technology platform embodies the
ability to transfer technologies across different areas, leveraging proven technologies in mature
areas to empower new end uses. Our supply pl atform, which encompasses major phases of
production and testing, is built upon our in-house m anufacturing capabilities, covering tooling,
fixtures, cutting tools, and mold manufactur ing, along with our in-house production of raw
materials and auxiliary materials, supported by e xtensive global upstream resources. This further
enables the rapid mass production of a wide range of products and the efficient fulfillment of
customers ’ diverse requirements. Our smart manuf acturing platform, stems from years of
accumulated experience in equipment developmen t, which enables us to make adjustments based
on the modules and designs of existing equipment a nd efficiently develop production lines for new
products.
Vertical Integration
Our business operations cover everything from p roduction of raw materials and structural part
production such as cover glass and metal mid-fra mes, to functional modu le lamination such as
touch modules, display modules, thermal modules, radio frequency antenna modules, fingerprint
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modules, camera modules and wireless charging m odules, as well as complete device assembly of
smart devices. We have achieved comprehensi ve coverage of raw materials through technical
capabilities for a variety of functional materials . More specifically, we are one of the few solution
providers in the global consumer electronics suppl y chain with advanced processing capabilities in
both glass and metal. We offer our customers verti cally integrated one-stop solutions, covering
everything from design to mass production.
Global Footprint
We have nine production and R&D centers both dom estically and internationally, including a
production center in Southeast Asia and domestic a nd overseas offices ensuring extensive coverage
of domestic and international markets. By strategi cally positioning ourselves close to our customers,
we optimize supply chains and log istics costs, enabling us to respond quickly to customer demands.
Market Opportunities
. Consumer electronics: Consumer electronics products will continue to be updated,
iterated and innovated in the next few years w ith continuous technological development
and innovation being the key drivers. For ex ample, the advancement of foldable screen
technology and the continuous enhancement of AI function are expected to make,
smartphones lighter, more individualized, intelligent and high-end. This led to higher
hardware requirements for structural parts and functional modules of smartphones. For
example, ultra-thin flexible glass ( ‘‘UTG’’) will be widely used in foldable smartphones
due to its small bending radius and its ability t o fold without creases. Variable-thickness
glass ( ‘‘VTG’’) can offer higher strength, impact resistance and scratch resistance
compared to UTG, and has become one of the key research and development areas of
leading companies in the industry. In ad dition, we have also developed optical
waveguide technology, which will be widely adopted in AR/AI glasses in the future.
. Smart vehicles: Driven by policy support and technological innovation, the smart
vehicles market is expected to continue to develop rapidly in the next few years, and
vehicles are expected to become more i ntelligent. Specifically, as users ’ expectations for
driving and riding experience increase, th e application of smart glass is developing
rapidly. Glass components such as side windows and sunroofs will provide a variety of
intelligent functions, such as heat insulation , electrochromic sunsha de, water-repellency,
anti-fogging and image display. This has dr iven the widespread use of glass in smart
vehicles and also requires hardware suppliers to achieve new technological developments
and breakthroughs in materials and processing.
. Other emerging end markets: With the development of artificial intelligence and
technological advancements in new mater ials and new end uses, many emerging end
markets such as humanoid robots, AI glasse s/XR head-mount displays and smart retail
are expected to experience significant growth in the coming years.
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Financial Performance
As a result of the continuous expansion of our product and service portfolio and the deepening
of our relationships with our customers, we hav e achieved remarkable growth in revenue and net
profit during the Track Record Period. We recorded revenue of RMB46,698.5 million,
RMB54,490.7 million and RMB69,896.8 million in 2022, 2023 and 2024, with a year-on-year
growth of 16.7% in 2023 and 28.3% in 2024. We recorded profit for the year of RMB2,519.8
million, RMB3,041.8 million and RMB3,676.9 mil lion in 2022, 2023 and 2024, with a year-on-year
growth of 20.7% in 2023 and 20.9% in 2024. As furthe r testament to our ability to create value for
our Shareholders, we declared and paid dividends of RMB493.1 million, RMB986.2 million and
RMB1,482.2 million in 2022, 2023 and 2024.
STRENGTHS
Global leader in integrated one-stop precision manufacturing, with leading positions across
multiple industries
We are a leading integrated one-stop precision manufacturing solution provider with services
covering the entire smart devices value chain, and we are a global leader in multiple smart device
end markets. We provide vertically integrated solu tions that cover the entire industry value chain of
precision manufacturing for a diverse range of smart devices, including product design, mold
development, production of new materials, softw are development, manufacturing and processing,
quality management and complete device assembly.
. Based on revenue in 2024, we have global lea ding market share in precision structural
parts and modules integrated solutions for bot h consumer electronics and smart vehicles
interaction systems.
. Based on revenue in 2024, we are (i) the primary supplier of cover glass for mid-to-high-
end smartphone brands globally, and (ii) the main supplier of central control screens and
intelligent B-pillars for the world ’s largest battery electric vehicle brand.
Leveraging our excellent innovation capab ility and sustained R&D investment, we
continuously explore new business growth areas and lead the industry in terms of innovation. We
have developed high-precision, high-performanc e components for emerging end-use areas through
our expertise in precision structural parts and smart manufacturing. With our platform-based
capabilities, we have improved the performance of humanoid robots and AI glasses/XR head-mount
displays while empowering smart retail devices with better user experience.
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Focused on technological innovation and commi tted to research and development, we drive the
evolution of advanced materials and technology
The precision manufacturing industry addresse s end markets such as consumer electronics and
smart vehicles, which are characterized by the per sistent introduction of innovative technologies
and new product features. Our focus on research an d development and innovation enables us to stay
at the forefront of the market and provide smart manufacturing solutions for the latest products.
Guided by our ‘‘four new ’’strategy, namely new materials, ne w technologies, new equipment and
new fields, we are able to fulfill our long-term strategic customers ’ needs for innovative product
functions while also spearheading the developme nt of new products through collaborative research
and development with our downstream partners.
We are committed to research and develop ment and innovation, and have accumulated
abundant core technologies in materials and produ ction processes, thereby l eading the technological
transformation in smart devices and significantly imp roving the aesthetics and functionality of smart
devices. For example, we were one of the first compa nies to apply materials such as glass, sapphire
and ceramics in premium smart devices. We independently developed and achieved process
innovations such as CNC glass machining, fully-au tomatic silk-screen printing and intelligent
transfer printing and coating, which have become industry standard technologies. In addition, we
have strategically planned for the research and development of cutting-edge technologies with
growth opportunities in emerging areas such as fo ldable screens, industrial and humanoid robots
and AI glasses/XR head-mount displays.
To prepare for future changes, we proactivel y established a scientific and technological
innovation system. The core of our in-house R&D system in recent years has been our Innovation
Research Institute and the Shenzhen R&D Center, w hich are committed to technological research
and development and product innovation focused on addressing key issues in the industry, market
demands and future technologies. In addition, we also continuously conduct R&D and technological
transformation of products and end uses during the production process. Through our R&D planning
and forward-looking technological advancements, we can seize the strategic opportunities brought
about by the dual-wheel drive of AI-enable d devices and foldable screens. We have been
strategically and proactively engaged in the resea rch and development of new technologies such as
UTG and VTG and exploring foldable screen structural component upgrades. In the area of robots,
we have developed the capabilities of independe nt R&D and mass production of core components
for robots. Moreover, we continue to cooperate with customers in the research and development and
innovation of components related to AI-enabled de vices, which are expected to grow significantly
in the future.
Furthermore, we collaborate wit h top-tier domestic and international customers to establish
research and development centers dedicated to the ir products, building a global R&D network. At
the same time, we partner with renowned univers ities worldwide to develop an industry-academia
collaboration model, broadening the application o f scientific research outco mes to cultivate future
technology talent and meet the diverse demands of future markets. Through this mechanism, we
enhance the research capabilities of our R&D and t echnical personnel, expand their perspectives,
and jointly design and manufacture new products t o cater to the diverse needs of both domestic and
international markets.
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As of December 31, 2024, we had over 24,000 experienced R&D and technical personnel and
our total research and development expens es from 2015 to 2024 exceeded RMB18 billion.
Our ongoing breakthroughs in core technologies and our leading first-mover advantage enable
us to seize market opportunities more effectively, continuously enhance our competitive edge,
achieve long-term sustainable growth and solidi fy our leading position in the global precision
manufacturing industry.
Long-term strategic collaborations with global l eading customers to drive developments within
the industry
We have been a trusted partner of many globa l leading consumer electronics and smart
vehicles brands and have established long-term and stable cooperative relationships with them. In
terms of revenue in 2024, we are (i) the primary supplier of cover glass for mid-to-high-end
smartphone brands globally; and (ii) the main suppl ier of central control screens and intelligent B-
pillars for the world ’s largest battery electric vehicle brand. For more than a decade, we have been
working with the world ’s largest consumer IoT platform company, and our solutions to this
company have covered cover glass and metal mi d-frames in its flagship smartphones as well as
complete device assembly. Since our initial coll aboration more than 10 years ago, our relationships
have expanded from the initial smartphones related products and services to smart vehicles and IoT
products.
The long-term and sustainable partnerships we maintain with global leading brands testify to
our technical expertise, strong manufacturing cap acity, efficient production processes and robust
R&D capabilities. Such cooperation also lays the foundation for new opportunities and growth
potentials.
We are committed to driving progress and evol ution in the consumer electronics industry,
partnering with our key customers to shape indust ry trends and deepen our cooperation in mutually-
beneficial ways.
. Collaboration since th e product design phase. We collaborate with our key customers
throughout the entire process of product development, including product design, research
and development, manufacturing and future it erations, offering tailored solutions and
establishing ourselves as a key technical partner of our key customers.
. Continuous expansion of relationship. We continually and proactively improve our
R&D and precision manufacturing capab ilities, which allows us to expand our
collaboration with our customers into other areas such as smart wearables, encompassing
structural parts made of various materials s uch as metal, sapphire and ceramics. This set
the stage for our vertical expansion into functional module lamination and complete
device assembly, ultimately a chieving closed-loop coverage of the industry value chain.
This not only increases technological barrier s and entry thresholds but also strengthens
our long-term strategic partnerships with customers and creates value for our key
customers.
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. Next generation product development. Precision manufacturin g capability directly
impacts the competitiveness of the end pro ducts and the successf ul realization of
innovative concepts. We set up our Innovation Research Institute in 2023 to strategically
undertake research and development of t echnology, processing and production
techniques, materials and innovative production or end uses. Our Innovation Research
Institute currently focuses on the resear ch and development of brittle materials,
applications of new energy and optics, metal mat erials, modules, artificial intelligence
and others. We have collaborated with our key customers to engage in and strategize our
future-oriented technological R&D for innovative products by setting up joint R&D
facilities and labs. Typically, our research and development starts approximately two to
three years prior to the end product ’s official release. This allows us to consistently
maintain a leading positio n in the industry with each ne w product iteration through
providing of effective and high-quality comprehensive solutions to our customers. In
addition, we strategically expand our globa l footprint to stay close to our customers,
allowing us to respond to customer needs q uickly and optimize logistics costs, to
improve our overall competitiveness.
Leading brands in smart devices typically begin c ollaborating with precision manufacturing
solution providers during the product R&D phase, and these brands usually have rigorous and
lengthy supplier approval procedures. These fact ors significantly increase the difficulty for new
suppliers to enter the brand customers ’ supply chain, thereby solidifying our competitive
advantages.
Comprehensive platform-based strategy and vert ical integration along the full industry value
chain to identify and capture market opportunities
We have accumulated deep expertise and capabil ities in the consumer electronics and smart
vehicles industries, with strong and comprehensive platform-based capabilit ies, encompassing the
following aspects:
Talent Platform: We have cultivated a high-quality R&D team that combines theoretical
innovation with exceptional craftsmanship. The average age of our R&D team is 30 years old, and
we have over 24,000 R&D and technical personnel, with a focus on exploration and willingness to
push the boundaries of technology. Additionally, our core R&D and technical personnel have over
15 years of industry experience, possessing de ep practical expertise and strong technical
capabilities. Our platform has brought together an d nurtured many experienced technical experts
through business units, research institutes a nd external academic partnerships with multi-
disciplinary and comprehensive technical capabil ities, enabling us to quickly form cross-domain
and cross-industry teams when nee ded and realizing the synergistic effect of our talent network to
efficiently execute R&D plans. With the ongoi ng AI revolution, we continuously advance in
research methods and experimental validation eq uipment, while also actively recruiting high-end
talent to keep the team in a state of constant activation.
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Technical Platform: We possess the capability of cross-fie ld technology transfer, utilizing
proven technologies in mature areas to empower new end uses. For instance, we have successfully
transferred our efficient implementation capabil ities and precision manufacturing capabilities in
smartphones to smart retail devices. We were the first to achieve advanced processing of and
precise assemble for metal mid-frames, 3D glass pan els and die-cut accessories, thereby providing
one-stop solutions for payment devices, covering everything from design and development to mass
production. In addition, our numerous technological breakthroughs in cover glass, curved glass,
coating technology and touch display modules for consumer electronics have a wide range of
applications in smart vehicles. These technologi es enabled us to seamlessly expand into the supply
chain of products such as central contro l screens and intelligent B-pillars.
Supply Platform: By leveraging strong upstream capabilities, advanced production processes
and technologies and a diverse product portfol io, we have established platform-based supply
capabilities. On the upstream side, we have the cap ability to produce multiple raw materials in-
house and maintain a comprehensive network of upstream resources. With years of manufacturing
experience and advanced production technologies, we can swiftly organize production workflows
and achieve high-efficiency mass production. Fo r example, our industry-first single-piece flow
production method has significantly reduced vari ous production costs and lead times, ultimately
creating value for our customers. Fu rthermore, our diverse product offerings enable us to effectively
fulfill customers ’ various requirements efficiently.
Smart Manufacturing Platform: We possess strong capabili ties in bringing innovative
equipment and products to life in scale. With our in-house expertise in equipment and process
development, we collaborate closely with custom ers in the early stages of product innovation. This
allows us to adjust and adapt equipment based on product characteristics, production line layouts
and processing technologies, enabling tailore d improvements to create highly automated and
intelligent production systems. As a result, we a re able to systematically enhance production
efficiency and yield rates, achieving rapid l arge-scale manufacturing and delivery.
Our operation is vertically integrated along the entire industry value chain from R&D and
manufacturing of smart manufacturing equipment to production of innovative materials, product
design, software development, production of struct ural parts and lamination of functional modules,
quality management and complete device assembly , ultimately forming our capability to provide an
integrated one-stop precision manufacturing solut ion. Our strong and vertically integrated operation
allows us to achieve closed-loop coverage of the entire industry value chain, fostering a robust
industrial ecosystem around our main operations.
We have achieved comprehensive material cover age while consistently advancing research and
development of new materials and their innovati ve applications. We are a global leader in the
processing and production of glass, sapphire, cer amics, leather, glass fiber, and carbon fiber,
achieving complete supply chain coverage for smart devices and providing hol istic solutions for our
customers. With the establishment of Lens Taizhou through acquisition and integration with our
existing businesses, we significantly enhanced ou r processing and assembly capabilities for metal.
With this expansion, we became one of the few solution providers in the global consumer
electronics supply chain with advanced proces sing capabilities for both glass and metal.
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Leveraging our extensive technological expertis e, we have established robust capabilities that
are underpinned by our core technologies. This enabl es us to comprehensively and effectively cater
to a wide range of customers in smart devices while expanding into diverse end uses, allowing us to
capitalize on significant growth opportunities presented by the following end markets:
. Consumer Electronics: Capitalizing on our long-lastin g strategic alliances with global
leading brands in consumer electronics, we h ave significant first-mover advantage and
have made technological achievements in cu tting-edge science and technology. For
example, we actively invest in the research a nd development of new technologies such as
UTG and VTG, and we have developed the cap ability for rapid m ass production of
foldable screen structural parts and modules.
. Smart Vehicles: We have expanded into the smart vehicles industry to establish an
additional growth driver. We have significantly expanded the range of products offered
to customers in the smart vehicles industry, with our current product offerings
encompassing central control scr eens, instrument panels, intel ligent B-pillars, C-pillars,
charging stations, structural parts for bat teries and multi-functi onal glasses for side
windows, windshields and sunroofs. With t he rapid development of the smart vehicles
industry, this business line has become our second-largest revenue source, generating
RMB5.9 billion in 2024, and we have established close strategic partnerships with
several global leading brands in the smart vehicles industry.
. Emerging end uses: We continue to expand our footprint in a number of cutting-edge
areas, such as smart retail devices, huma noid robots and AI glasses/XR head-mount
displays. We undertook the production, assembly and quality control of the core
components of humanoid robots for a leading robotics company, and have successfully
delivered the first batch of humanoid robots. In addition, with our expertise in
nanocrystalline glass technology, we entered i nto an in-depth strategic cooperation with a
leading AI glass company for its entire range of AI glasses, helping it to accelerate bulk
delivery and providing core support for the expected explosive growth in AI glasses
globally in 2025. Furthermore, we collaborated with a global leading mobile payment
platform to develop a smart retail devic e. Leveraging our extensive expertise in
functional modules and complete device a ssembly, we capitali zed on our vertically
integrated operation along the full industry value chain to accelerate the delivery and
deployment of such device, showcasing our robust product development capabilities in
smart devices.
Industry-first automated smart manufacturing equipment and highly advanced data-driven
manufacturing system
As an early mover in the Chinese smart manufacturing landscape, we champion and lead the
industry by being one of the earliest companies to focus on the research, production and large-scale
application of automated equipm ent, industrial robots and smart manufacturing production system.
We have created smart manufacturing facilities th at incorporate state-o f-the-art technologies,
including the Internet of Things, intelligent wa rehousing, fully automated production processes,
single-piece flow and real-time quality checks. The layout of our facilities is guided by the
principle of aligning with the specific production processes of individual products, while operating
as independent units to ensure operational effici ency and facilitate perfo rmance accounting. We
were listed on the MIIT ’s ‘‘National Quality Benchmark List ’’ and the Industrial Internet Pilot
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Demonstration List in 2022. In addition, our high-end in-vehicle display components full lifecycle
collaborative smart factory in Changsha was recognized as an ‘‘Excellent Smart Factory Project ’’by
the MIIT in 2025.
We have accumulated substantial experience and achievements in the R&D and application of
smart manufacturing in both hardware and software. In terms of hardware, we conduct large-scale
in-house R&D, production and deployment of s mart and automated production equipment
(including laser processing, robotic arms and hot bending machines), and have successfully
developed, among others, the industry ’s first automatic glass printing line and baking line. We are
also independently developing and producing high-p recision, cost-effectiv e and highly versatile
industrial robots and premium smart manufacturi ng equipment, such as four-axis, six-axis and
parallel robots, humanoid robots, AOI visual insp ection robots and automatic towing vehicles.
These proprietary equipment not only outperforms conventional equipment in the market in terms
of performance, overall efficiency , degree of automation, energy consumption and cost, but also
ensures high product quality and consistency, expa nding our advantages in efficiency and product
yield rate. Moreover, we enhance our cost-efficiency by upgrading our equipment to adapt to the
layout of our production lines and our processing techniques. For example, we designed and
established the first single-piece flow produc tion line in the industry, which strings multiple
processes into one straight production line extending over hundreds of meters, enabling the
seamless and efficient production of products. This unique design effectively eliminates the need to
physically transport work-in-progress and coordi nate among different facili ties, thereby reducing
costs and expenses and creating value for our customers.
In terms of software, we deeply integrate manufacturing with new technologies such as
industrial internet, big data, cloud computing and art ificial intelligence, significantly improving the
level of automated data collectio n, analysis and reverse control. We have independently developed
an industrial large model and its algorithms for in ternal monitoring of the behavioral patterns of
manufacturing processes, such as optimizing the CNC machining process and developing a coating
operation system for real-time monitoring of coa ting quality. We have also successfully leveraged
deep learning, large models, and AI technologies to optical inspection in smartphones, computers,
and wearable devices. Our smart manufacturing system has achieved full internal connection and
system integration through our self-developed ‘‘Lens Cloud ’’ industrial internet platform. We
achieved real-time sharing of data and information, and digital monitoring of, various processes,
thereby facilitating intelligized business decisi on making, optimizing the design and operation of
our factories and production lines, improving our o verall production efficiency and product yield
rate, and reducing production management cost. I n addition, we are among the first in the industry
to apply cutting-edge technologies such as mach ine vision to product exterior inspection. We
significantly reduced the costs and labor intensity for product inspection with our automated
inspection software and optical platforms that c an analyze various charac teristics and quality
metrics of different materials. With our four CNAS-certified testing centers, we have also
substantially enhanced the accuracy and reco gnition of our testing and analysis results.
Currently, our major production lines have been a utomated, and our key production processes
such as hot bending, precision carving, printing (including silk-screen printing and pad printing)
and AOI inspection have been digitalized and, th rough the construction of industrial Internet of
Things, we have achieved interconnection within our production system. Various operations within
our warehousing and logistics system have also b een digitalized, such as product warehousing,
sorting, handling and transportation. The integr ation of various processes including production,
logistics and warehousing enables precise and tar geted transportation and delivery based on real-
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time production requirements. Our capabilities in di gitalizing and automating production enable us
to continuously optimize our production proces ses and techniques, thereby enhancing our
customers ’ trust in us and increasing our profit margins.
Dedicated founder and experienced senior management team that guided our rise to global
leadership in smart manufacturing
Our founder, Ms. Chau, is an entrepreneur with strategic vision, innovative spirit, strong
execution ability, acute market insight and s ubstantial industry experience. Ms. Chau ’s strategic
vision, her ability to grasp the general trend of the industry from a macro perspective and the rich
industry experience she has accumulated was inst rumental in our success and growth on a global
scale. Since the establishment of Lens Shenzhen in 2003, Ms. Chau has been fully responsible for
the strategic planning of our growth and has led us to achieve remarkable achievements over the
past 20 years. Ms. Chau has received numerous honors and awards in the industry. These include
b e i n gl i s t e do nt h eF o r b e sl i s to ft h eW o r l d’s 100 Most Powerful Women in 2019, Forbes China ’s
Best CEO in 2021, Hurun Richest Self-Made Women in the World in 2022, ‘‘The Most Powerful
Women ’’ by Fortune China in 2024 and ranking 2nd on the Forbes ‘‘100 Power Businesswomen ’’
list in 2025.
Under the leadership of our Chairman, Ms. Cha u, we have formed a proficient management
team that brings a wealth of industry expertise and a global perspective. Our executive directors
and senior management have an average tenure of more than 15 years with us and more than 20
years of experience in the relevant industries. W e recruited management and technical personnel
from around the world who possess diverse backgrounds and overseas experiences as well as
strategic global mindsights. For deta ils regarding our senior management, see ‘‘Directors,
Supervisors, and Senior Management ’’. We are confident that the extensive industry knowledge
and keen market awareness possessed by our senior ma nagement will significantly contribute to our
ability to develop our business strategies, reach ou r strategic objectives, foster employee unity and
capitalize on growth opportunities, ultimately facilitating our consistent and sustainable business
expansion.
Our employees, whether those who have spent decades with us or those international talent,
are united together by our shared and unique corporate culture of ‘‘law-abiding, people-centric,
integrity-first, bold in innovation and willing to commit ’’. Our commitment to our people-centric
corporate culture has remained steadfast, as we s trive to enhance the well-being of our employees
by fostering a safe and healthy workplace, along w ith extensive welfare i nitiatives. We have
adopted share incentive plans to mobilize our employees by enabling them to benefit from the
success of our business.
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OUR STRATEGIES
Expand our global footprint through strategic expansion and optimization of production
capacity
We are committed to continuously providing m arket-leading products and services to our
existing and potential customers around the world. To this end, we plan to expand our global
footprint to solidify our market leadership, enhanc e our supply chain resilience and meet increasing
demands for precision manufacturing solutions. B y strategically broadening our global footprint, we
aim to align our manufacturing capabilities with g lobal market dynamics, ensuring proximity to our
key customers and reducing logistics costs.
We plan to expand and optimize our production capacity globally by setting up new
production centers at strategic locations that are close to our key customers. In addition, as
demands from emerging end markets such as AI-e nabled devices and humanoid robots are expected
to grow rapidly, our expanded production capacity will enable us to capitalize on market
opportunities to strengthen our competitiveness . For details of our production capacity expansion
plan, please refer to the section headed ‘‘Future Plans and Use of Proceeds ’’.
Enrich product and service portfoli o to meet diversified customer needs
We will continue to enrich our product and service portfolio to stay at the forefront of cutting-
edge industry developments. We will continuously fa cilitate product iterations and service upgrades
by incorporating new materials and manufa cturing processes to meet our customers ’ requirements
for product features. This will enable us to fu rther deepen our cooperative relationships with
existing customers and expand our diverse cust omer base. We will also continue to cooperate with
our strategic customers to develop upgraded produ cts with innovative features, so as to capitalize
on opportunities arising from the development of emerging technologies in the consumer electronics
industry. In the meantime, we will further vertically integrate our operation along the smart vehicles
supply chain, and expand our offerings of smart exterior structural parts and ancillary products. In
addition, we will leverage our advantages in mate rial, technology and smart manufacturing to
accelerate the implementation and mass productio no fp r o d u c t st a i l o r e dt oe m e r g i n ge n dm a r k e t s ,
such as AI glasses/XR head-mount displays and humanoid robots.
Continue to enhance our smart manufacturing system to improve production efficiency and
promote green manufacturing
We will continue to pursue the digitalization and automation of our production processes and
equipment to further improve our production effi ciency and increase our product yield, which in
turn enable us to offer high-quality products and s ervices to our customers at competitive prices and
at our desired profit margins. We will also invest in the research and development of production
techniques and manufacturing equi pment and upgrade our existing production facilities and systems
to enhance our capabilities in smart manufact uring. We will also continue to promote green
manufacturing by continuously optimizing our production processes and techniques as well as
upgrading our automation technologies to furthe r reduce production waste, energy use and carbon
emissions.
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Further invest in research and development to solidify our technological leadership
As a company focused on and driven by technol ogical innovation, we will continue to invest
in research and development to strengthen and solid ify our technological leadership in the industry.
We intend to continue to invest in and follow our ‘‘four new ’’ strategy on research and
development. In addition, we plan to deepen ou r collaboration with our customers as well as
suppliers on the research and development of new products and new equipment.
Furthermore, to strengthen our research and dev elopment capabilities, we plan to continue to
attract, train, retain and motiva te high-quality talents to support our research and development
activities. Specifically, we plan to continue to recr uit and cultivate talents for innovation in key
aspects of our research and development, inclu ding product design and development, innovative
technologies and new materials, production t echniques and smart manufacturing equipment. We
believe that a high quality, dedi cated and experienced research and development team is the key to
our research and development success.
Facilitate growth through potential industry val ue chain integration and strategic acquisitions
To complement our organic growth strategy, we wi ll selectively pursue strategic investments,
including investments and acquisitions that enhan ce our capabilities in the vertical industry value
chain and the end markets that we currently serve or may enter. Additionally, we aim to expand our
user base and extend our product and service offe rings. We will continue to evaluate potential
businesses and assets that can complement our existing operations and create synergies.
OUR EVOLUTION
We started processing, manufacturing and selli ng glass products more than 20 years ago, and
have since successfully developed in-depth techno logy and experience in the processing of glass,
gained customer recognition in glass products and became the supplier of glass products, primarily
cover glass, of many well-known global brands in the consumer electronics industry.
Through our research and development efforts in our core competence of cover glass
processing and manufacturing, we developed a nd applied several processing techniques and
technologies that became the industry standard. For example, we were the first to introduce CNC
techniques in the processing of cover glass, signifi cantly increasing product yield and precision and
opening up possibilities for more product specifi cations and customizatio n s .W ea l s oi n v e n t e da n
anti-fingerprint coating technique that became th e industry-standard technique and enabled mobile
phone screens to become stain-resistant and wate r-resistant. For details of our research and
development breakthroughs, see ‘‘ — Research and Development — Innovative R&D. ’’
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With the development of consumer electronics an d increasing consumer desire for better and
more diverse products, we started exploring oth er materials to meet the design and functional
requirements of our customers. We were the first to use sapphire and ceramics in smartphones and
wearable products. Sapphire and ceramics each h as distinct characteristics that enhance the
hardness, abrasion resist ance, corrosion resistance and texture of consumer electronics products, but
the processing of these materials presented challe nges for manufacturers. We successfully overcame
these challenges with research and development br eakthroughs in material optimization, equipment
development and processing technology. Our pro cessing techniques allow our customers to have
more diverse options of applying different materials in the design of their products.
In 2020, Lens Taizhou was established through acquisition and integration, significantly
increasing our production capacity of precision metal and expanding our business scale. By
expanding our coverage of the consumer electronics value chain, we further deepened our
relationships with existing customers and laid the foundation for our future growth.
With the rapid development of smart vehicles in recent years, we saw an opportunity to apply
our expertise in precision processing and manufacturing to a new industry in 2018. Accordingly, we
started cooperating with leading brands in smar t vehicles, both domestically and overseas, and
expanded our product offerings to central control scr een, instrument panel, intelligent B-pillars and
rearview mirror for smart vehicles.
Over the years, we deepened our expertise in s tructural parts and started expanding our
business to functional modules to vertically expa nd our coverage of the consumer electronics value
chain. Our vertically integrated ma nufacturing processes allows s eamless one-stop production from
structural parts to functional modules with high effi ciency and cost-effectiveness. In addition, our
large-scale production capacity and adherence to s tringent quality control ensures that we can meet
the rigorous demands of our customers by reliably providing high-quality functional modules in
large quantities and on time.
In line with our growth strategy of becoming the one-stop solution provi der covering the full
smart device industry value chain, we started strat egically planning for our expansion into complete
device assembly several years ago. In 2021, we started providing complete device assembly on a
large scale. This milestone enabled us to captu re more of the industry value chain and further
solidified our strategic relat ionship with our customers.
Our vertically-integrated ope ration enables us to quickly capture market share in new and
growing end markets such as humanoid robots, smart retail and AI glasses/XR head-mount displays.
In the humanoid robots market, we have established strong partnerships with a number of
innovative companies for the manufacturing, asse mbly and quality control of essential components
such as joint modules, DCU controller and gripper, and have successfully delivered the first batch
of humanoid robots in January 2025. In the smart retail market, we have demonstrated our strong
capability to implement processe s efficiently from the research pha se to full-scale production by
partnering closely with a global leading mobile pay ment platform to jointly develop a smart retail
device by leveraging our full-spectrum industr y strengths. In the AI glasses/XR head-mount
displays market, we have established strategic par tnerships with prominent players in AI interaction
for AI glasses/XR head-mount displays, encompassing functional modules and complete device
assembly, enabling our customers to overcome p roduction capacity challenges and accelerate the
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schedule for mass-scale delivery, thereby providi ng essential support for the anticipated surge in
global deliveries of AI glasses /XR head-mount displays in 2025.
OUR SOLUTIONS
We currently offer a comprehensive suite of precision manufacturing solutions in consumer
electronics, smart vehicles and other emerging en d markets, including various structural parts,
functional modules and others, such as complete device assembly. Most of our solutions are
specifically designed and manufactured pursuan t to the customizations and needs of our customers.
The following diagram shows our coverage of our value chain:
ĊĊĊĊ
Glass Smartphones
Tablets
Laptops
Consumer
Electronics
Smart Vehicles
Smart Payment Terminals
Intelligent Robots
Others
Smart Watches
AI glasses/
XR head-mount displays
Protective Covers
Middle Frames and Small Pieces
Camera Covers
Others
Touch display modules
Fingerprint Recognition Modules
Acoustic Modules
Display Modules
Others
Raw
Materials
Suppliers
PCBA Suppliers
High-
precision
Components
Complete
Device
Assembly
Functional
Modules
SuppliersProduction
Equipment
Suppliers
Metals
Plastics
Sapphire
Ceramics
Others
Processing Equipment
Cutting and
Molding Equipment
Surface Treatment
Equipment
Assembly and
Bonding Equipment
Testing and
Inspection Equipment
Upstream Midstream Downstream Applications
Business Presence of the Company
Major end uses of our solutions include the following:
Smartphones and Computers
We offer a comprehensive suite of structural parts and functional modules for use in
smartphones and computers, including cover gl ass used in smartphones, tablets and laptops,
metal mid-frames for smartphones and vari ous modules such as to uch display module
fingerprint modules, antenna modules and cam era modules and back cover for smartphones
and tablets.
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Our cover glass are light, thin, clear, scratch -resistant and fingerpri nt-resistant. Light
transmittance rate of our front cover glass can reach up to 98% with our advanced double-
sided anti-reflective coating, and cover gla ss produced with our chemical strengthening
technique can achieve a surface hardness of ov er 680HV, significantly enhancing their
performance in 4-point bending tests. We utilize a diversified range of surface treatment
techniques for our glass products, including non-conductive vacuum coating color film,
gradient color coating, silk screen printing, pad printing, lithography processing, frosted
surface treatment, film lamination, texturing and wire drawing, providing our customers with a
complete set of technical solutions.
Our metal mid-frames are crafted with p recision to accommodate various device
specifications, ensuring structural integrit y and design aesthetics. We have comprehensive
surface treatment capabilities for our metal pro ducts, such as automatic three-dimensional
polishing, super-hard physical vapor depositi on coating, automated anodizing and various
metal surface treatments. Our processing accu racy for metal remains stable at around 0.03mm.
We provide a variety of functional modules for use in smartphones and computers,
primarily touch display module, fingerprint modules, antenna modules and camera modules. A
functional module is a set of parts and units that are integrated together to construct a more
complex structure and is one of the basic com ponents of an electronic device. For example, a
touch display module in a smartphone includes sev eral parts such as the touchscreen digitizer,
the display panel, the touch sensor and the cove r glass, which are laminated together to form
the touch display module that enables users to interact with the phone through touch gestures.
Thanks to our advanced processing techniques and vertically integrated operation, we can
seamlessly integrate the production processes f or structural parts and functional modules.
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Set forth below are photos of our main products for smartphones and computers.
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In addition to structural parts and function al modules, we also provide complete device
assembly for smartphones where we assembl e components and modules, including those
manufactured by us and other providers, in to end products. With our complete device
assembly, we provide our customers with a one-stop solution for structural parts, modules and
assembly, achieving vertical inte gration of the entire value chain.
Smart Vehicles and Cockpits
We offer a variety of structural parts and functional modules for smart vehicles and
cockpits include, among other s, in-vehicle electronic glass and components such as central
control screens and instrument panels, intelli gent B-pillars/C-pillars and multi-functional
glasses for vehicle side windows, windshields and sunroofs. Our in-depth experience gained in
smartphones and computers, along with our pl atform-based capabi lities, allowed us to
successfully expand to smart vehicles and cockpits in 2018.
Set forth below are photos of our main products for smart vehicles and cockpits.
Central
Control
Screen
Instrument panel
Panoramic
Sunroof
Front
Windshield
Back
Windshield
Charging Pile
Glass
Side Window Glass
Quarter Glass
Battery
Components
Car
Decorative
Parts
Domain Controller
Intelligent
B-pillar
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Others
We offer structural parts and functional modules for a diverse range of end markets and
end uses, including the following:
. Intelligent head-mounted d isplays and smart wearables: We provide various
structural parts and functional modules for intelligent head-mounted displays and
smart wearables in the consumer electroni cs industry, such as cover glass for smart
watches and functional modules for intelligent head-mounted displays.
. Other smart devices: We offer structural parts and functional modules for other
smart devices in emerging end markets such as humanoid robots and smart retail
devices. We also provide complete d evice assembly for these devices.
We also generate revenue from the sale of scraps and materials, processing fees and
leases.
The table below sets forth a breakdown of our revenue by product end use for the
periods indicated.
2022 2023 2024
R M B%R M B%R M B%
(in millions, except for percentages)
Smartphones and computers
Structural parts and functional
m o d u l e s .............. 3 7 , 7 1 0 . 4 8 0 . 7 % 3 6 , 8 6 8 . 4 6 7 . 7 % 4 3 , 2 3 4 . 3 6 1 . 9 %
C o m p l e t ed e v i c ea s s e m b l y.... 5 0 3 . 4 1 . 1 % 8 , 0 3 2 . 2 1 4 . 7 % 1 4 , 5 1 9 . 9 2 0 . 7 %
S u b t o t a l ................ 3 8 , 2 1 3 . 8 8 1 . 8 % 4 4 , 9 0 0 . 6 8 2 . 4 % 5 7 , 7 5 4 . 2 8 2 . 6 %
S m a r tv e h i c l e sa n dc o c k p i t s..... 3 , 5 8 3 . 8 7 . 7 % 4 , 9 9 8 . 5 9 . 2 % 5 , 9 3 4 . 8 8 . 5 %
Intelligent head-mounted displays
a n ds m a r tw e a r a b l e s ........ 3 , 5 3 8 . 7 7 . 6 % 3 , 1 0 3 . 8 5 . 7 % 3 , 4 8 8 . 4 5 . 0 %
O t h e rs m a r td e v i c e s.......... 1 7 1 . 8 0 . 4 % 1 6 4 . 8 0 . 3 % 1 , 4 0 8 . 4 2 . 0 %
Others (1) ................. 1 , 1 9 0 . 4 2 . 5 % 1 , 3 2 3 . 0 2 . 4 % 1 , 3 1 1 . 0 1 . 9 %
Total ................... 4 6 , 6 9 8 . 5 1 0 0 % 5 4 , 4 9 0 . 7 1 0 0 % 6 9 , 8 9 6 . 8 1 0 0 %
Note:
(1) Others mainly include revenue generated from sales of scape and materials, processing fees, leases and
others.
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Complete device assembly is the sale of the as sembled complete device to our customers.
It typically has a lower gross profit margin than s ale of structural parts and functional modules
because (i) structural parts and functional modules often have higher perceived value due to
the complexity and highly specialized knowledge and expertise involved in designing and
manufacturing the products, whereas comple te device assembly might not command the same
premium; and (ii) complete device assembly usu ally involves higher labor costs compared to
the manufacturing of structural parts and fun ctional modules since the assembly process
requires high numbers of skilled labor, however, the price for the final assembled device is
influenced by intense market competition and manufacturers might need to keep prices
competitive to maintain their market share. According to Frost & Sullivan, the lower gross
profit margin of complete device assembly as compared to structural parts and functional
modules is in line with industry norms.
While we plan to further grow our complete device assembly business, we do not expect
such growth to have a significant impact on our ove rall profitability and financial condition in
the near future given the diversified nature of our product and service portfolio. In particular,
in line with our proposition of offering customer s vertically integrated one-stop solutions, we
generally grow our complete device assembly business by expanding our relationship with
existing customers who are already purchasin g structural parts and functional modules from
us, rather than serving new customers with just complete device assemb ly. This enables us to
deepen our relationship with customers an d increases our operational efficiency.
Seasonality
Demand for and sales of our products follow the same seasonality pattern as sales of the end
products that feature our products, including co nsumer electronics and smart vehicles. Demand for
end products is affected by the holiday season and people ’s consumption habits, with certain
seasonality patterns. As a result, we typically e xperience higher sales in the fourth quarter of the
year. See ‘‘Risk Factors — Our sales may be influenced by seasonality ’’ for risks associated with
the seasonality of our sales.
Product Pricing
We generally determine the price of our products based on a variety of factors, including (i)
complexity of the product both in terms of design and manufacturing, (ii) the costs of developing
and manufacturing such products and our expected profit margin and (iii) competition.
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RESEARCH AND DEVELOPMENT
Research and development are critical to mainta ining our market-leading position and to the
sustained growth of our business by ensuring that we can continue to meet the evolving needs of
global brands. We are dedicated to research and dev elopment, continuously exploring new materials
and technologies to enhance our product offerings and upgrade our production processes.
Product R&D
Given the highly customized nature of our products and solutions, our product R&D are
primarily done in cooperation wi th our customers for specific projects according to the customers ’
customization requirements and end product de signs. Our customers usually approach us at the
beginning of the product cycle of the end produc ts, and we work with them c l o s e l yt od e s i g na n d
develop customized structural parts or functiona l modules pursuant to their specifications and the
design of the end products in which the structural parts and functional modules will be used.
Depending on the specific project or product and th e result of our negotiation with our customer,
our agreement with the customer will specify whic h party should be responsible for the expenses of
such research and development and own th e resulting intellectual properties.
Innovative R&D
In addition to the research and development of specific projects and products, we also
undertake innovative R&D initiatives that focus on new materials, new technologies, new
equipment and new fields. Our i nnovative R&D has resulted in various technology breakthroughs
and upgrades that enabled the continuous iterat ion and advancement of consumer electronics.
To address the challenges of glass processi ng, we developed several glass processing
techniques that became industry standard pr actices. Set forth below are some examples.
. CNC processing. We were the first to adopt computer numerical control ( ‘‘CNC’’)
techniques in the processing of cover glass. CNC is a manufacturing method that
automates the control, movement and preci sion of machine tools through preprogrammed
software. There were challenges in appl ying CNC processing on glass due to its
brittleness. The application of CNC to glas s processing allowed glass to be drilled and
cut with high precision and high speed, significantly improving product yields and
production efficiency and opened up possibi lities for more product specifications and
customizations.
. Ion-exchange strengthened glass. We invented a method fo r eliminating surface
compressive stress of strengthened glass through chemical ion exchange. This technique
prevents glass bending during p rocessing due to stress differences in glass surface, thus
achieving a high-flatness, high-quality sm ooth surface of strengthened glass while
improving yield rates.
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. Coating technique. When tackling the technical challenges of making glass water-
resistant and stain-resistant, we invented an anti-fingerprint coating technique, where a
layer of material is applied onto the glass su rface using nanocoating technology to reduce
the adhesiveness of glass, making it difficult for dust or water to stick to the glass. This
technique soon became the indus try-standard technique and enabled smartphone screens
to become stain-resistant and water-resistant.
. High-adhesion ultra-thin ink. Our high-adhesion ultra-thin ink is a patented innovation
that overcame critical challenges in the processing of glass such as poor adhesion on
ultra-thin or curved glass, reduced touch sensi tivity from thick coatings and vulnerability
to environmental factors like sweat or chemi cals. Our ink achieves micron-level thinness
while maintaining strong adhesion, scratch resistance and corrosion durability. This
breakthrough set industry benchmarks by enabling sleeker, more durable device designs
and improved product yields.
. Polishing techniques. We were the first company in China to adopt glass hole polishing
and cross-section polishing technologies to solve the problem of glass being easily
broken due to microcracks. This innovation makes glass more durable and less prone to
breaking, increasing both product yields and the durability of the finished product.
. Spraying techniques. Our patented gradient glass spraying technique solved the issue
where the surface of glass, after painted, is u sually not smooth which reduces its appeal
and practical application. Our gradien t glass spraying technique advanced the
development of various colorful designs of mobile phone back covers.
. Yellow light processing. We were the first company in adopting the yellow light process
in the manufacturing of three-dimensiona l cover glass, which solved the previous
technical problem where edge oil was easily formed during processing, and manual
wiping caused secondary defects such as edg e transparency and chipping, resulting in
high production costs and low yields.
We were also one of the first companies to appl y ceramics and sapphire to mobile phones and
smart wearable devices.
. Sapphire
Sapphire has several advantages that ma ke it an excellent material for consumer
electronics. For example, it is one of the hardes t materials, highly resistant to scratches and
wear, making it ideal for watch faces since watches face harsher conditions than phones due to
daily wear by consumers and constant contact with skin, sweat and outdoor environment. It is
also highly transparent, which is critical for r eadability in sunlight and accuracy of sensors,
such as the heart rate or blood oxygen sensors imbedded in some smart watches, which rely
on precise light transmission for accuracy.
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However, manufacturing sapphire is expensive, which limited its application in
electronics products. We started investing in the growing, processing and manufacturing of
sapphire more than 10 years ago and have developed vertically integrated comprehensive
capabilities along the sapphire value chain, from growing sapphire in furnaces, processing
sapphire to applying sapphire in structural parts and functional modules. This allowed us to
significantly decrease costs associated wi th applying sapphire in consumer electronics,
providing our customers with the option of applying sapphire in more products and end uses
a n do nab r o a d e rs c a l e .
. Ceramics
Ceramics are resistant to wear, corrosion an d thermal cycling, maki ng them suitable for
harsh environments. In addition, ceramics exh ibit high thermal conductivity, efficiently
dissipating heat from components such as pr ocessors. This prevents overheating in
smartphones, ensuring reliability and longevity of devices.
The processing of ceramics presents several di fficulties. For example, ceramics are prone
to cracking under mechanical or thermal stress which requires careful handling during
manufacturing. We overcame these processing difficulties by adjusting the traditional
production formula for ceramics and adopting innovative techniques to enhance their
durability during processing. Furthermore, we a lso applied various techniques to enhance the
appearance and functionality of ceramics produ cts, widely increasing their application in
consumer electronics.
Innovation Research Institute
We set up our Innovation Research Institute in 2023 to strategically undertake research and
development of technology, processing and pr oduction techniques, materials and innovative
production or end uses. Our Innovation Research Institute currently focuses on the research and
development of brittle materials, applications of new energy and optics, metal materials, modules,
artificial intelligence and others. For example , we have developed three- dimensional aspheric
freeform glass molding technology and its printin g technology, which eliminates straight lines and
flat surfaces, as well as a full- process laser machining technology which ensures precise and
consistent results for brittle materials such as gl ass and ceramics. Additionally, we have developed
a coating machine software platform and a nove l AI dynamic control system to achieve optimal
coating results.
In addition to internal research and developm ent efforts, we also collaborate with external
parties such as universities or research instituti ons, including Xiangtan University and Central
South University, to undertake research and d evelopment projects. For our research and
development projects with universities, we gene rally bear the expenses of such projects and obtain
the resulting intellectual properties.
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Recent R&D Focus
We adjust our research and development focus based on the latest industry trends and
projected growth areas. For example, in recent years, we have been focusing on research and
development of techniques and technologies relat ing to foldable screen and AI-enabled devices and
have achieved significant results. Set fo rth below are three notable examples.
. Foldable screens
We have been strategically and proactively planning the advancement and exploration of
new techniques and technologies to prepare for opportunities presented by foldable screens in
consumer electronics. Foldable screens still pres ent a number of technical difficulties, such as
the tendency to have folding marks and fragili ty. We are engaged in technological as well as
product R&D to try to overcome these challenge s. Specifically, we are optimizing the design
and structure of the hinges for foldable screens to reduce the pressure on screens, thereby
minimizing the folding marks on screen.
. AI glasses/XR head-mount displays
Leveraging our advanced manufacturing system and technological breakthroughs, we
collaborated with our customers to address cha llenges presented in the production of AI
glasses/XR head-mount displa ys and successfully expedited the timeline for mass product
delivery.
We have made several breakthroughs in key technologies. Our proprietary nano-
microcrystalline glass technology improves th e strength and light transmission rate of glass
lenses, allowing AI glasses/XR head-mount di splays to be both lightweight and capable of
delivering high-quality visuals. Our technolo gical innovation in optical waveguide enables
compact designs and more immersive experien ces for AI glasses/XR head-mount displays.
Furthermore, our Innovation Res earch Institute is working on cr eating lightweight, durable
materials, establishing us as a m ain provider for global leading brands in AI-enabled devices.
. Industrial and humanoid robots
We have been developing industrial robots since 2016, including four-axis, six-axis,
parallel robots, humanoid robots and AOI visual inspection robots. Our industrial robots are
widely used in our production activities, signifi cantly increasing our production efficiency and
scalability and enhancing the consis tency and precision of our products.
We have made significant progress in humanoid robots and are well-positioned to
capitalize on the strong growth opportunities by developing and manufacturing core structural
parts and functional modu les for humanoid robots.
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We successfully enhanced robot exteriors with our advancements and innovation in
materials and process, such as the curved glass display technology and the nano-
microcrystalline glass technology. In 2024 and 2025, we delivered structural parts and
functional modules for joints, hands and tors os and provided complete device assembly for
humanoid robots.
R&D Team and Expenses
As of December 31, 2024, we had more than 24,000 experienced R&D and technical
personnel. In 2022, 2023 and 2024, our R&D expenses amounted to RMB2,105.0 million,
RMB2,316.6 million and RMB2,784.8 million, representing 4.5%, 4.3% and 4.0% of our total
revenue in the respective periods. Our R&D exp enses are expensed rather than capitalized.
OUR CUSTOMERS
Our customers are mainly global brands in th e consumer electronics and smart vehicles
industries.
During the Track Record Period, we did not engage any distributors, and all our products and
services were sold or provided by us to our customers directly. We intend to continue to engage in
direct sales only without the us e of distributors given the nature of our long-term strategic
relationships with our customers.
Our Top Five Customers
In 2022, 2023 and 2024, sales to our five largest customers amounted to RMB38,878.3
million, RMB45,282.2 million and RMB56,707.4 m illion, accounting for 83.3%, 83.1% and 81.1%
of our total revenue in the respective periods. In 2022, 2023 and 2024, sales to our largest
customer, Customer/Supplier A, amounted to RM B33,136.2 million, RMB31,512.3 million and
RMB34,566.5 million, accounting for 71.0%, 57.8% and 49.5% of our total revenue in the
respective periods. During the Track Record Period, to the best knowledge of our Directors, none of
our Directors, their associates or any of our current Shareholders (who, to the knowledge of our
Directors, own more than 5% of our share capital) h ad any interest in our five largest customers in
any period during the Track Record Period that ar e required to be disclosed under the Hong Kong
Listing Rules.
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The following tables set forth certain informatio n relating to our five largest customers for the
periods indicated.
For the year ended December 31, 2022
Rank
Customer
Transaction
amount
(in RMB million)
Percentage
of revenue
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier A (2)
33,136.2 71.0% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
2C u s t o m e r B
(3) 1,563.1 3.3% 8 A Nasdaq-listed American company
founded in 2003 that designs and sells
smart vehicles, clean energy solutions
and related products and services
3C u s t o m e r /
Supplier C (4)
1,513.5 3.2% 20 A public multinational corporation
established in 1969 and headquartered in
South Korea, which principally engages
in the design, manufacturing, and
marketing of various electronics products
4C u s t o m e r D
(5) 1,363.5 2.9% 6 A public French automotive supplier
founded in 1997 that principally engages
in the design and manufacturing of
automotive products for global
automotive brands, and a supplier of
Customer B
5C u s t o m e r E
(6) 1,302.0 2.9% 18 A private Chinese multinational corporation
that designs, develops and sells digital
telecommunications equipment,
consumer electronics and other related
products and services
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Sales to Customer/Supplier A in 2022 primarily included structural part s and functional modules.
(3) Sales to Customer B in 2022 primarily included B-pillar parts and central control screens for cars.
(4) Sales to Customer/Supplier C in 2022 primarily included structural parts, functional modules and processing
services.
(5) Sales to Customer D in 2022 primarily included central control screens for cars.
(6) Sales to Customer E in 2022 primarily incl uded structural parts and functional modules.
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For the year ended December 31, 2023
Rank
Customer
Transaction
amount
(in RMB million)
Percentage
of revenue
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier A (2)
31,512.3 57.8% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
2C u s t o m e r /
Supplier F
(3)
8,472.7 15.6% 11 A Chinese technology company founded in
2010 and listed on the Hong Kong Stock
Exchange that designs, develops, and
sells smartphones, smart hardware and
intelligent home products
3C u s t o m e r D (4) 1,976.6 3.6% 6 A public French automotive supplier
founded in 1997 that principally engages
in the design and manufacturing of
automotive products for global
automotive brands, and a supplier of
Customer B
4C u s t o m e r B (5) 1,951.2 3.6% 8 A Nasdaq-listed American company
founded in 2003 that designs and sells
smart vehicles, clean energy solutions
and related products and services
5C u s t o m e r E (6) 1,369.4 2.5% 18 A private Chinese multinational corporation
that designs, develops and sells digital
telecommunications equipment,
consumer electronics and other related
products and services
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Sales to Customer/Supplier A in 2023 primarily included structural part s and functional modules.
(3) Sales to Customer/Supplier F in 2023 primarily incl uded complete device services and structural parts.
(4) Sales to Customer D in 2023 primarily included central control screens and glasses for cars.
(5) Sales to Customer B in 2023 primarily included B-pillar parts and central control screens for cars.
(6) Sales to Customer E in 2023 primarily incl uded structural parts and functional modules.
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For the year ended December 31, 2024
Rank
Customer
Transaction
amount
(in RMB million)
Percentage
of revenue
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier A (2)
34,566.5 49.5% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
2C u s t o m e r /
Supplier F
(3)
16,328.1 23.4% 11 A Chinese technology company founded in
2010 and listed on the Hong Kong Stock
Exchange that designs, develops, and
sells smartphones and smart hardware
and intelligent home products
3C u s t o m e r B
(4) 2,201.1 3.1% 8 A Nasdaq-listed American company
founded in 2003 that designs and sells
smart vehicles, clean energy solutions
and related products and services
4C u s t o m e r E
(5) 2,094.8 3.0% 18 A private Chinese multinational corporation
that designs, develops and sells digital
telecommunications equipment,
consumer electronics and other related
products and services
5C u s t o m e r /
Supplier C
(6)
1,516.9 2.1% 20 A public multinational corporation
established in 1969 and headquartered in
South Korea, which principally engages
in the design, manufacturing, and
marketing of various electronics products
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Sales to Customer/Supplier A in 2024 primarily included structural part s and functional modules.
(3) Sales to Customer/Supplier F in 2024 primarily incl uded complete device services and structural parts.
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(4) Sales to Customer B in 2024 primarily included B-pilla r parts, C-pillar parts and central control screens for
cars.
(5) Sales to Customer E in 2024 primarily incl uded structural parts and functional modules.
(6) Sales to Customer/Supplier C primarily includ ed structural parts and processing services.
We believe that the likelihood of any material adverse change in or termination of our
business relationship with our five largest cust omers in each year during the Track Record Period
customers is low, considering that (i) we have p artnered with all of these customers for long
periods of time and have established mutually benef icial relationships with them; and (ii) we are
involved in the very beginning of their product d evelopment process to develop the end products
together, which enables us to gain a unique and deep understanding of their demands and
preferences, giving us competitive advantages as compared to our competitors. For risks associated
with our key customers, see ‘‘Risk Factors — We generate the majority of our revenue from a
limited number of key customers. ’’
Relationship with Cu stomer/Supplier A
Our strategic and mutually beneficial relati onship with Customer/Supplier A started almost
two decades ago when Customer/Supplier A was developing the industry ’s first touch-enabled
smartphone with full-sized screen. Over the past 19 years, we were closely involved in the product
development phase of Customer/Supplier A ’s product iterations, offering crucial technological
solutions to facilitate its design ideas and functionality requirements.
Ever since, we had grown our relationship with C ustomer/Supplier A and, according to Frost
& Sullivan, we have been the primary supplier of cover glass for Customer/Supplier A ’s
smartphones and tablets since 2007. More specifi cally, we provide Customer/Supplier A with (i)
cover glass, back cover, touch module and midframe for their smartphones, (ii) cover glass, touch
module and physical button for their tablets, and (iii) sapphire cover and ceramic back cover for
their wearables.
According to Frost & Sullivan, the consumer electronics market is highly concentrated,
particularly among top-tier brands that command a large share of global shipments. As such, it is
common for suppliers of premium consumer elect ronics brands to have a concentrated customer
base.
Going forward, we believe that the likelihood o f any material adverse change in or termination
of our business relationship with Customer/S upplier A is low because of our long-term mutually
beneficial relationship, the strict requiremen ts that Customer/Supplier A has on its suppliers
(including lengthy and rigorous supplier approval procedures and strict requirements on various
aspects of the supplier ’s business operations such as ESG compliance, corporate governance and
others) and the financial condition of Customer/Supplier A (the ‘‘Directors ’ Views on the Business
Relationship with Customer/Supplier A ’’). The raw materials, mainly glass, used in Customer/
Supplier A ’s products are primarily sourced from China, South Korea, the United States, Japan and
Taiwan.
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Having considered the above Directors ’ Views on the Business Relationship with Customer/
Supplier A and based on the due diligence work pe rformed by the Sole Sponsor, nothing has come
to the attention of the Sole Sponsor that would reasonably cause it to cast doubt on the Directors ’
Views on the Business Relationship with Cust omer/Supplier A in any material respect.
It is reported that, in response to the Current U. S. Tariffs, Customer/Supplier A is considering
diversifying its supply chain from China to other countries. We do not believe that such
diversification will significantly affect our bus iness operations or financial condition given our
global production planning, which enables us to keep serving Customer/Supplier A from our
overseas production centers. Specifically, acco rding to Frost & Sullivan, only approximately 20%
of Customer/Supplier A ’s products are sold in the United States. In addition, only 17%, 14% and
11% of our products were imported into the United States as part of end products in 2022, 2023
and 2024. We believe that, our existing production lines in Vietnam, together with the new
production lines we are planning to set up in Vietnam and Thailand with the proceeds of the
Offering, will together account for approximately 9% of our production capacity (with our
production capacity in 2024 as the base) when the new production lines are operational. Therefore,
even if Customer/Supplier A decides to completel y pivot its supply chain away from China for its
products sold in the United States, we believ e that we have sufficient production capacity to
support Customer/Supplier A given its relatively low percentage of product sales in the United
States and our production capacity overseas. If the US and China ’s trade relationship further
deteriorates and additional tariffs are imposed, i t is possible that Customer/Supplier A may require
its suppliers to produce products for its US sales outside of China. We believe that our existing and
planned production capacity overseas is suffi cient to ensure that we can produce products for
Customer/Supplier A ’s US sales outside of China.
Fluctuations in sales to Customer/Supplier A
During the Track Record Period, we did not experience any disruptions in our relationship
with Customer/Supplier A, including significant o rder cancellations due to quality reasons or failure
to renew agreements. The fluctuations in our sale s to Customer/Supplier A were primarily driven by
macroeconomic conditions and the then-prevailing i ndustry-wide trends, which led to fluctuations in
shipments in the global consumer electronics industry.
Our sales to Customer/Supplier A decreased by 4.9% from RMB33,136.2 million in 2022 to
RMB31,512.3 million in 2023, primarily due to a decrease in end-market demand for Customer/
Supplier A ’s products. In 2023, the global consumer electronics industry experienced a moderation
in overall demand, primarily due to macroecono mic factors. These challenges contributed to a
general decline in global shipmen ts of consumer electronics, affecting procurement volumes across
the supply chain.
Our sales to Customer/Supplier A increas ed by 9.7% from RMB31,512.3 million in 2023 to
RMB34,566.5 million in 2024, primarily due to a rebound in consumer demand for Customer/
Supplier A ’s products, particularly its new generation smartphone incorporating AI features. More
broadly, the global consumer electronics market gradually recovered in 2024.
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During the Track Record Period, approximately 75% to 85% of the products we supplied to
Customer/Supplier A were delivered to the special supervision territory in China for further
processing by other manufacturers and assembly into end products such as smartphones.
Decreasing Reliance on Customer/Supplier A
During the Track Record Period, revenue contribution from Customer/Supplier A continued to
decrease as a percentage of our revenue. This is primarily due to our efforts in (i) expanding our
customer base, (ii) expanding our product and solut ion portfolio and (iii) expanding vertically along
the value chain. While we expect Customer/Suppli er A to remain as our largest customer in at least
2025 and as an important customer going forward, we expect the revenue contribution from
Customer/Supplier A to account for less than 50% o f our total revenue in 2025. As we continue to
execute our growth strategies, we expect to further diversify our revenue sources.
The three-dimensional expansion is intertwi ned. For example, in addition to Customer/
Supplier A, we are currently the primary supplier f or cover glass for all top five mid-to-high end
smartphone brands. As we expanded beyond consumer electronics through the offering of structural
parts and functional modules for smart vehicles and cockpits, we also won the recognition of a
leading smart vehicle company in 2017, who was among our top five customers during the Track
Record Period. In addition, we proactively expand into broad and high- growth-potential areas and
extend horizontally into diversified markets such as smart retail devices, industrial applications,
smart home, humanoid robots and AI glasses/XR head-mount displ ays, creating a multi- faceted
presence in various emerging markets. As a resul t of such efforts, we have broadened our customer
base to include prominent players in these spaces, and non-consumer electronics end-uses have
contributed to a significant portion of our revenue during the Track Record Period.
Our vertical expansion along the value chain not only enabled us to quickly capture market
share and win client recognition in these emerg ing areas, but also attr acted new customer for a
significant revenue source. We began offering co mplete device assembly on a large scale in 2021,
and our complete device assembly experienced ra pid ramp up during the Track Record Period. As a
percentage of our total revenue, complete device assembly revenue grew from 1.1% in 2022 to
14.7% in 2023 and 20.7% in 2024. This is primari ly due to our success in winning over a leading
Chinese technology company that designs, develop s and sells smartphones, among other products,
who became our second largest customer in 2024.
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Major Terms with Our Key Customers
We generally enter into framewo rk agreements with our key custo mers that cover the design,
manufacturing and sales of products. Our products are highly customized, and the majority of our
products are developed solely for the relevant customers. Other than this, we do not have
exclusivity arrangements with our customers, th e terms of these agreements vary depending on the
specific product or project and the result of our ne gotiation with each custom er. These agreements,
including those with Customer/Supplier A, can be terminated by mutual agreement between the
parties. These agreements genera lly contain the following terms:
Duration : Generally ranges between one year to three years. Some of
these framework agreements do not have fixed terms. These
agreements are typically automatically renewed.
Pricing : Pricing of the products is generally specified in purchase
orders.
Transfer of risks : Risks are transferred to our customers when the products are
accepted by them.
Payment and credit
terms
: We generally deliver products to our customers before
payment and grant our customers credit periods ranging
between 30 days to 60 days after delivery of products.
Minimum purchase
requirements
: Our framework agreements with our customers usually do not
contain minimum purchase requirements.
Logistics : We are generally respon sible for delivering products to
locations specified by our customers.
Returns/exchanges : Our customers will in spect the products upon delivery and are
generally entitled to return or exchange products that do not
meet their requirements in terms of quality or specifications.
We generally do not otherwise accept product returns or
exchanges once the products have been accepted by our
customers.
Confidentiality : These framework agreem ents usually have strict confidentiality
provisions that restrict us from disclosing confidential
information of our customer.
Termination : These framework agreements can be terminated with mutual
agreement of parties and under certain circumstances such as
force majeure or bankruptcy of a party.
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Customer Service
We cooperate closely with our customers throughout the product design, development and
manufacturing processes and strive to ensure that we provide our customers with satisfactory
services and products that meet their expectat ions. Specifically, w ec o m m u n i c a t ew i t ho u r
customers frequently during the product design process since we usually conduct the research and
development activities together with our customer s, and we also regularly collect customer feedback
during our cooperation to ensure that they are satisfied with our products and services.
RAW MATERIALS AND SUPPLY CHAIN
Raw Materials
The main raw materials used in our structural parts are glass, metal, sapphire and ceramics. In
particular, the main raw materials for our st ructural parts and functional modules for (i)
smartphones and computers are glass, metal, sa pphire and ceramics; (ii) smart vehicles and
cockpits are glass and metal; (iii) intelligent hea d-mounted displays and smart wearables are glass,
metal, sapphire and ceramics; and (iv) other smar t devices are glass and metal. For our functional
module lamination and complete de vice assembly, we also use elec tronic and optical components
and structural parts produced by other suppliers. Our raw materials, primarily glass, are mainly
imported from the United States, Korea and Japan. To the extent the goods are not delivered to the
special supervision territory, imports from Sou th Korea and Japan are generally subject to PRC
tariffs as of the Latest Practicable Date. Specifi cally, glass from South Korea used for mobile phone
or tablet front or back covers is subject to a tariff rate of 5%. Glass from Japan used for mobile
phone or tablet front or back covers is also subject to a tariff rate of 5%.
We source raw materials globally for our custom ers. If our customers designate suppliers for
certain raw materials, we source such raw material s based on their designations. In addition, we
produce certain of these raw materials ourselves. For details, see ‘‘ — Research and Development —
Innovative R&D. ’’ Apart from these key raw materials, we al so need ancillary pac kaging materials
such as cardboard boxes and shrink wraps for the packaging of our products.
Our raw material prices fluctuate due to a var iety of factors, including supply and demand
dynamics, our ability to negotiate prices with suppliers and others. We usually work with multiple
suppliers to reduce risks associated with produ ct supply. During the Track Record Period, we did
not experience any significant shortage of raw mat erial supplies, and the raw materials provided by
our suppliers did not have any significant quality issues.
Our Suppliers
Our suppliers are mainly suppliers of raw materials and equipment. We have established and
maintain stable and long-term relationships with these major suppliers.
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Selection and Management of Suppliers
We have established rigorous processes for th e selection, evaluation and management of our
suppliers to ensure suppliers meet our quality and p erformance standards. We consider a number of
factors during our supplier selection and qu alification process, in cluding each supplier ’s financial
condition, industry reputation, technical certifications and the pr ice and quality of the products or
raw materials they offer. We assess each potential supplier ’s qualifications and credentials carefully,
and we also conduct on-site visits to potential suppliers ’ business premises before we decide to
engage the suppliers.
We regularly evaluate the performance of our su ppliers, focusing on criteria such as delivery
capability, price and quality of the products s upplied by them and their compliance with our
policies and requirements (including policies on e nvironmental matters, occupational safety and
corporate social responsibilities).
Certain of our customers require us to purcha se certain key raw materials and components
used in products manufactured for the customer from designated suppliers or to purchase such key
raw materials and components from such custo mer after it has first purchased them from the
upstream supplier, in order to exert control over t he quality of the raw materials and components.
In these cases, the customer will select the suppli ers of the raw materials and components according
to its standards and be responsible for negotiating t he supply terms with the suppliers. For details,
also see ‘‘ — Raw Materials and Supply Chain — Overlapping Customers and Suppliers. ’’
Terms of Contract with Our Suppliers
We enter into procurement framework agree ments with certain of our suppliers. We do not
have exclusivity arrangements with our suppliers. The terms of the agreements vary depending on
the result of our negotiation with each suppli er, but these agreements typically include the
following terms:
Duration : Our procurement agreements with our main suppliers usually
do not have a fixed term.
Pricing : Price is determined by us and our suppliers mutually and
adjusted every month based on the prevailing market
conditions.
Payment and credit
terms
: Payment terms are usually set out in specific purchase orders
rather than the framework agreement. We will make payments
once all the payment conditions have been satisfied.
Minimum purchase
requirements
: Our procurement agreements with our main suppliers usually
do not contain minimum purchase requirements.
Returns/exchanges : We can exchange or re turn the raw materials or components
that do not meet our quality standards.
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Liability/warranty : Our suppliers usual ly provide us a 24-month warranty for raw
materials or components supplied by them.
Logistics : Our suppliers are responsible for arranging for the logistics of
delivering the raw materials or components to us.
Termination/renewal : The agreement can be terminated by either party upon the
occurrence of a list of events, including the un-rectified non-
performance of the other party of its obligations under the
agreement and insolvency or other conditions that will affect
the financial condition of the other party. After the agreement
is terminated, unless the termination is due to reasons caused
by us or force majeure events, o ur suppliers shall continue
supplying raw materials or components to us until we find a
new supplier, otherwise our supplier is liable for any losses we
will incur as a result of shortage of supplies.
Top Five Suppliers
In 2022, 2023 and 2024, purchase of raw materials from our five largest suppliers amounted to
RMB9,033.5 million, RMB17,224.6 million and RMB26,064.7 million, accounting for 23.7%,
37.4% and 43.6% of our total cost of sales in the respective periods. In 2022, 2023 and 2024,
purchases from our largest supplier amounted to RMB6,198.4 million, RMB7,665.7 million and
RMB14,372.7 million, accounting for 16.2%, 16.7% and 24.1% of our total cost of sales in the
respective periods. During the Track Record Period, to the best knowledge of our Directors, none of
our Directors, their associates or any of our current Shareholders (who, to the knowledge of our
Directors, own more than 5% of our share capital) h ad any interest in our five largest suppliers in
any period during the Track Record Period that ar e required to be disclosed under the Hong Kong
Listing Rules.
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The tables below set forth certain information of our top five suppliers during the Track
Record Period.
For the year ended December 31, 2022
Rank Supplier
Transaction
amount
(in RMB million)
Percentage
of total cost
of sales
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier A (2)
6,198.4 16.2% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
2 Supplier B
(3) 927.2 2.4% 14 A public South Korean multinational
corporation that man ufactures and sells
electronics, chemicals, household
appliances and telecommunications
products
3 Supplier D
(4) 696.1 1.8% 7 A public Japanese company established in
1972 that provides manufacturing
automation products and services such as
CNC machines
4C u s t o m e r /
Supplier C
(5)
611.1 1.6% 20 A public multinational corporation
established in 1969 and headquartered in
South Korea, which principally engages
in the design, manufacturing, and
marketing of various electronics products
5 Supplier E
(6) 600.7 1.7% 18 An American multinational company
founded in 1851 and listed on the New
York Stock Exchange that specialized in
specialty glass, ce ramics and other
related materials and technologies
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Purchases from Customer/Supplier A in 2022 primar ily included raw materials and components required for
the manufacturing of products sold to Customer/Sup plier A, including glass and various electronic
components.
(3) Purchases from Supplier B in 2022 primarily included LCM electronic parts.
(4) Purchases from Supplier D in 2022 primarily included equipment, processing c onsumables and electronic
parts.
(5) Purchases from Customer/Supplier C in 2022 pr imarily included raw materials of glasses.
(6) Purchases from Supplier E in 2022 primarily included raw materials of glasses.
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For the year ended December 31, 2023
Rank Supplier
Transaction
amount
(in RMB million)
Percentage
of total cost
of sales
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier A (2)
7,665.7 16.7% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
2C u s t o m e r /
Supplier F
(3)
7,177.1 15.6% 11 A Chinese technology company founded in
2010 listed on the Hong Kong Stock
Exchange that designs, develops, and
sells smartphones and smart hardware
and intelligent home products
3 Supplier B (4) 1,074.2 2.3% 14 A public South Korean multinational
corporation that man ufactures and sells
electronics, chemicals, household
appliances and telecommunications
products
4C u s t o m e r /
Supplier C (5)
668.1 1.5% 20 A public multinational corporation
established in 1969 and headquartered in
South Korea, which principally engages
in the design, manufacturing, and
marketing of various electronics products
5 Supplier G (6) 639.5 1.3% 6 A public Chinese company established in
1975 that provides structural parts,
components and functional modules of
electronics products
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Purchases from Customer/Supplier A in 2023 primar ily included raw materials and components required for
the manufacturing of products sold to Customer/Sup plier A, including glass and various electronic
components.
(3) Purchases from Customer/Supplier F in 2023 primarily included parts for surface mount technology.
(4) Purchases from Supplier B in 2023 primarily included LCM electronic parts and raw materials of glasses.
(5) Purchases from Supplier/Customer C in 2023 pr imarily included raw materials of glasses.
(6) Purchases from Supplier G in 2023 primarily included m anufacturing consumables such as screws, rings and
glues.
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For the year ended December 31, 2024
Rank Supplier
Transaction
amount
(in RMB million)
Percentage
of total cost
of sales
Years of
business
relationship (1) Background
1C u s t o m e r /
Supplier F (2)
14,372.7 24.1% 11 A Chinese technology company founded in
2010 and listed on the Hong Kong Stock
Exchange that designs, develops, and
sells smartphones and smart hardware
and intelligent home products
2C u s t o m e r /
Supplier A
(3)
8,659.8 14.5% 19 A Nasdaq-list ed multinationa l corporation
headquartered in the U.S. and
established in 1976, which principally
engages in the design, manufacturing
and marketing of consumer electronics
as well as sales of related services
Its major products include (i) smartphones,
(ii) laptop and desktop personal
computers, (iii) tablets, and (iv)
wearables, home devices and accessories.
Its major services include (i) advertising,
(ii) fee-based after-sale services, (iii)
cloud services, (iv) digital content, and
(v) payment services.
3 Supplier B
(4) 1,585.7 2.7% 14 A public South Korean multinational
corporation that man ufactures and sells
electronics, chemicals, household
appliances and telecommunications
products
4 Supplier E
(5) 723.8 1.2% 18 An American multinational company
founded in 1851 and listed on the New
York Stock Exchange that specialized in
specialty glass, ce ramics and other
related materials and technologies
5C u s t o m e r /
Supplier C
(6)
722.7 1.1% 20 A public multinational corporation
established in 1969 and headquartered in
South Korea, which principally engages
in the design, manufacturing, and
marketing of various electronics products
Notes:
(1) For customers who are also suppliers, the years of bus iness relationships refer to the number of years they
first became a customer or supplier, whenever earlier.
(2) Purchases from Customer/Supplier F in 2024 primarily included assembly parts for complete device services
and parts for surface mount technology.
(3) Purchases from Customer/Supplier A in 2024 primar ily included raw materials and components required for
the manufacturing of products sold to Customer/Sup plier A, including glass and various electronic
components.
(4) Purchases from Supplier B in 2024 primarily included LCM electronic parts and raw materials of glasses.
(5) Purchases from Supplier E in 2024 primarily included raw materials of glasses.
(6) Purchases from Customer/Supplier C in 2024 pr imarily included raw materials of glasses.
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Overlapping Customers and Suppliers
During the Track Record Period, certain of our top five customers were also our suppliers, and
certain of our top five suppliers were also our cu stomers, details of which are explained below.
Buy-and-sell model
Customer/Supplier A, our top customer in each of 2022, 2023 and 2024, was also one of our
five largest suppliers in the same years. This is becau se Customer/Supplier A re quires its suppliers,
including us, to purchase certain raw materials a nd components used in products manufactured for
it from Customer/Supplier A itself in order to exer t overall control of the procurement process and
to better control the cost and quality of raw materials. This is commonly referred to in the industry
as the buy-and-sell model. Our sales to and purch ases from Customer/Supplier A were conducted in
the ordinary course of business and on commercial terms negotiated on an arm ’s length basis.
Customer/Supplier F, one of our top five customers in 2023 and 2024, was also one of our
five largest suppliers in the same years due to si milar reasons. Our sales to and purchases from
Customer/Supplier F were conducted in the ordi nary course of business and on commercial terms
negotiated on an arm ’s length basis.
Supplier B, one of our top five suppliers in 2022, 2023 and 2024, was also one of our largest
customers in 2024 for similar reasons. In 2024 , our sales to Supplier B amounted to RMB830.8
million, accounting for 1.2% of our total revenue in the same year. Our sales to and purchases from
Supplier B were conducted in the ordinary course o f business and on commercial terms negotiated
on an arm ’s length basis.
According to Frost & Sullivan, it is in line with industry practice for a company to have both
sales to and purchases from the same customer/supplier, and the adoption of the buy-and-sell model
is not a definitive determinant of pricing wi thin the precision manufacturing industry.
Conglomerate customers or suppliers
Customer/Supplier C, one of our top five suppliers in 2022, 2023 and 2024, was also our
customer in the same years. This is because Customer /Supplier C is a multinational conglomerate in
the electronics industry and has very diverse pr oduct offerings and business needs. Our sales to
Customer/Supplier C in 2022, 2023 and 2024 were not related to or conditional upon our purchases
from it. In 2022, 2023 and 2024, we mostly sold structural parts, primarily cover glass for
smartphones, to Customer/Supplier C, while our pu rchases from Customer/Supplier C in the same
years were mostly camera modules. Our sales t o Customer/Supplier C and purchases from it are
negotiated in separate processes and conducted in the ordinary course of business and on
commercial terms negotiated on an arm ’s length basis.
Supplier B, one of our top five suppliers in 2022, 2023 and 2024, was also our customer in
2022 and 2023 for similar reasons. Other than a small portion of our business with Supplier B
under the buy-and-sell model, our purchases from Supplier B in 2022 and 2023 were not related to
or conditional upon our sales to it. In 2022 and 2023, we mostly purchased LCD display for cars
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from Supplier B, while our revenue from Supplier B were primarily processing fees for glasses. In
2022 and 2023, our sales to Supplier B amounted to RMB198.8 million and RMB248.9 million,
accounting for 0.4% and 0.5% of our total revenue in the respective periods. Our purchases from
Supplier B and sales to it are negotiated in separate processes and conducted in the ordinary course
of business and on commercial terms negotiated on an arm ’s length basis.
Customer E, one of our top five customers in 2022, 2023 and 2024, was also our supplier in
2023 and 2024 for similar reasons. Our sales to Customer E in 2023 and 2024 were not related to
or conditional upon our purchases from it. In 2023 and 2024, our purchases from Customer E
represented an insignificant percentage of our tot al cost of sales in the respective periods. Our sales
to Customer E and purchases from it are negotiat ed in separate processes and conducted in the
ordinary course of business and on commercial terms negotiated on an arm ’s length basis.
Supplier E, one of our top five suppliers in 2022 and 2024, was also our customer in 2024.
Supplier E is one of our main suppliers for glass . In 2024, Supplier E purchased certain of our
smartphones and computers products. This is beca use certain customers of Supplier E require that
Supplier E uses our structural parts and modules in the products they provide to these customers. In
2024, our purchases from Supplier E were mainly glass. Our purchases from Supplier E in 2024
were not related to or conditional upon our sales t o it. Our sales to Supplier E were insignificant in
2024. Our sales to Supplier E and purchases from it are negotiated in separate processes and
conducted in the ordinary course of business and on commercial terms negotiated on an arm ’s
length basis.
Supplier G, one of our top five suppliers in 2023, was also our customer in 2023. Supplier G
is a company engaged in the production and sales of structural parts, components and functional
modules of electronics. In 2023, Supplier G purch ased certain of our smartphones and computers
products as well as intelligent h ead-mounted displays and smart w earables products. This is because
certain customers of Supplier G require that Suppli er G uses our structural parts and modules in the
products they provide to these customers. In 2023, our purchases from Supplier G were mainly
materials used in our production such as metal screws, dustpoof net and glue. Our purchases from
Supplier G in 2023 were not related to or conditi onal upon our sales to it. Our sales to Supplier G
were insignificant in 2023. Our sales to Supplier G a nd purchases from it are negotiated in separate
processes and conducted in the ordinary course of business and on commercial terms negotiated on
an arm ’s length basis.
During the Track Record Period, the raw materials we purchased from the overlapping
customers or suppliers mentioned above were not resold back to them, nor vice versa.
PRODUCTION AND MANUFACTURING
We produce all our products ourselves in our nine production centers to ensure that we
consistently deliver high-quality products on time to meet our customers ’ demands.
We have integrated smart manufacturing into var ious aspects of our production, significantly
improving our production efficiency and product yi elds. For example, we have been investing in the
design and manufacturing of intelligent and auto mated production machines. We were the first in
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the industry to successfully develop a fully autom ated printing line and baking line. We have also
been investing in the research and development of high -precision, cost-effective and highly versatile
industrial robots and high-end intelligent manuf acturing equipment such as automated guided
vehicles ( ‘‘AGV’’) that are tailored to our production lin e layouts. AGVs are now utilized in our
production centers on a large scale and have signif icantly increased our production efficiency. For
more details on the technology and equipment used in our production, see ‘‘ — Production and
Manufacturing — Technology. ’’
Our production centers in Hunan, China are strategically located close to each other to
minimize the transportation of products among our p roduction centers. Similarly, our production
centers overseas are located close to our customer s or their other suppliers to minimize logistics
expenses.
In addition, the layout and design of our produc tion centers are carefully and strategically
planned to increase production efficiency. For exam ple, the buildings for our factories are typically
relatively long to allow us to fit the equipment and machinery for the entire production process
(from loading of raw materials to packaging of the finished products) int o one building without
physical redirection of the production flow, which reduces transportation of products and materials
within our factories.
We have established a standardized process for setting up new production centers, and layout
and design of our production centers are standardized. This way, we can set up new production
centres relatively quickly to address emerging cus tomer needs, and our new production centers can
ramp up quickly to achieve our desired pro duction efficiency and product yield.
Production Process
Glass products
The chart below illustrates the production process of our glass products:
ThermoformingPrecision cutting Chemical
strengthening
Surface
finishing
Quality
inspection
Product
delivery
. Precision cutting. Glass is cut into shapes that matches the device ’sd e s i g n ,a n dC N C
machines are used to carve precise holes and bevel edges for smooth integration into the
device chassis.
. Thermoforming. For three-dimensional glass (for example, glass with curved edges),
blanks are heated and pressed into molds to ach ieve the desired curvature. Glass is then
cooled to relieve internal stresses and prevent cracking.
. Chemical strengthening. Glass is submerged in a molten potassium nitrate bath where
smaller sodium ions in the glass are replaced with larger potassium ions, creating
compressive stress on the surface to boos t scratch resistance and durability.
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. Surface finishing. Edges and surfaces are polished to a smooth finish, and anti-reflective,
anti-fingerprint or anti-glare coatings are applied via vacuum deposition or spray
processes.
. Quality inspection . Various testes are conducted to check for bubbles, cracks or
distortions, hardness, thickness and durability.
Metal products
The chart below illustrates the production process of our metal products:
CNC
machining
Material
preparation
Heat treatment
and
strengthening
Surface
finishing
Quality
inspection
Product
delivery
. Material preparation . Raw material is cast into blocks o r sheets and cut into pre-shaped
pieces for further processing.
. CNC machining . CNC machines carve pre-shaped pieces into precise shapes and create
screw holes, cutouts and cavities according to the product design.
. Heat treatment and strengthening. The product is heated and coo led to enhance hardness
and structural integrity, and metal surfaces are treated to reduce stress and improve
fatigue resistance.
. Surface finishing. An electrolytic process adds a protective oxide layer to the product,
improving scratch resistance and enabling color customization.
. Quality inspection. The product goes through various checks, such as dimensional
checks, stress tests and defect det ections to ensure product quality.
Functional modules
The chart below illustrates the produc tion process of our functional modules:
Material
preparation
Adhesive
application
Precision
layering
Lamination
bonding
Curing and
solidification
Quality
inspection
Product
Delivery
. Material preparation. Thin films, glass, sensors, adhesives and protective coatings are
cut to the desired sizes, and surface laye rs are cleaned in dust -free environments to
remove contaminants that could cause defects.
. Adhesive application. Adhesive is applied between layers.
. Precision layering. Layers are aligned with micron-level accuracy, and pressure or
vacuum holds layers in place before lamination.
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. Lamination bonding. Heat, pressure or UV light activates the adhesive to bond layers
permanently, and air bubbles are removed i n critical modules such as camera modules.
. Curing and solidification. Adhesive is fully cured under controlled conditions to achieve
maximum strength, and excess adhesive or film is removed to ensure clean edges and
precise dimensions.
. Quality inspection. Automated systems check for bubbles , delamination or misalignment.
Modules are tested for perfo rmance. Real-world stress is simulated to test the module ’s
durability.
Technology
Technology is the core of our competitiven ess in production. We are one of the earliest
companies to develop and implement automate d equipment in production processes, which
significantly increases efficiency, preci sion and consistency in production. We have been
continuously upgrading our production centers and progressively rolling out new technologies and
equipment. We regularly assess each step within ou r production processes to determine if there are
measures that can enhance cost efficiency or product yield. For details, also see ‘‘ — Research and
Development ’’and ‘‘ — Production and Manufacturing — Equipment and machinery. ’’
Process automation
Leveraging technological upgrades in our produ ction centers, we have significantly improved
our production efficiency. Several steps along our production processes for our structural parts and
modules have been fully automated, achieving both decreased labor costs and higher and more
consistent product quality. In addition, we impl emented several digitalization measures in our
production centers. For example, our production l ines have full product tracing capabilities where
we can track each structural part ’s full production processes, including the time when this structural
part started undergoing a specific production p rocess, which machine was used for a specific
process, which quality control measures were u ndertaken after each process and the data for each
quality check procedure. All these data are stored in our systems and, if a certain product has
quality issues, we can easily identify the cause of th e issue. These digitalization initiatives and the
resulting data also help us to analyze each step al ong the production chain to assess if there are
areas for improvement.
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Set forth below are photos of our process automation.
Intelligent warehousing
We have also implemented an intelligent wa rehousing system that helped to improve our
warehousing, logistics and invent ory management capabilities. In the traditional warehousing
model, employees are responsible for sorting, handl ing, retrieving and transporting inventories,
which has relatively high labor costs and incidents rates. With our intelligent warehousing system,
AGVs, which are designed and manuf actured by us, are used to sort inventories, load inventories
onto storage shelves, record the storage location and amount of inventories and, when needed,
retrieve and transport inventories to designated locations, including loading inventories onto
machines for processing. This system has great ly decreased the amount of labor required in the
process and reduced both the associated labor costs a nd incidents rates. In addition, our intelligent
warehousing system is integrated w ith our manufacturing execution system and enterprise resource
planning system, which enables it to monitor the a ging status of inventories in storage and manage
inventories accordingly, significantly i mproving our inventory turnover rates.
Industrial robots
We have been developing industrial robots for our production centers to enhance efficiency,
precision and scalability. By leveraging machine learning algorithms, our industrial robots are
capable of performing highly complex tasks with o ptimal accuracy, significantly reducing human
error and defection rates while also decreasing labor costs. For example, the four-axis, six-axis and
parallel robots, humanoid robots, AOI visual inspection robots and AGV tuggers developed and
manufactured by us not only outperform conve ntional equipment in the market in terms of
performance overall efficiency, degree of autom ation, energy consumption and cost, but also
ensures high product quality and consistency.
As a result of our advanced technologies and e quipment, during the Track Record Period, the
product yields for our structural parts, functi onal modules and complete device assembly were all
above industry average.
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Our Production Centers
As of December 31, 2024, we had nine production centers located in China, Vietnam and
Mexico for the production of our products. The following table sets forth certain information
regarding our production centers as of December 31, 2024.
Production center
Year
established Primary products Total Gross Floor Area
Liuyang, Hunan, China 2008 Smartphones a nd computers Approximately 2,305,700 sq.m.
Langli, Hunan, China 2014 Smart phones and computers, smart
vehicles and cockpit, intelligent
head-mounted displays and
smart wearables
Approximately 880,000 sq.m.
Xingsha, Hunan, China 2011 Smartphones a nd computers Approximately 160,000 sq.m.
Huanghua, Hunan, China 2020 Smart phones and computers, smart
vehicles and cockpit, intelligent
head-mounted displays and
smart wearables
Approximately 1,560,000 sq.m.
Xiangtan, Hunan, China 2020 Smartphones and computers
(including complete device
assembly) and others
Approximately 765,000 sq.m.
Dongguan, Guangdong,
China
2010 Smartphones and computers Approximately 788,361 sq.m.
Taizhou, Jiangsu, China 2021 Smartphones a nd computers Approximately 941,533 sq.m.
Bac Giang, Vietnam 2017 Smart phones and computers, smart
vehicles and cockpit, intelligent
head-mounted displays and
smart wearables
Approximately 461,320 sq.m.
Monterrey, Mexico 2022 Smart vehicles and cockpit Approximately 12,500 sq.m.
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The table below sets forth our production cap acity and utilization rate by production center
during the Track Record Period.
Production center
Production capacity
(units, pieces in million)
Utilization rate
(%)
2022 2023 2024 2022 2023 2024
Liuyang, Hunan, China 823.8 656.4 782.2 87.6% 76.2% 82.2%
Langli, Hunan, China 185.7 200.0 299.3 96.8% 95.7% 98.6%
Xingsha, Hunan, China 49.9 16.8 3.3 90.4% 22.0% 45.9%
Huanghua, Hunan, China 31.7 51.6 86.2 84.8% 94.2% 89.2%
Xiangtan, Hunan, China 21.6 56.0 123.0 53.0% 95.2% 93.3%
Dongguan, Guangdong,
China 46.8 80.9 75.4 87.8% 90.1% 97.6%
Taizhou, Jiangsu, China 85.2 85.4 75.1 91.8% 94.1% 98.0%
Bac Giang, Vietnam 73.2 30.4 37.9 37.6% 75.3% 76.9%
Monterrey, Mexico N/A 0.8 0.8 N/A 11.2% 46.3%
Others 5.3 2.2 3.4 43.9% 101.6% 93.5%
Total/Overall 1,323.2 1,180.5 1,486.6 85.7% 82.7% 88.2%
Set forth below are photos of our select production centers.
Liuyang, Hunan, China Langli, Hunan, China
Xingsha, Hunan, China Huanghua, Hunan, China
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Xiangtan, Hunan, China Dongguan, Guangdong, China
Taizhou, Jiangsu, China Bac Gang, Vietnam
We had a small production center in Mexico for the manufacturing of our smart vehicles and
cockpit products as of December 31, 2024, primarily serving one of our key customers in the smart
vehicles industry. We are currently in the process o f strategically adjusting the operations of this
production center in response to a change in our customer ’s own production adjustments and also
because we are planning to concentrate the produc tion of our smart vehicles and cockpit products in
our other production centers to increase our production and operation efficiency and decrease
transportation costs. During the Track Reco rd Period, our Mexico production center did not
contribute materially to our production capacity.
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The following table sets forth the production capacity and utilization rate for our main product
categories for the periods indicated.
Product category
Production capacity
(units, pieces in million)
Utilization rate
(%)
2022 2023 2024 2022 2023 2024
Smartphones and computers
Structural parts and functional
m o d u l e s ................ 1 , 2 2 3 . 3 1 , 0 6 5 . 1 1 , 3 1 5 . 7 8 6 . 2 % 8 2 . 3 % 8 7 . 5 %
C o m p l e t ed e v i c ea s s e m b l y .... 1 2 . 0 1 5 . 9 2 2 . 8 8 5 . 2 % 9 1 . 8 % 8 8 . 7 %
S u b t o t a l ................. 1 , 2 3 5 . 3 1 , 0 8 1 . 0 1 , 3 3 8 . 5 8 6 . 2 % 8 2 . 4 % 8 7 . 6 %
S m a r tv e h i c l e sa n dc o c k p i t...... 7 . 5 1 7 . 5 1 5 . 2 8 3 . 5 % 7 1 . 4 % 8 8 . 1 %
Intelligent head-mounted displays
a n ds m a r tw e a r a b l e s......... 7 5 . 9 7 6 . 9 1 1 8 . 3 7 7 . 4 % 8 9 . 3 % 9 4 . 6 %
O t h e rs m a r td e v i c e s ........... 4 . 4 5 . 1 1 4 . 6 9 3 . 8 % 8 3 . 4 % 9 3 . 8 %
Total .................... 1 , 3 2 3 . 1 1 , 1 8 0 . 5 1 , 4 8 6 . 6 8 5 . 7 % 8 2 . 7 % 8 8 . 2 %
Notes:
(1) Production capacity is calculated based on the following assumptions: (i) all our production lines and
equipment operating in their full capacity, (ii) 10 hours a shift, two shifts a day and (iii) 312 working days a
year.
(2) Utilization rate is calculated by dividing the actual number of units produced in the period by the production
capacity of the period.
Production Planning
We typically plan our product ion on a monthly basis based o n the forecasted demand of our
customers and the anticipated market trends. W e continuously review our production plans and
utilization rates and update our production plan s at least on a weekly basis, or more frequently on a
daily basis if required, pursuant to the utilization rate of our factories in the preceding week and the
rolling forecasts of customer orders and expected ut ilization rates. We also strategically plan our
production in advance to prepare for sea sonal increases in customer orders.
Inventory Management
Our inventories mainly include raw materials, work-in-progress, finished goods and goods in
transit. Based on our forecasted orders, our inventory management department conducts a daily
check and update of our inventory level and plans our procurement accordingly. We also conduct
inventory aging analysis periodically to reduce the risk of inventory obsolescence and employ our
intelligent warehousing system to track and manage our inventory aging status.
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As of December 31, 2022, 2023 and 2024, our inve ntories amounted to RMB6,685.0 million,
RMB6,682.7 million and RMB7,160.6 million, and our inventory turnover days in 2022, 2023 and
2024 are 60.5 days, 52.3 days and 41.7 days.
Equipment and Machinery
The material equipment and machinery used in our production processes include (i) anode
line, typically used in electroplating or anodizin g processes to coat materials with a protective or
decorative layer; (ii) hot bending machine, used to bend glass or other materials by heating them to
a pliable state; (iii) pressurized furnace, a furn ace that applies pressure and heat, often used in
processes like sintering or bonding materials; (iv) six-station screen printing machine, a machine
with six stations for screen printing, allowing for efficient multi-color or multi-layer printing on
materials; (v) washing machine, used to clean ma terials or components during the manufacturing
process to ensure they are free of contaminants; (vi) oven, used for baking or curing materials,
often to harden coatings or adhesives and (vii) coating machine, used to apply thin films or
coatings to materials, such as anti -reflective coatings on glass.
In line with our strategy developing vertically-integrated capabilities, we design and
manufacture certain of these equipment ourselv es, especially the equipment used in our critical
production processes such as the hot bending machine and six-station screen printing machine. We
identify aspects of the production processes t hat can be improved and accordingly undertake
research and development activities to design and manufacture equipment that can optimize these
areas.
We regularly inspect and maintain the material equipment and machinery used in our
production processes and replace worn consumable parts and components. Our major production
equipment and machinery have an estimated average useful life of 10 years.
Logistics
Our products are usually stored in our own warehouses located in our production centers
before they are delivered to our customers. We prim arily use third-party logistics service providers
for the delivery of finished goods from our production centers and warehouses to locations
specified by our customers. We set strict standards for the transportation of our products that these
third-party logistics service providers are re quired to follow, and we evaluate the third-party
logistics service providers periodically on their p erformance and compliance with our requirements
to ensure smooth delivery of products to customer s. We usually enter into agreements with our
logistics service providers on a biennial basis. Our logistics se rvice providers bear the risks
associated with the transportation of our products.
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Quality Control
We believe that product quality is the cornersto ne of our business operations and sustainable
growth. We are committed to delivering products that meet the highest industry standards and
exceed customer expectations. Our comprehensive quality control a nd quality assurance systems are
integrated into every stage of our vertically integ rated production process, ensuring the consistent
and reliable production and delivery of high-quality products.
We have established ISO 9001:2008-certified quality management system. We conduct regular
internal audits and management reviews of our quality control systems to promptly identify and
address potential issues, ensur ing continuous improvement and refinement of our quality control
systems. In 2023 we received a certification for establishing and applying a quality management
system for manufacturing glass cover plate, inj ection plastic parts, st amping metal parts and
touchscreens in accordance with IATF 16949. In 2 023, we received IECQ Certificate of Conformity
for hazardous substance process management under th e European Directive 2011/65/EU in electrical
and electronic equipment. In 2024, we received a certi fication for operating our management system
in accordance with ISO 9001:2015.
To ensure product quality, we have established a Quality Control department responsible for
implementing quality control measures throughout the entire production cycle, including raw
material inspection, in-process quality control, and final product inspection.
We have built in various quality control procedures and processes during our production
process to ensure that our product quality meets th e expectation and requirement after each critical
process, and we monitor the product yield for each of our critical production processes.
We have established a testing center at our Huanghua production center, which has been
certified by the China National Accreditation Serv ice for Conformity Assessment. This enables us
to carry out certain quality checks and product s pecification tests required by our customers
ourselves instead of engaging third-party agencies for these tests.
Product Returns and Warranty
For our structural parts and modules, our customers will conduct quality check and inspection
when they receive the products, and if there are prod ucts that do not pass their inspection, they will
either return or exchange these p roducts with us. We generally do not offer product warranties for
our structural parts and modules once the products have been accepted by our customers.
For our complete device assembly, we typically offer a warranty of a certain period. During
the warranty period, we are responsible for repairing or exchanging defective products if the defects
are caused by issues in our complete device assembly.
During the Track Record Period and up to the Latest Practicable Date, we have not
experienced any product return and/or exchange of de fective products that has resulted in a material
and adverse effect on our business, results of operations or financial condition.
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SALES AND MARKETING
We believe that consistently delivering high-quality products on time that meet and exceed our
customers ’ expectations is the most efficient sales an d marketing approach for us. As such, our
sales and marketing activities are focused on mai ntaining and expanding the scope of our strategic
relationships with our customers since we aim to b ecome and remain the strategic long-term partner
of our customers.
In addition to maintaining and strengthening relationships with our existing customers, our
sales team also proactively explore new partnershi ps with potential customers, especially as we
expand our offering of products and services.
INTELLECTUAL PROPERTIES
As of December 31, 2024, we and our subsidiaries held a total of 2,249 patents, including 495
invention patents and 135 design patents. Thes e patents are primarily applied in functional
materials, such as glass, ceramics, and metals , such as automotive B-pillars, with a focus on
product processes and safety in market applications , 113 registered trademar ks, 127 copyrights and
three domain names as of December 31, 2024. See ‘‘Appendix IV — Statutory and General
Information — Further Information about the Business — Intellectual Property. ’’ These intellectual
properties cover our production processes as well as the design of our products.
We rely on a combination of intellectual property protection laws and contractual
arrangements (including confidentiality provis ions) to establish and protect our proprietary
technologies, know-how and other intellectual pr operty rights. Our legal department is primarily
responsible for protecting our intellectual pr operties. We proactively manage and expand our
intellectual property portfolio and use confiden tiality and non-compete agreements to protect our
intellectual properties and trade secrets. Despite our efforts, we may be subject to risks associated
with alleged infringement of third parties ’ intellectual property rights, or infringement of our
intellectual property rights by third parties. See ‘‘Risk Factors — Our patents and other non-
patented intellectual properties are valuable assets, and if we are unable to protect them from
infringement, our business prospects may be harmed. ’’
During the Track Record Period, we did not e xperience any material infringement of our
intellectual property rights. Neither our Group nor any of our intellectual properties was the subject
of, or to the best of the Directors ’ knowledge, is expected to be subject to, any material disputes or
litigation in relation to the infringement of any intellectual property rights during the Track Record
Period.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
We are committed to ESG initiatives by embedding sustainability into our daily operations and
long-term strategies. Driven by technological innovation, we leverage our expertise in glass
processing to drive the application of advanced materials for consumer electronics and smart
vehicles, contributing to industry-wide sustaina ble development. We advocate clean production and
invest in new energy infrastructure to reduce e missions and foster long-term industry growth.
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ESG Governance Structure
Our ESG governance is built on our mission and vision, with a focus on innovation and global
leadership. We implement a robust three-tier governance framework supported by over 30 ESG-
experienced employees. Each year, our board revi ews ESG strategies, assesses risks, and sets
objectives. Department heads co ordinate implementation, while business units execute projects,
monitor progress, and report data. We continuously enhance our ESG strategies through
collaboration with internal and external experts.
ESG Risk Identification, Assessment, and Response Summary
By integrating the MSCI ESG Key Issues Fram ework, SASB Materiality Map and industry-
specific key issues analysis, we have identified 30 material issues releva nt our operations. Aligned
with our commitment to sustainab le development and fostering a balanced relationship between
humanity and the environment, these issues h ave been assessed from a multi-stakeholder
perspective. We have established corresponding measures to address them:
Category Material Issues Importance/Relevance to the Group Group ’s Corresponding Measures
Environmental . . . . Environmental
Compliance
Management
By complying with environmental
regulations, companies can reduce risks
and attract green investors.
Adhere to international conventions,
national laws, and customer
requirements. Set and continuously
improve environmental management
goals and indicators.
Water Resource
Utilization
Efficient water use and protection can
drive economic and environmental
harmony while showcasing brand
responsibility.
Assess water usage, build a management
framework, establish systems, identify
risks and opportunities, and implement
management measures.
Energy
Utilization
Promote energy saving, green
production, and highlight brand
responsibility.
Improve energy management, implement
clean energy plans, set up monitoring
platforms, and establish tiered targets.
Pollutant
Emissions
Implement wastewater reuse and water-
saving tech to cut water use and
discharge. Through waste sorting and
recycling, boost resource efficiency and
reduce wastage.
Establish a pollutant management
system, conduct impact assessments,
implement emission cuts, set pollutant
discharge targets, and disclose emission
details. Strictly manage pollutants at all
stages.
Waste
Management
Improving waste management and
promoting recycling show the brand ’s
environmental commitment.
Follow local laws, manage waste via
ISO 14001, and advance the zero-
landfill project.
Climate Change
Mitigation
As demand for low-carbon products
grows, developing and providing them
helps the company meet market needs
and achieve growth
The company has systematically
identified climate risks and explored
opportunities related to short-term and
long-term physical and transition risks.
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Category Material Issues Importance/Relevance to the Group Group ’s Corresponding Measures
Circular
Economy
Implementing reuse measures reduces
raw material and waste disposal costs,
and improves resource efficiency.
Developing a circular economy drives
innovation, creating new markets and
product lines.
Purchasing efficient machinery and
adopting resource-saving technologies
also optimizes resource management and
emphasizes recycling and reuse.
Chemical Usage
and Emissions
Reduce hazardous chemicals and
pollution to show brand commitment to
sustainability.
Manage chemical use and emissions
from product design to comply with
environmental regulations.
Social . . . . . . . . . . Product and
Service Safety
and Quality
A robust quality management system
helps the company handle regulatory
changes and reduce compliance risks.
High-quality products open new markets
and attract safety-conscious customers.
Actively carry out quality management
training and learning activities, absorb
advanced quality management concepts
and methods, and continuously improve
and innovate the quality system and
management model of products.
Supply Chain
Security and
Management
A strong quality management system
helps the company handle regulatory
changes and reduce c ompliance risks.
Actively conduct quality training, adopt
advanced concepts, and continuously
improve the quality system.
Protection of
Employees ’ Legal
Rights and
Interests
Valuing employee rights, providing fair
pay and a good work environment
boosts satisfaction and loyalty, reducing
turnover and improving efficiency.
Offer comprehensive benefits, respect
labor rights, and share sustainable
development values with employees.
Employee
Training and
Development
A good career development mechanism
attracts top talent and boosts
competitiveness.
A training system with operational,
curriculum, and instructor components
has been established.
Occupational
Health and Safety
Good working conditions and safety
measures improve employee loyalty and
efficiency, enhance corporate cohesion,
and attract skilled talent.
An occupational health management
system is in place with a dedicated team
to identify hazards, conduct monitoring
and health checks, and prevent risks.
Employee
Compensation
and Benefits
Enhance employee pay and benefits to
boost corporate cohesion and drive long-
term brand development.
Establish a market-oriented pay system,
introduce flexible benefits, improve
performance evaluation, and implement
equity incentives to increase motivation.
Stakeholder
Communication
Effective communication builds trust
with stakeholders and boosts
cooperation. Proactive communication
shapes a positive image and enhances
brand value.
Accurately identify stakeholders,
establish a multi-dimensional
communication platform, conduct annual
ESG surveys, and maintain regular
communication.
Diversity and
Equal
Opportunity
Eliminate discrimination and create a
diverse, equal, and inclusive workplace.
Establish anti-discrimination policies,
conduct diverse recruitment, launch
empowerment programs, and embrace
internationalization.
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Category Material Issues Importance/Relevance to the Group Group ’s Corresponding Measures
Social
Contribution
Participating in public welfare and
charity enhances visibility, strengthens
brand image, and attracts socially
responsible customers and partners.
Conduct volunteer activities and focus
on community building and social
giving.
Rural
Revitalization
Engaging in rural revitalization projects
enhances social visibility and corporate
image.
Actively participate in targeted poverty
alleviation and rural revitalization
efforts.
Customer Rights Protect customer rights, optimize service
quality, and build a win-win customer
relationship system.
High-quality products and services,
customer-centric thinking, and
wholehearted service build strong
customer trust.
Data Security and
Customer Privacy
Protection
High-standard information security
services attract customers with high
security needs. A robust security and
privacy management system enhances
trust and competitiveness.
Based on ISO/IEC 27001:2022 and
other requirements, the Group has
developed a manual to ensure zero loss
and leakage, achieving 100%
compliance.
Fair Treatment of
Small and
Medium-sized
Enterprises
Fair treatment of SMEs builds a stable
and efficient supply chain.
Maintain integrity with suppliers, make
timely payments, protect SME rights,
and optimize the business environment.
Governance ...... S h a r e h o l d e r
Rights Protection
Protecting shareholder rights enhances
the company ’s image and attracts more
investments.
The Company establishes a governance
structure to ensure all shareholders can
fully exercise their rights and enjoy
equal status, in line with its Articles of
Association.
Innovation-
Driven
Development
Technological innovation helps develop
core technologies with independent IP,
gaining market leadership and enhancing
competitiveness and profitability.
The company continuously invests in
R&D, establishes res earch institutes, and
focuses on improving product quality
and competitiveness.
Due Diligence Without a robust due diligence system,
failure to identify or control ESG issues
can impact sustainable development.
Establish a sustainability compliance
framework, assemble a professional
team, and enhance employee
sustainability awareness.
Corporate
Governance
Standardized operations of the three
meetings improve decision-making
efficiency and competitiveness, ensuring
long-term interests and sustainable
development.
The company adheres to relevant laws
and regulatory requirements, has a
governance structure centered on the
‘‘three meetings and one level, ’’ and
ensures scientific decision-making and
transparent operations through
comprehensive rules.
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Category Material Issues Importance/Relevance to the Group Group ’s Corresponding Measures
Anti-Bribery and
Anti-Corruption
A robust anti-bribery and anti-corruption
mechanism boosts governance
transparency and builds shareholder and
customer trust. Regular risk assessments
help identify and avoid legal and
financial risks.
The Group has set up an Internal
Inspection Department developed
integrity management systems, and
opened a dedicated complaint channel.
Compliance and
Risk Control
A sound risk management mechanism
offers clear risk information for
decision-making. Risk assessment
enables efficient resource allocation and
focuses on major risks.
Establish a sustainability compliance
framework, assemble a professional
team, and enhance employee
sustainability awareness.
ESG Governance A robust ESG governance mechanism
boosts market competitiveness and
attracts investors and customers.
Establishing an ESG governance
mechanism achieves sustainable
development.
Construct a comprehensive risk
management framework and a sound
internal control system to manage
operational risks.
Anti-Unfair
Competition
A sound management system ensures
legal compliance and reduces legal and
financial risks.
Strengthen governance by improving
structure, establishing systems to
prevent unfair competition, and adhering
to ethical guidelines and codes of
conduct.
Intellectual
Property Rights
Protection
Establish an IPR protection system,
standardize IPR management, and
demonstrate brand awareness.
Prevent infringement through patents
and trademarks. A comprehensive IPR
management system is in place to
promote professional, systematic, and
standardized IPR work.
Environmental Indicators and Management
We integrate environmental management into operations, adhering to sustainability and
pollution prevention. We comply with regulations, conserve energy, reduce emissions, and maintain
a comprehensive system with standardized docume ntation and regular monitoring. During the Track
Record Period, we were not subject to any ma terial administrative penalties imposed by
environmental protection authorities for violations of environmental protection laws, regulations, or
regulatory documents.
Emissions
Our key emissions include exhaust gases, s olid waste, and industrial wastewater. Key
highlights in 2024 include:
Ø Exhaust Gas Management: Invested RMB24. 03 million to upgrade facilities using
activated carbon adsorption and low-temperature plasma , reducing VOC emissions
by 42.09 metric tons and ensurin g compliance with standards.
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Ø Solid Waste Management: Successfully utilized over 189,356.9 tons of waste
through our ‘‘Zero Landfill ’’initiative, minimizing landfill waste.
Ø Wastewater Management: Liuyang produ ction center received recognition for
outstanding water-saving practices, e mphasizing our commitment to water
efficiency and reduced wastewater discharge.
As of December 31, 2024, the emission data f or exhaust gases, wastewater and waste
generated by us during the Track Record Period are as follows:
Classification Unit 2022 2023 2024
Exhaust Gas
N o x................. k g 3 , 5 0 0 9 , 3 8 0 . 2 7 5 , 393.39
S o x ................. k g 1 , 2 6 2 . 5 1 5 , 3 8 4 . 3 3 , 485.47
P M ................. k g 1 1 , 9 4 6 . 4 7 4 8 , 7 6 7 . 2 4 2 8 , 716.26
Wastewater
Total Water Consumption . . tonn es 34,318,201 32,369,502 36,596,517
R e c y c l e dA m o u n t ....... t o n n e s 6 , 6 8 6 , 2 1 0 5 , 599,585 5,524,543
Waste
Hazardous Waste . ....... k g 8 , 0 1 8 , 2 6 0 7 , 399,330 10,012,460
Non-hazardous Waste . . . . . kg 167, 774,510 186,159, 280 194,340,220
Recycled Volume of
H a z a r d o u sW a s t e ...... k g 6 2 7 , 0 3 0 453,430 694,290
Recycled Volume of Non-
hazardous Waste ....... k g 1 5 9 , 4 3 6 , 2 3 0 1 6 3 , 297,710 188,662,570
Resource Consumption
Our main resource consumptions are ener gy and water. By December 31, 2024, we have
established 12 reclaimed water recycling stati ons, achieving an annual recycled water volume
of over 1,125.9 million tons. Household and kitc hen waste are fully collected and utilized for
bioenergy and biogas power generation. Over 90 % of industrial waste is recycled, further
reducing carbon emissions.
In December 2024, Lens Technology Songshan Lake Park was listed in the MIIT 2024
Annual Green Manufacturing List .
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Details of our resource consumption during the Track Record Period are as follows:
Resource Classification Unit 2022 2023 2024
E l e c t r i c i t y............. M W h 4 , 4 9 2 , 4 7 5 4 , 140,715 4,515,729
W a t e rR e s o u r c e s ........ t o n n e s 2 7 , 6 3 1 , 9 9 1 2 6 , 769,917 31,071,974
Aligned with our current business operations and industry practices, we have established
the following energy management goals t o drive sustainable transformation
Ø Implement energy-saving retrofit projects across the entire business chain. The
average annual energy-saving growth rate will be no less than 3% from 2025 to
2030, with the energy savings in 2030 ex ceeding 60 million kilowatt-hours.
Ø By 2030, the proportion of clean energy usage will be increased to 60%. The scale
of green electricity procurement will b e expanded year by year, with the green
electricity consumption ratio breaking through 30% by 2030.
We implemented the ‘‘New Product Development Control Procedure ’’ to assess
environmental impacts throughout the produc t lifecycle to minimize resource use, energy
consumption, and pollution, ensuring sustainable design and production.
Carbon Management
We integrate sustainability into procurement by prioritizing environmentally friendly
materials and suppliers with strong resource c onservation practices. In 2024, we executed 45
energy-saving projects, reducing car bon emissions by 2.7 million tons of CO 2.
In recognition of our efforts, we were named an ‘‘Outstanding Practice Case for
Enterprise Green and Low-Carbon Development in 2024 ’’ by the China Enterprise
Confederation .
Details of our carbon emission during th e Track Record Period are as follows:
Classification Unit 2022 2023 2024
S c o p e1 ..... M e t r i ct onnes of
carbon dioxide
equivalent
18,441.858 19,055.210 25,953.347
S c o p e2 ..... M e t r i ct onnes of
carbon dioxide
equivalent
2,628,569.730 2,372,615.850 2,613,215.071
S c o p e3 ..... M e t r i ct onnes of
carbon dioxide
equivalent
4,662.280 4,611.061 5,363.140
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To support China ’s2 0 3 0 ‘‘carbon neutrality ’’ goal, we ’ve set the following carbon
emission targets based on current operations and industry practices to drive sustainable
transformation:
Ø Taking the year 2024 as the baseline, we plan to reduce the carbon emission
intensity (tCO 2/ten thousand yuan of output value) of our operations (Scope 1,
Scope 2, and Scope 3) by 20% over the next five years.
Identification of climate-related risks and opportunities
We prioritize climate-related governance and have systematically identified both
physical and transition risks, ass essing their potential impacts:
Ø Climate Physical Risks
a. Short-term Risks: Our production facilities in regions like Hunan,
Guangdong, and Jiangsu are vulnerable to extreme weather threats such
as floods and typhoons, which could disrupt operations, transportation,
and warehouse safety, resulting in increased costs.
b. Long-term Risks: Rising global temperatures may impact employee
health and productivity, necessitat ing investments in protective measures
and workplace improvements, which could increase labor costs.
Ø Climate Transition Risks
a. Policy and Compliance Risks: Stricter environmental regulations require
us to enhance emission controls, leading to higher compliance costs and
potential impacts on brand reputation.
b. Market and Consumer Demand Risks: The growing demand for
sustainable products drives the need for green transformation; failure to
adapt could negatively impact market share.
While managing these risks, we actively seek opportunities for sustainable growth:
Ø Renewable Energy: We promote solar and wind energy adoption within our
operations and supply chain, reducing carbon emissions and energy costs.
Ø Products and Markets: Increasing consumer awareness of sustainability,
creates opportunities for green products, enabling market expansion.
Ø Policy Support and Competitive Advantage: Developing a green supply
chain enhances brand recognition, ensures compliance with evolving carbon
standards, and supports long-term growth.
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Corporate Strategy and Objectives: We integrates climate risks into strategic
decisions, assesses climate impacts on th e value chain, upgrades facilities, deploys
renewable energy and recycling solutions, implements emission reduction plans,
promotes low-carbon technologies, and explores green business models.
Social Indicators and Management
As a leading precision manufacturing platf orm for smart devices, we are committed to
corporate social responsibility by fostering po sitive social impact thro ugh occupational safety,
employee development, sustainable supply chain s, consumer rights protection, and social welfare
initiatives.
Employment Practices
We prioritize employee rights and welfare, ensuring a fair and equitable employment
system. We strictly comply with the Labor Law of the People ’s Republic of China ,t h e Labor
Contract Law of the People ’s Republic of China and other relevant labor regulations to ensure
full protection of employees ’ legal rights. In accordance with our internal control systems
regarding working hours and remuneration stipul ated in our human resources policy, overtime
work of our employees is based on the principle of voluntariness, and employees who
voluntarily work overtime shall sign the overtime application by hand. The maximum daily/
monthly working hours policy complies with local regulations. We have established the
‘‘Attendance Management Measures ’’which stipulate that employees ’ overtime work generally
shall not exceed two hours per day and 36 hours per month. Overtime compensation for
weekdays shall be calculated at 1.5 times the standard hourly wage, for Saturdays and
Sundays shall be calculated at 2 times the standard hourly wage, and for statutory holidays
shall be calculated at 3 times the standard hourly wage.
Moreover, we have put in place emergency measures to deal with potential forced labour
incidents. As confirmed by our consultant on in ternal controls, based on internal control
review procedures performed, no material interna l control deficiencies were identified in this
regard. We ’ve established a diversifie d compensation and benefits system with transparent
performance evaluations and in centives to enhance well-being. We also promote engagement
through community activities and long-term rewards. During the Track Record Period, we
were not involved in any material non-compliance incidents or subject to any material
administrative penalties in relation to labour protection laws and regulations. According to the
Working Hours Control Management Standar d, employees shall work no more than 10 hours
per day and no more than 60 hours per week. We require that employees take at least one day
off after every six consecutive working days, and mandate a 15-minute break in both the
morning and afternoon. To prevent instances of involuntary labor, we have established the
Management Procedure for the Prevention of Involuntary Labor, which clearly stipulates that
employees must not be forced to work overtime and have the right to refuse overtime work.
Additionally, we prohibit the setting of produc tion targets that require employees to work
beyond regular hours in order to earn the minimum statutory wage or an industry-standard
wage. No punitive measures shall be taken aga inst employees who refuse to work overtime,
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such as wage deductions, any form of coercion, or other penalties. Going forward, we will
continue to improve and refine our labor management system to ensure sustainable practices in
employment.
In 2024, we were selected as one of the top 100 employers by 58.com and ranked 20th in
China ’s Top 100 Best Employers by HR Value Network.
The breakdown of our employee as of year-end 2024 is summarized as follows:
Ø By Gender
Year Male Female
2 0 2 4 ......................... 8 2 , 4 7 8 5 3 , 9 8 0
Ø By Age
Year Below 30 Years Old 31 –45 Years Old Above 45 Years Old
2 0 2 4........... 4 6 , 3 6 5 7 6 , 2 9 6 1 3 , 7 9 7
Ø By Geographic Distribution
Year Local Employees
Non-Local
Employees
2 0 2 4 ......................... 7 9 , 6 4 0 5 6 , 8 1 8
As of December 31, 2024, we had a total of 130,759 employees in China. In addition, we
had 5,540 employees in Vietnam, 133 employees in Mexico and 26 employees in other
overseas countries/regions.
During the Track Record Period, we strictly enforced the Management Procedures for
Prevention of Involuntary Labor , ensuring no forced labor or employment of minors while
upholding voluntary overtime and resignation rights.
Ø Compensation System: Salaries are based on positi on, skills, and performance,
ensuring fairness and competitiveness. E mployees can dispute salary details through
official channels. A Remuneration and Evaluation Committee , led by an
independent director, regularly reviews m arket salary data to maintain internal
fairness and external competitiveness.
Ø Employee Benefits: We provide a modern workplace, team-building activities, and
an Employee Care Center offering mental health support. Our Employee Assistance
Program facilitates psychological well-being and professional growth.
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Ø Employee Feedback Mechanism: Employees can voice concerns through
suggestion boxes, emails, forums, and representative meetings. HR hosts quarterly
forums and new hire feedback sessions. In 2024, we conducted 172 psychological
knowledge lectures (7,163 participants), 525 home visits (6,972 participants), 4,365
‘‘Project 520 ’’sessions (61,017 participants), and 1,778 employee seminars (30,085
participants).
Staff Development and Training
The company attaches great importance to the life safety and health of its employees.
Occupational health management systems hav e been established in all company campuses,
with dedicated teams in place to identify and a ssess occupational hazards. Professional
personnel are invited to conduct on-site monito ring and health check-ups. As advised by our
PRC Legal Advisor and confirmed by our Directors, we experienced no major accidents 1
during the Track Record Period. There were no ma jor administrative penalties imposed by the
work safety authorities for violations of laws and regulations in relation to production safety.
As of today, our career development and vocational skills training during the Track
Record Period is as follows:
Classification
Unit (of
measure) 2022 2023 2024
Duration of training . . . . Hours 395,336 395,563 391,424
Number of persons
t r a i n e d............ P e r s o n - t i m e s 1 , 4 3 3 , 7 4 9 1 , 013,933 1,568,092
Sustainable Supply Chains
We ensure a sustainable supply chain through strict supplier selection, performance
evaluation, and dynamic management.
As of December 31, 2024, our suppliers are ma inly divided into Mainland China and
those from outside Mainland China. The distribution of suppliers during the Track Record
Period is as follows:
Regional distribution of
suppliers
Unit (of
measure) 2022 2023 2024
M a i n l a n dC h i n a....... E n t i t i e s 1 , 3 4 6 1 , 6 3 6 1 , 9 2 3
Outside the Mainland
(including Hong Kong,
Macao, and Taiwan
r e g i o n s )........... E n t i t i e s 1 9 3 2 6 0 3 1 0
1 A major accident refers to an accident that results in the death of 10 to 30 people, serious injuries to 50 to 100 people,
or direct economic losses ranging from RMB50 million to RMB100 million.
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Supplier Access Assessment and Introduction Management
We classify suppliers into material, eq uipment, and engineering categories,
conducting strict qualification assessme nts before onboarding. Suppliers must meet
environmental and safety standards, with polluting enterprises required to hold ISO14001
certification. Those handling hazardous chemi cals must provide relevant licenses. All
suppliers sign social responsibility and environmental agreements, adhering to
Responsible Busin ess Alliance (RBA) standards and complian ce documents such as
REACH and VOC declarations.
Supply Chain Daily Management
We conduct continuous supplier evaluations , adjusting strategies based on real-time
performance data.
Ø Supplier Performance Management: Monthly appraisals cover quality,
procurement, technology, and hazardous substances management.
Ø Social Responsibility: Key suppliers undergo annual audits to ensure
compliance with labor, environmental, an d ethical standards. High-pollution
suppliers require prior environmental approval.
Ø Trade security: Vendors must provide trade security certificates or sign
customs agreements, with regular compliance checks.
Ø P r o o fo fo r i g i n :Suppliers must follow import regulations, label the country of
origin, and provide relevant certificates.
Ø Integrity Procurement: Suppliers sign confidentiality and social
responsibility agreements; violations lead to suspension. Reporting channels
are available for complaints.
Ø Conflict-Free Raw Material Management: We ensure traceability of gold,
tantalum, tin, tungsten, and cobalt, re quiring conflict-free certification and
OECD-compliant due diligence. All suppliers sign a Conflict Minerals
Questionnaire and submit regular compliance reports.
Product Responsibility
We are committed to delivering high-quality , innovative, and sustainable products, that
meet environmental, social, and quality standards. Through our Innovation Research Institute
and rigorous testing, we continuously enhanc e product safety and performance. Customer
needs are central to our operat ions. Following the vision ‘‘to lead industry trends through
technological innovation and forge a global leading smart manufacturing enterprise, ’’ we have
had no major product recalls over the past three years.
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Innovative Design and Research and Development
We integrate both vertical and horizontal supply chain strategies. By advancing lean
production, automation, and new materials , we enhance efficiency, reduce costs, and
strengthen market competitiveness. Our Innovation Research Institute on the research and
development of brittle material s, applications of new energy and optics, artificial intelligence
and others.
Ø Accelerating Intelligent Manufacturing: We’re transforming ‘‘Made in China ’’ to
‘‘Smart Manufacturing in China ’’ via smart manufacturing factories, industrial IoT,
and automation. Lens Xi angtan lead in IoT, smart warehousing, and full
automation, earning high customer recognition.
Intellectual Property Protection
We adhere to patent, trademark, and copyright laws, establishing a structured
Intellectual Property Management System to safeguard innovation. As of December 31,
2024, we hold 2,249 valid patents, including 495 invention patents, 1,619 utility model
patents, and 135 design patents, alongside 127 software copyrights.
High Standards of Quality Assurance
We ensure all products meet international quality standards, with accredited Testing
and Metrology Centers certified under ISO/IEC 17025:2017 and CNAS standards. We
hold four national laboratory accreditations , reinforcing our commitment to excellence in
quality and environmental sustainability.
Community and Public Goods
Over the years, we have continuously conduc ted various volunteer service activities,
actively participated in community building, an d also focus on giving back to society through
various initiatives. In 2024, we donated over RMB7.8 million through direct contributions and
foundations, supporting disaster relief, poverty al leviation, education, and disability assistance
programs.
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Privacy and Data Security
We prioritize data security and privacy protection, strictly adhering to the Network
Security Law, Personal Information Protection Law, Data Security Law ,a n d ISO 27001
standards.
Ø Data Security Protection
a. Information Security Practices: We conduct regular security drills, disaster
recovery tests, and penetration testing t o identify and resolve vulnerabilities.
Annual ISO 27001 internal and external audits ensure compliance and
continuous improvement in data security management.
b. Information Security Incident Plan and Summary: Our Information
Security Incident Management Specification outlines response mechanisms for
security threats, supported by predefined workflows and preventive measures
to minimize risks.
c. Information Security Education and Training: New employees undergo
mandatory online and offline security training on data protection and
confidentiality. Passing an examination is required before starting work,
reinforcing compliance with security protocols.
Anti-Corruption
We maintain a zero-tolerance policy against bribery and corruption, overseen by the
Internal Inspection Department , which ensures compliance with an ti-corruption regulations.
a. Internal Employees: Employees must sign the Ten Provisions on Integrity and
Self-Discipline of Management Personnel , undergo annual anti-corruption training,
and adhere to a ‘‘one-vote veto ’’policy in promotions.
b. Suppliers: Suppliers must comply with the Confidentiality Agreement on Honesty
and Integrity and the Code of Business Conduct . First-time suppliers undergo
audits, and violations result in blacklisting or disqualification.
c. Complaint Handling: We have opened a special complaint channel for employees,
customers or suppliers to report irre gularities and violations of the law.
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DATA PRIVACY AND CYBERSECURITY
In recent years, data privacy and cybersecurity have emerged as critical governance priorities
for companies worldwide. In particular, the PRC l egislative and government authorities regularly
introduce new cybersecurity, data security and privacy laws and regulations. Consequently, our
practices regarding the collection, process and transfer of various types of data may come under
increased administrative scrutiny. See ‘‘Risk Factors — Risk Relating to Our Business Operations
— Our operations rely on complex information tech nology systems and networks, and our business
and reputation may be impacted by information tec hnology system failures, network disruptions or
cybersecurity breaches. ’’
We collect and store business data, management d ata and transaction data generated during or
in connection with our business operations, includi ng data related to our business and transactions
with our customers, suppliers and other relevant parties. We generally do not collect or process
individual customers ’ personal information since our customers are brand companies rather than
individuals. We also do not have any cross border data transaction. As advised by our PRC Legal
Advisors, during the Track Record Period and up t o the Latest Practicable Date, we had complied
with applicable laws and regulations related to c ybersecurity and data protection in all material
aspects.
We have established a comprehensive data compl iance system that consists of organizational
structure and internal policies. Specifically, w e have established our Group Data Security Handbook
pursuant to the requirements under ISO27001 and h ave set up data security operational platforms
covering multiple areas of our business operations, from terminals, network, a pplication, computers
to data security. Our platforms and procedures ensure that we have a comprehensive set of
protocols covering the prevention of data breache s, immediate action and response in case of data
incidents and post-incident assessment and analy sis. Our data security policies have been certified
under ISO27001 and ISO20000. In addition, we conduct annual tr ial runs of data breach incidents
to test our data protection mechanism and provide various data security trainings to our employees
(including trainings during their on-boarding process) to ensure that our employees are well aware
of our data security policies and their responsibil ities in terms of data protection. We require our
employees to pass our data security tests before they can commence working for us.
Our legal and information technology departments are responsible for developing and
implementing our policies and procedures re lating to cybersecurity and data security.
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INFORMATION TECHNOLOGY
Our information technology systems are es sential to our business operations. We have
developed or employ various information technolo gy systems covering all material aspects of our
operations, including sales, supply chain manag ement, inventory management, production and
quality control. Our information technology d epartment is responsible for developing and
maintaining information technology systems t o support our business operations and growth.
Our key information technology systems are set forth below:
. Our Customer Relationship Manag ement system manages customers ’ information and
sales processes. It helps to track potential customers and sales opportunities in order to
enhance efficiency, reduce human errors and increase customer satisfaction.
. Our Enterprise Resource Planning system provides a unified platform that enables cross-
departmental collaboration and enhances overal l operational efficiency. It delivers real-
time business data to help man agement in decision-making.
. Our Supplier Relationship Management sys tem optimizes supply chain processes by
predicting demand, managing inventories, reducing costs and enhancing the flexibility of
the supply chain. It helps to ensure timely supply of raw materials and products.
. Our Manufacturing Execution system ensures e fficient production while maintaining our
quality standards. Used for planning and controlling various stages of production
processes, it optimizes resource allocati on, improves production efficiency, shortens
production cycles, and ensures product quality consistency.
. Our Quality Management system monitors and controls product quality to ensure
compliance with our and industry standards. By conducting quality inspection and
analysis, it detects and resolves quality is sues early on and minimizes product defects.
. Our Warehouse Management system optimi zes inbound and outbound logistics and
inventory management. By reducing storage costs, improving order processing speed and
enhancing warehouse space utilization, it im proves warehouse efficiency, reduces errors
and ensures our inventory data accuracy.
COMPETITION
We operate in a highly competitive market, and we mainly compete with other providers in
the global precision manufacturing industry. Our ability to maintain and grow our market share
depends on us competing effectively against our c ompetitors. The competitive landscape is shaped
by multiple factors, including the growth of our customers and their respective industries,
advancements in technology, emergence of new m aterials or technology , production capacity,
regulatory changes and general economic conditio ns. Despite high barriers to entry, new market
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participants may emerge, introducing innovative o r cost-effective products that challenge existing
players. If we are unable to keep pace with such advancements or fail to differentiate our products
in terms of quality or cost, we risk losing market share to our competitors. See ‘‘Industry
Overview ’’for details relating to our competitive landscape.
INSURANCE
We maintain insurance policies to cover product liability and employer liability. In addition,
we have purchased a number of property, equipment and transportation related insurance policies
covering our facilities, machinery, equipment, in ventories and other tangible assets. We review our
insurance policies from time to time to assess t he adequacy and breadth of coverage. We believe
that our existing insurance coverage is adequat e for our business operations and is in line with
industry standards. Nevertheless, we may be expos ed to claims and liabilities which exceed our
insurance coverage. See ‘‘Risk Factors — Risks Relating to our Business Operations — Our
insurance coverage may not cover all losses ’’for details.
During the Track Record Period, we had not made , and were not the subject of, any insurance
claims which are material to our b usiness or financial condition.
INTRA-GROUP TRANSACTIONS
In our ordinary course of business, we conduct certain intra-group transactions among our
entities in different jurisdictions. The table below sets forth the amount of our intra-group
transactions and arrangements for the periods indicated.
Year ended December 31,
Transaction Type 2022 2023 2024
RMB’000
F i n i s h e dG o o dS a l e s ............. 4 4 , 8 0 9 , 1 8 3 5 1 , 4 7 6 , 4 5 6 5 2 , 6 3 3 , 4 9 1
S e m i - F i n i s h e dG o o d sS a l e s ........ 4 , 3 6 2 , 1 9 9 1 , 0 3 4 , 3 2 1 2 , 2 3 5 , 3 9 5
R a wM a t e r i a lS a l e s ............. 1 0 , 2 6 9 , 6 4 3 1 0 , 8 0 2 , 5 0 8 7 , 0 7 2 , 9 7 9
Auxiliary Material Sales . . ........ 8 6 7 , 2 5 8 6 6 5 , 4 4 4 6 7 7 , 5 9 1
S m a r tE q u i p m e n tS a l e s........... 7 5 3 , 4 0 3 4 5 1 , 1 8 2 8 1 8 , 4 0 2
I TS e r v i c e s ................... 1 5 7 , 3 1 2 2 1 8 , 4 2 3 5 8 , 4 6 5
P r o c e s s i n gS e r v i c e s ............. 1 2 3 , 6 7 4 1 7 0 , 6 2 7 5 5 , 4 1 6
I n t e r c o m p a n yL o a n .............. 6 7 , 2 1 3 3 , 9 6 0 2 1 9 , 7 7 1
During the Track Record Period, our manufact uring entities sell goods, including finished
products, work-in-progress, equipment and supp orting materials to other entities within the Group
and receive payments correspondingly, and our tradin g entities sell raw mate rials to other entities
within the Group and receive payments correspond ingly. In addition, entities within the Group
would provide IT services, processi ng services and sales support services to other entities, and there
are financing transactions within the Group as well.
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We have engaged an independent transfer pricing consultant to conduct a review of our key
intra-group transactions during the Track Reco rd Period, with a focus on material and recurring
transactions. The consultant reviewed informatio n provided by us, including financial figures and
activities performed by relevant group entities, a nd performed benchmark studies. The consultant
assessed the reasonableness of the relevant tra nsfer pricing transactions and arrangements by
applying appropriate transfer pricing methods primarily using the interquartile range approach. The
objective was to evaluate whether the relevant pric ing of intra-group transactions was in line with
the arm ’s length principle and would not giv e rise to material tax exposure.
According to our independent transfer pricing c onsultant, during the T rack Record Period, our
transfer pricing risks resulting from our intra-group transactions were relatively low, and our
transfer pricing practice with respect to our int ra-group transactions worldwide did not have any
material compliance issues.
The independent transfer pricing consultant reviewed the following transfer pricing
transactions and arrangements, and the resu lts of the analyses are summarized as below.
(1) Analysis of sale of finished and semi-finish ed goods by manufacturing entities to trading
entities
During the Track Record Period, certain manuf acturing entities, including the Company, Lens
Changsha, Lens Xiangtan, Lens Dongguan and Lens Taizhou, sold finished products to trading
entities, including Lens Shenzhen and Lens Inter national, for onward sale to external customers.
Certain manufacturing entities, including the Co mpany, Lens Changsha, Lens Intelligent Control,
sold semi-finished products to other manufacturing entities, including Lens Vietnam, the Company
and MOSS TECHNOLOGY, S.A. DE C.V., for furthe r processing where production capacity
constraints or multi-stage processes were involved.
The independent transfer pricing consultant has r eviewed these transactions and found that the
gross profit margins for such sales were largely within the interqua rtile range based on comparable
benchmarks. For certain transactions where the margins fell outside the range, the deviations were
supported by commercial rationale. Accordingly, the pricing of these tra nsactions is considered
consistent with the arm ’s length principle.
( 2 ) A n a l y s i so fs a l eo fr a wm a t e r ials to manufacturing entities
During the Track Record Period, certain trading en tities, including Lens I nternational and Lens
Shenzhen, sold raw materials to other manufacturing entities, including the Company, Lens
Changsha, Lens Taizhou, and Lens Vietnam, ba sed on centrally coordinated procurement
arrangements. Certain trading en tities, including Shenzhen Lens Wang and Lens Precision Co.,
Ltd., sold specialised raw materials to manufact uring entities, including the Company and Lens
Changsha, to support bespoke production needs. Cert ain manufacturing entities, including Changsha
Lens New Materials Company Limited and Changsha Yong ’an New Material Company Limited,
sold self-produced auxiliary materials to other ma nufacturing entities, including the Company, Lens
Changsha and Lens Dongguan, for use at various stages of the production process.
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The independent transfer pricing consultant ha s reviewed and benchmarked these transactions
and found that the gross profit margins of such sales were largely within the interquartile range
based on comparable benchmarks. For certain tran sactions where margins fell outside the range, the
associated risk is considered low given the scal e of the transactions, the absence of any tax
avoidance motive, and the presence of commercia l rationale. Accordingl y, the pricing of these
transactions is considered consistent with the arm ’s length principle.
(3) Analysis of sale of smart equipment to manufacturing entities
During the Track Record Period, certain manuf acturing entities, including Lens Intelligent
Robot and Lens Shenzhen, sold smart manufacturing equipment to other manufacturing entities,
including the Company, Lens Changsha, Lens T aizhou and Lens Vietnam, for use in automated
production processes.
The independent transfer pricing consultant has r eviewed these transactions and found that the
gross profit margins of such sales were largely wi thin the interquartile range based on comparable
benchmarks. For certain transactions where the margins fell outside the range, the deviations did
not result in reduction in PRC tax payable and the a ssociated risk is consid ered low. Accordingly,
the pricing of these transactions is considered consistent with the arm ’s length principle.
(4) Analysis of provision of serv ices to manufacturing entities
During the Track Record Period, certain system integration service entities, including Lens
System Integration Company Limited and Shenzh en Lens System Integration Company Limited,
provided IT system integration services to manuf acturing entities, including the Company, Lens
Changsha, Lens Xiangtan and Lens Taizhou, for maintenance and support of software systems and
hardware infrastructure used in daily production a nd operations. Certain manufacturing entities,
including the Company, Lens Changsha and Lens Int elligent Control, provided processing services
to other manufacturing entities, including Lens Changsha, the Company, Lens Dongguan and Lens
Xiangtan, primarily to address inter nal production capacity constraints.
The independent transfer pricing consultant has reviewed these arrangements and found that
the gross profit margins of such service arrangeme nts were largely within the interquartile range
based on comparable benchmarks. For certain trans actions where the margins fell outside the range,
the deviations did not result in reduction in PRC ta x payable and the associated risk is considered
low. Accordingly, the pricing of these transactions is considered consistent with the arm ’sl e n g t h
principle.
(5) Analysis of provision of sales support serv ices by an overseas entity to trading entities
During the Track Record Period, Lens Technology, Inc. provided sales support services to
Lens International, including customer develo pment and routine client management in the U.S.
market.
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The independent transfer pricing consultant ha s reviewed the transaction and found that a cost-
plus pricing method was adopted, with markups with in the interquartile range based on comparable
benchmarks. Accordingly, the pricing of these tra nsactions is considered c onsistent with the arm ’s
length principle.
(6) Analysis of intra-group financing arra ngements and pass-through transactions
During the Track Record Period, certain Group entities, including the Company, Lens
Changsha, Lens Technology (Kunshan) Company Limited, Lens Wang Technology, and Lens
Dongguan, entered into intercompany loan arrangements for working capital and strategic funding
purposes. Certain trading entities, including Lens Shenzhen and Lens International Limited, passed
on customer-provided rebates and R&D subsidies t o certain manufacturing entities, including Lens
Changsha and Lens Vietnam. In certain cases, cust omer-supplied moulds were also transferred via
trading entities to manufacturin g entities on a pass-through basis.
The independent transfer pricing consultant has reviewed these arrangements and found that
most loans were interest-bearing and priced in line with market rates. A limited number of interest-
free loans were made to support financially w eaker or developing subsidiaries, and such
arrangements were not motivated by tax avoidance a nd thus the associated risk is considered low.
For the pass-through transactions, trading entities did not assume any functional or risk-bearing role
and did not retain any margin. Accordingly, th e pricing of these transactions is considered
consistent with the arm ’s length principle.
Based on the above analysis, the independent tra nsfer pricing consultant is of the view that,
during the Track Record Period, the transfer pricin g transactions and arrangements were generally
consistent with the arm ’s length principle and our transfer pricing practice worldwide did not have
any material compliance issues.
Although we cannot assure you that the Mainland China, Hong Kong and other jurisdictions
tax authorities will not make any transfer pricin g adjustments according to the relevant laws and
regulations, the Directors (after c onsultation with our independent transfer pricing consultant) are of
the view that the Group would have reasonable gro unds of defense against possible challenges to
the Group ’s transfer pricing arrangements for the Track Record Period.
PROPERTIES
As of December 31, 2024, we operated our business through owned and leased properties in
20 locations in countries including China, Vie tnam and Mexico. We primarily use our owned and
leased properties as our production centers and office premises.
As of December 31, 2024, we had no single property with a carrying amount of 15% or more
of our total assets, and on this basis, we are not required by Rule 5.01A of the Hong Kong Listing
Rules to include any valuation report in this Prospectus. Pursuant to section 6(2) of the Companies
Ordinance (Exemption of Compa nies and Prospectuses from Com pliance with Provisions) Notice,
this Prospectus is exempted from compliance wit h the requirements of section 342(1)(b) of the
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Companies (Winding Up and Miscellaneous Provisi ons) Ordinance in relation to paragraph 34(2) of
the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, which
requires a valuation report with respect to all of our interests in land or buildings.
Owned Properties
As of December 31, 2024, we owned properties in 12 locations with a gross floor area of over
six million square meters in China, Vietnam and th e United States. We mainly use these properties
as our production centers and office premises, of w hich, we are currently applying for property
ownership certificates for four properties with a n aggregate gross floor area of approximately 110
thousand square meters. Our PRC Legal Advisor ha s advised us that, with respect to those four
properties that we are currently using and applying for property ownership certificates, we may be
imposed (i) a maximum fine of RMB300,000 and may be ordered to stop using the property in the
two cases of deficiency in fire safety inspecti on or (ii) a maximum fine amounting to 10% of the
cost of constructing the property and may be ordered for demolishment in the other two cases of
deficiency in the construction planning permit. W e expect to obtain the ownership certificates for
two properties in our Xingsha production cent er in around October 2025. Afterwards, we will
continue to coordinate with the relevant local gov ernment department for ownership certificates
after we obtain the certificates for our Xingsha pro perties. With respect such properties, based on
interviews with the competent regulatory authorit y, and considering that these properties are either
not used as production facilities or not in actual u se, we could find alternative properties to use if
needed, our PRC Legal Advisor is of the view that such circumstance would not have any material
adverse impact on our business operation.
Leased Properties
As of December 31, 2024, we leased properties in eight locations with a gross floor area of
over 100 thousand square meters in mainland China, Hong Kong, Japan, Mexico, Vietnam and
Singapore, mainly as our employee dormitories, p roduction centers and office premises. According
to applicable PRC laws and regulations, the lesso r and the lessee to a lease agreement are required
to file the lease agreement with relevant government authorities within a prescribed time period. As
of the Latest Practicable Date, with respect to 15 leased properties in mainland China with
relatively large gross floor area, we had not f iled the lease agreements. As advised by our PRC
Legal Advisor, the absence of registrations will no t affect the validity of the lease agreements, nor
materially and adversely affect our operations but we may be ordered by relevant competent
authorities to complete the filing within a designated time limit, and may be subject to fines from
RMB1,000 to RMB10,000 for each such lease agreem ent for failure to do so within the time limit.
As advised by our PRC Legal Advisor, if the filing of these lease agreements can be completed in
accordance with relevant laws and regulations w ithin the prescribed time limit ordered by the
competent governmental authorities, such circ umstances would not have any material adverse
impact on our business operations.
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With respect to the non-compliances regarding our leased properties, we will actively work on
completing the lease registration, and the lack of registration does not affect normal use. With
respect to the non-compliances regarding our owne d properties, we have received written support
from local government authorities, committing to en sure that the properties are used normally until
the issues are resolved and actively c oordinating to address the issues.
EMPLOYEES
As of December 31, 2024, we had 136,458 full-t ime employees, with approximately 96% of
our employees located in China. The following table sets forth a breakdown of our full-time
employees by function as of December 31, 2024.
Function As of December 31, 2024
Number %
P r o d u c t i o n ................................ 9 8 , 8 5 3 7 2 . 4 %
R & Da n dt e c h n i c a lp e r s o n n e l ................... 2 4 , 5 4 5 1 8 . 0 %
A d m i n i s t r a t i v e .............................. 1 1 , 8 2 0 8 . 7 %
S a l e sa n dm a r k e t i n g.......................... 8 9 9 0 . 7 %
F i n a n c e .................................. 3 4 1 0 . 2 %
Total .................................... 1 3 6 , 4 5 8 1 0 0 . 0 %
We provide our employees with certain benefits including social insurance coverage and
retirement benefits. We enter into individual e mployment contracts with our employees to cover
matters such as wages, employee benefits, confidentiality and grounds for termination. Our
employees ’ compensation is determined with reference to their job positions, technical skills, job
performance and competition.
We have various employee training programs that aim to enhance our employees ’ technical
skills and innovation capability. Our employee tra ining system is centred around three pillars,
namely our operational system, our class system an d our instructor system. Our operational system
governs the design and implementation of our tr aining policies; our class system decides our
training content, and our instructor system makes sure that we have the right instructors who can
properly train and inspire our employees.
None of our employees are represented by a uni on or collective bargaining agreements. We
believe that we have good employment relations hips with our employees. During the Track Record
Period, we did not experience any strikes, work stoppages, labor disputes or actions which had a
material adverse effect on our business and operations.
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NON-COMPLIANCE INCIDENTS
Social Insurance and Housing Provident Funds
According to relevant PRC laws and regulations, we are required to make contributions to the
social insurance fund and housing provident fund for the benefit of our employees in China. During
the Track Record Period, we and certain of our PRC subsidiaries did not make adequate
contributions to the social insurance and housing provident funds with respect to certain of our
employees as required by the relevant PRC laws and regulations.
As advised by our PRC Legal Advisor, pursuant to applicable PRC laws and regulations, if an
employer fails to make social insurance contributi ons in full, the relevant authorities could order the
employer to pay, within a prescribed time limit , the outstanding amount with an additional late
payment penalty at the daily rate of 0.05%, and if the employer fails to make the overdue
contributions within such time limit, a fine equa l to one to three times the outstanding amount may
be imposed. Additionally, pursuant to applicabl e PRC laws and regulations, if an employer is
overdue in the payment and deposit of, or underpays, the housing provident fund, the relevant
authority could order the employer to make the payment and deposit within a prescribed time limit
and, failing which, an application may be made to a court in China for compulsory enforcement.
B a s e do ni n t e r v i e w sw i t hs e v e r a lr e l e v a n tP R Cregulatory authorities which are the competent
regulatory authorities, they would not conduct centr alized collection of historical social insurance
and housing provident fund underpayments on us or our relevant PRC subsidiaries unless they
receive complaints from our employees, and we an d our relevant PRC subsidiaries would not be
penalized if we rectify the non-compliance withi n the stipulated time period after receiving
complaints. If we receive a notice from relevant a uthorities requiring us to rectify, pay or make up
social insurance and housing provident funds within a specified period, we will promptly comply
with the requirements of such notice. As at the Latest Practicable Date, (i) we and the relevant PRC
subsidiaries had not been subject to any material a dministrative actions, fines or penalties due to
such non-compliance, (ii) we were not aware of any material employee complaints filed against us
nor were we involved in any material labor disput es with our employees with respect to social
insurance or housing provident fund contributions and (iii) we had not received any notice issued
by the social insurance premium collection agencies and housing provident fund management
departments regarding payments within limite d time or overdue payments of social insurance
premiums and housing provident fund contribution s. No shortfall repayments, fines or penalties
were triggered during the Track Record Period and up to the Latest Practicable Date.
According to the Social Insurance Law of the PRC and the Regulations on the Administration
of Housing Provident Fund, human resources and s ocial security bureaus and housing provident
fund management centers are the competent authorities for employee social insurance and housing
provident fund matters. According to the Interim Regulations on the Collection and Payment of
Social Insurance Premiums ( 《社會保險費徵繳暫行條例》), local tax authorities have the right to
collect social insurance premiums. We conducted interviews with relevant departments of social
security bureaus, housing provident fund management centers, and tax bureaus in Changsha,
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Xiangtan, Liuyang, Taizhou, and other places. O ur PRC Legal Advisor is of the view that the
interviewed departments are the competent autho rities responsible for the social security and
housing fund contributions and penalties of our related subsidiaries.
Considering relevant regulatory policies and the facts stated above and the confirmations we
have received from the competent PRC authorities, provided that there are no material changes to
the current social insurance, housing provident fu nd policies and regulations, or to the enforcement
and supervision requirements of local governme nts, our PRC Legal Advisor is of the view that the
likelihood that we would be subject to material administrative penalties due to our failure to
provide full social insurance and housing provident fund contributions is low.
Labor Dispatch
According to Interim Provisions on Labour Dispatch ( 《勞務派遣暫行規定》)w h i c hw a s
promulgated by the Ministry of Human Resou rces & Social Security on 24 January 2014 and
became effective on 1 March 2014, an employer may employ dispatched workers in temporary,
auxiliary or substitutable positions only and shall strictly control the numbe r of dispatched workers
employed which shall not exceed 10% of the total number of its workers. A penalty ranging from
RMB5,000 to RMB10,000 per dispatched worker exceeding the 10% threshold may be imposed for
any non-compliance that is not rectified within a prescribed time period.
During the Track Record Period, the percentage of dispatched workers engaged by certain of
our PRC subsidiaries exceeded 10%. As of the Latest Practicable Date, we had rectified such non-
compliance by reducing the number of dispatched workers the relevant PRC subsidiaries engaged.
Considering our remedial actions and interview wi th the competent regulatory authority, provided
that (i) there are no material changes to the current laws, regulations, and policies governing labor
dispatch arrangements, or to the enforcement and supervision requirements of local governments,
and (ii) no material collective emp loyee complaints or related liti gation/arbitration proceedings
initiated against us, our PRC Legal Advisor is of the view that the likelihood that we would be
subject to material administrative penalties due to our non-compliance with the labor dispatch
regulations is low.
We established the Control Procedure for Id entification and Evaluation of Compliance
Obligations, which specifies that the adm inistrative department of the Group ( ‘‘Administrative
Department ’’) is responsible for compliance evaluatio n and non-compliance identification of
applicable laws, regulations and other requiremen ts related to the environment, occupational health
and work safety promulgated by comp etent regulatory authorities (the ‘‘Regulatory
Requirements ’’). In addition, we have populated the Emergency Response Plan for Other Major
Incidents and established a handling process a nd risk control mechanis m to prevent potential
violations of the Regulatory Requirements. The A dministrative Departm ent also maintains the
compliance management ledger, overseeing, among others, production safety and construction
project status.
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We also established the Management Specifi cations for Employee Social Insurance and
Housing Fund. Prior to new employees ’ onboarding, unified training on payment rules, bases and
ratios of the social insurance and housing provident funds shall be conducted, and employees are
required to sign a training attendance sheet. Each month, our human resources department, finance
department and other relevant departments conduct reviews of the social insurance and housing
provident fund purchase rosters, employment and re signation records, payment records, deduction
records, bank receipts and local policy documents . This aims to mitigate risks and ensure accurate
implementation of our policies. Meanwhile, we hav e also established dedica ted complaint channels
for social insurance and housing provident fund re lated issues. Employees can submit issues or seek
consultations through the human resources emplo yee service center, Feige online service platform
representative assembly. Relevan t departments shall verify, handle and give feedback on such issues
or complaints, while strictly safeguarding the confidentiality of whistleblowers ’ information.
Non-compliance with Overtime Requirements
According to PRC laws and regulations, employees ’ daily working hours shall not exceed
eight hours, and the average weekly working hours shall not exceed 44 hours. If it is necessary to
extend working hours due to speci al circumstances, the extensio n shall not exceed three hours per
day, provided that the health of the employees is ensured. Additionally, the total extension shall not
exceed 36 hours per month. Therefore, under PRC laws and regulations, where an extension of
working hours is required due to special circum stances, working hours shall not exceed 11 hours
per day or 210 hours per month.
During the Track Record Period, certain of our employees ’ overtime hours exceeded the
legally prescribed number of hours under PRC laws and regulations. According to PRC laws and
regulations, in the case of overtime work exceedin g the legally prescribed number of hours, the
Labor and Social Security Admini strative Department will give the employer a warning and order it
to make rectifications within a prescribed tim e period and may impose a fine of more than RMB100
but less than RMB500 for each employee who is affected. During the Track Record Period and up
to the Latest Practicable Date, we had not recei ved any warnings or orders from the Labor and
Social Security Administrative De partment for rectifications or fines in relation to overtime work.
For illustration purposes, based on the number of our employees as of December 31, 2024,
assuming all our employees engaged in overtime work exceeding the legal prescribed number of
hours, the potential fine we may face for such overtime work ranges between RMB13.6 million and
RMB68.2 million, accounting for approximately 0.4% and 1.9% of our profit for the year in 2024.
As such, as advised by our PRC Legal Advisor, we believe that the risk of us being subject to fines
for employee ’s overtime work during the Track Record Period is low, and the overtime incidents do
not have any material impact on our business, resu lts of operations or financial condition. The
Company ’s policy requires overtime work to be app lied for and approved in advance. The
application is done on a monthly basis. The factory/ workshop shall, according to production needs,
submit the detailed forecast of overtime for the n ext month, which shall be signed and confirmed
by the employees to be involved in the overtime working plan, reviewed by the department
supervisor and approved by the department ma nager, and then submitted to the human resources
department for record. Overtime work must be applied for in advance and approved by the manager
in charge to be regarded as valid.
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RISK MANAGEMENT AND INTERNAL CONTROL
Our future operating performance may be affected by risks relating to our business. Some of
these risks are specific to us while others relate to economic conditions and the general industry in
which we operate. See ‘‘Risk Factors ’’for a discussion of these risks.
The Board of Directors and our senior managem ent are responsible for establishing and
maintaining adequate risk management and internal control systems. Risk management is the
process designed to identify potential events that may affect us and to manage risks to be within
our risk appetite. Internal control is the process des igned to provide reasonable assurance regarding
achievement of objectives related to effectivenes s and efficiency of operations, reliability of
financial reporting and compliance w ith applicable laws and regulations.
Risk Management and Internal Control Policies
We have implemented or will adopt upon Listing a number of policies and measures to
manage our risks and set up proper internal controls. These policies cover areas such as (i) the
duties and roles of the Directors, the Board a nd our senior management; (ii) social and
environmental matters, including policies on diversi ty; (iii) financial reporting; (iv) whistleblowing;
(v) prevention of market misconduct and (vi) c ompliance with the Hong Kong Listing Rules.
Under our risk management and internal control policies, the Board oversees risk management
and internal control systems on an ongoing basis a nd reviews the effectiveness of these systems.
In February 2025, we engaged an independent consulting firm to perform a review over our
internal control. The key areas of inspection include financial reporting and disclosure, research and
development management, management policies ov er sales, supply chain controls, trade receivables
and payables management, product safety contr ol, inventory management, intangible assets
management, human resource and remunerat ion management, capital management, tax
management, insurance management, contr act control and information system control.
LICENSES, PERMITS AND APPROVALS
We are required to obtain or maintain various licenses, permits and approvals in order to
o p e r a t eo u rb u s i n e s s .W eb e l i e v ew eh a v ea l lm a t e r ial licenses, permits and approvals necessary in
order to operate our business. We continually monitor our compliance with these requirements in
order to ensure that we have all such approvals, licenses and permits as are necessary to operate our
business.
We had not experienced any material difficultie s in renewing our material licenses, permits or
approvals during the Track Record Period and do n ot expect there to be any material difficulties in
renewing them upon their expiry.
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IMPACT OF COVID-19 PANDEMIC
Despite the macroeconomic challenges posed by the COVID-19 pandemic, our business
operations and financial condition remained st able during the Track Record Period and were not
materially and adversely impacted by the COVID- 19 pandemic. Our supply chain remained stable
and was operating without material constraint d uring the Track Record Period. In addition, we
continued to observe healthy demand across our cu stomer base, with no material shift in consumer
purchasing behavior that can be directly attributed to the COVID-19 pandemic. During the Track
Record Period, inventory levels and order flows remain stable and have fluctuated only in the
ordinary course of business, and we have not enco untered any significant cancellations, deferments
or abnormal pricing pressures linked to f actors related to the COVID-19 pandemic.
LEGAL PROCEEDINGS
W em a yf r o mt i m et ot i m eb e c o m eap a r t yt ov a r ious legal, arbitral or administrative
proceedings arising in the ordinary course of our business. As of the Latest Practicable Date, there
were no litigation, arbitration or administrative proceedings pending or threatened against us or any
of our Directors which could have a material and adv erse effect on our financial condition or results
of operations.
During the Track Record Period and up to the Latest Practicable Date, there were no material
breaches or violations of laws or regulations appli cable to us which are expected to have a material
adverse effect on our business, financial condition or results of operations.
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You should read the following discussion a nd analysis with our audited consolidated
financial information, including the n otes thereto, included in the Accountants ’ Report in
Appendix I to this Prospectus. Our consolidat ed financial information has been prepared in
accordance with the IFR S Accounting Standards.
The following discussion and analysis contain forward-looking statem ents that reflect our
current views with respect to future events and f inancial performance. These statements are
based on our assumptions and analysis in light of our experience and perception of historical
trends, current conditions and expected futu re developments, as well as other factors we
believe are appropriate under the circumstances. However, w hether actual outcomes and
developments will meet our expectations and p redictions depends on a number of risks and
uncertainties. In evaluating our business, you should carefully consider the information
provided in this Prospectus, including but not limited to the sections headed ‘‘Risk Factors ’’
and ‘‘Business. ’’
For the purpose of this section, unless the con text otherwise requires, references to 2022,
2023 and 2024 refer to our financial years en ded December 31 of such years. Unless the
context otherwise requires, financial informa tion described in this section is described on a
consolidated basis.
OVERVIEW
We are an industry-leading integrated one-sto p precision manufacturing solution provider. We
are focused on technological innovation and em powered by smart manufacturing. In terms of
revenue in 2024, we are a global leading player in pre cision structural parts a nd modules integrated
solutions for both consumer electronics and smart vehicles interaction systems.
We currently offer a comprehensive suite of precision manufacturing solutions in consumer
electronics, smart vehicles and other smart devices , including various structural parts, functional
modules and others, such as co mplete device assembly.
Our structural parts and functional modules are specifically designed and manufactured
pursuant to the customizations and needs of our customers for use in (i) smartphones and
computers, (ii) smart vehicles and cockpits, (ii i) intelligent head-moun ted displays and smart
wearables and (iv) other smart devices which incl ude smart retail devices. Our customers during the
Track Record Period were mainly global brand com panies in the consumer electronics and smart
vehicles industries.
We achieved strong growth of both our revenue and our profit for the year during the Track
Record Period. In 2022, 2023 and 2024, our re venue amounted to RMB46,698.5 million,
RMB54,490.7 million and RMB69,896.8 million, representing a year-on-year growth of 16.7% in
2023 and 28.3% in 2024. In 2022, 2023 and 2024, our profit for the year amounted to RMB2,519.8
million, RMB3,041.8 million and RMB3,676.9 mi llion, representing a year-on-year growth of
20.7% in 2023 and 20.9% in 2024.
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SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financ ial condition are affected by a number of general
factors influencing the overall global precision manufacturing industry. These factors include
macroeconomic trends, industry development and co mpetitive landscape in t he market. Any adverse
development can have a negative impact on our results of operations.
In addition to these general factors, our resul ts of operations are affected by the following
specific factors:
Maintaining and Growing Our Relationship with Our Existing Customers
Our results of operations have been and are expected to be affected by our ability to maintain
and grow our relationship with our existing cust omers, which is in turn affected by many factors,
including the global consumers ’ demand for consumer electroni cs and smart vehicles and our
product and service offerings.
We generate our revenue primarily from providing structural parts, functional modules and
complete device assembly to global brand compani es in the consumer electronics and smart vehicles
industries. Unfavorable changes in global eco nomic conditions and consumer spending could
negatively affect demand for consumer electronics and smart vehicles, which in turn will negatively
affect our customers ’ demand for our products and services and materially and adversely affect our
results of operations.
In addition, consumer electronics and smart vehi cles industries are characterized by intense
competition and constant price r eduction pressures in recent years . As a result, our customers face
ongoing pressure to launch new products at competitive prices, which in turn requires us to (i)
advance our technologies and production technique s to develop, together with our customers, end
products with innovative features and specificati ons and (ii) optimize our production efficiency to
lower our production costs. Our ability to achieve technological innovation and to enhance our
production efficiency and manage our production costs will affect our customers ’ demand for our
products and services as well as our profit margins.
Furthermore, our ability to grow our relations hip with our existing customers is affected by
our ability to (i) advance our research and development to produce new products that meet our
customers ’ evolving requirements and (ii) cross-sel l additional products and services to our
customers, which in turn depend on the growth or upgrade of our production techniques, products
and services through technological innovation.
Further Penetration into New End Markets
Our ability to continue to grow our business will depend on our capability to enter or further
penetrate into new end markets. We have been continuously growing our portfolio of products and
services to capture emerging opportunities fro m new end markets or application scenarios. For
example, we expanded into the smart vehicles industry in 2018, and in 2022, 2023 and 2024, smart
vehicles and cockpits related revenue accounte d for 7.7%, 9.2% and 8.5% of our total revenue in
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the respective periods. We also successfully enter ed the smart retail industry with our smart retail
devices in 2024, and we have recently expanded into the humanoid robots industry, having
delivered the first batch of humanoid robots in January 2025.
Even though we currently only generate an immaterial portion of our revenue from new end
markets such as humanoid robots, we expect that our revenue from these new end markets will
grow in the future due to the anticipated developm ent of these markets. Our ability to successfully
capitalize on such development and acquire new customers in these markets, which depends on our
research and development capabilities in these new end markets and the demand of brand
companies in these markets, will affect our business and financial condition.
Product Mix and Pricing
Our revenue and profitability are affected by the mix of our products and solutions. In line
with our strategy of offering vertically integrated solutions to our customers, we have been
expanding our product and solution offerings alo ng the precision manufacturing industry value
chain. Our product offerings have expanded from cover glass for mobile phones to structural parts
for various consumer electronics and smart vehi cles, as well as functional modules and complete
device assembly. Our wide range of products and sol utions have highly different selling price and
margin profile. For example, our gross margin for complete device assemb ly was (1.6%), 2.6% and
1.3% in 2022, 2023 and 2024, significantly lower than our overall gross margin. Even within the
same category of products, we offer an extensive range of different products with varying prices
and margin profiles. In particular, part of our co mplete device assembly business was performed
under the buy-and-sell model, under which we buy certain raw materials and components and sold
the complete device, instead of charging a process ing fee. As such, complete devices sold under the
buy-and-sell model are associated with much highe r selling prices but lower gross profit margin.
Our profitability is also affected by our ability to price our products and solutions to achieve our
intended profit margins. If we are unable to manage our portfolio of products and solutions or to
price our products and solutions to achieve our desired profitability, our business and financial
condition will be adversely affected.
Ability to Control Cost of Sales
Our cost of sales mainly includes costs of raw materials and components used in the
production of our products, such as glass, metals and the electronic components used in our
functional modules, as well as labor costs, deprecia tions costs, power costs and transportation costs
associated with the pro duction of our products.
Our ability to control our cost of sales is crucial in maintaining our desired profitability.
While we are able to source our raw materials and components through a variety of sources (other
than the raw materials and components specifical ly designated by our key customers, for which our
key customers are responsible for negotiating the s upply terms), if the availability of, or access to,
or the cost of purchasing certain raw materials or components that we need to manufacture our
products is adversely affected (for example, due to a decrease in the number of suppliers of such
materials or a reduction in the overall availabili ty of such materials, whether due to a lack of supply
or increased demand from our competitors or fluctuations in market prices), we may have to pay
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more for these materials. Our ability to maintain a high product yield rate also impacts our raw
materials cost. Increased raw material or components costs will reduce our profit margins if we are
unable to recover these additional costs through higher selling prices or increased production
efficiencies.
In addition, while a large part of our production equipment and facilities has been automated,
labor costs remains a key component of our cost of s ales. If we experience any significant increase
in labor costs and we are unable to upgrade our production in time to compensate for such increase,
our business and financial condition will be affected.
Foreign Exchange Fluctuations
Our reporting currency is the RMB. The functional currency of the majority of our
subsidiaries is the RMB. Some of our sales, purch ases, trade receivables and payables and bank
balances are recorded or denominated in foreign currencies. Consequently, foreign currency
exchange rates have a significant impact on o ur consolidated financial information.
Foreign currency transactions are translated into the functional currency using the exchange
rates at the end of the previous month. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary
items carried at fair value that are denominated i n foreign currencies are retranslated at the rates
prevailing on the date when the fair value was de termined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated. In 2022, 2023 and 2024, we
recorded net foreign exchange gains of RMB231.5 million, RMB59.5 million and RMB193.2
million.
For further details regarding the carrying amounts of our monetary assets and liabilities
denominated in foreign currencies and the effect of foreign currency fluctuations on our results of
operations, see Note 41 to the Accountants ’ Report set out in Appendix I.
Research and Development Efforts and Achievements
Research and development are crucial to our sust ained business growth a s our competitiveness
depends on our ability to develop and implement new technologies and production techniques to
address evolving needs of our customers. Therefore, we have been investing and will continue to
invest in research and development efforts. In 2022, 2023 and 2024, our research and development
expenses amounted to RMB2,105.0 million, RM B2,316.6 million and RMB2,784.8 million,
representing 4.5%, 4.3% and 4.0% of our total revenue in the respective periods.
Our research and development achievements aff ect our business in multiple ways, such as (i)
whether we will be successful in maintaining our relationships with our existing customers and
acquiring new customers, (ii) whether we can expa nd our portfolio of products and services and
(iii) whether we can manage our production cos ts by employing more advanced and automated
production equipment or by maintaining high product yields. We cannot assure you that our
research and development efforts will achieve our intended results, or that we will be able to
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successfully implement new t echnologies or technologies resulting from our research and
development to achieve our intended benefits. In this case, our business and financial condition
will be adversely affected.
BASIS OF PRESENTATION
Our financial information during the Track Record Period has been prepared in accordance
with IFRS Accounting Standards, which comprise a ll standards and interpretations approved by the
International Accounting Standards Board. Our financial information during the Track Record
Period has been prepared under the historical cost convention, except for certain financial assets
which have been measured at fair value. See note 2 to Appendix I — Accountants ’ Report.
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
N o t e4t oA p p e n d i xI — Accountants ’ Report to this Prospectus sets forth certain material
accounting policies, which are important for unders tanding our financial condition and results of
operations.
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments relating to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our financial
position and results of operations. Our manage ment continually evaluates such estimates,
assumptions and judgments based on past experiences and other factors, including industry
practices and expectations of future events that are believed to be reasonable under the
circumstances. During the Track Record Period, there was no material deviation between our
management ’s estimates or assumptions and actual res ults, and we did not make any material
changes to these estimates or assumptions. We do not expect any material changes in these
estimates and assumptions in the foreseeable future.
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RESULTS OF OPERATIONS
2022 2023 2024
RMB
% of total
revenue RMB
% of total
revenue RMB
% of total
revenue
(in thousands, except for percentages)
Revenue
Contracts with customers . . . . 46,603,225 99.8% 54,364,061 99.8% 69,756,758 99.8%
L e a s e s ................ 9 5 , 3 2 1 0 . 2 % 1 2 6 , 6 7 3 0 . 2 % 140,018 0.2%
Total revenue ........... 46,698,546 100.0% 54,490,734 100.0% 69,896,776 100.0%
C o s to fs a l e s ............ ( 3 8 , 151,630) (81.7%) (45,998,870) (84.4%) (59,713,283) (85.4%)
Gross profit .............. 8,546,916 18.3% 8,491,864 15.6% 10,183,493 14.6%
O t h e ri n c o m e............ 678,576 1.5% 1,017,209 1.9% 567,024 0.8%
Reversal of impairment losses
(impairment losses
recognised) under expected
credit loss ( ‘‘ECL ’’) model,
n e t................. 4 3 , 9 6 2 0 . 1 % 1 , 2 5 9 0 . 0 % ( 3 3 , 8 5 9 ) 0 . 0 %
Other gains and losses, net . . . 321,012 0.7% 218,657 0.4% 384,380 0.5%
Selling expenses . . ........ ( 708,849) (1.5%) (674,057) (1.2%) (705,599) (1.0%)
Administrative expenses . . . . . (3,239,490) (6.9%) (2,910,299) (5.3%) (3,368,955) (4.8%)
Research and development
e x p e n s e s ............. ( 2 , 104,976) (4.5%) (2,316,619) (4.3%) (2,784,813) (4.0%)
O t h e re x p e n s e s........... ( 1 0 , 0 3 2 ) 0 . 0 % ( 6 , 8 4 8 ) 0 . 0 % ( 8 , 2 1 6 ) 0 . 0 %
Share of results of investments
accounted for using the
e q u i t ym e t h o d.......... 3 , 9 8 7 0 . 0 % ( 5 7 , 2 9 1 ) ( 0 . 1 % ) 3 , 8 9 9 0 . 0 %
F i n a n c ec o s t s............ ( 616,216) (1.3%) (509,986) (0.9%) (388,438) (0.6%)
Profit before tax ........... 2,914,890 6.2% 3,253,889 6.0% 3,848,916 5.5%
I n c o m et a xe x p e n s e ......... ( 395,069) (0.8%) (212,062) (0.4%) (172,061) (0.2%)
Profit for the year ......... 2,519,821 5.4% 3,041,827 5.6% 3,676,855 5.3%
Profit for the year
attributable to:
Owners of the Company . . . . . 2,448,037 5.2% 3,021,342 5.6% 3,623,901 5.2%
Non-controlling interests . . . . . 71,784 0.2% 20,485 0.0% 52,954 0.1%
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NON-IFRS MEASURE
To supplement our consolidated financial sta tements that are presented in accordance with
IFRS, we also use adjusted profit for the year (a non-IFRS measure) and adjusted net margin (a
non-IFRS measure), as additional financial meas ures, which are not required by, or presented in
accordance with IFRS. We believe that these non-IFRS measures facilitate comparisons of operating
performance from period to period by eliminating po tential impact of certain items. We believe that
these measures provide useful information to inves tors and others in understanding and evaluating
our consolidated financial statements in the sam e manner as they help our management. However,
our presentation of adjusted profit for the year (a non-IFRS measure) and adjusted net margin (a
non-IFRS measure) may not be comparable to similar item measures presented by other companies.
The use of these non-IFRS measures has limitat ions as an analytical tool, and you should not
consider them in isolation from, or as substitu te for analysis of, our consolidated financial
statements or financial conditi on as reported under IFRS. We define adjusted profit for the year (a
non-IFRS measure) as profit/(loss) for the year ad justed for share-based compensations (a non-cash
item). We define adjusted net margin (a non-IFRS measure) as adjusted profit for the year (a non-
IFRS measure) as a percentage of our total revenue.
2022 2023 2024
(in thousands, except for percentages)
Profit for the year .............. 2,519,821 3,041,827 3,676,855
Add:
S h a r e - b a s e dc o m p e n s a t i o n......... — 54,260 161,375
Adjusted profit for the year
(a non-IFRS measure) ......... 2,519,821 3,096,087 3,838,230
Adjusted net margin
(a non-IFRS measure) ......... 5.4% 5.7% 5.5%
In 2024, we recorded an adjusted profit for the year (a non-IFRS measure) of RMB3,838.2
million and an adjusted net margin (a non-IFRS measure) of 5.5%, as compared with an adjusted
profit for the year (a non-IFRS measure) of RMB3,096.1 million and an adjusted net margin (a non-
IFRS measure) of 5.7% in 2023, primarily due to growth in our smartphones and computers related
revenue.
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PRINCIPAL COMPONENTS OF RESULTS OF OPERATIONS
Revenue
During the Track Record Period, we mainly gene rated revenue from the provision of precision
manufacturing solutions for a wide variety of e nd-uses, including smartphones and computers,
smart vehicles and cockpits, intelligent head-m ounted displays and smart wearables and other smart
devices. These solutions include structural parts, functional modules and co mplete device assembly.
By product end use
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Smartphones and computers
Structural parts and functional
modules . . . . . . . . . . . . . 37,710,398 80.7% 36,868,430 67.7% 43,234,267 61.9%
Complete device assembly . . . 503,413 1.1% 8,032,202 14.7% 14,519,902 20.7%
Subtotal . . . . . . . . . . . . . . . 38,213,811 81.8% 44,900,632 82.4% 57,754,169 82.6%
Smart vehicles and cockpits . . . 3,583,820 7.7% 4,998,464 9.2% 5,934,795 8.5%
Intelligent head-mounted
displays and smart wearables . 3,538,691 7.6% 3,103,753 5.7% 3,488,408 5.0%
Other smart devices . . . . . . . . 171,817 0.4% 164,872 0.3% 1,408,378 2.0%
Others 1 ................. 1 , 1 9 0 , 4 0 7 2 . 5 % 1 , 3 2 3 , 0 1 3 2 . 4 % 1 , 3 1 1 , 0 2 6 1 . 9 %
Total .................. 46,698,546 100.0% 54,490,734 100.0% 69,896,776 100.0%
Note:
1 Others mainly include revenue generated from sales of scraps and materials, processing fee, leases and others.
During the Track Record Period, smartphones and computers related revenue accounted for a
substantial majority of our total revenue, and we expect this to continue to be a major contributor to
our total revenue going forward.
We offer a comprehensive suite of structural parts and functional modules for use in
smartphones and computers, in cluding cover glass, metal mid-fra mes and various modules such as
touch display module, fingerprint modules and others. In addition to structural parts and functional
modules, we also provide complete device assembly for smartphones.
We offer a variety of structural parts and functi onal modules for smart vehicles and cockpits,
which include in-vehicle electronic glass, central control screens and instru ment panels, intelligent
B-pillars/C-pillars and multi-functional glasses for vehicle side windows, windshields and sunroofs.
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We offer structural parts and functional modules for intelligent head-mounted displays and
smart wearables, including cover gla ss and various functional modules.
We offer structural parts and functional modules for other smart devices in emerging end
markets such as humanoid robots and smart retai l. We also provide complete device assembly for
these devices. Revenue from compl ete device assembly for these d evices in emerging end markets
is recorded under other smart devices.
By region
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Offshore
special supervision territory in
China . . . . . . . . . . . . . . . 28,896,418 61.9% 24,822,418 45.6% 27,496,661 39.3%
Vietnam . . . . . . . . . . . . . . . 4,871,324 10.4% 5,420,199 9.9% 4,882,063 7.0%
Asia (excluding mainland
China and Vietnam) . . . . . 2,811,336 6.0% 4,187,813 7.7% 6,079,024 8.7%
North America (1) . . . . . . . . . 1,544,346 3.3% 2,008,840 3.7% 2,036,548 2.9%
Others (2) . . . . . . . . . . . . . . 143,019 0.3% 367,288 0.6% 484,087 0.7%
38,266,443 81.9% 36,806,558 67.5% 40,978,383 58.6%
Mainland China (excluding
special supervision territory) . 8,432,103 18.1% 17,684,176 32.5% 28,918,393 41.4%
Total .................. 46,698,546 100.0% 54,490,734 100.0% 69,896,776 100.0%
Notes:
(1) North America includes revenue generate d from the United States, Canada and Mexico.
(2) Others mainly include revenues generated from Germany, Bulgaria and Serbia.
Information about our revenue from external customers is presented based on delivery
destination or the shipping destination on customs declaration. Our offshore customers are primarily
l o c a t e di nV i e t n a m ,S o u t hK o r e aa n dt h eU n i t e dS tates. Revenue from offshore customers included
products first delivered to special supervision t erritory in China. During the Track Record Period,
as a percentage of total revenue, our revenue from m ainland China (excluding special supervision
territory) increased significantly both in absolut e terms and as a percentage of our total revenue,
primarily as we expanded our cooperation with a number of customers in mainland China during
the Track Record Period.
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As advised by our PRC Legal Advisor, sales of goods by our domestic entities during the
Track Record Period to special supervision territo ry in China are subject to export tax policies and
can be regarded as offshore sales for tax purpose s. Products entering the special supervision
territory from place other than the special supervision territory in China are treated as exports and
thus eligible for export tax rebates. Under the PRC regulations, most exported goods are exempt
from export tariffs, with the applicable export tari ff rate being 0%. Our export products qualify for
this 0% tariff treatment. Materials entering and s tored in the special supervision territory from
overseas are not treated as import and thus exempt from PRC import tax.
Sales Volume and Average Selling Price
2022 2023 2024
Sales
volume
Average
selling
price 2
Sales
volume
Average
selling
price
Sales
volume
Average
selling
price
(units ’000) (RMB) (units ’000) (RMB) (units ’000) (RMB)
Smartphones and computers
Structural parts and
f u n c t i o n a lm o d u l e s .... 1 , 0 4 2 , 5 5 2 3 6 . 2 8 9 4 , 5 8 2 4 1 . 2 1 , 1 5 7 , 3 0 4 3 7 . 4
Complete device
a s s e m b l y .......... 1 0 , 2 1 4 4 9 . 3 1 4 , 5 7 4 5 5 1 . 1 2 0 , 1 3 2 7 2 1 . 2
S u b t o t a l ............. 1 , 0 5 2 , 7 6 6 3 6 . 3 9 0 9 , 1 5 6 4 9 . 4 1 , 1 7 7 , 4 3 6 4 9 . 1
Smart vehicles and cockpits 6,139 583.8 11,944 418.5 13,087 453.5
Intelligent head-mounted
displays and smart
w e a r a b l e s ........... 5 9 , 0 2 9 5 9 . 9 6 7 , 2 4 8 4 6 . 2 1 1 0 , 5 5 5 3 1 . 6
O t h e rs m a r td e v i c e s ...... 4 , 1 7 8 4 1 . 1 4 , 1 8 8 3 9 . 4 1 3 , 7 5 9 1 0 2 . 4
O t h e r s ............... N / A
1 N/A1 N/A1 N/A1 N/A1 N/A1
Total/Overall 2 ......... 1,122,112 41.6 992,536 54.9 1,314,837 53.2
Notes:
(1) Others mainly include revenue generated from sales of scraps and materials, processing fee and leases, which cannot
be quantified into units.
(2) The overall average selling price is calculated by dividing the total revenue, excluding others, by the total sales
volume as stated in the table above.
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Our sales volume decreased by 11.5% from 1,122.1 million units in 2022 to 992.5 million in
2023, primarily due to a decrease in the sales volume of structural parts and functional modules as
we sold camera lens protectors and back panels on smartphones as one integrated unit in 2023
instead of two units. Our sales volume increased by 32.5% from 992.5 million units in 2023 to
1,314.8 million units in 2024, due to increased sales across our product end uses, which in turn
were due to increased global demand for consumer electronic products and smart vehicles. Our
average selling price increased by 32.0% from RMB41.6 in 2022 to RMB54.9 in 2023, primarily as
a result of the increase in average selling price of our complete device assembly from RMB49.3 in
2022 to RMB551.1 in 2023, since as an increasin g portion of our complete device assembly was
performed under the buy-and-sell model. Our a verage selling price decreased by 3.1% from
RMB54.9 in 2023 to RMB53.2 in 2024, primarily due to a 31.6% decrease in intelligent head-
mounted displays and smart wearables ’ average selling price from RMB46.2 in 2023 to RMB31.6
in 2024 as a result of change in our customers ’ product mix.
Cost of Sales
Our cost of sales consists of raw materials cost s, labor costs, manufacturing costs and others,
which primarily includes transportation cost s, product quality assurance losses and taxes.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Raw material costs . . . . . 21,836,868 57.2% 29,983,732 65.2% 42,652,499 71.4%
L a b o rc o s t s .......... 8 , 2 3 8 , 0 9 2 2 1 . 6 % 7,751,054 16.9% 8,512,435 14.3%
Manufacturing costs . . . . . 7,784,941 20 .4% 7,937,924 17.3 % 8,102,582 13.6%
Others . . . . . . . . . . . . . 291,729 0.8% 326,160 0.6% 445,767 0.7%
Total .............. 38,151,630 100.0% 45,998,870 100.0% 59,713,283 100.0%
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Gross Profit and Gross Margin
By product end use
2022 2023 2024
Gross
profit
Gross
margin 1
Gross
profit
Gross
margin
Gross
profit
Gross
margin
(in RMB thousands, except for percentages)
Smartphones and computers
Structural parts and
f u n c t i o n a lm o d u l e s .... 6 , 554,143 17.4% 6,338,393 17.2% 7,767,219 18.0%
Complete device
a s s e m b l y .......... ( 8 , 2 2 2 ) ( 1 . 6 % ) 2 0 7 , 2 4 5 2 . 6 % 1 8 3 , 2 5 1 1 . 3 %
S u b t o t a l ............. 6 , 545,921 17.1% 6,545,638 14.6% 7,950,470 13.8%
Smart vehicles and cockpits 698,364 19.5% 734,791 14.7% 518,202 8.7%
Intelligent head-mounted
displays and smart
w e a r a b l e s ........... 559,927 15.8% 433,417 14.0% 636,531 18.2%
O t h e rs m a r td e v i c e s ...... 2 0 , 2 9 0 1 1 . 8 % 1 0 , 7 8 1 6 . 5 % 2 7 0 , 0 6 9 1 9 . 2 %
O t h e r s ............... 722,414 60.7% 767,237 58.0% 808,221 61.6%
Total/Overall
1 ......... 8,546,916 18.3% 8,491,864 15 .6% 10,183,493 14.6%
Note:
(1) The overall gross profit margin is calculated as gross pr ofit for the year divided by revenue for the corresponding
year and multiplied by 100%.
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Other Income
Our other income consists of (i) various government grants we received from PRC government
authorities, (ii) interest income, (iii) compensati on income and (iv) others, which primarily consists
of deduction for value-added tax. There were no unfulfilled conditions or contingencies relating to
these government subsidies.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Government grants . . . . . 492,534 72.6% 759,006 74.6% 224,841 39.7%
I n t e r e s ti n c o m e........ 1 4 7 , 8 9 3 2 1 .8% 218,288 21.5% 254,979 45.0%
Compensation income . . . 17,458 2.6% 20,828 2.0% 32,567 5.7%
O t h e r s ............. 2 0 , 6 9 1 3 . 0 % 1 9 , 0 8 7 1 . 9 % 5 4 , 6 3 7 9 . 6 %
Total .............. 678,576 100.0% 1,017,209 100.0% 567,024 100.0%
as % of total revenue .... 1.5% 1.9% 0.8%
Selling Expenses
Our selling expenses include (i) salaries, compen sations and benefits for personnel engaging in
the sales function, (ii) sorting costs in screening, selecting and finalizing (such as cleaning) our
products after deliveries to our customers, (iii ) intermediary service fees, (iv) samples and
packaging fees, (v) business entertainment expens es and (vi) others, which mainly includes travel
expenses, material consumables, professional service fees and depreciation of fixed assets.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Salaries, compensations
a n db e n e f i t s ........ 3 1 8 , 1 0 6 4 4 .9% 317,534 47.1% 377,481 53.5%
Sorting costs . . . . . . . . . 159,843 22 .5% 108,070 16.0% 117,130 16.6%
Intermediary service fees . 79,165 11.2% 81,638 12.1% 56,072 7.9%
Samples and packaging
fees . . . . . . . . . . . . . . 82,097 11.6% 53,864 8.0% 64,950 9.2%
Business entertainment
e x p e n s e s .......... 1 2 , 8 9 7 1 . 8 % 1 5 , 8 8 6 2 . 4 % 2 4 , 5 4 0 3 . 5 %
Others . . . . . . . . . . . . . 56,741 8.0% 97,065 14.4% 65,426 9.3%
Total .............. 708,849 100.0% 674,057 100.0% 705,599 100.0%
as % of total revenue .... 1.5% 1.2% 1.0%
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses include (i) salar ies, compensations and benefits for personnel
engaging in the administrative function, (ii) dep reciation of properties and equipment related to
administrative function, (iii) recruiting fees, (iv ) impairment losses recognized on property, plant
and equipment, (v) office expenses, (vi) professiona l service fees, (vii) amortization of intangible
assets, (viii) maintenance costs, (ix) property taxes , (x) environmental protection fees, (xi) disability
insurance, (xii) land use taxes, (xiii) stamp duties and (xiv) others, which mainly includes
contributions to water conservancy construction f und, entertainment expenses, land value-add tax
from intra-Group land transfer and travel expenses.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Salaries, compensations
and benefits . . . . . . . . 1,069,497 33.0 % 1,128,381 38.8% 1,289,992 38.3%
Depreciation of properties
and equipment . . . . . . . 649,241 20 .0% 597,967 20.5% 576,904 17.1%
Recruiting fees . . . . . . . . 360,772 11.1% 153,323 5.3% 180,280 5.4%
Impairment losses
recognized on property,
plant and equipment . . . 273,077 8.4% 73,242 2.5% 226,942 6.7%
Amortization of intangible
assets . . . . . . . . . . . . 214,397 6.6% 221,873 7.6% 221,292 6.6%
Property taxes . . . . . . . . 193,594 6.0% 220,043 7.6% 235,243 7.0%
Maintenance costs . . . . . . 58,840 1.8% 84,262 2.9% 143,067 4.2%
Office expenses . . . . . . . 68,052 2.1% 67,793 2.3% 78,936 2.3%
Professional service fees . . 29,265 0.9% 50,253 1.7% 37,944 1.1%
Environmental protection
c o s t s............. 5 2 , 8 0 7 1 . 6 % 3 8 , 2 6 1 1 . 3 % 3 2 , 2 6 1 1 . 0 %
Disability insurance . . . . . 39,989 1.2% 41,162 1.4% 40,869 1.2%
Land use taxes . . . . . . . . 32,207 1.0% 32,010 1.1% 33,304 1.0%
S t a m pd u t i e s ......... 3 0 , 3 3 3 0 . 9 % 4 0 , 2 1 2 1 . 4 % 4 7 , 4 9 9 1 . 4 %
Others . . . . . . . . . . . . . 167,419 5.4% 161,517 5.6% 224,422 6.7%
Total .............. 3,239,490 100.0% 2,910,299 100.0% 3,368,955 100.0%
as % of total revenue .... 6.9% 5.3% 4.8%
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses include (i ) salaries, compensations and benefits for
personnel engaging in the research and developme nt function, (ii) materials and consumables used
in the research and development process, (iii) dep reciation of properties and equipment related to
research and development function, (iv) power cost and (v) others which primarily includes
maintenance costs, professional servic e fees, inspection fees and sample fees.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Salaries, compensations
a n db e n e f i t s ........ 9 1 0 , 0 0 4 4 3 . 2 % 1,120,035 48.3% 1,324,724 47.6%
Materials and consumables
u s e d ............. 8 3 5 , 9 3 5 3 9 . 7 % 7 0 6 , 4 6 8 3 0 . 5 % 8 9 0 , 2 8 2 3 2 . 0 %
Depreciation of properties
and equipment . . . . . . . 199,556 9.5% 219,632 9.5% 240,263 8.6%
Power costs . . . . . . . . . . 131,988 6.3% 115,948 5.0% 120,443 4.3%
O t h e r s ............. 2 7 , 4 9 3 1 . 3 % 1 5 4 , 5 3 6 6 . 7 % 2 0 9 , 1 0 1 7 . 5 %
Total .............. 2,104,976 100.0% 2,316,619 100.0% 2,784,813 100.0%
as % of total revenue .... 4.5% 4.3% 4.0%
Finance Costs
Our finance costs include interest on borrowi ngs, interest on loans from related parties and
interest on lease liabilities.
2022 2023 2024
R M B%R M B%R M B%
(in thousands, except for percentages)
Interest on borrowings . . . 569,573 92.4% 471,022 92.4% 382,959 98.6%
Interest on loan from
a related party . . . . . . . 44,826 7.3% 37,514 7.4% 1,457 0.4%
Interest on lease liabilities 1,817 0.3% 1,450 0.2% 4,022 1.0%
Total .............. 616,216 100.0% 509,986 100.0% 388,438 100.0%
as % of total revenue .... 1.3% 0.9% 0.6%
FINANCIAL INFORMATION
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Other Gains and Losses, net
Our other gains and losses primarily represent net foreign exchange gains, net gain from
changes in fair value of financial assets at FVTPL and loss on disposal of property, plant and
equipment.
In 2022, 2023 and 2024, our other gains and losses amounted to RMB321.0 million,
RMB218.7 million and RMB384.4 m illion, representing less than 0.7% of our total revenue in each
of the respective periods.
Reversal of Impairment Losses (Impairment L osses Recognised) under Expected Credit Loss
(‘‘ECL’’) Model, net
Our impairment losses under expected credit lo ss model, net of reversal represents our net
impairment losses recognized on trade and bills receivables and o ther receivables.
In 2022 and 2023, our reversal of impairmen t loss under ECL model amounted to RMB44.0
million, RMB1.3 million while in 2024, our im pairment loss under ECL model amounted to
RMB33.9 million, representing less than 0.1% of our total revenue in each of the respective
periods.
Other Expenses
Our other expenses primarily represent donations to third parties such as donations on
education and natural disaster reliefs.
In 2022, 2023 and 2024, our other expenses amounted to RMB10.0 million, RMB6.8 million
and RMB8.2 million, representing less than 0.1 % of our total revenue in each of the respective
periods.
Share of Results of Investments Accounted for Using the Equity Method
Our share of results of investments accounted for using the equity method reflects our
investment in associates and the correspond ing share of results of these associates.
In 2022, 2023 and 2024, our shar e of results of investments accounted for using the equity
method amounted to RMB4.0 million, RMB(57.3) mi llion and RMB3.9 million, representing less
than 0.1% of our total revenue in each of the respective periods.
Income Tax Expense
We are subject to income tax on an entity basis on profits arising in or derived from the tax
jurisdictions in which the members of our Group are domiciled and operate. Our income tax
expense comprises current tax and deferred tax.
FINANCIAL INFORMATION
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The Company and several of our subsidiaries were accredited as ‘‘High New Tech Enterprise ’’
during the Track Record Period and were therefore entitled to a preferential income tax rate of 15%
for certain years during the Track Record Period. in addition, several of our subsidiaries were
eligible as ‘‘Small Low-profit Enterprise ’’ and were subject to preferential tax treatments. For
details, see note 11 to Appendix I — Accountants ’ Report.
As of the Latest Practicable Date and during t he Track Record Period, we had fulfilled all our
tax obligations and did not have any unresolved tax disputes.
YEAR-ON-YEAR COMPARISON OF RESULTS OF OPERATIONS
2024 Compared to 2023
Revenue
2023 2024 % change
(in RMB thousands, except for percentages)
Revenue
Smartphones and computers
S t r u c t u r a lp a r t sa n df u n c t i o n a lm o d u l e s ....... 3 6 , 8 6 8 , 4 3 0 4 3 , 234,267 17.3%
C o m p l e t ed e v i c ea s s e m b l y ................ 8 , 0 3 2 , 2 0 2 1 4 , 519,902 80.8%
S u b t o t a l............................. 4 4 , 9 0 0 , 6 3 2 5 7 , 754,169 28.6%
S m a r tv e h i c l e sa n dc o c k p i t s................. 4 , 9 9 8 , 4 6 4 5 , 934,795 18.7%
Intelligent head-mounted displays and smart
w e a r a b l e s............................ 3 , 1 0 3 , 7 5 3 3 , 488,408 12.4%
O t h e rs m a r td e v i c e s ...................... 1 6 4 , 8 7 2 1 , 408,378 754.2%
O t h e r s ................................ 1 , 3 2 3 , 0 1 3 1 , 311,026 (0.9%)
Total ................................ 54,490,734 69,896,776 28.3%
Our revenue increased by 28.3% from RMB54,490. 7 million in 2023 to RMB69,896.8 million
in 2024, primarily due to a 28.6% increase in smartphones and computers related revenue from
RMB44,900.6 million in 2023 to RMB57,754.2 million in 2024.
FINANCIAL INFORMATION
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Smartphones and computers
Our smartphones and computers related revenue increased by 28.6% from RMB44,900.6
million in 2023 to RMB57,754.2 million in 2024, primarily due to:
. a 80.8% increase in our complete device assembly related revenue from RMB8,032.2
million in 2023 to RMB14,519.9 million in 2024, which was attributable to (i) a 37.7%
increase in the sales volume of our complete devices from 14.6 million units in 2023 to
20.1 million units in 2024, which in turn was the result of the ramp up of our complete
device assembly business as we increased in our capacity and capab ility in complete
device assembly and deepened cooperation with select key customers to serve the
increased demand of their products, and (ii) a 30.9% increase in the average selling price
of our complete device, as our customers continued to introduce and upgrade their
products and our revenue under the buy-and-sell model in our complete device assembly
business increased; and
. a 17.3% increase in our structural parts and functional modules related revenue from
RMB36,868.4 million in 2023 to RMB43,234.3 million in 2024, which was primarily
attributable to a 29.4% increase in sales volume of structural parts and functional
modules from 894.6 million units in 2023 to 1,157.3 million units in 2024, as a result of
t h eg r o w t hi nc o n s u m e r s’ demand, which in turn was driven by the upgrading demand
for products with new features or incorporating new technologies such as AI. Such
increase in sales volume was partially offset by a decrease in average selling price of
structural parts and functional modules from RMB41.2 in 2023 to RMB37.4 in 2024,
which in turn was the result of a change in product mix.
Smart vehicles and cockpits
Our smart vehicles and cockpits related revenue, w hich represents the sales of structural parts
and functional modules, increased by 18.7% from RMB4,998.5 million in 2023 to RMB5,934.8
million in 2024, primarily due to (i) a 9.6% increase in sales volume of structural parts and
functional modules for smart vehicles and cockpi ts from 11.9 million units in 2023 to 13.1 million
units in 2024, which in turn was the result of the growth in consumers demand for smart vehicles
driven by product iterations associated with inno vative technologies and features, and (ii) a 8.4%
increase in average selling price of structural par ts and functional modules for smart vehicles and
cockpits from RMB418.5 in 2023 to RMB453.5 in 2024, primarily driven by increased orders for
higher-value products such as central control screen s and intelligent B-pillars, which was a further
validation to our core strengths.
FINANCIAL INFORMATION
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Intelligent head-mounted displays and smart wearables
Our intelligent head-mounted displays and smar t wearables related revenue, which represents
the sales of structural parts and functional mod ules, increased by 12.4% from RMB3,103.8 million
in 2023 to RMB3,488.4 million in 2024, primarily due to a 64.6% increase in the sales volume of
structural parts and functional modules for intelli gent head-mounted displays and smart wearables
from 67.2 million units in 2023 to 110.6 million units in 2024, which in turn was the result of
higher market demand for smart watches our custom ers offered. Such increase in sales volume was
partially offset by a 31.6% decrease in the average s elling price of structural parts and functional
modules for intelligent head-mounted display s and smart wearables from RMB46.2 in 2023 to
RMB31.6 in 2024, primarily due to a change in our customers ’ product mix and their higher order
volumes for lower-priced structural parts a nd functional modules in smart watches.
Other smart devices
Our other smart devices related revenue incr eased significantly from RMB164.9 million in
2023 to RMB1,408.4 million in 2024, primarily due to (i) a 228.5% increase in sales volume of
structural parts and functional modules for oth er smart devices from 4.2 million units in 2023 to
13.8 million units in 2024, which in turn was the result of increased business in smart retail devices
as our planning and technological development in advance paid off, and (ii) a 159.9% increase in
average selling price of structural parts and functional modules for other smart devices from
RMB39.4 to RMB102.4, which in turn was the result of higher unit prices from our smart retail
devices.
Cost of sales
2023 2024 % change
(in RMB thousands, except for percentages)
Cost of sales
R a wm a t e r i a lc o s t s ....................... 2 9 , 9 8 3 , 7 3 2 4 2 , 652,499 42.3%
L a b o rc o s t s ............................ 7 , 7 5 1 , 0 5 4 8 , 512,435 9.8%
M a n u f a c t u r i n gc o s t s ...................... 7 , 9 3 7 , 9 2 4 8 , 102,582 2.1%
O t h e r s ................................ 3 2 6 , 1 6 0 445,767 36.7%
Total ................................ 45,998,870 59,713,283 29.8%
as % of total revenue ..................... 84.4% 85.4%
FINANCIAL INFORMATION
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Our cost of sales increased by 29.8% from RMB45,998.9 million in 2023 to RMB59,713.3
million in 2024 primarily due to a 42.3% increase i n our raw material costs, which in turn was the
result of a 32.5% increase in our sales volume and a change of product mix.
Gross profit and gross margin
2023 2024
Gross profit Gross margin Gross profit Gross margin
(in RMB thousands, except for percentages)
Smartphones and computers
Structural parts and functional
m o d u l e s ................ 6 , 3 3 8 , 3 9 3 1 7 . 2 % 7 , 767,219 18.0%
Complete device assembly . . . . . 207,245 2.6% 183,251 1.3%
S u b t o t a l .................. 6 , 5 4 5 , 6 3 8 1 4 . 6 % 7 , 950,470 13.8%
Smart vehicles and cockpits . . . . . . 734,791 14.7% 518,202 8.7%
Intelligent head-mounted displays
a n ds m a r tw e a r a b l e s.......... 4 3 3 , 4 1 7 1 4 . 0 % 636,531 18.2%
O t h e rs m a r td e v i c e s ........... 1 0 , 7 8 1 6 . 5 % 270,069 19.2%
O t h e r s..................... 7 6 7 , 2 3 7 5 8 . 0 % 808,221 61.6%
Total/Overall ............... 8,491,864 15.6% 10,183,493 14.6%
Our gross profit increased by 19.9% from RMB8,491.9 million in 2023 to RMB10,183.5
million in 2024, primarily due to an increase in smartphones and computers related gross profit,
partially offset by a decrease in smart vehicles and cockpits related gross profit. Our gross margin
decreased from 15.6% in 2023 to 14.6% in 2024, primarily due to an increase in revenue
contribution from complete device assembly whi ch had a lower gross margin and a decrease in our
smart vehicles and cockpits related gross margin.
Smartphones and computers
Our smartphones and computers related gross profit increased by 21.5% from RMB6,545.6
million in 2023 to RMB7,950.5 million in 2024, primarily due to:
. a 22.5% increase in our structural parts and fu nctional modules related gross profit from
R M B 6 , 3 3 8 . 4m i l l i o ni n2 0 2 3t oR M B 7 , 7 6 7 .2 million in 2024, which was primarily
attributable to an increase in our structural pa rts and functional modules related revenue.
Our structural parts and functional modules related gross margin increased from 17.2% in
2023 to 18.0% in 2024, primarily due to better cost control measures such as switching
certain material purchases to self-production and increasing automation to reduce labor
costs and higher production yield rate achie ved through continuous improvement of our
manufacturing capability; and
FINANCIAL INFORMATION
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. partially offset by a 11.6% decrease in our comp lete device assembly related gross profit
from RMB207.2 million in 2023 to RMB183.3 million in 2024, as we priced more
competitively for our customers. Our complete devices assembly related gross margin
decreased from 2.6% in 2023 to 1.3% in 2024 primarily due to our competitive pricing
and increased sales and revenue contribution under the buy-and-sell model. In particular,
under the buy-and-sell model, we purchased certain raw materials and components for
the device from our customer and sold the completed device to our customer, and the
sales price of the completed device is record ed as our revenue on a gross basis. As such,
complete devices sold under the buy-and-sell model are associated with much higher
selling prices but lower gross profit margin. See ‘‘Business — Raw Materials and Supply
Chain — Buy-and-sell model ’’for more details.
Despite the growth in gross margin for our structural parts and functional modules from 2023
to 2024, the increase in revenue contribution and the decrease in gross margin from complete
device assembly resulted in a decrease in our smar tphones and computers related gross margin from
14.6% in 2023 to 13.8% in 2024.
Smart vehicles and cockpits
Our smart vehicles and cockpits related gr oss profit decreased by 29.5% from RMB734.8
million in 2023 to RMB518.2 million in 2024, primarily due to a decrease in our smart vehicles
and cockpits related gross margin. Our smart vehi cles and cockpits related gross margin decreased
from 14.7% in 2023 to 8.7% in 2024, primarily because (i) we produced an increased portion of
structural parts and functional modules for smar t vehicles and cockpits in our overseas production
facilities that led to higher transportation cos ts and raw material costs for products produced in
those facilities. Increasing the ut ilization of our overseas production facilities is part of our efforts
in expanding our global footprint to respond qu ickly to customer demand, and (ii) some of our
customers imposed stricter testing and inspection r equirements, leading to a dditional testing costs.
Intelligent head-mounted displays and smart wearables
Our intelligent head-mounted displays and sma rt wearables related gross profit increased by
46.9% from RMB433.4 million in 2023 to RMB636.5 million in 2024, primarily due to an increase
in our intelligent head-mounted displays and smart wearables related revenue. Our intelligent head-
mounted displays and smart wearables related gr oss margin increased from 14.0% in 2023 to 18.2%
in 2024 mainly due to higher production yield rate, which in turn was the result of our efforts in
optimizing our production flow for our smart watches products.
Other smart devices
Our other smart devices related gross profit increased significantly from RMB10.8 million in
2023 to RMB270.1 million in 2024 and our other smart devices related gross margin increased from
6.5% in 2023 to 19.2% in 2024, primarily due to a change in our product mix. In particular,
revenue contribution from our smart retail devic es, which carried a higher gross margin increased
significantly.
FINANCIAL INFORMATION
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Other income
2023 2024 % change
(in RMB thousands, except for percentages)
O t h e ri n c o m e........................... 1 , 0 1 7 , 2 0 9 567,024 (44.3%)
as % of total revenue ..................... 1.9% 0.8%
Our other income decreased by 44.3% from RMB1,017.2 million in 2023 to RMB567.0
million in 2024, primarily due to a decrease in gov ernment grants received as a result of a policy
change. For the same reason, our other income as a percentage of our total revenue decreased from
1.9% in 2023 to 0.8% in 2024.
Selling expenses
2023 2024 % change
(in RMB thousands, except for percentages)
S e l l i n gE x p e n s e s ........................ 6 7 4 , 0 5 7 705,599 4.7%
as % of total revenue ..................... 1.2% 1.0%
Our selling expenses increased by 4.7% fr om RMB674.1 million in 2023 to RMB705.6
million in 2024, mainly reflecting (i) an increase of RMB59.9 million in salaries, compensation and
benefits, and (ii) an increase of RMB9.1 million in sorting costs, which was in line with the
expansion of our business. Our selling expense s as a percentage of our total revenue remained
relatively stable at 1.2% in 2023 and 1.0% in 2024.
Administrative expenses
2023 2024 % change
(in RMB thousands, except for percentages)
A d m i n i s t r a t i v eE x p e n s e s ................... 2 , 9 1 0 , 2 9 9 3 , 368,955 15.8%
as % of total revenue ..................... 5.3% 4.8%
Our administrative expenses increased by 15.8% from RMB2,910.3 million in 2023 to
RMB3,369.0 million in 2024, mainly reflecting an increase of RMB161.6 million in salaries,
compensation and benefits and an increase of R MB153.7 million in impairment losses recognized
on property, plant and equipment. Our administrat ive expenses as a percentage of our total revenue
decreased from 5.3% in 2023 to 4.8% in 2024 primarily due to an improved economies of scale.
FINANCIAL INFORMATION
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Research and development expenses
2023 2024 % change
(in RMB thousands, except for percentages)
R e s e a r c ha n dD e v e l o p m e n tE x p e n s e s .......... 2 , 3 1 6 , 6 1 9 2 , 784,813 20.2%
as % of total revenue ..................... 4.3% 4.0%
Our research and development expenses incr eased by 20.2% from RMB2,316.6 million in
2023 to RMB2,784.8 million in 2024, primarily due to (i) an increase of RMB204.7 million in
salaries, compensation and benefits, which refl ects our continuous commitment in research and
development, and (ii) an increase of RMB183. 8 million in materials and consumables used,
reflecting the larger number of research and d evelopment projects we undertook in 2024. Our
research and development expens es as a percentage of our total revenue remained relatively stable
at 4.3% in 2023 and 4.0% in 2024.
Finance costs
2023 2024 % change
(in RMB thousands, except for percentages)
F i n a n c eC o s t s .......................... 5 0 9 , 9 8 6 388,438 (23.8%)
as % of total revenue ..................... 0.9% 0.6%
Our finance costs decreased by 23.8% from RMB510.0 million in 2023 to RMB388.4 million
in 2024, primarily because we repaid part of our long-term bank loans in 2024. Our finance costs as
a percentage of our total revenue remained relatively stable at 0.9% in 2023 and 0.6% in 2024.
Other Gains and Losses, net
Our other gains and losses increased by 75.8% from RMB218.7 million in 2023 to RMB384.4
million in 2024, primarily due to an increase of RMB133.8 million in net foreign exchange gains as
a result of the appreciation of foreign currencies against the RMB in 2024.
Reversal of impairment losses (impairment lo sses recognised) under expected credit loss
(‘‘ECL’’) model,net
Our impairment losses under expected credit lo ss model, net of reversal shifted from reversal
of impairment loss of RMB1.3 million in 2023 to loss of RMB33.9 million in 2024, primarily due
to an increase in the balance of our trade and bills receivables as of December 31, 2024 as
compared to December 31, 2023.
Other expenses
Our other expenses increased by 20.6% from R MB6.8 million in 2023 to RMB8.2 million in
2024, primarily due to donations in 2024 to areas affected by flood.
FINANCIAL INFORMATION
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Share of results of investments accounted for using the equity method
Our share of results of investments accounted for using the equity method was a loss of
RMB57.3 million in 2023 and a gain of RMB3.9 million in 2024, primarily attributable to the gain
related to one of our associates engaged in production and processing of sapphire materials that
turned profitable in 2024.
Income tax expense
Our income tax expense decreased by 18.9% from RMB212.1 million in 2023 to RMB172.1
million in 2024 despite a 18.3% increase in our profit before tax, primarily due to the utilization of
tax loss by certain of our subsidiaries. For the sa me reason, our effective tax rate decreased from
6.5% in 2023 to 4.5% in 2024.
2023 Compared to 2022
Revenue
2022 2023 % change
(in RMB thousands, except for percentages)
Revenue
Smartphones and computers
S t r u c t u r a lp a r t sa n df u n c t i o n a lm o d u l e s ....... 3 7 , 7 1 0 , 3 9 8 3 6 , 868,430 (2.2%)
C o m p l e t ed e v i c ea s s e m b l y ................ 5 0 3 , 4 1 3 8 , 032,202 1,495.5%
S u b t o t a l............................. 3 8 , 2 1 3 , 8 1 1 4 4 , 900,632 17.5%
S m a r tv e h i c l e sa n dc o c k p i t s................. 3 , 5 8 3 , 8 2 0 4 , 998,464 39.5%
Intelligent head-mounted displays and smart
w e a r a b l e s............................ 3 , 5 3 8 , 6 9 1 3 , 103,753 (12.3%)
O t h e rs m a r td e v i c e s ...................... 1 7 1 , 8 1 7 164,872 (4.0%)
O t h e r s ................................ 1 , 1 9 0 , 4 0 7 1 , 323,013 11.1%
Total ................................ 46,698,546 54,490,734 16.7%
Our revenue increased by 16.7% from RMB46,698. 5 million in 2022 to RMB54,490.7 million
in 2023, primarily due to a 17.5% increase in smartphones and computers related revenue from
RMB38,213.8 million in 2022 to RMB44,900.6 million in 2023.
FINANCIAL INFORMATION
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Smartphones and computers
Our smartphones and computers related revenue increased by 17.5% from RMB38,213.8
million in 2022 to RMB44,900.6 million in 2023, primarily due to:
. a 1,495.5% increase in our complete device assembly related revenue from RMB503.4
million in 2022 to RMB8,032.2 million in 2023, which was attributable to (i) a 42.7%
increase in the sales volume of our complete devices from 10.2 million units in 2022 to
14.6 million units in 2023, which in turn was the result of the ramp up of our complete
device assembly business as we improved our capacity and capability in complete device
assembly to serve the increased demand of our customers ’ products, and (ii) a 1,017.8%
increase in the average selling price of our complete device from RMB49.3 in 2022 to
RMB551.1 in 2023, as an increasing portion of our complete device assembly was
performed under the buy-and-sell model; and
. partially offset by a 2.2% decrease in our struct ural parts and functional modules related
revenue from RMB37,710.4 million in 2022 to RMB36,868.4 million in 2023 as the
consumer electronics market moderated in 2023. In 2023, the global consumer
electronics industry experienced a moderation in overall demand, primarily due to
macroeconomic factors. These challenges c ontributed to a general decline in global
shipments of consumer electronics, affecting procurement volumes across the supply
chain. In addition, the 14.2% decrease in the sales volume of structural parts and
functional modules from 1, 042.6 million units in 2022 to 894.6 million units in 2023 was
the result of decreased sales in camera lens p rotectors on smartphones, which carried a
lower unit price, which in turn led to an increas e in the average selling price of structural
parts and functional modules by 13.8% from RMB36.2 in 2022 to RMB41.2 in 2023.
Smart vehicles and cockpits
Our smart vehicles and cockpits related revenue, w hich represents the sales of structural parts
and functional modules, increased by 39.5% from RMB3,583.8 million in 2022 to RMB4,998.5
million in 2023, primarily due to a 94.6% increase i n sales volume of structural parts and functional
modules for smart vehicles and cockpits from 6.1 million units in 2022 to 11.9 million units in
2023, which in turn was attributable to (i) increased demand for our customers ’ products as the
global smart vehicles market continued to gro w, and (ii) the fact that we started to offer our
customers lowered-price structural parts and functional modules such as battery plates as we
deepened our cooperation with our customers. The s ale of battery plates for smart vehicles was the
primary reason of a 28.3% decrease in the average selling price of structural parts and functional
modules for smart vehicles and cockpits from R MB583.8 in 2022 to RMB418.5 in 2023. Excluding
the sales of battery plate, our average sel ling price remained relatively stable.
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Intelligent head-mounted displays and smart wearables
Our intelligent head-mounted displays and smar t wearables related revenue, which represents
the sales of structural parts and functional m odules, decreased by 12.3% from RMB3,538.7 million
in 2022 to RMB3,103.8 million in 2023, primarily due to a 22.9% decrease in the average selling
price of structural parts and functional modules for intelligent head-mounted displays and smart
wearables from RMB59.9 in 2022 to RMB46.2 in 2023, which in turn was the result of a change in
our product mix. Such decrease was partially offset by a 13.9% increase in the sales volume of
structural parts and functional modules for intelli gent head-mounted displays and smart wearables
from 59.0 million units in 2022 to 67.2 million uni ts in 2023, primarily due to increased sales in
VR glasses and structural parts for smart watches.
Other smart devices
Our other smart devices related revenue de creased by 4.0% from RMB171.8 million in 2022
to RMB164.9 million in 2023, primarily due to a 4 .1% decrease in the average selling price of
structural parts and functional modules for other smart devices from RMB41.1 in 2022 to RMB39.4
in 2023.
Cost of sales
2022 2023 % change
(in RMB thousands, except for percentages)
Cost of sales
R a wm a t e r i a lc o s t s ....................... 2 1 , 8 3 6 , 8 6 8 2 9 , 983,732 37.3%
L a b o rc o s t s ............................ 8 , 2 3 8 , 0 9 2 7 , 751,054 (5.9%)
M a n u f a c t u r i n gc o s t s ...................... 7 , 7 8 4 , 9 4 1 7 , 937,924 2.0%
O t h e r s ................................ 2 9 1 , 7 2 9 326,160 11.8%
Total ................................ 38,151,630 45,998,870 20.6%
as % of total revenue ..................... 81.7% 84.4%
Our cost of sales increased by 20.6% from RMB38,151.6 million in 2022 to RMB45,998.9
million in 2023, in line with our revenue growth.
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Gross profit and gross margin
2022 2023
Gross profit Gross margin Gross profit Gross margin
(in RMB thousands, except for percentages)
Smartphones and computers
Structural parts and functional
m o d u l e s ................ 6 , 5 5 4 , 1 4 3 1 7 . 4 % 6 , 338,393 17.2%
Complete device assembly . . . . . (8,222) (1.6%) 207,245 2.6%
S u b t o t a l .................. 6 , 5 4 5 , 9 2 1 1 7 . 1 % 6 , 545,638 14.6%
Smart vehicles and cockpits . . . . . . 698,364 19.5% 734,791 14.7%
Intelligent head-mounted displays
a n ds m a r tw e a r a b l e s.......... 5 5 9 , 9 2 7 1 5 . 8 % 433,417 14.0%
O t h e rs m a r td e v i c e s ........... 2 0 , 2 9 0 1 1 . 8 % 1 0 , 7 8 1 6 . 5 %
O t h e r s..................... 7 2 2 , 4 1 4 6 0 . 7 % 767,237 58.0%
Total/Overall ............... 8,546,916 18.3% 8,491,864 15.6%
Our gross profit decreased by 0.6% from RMB8, 546.9 million in 2022 t o RMB8,491.9 million
in 2023, primarily due to a decrease in our intellig ent head-mounted displays and smart wearables
related gross profit, partially offset by an increas e in our smart vehicles and cockpits related gross
profit. Our gross margin decreased from 18.3% in 2022 to 15.6% in 2023, primarily due to the
substantial increase in revenue contribution from the buy-and-sell model which had a lower gross
margin compared to our other businesses.
Smartphones and computers
Our smartphones and computers related gross profit slightly decreased from RMB6,545.9
million in 2022 to RMB6,545.6 million in 2023, primarily due to:
. a 3.3% decrease in our structural parts and fu nctional modules related gross profit from
RMB6,554.1 million in 2022 to RMB6,338.4 million in 2023, which was attributable to a
decrease in our structural parts and functional modules related revenue as the consumer
electronics market moderated. Our structura l parts and functional modules related gross
margin remained stable at 17.4% in 2022 and 17.2% in 2023; and
. partially offset by our complete device assembly related gross profit in 2023. In 2022,
our complete device assembly b usiness was still in the ramp-up stage, and we therefore
experienced a complete device assembly relat ed gross loss of RMB8.2 million. The lower
utilization rate in the ramp -up stage resulted in higher per-unit depreciation and
amortization costs, which led to a gross los s. In 2023, as we successfully scaled up our
complete device assembly business and achieved a higher util ization rate of our
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production facilities, we achieved a gross pro fit of RMB207.2 million and a gross profit
margin of 2.6% for our complete device assemb ly business. In particular, the utilization
rate of our complete device assembly facil ities increased from 85.2% in 2022 to 91.8% in
2023, and the sales volume of our complete device increased by 42.7% from 2022 to
2023. The higher utilization rate and production volume improved our economies of
scale by significantly lowering the per-uni t depreciation and amortization costs.
However, despite the growth in our complete device assembly related gross margin from 2022
to 2023, the significant increase in revenue contri bution from complete device assembly business
resulted in a decrease in our smartphones and com puters related gross margin from 17.1% in 2022
to 14.6% in 2023.
Smart vehicles and cockpits
Our smart vehicles and cockpit related gross p rofit increased by 5.2% from RMB698.4 million
in 2022 to RMB734.8 million in 2023, primarily due to an increase in our smart vehicles and
cockpits related revenue. Our smart vehicles and cockpits related gross margin decreased from
19.5% in 2022 to 14.7% in 2023, primarily due to our increased investment in new production
facilities, which resulted in higher equipment depreciation and amortization costs as these
production facilities were ramping up in 2023. I n particular, the production capacity of our
production facilities for smart vehicles and coc kpits structural parts and functional module
increased by approximately 133.3% and the utilizat ion rate of our production facilities for smart
vehicles and cockpits structural parts and func tional modules decreased from 83.5% in 2022 to
71.4% in 2023. Despite a higher sales volume i n 2023, the unutilized new capacity resulted in a
higher per-unit depreciation and amortization costs . To a lesser extent, the decrease in gross margin
was also attributable to the higher transportati on and raw material costs we incurred from our
overseas production facilities.
Intelligent head-mounted displays and smart wearables
Our intelligent head-mounted displays and sma rt wearables related gross profit decreased by
22.6% from RMB559.9 million in 2022 to RMB433.4 million in 2023, primarily due to a decrease
in intelligent head-mounted displays and smart w earables related revenue. Our intelligent head-
mounted displays and smart wearables related gr oss margin decreased from 15.8% in 2022 to 14.0%
in 2023, primarily because we started to produce sma rt wearables products for certain customers at
our new production center in addition to our existing relevant production center, which resulted in
higher per-unit depreciation and amortization costs since the re levant order volumes for these
products did not increase in tandem wit h the increased production capacity.
Other smart devices
Our other smart devices related gross prof it decreased by 46.9% fro m RMB20.3 million in
2022 to RMB10.8 million in 2023, and our other smart devices related gross margin decreased from
11.8% in 2022 to 6.5% in 2023 due to the introduction of certain new products such as
photovoltaic glass products that were loss-making.
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Other income
2022 2023 % change
(in RMB thousands, except for percentages)
O t h e ri n c o m e........................... 6 7 8 , 5 7 6 1 , 017,209 49.9%
as % of total revenue ..................... 1.5% 1.9%
Our other income increased by 49.9% fro m RMB678.6 million in 2022 to RMB1,017.2
million in 2023, and, as a percentage of our total revenue, our other income increased from 1.5% in
2022 to 1.9% in 2023, primarily due to an increase in government grants as our operations
expanded and received more government g rants based on our business scale.
Selling expenses
2022 2023 % change
(in RMB thousands, except for percentages)
S e l l i n gE x p e n s e s ........................ 7 0 8 , 8 4 9 674,057 (4.9%)
as % of total revenue ..................... 1.5% 1.2%
Our selling expenses decreased by 4.9% from RMB708.8 million in 2022 to RMB674.1
million in 2023, primarily due to a decrease i n sorting costs as a result of our improvement in
production efficiency and product yields, which led to lower sorting costs relating to the sortation
at our customers ’ sites.
Administrative expenses
2022 2023 % change
(in RMB thousands, except for percentages)
A d m i n i s t r a t i v eE x p e n s e s ................... 3 , 2 3 9 , 4 9 0 2 , 910,299 (10.2%)
as % of total revenue ..................... 6.9% 5.3%
Our administrative expenses decreased by 10.2% from RMB3,239.5 million in 2022 to
RMB2,910.3 million in 2023, primarily due to (i) a shift in the labor market dynamics and
accordingly our revised recruitment policies, (ii ) impairment losses recognized on property, plant
and equipment recorded in 2022 in connection with certain outdated equipment and machinery that
were required to be replaced in that year, and (iii) a decrease in our depreciation of properties and
equipment, since we sold certain equipment in 2022 and accordingly recorded lower depreciation
and amortization costs in 2023, partially offset by (iv) an increase in salaries, compensations and
benefits as we gave continued service bonuses to ce rtain employees. As a result, and because of the
increase in our total revenue in 2023, our administrative expenses as a percentage of our total
revenue decreased from 6.9% in 2022 to 5.3% in 2023.
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Research and development expenses
2022 2023 % change
(in RMB thousands, except for percentages)
R e s e a r c ha n dD e v e l o p m e n tE x p e n s e s .......... 2 , 1 0 4 , 9 7 6 2 , 316,619 10.1%
as % of total revenue ..................... 4.5% 4.3%
Our research and development expenses incr eased by 10.1% from RMB2,105.0 million in
2022 to RMB2,316.6 million in 2023, primarily due to increased spending on materials and
consumables as we undertook more research and d evelopment projects, some of which involved
complex production processes or techniques and the refore required increased usage of consumables
and materials. Our research and development expenses as a percentage of our total revenue
decreased slightly from 4.5% in 2022 to 4.3% in 2023 , primarily due to the growth in our revenue.
Finance costs
2022 2023 % change
(in RMB thousands, except for percentages)
F i n a n c eC o s t s .......................... 6 1 6 , 2 1 6 509,986 (17.2%)
as % of total revenue ..................... 1.3% 0.9%
Our finance costs decreased by 17.2% from RMB616.2 million in 2022 to RMB510.0 million
in 2023, primarily due to a decrease in interest o n borrowings from our ear ly repayment of loans.
Our finance costs as a percentage of our total revenue decreased from 1.3% in 2022 to 0.9% in
2023 due to the same reason.
Other gains and losses, net
Our other gains and losses decreased by 31.9% from RMB321.0 million in 2022 to RMB218.7
million in 2023, primarily due to a decrease in net foreign exchange gains due to fluctuations in
foreign currencies, partially offset by a decr ease in loss on disposal of property, plant and
equipment and impairment losses recognized on pr operty, plant and equipment, due to the disposal
of certain assets of one of our n on-material subsidiaries.
Reversal of impairment losses (impairment lo sses recognised) under expected credit loss
(‘‘ECL’’) model, net
Our reversal of impairment loss under ECL mod el decreased by 97.1% from RMB44.0 million
in 2022 to RMB1.3 million in 2023, primarily beca use we collected certain receivables in 2022.
Other expenses
Our other expenses decreased by 32.0% from R M B 1 0 . 0m i l l i o ni n2 0 2 2t oR M B 6 . 8m i l l i o ni n
2023, primarily due to our decreased spending in donations.
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Share of results of investments accounted for using the equity method
Our share of results of investments accounted for using the equity method was a gain of
RMB4.0 million in 2022 and a loss of RMB57.3 million in 2023. The loss in 2023 primarily
reflected the losses incurre d by some of our associates.
Income tax expense
Our income tax expense decreased by 46.3% from RMB395.1 million in 2022 to RMB212.1
million in 2023, primarily because we recognize d net deferred tax expenses of RMB14.8 million in
2022, as compared to net deferred tax credit of RMB275.6 million in 2023, as one of the
subsidiaries acquired by us obtained the ‘‘High-Tech Enterprise ’’ qualification in 2023, which in
turn led to our adjustment in the deferred tax liab ilities arising from the difference between the
assessed value at the time of acquisition and the book value. Our effective tax rate decreased from
13.6% in 2022 to 6.5% in 2023, mainly due to the same reason.
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period, we financed our operations primarily through a combination
of cash generated from operations and borrowings. As of December 31, 2024 and April 30, 2025,
we had bank balances and cash of RMB10,936.8 mil lion and RMB9,167.8 million, respectively.
Going forward, we believe our liquidity requ irements will be satisfied by using funds from a
combination of cash generated from operations and net proceeds from the Global Offering. As of
April 30, 2025, we had bank loan facilities of RMB47,054.0 million, of which RMB32,601.8
million remained unutilized.
Taking into consideration the financial resour ces including internall y generated funds, cash
and cash equivalents, the available banking and c redit facilities and the es timated net proceeds of
the Global Offering, our Directors are of the opinion that our Group have sufficient working capital
for our present requirements for at least the next 12 months from the date of the Prospectus.
FINANCIAL INFORMATION
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Net Current Assets/Liabilities
The table below sets forth our current assets and liabilities as of the dates indicated.
As of December 31,
As of
April 30,
2022 2023 2024 2025
RMB’000
(unaudited)
Current assets
I n v e n t o r i e s ............ 6 , 6 8 5 , 0 0 9 6 , 6 8 2 , 6 5 9 7 , 160,553 6,507,853
Trade and bills receivables . . 9,02 2,460 9,308,444 10,865,736 8,751,540
Bills receivables at FVTO CI 3,697 112,288 9,779 86,763
Prepayments and other
r e c e i v a b l e s........... 8 0 4 , 1 1 0 1 , 0 2 5 , 4 8 2 1 , 000,455 1,169,561
Amounts due from related
p a r t i e s .............. 3 2 , 2 3 5 2 9 , 7 5 4 2 4 , 8 7 3 7 , 9 6 7
Financial assets at fair value
through profit or loss
(‘‘FVTPL ’’) .......... 3 5 5 , 2 6 6 3 4 9 , 6 6 5 354,917 1,116,364
Income tax recoverable . . . . 22,614 53,391 45,976 169,425
T i m ed e p o s i t s .......... —— 322,412 327,568
Restricted bank deposits . . . 3,673 25,474 51,276 52,850
Bank balances and cash . . . . 11,682 ,255 10,493,519 10,936,804 9,167,752
Total current assets ....... 28,611,319 28,080,676 30,772,781 27,357,643
Current liabilities
Trade and other payables . . . 12,2 09,236 13,171,801 16,365,834 16,433,244
Financial liabilities at
F V T P L ............. —— 9,620 5,895
Amounts due to related
p a r t i e s .............. 2 1 9 4 2 6 2 6
I n c o m et a xp a y a b l e ....... 8 8 , 3 1 9 1 7 8 , 7 6 4 110,787 11,524
B o r r o w i n g s ............ 9 , 8 4 8 , 3 9 3 5 , 6 6 9 , 8 1 2 6 , 518,634 7,051,185
L e a s el i a b i l i t i e s ......... 1 3 , 5 0 3 2 7 , 7 2 6 4 7 , 6 5 9 5 8 , 8 2 8
C o n t r a c tl i a b i l i t i e s ....... 7 , 5 8 9 8 , 1 1 9 1 2 , 6 0 1 2 1 , 7 6 9
Total current liabilities ..... 22,167,061 19,056,316 23,065,161 23,582,471
Net current assets ........ 6,444,258 9,024,360 7,707,620 3,775,172
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Comparison between April 30, 2025 and December 31, 2024
Our net current assets decreased from RMB7,707.6 million as of December 31, 2024 to
RMB3,775.2 million as of April 30, 2025, primaril y due to a decrease in trade and bills receivables,
bank balances and cash and inventories, partially offset by an increase in financial assets at fair
value through profit or loss.
Comparison between December 31, 2024 and December 31, 2023
Our net current assets decreased from RMB9,024.4 million as of December 31, 2023 to
RMB7,707.6 million as of December 31, 2024, pri marily due to an increase in trade and other
payables and borrowings, and a decrease in bills receivables at FVTOCI and income tax
recoverable, partially offset by a decrease in inco me tax payable and an increase in inventories and
trade and bills receivables.
Comparison between December 31, 2023 and December 31, 2022
Our net current assets increased from RMB6, 444.3 million as of December 31, 2022 to
RMB9,024.4 million as of December 31, 2023, primarily due to an increase in trade and bills
receivables and prepayments and other receivables, and a decrease in borrowings.
SELECTED BALANCE SHEET ITEMS
Inventories
Our inventories include raw materials, work in progress, finished goods, goods in transit and
consumables and others. The table below sets fort h the breakdown of our inventories as of the dates
indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
R a wm a t e r i a l s....................... 1 , 3 1 2 , 5 6 5 958,587 1,151,628
W o r ki np r o g r e s s .................... 1 , 6 4 6 , 9 2 9 1 , 836,533 1,938,450
F i n i s h e dg o o d s ...................... 2 , 7 0 1 , 9 0 4 3 , 150,286 3,286,086
G o o d si nt r a n s i t ..................... 1 , 2 9 6 , 4 1 2 982,358 1,029,114
C o n s u m a b l e sa n do t h e r s................ 2 2 9 , 7 1 4 158,392 206,631
L e s s :p r o v i s i o n...................... ( 5 0 2 , 5 1 5 ) ( 403,497) (451,356)
Total ............................. 6,685,009 6,682,659 7,160,553
Our inventories remained stable at RMB6,685.0 million as of December 31, 2022 and
RMB6,682.7 million as of December 31, 2023. Our i nventories increased by 7.2% to RMB7,160.6
million as of December 31, 2024 as our operational scale continued to grow.
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Aging analysis
The table below sets forth an aging analysis o f our inventories as of the dates indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
W i t h i nt h r e em o n t h s .................. 6 , 0 1 1 , 1 9 8 6 , 067,134 6,889,377
T h r e et os i xm o n t h s ................... 4 4 2 , 4 9 5 391,735 303,848
S i xm o n t h st oo n ey e a r ................ 4 4 8 , 4 0 1 214,914 139,901
O n et ot w oy e a r s ..................... 1 4 2 , 3 0 1 307,453 104,230
T w ot ot h r e ey e a r s ................... 8 9 , 6 3 5 4 9 , 5 8 0 1 3 3 , 9 0 8
T h r e et of i v ey e a r s .................... 5 2 , 9 8 2 5 4 , 7 2 0 4 0 , 0 1 8
O v e rf i v ey e a r s...................... 5 1 2 6 2 0 6 2 7
Total ............................. 7,187,524 7,086,156 7,611,909
Turnover days
The table below sets forth the turnover days of our inventories for the periods indicated. Our
inventory turnover days for each period equals the average of the beginning and ending balances of
inventories (net of provision) for that period divided by cost of sales for that period and multiplied
by 360 days in that period.
2022 2023 2024
I n v e n t o r yt u r n o v e rd a y s ................ 6 0 . 5 5 2 . 3 4 1 . 7
Our inventory turnover days decreased from 60.5 days in 2022 to 52.3 days in 2023, and
further decreased to 41.7 days in 2024, primarily due to (i) an increase in complete device assembly
related revenue under the buy-and-sell model, because we were able to finish the assembly and ship
out the devices efficiently, and the buy-and-sell model thus increased our cost of sales without
corresponding increase in our inventory, and (ii) shift of our product structures which led to quicker
inventory turnover management.
Subsequent utilization
As of April 30, 2025, 81.1% of our total i nventories as of December 31, 2024, or
RMB5,805.6 million, were utilized or sold.
Trade and Bills Receivables
Our trade and bills receivables primarily arise from sales of our products on credit. We usually
grant credit periods ranging between one month to two months to our major customers.
FINANCIAL INFORMATION
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The table below sets forth the breakdown of our trade and bills receivables as of the dates
indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
T r a d er e c e i v a b l e s .................... 9 , 1 5 3 , 5 3 4 9 , 436,891 11,006,529
Bills receivables . . ................... 1 , 3 9 2 6 , 1 6 7 7 , 5 1 9
L e s s :a l l o w a n c ef o rE C L ............... ( 1 3 2 , 4 6 6 ) ( 134,614) (148,312)
Total ............................. 9,022,460 9,308,444 10,865,736
Our trade and bills receivables increased by 3.2% from RMB9,022.5 million as of December
31, 2022 to RMB9,308.4 million as of December 31, 2023, and further increased by 16.7% to
RMB10,865.7 million as of December 31, 2024, in line with our revenue and business growth.
Aging analysis
The table below sets forth an aging analysis of o ur trade receivables as of the dates indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
N o tp a s td u e ........................ 8 , 6 7 3 , 9 8 4 8 , 995,893 10,610,390
Past due:
0– 9 0d a y s ......................... 4 2 9 , 8 6 8 397,664 363,411
91– 1 8 0d a y s........................ 2 1 , 0 5 4 1 7 , 6 4 6 9 , 3 9 6
181– 3 6 5d a y s....................... 2 1 , 4 2 3 1 2 , 4 5 3 4 , 2 3 6
O v e ro n ey e a r....................... 7 , 2 0 5 1 3 , 2 3 5 1 9 , 0 9 6
Total ............................. 9,153,534 9,436,891 11,006,529
Turnover days
The table below sets forth the turnover days of our trade and bills receivables for the periods
indicated. Trade and bills receivable turnover days for each period equals the average of the
beginning and ending balances of trade and bills r eceivables (net of ECL) for that period divided by
revenue for that period and multi plied by 360 days in that period.
2022 2023 2024
Trade and bills receiva ble turnover days . .... 7 2 . 2 6 0 . 6 5 2 . 0
FINANCIAL INFORMATION
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Our trade and bills receivable turnover days decreased from 72.2 days in 2022 to 60.6 days in
2023, and further decreased to 52.0 days in 2024, primarily due to our tighter control over our trade
and bills receivables and increased our collection efforts.
Subsequent settlement
As of April 30, 2025, 98.7% of our total trade and bills receivables as of December 31, 2024,
or RMB10,866.5 million, were settled.
Prepayments and Other Receivables
Our prepayments and other receivables primarily include prepayments for property, plant and
equipment, value-added tax recoverable, refund able deposits for land use rights, prepayments for
materials and others, refundable deposits for project performance, rental and other deposits,
dividend receivable and other receivables.
The table below sets forth the breakdown of our prepayments and other receivables as of the
dates indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
Prepayments for property, plant and equipment 783,318 673,682 1,020,338
V a l u e - a d d e dt a xr e c o v e r a b l e............. 3 8 9 , 7 6 6 296,627 344,998
R e f u n d a b l ed e p o s i t sf o rl a n du s er i g h t s ..... 2 0 0 , 0 0 0 200,000 200,000
P r e p a y m e n t sf o rm a t e r i a l sa n do t h e r s....... 6 0 , 1 2 9 126,382 174,304
Refundable deposits for project performance . . — 250,000 150,000
R e n t a la n do t h e rd e p o s i t s............... 4 6 , 7 1 3 3 8 , 4 4 4 4 8 , 2 1 3
D i v i d e n dr e c e i v a b l e................... — 648 —
Other receivables . ................... 1 4 0 , 6 0 3 151,120 141,181
L e s s :a l l o w a n c ef o rE C L ............... ( 3 3 , 1 0 1 ) ( 2 3 , 4 2 7 ) ( 4 0 , 2 6 5 )
Total ............................. 1,587,428 1,713,476 2,038,769
Our prepayments and other receivables inc reased by 7.9% from RMB1,587.4 million as of
December 31, 2022 to RMB1,713. 5 million as of December 31, 2023, as a result of an increase in
refundable deposits for project performance. Ou r prepayments and other receivables further
increased by 19.0% to RMB2,038.8 million as of December 31, 2024, primarily because of increase
in prepayments for property, plant and equipment.
Subsequent settlement
As of April 30, 2025, 40.1% of our total prepayments and other receivables as of December
31, 2024, or RMB832.7 million, were settled.
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Trade and Other Payables
Trade and bills payables
Our trade and bills payables primarily include trade payables to our suppliers. Our suppliers
usually grant us a credit period of within 120 days to settle our purchases of goods.
The table below sets forth the breakdown of our trade and bills payables as of the dates
indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
T r a d ep a y a b l e s ...................... 6 , 9 5 0 , 7 5 1 7 , 829,164 10,388,566
B i l l sp a y a b l e s....................... — 13,012 91,623
Total ............................. 6,950,751 7,842,176 10,480,189
Our trade and bills payables increased by 12.8% from RMB6,950.8 million as of December
31, 2022 to RMB7,842.2 million as of December 31, 2023, and further increased by 33.6% to
RMB10,480.2 million as of December 31, 2024, as a result of increased purchases during the Track
Record Period, in line with our business expansion.
Aging analysis
The table below sets forth an aging analysis of our trade payables as of the dates indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
W i t h i n1y e a r....................... 6 , 9 5 0 , 7 5 1 7 , 829,164 10,388,566
Turnover days
The table below sets forth the turnover days of our trade and bills payables for the periods
indicated. Trade and bills payable turnover days for each period equals the average of the beginning
and ending balances of trade and bills payables for that period divided by cost of sales for that
period and multiplied by 360 days in that period.
2022 2023 2024
T r a d ea n db i l l sp a y a b l et u r n o v e rd a y s ...... 6 6 . 4 5 7 . 9 5 5 . 2
Our trade and bills payable turnover days decreased from 66.4 days in 2022 to 57.9 days in
2023, and our trade and bills payable turnover days further decreased to 55.2 days in 2024, mainly
as a result of better management in payment schemes with our suppliers.
FINANCIAL INFORMATION
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Subsequent settlement
As of April 30, 2025, 87.2% of our total trade and bills payables as of December 31, 2024, or
RMB9,113.5 million, were settled.
Other payables and accruals
Our other payables and accruals primarily represent accrued employees ’ benefits, other
accrued charges, other tax payables and deposits received.
The table below sets forth the breakdown of our other payables and accruals as of the dates
indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
A c c r u e ds t a f fc o s t.................... 1 , 4 7 9 , 9 4 4 1 , 327,597 1,532,142
C o n s t r u c t i o np a y a b l e s ................. 3 , 1 7 9 , 4 1 2 3 , 290,317 3,616,325
Other accrued charges . . . .............. 3 3 5 , 4 7 4 305,873 306,028
O t h e rt a xp a y a b l e s .................... 1 4 0 , 2 6 9 248,432 267,313
D e p o s i t sr e c e i v e d .................... 9 0 , 7 3 2 137,415 86,499
O t h e r s............................ 3 2 , 6 5 4 1 9 , 9 9 1 7 7 , 3 3 8
Total ............................. 5,258,485 5,329,625 5,885,645
Our other payables and accruals increased slightly by 1.4% from RMB5,258.5 million as of
December 31, 2022 to RMB5,329. 6 million as of December 31, 2023, as a result of an increase in
construction payables and other tax payables. O ur other payables and accruals increased by 10.4%
to RMB5,885.6 million as of December 31, 2024 , primarily because of an increase in accrued
employees ’ benefits as we paid out more bonuses and incentives in sync with our business growth.
Goodwill
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
The Group
COST AND CARRYING VALUES
A sa t1J a n u a r ya n d3 1D e c e m b e r ......... 2 , 9 7 0 , 1 4 4 2 , 970,144 2,970,144
Goodwill acquired in a business combination of Lens Taizhou in 2020 is tested for impairment
annually. For the purposes of impairment testing, goodwill has been allocated to cash-generated
unit ( ‘‘CGU’’), comprising the assets and liabilities t hat generate cash flows together with the
related goodwill (the ‘‘Taizhou CGU ’’).
FINANCIAL INFORMATION
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The recoverable amount of Taizhou CGU has been determined based on value in use
calculations. The value in use calculation is base d on cash flow projections with reference to
financial budgets approved by our management covering a five-year period, and a pre-tax discount
rate of 10.9%, 10.7% and 10.6% at December 31, 2022, 2023 and 2024. Cash flows beyond the
five-year period are extrapolated using a st eady growth rate of 0%, 0% and 0% at December 31,
2022, 2023 and 2024. Expected cash inflows/outflow s, which include estimations of growth rates of
business volume, unit price and cost of sales, hav e been determined based on past performance and
management ’s expectations of the market development. The discount rate used reflects the cost of
capital of Taizhou CGU and the industry specific factors.
The Group engages an independent qualified va luer, Beijing Zhonglin Assets Appraisal Co.,
Ltd. to assess the growth rates and discount r ates used in the value in use calculation.
In 2022, 2023 and 2024, our management determined that there was no impairment of the
Taizhou CGU as the recoverable amount exceeds its carrying amount by RMB259.9 million,
RMB362.8 million and RMB554.1 mi llion, respectively. If the pre-tax discount rate was changed to
11.1%, 11.0 % and 11.1%, respectively, while other parameters remain constant, the recoverable
amount of Taizhou CGU would equal its carrying amount. Our management believes that any
reasonably possible change in any of these assumptions would not cause the carrying amount of the
Taizhou CGU to exceed the recoverable amount determined.
Restricted Bank Deposits
We had restricted bank deposits of RMB3.7 m illion, RMB25.5 milli on and RMB51.3 million
as of December 31, 2022, 2023 and 2024. In parti cular, we had restricted bank deposits of
RMB41.5 million as of December 31, 2024 due to a n ongoing litigation case brought against Lens
Shenzhen and Shenzhen Lens Wang for contractual disputes relating to the defendants ’ alleged
failure to perform minimum purchase obligat ions under a sales contract. As of the Latest
Practicable Date, the case was being transferred from a district court in Chengdu, the original court
where the plaintiff sued, to a district court in Cha ngsha on account of jurisdiction. We believe that
the amount sought by the plaintiff is not in accordance with either the contract or the relevant
regulations. Nonetheless, RMB41.5 million was treated as restricted bank deposits since the
relevant funds were frozen by the court because of the ongoing litigation. Considering the amount
involved, we do not expect this case to have any ma terial impact on our b usiness operations or
financial condition.
FINANCIAL INFORMATION
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CASH FLOWS
The table below sets forth our cash flows for the periods indicated.
2022 2023 2024
RMB’000
Operating cash flows before movements in
w o r k i n gc a p i t a l .................... 7 , 4 7 1 , 2 4 6 8 , 341,908 9,154,875
Changes in working capital 1 ............. 1 , 7 2 0 , 1 0 3 1 , 178,331 1,904,672
I n c o m et a xp a i d ..................... ( 1 5 4 , 4 0 2 ) ( 427,988) (414,224)
I n t e r e s tR e c e i v e d ..................... 1 4 3 , 5 8 6 207,947 243,518
N e tc a s hf r o mo p e r a t i n ga c t i v i t i e s ......... 9 , 1 8 0 , 5 3 3 9 , 300,198 10,888,841
N e tc a s hu s e di ni n v e s t i n ga c t i v i t i e s ........ ( 5 , 5 7 6 , 6 9 5 ) ( 5 , 367,384) (6,050,290)
N e tc a s hu s e di nf i n a n c i n ga c t i v i t i e s ....... ( 2 , 4 1 6 , 3 1 6 ) ( 5 , 136,912) (4,454,405)
Net increase (decrease) in cash and
cash equivalents ................... 1,187,522 (1,204,098) 384,146
Cash and cash equivalents at beginning of
t h ey e a r ......................... 1 0 , 2 1 6 , 3 3 9 1 1 , 682,255 10,493,519
E f f e c to ff o r e i g ne x c h a n g er a t ec h a n g e s ..... 2 7 8 , 3 9 4 1 5 , 3 6 2 5 9 , 1 3 9
Cash and cash equivalents at ending of
the year ......................... 11,682,255 10,493,519 10,936,804
Note:
(1) Changes in working capital represents change in workin g capital items, including, inventories, trade and bill
receivables, trade receivables at FVTOCI, prepayments and other receivables, restricted bank deposits, trade and
other payables, contract liabilities, deferred income, interest and provision.
Operating Activities
In 2024, we had net cash generated from operating activities of RMB10,888.8 million,
primarily consisting of our profit for the year of RMB3,676.9 million, adjusted for items mainly
including (i) non-cash and non-operating items, prima rily comprising depreciation of property, plant
and equipment of RMB4,770.8 million, and (ii) ch anges in working capital, primarily comprising
(a) an increase in trade and other payables of RMB3,928.4 million, and (b) an increase in trade and
bills receivables of RMB1,511.3 million.
FINANCIAL INFORMATION
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In 2023, we had net cash generated from opera ting activities of RMB9,300.2 million,
primarily consisting of our profit for the year of RMB3,041.8 million, adjusted for items mainly
including (i) non-cash and non-operating items, prima rily comprising depreciation of property, plant
and equipment of RMB4,633.0 million, and (ii) chang es in working capital, primarily comprising an
increase in trade and other payables of RMB1,455.0 million.
In 2022, we had net cash generated from opera ting activities of RMB9,180.5 million,
primarily consisting of our profit for the year of RMB2,519.8 million, adjusted for items mainly
including (i) non-cash and non-operating items, prima rily comprising depreciation of property, plant
and equipment of RMB4,340.7 million, and (ii) ch anges in working capital, primarily comprising
(a) a decrease in trade and bills receivables of RM B1,450.0 million, (b) a decrease in prepayments
and other receivables of RMB485.6 million and (c) a decrease in trade and other payables of
RMB217.1 million.
Investing Activities
In 2024, we had net cash used in investing activities of RMB6,050.3 million, primarily
consisting of purchase of financial assets/de rivatives at FVTPL of RMB1,719.7 million and
purchase of property, plant and equipment of RMB 6,237.7 million, partially offset by proceeds
from disposal of financial assets/deriv atives at FVTPL of RMB1,932.0 million.
In 2023, we had net cash used in investing activities of RMB5,367.4 million, primarily
consisting of purchase of financial assets/de rivatives at FVTPL of RMB1,185.5 million and
purchase of property, plant and equipment of RMB 5,085.3 million, partially offset by proceeds
from disposal of financial assets/deriv atives at FVTPL of RMB1,387.0 million.
In 2022, we had net cash used in investing activities of RMB5,576.7 million, primarily
consisting of purchase of financial assets/de rivatives at FVTPL of RMB7,342.2 million and
purchase of property, plant and equipment of RMB 6,824.3 million, partially offset by proceeds
from disposal of financial assets/deriv atives at FVTPL of RMB8,702.3 million.
Financing Activities
In 2024, we had net cash used in financing ac tivities of RMB4,454.4 million, primarily
consisting of repayment of borrowings of RMB6,661.4 million and dividends paid to the
shareholders of the Company of RMB1,482.2 millio n, partially offset by new borrowings raised of
RMB5,120.2 million.
In 2023, we had net cash used in financing ac tivities of RMB5,136.9 million, primarily
consisting of repayment of borrowings of RM B11,236.3 million and dividends paid to the
shareholders of the Company of RMB986.2 milli on, partially offset by new borrowings raised of
RMB7,533.7 million.
In 2022, we had net cash used in financing ac tivities of RMB2,416.3 million, primarily
consisting of repayment of borro wings of RMB17,978.2 million and interest paid for borrowings of
RMB558.7 million, partially offset by new b orrowings raised of RMB17,584.2 million.
FINANCIAL INFORMATION
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INDEBTEDNESS
The table below sets forth our indebtedness as of the dates indicated.
As of December 31,
As of
April 30,
2022 2023 2024 2025
(in RMB thousands)
(unaudited)
Current
B o r r o w i n g s .............. 9 , 8 4 8 , 3 9 3 5 , 6 6 9 , 8 1 2 6 , 518,634 7,051,185
L e a s el i a b i l i t i e s........... 1 3 , 5 0 3 2 7 , 7 2 6 4 7 , 6 5 9 5 8 , 8 2 8
Non-current
B o r r o w i n g s .............. 9 , 1 2 2 , 8 9 0 9 , 5 8 8 , 2 6 4 7 , 807,931 6,718,940
L e a s el i a b i l i t i e s........... 3 4 , 1 4 5 2 0 , 7 7 3 151,529 159,442
Loans from related parties . . . 1,027,632 1,065,146 ——
Total .................. 20,046,563 16,371,721 14,525,753 13,988,395
As of April 30, 2025, being the most recent prac ticable date for the purpose of the statement
of indebtedness, we had total indebtedness of RMB13,988.4 million, including (i) borrowings of
RMB13,770.1 million; and (ii) leas e liabilities of RMB218.3 million.
Borrowings
As of December 31, 2022, 2023 and 2024, we had borrowings of RMB18,971.3 million,
RMB15,258.1 million and RMB14,326.6 million, respectively. As of April 30, 2025, we had bank
borrowings of RMB13,770.1 million, which were u nsecured and unguaranteed. The table below sets
forth the maturity profile of our borrowings as of the dates indicated.
As of December 31,
As of
April 30,
2022 2023 2024 2025
(in RMB thousands)
(unaudited)
W i t h i no n ey e a r .......... 9 , 8 4 8 , 3 9 3 5 , 6 6 9 , 8 1 2 6 , 518,634 7,051,185
Between one to two years . . . . 4,451,040 5,903,733 4,640,250 4,023,465
Between two to five years . . . 4,671,850 3,684,531 3,097,525 2,695,475
M o r et h a nf i v ey e a r s ....... —— 70,156 —
Total .................. 18,971,283 15,258,076 14,326,565 13,770,125
FINANCIAL INFORMATION
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During the Track Record Period and up to the Latest Practicable Date, our outstanding
borrowings contained certain customary covenants, and we had not defaulted on any covenants on
these outstanding borrowings. In addition, we had not experienced any difficulty in obtaining bank
loans or other borrowings during the Track Record Period and up to the Latest Practicable Date.
Loans From Related Parties
As of December 31, 2022, 2023 and 2024 and as of April 30, 2025, we had loans from related
parties of RMB1,027.6 million, RMB1,065.1 milli on, nil, and nil, respectively. These loans were
mainly used for supplementing our working capital and optimizing our debt structure by repaying
certain loans from financial institut ions and were non-trade in nature.
Lease Liabilities
Our lease liabilities increased from RMB47.6 m illion as of December 31, 2022 to RMB48.5
million as of December 31, 2023 and our lease lia bilities increased from RMB48.5 million as of
December 31, 2023 to RMB199.2 million as of D ecember 31, 2024, both as a result of new leases
entered into for new factories and employees ’ housing. As of April 30, 2025, we had lease
liabilities of RMB218.3 million, among w hich RMB137.2 million were unsecured and
unguaranteed, and RMB81.1 million were secured by our rental deposits and unguaranteed. Our
lease liabilities increased from RMB199.2 mil lion as of December 31, 2024 to RMB218.3 million
as of April 30, 2025, primarily due to the same foregoing reason.
Except as disclosed above, and apart from intra-group liabilities and normal trade payables as
of April 30, 2025 and the Latest Practicable Date, we did not have any material mortgages, charges,
debentures, loan capital, debt securities, loan s, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabi lities under acceptances (other than normal trade
bills), acceptance credits, which are either gua ranteed, unguaranteed, secured or unsecured, or
guarantees, or material c ontingent liabilities.
Recent Development
There has been no material change in our indebte dness since the Latest Practicable Date up to
the date of this prospectus.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURE AND COMMITMENTS
Capital Expenditure
The table below sets forth our capital expenditure (cash outflow) for the periods indicated.
2022 2023 2024
(in RMB thousands)
Purchase of property, plant and equi pment . . . 6,824,316 5,085,273 6,237,734
U p f r o n tp a y m e n t sf o rl e a s e h o l dl a n d ....... — 277,654 118,320
Total ............................. 6,824,316 5,362,927 6,356,054
During the Track Record Period, our capital expenditure was primarily for purchase of
property, plant and equipment used in our production and payments for leasehold land.
Capital Commitments
The table below sets forth our capital c ommitments as of the dates indicated.
As of December 31,
2022 2023 2024
(in RMB thousands)
Capital expenditure contracted for
but not provided for in the
Historical Financial Information
— P r o p e r t y ,p l a n ta n de q u i p m e n t........ 8 2 0 , 4 7 2 1 , 352,626 2,217,417
KEY FINANCIAL RATIOS
For the year ended/as of December 31,
2022 2023 2024
Gross margin 1 .......................... 1 8 . 3 % 1 5 . 6 % 1 4 . 6 %
Net profit margin 2 ....................... 5 . 4 % 5 . 6 % 5 . 3 %
Return on assets 3 ........................ 3 . 3 % 3 . 9 % 4 . 6 %
Return on equity 4 ........................ 5 . 8 % 6 . 7 % 7 . 7 %
Current ratio 5 ........................... 1 . 3 1 . 5 1 . 3
Quick ratio 6 ............................ 1 . 0 1 . 1 1 . 0
Gearing ratio 7 .......................... 4 2 . 7 % 3 2 . 8 % 2 9 . 3 %
FINANCIAL INFORMATION
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Notes:
(1) Gross margin is calculated as gross profit for the year divided by revenue for the corresponding year and multiplied
by 100%.
(2) Net profit margin is calculated as net profit for the year divided by revenue for the corresponding year and
multiplied by 100%.
(3) Return on assets is calculated as net profit for the year divided by the average total assets and multiplied by 100%.
Average total assets is the sum of the balance of total ass ets at the beginning and at the end of the year, divided by
two.
(4) Return on equity is calculated as net profit for the year divided by the average total equity and multiplied by 100%.
Average total equity is the sum of the balance of total equity at the beginning and at the end of the year, divided by
two.
(5) Current ratio is calculated as total current assets as at the end of the year divided by total current liabilities as at the
end of the corresponding year.
(6) Quick ratio is calculated as total current assets less inve ntories as at the end of the year and divided by total current
liabilities as at the end of the corresponding year.
(7) Gearing ratio is calculated as the total bank loans as at the end of the year divided by total equity as at the end of
the corresponding year and multiplied by 100%.
DISCLOSURE ABOUT FINANCIAL RISKS
We are exposed to a variety of financial risks including currency risk, interest risk, credit risk
and liquidity risk. For details of our risk exposure a nd sensitivity analysis, see note 41 to Appendix
I — Accountants ’ Report.
Currency Risk
Currency risk arises when recognized financia l assets and liabilities are denominated in a
currency that is not the same as an entity ’s functional currency. We have certain sales, purchases,
bank balances and borrowings denominated in foreign currencies, which exposes us to currency
risk. We manage and monitor our exposure to currency risk to ensure appropriate measures are
implemented in a timely and effective manner.
Specifically, if the RMB strengthened 10% ag ainst the U.S. dollar, we would have recorded
RMB 551.2 million, RMB586.9 million and RMB854.9 million less of profit for the year in 2022,
2023 and 2024.
Interest Risk
We are exposed to fair value interest rate risk i n relation to our pledged and restricted bank
deposits, fixed-rate bank borrowings and lease lia bilities. We are exposed to cash flow interest rate
risk in relation to variable-rate bank balances and borrowings.
FINANCIAL INFORMATION
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Credit Risk
Credit risk refers to the risk that our counte rparties may default on their contractual
obligations resulting in financial losses to us. Ou r credit risk exposures primarily relate to our trade
and bills receivables and bank balances. We do not hold any collateral or other credit enhancements
to cover our credit risks associated with our financial assets.
Liquidity Risk
Liquidity risk is the risk that we will encounter d ifficulty in meeting financial obligations due
to shortage of funds. To manage our liquidity risk, we monitor and maintain a level of bank
balances and cash deemed adequate by our managem ent to finance our operations and mitigate the
effects of fluctuations in cash flows.
Capital Management
The primary objectives of our capital manageme nt are to safeguard our ability to continue as a
going concern and to maximize our return to shareholders through the optimization of our debt and
equity balance. Our overall strategy remained unchanged during the Track Record Period.
Our capital structure consists of net debt, which i ncludes borrowings and lease liabilities, net
of bank balances and cash and total equity, mainly comprising issued share capital, share premium
and retained profits, other reserv es and non-controlling interests.
Our management reviews our capital structure o n a regular basis. As part of this review, they
consider the cost of capital and risks associated with the capital. Based on recommendations of our
management, we will balance our overall capital st ructure through the payment of dividends, new
share issues and share buy-backs as well as the is sue of new debt or the redemption of existing
debt.
RELATED PARTY TRANSACTIONS
R e l a t e dp a r t yt r a n s a c t i o n sa r es e to u ti nn o t e4 2t oA p p e n d i xI— Accountants ’ Report. Our
Directors confirm that these transactions were c onducted in the ordinary course of our business, on
an arm ’s length basis and with normal commercia l terms between the relevant parties.
OFF-BALANCE SHEET ARRANGEMENTS
During the Track Record Period, we did not ente r into any off-balance sheet arrangements.
FINANCIAL INFORMATION
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DIVIDEND POLICY
In 2022, 2023 and 2024, our Company declared dividends of RMB493.1 million, RMB986.2
million and RMB1,482.2 million, all of which had been paid in full. See Note 15 to the
Accountants ’ Report included in Appendix I to this prospectus for details.
We do not have a fixed dividend distribution ratio. PRC laws require that dividends be paid
only out of our distributable profits. Distributable profits are our after-tax profits, less
appropriations to statutory and other reserves that we are required to make. Our dividend policy
sets forth that, subject to the condition that the C ompany has recorded a net profit for the year and
maintains a positive balance of accumulated u ndistributed profits, and provided that such
distribution would not impair the Company ’s ability to sustain ongoing operations and long-term
development, the Company shall prioritize pro fit distribution by way of cash dividends in the
absence of any significant capital expenditure plans. The amount of profits distributed by cash
dividends shall not be less than 15% of the distributable profits realized for that year. Over any
three-year period, the total profits distributed by way of cash dividends shall not be less than 30%
of the average annual distributable profits realized during the same three-year period. Pursuant to
our Articles of Association, our Board may declare d ividends in the future after taking into account
our results of operations, financial conditions, ca sh requirements and availability, and other factors
as it may deem relevant at such time. Any declaration and payment as well as the amount of
dividends will be subject to our constitutional d ocuments, applicable PRC laws and approval by our
Shareholders.
After the Global Offering, we may declare and pay dividends mainly by cash or by stock that
we consider appropriate. Decisions to declare or to pay any dividends in the future will depend on,
among other things, our Company ’s profitability, operations an d development plans, external
financing environment, costs of capital, our Company ’s cash flows and other factors that our
Directors may consider relevant. Our ability to d istribute dividends in the future also depends on
whether we can receive dividends from our subsidiaries.
DISTRIBUTABLE RESERVE
As of December 31, 2024, our Company has retained profits of RMB15,717.1 million.
DISCLOSURE REQUIRED UNDER RULES 13.13 TO 13.19 OF THE HONG KONG
LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, they were not aware of any
circumstances that would give ris e to a disclosure requirement under Rules 13.13 to Rules 13.19 of
the Hong Kong Listing Rules.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Please refer to Appendix II — Unaudited Pro Forma Financial Information for details.
FINANCIAL INFORMATION
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LISTING EXPENSES
Listing expenses represent professional fees, underwriting commission and fees incurred in
connection with the Listing and the Global Offering. Our listing expenses are estimated to be
approximately HK$73.3 million (including underw riting commission), accounting for 1.6% of the
gross proceeds of the Global Offering (assumin g an Offer Price of HK$17.78 per H Share, being
the mid-point of the Offer Price range stated in this prospectus, and no exercise of the Over-
allotment Option or the Offer Size Adjustment Opt ion). Among our listing ex penses, approximately
HK$69.7 million is directly attributable to the issuance of H Shares and will be charged to equity
upon completion of the Listing, and approximat ely HK$0.0 million has been charged to our
consolidated statements of profit or loss and oth er comprehensive income. The listing expenses we
incurred during the Track Record Period and expect to incur would consist of approximately
HK$37.3 million underwriting related expenses a nd fees (including but not limited to commissions
and fees), approximately HK$35.6 million non-underwriting-related expenses and fees of the Sole
Sponsor, legal advisors and reporting accountant and approximately HK$0.4 million for other non-
underwriting-related fees and expenses.
The listing expenses above are the latest practi cable estimate for reference only, and the actual
amount may differ from this estimate.
NO MATERIAL ADVERSE CHANGE
Our Directors confirmed that, as of the date of this Prospectus, there has been no material
adverse change in our financial position since December 31, 2024, and there has been no event
since December 31, 2024 that would materially affe ct the information as set out in the Accountants ’
Report in Appendix I to this Prospectus.
FINANCIAL INFORMATION
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BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the total issued share capital of our Company was
RMB4,982,772,171, comprisin g 4,982,772,171 A Shares of nominal value RMB1.00 each, all of
which are listed on the Shenzhen Stock Exchange.
Description of Shares Number of Shares
Percentage of
issued share
capital
AS h a r e s ................................. 4 , 9 8 2 , 7 7 2 , 1 7 1 1 0 0 . 0 0 %
Total .................................... 4,982,772,171 100.00%
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Globa l Offering, assuming that the Over- allotment
Option and the Offer Size Adjustment Option are not exercised, the entire share capital of our
Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
AS h a r e s ................................. 4 , 9 8 2 , 7 7 2 , 1 7 1 9 5 . 0 0 %
HS h a r e si s s u e dp u r s u a n tt ot h eG l o b a lO f f e r i n g ...... 2 6 2 , 2 5 6 , 8 0 0 5 . 0 0 %
Total .................................... 5,245,028,971 100.00%
Immediately following completion of the Globa l Offering, assuming that the Over-allotment
Option is fully exercised but the Offer Size Adjus tment Option is not exercised, the entire share
capital of our Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
AS h a r e s ................................. 4 , 9 8 2 , 7 7 2 , 1 7 1 9 4 . 2 9 %
HS h a r e si s s u e dp u r s u a n tt ot h eG l o b a lO f f e r i n g ...... 3 0 1 , 5 9 5 , 2 0 0 5 . 7 1 %
Total .................................... 5,284,367,371 100.0%
SHARE CAPITAL
– 264 –


--- page 275 ---
Immediately following completion of the Gl obal Offering, assuming that the Offer Size
Adjustment Option is fully exercised but the Over -allotment Option is not exercised, the entire
share capital of our Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
AS h a r e s ................................. 4 , 9 8 2 , 7 7 2 , 1 7 1 9 4 . 2 9 %
HS h a r e si s s u e dp u r s u a n tt ot h eG l o b a lO f f e r i n g ...... 3 0 1 , 5 9 5 , 2 0 0 5 . 7 1 %
Total .................................... 5,284,367,371 100.00%
Immediately following completion of the Gl obal Offering, assuming that the Offer Size
Adjustment Option and the Over-allotment Option a re fully exercised, the en tire share capital of our
Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
AS h a r e s ................................. 4 , 9 8 2 , 7 7 2 , 1 7 1 9 3 . 4 9 %
HS h a r e si s s u e dp u r s u a n tt ot h eG l o b a lO f f e r i n g ...... 3 4 6 , 8 3 4 , 4 0 0 6 . 5 1 %
Total .................................... 5,329,606,571 100.00%
OUR SHARES
Our H Shares in issue upon completion of the Global Offering (including H Shares issued
pursuant to the exercise of the Over-allotment Op tion and the Offer Size Adjustment Option) and
our A Shares are ordinary shares in the share capital of our Company and are considered as one
class of Shares. However, apart from qualified dom estic institutional investors and persons who are
entitled to hold our H Shares pursuant to relevant PRC laws and regulations or upon approval of
any competent authority, or (if our H Shares are eligible securities for that purpose) through
Shenzhen-Hong Kong Stock Connect pursuant to rel evant PRC laws and regulations, our H Shares
may not be subscribed by or traded between legal or natural persons of the PRC.
Shenzhen-Hong Kong Stock Connect has establi shed a stock connect mechanism between the
PRC and Hong Kong. Our A Shares can be subscribed for and traded by PRC investors, qualified
foreign institutional investors or qualified fore ign strategic investors and must be traded in RMB.
As our A Shares are eligible securities under the Northbound Trading Link, they can also be
subscribed for and traded by Hong Kong and other overseas investors pursuant to the rules and
limits of Shenzhen-Hong Kong Stock Connect. If our H Shares are eligible securities under the
Southbound Trading Link, they can also be subscribed for and traded by PRC investors in
accordance with the rules and limits of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong
Kong Stock Connect.
SHARE CAPITAL
– 265 –


--- page 276 ---
RANKING
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all other respects and, in particular, will
rank equally for all dividends or distributions declared, paid or made after the date of this
Prospectus. All dividends in respect of our H S hares are to be paid by us in Hong Kong dollars
whereas all dividends in respect of our A Shares are to be paid by us in RMB. In addition to cash,
dividends may also be distributed in the form of S hares. Holders of our H Shares will receive share
dividends in the form of H Shares, and holders of our A Shares will receive share dividends in the
form of A Shares.
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND TRADING
ON THE HONG KONG STOCK EXCHANGE
Our A Shares and our H Shares are generally nei ther interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for ‘‘Full Circulation ’’ of Domestic Unlisted Shares of H-share
Companies (《H股公司境內未上市股份申請‘‘全流通’’業務指引》) announced by the CSRC are not
applicable to companies dual listed in the PRC and on the Hong Kong Stock Exchange. As of the
Latest Practicable Date, there were no relevant rules or guidelines from the CSRC providing that A
Shares holders may convert A Shares held by them into H Shares for listing and trading on the
Hong Kong Stock Exchange.
APPROVAL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL OFFERING
We have obtained approval from our holders of A Shares to issue H Shares and seek the
listing of H Shares on the Hong Kong Stock Excha nge at the general meeting of our Company held
on March 28, 2025. Pursuant to such approval, a mong other things, (i) the number of H Shares to
be offered under the Global Offering shall not exceed 7.00% of the total share capital of our
Company as enlarged by the H Shares to be issued pursuant to the Global Offering (before the
exercise of the Over-allotment Option); and (ii) the number of H Shares to be issued pursuant to the
exercise of the Over-allotment Option shall n ot exceed 15% of the total number of H Shares to be
initially offered pursuant to the Global Offering.
The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange shall be
completed within 24 months from the date when the Shareholders ’ meeting was held on March 28,
2025.
There is no other approved offering plan for any other Shares except for the Global Offering.
SHAREHOLDERS ’ GENERAL MEETINGS
For details of circumstance under which our Shareholders ’ general meeting is required, see
‘‘Appendix III — Summary of Articles of Association — Shareholders and General Meetings ’’ of
this Prospectus.
SHARE CAPITAL
– 266 –


--- page 277 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a ‘‘Cornerstone Investment
Agreement ,’’ and together the ‘‘Cornerstone Investment Agreements ’’) with the cornerstone
investors set out below (each a ‘‘Cornerstone Investor ’’, and together the ‘‘Cornerstone
Investors ’’), pursuant to which the Cornerstone Inve stors have agreed to, subject to certain
conditions, subscribe, or cause their designated e ntities to subscribe, at the Offer Price for such
number of Offer Shares (rounded down to the nearest whole board lot of 200 H Shares) that may be
purchased for an aggregate amount of approximate ly US$191 million (or approximately HK$1,499
million, calculated based on an exchange ra te of US$1.00 to HK$7.8501) and exclusive of
brokerage fee, the SFC transaction levy, the A FRC transaction levy and the Hong Kong Stock
Exchange trading fee) (the ‘‘Cornerstone Placing ’’).
Based on the Offer Price of HK$18.18 per Offer Share, being the high-end of the indicative
Offer Price range set out in this Prospectus, the total number of Offer Shares to be subscribed for
by the Cornerstone Investors would be 82,471,8 00. The table below reflects the shareholding
percentage immediately after the c ompletion of the Global Offering.
Assuming the Offer Size Adjustment Option
is not exercised
A s s u m i n gt h eO f f e rS i z eA d j u s t m e n tO p t i o n
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
i se x e r c i s e di nf u l l
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
31.45% 1.57% 27.35% 1.56% 27.35% 1.56% 23.78% 1.55%
Based on the Offer Price of HK$17.78 per Offer Share, being the mid-point of the indicative
Offer Price range set out in this Prospectus, the total number of Offer Shares to be subscribed for
by the Cornerstone Investors would be 84,328,0 00. The table below reflects the shareholding
percentage immediately after the c ompletion of the Global Offering.
Assuming the Offer Size Adjustment Option
is not exercised
A s s u m i n gt h eO f f e rS i z eA d j u s t m e n tO p t i o n
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
i se x e r c i s e di nf u l l
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
32.15% 1.61% 27.96% 1.60% 27.96% 1.60% 24.31% 1.58%
CORNERSTONE INVESTORS
– 267 –


--- page 278 ---
Based on the Offer Price of HK$17.38 per Offer Share, being the low-end of the indicative
Offer Price range set out in this Prospectus, the total number of Offer Shares to be subscribed for
by the Cornerstone Investors would be 86,268,8 00. The table below reflects the shareholding
percentage immediately after the c ompletion of the Global Offering.
Assuming the Offer Size Adjustment Option
is not exercised
A s s u m i n gt h eO f f e rS i z eA d j u s t m e n tO p t i o n
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
i se x e r c i s e di nf u l l
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
total issued
share capital
32.89% 1.64% 28.60% 1.63% 28.60% 1.63% 24.87% 1.62%
We believe that the Cornerstone Placing demonstrates our Cornerstone Investors ’ confidence
in our Company and its business prospect, and that the Cornerstone Placing will help to raise the
profile of our Company. Our Company became acquainted with each of the Cornerstone Investors
in its ordinary course of operation through the Group ’s business network or through introduction by
the Company ’s business partners/the Underwriters in the Global Offering.
The Cornerstone Placing will form part of the I nternational Offering, and, save as otherwise
obtained consent from the Hong Kong Stock Exc hange, the Cornerstone Investors and their
respective close associates will not subscribe for any Offer Shares under the Global Offering (other
than pursuant to the Cornerstone Investment Agr eements). The Offer Shares to be subscribed by the
Cornerstone Investors will rank pari passu in all respects with the fully paid H Shares in issue
following the Global Offering and will be counted towards the public float of the Company under
Rule 8.08 of the Hong Kong Listing Rules. Immedi ately following the completion of the Global
Offering, the Cornerstone Investo rs or their close associates will not, by virtue of their cornerstone
investments, have any Board representation in our Company; and none of the Cornerstone Investors
and their close associates will become a substa ntial Shareholder of the Company. Other than a
guaranteed allocation of the relevant Offer Shares a t the final Offer Price, the Cornerstone Investors
do not have any preferential rights under each of their respective Cornerstone Investment
Agreements, as compared with other public Sh areholders. There are no side arrangements or
agreements between the Company and the Cornersto ne Investors or any benefit, direct or indirect,
conferred on the Cornerstone Investors by virtu eo fo ri nr e l a t i o nt ot h eL i s t i n g ,o t h e rt h a na
guaranteed allocation of the relevant Offer Shares at the final Offer Price, following the principles
as set out in Chapter 4.15 of the Guide for New Listing Applicants.
To the best knowledge and belief of the Compan y, each of the Cornerstone Investors and its
ultimate beneficial owners is (i) not accustom ed to take instructions from the Company or any of
our Directors, Supervisors, chief executive, our C ontrolling 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 dispos ition of the Shares registered in their name or
otherwise held by them; (ii) not financed by the C ompany or any of our Directors, Supervisors,
CORNERSTONE INVESTORS
– 268 –


--- page 279 ---
chief executive of our Company, our Controlling Sha reholders, substantial Shareholders, existing
Shareholders or any of its subsidiaries or their res pective close associates; and (iii) independent of
the other Cornerstone Investors, the Group, our co nnected persons and their respective associates,
and is not an existing Shareholder or a close associate of the Group. In addition, to the best
knowledge of the Company, each of the Cornerstone Investors is independent from each other and
makes independent investment decisions.
To the best knowledge of the Overall Coordinators and based on the indicative interest of
investment of the Cornerstone Investors and/or their close associates as of the date of this
Prospectus, certain Cornerstone Investors and/o r their close associates may participate in the
International Offering as placees and subscribe f or further Offer Shares in the Global Offering,
subject to the consent of the Hong Kong Stock Exc hange and without obtaining any preferential
treatment. The Company will seek the Hong Kong Stock Exchange ’s consent and/or waiver to allow
the Cornerstone Investors and/or their close assoc iates to participate in the International Offering as
placees pursuant to Chapter 4.15 of the Guid e for New Listing Applicants. Whether such
Cornerstone Investors and/or their associates will place orders in the International Offering and the
allocation to such investors as placees in the Inter national Offering are uncertain and will be subject
to the final investment decisions of such inves tors and the terms and conditions of the Global
Offering.
As confirmed by each of the Cornerstone Invest ors, its subscription under the Cornerstone
Placing would be financed by its own internal fina ncial resources, financial resources of its
shareholders or the assets managed for its investors (in the case of Cornerstone Investors which are
funds or investment managers) and it has sufficient funds to settle its respective investment under
the Cornerstone Placing. Each of the Cornerstone Investors has confirmed that all necessary
approvals have been obtained with respect to the Cornerstone Placing and that no specific approval
from any stock exchange (if relevant) is required for the relevant Cornerstone Placing.
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed before dealings in the Company ’s H Shares commence on the Hong Kong Stock
Exchange. Some of the Cornerstone Investors have agreed that, the Company, the Sole Sponsor and
the Overall Coordinators may in their sole discretion defer the delivery of all or part of the Offer
Shares it will subscribe to on a date later than the Listing Date. Such delaye d delivery arrangement
is in place to facilitate the over-allocation in the In ternational Offering. There will be no delayed
delivery if there is no over-alloc ation in the International Offering. Where delayed delivery takes
place, (i) there would be delayed delivery of Offer Shares to some of the Cornerstone Investors
based on commercial negotiations with the Corner stone Investors, (ii) the delayed delivery date
should be no later than three business days follo wing the last day on which the Over-allotment
Option may be exercised, (iii) no extra payment wi ll be made to the relevant Cornerstone Investors
for the purpose of the delayed delivery arrangeme nt, and (iv) each of the Cor nerstone Investors has
agreed that it shall nevertheless pay for the rele vant Offer Shares in full before the Listing. As
such, there will not be any deferred settlement in payment by the Cornerstone Investors.
CORNERSTONE INVESTORS
– 269 –


--- page 280 ---
The total number of Offer Shares to be subscribed by the Cornerstone Investors may be
affected by reallocation of the Offer Shares betw een the International Offering and the Hong Kong
Public Offering. If the total demand for H Shares in the Hong Kong Public Offering falls within the
circumstance as set out in the section headed ‘‘Structure of the Global Offering — The Hong Kong
Public Offering — Reallocation ’’ in this Prospectus, the Company and the Overall Coordinators
have the absolute discretion, but not obliged, to d educt the number of Offer Shares to be subscribed
by the Cornerstone Investors on a pro rata basis under the Hong Kong Public Offering pursuant to
Practice Note 18 of the Hong Kong Listing Rules. Details of the actual number of Offer Shares to
be allocated to the Cornerstone Investors will be d isclosed in the allotment results announcement of
the Company to be published on or around Tuesday, July 8, 2025.
THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Assuming an Offer Price of HK$17.38 per H Share
(being the low-end of the Offer Price range)
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Cornerstone Investor
Subscription
amount
Number of
Offer Shares (1)
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
(USD in
millions)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Green Better Limited
(‘‘Green Better ’’) . 10 4,516,600 1.72% 0.09% 1.50% 0.09% 1.50% 0.09% 1.30% 0.08%
Olympic Country
Company Limited
(‘‘Olympic
Country ’’) . . . . . 10 4,516,600 1.72% 0.09% 1.50% 0.09% 1.50% 0.09% 1.30% 0.08%
UBS Asset
Management
(Singapore) Ltd.
(‘‘UBS AM
Singapore ’’) . . . . 50 22,583,600 8.61% 0.43% 7.49% 0.43% 7.49% 0.43% 6.51% 0.42%
Oaktree Capital
Management, L.P.
(‘‘Oaktree ’’) . . . . 25 11,291,800 4.31% 0.22% 3.74% 0.21% 3.74% 0.21% 3.26% 0.21%
LMR Multi-Strategy
Master Fund
Limited ( ‘‘LMR ’’) . 30 13,550,200 5.17% 0.26% 4.49% 0.26% 4.49% 0.26% 3.91% 0.25%
Redwood Elite Limited
(‘‘Redwood ’’) . . . 6 2,710,000 1.03% 0.05% 0.90% 0.05% 0.90% 0.05% 0.78% 0.05%
QRT Master Fund SPC
(‘‘QRT ’’) . . . . . . 20 9,033,400 3.44% 0.17% 3.00% 0.17% 3.00% 0.17% 2.60% 0.17%
Poly Platinum
Enterprise Limited
(‘‘Poly
Platinum ’’) . . . . . 15 6,775,000 2.58% 0.13% 2.25% 0.13% 2.25% 0.13% 1.95% 0.13%
Infini Global Master
Fund ( ‘‘Infini ’’) . . 15 6,775,000 2.58% 0.13% 2.25% 0.13% 2.25% 0.13% 1.95% 0.13%
Verition Multi-Strategy
Master Fund Ltd.
(‘‘Verition ’’) . . . . 10 4,516,600 1.72% 0.09% 1.50% 0.09% 1.50% 0.09% 1.30% 0.08%
CORNERSTONE INVESTORS
– 270 –


--- page 281 ---
Assuming an Offer Price of HK$17.78 per H Share
(being the mid-point of the Offer Price range)
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Cornerstone Investor
Subscription
amount
Number of
Offer Shares (1)
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
(USD in
millions)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Green Better . . . . . . 10 4,415,000 1.68% 0.08% 1.46% 0.08% 1.46% 0.08% 1.27% 0.08%
Olympic Country . . . . 10 4,415,000 1.68% 0.08% 1.46% 0.08% 1.46% 0.08% 1.27% 0.08%
UBS AM Singapore . . 50 22,075,600 8.42% 0.42% 7.32% 0.42% 7.32% 0.42% 6.36% 0.41%
Oaktree . . . . . . . . . 25 11,037,800 4.21% 0.21% 3.66% 0.21% 3.66% 0.21% 3.18% 0.21%
LMR . . . . . . . . . . . 30 13,245,200 5.05% 0.25% 4.39% 0.25% 4.39% 0.25% 3.82% 0.25%
Redwood . . . . . . . . 6 2,649,000 1.01% 0.05% 0.88% 0.05% 0.88% 0.05% 0.76% 0.05%
QRT . . . . . . . . . . . 20 8,830,200 3.37% 0.17% 2.93% 0.17% 2.93% 0.17% 2.55% 0.17%
Poly Platinum . . . . . . 15 6,622,600 2.53% 0.13% 2.20% 0.13% 2.20% 0.13% 1.91% 0.12%
Infini . . . . . . . . . . . 15 6,622,600 2.53% 0.13% 2.20% 0.13% 2.20% 0.13% 1.91% 0.12%
Verition . . . . . . . . . 10 4,415,000 1.68% 0.08% 1.46% 0.08% 1.46% 0.08% 1.27% 0.08%
Assuming an Offer Price of HK$18.18 per H Share
(being the high-end of the Offer Price range)
Assuming the Offer Size Adjustment Option
is not exercised
Assuming the Offer Size Adjustment Option
is exercised in full
Cornerstone Investor
Subscription
amount
Number of
Offer Shares
(1)
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
Assuming
the Over-allotment Option
is not exercised
Assuming
the Over-allotment Option
is exercised in full
(USD in
millions)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Green Better . . . . . . 10 4,317,800 1.65% 0.08% 1.43% 0.08% 1.43% 0.08% 1.24% 0.08%
Olympic Country . . . . 10 4,317,800 1.65% 0.08% 1.43% 0.08% 1.43% 0.08% 1.24% 0.08%
UBS AM Singapore . . 50 21,589,800 8.23% 0.41% 7.16% 0.41% 7.16% 0.41% 6.22% 0.41%
Oaktree . . . . . . . . . 25 10,794,800 4.12% 0.21% 3.58% 0.20% 3.58% 0.20% 3.11% 0.20%
LMR . . . . . . . . . . . 30 12,953,800 4.94% 0.25% 4.30% 0.25% 4.30% 0.25% 3.73% 0.24%
Redwood . . . . . . . . 6 2,590,600 0.99% 0.05% 0.86% 0.05% 0.86% 0.05% 0.75% 0.05%
QRT . . . . . . . . . . . 20 8,635,800 3.29% 0.16% 2.86% 0.16% 2.86% 0.16% 2.49% 0.16%
Poly Platinum . . . . . . 15 6,476,800 2.47% 0.12% 2.15% 0.12% 2.15% 0.12% 1.87% 0.12%
Infini . . . . . . . . . . . 15 6,476,800 2.47% 0.12% 2.15% 0.12% 2.15% 0.12% 1.87% 0.12%
Verition . . . . . . . . . 10 4,317,800 1.65% 0.08% 1.43% 0.08% 1.43% 0.08% 1.24% 0.08%
Note:
(1) Subject to rounding down to the nearest whole board lot of 200 Offer Shares. Calculated based on the
exchange rate set out in the section headed ‘‘Information about This Prospectus and the Global Offering —
Exchange Rate Conversion. ’’
The information about the Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
CORNERSTONE INVESTORS
– 271 –


--- page 282 ---
Green Better
Green Better Limited ( ‘‘Green Better ’’) is an investment company incorporated in the British
Virgin Islands. Green Better is a wholly-owned subs idiary of Xiaomi Corporation, a company listed
on the Stock Exchange (stock code: 1810). Xiaomi Corporation is an investment holding company
principally engaged in the resea rch, development and sales of smartphones, Internet of things and
lifestyle products, the provision of Internet serv ices, the development, manufacturing and sales of
smart electric vehicles and investment busi ness in China and other countries or regions.
Olympic Country
Olympic Country Company Limited is registered in Hong Kong. Its parent company is
Olympic Circuit Technology Co., Ltd. (stock code: 603920.SH, a company listed on the Shanghai
Stock Exchange) ( ‘‘Olympic Circuit ’’). The controlling shareholder of Olympic Circuit is
Guangdong Shunde Holding Group Co., Ltd., and the ultimate controlling entity of Olympic
Circuit is the State-owned Assets Supervision and Administration Bureau of Shunde District,
Foshan City. Olympic Circuit specializes in the R&D, production, and sales of various types of
printed circuit boards (PCBs), which are widely used in automotive electronics, artificial
intelligence (AI), high-end consumer electronics, w ind power generation, photovoltaic (PV), energy
storage, humanoid robots, low-altitude aircraft, A I smart glasses, computers, and related equipment.
The company has become one of the leading enterprises in China ’sP C Bi n d u s t r y .
UBS AM SINGAPORE
UBS Asset Management (Singapore) Ltd. ( ‘‘UBS AM Singapore ’’), a company incorporated
in Singapore in December 1993, has entered into a cornerstone investment agreement with the
Company and the Joint Sponsors, in its capacity as the delegate of the investment manager for and
on behalf of the following fund(s): (i) UBS (Lux) Equity Fund — Greater China (USD); (ii) UBS
(Lux) Equity Fund — China Opportunity (USD); (iii) UBS (HK) Fund Series — China Opportunity
Equity (USD); (iv) UBS (Lux) Equity SICAV — All China (USD); (v) U BS (Lux) Investment
SICAV — China A Opportunity (USD); (vi) UBS (CAY) China A Opportunity; (vii) UBS (Lux)
Key Selection SICAV — China Allocation Opportunity (USD); and (viii) certain other segregated
accounts and mandates.
UBS AM Singapore is a wholly-owned subsidiary of UBS Asset Management AG, an
investment management company, which is who lly ultimately owned by UBS Group AG, which is a
company organized under Swiss law as a corpora tion that has issued shares of common stock to
investors. UBS Group AG ’s shares are listed on the SIX Swiss Exchange (stock code: UBSG) and
the New York Stock Exchange (stock code: UBS). No single ultimate beneficial owner holds 30%
or more interests in those funds.
Oaktree
Oaktree Capital Management, L.P. ( ‘‘Oaktree ’’) is the investment manager of Oaktree
Emerging Markets Equity Fund, L.P. and certain sep arately managed accounts within its Emerging
Markets Equity strategy (sever ally and not jointly) (each, an ‘‘Oaktree Fund ,’’ and collectively the
CORNERSTONE INVESTORS
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‘‘Oaktree Funds ’’). Oaktree Emerging Markets Equity Fund, L.P. had more than 50 limited
partners as of March 31, 2025, and no limited partner of Oaktree Emerging Markets Equity Fund,
L.P. holds 30% or more interests in Oaktree Emerging Markets Equity Fund, L.P. as of March 31,
2025, while the other Oaktree Funds are separately managed accounts or seed portfolio of Oaktree.
Oaktree is a Delaware limited partnership and is registered as an investment adviser with the United
States Securities and Exchange Commission. Oak tree is a global investment management firm
managing a broad array of complementary strategies in four asset classes: credit, private equity, real
assets and listed equities, and maintains a cont rarian, value-oriente d investment philosophy.
Oaktree ’s investor base includes institutional investor s such as pension plans, insurance companies,
endowments, foundations and sovereign wealth funds. Brookfield Corporation, a company public
listed on the New York Stock Exchange (ticker symbol: BN) and the Toronto Stock Exchange
(ticker symbol: BN), is the only ultimate beneficia l owner that indirectly holds an economic interest
of more than 30% in Oaktree as of May 1, 2025.
LMR
LMR Multi-Strategy Master Fund Limited ( ‘‘LMR Master Fund ’’) is established in the
Cayman Islands and managed by LMR Partners LLP ( ‘‘LMR Partners ,’’together with its affiliates,
‘‘LMR’’), a global multi-strategy investment firm foun ded in 2009, specializing in liquid, market-
neutral trading strategies with a focus on re lative value. LMR employs both systematic and
discretionary approaches to construct a diversified portfolio designed to generate uncorrelated
returns. LMR currently manages over US$11 bill ion in assets on behalf of a global institutional
client base. LMR has over 350 employees across offices in London, New York, Hong Kong,
Zurich, Dubai, Dublin, and Glasgow. Mr. Benjamin Levine, who is an Independent Third Party, is
the only individual that owns more than a 30% int erest in LMR Partners. There is no individual
underlying investor that has more than 30% beneficial ownership in the LMR Master Fund.
Redwood
Redwood Elite Limited ( ‘‘Redwood ’’), a company incorporated in the Cayman Islands with
limited liability and a directly wholly-owned su bsidiary and an investmen ts holding of Goldstream
Investment Limited ( ‘‘GIL’’), invests on behalf of GIL. GIL is listed on the Main Board of the
Hong Kong Stock Exchange (Stock Code: 1328.HK), of which Hony Capital Group, L.P. ( 弘毅投
資)( ‘‘Hony Capital ’’) is a controlling shareholder with more than 60% of its interests and with Mr.
Zhao John Huan, being the ultimate controlling shareholder and chairman of Hony Capital.
GIL is principally engaged in provision of (i) a dvisory services on securities and (ii) asset
management through its wholly owned subsidiary, Goldstream Capital Management Limited
(‘‘GCML ’’) a SFC licensed corporation with Type 4 (a dvising on securities) and Type 9 (Asset
Management) licenses, and strategic direct inve stment business on behalf of the group. The group
routinely conducts investments in companies with excellent reputation and business potential.
Hony Capital was founded in the early 2000s to capture investment opportunities as a private
equity platform. Through more than 20 years, Ho ny Capital has become one of the most successful
and reputable Chinese private equity firms, has invested in over 100 companies in the areas of
technology, pharmaceutical and healthcare, consum er products, food and beverage, entertainment,
CORNERSTONE INVESTORS
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environmental protection and new energy, as we ll as machinery and equipment manufacturing.
Hony Capital and its group members manage asset s on behalf of institutional clients such as
foundations, sovereign wealth funds, uni versity endowments, and family offices.
QRT
Torus Fund SP ( ‘‘Torus ’’) is a segregated portfolio of QRT Master Fund SPC, a Cayman
Islands exempted company registered as a segreg ated portfolio company. There is no beneficial
owner holding 30% or more of the shares in Torus. Torus is managed by Qube Research &
Technologies Hong Kong Limited ( ‘‘QRT HK ’’) and certain affiliates of QRT HK (collectively
‘‘QRT’’) .Q R TH Ki sac o m p a n yi n c o r p o r a t e di nH o n gK o n ga n dl i c e n s e db yt h eS F Ct oc a r r yo n
type 9 (asset management) regulated activity. QRT d eploys a diverse range of investment strategies
across geographies, asset classes and time frames, combining data, research, technology, and
trading expertise. There is no beneficial owner holding 30% or more of the shares in QRT.
Poly Platinum
Poly Platinum Enterprises Limited ( ‘‘Poly Platinum ’’) is a company incorporated in the
British Virgin Islands with limited liability and is wholly controlled by Greater Bay Area Homeland
Development Fund LP ( ‘‘GBA Fund ’’).
GBA Fund is a private fund established in t he Cayman Islands and is jointly owned by a
number of international large-scale industrial insti tutions, financial institutions and new economic
enterprises, each of which holds less than 16% equity interest therein. GBA ’s business encompasses
private equity investment to grasp the histori cal opportunities of the development of Guangdong-
Hong Kong-Macao Greater Bay Area, and the constr uction of an international innovation and
technology hub, focusing on technological innovat ion, industrial upgrading, quality of life, smart
city and all other related industries.
Both Poly Platinum and GBA Fund are manag ed by Greater Bay Area Development Fund
Management Limited ( 大灣區發展基金管理有限公司)( ‘‘GBA Development Fund ’’), a company
licensed under the SFO to conduct Type 1 (dealing in securities), Type 4 (advising on securities)
and Type 9 (asset management) regulated activi ties in Hong Kong. No single ultimate beneficial
owner holds 30% or more interests in GBA Development Fund.
Infini
Infini Global Master Fund ( ‘‘Infini ’’) is 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 Ab u Dhabi Global Market (ADGM) Financial Services
Regulatory Authority (FSRA). Infini Capital is wholly owned by Infini Capital Global, a Cayman
Island holding company and the ultimate benefi cial owner of the Infini Capital is Tony Chin, the
founder and Chief Investment Officer of Infini Capital. Save for Tony Chin, none of the other
investors hold more than 30% interest in the fund.
CORNERSTONE INVESTORS
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Verition
Verition Multi-Strategy Master Fund Ltd. is managed by Verition Fund Management LLC
(‘‘Verition ’’), an investment firm founded in 2008. Verition is a subsidiary of Verition Fund
Management NY, Inc., which owns the vast majority of Verition ’s equity. Save for Mr. Nicholas
Maounis, there is no single ultimate beneficial owner holds 30% or more interests in Verition Fund
Management NY, Inc. Verition manages a multi-strategy, multi-manager hedge fund focused on
global investment strategies including Credit, Fi xed Income & Macro, Convertible & Volatility
Arbitrage, Event-Driven, Equity Long/Short & Capital Markets Trading, and Quantitative
Strategies. As part of its investment activities, Ve rition seeks to construct a diversified portfolio
with low correlation to traditional and alternativ e asset classes and consistently attractive risk
adjusted returns. Capital is allocated dynamical ly across the strategies based on the market view
and opportunity set for each individual invest ment team. As of April 1, 2025, the assets under
management of Verition and its affiliates is ap proximately US$12.6 billion. Verition employs
approximately 700 people and has offices in New York, Greenwich, Norwalk, London, Singapore,
Hong Kong and Dubai. Verition M ulti-Strategy Master Fund Ltd. has two feeder funds, Verition
International Multi-Strategy Fund Ltd. and Ve rition Multi-Strategy Fund LLC. As of the date of
this Prospectus, there is no natural person who is an ultimate beneficial owner who owns 30% or
more of Verition Multi-Strategy Master Fund Limited.
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the underwriting agreements 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 t erms 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;
(ii) 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);
(iii) the Hong Kong Stock Exchange having granted the approval for the listing of, and
permission to deal in, the H Shares (including the H Shares under the Cornerstone
Placing) as well as other applicable waivers a nd approvals and such approval, permission
or waiver having not been revoked prior to the commencement of dealings in the H
Shares on the Hong Kong Stock Exchange;
CORNERSTONE INVESTORS
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(iv) no laws shall have been enacted or promulgated by any governmental authorities which
prohibits the consummation of the transacti ons contemplated in the Global Offering or
the respective Cornerstone Investment Agreement, and there being no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
(v) the respective agreements, representati ons, warranties, undertakings, confirmations and
acknowledgements of the Cornerstone Inve stors under the respective Cornerstone
Investment Agreement are accurate and true i n all respects and not misleading and that
there is no breach of the respective Cornerstone Investment Agreement on the part of the
relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed th at it will not, and will cause its affiliates not
to, whether directly or indirectly, at any time during the period of six months from (and inclusive
of) the Listing Date (the ‘‘Lock-up Period ’’), dispose of, in any way, any of the Offer Shares or
any interest in any company or entity holding such Offer Shares that they have purchased pursuant
to the relevant Cornerstone Investment Agreemen t, save for certain limited circumstances, such as
transfers to any of its wholly-owned subsidiari es who will be bound by the same obligations of
such Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, as of the Lates t Practicable Date and immediately following
the completion of the Global Offe ring (assuming that no other changes are made to the issued share
capital of the Company between the Latest Practicab le Date and the Listing), each of the following
persons will have an interest or short position (as applicable) in our Shares or underlying Shares
which would be required to be disclosed to our Company and the Hong Kong Stock Exchange
under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be
interested in 10% or more of the issued voting shares of our Company:
Assuming no exercise of the
Over-allotment Option or the
Offer Size Adjustment Option
Assuming full exercise of the
Over-allotment Option and the
Offer Size Adjustment Option
Name of the
substantial
Shareholder Nature of Interest
Description
of Shares
Number of
Shares directly
or indirectly
held
Approximate
percentage of
interest in the
total issued
share capital of
our Company
as of the Latest
Practicable
Date
(1)
Approximate
percentage of
shareholding in
our A Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company
Approximate
percentage of
shareholding in
our A Shares
Approximate
percentage of
interest in the
total issued
share capital of
our Company
Ms. Chau .......I n t e r e s th e l db y
controlled
corporation
(2)(3)(4)
A Shares 3,116,352,600 62.54% 62.54% 59.42% 62.54% 58.47%
Interest of spouse (5) A Shares 3,347,879 0.07% 0.07% 0.06% 0.07% 0.06%
Mr. Cheng . . . . . . Beneficial owner A Shares 3,347,879 0.07% 0.07% 0.06% 0.07% 0.06%
Interest of spouse (5) A Shares 3,116,352,600 62.54% 62.54% 59.42% 62.54% 58.47%
Lens Technology
(HK) .......
Beneficial owner (2) A Shares 2,804,509,821 56.28% 56.28% 53.47% 56.28% 52.62%
Changsha Qunxin . . Beneficial owner (3) A Shares 288,025,612 5.78% 5.78% 5.49% 5.78% 5.40%
Notes:
(1) The calculation is based on the total number of 4, 982,772,171 Shares in issue as of the Latest Practicable
Date.
(2) As of the Latest Practicable Date, Lens Technolog y (HK) held 2,804,509,821 A Shares. Lens Technology
(HK) was directly wholly owned by Ms. Chau. As such, Ms. Chau will be deemed to be interested in the A
Shares held by Lens Technology (HK) by virtue of the SFO.
(3) As of the Latest Practicable Date, Changsha Q unxin held 288,025,612 A Shares. Changsha Qunxin is a
limited liability company established in the PRC, which is owned as to 97.9% by Ms. Chau and 2.1% by Mr.
Cheng. As such, Ms. Chau is deemed to be interested in the A Shares held by Changsha Qunxin by virtue of
the SFO.
(4) As of the Latest Practicable Date, there were 23,817 ,167 A Shares repurchased and held in our Company ’s
stock repurchase account as treasury shares. Ms. Chau, directly and indirectly through Lens Technology (HK)
and Changsha Qunxin, controls more than one-third of the voting power at the general meetings of our
Company and would be taken to have an interest in such repurchased A Shares held by our Company by
virtue of the SFO.
(5) Ms. Chau is the spouse of Mr. Cheng. Therefore, each of Ms. Chau and Mr. Cheng is deemed to be interested
in the Shares held by each other under the SFO.
SUBSTANTIAL SHAREHOLDERS
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Save as disclosed above and in ‘‘Appendix IV — Statutory and Genera Information ’’ of this
Prospectus, our Directors are not aware of any per son who will, immediately following the Global
Offering (and the offering of any additional H Shares pursuant to the Over-allotment Option and the
Offer Size Adjustment Option), have an interest or short position in the Shares or underlying Shares
of our Company which would be required to be disclosed to our Company and the Hong Kong
Stock Exchange under the provisions of Division s 2 and 3 of Part XV of the SFO, or will, directly
or indirectly, be interested in 10% or more of the issued voting shares of any other members of our
Group.
SUBSTANTIAL SHAREHOLDERS
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OVERVIEW
As of the Latest Practicable Date, the equity interest of our Company was controlled directly
as to approximately 56.28% by Lens Technology (HK), 5.78% by Changsha Qunxin and 0.07% by
Mr. Cheng. 100% equity interest of Lens Technology (HK) was directly held by Ms. Chau and
Changsha Qunxin was directly held as to 97.90% by Ms. Chau and 2.10% by Mr. Cheng. Ms. Chau
and Mr. Cheng are spouses. For a simplified corp orate structure chart of our Group before the
Listing, see ‘‘History, Development and Corporate Structure. ’’
Accordingly, immediately following the completion of the Global Offering (assuming the
Over-allotment Option and the Offer Size Adj ustment Option are not exercised), Ms. Chau,
Mr. Cheng, Lens Technology (HK) and Changsha Qu nxin will control in aggregate approximately
59.03% of the total issued share capital of our Company and be entitled to exercise more than 30%
of the voting power at Shareholders ’ general meetings of our Company. As such, Ms. Chau, Mr.
Cheng, Lens Technology (HK) and Changsha Q unxin will together constitute a group of
Controlling Shareholders upon Listin gu n d e rt h eH o n gK o n gL i s t i n gR u l e s .
CLEAR BUSINESS DELINEATION
Our Business
We are an industry-leading integrated one-sto p precision manufacturing solution provider. We
are focused on technological innovation and em powered by smart manufacturing. In terms of
revenue in 2024, we are a global leading player in pre cision structural parts a nd modules integrated
solutions for both consumer electronics and sma rt vehicles interaction systems. We have
accumulated strong expertise and capabilities in consumer electr onics and smart vehicles, with
robust and comprehensive platform-based capabi lities that include talent, technology, supply and
smart manufacturing.
The Business of Our Controlling Shareholders
Lens Technology (HK) is an investment holding company incorporated under the laws of
Hong Kong and Changsha Qunxin is an investment holding company incorporated under the laws
of the PRC.
Each of our Controlling Shareholders confirms th at, as of the Latest Practicable Date, she/he/it
did not have any interest in a business, apart fro m the business of our Group, which competes or is
likely to compete, directly or indi rectly, with our business that would require disclosure under Rule
8.10 of the Hong Kong Listing Rules.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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NON-COMPETE UNDERTAKINGS
For the purpose of the listing of our A Shares on the Shenzhen Stock Exchange and in order
to avoid any potential competition between ou r Group and the Controlling Shareholders, the
Controlling Shareholders provided a non-competition undertaking in favor of our Company on
M a r c h2 ,2 0 1 2( t h e ‘‘Non-competition Undertaking ’’). Pursuant to the Non-competition
Undertaking, each of the Controlling Shareholders has undertaken that:
(i) the Controlling Shareholders and the companies controlled by them shall not directly or
indirectly engage in any business that c ompetes or may compete with the business
operated by the Group, nor shall they invest in any other enterprises that compete or may
compete with the business operated by the Group;
(ii) if the Controlling Shareholders and the companies controlled by them expand the scope
of their business, they shall not engage in an y business that competes with the expanded
business of the Group. If competition arises w ith the expanded business of the Group, the
Controlling Shareholders and the companies controlled by them shall avoid such
competition by either ceasing the operation o f the competing business, incorporating the
competing business into the Group ’s operations, or transferring the competing business to
an unrelated third party; and
(iii) for so long as the Controlling Shareholde rs and the companies controlled by them remain
as a related party of the Group, if the Controlling Shareholders and the companies
controlled by them fail to comply with the rel evant undertakings, they shall compensate
the Group for all direct and indirect losses and will bear the corresponding legal
responsibilities.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable of
carrying on our business independently from our Cont rolling Shareholders and their close associates
after the Listing.
Management Independence
Our business is managed and conducted by the Board and senior management of the
Company. Upon Listing, the Board will consist o f seven Directors comprising three executive
Directors and four independent non-executive Directors. For more information, see ‘‘Directors,
Supervisors and Senior Management. ’’ Our Directors consider that the Board, Supervisors and
senior management of our Company are capable of functioning independently of our Controlling
Shareholders for the following reasons:
(i) our daily management and operations are carried out by a senior management team, all of
whom have substantial experiences in the i ndustry in which our Company is engaged,
and will therefore be able to make business decisions that are in the best interest of the
Group;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(ii) each Director is aware of her/his fiduciary duties as a director which require, among
other things, that she/he must act for the benefit and in the interest of our Company and
the Shareholders as a whole, and not allow any conflict between her/his duties as a
Director and her/his personal interests;
(iii) we have four independent non-executive Directors who individually and collectively
possess requisite knowledge an d experience, and will be able t o provide professional and
experienced advice to our Company. In conclusion, the Directors believe that our
independent non-executive Directors are able to bring impartial and sound judgment to
the decision-making process of the Board an d protect the interest of our Company and
our Shareholders as a whole;
(iv) as an A-share listed company, we have form ulated and adopted a comprehensive internal
control and management system in compliance with the relevant requirements of the rules
of the Shenzhen Stock Exchange. Our Direct ors shall not vote in any Board resolution
approving any contract or arrangement or an y other proposal in which she/he or any of
her/his close associates have a material int erest and shall not be counted in the quorum
present at the particular Board meeting; and
(v) we have adopted a series of corporate gov ernance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders which would
support our independent management. See ‘‘ — Corporate Governance Measures ’’ in this
section for further information.
Based on the above, our Directors are satisfied that they are able to perform their managerial
roles in our Company independently, and our Di rectors are of the view that we are capable of
managing our business independently from the Controlling Shareholders after the Listing.
Operational Independence
We have full rights to make business decisions and to carry out our business independently
from our Controlling Shareholders. On the basis o f the following reasons, our Directors consider
that our Company will continue to be operationally independent from our Controlling Shareholders
and their respective close associates after the Listing:
(i) we have sufficient capital , facilities, equipment and employees to operate our business
independently from our Controlling Shareholders;
(ii) we have independent access to our customers and suppliers;
(iii) we have our own administrative and corpor ate governance infrastructure, including our
own accounting, legal and human resources departments; and
(iv) none of our Controlling Shareholders have any interests in any bus iness which competes
or is likely to compete with the business of our Group.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 292 ---
Based on the above, our Directors believe that we are able to operate independently from our
Controlling Shareholders.
Financial Independence
We have independent internal control and accounting systems. We also have an independent
finance department responsible for discharging t he financial management, accounting, reporting and
funding functions of our Group. We are capable of obtaining financing from third parties, if
necessary, without reliance on our Controlling Shareholders.
As of the Latest Practicable Date, we did not have any outstanding loans granted or
guaranteed by any of our Controlling Shareholders to us.
Based on the above, our Directors are of the view that we are capable of carrying on our
business independently from, and do not place u ndue reliance on, our Controlling Shareholders
after the Listing.
CORPORATE GOVERNANCE MEASURES
Our Company and Directors recognize the import ance of protecting the rights and interests of
all Shareholders, including the rights and interests of our minority Shareholders.
We have adopted, among others, the following measures to ensure good corporate governance
standards and to avoid potential conflicts of in terest between our Group and our Controlling
Shareholders:
(i) where a Shareholders ’ meeting is to be held for considering proposed transactions in
which our Controlling Shareholders have a mat erial interest, the relevant Controlling
Shareholders will not vote on the relevant resolutions;
(ii) our Company has established internal control mechanisms to identify connected
transactions and related party transactions. Upon the Listing, if our Company enters into
connected transactions or related party transa ctions with our Controlling Shareholders or
any of their associates, our Company will comply with the applicable laws and
regulations, including the Hong Kong Listing Rules;
(iii) the independent non-executive Director s will review, on an annual basis, whether there
are any conflicts of interests between the Group and our Controlling Shareholders and
provide impartial and professional advic e to protect the interests of our minority
Shareholders;
(iv) our Company will disclose decisions on matters reviewed by the independent non-
executive Directors either in its annual reports or by way of announcements as required
by applicable laws and regulations, i ncluding the Hong Kong Listing Rules;
(v) where our Directors reasonably request the advice of independent professionals, such as
financial advisors, the appointment of such independent professionals will be made at our
Company ’se x p e n s e ;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 293 ---
(vi) we have appointed Gram Capital Limited as our Compliance Advisor to provide advice
and guidance to us in respect of compliance wi th the applicable laws and regulations, as
well as the Hong Kong Listing Rules, including various requirements relating to
corporate governance; and
(vii) we have established the Audit Committee, the Nomination Committ ee, the Remuneration
and Appraisal Committee and the Strategy Co mmittee with written terms of reference in
compliance with the Hong Kong Listing Rules and the Corporate Governance Code in
Appendix C1 to the Hong Kong Listing Rules (where applicable).
Based on the above, our Directors are satisfied that sufficient corporate governance measures
have been put in place to manage conflicts of interest that may arise between our Group and our
Controlling Shareholders, and to protect our minority Shareholders ’ interests after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 294 ---
OVERVIEW
Our Board consists of seven Directors, comprising three executive Directors and four
independent non-executive Directors. Our Directors are appointed for a term of three years and are
eligible for re-election upon expiry of their term of office. The independent non-executive Directors
shall not hold office for more than six consecutive years pursuant to the relevant PRC laws and
regulations.
Our Supervisory Committee consists of th ree Supervisors including one employee
representative Supervisor. Our Supervisors are el ected for a term of three years and are eligible for
re-election.
DIRECTORS
The following table sets forth the information about the Directors:
Name Age Position Responsibilities
Date of
appointment
as a Director
Time of joining
the Group
Ms. Chau Kwan
Fei ( 周群飛)..
54 Executive Director,
chairman of the Board
and general manager
Responsible for the
strategy planning and
the overall operation
and management of
the Group
June 18, 2011 December 2006
Mr. Cheng Chun
Lung
(鄭俊龍) ....
52 Executive Director and
vice chairman of the
Board
Responsible for the
marketing and
procurement of the
Group
June 18, 2011 December 2006
Mr. Rao Qiaobing
(饒橋兵) ....
54 Executive Director and
deputy general
manager
Responsible for the
management of
production and
operation of the
Group
July 31, 2021 December 2006
Ms. Wan Wei
(萬煒)......
52 Independent non-
executive Director
Supervising and
providing independent
judgment to the Board
July 31, 2021 July 2021
Mr. Liu Yue
(劉岳)......
50 Independent non-
executive Director
Supervising and
providing independent
judgment to the Board
July 31, 2021 July 2021
Mr. Tian Hong
(田宏)......
63 Independent non-
executive Director
Supervising and
providing independent
judgment to the Board
January 21, 2025 January 2025
Mr. Xie Zhiming
(謝志明) ....
52 Independent non-
executive Director
Supervising and
providing independent
judgment to the Board
January 21, 2025 January 2025
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Executive Directors
M s .C h a uK w a nF e i( 周群飛), aged 54, the co-founder of the Company, has been the
chairman of the Board and the general manag er of the Company since June 2011, and was
redesignated as an executive Director in March 2025 with effect from the Listing Date. Ms. Chau is
fully responsible for the development strategy p lanning and overall operation and management of
the Company.
Ms. Chau founded the Group in December 2006 and held directorship or general manager
positions in various subsidiaries of the Group, incl uding a supervisor of Lens Shenzhen, a director
of Lens International, the chairman of the board of Lens Taizhou, the chairman of the board and
general manager of Lens Changsha and the chai rman of the board of Lens New Energy Company
Limited* ( 藍思新能源有限公司). Ms. Chau has also served as a dir ector of Changsha Intelligent
Robot Research Institute Company Limited* ( 長沙智能機器人研究院有限公司) since March 2016;
an executive director of Changs ha Qunxin since 2017; a director of Qunxin Investment Company
Limited* ( 群欣投資有限公司) since May 2017; and served as a director of Lens Technology (HK).
Ms. Chau is the spouse of Mr. Cheng, one of our executive Directors.
Mr. Cheng Chun Lung ( 鄭俊龍), aged 52, the co-founder of the Company, was the vice
chairman of the Board and the deputy general manager of the Company from June 2011 to July
2021, has been the vice chairman of the Board since July 2021, and was redesignated as an
executive Director in March 2025 with effect fro m the Listing Date. Mr. Cheng is primarily
responsible for the marketing and procurement of the Group.
Mr. Cheng founded the Group in December 2006, and held directorship or general manager
positions in various subsidiaries of the Group, including an executive director of Lens Shenzhen,
and a director of Lens Xiangtan, Lens Changsh a, etc. Mr. Cheng served as a director of Lens
Technology (HK). He also served as the general manager of Changsha Qunxin from January 2021
to January 2025.
Mr. Cheng is the spouse of Ms. Chau, one of our executive Directors.
Mr. Rao Qiaobing ( 饒橋兵), aged 54, has been the deputy general manager of the Company
since June 2011, a Director and a deputy general manager of the Company since July 2021, and
was redesignated as an executi ve Director in March 2025 with effect from the Listing Date. Mr.
Rao is primarily responsible for the management of production and operation of the Group.
Mr. Rao joined the Group in December 2006 and held various positions in the Group. Mr. Rao
served as an executive director and the factory m anager of Huizhou Gaokeda Photonics Company
Limited* ( 惠州市高科達光電有限公司) from 2001 to 2005, the chief engineer and factory manager
of Shenzhen Keda Photonics Company Limited* ( 深圳市科達光電有限公司) from 1997 to 2000,
the factory manager of production technology of Aoya Optics Company Limited* ( 澳亞光學有限公
司) from 1994 to 1996; and a technologist of Shenzhen Dechang Electric Machinery Corporation*
(深圳市德昌電機公司) from 1992 to 1994.
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Independent Non-executive Directors
Ms. Wan Wei ( 萬煒), aged 52, has been an independent Director since July 2021, and was
redesignated as an independent non-executive Director in March 2025 with effect from the Listing
Date. Ms. Wan is primarily responsible for supe rvising and providing independent judgment to the
Board.
Ms. Wan has served as an associate professor of Business School of Hunan University since
December 2019, and a lecturer in the marketing de partment of Hunan University since June 2004.
From July 1994 to July 2001, Ms. Wan served at Hunan Pharmaceutical and Health Products
Import and Export Corporation* ( 湖南省醫藥保健品進出口公司).
Ms. Wan obtained a doctor ’s degree in corporate management from Hunan University in
December 2013, a master ’s degree in international business administration from Sun Yat-sen
University in June 2003, and a bachelor ’s degree in electromagnetic measurement and
instrumentation from Hunan University in July 1994. In April 2013, Ms. Wan was awarded the
KAB Entrepreneurship Education (China) Project Lecturer qualification by the All-China Youth
Federation ( 中華全國青年聯合會), the All-China Students Federation ( 中華全國學生聯合會), and
the International Labour Organization.
Mr. Liu Yue ( 劉岳), aged 50, has been an independent Director since July 2021, and was
redesignated as an independent non-executive Director in March 2025 with effect from the Listing
Date. Mr. Liu is primarily responsible for superv ising and providing independent judgement to the
Board.
Mr. Liu has been a senior partner of Hunan Jinzhou Law Firm* ( 湖南金州律師事務所)s i n c e
March 2013 and has served as an arbitrato ro fC h a n g s h aA r b i t r a t i o nC o m m i s s i o n(長沙仲裁委員
會), a researcher of Human Resources Research Cent er of Central South University, an off-campus
master tutor of Hunan University, Law School of Changsha University of Science & Technology
(長沙理工大
學), and Hunan University of Technology and Business ( 湖南工商大學), and the
expert of the Changsha Social Sciences Think Tank ( 長沙社科智庫). In March 2007, he established
Hunan Herun Law Firm* ( 湖南和潤律師事務所) as a director. He also served as the deputy
director of the Publicity Section of Changsha Municipal Justice Bureau and the deputy director as
well as the director of Changsha 148 Legal Se rvices Co-ordination and Command Centre ( 長沙市
148法律服務協調指揮中心) from July 2000 to February 2007; and the secretary of Changsha
Xinye Industrial Corporation* ( 長沙新業實業公司) from November 1993 to December 1996.
Mr. Liu was qualified as a PRC lawyer by the Ministry of Justice of the PRC.
Mr. Tian Hong ( 田宏), aged 63, has been an independent Director since January 2025, and
was redesignated as an independent non-execu tive Director in March 2025 with effect from the
Listing Date. Mr. Tian is primarily responsible f or overseeing and providing independent judgment
to the Board.
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Mr. Tian has served as an independent director of Broadex Technologies Co., Ltd.* ( 博創科技
股份有限公司) (SZSE: 300548.SZ) since May 2023 and the director of the International Center of
Science and Innovation in the Gua ngdong-Hong Kong-Macao Great Bay Area ( 粵港澳大灣區國家
技術創新中心) from October 2022 to July 2024. From February 1996 to September 2022, he served
positions such as the general manager of the China HQ of TDK (Tokyo Denki Kagaku Kogyo K.K)
(TSE: 6762.T), the president, chairman of the board and CEO of SAE Magnetics (HK) Ltd. (a
wholly-owned subsidiary of TDK), and the general manager of TDK ’s micro-actuator business
department. He served as a senior hardware integration engineer at Conner Peripherals from
December 1993 to December 1995 and a research an d development engineer at Hoya Electronics in
the U.S. from October 1990 to November 1993.
Mr. Tian obtained a doctor ’s degree from the Massachuset ts Institute of Technology ( ‘‘MIT’’)
in the U.S. in September 1990, a master ’s degree from MIT in February 1987, and a bachelor ’s
degree from Tsinghua University in July 1983.
Mr. Xie Zhiming ( 謝志明), aged 52, has been an independent Director since January 2025,
and was redesignated as an independent non-executive Director in March 2025 with effect from the
Listing Date. Mr. Xie is primarily responsible fo r overseeing and providing independent judgment
to the Board.
Mr. Xie has served as an independent director of Zhuzhou Gofront Equipment Co., Ltd.*
(株洲九方裝備股份有限公司) (NEEQ: 874132.NQ). From 2015, he served as a consulting expert
on managerial accounting of Hunan Provincial Dep artment of Finance, a c onsulting expert of the
Finance Committee of Hunan Provincial People ’s Congress, a project assessment expert of
Department of Science and Technology of Hunan P rovince, and an peer assessment expert of the
Zhejiang Provincial Natural Science Foundation of China ( 浙江省自然科學基金). Since 2003, Mr.
Xie has successively served as an associate professor, director of the MBA Centre and a professor
at the School of Economics & Management at Cha ngsha University of Science and Technology ( 長
沙理工
大學).
Mr. Xie obtained a doctor ’sd e g r e ea n dam a s t e r’s degree in accounting from Central South
University located in Hunan Pro vince, the PRC in June 2012 and December 2004, respectively, and
ab a c h e l o r’s degree in accounting from Zhejiang Business School* ( 杭州商學院) (currently known
as Zhejiang Gongshang University ( 浙江工商大學)) in July 1995. Mr. Xie was awarded the
professorship in accounting by the Human Resources and Social Security Department of Hunan
Province in November 2016 and obtained the qualif ication of a PRC Certified Public Accountant
from the Certified Public Accountant Examination Committee of the MOF in May 2001.
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SUPERVISORS
The following table sets forth the information about the Supervisors.
Name Age Position Responsibilities
Date of
appointment
as a Supervisor
Time of joining
the Group
Mr. Tang Jun
(唐軍)......
46 Chairman of the
Supervisory
Committee
Responsible for
monitoring the
performance of the
Directors and senior
management
August 30, 2019 April 2009
Mr. Chen
Xiaoqun
(陳小群) ....
43 Shareholder
representative
Supervisor
Responsible for
monitoring the
performance of the
Directors and senior
management
June 18, 2011 December 2006
Ms. Zhou Xinyi
(周新益) ....
54 Employee
representative
Supervisor
Responsible for
monitoring the
performance of the
Directors and senior
management
July 31, 2021 December 2006
Mr. Tang Jun ( 唐軍), aged 46, is the chairman of our Supervisory Committee. Mr. Tang is
primarily responsible for monitoring the perfo rmance of the Directors and senior management.
Mr. Tang joined the Group in April 2009. Since 2011, Mr. Tang has been serving as a senior
director and deputy general manager of the Group ’s Business Management Department, a deputy
general manager of the Group ’s Commerce Department and a direc tor of Lens Taizhou, a subsidiary
of the Company. From 2009 to 2011, Mr. Tang was the finance manager and chief financial officer
of Lens Technology (Hunan) Company Limited* ( 藍思科技(湖南)有限公司), the predecessor of the
Company. From 2003 to 2009, Mr. Tang served at Shenzhen Futaihong Precision Industry
Company Limited* ( 深圳富泰宏精密工業有限公司) in Guangdong Province.
Mr. Tang obtained a bachelor ’s degree in accounting in July 2003 from Shaanxi University of
Science & Technology ( 陝西科技大學).
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Mr. Chen Xiaoqun ( 陳小群), aged 43, is our shareholder representative Supervisor. Mr. Chen
is primarily responsible for monitoring the performance of the Directors and senior management.
Mr. Chen joined the Group in December 2006. Mr . Chen has been serving as the director and
vice director of the Research and Development Dep artment of the Group since December 2006; and
a director of Changsha Lens New Materials Company Limited* ( 長沙藍思新材料有限公司), a
subsidiary of the Company since October 2018. Mr. Chen served as the deputy general manager
and chief technology officer of the Company from July 2021 to January 2025, a Supervisor from
June 2011 to July 2021, and concurrently a supervisor of Changsha Qunxin from March 2011 to
July 2017. Prior to joining the Group, Mr. Chen worked as an assistant engineer in Flextronics
Manufacturing (Zhuhai) Company Limited* ( 偉創力(珠海)有限公司) in Guangdong Province from
May 2005 to March 2006, and a technologist in Zh uhai Feitianli Concrete Company Limited* ( 珠海
飛天利商品混凝土有限公司) in Guangdong Province from August 2004 to May 2005.
Mr. Chen obtained a bachelor ’s degree in inorganic non-metallic materials engineering from
Hunan University of Science and Technology ( 湖南科技大學) in June 2004.
Ms. Zhou Xinyi ( 周新益), aged 54, is our employee representative Supervisor. Ms. Zhou
Xinyi is primarily responsible for monitorin g the performance of the Directors and senior
management.
Ms. Zhou Xinyi joined the Group in December 2006 and has held multiple positions,
including Director. Since July 2021, Ms. Zhou Xi nyi has served as a Supervisor and a supervisor of
Lens Wang Technology (Shenzhen) Company Limited* ( 藍思旺科技(深圳)有限公司)( ‘‘Lens
Wang Technology ’’), a subsidiary of the Company. She served as the production manager of Lens
Wang Technology from 2006 to 2009; and the production manager of Lens Shenzhen from 2003 to
2005.
Ms. Zhou Xinyi obtained a junior college degre e in business administration from the Open
University of China ( 國家開放大學) located in Beijing, the PRC in January 2017.
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SENIOR MANAGEMENT
The following table sets forth the information about the senior management of the Company:
Name Age Position Responsibilities
Date of
appointment
as senior
management
Time of joining
the Group
Ms. Chau
Kwan Fei
(周群飛) ....
54 Executive Director,
chairman of the Board
and general manager
Responsible for the
strategy planning and
the overall operation
and management of
the Group
June 18, 2011 December 2006
Mr. Rao Qiaobing
(饒橋兵) ....
54 Executive Director and
deputy general
manager
Responsible for the
management of
production and
operation of the
Group
June 18, 2011 December 2006
Mr. Jiang Nan
(江南)......
50 Deputy general manager,
president of China
region and Board
Secretary
Responsible for the
external investment,
new business
development and
public relations
management of the
Group
April 21, 2023 September 2021
Mr. Liu Shuguang
(劉曙光) ....
51 Deputy general manager
and chief financial
officer
Responsible for the
financial operations of
the Group
June 18, 2011 October 2010
Mr. Cai Xinfeng
(蔡新鋒) ....
50 Deputy general manager Responsible for the
industrial engineering
and new product
introduction of the
Group
July 31, 2021 February 2011
Mr. Chen Yunhua
(陳運華) ....
37 Deputy general manager Responsible for the
smart manufacturing
planning and
implementation of the
Group
July 31, 2021 December 2010
For the biographical details of Ms. Cha u and Mr. Rao Qiaobing, please refer to ‘‘ —
Directors ’’above.
Mr. Jiang Nan ( 江南), aged 50, serves as a deputy general manager, the president of China
region, the secretary to the Board and a joint co mpany secretary of the Company. Mr. Jiang is
primarily responsible for the Group ’s external investments, new business development, and public
relations management.
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Mr. Jiang joined the Group in September 2021. Since September 2021, Mr. Jiang has been the
vice chairman of Hunan Lens N ew Energy Company Limited* ( 湖南藍思新能源有限公司), a
subsidiary of the Company; from March 2021 to September 2021, he served as the president of
China region and chief strategy officer of Guan gdong Lingyi iTECH Manufacturing Co., Ltd.* ( 廣
東領益智造股份有限公司) (SZSE: 002600.SZ); from February 2019 to March 2021, he served as
the senior vice president of public relations department of AAC Technologies Holdings Inc.
(HKEX: 2018.HK); from April 2016 to March 2018, he served as the vice president at Jumei
International Holding Limited; and from August 1996 to March 2016, he held successive roles
including secretary of the General Office of the Ministry of Foreign Trade and Economic
Cooperation and director of the Industrial Products Division, Market Division, and Comprehensive
Division of the Foreign Trade Departm ent under the Ministry of Commerce.
Mr. Jiang obtained a master ’s degree of business administration from the University of
International Business and Economics located in Beijing, the PRC in June 2002.
Mr. Liu Shuguang ( 劉曙光), aged 51, serves as a deputy general manager and chief financial
officer of the Company. Mr. Liu is primarily responsible for the Group ’s financial operations.
Mr. Liu joined the Group in October 2010. Since April 2023, Mr. Liu has served as a
supervisor of Changsha Yongping Investment Consulting Company Limited* ( 長沙永平投資諮詢有
限公司); since December 2020, he has been a direct or of Lens Taizhou, a subsidiary of the
Company; since October 2018, he has been a direct or of Changsha Lens New Materials Company
Limited* ( 長沙藍思新材料有限公司), a subsidiary of the Company; since 2017, he has been a
supervisor of Changsha Qunxin; and from 199 7 to 2010, he held successive positions as deputy
manager and manager of the finance department a t Skyworth Electrical Appliances (Shenzhen)
Company Limited* ( 新創維電器(深圳)有限公司), and assistant director of finance and deputy
director of the TV manufacturing division at Skyworth Group Limited (HKEX: 0751.HK), and the
deputy director of the finance and operation man agement department of Skyworth Group Limited.
Mr. Liu obtained a master ’s degree of business administration from Hong Kong Baptist
University in November 2009 and obtained the qualification of a PRC Public Accountant from the
MOF in May 1997.
Mr. Cai Xinfeng ( 蔡新鋒), aged 50, serves as a deputy general manager of the Company. Mr.
Cai is primarily responsible for the IE (industrial engineering), lean production, automation, molds,
jigs & fixtures, and NPI (new product introduction) of the Group.
Mr. Cai joined the Group in February 2011. From 2018 to July 2021, Mr. Cai served as the
executive deputy general manager of production operations of the Company and the director of
Liuyang Industrial Park of the Company; from 2014 to 2017, he served as a deputy general
manager of the Research and Development Department of the Company; from 2011 to 2013, he
served as the director of the Production Technology Department of the Group; from 2003 to 2011,
he served at Shenzhen Futaihong Precision Industry Company Limited* ( 深圳富泰宏精密工業有限
公司); and from 1999 to 2003, he served at Tangde Electronics (China) Co., Ltd.* ( 唐德電子(中國)
有限公司).
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Mr. Cai graduated from Shaanxi University of Technology ( 陝西工學院) in plastic forming
technology and mold design in July 1999.
In June 2022, Mr. Cai received a caution letter (the ‘‘Caution Letter ’’) from CSRC Hunan
Bureau. According to the Caution Letter, Mr. C ai disposed of 16,000 A Shares on the secondary
market in January 2022 with a total transaction amount of RMB344,800, which violated the
Measures for the Administration of Inform ation Disclosure by Listed Companies ( 《上市公司信息披
露管理辦法》) and Certain Provisions on the Disposal of Shares Held by Shareholders, Directors,
Supervisors, and Senior Management of Listed Companies ( 《上市公司股東、董監高減持股份的若
干規定》). As of the Latest Practicable Date, save for the receipt of the Caution Letter, Mr. Cai has
not been imposed any further penalties or invo lved in any other investigation, hearing or
proceeding brought or instituted by any securities r egulatory authority or stock exchange, relating
to the Caution Letter. As advised by our PRC Legal Advisor, the Caution Letter does not constitute
a major or severe administrative regulatory measure pursuant to applicable PRC laws and
regulations, and would not impair the suitability of Mr. Cai to serve as a senior management of the
Company. The Company has adopted internal control measures, including, among others,
formulating written internal policies to manage th e trading of Shares by the Directors, Supervisors
and senior management to prevent reoccurrence o f similar non-compliance, and the Company will
arrange to send notice to all Directors, Superviso rs and relevant employees to remind them of the
blackout period and the trading restrictions r equired by the Listing Rules after the Listing.
Mr. Chen Yunhua ( 陳運華), aged 37, serves as a deputy general manager of the Company.
Mr. Chen is primarily responsible for the smart manufacturing planning and implementation of the
Group.
Mr. Chen joined the Group in December 2010. Since March 2019, Mr. Chen has been serving
as the general manager of Lens System Integration, a subsidiary of the Company; from January
2011 to August 2024, he served as a director of Lens Changsha, a subsidiary of the Company; and
from December 2010 to June 2011, he served as a manager of the Company.
As of the Latest Practicable Date, (i) none of the Directors has any interest in any business
that directly or indirectly competes or is like ly to compete with the business of the Company in
accordance with Rule 8.10(2) of the Hong Kong Listing Rules; (ii) except as disclosed in the
section headed ‘‘Appendix IV — Statutory and General Information ’’ of this Prospectus, none of
the Directors, Supervisors and the chief executive officer has any interest in the Shares which is
required to be disclosed pursuant to Part XV of the SFO; (iii) except as disclosed above and that
Mr. Chen Xiaoqun, Ms. Zhou Xinyi and Mr. Chen Yunhua are relatives (as defined under the Hong
Kong Listing Rules) of Ms. Chau or Mr. Zheng, there is no relationship among any of the
Directors, Supervisors and the chief executi ve officer of the Company and other Directors,
Supervisors and chief executive officer; and (iv) except for the above disclosures, there are no other
matters in relation to the appointment of Directors or Supervisors that need to be brought to the
attention of the Shareholders, and there is no oth er information in relation to the Directors or
Supervisors that is required to be disclosed in accordance with Rule 13.51(2) of the Hong Kong
Listing Rules.
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JOINT COMPANY SECRETARY
Mr. Jiang Nan ( 江南) has been appointed as the joint company secretary of the Company.
For the biographical details of Mr. Jiang Nan, see ‘‘ — Senior Management ’’above.
Ms. Yu Wing Sze ( 余詠詩), aged 41, is one of the joint company secretaries of the Company.
She is a manager of the listing services divisio n at TMF Hong Kong Limited, a company providing
corporate accounting and corporate secretarial services in Hong Kong. She has over 15 years of
experience in company secretarial profession and has been serving as the company secretary of
several listed companies in Hong Kong.
Ms. Yu is an associate member of both The Hong Kong Chartered Governance Institute and
The Chartered Governance Institute (formerly kn own as the Institute of Chartered Secretaries and
Administrators) in the United Kingdom.
Ms. Yu received a bachelor ’s degree in business administration from the Chinese University of
Hong Kong in Hong Kong in December 2005.
BOARD COMMITTEES
The Company has established four Board co mmittees, namely the Au dit Committee, the
Nomination Committee, the Remuneration and Appr aisal Committee and the Strategy Committee in
accordance with relevant laws and regulations of the PRC, the Article of Association of the
Company and the Hong Kong Listing Rules.
Audit Committee
The Company has established the Audit Committee with written terms of reference in
compliance with Rule 3.21 of the Hong Kong Listing Rules and the Corporate Governance Code in
Appendix C1 to the Hong Kong Listing Rules. The Audit Committee is mainly responsible for
reviewing and overseeing the financial reporting procedure and internal control system of the
Group, reviewing and approving connected transa ctions and providing advice and recommendation
to the Board. The Audit Committee consists of three members, namely Mr. Xie Zhiming, Ms. Wan
Wei and Mr. Liu Yue, with Mr. Xie Zhiming serving as the chairman of the Audit Committee. Mr.
Xie Zhiming has the appropriate qualification a s required under Rules 3.10(2) and 3.21 of the Hong
Kong Listing Rules. The primary duties of the Au dit Committee include, but not limited to, the
following:
. proposing the appointment or change of external auditors to the Board, overseeing the
independence of external auditors and assessing their performance;
. examining the financial information of our Co mpany and reviewing financial reports and
statements of our Company;
. proposing change of accounting policies or accounting estimates or corrections of
significant accounting errors for reasons other than changes in accounting standards; and
. dealing with other matters that are authorized by the Board.
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Nomination Committee
The Company has established the Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Hong Kong List ing Rules and the Corporate Governance Code
in Appendix C1 to the Hong Kong Listing Rules. Th e Nomination Committee is mainly responsible
for formulating standards and procedures for the election of Directors and members of senior
management of our Company, and making recommendations to the Board on appointment of
Directors and management of the Board succession . The Nomination Committee consists of three
m e m b e r s ,n a m e l yM s .W a nW e i ,M r .L i uY u ea n dM r .C h e n g ,w i t hM s .W a nW e is e r v i n ga st h e
chairman of the Nomination Commi ttee. The primary duties of the Nomination Committee include,
but not limited to, the following:
. conducting extensive search and providing to the Board suitable candidates for the
Directors, chief executive officer and other members of the senior management;
. reviewing the structure, size and compositio no ft h eB o a r da tl e a s ta n n u a l l y ,a s s i s t i n gt h e
Board in maintaining a board skills matrix and making recommendations on any
proposed changes to the Board;
. analyzing and developing standards and procedures for the election of the Board
members, chief executive officer and members of the senior management, and making
recommendations to the Board;
. supporting our Company ’s regular evaluation of our Board ’s performance;
. making recommendations to the Board on the arrangement of cumulative voting systems;
and
. dealing with other matters that are authorized by the Board.
Remuneration and Appraisal Committee
The Company has established the Remuneratio n and Appraisal Committee with written terms
of reference in compliance with Rule 3.25 of t he Hong Kong Listing Rules and the Corporate
Governance Code in Appendix C1 to the Hong Kong Listing Rules. The Remuneration and
Appraisal Committee is mainly responsible for revi ewing the appraisal criteria and remuneration
packages of the Directors and senior management of our Company and making recommendations to
the Board. The Remuneration and Appraisal Commi ttee consists of three members, namely Mr. Xie
Zhiming, Mr. Liu Yue and Mr. Cheng, with Mr. Xie Zhiming serving as the chairman of the
Remuneration and Appraisal Com mittee. The primary duties of t he Remuneration and Appraisal
Committee include, but not limited to, the following:
. making recommendations to the Board on the policy and structure for all Directors ’ and
senior management ’s remuneration, and on the formal and transparent procedure to be
established for developing the remuneration policy;
. monitoring the implementation of remuneration system of our Company;
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. making recommendations to the remunerat ion packages of our Directors and senior
management;
. formulating or amending equity incentive plan s and employee stock ownership plans, and
determining the conditions for the authorized benefits and exercise of such benefits by
the incentive participants; and
. dealing with other matters that are authorized by the Board.
Strategy Committee
The Company has established the Strategy Committee with written terms of reference in place.
The Strategy Committee is mainly responsible f or analyzing and making recommendations to the
Board on the long-term development strategy and major investments of our Company. The Strategy
Committee consists of three members, namely Ms. Chau, Mr. Tian Hong and Ms. Wan Wei, with
Ms. Chau serving as the chairman of the Strategy Committee. The primary duties of the Strategy
Committee include, but not limited to, the following:
. analyzing and making recommendations on the long-term development strategy plans of
our Company;
. analyzing and making recommendations on ma jor investment and financing proposals;
and
. analyzing and making recommendations o n other major issues that would affect the
development of our Company.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Hong Kong Listing Rules
Each of our Directors confirms that as of the Latest Practicable Date, he or she did not have
any interest in a business which competes or is likel y to compete, either directly or indirectly, with
our Company ’s business which would require disclosure under Rule 8.10 of the Hong Kong Listing
Rules.
Rule 3.09D of the Hong Kong Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to
under Rule 3.09D of the Hong Kong Listing Rules on March 28, 2025, and (ii) understands all the
requirements under the Hong Kong Listing Rules that are applicable to him or her as a director of a
listed issuer and the possible consequences of making a false statement or providing false
information to the Hong Kong Stock Exchange.
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Rule 3.13 of the Hong Kong Listing Rules
Each of the independent non-ex ecutive Directors has confirmed (i) his or her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Hong Kong 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 connectio n with any core connected person of the Company under the Hong
Kong Listing Rules as of the Latest Practicable Da te, and (iii) that there are no other factors that
may affect his or her independence at the time of his or her appointments.
BOARD DIVERSITY
In order to enhance the effectiveness of the Board and to maintain the high standard of
corporate governance, the Company seeks to achieve board diversity by taking into account a
number of factors, including but not limited to gender, skills, age, professional experience, cultural
and educational background, and length of service, in selecting candidates for the Board members.
The ultimate decision of the appointment will be based on the merits of candidates and the
contribution they will make to the Board.
Our Board currently consists of two female Dir ectors and five male Directors, with three
executive Directors and four independent non-executive Directors, of ages ranging from 50 to 63
with diversified backgrounds and experience. Our Directors have a balanced mix of skill-set and
expertise, including overall management and strat egic development, law, finance and accounting, as
well as industry experience relevant to the Group ’s operations and busines s. They have obtained
degrees in various professions including accoun ting, law and management. This diverse academic
background enables the Board to address challenges and opportunities from multiple perspectives,
foster innovative solutions and develop comprehensive strategies.
Upon Listing, the Nomination Committee will from time to time (i) discuss and agree on
expected goals to ensure board diversity, and ( ii) review and, where necessary, update the board
diversity policy to ensure that the policy rema ins effective. The Company will (i) disclose the
biographical details of each Director and (ii) repor t on the implementation of the board diversity
policy (including whether we have achieved board diversity) in its annual corporate governance
report.
REMUNERATION OF THE DIRECTORS, SU PERVISORS AND SENIOR MANAGEMENT
The Directors, Supervisors and senior management members who receive remuneration from
the Company are paid in forms of salaries, allowances, contribution to pension schemes,
discretionary bonuses and other benefits in kind . The remuneration of the Directors, Supervisors
and senior management members is determined with reference to the remuneration paid by relevant
companies in the same industry and the achievement of major operating indicators of the Company.
The aggregate amount of remuneration of the Directors for the years ended December 31,
2022 and 2023 and 2024 amounted to RMB9.3 million, RMB9.3 million and RMB9.5 million,
respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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The aggregate amount of remuneration of the Supervisors for the years ended December 31,
2022 and 2023 and 2024 amounted to RMB2.0 million, RMB2.1 million and RMB3.0 million,
respectively.
The aggregate amount of remuneration of the five highest paid individuals (including the
Directors) for the years ended December 31, 2 022 and 2023 and 2024 amounted to RMB10.5
million, RMB10.5 million and R MB11.0 million, respectively.
Under the arrangement currently in force, the Company estimates that the aggregate fixed
remuneration (before tax) payable to the Direct ors and Supervisors for the year ended December 31,
2025 is approximately RMB12.5 million.
During the Track Record Period, no fees were paid by the Company to any of the Directors
(or former Directors), Supervisors or the five highest paid individuals as an inducement to join the
Company or as compensation for loss of office. None of the Directors or Supervisors waived their
remuneration during the Track Record Period.
2023 RESTRICTIVE SHARE INCENTIVE PLAN
In order to incentivize employees for their contribution to the Group and to attract and retain
suitable personnel to the Group, the Company adopted the 2023 Restrictive Share Incentive Plan.
For further details, see ‘‘Appendix IV — Statutory and General Information — Share Incentive
Scheme — 2023 Restrictive Share Incentive Plan. ’’
COMPLIANCE ADVISOR
The Company has appointed Gram Capital Limit ed as its Compliance Advisor in compliance
with Rule 3A.19 of the Hong Kong Listing Rules. The material terms of the Compliance Advisor ’s
agreement are as follows:
(i) Gram Capital Limited shall act as our Comp liance Advisor for the purpose of Rule 3A.19
of the Hong Kong Listing Rules for a period commencing on the Listing Date and ending
on the date on which the Company complies with Rule 13.46 of the Hong Kong Listing
Rules in respect of the financial results for th e first full financial year commencing after
the Listing Date;
(ii) the Compliance Advisor will provide the Company with certain services, including
proper guidance and advice as to compliance with the requirements under the Hong Kong
Listing Rules and applicable la ws, regulations and rules;
(iii) the Compliance Advisor will, as soon as r easonably practicable, inform the Company of
any amendment or supplement to the Hong Kong Listing Rules announced by the Hong
Kong Stock Exchange from time to time, and of any amendment or supplement to the
applicable laws, regulations and rules in Hong Kong applicable to the Company; and
(iv) the Compliance Advisor will act as one of the key channels of communication of the
Company with the Hong Kong Stock Exchange.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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CODE PROVISION C.2.1 OF THE CORPORATE GOVERNANCE CODE
Ms. Chau is the chairman of the Board and the general manager of the Company. In view of
Ms. Chau ’s experience, personal profile and her roles in the Company as mentioned above, the
Board considers it beneficial to the business pro spects and operational efficiency of the Company
that Ms. Chau, in addition to acting as the chairman of the Board, continues to act as the general
manager of the Company after the Listing.
While this will constitute a deviation from Code Provision C.2.1 of the Corporate Governance
Code as set out in Appendix C1 to the Hong Kong Li sting Rules, the Board believes that this
structure will not impair the balance of power and authority between the Board and the management
of the Company, given that:
(i) there is sufficient check and balance in the Board as the decision to be made by the
Board requires approval by at least a majority of the Directors and the Board has four
independent non-executive Directors out of the seven Directors, which is in compliance
with the Hong Kong Listing Rules;
(ii) Ms. Chau and the other Directors are aware of and undertake to fulfill their fiduciary
duties as Directors, which require, among other things, that they act for the benefit and
in the best interest of the Company and make decisions for the Company accordingly;
(iii) the balance of power and authority is e nsured by the operations of the Board which
comprises experienced and high caliber indi viduals who meet regularly to discuss issues
affecting the operations of the Company; and
(iv) the overall strategic and ot her key business, financial, a nd operational policies of the
Company are made collectively after thorough discussion at both Board and senior
management levels. The Board will continue to review the effectiveness of the corporate
governance structure of the Company in order to assess whether separation of the roles
of the chairman of the Board and the general manager of the Company is necessary.
Save as disclosed above, the Company has complied with all the code provisions of the
Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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FUTURE PLANS
For a detailed description of our future plans, see ‘‘Business — Our Strategies. ’’
USE OF PROCEEDS
Assuming an Offer Price of HK$17.78 per Offer S hare (being the midpoint of the range of the
Offer Price stated in this Prospectus), we estimate that we will receive net proceeds of
approximately HK$4,590 million from the Globa l Offering after deducting the underwriting
commissions and other estimated expenses in conn ection with the Global Offering (assuming the
Over-allotment Option and the Offer Size Adjustm ent Option are not exercised). We intend to use
our proceeds for the purposes and in the amounts set forth below.
. Approximately 48%, or HK$2,203 million, will be used to expand our product and
service portfolio and explore additional a pplication scenarios for our products. This
includes relevant production planning and long-term research and development in
cutting-edge technologies. We intend to contin ue to engage in research and development,
make innovation in relevant fields and main tain our market-leading position. We believe
that these investments will help to expand our product and service portfolio by increasing
the production capacity for our core product categories such as structural parts and
functional modules for smartphones, computers, smart vehicles and cockpits and
upgrading our production infrastructure and digital management systems. In addition, we
plan to explore additional downstream applic ations such as smart wearables. Specifically,
we plan to use the proceeds in the following aspects:
— Approximately 30%, or HK$1,377 million, will be used to support the technical
development and capacity enhancement for structural parts for the next-generation
foldable screens and related smart devices accessories, with the majority of such
proceeds used on purchasing relevant equipment for research and development as
well as manufacturing. We intend to achiev e enhanced strength, durability, impact
resistance and stain resistance for our structural parts, through innovation in
technologies such as UTG and design of prec ision structural of related metal parts,
thereby driving the progression of t echnical standards and elevating user
experience. By increasing our producti on capacity in China, we aim to ensure
robust support for the mass production of middle and high-end foldable
smartphones for our customers and improve our market share in foldable screens.
According to Frost & Sullivan, the globa l shipment of foldable smartphones is
expected to grow rapidly from 23.8 million units in 2024 to 69.7 million units in
2029, with a CAGR of 24.0%. The estimated a llocation of capital investment is
approximately 10% for construction a nd 90% for equipment procurement. We
expect the related production to ramp up in 2027.
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— Approximately 8%, or HK$367 million, wil l be used to develop exterior structural
parts and related products with distinct functions on smart vehicles, covering
vehicle bodies, in-vehicle systems and domain control areas, with the majority of
such proceeds used on equipment. This endeavor seeks to refine the technological
and functional elements of interior and exter ior automotive parts. The application of
multi-functional glass is dev eloping rapidly as users ’ demands for driving and rider
experiences increase. Structural parts a nd related products for side windows and
sunroofs will provide a variety of intelligent and functional services, such as heat
insulation, color-changing s unshade, water repellency, anti-fog, image display and
others. This requires manufacturers like us to achieve new technological
development and breakthroughs in materials and processing. According to Frost &
Sullivan, the global sales volume of smart vehicles is expected to increase from
73.2 million units in 2025 to 92.1 million units in 2029, with a CAGR of 5.9%
from 2025 to 2029. The estimated allocation o f capital investment is approximately
20% for construction and 80% for equipment procurement. We expect the related
production to ramp up in 2026.
— Approximately 5%, or HK$229 million, will be used for production capacity
support and the research and development of i ntelligent robots, with the majority of
such proceeds used on research and development. In particular, we plan to set up
relevant laboratories, recruit qualified personnel and build production lines with
both self-developed and purchased equipme nt. This will enhance our capabilities in
and production capacity for structural par ts such as the joints, dexterous hands,
trunk shells and masks of intelligent robots joint modules as well as complete
device assembly, enabling us to deliver relevant products and services to our
customers on a large scale. According to Fr ost & Sullivan, the global market size of
intelligent robots is expected to reach US$123.9 billion by 2029 from US$60.2
billion in 2024. The estimated allocation o f capital investment is approximately
20% for construction and 80% for equipment procurement. We expect the related
production to ramp up in 2027.
— Approximately 5%, or HK$229 million, will be used to expand our production
capacity, primarily by purchasing equipment, for augmented, virtual and mixed
reality glasses, as well as various intellig ent wearable devices, encompassing both
production of structural parts and comple te device assembly. Leveraging our top-
tier smart manufacturing system, we will ramp up the production and delivery of
smart glasses. By investing in resear ch and development, we will promote
advancements in lightweight materials and e nergy-saving solutions, accelerating the
transition of the industry from testing t echnologies to bringing them to market. The
estimated allocation of capital investme nt is 100% to equipment procurement. We
expect the related production to ramp up in 2027.
FUTURE PLANS AND USE OF PROCEEDS
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. Approximately 28%, or HK$1,285 million, will be used to expand our overseas presence,
increase our production capacity overseas and e nhance our overseas delivery capabilities
to better serve our customers. Specifically , we will set up production lines in Vietnam
and Thailand for our structural parts for smart devices, including smartphones and
computers products, as well as smart vehicle s and cockpit products. This will enable us
to have a more diversified customer base and meet their growing demands, so as to
solidify our overseas leadership position. We expect our new productions lines in
Thailand to commence operations toward s the end of 2025 and ramp up production in
2026, and the estimated allocation of capit al investment is approximately 20% for
construction and 80% for equipment procurement. The Thailand production lines will be
primarily used for smart vehicles and cockpit products. We expect our new production
lines in Vietnam to commence operations in phases towards the end of 2025 and ramp up
in 2026, and the estimated allocation of capit al investment is approximately 30% for
construction and 70% for equipment procurement.
. Approximately 14%, or HK$643 million, will be used to advance our vertical integration
in smart manufacturing, including enhancin g our capabilities along our vertically
integrated industry value chain and promoting the development of ‘‘smart manufacturing
factories ’’. Specifically, we plan to use the proceeds in the following aspects:
— Approximately 6%, or HK$275 million, wi ll be used to set up complete device
assembly lines for consumer electronics, s mart wearables and smart retail devices,
with the majority of such proceeds used on equipment. We will also invest in the
research and development as well as manuf acturing of advanced smart retail devices
to promote technological advancements in p ayment solutions and digital price tag
displays. The estimated allocation of cap ital investment is approximately 30% for
construction and 70% for equipment procu rement. We expect the related production
to ramp up in 2026.
— Approximately 8%, or HK$367 million, will be used to promote the development of
‘‘smart manufacturing factories ’’. This encompasses research and development as
well as manufacturing of automated industr ial systems and intelligent machinery,
alongside widespread use of industrial robots such as six-axis robots, vision
inspection robots for automated optical inspection, autonomous transport robots and
advanced multifunctional robots. The est imated allocation of capital investment is
100% for equipment procurement. We expec tt h er e l a t e dp r o d u c t i o nt or a m pu pi n
2026. Such investments will further our smart manufacturing initiatives without
increasing our production capacity. We will improve conventional manufacturing
processes by incorporating industrial in ternet technologies and unified software
solutions for better adaptability, bolster ing intelligent factory management, and
continuously improving a cutting-edge manufacturing framework that prioritizes
efficiency and is powered by data management.
. Approximately 10%, or HK$459 million, will be used for working capital and other
general corporate purposes.
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The aggregate annual production capacity of the above projects is expected to reach
approximately 142 million pieces per year.
These investments are expected to significantly e nhance our smart manufacturing capabilities,
production capacity, products and ov erall operational efficiency.
In terms of financial impact, the planned inve stments are closely aligned with our core
business focus and historical margin profile. They are expected to generate favorable economic
returns and support our sustainable growth. Howe ver, as with most capacity ex pansion initiatives,
there will be a time lag before the projects begin to ramp up and start to contribute materially to
revenue and profit. As such, it is possible that cer tain financial indicators, such as earnings per
share, may fluctuate briefly during the ramp -up period. As we implement and ramp up these
investments gradually, we expect to see steady i mprovements in our profitability and overall
business performance. We also expect this Globa l Offering to enhance our capital position, with
positive impacts on our asset-to-liability ratio a nd our net assets, resulting in a more optimal capital
structure that will strengthen our resilien ce and enhance our long-term competitiveness.
In the event that the Offer Price is fixed at a higher or lower level compared to the midpoint
of the range of the Offer Price stated in this Prosp ectus, the net proceeds from the Global Offering
will be allocated to the above purposes on a pro rata basis.
To the extent that the net proceeds of the Globa l Offering are not immediately used for the
above purposes or if we are unable to effect any part of our future development plans as intended,
we will only deposit such funds in short-term interest-bearing accounts at licensed commercial
banks and/or other authorized financial institu tions (as defined under the Securities and Futures
Ordinance or applicable laws and regulations in ot her jurisdictions). In such event, we will comply
with the appropriate disclosure require ments under the Hong Kong Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
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In preparation of the Global Offering, the Company has sought the following waivers from
strict compliance with the relevant pro visions of the Hong Kong Listing Rules.
WAIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Rule 8.12 of the Hong Kong Listing Rules provides that a new applicant for listing on the
Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong and, under
normal circumstances, at leas t two of the new applicant ’s executive directors must be ordinarily
resident in Hong Kong. Rule 19A.15 of the Hong Kong Listing Rules further provides that the
requirement in Rule 8.12 of the Hong Kong Listing Rules may be waived by having regard to,
among other considerations, our arrangements for maintaining regular communication with the
Hong Kong Stock Exchange.
The Company ’s business operations are primarily located in the PRC and most of the
Company ’s assets are located in the PRC. Our executive Directors ordinarily reside in the PRC, as
the Board believes it would be more effective and efficient for its executive Directors to be based
in a location where the Company ’s substantial operations are located. As such, the Company does
not and, in the foreseeable future, will not be able to comply with the requirements of Rule 8.12 of
the Hong Kong Listing Rules for sufficient management presence in Hong Kong.
Accordingly, pursuant to Rule 19A.15 of the Hong Kong Listing Rules, the Company has
applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a
waiver from strict compliance with the requirements under Rule 8.12 of the Hong Kong Listing
Rules, provided that the Company implements the following arrangements:
(i) the Company has appointed Ms. Chau and Ms. YU Wing Sze as the authorized
representatives of the Company (the ‘‘Authorized Representatives ’’) for the purpose of
Rule 3.05 of the Hong Kong Listing Rules. The Authorized Representatives will serve as
the Company ’s principal channel of communication with the Hong Kong Stock
Exchange. They can be readily contactable by phone and email to deal promptly with
enquiries from the Hong Kong Stock Exchange and will also be available to meet with
the Hong Kong Stock Exchange to discuss any matters on short notice. The contact
details of the Authorized Representatives have been provided to the Hong Kong Stock
Exchange;
(ii) all the Directors who are not ordinarily resident in Hong Kong possess or can apply for
valid travel documents to visit Hong Kong and can meet with the Hong Kong Stock
Exchange within a reasonable period. In addi tion, each Director has provided her/his
contact details, including office phone numbers, mobile phone numbers (if any) and
email addresses, to the Authorized Representatives and to the Hong Kong Stock
Exchange, so that each of the Authorized Representatives and the Hong Kong Stock
Exchange would be able to contact all the Directors (including the independent non-
executive Directors) promptly at all times if and when the Hong Kong Stock Exchange
wishes to contact the Directors;
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(iii) the Company has appointed Gram Capita l Limited as its Compliance Advisor for the
period commencing on the Listing Date and ending on the date on which the Company
complies with Rule 13.46 of the Hong Kong Listing Rules in respect of the Company ’s
financial results for the first full financi al year commencing after the Listing Date, or
until the agreement is terminated, whichever is earlier. The Company ’s Compliance
Advisor will act as the Company ’s additional and alternative channel of communication
with the Hong Kong Stock Exchange, and its representatives will be readily available to
answer enquiries from the Hong Kong Stock Exchange; and
(iv) the Company has appointed designated sta ff members as the responsible communication
officers at our headquarters to oversee regular communication with the Authorized
Representatives and the Company ’s professional advisors in Hong Kong, including our
legal advisors and the Compliance Advisor, keep abreast of any correspondence and/or
inquiries from the Hong Kong Stock Exchange and report to the executive Directors,
streamlining communication between the Hong Kong Stock Exchange and the Company
following the Listing.
WAIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Hong Kong Listing Rules, the company secretary must
be an individual who, by virtue of his or her acade mic or professional qualifications or relevant
experiences, is, in the opinion of the Hong Kong Stock Exchange, capable of discharging the
functions of the company secretary. Pursuant to Note 1 to Rule 3.28 of the Hong Kong Listing
Rules, the Hong Kong Stock Exchange conside rs the following academic or professional
qualifications to be acceptable:
(i) a member of The Hong Kong Chartered Governance Institute;
(ii) a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
(iii) a certified public accountant (as defined in the Professional Accountants Ordinance).
Pursuant to Note 2 to Rule 3.28 of the Hong Kong Listing Rules, in assessing ‘‘relevant
experience, ’’the Hong Kong Stock Exchange will consider the individual ’s:
(i) length of employment with the issuer an d other issuers and the roles he played;
(ii) familiarity with the Hong Kong Listing Rules and other relevant law and regulations
including the Securities and Futures Ord inance, Companies Ordinance, Companies
(Winding Up and Miscellaneous Provisi ons) Ordinance, and the Takeovers Code;
(iii) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Hong Kong Listing Rules; and
(iv) professional qualifications in other jurisdictions.
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The Company has appointed Mr. Jiang Nan as one of the joint company secretaries of the
Company. Mr. Jiang Nan joined the Group in September 2021. He currently also holds the position
of the board secretary to the Company. See ‘‘Directors, Supervisors and Senior Management ’’ for
further biographical details of Mr. Jiang Nan . Although Mr. Jiang Nan does not possess the
qualifications set out in Rule 3.28 of the Hong K ong Listing Rules, the Company believes that it
would be in the best interests of the Company and the corporate governance of the Group to have
Mr. Jiang Nan as its joint company secr etary who is familiar with the Group ’s internal operation
and management and possesses professional knowledge and experience in handling corporate
governance and compliance, legal affairs and publ ic relationship related matters. The Company has
also appointed Ms. YU Wing Sze to act as the other joint company secretary to assist Mr. Jiang
Nan in discharging the duties of a company secretary of the Company. Ms. YU Wing Sze is an
associate member of both The Hong Kong Charte red Governance Institute and The Chartered
Governance Institute in the United Kingdom and is therefore qualified under Rule 3.28 of the Hong
Kong Listing Rules to act as a joint com pany secretary of the Company. See ‘‘Directors,
Supervisors and Senior Management ’’for further biographical details of Ms. YU Wing Sze.
Since Mr. Jiang Nan does not possess the form al qualifications required of a company
secretary under Rule 3.28 of the Hong Kong Listing Rules, the Company has applied to the Hong
Kong Stock Exchange for, and the Hong Kong Stoc k Exchange has granted, a waiver from strict
compliance with the requirements under Rules 3.28 and 8.17 of the Hong Kong Listing Rules for a
period of three years since the Listing Date on the following conditions: (i) Mr. Jiang Nan must be
assisted by Ms. YU Wing Sze who possesses the qu alifications or experience as required under
Rule 3.28 of the Hong Kong Listing Rules and i s appointed as a joint company secretary
throughout the waiver period; and (ii) the waiver can be revoked in the event of a material breach
of the Hong Kong Listing Rules by the Company.
In support of the waiver application, the Company has adopted, or will adopt the following
arrangements:
(i) in preparation of the application of the Li sting, Mr. Jiang Nan has attended training on
the respective obligations of the Directors , Supervisors, senior managements and the
Company under the relevant Hong Kong laws and the Hong Kong Listing Rules
organised by the Hong Kong legal advisors to the Company;
(ii) Ms. YU Wing Sze will work closely with Mr. Jiang Nan to jointly discharge the duties
and responsibilities as the joint company s ecretaries of the Company and to assist Mr.
Jiang Nan in acquiring the relevant experience as required under the Hong Kong Listing
Rules for an initial period of three years fro m the Listing Date, a period which should be
sufficient for Mr. Jiang Nan to acquire the relevant experience as required under the
Hong Kong Listing Rules;
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(iii) the Company will ensure that Mr. Jiang Nan continues to have access to the relevant
training and support in relation to the Hong Kong Listing Rules and the duties required
f o rac o m p a n ys e c r e t a r yo fa ni s s u e rl i s t e do nt h eH o n gK o n gS t o c kE x c h a n g e .
Furthermore, both Mr. Jiang Nan and Ms. YU Wing Sze will seek advice from the
Company ’s Hong Kong legal and other professiona l advisors as and when required. Mr.
Jiang Nan also undertakes to take no less than 15 hours of relevant professional training
in each financial year of the Company; and
(iv) at the end of the three-year period, the qualifications and experience of Mr. Jiang Nan
and the need for on-going assistance of Ms. YU Wing Sze will be further evaluated by
the Company. The Company will then endeavour to demonstrate to the Hong Kong Stock
Exchange ’s satisfaction that Mr. Jiang Nan, having had the benefit of the assistance of
Ms. YU Wing Sze for the immedi ately preceding three years, has acquired the relevant
experience (within the meaning of Note 2 to Rule 3.28 of the Hong Kong Listing Rules)
such that a further waiver from Rules 3.28 and 8.17 of the Hong Kong Listing Rules will
not be necessary. The Company understands that the Hong Kong Stock Exchange may
revoke the waiver if Ms. YU Wing Sze ceases to provide assistance to Mr. Jiang Nan
during the three-year period.
Prior to the expiry of the three-year period, the Company will liaise with the Hong Kong
Stock Exchange to enable it to assess whether Mr. Jiang Nan has acquired the relevant experience
within the meaning of Note 2 to Rule 3.28 of the Hong Kong Listing Rules.
WAIVER IN RESPECT OF STRICT COMPLIANCE WITH PRACTICE NOTE 15 AND THE
THREE-YEAR RESTRICTION ON SPIN-OFFS
Paragraph 3(b) of Practice Note 15 of the Hong Kong Listing Rules (the ‘‘PN15 ’’) provides
that the Listing Committee would not normally cons ider a spin-off application within three years of
the date of listing of the issuer with regard to pro posals submitted by issuers to effect the separate
listing on the Hong Kong Stock Exchange or elsewhere of assets or business wholly or partly
within their existing groups, given the original listing of the issuer will have been approved on the
basis of the issuer ’s portfolio of businesses at the time o f listing, and that the expectation of
investors at that time would have been that the iss uer would continue to develop those businesses
(the ‘‘Three-year Spin-off Restriction ’’).
Lens Taizhou was established through acquis ition by the Group of two companies in 2020.
For details, see ‘‘History, Development and Corporate Structure — Major Acquisitions, Disposals
and Mergers — Acquisition and Establishment of Lens Taizhou ’’ of this Prospectus. As of the
Latest Practicable Date, Lens Taizhou was eng aged in the production and sales of the Group ’s metal
products, primarily metal mid-frames and other sma ll metal parts. As disclosed in this Prospectus,
the Group ’s metal mid-frames are crafted with precision to accommodate various device
specifications, ensuring structural integrity an d design aesthetics. The Group has comprehensive
surface treatment capabilities for its metal product s, such as automatic three-dimensional polishing,
super-hard physical vapor deposition coating, au tomated anodizing and various metal surface
treatments.
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Considering that (i) the materials required for the manufacturing of, and the production
process for, the metal products are different from those for the Group ’s other structural parts and
functional modules, such as glass products, a nd (ii) Lens Taizhou was established through
acquisition and integration, Lens Taizhou has b een operated as an independent business unit as of
the Latest Practicable Date with separate mana gement team, many of whom do not overlap with
those of other companies in the Group.
Since the establishment of Lens Taizhou by th e Group and through years of development,
Lens Taizhou has become one of the largest manufactures of metal structural parts for consumer
electronics in the PRC as of December 31, 2024, according to Frost & Sullivan. As of December
31, 2024, the total assets of Lens Taizhou was ap proximately RMB16,336.4 million prepared under
the PRC GAAP, representing approximately 20.2% of the total assets of the Group as of December
31, 2024 prepared under the PRC GAAP. For the y ear ended December 31, 2024, the revenue and
net profits of Lens Taizhou prepared under t he PRC GAAP reached approximately RMB10,211.1
million and RMB410.3 million, respectively. If Le ns Taizhou were to become an independent listed
company, it will enable Lens Taizhou to enhance its corporate profile, thereby increasing its ability
to attract strategic investors.
Having considered, among others, the size of Lens Taizhou as illustrated above and its clear
delineation with the Company ’s other businesses in terms of product offerings, manufacturing
process and management, the Company wishes to r etain the possibility to spin off Lens Taizhou
within three years after the Listing (the ‘‘Proposed Spin-off ’’). As of the Latest Practicable Date,
the Company did not have any detailed plan in relation to the Proposed Spin-off, including the
timetable and the listing venue. The remaini ng group will continue to operate the Company ’so t h e r
businesses after the Proposed Spin-off.
The Company has applied to the Hong Kong Stock Exchange for a waiver from strict
compliance with the Three-year Spin-off Restrict ion under paragraph 3(b) of PN15 on the following
grounds:
(a) Full compliance with PN15: except for the Three-year Spin-off Restriction, the
Proposed Spin-off will be in full compliance with all other applicable requirements under
the Hong Kong Listing Rules, including but not limited to (i) the requirement for the
retained group to retain a sufficient level of operations and sufficient assets to support its
separate listing status, (ii) a clear delineation between the businesses of the retained
group and the spun-off group, (iii) independence of the spun-off group in terms of
directorship and management, ad ministration, business operation, financing and treasury
function, and (iv) announcement or shareholders ’ approval procedures, as applicable, at
the time of spin-off. The Company will demonstrate such compliance if the Proposed
Spin-off materializes.
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(b) No material impact on the Group ’s overall performance: as disclosed above, total
assets of Lens Taizhou as of December 31, 2024 were RMB16,336. 4 million, accounting
for approximately 20.2% of total assets of the Group as of December 31, 2024, and
revenue and net profits of Lens Taizhou for the year ended December 31, 2024 were
approximately RMB10,211.1 million and RMB41 0.3 million, respectively, accounting for
approximately 14.6% and 11.2% of those of the Group for the year ended December 31,
2024. Giving the size of operation of the Gorup, the Group will still retain a substantial
proportion of business operation upon completion of the Proposed Spin-off and the
remaining group is still expected to satisfy the profits test under Rule 8.05(1) of the
Hong Kong Listing Rules. In addition, the busi ness of Lens Taizhou is clearly delineated
with the other businesses in terms of product offerings, manufacturing process and
management. As such, the Proposed Spin-o ff will not have any material adverse impact
to operations of remaining businesses of the Group.
(c) In line with Shareholders ’ interests: the Company believes that the Proposed Spin-off
could better reflect the value of Lens Taizhou on its own merits and increase its
operational and financial transparency, through which investors would be able to appraise
and assess the performance and potential of Le ns Taizhou separately and distinctly from
those of the remaining businesses of the Group. The value of Lens Taizhou is expected
to be enhanced through the Proposed Spin-off given that a listing will enhance its profile
and enable it to directly and independently access both equity and debt capital markets.
In addition, the Proposed Spin-off will facilitate the Company to structure dedicated
equity incentive schemes for the management of Lens Taizhou, particularly those were
retained by the Group upon completion of the acquisition. As such, it is in the interest of
the Shareholders and the Company as a whole to conduct the Proposed Spin-off.
(d) No material adverse effect on the expectati on of the investors at the time of Listing:
upon the Proposed Spin-off, the investors can expect to continue to benefit from the
growth of Lens Taizhou by way of preferenti al offering and Lens Taizhou is expected to
continue to be a subsidiary of the Group. Also, as elaborated above, the impact for the
Proposed Spin-off on the overall business performance and financial positions is
expected to be insignificant to the Group as a whole. At the time of Listing, considering
that the Company does not have any concrete plan on the timetable, listing venue and
offering size of the Proposed Spin-off, there should be minimal impact on the Global
Offering resulting from the expectatio n of investors on the Proposed Spin-off.
(e) Safeguards in place to protect Shareholders ’ interests: The following safeguards will
be in place to protect the Shareholders ’ interest:
. the Directors owe fiduciary duties to the Company, including the duty to act in
good faith and in the best interest of the Shareholders. As such, the Directors will
only pursue the Proposed Spin-off if ther e are clear commercial benefits for both
the Company and Lens Taizhou. The Directors will not direct the Company to
conduct the Proposed Spin-off if they believe that it will have an adverse impact on
the interests of the Company and the Shareholders as a whole;
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. in the event that the waiver from strict compliance with Three-year Spin-off
Restriction is granted, it will not dispense with the requirement to obtain the
approval from the Hong Kong Stock Exchange for the Proposed Spin-off, which
will be evaluated with reference to the facts prevailing at the time of submission of
the spin-off application. The Proposed Spin-off will remain subject to the other
requirements of PN15, including that the Company will satisfy applicable listing
eligibility requirements on a standalone basis;
. sufficient information will be provided to t he Shareholders to assess the impact of
the Proposed Spin-off. In particular, details of this waiver will be disclosed in the
Prospectus, and the Company will also announce in accordance with the Hong
Kong Listing Rules the details of the Pr oposed Spin-off when it materializes. In
addition, the Company will update its plan a nd status of the Proposed Spin-off in its
annual and interim reports after the Listing, so that the Shareholders will obtain
periodic updates on the progress of the Proposed Spin-off;
. after the Listing, the Company will follow the relevant disclosure requirement and
approval procedures pursuant to the applicable requirements under the Hong Kong
Listing Rules and applicable PRC laws and regulations, including the Shareholders ’
approval pursuant to Rules for the Spin-off of Listed Companies (For Trial
Implementation) ( 《上市公司分拆規則(試行)》); and
(f) Robust disclosures of Lens Taizhou and the Proposed Spin-off: details of Lens
Taizhou, including its financial informatio n relating to revenue and net profits for the
year ended December 31, 2024, and the Proposed Spin-off will be disclosed in the
Prospectus in addition to those informati on which have already been disclosed in the
Prospectus.
The Stock Exchange has granted the Company a waiver from strict compliance with the
Three-year Spin-off Restriction under paragraph 3(b) of PN15, subject to the following conditions:
(a) disclosures of this waiver will be made in the Prospectus;
(b) details of Lens Taizhou, including its princ ipal scope of businesses and its revenue and
net profits for the year ended December 31, 2024, will be disclosed in the Prospectus;
(c) the Company will announce the details of the Proposed Spin-off in accordance with the
Hong Kong Listing Rules when it materializes;
(d) the Company will update the status of the Proposed Spin-off in its annual and interim
reports within three years after the Listing;
(e) the Company will comply with the applicable requirements under the Hong Kong Listing
Rules, including but not limited to Chapters 14 and 14A of the Hong Kong Listing Rules
with respect to the Proposed Spin-off; and
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(f) the Proposed Spin-off will be subject to the requirements of PN15 (other than paragraph
3(b) thereof), including that the Company wil l satisfy the applicable listing eligibility
requirements on a standalone basis.
WAIVER IN RESPECT OF ACQUISITI ON AFTER THE TRACK RECORD PERIOD
Pursuant to Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Rules, the accountants ’
report to be included in a listing document must in clude the income statements and balance sheets
of any subsidiary or business acquired, agreed to be acquired or proposed to be acquired since the
date to which its latest audited accounts have been made up in respect of each of the three financial
years immediately preceding the issue of the listing document.
Pursuant to Rule 4.02A of the Hong Kong Listin g Rules, acquisitions of business include
acquisitions of associates and any equity intere st in another company. Pursuant to Note 4 to Rule
4.04 of the Hong Kong Listing Rules, the Hong Kong Stock Exchange may consider granting a
waiver of the requirements under Rules 4.04(2 ) and 4.04(4) on a case-by-case basis, and having
regard to all relevant facts and circumstances an d subject to certain conditions set out thereunder.
After the Track Record Period and up to the Latest Practicable Date, the Group has proposed
to acquire 5% of the equity interest in Xiangtan Hongda Vacuum Technology Company Limited ( 湘
潭宏大真空技術股份有限公司, ‘‘Xiangtan Hongda ’’)h e l db yM r .H u a n gG u o x i n g( 黃國興)a ta
consideration of RMB50 million (the ‘‘Acquisition ’’). The consideration was determined after arm ’s
length negotiations with reference to market dyna mics and mutually agreed valuation. To the best
knowledge, information and belief of the Directo rs and having made all reasonable enquiry, each of
Mr. Huang Guoxing and other ultimate beneficial owners of Xiangtan Hongda as of the Latest
Practicable Date is an Independent Third Party.
Xiangtan Hongda is primarily engaged in research and development, production and sales of
vacuum coating equipment. As of the Latest Pract icable Date, the Company had no equity interest
in Xiangtan Hongda. Upon completion of the Acquisition, Xiangtan Hongda will be held as to 5%
by the Company and will not become a subsidiary of the Company.
The Directors believe that the Acquisition wil l create synergy effect between the businesses of
the Company and Xiangtan Hongda and therefore optimize the Company ’s business development.
Accordingly, the Directors believe that the Acqui sition, if consummated, will be fair and reasonable
and in the interests of the Shareholders as a who le. The consideration for the Acquisition, if
consummated, will be satisfied by the Group ’s own source of funds rather than the net proceeds
from the Global Offering.
The Company has applied for, and the Hong Kong Stock Exchange has granted, a waiver from
strict compliance with Rules 4.0 4(2) and 4.04(4)(a) of the Hong Kong Listing Rules in respect of
the Acquisition on the following grounds:
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The percentage ratios of the Acquisition ar e less than 5% by reference to the most recent
fiscal year of the Track Record Period
The applicable percentage ratios calculated i n accordance with Rule 14.07 of the Hong Kong
Listing Rules for the Acquisition are less than 5% by reference to the financial year ended
December 31, 2024. Accordingly, the Company does not expect the Acquisition to result in any
significant changes to its financial position sin ce December 31, 2024, and all information that is
reasonably necessary for potential investors to m ake an informed assessment of the activities or
financial position of the Group has been included in this Prospectus. As such, the Company
considers that a waiver from compliance with the requirements under Rules 4.04(2) and 4.04(4)(a)
of the Hong Kong Listing Rules would not prejudice the interests of the investors.
The historical financial information of Xiangtan Hongda is not available and would be unduly
burdensome to obtain or prepare
The Company confirms that Xiangtan Hongda does not have available historical financial
information which is readily ava ilable for disclosure in this Pro spectus in accordance with the Hong
Kong Listing Rules given that Xiangtan Hongda , as a PRC-incorporated company, ordinarily
prepares its financial st atements in accordance with PRC GAAP while the Company ’s consolidated
financial statements as disclosed in this Prospectus are prepared based on IFRS Accounting
Standards. See ‘‘Accountants ’ Report — Historical Financial Information of the Group —
Preparation of Historical Financial Information ’’ in Appendix I to this Prospectus. In addition, it
would require considerable time and resources for the Company and its reporting accountants to
fully familiarize themselves with the managem ent accounting policies of Xiangtan Hongda and
compile the necessary financial information and supporting documents for disclosure in this
Prospectus. As of the Latest Practicable Date, the Company has no access to the books or records
of Xiangtan Hongda for conducting an audit given that the Company will not, as a result of or
immediately following the completion of the Acqu isition, have control over Xiangtan Hongtan, nor
will the Company be in a position to consolidate the financials of Xiangtan Hongda. As such, the
Company believes that it would be impractical an d unduly burdensome for the Company within the
tight timeframe to disclose the audited financial information of Xiangtan Hongda as required under
Rules 4.04(2) and 4.04(4)(a) o f the Hong Kong Listing Rules.
In addition, having considered the Acquisition to be immaterial and that the Company does
not expect the Acquisition to have any material e ffect on its business, financial condition or
operations, the Company believes that (i) it would not be meaningful and would be unduly
burdensome for it to prepare and include the financial information of Xiangtan Hongda during the
Track Record Period in this Prospectus, and (ii) the non-disclosure of the required information
pursuant to Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Rules would not prejudice the
interests of the investors.
WAIVERS FROM STRICT COMPLIANCE WITH THE HONG KONG LISTING RULES
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Ordinary and usual course of business
Xiangtan Hongda is engaged in business activitie s complementary with and closely related to
the existing business of the Company. The Com pany has conducted acquisitions and minority
investments during the Track Record Period. As a result, the Company is of the view that
conducting the Acquisition is within its ordinary and usual course of business.
Alternative disclosure of the Acquisition in this Prospectus
The Company has disclos ed alternative information about the Acquisition in this Prospectus.
Such information includes those which would be r equired for a discloseable transaction under
Chapter 14 of the Hong Kong Listing Rules that th e Directors consider to be material, including,
for example, descriptions of Xiangtan Hongda ’s principal business activities, the consideration
amounts, and a statement as to whether the counte rparty is an Independent Third Party. Since the
applicable percentage ratios of the Acquisiti on are less than 5% by reference to the most recent
fiscal year of the Track Record Period, the Compan y believes that the current disclosure is adequate
for potential investors to form an informed assessment of the Company.
WAIVER IN RESPECT OF CLAWBACK MECHANISM
Paragraph 4.2 of Practice Note 18 of the Listin g Rules requires a clawback mechanism to be
put in place, which would have the effect of increasing the number of Hong Kong Offer Shares to
certain percentages of the total number of Offer S hares offered in the Global Offering if certain
prescribed total demand levels are reached.
Subject to the Stock Exchange granting the w aiver described below, the Hong Kong Public
Offering and the International Offering will in itially account for 11.0% and 89.0% of the Global
Offering, respectively, subject to the clawback me chanism described below. We have applied for,
and the Stock Exchange has granted to us, a waiver from strict compliance with the requirements of
Paragraph 4.2 of Practice Note 18 to the Listing Rules such that the allocation of the Offer Shares
in the Hong Kong Public Offering will be adjusted as follows:
(a) if the number of the Offer Shares validly applied for under the Hong Kong Public
Offering represents 10 times or more but less than 35 times the number of the Offer
Shares initially available for subscription under the Hong Kong Public Offering, then the
number of Offer Shares will be reallocated to the Hong Kong Public Offering from the
International Offering, so that the total number of Offer Shares available under the Hong
Kong Public Offering will be 47,206,400 Offer Shares, representing approximately
18.0% of the Offer Shares initially availa ble under the Global Offering (assuming the
Offer Size Adjustment Option and the Over-allotment Option are not exercised);
(b) if the number of the Offer Shares validly applied for under the Hong Kong Public
Offering represents 35 times or more but less than 70 times the number of the Offer
Shares initially available for subscription under the Hong Kong Public Offering, then the
number of Offer Shares to be reallocated to the Hong Kong Public Offering from the
International Offering will be increased so that the total number of the Offer Shares
WAIVERS FROM STRICT COMPLIANCE WITH THE HONG KONG LISTING RULES
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--- page 323 ---
available under the Hong Kong Public Offering will be 65,564,200 Offer Shares,
representing approximately 25.0% of the Offe r Shares initially available under the Global
Offering (assuming the Offer Size Adjustmen t Option and the Over-allotment Option are
not exercised); and
(c) if the number of the Offer Shares validly applied for under the Hong Kong Public
Offering represents 70 times or more the number of the Offer Shares initially available
for subscription under the Hong Kong Public Offering, then the number of Offer Shares
to be reallocated to the Hong Kong Public Offe ring from the International Offering will
be increased, so that the total number of the Offer Shares available under the Hong Kong
Public Offering will be 118,015,600 Offer Sha res, representing approximately 45.0% of
the Offer Shares initially available under th e Global Offering (assuming the Offer Size
Adjustment Option and the Over-all otment Option are not exercised).
In each case, the additional Offer Shares reallo cated to the Hong Kong Public Offering will be
allocated between pool A and pool B and the number o f Offer Shares allocated to the International
Offering will be correspondingly reduced in such manner as the Overall Coordinators deem
appropriate. In addition, the Overall Coordinato rs would have discretion to allocate Offer Shares
from the International Offering to the Hong Kong Pu blic Offering to satisfy valid applications
under the Hong Kong Public Offering. On the other hand, if the Hong Kong Public Offering is not
fully subscribed, the unsubscribed Offer Share s under the Hong Kong Public Offering may be
reallocated to the International Offeri ng. Please refer to the paragraphs headed ‘‘Structure of the
Global Offering — The Hong Kong Public Offering — Reallocation and Clawback ’’ for more
details.
WAIVER IN RESPECT OF MINIMUM PUBLIC FLOAT OF H SHARES
Rule 8.08(1)(a) and (b) (as amended by Rule 19A.13A) of the Hong Kong Listing Rules states
that there must be an open market in the securities for which listing is sought. This will normally
mean that: (a) at least 25% of the issuer ’s total number of issued shares (excluding treasury shares)
must at all times be held by the public; (b) where an issuer has one class of securities or more apart
from the class of securities for which listing is sought, the total securities of the issuer held by the
public (on all regulated market(s) including the Hong Kong Stock Exchange) at the time of listing
must be at least 25% of the issuer ’s total number of issued shares (excluding treasury shares).
However, the class of securities for which listing is sought must not be less than 15% of the
issuer ’s total number of issued shares (excluding treasury shares), having an expected market
capitalization at the time of listing of not less than HK$125,000,000. Rule 19A.13A further
provides that Rule 8.08 of the Listing Rules is a mended by adding the following provision to sub-
paragraph (1)(b): Where a PRC issuer has share s apart from the H shares for which listing is
sought, the total securities of the issuer held by the public (on all regulated market(s) including the
Stock Exchange) at the time of listing must be at least 25% of the issuer ’s total number of issued
shares (excluding treasury shares). However, the issuer ’s H shares (for which listing is sought) must
represent at least 15% of its total number of issued shares (excluding treasury shares), having an
expected market capitalisation at the time of listing of not less than HK$125,000,000.
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Based on the minimum Offer Price of HK$17.38 and assuming no exercise of the Offer Size
Adjustment Option and the Over-allotment Option, we expected that the market capitalization of
our H Shares will exceed the minimum expected ma rket capitalization of HK$125,000,000 required
by Rules 8.08(1)(b) and 19A.13A of the Hong Kong Listing Rules. We have applied to the Hong
Kong Stock Exchange to request the Hong Kong St ock Exchange to exercise its discretion under
Rule 8.08(1)(b) of the Hong Kong Listing Rules, and the Hong Kong Stock Exchange has granted,
a waiver from strict compliance with Rule 8.08(1)(b) and Rule 19A.13A of the Hong Kong Listing
Rules to allow the minimum percentage of the H Shares of the Company to be held by the public
from time to time shall be no less than 5.00%, or such higher percentage upon the completion of
any exercise of the Offer Size Adjustment Opt ion and/or the Over-allotment Option, of the
Company ’s total issued share capital (excluding treasury Shares), subject to the following:
(i) our Company will comply with the public fl oat requirement under Rule 8.08(1) of the
Hong Kong Listing Rules where at least 25% of the Company ’s total number of issued
shares (A Shares and H Shares in aggregate, excluding treasury shares) must be held by
the public from time to time;
(ii) our Company will announce the percentage of H Shares held by the public immediately
after the completion of the Global Offeri ng (before any exercise of the Offer Size
Adjustment Option and/or the Over-allotment Option) and upon any exercise of the Offer
Size Adjustment Option and/or the Over-allotment Option;
(iii) our Company will confirm sufficiency of public float under Rule 8.08(1)(a) of the Hong
Kong Listing Rules in successive annual reports after the Listing; and
(iv) our Company will implement appropriate m easures and mechanisms to ensure continual
maintenance of the 5.0% minimum public float of H Shares upon completion of the
Global Offering (or such higher percentage upon the completion of any exercise of the
Offer Size Adjustment Option and/or the Over-allotment Option).
In the event that the public float percentage falls below the minimum percentage prescribed by
the Hong Kong Stock Exchange, the Directors will take appropriate steps to ensure the minimum
percentage of public float prescribed by the Hong Kong Stock Exchange is complied with.
ALLOCATION OF H SHARES TO EXISTING M INORITY SHAREHOLDERS AND THEIR
CLOSE ASSOCIATES
Rule 10.04 of the Hong Kong Listing Rules r equires that a person who is an existing
shareholder of the issuer may only subscribe for o r purchase any securities for which listing is
sought which are being marketed by or on behalf of the issuer either in his or its own name or
through nominees if the conditions in Rules 10.03(1) and (2) of the Hong Kong Listing Rules are
fulfilled. It is provided in Rule 10.03(1) of the Hong Kong Listing Rules that no securities may be
o f f e r e dt oe x i s t i n gs h a r e h o l d e r so nap r e f e r e n t ial basis and no preferential treatment may be given
to them in the allocation of the securities; and in Rule 10.03(2) that the minimum prescribed
percentage of public shareholders required by Rule 8.08(1) must be achieved.
WAIVERS FROM STRICT COMPLIANCE WITH THE HONG KONG LISTING RULES
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Paragraph 5(2) of Appendix F1 to the Hong Kong Listing Rules provides that no allocations
will be permitted to the existing shareholders of th e applicant or their close associates, whether in
their own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Hong Kong Listing Rules are fulfilled. Chapter 4.15 of the Guide provides
that the Hong Kong Stock Exchange will consider giving consent and granting waiver from Rule
10.04 of the Hong Kong Listing Rules to an applicant ’s existing shareholders or their close
associates to participate in an ini tial public offering if any actual or perceived preferential treatment
arising from their ability to influence the appli cant during the allocation process can be addressed.
Prior to the Listing, our Company ’s share capital comprises ent irely A Shares listed on the
Shenzhen Stock Exchange. We have a large and wid ely dispersed public A Share shareholder base.
We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange
has granted to us, a waiver from strict compliance with the requirements under Rule 10.04 and
consent under Paragraph 5(2) of Appendix F1 to the Hong Kong Listing Rules to permit H Shares
in the International Offering to be placed to certain ex isting minority Shareh olders who (i) hold less
than 5% of the total number of A Shares in issue of our Company prior to the completion of the
Global Offering and (ii) are not and will not become (upon the completion of the Global Offering)
core connected persons of our Company or the close associates of any such core connected person
(together, the ‘‘Existing Minority Shareholders ’’), subject to the conditions as follows:
(i) each Existing Minority Shareholder to whom our Company may allocate the H Shares in
the International Offering holds less than 5% of the total number of A Shares in issue of
our Company before Listing;
(ii) each Existing Minority Shareholder is not , and will not be, a core connected person of
our Company or any close associate of any su ch core connected person immediately prior
to or following the Global Offering;
(iii) none of the Existing Minority Shareholder s has the right to appoint a Director and/or has
any other special rights;
(iv) allocation to the Existing Minority Shareholders or their close associates will not affect
our ability to satisfy the public float requirement as prescribed by the Hong Kong Stock
Exchange under Rule 8.08 of the Hong Kong Listing Rules or otherwise approved by the
Hong Kong Stock Exchange;
(v) the Sole Sponsor and Overall Coordinators will confirm to the Hong Kong Stock
Exchange that based on (a) the discussions amongst the Company, the Sole Sponsor and
the Overall Coordinators; and (b) the confirmations provided to the Hong Kong Stock
Exchange by our Company, the Sole Sponsor and the Overall Coordinators (including
this confirmation and confirmations (vi) and (vii) mentioned below), and to the best of
their knowledge and belief, they have no reason to believe that the Existing Minority
Shareholders or their close associates rece ived any preferential treatment, either as
cornerstone investors or as placees by virt ue of their relationship with our Company,
other than, in the case of participation as corn erstone investors, the preferential treatment
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of assured entitlement under a cornerstone investment following the principles set out in
Chapter 4.15 of the Guide, and details of allocation to the Existing Minority
Shareholders holding more than 1% of the issued share capital of the Company
immediately prior to the completion of the Gl obal Offering, and/or their close associates
will be disclosed in this Prospectus (for cornerstone investors, if any) and allotment
results announcement (for both cornersto ne investors and placees) of our Company;
(vi) our Company will confirm to the Hong Kong Stock Exchange in writing that:
(a) in the case of participation as cornerstone investors, no preferential treatment has
been, nor will be, given to the Existing Minority Shareholders or their close
associates by virtue of their relati onship with our Company, other than the
preferential treatment of assured enti tlement under a cornerstone investment
following the principles set out in Chapter 4.15 of the Guide, nor is the Existing
Minority Shareholder in a position to exert influence on the Company to obtain
actual or perceived preferential treatment , and the Existing Minority Shareholders or
their close associates ’ cornerstone investment agreements do not contain any
material terms which are more favorable to the Existing Minority Shareholders or
their close associates than those in other cornerstone investment agreements; or
(b) in the case of participation as placees, n o preferential treat ment has been, nor will
be, given to the Existing Minority Shareholders or their close associates, nor is the
Existing Minority Shareholder in a posi tion to exert influence on the Company to
obtain actual or perceived preferential treat ment, by virtue of their relationship with
our Company in any allocation in the placing tranche; and
(vii) in the case of participation as placees, the Overall Coordinators will confirm to the Hong
Kong Stock Exchange that, to the best of their knowledge and belief, no preferential
treatment has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company in any allocation in the
placing tranche.
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HONG KONG UNDERWRITERS
CLSA Limited
Merrill Lynch (Asia Pacific) Limited
ABCI Securities Company Limited
BOCI Asia Limited
Futu Securities International (Hong Kong) Limited
AVICT Global Asset Management Limited
UNDERWRITING
This Prospectus is published solely in connection with the Hong Kong Public Offering. The
Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional
basis. The International Offering is expected to be fully underwritten by the International
Underwriters subject to the terms and conditions of the International Underwriting Agreement. If,
for any reason, the Offer Price is not agreed betwe en the Overall Coordinators (for themselves and
on behalf of the Underwriters) and our Company, the Global Offering will not proceed and will
lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 28,848,400 Hong
Kong Offer Shares and the International Offeri ng of initially 233,408,400 International Offer
Shares, subject, in each case, to real location on the basis as described in ‘‘Structure of the Global
Offering ’’as well as to the Offer Size Adjustment Option and the Over-allotment Option in the case
of the International Offering.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong Offer
Shares (subject to reallocation) for subscription by the public in Hong Kong in accordance with the
terms and conditions of this Prospectus and the Hong Kong Underwriting Agreement at the Offer
Price.
UNDERWRITING
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Subject to (a) the Hong Kong Stock Exchange granting approval for the listing of, and
permission to deal in, the H Shares to be issued a s mentioned in this Pros pectus (including any
additional H Shares which may be issued pursuan t to the exercise of the Offer Size Adjustment
Option and the Over-allotment Option) on the Main Board of the Hong Kong Stock Exchange and
such approval not having been withdrawn and (b) certain other conditions set forth in the Hong
Kong Underwriting Agreement (including the Ove rall Coordinators (for themselves and on behalf
of the Hong Kong Underwriters) and our Company agreeing upon the Offer Price) being satisfied
(or, as the case may be, waived), the Hong Kong Underwriters have agreed severally but not jointly
to procure subscribers for, or themselves to subscribe for, their respective applicable portions of the
Hong Kong Offer Shares in aggregate, now being offered which are not taken up under the Hong
Kong Public Offering on the terms and conditions of this Prospectus and the Hong Kong
Underwriting Agreement.
The Hong Kong Underwriting Agreement is condi tional on and subject to, among other things,
the International Underwriting Agreement hav ing been executed and becoming unconditional and
not having been terminated in accordance with its terms.
Grounds for Termination
The Sole Sponsor and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) may, in their sole and absolute discretion and upon giving notice in writing to
our Company, terminate the Hong Kong Underwriting Agreement with immediate effect if at any
time prior to 8:00 a.m. on the Listing Date:
(1) there develops, occurs, exists or comes into force:
(a) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a change
or a development involving a prospective c hange in existing laws or regulations, or
the interpretation or application thereof by any court or any competent Authority in
or affecting Hong Kong, the PRC, the United States, the United Kingdom, the
European Union, Japan, Singapore, or other jurisdictions relevant to our Group
(each a ‘‘Relevant Jurisdiction ’’ and collectively, the ‘‘Relevant Jurisdictions ’’);
or
(b) any change or development involving a prospective change, or any event or series
of events or circumstances likely to resul t in a change or prospective change, in any
local, national, regional or international f inancial, political, military, industrial,
economic, fiscal, legal, regulatory, currency, credit or market conditions or
sentiments, taxation, equity securities or currency exchange rate or controls or any
monetary or trading settlement system, or fo reign investment regulations (including,
without limitation, a devaluation of the H ong Kong dollar, United States dollar or
Renminbi against any foreign currencies, a change in the system under which the
value of the Hong Kong dollar is linked to that of the United States dollar or the
Renminbi is linked to any foreign currency o r currencies) or other financial markets
UNDERWRITING
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(including, without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the in ter-bank markets and credit markets) in
or affecting any Relevant Jurisdictions, or affecting an investment in the Offer
Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts o f government, declaration of a regional,
national or international emergency or wa r, calamity, crisis, economic sanctions,
strikes, labor disputes, other industrial act ions, lock-outs, fire, explosion, flooding,
tsunami, earthquake, volcanic eruption, ci vil commotion, riots, rebellion, public
disorder, paralysis in government opera tions, acts of war, epidemic, pandemic,
outbreak or escalation, mutation or aggravat ion of diseases, accident or interruption
or delay in transportation, local, nation al, regional or international outbreak or
escalation of hostilities (whether or not war is or has been declared), act of God or
act of terrorism (whether or not responsib ility has been claimed)) in or affecting any
of the Relevant Jurisdictions; or
(d) the imposition or declaration of any moratorium, suspension or limitation (including
without limitation, any imposition of or requirement for any minimum or maximum
price limit or price range) on (i) the trading in shares or securities generally on the
Stock Exchange, the Shanghai Stock Exch ange, the Shenzhen Stock Exchange, the
Tokyo Stock Exchange, the Singapore Stock Exchange, the New York Stock
Exchange, the NASDAQ Global Market or the London Stock Exchange; or (ii) the
trading in any securities of our Company listed or quoted on a stock exchange or an
over-the-counter market; or
(e) the imposition or declaration of any general moratorium on banking activities in or
affecting any of the Relevant Jurisdictio ns or any disruption in commercial banking
or foreign exchange trading or securities se ttlement or clearing services, procedures
or matters in or affecting any of th e Relevant Jurisdictions; or
(f) except with the prior written consent of the Sole Sponsor and the Overall
Coordinators, the issue or requirement to issue by our Company of a supplement or
amendment to this Prospectus, the CSRC Fi lings, or other documents in connection
with the offer and sale of the Offer Shares pursuant to the Companies (Winding Up
and Miscellaneous Provisions) Ordinan ce or the Listing Rules or the CSRC Rules
or upon any requirement or request of the Stock Exchange and/or the SFC and/or
the CSRC; or
(g) the imposition of sanctions or export controls in whatever form, directly or
indirectly, on or relevant to any Group company by or on any Relevant Jurisdiction,
or the withdrawal of trading privileges which existed on the date of the Hong Kong
Underwriting Agreement, in whatever form , directly or indirectly, by, or for, any
Relevant Jurisdiction; or
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(h) any valid demand by creditors for payment or repayment of indebtedness of any
member of our Group or in respect of which any member of our Group is liable
prior to its stated maturity; or
(i) an order or petition is presented for th e winding-up or liquidation of any member of
our Group, or any member of our Group makes any composition or arrangement
with its creditors or enters into a scheme o f arrangement or any resolution is passed
for the winding-up of any member of our Group or a provisional liquidator, receiver
or manager is appointed over all or material part of the assets or undertaking of any
member of our Group or anything analogous thereto occurs in respect of any
member of our Group; or
(j) any non-compliance of this Prospectus (or any other documents used in connection
with the contemplated offering, allotment , issue, subscription or sale of any of the
Offer Shares), the CSRC Filings or any aspect of the Global Offering with the
Listing Rules or any other applicable Laws; or
(k) any litigation, dispute, legal action o r claim or regulatory or administrative
investigation or action being threatened, instigated or announced by any authority
against any member of our Group or any Director, Supervisor or senior management
members of our Company as named in this Prospectus; or
(l) any contravention by any Group company or any Director or Supervisor of the
Listing Rules or applicable Laws; or
(m) any change or prospective change, or a materialization of, any of the risks set out in
the section headed ‘‘Risk Factors ’’in this Prospectus;
(n) any Director, any Supervisor or any mem ber of senior management of our Company
n a m e di nt h i sP r o s p e c t u sb e i n gc h a r g e dw i t ha ni n d i c t a b l eo f f e n c eo rp r o h i b i t e db y
operation of law or otherwise disqualified from taking part in the management or
taking directorship or supervisorship of a company; or
(o) any Director being removed fro m office or vacating his/her office;
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which, in any such case individually or in the aggregate, in the sole and absolute opinion
of the Sole Sponsor and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters):
(i) has or will or may have a material adverse change, or a material adverse effect, or
any development involving a prospectiv e material adverse change or material
adverse effect, on the profits, losses, results of operations, assets, liabilities, general
affairs, business, management, performance, prospects, shareholders ’ equity,
position or condition (financial or oth erwise) of our Group, taken as a whole
(‘‘Material Adverse Effect ’’);
(ii) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications u nder the Hong Kong Public Offering or the
level of indications of interest under the International Offering; or
(iii) makes or will make or may make it impr acticable, inadvisable, inexpedient or
incapable for the Global Offering to be pe rformed or implemented as envisaged, or
for the Global Offering to proceed, or to market the Global Offering or the delivery
or distribution of the Offer Shares on the terms and in the manner contemplated by
the offering documents; or
(iv) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or preventing the processing of ap plications and/or
payments pursuant to the Global Offering or pursuant to the underwriting thereof;
or
(2) there has come to the notice of the Sole Sponsor and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(a) any statement contained in any of the Hong Kong Public Offering Documents, the
CSRC Filings and/or any notices, announcem ents, advertisements, communications
or other documents issued or used by or on behalf of our Company in connection
with the Hong Kong Public Offering (including any supplement or amendment
thereto but excluding the Underwriters ’ Information) (the ‘‘Global Offering
Documents ’’) was, when it was issued, or has be come untrue, incorrect, inaccurate
in any material respect or misleading; or th at any estimate, for ecast, expression of
opinion, intention or expectation contained in any such documents, was, when it
was issued, or has become unfair or misleading in any respect or based on untrue,
dishonest or unreasonable assumptions; or
(b) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of t his Prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
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(c) any material breach of, or any event or circumstance rendering untrue or incorrect
o rm i s l e a d i n gi na n yr e s p e c t ,a n yo ft he representations, warranties and
undertakings given by our Company in the Hong Kong Underwriting Agreement or
the International Underwriting Agreement; or
(d) any event, act or omission which gives ri se or is likely to give rise to any liability
of the Indemnifying Party pursuant to the Hong Kong Underwriting Agreement; or
(e) any material breach of any of the obli gations or undertakings imposed upon our
Company under the Hong Kong Underwriting Agreement or the International
Underwriting Agreement; or
(f) there is any change or development invol ving a prospective change, constituting or
having a Material Adverse Effect; or
(g) our Company withdraws this Prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to the
Global Offering) or the Global Offering; or
(h) that the approval by the Listing Committee of the listing of, and permission to deal
in, the H Shares in issue and to be issued pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option and the Offer Size
Adjustment Option) is refused or not granted, other than subject to customary
conditions, on or before the Listing Date, or if granted, the approval is subsequently
withdrawn, cancelled, qualified (other t han by customary conditions), revoked or
withheld; or
(i) any of the experts named in this Prospectus (other than the Sole Sponsor) has
withdrawn its consent to the issue of this Prospectus with the inclusion of its
reports, letters and/or legal opinions (as the case may be) and references to its name
included in the form and context in w hich it respectively appears; or
(j) the notice of acceptance of the CSRC Fili ngs issued by the CSRC and/or the results
of the CSRC Filings published on the website of the CSRC is rejected, withdrawn,
revoked or invalidated.
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Undertakings to the Hong Kong Stock Exchange Pursuant to the Hong Kong Listing Rules
Undertakings by our Company
Pursuant to Rule 10.08 of the Hong Kong Listing Rules, our Company has undertaken to the
Hong Kong Stock Exchange that no further shares or s ecurities convertible into equity securities of
our Company (whether or not of a class already listed) may be issued or form the subject of any
agreement to such an issue within six months from the date on which the H Shares of our Company
first commence dealing on the Stock Exchange (whether or not such issue of H Shares or securities
will be completed within six months from the commencement of dealing), except (a) pursuant to the
Global Offering, the Offer Size Adj ustment Option and the Over-allotment Option, if any, or (b)
under any of the circumstances provided under Rule 10.08 of the Listing Rules.
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Hong Kong Listing Rules, each of the Controlling Shareholders
has undertaken to the Hong Kong Stock Exchange and the Company that, except pursuant to the
Global Offering (including the Offer Size Adjustm ent Option and the Over-allotment Option), he/
she/it will not and will procure that the relevant r egistered holder(s) will not without the prior
written consent of the Hong Kong Stock Exchange or unless otherwise in compliance with the
applicable requirement of the Hong Kong Listing Rules:
(a) in the period commencing on the date by ref erence to which disclosure of his/her/its
shareholding in our Company is made in this prospectus and ending on the date which is
six months from the Listing Date (the ‘‘First Six-Month Period ’’), either directly or
indirectly, dispose of, nor enter into any agreement to dispose of or otherwise create any
options, rights, interests or encumbrances in respect of, any of the securities of the
Company in respect of which he/she/it is sh own by this Prospectus to be the beneficial
owner; and
(b) in the period of six months from the expiry of the First Six-Month Period, either directly
or indirectly, dispose of, nor enter into any agreement to dispose of or otherwise create
any options, rights, interests or encumbran ces in respect of, any of the securities referred
to in paragraph (a) above if, immediately following such disposal or upon the exercise or
enforcement of such options, rights, intere sts or encumbrances, he/she/it would cease to
be a controlling shareholder of our Company.
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Pursuant to Note 3 to Rule 10.07(2) of the Hong Kong Listing Rules, each of the Controlling
Shareholders has undertaken to the Hong Kong Stock Exchange and our Company that, within the
period commencing on the date by reference to whic h disclosure of his/her/its shareholding in our
Company is made in this Prospectus and ending on the date which is 12 months from the Listing
Date, he/she/it will:
(a) when he/she/it pledges or charges any securities of our Company beneficially owned by
him/her/it in favor of an authorized institution (as defined under the Banking Ordinance
(Chapter 155 of the Laws of Hong Kong) for a bona fide commercial loan relying on
Note 2 to Rule 10.07(2) of the Listing Rules, immediately inform the Company of such
pledge or charge together with the number of securities so pledged or charged; and
(b) when he/she/it receives indications, either v erbal or written, from the pledgee or chargee
of any securities of our Company that any of the pledged or charged securities will be
disposed of, immediately inform our Company of such indications.
Our Company will inform the Hong Kong Stock Exchange as soon as we have been informed
of the matters referred to in paragraphs (i) and (ii) above by any of the Controlling Shareholders
and subject to the then applicable requirements of the Hong Kong Listing Rules disclose such
matters by way of an announcement.
Undertakings Pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company in respect of our Company
Our Company has undertaken to each of the Sol e Sponsor, the Sponsor-Overall Coordinator,
the Overall Coordinators, the Joint Global Coordinators, the Capital Market Intermediaries, the
Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters that except pursuant to
the Global Offering (including pursuant to the Offer Size Adjustment Option and/or the Over-
allotment Option), at any time after the date of the Hong Kong Underwriting Agreement up to and
including the date falling six months after the Listing Date (the ‘‘First Six Month Period ’’), we
will not, without the prior written consent of the Sole Sponsor and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Unde rwriters) and unless in compliance with the
requirements of the Hong Kong Listing Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to
allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or sell any
option, warrant, contract or right to subscribe for or purchase, grant or purchase any
option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of
or create an encumbrance over, or agree to transfer or dispose of or create an
encumbrance over, either directly or indir ectly, conditionally or unconditionally, or
repurchase, any legal or beneficial interest in the H Shares or any other securities of our
Company or any interest in any of the foregoing (including, without limitation, any
securities convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to pu rchase any H Shares or other securities of
UNDERWRITING
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our Company, as applicable), or deposit any H Shares or other securities of our
Company, as applicable, with a depositary in connection with the issue of depositary
receipts; or
(b) enter into any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of owners hip (legal or beneficial) of the H Shares or
any other securities of our Company, or any interest in any of the foregoing (including,
without limitation, any securities converti ble into or exchangeable or exercisable for or
that represent the right to receive, or any warrants or other rights to purchase, any H
Shares); or
(c) enter into any transaction with the same eco nomic effect as any transaction described in
paragraph (a) or (b) above; or
(d) offer to or agree to do any of the foregoing specified in paragraph (a), (b) or (c) or
announce any intention to do so,
in each case, whether any of the foregoing trans actions is to be settled by delivery of H Shares or
such other securities, in cash or otherwise (whether or not the issue of such H Shares or other
securities will be completed within the First Six Month Period). Our Company has further agreed
that, in the event our Company is allowed to en ter into any of the transactions described in
paragraph (a), (b) or (c) above or offers to or agrees to or announces any intention to effect any
such transaction during the period of six months commencing on the date on which the First Six
Month Period expires (the ‘‘Second Six Month Period ’’), we will take all reasonable steps to
ensure that such an issue or disposal will not , and no other act of our Company will, create a
disorderly or false market for any H Shares or other securities of our Company.
Our Company has agreed and undertaken to each of the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Jo int Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters
that it will, comply with the minimum public float requirements specified in the Hong Kong Listing
Rules or any waiver granted and not revoked by the Hong Kong Stock Exchange (the ‘‘Minimum
Public Float Requirement ’’), and it will not effect any purchase of the H Shares, or agree to do so,
which may reduce the holdings of the H Shares held by the public (as defined in Rule 8.24 of the
Listing Rules) to below the Minimum Public Fl oat Requirement or any waiver granted and not
revoked by the Stock Exchange prior to the expiration of the First Six Month Period without first
having obtained the prior written consent of the Sole Sponsor and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters).
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Indemnity
Our Company and the Controlling Shareholders have agreed to indemnify, among the others,
the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners, the Joint Lead Managers and the Hong Kong Underwriters
for certain losses which they may suffer, including, amongst others, losses arising from their
performance of their obligations under the Hong Kong Underwriting Agreement and any breach by
our Company of the Hong Kong Underwriting Agreement.
Hong Kong Underwriters ’ Interests in our Company
Except for their obligations under the Hong Kong Underwriting Agreement, as of the Latest
Practicable Date, the Hong Kong Underwriters do not have any shareholding interest in our
Company or any right or option (whether legally en forceable or not) to subscribe for or nominate
persons to subscribe for securities in our Company or any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, a mong others, the Controlling Shareholders, the
Overall Coordinators and the International Under writers. Under the International Underwriting
Agreement, subject to the conditions set forth there in, the International Underwriters would agree to
purchase, or procure subscribers to purchase, the Offer Shares being offered pursuant to the
International Offering (subject to, amongst other s, any reallocation between the International
Offering and the Hong Kong Public Offering). It is expected that the International Underwriting
Agreement may be terminated on similar ground s as the Hong Kong Underwriting Agreement.
Potential investors are reminded that in the event that the International Underwriting Agreement is
not entered into, the Global Offering will not proceed.
Over-allotment Option
Our Company is expected to grant to the International Underwriters, exercisable in whole or in
part by the Overall Coordinators at their sole and absolute discretion (for themselves and on behalf
of the International Underwriters), the Over-all otment Option, which will be exercisable from the
Listing Date until 30 days after the last day for the lodging of applications under the Hong Kong
Public Offering, to require our Company to issue and allot, up to an aggregate of 39,338,400 H
Shares, representing approximately 15.0% of t he initial Offer Shares (assuming the Offer Size
adjustment Option is not exercised at all) , or up to an aggregate of 45,239,200 H Shares,
representing approximately 15.0% of the Offer Sha res (assuming the Offer Size Adjustment Option
UNDERWRITING
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is exercised in full), at the Offer Price under the Inte rnational Offering, to cover over-allocations in
the International Offering, if any. Further details are set out in the section headed ‘‘Structure of the
Global Offering — International Offering — Over-allotment Option ’’in this Prospectus.
Offer Size Adjustment Option
Our Company is expected to grant to the Overal l Coordinators the Offer Size Adjustment
Option, exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) on or before the second Business Day prior to the Listing Date and will lapse
immediately thereafter, whichever is earlier, t o require our Company to allot and issue up to an
aggregate of 39,338,400 additional Offer Shares, representing approximately 15.0% of the Offer
Shares initially being offered under the Global O ffering at the Offer Price to cover any excess
demand in the International Offering. The Offer Siz e Adjustment Option provides flexibility for the
Overall Coordinators to increase the number of Offer Shares available for purchase under the
International Offering to cover additional market d emand. Further details are set out in the section
headed ‘‘Structure of the Global Offering — International Offering — Offer Size Adjustment
Option ’’in this Prospectus.
Commissions and Expenses
The Capital Market Intermediaries will receive an underwriting commission of 0.5% of the
aggregate gross proceeds from the Global Offering (including any proceeds arising from exercise of
the Offer Size Adjustment Option and the Over-all otment Option), out of which they will pay any
sub-underwriting commissions and other fees . In addition, our Company may, at our sole and
absolute discretion, pay any one or more of Capita l Market Intermediaries an incentive fee of an
aggregate of up to 0.3% of the gross proceeds fro m the Global Offering (including any proceeds
arising from exercise of the Offer Size Adjustment Option and the Over-allotment Option).
Assuming the incentive fee is paid in full, the f ixed fees and discretionary fees payable to the
Capital Market Intermediaries represent 62.5 % and 37.5% of the aggregate fees payable to the
Capital Market Intermediarie s in total in connection with the Global Offering. For unsubscribed
Hong Kong Offer Shares reallocated to the International Offering, we will pay an underwriting
commission at the rate applicable to the International Offering and such commission will be paid to
the relevant International Underwrite rs and not the Hong Kong Underwriters.
The aggregate underwriting commissions, incenti ve fee (if any), documentation fee, listing
fees, Hong Kong Stock Exchange trading fee and tran saction levies, legal and other professional
fees, and printing and other expenses in relation to the Global Offering are estimated to amount to
approximately HK$73.30 million in total (based on the Offer Price of HK$17.78 per Offer Share,
being the mid-point of the indicative Offer Price r ange and assuming full payment of discretionary
fees and the Offer Size Adjustment Option and th e Over-allotment Option are not exercised), and
are payable by our Company.
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ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offeri ng and the International Offering (together,
the ‘‘Syndicate Members ’’) and their affiliates may each individually undertake a variety of
activities (as further described below) which do not form part of the underwriting or stabilizing
process.
The Syndicate Members and their affiliates ar e diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of commercial
and investment banking, brokerage, funds mana gement, trading, hedging, investing and other
activities for their own account and for the account of others. In the ordinary course of their various
business activities, the Syndicate Members and the ir respective affiliates may purchase, sell or hold
a broad array of investments and actively trade securities, derivatives, loans, commodities,
currencies, credit default swaps and other financial instruments for their own account and for the
accounts of their customers. Such investment and t rading activities may involve or relate to assets,
securities and/or instruments of our Company a nd/or persons and entities with relationships with
our Company and may also include swaps and other financial instruments entered into for hedging
purposes in connection with the Group ’s loans and other debt.
In relation to the H Shares, those activities coul d include acting as agent for buyers and sellers
of the H Shares, entering into transactions with those buyers and sellers in a principal capacity,
proprietary trading in the H Shares, and enteri ng into over the counter or listed derivative
transactions or listed and unlisted securities t ransactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Those activities may requ ire hedging activity by those entities involving,
directly or indirectly, the buying and selling of the H Shares. All such activity could occur in Hong
Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the H Shares , in baskets of securities or indices including the
H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any of the
foregoing.
In relation to issues by Syndicate Members or th eir affiliates of any listed securities having
the H Shares as their underlying securities, whether on the Hong Kong Stock Exchange or on any
other stock exchange, the rules of the exchange ma y require the issuer of those securities (or one of
its affiliates or agents) to act as a market maker or liquidity provider in the security, and this will
also result in hedging activity in the H Shares in most cases.
All such activities may occur both during and af ter the end of the stabilizing period described
in the section headed ‘‘Structure of the Global Offering ’’ in this Prospectus. Such activities may
affect the market price or value of the H Shares, th e liquidity or trading volume in the H Shares and
the volatility of the price of the H Shares, and t he extent to which this occurs from day to day
cannot be estimated.
UNDERWRITING
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It should be noted that when engaging in any of these activities, the Syndicate Members will
be subject to certain restrictions, including the following:
. the Syndicate Members (other than the Stab ilizing Manager or any person acting for it)
must not, in connection with the distribution o f the Offer Shares, effect any transactions
(including issuing or enterin g into any option or other derivative transactions relating to
the Offer Shares), whether in the open market or otherwise, with a view to stabilizing or
maintaining the market price of any of the Offer Shares at levels other than those which
might otherwise prevail in the open market; and
. the Syndicate Members must comply with all a pplicable laws and regulations, including
the market misconduct provisions of the SFO, including the provisions prohibiting
insider dealing, false trading, price rigging and stock market manipulation.
Certain of the Syndicate Members or their resp ective affiliates have provided from time to
time, and expect to provide in the future, investment banking and other services to our Company
and its affiliates for which such Syndicate Members or their respective aff iliates have received or
will receive customary fees and commissions.
In addition, the Syndicate Members or their res pective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
SOLE SPONSOR ’S INDEPENDENCE
The Sole Sponsor satisfies the independence c riteria applicable to sponsor set out in Rule
3A.07 of the Hong Kong Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This Prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. The Global Offering comprises:
(1) the Hong Kong Public Offering of initiall y 28,848,400 H Shares (subject to reallocation
as mentioned below) for subscription by the public in Hong Kong as described in the
paragraph headed ‘‘ — The Hong Kong Public Offering ’’below; and
(2) the International Offering of initially 233, 408,400 H Shares (subject to reallocation, the
Offer Size Adjustment Option and the Over-allotment Option as mentioned below)
outside the United States (including profes sional and institutional investors within Hong
Kong) in offshore transactions in reliance on Regulation S, and in the United States only
to QIBs in reliance on Rule 144A or other ava ilable exemption fro m registration under
the U.S. Securities Act, as described in the paragraph headed ‘‘ — the International
Offering ’’below.
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public Offering or
indicate an interest, if qualified to do so, for the I nternational Offer Shares under the International
Offering, but may not do both.
The Offer Shares will represent approximatel y 5.00% of the enlarged issued share capital of
our Company immediately after completion of the Global Offering without taking into account the
exercise of the Offer Size Adjustment Option and th e Over-allotment Option. If the Over-allotment
Option is exercised in full, the Offer Shares will r epresent approximately 5.71% of the enlarged
issued share capital of our Company (assuming th e Offer Size Adjustment Option is not exercised
at all) or approximately 6.51% of the enlarged issued share capital of our Company (assuming the
Offer Size Adjustment Option is exercised in full) immediately after completion of the Global
Offering and the exercise of the Over-allotment Option as set out in ‘‘ — The International Offering
— Over-allotment Option ’’below.
References in this Prospectus to applicati ons, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering, respectively, ma y be subject to reallocation as described in ‘‘ — The Hong
Kong Public Offering — Reallocation and Clawback ’’below.
THE HONG KONG PUBLIC OFFERING
Number of Hong Kong Offer Shares Initially Offered
We are initially offering 28,848,400 H Shares for subscription by the public in Hong Kong at
the Offer Price, representing approximately 11.00% of the total number of the Offer Shares initially
available under the Global Offering. Subject to th e reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering, the Hong Kong Offer Shares will
STRUCTURE OF THE GLOBAL OFFERING
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represent approximately 0.55% of the enlarged issued share capital of our Company immediately
following the completion of the Global Offering (assuming the Offer Size Adjustment Option and
the Over-allotment Option are not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to
institutional and professional i nvestors. Professional investors gen erally include brokers, dealers,
and companies (including fund managers) whose o rdinary business involves dealing in shares and
other securities, and corporate entities which regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set forth in
‘‘ — Conditions of the Global Offering ’’below.
Allocation
Allocation of the Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering. The
basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly applied
for by applicants. Such allocation could, where ap propriate, consist of balloting, which would mean
that some applicants may receive a higher allocation than the others who have applied for the same
number of the Hong Kong Offer Shares, and those applicants who are not successful in the ballot
may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of the Offer Shares initially available under the
Hong Kong Public Offering (after taking into acc ount any allocation) is to be divided into two
pools (subject to adjustment of odd lot size): Pool A and Pool B. Accordingly, the maximum
number of Hong Kong Offer Shares initially in Pool A and Pool B will be 14,424,200 and
14,424,200, respectively. The Hong Kong Offer Shares in Pool A will be allocated on an equitable
basis to applicants who have applied for Hong Kong Offer Shares with an aggregate subscription
price of HK$5 million (excluding the brokerage, S FC transaction levy, AFRC transaction levy and
the Hong Kong Stock Exchange trading fee payable) or less. The Offer Shares in Pool B will be
allocated on an equitable basis to applicants wh o have applied for Offer Shares with an aggregate
subscription price of more than HK$5 million and up to the total value of pool B (excluding the
brokerage, SFC transaction levy, AFRC transa ction levy and the Hong Kong Stock Exchange
trading fee payable).
Investors should be aware that applications in Pool A and applications in Pool B may receive
different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the pools are
under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to
satisfy demand in that other pool and be allocated accordingly. For the purpose of this subsection
only, the ‘‘price ’’ for the Hong Kong Offer Shares means the price payable on application therein
(without regard to the Offer Price as finally deter mined). Applicants can only receive an allocation
of the Offer Shares from either Pool A or Pool B but not from both pools.
Multiple or suspected multiple applications and any application for more than 14,424,200
Hong Kong Offer Shares (being approximately 50% of the 28,848,400 Hong Kong Offer Shares
initially available under the Hong Kong P ublic Offering) are liable to be rejected.
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Reallocation and Clawback
The allocation of the Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation u nder the Hong Kong Listing Rules. Paragraph 4.2
of Practice Note 18 of the Hong Kong Listing Rules requires a clawback mechanism to be put in
place which would have the effect of increasing the number of the Offer Shares under the Hong
Kong Public Offering to a certain percentage of the total number of the Offer Shares offered under
the Global Offering if the International Offering is fu lly subscribed or oversubscribed under certain
circumstances.
We have applied for, and the Stock Exchange has granted us, a waiver from strict compliance
with paragraph 4.2 of Practice Note 18 of the Hong Kong Listing Rules to the effect as further
described below.
28,848,400 Offer Shares are initially available i n the Hong Kong Public Offering, representing
approximately 11.0% of the Offer Shares initially available for subscription under the Global
Offering. In the event that the International Offer S hares are fully subscribed or oversubscribed, if
the number of Offer Shares validly applied for unde r the Hong Kong Public Offering represents (a)
10 times or more but less than 35 times, (b) 35 times or more but less than 70 times and (c) 70
times or more of the total number of Offer Shares initially available under the Hong Kong Public
Offering, then Offer Shares will be reallocat ed to the Hong Kong Public Offering from the
International Offering. As a resu lt of such reallocation, the total number of Offer Shares available
under the Hong Kong Public Offering will be increased to 47,206,400 Offer Shares (in the case of
(a)), 65,564,200 Offer Shares (in the case of (b)) a nd 118,015,600 Offer Shares (in the case of (c)),
representing approxim ately 18.0%, 25.0% and 45.0% of the total number of Offer Shares initially
available under the Global Offering, respectivel y (before any exercise of the Over-allotment
Option).
In each case, the additional Offer Shares reallo cated to the Hong Kong Public Offering will be
allocated between Pool A and Pool B and the number o f Offer Shares allocated to the International
Offering will be correspondingly reduced in such manner as the Overall Coordinators in their sole
discretion consider appropriate.
In addition, the Overall Coordinators may in the ir sole discretion reallocate Offer Shares from
the International Offering to the Hong Kong Public Offering to satisfy valid applications under the
Hong Kong Public Offering under the condition that (1) the International Offering is not fully
subscribed and the Hong Kong Public Offering is fully subscribed or oversubscribed (irrespective
of the number of times); or (2) the International O ffering is fully subscribed or oversubscribed and
the Hong Kong Public Offering is fully subscrib ed or oversubscribed with the number of Offer
Shares validly applied for in the Hong Kong Public Offering representing less than 10 times of the
number of Shares initially available for subscri ption under the Hong Kong Public Offering. In such
event, the Overall Coordinators have the authori ty to re-allocate International Offer Shares
originally allocated in the Inter national Offering to the Hong Kong Public Offering in such number
as they deem appropriate, provided that in accor dance with Chapter 4.14 of the Guide, (1) the
number of International Offer Shares re-allocat ed to the Hong Kong Public Offering should not
STRUCTURE OF THE GLOBAL OFFERING
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exceed 28,848,400 Shares, such that the total number of Hong Kong Offer Shares following such
reallocation will not exceed 57,696,800 Shares, rep resenting twice of the Offer Shares initially
available under the Hong Kong Public Offering; and (2) the final Offer Price should be fixed at the
bottom end of the indicative Offer Price range (i . e .H K $ 1 7 . 3 8p e rO f f e rS h a r e )s t a t e di nt h i s
Prospectus.
If the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators have the
authority to reallocate all or any unsubscribed Hong Kong Offer Shares to the International
Offering in such proportions as the Overall Coordinators deem appropriate.
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application s ubmitted by him/her that he/she and any person(s)
for whose benefit he/she is making the application have not applied for or taken up, or indicated an
interest for, and will not apply for or take up, or indicate an interest for, any Offer Shares under the
International Offering, and such applicant ’s application is liable to be rejected if the said
undertaking and/or confirmation is breached a nd/or untrue (as the case may be) or it has been or
will be placed or allocated Offer Share s under the International Offering.
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channel), the maximum price of HK$18.18 per Offer Share in addition to the
brokerage, SFC transaction levy, Hong Kong St ock Exchange trading fee and AFRC transaction
levy payable on each Offer Share. If the Offer Price, as finally determined in the manner described
in the paragraph headed ‘‘ — Pricing and Allocation ’’ below, is less than the maximum price of
HK$18.18 per Offer Share, appropriate refund paym ents (including the brokerage, SFC transaction
levy, Hong Kong Stock Exchange trading fee and AF RC transaction levy attributable to the surplus
application monies) will be made to successful applic ants (subject to application channels), without
interest. Further details are set out in the section headed ‘‘How to Apply for Hong Kong Offer
Shares ’’in this Prospectus.
THE INTERNATIONAL OFFERING
Number of International Offer Shares Initially Offered
The International Offering will consist of an i nitial offering of 233,408,400 Offer Shares,
representing approximately 89% of the total num ber of Offer Shares initially available under the
Global Offering and approximately 4.45% of th e enlarged issued share capital of our Company
immediately following the completion of the Gl obal Offering subject to the reallocation of Offer
Shares between the International Offering and the Hong Kong Public Offering and assuming that
the Offer Size Adjustment Option and the Ove r-allotment Option are not exercised. The
International Offering will be offered by us outsi de of the United States in reliance on Regulation
Sa n di nt h eU n i t e dS t a t e so n l yt oQ I B si nr e l i a nce on Rule 144A or other available exemption
from registration under the U.S. Securities Act.
STRUCTURE OF THE GLOBAL OFFERING
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Allocation
The International Offering will include selecti ve marketing of Offer Shares to institutional and
professional investors and other investors ant icipated to have a sizeable demand for such Offer
Shares. Professional investors generally include brokers, dealers, companies (including fund
managers) whose ordinary business involves deal ing in shares and other securities and corporate
entities which regularly invest in shares and other securities. Allocation of Offer Shares pursuant to
the International Offering will be effected in accordance with the ‘‘book-building ’’ process
described in the paragraph headed ‘‘ — Pricing and Allocation ’’ below and based on a number of
factors, including the level and timing of dem and, the total size of the relevant investor ’si n v e s t e d
assets or equity assets in the relevant sector and whether or not it is expected that the relevant
investor is likely to buy further Offer Shares, and/or hold or sell its Offer Shares, after the listing of
the Offer Shares on the Hong Kong Stock Exchange. Such allocation is intended to result in a
distribution of the Offer Shares on a basis which would lead to the establishment of a solid
professional and institutional shareholder base t o the benefit of our Company and the Shareholders
as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require any
investor who has been offered Offer Shares under the International Offering, and who has made an
application under the Hong Kong Public Offering, to provide sufficient information to the Overall
Coordinators so as to allow them to identify the re levant applications under the Hong Kong Public
Offering and to ensure that they are excluded from any application of Offer Shares under the Hong
Kong Public Offering.
Reallocation
The total number of the Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the r eallocation arrangement described in ‘‘ — The Hong Kong
Public Offering — Reallocation and Clawback ’’ above, the exercise of the Offer Size Adjustment
Option and the Over-allotment Option in whole o r in part and/or any reallocation of unsubscribed
Offer Shares originally included in the Hong Kong Public Offering to the International Offering.
Over-allotment Option
Our Company is expected to grant to the International Underwriters, exercisable in whole or in
part by the Overall Coordinators at their sole and absolute discretion (for themselves and on behalf
of the International Underwriters), the Over-all otment Option, which will be exercisable from the
Listing Date until 30 days after the last day for the lodging of applications under the Hong Kong
Public Offering, to require our Company to allot and issue, up to an aggregate of 39,338,400 Offer
Shares, representing approximately 15.0% of the O ffer Shares initially available under the Global
Offering (assuming the Offer Size Adjustment Option is not exercised) or up to an aggregate of
45,239,200 Offer Shares, representing approximately 15.00% of the Offer Shares available under
the Global Offering (assuming the Offer Size Adjus tment Option is exercised in full), at the Offer
Price, to cover overallocations in the Internation al Offering, if any. If the Offer Size Adjustment
STRUCTURE OF THE GLOBAL OFFERING
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Option and the Over-allotment Option are exercis ed in full, the additional Offer Shares to be issued
pursuant to the Over-allotment Option will repre sent approximately 0.85% of the total number of
Shares in issue immediately following the completion of the Global Offering and the exercise of the
Offer Size Adjustment Option and the Over-allot ment Option. If the Over-allotment Option is
exercised, an announcement will be made.
Offer Size Adjustment Option
In order to provide flexibility for the Overall Coordinators to increase the number of Offer
Shares available for purchase under the Interna tional Offering to cover additional market demand,
the Company is expected to grant to the Overall Coordinators the Offer Size Adjustment Option,
exercisable by the Overall Coordinators at their absolute discretion (for themselves and on behalf of
the International Underwriters) on or before the second business day prior to the Listing Date and
will lapse immediately thereafter, to require th e Company to allot and issue up to an aggregate of
39,338,400 additional Offer Shares (representing approximately 15.0% of the Offer Shares initially
being offered under the Global Offering) at the Offer Price to cover any excess demand in the
International Offering.
If the Offer Size Adjustment Option is exercis ed in full, the additional Offer Shares to be
issued pursuant thereto will represent approximate ly 0.74% of our issued shar e capital immediately
following the completion of the Global Offering (assuming the Over-allotment Option is not
exercised) and the full exercise of the Offer Size Adjustment Option.
In considering whether to exercise the Offer S ize Adjustment Option, the Company and the
Overall Coordinators will take into account a num ber of factors, including, among other things:
(i) whether the level of interest expressed by p rospective professional and institutional
investors during the book-building process under the International Offering is sufficient
to cover:
(a) the total number of Offer Shares, which represents the aggregate of the Offer Shares
initially available under the Global Offe ring and the additional Offer Shares upon
any exercise of the Offer Size Adjustment Option; and
(b) the corresponding number of Shares under the Over-allotment Option;
(ii) the prices at which prospect ive professional and institutional investors have indicated
they would be prepared to acquire the Offer Shares in the course of the book-building
process;
(iii) the quality of investors, with a view to estab lishing a solid professional institutional and
investor shareholder base to the benefit of the Company and its Shareholders as a whole;
and
(iv) general market conditions.
STRUCTURE OF THE GLOBAL OFFERING
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The dilution effect of the Offer Size Adjustment Option (assuming the Over-allotment Option
is not exercised) is set out below:
Number of H Shares
issued under the Global
Offering before the
exercise of the Offer Size
Adjustment Option (the
‘‘Original Subscribers ’’)
Approximate percentage
of total issued share
capital held by the
Original Subscribers
before the exercise of
the Offer Size
Adjustment Option
Number of H Shares
issued under the Global
Offering after the full
exercise of the Offer Size
Adjustment Option
Approximate percentage
of total issued share
capital held by the
Original Subscribers
after the full exercise of
the Offer Size
Adjustment Option
262,256,800 5.00% 301,595,200 4.92%
The Offer Size Adjustment Option will not be used for price stabilization purposes and will
not be subject to the provisions of the Securities and Futures (Price Stabilizing) Rules (Chapter
571W of the Laws of Hong Kong). The Offer Size A djustment Option will be in addition to the
Over-allotment Option.
If the Offer Size Adjustment Option is exercise d in full, the additional net proceeds received
from the placing of the additional Shares allotted and issued will be allocated in accordance with
the allocations as disclosed in the section headed ‘‘Future Plans and Use of Proceeds ’’ in this
Prospectus, on a pro rata basis.
The Company will disclose in its allotment results announcement if and to what extent the
Offer Size Adjustment Option has been exercised, or will confirm that if the Offer Size Adjustment
Option has not been exercised by the Price Determination Date, it will lapse and cannot be
exercised at any future date.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the distribution of
securities. To stabilize, the underwriters may bid fo r, or purchase, the newly issued securities in the
secondary market, during a specified period of tim e, to retard and, if possible, prevent any decline
in the market price of the securities below the offer price. Such transactions may be effected in all
jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws
and regulatory requirements, including thos e of Hong Kong. In Hong Kong, the price at which
stabilization is effected is not permitted to exceed the offer price.
In connection with the Global Offe ring, the Stabilizing Manager, its affiliates or any person
acting for it, on behalf of the Underwriters, may ove r-allocate or effect transactions with a view to
stabilizing or supporting the market price of the H Shares at a level higher than that which might
otherwise prevail for a limited period after the L isting Date, to the extent permitted by applicable
laws of Hong Kong or elsewhere. However, there is no obligation on the Stabilizing Manager, its
affiliates or any persons acting for it, to conduc t any such stabilizing action. Such stabilization
action, if taken, (a) will be conducted at the absolu te discretion of the Stabilizing Manager (or any
STRUCTURE OF THE GLOBAL OFFERING
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person acting for it) and in what the Stabilizing Man ager reasonably regards as the best interest of
our Company, (b) may be discontinued at any time and (c) is required to be brought to an end
within 30 days of the last day for lodging applications under the Hong Kong Public Offering.
Stabilizing action permitted in Hong Kong pu rsuant to the Securities and Futures (Price
Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong), as amended, includes (i) over-
allocation for the purpose of preventing or minimizing any reduction in the market price of the H
Shares, (ii) selling or ag reeing to sell the H Shares so as to establish a short position in them for
the purpose of preventing or minimizing any reduction in the market price of the H Shares, (iii)
purchasing or subscribing for, or agreeing to purchase or subscribe for, the H Shares pursuant to the
Over-allotment Option in order to close out any pos ition established under (i) or (ii) above, (iv)
purchasing, or agreeing to purchase, any of the H Shares for the sole purpose of preventing or
minimizing any reduction in the market price of the H Shares, (v) selling or agreeing to sell any H
Shares in order to liquidate any position establis hed as a result of those purchases and (vi) offering
or attempting to do anything as described in paragraph (ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
. the Stabilizing Manager, its affiliates or any person acting for it may, in connection with
the stabilizing action, maintain a long position in the H Shares;
. there is no certainty regarding the extent to which and the time or period for which the
Stabilizing Manager, its affiliates or any person acting for it, will maintain such a long
position;
. liquidation of any such long position by the St abilizing Manager, its affiliates or any
person acting for it may have an adverse impact on the market price of the H Shares;
. no stabilizing action can be taken to support the price of the H Shares for longer than the
s t a b i l i z i n gp e r i o dw h i c hw i l lb e g i no nt h eL i s t i n gD a t e ,a n di se x p e c t e dt oe x p i r eo n
Sunday, August 3, 2025, being the 30th day after the date of closing of the application
lists under the Hong Kong Public Offering. After this date, when no further stabilizing
action may be taken, demand for the H Shares, and therefore the price of the H Shares,
could fall;
. the price of the H Shares cannot be assured to stay at or above the Offer Price by the
taking of any stabilizing action; and
. stabilizing bids may be made or transactions 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 transactions effected at a price be low the price paid by applicants for, or
investors in, the H Shares.
STRUCTURE OF THE GLOBAL OFFERING
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In order to effect stabilization actions, the St abilizing Manager will arrange cover of up to an
aggregate of 39,338,400 H Shares (representing ap proximately 15.0% of the initial Offer Shares
assuming the Offer Size Adjustment Option is not exercised) or up to an aggregate of 45,239,200 H
Shares (representing approximately 15.0% of the O ffer Shares assuming the Offer Size Adjustment
Option is exercised in full), through delayed del ivery arrangements with investors who have been
allocated Offer Shares in the International Off ering. The delayed delivery arrangements (if
specifically agreed by an investor) relate only to the delay in the delivery of the Offer Shares to
such investor and the Offer Price for the Offer Sha res allocated to such investor will be paid before
the Listing Date. Both the size of such cover and the extent to which the Over-Allotment Option
can be exercised will depend on whether arrang ements can be made with investors such that a
sufficient number of H Shares can be delivered on a delayed basis. If no investor in the
International Offering agrees to the delayed deli very arrangements, no stabilizing actions will be
undertaken by the Stabilizing Manager and the O ver-Allotment Option will not be exercised.
Our Company will ensure or procure that an ann ouncement in compliance with the Securities
and Futures (Price Stabilizing) Rules (Chap ter 571W of the Laws of Hong Kong) will be made
within seven days of the expiration of the stabilization period.
Over-allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or any person acting for it) m ay cover the over-allocation by exercising the
Over-allotment Option in full or in part, or by u s i n gHS h a r e sp u r c h a s e db yt h eS t a b i l i z i n g
Manager (or any person acting for it) in the secondary market at prices that do not exceed the Offer
Price or a combination of these means.
PRICING AND ALLOCATION
The International Underwriters will be solic iting from prospective investors indications of
interest in acquiring Offer Shares in the Intern ational Offering. Prospective professional and
institutional investors will be re quired to specify the number of Offer Shares under the International
Offering they would be prepared t o acquire either at different prices or at a particular price. This
process, known as ‘‘book-building, ’’ is expected to continue up to, and to cease on or about, the
last day for lodging applications un der the Hong Kong Public Offering.
The Offer Price is expected to be fixed by agr eement between our Company and the Overall
Coordinators on the Price Determination Date, which is expected to be on or before Monday, July
7, 2025 and in any event no later than 12:00 noon on Monday, July 7, 2025.
The Offer Price will not be more than HK$18.18 per Offer Share and is expected to be not
less than HK$17.38 per Offer Share unless otherwise announced, as further explained below, not
later than the morning of the last day for lodging applications under the Hong Kong Public
Offering. Applicants under the Hong Kong Public O ffering may be required t o pay, on application
(subject to application channel), the maximum Offer Price of HK$18.18 per Offer Share plus
STRUCTURE OF THE GLOBAL OFFERING
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--- page 349 ---
brokerage of 1.0%, SFC transaction levy of 0.0027%, the AFRC transaction levy of 0.00015%, and
Hong Kong Stock Exchange trading fee of 0.005 65%, amounting to a total of HK$3,672.68 for one
board lot of 200 H Shares.
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 Offer Price
range stated in this Prospectus.
The Overall Coordinators (for themselves and o n behalf of the Hong Kong Underwriters) may,
where considered appropriate, based on the level of interest expressed by prospective professional
and institutional investors during the book-building process, and with our consent, reduce the
number of Offer Shares and/or the indicative Offer Price range below as stated in this Prospectus at
any time on or prior to the morning of the last day for lodging applications under the Hong Kong
Public Offering.
In such a case, our Company will, as soon as practicable following the decision to make such
reduction, and in any event not later than the morning of the last day for lodging applications under
the Hong Kong Public Offering, cause to be published on the websites of our Company and the
Hong Kong Stock Exchange at
www.hnlens.com and www.hkexnews.hk , respectively, an
announcement, cancel the offer and relaunch the offer at the revised number of Offer Shares and/or
the revised Offer Price range and the requirements under Rule 11.13 of the Hong Kong Listing
Rules (which include the issue of a supplemental or a new prospectus (as appropriate)), and
complete the requisite associated settlement pr ocesses on the FINI platform afresh. The Global
Offering must first be canceled and subsequently relaunched on the FINI platform pursuant to the
supplemental or new prospectus.
In the absence of any such announcement or supplemental or new prospectus, 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 Underwriters) m ay, at their discretion, reallocate the number of
Offer Shares to be offered in the Hong Kong Publ ic Offering and the International Offering in
accordance with Chapter 4.14 of the Guide published by the Hong Kong Stock Exchange and
paragraph 4.2 of Practice Note 18 of the Hong Kong Listing Rules, provided that the number of
Offer Shares comprised in the Hong Kong Public O ffering shall not be less than 10.00% of the total
number of Offer Shares available under the Global O ffering. Subject to the foregoing paragraph, the
Offer Shares to be offered in the Hong Kong Public Offering and the Offer Shares to be offered in
the International Offering may, in certain circum stances, be reallocated between these offerings at
the discretion of the Overall Coordinators (for themselves and on behalf of the Underwriters).
STRUCTURE OF THE GLOBAL OFFERING
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The final Offer Price, the level of indications of i nterest in the International Offering, the level
of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Offer
Shares and the results of allocations in the H ong Kong Public Offering are expected to be made
available through a variety of channels in the manner described in the section headed ‘‘How to
Apply for Hong Kong Offer Shares — B. Publication of Results ’’in this Prospectus.
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under
the terms of the Hong Kong Underwriting Agreement and is conditional upon the International
Underwriting Agreement being si gned and becoming unconditional.
We expect that we will enter int o the International Underwriting Agreement relating to the
International Offering on the Price Determination Date.
The underwriting arrangements under the Hong Kong Underwriting Agreement and the
International Underwriting Agreemen t are summarized in the section headed ‘‘Underwriting ’’in this
Prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptances of all applications for Offer Shares will be conditional on:
(1) the Listing Committee granting the approva l for the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering (including the Offer Shares
which may be issued pursuant to the exercise of the Offer Size Adjustment Option and
the Over-allotment Option) on the Main Board of the Hong Kong Stock Exchange and
such approval not subsequently having been withdrawn or revoked prior to the Listing
Date;
(2) the Offer Price having been duly determined between our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(3) the execution and delivery of the International Underwriting Agreement on or about the
Price Determination Date; and
(4) the obligations of the Underwriters under each of the respective Underwriting
Agreements becoming and remaining uncond itional and not having been terminated in
accordance with the terms of the respective Underwriting Agreements;
in each case on or before the dates and times specified in the respective Underwriting Agreements
(unless and to the extent such conditions are va lidly waived on or before such dates and times).
If, for any reason, the Offer Price is not agreed between our Company and the Overall
Coordinators by 12:00 noon on Monday, July 7, 2025, the Global Offering will not proceed
and will lapse.
STRUCTURE OF THE GLOBAL OFFERING
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If the above conditions are not fulfilled or waived prior to the times and dates specified, the
Global Offering will lapse and the Hong Kong Stock Exchange will be notified immediately. We
will as soon as possible publish or cause to be published a notice of the lapse of the Hong Kong
Public Offering on the website of our Company ( www.hnlens.com ) and the website of the Hong
Kong Stock Exchange ( www.hkexnews.hk ). In such eventuality, all a pplication monies will be
returned, without interest, on the te rms set forth in the section headed ‘‘How to Apply for Hong
Kong Offer Shares — D. Despatch/Collection of H Share Cer tificates and Refund of Application
Monies ’’ in this Prospectus. In the meantime, all application monies will be held in separate bank
account(s) with the receiving banks or other bank(s) in Hong Kong licensed under the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong), as amended.
H Share certificates issued in respect of the Hong Kong Offer Shares will only become valid
evidence of title at 8:00 a.m. on the Listing Dat e provided that the Global Offering has become
unconditional in all respects (including the Unde rwriting Agreements not having been terminated in
accordance with their terms) at any time prior to 8:00 a.m. on the Listing Date.
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and permission to
deal in, the H Shares to be issued pursuant to the Global Offering (including H Shares which may
be issued pursuant to the Offer Size Adjustment Option and the exercise of the Over-allotment
Option).
Save as disclosed in the Prospectus, no part of our Company ’s share or loan capital is listed
on or dealt in on any other stock exchange and no such listing or permission to deal is being or
proposed to be sought in the near future.
H SHARES WILL BE ELIGIBL E FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the Hong
Kong Stock Exchange and compliance with the st ock admission require ments of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
C C A S Sw i t he f f e c tf r o mt h eL i s t i n gD a t eo ro na n yo t h e rd a t ea sd e t e r m i n e db yH K S C C .
Settlement of transactions between participan ts of the Hong Kong Stock Exchange is required to
take place in CCASS on the second settlement da y after any trading day. All activities under
CCASS are subject to the General Rules of HKSCC and the HKSCC Operational Procedures in
effect from time to time.
All necessary arrangements have been made to enable the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbroker or other professional advisor for
details of those settlement arrangements and how such arrangements will affect their rights and
interests.
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DEALING IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Wednesday, July 9, 2025, it is expected that dealings in the H Shares on the
Hong Kong Stock Exchange will commence a t 9:00 a.m. on Wednesday, July 9, 2025.
The H Shares will be traded on the Main Board of the Hong Kong Stock Exchange in board
lots of 200 H Shares each. The stock code of the H Shares will be 6613.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 353 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic appli cation process for the Hong Kong Public
Offering and below are the procedures for application.
This Prospectus is available at the web site of the Hong Kong Stock Exchange at
www.hkexnews.hk under the ‘‘HKEXnews > New Listings > New Listing Information ’’
section, and our website at www.hnlens.com.
The contents of this Prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who can apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
. are 18 years of age or older; and
. have a Hong Kong address (for the White Form eIPO service only) .
Unless permitted by the Hong Kong Listing Rules or a waiver and/or consent has been
granted by the Hong Kong Stock Exchange to us, you cannot apply for any Hong Kong Offer
Shares if you or the person(s) for whose benefit you are applying for:
. are an existing beneficial owner of any Shares in the Company and/or any of its
subsidiaries;
. are a Director or a Supervisor or chief executive officer of the Company and/or any
of its subsidiaries;
. are a close associate (as defined in the Hong Kong Listing Rules) of any of the
above;
. a connected person (as defined in the Hong Kong Listing Rules) of the Company or
will become a connected person of the Company immediately upon completion of
the Global Offering; or
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 354 ---
. have been allocated or have applied for any International Offer Shares or otherwise
participate in the Inte rnational Offering.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, June 30,
2025 and end at 12:00 noon on Friday, July 4, 2025 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
White Form
eIPO
s e r v i c e ....
www.eipo.com.hk Applicants who
would like to receive
a physical H Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
a n di s s u e di ny o u r
own name.
From 9:00 a.m. on
Monday, June 30,
2025, to 11:30 a.m.
on Friday, July 4,
2025, Hong Kong
time. The latest time
for completing full
payment of
application monies
will be 12:00 noon on
Friday, July 4, 2025
Hong Kong time.
HKSCC EIPO
c h a n n e l....
Your broker or
custodian
who is a HKSCC
Participant will
submit electronic
application
instruction(s) on
your behalf through
HKSCC ’sF I N I
system in accordance
with your
instruction.
Applicants who
would not like to
receive a physical H
Share certificate.
Hong Kong Offer
Shares successfully
applied for will be
allotted and issued in
the name of HKSCC
Nominees, deposited
directly into CCASS
and credited
to your designated
HKSCC Participant ’s
stock account.
Contact your broker
or custodian for the
earliest and latest time
for giving such
instructions, as this
m a yv a r yb yb r o k e ro r
custodian.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 355 ---
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service inte rruptions and you are advised not to wait until
the last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Ko ng Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shal l be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have d eclared that you have only given one set of
electronic application instructions for the ben efit of the person for whom you are an agent and
that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under White Form eIPO
service more than once and obtaining different ap plication reference numb ers without effecting
full payment in respect of a particular refer ence 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 White Form eIPO
service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of
you jointly and severally) are deemed to have instructed and authorized HKSCC to cause
HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong
Kong Offer Shares on your behalf and to do on your behalf all the things stated in this
Prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instr uctions 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 b een withdrawn or otherwise invalidated before
the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken
by HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for
any breach of the terms and conditions of this Prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 356 ---
3. Information Required to Apply
You must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
. Full name(s) 2 a ss h o w no ny o u r
identity document
. Full name(s) 2 as shown on your
identity document
. Identity document ’s issuing country
or jurisdiction
. Identity document ’s issuing country or
jurisdiction
. Identity document type, with order
of priority:
. Identity document type, with order of
priority:
i. Hong Kong identity card
(‘‘HKID ’’); or
i. Legal entity identifier ( ‘‘LEI’’)
registration document; or
ii. National identification
document; or
ii. Certificate of incorporation;
or
iii. Passport; and iii. Business registration certificate;
or
. Identity document number iv. Other equivalent document; and
. Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid
e-mail address, a contact telephone number and a H ong Kong address. You are also required to declare
that the identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exce ed four. If you are a firm, the applicant must be in
the individual members ’ names.
2. The applicant ’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant ’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant ’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be u s e dw h e nm a k i n ga na p p l i c a t i o nt os u b s c r i b ef o r
Hong Kong Offer Shares. Similarly for corporate applicants, a LEI number must be used if an entity
has a LEI certificate.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 357 ---
3. If the applicant is a trustee, the client identification data ( ‘‘CID’’) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the
CID of the asset management compa ny or the individual fund, as appropriate, which has opened a
trading account with the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
5. If you are applying as a nominee, you must pr ovide: (i) the full name (as shown on the identity
document), the identity document ’s issuing country or jurisdiction, th e identity document type; and (ii),
the identity document number, for each of the benefic ial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do no t include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
Unlisted company ’’ means a company with no equity securities listed on the Hong Kong Stock
Exchange or any other stock exchange.
‘‘Statutory control ’’means you:
. control the composition of the board of directors of the company;
. control more than half of the voting power of the company; or
. hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specifi ed 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.
Failing to provide any required information ma y result in your application being rejected.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 358 ---
4. Permitted Number of Hong Kong Offer Shares for Application Board
lot size :2 0 0 H S h a r e s
Permitted number of
Hong Kong Offer
Shares for application
and amount payable
on application/
successful allotment
: Hong Kong Offer Shares are available for application
in specified board lot sizes only. Please refer to the
amount payable associated with each specified board
lot size in the table below.
The maximum Offer Price is HK$18.18 per Offer
Share.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require you to
pre-fund your application in such amount as
determined by the broker or custodian, based on the
applicable laws and regulations in Hong Kong. You
are responsible for complying with any such pre-
funding requirement imposed by your broker or
c u s t o d i a nw i t hr e s p e c tt ot h eH o n gK o n gO f f e rS h a r e s
you applied for.
By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through
the HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of
the final Offer Price, brokerage, SFC transaction levy,
the Hong Kong Stock Exchange trading fee and the
AFRC transaction levy by debiting the relevant
nominee bank account at the Designated Bank for
your broker or custodian. If you are applying through
the White Form eIPO service, you may refer to the
table below for the amount payable for the number of
Offer 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
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--- page 359 ---
Lens Technology Co., Ltd.
(HK$18.18 per Hong Kong Offer Share)
NUMBER OF HONG KONG OFFER SHARES THAT MAY BE APPLIED
FOR AND PAYMENTS
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount payable (2)
on application
HK$ HK$ HK$ HK$
200 3,672.68
400 7,345.34
600 11,018.01
800 14,690.67
1,000 18,363.35
1,200 22,036.01
1,400 25,708.69
1,600 29,381.35
1,800 33,054.02
2,000 36,726.68
3,000 55,090.03
4,000 73,453.38
5,000 91,816.73
6,000 110,180.07
7,000 128,543.42
8,000 146,906.77
9,000 165,270.11
10,000 183,633.45
20,000 367,266.91
30,000 550,900.37
40,000 734,533.81
50,000 918,167.26
100,000 1,836,334.54
150,000 2,754,501.80
200,000 3,672,669.05
250,000 4,590,836.33
500,000 9,181,672.66
750,000 13,772,508.98
1,000,000 18,363,345.30
1,500,000 27,545,017.96
2,000,000 36,726,690.60
2,500,000 45,908,363.26
3,000,000 55,090,035.90
4,000,000 73,453,381.20
5,000,000 91,816,726.50
6,000,000 110,180,071.80
8,000,000 146,906,762.40
10,000,000 183,633,453.00
12,000,000 220,360,143.60
14,424,200
(1) 264,876,565.28
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC tr ansaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants
(as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in t he 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. Applications for
Hong Kong Offer Shares — 3. Information Required to Apply ’’ in this section. If you are
suspected of submitting or cause to submit more than one application, all of your applications
will be rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any
Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 360 ---
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 agent, to ex ecute any documents for you and to do on
your behalf all things necessary to regist er 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 parti cipant 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 restric tions 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, causi ng your application to be made) and will
not rely on any other informat ion or representations;
(vi) agree that the Sole Sponsor, the Overall Coordinators, the Joint Global
Coordinators, the Capital Market Intermediaries, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters, their di rectors, officers, employees, partners,
agents, advisors 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 361 ---
(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 t o us, the Relevant Persons, the H Share
Registrar, HKSCC, HKSCC Nominees, t he Hong Kong Stock Exchange, the SFC
and any other statutory regulatory or gover nmental bodies or otherwise as required
by laws, rules or regulations, for the purposes under the paragraph headed ‘‘-G .
Personal Data — 3. Purposes ’’ and ‘‘ — 4. Transfer of personal data ’’ in this
section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees ’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance , any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the ti me and in the manner as specified in the
paragraph headed ‘‘ — B. Publication of Results ’’in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed ‘‘ —
C. Circumstances In Which You Will Not Be Allocated Hong Kong Offer Shares ’’
in this section;
(xi) agree that your application or HKSCC Nominees ’ application, any acceptance of it
and the resulting contract will be govern ed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and condi tions contained in this Prospectus;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 362 ---
(xiii) confirm that (a) your application or HKSCC Nominees ’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or e xisting 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 ta king instructions from the Company,
any of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its s ubsidiaries or any of their respective
close associates in relation to the acquisiti on, 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 de ciding 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 a pplied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirect ly or through the application channel of
the White Form eIPO Service Provider or by any one as your agent or by any
other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and the
White Form eIPO Service Provider and (2) you have due authority to give
electronic applicatio n instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 363 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the White Form eIPO service or HKSCC EIPO channel:
Website The designated results of allocation
at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/
eIPOAllotment ) with a ‘‘search by
ID’’function.).
The full list of (i) wholly or
partially successful applicants
using the White Form eIPO
service and HKSCC EIPO
channel, and (ii) the number of
Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed on the ‘‘Allotment
Results ’’page of the White Form
eIPO service at
www.iporesults.com.hk
(alternatively: www.eipo.com.hk/
eIPOAllotment ).
24 hours, from
11:00 p.m. on Tuesday,
July 8, 2025 to
12:00 midnight on
Monday, July 14, 2025
(Hong Kong time)
The Hong Kong Stock
Exchange ’s website at
www.hkexnews.hk and our
website at www.hnlens.com which
will provide links to the above
mentioned websites of the H
Share Registrar.
No later than 11:00
p.m. on Tuesday, July 8,
2025 (Hong Kong time)
Telephone +852 2862 8555 — the allocation results telephone enquiry line
provided by the H Share Registrar
between 9:00 a.m. and 6:00
p.m., on Wednesday, July
9, 2025, Thursday, July 10,
2025, Friday, July 11, 2025
and Monday, July 14, 2025
(Hong Kong time)
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Monday, July 7, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Monday, July 7, 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 364 ---
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the International Offering, the level of applications in the Hong Kong Public
Offering and the basis of allocations of Hong Kong Offer Shares on the Hong Kong Stock
Exchange ’s website at www.hkexnews.hk and our website at www.hnlens.com by no later
than 11:00 p.m. on Tuesday, July 8, 2025 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Hong Kong Stock
Exchange does not grant permiss ion 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 Hong Kong Stock Exchange
notifies us of that longer period withi n 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. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited ’’ in this section on what constitutes multiple
applications;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 365 ---
. you or the person for whose benefit you are applying have applied for or taken up,
or indicated an interest for, or have been or will be placed or allocated (including
conditionally and/or provisionally) Hong Kong Offer Shares and International Offer
Shares;
. your electronic application instructions through the White Form eIPO service are
not completed in accordance with the instructions, terms and conditions on the
designated website at
www.eipo.com.hk ;
. your application instruction is incomplete;
. your payment (or confirmation of funds, as the case may be) is not made correctly;
. the Underwriting Agreements do not become unconditional or are terminated;
. we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations; or
. your application is for more than 50% of the Hong Kong Offer Shares initially
offered under the Hong Kong Public Offering.
5. If there is money settlement failure for allotted Offer Shares:
Based on the arrangements between HKS CC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before ballot ing. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant ’sa c t u a l
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted H Shares , HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectif y or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to th e 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 w ill not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 366 ---
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one H Share certificate for al l 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 evid ence of title at 8:00 a.m. on Wednesday, July
9, 2025 (Hong Kong time), provided that the Global Offering has become unconditional and the
right of termination described in the section headed ‘‘Underwriting ’’ has not been exercised.
Investors who trade H Shares prio r to the receipt of H Share certifi cates or the H Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For physical share
certificates of
1,000,000 or more
Offer Shares issued
under your own
name
Collection in person: from Computershare Hong Kong
Investor Services Limited at Shops 1712 – 1716, 17th
Floor, Hopewell Centre, 183 Queen ’sR o a dE a s t ,W a n
Chai, Hong Kong
Time: from 9:00 a.m. to 1:00 p.m. on Wednesday,
July 9, 2025 (Hong Kong time)
If you are an individual, you must not authorize any
other person to collect for you. If you are a corporate
applicant, your authorized representative must bear a
letter of authorization from your corporation stamped
with your corporation ’s chop.
Both individuals and authorized representatives must
produce, at the time of collection, evidence of identity
acceptable to the H Share Registrar.
Note: If you do not collect your H Share certificate(s)
personally within the time above, it/they will be sent to
the address specified in your application instructions by
ordinary post at your own risk.
H Share certificate(s) will be
issued in the name of HKSCC
Nominees, deposited into
C C A S Sa n dc r e d i t e dt oy o u r
designated HKSCC
Participant ’s stock account. No
action by you is required.
1 Except in the event of a Severe Weather Signals (as defined below) in force in Hong Kong in the morning on Tuesday, July 8,
2025 rendering it impossible for the relevant H Share certificates to be dispatched to HKSCC in a timely manner, the Company
shall procure the H Share Registrar to arrange for delivery of the supporting documents and H Share certificates in accordance
with the contingency arrangements as agreed between them. You may refer to ‘‘ — E. Severe Weather Arrangements ’’ in this
section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 367 ---
White Form eIPO service HKSCC EIPO channel
For physical 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
Date: Tuesday, July 8, 2025
Refund mechanism for surplus application monies paid by you
Date Wednesday, July 9, 2025 Subject to the arrangement
between you and your broker
or custodian
Responsible party H Share Registrar Your broker or custodian
Application monies
paid through single
bank account
White Form e-Refund payment instructions to your
designated bank account
Your broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and 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 close on Friday, July 4, 2025 if, there is/are:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. Extreme Conditions,
(collectively, ‘‘Severe Weather Signals ’’),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, July 4, 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 list ing 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 Hong Kong Stock Exchange ’s website at www.hkexnews.hk and our
website at www.hnlens.com of the revised timetable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 368 ---
If a Severe Weather Signal is hoisted on Tuesday, July 8, 2025, the H Share Registrar will
make appropriate arrangements for the delive ry of the H Share certificates to the CCASS
Depository ’s service counter so that they would be available for trading on Wednesday, July 9,
2025.
If a Severe Weather Signal is hoisted on Tuesda y, July 8, 2025, for physical share certificates
of less than 1,000,000 Offer Shares issued under y our own name, the despatch of physical H Share
certificate(s) will be made by ordinary post when the post office re-opens after the Severe Weather
Signal is lowered or cancelled (e.g. in the after noon of Tuesday, July 8, 2025 or on Wednesday,
July 9, 2025).
If a Severe Weather Signal is hoisted on We dnesday, July 9, 2025, for physical share
certificates of 1,000,000 or more Offer Shares issued under your own name, you may collect your
share certificates, physical H Sha re certificate(s) will be available for collection in person at the H
Share Registrar ’s office after the Severe Weather Signal is lowered or cancelled (e.g. in the
afternoon of Wednesday, July 9, 2025 or on Thursday, July 10, 2025).
Prospective investors should be aware t hat 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 Hong Kong Stock Exchange grants the listing of, and permission to deal in, the H
Shares on the Hong Kong Stock Exchange and we comply with the stock admission requirements of
HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the H Shares or
any other date HKSCC chooses. Settlement of tra nsactions between Exchange Participants is
required to take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangem ents may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 369 ---
G. PERSONAL DATA
The following Personal Information Collect ion Statement applies to any personal data
collected and held by the Company, the H Share R egistrar, the receiving bank and the Relevant
Persons about you in the same way as it applies t o personal data about applicants other than
HKSCC Nominees. This personal data may include c lient identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have read,
understood and agreed to all of the terms of the Pe rsonal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Stateme nt 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 P ersonal 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 i ts agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or su pplying inaccurate data may result in your
application for Hong Kong Offer Shares being re jected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Sh are 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 immediat ely 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), where applicable, verification of compliance with the terms and
application procedures set out in this Prospectus and announcing results of
allocation of Hong Kong Offer Shares;
. compliance with applicable laws and re gulations in Hong Kong and elsewhere;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 370 ---
. registering new issues or transfers into or out of the names of the holders of the
Offer 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 Offer Shares and identifying
any duplicate applications for the Offer Shares;
. facilitating Hong Kong Offer Shares balloting;
. establishing benefit entitlements of holde rs of the Offer Shares, such as dividends,
rights issues, bonus issues, etc.;
. distributing communications from t he Company and its subsidiaries;
. compiling statistical information and profiles of the holder of the Offer Shares;
. disclosing relevant information to facilitate claims on entitlements; and
. any other incidental or asso ciated 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 Offer Shares and/or re gulators and/or any other purposes to
which applicants and holders of the Offer Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessa ry for achieving any of the above purposes,
disclose, obtain or transfer (whether within o r outside Hong Kong) the personal data to, from
or with any of the following:
. the Company ’s appointed agents such as financial advisors and receiving bank;
. HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing
its services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
. any agents, contractors or t hird-party service provide rs who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with the ir respective business operation;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 371 ---
. the Hong Kong 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 Hong Kong Stock Exchange ’s administration of the
Hong Kong Listing Rules and the SFC ’s performance of its sta tutory functions; and
. any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their ba nkers, 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 fulfill the purposes for
which the personal data were collected. Personal data which is no longer required will be
destroyed or dealt with in accordance with the Per sonal 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 Registra r 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 b e addressed to the Company and the H Share
Registrar, at their registered add ress disclosed in the section headed ‘‘Corporate information ’’
in this Prospectus or as notified from time to time, for the attention of the company secretary,
or the H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 372 ---
The following is the text of a report set out on pages I-1 to I-103, received from the
Company ’s reporting accountants, Deloitte Touche To hmatsu, Certified Public Accountants, Hong
Kong, for the purpose of incorporation in this prospectus.
ACCOUNTANTS ’ REPORT ON HISTORICAL FI NANCIAL INFORMATION TO THE
DIRECTORS OF LENS TECHNOLOGY CO., LTD. 藍思科技股份有限公司 AND CITIC
SECURITIES (HONG KONG) LIMITED
Introduction
We report on the historical financial in formation of Lens Technology Co., Ltd. 藍思科技股份
有限公司 (the ‘‘Company ’’) and its subsidiaries (together, the ‘‘Group ’’) set out on pages I-4 to I-
103, which comprises the consolidated stateme nts of financial position of the Group as at 31
December 2022, 2023 and 2024, the statements of financial position of the Company as at 31
December 2022, 2023 and 2024, and the consolid ated statements of profit or loss and other
comprehensive income, the consolidated statem ents of changes in equity and the consolidated
statements of cash flows of the Group for each of the three years ended 31 December 2024 (the
‘‘Track Record Period ’’) and material accounting policy information and other explanatory
information (together, the ‘‘Historical Financial Information ’’). The Historical Financial Information
set out on pages I-4 to I-103 forms an integral part of this report, which has been prepared for
inclusion in the prospectus of the Company dated 30 June 2025 (the ‘‘Prospectus ’’) in connection
with the proposed global offering of H shares of the Company on the Main Board of The Stock
Exchange of Hong Kong Limited (the ‘‘Stock Exchange ’’).
Directors ’ responsibility for the Historical Financial Information
The directors of the Company (the ‘‘Directors ’’) 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 to the Historical Financial Information, and for such internal control
as the Directors determine is necessary to enabl e the preparation of the Historical Financial
Information that is free from material mi sstatement, whether due to fraud or error.
Reporting accountants ’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our wo rk in accordance with Hong Kong Standard on
Investment Circular Repo rting Engagements 200 ‘‘Accountants ’ Reports on Historical Financial
Information in Investment Circulars ’’ issued by the Hong Kong Institute of Certified Public
Accountants (the ‘‘HKICPA ’’). This standard requires that we comply with ethical standards and
plan and perform our work to obtain reasonable assurance about whether the Historical Financial
Information is free from material misstatement.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-1 –


--- page 373 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Informati on. The procedures selected depend on the reporting
accountants ’ judgement, including the assessment of risks o f material misstatem ent of the Historical
Financial Information, whether due to fraud or error. In making those risk assessments, the
reporting accountants consider internal control relevant to the entity ’s preparation of Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation set
out in Note 2 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 Infor mation gives, for the purposes of the accountants ’
report, a true and fair view of the Group ’s financial position as at 31 December 2022, 2023 and
2024, of the Company ’s financial position as at 31 Decem ber 2022, 2023 and 2024, and of the
Group ’s financial performance and cash flows for the Track Record Period in accordance with the
basis of preparation set out in Note 2 to t he Historical Financial Information.
Report on matters under the Rules Governing th e Listing of Securities on the Stock Exchange
and the Companies (Winding Up and Mis cellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Informati on, no adjustments to the Underlying Financial
Statements as defined on page I-3 have been made.
Dividends
We refer to Note 15 to the Historical Financial I nformation which contains information about
the dividends declared and paid by the Comp any in respect of the Track Record Period.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
30 June 2025
APPENDIX I ACCOUNTANTS ’ REPORT
– I-2 –


--- page 374 ---
HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation of Historica l Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants ’ report.
The consolidated financial statements of the Group for the Track Record Period, on which the
Historical Financial Information is based, ha ve been prepared in accordance with the IFRS
Accounting Standards issued by Interna tional Accounting Standards Board (the ‘‘IASB ’’)a n dw e r e
audited by us in accordance with Hong Kong St a n d a r d so nA u d i t i n gi s s u e db yt h eH K I C P A
(‘‘Underlying Financial Statements ’’).
The Historical Financial Information is presented in Renminbi ( ‘‘RMB’’) ,w h i c hi sa l s ot h e
functional currency of the Company, and all values are rounded to the nearest thousand (RMB ’000)
except when otherwise indicated.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-3 –


--- page 375 ---
CONSOLIDATED STATEMENTS OF PROF IT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Year ended 31 December
2022 2023 2024
Notes RMB’000 RMB ’000 RMB ’000
R e v e n u e....................... 6
C o n t r a c t sw i t hc u s t o m e r s.......... 4 6 , 6 0 3 , 2 2 5 5 4 , 364,061 69,756,758
L e a s e s....................... 9 5 , 3 2 1 126,673 140,018
T o t a lr e v e n u e ................... 4 6 , 6 9 8 , 5 4 6 5 4 , 490,734 69,896,776
C o s to fs a l e s.................... ( 3 8 , 1 5 1 , 6 3 0 ) ( 4 5 , 998,870) (59,713,283)
G r o s sp r o f i t ..................... 8 , 5 4 6 , 9 1 6 8 , 491,864 10,183,493
O t h e ri n c o m e ................... 7 678,576 1,017,209 567,024
Reversal of impairment losses
(impairment losses recognised) under
expected credit loss ( ‘‘ECL’’) model,
n e t ......................... 8 43,962 1,259 (33,859)
O t h e rg a i n sa n dl o s s e s ,n e t .......... 9 321,012 218,657 384,380
S e l l i n ge x p e n s e s ................. ( 7 0 8 , 8 4 9 ) ( 674,057) (705,599)
A d m i n i s t r a t i v ee x p e n s e s ............ ( 3 , 2 3 9 , 4 9 0 ) ( 2 , 910,299) (3,368,955)
Research and development expenses . . . . (2,104,976) (2,316,619) (2,784,813)
O t h e re x p e n s e s .................. ( 1 0 , 0 3 2 ) ( 6 , 8 4 8 ) ( 8 , 2 1 6 )
Share of results of investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ........ 3 , 9 8 7 ( 5 7 , 2 9 1 ) 3 , 8 9 9
F i n a n c ec o s t s .................... 10 (616,216) (509,986) (388,438)
P r o f i tb e f o r et a x ................. 2 , 9 1 4 , 8 9 0 3 , 253,889 3,848,916
I n c o m et a xe x p e n s e ............... 11 (395,069) (212,062) (172,061)
Profit for the year ............... 12 2,519,821 3,041,827 3,676,855
Other comprehensive income (expense):
Item that may be reclassified
subsequently to profit or loss:
Exchange differences arising on
t r a n s l a t i o no ff o r e i g no p e r a t i o n s ..... 7 4 , 6 6 4 9 , 6 4 9 ( 1 3 4 , 0 9 0 )
Item that will not be reclassified to profit
or loss:
Fair value gain (loss) on investments in
equity instruments measured at fair
value through other comprehensive
income ( ‘‘FVTOCI ’’)............. 1 1 , 5 8 9 4 , 7 1 1 ( 2 0 , 4 5 4 )
Total comprehensive income for t he year 2,606,074 3,056,187 3,522,311
APPENDIX I ACCOUNTANTS ’ REPORT
– I-4 –


--- page 376 ---
Year ended 31 December
2022 2023 2024
Note RMB’000 RMB ’000 RMB ’000
Profit for the year attributable to:
— O w n e r so ft h eC o m p a n y ........ 2 , 4 4 8 , 0 3 7 3 , 021,342 3,623,901
— N o n - c o n t r o l l i n gi n t e r e s t s ........ 7 1 , 7 8 4 2 0 , 4 8 5 5 2 , 9 5 4
2,519,821 3,041,827 3,676,855
Total comprehensive income for the year
attributable to:
— O w n e r so ft h eC o m p a n y ........ 2 , 5 3 4 , 2 9 0 3 , 035,702 3,469,357
— N o n - c o n t r o l l i n gi n t e r e s t s ........ 7 1 , 7 8 4 2 0 , 4 8 5 5 2 , 9 5 4
2,606,074 3,056,187 3,522,311
Earnings per share ............... 16
— B a s i c( R M B ) ................ 0 . 5 0 0 . 6 1 0 . 7 3
— D i l u t e d( R M B )............... N / A 0 . 6 1 0 . 7 3
APPENDIX I ACCOUNTANTS ’ REPORT
– I-5 –


--- page 377 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF THE GROUP
As at 31 December
2022 2023 2024
Notes RMB’000 RMB ’000 RMB ’000
Non-current assets
P r o p e r t y ,p l a n ta n de q u i p m e n t ........ 17 37,294,360 37,089,310 37,809,136
R i g h t - o f - u s ea s s e t s................ 18 3,051,857 3,261,047 3,441,157
I n v e s t m e n tp r o p e r t i e s .............. 19 954,123 1,020,305 900,777
I n t a n g i b l ea s s e t s ................. 20 2,184,949 2,017,889 1,822,041
G o o d w i l l ...................... 21 2,970,144 2,970,144 2,970,144
Investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ........ 22 479,537 374,957 325,665
E q u i t yi n s t r u m e n t sa tF V T O C I ........ 23 460,021 465,563 445,109
T i m ed e p o s i t s ................... 29 304,307 314,648 103,697
D e f e r r e dt a xa s s e t s................ 24 1,251,837 1,187,208 1,387,226
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s ..... 28 783,318 687,994 1,038,314
49,734,453 49,389,065 50,243,266
Current assets
I n v e n t o r i e s ..................... 26 6,685,009 6,682,659 7,160,553
T r a d ea n db i l l sr e c e i v a b l e s .......... 27 9,022,460 9,308,444 10,865,736
B i l l sr e c e i v a b l e sa tF V T O C I ......... 30 3,697 112,288 9,779
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s ..... 28 804,110 1,025,482 1,000,455
A m o u n t sd u ef r o mr e l a t e dp a r t i e s...... 42 32,235 29,754 24,873
Financial assets at fair value through
profit or loss ( ‘‘FVTPL ’’).......... 25 355,266 349,665 354,917
I n c o m et a xr e c o v e r a b l e............. 2 2 , 6 1 4 5 3 , 3 9 1 4 5 , 9 7 6
T i m ed e p o s i t s ................... 29 —— 322,412
R e s t r i c t e db a n kd e p o s i t s ............ 29 3,673 25,474 51,276
B a n kb a l a n c e sa n dc a s h ............ 29 11,682,255 10,493,519 10,936,804
28,611,319 28,080,676 30,772,781
Current liabilities
T r a d ea n do t h e rp a y a b l e s ........... 31 12,209,236 13,171,801 16,365,834
F i n a n c i a ll i a b i l i t i e sa tF V T P L ........ 25 —— 9,620
A m o u n t sd u et or e l a t e dp a r t i e s ........ 42 21 94 26
I n c o m et a xp a y a b l e ............... 8 8 , 3 1 9 178,764 110,787
B o r r o w i n g s..................... 32 9,848,393 5,669,812 6,518,634
L e a s el i a b i l i t i e s .................. 33 13,503 27,726 47,659
C o n t r a c tl i a b i l i t i e s ................ 34 7,589 8,119 12,601
22,167,061 19,056,316 23,065,161
Net current assets ................ 6 , 4 4 4 , 2 5 8 9 , 024,360 7,707,620
Total assets less current liabilities . . . . 56,178,711 58,413,425 57,950,886
APPENDIX I ACCOUNTANTS ’ REPORT
– I-6 –


--- page 378 ---
As at 31 December
2022 2023 2024
Notes RMB’000 RMB ’000 RMB ’000
Non-current liabilities
L o a nf r o mar e l a t e dp a r t y ........... 42 1,027,632 1,065,146 —
B o r r o w i n g s..................... 32 9,122,890 9,588,264 7,807,931
L e a s el i a b i l i t i e s .................. 33 34,145 20,773 151,529
P r o v i s i o n ...................... 1 , 3 2 8 3 , 5 9 2 1 8 , 8 8 0
D e f e r r e dt a xl i a b i l i t i e s ............. 24 765,678 424,869 385,058
D e f e r r e di n c o m e ................. 35 845,795 789,154 741,578
11,797,468 11,891,798 9,104,976
Net assets ...................... 4 4 , 3 8 1 , 2 4 3 4 6 , 521,627 48,845,910
Capital and reserves
S h a r ec a p i t a l.................... 36 4,973,480 4,983,228 4,982,879
R e s e r v e s....................... 3 9 , 1 9 8 , 5 1 3 4 1 , 355,757 43,673,762
Equity attributable to owners of the
C o m p a n y..................... 4 4 , 1 7 1 , 9 9 3 4 6 , 338,985 48,656,641
N o n - c o n t r o l l i n gi n t e r e s t s............ 2 0 9 , 2 5 0 182,642 189,269
Total equity .................... 4 4 , 3 8 1 , 2 4 3 4 6 , 521,627 48,845,910
APPENDIX I ACCOUNTANTS ’ REPORT
– I-7 –


--- page 379 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
2022 2023 2024
Notes RMB’000 RMB ’000 RMB ’000
Non-current assets
P r o p e r t y ,p l a n ta n de q u i p m e n t ........ 17 9,065,022 8,221,199 8,489,707
R i g h t - o f - u s ea s s e t s................ 18 420,387 402,634 730,497
I n v e s t m e n tp r o p e r t i e s .............. 19 320,034 305,129 329,815
I n t a n g i b l ea s s e t s ................. 20 50,586 61,317 52,305
Investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ........ 22 421,370 317,987 284,710
I n v e s t m e n t si ns u b s i d i a r i e s .......... 44 31,150,285 34,279,477 34,753,669
A m o u n t sd u ef r o ms u b s i d i a r i e s ....... 42 1,312,927 2,061,863 661,692
E q u i t yi n s t r u m e n t sa tF V T O C I ........ 23 439,567 445,109 445,109
T i m ed e p o s i t s ................... 29 304,307 314,648 103,697
D e f e r r e dt a xa s s e t s................ 24 71,200 52,792 101,059
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s ..... 28 25,363 52,356 123,749
43,581,048 46,514,511 46,076,009
Current assets
I n v e n t o r i e s ..................... 26 2,217,441 1,381,980 1,023,288
T r a d ea n db i l l sr e c e i v a b l e s .......... 27 7,392,543 5,375,735 6,767,472
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s ..... 28 350,523 530,304 475,558
A m o u n t sd u ef r o ms u b s i d i a r i e s ....... 42 1,790,731 752,094 498,716
F i n a n c i a la s s e t sa tF V T P L ........... 25 87,153 — 100,000
I n c o m et a xr e c o v e r a b l e............. 1 5 , 3 3 9 ——
T i m ed e p o s i t s ................... 29 —— 322,412
B a n kb a l a n c e sa n dc a s h ............ 29 3,772,088 3,116,182 5,268,284
15,625,818 11,156,295 14,455,730
Current liabilities
T r a d ea n do t h e rp a y a b l e s ........... 31 6,093,761 3,000,975 5,374,209
F i n a n c i a ll i a b i l i t i e sa tF V T P L ........ 25 —— 3,903
A m o u n t sd u et os u b s i d i a r i e s ......... 42 2,717,418 2,735,154 2,318,226
I n c o m et a xp a y a b l e ............... — 104,286 47,248
B o r r o w i n g s..................... 32 2,265,819 2,927,639 2,389,631
L e a s el i a b i l i t i e s .................. 33 8,033 8,304 34,993
C o n t r a c tl i a b i l i t i e s ................ 34 —— 2,013
11,085,031 8,776,358 10,170,223
Net current assets ................ 4 , 5 4 0 , 7 8 7 2 , 379,937 4,285,507
Total assets less current liabilities . . . . 48,121,835 48,894,448 50,361,516
APPENDIX I ACCOUNTANTS ’ REPORT
– I-8 –


--- page 380 ---
As at 31 December
2022 2023 2024
Notes RMB’000 RMB ’000 RMB ’000
Non-current liabilities
L o a n sf r o mr e l a t e dp a r t i e s........... 42 1,327,632 1,365,146 2,051,240
B o r r o w i n g s..................... 32 4,695,460 4,178,064 3,888,168
L e a s el i a b i l i t i e s .................. 33 20,260 11,971 110,707
D e f e r r e dt a xl i a b i l i t i e s ............. 24 43,432 28,862 28,250
D e f e r r e di n c o m e ................. 35 65,303 58,248 51,193
6,152,087 5,642,291 6,129,558
Net assets ...................... 4 1 , 9 6 9 , 7 4 8 4 3 , 252,157 44,231,958
Capital and reserves
S h a r ec a p i t a l.................... 36 4,973,480 4,983,228 4,982,879
R e s e r v e s....................... 36 36,996,268 38,268,929 39,249,079
Total equity .................... 4 1 , 9 6 9 , 7 4 8 4 3 , 252,157 44,231,958
APPENDIX I ACCOUNTANTS ’ REPORT
– I-9 –


--- page 381 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
capital
Share
premium
Treasury
share
Capital
reserve
FVTOCI
reserve
Translation
reserve
Statutory
reserve
Retained
profits Subtotal
Non-
controlling
interests Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
(note)
At 1 January 2022 . . . . . . . . . . . 4,973,480 20,536,449 — 163,690 143,783 68,614 1,981,141 14, 763,698 42,630,855 168,093 42,798,948
P r o f i tf o rt h ey e a r ........... ——————— 2,448,037 2,448,037 71,784 2,519,821
Other comprehensive income for
t h ey e a r ............... ———— 11,589 74,664 —— 86,253 — 86,253
Total comprehensive income for
t h ey e a r ............... ———— 11,589 74,664 — 2,448,037 2,534,290 71,784 2,606,074
Transfer to statutory reserve . . . . . —————— 208,385 (208,385) ———
D i s t r i b u t i o n ............... ——————— (493,095) (493,095) (30,627) (523,722)
Repurchase of shares (Note 36) ... —— (499,998) ————— (499,998) — (499,998)
Transaction costs attributable to
r e p u r c h a s eo fs h a r e s ........ —— (59) ————— (59) — (59)
At 31 December 2022 . . . . . . . . . 4,973,480 20,536,449 (500,057) 163,690 155,372 143,278 2,189,526 16,510,255 44,171,993 209,250 44,381,243
P r o f i tf o rt h ey e a r ........... ——————— 3,021,342 3,021,342 20,485 3,041,827
Other comprehensive income for
t h ey e a r ............... ———— 4,711 9,649 —— 14,360 — 14,360
Total comprehensive income for
t h ey e a r ............... ———— 4,711 9,649 — 3,021,342 3,035,702 20,485 3,056,187
Transfer to statutory reserve . . . . . —————— 214,723 (214,723) ———
D i s t r i b u t i o n ............... ——————— (986,190) (986,190) ( 47,093) (1,033,283)
Issue of restricted shares under
restricted A-share incentive
scheme (the ‘‘Restricted A-share
Scheme ’’) .............. 9 , 7 4 8 5 2 , 0 5 5 —————— 61,803 — 61,803
Recognition of equity-settled
s h a r e - b a s e dp a y m e n t s....... ——— 55,677 ———— 55,677 — 55,677
At 31 December 2023 . . . . . . . . . 4,983,228 20,588,504 (500,057) 219,367 160,083 152,927 2,404,249 18,330,684 46,338,985 182,642 46,521,627
P r o f i tf o rt h ey e a r ........... ——————— 3,623,901 3,623,901 52,954 3,676,855
Other comprehensive expense for
t h ey e a r ............... ———— (20,454) (134,090) —— (154,544) — (154,544)
Total comprehensive (expense)
i n c o m ef o rt h ey e a r........ ———— (20,454) (134,090) — 3,623,901 3,469,357 52,954 3,522,311
Transfer to statutory reserve . . . . . —————— 216,021 (216,021) ———
D i s t r i b u t i o n ............... ——————— (1,482,163) (1,482,163 ) (46,327) (1,528,490)
Recognition of equity-settled share-
b a s e dp a y m e n t s ........... ——— 219,603 ———— 219,603 — 219,603
Repurchase and cancellation of
restricted shares under
Restricted A-share Scheme . . . . (349) (1,805) —————— (2,154) — (2,154)
Exercise of restricted shares under
Restricted A-share Scheme . . . . — 26,814 220,038 (133,839) ———— 113,013 — 113,013
Derecognition of investment in
equity instruments at FVTOCI
upon liquidation of the investee ———— 20,454 —— (20,454) ———
At 31 December 2024 . . . . . . . . . 4,982,879 20,613,513 (280,019) 305,131 160,083 18,837 2,620,270 20,235,947 48,656,641 189,269 48,845,910
Note: It represents the statutory reserve of the Company in the People ’s Republic of China (the ‘‘PRC’’). Pursuant to
applicable PRC regulations, PRC entity is required to appr opriate 10% of its profit after tax (after offsetting prior
year losses) to the statutory reserve until such reserve reaches 50% of its registered capital. Transfers to this reserve
must be made before distribution of dividends to sharehol ders. Upon approval by relevant authorities, the statutory
reserve can be utilised to offset the accumulated losses o r to increase the paid-up capital of the relevant entity.
APPENDIX I ACCOUNTANTS ’ REPORT
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
OPERATING ACTIVITIES
P r o f i tf o rt h ey e a r ........................ 2 , 5 1 9 , 8 2 1 3 , 041,827 3,676,855
Adjustments for:
T a x a t i o n .............................. 3 9 5 , 0 6 9 212,062 172,061
Share of results of investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ............... ( 3 , 9 8 7 ) 5 7 , 2 9 1 ( 3 , 8 9 9 )
D e p r e c i a t i o no fp r o p e r t y ,p l a n ta n de q u i p m e n t .... 4 , 3 4 0 , 6 9 6 4 , 632,953 4,770,849
D e p r e c i a t i o no fr i g h t - o f - u s ea s s e t s ............ 9 6 , 9 4 1 9 6 , 4 7 7 1 1 5 , 2 1 7
D e p r e c i a t i o no fi n v e s t m e n tp r o p e r t i e s .......... 4 4 , 2 4 1 5 2 , 9 3 4 5 6 , 2 6 0
A m o r t i s a t i o no fi n t a n g i b l ea s s e t s ............. 2 0 2 , 4 1 1 208,168 210,244
(Reversal of impairment losses) impairment losses
r e c o g n i s e du n d e rE C Lm o d e l ,n e t ........... ( 4 3 , 9 6 2 ) ( 1 , 2 5 9 ) 3 3 , 8 5 9
Loss on disposal of property, plan t and equipment . 119,874 37,047 16,776
L o s so nd i s p o s a lo fi n t a n g i b l ea s s e t s........... — 257 61
Net gain from changes in fair value of financial
a s s e t s / l i a b i l i t i e sa tF V T P L ................ ( 2 0 8 , 9 0 4 ) ( 195,897) (207,985)
R e l e a s eo fd e f e r r e di n c o m e ................. ( 5 8 , 4 9 7 ) ( 6 0 , 6 7 9 ) ( 6 1 , 8 2 6 )
G a i nf r o mt e r m i n a t i o no fal e a s ec o n t r a c t ........ ( 4 3 ) ——
S h a r e - b a s e dp a y m e n te x p e n s e ................ — 54,260 161,375
F i n a n c ec o s t s........................... 6 1 6 , 2 1 6 509,986 388,438
I n t e r e s ti n c o m e ......................... ( 1 4 7 , 8 9 3 ) ( 218,288) (254,979)
(Reversal of write-down) write-down of inventories . (442,288) (99,018) 47,859
Impairment losses on property, plant and equipment 273,077 73,242 226,942
N e tf o r e i g ne x c h a n g eg a i n s ................. ( 2 3 1 , 5 2 6 ) ( 5 9 , 4 5 5 ) ( 1 9 3 , 2 3 2 )
Operating cash flows before movements in working
c a p i t a l .............................. 7 , 4 7 1 , 2 4 6 8 , 341,908 9,154,875
Placement of restricted bank deposits . ......... ( 2 , 9 2 5 ) ( 2 1 , 8 0 1 ) ( 2 5 , 8 0 2 )
I n c r e a s ei np r o v i s i o n ...................... 3 1 2 2 , 2 6 4 1 5 , 2 8 8
( I n c r e a s e )d e c r e a s ei ni n v e n t o r i e s ............. ( 1 0 5 , 4 2 0 ) 101,368 (525,753)
Decrease (increase) in trade and bills recei vables . . 1,449,987 (272,948) (1,511,293)
Decrease (increase) in bills receiva bles at FVTOCI . 90,227 (108,591) 102,509
Decrease (increase) in prepayments and other
receivables . . . ........................ 4 8 5 , 5 5 5 1 8 , 4 9 1 ( 9 7 , 4 2 8 )
( D e c r e a s e )i n c r e a s ei nt r a d ea n do t h e rp a y a b l e s .... ( 2 1 7 , 0 7 2 ) 1 , 454,980 3,928,419
I n c r e a s ei nd e f e r r e di n c o m e ................. 1 9 , 9 6 4 4 , 0 3 8 1 4 , 2 5 0
( D e c r e a s e )i n c r e a s ei nc o n t r a c tl i a b i l i t i e s ........ ( 5 2 5 ) 5 3 0 4 , 4 8 2
C a s hg e n e r a t e df r o mo p e r a t i o n s .............. 9 , 1 9 1 , 3 4 9 9 , 520,239 11,059,547
I n c o m et a xp a i d ......................... ( 1 5 4 , 4 0 2 ) ( 427,988) (414,224)
I n t e r e s tr e c e i v e d......................... 1 4 3 , 5 8 6 207,947 243,518
Net cash from operating activities ........... 9 , 1 8 0 , 5 3 3 9 , 300,198 10,888,841
APPENDIX I ACCOUNTANTS ’ REPORT
– I-11 –


--- page 383 ---
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
INVESTING ACTIVITIES
Proceeds from disposal of financial assets/
d e r i v a t i v e sa tF V T P L.................... 8 , 7 0 2 , 3 4 1 1 , 387,040 1,932,012
Dividends received from investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ............... 1 4 0 , 3 4 9 4 6 , 6 4 1 3 9 , 6 0 1
Proceeds from disposal of property, plant and
e q u i p m e n t ........................... 8 0 , 5 1 7 3 6 , 3 3 1 4 9 , 2 2 3
R e p a y m e n tf r o mr e l a t e dp a r t i e s .............. 2 5 , 3 0 2 2 , 4 5 5 4 , 8 5 0
Proceeds on disposal of investments accounted
f o ru s i n gt h ee q u i t ym e t h o d ............... 2 , 9 0 0 — 14,537
R e p a y m e n to fd e p o s i t sf o rp r o j e c tp e r f o r m a n c e .... —— 100,000
U p f r o n tp a y m e n t sf o rl e a s e h o l dl a n d........... — (277,654) (118,320)
P a y m e n t so fd e p o s i t sf o rp r o j e c tp e r f o r m a n c e..... — (250,000) —
P u r c h a s eo fi n t a n g i b l ea s s e t s ................ ( 2 8 , 0 7 8 ) ( 4 1 , 3 8 2 ) ( 1 4 , 5 0 1 )
Investments accounted for using the equity method . (33,500) — (299)
Placement of time deposits . . . .............. ( 3 0 0 , 0 0 0 ) — (100,000)
P u r c h a s eo fp r o p e r t y ,p l a n ta n de q u i p m e n t....... ( 6 , 8 2 4 , 3 1 6 ) ( 5 , 085,273) (6,237,734)
Purchase of financial assets/derivatives a t FVTPL . . (7,342,210) (1,185,542) (1,719,659)
Net cash used in investing activities .......... ( 5 , 5 7 6 , 6 9 5 ) ( 5 , 367,384) (6,050,290)
FINANCING ACTIVITIES
N e wb o r r o w i n g sr a i s e d .................... 1 7 , 5 8 4 , 1 9 3 7 , 533,650 5,120,211
A d v a n c ef r o mr e l a t e dp a r t i e s ................ — 73 —
P r o c e e d sf r o mi s s u eo fr e s t r i c t e ds h a r e s......... — 61,803 —
E x e r c i s eo fr e s t r i c t e ds h a r e s................. —— 113,013
Transaction costs attributable to repurchase of
s h a r e s .............................. ( 5 9 ) ——
R e p a y m e n tt or e l a t e dp a r t i e s ................ ( 4 3 9 ) — (68)
Repurchase and cancellation of restricted shares . . . —— (2,154)
I n t e r e s tp a i df o rl e a s el i a b i l i t i e s .............. ( 1 , 8 1 7 ) ( 1 , 4 5 0 ) ( 4 , 0 2 2 )
R e p a y m e n to fl e a s el i a b i l i t i e s................ ( 3 0 , 3 0 9 ) ( 2 7 , 3 5 9 ) ( 2 6 , 5 5 8 )
Dividends paid to non-controlling shareholders of
s u b s i d i a r i e s ........................... ( 3 0 , 6 2 7 ) ( 4 7 , 0 9 3 ) ( 4 6 , 3 2 7 )
I n t e r e s tp a i df o rl o a nf r o mar e l a t e dp a r t y ....... ( 6 3 , 8 1 2 ) — (66,603)
R e p a y m e n to fl o a nf r o mar e l a t e dp a r t y......... ( 3 4 3 , 4 0 0 ) — (1,000,000)
Dividends paid to the shareholders of the Company . (493,095) (986,190) (1,482,163)
P a y m e n to nr e p u r c h a s eo fs h a r e s ............. ( 4 9 9 , 9 9 8 ) ——
I n t e r e s tp a i df o rb o r r o w i n g s................. ( 5 5 8 , 7 4 8 ) ( 434,010) (398,355)
R e p a y m e n to fb o r r o w i n g s .................. ( 1 7 , 9 7 8 , 2 0 5 ) ( 1 1 , 236,336) (6,661,379)
Net cash used in financing activities .......... ( 2 , 4 1 6 , 3 1 6 ) ( 5 , 136,912) (4,454,405)
Net increase (decrease) in cash and cash
equivalents .......................... 1 , 1 8 7 , 5 2 2 ( 1 , 204,098) 384,146
E f f e c to ff o r e i g ne x c h a n g er a t ec h a n g e s......... 2 7 8 , 3 9 4 1 5 , 3 6 2 5 9 , 1 3 9
Cash and cash equivalents at the beginning of
the year ............................. 1 0 , 2 1 6 , 3 3 9 1 1 , 682,255 10,493,519
Cash and cash equivalents at the end of the year 11,682,255 10,493,519 10,936,804
APPENDIX I ACCOUNTANTS ’ REPORT
– I-12 –


--- page 384 ---
NOTES TO THE FINANCIAL INFORMATION
1. INFORMATION
The Company was incorporated in the PRC as a joint st ock company with limited liability. In March 2015, the
Company was listed on the Shenzhen Stock Exchange (stock code: 300433). The Company ’s immediate and ultimate
holding company is Lens Technology (HK) Co., Ltd. The Co mpany is ultimately controlled by Ms. Chau Kwan Fei and
Mr. Cheng Chun Lung ( ‘‘Mr. Cheng ’’), spouse of Ms. Chau Kwan Fei, who act in concert with each other. Ms. Chau Kwan
Fei is also the Chair and an executive director of the Compa ny, and Mr. Cheng is the Vice-Chair and an executive director
of the Company. Lens Technology (HK) Co., Ltd., Ms. Ch au Kwan Fei and Mr. Cheng together are referred to the
Controlling Shareholders. The addresses of the registered office and principal place of business of the Company are the
same as the registered office in the PRC and the headquarter in the PRC as stated in the section headed ‘‘Corporate
Information ’’of the Prospectus.
The Group is principally engaged in the businesses of resear ch and development, design, manufacturing and sales of
various structural parts, functional modules and others, such as complete device assembly for consumer electronics, smart
vehicles and other emerging areas throughout the Track Record Pe riod. Details of the subsidiaries are disclosed in Note 44.
The statutory consolidated financial statements of t he Company for the years ended 31 December 2022, 2023 and
2024 prepared in accordance with the relevant accounting princi ples and financial regulations applicable to the enterprises
in the PRC were audited by Pan-China Certified Public Accountants LLP ( 天健會計師事務所(特殊普通合夥), certified
public accountants registered in the PRC.
2. BASIS OF PREPARATION OF HISTORICAL FINANCIAL INFORMATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards issued by the
IASB. For the purpose of preparation of the Historical Financi al Information, information is considered material if such
information is reasonably expected to influence decisions made by primary users of the Historical Financial Information. In
addition, the Historical Financial Information include applicab le disclosures required by the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited ( ‘‘Listing Rules ’’) and by the Hong Kong Companies Ordinance.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-13 –


--- page 385 ---
3. APPLICATION OF IFRS ACCOUNTING STANDARDS
For the purpose of preparing the Historical Financial In formation for the Track Record Period, the Group has
consistently applied the IFRS Accounting Standards issued by the IASB, which are effective for the accounting period
beginning on 1 January 2024 throughout the Track Record Period.
New and amendments to IFRS Accounting Standards in issue but not yet effective
The Group has not early applied the following new a nd amendments to IFRS Ac counting Standards which
have been issued but are not yet effective:
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of
Financial Instruments 3
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity 3
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture 1
Amendments to IFRS
Accounting Standards
Annual Improvements to IFR S Accounting Standards —
Volume 11 3
Amendments to IAS 21 Lack of Exchangeability 2
IFRS 18 Presentation and Disclosure in Financial Statements 4
1 Effective for annual periods beginning on or after a date to be determined.
2 Effective for annual periods beg inning on or after 1 January 2025.
3 Effective for annual periods beg inning on or after 1 January 2026.
4 Effective for annual periods beg inning on or after 1 January 2027.
IFRS 18 ‘‘Presentation and Disclosure in Financial Statements ’’, which sets out requirements on presentation
and disclosures in financial statements, will replace IAS 1 ‘‘Presentation of Financial Statements ’’.T h i sn e wI F R S
Accounting Standard, while carrying forward many of the r equirements in IAS 1, introduces new requirements to
present specified categories and defined subtotals in t he statement of profit or loss; provide disclosures on
management-defined performance measures in the notes to the financial statements and improve aggregation and
disaggregation of information to be disclosed in the finan cial statements. In addition, some IAS 1 paragraphs have
been moved to IAS 8 ‘‘Accounting Policies, Changes in Accounting Estimates and Errors ’’ and IFRS 7 ‘‘Financial
Instruments: Disclosures ’’. Minor amendments to IAS 7 ‘‘Statement of Cash Flows ’’ and IAS 33 ‘‘Earnings per
Share ’’are also made.
IFRS 18, and amendments to other standards, will be ef fective for annual periods beginning on or after 1
January 2027, with early application permitted. The application of the new standard is expected to affect the
presentation of the statement of profit or loss and disclosure s in the future financial state ments which, the directors
of the Company anticipate, the impact will not be material.
Except as described above, the Directors anticipat e that the application of the amendments to IFRS
Accounting Standards will have no material impact on the Group ’s financial position and performance in the
foreseeable future.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-14 –


--- page 386 ---
4. MATERIAL ACCOUNTING POLICY INFORMATION
Basis of consolidation
The Historical Financial Information incorporate the financial statements of the Company and entities
controlled by the Group. Control is achieved when the Company:
. has power over the investee;
. is exposed, or has rights, to variable returns from its investment with the investee; and
. has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obt ains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Specifically, inc ome and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated statemen ts of profit or loss and other comprehensive income from
the date the Group gains control until the date whe n the Group ceases to control the subsidiary.
Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and
to the non-controlling interests. Total comprehensive i ncome of subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group ’s accounting policies.
All intragroup assets and liabilities, equity, income, expe nses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group ’s equity therein, which
represent the present ownership interests entitling the non- controlling interest to a proportionate share of net assets
of the relevant subsidiaries upon liquidation.
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of
the business (see the accounting policy above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group ’s cash-generating units
(‘‘CGU’’) (or group of CGUs) that is expected to benefit from the synergies of the combination, which represent the
lowest level at which the goodwill is monitored for internal management purposes and not larger than an operating
segment.
A CGU (or group of CGUs) to which goodwill has been allocated is tested for impairment annually or more
frequently when there is indication that the unit may be impaired.
Investments in subsidiaries
Investments in subsidiaries are stated in the statements of financial position of the Company at cost less any
identified impairment loss.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 387 ---
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisi ons of the investee but is not control or joint control over
those policies.
A joint venture is a joint arrangement whereby the pa rties that have joint control of the arrangement have
rights to the net assets of the joint arrangement. Joint c ontrol is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties
sharing control.
The results and assets and liabilities of associates and joint ventures are incorporated in the Historical
Financial Information using the equity method of accounti ng. The financial statements of associates and joint
ventures used for equity accounting purposes are prepare d using uniform accounting policies as those of the Group
for like transactions and events in similar circumstances . Under the equity method, an investment in an associate or
a joint venture is initially recognised in the consolidated statements of financial position at cost and adjusted
thereafter to recognise the Group ’s share of the profit or loss and other com prehensive income of the associate or
joint venture.
When a group entity transacts with an associate or a join t venture of the Group, profits and losses resulting
from the transactions with the associate or joint venture are recognised in the Historical Financial Information only
to the extent of interests in the associate that are not related to the Group.
Revenue from contracts with customers
The Group recognises revenue when (or as) a per formance obligation is satisfied, i.e. when ‘‘control ’’ of the
goods or services underlying the particular perform ance obligation is transferred to the customer.
A performance obligation represents a good or service (or a bundle of goods or services) that is distinct or a
series of distinct goods or services that are substantially the same.
Revenue is recognised at a point in time when the custom er obtains control of the distinct good or service.
A contract liability represents the Group ’s obligation to transfer goods or services to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customer.
Principal versus agent
When another party is involved in providing goods or se rvices to a customer, the Group determines whether
the nature of its promise is a performance obligation to pr ovide the specified goods or services itself (i.e. the Group
is a principal) or to arrange for those goods or services to be provided by the other party (i.e. the Group is an agent).
The Group is a principal if it controls the specified good or service before that good or service is transferred
to a customer.
The Group is an agent if its performance obligatio n is to arrange for the provision of the specified good or
service by another party. In this case, the Group does not c ontrol the specified good or service provided by another
party before that good or service is transferred to the c ustomer. When the Group acts as an agent, it recognises
revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the
specified goods or services to be provided by the other party.
Leases
The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 ‘‘Lease ’’
at inception of the contract. Such contract will not be reassessed unless the terms and conditions of the contract are
subsequently changed.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 388 ---
The Group as a lessee
Short-term leases
The Group applies the short-term lease recognition exe mption to leases for staff quarters and warehouses that
have a lease term of 12 months or less from the commenc ement date and do not contain a purchase option. Lease
payments on short-term leases are recognised as expe nse on a straight-line basis over the lease term.
Right-of-use assets
The cost of right-of-use assets includes the amount of the initial measurement of the lease liability, any lease
payments made at or before the commencement date and any initial direct cost incurred by the Group.
Right-of-use assets are measured at cost, less any accu mulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities.
Right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful lives and
the lease terms.
The Group presents right-of-use assets that do not m eet the definition of investment property as a separate
line item on the consolidated statements of financial position. Right-of-use assets that meet the definition of
investment property are presented within ‘‘investment properties ’’.
Lease liabilities
At the commencement date of a lease, the Group rec ognises and measures the lease liability at the present
value of lease payments that are unpaid at that date. In cal culating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commenc ement date as the interest rate implicit in the lease is not
readily determinable.
The lease payments include fixed payments less any lease incentives receivable.
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Group remeasures lease liabilities (and makes a cor responding adjustment to the related right-of-use
assets) whenever:
. the lease term has changed, in which case the related lease liability is remeasured by discounting the
revised lease payments using a revised discount rate at the date of reassessment.
. a lease contract is modified and the lease modification is not accounted for as a separate lease.
The Group presents lease liabilities as a separate line item on the consolidated statements of financial
position.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the
functional currency of that entity (foreign currencies) ar e recognised at the rates of exchange prevailing on the dates
of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-mo netary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-
monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
APPENDIX I ACCOUNTANTS ’ REPORT
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Exchange differences arising on the settlement of monetary items, and on the re-translation of monetary items,
are recognised in profit or loss in the period in which they arise.
For the purposes of presenting the Historical Financial Information, the assets and liabilities of the Group ’s
operations are translated into the presentation currency of the Group (i.e. RMB) using exchange rates prevailing at
the end of each reporting period. Income and expenses ite ms are translated at the average exchange rates for the
period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date
of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and
accumulated in equity under the heading of translation reserve.
Borrowing costs
Borrowing costs, other than those directly attributab le to the acquisition, construction or production of
qualifying assets, are recognised in profit or loss in the period in which they are incurred.
Government grants
Government grants are not recognised until there is rea sonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the gran ts are intended to compensate. Specifically, government
grants whose primary condition is that the Group should pur chase, construct or otherwise acquire non-current assets
are recognised as deferred income in the consolidated stat ements of financial position and transferred to profit or
loss on a systematic and rational basis over the useful lives of the related assets.
Government grants related to incom e that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving i mmediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable. Such grants are presented under ‘‘other
income ’’.
Employee benefits
Retirement benefit costs
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
Employees in the PRC are members of a state-managed employee pension scheme operated by the relevant
municipal government in the PRC which undertakes to assume the retirement benefit obligations of all existing and
future retired employees. The Group ’s obligation is to make the required contributions under the scheme. The Group
has no further payment obligations once the contributio ns have been paid. The contributions are recognised as
employee benefit expenses when they are due.
Short-term employee benefits
Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid as
and when employees rendered the services. All short-term employee benefits are recognised as an expense unless
another IFRS requires or permits the inclu sion of the benefit in the cost of an asset.
A liability is recognised for benefits accruing to employees (such as wages and salaries) after deducting any
amount already paid.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 390 ---
Share-based payment
Equity-settled share-based payment transactions
Shares/share options granted to employees
Equity-settled share-based payments to employees providing similar services are measured at the fair value of
the equity instruments at the grant date.
The fair value of the equity-settled share-based paymen ts determined at the grant date without taking into
consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting period, based on
the Group ’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity (capital
reserve). At the end of each reporting period, the Group re vises its estimate of the number of equity instruments
expected to vest based on assessment of all relevant non-m arket vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or los s such that the cumulative expense reflects the revised
estimate, with a corresponding adju stment to the capital reserve.
When share options are exercised, the amount previously recognised in capital reserve will be transferred to
share premium.
When shares granted are vested, the amount previously recognised in capital reserve will be transferred to
share premium.
Taxation
Income tax expense represents the sum of the current and deferred income tax expense.
Deferred tax is recognised on temporary differences be tween the carrying amounts of assets and liabilities in
the Historical Financial Information and the correspondi ng tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all ta xable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differenc es to the extent that it is probable that taxable profit will
be available against which those deduc tible temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference a rises from the initial recognition (other than in a business
combination) of assets and liabilities in a transaction that a ffects neither the taxable profit nor the accounting profit
and at the time of the transaction does not give rise to equal taxable and deductible temporary differences. In
addition, deferred tax liabilities are not recognised if the tem porary difference arises from the initial recognition of
goodwill.
Deferred tax liabilities are recognised for taxable tem porary differences associated with investments in
subsidiaries and associates, and interests in joint ventur es, except where the Group is able to control the reversal of
the temporary difference and it is probable that the tempor ary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments and interests are
only recognised to the extent that it is probable that there w ill be sufficient taxable profits against which to utilise
the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of each reporting period.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-19 –


--- page 391 ---
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from
the manner in which the Group expects, at the end of each reporting period, to recover o r settle the carrying amount
of its assets and liabilities.
For the purposes of measuring deferred tax for leasing t ransactions in which the Group recognises the right-
of-use assets and the related lease liabilities, the Group first determines whether the tax deductions are attributable to
the right-of-use assets or the lease liabilities.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group applies
IAS 12 ‘‘Income Taxes ’’ requirements to lease liabilities and the related assets separately.
The Group recognises a deferred tax asset related to lease liabilities to the extent that it is probable that
taxable profit will be available against which the deductible temporary difference can be utilised and a deferred tax
liability for all taxable temporary differences.
Deferred tax assets and liabilities are offset when ther e is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied to the same taxable entity by the
same taxation authority.
Current and deferred tax are recognised in profit or lo ss, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in w hich case, the current and deferred tax are also recognised
in other comprehensive income or directly in equity respectively.
Property, plant and equipment
Property, plant and equipment are tangible assets th at are held for use in the production or supply of goods or
services, or for administrative purposes (other than cons truction in progress). Property, plant and equipment are
stated in the consolidated statements of financial pos ition at cost less subsequent accumulated depreciation and
subsequent accumulated impairment losses, if any.
Buildings, machinery and equipment in the course of c onstruction for production, supply or administrative
purposes are carried at cost, less any recognised impairment loss. Costs include any costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by
management, including costs of testing whether the relate d assets are functioning properly and, for qualifying assets,
borrowing costs capitalised in accordance with the Group ’s accounting policy. Depreciation of these assets, on the
same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost of assets other than construction in progress less their
residual values over their estimated useful lives, using the s traight-line method. The estimated useful lives, residual
values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for a prospective basis.
An item of property, plant and equipment is derecogni sed upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-20 –


--- page 392 ---
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at costs less accumulated
amortisation and any accumulated impairment losses. Amor tisation for intangible assets with finite useful lives is
recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted
for on a prospective basis.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are recognised separately from goodwill and are initially
recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acqu ired in a business combination with finite useful lives
are reported at costs less accumulated amortisation and any accumulated impairment losses, on the same basis as
intangible assets that are acquired separately.
Research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Expenditure on development activities is recognised as a n expense in the period in which it is incurred where no
internally-generated intangible asset can be recognised.
Investment properties
Investment properties are properties held to e arn rentals and/or for capital appreciation.
Investment properties are initially measured at cost, i ncluding any directly attributable expenditure.
Subsequent to initial recognition, invest ment properties are stated at cost less subsequent accumulated depreciation
and any accumulated impairment losses. Depreciation is recognised so as to write off the cost of investment
properties over their estimated useful lives and after takin g into account of their estimated residual value, using the
straight-line method.
Impairment on property, plant and equipment, right-of-use assets, investment property and intangible assets
other than goodwill
At the end of each reporting period, the Group review s the carrying amounts of its property, plant and
equipment, right-of-use assets, investment property a nd intangible assets with finite useful lives to determine
whether there is any indication that these assets have suffe red an impairment loss. If any such indication exists, the
recoverable amount of the relevant asset is estimated in orde r to determine the extent of the impairment loss (if any).
The recoverable amount of property, plant and equipm ent, right-of-use assets, investment property and
intangible assets are estimated individually. When it is not po ssible to estimate the recoverable amount individually,
the Group estimates the recoverable amount of the CGU to which the asset belongs.
In testing a CGU for impairment, corporate assets ar e allocated to the relevant CGU when a reasonable and
consistent basis of allocation can be established, or otherwise they are allocated to the smallest group of CGUs for
which a reasonable and consistent allocation basis can be es tablished. The recoverable amount is determined for the
CGU or group of CGUs to which the corporate asset bel ongs, and is compared with the carrying amount of the
relevant CGU or group of CGUs.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-21 –


--- page 393 ---
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset (or a CGU) for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or a CGU) is estimat ed to be less than its carrying amount, the carrying
amount of the asset (or a CGU) is reduced to its recoverabl e amount. For corporate assets or portion of corporate
assets which cannot be allocated on a reasonable and cons istent basis to a CGU, the Group compares the carrying
amount of a group of CGUs, including the carrying amoun ts of the corporate assets or portion of corporate assets
allocated to that group of CGUs, with the recoverable a mount of the group of CGUs. In allocating the impairment
loss, the impairment loss is allocated to the assets on a pro -rata basis based on the carrying amount of each asset in
the unit or the group of CGUs. The carrying amount of an asset is not reduced below the highest of its fair value
less costs of disposal (if measurable), its value in use (if d eterminable) and zero. The amount of the impairment loss
that would otherwise have been allocated to the asset is a llocated pro rata to the other assets of the unit or the group
of CGUs. An impairment loss is recognised immediately in profit or loss.
Inventories
Inventories are stated at the lower of cost and net realis able value. Cost of inventories are determined on the
weighted average method. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale. Costs necessary to make the sale include incremental costs
directly attributable to the sale and non-incremen tal costs which the Group must incur to make the sale.
Provisions
Provisions are recognised when the Group has a present o bligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimat e of the consideration required to settle the present
obligation at the end of each reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flo ws estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (when t he effect of the time value of money is material).
Financial instruments
Financial assets and financial liabilities are recognis ed when a group entity becomes a party to the contractual
provisions of the instrument. All regular way purchases or sales of financial assets are recognised and derecognised
on a trade date basis. Regular way purchases or sales are pu rchases or sales of financial assets that require delivery
of assets within the time frame established by regulation or convention in the market place.
Financial assets and financial liabilities are initially meas ured at fair value except for trade receivables arising
from contracts with customers which are initially measured in accordance with IFRS 15 ‘‘Revenue from Contracts
with Customers ’’. Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets at FVTPL) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on in itial recognition. Transaction costs directly attributable to
the acquisition of financial assets at FVTPL are recognised immediately in profit or loss.
The effective interest method is a method of calculating the amortised cost of a financial asset or financial
liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or
received that form an integral part of the effective interes t rate, transaction costs and other premiums or discounts)
through the expected life of the financial asset or financi al liability, or, where appropriate, a shorter period, to the
net carrying amount on initial recognition.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-22 –


--- page 394 ---
Financial assets
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditi ons are subsequently measured at amortised cost:
. the financial asset is held within a business model whose objective is to collect contractual cash flows;
and
. the contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Debt instruments that meet the following cond itions are subsequently measured at FVTOCI:
. the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the financial assets; and
. the contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
All other financial assets are subsequently measured at FVTPL, except that at initial recognition of a financial
asset the Group may irrevocably elect to present subseque nt changes in fair value of an equity investment in other
comprehensive income if that equity investment is neither h eld for trading nor contingent consideration recognised
by an acquirer in a business combination to which IFRS 3 ‘‘Business Combinations ’’applies.
(i) Amortised cost and interest income
Interest income is recognised using the effective inter est method for financial assets measured subsequently at
amortised cost and bills receivables at FVTOCI. Interest income is calculated by applying the effective interest rate
to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-
impaired. For financial assets that have subsequently b ecome credit-impaired, interest income is recognised by
applying the effective interest rate to the amortised cost of the financial asset from the next reporting period. If the
credit risk on the credit-impaired financial instrumen t improves so that the financial asset is no longer credit-
impaired, interest income is recognised by applying the effe ctive interest rate to the gross carrying amount of the
financial asset from the beginning of the reporting period f ollowing the determination that the asset is no longer
credit-impaired.
(ii) Bills receivables classified at FVTOCI
Subsequent changes in the carrying amounts for bills receivables classified as at FVTOCI as a result of
interest income calculated using the effective interest m ethod are recognised in profit or loss. All other changes in
the carrying amount of these bills receivables are recognise d in other comprehensive income and accumulated under
the heading of FVTOCI reserve. Impairment allowan ces are recognised in profit or loss with corresponding
adjustment to other comprehensive income without reducing the carrying amounts of these bills receivables. The
amounts that are recognised in profit or loss are the same as the amounts that would have been recognised in profit
or loss if these bills receivables had been measured at amortised cost. When these bills receivables are derecognised,
the cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss.
(iii) Equity instruments designated as at FVTOCI
Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses
arising from changes in fair value recognised in other c omprehensive income and accumulated in the FVTOCI
reserve; and are not subject to impairment assessment. The c umulative gain or loss will not be reclassified to profit
or loss on disposal of the equity investments, and will be transferred to retained profits.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-23 –


--- page 395 ---
(iv) Financial assets at FVTPL
Financial assets that do not meet the criteria for bein g measured at amortised cost or FVTOCI or designated
as FVTOCI are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value
gains or losses recognised in profit or loss. The net gain or loss recognised in profit or loss excludes any dividend or
interest earned on the financial asset and is included in the ‘‘other gains and losses ’’line item.
Impairment of financial assets subject to impairment assessment under IFRS 9 ‘‘Financial Instruments ’’
The Group performs impairment assessment under ECL m odel on financial assets (including trade and bills
receivables, bills receivables at FVTOCI, other receivables, amounts due from related parties, time deposits,
restricted bank deposits and bank balances) which are sub ject to impairment assessment under IFRS 9. The amount
of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the
relevant instrument. In contrast, 12-month ECL ( ‘‘12m ECL ’’) represents the portion of lifetime ECL that is expected
to result from default events that are possible within 12 months after the reporting date. Assessment is done based
on the Group ’s historical credit loss experience, and factors that are specific to the debtors, general economic
conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future
conditions.
The Group always recognises lifetime ECL for trade receivables. The ECL on these assets are assessed
individually for debtors with significant balances and cred it-impaired and collectively for the remaining debtors
using a provision matrix with appropriate groupings.
For all other instruments, the Group measures the loss allowance equal to 12m ECL, unless there has been a
significant increase in credit risk since initial recognition, in which case the Group recognises lifetime ECL. The
assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk
of a default occurring since initial recognition.
(i) Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group compares
the risk of a default occurring on the financial instrument as at each reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group
considers both quantitative and qualitative information that is reasonable and supportable, including historical
experience and forward-looking information t hat is available without undue cost or effort.
In particular, the following information is taken into a ccount when assessing whether credit risk has increased
significantly:
. an actual or expected significant deterioration in the financial instrument ’s external (if available) or
internal credit rating;
. significant deterioration in external market indicator s of credit risk, e.g. a significant increase in the
credit spread, the credit default swap prices for the debtor;
. existing or forecast adverse changes in business, fina ncial or economic conditions that are expected to
cause a significant decrease in the debtor ’s ability to meet its debt obligations;
. an actual or expected significant deterior ation in the operating results of the debtor;
APPENDIX I ACCOUNTANTS ’ REPORT
– I-24 –


--- page 396 ---
. an actual or expected significant adverse change in the regulatory, economic, or technological
environment of the debtor that results in a significant decrease in the debtor ’s ability to meet its debt
obligations.
Irrespective of the outcome of the above assessment, th e Group presumes that the credit risk has increased
significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group
has reasonable and supportable informa tion that demonstrates otherwise.
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a
significant increase in credit risk and revises them as appr opriate to ensure that the criteria are capable of identifying
significant increase in credit risk before the amount becomes past due.
(ii) Definition of default
For internal credit risk management, the Group cons iders an event of default occurs when information
developed internally or obtained from external sources in dicates that the debtor is unlikely to pay its creditors,
including the Group, in full (without taking into account any collaterals held by the Group).
Irrespective of the above, the Group considers that default has occurred when a financial asset is more than 90
days past due unless the Group has reasonable and sup portable information to demonstrate that a more lagging
default criterion is more appropriate.
(iii) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Ev idence that a financial asset i s credit-impaired includes
observable data about the following events:
. significant financial difficulty of the issuer or the borrower;
. a breach of contract, such as a default or past due event;
. the lender(s) of the borrower, for economic or contractual reasons relating to the borrower ’s financial
difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise
consider;
. it is becoming probable that the borrower will enter b ankruptcy or other financial reorganisation.
(iv) Write-off policy
The Group writes off a financial asset when there is information indicating that the counterparty is in severe
financial difficulty and there is no realistic prospect of r ecovery, for example, when the counterparty has been placed
under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to
enforcement activities under the Group ’s recovery procedures, taking into account legal advice where appropriate. A
write-off constitutes a derecognition event. Any subsequent recoveries are recognised in profit or loss.
(v) Measurement and recognition of ECL
The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. Th e assessment of the probability of default and loss given
default is based on historical data and forward-looking information. Estimation of E CL reflects an unbiased and
probability-weighted amount that is determined with the res pective risks of default occurring as the weights. Trade
receivables of the Group with significant balances and credit-impaired are assessed for ECL individually. The Group
APPENDIX I ACCOUNTANTS ’ REPORT
– I-25 –


--- page 397 ---
uses a practical expedient in estimating ECL on trade r eceivables, which are not assessed individually, using a
provision matrix taking into consideration historical cred it loss experience and forward-looking information that is
available without undue cost or effort.
Generally, the ECL is the difference between all c ontractual cash flows that are due to the Group in
accordance with the contract and the cash flows that the Group expects to receive, discounted at the effective
interest rate determined at initial recognition.
Trade receivables of the Group with significant ba lances and credit-impaired are assessed for ECL
individually. Except as those trade receivables, lifetime E CL for trade receivables are considered on a collective
basis taking into consideration past due information a nd relevant credit information such as forward-looking
macroeconomic information.
For collective assessment, the Group takes into consideration the following characteristics when formulating
the grouping:
. Past-due status;
. Nature, size and industry of debtors; and
. External credit ratings where available.
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share
similar credit risk characteristics.
Interest income is calculated based on the gross carry ing amount of the financial asset unless the financial
asset is credit-impaired, in which case interest income is calculated based on amortised cost of the financial asset.
Except for bills receivables that are measured at FVTOCI , the Group recognises an impairment gain or loss in
profit or loss for all financial instruments by adjustin g their carrying amount, with the exception of trade and other
receivables, where the corresponding adjustment is recognised through a loss allowance account. For bills
receivables are measured at FVTOCI, the loss allowance is recognised in other comprehensive income and
accumulated in the FVTOCI reserve without reducing the carrying amounts of these bills receivables. Such amount
represents the changes in the FVTOCI reserve in relation to accumulated loss allowance.
Derecognition of financial assets
The Group derecognises a financial asset only when th e contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substa ntially all the risks and rewards of ownership of the asset to
another entity. If the Group retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Group continues to recognis e the financial asset and also recognises a collateralised borrowing for the
proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset ’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of bills receivables at FVTOCI, the cumulative gain or loss previously accumulated in the
FVTOCI reserve is reclassified to profit or loss.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the defi nitions of a financial liability and an equity instrument.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 398 ---
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Compa ny are recognised at the proceeds received, net of direct
issue costs.
Repurchase of the Company ’s own equity instruments is recognised and deducted directly in equity. No gain
or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company ’s own equity
instruments.
Financial liabilities
Financial liabilities including trade and other payables, amounts due to related parties, loan from a related
party and borrowings are subsequently measured at am ortised cost using the effective interest method.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group ’s obligations are discharged,
cancelled or have expired. The difference between the car rying amount of the financial liability derecognised and the
consideration paid and payable, is recognised in profit or loss.
Derivative financial instruments
Derivatives are initially recognised at fair value at the date when derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of the reporting period. The resulting gain or loss is
recognised in profit or loss.
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the
instrument is more than 12 months and it is not due to be realised or settled within 12 months. Other derivatives are
presented as current assets or current liabilities.
Offsetting a financial asset and a financial liability
A financial asset and a financial liability are offset and the net amount presented in the consolidated
statements of financial position when, and only when, the Group currently has a legally enforceable right to set off
the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
5. KEY SOURCES OF ESTIMATION UNCERTAINTY
The following are the key assumptions concerning the futur e, and other key sources of estimation uncertainty at the
end of each reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next twelve months.
Deferred tax asset
As at 31 December 2022, 2023 and 2024, a deferred tax asset of RMB531,028,000, RMB665,545,000, and
RMB824,043,000, respectively, in relation to unused tax l osses for certain operating subsidiaries has been
recognised in the consolidated statements of financial p osition. No deferred tax asset has been recognised on the tax
losses of RMB3,105,107,000, RMB3,099,773,000, and RMB2,296, 299,000, respectively, for certain subsidiaries due
to the unpredictability of future profit streams. The realisability of the deferred tax asset mainly depends on whether
sufficient taxable profits will be available in the future or taxable temporary differences are expected to reverse in
the same period as the expected reversal of the deductible te mporary differences, which is a key source of estimation
uncertainty. The uncertainty would depend on how th e ongoing uncertain macroeconomic and geopolitical
environment. In cases where the actual future taxable prof its generated are less or more than expected, or change in
APPENDIX I ACCOUNTANTS ’ REPORT
– I-27 –


--- page 399 ---
facts and circumstances which result in revision of future taxable profits estimation, a material reversal or further
recognition of deferred tax assets may arise, which would be recognised in profit or loss for the period in which
such a reversal or further recognition takes place.
Net realisable value of inventories
As at 31 December 2022, 2023 and 2024, the carrying amount of the Group ’s inventories is
RMB6,685,009,000, RMB6,682,659,00 0, and RMB7,160,553,000, respectiv ely. During the years ended 31
December 2022 and 2023, a reversal of write-down of i nventories of RMB442,288,000, RMB99,018,000 was
recognised or in profit or loss, respectively. During th e year ended 31 December 2024, a write-down of inventories
of RMB47,859,000 was recognised or in profit or loss.
Net realisable value of inventories is the estimated se lling price in the ordinary course of business, less the
estimated costs of completion and costs necessary to make the sale.
The Group assesses the net realisable value of invento ries as well as the amount of write-down of inventory
provision at the end of each reporting period, which i nvolves significant judgement on determination of the
estimated selling prices, costs to completion and costs necessary to make the sale.
Impairment assessment of goodwill
Determining whether goodwill is impaired requires an e stimation of the recoverable amount of the CGU (or
group of CGUs) to which goodwill has been allocated, which i s the higher of the value in use or fair value less costs
of disposal. The value in use calculation requires the Group to estimate the future cash flo ws expected to arise from
the CGU (or a CGUs) and a suitable discount rate in order to calculate the present value. Where the actual future
cash flows are less than expected, or change in facts and ci rcumstances which results in downward revision of future
cash flows or upward revision of discount rate, a material impairment loss or further impairment loss may arise.
As at 31 December 2022, 2023 and 2024, the carrying amounts of goodwill was RMB2,970,144,000,
RMB2,970,144,000 and RMB2,970,144,000, respectively. De tails of the calculation of recoverable amounts are
disclosed in Note 21.
Provision of ECL for trade receivables
Trade receivables of the Group with significant ba lances and credit-impaired are assessed for ECL
individually.
In addition, the Group uses practical expedient in estimating ECL on trade receivables which are not assessed
individually using a provision matrix. The provision ra tes are based on ageing of debtors as groupings of various
debtors taking into consideration the Group ’s historical default rates and forward-looking information that is
reasonable and supportable available without undue costs or e ffort. At each reporting date, the historical observed
default rates are reassessed and changes in the forward-looking information are considered.
The provision of ECL is sensitive to changes in estim ates. The information about the ECL and the Group ’s
trade receivables are disclosed in Note 41.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-28 –


--- page 400 ---
6. REVENUE AND SEGMENT INFORMATION
(i) Revenue
The following is an analysis of the Group ’s revenue from major end use products and services:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Smartphones and computers . . .............. 3 8 , 2 1 3 , 8 1 1 4 4 , 9 0 0 , 6 3 2 5 7 , 754,169
S m a r tv e h i c l e sa n dc o c k p i t s ................ 3 , 5 8 3 , 8 2 0 4 , 9 9 8 , 4 6 4 5 , 934,795
Intelligent head-mounted displays and smart
w e a r a b l e s ........................... 3 , 5 3 8 , 6 9 1 3 , 1 0 3 , 7 5 3 3 , 488,408
O t h e r ss m a r td e v i c e s ..................... 1 7 1 , 8 1 7 1 6 4 , 8 7 2 1 , 408,378
S c r a p sa n dm a t e r i a l s ..................... 4 4 7 , 8 6 8 4 5 1 , 8 3 1 426,465
P r o c e s s i n gf e e.......................... 5 7 1 , 4 4 6 6 5 2 , 9 6 9 635,804
O t h e r s ............................... 7 5 , 7 7 2 9 1 , 5 4 0 108,739
R e v e n u ef r o mc o n t r a c t sw i t hc u s t o m e r s ........ 4 6 , 6 0 3 , 2 2 5 5 4 , 3 6 4 , 0 6 1 6 9 , 756,758
L e a s e s ............................... 9 5 , 3 2 1 1 2 6 , 6 7 3 140,018
T o t a l ................................ 4 6 , 6 9 8 , 5 4 6 5 4 , 4 9 0 , 7 3 4 6 9 , 896,776
Geographical information
The Group ’s operations are located in the PRC (country of domicile), the United States of America (the
‘‘U.S. ’’), Vietnam, Mexico and Japan.
Information about the Group ’s revenue from external customers is presented based on delivery
destination or the shipping dest ination on customs declaration.
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Offshore
— Special supervision territory in China
(note) ......................... 2 8 , 8 9 6 , 4 1 8 2 4 , 8 2 2 , 4 1 8 2 7 , 496,661
— V i e t n a m ....................... 4 , 8 7 1 , 3 2 4 5 , 4 2 0 , 1 9 9 4 , 882,063
— Asia (excluding Mainland China
a n dV i e t n a m ) .................... 2 , 8 1 1 , 3 3 6 4 , 1 8 7 , 8 1 3 6 , 079,024
— N o r t hA m e r i c a................... 1 , 5 4 4 , 3 4 6 2 , 0 0 8 , 8 4 0 2 , 036,548
— O t h e r s ........................ 1 4 3 , 0 1 9 3 6 7 , 2 8 8 484,087
38,266,443 36,806,558 40,978,383
Mainland China (excluding special
supervision territory) (note) .......... 8 , 4 3 2 , 1 0 3 1 7 , 6 8 4 , 1 7 6 2 8 , 918,393
46,698,546 54,490,734 69,896,776
APPENDIX I ACCOUNTANTS ’ REPORT
– I-29 –


--- page 401 ---
Note: During the years ended 31 December 2022, 2023 and 2024, the amount of Group ’s total revenue
from Mainland China (country of domicile), repr esented by domestic and special supervision
territory within the PRC (excluding Hong Kong, Macao and Taiwan) is RMB37,328,521,000,
RMB42,506,594,000, and RMB56,415,054,000, respectively.
Timing of revenue from contracts with customers recognition
All revenue from contracts with customers within the scope of IFRS 15 are recognised at a point in
time.
(ii) Performance obligations for contracts with customers and revenue recognition policies
Revenue from the sale of products is recognised at the poi nt in time when control of the asset is transferred to
the customer, generally on the receipt of products by customers.
Processing fee is recognised at the point in time when the processing has been completed and the control of
the processed product is transferred to customers.
The Group requires an advance payment or grants the c ustomers a credit period from 30 days to 120 days
based on the assessed credit worthiness of the customers. A contract liability represents the Group ’s obligation to
transfer goods or services for which the Group ha s received consideration from the customer.
(iii) Transaction price allocated to the remaining performance obligation for contracts with customers
The Group applies the practical expedient of not disclosing the transaction price allocated to the remaining
performance obligation as the original expected duratio n of all the contracts from customers of the Group are within
one year or less.
(iv) Leases
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
For operating leases:
L e a s ep a y m e n t st h a ta r ef i x e d ............. 9 5 , 3 2 1 1 2 6 , 6 7 3 140,018
Operating leases, in which the Group is the lessor, relate to investment property owned by the Group with
non-cancellable lease terms of between 5 to 15 years. All ope rating lease contracts contain market review clauses in
the event that the lessee exercises its option to renew. The lease contracts do not contain residual value guarantee
and/or lessee ’s option to purchase the property at the end of lease term. Lease payments are usually adjusted every
year to reflect market rentals. None of the leases includes variable lease payments.
(v) Segment information
For the purpose of resource allocation and assessment of segment performance, the executive directors of the
Company, being the chief operating decision makers, fo cus on the overall results and financial position of the
Group, therefore no other discrete financia l information is provided other than the Group ’s results and financial
position as a whole. The Group has only one single operating and reportable segment and only entity-wide
disclosures are presented.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 402 ---
Geographical information
The details of the Group ’s revenue from external customers by geographical markets of the products
presented based on delivery destination or the shipping destination on customs declaration are set out in Note
6(i). Information about the Group ’s non-current assets is presented based on the geographical location of the
assets.
The Group ’s non-current assets (excluding deferr ed tax assets and financial assets) of
RMB43,312,814,000, RMB42,494,649,000 and RMB 42,649,416,000 are located in the PRC as at 31
December 2022, 2023 and 2024, respectively. The remaining non-current assets are located in the U.S.,
Vietnam, Mexico and Japan, with each jurisdiction ’s individual non-current assets constituting less than 10%
to the Group ’s non-current assets.
(vi) Information about major customers
Revenue from customers of the corresponding years contributing over 10% of the total revenue of the Group
are as follow:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Customer A (note i) ...................... 3 3 , 1 3 6 , 1 5 1 3 1 , 5 1 2 , 2 6 7 3 4 , 566,472
Customer B (notes i & ii) .................. N / A 8 , 4 7 2 , 7 3 3 1 6 , 328,058
Notes:
(i) The customer is a group of companies under the same holding company.
(ii) The corresponding revenue did not contribute o ver 10% of the total revenue of the Group for the year
ended 31 December 2022.
7. OTHER INCOME
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Government grants
— related to expense items (note) ............... 4 3 4 , 0 3 7 6 9 8 , 3 2 7 163,015
— related to assets (Note 35) .................. 5 8 , 4 9 7 6 0 , 6 7 9 6 1 , 8 2 6
492,534 759,006 224,841
I n t e r e s ti n c o m e .............................. 1 4 7 , 8 9 3 2 1 8 , 2 8 8 254,979
C o m p e n s a t i o ni n c o m e......................... 1 7 , 4 5 8 2 0 , 8 2 8 3 2 , 5 6 7
O t h e r s .................................... 2 0 , 6 9 1 1 9 , 0 8 7 5 4 , 6 3 7
678,576 1,017,209 567,024
Note: The amount mainly represents various subsidies received from the PRC government authorities for the
purpose of motivating the business development of the Group. There were no unfulfilled conditions or
contingencies relating to these government grants.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 403 ---
8. REVERSAL OF IMPAIRMENT LOSSES (IMPAIRMENT LOSSES RECOGNISED) UNDER ECL MODEL,
NET
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Impairment losses reversed (recognised) on:
— Trade and bills receivables . . . .............. 5 3 , 4 4 4 ( 2 , 2 4 2 ) ( 1 5 , 6 0 0 )
— Other receivables . ....................... ( 9 , 2 2 7 ) 3 , 5 2 7 ( 1 8 , 2 2 8 )
— A m o u n t sd u ef r o mr e l a t e dp a r t i e s............. ( 2 5 5 ) ( 2 6 ) ( 3 1 )
43,962 1,259 (33,859)
Details of impairment assessment are set out in Note 41.
9. OTHER GAINS AND LOSSES, NET
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
N e tf o r e i g ne x c h a n g eg a i n s ..................... 2 3 1 , 5 2 6 5 9 , 4 5 5 193,232
Net gain from changes in fair value of financial assets/
liabilities at FVTPL . ....................... 2 0 8 , 9 0 4 1 9 5 , 8 9 7 207,985
Loss on disposal of property, plant and equipment and
i n t a n g i b l ea s s e t s........................... ( 1 1 9 , 8 7 4 ) ( 3 7 , 3 0 4 ) ( 1 6 , 8 3 7 )
O t h e r s .................................... 4 5 6 6 0 9 —
321,012 218,657 384,380
10. FINANCE COSTS
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
I n t e r e s to nb o r r o w i n g s ......................... 5 6 9 , 5 7 3 4 7 1 , 0 2 2 382,959
Interest on loan from a related party (Note 42) ........ 4 4 , 8 2 6 3 7 , 5 1 4 1 , 4 5 7
Interest on lease liabilities ...................... 1 , 8 1 7 1 , 4 5 0 4 , 0 2 2
T o t a lb o r r o w i n gc o s t s ......................... 6 1 6 , 2 1 6 5 0 9 , 9 8 6 388,438
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 404 ---
11. INCOME TAX EXPENSE
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Current tax:
— P R CE n t e r p r i s eI n c o m eT a x................. 2 8 7 , 5 8 3 3 8 8 , 4 9 0 291,434
— H o n gK o n g ............................ 5 5 , 8 6 4 4 2 , 2 7 8 9 , 2 6 4
— V i e t n a m .............................. 3 3 , 7 1 9 4 8 , 0 7 5 4 3 , 0 1 1
— U . S . ................................. 2 1 3 2 9 9 8 1 6
— O t h e rj u r i s d i c t i o n s ....................... — 88 215
377,379 479,230 344,740
Under provision in prior years:
— P R CE n t e r p r i s eI n c o m eT a x................. 2 , 9 2 8 8 , 4 2 6 8 , 9 2 2
— H o n gK o n g ............................ ( 7 ) ——
2,921 8,426 8,922
Deferred tax (Note 24) ........................ 1 4 , 7 6 9 ( 2 7 5 , 5 9 4 ) ( 181,601)
395,069 212,062 172,061
PRC Enterprise Income Tax
Under the Law of the PRC on Enterprise Income Tax (the ‘‘EIT Law ’’) and Implementation Regulation of the
EIT Law, the tax rate of the Group ’s PRC subsidiaries is 25%.
The Company and certain of its PRC subsidiaries are accredited as High New Tech Enterprises during the
Track Record Period and are subject to preferential tax rate of 15% during the respective accredited period in the
Track Record Period.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-33 –


--- page 405 ---
Pursuant to relevant laws and regulations in the PRC, several subsidiaries are eligible as a Small Low-profit
Enterprise ( 小型微利企業) and are subject to preferential tax treatments during the Track Record Period.
From 1 January 2022 to 31 December 2022, for Small Low-profit Enterprises, the annual taxable income not
exceeding RMB1.0 million was reduced to 12.5% and taxe d at a rate of 20%. From 1 January 2023 to 31 December
2024, for Small Low-profit Enterprises, the annual taxab le income not exceeding RMB3.0 million was reduced to
25% and taxed at a rate of 20%.
Hong Kong
The Company ’s subsidiary domiciled in Hong Kong is subject t o a two-tiered income tax rate for taxable
income earned in Hong Kong effectively since 1 April 2018 . The first 2 million Hong Kong dollars of profits earned
by the qualifying group entity are subject to be taxed at an income tax rate of 8.25%, while the remaining profits
will be taxed at 16.5%.
Vietnam
The Company ’s subsidiary domiciled in Vietnam is subject to a corporate income tax rate of 20%. According
to the policies promulgated by the local policy, all eligible enterprises are subsequently entitled to two-year income
tax exemptions followed by four years ’ 50% reduction of the statutory income tax rates, starting from their first
profit making year. The Company ’s Vietnam subsidiary is qualified as an eligible enterprise and was entitled to the
two years ’ exemption from income tax followed by four yea rs of 50% tax reduction with effect from 2020 and
entitled to a preferential income tax rate of 10% during the Track Record Period.
U.S.
Pursuant to the applicable U.S. federal and state incom e tax laws, the U.S. subsidiaries have provided income
taxes on their federal and state taxable income at the 21% U. S. federal statutory corporate income tax rate and states
statutory corporate tax rates of up to 8. 84% throughout the Track Record Period.
Other jurisdictions
Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-34 –


--- page 406 ---
The tax charge for the Track Record Period can be reconciled to the profit before tax per the consolidated
statements of profit or loss and other comprehensive income as follows:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
P r o f i tb e f o r et a x ........................ 2 , 9 1 4 , 8 9 0 3 , 2 5 3 , 8 8 9 3 , 848,916
T a xa tt h ep r e f e r e n t i a lt a xr a t eo f1 5 % ......... 4 3 7 , 2 3 4 4 8 8 , 0 8 3 577,337
Tax effect of expenses not deductible for
t a xp u r p o s e s ......................... 1 1 7 , 9 5 2 1 2 , 2 7 7 2 3 , 0 7 4
E f f e c to fd i f f e r e n tt a xr a t e so ft h es u b s i d i a r i e s.... 9 9 , 7 5 4 1 0 2 , 0 3 7 9 2 , 2 9 8
Tax effect of income not taxable for tax purpose . . (1,880) (402) (54,648)
Utilisation of tax losses previously not recognised . (27,579) (60,189) (134,897)
Tax effect of deductible temporary differences and
tax losses not recognised . . .............. 1 4 1 , 1 6 3 3 9 , 4 8 7 1 5 , 1 8 5
Decrease in opening deferred tax liabilities
resulting from a decrease in applicable tax rate
(note i) ............................. — (89,628) —
Additional deduction of research and development
expenses (note ii) ...................... ( 3 1 2 , 6 0 5 ) ( 2 7 9 , 8 0 4 ) ( 351,320)
Additional deduction of acquisition of equipment
(note iii) ............................ ( 5 6 , 5 8 6 ) ——
U n d e rp r o v i s i o ni nr e s p e c to fp r i o ry e a r s ....... 2 , 9 2 1 8 , 4 2 6 8 , 9 2 2
O t h e r s ............................... ( 5 , 3 0 5 ) ( 8 , 2 2 5 ) ( 3 , 8 9 0 )
395,069 212,062 172,061
Notes:
(i) A PRC subsidiary applied High New Tech Enterprises in 2023 and enjoys preferential tax rate of 15%
for the years ended 31 December 2023 and 2024.
(ii) According to the relevant laws and regulations promulgated by the State Administration of Taxation of
the PRC that have been effective from 2018 onwards, e nterprises engaging in research and development
activities are entitled to claim 175% and 200% of their research and development expenditures incurred
as tax deductible expenses when determining their assessable profits for the period from 1 January 2022
to 30 September 2022 and for the period from 1 October 2022 to 31 December 2024, respectively.
(iii) The State Taxation Administration of the PRC a nnounced in September 2022 that enterprises accredited
as ‘‘High New Tech Enterprises ’’ would be entitled to claim 100% of the purchase price for equipment
and appliances newly purchased during the period from 1 October 2022 to 31 December 2022 as tax
deductible expenses and 100% additional deduction for the year ended 31 December 2022.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-35 –


--- page 407 ---
12. PROFIT FOR THE YEAR
Profit for the year has been arrived at after charging (crediting):
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Directors ’ and supervisors ’ emoluments (Note 13) ...... 1 1 , 3 0 0 1 1 , 4 0 0 1 2 , 5 2 0
Other staffs costs (excluding directors ’ and supervisors ’
emoluments)
— Salaries and other benefit, including share-based
p a y m e n te x p e n s e s ...................... 1 2 , 1 8 3 , 3 0 2 1 1 , 0 3 9 , 6 9 3 1 2 , 590,852
— R e t i r e m e n tb e n e f i t ss c h e m ec o n t r i b u t i o n s ........ 8 6 9 , 0 3 8 7 7 9 , 5 7 5 871,074
T o t a ls t a f fc o s t s ............................. 1 3 , 0 6 3 , 6 4 0 1 1 , 8 3 0 , 6 6 8 1 3 , 474,446
C a p i t a l i s e di ni n v e n t o r i e s ....................... ( 1 0 , 7 6 6 , 0 3 3 ) ( 9 , 2 6 4 , 7 1 9 ) ( 1 0 , 482,249)
2,297,607 2,565,949 2,992,197
D e p r e c i a t i o no fp r o p e r t y ,p l a n ta n de q u i p m e n t ........ 4 , 3 4 0 , 6 9 6 4 , 6 3 2 , 9 5 3 4 , 770,849
D e p r e c i a t i o no fi n v e s t m e n tp r o p e r t i e s .............. 4 4 , 2 4 1 5 2 , 9 3 4 5 6 , 2 6 0
D e p r e c i a t i o no fr i g h t - o f - u s ea s s e t s ................ 9 6 , 9 4 1 9 6 , 4 7 7 115,217
A m o r t i s a t i o no fi n t a n g i b l ea s s e t s ................. 2 0 2 , 4 1 1 2 0 8 , 1 6 8 210,244
T o t a ld e p r e c i a t i o na n da m o r t i s a t i o n................ 4 , 6 8 4 , 2 8 9 4 , 9 9 0 , 5 3 2 5 , 152,570
C a p i t a l i s e di ni n v e n t o r i e s ....................... ( 3 , 5 6 4 , 3 4 9 ) ( 3 , 8 8 0 , 8 7 1 ) ( 4 , 043,350)
1,119,940 1,109,661 1,109,220
Auditor ’sr e m u n e r a t i o n ........................ 2 , 0 0 0 2 , 4 0 0 2 , 9 0 0
Impairment losses recognised on property, plant and
e q u i p m e n t ,i n c l u d e di na d m i n i s t r a t i v ee x p e n s e s ..... 2 7 3 , 0 7 7 7 3 , 2 4 2 226,942
Other expenses
— D o n a t i o n.............................. 1 0 , 0 3 2 6 , 8 4 8 8 , 2 1 6
C o s to fi n v e n t o r i e sr e c o g n i s e da sa ne x p e n s e ......... 3 8 , 2 7 2 , 3 5 1 4 5 , 6 9 8 , 8 7 6 5 9 , 385,583
Excluding: (reversal of write-down) write-down of
i n v e n t o r i e s............................. ( 4 4 2 , 2 8 8 ) ( 9 9 , 0 1 8 ) 4 7 , 8 5 9
APPENDIX I ACCOUNTANTS ’ REPORT
– I-36 –


--- page 408 ---
13. DIRECTORS ’ AND SUPERVISORS ’ EMOLUMENTS
Details of the emoluments paid or payable to the directors and supervisors of the Company during the Track Record
Period disclosed pursuant to the applicable Listing Rul es and the Hong Kong Companies Ordinance are as follows:
Fees
Salaries, bonus
and other
allowances
(note i)
Share-based
payment
Retirement
benefit scheme
contributions Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
F o rt h ey e a re n d e d
31 December 2022
Executive directors:
M s .C h a uK w a nF e i...... — 4,984 — 16 5,000
M r .C h e n gC h u nL u n g .... — 2,984 — 16 3,000
M r .R a oQ i a o b i n g ....... — 892 — 8 900
Independent non-executive
directors:
Mr. Tang Guoping (note ii) . 100 ——— 100
M s .W a nW e i .......... 1 0 0 ——— 100
M r .L i uY u e ........... 1 0 0 ——— 100
M r .P e n gD i e f e n g ....... 1 0 0 ——— 100
Supervisors:
Mr. Kuang Hongfeng ..... — 692 — 8 700
M r .T a n gJ u n .......... — 492 — 8 500
M s .Z h o uX i n y i......... — 792 — 8 800
400 10,836 — 64 11,300
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 409 ---
Fees
Salaries, bonus
and other
allowances
(note i)
Share-based
payment
Retirement
benefit scheme
contributions Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
F o rt h ey e a re n d e d
31 December 2023
Executive directors:
M s .C h a uK w a nF e i...... — 4,984 — 16 5,000
M r .C h e n gC h u nL u n g .... — 2,984 — 16 3,000
M r .R a oQ i a o b i n g ....... — 780 112 8 900
Independent non-executive
directors:
Mr. Tang Guoping (note ii) .5 0 ——— 50
Mr. Yang Songbai (note iii) .5 0 ——— 50
M s .W a nW e i .......... 1 0 0 ——— 100
M r .L i uY u e ........... 1 0 0 ——— 100
M r .P e n gD i e f e n g ....... 1 0 0 ——— 100
Supervisors:
Mr. Kuang Hongfeng ..... — 792 — 8 800
M r .T a n gJ u n .......... — 492 — 8 500
M s .Z h o uX i n y i......... — 792 — 8 800
400 10,824 112 64 11,400
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 410 ---
Fees
Salaries, bonus
and other
allowances
(note i)
Share-based
payment
Retirement
benefit scheme
contributions Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
F o rt h ey e a re n d e d
31 December 2024
Executive directors:
M s .C h a uK w a nF e i...... — 4,984 — 16 5,000
M r .C h e n gC h u nL u n g .... — 2,984 — 16 3,000
M r .R a oQ i a o b i n g ....... — 530 462 8 1,000
Independent non-executive
directors:
Mr. Yang Songbai
(note iii & iv) ........ 1 3 0 ——— 130
M s .W a nW e i .......... 1 3 0 ——— 130
M r .L i uY u e ........... 1 3 0 ——— 130
Mr. Peng Diefeng (note iv) . 130 ——— 130
Supervisors:
Mr. Kuang Hongfeng
(note iv) ............ — 992 — 8 1,000
M r .T a n gJ u n .......... — 992 — 8 1,000
M s .Z h o uX i n y i......... — 992 — 8 1,000
520 11,474 462 64 12,520
Notes:
(i) The discretionary bonus is determined based on the Group ’s performance, performance of the relevant
individual within the Group and comparable market statistics.
(ii) Mr. Tang Guoping resigned as an independent non-executive director of the Company on 31 July 2023.
(iii) Mr. Yang Songbai was appointed as an independent non-executive director of the Company on 18 October
2023.
(iv) Mr. Yang Songbai and Mr. Peng Diefeng resigned as an independent non-executive director of the Company
on 21 January 2025. Mr. Kuang Hongfeng resigned a s a supervisor of the Company on 21 January 2025.
(v) Mr. Tian Hong and Mr.Xie Zhiming were appointed as an independent non-executive director of the Company
on 21 January 2025. Mr. Chen Xiaoqun was appointed as a supervisor of the Company on 21 January 2025.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 411 ---
The executive directors ’ emoluments shown above were paid for their se rvices in connection with the management
of affairs of the Group and the Compa ny during the Track Record Period.
The independent non-executive directors ’ emoluments shown above were for their services as directors of the
Company.
The supervisors ’ emoluments shown above were for their services as supervisors of the Company.
During the Track Record Period, certain directors were granted restricted shares, in respect of their services to the
Group under the Restricted A-share Scheme of the Company. De tails of the share-based payment are set out in note 38 to
the Historical Financial Information.
During the Track Record Period, ther e have been no arrangement under which a director or a supervisor waived or
agreed to waive any remuneration.
14. FIVE HIGHEST PAID EMPLOYEES
The five highest paid individuals of the Group included fou r, five and five directors and supervisors during the years
ended 31 December 2022, 2023 and 2024, respectively, details of whose remuneration are set out above. Details of the
remuneration for the remaining one, nil and nil highest paid individual during the years ended 31 December 2022, 2023
and 2024, respectively, are as follows:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Salaries and other benefits, including share-based payment
e x p e n s e s ................................ 5 2 2 ——
D i s c r e t i o n a r yb o n u s .......................... 2 7 0 ——
R e t i r e m e n tb e n e f i ts c h e m ec o n t r i b u t i o n s ............ 8 ——
800 ——
The number of the highest paid employees who are not the di rectors or supervisors whose remuneration fell within
the following band is as follows:
Year ended 31 December
2022 2023 2024
No. of
employees
No. of
employees
No. of
employees
Nil to Hong Kong dollar ( ‘‘HK$’’)1 , 0 0 0 , 0 0 0......... 1 ——
No emoluments had been paid by the Group to any of the directors or the supervisors or the five highest paid
individuals as an inducement to join or upon joining the Group or as compensation for loss of office.
APPENDIX I ACCOUNTANTS ’ REPORT
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15. DIVIDENDS
Dividends for ordinary shareholders of the Company rec ognised as distribution during the Track Record Period:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
D i v i d e n df o ro r d i n a r ys h a r e h o l d e r so ft h eC o m p a n y .... 4 9 3 , 0 9 5 9 8 6 , 1 9 0 1 , 482,163
During the year ended 31 December 2022, the Company declared and paid cash dividend of RMB0.10 per ordinary
share, in aggregate of RMB493,095,000, to or dinary shareholders of the Company.
During the year ended 31 December 2023, the Company declared and paid cash dividend of RMB0.20 per ordinary
share, in aggregate of RMB986,190,000, to or dinary shareholders of the Company.
During the year ended 31 December 2024, the Company declared and paid cash dividend of RMB0.30 per ordinary
share, in aggregate of RMB1,482,163,000, to ordinary shareholders of the Company.
Subsequent to the end of the Track Record Period, a fina l dividend in respect of the year ended 31 December 2024
of RMB0.40 per ordinary share, in aggregate of RMB1,983, 582,000, was approved by the shareholders of the Company at
the general meeting on 18 April 2025.
16. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share, as a pplicable, attributable to the owners of the Company is
based on the following data:
Year ended 31 December
2022 2023 2024
Earnings (RMB ’000):
Profit for the year attributable to owners of the Company 2,448,037 3,021,342 3,623,901
Number of shares ( ’000):
Weighted average number of ordinary shares for the
purpose of basic earnings per share (note) ......... 4 , 9 4 2 , 6 2 8 4 , 9 3 0 , 9 5 2 4 , 936,803
Effect of dilutive potential ordinary shares: Restricted
A - s h a r eS c h e m e ........................... N / A 2 , 9 1 0 1 1 , 7 8 3
Weighted average number of ordinary shares for the
p u r p o s eo fd i l u t e de a r n i n g sp e rs h a r e ............. 4 , 9 4 2 , 6 2 8 4 , 9 3 3 , 8 6 2 4 , 948,586
Note: Treasury shares and restricted shares subject to repurchase were excluded in calculating the weighted average
number of ordinary shares of the purpose of basic earnings per share.
No diluted earnings per share for the year ended 31 De cember 2022 were presented as there were no potential
dilutive ordinary shares in issue for the year.
APPENDIX I ACCOUNTANTS ’ REPORT
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17. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
Office and
other
equipment
Construction
in progress
(‘‘CIP’’) Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
COST
At 1 January 2022 ..... 1 5 , 6 1 4 , 6 9 6 3 2 , 395,581 561,505 3,159,338 4,6 85,582 2,320,426 58,737,128
A d d i t i o n s........... 9 2 4 3 , 625,097 11,262 688,865 433,564 2,592,859 7,352,571
T r a n s f e r s ........... 2 , 6 6 9 , 9 6 0 516,030 95 24,815 243,733 (3,454,633) —
Transfers to investment
properties (Note 19) . . (92,892) ———— (224,507) (317,399)
D i s p o s a l s........... ( 1 0 , 3 2 3 ) ( 935,506) (1,632) (115,019) (58,689) (28,051) (1,149,220)
Exchange adjustments . . 32,943 13,620 177 495 678 — 47,913
At 31 December 2022 . . 18,215,308 35,614,822 5 71,407 3,758,494 5,304,868 1,206,094 64,670,993
A d d i t i o n s........... 1 8 , 6 3 7 1 , 993,186 7,364 440,185 238,641 2,004,379 4,702,392
T r a n s f e r s ........... 1 , 2 5 6 , 7 0 9 370,912 790 200,141 441,253 (2,269,805) —
Transfers to investment
properties (Note 19) . . (83,330) ———— (39,729) (123,059)
D i s p o s a l s........... ( 7 7 ) ( 716,172) (2,281) (33,721) (57,271) (8,800) (818,322)
Exchange adjustments . . (6,962) (3,594) 25 (100) (121) — (10,752)
At 31 December 2023 . . 19,400,285 37,259,154 577,305 4,364,999 5,927,370 892,139 68,421,252
A d d i t i o n s........... 3 , 2 2 0 2 , 796,601 10,081 544,431 310,920 2,117,094 5,782,347
T r a n s f e r s ........... 7 9 4 , 2 6 9 597,765 21 58,437 162,286 (1,612,778) —
Transfers from
investment properties
(Note 19) ......... 1 2 5 , 3 7 1 ———— — 125,371
D i s p o s a l s........... ( 1 0 , 1 3 1 ) ( 791,634) (10,068) (64,356) (33,334) (10,091) (919,614)
Exchange adjustments . . (23,719) (38,762) 951 (3,951) (1,937) — (67,418)
At 31 December 2024 . . 20,289,295 39,823,124 5 78,290 4,899,560 6,365,305 1,386,364 73,341,938
APPENDIX I ACCOUNTANTS ’ REPORT
– I-42 –


--- page 414 ---
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
Office and
other
equipment CIP Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
DEPRECIATION
A t1J a n u a r y2 0 2 2 ...... 3 , 2 4 4 , 9 3 4 1 5 , 0 4 2 , 6 1 8 1 3 8 , 7 6 0 1 , 7 5 8 , 7 3 5 3 , 2 0 7 , 5 0 5 — 23,392,552
P r o v i d e df o rt h ey e a r.... 7 9 3 , 6 6 8 2 , 5 4 7 , 9 2 1 2 9 , 4 3 2 4 5 0 , 1 3 0 5 1 9 , 5 4 5 — 4,340,696
Transfers to investment
properties (Note 19) ... ( 4 6 , 9 6 9 ) ————— (46,969)
Eliminated on disposals . . (2,245) (675,447) (1,144) (78,151) (46,164) — (803,151)
Exchange adjustments . . . 5,039 3,644 110 252 511 — 9,556
At 31 December 2022 . . . 3,994,427 16,918, 736 167,158 2,130,966 3,681,397 — 26,892,684
P r o v i d e df o rt h ey e a r.... 6 7 8 , 6 4 5 2 , 5 9 9 , 2 1 4 2 7 , 3 1 8 5 5 7 , 3 6 9 7 7 0 , 4 0 7 — 4,632,953
Transfers to investment
properties (Note 19) ... ( 3 , 9 4 3 ) ————— (3,943)
Eliminated on disposals . . (38) (528,772) (2,080) (29,053) (47,794) — (607,737)
Exchange adjustments . . . (1,268) (726) 13 69 (87) — (1,999)
At 31 December 2023 . . . 4,667,823 18,988, 452 192,409 2,659,351 4,403,923 — 30,911,958
P r o v i d e df o rt h ey e a r.... 9 4 5 , 5 0 2 2 , 8 4 7 , 0 2 7 2 7 , 8 7 5 4 4 7 , 2 0 2 5 0 3 , 2 4 3 — 4,770,849
Transfers from investment
properties (Note 19) . . . 69,310 ————— 69,310
Eliminated on disposals . . (6,673) (583,359) (9,120) (58,309) (29,046) — (686,507)
Exchange adjustments . . . (5,252) (6,204) (6) (672) (492) — (12,626)
At 31 December 2024 . . . 5,670,710 21,245, 916 211,158 3,047,572 4,877,628 — 35,052,984
IMPAIRMENT
A t1J a n u a r y2 0 2 2 ...... — 304,889 15 7,627 2,680 41,339 356,550
P r o v i d e df o rt h ey e a r.... — 244,488 — 8,565 1,008 19,016 273,077
Eliminated on disposals . . — (118,575) — (3,034) (56) (24,013) (145,678)
At 31 December 2022 . . . — 430,802 15 13,158 3,632 36,342 483,949
P r o v i d e df o rt h ey e a r.... — 50,536 93 8,076 216 14,321 73,242
Eliminated on disposals . . — (127,301) (1) (1,642) (533) (7,730) (137,207)
At 31 December 2023 . . . — 354,037 107 19,592 3,315 42,933 419,984
P r o v i d e df o rt h ey e a r.... — 184,307 101 3,224 5,367 33,943 226,942
Eliminated on disposals . . — (151,506) (190) (4,964) (547) (9,901) (167,108)
At 31 December 2024 . . . — 386,838 18 17,852 8,135 66,975 479,818
CARRYING VALUES
At 31 December 2022 . . . 14,220,881 18,265,284 404, 234 1,614,370 1,619,839 1,169,752 37,294,360
At 31 December 2023 . . . 14,732,462 17,916,665 384 ,789 1,686,056 1,520, 132 849,206 37,089,310
At 31 December 2024 . . . 14,618,585 18,190,370 367, 114 1,834,136 1,479,542 1,319,389 37,809,136
APPENDIX I ACCOUNTANTS ’ REPORT
– I-43 –


--- page 415 ---
The Company
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
Office and
other
equipment CIP Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
COST
A t1J a n u a r y2 0 2 2 .... 4 , 4 6 3 , 9 2 6 9 , 1 3 9 , 0 9 0 2 1 , 4 6 9 1 , 157,718 1,991,127 29,187 16,802,517
A d d i t i o n s .......... — 789,584 441 175,021 60,594 163,905 1,189,545
T r a n s f e r s ........... 5 4 , 5 3 3 2 6 , 9 7 4 — 101 93,889 (175,497) —
Transfers to investment
properties (Note 19) . (204,928) ———— (298) (205,226)
D i s p o s a l s .......... ( 1 , 1 5 9 ) ( 8 6 4 , 5 7 5 ) ( 4 1 ) ( 6 2 , 5 2 4 ) ( 4 7 , 8 6 2 ) — (976,161)
At 31 December 2022 . . 4,312,372 9,091,073 21, 869 1,270,316 2,097,748 17,297 16,810,675
A d d i t i o n s .......... — 332,754 254 51,689 5,857 146,007 536,561
T r a n s f e r s ........... 1 1 , 0 7 3 7 0 , 5 8 1 1 9 5 2 2 2 3 , 3 3 4 ( 1 0 5 , 5 2 9 ) —
Transfers to investment
properties (Note 19) . ————— (655) (655)
D i s p o s a l s .......... ( 7 7 ) ( 3 1 2 , 4 7 6 ) ( 6 7 7 ) ( 4 4 , 8 6 9 ) ( 2 3 , 8 5 6 ) — (381,955)
At 31 December 2023 . . 4,323,368 9,181,932 21, 465 1,277,658 2,103,083 57,120 16,964,626
A d d i t i o n s .......... 1 3 6 , 3 1 7 7 4 7 , 4 0 8 1 , 5 4 6 7 5 , 9 8 4 6 0 , 9 1 8 5 6 3 , 0 5 7 1 , 5 8 5 , 2 3 0
T r a n s f e r s ........... 8 0 , 3 0 5 4 7 , 7 1 3 — 8,631 74,258 (210,907) —
Transfers to investment
properties (Note 19) . ————— (42,439) (42,439)
D i s p o s a l s .......... — (379,965) (5,631) (60,634) (20,424) — (466,654)
At 31 December 2024 . . 4,539,990 9,597,088 17, 380 1,301,639 2,217,835 366,831 18,040,763
APPENDIX I ACCOUNTANTS ’ REPORT
– I-44 –


--- page 416 ---
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
Office and
other
equipment CIP Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
DEPRECIATION
A t1J a n u a r y2 0 2 2 ...... 1 , 1 4 1 , 4 8 0 3 , 6 9 8 , 0 5 9 1 7 , 4 2 6 6 6 8 , 7 7 8 1 , 3 7 3 , 0 3 5 — 6,898,778
P r o v i d e df o rt h ey e a r.... 2 2 8 , 8 8 7 6 7 9 , 7 1 2 7 6 7 1 7 4 , 5 6 1 1 9 5 , 7 1 0 — 1,279,637
Transfers to investment
properties (Note 19) ... ( 1 4 , 4 8 2 ) ————— (14,482)
Eliminated on disposals . . (550) (416,036) (4) (44,516) (30,264) — (491,370)
At 31 December 2022 . . . 1,355,335 3,9 61,735 18,189 798,823 1,538,481 — 7,672,563
P r o v i d e df o rt h ey e a r.... 2 0 6 , 7 2 9 7 0 6 , 1 6 8 6 4 9 1 3 8 , 7 7 5 1 5 5 , 4 5 4 — 1,207,775
Eliminated on disposals . . (38) (164,979) (586) (13,596) (21,358) — (200,557)
At 31 December 2023 . . . 1,562,026 4,5 02,924 18,252 924,002 1,672,577 — 8,679,781
P r o v i d e df o rt h ey e a r.... 2 1 6 , 2 4 3 7 3 9 , 5 2 8 5 7 2 8 8 , 0 4 2 9 7 , 8 9 3 — 1,142,278
Eliminated on disposals . . — (241,190) (5,044) (50,459) (18,093) — (314,786)
At 31 December 2024 . . . 1,778,269 5,0 01,262 13,780 961,585 1,752,377 — 9,507,273
IMPAIRMENT
A t1J a n u a r y2 0 2 2 ...... — 56,701 — 4,287 134 — 61,122
P r o v i d e df o rt h ey e a r.... — 47,935 — 387 30 — 48,352
Eliminated on disposals . . — (34,121) — (2,250) (13) — (36,384)
At 31 December 2022 . . . — 70,515 — 2,424 151 — 73,090
P r o v i d e df o rt h ey e a r.... — 223 — 565 23 — 811
Eliminated on disposals . . — (10,251) —— (4) — (10,255)
At 31 December 2023 . . . — 60,487 — 2,989 170 — 63,646
P r o v i d e df o rt h ey e a r.... — 30,952 — 2,773 3,379 — 37,104
Eliminated on disposals . . — (55,012) — (1,821) (134) — (56,967)
At 31 December 2024 . . . — 36,427 — 3,941 3,415 — 43,783
CARRYING VALUES
At 31 December 2022 . . . 2,957,037 5,058,823 3 ,680 469,069 559,116 17,297 9,065,022
At 31 December 2023 . . . 2,761,342 4,618,521 3 ,213 350,667 430,336 57,120 8,221,199
At 31 December 2024 . . . 2,761,721 4,559,399 3 ,600 336,113 462,043 366,831 8,489,707
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 417 ---
The Group ’s and the Company ’s property, plant and equipment are stated at cost less subsequent accumulated
depreciation and accumulated impairment losses, if any.
Transfers to, or from, investment p roperty are made when, and only when, there is a change in use, evidenced
by (i) commencement of owner-occupa tion, for a transfer from investment prop erty to owner-occupied property; (ii)
end of owner-occupation, for a transfer from ow ner-occupied property to investment property.
The above items of property, plant and equipment excep t for construction in progress are depreciated on a
straight-line basis over the useful lives as follows:
Buildings 20 years
Machinery and equipment 10 years
Motor vehicles 3 to 25 years
Electronic equipment 5 years
Office and other equipment 3 to 10 years
The Group is in the process of obtaining the property ownership certificates of buildings with carrying
amounts of RMB3,055,226,000, RMB568,642,000, and RMB 207,479,000 as at 31 December 2022, 2023 and 2024,
respectively.
Impairment Assessment:
Management of the Group concluded there was indica tion for impairment when an equipment is not expected
to be used in the operations, this is normally when the co st of upgrading or maintaining the equipment outweighed
its use. The assessment is performed on individual a sset base. Impairment amounted to RMB273,077,000,
RMB73,242,000 and RMB226,942,000 are recognised during the years ended 31 December 2022, 2023 and 2024,
respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 418 ---
18. RIGHT-OF-USE ASSETS
The Group
Leasehold
lands
Leased
properties Total
RMB’000 RMB ’000 RMB ’000
As at 31 December 2022
C a r r y i n ga m o u n t s............................ 3 , 0 0 0 , 6 3 9 5 1 , 2 1 8 3 , 051,857
As at 31 December 2023
C a r r y i n ga m o u n t s............................ 3 , 2 0 9 , 4 5 8 5 1 , 5 8 9 3 , 261,047
As at 31 December 2024
C a r r y i n ga m o u n t s............................ 3 , 2 5 2 , 4 6 2 1 8 8 , 6 9 5 3 , 441,157
For the year ended 31 December 2022
D e p r e c i a t i o nc h a r g e .......................... 6 7 , 4 9 4 2 9 , 4 4 7 9 6 , 9 4 1
For the year ended 31 December 2023
D e p r e c i a t i o nc h a r g e .......................... 6 8 , 6 3 8 2 7 , 8 3 9 9 6 , 4 7 7
For the year ended 31 December 2024
D e p r e c i a t i o nc h a r g e .......................... 7 5 , 0 7 6 4 0 , 1 4 1 115,217
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
E x p e n s er e l a t i n gt os h o r t - t e r ml e a s e s ............... 1 1 , 7 2 5 2 6 , 8 5 3 8 0 , 8 4 6
T o t a lc a s ho u t f l o wf o rl e a s e s .................... 4 3 , 8 5 1 3 3 3 , 3 1 6 229,746
Addition to right-of-use assets ................... 2 5 , 1 9 4 3 0 5 , 8 6 4 303,393
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 419 ---
The Company
Leasehold land
Leased
properties Total
RMB’000 RMB ’000 RMB ’000
As at 31 December 2022
C a r r y i n ga m o u n t s............................ 3 8 7 , 7 4 3 3 2 , 6 4 4 420,387
As at 31 December 2023
C a r r y i n ga m o u n t s............................ 3 7 8 , 2 7 9 2 4 , 3 5 5 402,634
As at 31 December 2024
C a r r y i n ga m o u n t s............................ 5 9 3 , 3 0 6 1 3 7 , 1 9 1 730,497
For the year ended 31 December 2022
D e p r e c i a t i o nc h a r g e .......................... 9 , 6 9 1 6 , 6 8 5 1 6 , 3 7 6
For the year ended 31 December 2023
D e p r e c i a t i o nc h a r g e .......................... 9 , 4 6 4 8 , 2 8 9 1 7 , 7 5 3
For the year ended 31 December 2024
D e p r e c i a t i o nc h a r g e .......................... 1 3 , 7 4 2 1 8 , 1 6 1 3 1 , 9 0 3
The Group and the Company lease plant and staff quarters for its operations. Lease terms are negotiated by the
G r o u pa n dt h eC o m p a n yo na ni n d i v i d u a lb a s i sa n dc o n t a i naw ide range of different terms and conditions. The terms are
fixed with various period, from 1 to 10 years. In determining t he lease term and assessing the length of the non-cancellable
period, the Group and the Company apply the definition of a contract and determines the period for which the contract is
enforceable.
The Group regularly entered into short-term leases fo r staff quarters and warehouses. As at 31 December 2022, 2023
and 2024, the portfolio of short-term leases is similar to the portfolio of short-term leases to which the short-term lease
expense disclosed above.
In addition, the Group and the Company own several office buildings and industrial buildings. The industrial
buildings are where its manufacturing facilities are primarily located. The Group and the Co mpany are the registered
owners of these property interests, including underlyi ng leasehold lands. Lump sum payments were made upfront to
acquire these property interests. The leasehold land compone nts of these owned properties are presented separately, for
which the Group and the Company have obtained the land use ri ght certificates. The leasehold lands are depreciated on a
straight-line basis over the term of the lease from 40 to 50 years.
The lease agreements do not impose any c ovenants other than the security interests in the leased assets that are held
by the lessor. Leased properties may not be used as security for borrowing purposes.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 420 ---
19. INVESTMENT PROPERTIES
The Group
Buildings
Leasehold
lands Total
RMB’000 RMB ’000 RMB ’000
COST
As at 1 January 2022 . . ....................... 6 4 5 , 2 3 5 1 3 9 , 4 8 2 784,717
Transfers from property, plant and equipment (Note 17) . . 317,399 — 317,399
T r a n s f e rf r o mr i g h t - o f - u s ea s s e t s .................. — 81,679 81,679
As at 31 December 2022 ....................... 9 6 2 , 6 3 4 2 2 1 , 1 6 1 1 , 183,795
Transfers from property, plant and equipment (Note 17) . . 123,059 — 123,059
As at 31 December 2023 ....................... 1 , 0 8 5 , 6 9 3 2 2 1 , 1 6 1 1 , 306,854
Transfers to property, plant and equipment (Note 17) . . . (125,371) — (125,371)
T r a n s f e rt or i g h t - o f - u s ea s s e t s ................... — (11,085) (11,085)
As at 31 December 2024 ....................... 9 6 0 , 3 2 2 2 1 0 , 0 7 6 1 , 170,398
DEPRECIATION
As at 1 January 2022 . . ....................... 1 1 6 , 5 3 3 1 6 , 3 5 0 132,883
C h a r g ef o rt h ey e a r ........................... 3 8 , 6 3 7 5 , 6 0 4 4 4 , 2 4 1
Transfers from property, plant and equipment (Note 17) . . 46,969 — 46,969
T r a n s f e rf r o mr i g h t - o f - u s ea s s e t s .................. — 5,579 5,579
As at 31 December 2022 ....................... 2 0 2 , 1 3 9 2 7 , 5 3 3 229,672
C h a r g ef o rt h ey e a r ........................... 4 8 , 6 0 3 4 , 3 3 1 5 2 , 9 3 4
Transfers from property, plant and equipment (Note 17) . . 3,943 — 3,943
As at 31 December 2023 ....................... 2 5 4 , 6 8 5 3 1 , 8 6 4 286,549
C h a r g ef o rt h ey e a r ........................... 5 1 , 6 1 9 4 , 6 4 1 5 6 , 2 6 0
Transfers to property, plant and equipment (Note 17) . . . (69,310) — (69,310)
T r a n s f e rt or i g h t - o f - u s ea s s e t s ................... — (3,878) (3,878)
As at 31 December 2024 ....................... 2 3 6 , 9 9 4 3 2 , 6 2 7 269,621
CARRYING VALUES
At 31 December 2022 . . ....................... 7 6 0 , 4 9 5 1 9 3 , 6 2 8 954,123
At 31 December 2023 . . ....................... 8 3 1 , 0 0 8 1 8 9 , 2 9 7 1 , 020,305
At 31 December 2024 . . ....................... 7 2 3 , 3 2 8 1 7 7 , 4 4 9 900,777
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
Buildings
Leasehold
lands Total
RMB’000 RMB ’000 RMB ’000
COST
As at 1 January 2022 . . ....................... 1 0 8 , 9 5 6 2 0 , 0 0 9 128,965
Transfers from property, plant and equipment (Note 17) . . 205,226 — 205,226
T r a n s f e rf r o mr i g h t - o f - u s ea s s e t s .................. — 33,959 33,959
As at 31 December 2022 ....................... 3 1 4 , 1 8 2 5 3 , 9 6 8 368,150
Transfers from property, plant and equipment (Note 17) .. 6 5 5 — 655
As at 31 December 2023 ....................... 3 1 4 , 8 3 7 5 3 , 9 6 8 368,805
Transfers from property, plant and equipment (Note 17) . . 42,439 — 42,439
As at 31 December 2024 ....................... 3 5 7 , 2 7 6 5 3 , 9 6 8 411,244
DEPRECIATION
As at 1 January 2022 . . ....................... 1 8 , 9 5 0 1 , 7 6 4 2 0 , 7 1 4
C h a r g ef o rt h ey e a r ........................... 1 0 , 4 5 3 8 5 3 1 1 , 3 0 6
Transfers from property, plant and equipment (Note 17) . . 14,482 — 14,482
T r a n s f e rf r o mr i g h t - o f - u s ea s s e t s .................. — 1,614 1,614
As at 31 December 2022 ....................... 4 3 , 8 8 5 4 , 2 3 1 4 8 , 1 1 6
C h a r g ef o rt h ey e a r ........................... 1 4 , 4 8 1 1 , 0 7 9 1 5 , 5 6 0
As at 31 December 2023 ....................... 5 8 , 3 6 6 5 , 3 1 0 6 3 , 6 7 6
C h a r g ef o rt h ey e a r ........................... 1 6 , 6 7 4 1 , 0 7 9 1 7 , 7 5 3
As at 31 December 2024 ....................... 7 5 , 0 4 0 6 , 3 8 9 8 1 , 4 2 9
CARRYING VALUES
At 31 December 2022 . . ....................... 2 7 0 , 2 9 7 4 9 , 7 3 7 320,034
At 31 December 2023 . . ....................... 2 5 6 , 4 7 1 4 8 , 6 5 8 305,129
At 31 December 2024 . . ....................... 2 8 2 , 2 3 6 4 7 , 5 7 9 329,815
The above investment properties are depreciated o n a straight-line basis on the following bases:
Buildings 20 years
Leasehold lands 40 – 50 years
The Group leases out office units, a factory and commer cial property units under operating leases with rentals
payable monthly. The leases typically run for an initial period of 5 to 15 years, with unilateral rights to extend the lease
beyond initial period held by lessees only. The lease contract s do not contain residual value guarantee and/or lessee ’s
option to purchase the property at the end of lease term.
APPENDIX I ACCOUNTANTS ’ REPORT
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Details of the Group ’s investment properties and information about th e fair value hierarchy as at the end of each
reporting period are as follows:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
B u i l d i n g s ............. 1 , 637,980 1,550,920 1,246,400 275,873 262,527 289,173
L e a s e h o l dl a n d s......... 361,080 362,100 332,690 58,466 58,986 58,637
1,999,060 1,913,020 1,579,090 334,339 321,513 347,810
The fair value has been arrived at based on a valuation car ried out by an independent qualified professional valuer
not connected with the Group.
The fair value was determined based on the income approach or the cost approach based on location of the buildings
and leasehold lands, whereby the income approach takes i nto account the projected future earnings of the subject of
valuation and then converts the future earnings into value by u sing an appropriate rate of compensation or capitalisation
rate to obtain the value of the subject of valuation; the cost approach takes into account the replacement or reconstruction
cost of the subject of valuation at the time of valuation and de preciation, and subtracts depreciation from the replacement
cost or reconstruction cost to obtain the value of t he subject of valuation. The fair value of the Group ’s investment
property as at 31 December 2022, 2023 and 2024 is grouped int o Level 3 of fair value measurement. There has been no
change from the valuation technique used in the Track Record Period.
20. INTANGIBLE ASSETS
The Group
Software
Proprietary
technology
Customer
relationships Others Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
COST
As at 1 January 2022 . . . . 134,660 472,030 1,994,430 13,453 2,614,573
A d d i t i o n s ............ 2 3 , 0 4 3 —— 5,035 28,078
D i s p o s a l s ............ ( 7 , 2 1 8 ) ——— (7,218)
As at 31 December 2022 . . 150,485 472,030 1,994,430 18,488 2,635,433
A d d i t i o n s ............ 2 5 , 5 8 3 —— 15,799 41,382
D i s p o s a l s ............ ——— (521) (521)
Exchange adjustments . . . . (19) ——— (19)
As at 31 December 2023 . . 176,049 472,030 1,994,430 33,766 2,676,275
A d d i t i o n s ............ 1 4 , 5 0 1 ——— 14,501
D i s p o s a l s ............ ——— (138) (138)
Exchange adjustments . . . . (62) ——— (62)
As at 31 December 2024 . . 190,488 472,030 1,994,430 33,628 2,690,576
APPENDIX I ACCOUNTANTS ’ REPORT
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Software
Proprietary
technology
Customer
relationships Others Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
AMORTISATION
As at 1 January 2022 . . . . 66,866 47,203 132,962 8,260 255,291
C h a r g ef o rt h ey e a r ..... 1 9 , 3 7 0 4 7 , 2 0 3 132,962 2,876 202,411
D i s p o s a l s ............ ( 7 , 2 1 8 ) ——— (7,218)
As at 31 December 2022 . . 79,018 94,406 265,924 11,136 450,484
C h a r g ef o rt h ey e a r ..... 1 2 , 1 5 9 4 7 , 2 0 3 132,962 15,844 208,168
D i s p o s a l s ............ ——— (264) (264)
Exchange adjustments . . . . (2) ——— (2)
As at 31 December 2023 . . 91,175 141,609 398,886 26,716 658,386
C h a r g ef o rt h ey e a r ..... 2 5 , 3 6 8 4 7 , 2 0 3 132,962 4,711 210,244
D i s p o s a l s ............ ——— (77) (77)
Exchange adjustments . . . . (18) ——— (18)
As at 31 December 2024 . . 116,525 188,812 531,848 31,350 868,535
CARRYING VALUES
At 31 December 2022 . . . . 71,467 377,624 1,728,506 7,352 2,184,949
At 31 December 2023 . . . . 84,874 330,421 1,595,544 7,050 2,017,889
At 31 December 2024 . . . . 73,963 283,218 1,462,582 2,278 1,822,041
All of the Group ’s proprietary technology and customer rela tionships were purchased as part of a business
combination in prior years.
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
Software Others Total
RMB’000 RMB ’000 RMB ’000
COST
As at 1 January 2022 . . ....................... 8 2 , 0 9 3 3 , 7 2 5 8 5 , 8 1 8
A d d i t i o n s ................................. 1 3 , 4 7 0 — 13,470
As at 31 December 2022 ....................... 9 5 , 5 6 3 3 , 7 2 5 9 9 , 2 8 8
A d d i t i o n s ................................. 2 0 , 9 8 0 — 20,980
As at 31 December 2023 ....................... 1 1 6 , 5 4 3 3 , 7 2 5 120,268
A d d i t i o n s ................................. 2 , 6 6 4 — 2,664
As at 31 December 2024 ....................... 1 1 9 , 2 0 7 3 , 7 2 5 122,932
DEPRECIATION
As at 1 January 2022 . . ....................... 3 7 , 7 9 3 1 , 7 8 1 3 9 , 5 7 4
C h a r g ef o rt h ey e a r ........................... 8 , 1 6 9 9 5 9 9 , 1 2 8
As at 31 December 2022 ....................... 4 5 , 9 6 2 2 , 7 4 0 4 8 , 7 0 2
C h a r g ef o rt h ey e a r ........................... 9 , 2 6 4 9 8 5 1 0 , 2 4 9
As at 31 December 2023 ....................... 5 5 , 2 2 6 3 , 7 2 5 5 8 , 9 5 1
C h a r g ef o rt h ey e a r ........................... 1 1 , 6 7 6 — 11,676
As at 31 December 2024 ....................... 6 6 , 9 0 2 3 , 7 2 5 7 0 , 6 2 7
CARRYING VALUES
At 31 December 2022 . . ....................... 4 9 , 6 0 1 9 8 5 5 0 , 5 8 6
At 31 December 2023 . . ....................... 6 1 , 3 1 7 — 61,317
At 31 December 2024 . . ....................... 5 2 , 3 0 5 — 52,305
The above items of intangible assets are amortised on a strai ght-line basis at the following estimated useful lives:
Software 3 – 10 years
Proprietary technology 10 years
Customer relationships (note) 15 years
Others 10 years
Note: The useful life of customer relationshi ps has been estimated based on management ’s expectation of their
beneficial life in conjunction with past collaborations and with reference to comparable companies and
industry experience.
APPENDIX I ACCOUNTANTS ’ REPORT
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21. GOODWILL
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
The Group
COST AND CARRYING VALUES
A sa t1J a n u a r ya n d3 1D e c e m b e r ................. 2 , 9 7 0 , 1 4 4 2 , 9 7 0 , 1 4 4 2 , 970,144
Goodwill acquired in a business combination of Lens Taizhou (as defined in note 42) in the year ended 31
December 2020 is tested for impairment annually. For the pur poses of impairment testing, goodwill has been allocated to
CGU, comprising the assets and liabilities that generate cash flows together with the related goodwill (the ‘‘Taizhou
CGU’’).
The recoverable amount of Taizhou CGU has been determined based on value in use calculations. The value in use
calculation is based on cash flow projec tions with reference to financial budget s approved by management covering a five-
year period, and a pre-tax discount rate of 10.9%,10.7% and 10.6% at 31 December 2022, 2023 and 2024. Cash flows
beyond the five-year period are extrapolated using a steady growth rate of 0%, 0% and 0% at 31 December 2022, 2023 and
2024. Expected cash inflows/outflows, which include estima tions of growth rates of business volume, unit price and cost of
sales, have been determined based o n past performance and management ’s expectations of the market development. The
discount rate used reflects the cost of capital o f Taizhou CGU and the industry specific factors.
The Group engages an independent qualified valuer, Be ijing Zhonglin Assets Appraisal Co., Ltd. to assess the
growth rates and discount rates used in the value in use calculation.
During the year ended 31 December 2022, 2023 and 2024, ma nagement of the Group determines that there is no
impairment of the Taizhou CGU as the recoverable a mount exceeds its carrying amount by RMB259,893,000,
RMB362,829,000, and RMB 554,112,000, respectively. Manage ment believes that any reasonably possible change in any
of these assumptions would not cause the carrying amoun t of the Taizhou CGU to exceed the recoverable amount
determined. If the pre-tax discount rate was changed to 11.1% , 11.0%, and 11.1%, respectively, while other parameters
remain constant, the recoverable amount of Taizhou CGU would equal its carrying amount.
22. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
C o s to fi n v e s t m e n t .............. 3 3 7 , 1 1 5 337,115 317,100 282,315 282,315 282,300
Share of post-acquisition profit, net of
dividends received . ........... 1 4 2 , 4 2 2 3 7 , 8 4 2 8 , 5 6 5 139,055 35,672 2,410
479,537 374,957 325,665 421,370 317,987 284,710
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 426 ---
Details of each of the Group ’s investments accounted for using the equity method at the end of each reporting period
are as follows:
The Group
Name of entities
Country of
incorporation/
principal place
of business
Proportion of ownership
interest held by the Group
Proportion of voting rights
held by the Group Principal activities
2022 2023 2024 2022 2023 2024
%%%%%%
Dongguan Yutong Precision
Technology Co., Ltd.
(‘‘Dongguan Yutong ’’)
東莞市裕同精密科技
有限公司 (note i) ......
The PRC 40.00 40.00 N/A 40.00 40.00 N/A Computer,
communications and
other electronic
equipment
manufacturing
Dongguan Yuya Technology
Co., Ltd.
(‘‘Dongguan Yuya ’’)
東莞市裕雅科技
有限公司 ............
The PRC 40.00 40.00 40.00 40.00 40.00 40.00 Computer,
communications and
other electronic
equipment
manufacturing
Hunan Huajiang Education
Consulting Co., Ltd.
(‘‘Hunan Huajiang ’’)
(湖南華匠教育
諮詢有限公司) (note i) ...
The PRC 49.00 49.00 N/A 49.00 49.00 N/A Education
Hunan Juhong Technology
Co., Ltd.
(‘‘Hunan Juhong ’’)
湖南鉅宏科技
有限公司 ............
The PRC 40.00 40.00 40.00 40.00 40.00 40.00 Professional and
technical services
Ningxia Xinjingsheng
Electronic Materials
Co., Ltd.
(‘‘Ningxia Xinjingsheng ’’)
寧夏鑫晶盛電子材料
有限公司 ............
The PRC 49.00 49.00 49.00 49.00 49.00 49.00 Computer,
communications and
other electronic
equipment
manufacturing
Shenzhen Guoxin Lens No.1
Investment Fund
Partnership Enterprise
(Limited Partnership)
(‘‘Shenzhen Guoxin Lens
No.1 Investment ’’)
深圳市國信藍思壹號
投資基金合夥企業
(有限合夥) (note ii) .....
The PRC 60.61 60.61 60.61 28.57 28.57 28.57 Investment
APPENDIX I ACCOUNTANTS ’ REPORT
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Name of entities
Country of
incorporation/
principal place
of business
Proportion of ownership
interest held by the Group
Proportion of voting rights
held by the Group Principal activities
2022 2023 2024 2022 2023 2024
%%%%%%
Changsha Sinocera
New Material Co., Ltd.
(‘‘Changsha Sinocera ’’)
長沙國瓷新材料
有限公司 ............
The PRC 49.00 49.00 49.00 49.00 49.00 49.00 Research and
experimental
development
Changsha Ruihong
Technology Co., Ltd.
(‘‘Changsha Ruihong ’’)
長沙睿鴻科技
有限公司) ...........
The PRC 40.00 40.00 40.00 40.00 40.00 40.00 Research and
experimental
development
Changsha Intelligent
Robot Research
Institute Co., Ltd.
(‘‘Changsha Intelligent
Robot ’’)
長沙智慧型機器人研究院
有限公司 ............
The PRC 20.00 20.00 20.00 20.00 20.00 20.00 Research and
experimental
development
Zibo Jincheng New
Materials Co., Ltd.
(‘‘Zibo Jincheng ’’)
淄博金成新材料有限公司 .
The PRC 40.00 40.00 40.00 40.00 40.00 40.00 Chemical raw materials
and chemical
products
manufacturing
The Company
Name of entities
Country of
incorporation/
principal place
of business
Proportion of ownership
interest held by the Group
Proportion of voting rights
held by the Group Principal activities
2022 2023 2024 2022 2023 2024
%%%%%%
Hunan Huajiang (note i) .... T h eP R C 4 9 . 0 0 4 9 . 0 0 N / A 4 9 . 0 0 4 9 . 0 0 N / A E d u c a t i o n
H u n a nJ u h o n g .......... T h eP R C 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 P r o f e s s i o n a la n d
technical services
N i n g x i aX i n j i n g s h e n g ...... T h eP R C 4 9 . 0 0 4 9 . 0 0 4 9 . 0 0 4 9 . 0 0 4 9 . 0 0 4 9 . 0 0 C o m p u t e r ,
communications and
other electronic
equipment
manufacturing
Shenzhen Guoxin Lens No.1
Investment (note ii) .....
The PRC 60.61 60.61 60.61 28.57 28.57 28.57 Investment
C h a n g s h aR u i h o n g ....... T h eP R C 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 R e s e a r c ha n d
experimental
development
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 428 ---
Name of entities
Country of
incorporation/
principal place
of business
Proportion of ownership
interest held by the Group
Proportion of voting rights
held by the Group Principal activities
2022 2023 2024 2022 2023 2024
%%%%%%
Changsha Intelligent Robot . . The PRC 20.00 20.00 20.00 20.00 20.00 20.00 Research and
experimental
development
Z i b oJ i n c h e n g ........... T h eP R C 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 4 0 . 0 0 C h e m i c a lr a wm a t e r i a l s
and chemical
products
manufacturing
Notes:
(i) During the year ended 31 December 2024, this company was disposed of or de-registered.
(ii) The entity is an investment partnership. The Group holds 60.61% of the issued partnership share of the entity.
Pursuant to the limited partnership agreement, the Group has the right to appoint two out of seven members of
the investment committee and all investment resolutions need to be passed and to be confirmed by six out of
seven members of the investment committee. The directors of the Company considered that the Group has
significant influence over the entity.
The directors of the Company considered that all invest ments accounted for using the equity method are not
individually material.
Aggregate information of investment s accounted for using the equity method that are not individually material
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
The Group ’s share of profit (loss) and total comprehensive
i n c o m e( e x p e n s e )f o rt h ey e a r .................. 3 , 9 8 7 ( 5 7 , 2 9 1 ) 3 , 8 9 9
Aggregate carrying amount of the Group ’s interests in
t h e s ei n v e s t e e s ............................ 4 7 9 , 5 3 7 3 7 4 , 9 5 7 325,665
23. EQUITY INSTRUMENTS AT FVTOCI
The Group The Company
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Unlisted equity instruments (note) . . . 460,021 465,563 445,109 439,567 445,109 445,109
Note: These investments are not held for trading, instead, they are held for long-term strategic purposes. The
directors of the Company have elected to designate these investments as accounted for FVTOCI as they
believe that recognising short-term fair value fluctua tions in these instruments in profit or loss would not be
consistent with the Group ’s strategy of holding these instruments for long-term purposes and realising their
performance potential in the long run.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 429 ---
Details of the fair value hierarchy and major assumptions used in valuation for the financial assets are set out
in Note 41.
24. DEFERRED TAXATION
For the purpose of presentation in the consolidated statem ents of financial position, certain deferred tax assets and
liabilities have been offset. The following is the analysis of the deferred tax balances for financial reporting purposes:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
D e f e r r e dt a xa s s e t s .............. 1 , 2 5 1 , 8 3 7 1 , 187,208 1,387,226 71,200 52,792 101,059
Deferred tax liabilities ........... ( 7 6 5 , 6 7 8 ) ( 424,869) (385,058) (43,432) (28,862) (28,250)
486,159 762,339 1,002,168 27,768 23,930 72,809
The Group
Provision for
impairment
of assets
Depreciation
of fixed
assets
Unrealised
profit on
internal
transactions
Deferred
income Tax losses
Share-based
payment
Increase in
fair value of
consolidated
assets not
under
common
control Others Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2022 236,065 425,914 97,027 94,465 455,195 — (776,454) (29,239) 502,973
(Charge) credit to
profit or loss . . (52,259) (131,418) 22,539 (497) 75,833 — 66,368 4,665 (14,769)
Charge to other
comprehensive
i n c o m e ..... —————— — (2,045) (2,045)
At 31 December
2022 . ...... 183,806 294,496 119,566 93,968 531,028 — (710,086) (26,619) 486,159
(Charge) credit to
profit or loss . . (43,419) (126,945) (19,149) (5,413) 134,517 7,069 323,317 5,617 275,594
C h a r g e dt oo t h e r
comprehensive
i n c o m e ..... —————— — (831) (831)
Credit to equity for
t h ey e a r ..... ————— 1,417 —— 1,417
At 31 December
2023 . ...... 140,387 167,551 100,417 88,555 665,545 8,486 (386,769) (21,833) 762,339
Credit (charge) to
profit or loss . . 21,477 (32,353) 4,995 (4,093) 158,498 (25,201) 31,536 26,742 181,601
Credit to equity for
t h ey e a r ..... ————— 58,228 —— 58,228
At 31 December
2024 . ...... 161,864 135,198 105,412 84,462 824,043 41,513 (355,233) 4,909 1,002,168
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 430 ---
The Company
Provision
for
impairment
of assets
Depreciation
of fixed
assets
Deferred
income
Share-
based
payment Others Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2022 ............... 7 5 , 0 6 1 2 1 , 5 5 3 1 0 , 8 5 4 — (26,162) 81,306
( C h a r g e )c r e d i tt op r o f i to rl o s s ...... ( 3 1 , 9 5 6 ) ( 2 3 , 8 4 1 ) ( 1 , 0 5 9 ) — 5,363 (51,493)
Charge to other comprehensive income . — ——— (2,045) (2,045)
At 31 December 2022 . . ........... 4 3 , 1 0 5 ( 2 , 2 8 8 ) 9 , 7 9 5 — (22,844) 27,768
( C h a r g e )c r e d i tt op r o f i to rl o s s ...... ( 1 7 , 2 3 6 ) 6 , 4 6 4 ( 1 , 0 5 8 ) 2 , 9 4 9 5 , 2 8 3 ( 3 , 5 9 8 )
Charge to other comprehensive income . — ——— (831) (831)
C r e d i tt oe q u i t yf o rt h ey e a r ........ —— — 591 — 591
At 31 December 2023 . . ........... 2 5 , 8 6 9 4 , 1 7 6 8 , 7 3 7 3 , 5 4 0 ( 1 8 , 3 9 2 ) 2 3 , 9 3 0
C r e d i t( c h a r g e )t op r o f i to rl o s s ...... 1 8 , 3 0 1 3 , 3 6 9 ( 1 , 0 5 8 ) ( 1 2 , 0 4 0 ) 1 0 , 7 8 3 1 9 , 3 5 5
C r e d i tt oe q u i t yf o rt h ey e a r ........ —— — 29,524 — 29,524
At 31 December 2024 . . ........... 4 4 , 1 7 0 7 , 5 4 5 7 , 6 7 9 2 1 , 0 2 4 ( 7 , 6 0 9 ) 7 2 , 8 0 9
No deferred tax asset has been recognised on deduct ible temporary differences of RMB1,024,600,000,
RMB1,056,272,000 and RMB963,512,000, as at 31 December 2022, 2023 and 2024, respectively, as it is not probable
that taxable profit will be available against which the deductible temporary differences can be utilised.
The Group has unused tax losses of RMB6,072,863,000, RM B7,536,739,000 and RMB7,789,918,000 available for
offset against future profits as at 31 December 2022, 2023 and 2024, respectively. Deferred tax asset has been recognised
in respect of RMB2,967,756,000, RMB4,436,966,000 and RMB 5,493,619,000 of such losses and no deferred tax asset has
been recognised on remaining RMB3,105,107,000, RMB3,0 99,773,000 and RMB2,296,299,000 as at 31 December 2022,
2023 and 2024, respectively, due to the unpredictability of fu ture profit streams. The unrecognised tax losses with expiry
dates are disclosed in the following table.
The Group
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
2023 ..................................... 3 9 1 , 2 6 9 ——
2024 ..................................... 5 5 1 , 3 8 4 4 4 8 , 3 3 3 —
2025 ..................................... 4 0 3 , 3 8 5 4 0 2 , 8 4 8 237,471
2026 ..................................... 6 5 9 , 4 0 2 6 5 7 , 9 8 9 494,053
2027 ..................................... 3 2 5 , 3 8 4 5 1 2 , 5 1 1 456,110
2028 ..................................... — 80,779 80,345
2029 ..................................... 1 0 3 , 5 4 1 1 0 3 , 5 4 1 131,003
2031 ..................................... 2 8 2 , 4 8 3 2 8 2 , 4 8 3 282,483
2032 ..................................... 3 8 8 , 2 5 9 4 4 4 , 9 8 8 444,988
2033 ..................................... — 166,301 166,301
2034 ..................................... —— 113
I n d e f i n i t e l y ................................ —— 3,432
3,105,107 3,099,773 2,296,299
APPENDIX I ACCOUNTANTS ’ REPORT
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25. FINANCIAL ASSETS (LIABILITIES) AT FVTPL
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
S t r u c t u r e dd e p o s i t s ............. 2 0 1 , 6 0 4 301,091 354,917 —— 100,000
D e l i v e r a b l ef o r w a r d s ............ 1 5 3 , 6 6 2 4 8 , 5 7 4 ( 9 , 6 2 0 ) 8 7 , 1 5 3 — (3,903)
355,266 349,665 345,297 87,153 — 96,097
Analysed for reporting purposes as:
F i n a n c i a la s s e t sa tF V T P L ........ 3 5 5 , 2 6 6 349,665 354,917 87,153 — 100,000
Financial liabilities at FVTPL ...... —— (9,620) —— (3,903)
The structured deposits are classified as current as the management expects to realise these financial assets within
twelve months after each reporting period.
The Group has the deliverable forwards outstanding as at the end of each reporting period. They are marked to
market with the resulting gain or loss taken to profit or loss.
Details of the fair value hierarchy and major assumptions us ed in valuation for the financial assets are set out in
Note 41.
26. INVENTORIES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
R a wm a t e r i a l s................. 1 , 3 1 2 , 5 6 5 958,587 1,151,628 295,608 164,615 139,249
W o r ki np r o g r e s s............... 1 , 6 4 6 , 9 2 9 1 , 836,533 1,938,450 534,112 344,594 268,301
F i n i s h e dg o o d s ................ 2 , 7 0 1 , 9 0 4 3 , 150,286 3,286,086 1,254,426 875,388 729,810
Goods in transit ................ 1 , 2 9 6 , 4 1 2 982,358 1,029,114 307,794 72,348 81,129
C o n s u m a b l e sa n do t h e r s.......... 2 2 9 , 7 1 4 158,392 206,631 26,695 18,427 23,753
7,187,524 7,086,156 7,611,909 2,418,635 1,475,372 1,242,242
L e s s :p r o v i s i o n ................ ( 5 0 2 , 5 1 5 ) ( 403,497) (451,356) (201,194) (93,392) (218,954)
6,685,009 6,682,659 7,160,553 2,217,441 1,381,980 1,023,288
APPENDIX I ACCOUNTANTS ’ REPORT
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27. TRADE AND BILLS RECEIVABLES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Trade receivables (note) .......... 9 , 1 5 3 , 5 3 4 9 , 436,891 11,006,529 7,394,643 5,377,022 6,768,615
Bills receivables ............... 1 , 3 9 2 6 , 1 6 7 7 , 5 1 9 ———
L e s s :a l l o w a n c ef o rE C L ......... ( 1 3 2 , 4 6 6 ) ( 134,614) (148,312) (2,100) (1,287) (1,143)
9,022,460 9,308,444 10,865,736 7,392,543 5,375,735 6,767,472
Note: As at the years ended 31 December 2022, 2023 and 2024, the amount of Company ’s total trade receivables
from the subsidiaries is RMB7,391,605,000, RMB5,368,278,000, and RMB6,767,472,000, respectively.
Details of the trade receivables for goods sold to the subsidiaries of the Company are set out in Note 42.
As at 1 January 2022, the carrying amount of trade and bills receivables net of allowance for ECL from contracts
with customers of the Group and the Company amounted to RMB9,723,721,000 and RMB8,766,763,000, respectively.
Ageing of trade receivables is prepared based on the invoice date, which approximated the respective revenue
recognition dates, as follows:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
N o tp a s td u e.................. 8 , 6 7 3 , 9 8 4 8 , 995,893 10,610,390 7,390,984 5,374,801 6,767,367
Past due:
0– 9 0d a y s.................. 4 2 9 , 8 6 8 397,664 363,411 4 ——
91– 1 8 0d a y s ................ 2 1 , 0 5 4 1 7 , 6 4 6 9 , 3 9 6 7 ——
181– 3 6 5d a y s ............... 2 1 , 4 2 3 1 2 , 4 5 3 4 , 2 3 6 1 , 8 3 9 ——
O v e r1y e a r ................. 7 , 2 0 5 1 3 , 2 3 5 1 9 , 0 9 6 1 , 8 0 9 2 , 2 2 1 1 , 2 4 8
9,153,534 9,436,891 11,006,529 7,394,643 5,377,022 6,768,615
The normal credit term to the customers ranged between 30 days to 120 days.
As at 31 December 2022, 2023 and 2024, included in the Group ’s trade receivables balance are debtors with
aggregate carrying amount of RMB479,550,000, RMB440 ,998,000 and RMB396,139,000 which are past due and with
aggregate carrying amount of RMB49,682,000, RMB43,3 34,000 and RMB32,728,000 are past due 90 days or more.
Out of the balances that are past due 90 days or more, R MB46,137,000, RMB39,751,000 and RMB29,404,000 is not
considered as in default due to the historical and expected subsequent repayment from the debtors and the remaining trade
receivables past due 90 days or more amounting to RMB3,545,000, RMB3,583,000 and RMB3,324,000 has become credit-
impaired. The Group does not hold any collateral over these balances.
Details of the impairment assessment of trade and bills receivables are set out in Note 41.
APPENDIX I ACCOUNTANTS ’ REPORT
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28. PREPAYMENTS AND OTHER RECEIVABLES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
V a l u e - a d d e dt a xr e c o v e r a b l e ....... 3 8 9 , 7 6 6 296,627 344,998 78,329 25,290 51,080
Prepayments for property, plant and
e q u i p m e n t.................. 7 8 3 , 3 1 8 673,682 1,020,338 25,363 52,356 123,749
Prepayments for materials and others . 60,129 126,382 174,304 13,459 14,001 47,974
Refundable deposits for land use
r i g h t s..................... 2 0 0 , 0 0 0 200,000 200,000 200,000 200,000 200,000
Refundable deposits for project
p e r f o r m a n c e ................ — 250,000 150,000 — 250,000 150,000
R e n t a la n do t h e rd e p o s i t s ......... 4 6 , 7 1 3 3 8 , 4 4 4 4 8 , 2 1 3 2 9 , 1 1 3 2 0 , 5 1 1 2 0 , 4 9 1
Dividend receivable . . ........... — 648 —— 648 —
Other receivables ............... 1 4 0 , 6 0 3 151,120 141,181 40,604 33,988 36,599
1,620,529 1,736,903 2,079,034 386,868 596,794 629,893
L e s s :a l l o w a n c ef o rE C L ......... ( 3 3 , 1 0 1 ) ( 2 3 , 4 2 7 ) ( 4 0 , 2 6 5 ) ( 1 0 , 9 8 2 ) ( 1 4 , 1 3 4 ) ( 3 0 , 5 8 6 )
1,587,428 1,713,476 2,038,769 375,886 582,660 599,307
Analysed for reporting purposes as:
C u r r e n ta s s e t s ............... 8 0 4 , 1 1 0 1 , 025,482 1,000,455 350,523 530,304 475,558
N o n - c u r r e n ta s s e t s ............ 7 8 3 , 3 1 8 687,994 1,038,314 25,363 52,356 123,749
1,587,428 1,713,476 2,038,769 375,886 582,660 599,307
Details of impairment assessment of other receivables are set out in Note 41.
29. TIME DEPOSITS/RESTRICTED BANK DEPOSITS AND BANK BALANCES AND CASH
The ranges of interest rates on the time deposits, restr icted bank deposits and bank balances are as follows:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
%%%%%%
Fixed-rate time deposits 3.40 – 5.50 3.40 – 6.00 2.55 – 3.40 3.40 – 5.50 3.40 – 6.00 2.55 – 3.40
Fixed-rate/variable-rate restricted bank
deposits 0.01 – 4.32 0.01 – 1.90 0.01 – 2.10 0.01 – 2.10 0.01 – 1.90 0.01 – 1.35
Variable-rate bank balances 0.00 – 5.67 0.00 – 5.50 0.00 – 5.55 0.00 – 5.67 0.00 – 5.50 0.00 – 5.55
As at 31 December 2022, 2023 and 2024, the Group ’s restricted bank deposits amounting to nil, nil and
RMB41,500,000, respectively, were frozen due to an ongoing litig ation case involving immaterial claims. The remaining
restricted bank deposits were required to be retained as collateral to meet warranty obligations.
Details of impairment assessment of time deposits, restricted bank deposits and bank balances are set out in Note 41.
APPENDIX I ACCOUNTANTS ’ REPORT
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30. BILLS RECEIVABLES AT FVTOCI
The Group
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Bills receivables at FVTOCI .................... 3 , 6 9 7 1 1 2 , 2 8 8 9 , 7 7 9
As at 1 January 2022, bills receivables at FVTOCI from contracts with customers amounted to RMB93,924,000.
The balance represents bills receivables held by the Group which are issued or guaranteed by reputable PRC banks
with high credit ratings. The bills receivables had a maturity of within six months at the end of each reporting period. The
bills receivables are measured at FVTOCI since the bills are held within the business model whose objective is achieved by
both collecting contractual cash flows and selling the financi al assets, and the contractual cash flows are solely payments
of principal and interest on the principal amount outstandi ng. The Group believes that the bills receivables do not expose
to significant credit risk and will not cause significant losses due to the bank default. The changes in the fair value of the
bills receivables are minimal due to its short-term nature.
In addition, the Group has discounted certain bills receivables to banks and endorsed certain bills receivables to its
suppliers to settle its payables. The directors of the Company consider the probabilities on default of the discounted or
endorsed bills receivables are limited and the Group has derec ognised the full carrying amount of these bills receivables
and the associated trade and other payables when the bills receiv ables are endorsed or discounted. Details of the transferred
trade and bills receivables are set out in Note 41(d).
The ageing analysis of the bills receivables at FVTOCI based on the invoice date is as follows:
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
0– 1 8 0d a y s ................................ 3 , 6 9 7 1 1 2 , 2 8 8 9 , 7 7 9
31. TRADE AND OTHER PAYABLES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
T r a d ep a y a b l e s ................ 6 , 9 5 0 , 7 5 1 7 , 829,164 10,388,566 4,622,145 1,704,298 3,518,279
Bills payables ................. — 13,012 91,623 — 320,000 —
6,950,751 7,842,176 10,480,189 4,622,145 2,024,298 3,518,279
A c c r u e ds t a f fc o s t .............. 1 , 4 7 9 , 9 4 4 1 , 327,597 1,532,142 614,287 516,362 580,112
C o n s t r u c t i o np a y a b l e s ........... 3 , 1 7 9 , 4 1 2 3 , 290,317 3,616,325 642,170 285,212 1,074,250
O t h e ra c c r u e dc h a r g e s ........... 3 3 5 , 4 7 4 305,873 306,028 167,366 125,253 127,051
O t h e rt a xp a y a b l e s.............. 1 4 0 , 2 6 9 248,432 267,313 14,915 21,769 38,697
D e p o s i t sr e c e i v e d .............. 9 0 , 7 3 2 137,415 86,499 26,666 21,760 21,735
O t h e r s ...................... 3 2 , 6 5 4 1 9 , 9 9 1 7 7 , 3 3 8 6 , 2 1 2 6 , 3 2 1 1 4 , 0 8 5
12,209,236 13,171,801 16,365,8 34 6,093,761 3,000,975 5,374,209
APPENDIX I ACCOUNTANTS ’ REPORT
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The following is the ageing analysis of trade payables ba sed on the date of goods and services received at the end of
each reporting period:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
W i t h i n1y e a r ................. 6 , 9 5 0 , 7 5 1 7 , 829,164 10,388,566 4,622,145 1,704,298 3,518,279
The credit period on purchases of goods and services of the Group and Company is within 120 days. All the bills
payable with maturity within one year.
32. BORROWINGS
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Unsecured bank loans
— V a r i a b l e - r a t e.............. 1 3 , 5 7 0 , 3 2 9 1 0 , 534,391 10,889,990 5,040,279 5,385,534 5,145,041
— F i x e d - r a t e ................ 5 , 4 0 0 , 9 5 4 4 , 723,685 3,436,575 1,921,000 1,720,169 1,132,758
18,971,283 15,258,076 14,326,5 65 6,961,279 7,105,703 6,277,799
The carrying amounts of the above
borrowings are repayable*:
— W i t h i no n ey e a r ........... 9 , 8 4 8 , 3 9 3 5 , 669,812 6,518,634 2,265,819 2,927,639 2,389,631
— Within a period of more than
one year but not exceeding
t w oy e a r s............... 4 , 4 5 1 , 0 4 0 5 , 903,733 4,640,250 2,952,589 1,958,464 3,888,168
— Within a period of more than
two years but not exceeding
f i v ey e a r s............... 4 , 6 7 1 , 8 5 0 3 , 684,531 3,097,525 1,742,871 2,219,600 —
— O v e rf i v ey e a r s............ —— 70,156 ———
18,971,283 15,258,076 14,326,5 65 6,961,279 7,105,703 6,277,799
Less: amounts due within one year
shown under current liabilities . . . . (9,848,393) (5, 669,812) (6,518,634) (2,265,819) (2,927,639) (2,389,631)
Amounts shown under non-current
liabilities .................. 9 , 1 2 2 , 8 9 0 9 , 588,264 7,807,931 4,695,460 4,178,064 3,888,168
* The amounts due are based on scheduled repaym ent dates set out in the loan agreements.
The Group ’s variable-rate bank borrowings carry interest at Loan Prime Rate ( ‘‘LPR’’)a d j u s t e db yf l o a t i n gu po r
down a certain percentage. The interest rate is reset a t regular intervals, ranging from 1 to 12 months.
APPENDIX I ACCOUNTANTS ’ REPORT
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The range of effective interest rates (which are also equal to contracted interest rates) on the borrowings is as
follows:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
%%%%%%
Effective interest rate:
F i x e d - r a t eb o r r o w i n g s ........... 1 . 4 8 – 3.40 1.20 – 3.35 1.35 – 2.80 1.50 – 3.40 1.20 – 3.35 1.45 – 2.60
V a r i a b l e - r a t eb o r r o w i n g s .......... 2 . 7 0 – 6.12 2.30 – 3.20 2.20 – 3.15 2.70 – 3.69 2.30 – 3.20 2.30 – 2.75
The Group ’s borrowings that are denominated in currencies ot her the functional currencies of the relevant group
entities are set out below:
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
United States Dollars ( ‘‘US$’’) . . . . . 3,155,893 —————
33. LEASE LIABILITIES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Lease liabilities payable:
W i t h i no n ey e a r.............. 1 3 , 5 0 3 2 7 , 7 2 6 4 7 , 6 5 9 8 , 0 3 3 8 , 3 0 4 3 4 , 9 9 3
Within a period of more than one
year but not more than two years 13,257 13,521 32,142 8,289 8,601 15,509
Within a period of more than two
years but not more than five
y e a r s ................... 2 0 , 8 8 8 7 , 2 5 2 6 2 , 7 6 0 1 1 , 9 7 1 3 , 3 7 0 3 8 , 5 7 1
O v e rf i v ey e a r s .............. —— 56,627 —— 56,627
47,648 48,499 199,188 28,293 20,275 145,700
Less: amount due for settlement within
12 months shown under current
liabilities .................. ( 1 3 , 5 0 3 ) ( 2 7 , 7 2 6 ) ( 4 7 , 6 5 9 ) ( 8 , 0 3 3 ) ( 8 , 3 0 4 ) ( 3 4 , 9 9 3 )
Amount due for settlement after 12
months shown under non-current
liabilities .................. 3 4 , 1 4 5 2 0 , 7 7 3 1 5 1 , 5 2 9 2 0 , 2 6 0 1 1 , 9 7 1 110,707
The weighted average incremental borrowing rates applied to lease liabilities is 2.08% – 3.85% per annum during the
Track Record Period.
APPENDIX I ACCOUNTANTS ’ REPORT
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34. CONTRACT LIABILITIES
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Sales of goods ................. 7 , 5 8 9 8 , 1 1 9 1 2 , 6 0 1 —— 2,013
As at 1 January 2022, the Group ’s and the Company ’s contract liabilities amounted to RMB8,114,000 and nil,
respectively.
Revenue recognised during each reporting p eriod with performance obligation satisfied includes the entire amount of
contract liability at the beginning of the relevant period.
35. DEFERRED INCOME
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
B a l a n c ea tt h eb e g i n n i n g .......... 8 8 4 , 3 2 8 845,795 789,154 72,358 65,303 58,248
A d d i t i o n s .................... 1 9 , 9 6 4 4 , 0 3 8 1 4 , 2 5 0 ———
R e l e a s e dt oo t h e ri n c o m e ......... ( 5 8 , 4 9 7 ) ( 6 0 , 6 7 9 ) ( 6 1 , 8 2 6 ) ( 7 , 0 5 5 ) ( 7 , 0 5 5 ) ( 7 , 0 5 5 )
B a l a n c ea tt h ee n d.............. 8 4 5 , 7 9 5 789,154 741,578 65,303 58,248 51,193
Deferred income consists of government grants provi ded by the relevant PRC government authorities for the
purposes of financing the purchase of plant and machinery. T he amounts are recognised as income to match with related
expenses or on systematic basis over the useful lives of the r elevant assets starting from the completion of inspection by
the related government authorities.
APPENDIX I ACCOUNTANTS ’ REPORT
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36. SHARE CAPITAL
Number of
shares Share capital
RMB’000
Ordinary shares of RMB1 each
Registered, issued and fully paid
At 1 January 2022 and 31 December 2022 ........................ 4 , 973,479,998 4,973,480
Issue of restricted shares under Restricted A-share Scheme (note) ........ 9 , 7 4 7 , 9 8 3 9 , 7 4 8
At 31 December 2023 . . . ................................... 4 , 983,227,981 4,983,228
Repurchase and cancellation of restricted shares under Restricted
A-share Scheme (note) .................................... ( 3 4 8 , 7 1 0 ) ( 3 4 9 )
At 31 December 2024 . . . ................................... 4 , 982,879,271 4,982,879
Note: On 8 October 2023, the Company issued 9,747,983 restri cted shares under Restricte d A-share Scheme at the
subscription price of RMB6.34 per share. Th e net amount received by the Company amounted to
RMB61,803,000.
For the year ended 31 December 2024, the Company repur chased and cancelled of 348,710 restricted shares
under Restricted A-share Scheme with an aggr egate consideration of RMB2,154,000 paid.
During the year ended 31 December 2024, 4,694,782 restricted shares under Restricted A-share Scheme were
released upon satisfaction of the vesting conditions. As at 31 December 2024, 4,704,491 restricted shares
remained outstanding.
Details of Restricted A-share Scheme are set out in Note 38.
During the Track Record Period, the C ompany repurchased its own ordinary shares through the Shenzhen Stock
Exchange as follows:
Month of repurchase
No. of ordinary
shares of
RMB1 each
Price per share
Aggregated
consideration
paidHighest Lowest
RMB RMB RMB ’000
J a n u a r y2 0 2 2 ................. 1 , 352,200 20.50 20.23 27,557
February 2022 . ............... 1 1 , 365,793 20.50 14.84 172,615
M a r c h2 0 2 2 .................. 3 , 208,300 20.50 11.79 40,434
April 2022 ................... 2 6 , 601,600 20.50 9.09 259,392
42,527,893 499,998
During the year ended 31 December 2022, the Company re purchased 42,527,893 of its own ordinary shares through
the Shenzhen Stock Exchange with an aggreg ate consideration of RMB499,998,000 paid.
Pursuant to the Restricted A-share Scheme, the Company tra nsferred 18,710,726 restricted shares previously granted
to incentive recipients with a deduction from the treasury sh ares of RMB220,038,000 during the year ended 31 December
2024.
At 31 December 2022, 2023 and 2024, the Company had outstan ding treasury shares of 42,527,893, 42,527,893 and
23,817,167 shares.
None of the Company ’s subsidiaries purchased, sold or redeemed any of the Company ’s listed securities during the
Track Record Period.
APPENDIX I ACCOUNTANTS ’ REPORT
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Reserves of the Company
Below table sets out the details of the reserves of the Company:
Share
premium
Treasury
share
Capital
reserve
FVTOCI
reserve
Statutory
reserve
Retained
profits Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2022 . . . . . . 20,679,513 — 163,190 143,783 1,981,141 12,926,533 35,894,160
Profit for the year . . . . . . ————— 2,083,671 2,083,671
Fair value change on
investments in equity
instruments at FVTOCI . ——— 11,589 —— 11,589
Total comprehensive
income for the year . . . . ——— 11,589 — 2,083,671 2,095,260
Transfer to statutory
r e s e r v e............ ———— 208,385 (208,385) —
D i s t r i b u t i o n ........... ————— (493,095) (493,095)
Repurchase of shares . . . . . — (499,998) ———— (499,998)
Transaction costs
attributable to repurchase
o fs h a r e s ........... — (59) ———— (59)
At 31 December 2022 . . . . 20,679,513 (500,057 ) 163,190 155,372 2,189,526 14,308,724 36,996,268
Profit for the year . . . . . . ————— 2,147,234 2,147,234
Fair value change on
investments in equity
instruments at FVTOCI . ——— 4,711 —— 4,711
Total comprehensive
income for the year . . . . ——— 4,711 — 2,147,234 2,151,945
Transfer to statutory
r e s e r v e............ ———— 214,723 (214,723) —
D i s t r i b u t i o n ........... ————— (986,190) (986,190)
Issue of restricted shares
under Restricted A-share
Scheme . . . . . . . . . . . 52,055 ————— 52,055
Recognition of equity-
settled share-based
p a y m e n t s .......... —— 54,851 ——— 54,851
At 31 December 2023 . . . . 20,731,568 (500,057 ) 218,041 160,083 2,404,249 15,255,045 38,268,929
Profit for the year . . . . . . ————— 2,160,207 2,160,207
Total comprehensive
income for the year . . . . ————— 2,160,207 2,160,207
Transfer to statutory
r e s e r v e............ ———— 216,021 (216,021) —
D i s t r i b u t i o n ........... ————— (1,482,163) (1,482,163)
Repurchase and cancellation
of restricted shares under
Restricted A-share
S c h e m e ........... ( 1 , 8 0 5 ) ————— (1,805)
Exercise of restricted shares
under Restricted A-share
Scheme . . . . . . . . . . . 26,814 220,038 (133,839) ——— 113,013
Recognition of equity-
settled share-based
p a y m e n t s .......... —— 190,898 ——— 190,898
At 31 December 2024 . . . . 20,756,577 (280,019 ) 275,100 160,083 2,620,270 15,717,068 39,249,079
APPENDIX I ACCOUNTANTS ’ REPORT
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37. CAPITAL COMMITMENTS
The Group
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Capital expenditure contracted for but not provided
for in the Historical Financial Information — Property,
p l a n ta n de q u i p m e n t ........................ 8 2 0 , 4 7 2 1 , 3 5 2 , 6 2 6 2 , 217,417
38. SHARE-BASED PAYMENT
On 18 August 2023, the Company has adopted Restricted A- share Scheme, pursuant to which the Company granted
restricted shares to eligible participants include, but not limited to the Group ’s directors, senior management and other
employees.
The Company granted both Type I and Type II restricted sh ares. Type I restricted shares under the Restricted A-
share Scheme are valid for a maximum of 48 months from the date of completion of registration of the grant of restricted
shares to the date of release of all restricted shares or cancellation on repurchase; Type II restricted shares under the
Restricted A-share Scheme are valid for a maximum of 48 month s from the date of grant of restricted shares to the date of
full vesting or lapsing.
The particulars of the Type I and Type II restricted shares are as follows:
(a) Type I restricted shares
Type I restricted shares refers to ordinary shares issued to the participants with certain restrictions stipulated
under the Restricted A-share Scheme. On the grant date of Type I restricted shares, the participants of Type I
restricted shares were entitled to receive newly issued ordinary shares of the Company and were required to pay the
purchase price upon accepting the Type I restricted shares.
Type I restricted shares shall be locked up immediately upon grant. The release of the restriction of the
restricted shares granted to the participants shall be subject to performance conditions and a lock-up period of 12
months and 24 months after the date of registration. The restr icted shares held by the participants shall be unlocked
in two tranches in the proportions of 50% and 50% of the tot al number of the restricted shares granted upon the
expiry of each lock-up period. The restriction on the re stricted share would only be released upon both the
performance condition of the Group and the perfo rmance condition of the individuals are met.
If the either of the performance conditions are not met, the Company will automatically repurchase the Type I
restricted shares from the employee at purchase price. The total consideration paid by the participants are recognised
as liabilities and will only be reversed by portion to other reserve when the shares are vested each year.
On 22 September 2023 (the date of grant), the board of di rectors approved 10,631,973 Type I restricted shares
to 2,754 eligible participants and the grant price was R MB6.34 per share. Except for 282 participants (who were
granted a total of 883,990 Type I restricte d shares) who voluntarily decided not to participate in the reserved grant,
2,472 participants had accepted and subscribed for a tota l of 9,747,983 restricted shares granted to them under the
Restricted A-share Scheme.
The grant date fair value of the restricted shares was R MB5.80, which was determined based on the difference
between the grant date closing price of the Company ’s A Share and the subscription price of the restricted shares.
The grant date closing price of the Company ’s A Shares was RMB12.14.
APPENDIX I ACCOUNTANTS ’ REPORT
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Set out below are details of the movements of the outstan ding restricted shares of Type I restricted shares
throughout the Track Record Period:
Year ended 31 December
2022 2023 2024
O u t s t a n d i n ga tt h eb e g i n n i n go ft h ey e a r ........ —— 9,710,783
G r a n t e dd u r i n gt h ey e a r ................... — 9,747,983 —
L a p s e dd u r i n gt h ey e a r.................... — (37,200) (371,210)
R e l e a s e dd u r i n gt h ey e a r .................. —— (4,694,782)
O u t s t a n d i n ga tt h ee n do ft h ey e a r ............ — 9,710,783 4,644,791
(b) Type II restricted shares
Type II restricted shares refers to the ordinary shares that participants could be subscribed upon the
satisfaction of both the Group ’s performance conditions and individual per formance conditions under the Restricted
A-share Scheme. Upon the satisfaction of the Group ’s and individuals ’ performance conditions under the Restricted
A-share Scheme, the participants of Type II restricted shares have the right to subscribe ordinary shares which were
repurchased by the Company through its dedicated repurchase account.
Type II restricted shares shall be vested over a two-year period, with 50% and 50% of total shares vesting on
each anniversary date after the vesting comm encement date upon the satisfaction of the Group ’s performance
conditions and individual performance conditions under t he Restricted A-share Scheme. The shares before the
participants ’ subscription do not give the participants the ri ght to obtain dividends or the right to vote at the
shareholders ’ meeting.
On 22 September 2023 (the date of grant), the board of directors approved 42,527,893 Type II restricted
shares to 2,754 eligible participants and the exercise price was RMB6.34 per share.
Set out below are details of the movements of the outstan ding restricted shares of Type II restricted shares
throughout the Track Record Period:
Year ended 31 December
2022 2023 2024
O u t s t a n d i n ga tt h eb e g i n n i n go ft h ey e a r ........ —— 38,843,133
G r a n t e dd u r i n gt h ey e a r ................... — 42,527,893 —
E x e r c i s e dd u r i n gt h ey e a r.................. —— (18,710,726)
F o r f e i t e dd u r i n gt h ey e a r .................. — (3,684,760) (1,546,040)
O u t s t a n d i n ga tt h ee n do ft h ey e a r ............ — 38,843,133 18,586,367
E x e r c i s a b l ea tt h ee n do ft h ey e a r ............ ———
In respect of the Type II restricted shares exercised for the year ended 31 December 2024, the weighted
average share price at the dates of exercise was RMB16.22.
APPENDIX I ACCOUNTANTS ’ REPORT
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The fair value of the equity-settled equity incentive granted on the grant date of RMB5.7 is estimated using
the Black-Scholes option pricing model, in combinatio n with the terms and conditions of the equity incentive
granted. The following table lists the inputs to the model used:
Type II restricted shares
S h a r ep r i c e ................................................ R M B 1 2 . 1 4
Exercise price (note) ......................................... R M B 6 . 3 4
E x p e c t e dv o l a t i l i t y........................................... 1 7 . 7 8 %
E x p e c t e dl i f e............................................... 2y e a r s
R i s k - f r e er a t e .............................................. 1 . 5 0 %
E x p e c t e dd i v i d e n dy i e l d ....................................... 1 . 6 3 %
Note: The exercise price of Type II restricted shares may be adjusted in case of any allotments of shares,
payments of share dividends or other similar changes in the Company ’s share capital. The exercise
price on the grant date of Type II restricted shares was RMB6.34 per share. Pursuant to resolutions
passed on 25 September 2024, the exercise price is adjusted to RMB6.04 due to the payments of share
dividends.
For the year ended 31 December 2022, 2023 and 2024, the Group recognised the total expense of nil,
RMB54,260,000 and RMB161,375,000, respectively, in relation to Restricted A-share Scheme.
39. RETIREMENT BENEFIT SCHEME
The employees of the Group ’s subsidiaries in the PRC are members of a state-managed defined contribution
retirement scheme operated by the PRC government. The PRC subsidiary is required to contribute a certain percentage of
their payroll to the retirement benefit scheme subject to certain cap as governed by the social fund bureau. The only
obligation of the Group with respect to the retirement benef it scheme is to make the required contributions under the
scheme.
The Group has joined the MPF Scheme which is registered with the Mandatory Provident Fund Schemes Authority
under the Mandatory Provident Fund Schemes Ordinance. The a ssets of the MPF Scheme are held separately from those of
the Group in funds under the control of an independent trustee. Under the rules of the MPF Scheme, the employer and the
employees are each required to make contributions to the schem e at the rates specified in the rules. The only obligation of
the Group with respect to the MPF Scheme is to make the required contributions under the scheme. Under the MPF
Scheme, there will not be any forfeited contribution available to reduce the contribution payable by the Group.
The Group participates in a defined contribution pla n managed by the Vietnam government whereby the Group is
required to make contributions to the plan. The applicable rate s are 17.5% of total contractual salaries for the employer ’s
portion of social and health insurance in Vietnam. The Group has no obligation for the payment of retirement benefits
other than the contributions described above. The Group ’s contributions vest fully with the employees when contributed
into the plan.
The Group also operates a number of defined contribution s chemes in other overseas locations. Arrangements for
these staff retirement benefits vary from country to country a nd are made in accordance with local regulations and custom.
The total retirement benefits scheme contributions to those p lans recognised as employee benefit charged to profit or
loss and capitalised as inventories, amounting to RMB 869,102,000, RMB779,639,000 and RMB871,138,000 for each of
the three years ended 31 December 2022, 2023 and 2024, respectively, representing contributions paid to the retirement
benefits scheme by the Group.
APPENDIX I ACCOUNTANTS ’ REPORT
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40. CAPITAL RISK MANAGEMENT
The Group and the Company manages its capital to ensur e that entities in the Group and the Company will be able
to continue as a going concern with maximising the return to s hareholders through the optimisation of the debt and equity
balance. The Group ’s and the Company ’s overall strategy remains unchanged during the Track Record Period.
The capital structure of the Group and the Company consi sts of net debt, which includes the borrowings and lease
liabilities disclosed in Notes 32 and 33, respectively, net of bank balances and cash and equity attributable to the owners of
the Company, mainly comprising issued share capita l, share premium, reserves and retained profits.
The management reviews the capital structure on a regular basis. As part of this review, the management considers
the cost of capital and the risks associated with the capital. Based on recommendations of the management, the Group will
balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the
issue of new debt or the redemption of existing debt.
41. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
Financial assets
A m o r t i s e dc o s t............ 2 1 , 3 9 9 , 1 4 5 2 0 , 788,624 22,803,927 14,831,331 12,111,535 13,998,777
Equity instruments at FVTOCI . 460,021 465,563 445,109 439,567 445,109 445,109
Financial assets at FVTPL . . . . 355,266 349,665 354,917 87,153 — 100,000
Bills receivables at FVTOCI . . 3,697 112,288 9,779 ———
22,218,129 21,716,140 23,613,732 15,358,051 12,556,644 14,543,886
Financial liabilities
A m o r t i s e dc o s t............ 3 0 , 5 8 7 , 9 5 9 2 7 , 919,088 28,892,970 16,470,888 13,668,847 15,402,665
Financial liabilities at FVTPL . . —— 9,620 —— 3,903
30,587,959 27,919,088 28,902,590 16,470,888 13,668,847 15,406,568
(b) Financial risk management objectives and policies
The Group ’s major financial instruments include trade and bills receivables, other receivables, time deposits,
amounts due from related par ties, restricted bank deposits, bank balan ces and cash, equity instruments at FVTOCI,
financial assets at FVTPL, bills receivables at FVTOCI, trade and other payables, financial liabilities at FVTPL,
amounts due to related parties, loan from a r elated party and borrowings. The Company ’s major financial
instruments include trade and bills receivables, amounts due from subsidiaries, other receivables, time deposits, bank
balances and cash, equity instruments at FVTOCI, financ ial assets at FVTPL, trade and other payables, financial
liabilities at FVTPL, amounts due to subsidiaries, loans from related parties and borrowings. Details of the financial
instruments are disclosed in respective notes. The risks a ssociated with these financial instruments include market
risk (currency risk and interest rate risk), credit risk, and liquidity risk. The policies on how to mitigate these risks
are set out below. The management of the Group and the Com pany manages and monitors these exposures to ensure
appropriate measures are implemented in a timely and effective manner.
APPENDIX I ACCOUNTANTS ’ REPORT
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Market risk
(i) Currency risk
Certain Group entities have sales and purchases/b ank balances/borrowings denominated in US$,
Japanese Yen ( ‘‘JPY’’) ,H K $a n dE u r o( ‘‘EUR’’), other than their functional currencies.
The carrying amounts of the Group ’s and the Company ’s foreign currencies d enominated monetary
assets and liabilities at the end of each reporting period are as follows:
The Group
Assets
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
U S $ ............................ 1 1 , 7 1 2 , 1 9 6 9 , 9 3 7 , 7 4 9 1 2 , 544,082
J P Y ............................ 7 3 , 7 3 4 3 6 , 7 4 2 3 6 , 5 2 2
H K $............................ 3 5 , 2 9 6 1 9 , 8 5 9 6 3 , 7 2 6
E U R............................ 1 1 2 , 6 3 2 3 0 5 , 8 5 1 246,707
11,933,858 10,300,201 12,891,037
Liabilities
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
U S $ ............................ 5 , 3 8 0 , 2 5 6 3 , 0 5 5 , 3 8 6 3 , 154,403
J P Y ............................ 1 0 9 , 0 0 6 9 3 , 5 6 3 9 1 , 8 7 0
H K $............................ 6 , 6 5 5 2 , 7 7 7 1 , 0 6 2
E U R............................ 2 , 0 8 3 3 , 6 3 3 3 1 1
5,498,000 3,155,359 3,247,646
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
Assets
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
U S $ ............................ 9 , 2 2 7 , 1 0 0 6 , 7 5 6 , 9 0 2 9 , 704,315
J P Y ............................ 2 4 , 9 8 2 7 0 9 6 6 5
9,252,082 6,757,611 9,704,980
Liabilities
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
U S $ ............................ 1 , 3 9 4 , 3 2 3 2 6 6 , 3 1 7 966,860
J P Y ............................ 3 3 8 , 8 3 1 7 8 , 4 5 4 8 3 , 1 3 9
H K $............................ 6 2 1 2 1 7 —
E U R............................ 2 9 2 ——
1,734,067 344,988 1,049,999
Sensitivity analysis
The following table details the Group ’s and the Company ’s sensitivity to a 10% increase and
decrease in RMB against US$10% is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management ’s assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding US$
denominate monetary items and adjusts their translation at the end of each reporting period for a 10%
change in foreign currency rates. A negative number b elow indicates a decrease in post-tax profit where
RMB strengthen 10% against US$. For a 10% weakening of RMB against US$, there would be an
equal and opposite impact on the post-tax profit and the amounts below would be positive.
The Group The Company
As at 31 December As at 31 December
2022 2023 2024 2022 2023 2024
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
U S $ .......... ( 5 5 1 , 2 1 6 ) ( 586,872) (854,868) (665,786) (551,700) (742,684)
During the Track Record Period, the currency exposure of RMB against currencies other than
US$ is immaterial, and accordingly, no sensitivity analysis is disclosed.
In relation to deliverable forwards:
If the relevant exchange rate had been 5% depreciation/appreciation of RMB against US$ and all
other variables were held constant, the Group ’s profit after taxation for the year would increase/
decrease by approximately RMB6,531,000, RMB2, 028,000 and RMB409,000 as at 31 December 2022,
2023 and 2024, respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
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(ii) Interest risk
The Group and the Company are exposed to fair value interest rate risk in relation to restricted bank
deposits (see Note 29), fixed-rate bank borrowings (see Note 32 for details of these borrowings), loan from a
related party/related parties (see Note 42) and lease liabilities (see Note 33 for details). The Group and the
Company are exposed to cash flow interest rate risk in relation to variable-rate bank balances (see Note 29 for
details). Furthermore, the Group and the Company is exposed to cash flow interest rate risk in relation to
variable-rate bank borrowings (see Note 32 for details). The cash flow interest rate risk is mainly concentrated
on the fluctuation of interest rates on bank balances of the Group and the Company and fluctuation on LPR
on the Group ’s and the Company ’s variable-rate bank borrowings. The Group aims at keeping borrowings at a
combination of fixed and variable rates. The Group ma nages its interest rate exposures by assessing the
potential impact arising from any interest rate movements based on interest rate level and economic outlook.
The management will review the proportion of borrowi ngs in fixed and variable rates and ensure they are
within reasonable range.
Sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates at
the end of each reporting period. The analysis is prepared assuming the financial instruments
outstanding at the end of each reporting period were outstanding for the whole year. A 50 basis point
increase or decrease in variable-rate bank borrowings are used when reporting interest rate risk
internally to key management personnel and represents management ’s assessment of the reasonably
possible change in interest rates. Bank balances are excluded from sensitivity analysis as the
management considers that the exposure of cash flow i nterest rate risk arising from variable-rate bank
balances is insignificant.
If interest rates had been 50 basis point higher/lo wer and all other variables were held constant,
the Group ’s post-tax profit for the year would decrea se/increase by RMB57,674,000, RMB44,771,000
and RMB46,282,000 for the years ended 31 December, 2022, 2023 and 2024, respectively, and the
Company ’s post-tax profit for the year would decrea se/increase by RMB21,421,000, RMB22,889,000
and RMB21,866,000 for the years ended 31 December, 2022, 2023 and 2024, respectively. This is
mainly attributable to the Group ’s exposure to interest rates on its variable-rate borrowings.
Credit risk and impairment assessment
Credit risk refers to the risk that the Group ’s and the Company ’s counterparties default on their
contractual obligations resulting in financial losses to the Group and the Company. The Group ’sa n dt h e
Company ’s credit risk exposures are primarily attributable to trade and bills receivables, bills receivables at
FVTOCI, restricted bank deposits, bank balances, time deposits, other receivables and amounts due from
related parties/subsidiaries. The Group does not hold any collateral or other credit enhancements to cover its
credit risks associated with its financial assets.
Trade receivables arising from contracts with customers and bills receivables
In order to minimise the credit risk, the management of the Group and the Company has delegated a
team responsible for determination of credit limits, cre dit approvals and other monitoring procedures to ensure
that follow-up action is taken to recover overdue debt s. In this regard, the management considers that the
Group ’s and the Company ’s credit risk is significantly reduced.
The Group ’s concentration of credit risk by geographical markets is mainly in Asia, which accounted
for 96%, 96% and 96% of the total trade receivables as at 31 December 2022, 2023 and 2024, respectively.
The Group has concentration of credit risk as 64%, 54% and 48% of the total trade receivables was due from
the Group ’s largest customer as at 31 December 2022, 2023 and 2024, respectively. The Group has
concentration of credit risk as 80%, 71% and 72% of the total trade receivables was due from the Group ’sf i v e
largest customers as at 31 December 2022, 2023 and 2024, respectively.
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company ’s concentration of credit risk by geographical markets is mainly in Asia, which
accounted for 100%, 100%and 100% of the total trade receivables as at 31 December 2022, 2023 and 2024,
respectively. The Group has concentration of credit r isk as 94%, 93% and 95% of the total trade receivables
was due from the Company ’s largest customer as at 31 December 2022, 2023 and 2024, respectively. The
Group has concentration of credit risk as 99%, 99% and 99% of the total trade receivables was due from the
Group ’s five largest customers as at 31 December 2022, 2023 and 2024, respectively.
For trade receivables, the Group and the Company has applied the simplified approach of IFRS 9 to
measure the loss allowance at lifetime ECL. Except for items that are subject to individual evaluation, which
are assessed for impairment individually, the remainin g trade receivables are grouped based on shared credit
risk characteristics by reference to the Group ’s ageing of outstanding balances. Details of the quantitative
disclosures are set out below in this note.
For bills receivables, the Group has applied the simplified approach of IFRS 9 to measure the loss
allowance at lifetime ECL. Based on the average loss rates, the lifetime ECL on bills receivables is considered
to be insignificant and therefor e no loss allowance was recognised.
Bills receivables at FVTOCI
Bills receivables at FVTOCI were all bank-issued notes. Since the issuers were reputable banks of good
credit quality, the management of the Group consider ed the credit risk of these bank issued bills is
insignificant and no impairment was provide d on them at the end of each reporting period.
Other receivables
For other receivables, the management makes peri odic individual assessment on the recoverability of
other receivables based on historical settlement records, past experience, and also quantitative and qualitative
information that is reasonable and supportive forward -looking information. The management believes that
there are no significant increase in credit risk of these amounts since initial recognition and the Group and the
Company provided impairment based on 12m ECL. Details of the quantitative disclosures are set out below in
this note.
Restricted bank deposits/time deposits/bank balances
Credit risk on restricted bank deposits/time deposits/bank balances is limited because the counterparties
are reputable banks with high credit ratings assigne d by credit agencies. The Group and the Company
assessed 12m ECL for time deposits/restricted bank deposits and bank balances by reference to information
relating to probability of default and loss given default of the respective credit rating grades published by
external credit rating agencies. Based on the average loss rates, the 12m ECL on time deposits/restricted bank
deposits and bank balances is considered to be insignifi cant and therefore no loss allowance was recognised.
APPENDIX I ACCOUNTANTS ’ REPORT
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The Group ’s and the Company ’s internal credit risk grading assessment comprises the following
categories:
Internal credit rating Description Trade receivables
Financial assets
other than trade
receivables
L o wr i s k ......... T h ec ounterparty has a low risk
of default
Lifetime ECL —
not credit-
impaired
12m ECL
D o u b t f u l ......... T h e r eh a v eb e e ns i g n i f i c a n t
increases in credit risk since
initial recognition through
information developed
internally or external
resources
Lifetime ECL —
not credit-
impaired
Lifetime ECL —
not credit-
impaired
L o s s ............ T h e r ei se v i d e n c ei n d i c a t i n gt h e
asset is credit-impaired
Lifetime ECL —
credit-impaired
Lifetime ECL —
credit-impaired
W r i t e - o f f ......... T h e r ei se v i d e n c ei n d i c a t i n gt h a t
the debtor is in severe
financial difficulty and the
Group and the Company has
no realistic prospect of
recovery
Amount is written
off
Amount is written
off
APPENDIX I ACCOUNTANTS ’ REPORT
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The tables below detail the credit risk exposures of the Group ’s and the Company ’s financial assets,
which are subject to ECL assessment:
The Group
As at 31 December 2022
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Debt instruments at FVTOCI
Bills receivables
a tF V T O C I ......
note i 12m ECL N/A 3,697 —
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 304,307 —
B a n kb a l a n c e s...... AAA/BBB+
note i
12m ECL N/A 11,682,255 —
Restricted bank
d e p o s i t s ........
AAA/BBB+
note i
12m ECL N/A 3,673 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
1.41 9,149,989 128,921
Lifetime ECL
(credit-impaired)
100.00 3,545 3,545
Bills receivables .... note i 12m ECL N/A 1,392 —
Other receivables .... note iii 12m ECL
(not credit-impaired)
1.01 357,113 3,589
Lifetime ECL
(credit-impaired)
97.71 30,203 29,512
Amounts due from
r e l a t e dp a r t i e s ....
note iii 12m ECL
(not credit-impaired)
1.01 32,563 328
21,565,040 165,895
APPENDIX I ACCOUNTANTS ’ REPORT
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As at 31 December 2023
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Debt instruments at FVTOCI
Bills receivables
a tF V T O C I ......
note i 12m ECL N/A 112,288 —
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 314,648 —
B a n kb a l a n c e s...... AAA/BBB+
note i
12m ECL N/A 10,493,519 —
Restricted bank
d e p o s i t s ........
AAA/BBB+
note i
12m ECL N/A 25,474 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
1.39 9,433,308 131,015
Lifetime ECL
(credit-impaired)
100.00 3,583 3,583
Bills receivables .... note i 12m ECL 0.26 6,167 16
Other receivables .... note iii 12m ECL
(not credit-impaired)
0.97 621,884 6,039
Lifetime ECL
(credit-impaired)
94.87 18,328 17,388
Amounts due from
r e l a t e dp a r t i e s ....
note iii 12m ECL
(not credit-impaired)
1.00 30,056 302
20,946,967 158,343
APPENDIX I ACCOUNTANTS ’ REPORT
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As at 31 December 2024
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Debt instruments at FVTOCI
Bills receivables
a tF V T O C I ......
note i 12m ECL N/A 9,779 —
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 426,109 —
B a n kb a l a n c e s...... AAA/BBB+
note i
12m ECL N/A 10,936,804 —
Restricted bank
d e p o s i t s ........
AAA/BBB+
note i
12m ECL N/A 51,276 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
1.32 11,003,205 144,984
Lifetime ECL
(credit-impaired)
100.00 3,324 3,324
Bills receivables .... note i 12m ECL 0.05 7,519 4
Other receivables .... note iii 12m ECL
(not credit-impaired)
0.95 503,466 4,760
Lifetime ECL
(credit-impaired)
98.82 35,928 35,505
Amounts due from
r e l a t e dp a r t i e s ....
note iii 12m ECL
(not credit-impaired)
1.08 25,144 271
22,992,775 188,848
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
As at 31 December 2022
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 304,307 —
B a n kb a l a n c e s...... AAA/BBB+ 12m ECL N/A 3,772,088 —
note i
Amounts due from
s u b s i d i a r i e s......
note iii 12m ECL N/A 3,103,658 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
0.03 7,394,643 2,100
Other receivables .... note iii 12m ECL
(not credit-impaired)
0.98 260,766 2,567
Lifetime ECL
(credit-impaired)
94.01 8,951 8,415
14,844,413 13,082
As at 31 December 2023
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 314,648 —
B a n kb a l a n c e s...... AAA/BBB+
note i
12m ECL N/A 3,116,182 —
Amounts due from
s u b s i d i a r i e s......
note iii 12m ECL N/A 2,813,957 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
0.02 5,377,022 1,287
Other receivables .... note iii 12m ECL
(not credit-impaired)
0.99 495,290 4,921
Lifetime ECL
(credit-impaired)
93.47 9,857 9,213
12,126,956 15,421
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 453 ---
As at 31 December 2024
External/
internal
credit rating
12m or
lifetime ECL
Average
loss rate
Gross carrying
amount
Impairment
loss
allowance
%R M B ’000 RMB ’000
Financial assets at amortised cost
T i m ed e p o s i t s ...... AAA/BBB+
note i
12m ECL N/A 426,109 —
B a n kb a l a n c e s...... AAA/BBB+
note i
12m ECL N/A 5,268,284 —
Amounts due from
s u b s i d i a r i e s......
note iii 12m ECL N/A 1,160,408 —
Trade receivables .... note ii Lifetime ECL
(not credit-impaired)
0.02 6,768,615 1,143
Other receivables .... note iii 12m ECL
(not credit-impaired)
1.00 380,016 3,801
Lifetime ECL
(credit-impaired)
98.93 27,074 26,785
14,030,506 31,729
Notes:
(i) The counterparties are reputable banks with hi gh credit ratings and the risk of default is limited.
(ii) For trade receivables, the Group and the Company a pplied the simplified approach in IFRS 9 to measure the
loss allowance at lifetime ECL. Except for receivables from debtors with significant balances or credit-
impaired, which are assessed individually, the Group an d the Company determine the ECL on the remaining
trade receivables on a collective basis using provision matrix, grouped by the ageing of the trade receivables.
As part of the Group ’s credit risk management, the Group uses the ageing of the trade receivables to assess
the impairment for its trade receivables in relation to its operation because these c ustomers have common risk
characteristics that are representative of the customers ’ abilities to pay all amounts due in accordance with the
contractual terms. The Group ’s trade receivables at amortised cost with significant balances or credit-impaired
with gross carrying amounts of RMB7,798,784,00 0, RMB7,308,817,000 and RMB8,443,358,000 as at 31
December 2022, 2023 and 2024, respectively, were assessed individually. The remaining trade receivables are
assessed based on provision matrix, and the imp airment losses recognised were insignificant.
The estimated loss rates used in the provision matrix a re estimated based on historical credit loss experience
of debtors taking into consideration the historical default rates and are adjusted for forward-looking
information that is available without undue cost or effo rt. The grouping is regularly reviewed by management
to ensure relevant information about specific debtors is updated.
The Company ’s trade receivables are mainly from the subsidiaries, as disclosed in Note 42. Both the
receivables from subsidiaries and the trade receivables that are credit-impaired are assessed individually.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 454 ---
The following table shows the movement in lifetime ECL that has been recognised for trade and bills
receivables under the simplified approach.
The Group
Lifetime ECL
not credit-
impaired
Lifetime ECL
credit-impaired Total
RMB’000 RMB ’000 RMB ’000
A sa t1J a n u a r y2 0 2 2..................... 1 7 0 , 7 0 8 1 4 , 8 1 2 185,520
I m p a i r m e n tl o s s( r e v e r s e d )r e c o g n i s e d ,n e t ...... ( 5 3 , 6 2 9 ) 1 8 5 ( 5 3 , 4 4 4 )
T r a n s f e r.............................. 1 1 , 4 5 1 ( 1 1 , 4 5 1 ) —
E x c h a n g ea d j u s t m e n t s .................... 3 9 1 ( 1 ) 3 9 0
As at 31 December 2022 .................. 1 2 8 , 9 2 1 3 , 5 4 5 132,466
I m p a i r m e n tl o s sr e c o g n i s e d ,n e t.............. 2 , 2 0 5 3 7 2 , 2 4 2
W r i t e - o f f ............................. ( 3 ) — (3)
E x c h a n g ea d j u s t m e n t s .................... ( 9 2 ) 1 ( 9 1 )
As at 31 December 2023 .................. 1 3 1 , 0 3 1 3 , 5 8 3 134,614
I m p a i r m e n tl o s sr e c o g n i s e d( r e v e r s e d ) ,n e t ...... 1 5 , 8 5 9 ( 2 5 9 ) 1 5 , 6 0 0
W r i t e - o f f ............................. ( 1 , 5 5 7 ) — (1,557)
E x c h a n g ea d j u s t m e n t s .................... ( 3 4 5 ) — (345)
As at 31 December 2024 .................. 1 4 4 , 9 8 8 3 , 3 2 4 148,312
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
Lifetime ECL
not credit-
impaired
Lifetime ECL
credit-impaired Total
RMB’000 RMB ’000 RMB ’000
A sa t1J a n u a r y2 0 2 2..................... 1 , 7 2 5 — 1,725
I m p a i r m e n tl o s sr e c o g n i s e d ,n e t.............. 3 7 5 — 375
As at 31 December 2022 .................. 2 , 1 0 0 — 2,100
I m p a i r m e n tl o s sr e v e r s e d ,n e t ............... ( 8 1 3 ) — (813)
As at 31 December 2023 .................. 1 , 2 8 7 — 1,287
I m p a i r m e n tl o s sr e v e r s e d ,n e t ............... ( 1 4 4 ) — (144)
As at 31 December 2024 .................. 1 , 1 4 3 — 1,143
(iii) For the purposes of internal credit risk managem ent, the ECL on other receivables of the Group and the
Company, as well as the non-trade amounts due from subsidiaries of the Company, is assessed individually.
Liquidity risk
In the management of the liquidity risk, the Group and the Company monitor and maintains a level of bank
balances and cash deemed adequate by the management t o finance the operations of the Group and the Company,
and mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of borrowings, if
necessary.
The following tables detail the Group ’s and the Company ’s remaining contractual maturity for its financial
liabilities and lease liabilities. The tables have been drawn up based on the undiscounted cash flows of and financial
liabilities and lease liabilities based on the earliest date on which the Group can be required to pay. The maturity
dates for other non-derivative financial liabili ties are based on the agreed repayment dates.
APPENDIX I ACCOUNTANTS ’ REPORT
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The tables include both interest and principal cash flows . To the extent that interest flows are floating rate, the
undiscounted amount is derived based on management ’s best estimates at the end of each reporting period.
In addition, the following tables detail the Group ’s and the Company ’s liquidity analysis for its derivative
financial instruments. The tables have been drawn up bas ed on the undiscounted contractual net cash (inflows) and
outflows on derivative instruments that settle on a net basis. The liquidity analysis for the Group ’sa n dt h e
Company ’s derivative financial instruments are prepared based on the contractual settlement dates as the
management of the Group considers that the settlement date s are essential for an understanding of the timing of the
cash flows of derivatives.
The Group
Weighted
average
effective
interest rate
On demand/
less than
1y e a r
1y e a rt o
3 years over 3 years
Total
undiscounted
cash flow
Carrying
amount
%R M B ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
As at 31 December 2022
Borrowings . . . . . . . . . . 3.45 10,262, 104 9,330,107 105,712 19,697,923 18,971,283
Trade and other payables . N/A 10,589,023 —— 10,589,023 10,589,023
Lease liabilities . . . . . . . 3. 61 14,880 31,707 4,512 51,099 47,648
Amounts due to related
p a r t i e s ........... N / A 2 1 —— 21 21
Loan from a related party 3.65 — 1,222,203 — 1,222,203 1,027,632
20,866,028 10,584,017 110, 224 31,560,269 30,635,607
As at 31 December 2023
Borrowings . . . . . . . . . . 2.62 6,016, 343 9,457,023 369,336 15,842,702 15,258,076
Trade and other payables . N/A 11,595,772 —— 11,595,772 11,595,772
Lease liabilities . . . . . . . 3. 27 28,912 21,020 363 50,295 48,499
Amounts due to related
p a r t i e s ........... N / A 9 4 —— 94 94
Loan from a related party 3.45 — 1,113,040 — 1,113,040 1,065,146
17,641,121 10,591,083 369, 699 28,601,903 27,967,587
As at 31 December 2024
Non-derivative financial
liabilities
Borrowings . . . . . . . . . . 2.36 6,793, 531 7,925,326 70,413 14,789,270 14,326,565
Trade and other payables . N/A 14,566,379 —— 14,566,379 14,566,379
Lease liabilities . . . . . . . 2.80 52,223 61,666 103,808 217,697 199,188
Amounts due to related
p a r t i e s ........... N / A 2 6 —— 26 26
21,412,159 7,986,992 174, 221 29,573,372 29,092,158
Derivatives — net
settlement
Financial liabilities at
F V T P L ........... N / A 9 , 6 2 0 —— 9,620 9,620
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
Weighted
average
effective
interest rate
On demand/
less than
1y e a r
1y e a rt o
3 years over 3 years
Total
undiscounted
cash flow
Carrying
amount
%R M B ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
As at 31 December 2022
Borrowings . . . . . . . . . . 3.05 2,307,366 4,849,698 — 7,157,064 6,961,279
Trade and other payables . N/A 5,464,559 —— 5,464,559 5,464,559
Amounts due to
subsidiaries . . . . . . . . N/A 2,717,418 —— 2,717,418 2,717,418
Lease liabilities . . . . . . . 3. 55 8,881 17,763 3,427 30,071 28,293
Loans from related
p a r t i e s ........... 3 . 6 5 — 1,522,203 — 1,522,203 1,327,632
10,498,224 6,389,664 3, 427 16,891,315 16,499,181
As at 31 December 2023
Borrowings . . . . . . . . . . 2.75 3,107,622 4,284,976 — 7,392,598 7,105,703
Trade and other payables . N/A 2,462,844 —— 2,462,844 2,462,844
Amounts due to
subsidiaries . . . . . . . . N/A 2,735,154 —— 2,735,154 2,735,154
Lease liabilities . . . . . . . 3.55 8,881 12,308 — 21,189 20,275
Loans from related
p a r t i e s ........... 3 . 4 5 — 1,413,040 — 1,413,040 1,365,146
8,314,501 5,710,324 — 14,024,825 13,689,122
As at 31 December 2024
Non-derivative financial
liabilities
Borrowings . . . . . . . . . . 2.40 2,521,579 3,983,556 — 6,505,135 6,277,799
Trade and other payables . N/A 4,755,400 —— 4,755,400 4,755,400
Amounts due to
subsidiaries . . . . . . . . N/A 2,318,226 —— 2,318,226 2,318,226
Lease liabilities . . . . . . . 2. 83 38,375 33,295 89,690 161,360 145,700
Loans from related
p a r t i e s ........... 2 . 1 0 — 2,059,144 — 2,059,144 2,051,240
9,633,580 6,075,995 89, 690 15,799,265 15,548,365
Derivatives — net
settlement
Financial liabilities at
F V T P L ........... N / A 3 , 9 0 3 —— 3,903 3,903
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 458 ---
(c) Fair value measurements of financial instruments
Fair value of the Group ’s and the Company ’s financial instruments measured at fair value on a recurring
basis
Some of the Group ’s and the Company ’s financial instruments are measured at fair value at the end of
each reporting period. The following tables give info rmation about how the fair values of these financial
instruments are determined (in particular, the valua tion technique and inputs used), as well as the level of the
fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree
to which the inputs to the fair value measurements is observable.
The Group
Set out below is the information about how the fair values of the Group ’s financial instruments that are
measured at fair value are determined, including the valuation technique and inputs used:
Financial assets/
(liabilities)
As at 31 December Fair value
hierarchy
Valuation technique
and key input(s)
Significant
unobservable
input2022 2023 2024
RMB ’000 RMB ’000 RMB ’000
Bills receivables at
F V T O C I.....
3,697 112,288 9,779 Level 2 Discounted cash flow
Risk-adjusted discount rate
and cash flow are key
inputs
N/A
Deliverable
forwards . . . . .
153,662 48,574 (9,620) Level 2 Discounted cash flow were
estimated based on the
applicable forward foreign
exchange rates
N/A
Structured deposits 201,604 301,091 354,917 Level 2 income approach
— The discounted cash
flow method was used
to estimate the interest
from the underlying
bank deposits
N/A
Equity instruments
at FVTOCI . . .
460,021 465,563 445,109 Level 3 Net assets value of the
underlying investments
The higher the
net assets
value, the
higher the
fair value.
A change in the unobservable input would not change the fair value of the relevant financial instrument
significantly, no sensitivity analysis is disclosed.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 459 ---
The Company
Set out below is the information about how the fair values of the Company ’s financial instruments that
are measured at fair value are determined, inc luding the valuation technique and inputs used:
Financial assets/
(liabilities)
As at 31 December Fair value
hierarchy
Valuation technique
and key input(s)
Significant
unobservable
input2022 2023 2024
RMB ’000 RMB ’000 RMB ’000
Deliverable
forwards . . . . .
87,153 — (3,903) Level 2 Discounted cash flow were
estimated based on the
applicable forward foreign
exchange rates
N/A
Structured deposits —— 100,000 Level 2 income approach
— The discounted cash
flow method was used
to estimate the interest
from the underlying
bank deposits
N/A
Equity instruments
at FVTOCI . . .
439,567 445,109 445,109 Level 3 Net assets value of the
underlying investments
The higher the
net assets
value, the
higher fair
value.
A reasonably possible change in the unobservable in put would not change the fair value of the relevant
financial instrument significantly, therefore no sensitivity analysis is disclosed.
There were no transfers between the fair value hierarchy levels during the Track Record Period.
Fair value of financial instruments that are recorded at amortised cost
The management consider that the carrying amounts of financial assets and liabilities recorded at
amortised cost in the Historical Financial Information approximate their fair values.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 460 ---
Reconciliation of Level 3 fair value measurements
The following table presents the changes in level 3 financial instruments during the Track Record
Period:
Equity
instruments at
FVTOCI
RMB’000
A t1J a n u a r y2 0 2 2 ............................................. 446,387
F a i rv a l u ec h a n g e st h r o u g ho t h e rc o m p r e h e n s i v ei n c o m e ................... 1 3 , 6 3 4
A t3 1D e c e m b e r2 0 2 2........................................... 460,021
F a i rv a l u ec h a n g e st h r o u g ho t h e rc o m p r e h e n s i v ei n c o m e ................... 5 , 5 4 2
A t3 1D e c e m b e r2 0 2 3........................................... 465,563
Fair value changes through other comprehensive income,
n e to fr e c l a s s i f i c a t i o na d j u s t m e n tt or e t a i n e dp r o f i t s ..................... ( 2 0 , 4 5 4 )
A t3 1D e c e m b e r2 0 2 4........................................... 445,109
(d) Transferred financial assets that are derecognised in their entirety but have continuing involvement
As of 31 December 2022, 2023 and 2024, the Group has derecognised the bills receivables endorsed to its
suppliers amounting to nil , nil and RMB1,440,000, respectively. If the bills cannot be accepted at maturity, the
relevant banks or suppliers have the right to require the G roup to pay off the outstanding balance. These bills are
issued or guaranteed by reputable PRC banks with high cr edit ratings, therefore the directors of the Company
consider the probabilities on default of the discounted or endorsed bills receivables are limited and the Group has
derecognised the full carrying amount of these bills receiva bles and the associated trade and other payables when the
bills receivables are endorsed or discounted.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 461 ---
42. RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party and/
or exercise significant influence over the other party in making financial and operation decisions. Parties are also
considered to be related if they are under control or joint c ontrol by the same party. Members of key management of the
Group and their close family members are also considered as related parties.
The following is a summary of the significant transactions carried out between the Group and its related parties in
the ordinary course of business for the years ended 31 December 2022, 2023 and 2024, respectively.
(a) Related parties and relationship
The Group
During the reporting period, the following parties are identified as related parties to the Group and the
respective relationships are set out below:
Name of Related Parties Relationship
M s .C h a uK w a nF e i..................... C o n t r o lling Shareholder
Lens Technology (HK) Co., Limited
藍思科技(香港)有限公司 ................. H o l d i n gC o m p a n y
Changsha Intelligent Robot . . . ............. A s s o c i a t e
C h a n g s h aS i n o c e r a ..................... A s s o c i a t e
Hunan Juhong . . ....................... A s s o c i a t e
D o n g g u a nY u y a ....................... A s s o c i a t e
D o n g g u a nY u t o n g...................... A s s o c i a t e
Z i b oJ i n c h e n g......................... A s s o c i a t e
C h a n g s h aR u i h o n g ...................... A s s o c i a t e
N i n g x i aX i n j i n g s h e n g ................... A s s o c i a t e
Hunan Hualian Special Yuanhua Co., Ltd.
(‘‘Hunan Hualian Special Yuanhua ’’)
湖南華聯特種陶瓷有限公司 .............
A related company controlled by
non-controlling shareholder
Hunan Hualian Torch Porcelain Insulator
& Electrical Apparatus Co., Ltd
(‘‘Hunan Hualian Torch ’’)
湖南華聯火炬電瓷電器有限公司 ..........
A related company controlled by
non-controlling shareholder
HAWEMA Werkzeugschleifmaschinen
G m b H ............................
A related company controlled by Ms. Chau
Kwan Fei
Hunan Miaomiao Shopping Commercial
Co., Ltd ( ‘‘Hunan Miaomiao ’’)
湖南妙妙購商業有限公司 ...............
A related company controlled by
a close member of Ms. Chau Kwan Fei
Ms. Zhou Xinyi 周新
益 .................. S u p e r v i s o r
Mr. Jiang Weiping 蔣衛平 ................ Ac l o s ef a m i l ym e m b e ro fM s .C h a uK w a nF e i
Ms. Zhou Yihui 周藝輝 .................. Ac l o s ef a m i l ym e m b e ro fM s .C h a uK w a nF e i
Changsha Maijing Technology Co., Ltd
(‘‘Changsha Maijing ’’)
長沙麥睛科技股份有限公司 .............
Associate of a related company controlled by
Ms. Chau Kwan Fei
Shenzhen Nanke Jia ’an Robot Technology
Co., Ltd ( ‘‘Shenzhen Nanke Jia ’an’’)
深圳市南科佳安機器人科技有限公司 ......
Associate of a related company controlled by
Ms. Chau Kwan Fei
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 462 ---
The Group and the Company entered into the following transactions/balances with the related parties:
(b) Transactions with related parties
(i) Purchase
The Group
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Hunan Juhong ..................... 3 6 0 , 0 8 6 2 3 7 , 9 2 8 375,272
Z i b oJ i n c h e n g ..................... 2 1 3 , 1 9 2 1 5 8 , 2 4 0 138,207
D o n g g u a nY u t o n g ................... 1 4 9 , 9 4 5 1 6 4 , 7 5 1 136,518
D o n g g u a nY u y a.................... 8 4 , 3 2 5 6 3 , 8 4 5 1 3 , 5 9 6
N i n g x i aX i n j i n g s h e n g ................ 8 2 , 3 1 6 1 1 2 , 2 3 7 322,542
C h a n g s h aM a i j i n g ................... 3 1 , 3 7 4 4 6 , 7 3 4 8 6 , 1 7 4
C h a n g s h aS i n o c e r a .................. 1 9 , 0 5 4 2 8 , 9 1 8 4 2 , 5 0 9
C h a n g s h aR u i h o n g .................. 3 , 3 0 3 1 1 , 0 2 4 2 0 , 3 6 4
Hunan Hualian Special Yuanhua ......... 2 , 9 9 2 6 —
H u n a nH u a l i a nT o r c h ................ 8 4 3 9 8 8 —
Changsha Intelligent Robot ............ 5 4 7 3 3 2 , 3 8 6
HAWEMA Werkzeugschleifmaschinen
G m b H......................... — 20,630 3,515
Shenzhen Nanke Jia ’a n ............... — 143 13,445
947,484 846,177 1,154,528
(ii) Revenue
The Group
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
D o n g g u a nY u y a.................... 1 8 , 8 7 4 6 , 1 0 2 2 , 7 6 1
D o n g g u a nY u t o n g ................... 5 , 1 7 6 4 2 , 3 4 1
C h a n g s h aM a i j i n g ................... 2 , 5 4 1 1 , 7 0 0 8 , 5 2 9
C h a n g s h aS i n o c e r a .................. 2 4 2 1 9 5 2 2 9
Hunan Juhong ..................... —— 294
Shenzhen Nanke Jia ’a n ............... —— 8
M s .Z h o uY i h u i .................... —— 47
26,833 8,001 14,209
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 463 ---
(iii) Rental income
The Group
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
D o n g g u a nY u t o n g ................... 1 7 , 2 5 9 1 3 , 0 0 8 1 3 , 7 3 7
D o n g g u a nY u y a.................... 4 , 3 1 2 3 , 5 0 8 3 , 2 1 6
C h a n g s h aS i n o c e r a .................. 3 0 4 2 7 8 2 7 9
Hunan Juhong ..................... 2 5 3 4 1 3 4 2 2
M s .Z h o uY i h u i .................... 3 7 3 7 4 3
M s .Z h o uX i n y i .................... 3 7 3 7 —
C h a n g s h aR u i h o n g .................. 6 1 5 1 7
M r .J i a n gW e i p i n g .................. — 73 —
C h a n g s h aM a i j i n g ................... — 180 732
H u n a nM i a o m i a o ................... — 236 510
Shenzhen Nanke Jia ’a n ............... — 31 40
22,208 17,816 18,996
(iv) Finance costs — Interest on lease liabilities
The Group
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
M s .C h a uK w a nF e i ................. 2 5 2 5 2 5
(v) Finance costs — interest on loan from a related party
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Lens Technology (HK) Co., Limited . . .... 4 4 , 8 2 6 3 7 , 5 1 4 1 , 4 5 7
(vi) Expense relating to short-term leases
The Group
Year ended 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
H u n a nH u a l i a nT o r c h ................ 3 0 0 2 7 5 2 7 5
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 464 ---
(c) Related party balances
(i) Trade and bills receivables
The Group
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
D o n g g u a nY u y a.................... 1 0 , 8 2 8 6 , 3 8 0 —
D o n g g u a nY u t o n g ................... 3 6 2 4 2 , 5 5 7
C h a n g s h aM a i j i n g ................... 1 8 7 6 3 8 6 , 9 4 6
H u n a nM i a o m i a o ................... — 42 —
Hunan Juhong ..................... —— 329
11,377 7,064 9,832
The amounts are in trade nature, unsecured, non-inte rest bearing and aged within one year at the end of
each reporting period.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 465 ---
The Company
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Lens International (HK) Ltd.
(‘‘Lens International ’’)
藍思國際(香港)有限公司 ............ 6 , 9 6 2 , 0 6 1 5 , 0 0 6 , 3 3 2 6 , 436,543
Lens Technology (VietNam) Company
Limited ( ‘‘Lens VietNam ’’)
藍思科技(越南)有限公司 ............ 2 1 8 , 7 5 4 9 8 , 7 5 9 104,939
Lens Technology (Changsha) Company
Limited ( ‘‘Lens Changsha ’’)
藍思科技(長沙)有限公司 ............ 7 2 , 6 7 9 7 , 0 6 3 2 6 , 0 8 5
Shenzhen Lens Technology Company
Limited ( ‘‘Lens Shenzhen ’’)
深圳市藍思科技有限公司 ........... 6 3 , 1 5 3 2 4 2 , 7 4 8 188,560
Lens Intelligent Control (Changsha)
Company Limited
(‘‘Lens Intelligent Control ’’)
藍思智控(長沙
)有限公司 ............ 5 3 , 3 6 9 6 , 6 6 3 9 , 7 9 0
Lens Precision (Taizhou) Company Limited
(‘‘Lens Taizhou ’’)
藍思精密(泰州)有限公司 ............ 1 7 , 6 6 5 1 4 3 9 4
Lens Technology (Dong Guan) Company
Limited ( ‘‘Lens Dongguan ’’)
藍思科技(東莞)有限公司 ............ 2 , 7 2 4 3 , 2 4 7 9 8 3
Lens Technology (Xiangtan) Company
Limited ( ‘‘Lens Xiangtan ’’)
藍思科技(湘潭)有限公司 ............ 1 , 0 9 0 3 , 2 3 5 3 9 3
Lens Intelligent Robot (Changsha) Company
Limited ( ‘‘Lens Intelligent Robot ’’)
藍思智能機器人(長沙)有限公司 ....... 4 6 6 8 —
Changsha Lens New Material
Company Limited
(‘‘Changsha Lens New Material ’’)
長沙藍思新材料有限
公司 ........... 2 9 1 5
Shenzhen Lens Intelligence Robot Company
Limited
(‘‘Shenzhen Lens Intelligence Robot ’’)
深圳藍思智能機器人有限公司 ........ 2 3 — 27
Lens System Integration Company Limited
(‘‘Lens System Integration ’’)
藍思系統集成有限公司 ............. 1 2 1 9 5 3
7,391,605 5,368,278 6,767,472
The amounts are in trade nature, unsecured, non-in terest bearing. Details of ageing of these trade
receivables are set out in Note 27.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 466 ---
(ii) Amounts due from related parties
The Group
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
D o n g g u a nY u y a.................... 1 7 , 4 9 4 1 7 , 0 2 1 1 6 , 7 0 0
D o n g g u a nY u t o n g ................... 1 4 , 4 3 9 1 2 , 3 0 0 7 , 7 0 7
M s .C h a uK w a nF e i ................. 1 5 9 1 6 1 1 6 5
C h a n g s h aS i n o c e r a .................. 1 1 5 1 1 9 1 1 7
Hunan Juhong ..................... 2 6 1 5 3 6 4
C h a n g s h aR u i h o n g .................. 2 — 2
M s .Z h o uY i h u i .................... —— 4
H u n a nM i a o m i a o ................... —— 85
Shenzhen Nanke Jia ’a n ............... —— 29
32,235 29,754 24,873
Except for RMB8,123,000, RMB5,642,000 and RMB781,000 as at 31 December 2022, 2023 and 2024,
respectively, which are rental and other deposits, uns ecured and repayable according to the mutually agreed
terms of payment, the remaining amounts are non-trade i n nature, unsecured, interest-free and repayable on
demand. As at 30 April 2025, the above non-trade amount had been fully settled.
Maximum amounts due from a director
As at 31 December
Name of a director 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
M s .C h a uK w a nF e i ................. 1 5 9 1 6 1 1 6 5
(iii) Prepayments for property, plant and equipment
The Group
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Hunan Juhong ..................... 2 5 , 6 2 4 2 7 , 5 0 3 2 7 , 9 3 0
C h a n g s h aM a i j i n g ................... 6 , 2 3 1 9 , 9 8 5 6 , 4 3 3
C h a n g s h aR u i h o n g .................. 3 , 6 9 7 — 839
HAWEMA Werkzeugschleifmaschinen
G m b H......................... — 4,338 4,801
35,552 41,826 40,003
APPENDIX I ACCOUNTANTS ’ REPORT
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The Company
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
L e n sS y s t e mI n t e g r a t i o n .............. 3 , 9 0 9 ——
Hunan Blue Crystal Photovoltaic Technology
Company Limited ( ‘‘Hunan Blue Crystal
Photovoltaic ’’)
湖南藍晶光伏科技有限公司 .......... — 20,000 —
3,909 20,000 —
The amounts are in non-trade nature, unsecured, non- interest bearing and the property, plant and
equipment will be delivered to the respective entities i n accordance with the terms of respective agreements.
As at 30 April 2025, the amount of RMB21,874,000 had b een transferred to property, plant and equipment
and the remaining amount will be transferred to pr operty, plant and equipment before 31 July 2025 as
represented by directors of the Company.
(iv) Amounts due from subsidiaries
The Company
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
L e n sT a i z h o u...................... 1 , 3 7 3 , 4 2 2 1 , 0 8 6 , 7 0 9 222,723
Lens Dongguan .................... 5 3 5 , 1 5 9 4 0 0 , 6 8 5 187,517
Lens Intelligent Control . .............. 4 6 3 , 4 5 5 3 1 , 6 0 1 2 3 , 7 1 6
L e n sX i a n g t a n ..................... 2 5 5 , 1 1 5 1 , 0 0 9 , 0 0 0 447,205
Lens One Technology (Dong Guan)
Company Limited
(‘‘Lens One Technology (Dong Guan) ’’)
藍思旺科技(東莞)有限公司 .......... 1 6 8 , 3 1 7 1 6 8 , 3 1 7 100,000
Lens Precision (Dongguan) Company
Limited ( ‘‘Lens Precision (Dongguan) ’’)
藍思精密(東莞
)有限公司 ............ 1 2 6 , 0 0 0 ——
L e n sC h a n g s h a..................... 1 0 5 , 5 7 9 7 5 , 9 4 6 105,901
Lens Technology (Kunshan) Company
Limited ( ‘‘Lens Technology (Kunshan) ’’)
藍思科技(昆山)有限公司 ............ 4 3 , 4 3 2 2 8 , 7 0 0 2 8 , 7 0 0
L e n sV i e t N a m ..................... 1 7 , 8 3 4 3 7 4 3 2 , 3 9 9
Liuyang Panzhi Consulting Company
Limited ( ‘‘Liuyang Panzhi ’’)
瀏陽磐智諮詢有限公司 ............. 9 , 0 0 0 9 , 0 0 0 9 , 0 0 0
Shenzhen Lens Wang Supply Chain
Management Company Limited
(‘‘Shenzhen Lens Wang ’’)
深圳市藍思旺供應鏈管理有限公司 ..... 3 , 2 7 3 ——
C h a n g s h aL e n sN e wM a t e r i a l........... 1 , 1 4 5 1 , 5 8 7 1 , 3 8 2
Lens Intelligent Robot . . .............. 1 , 1 3 3 1 , 8 1 9 1 , 6 4 6
L e n sS y s t e mI n t e g r a t i o n .............. 5 8 0 ——
Changsha Yong ’an New Materials
Company Limited
(‘‘Changsha Yong ’an New Materials ’’)
長沙永安新材料有限公司 ........... 2 1 4 2 1 9 2 1 9
3,103,658 2,813,957 1,160,408
Analysed for reporting purposes as:
C u r r e n ta s s e t s .................... 1 , 7 9 0 , 7 3 1 7 5 2 , 0 9 4 498,716
N o n - c u r r e n ta s s e t s ................. 1 , 3 1 2 , 9 2 7 2 , 0 6 1 , 8 6 3 661,692
3,103,658 2,813,957 1,160,408
The amount is non-trade in nature, unsecured, interest-free and repayable according to the mutually
agreed terms of payment.
APPENDIX I ACCOUNTANTS ’ REPORT
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(v) Trade and other payables
The Group
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Hunan Juhong ..................... 9 7 , 3 4 9 6 3 , 6 7 6 117,217
Z i b oJ i n c h e n g ..................... 7 6 , 6 2 9 6 1 , 5 5 7 5 7 , 0 0 2
D o n g g u a nY u t o n g ................... 4 9 , 5 2 8 6 6 , 2 2 1 2 7 , 0 1 6
D o n g g u a nY u y a.................... 2 2 , 3 6 7 1 9 , 8 8 2 8 , 6 4 9
C h a n g s h aM a i j i n g ................... 1 1 , 0 7 4 2 4 , 0 2 2 3 8 , 2 4 2
C h a n g s h aS i n o c e r a .................. 5 , 3 1 5 4 , 1 3 4 1 1 , 0 2 7
H u n a nH u a l i a nT o r c h ................ 1 0 3 2 5 2 5
C h a n g s h aR u i h o n g .................. 7 0 8 2 , 1 4 4 6 , 8 1 5
Hunan Hualian Special Yuanhua ......... 4 0 7 4 2 2 2 9 5
Changsha Intelligent Robot ............ 3 6 5 6 6 2 , 2 8 0
N i n g x i aX i n j i n g s h e n g ................ — 29,672 138,423
Shenzhen Nanke Jia ’a n ............... — 143 4,579
263,516 272,464 411,570
The Company
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Hunan Lens Hualian Precious Ceramics
Company Limited ( ‘‘Lens Hualian ’’)
湖南藍思華聯精瓷有限公司 .......... 2 6 0 ——
Hunan Lens New Energy
Company Limited
湖南藍思新能源有限公司 ........... —— 3
L e n sI n t e r n a t i o n a l................... 1 , 4 7 8 , 6 6 6 1 7 0 , 3 7 7 866,072
L e n sT a i z h o u...................... 1 7 4 , 7 2 7 1 6 , 4 5 6 1 9 4
Lens Dongguan .................... 9 6 1 1 , 3 9 1 4 2 7
L e n sX i a n g t a n ..................... — 88,513 75,006
L e n sC h a n g s h a..................... 1 , 4 8 4 , 1 3 7 8 6 , 3 3 8 748,991
L e n sS y s t e mI n t e g r a t i o n .............. — 3,333 3,051
Lens Intelligent Control . .............. 3 4 3 , 4 6 4 2 3 5 , 3 1 2 624,376
Lens Intelligent Robot . . .............. 1 1 1 , 6 7 8 6 6 , 8 8 1 217,070
S h e n z h e nL e n sW a n g ................ 3 7 0 , 0 8 1 3 7 1 , 2 3 1 1
Shenzhen Lens System Integration
Company Limited
(
‘‘Shenzhen Lens System ’’)
深圳市藍思系統集成有限公司 ........ 7 6 8 7 , 1 1 2 5 , 1 9 5
C h a n g s h aL e n sN e wM a t e r i a l........... 8 5 , 9 9 4 9 9 , 9 9 8 178,667
Changsha Yong ’a nN e wM a t e r i a l s ....... 4 8 , 1 6 9 6 3 , 1 6 1 6 6 , 1 2 4
H u n a nB l u eC r y s t a lP h o t o v o l t a i c ........ —— 312,679
Lens Technology Japan Co., Ltd ......... —— 484
4,098,905 1,210,103 3,098,340
APPENDIX I ACCOUNTANTS ’ REPORT
– I-97 –


--- page 469 ---
The amounts are trade in nature, unsecured, in terest-free and repayable within 120 days.
(vi) Amounts due to related parties
The Group
As at 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Hunan Juhong ..................... 2 0 2 0 2 0
D o n g g u a nY u t o n g ................... — 68 —
C h a n g s h aR u i h o n g .................. 1 1 1
Shenzhen Nanke Jia ’a n ............... — 55
21 94 26
Except for RMB21,000, RMB26,000 and RMB26,000 as at 31 December 2022, 2023 and 2024,
respectively, which are rental and other deposits, uns ecured and repayable according to the mutually agreed
terms of payment, the remaining amounts are non-trade i n nature, unsecured, interest-free and repayable on
demand. As at 30 April 2025, the above non-trade amounts had been fully settled.
(vii) Loan from a related party/related parties
The Group
As at 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Lens Technology (HK) Co., Limited (note) . 1,027,632 1,065,146 —
The Company
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
Lens Technology (HK) Co., Limited (note) . 1,027,632 1,065,146 —
Lens Technology (Changsha) ........... 3 0 0 , 0 0 0 3 0 0 , 0 0 0 1 , 800,000
Lens Intelligent Control . .............. —— 251,240
1,327,632 1,365,146 2,051,240
The carrying amounts of the above loans
are repayable:
— Within a period of more than one year
b u tn o te x c e e d i n gt w oy e a r s ...... 3 0 0 , 0 0 0 1 , 3 6 5 , 1 4 6 —
— Within a period of more than two years
b u tn o te x c e e d i n gf i v ey e a r s ...... 1 , 0 2 7 , 6 3 2 — 2,051,240
1,327,632 1,365,146 2,051,240
Note: The amounts as at 31 December 2022 and 2023 were unsecured and repayable in 2025 pursuant
to the loan agreement. The amounts bore interest at LPR. The loan was fully settled during the
year ended 31 December 2024.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-98 –


--- page 470 ---
(viii) Contract liabilities
The Group
As at 31 December
Name of related parties 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
C h a n g s h aM a i j i n g ................... 2 , 5 7 8 3 , 1 4 2 1 , 2 1 6
Shenzhen Nanke Jia ’a n ............... — 11
2,578 3,143 1,217
The amounts are trade in nature, un secured and non-interest bearing.
(ix) Amounts due to subsidiaries
The Company
As at 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
L e n sC h a n g s h a..................... 2 , 5 9 4 , 2 8 3 2 , 5 9 5 , 0 8 0 2 , 100,150
L e n sI n t e r n a t i o n a l................... 6 5 , 3 3 1 6 5 , 3 3 0 6 5 , 2 3 1
L e n sT a i z h o u...................... 4 1 , 9 0 2 4 5 , 3 6 4 4 0 , 8 2 7
L e n sX i a n g t a n ..................... 6 , 2 8 0 2 4 , 7 5 3 109,287
Shenzhen Lens Intelligence Robot ........ 5 , 0 9 2 2 1 4 —
Lens Intelligent Control . .............. 2 , 2 3 5 3 , 9 5 9 2 , 2 7 7
S h e n z h e nL e n sS y s t e m ............... 2 , 2 9 5 4 5 4 4 5 4
2,717,418 2,735,154 2,318,226
The amount is non-trade in nature, unsecured, interest-free and repayable on demand.
(x) Lease liabilities
The Group
As at 31 December
Name of related party 2022 2023 2024
RMB’000 RMB ’000 RMB ’000
M s .C h a uK w a nF e i ................. 9 1 6 9 2 4 9 5 5
The amounts are non-trade in nature and represen t leasing of office and repayable as per the lease
contracts. The lease contracts will be mature until June 2026 and the Group intends not to renew or extend the
lease before the expiration of the lease.
APPENDIX I ACCOUNTANTS ’ REPORT
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--- page 471 ---
(d) Compensation of key management personnel
The remuneration of directors of the Company and ot her members of key management of the Group during
the Track Record Period is as follows:
Year ended 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
S a l a r i e s ,a l l o w a n c e sa n do t h e rb e n e f i t s......... 9 , 8 0 2 1 0 , 3 1 9 1 1 , 7 0 2
D i s c r e t i o n a r yb o n u s...................... 4 , 7 9 4 5 , 0 4 4 5 , 7 1 4
R e t i r e m e n tb e n e f i ts c h e m ec o n t r i b u t i o n s........ 1 0 4 1 1 2 1 0 4
14,700 15,475 17,520
The remuneration of directors, supervisors and ot her members of key management is determined by the
remuneration committee having regard to the pe rformance of individuals and market trends.
43. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Group ’s liabilities arising from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activitie s are those for which cash flows were, or future cash flows
will be, classified in the Group ’s consolidated statements of cash flows as cash flows from financing activities.
Borrowings
Loan from a
related party
Lease
liabilities
Amounts due
to related
parties
Dividend
payable Total
RMB’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
A sa t1J a n u a r y2 0 2 2 .......... 1 8 , 075,738 1,390,018 54,839 460 — 19,521,055
F i n a n c i n gc a s hf l o w s.......... ( 952,760) (407,212) (32,126) (439) (523,722) (1,916,259)
D i v i d e n d sd e c l a r e d ........... ———— 523,722 523,722
N e wl e a s e se n t e r e d ........... —— 25,194 —— 25,194
E a r l yt e r m i n a t i o no fl e a s e ....... —— (2,076) —— (2,076)
Non-cash transactions (note) ..... 720,793 ———— 720,793
E x c h a n g ea d j u s t m e n t s ......... 557,939 ———— 557,939
I n t e r e s te x p e n s e s ............. 569,573 44,826 1,817 —— 616,216
A t3 1D e c e m b e r2 0 2 2 ......... 1 8 , 971,283 1,027,632 47,648 21 — 20,046,584
F i n a n c i n gc a s hf l o w s.......... ( 4 , 136,696) — (28,809) 73 (1,033,283) (5,198,715)
D i v i d e n d sd e c l a r e d ........... ———— 1,033,283 1,033,283
N e wl e a s e se n t e r e d ........... —— 28,210 —— 28,210
E x c h a n g ea d j u s t m e n t s ......... ( 4 7 , 5 3 3 ) ———— (47,533)
I n t e r e s te x p e n s e s ............. 471,022 37,514 1,450 —— 509,986
A t3 1D e c e m b e r2 0 2 3 ......... 1 5 , 258,076 1,065,146 48,499 94 — 16,371,815
F i n a n c i n gc a s hf l o w s.......... ( 1 , 939,523) (1,066,603) (30,580) (68) (1,528,490) (4,565,264)
D i v i d e n d sd e c l a r e d ........... ———— 1,528,490 1,528,490
N e wl e a s e se n t e r e d ........... —— 177,866 —— 177,866
E a r l yt e r m i n a t i o no fl e a s e ....... —— (619) —— (619)
Non-cash transactions (note) ..... 625,740 ———— 625,740
E x c h a n g ea d j u s t m e n t s ......... ( 6 8 7 ) ———— (687)
I n t e r e s te x p e n s e s ............. 382,959 1,457 4,022 —— 388,438
A t3 1D e c e m b e r2 0 2 4 ......... 1 4 , 326,565 — 199,188 26 — 14,525,779
Note: The amount represents the dr awdown of borrowings used for d irect settlement of the Group ’s obligations to its
suppliers, as agreed upon between the othe r financial institution and the Group.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-100 –


--- page 472 ---
44. PARTICULARS OF PRINCIPAL SUBSIDIARIES OF THE COMPANY
The Company
As at 31 December
2022 2023 2024
RMB’000 RMB ’000 RMB ’000
U n l i s t e di n v e s t m e n t s ,a tc o s t....................... 3 1 , 1 5 0 , 2 8 5 3 4 , 2 7 9 , 4 7 7 3 4 , 7 5 3 , 6 6 9
General information of subsidiaries
Place of
incorporation/
registration and
operation
Proportion of effective ownership interest held by Company
Directly Indirectly
Name of subsidiaries
Registered
capital
At 31 December Date of
report
At 31 December Date of
report Principal activities2022 2023 2024 2022 2023 2024
%% % % % % % %
Lens International (notes i) ..... H o n gK o n g
5 November 2010
USD
1,437,194,600
100.00 100.00 100.00 100.00 ———— Trade and investment
Lens Technology (Kunshan)
(note ii) .............
The PRC
31 December 2006
USD
25,000,000
75.00 75.00 75.00 75.00 25.00 25.00 25.00 25.00 Manufacturing and
sales of consumer
electronics
Lens One Technology
(Shenzhen) Company Limited
藍思旺科技(深圳)
有限公司
(note ii) .............
The PRC
19 April 2006
HK$
120,000,000
75.00 75.00 75.00 75.00 25.00 25.00 25.00 25.00 Manufacturing and
sales of consumer
electronics
Lens Shenzhen (note ii) ....... T h eP R C
18 September 2003
RMB
50,000,000
———— 100.00 100.00 100.00 100.00 Sales of products and
research and
development
Lens Changsha (note ii) ....... T h eP R C
26 January 2011
USD
3,103,032,466
75.00 75.00 84.34 84.34 25.00 25.00 15.66 15.66 R&D, production and
sales of window
protection screens
smart wearables and
smart vehicle
cockpits
Lens Hualian (note ii) ........ T h eP R C
13 June 2012
RMB
20,000,000
———— 51.00 51.00 51.00 51.00 Manufacturing and
Sales of consumer
electronics
Lens Xiangtan (note ii) ....... T h eP R C
23 July 2012
RMB
3,464,852,719
61.79 61.79 57.33 57.33 38.21 38.21 42.67 42.67 R&D, production,
assembly and sales
of electronic
products and spare
parts business
Lens Technology, Inc.
(note iv) .............
U.S.
9 January 2015
USD
1,000,000
———— 100.00 100.00 100.00 100.00 Trading
Lens Intelligent Robot
(note ii) .............
The PRC
22 July 2016
RMB
100,000,000
60.00 60.00 60.00 60.00 ———— R&D of intelligent
equipment and robot
Lens One Technology
(Dong Guan) (note ii) .....
The PRC
16 January 2012
USD
60,000,000
———— 100.00 100.00 100.00 100.00 Manufacturing and
sales of consumer
electronics
Lens Dongguan (note ii) ....... T h eP R C
6 July 2010
RMB
3,225,987,115
100.00 100.00 100.00 100.00 ———— R&D, production and
sales of window
protection screens
Lens Precision
(Dongguan) (note ii) ......
The PRC
24 February 2017
RMB
1,060,666,700
100.00 100.00 100.00 100.00 ———— Manufacturing and
sales of consumer
electronics
Lens Intelligent
Control (note ii) .........
The PRC
18 March 2017
RMB
826,112,640
75.00 38.34 33.24 33.24 25.00 61.66 66.76 66.76 Manufacture of
electronic
components
APPENDIX I ACCOUNTANTS ’ REPORT
– I-101 –


--- page 473 ---
Place of
incorporation/
registration and
operation
Proportion of effective ownership interest held by Company
Directly Indirectly
Name of subsidiaries
Registered
capital
At 31 December Date of
report
At 31 December Date of
report Principal activities2022 2023 2024 2022 2023 2024
%% % % % % % %
Lens Viet Nam (note iii) ...... V I E TN A M
12 June 2017
USD
360,000,000
———— 100.00 100.00 100.00 100.00 Production of electronic
components and
maintenance of
electronic and
optical equipment
Liuyang Panzhi (note ii) ....... T h eP R C
28 October 2018
RMB
8,000,000
100.00 100.00 100.00 100.00 ———— Business service industry
Changsha Lens
New Material (note ii) .....
The PRC
10 October 2018
RMB
100,000,000
100.00 100.00 100.00 100.00 ———— Sales of consumer
electronics
Lens System Integration (note ii) .. T h eP R C
22 March 2019
RMB
110,116,718
100.00 100.00 100.00 100.00 ———— Provision of information
system R&D and
integration services,
including the
industrial Internet
Changsha Yong ’an New Materials
(note ii) .............
The PRC
25 September 2019
RMB
10,000,000
51.00 51.00 51.00 51.00 ———— Sales of consumer
electronics
Lens Taizhou (note ii) ........ T h eP R C
3 May 2016
RMB
4,611,397,559
—— 2.17 2.17 100.00 100.00 97.83 97.83 R&D, manufacture and
sales of aluminum,
magnesium and
other new alloy
materials for mid-
frames and related
components of
consumer electronics
Hunan Lens New
Energy Company Limited
湖南藍思新能源
有限公司 (note ii) .......
The PRC
28 October 2021
RMB
1,000,000,000
100.00 100.00 100.00 100.00 ———— Sales of consumer
electronics
Shenzhen Lens Wang (note ii) ... T h eP R C
17 June 2022
RMB
100,000,000
———— 100.00 100.00 100.00 100.00 Supply chain
management
Shenzhen Lens System
(note ii) .............
The PRC
5 May 2022
RMB
5,000,000
———— 100.00 100.00 100.00 100.00 Sales of consumer
electronics
Shenzhen Lens Intelligent
Manufacturing
Technology
Company Limited
深圳藍思智造科技
有限公司 (note vi) .......
The PRC
26 April 2022
RMB
2,000,000
———— 100.00 100.00 100.00 N/A Sales of consumer
electronics
Shenzhen Lens
Intelligence Robot
(note ii) .............
The PRC
18 August 2022
RMB
100,000,000
———— 100.00 100.00 100.00 100.00 Sales of consumer
electronics
MOSS TECHNOLOGY,
S.A.DE C.V. (note iv) .....
Mexico
4 May 2022
MXN
50,000
———— 100.00 100.00 100.00 100.00 Sales of consumer
electronics
Lens One Technology
(Guangxi) Company Limited
藍思旺科技(廣西)
有限公司 (note iv) .......
The PRC
31 May 2022
USD
2,000,000
———— 100.00 100.00 100.00 100.00 Sales of consumer
electronics
Hunan Blue Crystal
Photovoltaic (note ii) ......
The PRC
10 April 2023
RMB
50,000,000
———— N/A 100.00 100.00 100.00 Sales of consumer
electronics
LENS Technology
Japan Co., Ltd
(notes iv & v) ..........
Japan
26 September 2022
JPY
88,880,000
———— N/A 100.00 100.00 100.00 Sales of consumer
electronics
Fortiter Technology Pte Ltd . . . . . Singapore
18 April 2024
SGD10,000 ———— N/A N/A 100.00 100.00 Sales of consumer
electronics
F o r t i t e rT e c h n o l o g y .......... T h a i l a n d
28 May 2024
THB
505,000,000
———— N/A N/A 98.06 98.06 Sales of consumer
electronics
* For identification purpose only
Notes:
(i) The statutory financial statements of this subs idiary for the years ended 31 December 2022, 2023 and 2024
were prepared in accordance with HKFRS Accounting Standards and were audited by Morison Heng CPA
Limited, certified public accounta nts registered in the Hong Kong.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-102 –


--- page 474 ---
(ii) The statutory financial statements of the subs idiaries for the years ended 31 December 2022, 2023 and 2024
were prepared in accordance with the relevant accounting principles and financial regulations applicable to the
PRC enterprises and were audited by Pan-China Certified Public Accountants LLP ( 天健會計師事務所(特殊
普通合夥), certified public accountants registered in the PRC.
(iii) The statutory financial statements of this subs idiary for the years ended 31 December 2022, 2023 and 2024
were prepared in accordance with relevant accounting principles generally accepted in the Vietnam were
audited by Ernst & Young.
(iv) No statutory financial statements have been prepared for these entities since the date of incorporation as these
entities were not subject to any statutory audit requirements under the relevant rules and regulations in their
jurisdiction of incorporation.
(v) This subsidiary was acquired in 2023.
(vi) This subsidiary was deregistered in May 2025. The sta tutory financial statements of this subsidiary for the
years ended 31 December 2022 and 2023 were prepared in accordance with the relevan t accounting principles
and financial regulations applicable to the PRC enterprises and were audited by Pan-China Certified Public
Accountants LLP ( 天健會計師事務所(特殊普通合夥), certified public accountants registered in the PRC.
All the subsidiaries of the Company are limited liability companies. All subsidiaries have adopted 31 December, as
their financial year end date.
None of the subsidiaries had issued any debt securities during the Track Record Period.
The directors of the Company considered that carrying amounts of non-controlling interests as at 31 December 2022,
2023 and 2024 is individually insignificant to the Group and n o detailed financial information of non-wholly owned
subsidiaries is disclosed.
45. EVENT AFTER THE END OF THE REPORTING PERIOD
Except as disclosed in note 15 of the Historical Financial I nformation, the Group has no other significant event after
the end of the Track Record Period.
46. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements of the Group, the Compan y or any of its subsidiaries have been prepared in respect
of any period subsequent to 31 December 2024.
APPENDIX I ACCOUNTANTS ’ REPORT
– I-103 –


--- page 475 ---
The following is the text of a report set ou t on pages IA-1 to IA-2, received from the
Company ’s reporting accountants, Deloitte Touche To hmatsu, Certified Public Accountants, Hong
Kong, for the purpose of incorporation in this prospectus. The information set out on pages IA-3 to
IA-28 is the unaudited condensed consolidated financial statements of the Group for the three
months ended 31 March 2025 and does not form part of the Accountant ’s Report from the reporting
accountant, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, as set out in
Appendix I to this prospectus, and is included herein for information purpose only.
REPORT ON REVIEW OF CONDENSED CO NSOLIDATED FINANCIAL STATEMENTS
TO THE BOARD OF DIRECTORS OF LENS TECHNOLOGY CO., LTD. 藍思科技股份有限
公司
Introduction
We have reviewed the condensed consolidated financial statements of Lens Technology Co.,
Ltd. 藍思科技股份有限公司 (the ‘‘Company ’’) and its subsidiaries (collectively referred to as the
‘‘Group ’’) set out on pages IA-3 to IA-28, which comprise the condensed consolidated statement of
financial position as of 31 March 2025, and the rela ted condensed consolidated statement of profit
or loss and other comprehensive income, conden sed consolidated statement of changes in equity
and condensed consolidated statement of cash flo ws for the three months then ended, and notes to
the condensed consolidated financial statement s. The directors of the Company are responsible for
the preparation and presentation of these condense d consolidated financial statements in accordance
with IAS 34 ‘‘Interim Financial Reporting ’’ issued by the International Accounting Standards
Board. Our responsibility is to express a conclusi on on these condensed consolidated financial
statements based on our review, and to repo rt our conclusion solely to you, as a body, in
accordance with our agreed terms of engagemen t, and for no other purpose. We do not assume
responsibility towards or accept liability to an y other person for the contents of this report.
Scope of Review
We conducted our review in accordance with H ong Kong Standard on Review Engagements
2410 ‘‘Review of Interim Financial Information P erformed by the Independent Auditor of the
Entity ’’ (‘‘HKSRE 2410 ’’) issued by the Hong Kong Institute of Certified Public Accountants. A
review of these condensed consolidated financial st atements consists of making inquiries, primarily
of persons responsible for financial and account ing matters, and applying analytical and other
review procedures. A review is substantially les s in scope than an audit conducted in accordance
with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance
that we would become aware of all significant m atters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-1 –


--- page 476 ---
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
condensed consolidated financial statements are no t prepared, in all material respects, in accordance
with IAS 34.
Other Matter
The comparative condensed consolidated statem ent of profit or loss and other comprehensive
income, condensed consolidated statement o f changes in equity and condensed consolidated
statement of cash flows for the three months end ed 31 March 2024 and the relevant notes to the
condensed consolidated financial statement s have not been reviewed in accordance with HKSRE
2410.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
30 June 2025
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-2 –


--- page 477 ---
CONDENSED CONSOLIDATED STATEME NT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Three months ended 31 March
2025 2024
Notes RMB’000 RMB ’000
(Unaudited) (Unaudited)
R e v e n u e.................................. 5
C o n t r a c t sw i t hc u s t o m e r s..................... 1 7 , 026,690 15,460,491
L e a s e s .................................. 3 6 , 5 1 0 3 7 , 7 8 4
T o t a lr e v e n u e .............................. 1 7 , 063,200 15,498,275
C o s to fs a l e s............................... ( 1 5 , 079,181) (13,850,837)
G r o s sp r o f i t ............................... 1 , 984,019 1,647,438
O t h e ri n c o m e .............................. 6 106,782 151,858
Reversal of impairment losses under expected credit loss
(‘‘ECL’’)m o d e l ,n e t ........................ 7 24,439 10,200
O t h e rg a i n sa n dl o s s e s ,n e t ..................... 8 123,818 37,226
S e l l i n ge x p e n s e s ............................ ( 149,116) (157,133)
A d m i n i s t r a t i v ee x p e n s e s ....................... ( 780,477) (762,961)
R e s e a r c ha n dd e v e l o p m e n te x p e n s e s............... ( 791,408) (574,622)
O t h e re x p e n s e s ............................. ( 1 1 4 ) ( 1 0 2 )
Share of results of investments accounted for using
t h ee q u i t ym e t h o d.......................... 2 , 2 5 7 ( 3 , 8 3 3 )
L i s t i n ge x p e n s e s ............................ ( 9 7 8 ) —
F i n a n c ec o s t s .............................. 9 (79,865) (102,480)
P r o f i tb e f o r et a x ............................ 439,357 245,591
I n c o m et a xc r e d i t............................ 10 14,583 70,127
Profit for the period ......................... 11 453,940 315,718
Other comprehensive income (expense):
Item that may be reclassified subsequently to
profit or loss:
Exchange differences arising on translation of
f o r e i g no p e r a t i o n s.......................... ( 7 0 0 ) ( 2 2 , 1 7 8 )
Item that will not be reclassified to profit or loss:
Fair value gain on investments in equity instruments
measured at fair value through other comprehensive
income ( ‘‘FVTOCI ’’)........................ 2 , 7 6 5 —
T o t a lc o m p r e h e n s i v ei n c o m ef o rt h ep e r i o d .......... 456,005 293,540
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-3 –


--- page 478 ---
Three months ended 31 March
2025 2024
Note RMB’000 RMB ’000
(Unaudited) (Unaudited)
Profit for the period attributable to:
— O w n e r so ft h eC o m p a n y ................... 428,885 309,202
— N o n - c o n t r o l l i n gi n t e r e s t s................... 2 5 , 0 5 5 6 , 5 1 6
453,940 315,718
Total comprehensive income for the period
attributable to:
— O w n e r so ft h eC o m p a n y ................... 430,950 287,024
— N o n - c o n t r o l l i n gi n t e r e s t s................... 2 5 , 0 5 5 6 , 5 1 6
456,005 293,540
Earnings per share .......................... 13
— B a s i c( R M B )........................... 0 . 0 9 0 . 0 6
— D i l u t e d( R M B ) .......................... 0 . 0 9 0 . 0 6
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-4 –


--- page 479 ---
CONDENSED CONSOLIDATED ST ATEMENT OF FINANCIAL POSITION
31 March
2025
31 December
2024
Notes RMB’000 RMB ’000
(Unaudited) (Audited)
Non-current assets
P r o p e r t y ,p l a n ta n de q u i p m e n t................... 14 38,237,196 37,809,136
R i g h t - o f - u s ea s s e t s........................... 14 3,441,621 3,441,157
I n v e s t m e n tp r o p e r t i e s......................... 888,276 900,777
I n t a n g i b l ea s s e t s ............................ 14 1,771,012 1,822,041
G o o d w i l l ................................. 2 , 970,144 2,970,144
Investments accounted for using the equity method . . . . 334,168 325,665
E q u i t yi n s t r u m e n t sa tF V T O C I .................. 483,159 445,109
T i m ed e p o s i t s .............................. 101,728 103,697
D e f e r r e dt a xa s s e t s ........................... 15 1,422,271 1,387,226
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s................ 19 1,711,147 1,038,314
51,360,722 50,243,266
Current assets
I n v e n t o r i e s ................................ 17 6,443,610 7,160,553
T r a d ea n db i l l sr e c e i v a b l e s ..................... 18 8,767,788 10,865,736
B i l l sr e c e i v a b l e sa tF V T O C I .................... 2 7 , 3 4 5 9 , 7 7 9
P r e p a y m e n t sa n do t h e rr e c e i v a b l e s................ 19 1,081,144 1,000,455
A m o u n t sd u ef r o mr e l a t e dp a r t i e s ................. 26 918 24,873
Financial assets at fair value through profit or loss
(‘‘FVTPL ’’) .............................. 16 1,086,599 354,917
I n c o m et a xr e c o v e r a b l e........................ 8 1 , 6 8 2 4 5 , 9 7 6
T i m ed e p o s i t s .............................. 327,568 322,412
R e s t r i c t e db a n kd e p o s i t s....................... 5 0 , 5 3 3 5 1 , 2 7 6
B a n kb a l a n c e sa n dc a s h ....................... 9 , 914,183 10,936,804
27,781,370 30,772,781
Current liabilities
T r a d ea n do t h e rp a y a b l e s ...................... 20 14,647,574 16,365,834
F i n a n c i a ll i a b i l i t i e sa tF V T P L ................... 16 4,976 9,620
A m o u n t sd u et or e l a t e dp a r t i e s .................. 26 26 26
I n c o m et a xp a y a b l e .......................... 1 4 , 6 9 0 1 1 0 , 7 8 7
B o r r o w i n g s................................ 21 6,689,243 6,518,634
L e a s el i a b i l i t i e s............................. 5 8 , 6 2 2 4 7 , 6 5 9
C o n t r a c tl i a b i l i t i e s ........................... 1 9 , 1 3 4 1 2 , 6 0 1
21,434,265 23,065,161
Net current assets ........................... 6 , 347,105 7,707,620
Total assets less current liabilities ............... 5 7 , 707,827 57,950,886
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-5 –


--- page 480 ---
31 March
2025
31 December
2024
Notes RMB’000 RMB ’000
(Unaudited) (Audited)
Non-current liabilities
B o r r o w i n g s................................ 21 7,113,739 7,807,931
L e a s el i a b i l i t i e s............................. 159,744 151,529
P r o v i s i o n ................................. 1 7 , 0 0 0 1 8 , 8 8 0
D e f e r r e dt a xl i a b i l i t i e s ........................ 15 380,660 385,058
D e f e r r e di n c o m e ............................ 726,199 741,578
8,397,342 9,104,976
Net assets ................................ 4 9 , 310,485 48,845,910
Capital and reserves
S h a r ec a p i t a l............................... 22 4,982,879 4,982,879
R e s e r v e s .................................. 4 4 , 113,282 43,673,762
E q u i t ya t t r i b u t a b l et oo w n e r so ft h eC o m p a n y ........ 4 9 , 096,161 48,656,641
N o n - c o n t r o l l i n gi n t e r e s t s ....................... 214,324 189,269
Total equity ............................... 4 9 , 310,485 48,845,910
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-6 –


--- page 481 ---
CONDENSED CONSOLIDATED ST ATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
capital
Share
premium
Treasury
share
Capital
reserve
FVTOCI
reserve
Translation
reserve
Statutory
reserve
Retained
profits Subtotal
Non-
controlling
interests Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2025 (unaudited) . . . . 4,982,879 20,613,513 (280,01 9) 305,131 160,083 18,837 2,620,270 20,235,947 48,656,641 189,269 48,845,910
P r o f i tf o rt h ep e r i o d .......... ——————— 428,885 428,885 25,055 453,940
Other comprehensive income
(expense) for the period . . . . . ———— 2,765 (700) —— 2,065 — 2,065
Total comprehensive income
(expense) for the period . . . . . ———— 2,765 (700) — 428,885 430,950 25,055 456,005
Recognition of equity-settled
s h a r e - b a s e dp a y m e n t s....... ——— 8,570 ———— 8,570 — 8,570
At 31 March 2025 (unaudited) . . . . 4,982,879 20,613,513 (280,01 9) 313,701 162,848 18,137 2,620,270 20,664,832 49,096,161 214,324 49,310,485
At 1 January 2024 (audited) . . . . . 4,983,228 20,588,504 (500,05 7) 219,367 160,083 152,927 2,404,249 18,330,684 46,338,985 182,642 46,521,627
P r o f i tf o rt h ep e r i o d .......... ——————— 309,202 309,202 6,516 315,718
Other comprehensive expense
f o rt h ep e r i o d ............ ————— (22,178) —— (22,178) — (22,178)
Total comprehensive (expense)
income for the period . . . . . . . ————— (22,178) — 309,202 287,024 6,516 293,540
D i s t r i b u t i o n ............... ————————— (46,858) (46,858)
Recognition of equity-settled
s h a r e - b a s e dp a y m e n t s....... ——— 51,265 ———— 51,265 — 51,265
At 31 March 2024 (unaudited) . . . . 4,983,228 20,588,504 (500,05 7) 270,632 160,083 130,749 2,404,249 18,639,886 46,677,274 142,300 46,819,574
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-7 –


--- page 482 ---
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
NET CASH FROM OPERATING ACTIVITIES ........ 2 , 6 3 0 , 4 4 3 2 , 0 2 9 , 8 5 4
INVESTING ACTIVITIES
Proceeds from disposal of fina ncial assets/derivatives
a tF V T P L ................................... 1 , 7 5 4 , 2 0 2 4 1 1 , 7 7 9
R e p a y m e n tf r o mr e l a t e dp a r t i e s...................... 2 4 , 1 8 2 1 , 9 1 5
U p f r o n tp a y m e n t sf o rl e a s e h o l dl a n d .................. — (68,558)
A c q u i s i t i o no fi n v e s t m e n t sa c c o u n t e df o re q u i t ym e t h o d..... ( 3 4 , 7 9 7 ) —
P u r c h a s eo fp r o p e r t y ,p l a n ta n de q u i p m e n t .............. ( 2 , 4 0 9 , 6 9 7 ) ( 1 , 4 9 9 , 3 5 6 )
P u r c h a s eo ff i n a n c i a la s s e t s / d e r i v a t i v e sa tF V T P L ......... ( 2 , 4 6 3 , 6 5 2 ) ( 1 , 0 5 9 )
O t h e ri n v e s t i n gc a s hf l o w s......................... 4 , 9 9 7 1 0 , 3 3 3
Net cash used in investing activities ................. ( 3 , 1 2 4 , 7 6 5 ) ( 1 , 1 4 4 , 9 4 6 )
FINANCING ACTIVITIES
N e wb o r r o w i n g sr a i s e d ........................... — 1,450,000
I n t e r e s tp a i df o rl o a nf r o mar e l a t e dp a r t y ............... — (66,603)
R e p a y m e n to fl o a nf r o mar e l a t e dp a r t y ................ — (1,000,000)
R e p a y m e n to fl e a s el i a b i l i t i e s....................... ( 1 3 , 1 4 5 ) ( 4 , 7 7 0 )
I n t e r e s tp a i df o rb o r r o w i n g s ........................ ( 7 4 , 9 7 5 ) ( 9 8 , 1 6 1 )
R e p a y m e n to fb o r r o w i n g s .......................... ( 5 2 8 , 5 0 2 ) ( 1 , 8 1 5 , 6 9 8 )
O t h e rf i n a n c i n gc a s hf l o w s......................... ( 3 , 3 7 8 ) ( 4 2 2 )
Net cash used in financing activities ................. ( 6 2 0 , 0 0 0 ) ( 1 , 5 3 5 , 6 5 4 )
Net decrease in cash and cash equivalents ............. ( 1 , 1 1 4 , 3 2 2 ) ( 6 5 0 , 7 4 6 )
E f f e c to ff o r e i g ne x c h a n g er a t ec h a n g e s................ 9 1 , 7 0 1 ( 5 , 2 6 7 )
Cash and cash equivalents at the beginning of the period . . 10,936,804 10,493,519
C a s ha n dc a s he q u i v a l e n t sa tt h ee n do ft h ep e r i o d...... 9 , 9 1 4 , 1 8 3 9 , 8 3 7 , 5 0 6
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-8 –


--- page 483 ---
NOTES TO THE CONDENSED CONSOL IDATED FINANCIAL STATEMENTS
1. INFORMATION
Lens Technology Co., Ltd. 藍思科技股份有限公司 (the ‘‘Company ’’) was incorporated in the PRC as a joint stock
company with limited liability. In March 2015, the Company was listed on the Shenzhen Stock Exchange (stock code:
300433). The Company ’s immediate and ultimate holding company is Lens Technology (HK) Co., Ltd. The Company is
ultimately controlled by Ms. Chau Kwan Fei and Mr. Cheng Chun Lung ( ‘‘Mr. Cheng ’’), spouse of Ms. Chau Kwan Fei,
who act in concert with each other. Ms. Chau Kwan Fei is also the Chair and an executive director of the Company, and
Mr. Cheng is the Vice-Chair and an executive director of th e Company. Lens Technology (HK) Co., Ltd., Ms. Chau Kwan
Fei and Mr. Cheng together are referred to the Controlling S hareholders. The addresses of the registered office and
principal place of business of the Company are the same as the registered office in the PRC and the headquarter in the
PRC as stated in the section headed ‘‘Corporate Information ’’of the Prospectus.
During the three months ended 31 March 2025, the Company and its subsidiaries (the ‘‘Group ’’) is principally
engaged in the businesses of research and development, desi gn, manufacturing and sales o f various structural parts,
functional modules and others, such as complete device asse mbly for consumer electronics, smart vehicles and other
emerging areas.
2. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial
Reporting issued by the International Accounting Standards Board (the ‘‘IASB ’’) as well as the applicable disclosure
requirements of the Rules Governing the Listing of Securities on the Stock Exchange.
The condensed consolidated financial statements have been prepared on the historical cost basis except for certain
financial instruments that are measured at fair values.
3. APPLICATION OF IFRS ACCOUNTING STANDARDS
In the current interim period, the Group has applied the fo llowing amendments to IFRS Accounting Standards issued
by the IASB, for the first time, which are mandatorily effective for the Group ’s annual period beginning on 1 January 2025
for the preparation of the Group ’s condensed consolidated financial statements:
Amendments to IAS 21 Lack of Exchangeability
The application of the amendments to IFRS Accounting Stand ards in the current interim period has had no material
impact on the Group ’s financial positions and performance for the curren t and prior periods and/or on the disclosures set
out in these condensed consolidated financial statements.
4. MATERIAL ACCOUNTING POLICY INFORMATION
Other than additional accounting policies resulting from the application of amendments to IFRS Accounting
Standards, the accounting policies used in the condensed consol idated financial statements for the three months ended 31
March 2025 are the same as those followed in the preparation of the Group ’s historical financial information for the three
years ended 31 December 2024 included in the accountants ’ report as set out in Appendix I to the Prospectus.
The condensed consolidated financial statements and the selected notes are included to explain events and
transactions that are significant to an understanding of th e changes in financial position and performance of the Group
since the latest consolidated financial statements as at and for the year ended 31 December 2024. The condensed
consolidated financial statements and notes do not include all of the information and disclosures required for a full set of
financial statements prepared in accordance with IFRS Accounting Standards.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-9 –


--- page 484 ---
5. REVENUE AND SEGMENT INFORMATION
The following is an analysis of the Group ’s revenue from major end use products and services:
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Smartphones and computers . . ............................ 1 4 , 4 8 0 , 7 5 1 1 3 , 119,478
S m a r tv e h i c l e sa n dc o c k p i t s.............................. 1 , 5 1 8 , 4 0 1 1 , 428,921
Intelligent head-mounted displays and smart wearables . . ......... 6 7 5 , 5 2 8 663,133
O t h e r ss m a r td e v i c e s................................... 1 1 8 , 1 4 4 6 1 , 7 3 3
S c r a p sa n dm a t e r i a l s................................... 1 0 5 , 0 9 9 7 4 , 4 0 7
P r o c e s s i n gf e e ....................................... 1 0 7 , 4 4 9 9 0 , 4 4 2
O t h e r s ............................................. 2 1 , 3 1 8 2 2 , 3 7 7
R e v e n u ef r o mc o n t r a c t sw i t hc u s t o m e r s...................... 1 7 , 0 2 6 , 6 9 0 1 5 , 460,491
L e a s e s ............................................ 3 6 , 5 1 0 3 7 , 7 8 4
T o t a l ............................................. 1 7 , 0 6 3 , 2 0 0 1 5 , 498,275
Timing of revenue from contracts with customers recognition
All revenue from contracts with customers within the scope of IFRS 15 are recognised at a point in time.
Geographical information
The Group ’s operations are located in the PRC (country of domicile), the United States of America (the
‘‘U.S. ’’), Vietnam, Mexico and Japan.
Information about the Group ’s revenue from external customers is presented based on delivery destination or
the shipping destination on customs declaration.
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Offshore
— Special supervision territory in China (note) .......... 6 , 0 3 4 , 7 7 3 5 , 732,452
— V i e t n a m................................... 1 , 2 4 9 , 2 6 5 866,997
— A s i a( e x c l u d i n gM a i n l a n dC h i n aa n dV i e t n a m ) ........ 1 , 2 1 6 , 1 1 4 1 , 340,209
— N o r t hA m e r i c a .............................. 5 4 1 , 1 8 5 620,672
— O t h e r s .................................... 2 2 9 , 1 1 8 8 8 , 0 7 8
9,270,455 8,648,408
Mainland China (excluding special supervision territory) (note) . 7,792,745 6,849,867
T o t a l ......................................... 1 7 , 0 6 3 , 2 0 0 1 5 , 498,275
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-10 –


--- page 485 ---
Note: During the three months ended 31 March 2025, the amount of Group ’s total revenue from Mainland
China (country of domicile), represented by domestic and special supervision territory within the PRC
(excluding Hong Kong, Macao and Taiwan), is R MB13,827,518,000 (three months ended 31 March
2024: RMB12,582,319,000).
Information about the Group ’s non-current assets is presented based on the geographical location of the assets.
The Group ’s non-current assets (excluding deferred tax asse ts and financial assets) of RMB43,348,439,000 (31
December 2024: RMB42,649,416,000) are located in th e PRC as at 31 March 2025. The remaining non-current
assets are located in the U.S., Vietnam, Mexico and Japan, with each jurisdiction ’s individual non-current assets
constituting less than 10% to the Group ’s non-current assets.
Segment information
For the purpose of resource allocation and assessm ent of performance, the executive directors of the
Company, being the chief operating decision makers, fo cus on the overall results and financial position of the
Group. The Group has only one single operating and reportable segment.
6. OTHER INCOME
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Government grants
— related to expense items (note) ........................ 1 8 , 7 7 3 2 9 , 0 6 8
— r e l a t e dt oa s s e t s .................................. 1 5 , 3 7 9 1 5 , 2 4 2
34,152 44,310
I n t e r e s ti n c o m e ...................................... 6 0 , 6 7 7 6 9 , 6 0 6
C o m p e n s a t i o ni n c o m e.................................. 5 , 6 1 1 9 , 8 9 7
O t h e r s ............................................. 6 , 3 4 2 2 8 , 0 4 5
106,782 151,858
Note: The amount mainly represents various subsidies received from the PRC government authorities for the
purpose of motivating the business development of the Group. There were no unfulfilled conditions or
contingencies relating to these government grants.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-11 –


--- page 486 ---
7. REVERSAL OF IMPAIRMENT LOSSES UNDER ECL MODEL, NET
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Impairment losses reversed (recognised) on:
— Trade and bills receivables .......................... 2 4 , 8 0 2 1 1 , 2 2 3
— Other receivables ................................. ( 5 9 0 ) ( 1 , 0 3 4 )
— A m o u n t sd u ef r o mr e l a t e dp a r t i e s...................... 2 2 7 1 1
24,439 10,200
8. OTHER GAINS AND LOSSES, NET
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
N e tf o r e i g ne x c h a n g eg a i n s( l o s s e s ) ........................ 9 4 , 9 3 0 ( 3 , 3 7 1 )
Net gain from changes in fair value of financial assets/liabilities
a tF V T P L ........................................ 2 6 , 8 7 6 3 8 , 9 0 0
Gain on disposal of property, plant and equipment and intangible
a s s e t s ........................................... 2 , 0 1 2 1 , 6 9 7
123,818 37,226
9. FINANCE COSTS
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
I n t e r e s to nb o r r o w i n g s ................................. 7 8 , 4 8 5 100,669
I n t e r e s to nl o a nf r o mar e l a t e dp a r t y ........................ — 1,457
Interest on lease liabilities . . . ............................ 1 , 3 8 0 3 5 4
T o t a lb o r r o w i n gc o s t s .................................. 7 9 , 8 6 5 102,480
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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--- page 487 ---
10. INCOME TAX CREDIT
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Current tax:
— P R CE n t e r p r i s eI n c o m eT a x .......................... 1 1 , 4 2 4 3 6 , 8 3 2
— H o n gK o n g ..................................... 2 0 , 1 9 9 2 0
— V i e t n a m ....................................... 1 6 5 , 0 3 7
— O t h e rj u r i s d i c t i o n s ................................ 4 4 5 3
31,683 41,942
Deferred tax credit (Note 15) ............................. ( 4 6 , 2 6 6 ) ( 112,069)
(14,583) (70,127)
Under the Law of the PRC on Enterprise Income Tax (the ‘‘EIT Law ’’) and Implementation Regulation of the EIT
Law, the tax rate of the Group ’s PRC subsidiaries is 25%.
The Company and certain of its PRC subsidiaries are accredited as High New Tech Enterprises and are subject to
preferential tax rate of 15% during the respective accredited period.
Pursuant to relevant laws and regulations in the PRC, se veral subsidiaries are eligible as a Small Low-profit
Enterprise ( 小型微利企業) and are subject to preferential tax treatments.
The Company ’s subsidiary domiciled in Hong Kong is subject to a two-tiered income tax rate for taxable income
earned in Hong Kong effectively since 1 April 2018. The first 2 million Hong Kong dollars of profits earned by the
qualifying group entity are subject to be taxed at an income tax rate of 8.25%, while the remaining profits will be taxed at
16.5%.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-13 –


--- page 488 ---
11. PROFIT FOR THE PERIOD
Profit for the period has been arrived at after charging (crediting):
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
D e p r e c i a t i o no fp r o p e r t y ,p l a n ta n de q u i p m e n t ................. 1 , 1 9 6 , 6 8 7 1 , 170,497
D e p r e c i a t i o no fi n v e s t m e n tp r o p e r t i e s ....................... 1 2 , 5 0 1 1 4 , 0 4 6
D e p r e c i a t i o no fr i g h t - o f - u s ea s s e t s ......................... 3 1 , 6 9 3 2 5 , 5 3 0
A m o r t i s a t i o no fi n t a n g i b l ea s s e t s .......................... 5 3 , 4 7 5 5 2 , 7 9 5
T o t a ld e p r e c i a t i o na n da m o r t i s a t i o n ......................... 1 , 2 9 4 , 3 5 6 1 , 262,868
C a p i t a l i s e di ni n v e n t o r i e s ............................... ( 9 9 8 , 5 3 8 ) ( 993,389)
295,818 269,479
Impairment losses recognised on p roperty, plant and equipment,
i n c l u d e di na d m i n i s t r a t i v ee x p e n s e s....................... 4 4 , 2 5 1 1 8 , 1 0 9
Other expenses
— D o n a t i o n....................................... 1 1 4 1 0 2
C o s to fi n v e n t o r i e sr e c o g n i s e da sa ne x p e n s e .................. 1 4 , 9 8 9 , 6 6 1 1 3 , 731,098
E x c l u d i n g :w r i t e - d o w no fi n v e n t o r i e s ..................... 3 2 , 5 8 5 7 0 , 3 1 3
12. DIVIDENDS
The directors of the Company do not recommend the paymen t of an interim dividend in respect of the three months
ended 31 March 2025.
Subsequent to the end of the reporting period, a final dividend in respect of the year ended 31 December 2024 of
RMB0.40 per ordinary share, in aggregate of RMB1,983,582 ,000, was approved by shareholders of the Company at the
general meeting on 18 April 2025.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-14 –


--- page 489 ---
13. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share attributable to the owners of the Company is based on the
following data:
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Earnings (RMB ’000):
P r o f i tf o rt h ep e r i o da t t r i b u t a b l et oo w n e r so ft h eC o m p a n y ........ 4 2 8 , 8 8 5 309,202
Number of shares ( ’000):
Weighted average number of ordinary shares for the purpose of
basic earnings per share (note) .......................... 4 , 9 5 4 , 3 5 8 4 , 930,952
Effect of dilutive potential ordinary shares:
R e s t r i c t e dA - s h a r eS c h e m e ............................. 1 6 , 3 9 4 3 , 1 4 4
Weighted average number of ordinary shares for the purpose of
d i l u t e de a r n i n g sp e rs h a r e ............................. 4 , 9 7 0 , 7 5 2 4 , 934,096
Note: Treasury shares and restricted shares subject to repurchase were excluded in calculating the weighted average
number of ordinary shares of the purpose of basic earnings per share.
14. PROPERTY, PLANT AND EQUIPMENT, RIGHT-OF-USE ASSETS AND INTANGIBLE ASSETS
During the three months ended 31 March 2025, the Gr oup purchased property, plant and equipment of
RMB1,677,552,000 (three months en ded 31 March 2024: RMB879,607,000).
During the three months ended 31 March 2025, the Group di sposed of certain property, plant and equipment with an
aggregate carrying amount of RMB5,431,000 (three months ended 31 March 2024: RMB2,521,000), resulting in a gain on
disposal of RMB2,012,000 (three months ended 3 1 March 2024: gain on disposal of RMB1,697,000).
During the three months ended 31 March 2025, the Group rene wed several lease agreements and entered into several
new lease agreements with lease terms ranged from 2 to 5 year s (three months ended 31 March 2024: nil). On date of lease
commencement, the Group recognised right-of-use assets of RMB32,323,000 (three months ended 31 March 2024: nil) and
lease liabilities of RMB32,323,000 (three months ended 31 March 2024: nil).
During the three months ended 31 March 2025, the Group made no upfront payment in respect of leasehold land
(three months ended 31 March 2024: RMB68,558,000).
During the three months ended 31 March 2025, the Group purchased intangible assets of RMB2,446,000 (three
months ended 31 March 2024: nil).
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-15 –


--- page 490 ---
15. DEFERRED TAXATION
For the purpose of presentation in the condensed consolidated statement of financial position, certain deferred tax
assets and liabilities have been offset. The following is the ana lysis of the deferred tax balances for financial reporting
purposes:
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
D e f e r r e dt a xa s s e t s .................................... 1 , 4 2 2 , 2 7 1 1 , 387,226
Deferred tax liabilities .................................. ( 3 8 0 , 6 6 0 ) ( 385,058)
1,041,611 1,002,168
Provision
for
impairment
of assets
Depreciation
of fixed
assets
Unrealised
profit on
internal
transactions
Deferred
income Tax losses
Share-
based
payment
Increase in
fair value of
consolidated
assets not
under common
control Others Total
RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000 RMB ’000
At 1 January 2024 (audited) . . . . . . . . 140,387 167,551 100,417 88,555 665,545 8,486 (386,769) (21,833) 762,339
Credit (charge) to profit or loss . . . . . . 9,978 (11,681) 14 (1,305) 87,047 6,368 8,138 13,510 112,069
Credit to equity for the period . . . . . . . ——— — — 2,378 —— 2,378
At 31 March 2024 (Unaudited) . . . . . . . 150,365 155,870 100,431 87,250 752,592 17,232 (378,631) (8,323) 876,786
Credit (charge) to profit or loss . . . . . . 11,499 (20,672) 4,981 (2,788) 71,451 (31,569) 23,398 13,232 69,532
Credit to equity for the period . . . . . . . ——— — — 55,850 —— 55,850
At 1 January 2025 (audited) . . . . . . . . 161,864 135,198 105,412 84,462 824,043 41,513 (355,233) 4,909 1,002,168
(Charge) credit to profit or loss . . . . . . (1,649) (1,093) 3,644 (2,172) 39,676 1,694 7,659 (1,493) 46,266
Charge to other comprehensive income . . — — ———— — (488) (488)
Charge to equity for the period . . . . . . ——— — — (6,335) —— (6,335)
At 31 March 2025 (Unaudited) . . . . . . . 160,215 134,105 109,056 82,290 863,719 36,872 (347,574) 2,928 1,041,611
No deferred tax asset has been recognised on deductible te mporary differences of RM B919,241,000 (31 December
2024: RMB963,512,000) as at 31 March 2025, as it is not probable t hat taxable profit will be available against which the
deductible temporary differences can be utilised.
At 31 March 2025, the Group has unused tax losses o f RMB8,107,847,000 (31 December 2024: RMB7,789,918,000)
available for offset against future pro fits. Deferred tax asset has been recognised in respect of RMB5,758,124,000 (31
December 2024: RMB5,493,619,000) of such losses and no de ferred tax asset has been recognised on remaining
RMB2,349,723,000 as at 31 March 2025 (31 December 2024: RMB2,296,299,000), due to the unpredictability of future
profit streams.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-16 –


--- page 491 ---
16. FINANCIAL ASSETS (LIABILITIES) AT FVTPL
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
S t r u c t u r e dd e p o s i t s.................................... 1 , 0 8 1 , 9 1 7 354,917
D e l i v e r a b l ef o r w a r d s................................... ( 2 9 4 ) ( 9 , 6 2 0 )
1,081,623 345,297
Analysed for reporting purposes as:
F i n a n c i a la s s e t sa tF V T P L............................... 1 , 0 8 6 , 5 9 9 354,917
Financial liabilities at FVTPL ............................ ( 4 , 9 7 6 ) ( 9 , 6 2 0 )
The structured deposits are classified as current as the management expects to realise these financial assets within
twelve months after the reporting period.
The Group has the deliverable forwards outstanding as at t he end of the reporting period. They are marked to market
with the resulting gain or loss taken to profit or loss.
17. INVENTORIES
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
R a wm a t e r i a l s ....................................... 1 , 1 6 5 , 1 8 2 1 , 151,628
W o r ki np r o g r e s s ..................................... 1 , 7 9 0 , 1 1 6 1 , 938,450
F i n i s h e dg o o d s ....................................... 2 , 6 2 4 , 1 6 2 3 , 286,086
Goods in transit ...................................... 1 , 0 5 6 , 0 2 1 1 , 029,114
C o n s u m a b l e sa n do t h e r s ................................ 2 9 2 , 0 7 0 206,631
6,927,551 7,611,909
L e s s :p r o v i s i o n ....................................... ( 4 8 3 , 9 4 1 ) ( 451,356)
6,443,610 7,160,553
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-17 –


--- page 492 ---
18. TRADE AND BILLS RECEIVABLES
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
Trade receivables ..................................... 8 , 8 8 9 , 9 7 5 1 1 , 006,529
Bills receivables ...................................... 1 , 2 7 3 7 , 5 1 9
L e s s :a l l o w a n c ef o rE C L................................ ( 1 2 3 , 4 6 0 ) ( 148,312)
8,767,788 10,865,736
Ageing of trade receivables is prepared based on the invoice date, which approximated the respective revenue
recognition dates, as follows:
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
N o tp a s td u e ........................................ 8 , 4 7 8 , 8 0 3 1 0 , 610,390
Past due:
0– 9 0d a y s ........................................ 3 7 2 , 7 0 7 363,411
91– 1 8 0d a y s ...................................... 2 0 , 8 7 7 9 , 3 9 6
181– 3 6 5d a y s ...................................... 7 , 6 3 0 4 , 2 3 6
O v e r1y e a r ....................................... 9 , 9 5 8 1 9 , 0 9 6
8,889,975 11,006,529
The normal credit term to the customers ranged between 30 days to 120 days.
As at 31 March 2025, included in the Group ’s trade receivables balance are debtors with aggregate carrying amount
of RMB411,172,000 (31 December 2024: RMB396,139,000) wh ich are past due and with aggregate carrying amount of
RMB38,465,000 (31 December 2024: RMB32,728,000) are past due 90 days or more.
Out of the balances that are past due 90 days or more, RMB35,144,000 (31 December 2024: RMB29,404,000) is not
considered as in default due to the historical and expected subsequent repayment from the debtors and the remaining trade
receivables past due 90 days or more amounting to RMB3,321,000 (31 December 2024: RMB3,324,000) has become
credit-impaired. The Group does not hol d any collateral over these balances.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-18 –


--- page 493 ---
19. PREPAYMENTS AND OTHER RECEIVABLES
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
V a l u e - a d d e dt a xr e c o v e r a b l e ............................. 4 1 1 , 5 0 0 344,998
P r e p a y m e n t sf o rp r o p e r t y ,p l a n ta n de q u i p m e n t ................. 1 , 6 9 4 , 2 0 5 1 , 020,338
P r e p a y m e n t sf o rm a t e r i a l sa n do t h e r s ....................... 1 6 5 , 9 8 6 174,304
R e f u n d a b l ed e p o s i t sf o rl a n du s er i g h t s ...................... 2 0 0 , 0 0 0 200,000
R e f u n d a b l ed e p o s i t sf o rp r o j e c tp e r f o r m a n c e .................. 1 5 0 , 0 0 0 150,000
R e n t a la n do t h e rd e p o s i t s ................................ 4 3 , 8 9 6 4 8 , 2 1 3
D e f e r r e di s s u ec o s t s ................................... 1 4 , 9 0 3 —
Other receivables ..................................... 1 5 2 , 6 5 6 141,181
2,833,146 2,079,034
L e s s :a l l o w a n c ef o rE C L................................ ( 4 0 , 8 5 5 ) ( 4 0 , 2 6 5 )
2,792,291 2,038,769
Analysed for reporting purposes as:
C u r r e n ta s s e t s ....................................... 1 , 0 8 1 , 1 4 4 1 , 000,455
N o n - c u r r e n ta s s e t s .................................... 1 , 7 1 1 , 1 4 7 1 , 038,314
2,792,291 2,038,769
20. TRADE AND OTHER PAYABLES
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
T r a d ep a y a b l e s....................................... 8 , 8 1 9 , 6 2 2 1 0 , 388,566
Bills payables . ...................................... 2 0 7 , 1 5 4 9 1 , 6 2 3
9,026,776 10,480,189
A c c r u e ds t a f fc o s t ..................................... 1 , 4 9 8 , 5 1 8 1 , 532,142
C o n s t r u c t i o np a y a b l e s.................................. 3 , 4 5 7 , 8 4 7 3 , 616,325
O t h e ra c c r u e dc h a r g e s.................................. 3 4 0 , 7 2 2 306,028
O t h e rt a xp a y a b l e s .................................... 1 6 7 , 7 9 9 267,313
D e p o s i t sr e c e i v e d..................................... 1 1 3 , 3 0 3 8 6 , 4 9 9
A c c r u e di s s u ec o s t s ................................... 1 2 , 9 0 5 —
A c c r u e dl i s t i n ge x p e n s e s................................ 3 7 8 —
O t h e r s ............................................. 2 9 , 3 2 6 7 7 , 3 3 8
14,647,574 16,365,834
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-19 –


--- page 494 ---
The following is the ageing analysis of trade payables ba sed on the date of goods and services received at the end of
reporting period:
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
W i t h i n1y e a r ........................................ 8 , 7 7 3 , 3 7 0 1 0 , 388,566
O v e r1y e a r......................................... 4 6 , 2 5 2 —
8,819,622 10,388,566
The credit period on purchases of goods and services of the Group is within 120 days. All the bills payables are
with maturity within one year.
21. BORROWINGS
During the three months ended 31 March 2025, the Grou p had no new borrowings (three months ended 31 March
2024: RMB1,450,000,000).
The Group ’s variable-rate bank borrowings carry interest at Loan Prime Rate adjusted by floating up or down a
certain percentage. The interest rate is reset at regular intervals, ranging from 1 to 12 months.
22. SHARE CAPITAL
Number of shares Share capital
RMB’000
Ordinary shares of RMB1 each
Registered, issued and fully paid
At 1 January 2024 (audited) and 31 March 2024 (unaudited) ....... 4 , 9 8 3 , 2 2 7 , 9 8 1 4 , 983,228
Repurchase and cancellation of restricted shares
u n d e rR e s t r i c t e dA - s h a r eS c h e m e ........................ ( 3 4 8 , 7 1 0 ) ( 3 4 9 )
At 31 December 2024 (audited) and 31 March 2025 (unaudited) ..... 4 , 9 8 2 , 8 7 9 , 2 7 1 4 , 982,879
At 31 March 2025, the Company had outstanding treas ury shares of 23,817,167 (31 December 2024: 23,817,167)
shares.
23. CAPITAL COMMITMENTS
At 31 March
2025
At 31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
Capital expenditure contracted but not provided
for in the condensed consolidated financial statements
— P r o p e r t y ,p l a n ta n de q u i p m e n t ........................ 2 , 5 5 7 , 1 5 4 2 , 217,417
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-20 –


--- page 495 ---
24. SHARE-BASED PAYMENT
On 18 August 2023, the Company has adopted Restricted A- share Scheme, pursuant to which the Company granted
restricted shares to eligible participants include, but not limited to the Group ’s directors, senior management and other
employees.
The Company granted both Type I and Type II restricted sh ares. Type I restricted shares under the Restricted A-
share Scheme are valid for a maximum of 48 months from the date of completion of registration of the grant of restricted
shares to the date of release of all restricted shares or cancellation on repurchase; Type II restricted shares under the
Restricted A-share Scheme are valid for a maximum of 48 month s from the date of grant of restricted shares to the date of
full vesting or lapsing.
Set out below are details of the movements of the outstandi ng restricted shares of Type I restricted shares throughout
the reporting period:
Three months ended 31 March
2025 2024
(Unaudited) (Unaudited)
O u t s t a n d i n ga tt h eb e g i n n i n go ft h ep e r i o d .................... 4 , 6 4 4 , 7 9 1 9 , 710,783
L a p s e dd u r i n gt h ep e r i o d................................ ( 4 2 , 1 0 0 ) ( 106,800)
O u t s t a n d i n ga tt h ee n do ft h ep e r i o d ........................ 4 , 6 0 2 , 6 9 1 9 , 603,983
Set out below are details of the movements of the outstanding restricted shares of Type II restricted shares
throughout the reporting period:
Three months ended 31 March
2025 2024
(Unaudited) (Unaudited)
O u t s t a n d i n ga tt h eb e g i n n i n go ft h ep e r i o d .................... 1 8 , 5 8 6 , 3 6 7 3 8 , 843,133
F o r f e i t e dd u r i n gt h ep e r i o d .............................. ( 1 6 8 , 4 0 0 ) ( 427,200)
O u t s t a n d i n ga tt h ee n do ft h ep e r i o d ........................ 1 8 , 4 1 7 , 9 6 7 3 8 , 415,933
E x e r c i s a b l ea tt h ee n do ft h ep e r i o d ........................ ——
For three months ended 31 March 2025, th e Group recognised total expense o f RMB14,905,000 (three months ended
31 March 2024: RMB48,887,000), in relation to Restricted A-share Scheme.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-21 –


--- page 496 ---
25. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Fair value of the Group ’s financial instruments measured at fair value on a recurring basis
Some of the Group ’s financial instruments are measured at fair value at the end of the reporting periods. The
following table gives information about how the fair valu es of these financial instruments are determined (in
particular, the valuation technique and inputs used), as w ell as the level of the fair value hierarchy into which the
fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value
measurements is observable.
Set out below is the information about how the fair values of the Group ’s financial instruments that are
measured at fair value are determined, incl uding the valuation technique and inputs used:
Financial assets/
(liabilities)
31 March
2025
31 December
2024
Fair value
hierarchy
Valuation technique
and key input(s)
Significant
unobservable input
RMB ’000 RMB ’000
(Unaudited) (Audited)
Bills receivables at
F V T O C I.....
27,345 9,779 Level 2 Discounted cash flow
Risk-adjusted discount rate and
cash flow are key inputs
N/A
Deliverable
forwards . . . . .
(294) (9,620) Level 2 Discounted cash flow were
estimated based on the
applicable forward foreign
exchange rates
N/A
Structured deposits 1,081,917 354,917 Level 2 income approach
— The discounted cash flow
method was used to estimate
the interest from the
underlying bank deposits
N/A
Equity instruments
at FVTOCI . . .
483,159 445,109 Level 3 Net assets value of the
underlying investments
The higher the net
assets value, the
higher the fair value.
A reasonably possible change in the unobservable inpu t would not change the fair value of the relevant
financial instrument significantly, there fore no sensitivity analysis is disclosed.
There were no transfers between the fair value hierarchy levels during the reporting period.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-22 –


--- page 497 ---
Fair value of financial instruments that are recorded at amortised cost
The management consider that the carrying amounts of f inancial assets and liabilities recorded at amortised
cost in the condensed consolidated financial statements approximate their fair values.
Reconciliation of Level 3 fair value measurements
The following table presents the changes in level 3 financial instruments during the reporting period:
Equity
instruments at
FVTOCI
RMB’000
At 1 January 2024 (audited) and at 31 March 2024 (unaudited) ................. 465,563
A t1J a n u a r y2 0 2 5( u n a u d i t e d ) ....................................... 445,109
P u r c h a s e d ..................................................... 3 4 , 7 9 7
Fair value changes through other comprehensive income . .................... 3 , 2 5 3
At 31 March 2025 (unaudited) ....................................... 483,159
26. RELATED PARTY TRANSACTIONS
The following is a summary of the significant transactions carried out between the Group and its related parties in
the ordinary course of business for the reporting period.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-23 –


--- page 498 ---
(a) Related parties and relationship
During the reporting period, the following parties are identified as related parties to the Group and the
respective relationships are set out below:
Name of Related Parties Relationship
M s .C h a uK w a nF e i....................... C o n t r o lling Shareholder
Lens Technology (HK) Co., Limited
藍思科技(香港)有限公司 .................
Holding Company
Changsha Intelligent Robot Research Institute
Co., Ltd. ( ‘‘Changsha Intelligent Robot ’’)
長沙智慧型機器人研究院有限公司 ..........
Associate
Changsha Sinocera New Material Co., Ltd.
(‘‘Changsha Sinocera ’’)
長沙國瓷新材料有限公司 .................
Associate
Hunan Juhong Technology Co., Ltd.
(‘‘Hunan Juhong ’’)
湖南鉅宏科技有限公司 ...................
Associate
Dongguan Yuya Technology Co., Ltd.
(‘‘Dongguan Yuya ’’)
東莞市裕雅科技有限公司 .................
Associate
Dongguan Yutong Precision Technology Co., Ltd.
(‘‘Dongguan Yutong ’’)
東莞市裕同精密科技有限公司 ..............
Associate (disposed of before 31 March 2025)
Zibo Jincheng New Materials Co., Ltd.
(‘‘Zibo Jincheng ’’)
淄博金成新材料有限公司 .................
Associate
Changsha Ruihong Technology Co., Ltd.
(‘‘Changsha Ruihong ’’)
長沙睿鴻科技有限公司 ...................
Associate
Ningxia Xinjingsheng Electronic Materials Co., Ltd.
(‘‘Ningxia Xinjingsheng ’’)
寧夏鑫晶盛電子材料有限公司 ..............
Associate
Hunan Hualian Special Yuanhua Co., Ltd.
(‘‘Hunan Hualian Special Yuanhua ’’)
湖南華聯特種陶瓷有限公司 ...............
A related company controlled by non-controlling
shareholder
Hunan Hualian Torch Porcelain Insulator &
Electrical Apparatus Co., Ltd
(‘‘Hunan Hualian Torch ’’)
湖南華聯火炬電瓷電器有限公司 ............
A related company controlled by non-controlling
shareholder
H A W E M AW e r k z e u g s c h l e i f m a s c h i n e nG m b H ..... Ar e l a t e dc o m p a n yc o n t r o l l e db yM s .C h a uK w a nF e i
Hunan Miaomiao Shopping Commercial Co., Ltd
(‘‘Hunan Miaomiao ’’)
湖南妙妙購商業有限公司 .................
A related company controlled by a close member of
Ms. Chau Kwan Fei
Ms. Zhou Yihui
周藝輝 ..............................
A close family member of Ms. Chau Kwan Fei
Changsha Maijing Technology Co., Ltd
(‘‘Changsha Maijing ’’)
長沙麥睛科技股份有限公司 ...............
Associate of a related company controlled by
Ms. Chau Kwan Fei
Shenzhen Nanke Jia ’an Robot Technology Co., Ltd
(‘‘Shenzhen Nanke Jia ’an’’)
深圳市南科佳安機器人科技有限公司 .........
Associate of a related company controlled by
Ms. Chau Kwan Fei
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-24 –


--- page 499 ---
The Group and the Company entered into the following transactions/balances with the related parties:
(b) Transactions with related parties
(i) Purchase
Three months ended 31 March
Name of related party 2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Hunan Juhong ................................... 1 4 8 , 1 7 4 103,882
N i n g x i aX i n j i n g s h e n g ............................. 3 8 , 4 7 1 4 9 , 4 6 2
C h a n g s h aM a i j i n g ................................ 1 6 , 9 8 8 1 7 , 3 4 1
Z i b oJ i n c h e n g................................... 1 6 , 2 9 5 3 2 , 2 7 1
Shenzhen Nanke Jia ’a n ............................. 1 1 , 3 5 7 4 6 0
C h a n g s h aS i n o c e r a ............................... 1 0 , 3 9 6 7 , 6 5 1
H A W E M AW e r k z e u g s c h l e i f m a s c h i n e nG m b H............. 4 , 6 9 9 —
C h a n g s h aR u i h o n g ................................ 1 , 4 4 2 4 4 6
Changsha Intelligent Robot .......................... 8 4 0 2 4 1
D o n g g u a nY u y a ................................. — 10,122
D o n g g u a nY u t o n g ................................ N / A 4 0 , 6 4 6
248,662 262,522
(ii) Finance costs — interest on loan from a related party
Three months ended 31 March
Name of related party 2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
Lens Technology (HK) Co., Limited . . . ................ — 1,457
(c) Related party balances
(i) Trade and bills receivables
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
C h a n g s h aM a i j i n g ................................ 3 , 6 7 8 6 , 9 4 6
Hunan Juhong ................................... 1 3 1 3 2 9
C h a n g s h aS i n o c e r a ............................... 1 —
D o n g g u a nY u t o n g ................................ N / A 2 , 5 5 7
3,810 9,832
The amounts are in trade nature, unsecured, non-inte rest bearing and aged within one year at the end of
reporting period.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-25 –


--- page 500 ---
(ii) Prepayments for property, plant and equipment
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
Hunan Juhong ................................... 9 9 , 6 8 2 2 7 , 9 3 0
C h a n g s h aM a i j i n g ................................ 7 , 3 1 1 6 , 4 3 3
H A W E M AW e r k z e u g s c h l e i f m a s c h i n e nG m b H............. 1 , 0 2 0 4 , 8 0 1
C h a n g s h aR u i h o n g ................................ 8 3 9 8 3 9
108,852 40,003
The amounts are in non-trade nature, unsecured, non- interest bearing and the property, plant and
equipment will be delivered to the respective entities i n accordance with the terms of respective agreements.
As at 30 April 2025, the amount of RMB72,781,000 had b een transferred to property, plant and equipment
and the remaining amount will be transferred to pr operty, plant and equipment before 31 July 2025 as
represented by directors of the Company.
(iii) Amounts due from related parties
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
D o n g g u a nY u y a ................................. 3 1 5 1 6 , 7 0 0
C h a n g s h aS i n o c e r a ............................... 2 3 3 1 1 7
M s .C h a uK w a nF e i............................... 1 6 4 1 6 5
H u n a nM i a o m i a o................................. 8 7 8 5
Hunan Juhong ................................... 8 4 6 4
Shenzhen Nanke Jia ’a n ............................. 3 1 2 9
C h a n g s h aR u i h o n g ................................ 4 2
M s .Z h o uY i h u i ................................. — 4
D o n g g u a nY u t o n g ................................ N / A 7 , 7 0 7
918 24,873
As at 31 March 2025, the amounts include rental and other deposits which are unsecured and repayable
according to mutually agreed terms, the remaining amounts, which have been fully settled in April 2025, are
non-trade in nature, unsecured, interest-free and repayable on demand.
Maximum amounts due from a director
Three months ended 31 March
Name of a director 2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
M s .C h a uK w a nF e i............................... 1 6 5 1 6 5
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-26 –


--- page 501 ---
(iv) Trade and other payables
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
Hunan Juhong ................................... 2 5 9 , 1 9 9 117,217
N i n g x i aX i n j i n g s h e n g ............................. 7 3 , 9 4 9 138,423
C h a n g s h aM a i j i n g ................................ 3 0 , 6 7 2 3 8 , 2 4 2
Z i b oJ i n c h e n g................................... 2 7 , 9 7 7 5 7 , 0 0 2
Shenzhen Nanke Jia ’a n ............................. 1 5 , 9 3 8 4 , 5 7 9
C h a n g s h aS i n o c e r a ............................... 1 1 , 4 4 4 1 1 , 0 2 7
C h a n g s h aR u i h o n g ................................ 7 , 1 6 5 6 , 8 1 5
Changsha Intelligent Robot .......................... 2 , 0 8 8 2 , 2 8 0
D o n g g u a nY u y a ................................. 3 6 1 8 , 6 4 9
Hunan Hualian Special Yuanhua ...................... 1 6 5 2 9 5
H u n a nH u a l i a nT o r c h.............................. — 25
D o n g g u a nY u t o n g ................................ N / A 2 7 , 0 1 6
428,958 411,570
The amounts are trade in nature, unsecured, in terest-free and repayable within 120 days.
(v) Amounts due to related parties
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
Hunan Juhong ................................... 2 0 2 0
Shenzhen Nanke Jia ’a n ............................. 5 5
C h a n g s h aR u i h o n g ................................ 1 1
26 26
As at 31 March 2025, the amounts are rental and othe r deposits, unsecured and repayable according to
the mutually agreed terms of payment.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-27 –


--- page 502 ---
(vi) Contract liabilities
Name of related parties
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
C h a n g s h aM a i j i n g ................................ 1 , 2 1 6 1 , 2 1 6
Shenzhen Nanke Jia ’a n ............................. 1 1
1,217 1,217
The amounts are trade in nature, un secured and non-interest bearing.
(vii) Lease liabilities
Name of related party
At
31 March
2025
At
31 December
2024
RMB’000 RMB ’000
(Unaudited) (Audited)
M s .C h a uK w a nF e i............................... 1 , 2 1 5 9 5 5
The amounts are non-trade in nature and represen t leasing of office and repayable as per the lease
contracts. The lease contracts will be mature until June 2026 and the Group intends not to renew or extend the
lease before the expiration of the lease.
(d) Compensation of key management personnel
During the reporting period, the remunerations of key m anagement personnel which represent the directors of
the Company and other members of key management were as follows:
Three months ended 31 March
2025 2024
RMB’000 RMB ’000
(Unaudited) (Unaudited)
S a l a r i e s ,a l l o w a n c e sa n do t h e rb e n e f i t s.................. 4 , 0 8 4 4 , 3 3 0
D i s c r e t i o n a r yb o n u s............................... 2 2 2 4
R e t i r e m e n tb e n e f i ts c h e m ec o n t r i b u t i o n s................. 2 4 2 6
4,130 4,380
The remuneration of these key executives of the Group is determined by the remuneration committee having
regard to the performance of individuals and market trends.
27. EVENT AFTER THE END OF THE REPORTING PERIOD
Except as disclosed in note 12 of the condensed consolidated financial statements, the Group has no other significant
event after the end of the reporting period.
APPENDIX IA REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
– IA-28 –


--- page 503 ---
The information set out in this Appendix does not form part of the accountants ’ report on the
historical financial information of the Group for the three years ended 31 December 2024 (the
‘‘Accountants ’ Report ’’) prepared by Deloitte Touche Tohmat su, Certified Public Accountants,
Hong Kong, the reporting accountants of the Company, as set out in Appendix I to this prospectus,
and is included herein for information only.
The unaudited pro forma financial informatio n should be read in conjunction with the section
headed ‘‘Financial Information ’’ in this prospectus and the Accountants ’ Report set out in
Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS OF THE GROUP AT TRIBUTABLE TO OWNERS OF THE
COMPANY
The following unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group attributable to owners of the Company prepared in accordance with paragraph 4.29 of the
Listing Rules is set out below to illustrate the effect of the Global Offering (as defined in this
prospectus) on the audited consolidated net tangi ble assets of the Group attributable to owners of
the Company as at 31 December 2024 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted c onsolidated net tangible assets of the Group
attributable to owners of the Company has been prep ared for illustrative purposes only and, because
of its hypothetical nature, it may not give a true pi cture of the consolidated net tangible assets of
the Group attributable to owners of the Company as at 31 December 2024 or any future dates
following the Global Offering.
The following unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group attributable to owners of the Company is prepared based on the audited consolidated net
tangible assets of the Group attributable to owners of the Company as at 31 December 2024 as
derived from the Accountants ’ Report, the text of which is set out in Appendix I to this prospectus,
and adjusted as described below:
Audited
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
31 December 2024
Estimated net
proceeds from
Global Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
31 December 2024
Unaudited pro forma adjusted
consolidated net tangible assets of
the Group attributable to owners
of the Company as at
31 December 2024 per Share
RMB ’000 RMB ’000 RMB ’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price
of HK$17.38
per Offer Share . . . . 43,865,051 4,096,677 47,961,728 9.19 10.07
Based on an Offer Price
of HK$18.18
per Offer Share . . . . 43,865,051 4,286,743 48,151,794 9.23 10.11
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 504 ---
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as at 31 December 2024 is arrived
at after (i) deducting intangible assets of RMB1,822, 041,000; (ii) deducting goodwill of RMB2,970,144,000
and (iii) adjusting the share of intangible assets attributable to non-controlling interests of RMB595,000 from
the consolidated total equity attributable to ow ners of the Company of RMB48,656,641,000 as at 31
December 2024 which is extracted from the Accountants ’ Report set forth in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on 262,256,800 H Shares to be issued at the
Offer Price of HK$17.38 and HK$18.18 per Offer Shar e, being the low end and high end of the indicated
Offer Price range respectively, after deduction of the estimated listing expenses and share issue costs
(including underwriting fees and other related expenses) incurred or expected to be incurred by the Group
subsequent to 31 December 2024, other than those expenses which had been recognised in profit or loss prior
to 31 December 2024. It does not take into account (i) any Shares which may be allotted and issued upon the
exercise of the Over-allotment Option, (ii) any Share s which may be issued by the Company pursuant to the
exercise of options or the vesting of restricted shares or other awards that have been or may be granted from
time to time under the share scheme, or (iii) any Shares which may be issued or repurchased by the Company
pursuant to the general mandates.
For the purpose of calculating the estimated net proceed s from the Global Offering, the amount denominated
in Hong Kong dollars has been converted into Renminbi at an exchange rate of HK$1 to RMB0.9133, which
was the exchange rate prevailing on 20 June 2025 with reference to the rate published by the People ’sB a n k
of China. No representation is made that Hong Kong dollar amounts have been, could have been or may be
converted to Renminbi, or vice versa, at t hat rate or at any other rates or at all.
(3) The number of shares used for the calculation of unaud ited pro forma adjusted consolidated net tangible assets
of the Group attributable to owners of the Company pe r Share is based on 5,216,614,413 Shares, comprising
4,954,357,613 Shares in issue as at 31 December 2024 excluding 23,817,167 Shares held by the Company in
treasury and 4,704,491 restricted shares which are contingently returnable as at 31 December 2024 as detailed
in note 36 of the Accountants ’ Report and 262,256,800 H Shares to be issued, assuming the Global Offering
had been completed on 31 December 2024. It does not take into account (i) any Shares which may be allotted
and issued upon the exercise of the Over-allotment Option, (ii) any Shares which may be issued by the
Company pursuant to the exercise of options or the vesting of restricted shares or other awards that have been
or may be granted from time to time under the share scheme, or (iii) any Shares which may be issued or
repurchased by the Company pursuant to the general mandates.
(4) The unaudited pro forma adjusted consolidated net ta ngible assets of the Group attributable to owners of the
Company per Share is converted from Renminbi to H ong Kong dollars at the rate of RMB0.9133 to HK$1,
which was the exchange rate prevailing on 20 June 2025 with reference to the rate published by the People ’s
Bank of China. No representation is made that the Renminbi amounts have been, would have been or may be
converted to Hong Kong dollars, or vice versa, at that date or at any other rates or at all.
(5) No adjustment has been made to the unaudited pro for ma adjusted consolidated net tangible assets of the
Group attributable to owners of the Company as at 31 December 2024 to reflect any operating result or other
transactions of the Group entered into subsequent to 31 December 2024.
In particular, the unaudited pro forma adjusted conso lidated net tangible assets of the Group attributable to
owners of the Company as shown on Page II-1 has not taken into account payment of dividends of
RMB1,983,582,000 which was approved by the Share holders at the general meeting on 18 April 2025.
The unaudited pro forma adjusted consolidated net tangi ble assets of the Group attributable to owners of the
Company as at 31 December 2024 per Share would ha ve been RMB8.81 (equivalent to HK$9.65) and
RMB8.85 (equivalent to HK$9.69) per Share base d on the Offer Price of HK$17.38 and HK$18.18,
respectively, if the dividend had been taken into account as at 31 December 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 505 ---
B. INDEPENDENT REPORTING ACCOUNTANTS ’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of the independent reporting accountants ’ assurance report received
from Deloitte Touche Tohmatsu, Certified Pu blic Accountants, Hong Kong, the reporting
accountants of the Company, in respect of the Group ’s unaudited pro forma financial information
prepared for the purpose of incor poration in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS ’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FO RMA FINANCIAL INFORMATION
To the Directors of Lens Technology Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial informatio n of Lens Technology Co., Ltd. 藍思科技股份有限公司 (the
‘‘Company ’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group ’’)b yt h e
directors of the Company (the ‘‘Directors ’’) for illustrative purposes only. The unaudited pro forma
financial information consists of the unaudited p ro forma statement of adjusted consolidated net
tangible assets as at 31 December 2024 and related notes as set out on pages II-1 to II-2 of
Appendix II to the prospectus issued by the Company dated 30 June 2025 (the ‘‘Prospectus ’’). The
applicable criteria on the basis of which the Di rectors have compiled t he unaudited pro forma
financial information are des cribed on pages II-1 to II-2 of Appendix II to the Prospectus.
The unaudited pro forma financial information has been compiled by the Directors to illustrate
the impact of the Global Offering (as defined in the Prospectus) on the Group ’s financial position as
at 31 December 2024 as if the Global Offering ha d taken place at 31 December 2024. As part of
this process, information about the Group ’s financial position has been extracted by the Directors
from the Group ’s historical financial information for each of the three years ended 31 December
2024, on which an accountants ’ report set out in Appendix I to the Prospectus has been published.
Directors ’ Responsibilities for the Unaudite d 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 Go verning the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the ‘‘Listing Rules ’’) and with reference to Accounting
Guideline 7 ‘‘Preparation of Pro Forma Financial Info rmation for Inclusion in Investment
Circulars ’’ (‘‘AG 7 ’’) issued by the Hong Kong Institute of Certified Public Accountants (the
‘‘HKICPA ’’).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 506 ---
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, professi onal competence and due care, confidentiality and
professional behavior.
Our firm applies Hong Kong Standa rd on Quality Management (HKSQM) 1 ‘‘Quality
Management for Firms that Perform Audits or Review s of Financial Statements, or Other Assurance
or Related Services Engagements ’’ issued by the HKICPA, which requires the firm to design,
implement and operate a system of quality manageme nt including policies and procedures regarding
compliance with ethical requirements, professiona l standards and applicable legal and regulatory
requirements.
Reporting Accountants ’ Responsibilities
Our responsibility is to express an opinion, a s required by paragraph 4.29(7) of the Listing
Rules, on the unaudited pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports prev iously given by us on any financial information
used in the compilation of the unaudited pro forma financial information beyond that owed to those
to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus ’’ issued by the HKICPA. This standard requires that the
reporting accountants plan and perform procedur es to obtain reasonable assurance about whether
the Directors have compiled the unaudited pro f orma financial information in accordance with
p a r a g r a p h4 . 2 9o ft h eL i s t i n gR u l e sa n dwith reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not respon sible for updating or reissuing any reports
or opinions on any historical financial information used in compiling the unaudited pro forma
financial information, nor have we, in the course of this engagement, performed an audit or review
of the financial information used in compiling the unaudited pro forma financial information.
The purpose of unaudited pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken at an
earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance
that the actual outcome of the event or trans action at 31 December 2024 would have been as
presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 507 ---
A reasonable assurance engagement to report o n whether the unaudited pro forma financial
information has been properly compiled on the basi s of the applicable criteria involves performing
procedures to assess whether the applicable crit eria used by the Directors in the compilation of the
unaudited pro forma financial info rmation provide a reasonable basi s for presenting the significant
effects directly attributable to the event or transac tion, and to obtain sufficient appropriate evidence
about whether:
. the related pro forma adjustments give a ppropriate effect to those criteria; and
. the unaudited pro forma financial informati on reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants ’ judgment, having regard to the
reporting accountants ’ understanding of the nature of the Group, the event or transaction in respect
of which the unaudited pro forma financial info rmation has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the over all 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 inform ation 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 pu rposes of the unaudited pro forma financial
information as disclosed pursuant to pa ragraph 4.29(1) of the Listing Rules.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
30 June 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 508 ---
This Appendix mainly provides investors with an overview of the Articles of Association. As
the following information is in s ummary form, it does not contain all the information that may be
important to investors.
SHARE ISSUES
The shares of the Company shall be issued in an open, fair and equal manner. Each share of
the same class shall rank pari passu with each other. Shares of a class in each issuance shall be
issued under the same terms and at the same price. Each of the shares shall be subscribed for at the
same price by subscribers.
INCREASE, DECREASE AND REPURCHASE OF SHARES
According to the operation and development needs of the Company, subject to the laws and
regulations, the Company may increase the capital by the following ways upon approval of separate
resolutions at the general meeting:
(i) issuing shares to unspecified parties;
(ii) issuing shares to specific targets;
(iii) distribution of bonus shares to existing shareholders;
(iv) converting the reserve funds into share capital;
(v) other means approved by the laws, adminis trative regulations or approved by the CSRC
or other securities regulatory authorities of the place where the shares of the Company
are listed.
Our Company may decrease our registered share c apital and shall comply with the procedures
stipulated in the Company Law of the People ’s Republic of China ( ‘‘Company Law ’’) and other
relevant regulations as well a s the Articles of Association.
REPURCHASE OF SHARES
The Company shall not acquire its own shares, except in any of the following circumstances:
(i) to reduce the registered capital of the Company;
(ii) to merger with other companies holding shares in the Company;
(iii) to use shares for employee shareholding schemes or as equity incentives;
(iv) to acquire the shares of shareholders (upon their request) who vote against any resolution
adopted at any general meetings regardin g the merger or division of the Company;
(v) to use the shares to satisfy the conversion o f the convertible corporate bonds into shares
issued by the Company;
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(vi) to safeguard corporate value and shareholders ’ interests as the Company deems
necessary.
Where the Company acquires its shares under the circumstances prescribed in items (iii), (v)
or (vi) as set out above, such acquisition shall b e conducted through public centralized trading.
Where the Company acquires its shares under the c ircumstances prescribed in items (i) and (ii)
as set out above, such acquisition shall be resolved at a general meeting. Where the Company
acquires its shares under the circumstances prescrib ed in items (iii), (v) and (vi) as set out above,
such acquisition shall be resolved at a Board meet ing attended by at least 2/3 of the directors in
accordance with the applicable securities regu latory rules of the place where the shares of the
Company are listed.
Where the Company acquires its shares under t he circumstances prescribed in item (i) as set
out above, such shares shall be cancelled within ten days from the date of acquisition. Where the
shares are acquired under the circumstances prescribed in items (ii) and (iv) as set out above, such
shares shall be transferred or can celled within six months. Where the shares are acquired under the
circumstances prescribed in items (iii), (v) and (v i) as set out above, the total number of the shares
held by the Company shall not exceed 10% of the total issued shares, and such shares shall be
transferred or cancelled within three years. If ther e are other provisions in the laws, regulations and
the securities regulatory rules of the place wher e the shares of the Company are listed on matters
relating to the share repurchases, such provisions shall prevail.
TRANSFER OF SHARES
Shares of the Company shall be transferred in accordance with the laws.
The Directors, Supervisors and senior manage ment of the Company shall notify the Company
of their holdings of shares in the Company and the changes therein. The shares transferrable by
them during each year of their tenures as determined at the time of appointment shall not exceed
25% of their total holdings of shares of the same class in the Company. The shares in the Company
held by them shall not be transferred within one year from the date on which the Company ’ss h a r e s
are listed for trading. The shares in the Company held by them shall not be transferred within half a
year from their departure from the Company. In the e vent that the securities regulatory rules of the
place where the shares of the Company are listed pr ovide otherwise in respect of the restrictions on
the transfer, such rules shall prevail.
When shareholders holding more than 5% of the shares, Directors, Supervisors and senior
management officers of the Company sell their sha res or other equity securities within six months
from the acquisition of such shares, or purchase s hares within six months from the disposal of such
shares, the resulting gains are owned by the Com pany and the Board of Directors of the Company
shall recover its resulting gains. However, the di sposal of such shares by securities companies
holding more than 5% of the shares as a result of the outstanding shares acquired under
underwriting, and other circumstances stipul ated by the CSRC are excluded. If there are other
securities regulatory rules of the place where the shares of the Company are listed, those
regulations shall prevail.
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The shares or other equity securities held by the Directors, Supervisors, senior management
officers and natural person shareholders referre d to in the preceding paragraph shall include the
shares or other equity securities held by their spous e, parents, children, and those held through the
accounts of others.
Shareholders may require the Board of Directors of the Company to comply with the above
requirement within 30 days if the Board of Directors fails to do so. In the event that the Board of
Directors of the Company fails to rectify the situation within the said timeline, shareholders may
file a legal action to the people ’s court in their own name for safeguarding the interests of the
Company. If the Board of Directors of the Compan y fails to comply with the above requirement,
relevant responsible Directors shall bear joint liability pursuant to the laws.
SHAREHOLDERS AND GENERAL MEETINGS
Shareholders
The Company shall set up a register of sharehold ers based on the certificates provided by the
securities registration agency. The register of shar eholders shall be sufficient evidence proving the
holding of the shares of the Company by a shareholder. A shareholder shall enjoy rights and
assume obligations as per the class of the shares he ld by them. Shareholders holding the same class
of shares shall enjoy the same rights and assume the same obligations.
The original register of shareholders of H sh ares listed in Hong Kong shall be kept in Hong
Kong and made available for inspection by sha reholders, but the Company may suspend the
registration of shareholders in accordance wit h the applicable laws and regulations and the
securities regulatory rules of the place where the shares of the Company are listed. Any person who
is a shareholder registered on the register of sha reholders of H shares or who requests his/her/its
name be entered in the register of shareholders of H shares may, if his/her/its share certificate
relating to the shares is lost, apply to the Compan y for a replacement share certificate in respect of
such shares. Application by a holder of overseas l isted shares, who has lost his/her/its share
certificate, for a replacement share certificate may be dealt with in accordance with the law of the
place where the original register of shareholders of overseas listed shares is maintained, the rules of
the stock exchange or othe r relevant regulations.
Shareholders of the Company shall enjoy the following rights:
(i) to receive dividends and other distributions in proportion to the number of shares held;
(ii) To request, convene, hold, participate or send proxy to attend general meetings and
exercise corresponding rights to speak and vote in accordance with the law;
(iii) To monitor, make suggestions on or question the Company ’s operation;
(iv) To transfer, donate or pledge shares in his/ her/its possession in accordance with the law,
administrative regulations, and provi sions of the Articles of Association;
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(v) to inspect and duplicate the Articles of Assoc iation, the register of shareholders, minutes
of general meetings, resolutions of the meeti ngs of the Board of Directors, resolutions of
the meetings of the Supervisory Committee, and financial and accounting reports.
Shareholders who meet the requirements may inspect the Company ’s accounting books
and certificates;
(vi) in the event of the termination or liquidation of the Company, to participate in the
distribution of remaining assets of the Company in proportion to the number of shares
held;
(vii) the shareholders disagreeing with the m erger or separation resolution made by the
general meeting are entitled to ask t he Company to acquire their shares;
(viii) other rights conferred by laws, administra tive regulations, departmental rules, the
securities regulatory rule s of the place where the shares of the Company are listed and
the Articles of Association.
Shareholders demanding inspection or duplicat ion of the relevant information or copies of the
materials mentioned in the preceding provision sh all provide the Company with written documents
evidencing the class and number of shares of the Company they hold. Upon verification of the
shareholder ’s identity, the Company shall provide such information at the shareholder ’sr e q u e s ti n
accordance with the Company Law, the Securities Law of the People ’s Republic of China
(‘‘Securities Law ’’), and other relevant laws, administrative regulations, and the Articles of
Association.
If a resolution passed at the Company ’s general meeting or the Board meeting violates laws or
administrative regulations, shareholders have t he right to institute proceedings before a people ’s
court to render the resolution invalid. If the pro cedures for convening, or the method of voting at, a
general meeting or a Board meeting violate laws, a dministrative regulations or the Articles of
Association, or a resolution violates the Articl es of Association, shareholders are entitled to
institute proceedings before a people ’s court to rescind such resolution within 60 days of the
adoption of such resolution, unless the proce dures for convening, or the method of voting at, a
general meeting or a Board meeting only contain s a minor defect without a substantial impact on
the resolution.
In the event of any loss caused to our Company as a result of violation of any laws,
administrative regulations or Articles of Assoc iation by the Directors or senior management when
performing their duties in our Company, the Shareholders holding more than 1% shares separately
or jointly for over 180 consecutive days may submit a written request to the Board of Supervisors
to file an action with the people ’s court. Where supervisors violate laws, administrative regulations
or the Articles of Association in their duty p erformance and cause loss to our Company, the
Shareholders may submit a written request to the Board of Directors to file an action with the
people ’sc o u r t .
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In the event that the Board of Supervisors or the Board of Directors refuse to file an action
upon receipt of the Shareholders ’ written request specified in the preceding paragraph, or fail to file
an action within 30 days upon receipt thereof, or in the event that the failure to immediately file an
action in an emergency case will cause irreparabl e damage to the interests of our Company, the
Shareholder(s) specified in the preceding paragr aph may, in their own name, directly file an action
to the court for the interest of our Company.
In the event of a director or senior managem ent person violates laws, administrative
regulations or our Company ’s Articles of Association, thereby damaging the interests of the
Shareholder(s), the Shareholders holding more than 1% shares separately or jointly for over 180
consecutive days may file an action with the court.
In the event of a director or senior managem ent person violates laws, administrative
regulations or our Company ’s Articles of Association, thereby damaging the interests of the
Shareholder(s), the Shareholder(s) may file an action with the court.
The obligations of Shareholders are as follows:
(i) To abide by laws, administrative regul ations and the Articles of Association;
(ii) To provide Share capital according to the Sh ares subscribed for and Share participation
methods;
(iii) Not to return Shares unless prescribed other wise in laws and administrative regulations;
(iv) Not to abuse Shareholders ’ rights to infringe upon the interests of the Company or other
Shareholders; not to abuse the Company ’s status as an independent legal entity or the
limited liability of Shareholders to damage the interests of the Company ’s creditors;
(v) To perform other duties prescribed in law s, administrative regulations, securities
regulatory rules of the place where the shares of the Company are listed and the Articles
of Association.
Any Shareholder who abuses Shareholders ’ rights and causes the Company or other
Shareholders to suffer a loss shall be liable for making compensation in accordance with the law.
Any Shareholder who abuses the status of the Company as an independent legal entity or the
limited liability of Shareholders to evade deb ts and seriously damages the interests of the
Company ’s creditors shall assume joint and s everal liability for the Company ’sd e b t s .
CONTROLLING SHAREHOLDERS AND ACTUAL CONTROLLERS
Controlling shareholders and actual controllers of the Company shall comply with the
following provisions:
(i) to exercise their rights as shareholders i n accordance with the law and not abuse their
control or use their affiliation to prejudice the legitimate interests of the Company or
other shareholders;
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--- page 513 ---
(ii) to strictly implement the public statement s and undertakings made and shall not change
or waive them;
(iii) to fulfil information disclosure oblig ations in strict accordance with the relevant
regulations, to proactively cooperate with the Company in information disclosure and to
inform the Company in a timely manner of m aterial events that have occurred or are
p r o p o s e dt oo c c u r ;
(iv) not to appropriate the Company ’s funds in any way;
(v) not to order, instruct or request the Company and relevant personnel to provide
guarantees in violation of laws and regulations;
(vi) not to make use of the Company ’s undisclosed material information to gain benefits, not
to disclose in any way undisclosed material i nformation relating to the Company, and not
to engage in insider trading, short-swing trading, market manipulation and other illegal
and unlawful acts;
(vii) not to prejudice the legitimate rights and interests of the Company and other shareholders
through unfair related transact ions, profit distribution, asset restructuring, foreign
investment or any other means;
(viii) to ensure the integrity of the Company ’s assets, and the independence of personnel,
finance, organisation and business, and not to affect the independence of the Company in
any way;
(ix) other provisions of laws, administrative regulations, the CSRC, the stock exchange and
the Articles of Association. Where a controlling shareholder or actual controller of the
Company does not act as a director of the Compa ny but actually carries out the affairs of
the Company, the provisions of the Article s of Association relating to the duties of
loyalty and diligence of directors shall apply.
Where a controlling shareholder or actual controller of the Company instructs a director or
senior management to engage in an act that is det rimental to the interests of the Company or the
shareholders, he/she shall be jointly and severall y liable with such director or senior management.
GENERAL RULES OF THE GENERAL MEETING
The General Meeting is the organ of authorit y of the Company, and shall exercise the
following functions and powers in accordance with the law:
(i) to elect and replace directors and supervis ors who are not employee representatives, and
to decide on matters relating to the remuneration of directors and supervisors;
(ii) to consider and approve the reports of the Board;
(iii) to consider and approve the report of the Board of Supervisors;
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(iv) to consider and approve the Company ’s profit distribution plans and loss recovery plans;
(v) to resolve on the increase or reduction of the registered capital of the Company;
(vi) to resolve on the issue of securities or bonds of the Company;
(vii) to resolve on the merger, division, dissolut ion, liquidation or change of corporate form of
the Company;
(viii) to amend the Articles of Association;
(ix) to resolve on the appointment and dismissa l of the accounting firm that undertakes the
auditing activities of the Company;
(x) to consider and approve the guarantee matte rs stipulated in Articl e 47 of the Articles of
Association;
(xi) to consider the purchase or disposal of material assets within one year with an amount
exceeding 30% of the latest audited total assets of the Company;
(xii) to consider and approve the change in use of proceeds;
(xiii) to consider share incentive schemes and employee share ownership schemes;
(xiv) to consider any related party transactions (e xcluding the receipt by the Company of cash
assets, and provision of guarantee by the C ompany) between the Company and related
parties, whose amount is more than RMB30 million and accounts for more than 5% of
the absolute value of the latest audited net assets of the Company, related party
transactions between the Company and the Company ’s directors, supervisors, senior
managers and their spouses, and related part y transactions with provision of guarantee to
the related parties by the Company;
(xv) to resolve on the purchase of shares of th e Company under the circumstances specified in
Article 25, items (1) and (2) of the Articles of Association;
(xvi) to consider other matters required by laws, admin istrative regulations, departmental rules,
the securities regulatory rules of the place wh ere the shares of the Company are listed or
the Articles of Association to be decided by the General Meeting.
The General Meeting may authorize the Board of Directors to make a resolution on the
issuance of bonds of the Company. Unless otherwise stipulated in the laws, administrative
regulations, and departmental ru les, the aforesaid functions and powers of the General Meeting
shall not be exercised by the Board of Directors o r other bodies and individuals through any form
of authorization.
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The following acts of the Company ’s external guarantees shall be considered and approved by
the General Meeting:
(i) any guarantee to be provided after the total amount of external guarantees provided by
the Company or the subsidiaries it controls has exceeded 50% of its latest audited net
assets;
(ii) any guarantee to be provided after the total amount of external guarantees provided by
the Company has exceeded 30% of its latest audited total assets;
(iii) the total amount of guarantees within one year exceeds 30% of the latest audited total
assets of the Company;
(iv) any guarantee provided to any guaranteed pa rty with assets-liabilities ratio exceeding
70%;
(v) any single guarantee exceeding 10% of the latest audited net assets;
(vi) any guarantees to be provided for shareh olders, actual controllers and their related
parties;
(vii) other guarantees that shall be consider ed by the General Meeting as required by laws,
administrative rules and regu lations, securities regulatory rules of the place where the
shares of the Company are listed or other regulatory documents.
The General Meetings are classified into annual general meetings and extraordinary general
meetings. The annual general meeting shall be co nvened once a year and be held within six months
of the end of the previous fiscal year.
In any of the following circumstances, the Company shall convene an extraordinary general
meeting within two months from the date of the occurrence of the circumstance:
(i) when the number of directors falls short of the statutory number specified in the
Company Law or is less than two-thirds of the number specified in the Articles of
Association;
(ii) when the unrecovered losses of the Company amount to one-third of the total share
capital;
(iii) when shareholders individually or toge ther holding 10% or more of the shares of the
Company request to hold such a meeting;
(iv) when the Board of Directors deems it necessary;
(v) when the Board of Supervisors proposes to hold such a meeting;
(vi) other circumstances as stipul ated by laws, administrative reg ulations, departmental rules,
the securities regulatory rules of the place wh ere the shares of the Company are listed or
the Articles of Association.
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--- page 516 ---
In the event that an extraordinary general meeting is convened at the request of the securities
regulatory rules of the place where the shares of t h eC o m p a n ya r el i s t e d ,t h ee f f e c t i v ed a t eo ft h e
extraordinary general meeting may be adjusted in accordance with the clearance progress of the
stock exchange where the Company ’s shares are listed.
CONVENING OF GENERAL MEETINGS
The Board of Directors shall convene the genera l meeting on time within the specified period
as stipulated in the Articles of Association. S ubject to the consent of more than half of all the
independent directors, the independent directors have the right to propose to the Board of Directors
to convene an extraordinary general meeting. With regard to the proposal made by the independent
directors for convening an extraordinary gener al meeting, the Board of Directors shall, in
accordance with the laws, administrative regul ations and the Articles of Association, provide a
written response indicating whether it agree or disagree to convene the extraordinary general
meeting within 10 days upon receipt of the proposal. Where the Board of Directors agrees to
convene the general meeting, a notice of convenin gs u c hm e e t i n gs h a l lb ei s s u e dw i t h i n5d a y sa f t e r
the resolution of the Board of D irectors is made. Where the Board of Directors does not agree to
convene the extraordinary general meeting, it shall provide reasons and make an announcement.
The Supervisory Committee is entitled to propose to the Board of Directors to convene an
extraordinary general meeting and such proposal shall be made in writing to the Board of Directors.
The Board of Directors shall, in accordance with law s, administrative regulations and the Articles
of Association, give a written reply on whether or no t it agrees to convene the extraordinary general
meeting within 10 days upon receipt of the proposal. Where the Board of Directors agrees to
convene the general meeting, a notice of convenin gs u c hm e e t i n gs h a l lb ei s s u e dw i t h i n5d a y sa f t e r
the resolution of the Board of Directors is made. Any change to the original proposal in the notice
shall be subject to the approval of the Superviso ry Committee. Where the Board of Directors does
not agree to convene the extraordinary general m eeting or fails to reply within 10 days after receipt
of the proposal, it shall be deemed to be unable to perform or fail to perform the duty of convening
the general meeting, and the Supervisory Commi ttee may convene and preside over the meeting by
itself.
Shareholders who individually or jointly hold more than 10% of the Company ’ss h a r e sa r e
entitled to request the Board of Directors to conv ene an extraordinary general meeting and such
requisition shall be made in writing to the Board of Directors The Board of Directors shall, in
accordance with laws, administrative regulation s and the Articles of Association, give a written
reply on whether or not it agrees to convene the ex traordinary general meeting within 10 days upon
receipt of the requisition.
Where the Board of Directors agrees to convene the general meeting, a notice of convening
such meeting shall be issued within 5 days after the resolution of the Board of Directors is made.
Any change to the original requisition in the notice shall be subject to the approval of relevant
shareholders. Where the Board of Directors doe s not agree to convene the extraordinary general
meeting or fails to reply within 10 days after receipt of the requisition, shareholders who
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 517 ---
individually or jointly hold more than 10% of the Company ’s shares shall have the right to propose
the Supervisory Committee to convene the extraordi nary general meeting and such requisition shall
be made in writing to the Supervisory Committee.
Where the Supervisory Committee agrees to convene the general meeting, a notice of
convening such meeting shall be issued within 5 day s after receipt of the requisition. Any change to
the original requisition in the notice shall be subj ect to the approval of relevant shareholders. If the
Supervisory Committee fails to issue the notice of t he meeting within the specified period, it shall
be deemed that the Supervisory Committee does not convene and preside over the general meeting.
Shareholders who individually or joi ntly hold more than 10% of the Company ’s shares for more
than 90 consecutive days may convene and pre side over the general meeting by themselves.
If the general meeting is convened by the Supe rvisory Committee or shareholders on their
own, it shall notify the Board of Directors in writing and file a record with the Shenzhen Stock
Exchange at the same time. Before the announcement of the resolution of the general meeting, the
shareholding of shareholders who convene the meeting shall not be less than 10%. The Supervisory
Committee or the shareholders who convene the m eeting shall submit the relevant evidentiary
materials to the Shenzhen Stock Exchange when i ssuing the notice of the general meeting and the
announcement of the resoluti on of the general meeting.
Where the Supervisory Committee or the shareholders convene a general meeting on their
own, the necessary expenses incurred t hereof shall be borne by the Company.
PROPOSALS AND NOTICES OF GENERAL MEETING
When the Company convenes a general meeting, the Board of Directors, the Supervisory
Committee and shareholders who individually or jointly hold more than 1% of the Company ’s
shares shall be entitled to put for ward proposals to the Company.
Shareholders who individually or jointly hold more than 1% of the Company ’ss h a r e sm a y
submit provisional proposals in writing to the convener 10 days prior to the convening of the
general meeting. The convener shall issue a suppl ementary notice of the general meeting within 2
days upon receipt of the proposals to announce the contents of the provisional proposal and submit
the provisional proposals to the general meeting for consideration, however, except for the
provisional proposals that violates the requiremen ts of the laws, administrative regulations or the
Articles of Association, or are not within the terms of reference of the general meeting. If the
general meeting needs to be postponed due to th e issuance of a supplementary notice of the
shareholders ’ meeting according to the securities regulat ory rules of the place where the shares of
the Company are listed, the convening of the general meeting shall be postponed according to the
securities regulatory rules of the place where the shares of the Company are listed.
Except as provided in the preceding paragraph, the convener shall not change the proposals set
out in the notice of the general meeting or add an y new proposal after the said notice is served.
Proposals not set out in the notice of the general meeting or not complying with the Articles
of Association shall not be voted on or resolved at the general meeting.
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--- page 518 ---
The convener shall notify all shareholders by announcement at least 21 days prior to the
convention of an annual general meeting, or at least 15 days prior to the convention of an
extraordinary general meeting. The Company shal l not include the date of convention of meeting
into the calculation of starting and ending time.
Notice of the general meeting shall contain:
(i) the date, venue and duration of the meeting;
(ii) matters and proposals submitted for consideration at the meeting;
(iii) a clear statement that: each shareholder is entitled to attend the general meeting in
person, or appoint one or more proxies who need not be shareholders of the Company, to
attend and vote on his/its behalf;
(iv) the date of record for the determination of shareholders who are entitled to attend the
general meeting;
(v) name and telephone number of permanent contact person;
(vi) contain a disclosure of the nature and extent , if any, of material interests of any Director,
Supervisor, or any senior management pers onnel in the matters to be discussed and the
effect of the matters to be discussed on them in their capacity as shareholders so far as it
is different from the effect on the inter est of shareholders of the same class;
(vii) time and procedures for voting online or by other means.
HOLDING OF GENERAL MEETINGS
All shareholders whose names appear on the register of members on the record date or their
proxies are entitled to attend the general meeting a nd exercise their voting rights in accordance with
the relevant laws, regulations and the Articles of Association, unless individual shareholders are
required to abstain voting from individual matter a s stipulated by the securities regulatory rules of
the place where the shares of the Company are listed.
Shareholders may attend a general meeting in person, or may appoint a proxy to attend and
vote on his/her behalf.
An individual shareholder that attends the meeting in person shall produce his or her own
identity card or other valid documents or proof evidencing his or her identity. If he or she appoints
a proxy to attend the meeting on his or her behalf, the proxy shall produce his or her own valid
proof of identity and the power of attorney issued by the shareholder.
Shareholder who is a corporation shall attend and vote at a meeting by its legal representative
or a proxy appointed by the legal representative. If the legal representative attends the meeting, he
or she shall produce his or her own identity card and a valid proof of his or her legal representative
status. If a proxy has been appointed to attend th e meeting, such proxy shall present his or her own
identity card and the power of attorney issued by th e legal representative of the shareholder as a
APPENDIX III SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 519 ---
corporation, except for shareholder who is a reco gnized clearing house and its nominees as defined
in the relevant ordinances in force from time to t ime under the laws of Hong Kong or the securities
regulatory rules of the place where the shares of the Company are listed. If such corporate
shareholder has appointed a proxy to attend the m eeting in accordance with the provisions of the
Articles of Association, it shall be deemed to be present in person.
If the shareholder is a recognized clearing house, it may authorize one or more persons it
deems fit to act as its representative at any general meeting or any meeting of creditors; however, if
more than one person is so authorized, the power of attorney shall specify the number and class of
shares in respect of which each such person is so a uthorized. A person so authorized may exercise
rights on behalf of the recognized clearing house (or its nominees) (no shareholding voucher,
notarized authorization and/or further evidence o f the duly authorization is required), as if such
person is an individual shareholder of the Company.
VOTING AND RESOLUTIONS AT GENERAL MEETINGS
Resolutions of the general meeting include ordi nary resolutions and special resolutions. An
ordinary resolution at a general meeting shall be passed by one half or above of the voting rights
held by shareholders (including their proxies) att ending and entitled to vote at the general meeting.
A special resolution at a general meeting shall be passed by two-thirds or above of the voting rights
held by shareholders (including their proxies) attending and entitled to vote at the general meeting.
The following matters shall be resolved by an ordinary resolution at a general meeting:
(i) work reports of the Board and the supervisory committee;
(ii) plans formulated by the Board for the distribution of profits and for making up losses;
(iii) appointment and removal of the members of the Board and the supervisory committee,
their remunerations and methods of payment;
(iv) matters other than those required by the laws and administrative regulations and the
securities regulatory rules of the place(s) wh ere the shares of the Company are listed or
by the Articles of Association to be adopted by special resolution.
The following matters shall be resolved by a special resolution at a general meeting:
(i) the increase or reduction of share capital of the Company;
(ii) the split, spin-off, merger, dissolution and liquidation (including voluntary winding-up)
of the Company;
(iii) amendments to the Articles of Association;
(iv) the acquisition or disposal of major asse ts or guarantees within one year reaches or
exceeds 30% of the Company ’s latest audited total assets;
(v) equity incentive plan;
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--- page 520 ---
(vi) adjustments or amendments to the cash dividend policy;
(vii) consider and approval of the resolution on repurchase of the Company ’s share under the
circumstances stipulated in Article 25( 1) and (2) of the Articles of Association;
(viii) any other matters as required by the laws, adm inistrative regulations, the securities
regulatory rules of the place where the share s of the Company are listed or the Articles
of Association, and any other matters cons idered by the general meeting, by way of an
ordinary resolution, to be of a nature which may have a material impact on the Company
and should be adopted by a special resolution.
A shareholder (including proxy) may exercise v oting rights in accordance with the number of
shares carrying the right to vote and each share shall have one vote.
When significant matters affecting the interest s of the minority shareholders are considered at
the general meeting, the v otes cast by minority investors shall be counted separately. The results of
separate counting shall be disclosed to the public in a timely manner.
T h es h a r e sh e l db yt h eC o m p a n yh a v en ov o t i n gr i ghts, and that part of the shareholding shall
not be counted as the total number of shares with voting rights held by shareholders attending the
meeting.
If a shareholder purchases voting shares of the Company in violation of the provisions of
Article 63(1) and (2) of the Securities Law, the voting rights of such shares in excess of the
prescribed proportion shall not be exercised for a period of thirt y-six months after the purchase and
shall not be counted as part of the total number of voting shares present at the general meeting.
The Board of the Company, independent directors, shareholders holding more than 1% of the
shares carrying voting rights or investor protectio n agencies established in accordance with laws,
administrative regulations or requirements o f the CSRC may publicly solicit shareholders ’ voting
rights. The specific voting intentions and other information shall be fully disclosed to the persons
whose voting rights are being solicited when soliciting shareholders ’ voting rights. It is forbidden
to solicit shareholders ’ voting rights with compensation or compensation in disguised form. The
Company shall not impose a minimum shareholding proportion limit on the solicitation of voting
rights except for statutory conditions.
DIRECTORS AND THE BOARD OF DIRECTORS
General provisions in relation to directors
A director of the Company who is a natural person shall not act as the director of the
Company under any of the following circumstances:
(i) lacking or having limited capacity to engage in civil juristic acts;
(ii) having been sentenced to any criminal pen alty due to an offense of corruption, bribery,
encroachment of property, misappropriation of property or disrupting the economic order
of the socialist market; or having ever been deprived of political rights due to any crime,
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with less than 5 years having elapsed since the completion date of the execution of the
penalty, or having been granted probation, with less than 2 years having elapsed since
the completion date of the probation period;
(iii) acting as a director, factory director or ge neral manager of a company or enterprise that
has been bankrupt and liquidated, whereby t he director is personally liable for the
bankruptcy of such company or enterprise, with 3 years having not elapsed since the
completion date of the bankruptcy and li quidation of the company or enterprise;
(iv) acting as the legal representative of a comp any or enterprise, but the business license of
this company or enterprise has been revoked and this company or enterprise has been
ordered to close due to a violation of the law, whereby the director is personally liable
for the revocation, with 3 years having not elapsed since the revocation date of the
business license thereof;
(v) classified as a dishonest person subject to enforcement due to significant outstanding
debts that have become due but have not been paid;
(vi) prohibited from entering the securities m arket by the CSRC with the penalty period not
yet expired;
(vii) recognized by stock exchanges as unsuitable for serving as a director, supervisor or
senior management officer of a company, wit h the disciplinary action period not yet
expired;
(viii) other circumstances as stipulated by the law s, administrative regulations, departmental
regulation, and other securities regula tory rules of the places where the Company ’ss h a r e s
are listed.
Directors shall comply with laws, administrative regulations, and the articles of association,
and owe fiduciary duties to the Company. They shall take measures to avoid conflicts of interest
between themselves and the Company, and shal l not exploit their positions to seek improper
benefits. Directors owe the followi ng fiduciary duties to the Company:
(i) They shall not misappropriate Comp any property or embezzle Company funds;
(ii) They shall not deposit Company funds into accounts opened in their personal names or
in the names of other individuals;
(iii) They shall not solicit or accept bribes or o ther illegal benefits through their authority;
(iv) They shall not directly or indirectly en ter into contracts or transactions with the
Company unless they have reported to the Board of Directors or the General meeting and
obtained approval through a resolution of the General meeting or the Board of Directors
in accordance with the articles of association;
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(v) They shall not exploit their positions to se ize business opportunities that rightfully
belong to the Company for their own benefit or the benefit of others, except that such
opportunities are reported to the Board of Di rectors or General meeting and approved by
a resolution of the General meeting; or the C ompany is legally, administratively, or
under its articles of association unable to pursue such opportunities;
(vi) They shall not engage in any business com peting with the Company, either on their own
behalf or for others, unless they have reported to the Board of Directors or General
meeting and obtained approval through a r esolution of the General meeting;
(vii) They shall not retain commissions derived from transactions between third parties and
the Company;
(viii) They shall not disclose Company secrets without authorization;
(ix) They shall not harm the Company ’s interests through their affiliated relationships;
(x) They shall comply with other fiduciary du ties stipulated by laws, administrative
regulations, departmental rules, and the articles of association.
Any income obtained by Directors in violation of this provision shall be returned to the
Company. Directors who cause losses to the Company through such violations shall be liable for
compensation.
Any contract or transaction entered into betw een the Company and immediate family members
of Directors, senior management personnel, ent erprises directly or in directly controlled by
Directors, senior management personnel, or thei r immediate family members, and other connected
persons affiliated with Directors or senior managem ent personnel, shall be governed by Article 100,
Paragraph 2(iv) of the articles of association.
The Directors shall abide by the provisions of laws , administrative regul ations and the articles
of association, and have a diligent obligation to t he Company, and shall perform their duties in the
best interests of the Company and with the reasonable care normally due by the management. The
Directors have the following diligent obligations to the Company:
(i) shall exercise prudently, conscientiou sly and diligently the rights conferred by the
Company in order to ensure that the Company ’s business activities comply with the
requirements of national laws, administrative regulations and various economic policies,
and that the business activities do not ex ceed the scope of business stipulated in the
business license;
(ii) all Shareholders shall be treated fairly;
(iii) to keep abreast of the business operation and management of the Company;
(iv) a written confirmation opinion shall be signed on the Company ’s periodic reports to
ensure that the information disclosed by t he Company is true, accurate and complete;
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(v) shall truthfully provide the supervisory boa rd with relevant information and information,
and shall not hinder the supervisory board or the supervisor from exercising their
powers;
(vi) other diligent obligations under laws, administrative regulations, departmental
regulations, the securities regulatory rules of the place where the shares of the Company
are listed and the articles of association.
The Company has established a director resi gnation management system to clarify the
safeguards for unfulfilled public commitments and other outstanding matters. When the resignation
of a Director takes effect or the term of office expire s, all transfer procedures shall be completed to
the board of directors, and the fidelity obli gations of the director to the Company and the
Shareholders shall not be automatically discha rged after the end of the term of office, but shall
remain valid for two years after the resignation of the director takes effect or the term of office
expires. Its obligation to keep the Company ’s trade secrets confidential shall survive the termination
of its duties until such time as the secrets b ecome public information. The Directors ’
responsibilities in the performance of their dutie s during their term of office shall not be relieved
or terminated by reason of their departure from office.
BOARD OF DIRECTORS
The Board of Directors consists of seven Directors, four of whom are independent Directors.
The Board of Directors exercises the following powers:
(i) To convene the general meeting and report on work to the general meeting;
(ii) Implement the resolutions of the general meeting;
(iii) Determine the business and investment plans of our Company;
(iv) Devise the earnings distribution and loss offset plans of our Company;
(v) Formulate the plans for increasing or decreasing our Company ’s registered capital, the
issuance of corporate bonds or other securiti es, as well as the listing of the stock of our
Company;
(vi) Make resolution on the plan for the purchase of shares of our Company in the
circumstances specified in Article 25, parag raph 1, item (3), (4) or (5) of the Articles of
Association;
(vii) Formulate plans for major acquisitions of the Company, the buy-back of shares of our
Company, corporate merger, separation, dissolution and changing the form of our
Company;
(viii) Determine such matters as the Company ’s external investment, purchase or sale of assets,
asset pledge, external guarantee, entrustin g wealth management, connected transaction
and external donation within the scope authorized by the general meeting;
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(ix) Decide on the setup of our Company ’s internal management organization;
(x) To decide on matters such as appointment or dismissal of the Company ’s general
manager and other senior officers and on their compensation and incentives/
disincentives; to decide on matters such as appointment or dismissal of the Company ’s
vice general manager, chief financial offi cer and other senior management and on their
compensation and incentives/disincenti ves based on the nominations by the general
manager;
(xi) Set the basic management systems of our Company;
(xii) Make the modification plan to the Articles of Association;
(xiii) Manage the disclosure of company information;
(xiv) Request to the general meeting of share holders to hire or replace the accounting firm
auditing for the company;
(xv) Attend to the work report of our Company ’s general manager and review the work of the
general manager;
(xvi) Other powers and duties authorized by the laws, administrative regulations, regulations
of the authorities, other securities regulat ory rules of the place where the shares of the
Company are listed and the Articles of Association.
Matters beyond the scope of authorization of the general meeting should be submitted by the
Board of Directors to the general meeting for discussion.
If any Director has connection with the enterpri se or individual involved in the resolution
made at a Board meeting, the said Director shall report to the Board of Directors in writing in a
timely manner and shall not vote on the said resoluti on for himself/herself or on behalf of another
Director. The Board meeting may be held when more than half of the non-connected Directors
attend the meeting. The resolut ion of the Board meeting shall b ep a s s e db ym o r et h a nh a l fo ft h e
non-connected Directors. If the number of non-connected Directors attending the meetings is less
than three, the issue shall be submitted to the gene ral meeting for consideration. If there are any
additional restrictions on Directors ’ participation in and voting at Board meetings in accordance
with laws and regulations and the securities regul atory rules of the place where the shares of the
Company are listed, such provisions shall prevail.
INDEPENDENT DIRECTORS
The Company establishes a mech anism for special meeting atte nded solely by independent
directors. Related party transactions should be p re-approved by the special meeting of independent
directors before being submitted to the Board of Directors for consideration.
The Company shall hold special meetings of independent directors on a regular or ad hoc
b a s i s .M a t t e r sl i s t e di ni t e m s( 1 )t o( 3 )o ft h ep a r a g r a p h1o fA r t i c l e1 3 2a n dA r t i c l e1 3 3o ft h e
Articles of Association shall be considered at a special meeting of independent directors.
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The special meetings of independent directors may study and discuss other matters of our
Company as needed.
The special meetings of indepe ndent directors shall be convened and presided over by an
independent director jointly elected by a majority of the independent directors; in the event that the
convener fails to or is unable to perform his/he r duties, two or more independent directors may
convene and elect a representative to preside over the meeting on their own.
Minutes of the special meetings of independent directors shall be prepared as required, with
the inclusion of the opinions of the independent directors, who shall sign to confirm the minutes of
the meetings
The Company shall facilitate and support the c onvening of special meetings of independent
directors.
SPECIAL COMMITTEES OF THE BOARD
The Board of the Company has established an Audit Committee. The Audit Committee
consists of three members, who are directors not holding senior management positions in the
Company. Among them, there are three independent directors, and shall be convened by an
accounting professional among the independent directors.
The Board of the Company has established othe r special committees such as the Strategy
Committee, the Nomination Committee, the Remuneration and Appraisal Committee, etc., which
perform their duties in accordance with the Arti cles and the authorization of the Board. The
proposals of the special committees shall be sub mitted to the Board for review and decision-
making. The working procedures of the special committees shall be formulated by the Board.
SENIOR MANAGEMENT MEMBERS
The Company has one general manager, who is appointed or dismissed by the Board. The
Company has several deputy general managers, w ho are appointed or dismissed by the Board. The
general manager, deputy general managers, chief financial officer, secretary of the Board and other
senior management personnel recognized by the B oard of the Company are the senior management
members of the Company.
The general manager is responsible to the Board and exercises the following authorities:
(i) preside over the production, operation an d management work of the Company, organize
the implementation of the resolutions of the Board, and report the work to the Board;
(ii) organize the implementation of the Company ’s annual business plan and investment plan;
(iii) draft the Company ’s internal management organization setup plan;
(iv) draft the Company ’s basic management system;
(v) formulate the specific rules and regulations of the Company;
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(vi) propose to the Board the appointment or dismissal of the Company ’s deputy general
managers and chief financial officer;
(vii) decide on the appointment or dismissal of management personnel other than those whose
appointment or dismissal shall be decided by the Board;
(viii) other authorities granted by the Articles or the Board.
The general manager shall attend the meetings of the Board as a non-voting participant.
The Company has a secretary of the Board, wh o is responsible for the preparation of the
meetings of the general meeting and the Board of the Company, the custody of documents, the
management of the Company ’s shareholder information, and handl ing matters related to information
disclosure, etc.
The secretary of the Board shall comply with the relevant provisions of laws, administrative
regulations, departmental rules and regulations and the Articles.
SUPERVISORY COMMITTEE
Supervisors
Directors, the general manager and other senio r management personnel shall not concurrently
serve as supervisors.
The term of office of a supervisor is three y ears for each term. Upon the expiration of a
supervisor ’s term of office, he/she may be re-elected for consecutive terms if re-elected.
Supervisors may attend of the Board meetings as non-voting participants and raise inquiries or
suggestions regarding the matters to be resolved by the Board.
SUPERVISORY COMMITTEE
The Company has a Supervisory Committee. The S upervisory Committee is composed of three
supervisors, and there is one chairman of the Supervisory Committee. The chairman of the
Supervisory Committee is elected by more than ha lf of all the supervisors. The chairman of the
Supervisory Committee shall convene and preside over the meetings of the Supervisory Committee;
if the chairman of the Supervisory Committee is unable to perform his/her duties or fails to perform
his/her duties, one supervisor shall be jointly elected by more than half of the supervisors to
convene and preside over the meetings of the Supervisory Committee.
The Supervisory Committee includes two shar eholder representatives and one employee
representative. The employee representative on the Supervisory Committee shall be democratically
elected by the employees of the Company through the Employees ’ Representative Meeting, the
Employees ’ Meeting or other forms.
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The Supervisory Committee shall exercise the following authorities:
(i) review the periodic reports of the Comp a n yp r e p a r e db yt h eB o a r da n di s s u ew r i t t e n
review opinions;
(ii) examine the financial affairs of the Company;
(iii) supervise the acts of directors and seni or management personnel in the performance of
their duties for the Company, and propose the removal of directors and senior
management personnel who violate laws, admini strative regulations, the listing rules of
the stock exchange where the Company ’s shares are listed, the Articles or the resolutions
of the general meeting;
(iv) require directors and senior management personnel to correct their acts when such acts
damage the interests of the Company;
(v) propose the convening of the EGM, and convene and preside over the general meeting
when the Board fails to perform its duties of convening and presiding over the general
meeting as stipulated in the Company Law;
(vi) submit proposals to the general meeting;
(vii) initiate legal proceedings against dir ectors and senior management personnel in
accordance with the provisions of Article 189 of the Company Law;
(viii) conduct investigations when it discovers abnormal business operations of the Company.
When necessary, it may engage professional i nstitutions such as accounting firms and
law firms to assist in its work, and the expenses shall be borne by the Company;
(ix) other authorities granted by laws, adminis trative regulations, d epartmental rules and
regulations, the listing rules of th e stock exchange where the Company ’ss h a r e sa r e
listed, the Company ’s articles of association or the general meeting.
FINANCIAL ACCOUNTING SYSTEM, PROFIT DISTRIBUTION AND AUDIT
Financial and Accounting System
The Company shall submit an annual financial report to the competent authorities of CSRC
and the stock exchange within 4 months after the e nd of each fiscal year, submit and disclose its
interim report to the competent authorities of C SRC and the stock exchange within 2 months after
the end of the first half of each accounting year.
The above-mentioned annual report and interim report are prepared in accordance with
relevant laws, administrative regulations and t he provisions of the CSRC and the stock exchange,
and the securities regulatory rules of the place where the shares of the Company are listed.
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.
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When distributing profits after taxation of th e year, the Company shall set aside 10% of its
profits for the Company ’s statutory reserve until the f und has reached 50% or more of the
Company ’s registered capital
When the Company ’s statutory reserve is not sufficient to make up for the Company ’sl o s s e s
for the previous years, the profits of the current year shall first be used to cover the losses before
any allocation is set aside for the statutory reserve pursuant to the preceding provision
After making allocations to the statutory reserve from its profits after taxation, the Company
may, upon passing a resolution at a general meetin g, make further allocations from its profits after
t a x a t i o nt ot h ed i s c r e t i o n a r yr e s e r v e
After the Company covers its losses and makes all ocations to its reserve, the remaining profits
after taxation shall be distributed in proportion to the number of shares held by the shareholders,
except for those which are not distributed in a pro portionate manner as provided by the Articles of
Association
If the general meeting resolves to distribute any profits to the shareholders in violation of the
Company Law, the shareholders shall return such profits distributed to the Company, and if any
losses are caused thereby to the Company, the shar eholders, as well as any directors, and senior
officers responsible for the violation, shall be liable for compensation
The Company shall not distribute any profits in respect of the shares held by it.
The Company is required to appoint one or more receiving agent(s) in Hong Kong for
shareholders of H shares. The receiving agen t(s) shall receive and hold on behalf of such
shareholders of H shares any dividends allocated to H shares and other amounts payable by the
Company, and transmit such payments to such sha reholders of H shares. The receiving agent(s)
appointed by the Company shall satisfy the requi rements under the laws and regulations and the
securities regulatory rules of the place where the shares of the Company are listed.
The provident fund of the Company is appropriated for purpose of making up the losses or
expanding production and operation o f the Company or being capitalized.
When using the Company ’s reserves to cover its losses, any discretionary reserve and statutory
reserve balances shall first be used to cover such l osses; if there is still a shortfall, the capital
reserve may be used in accordance with regulations.
In any capitalization of the statutory provident fund, the remaining statutory provident fund
shall not be less than twenty-five percent (25%) of the Company ’s registered capital immediately
prior to such capital increase through provident fund transfer
After the shareholders make a decision for distribution of profits in general meeting, or after
the Board of Directors formulates a specific plan in accordance with the co nditions and upper limit
of the interim dividend for the next year that approved by the annual general meeting of
shareholders, the Board of Directors must finish distributing the dividends (or shares) within two
months.
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INTERNAL AUDIT
The Company shall implement an internal audi t system and clarify the leadership system,
duties and authorities, staffing, f inancial support, application of a udit results, and accountability.
The internal audit institution of the Company shall conduct supervision and inspection on the
Company ’s business activities, risk management, intern al control, financial information and other
matters.
APPOINTMENT OF ACCOUNTING FIRM
The Company shall appoint an accounting firm in compliance with the Securities Law and the
securities regulatory rules of the place where t he shares of the Company are listed to conduct
accounting statements audit, net assets verificatio n and other related consulting services for a term
of one year, which may be renewed.
The appointment and selection of the Company ’s accounting firm shall be submitted to the
Board of Directors for deliberation and decided by the general meeting after being approved by a
majority of all members of the Audit Committee. The Board of Directors shall not appoint the
accounting firm until it is decided by the general meeting.
The Company shall undertake to provide its accounting firm with true and complete
accounting vouchers, accounting b ooks, financial reports and othe r accounting information, and
shall not reject, conceal or misstate any information.
The audit fee payable to an accounting firm shall be decided by the general meeting.
When the Company intends to dismiss or not to reappoint an accounting firm, it shall give 15
days prior notice to the accounting firm. When a general meeting of the Company votes on the
dismissal of the accounting firm, the firm sh all be allowed to represent its opinions.
Where the accounting firm resigns, it shall sta te to the general meeting whether the Company
has improper circumstances.
MERGER, DIVISION, CAPITAL INCREAS E, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital I ncrease and Capital Reduction
The merger of the Company may take the form of either merger by absorption or merger by
establishment of a new entity. One company absorbing another company is merger by absorption,
and the company being absorbed shall be disso lved. Merger of two or more companies through
establishment of a new company is merger by esta blishment of a new entity, and the parties to the
merger shall be dissolved.
In the event of a merger, the parties to the merger shall enter into a merger agreement and
prepare balance sheets and inventories of assets. The Company shall notify its creditors within 10
days after the date of the Company ’s resolution on merger and shall make an announcement in the
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newspapers designated by the Company or the Natio nal Enterprise Credit Information Publicity
System within 30 days after the date of the Company ’s resolution on merger. Creditors may demand
the Company to repay debts or provide corresponding security within 30 days upon receipt of such
notice or 45 days from the date of announce ment in case of receiving no such notice.
Upon the merger, claims and debts of each of the merged parties shall be assumed by the
company which survives the merger or the newly e stablished company resulting from the merger.
When the Company is divided, its assets shall b e split accordingly. In the event of a division
of the Company, the Company shall prepare a balance sheet and an inventory of assets. The
Company shall notify its creditors within 10 days after the date of the Company ’s resolution on
division and shall make an announcement in the newspapers designated by the Company or the
National Enterprise Credit Information Public ity System within 30 days after the date of the
Company ’s resolution on division.
The Company shall prepare a balance sheet an d an inventory of assets when it intends to
reduce its registered capital. The Company shall no tify the creditors within 10 days upon resolution
on reduction of registered capital by the general meeting and make announcement thereof in the
newspapers designated by the Company or the Natio nal Enterprise Credit Information Publicity
System within 30 days. Creditors may dem and the Company to repay debts or provide
corresponding security within 30 days upon receipt of such notice or 45 days from the date of
announcement in case of receiving no such notice.
When the Company reduces its registered capital, it shall reduce the amount of capital
contribution or shares in proportion to the shareholders ’ capital contribution or shareholding, unless
otherwise stipulated by the laws or the Articles of Association.
When the merger or division of the Company invol ves changes in registered particulars, such
changes shall be registered with the registratio n authority of the Company in accordance with the
laws. When the Company is dissolved, the Company shall cancel its registration in accordance with
the laws. When a new company is established, its es tablishment shall be registered in accordance
with the laws.
In case of increase or reduction of registered capital of the Company, the Company shall
legally complete the formalities for change registration with the registration authority of the
Company.
DISSOLUTION AND LIQUIDATION
The Company shall be dissolved for the following reasons:
(i) the term of its operations as is stipulated in the Articles of Association has expired or
other events of dissolution specified in the Articles of Association have occurred;
(ii) the general meeting resolves to dissolve the Company;
(iii) dissolution is necessary due to merger or division of the Company;
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(iv) the Company ’s business license is revoked, the Company is ordered to close down or be
revoked in accordance with the law;
(v) where the operation and management of the Company falls into serious difficulties and
its continued existence would cause material losses to sh areholders, the shareholders
holding above 10% of the total voting rights of the Company may apply to the people ’s
court to dissolve the Company if there are no other solutions.
If the Company encounters the reasons for dissolution as stipulated in the preceding
paragraph, it shall publicize the reasons for dis solution through the National Enterprise Credit
Information Publicity System within ten days.
Where the Company falls under the circumstances of items (i) and (ii) above and has not
distributed any property to shareholders, it ma y continue to exist by amending the Articles of
Association or by a resolution of the general meeting.
Amendments to the Articles of Association in a ccordance with the provisions of the preceding
paragraph or by resolution of the general meeting shall be approved by more than two-thirds of the
voting rights held by the shareholders attending the general meeting.
If the Company is dissolved pursuant to item (i), (ii), (iv) or (v) above, it shall be liquidated.
The Directors, being the liquidation obligors of t he Company, shall form a liquidation committee
for liquidation within 15 days from the date of occurrence of the cause for dissolution. The
liquidation committee shall comprise the Direct ors, unless the Articles of Association provide
otherwise or it is resolved at a general meeting to ele ct another person(s). If a liquidation committee
is not established within the deadline for liquidation, creditors may apply to the people ’s court to
designate relevant personnel to form a li quidation committee for liquidation.
The liquidation committee shall notify creditors within 10 days from the date of its
establishment, and publish an announcement in the designated newspapers and periodicals or the
National Enterprise Credit Information Publicit y System within 60 days. Creditors shall declare
their claims to the liquidation committee within 30 days from the date of receiving the notice, or
within 45 days from the date of announcement in case they have not received the notice.
If the liquidation committee discovers that th e assets of the Company are insufficient to repay
its debts after sorting out the assets of the Compa ny and preparing a balance sheet and an inventory
of assets, it shall apply to the people ’s court for bankruptcy liquidation in accordance with the law.
After the people ’s court accepts the bankruptcy application, the liquidation committee shall hand
over the liquidation matters to the bankruptc y administrator designated by the people ’s court.
In case the Company is declared to be insolvent according to the laws, liquidation shall be
processed in accordance with the laws on corporate bankruptcy.
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AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association under any of the following
circumstances:
(i) After the amendments are made to the Com pany Law or relevant laws, administrative
regulations and securities re gulatory rules of the place where the shares of the Company
are listed, the provisions of the Articles of Association are in conflict with the amended
laws, administrative regulations or securi ties regulatory rules of the place where the
shares of the Company are listed;
(ii) there is a change in the situation of the Com pany, which is inconsistent with the matters
recorded in the Articles of Association;
(iii) the general meeting decides to amend the Articles of Association.
The amendments to the Articles of Associat ion adopted by the general meeting shall be
submitted to the competent authorities for approval if they are subject to approval by the competent
authorities. If there is any change relating to the registered particulars of the Company, application
shall be made for registration of the c hanges in accordance with the laws.
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FURTHER INFORMATION ABOUT THE COMPANY
Incorporation
The Company was established as a limited liability company under the laws of the PRC on
December 21, 2006 and was converted into a joint s tock company with limited liability on June 13,
2011.
The Company has established a place of bus iness at Unit A, 7/F, MG Tower, 133 Hoi Bun
Road, Kwun Tong, Kowloon, Hong Kong. The Company was registered as a non-Hong Kong
company in Hong Kong under Part 16 of the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong) and the Companies (Non-Hong Kong Companies) Regulation (Chapter 622J of the
Laws of Hong Kong) on March 27, 2025, with Ms. Yu Wing Sze of 31/F, Tower Two, Times
Square, 1 Matheson Street, Causeway Bay, Hong Kong appointed as the Hong Kong authorised
representative of the Company for acceptance of the service of process and any notices required to
be served on the Company in Hong Kong.
As the Company was incorporated in the PRC, its operations are subject to the relevant laws
and regulations of the PRC. A summary of the relevant aspects of laws and regulations of the PRC
and the Articles of Association is set out in ‘‘Regulatory Overview ’’ and ‘‘Appendix III —
Summary of the Articles of Association ’’in this Prospectus, respectively.
Changes in the Share Capital of the Company
As approved by the Board on September 22, 2023, a total of 9,747,983 Type I Restricted
Shares were granted to eligible participants pursu ant to the 2023 Restricted Share Incentive Plan.
The Company completed the share registration of such 9,747,983 Shares on October 16, 2023 and
the total issued share capital of the Company was increased from 4,973,479,998 A Shares to
4,983,227,981 A Shares.
As approved by the Board on April 19, 2024, a total of 158,200 Type I Restricted Shares were
repurchased by the Company under a repurchase mandate pursuant to the 2023 Restricted Share
Incentive Plan and cancelled on May 30, 2024. The total issued share capital of our Company was
then decreased from 4,983,227,981 A Shares to 4,983,069,781 A Shares.
As approved by the Board on September 25, 2024, a total of 190,510 Type I Restricted Shares
were repurchased by the Company under a repurchase mandate pursuant to the 2023 Restricted
Share Incentive Plan and cancelled on November 2 1, 2024. The total issued share capital of our
Company was then decreased from 4,983,069,781 A Shares to 4,982,879,271 A Shares.
As approved by the Board on March 27, 2025, a total of 107,100 Type I Restricted Shares
were repurchased by the Company under a repurchase mandate pursuant to the 2023 Restricted
Share Incentive Plan and cancelled on April 16, 2025. The total issued share capital of our
Company was then decreased from 4,982,879,271 A Shares to 4,982,772,171 A Shares.
Save as disclosed above, there has been no alteration in our share capital within two years
immediately preceding the date of this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-1 –


--- page 534 ---
Resolutions Passed by Our Shareholders ’ General Meeting in Relation to the Global Offering
At the general meeting of the Shareholders held on March 28, 2025, the following resolutions,
among other things, were duly passed:
(i) the issue by the Company of H Shares with a nominal value of RMB1.00 each and such
H Shares be listed on the Hong Kong Stock Exchange;
(ii) the number of H Shares to be issued shall be no more than 7.00% of the total issued
share capital of our Company as enlarged by the Global Offering, and the grant of the
Over-allotment Option in respect of no more than 15% of the number of H Shares issued
pursuant to the Global Offering;
(iii) authorization of the Board or its authorized individuals to handle all matters relating to,
among other things, the Global Offering, the issue and listing of H Shares on the Hong
Kong Stock Exchange; and
(iv) subject to the completion of the Global Offe ring, the conditional adoption of the revised
Articles of Association, which shall become effective on the Listing Date, and the
authorization to the Board to amend the Artic les of Association in accordance with the
requirements of the relevant laws and regu lations and the Hong Kong Listing Rules.
Our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are set out in
Note 44 to the Accountant ’s Report as set out in Appendix I.
The following sets out the changes in the share capital of the Company ’s subsidiaries during
the two years immediately preceding the date of this Prospectus:
 on June 26, 2023, the registered capital of Lens Intelligent Control was increased from
RMB716,112,640 to RMB826,112,640;
 on August 28, 2023, the registered capital of Shenzhen Lens Intelligent Manufacturing
Technology Company Limited* ( 深圳藍思智造科技有限公司) was decreased from
RMB50,000,000 to RMB2,000,000;
 on September 28, 2023, the registered capital of Lens Taizhou was increased from
RMB4,151,397,559 to RMB4,511,397,559;
 on December 25, 2023, the registered capital of Lens Taizhou was increased from
RMB4,511,397,559 to RMB4,611,397,559;
 on August 20, 2024, the registered capital of Lens Changsha was decreased from
US$3,543,887,632 to US$3,103,032,467;
 on August 20, 2024, the registered capital of Lens System Integration was decreased
from RMB271,325,618 to RMB110,116,718; and
 on September 5, 2024, the registered capit al of Shenzhen Lens System Integration
Company Limited* ( 深圳市藍思系統集成有限公司) was decreased from
RMB50,000,000 to RMB5,000,000.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-2 –


--- page 535 ---
Save as disclosed above, there has been no altera tion in the share capital of the subsidiaries of
the Company within two years immediately preceding the date of this Prospectus.
FURTHER INFORMATION ABOUT THE BUSINESS
Summary of Material Contracts
The Group has entered into the following contracts (not being contract entered into in the
ordinary course of business) within the two years i mmediately preceding the date of this Prospectus
that is or may be material:
(a) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Green Better Limited, CITIC Secu rities (Hong Kong) Limited, CLSA Limited
and Merrill Lynch (Asia Pacific) Limited w ith respect to a subscription of the Offer
Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
US$10,000,000;
(b) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Olympic Country Company Limite d, CITIC Securities (Hong Kong) Limited,
CLSA Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription
of the Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$10,000,000;
(c) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, UBS Asset Management (Singapore ) Ltd., CITIC Securities (Hong Kong)
Limited, CLSA Limited and Merrill Lynch ( Asia Pacific) Limited, with respect to a
subscription of the Offer Shares at the Offer Price in the aggregate amount of the Hong
Kong dollar equivalent of US$50,000,000;
(d) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Oaktree Capital Management, L.P., CITIC Securities (Hong Kong) Limited,
CLSA Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription
of the Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$25,000,000;
(e) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, LMR Multi-Strategy Master Fund Limited, CITIC Securities (Hong Kong)
Limited, CLSA Limited and Merrill Lynch ( Asia Pacific) Limited, with respect to a
subscription of the Offer Shares at the Offer Price in the aggregate amount of the Hong
Kong dollar equivalent of US$30,000,000;
(f) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Redwood Elite Limited, CITIC Securities (Hong Kong) Limited, CLSA
Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription of the
Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$6,000,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-3 –


--- page 536 ---
(g) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, QRT Master Fund SPC, CITIC S ecurities (Hong Kong) Limited, CLSA
Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription of the
Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$20,000,000;
(h) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Poly Platinum Enterprise Lim ited, CITIC Securities (Hong Kong) Limited,
CLSA Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription
of the Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$15,000,000;
(i) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Infini Global Master Fund, CITIC Securities (Hong Kong) Limited, CLSA
Limited and Merrill Lynch (Asia Pacific) Limited, with respect to a subscription of the
Offer Shares at the Offer Price in the aggregate amount of the Hong Kong dollar
equivalent of US$15,000,000;
(j) a cornerstone investment agreement d ated June 27, 2025 entered into among the
Company, Verition Multi-Strategy Master Fund Ltd., CITIC Securities (Hong Kong)
Limited, CLSA Limited and Merrill Lynch ( Asia Pacific) Limited, with respect to a
subscription of the Offer Shares at the Offer Price in the aggregate amount of the Hong
Kong dollar equivalent of US$10,000,000; and
(k) the Hong Kong Underwriting Agreement.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-4 –


--- page 537 ---
Intellectual Property
As of December 31, 2024, the following intelle ctual property rights are material to the
Group ’sb u s i n e s s .
Trademarks
As of December 31, 2024, the Group had registered the following trademarks which are
material to our business.
No. Trademark Class Registered Owner Place of Registration
Registration
Number Expiry Date
1.
 40 the Company PRC 22602816 February 13, 2028
2.
 40 the Company PRC 16852935 July 13, 2026
3.
 9 the Company PRC 16820789 October 13, 2026
4.
 40 the Company PRC 16852911 June 27, 2026
5.
 14 the Company PRC 16850827 June 27, 2026
6.
 9 the Company PRC 16820788 October 13, 2026
7.
 6 the Company PRC 22602857 February 13, 2028
8.
 40 the Company PRC 16852883 June 27, 2026
9.
 9 the Company PRC 16820787 October 13, 2026
Domain Names
As of December 31, 2024, the Group had registe red the following domain names which are
material to our business.
No. Domain Name Registered Owner Expiry Date
1. hnlens.com the Company October 9, 2029
2. hnlens.net the Company May 6, 2028
3. tzlens.com Lens Taizhou October 22, 2025
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-5 –


--- page 538 ---
Patents
As of December 31, 2024, the Group had registered the following patents which are material
to our business.
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
1. A Multi-in-one Polishing Machine and
Polishing Method
(一種多位一體拋光機及拋光方法)
Invention Patent the Company PRC ZL202311006892.1 August 11, 2023
2. Copper Disc for Sapphire Polishing, and
Method of Repairing Double-Face
Copper Disc
(一種藍寶石拋光用銅盤及
其修盤方法)
Invention Patent the Company PRC ZL201410272515.7 June 18, 2014
3. Copper Disc for Sapphire Polishing, and
Method of Repairing Double-Face
Copper Disc
(一種藍寶石拋光用銅盤及
其修盤方法)
Invention Patent the Company Japan JP6364508B2 June 18, 2015
4. Copper Disc for Sapphire Polishing, and
Method of Repairing Double-Face
Copper Disc
(一種藍寶石拋光用銅盤及
其修盤方法)
Invention Patent the Company South Korea KR101930240B1 June 18, 2015
5. Copper Disc for Sapphire Polishing, and
Method of Repairing Double-Face
Copper Disc
(一種藍寶石拋光用銅盤及
其修盤方法
)
Invention Patent the Company U.S. US10220486B2 June 18, 2015
6. A Strengthening Method for Tempered
Glass
(一種強化玻璃的強化方法)
Invention Patent the Company PRC ZL201510422554.5 July 17, 2015
7. A Pretreatment Method before Glass
Strengthening and a Glass
Strengthening Method including the
Same
(玻璃強化處理前的預處理
方法及包含其的玻璃強化處理方法)
Invention Patent the Company PRC ZL202111097535.1 September 18, 2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 539 ---
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
8. A Method for Reducing the Stress in
Tempered Glass and a Recycling
Method for Defective Glass Products
(降低強化玻璃應力的方法及玻璃不良品
的回收利用方法)
Invention Patent the Company PRC ZL201811233295.1 October 22, 2018
9. An Additive Capable of Extending the
Service Life
of Chemical Tempering Molten Salt
(一種能延長化學鋼化熔鹽
使用壽命的添加劑)
Invention Patent the Company PRC ZL201010555918.4 November 19, 2010
10. Low-reflection AR Film, Ultra-hard AR-AS
Film, Glass Display Cover Plate,
Display Device, and Electronic Device
(低反射AR膜、超硬AR-AS 膜、玻璃顯
示蓋板、顯示裝置和電子設備)
Utility Model the Company PRC ZL202321769489.X July 6, 2023
11. A Scratch-resistant Transparent Film and
Its Preparation Method
(一種耐劃傷透明膜及
其製備方
法)
Invention Patent the Company PRC ZL201610349436.0 May 24, 2016
12. Manufacturing Method for
Ink Pattern-containing
Curved Glass
(一種含油墨圖案的曲面
玻璃的製備方法)
Invention Patent the Company PRC ZL201610863923.9 September 29, 2016
13. Manufacturing Method for
Ink Pattern-containing
Curved Glass
(一種含油墨圖案的曲面
玻璃的製備方法)
Invention Patent the Company South Korea KR102221933B1 October 21, 2016
14. A Silkscreen Protective Ink Composition
and Silkscreen Printing Method
(一種絲印保護油墨組合物及絲印方法)
Invention Patent the Company PRC ZL201410739835.9 December 8, 2014
15. A Production Process for Gradient Color
Film Sheets
(一種漸變色菲林膜片的
生產工藝)
Invention Patent the Company PRC ZL201810928278.3 August 15, 2018
16. CNC Positioning Device and CNC
Equipment
(CNC 定位裝置及CNC 設備)
Utility Model the Company PRC ZL202121507431.9 July 5, 2021
17. A CNC Processing Equipment and Its
Positioning Device
(一種CNC 加工
設備及
其定位裝置)
Utility Model the Company PRC ZL202122478915.1 October 14, 2021
18. Touch Panel and Preparation Method
Therefor
(一種觸控面板及其製備方法)
Invention Patent Lens Changsha PRC ZL201410504010.9 September 26, 2014
19. Touch Panel and Preparation Method
Therefor
(觸控面板及其製備方法)
Invention Patent Lens Changsha U.S. US9971182B2 September 10, 2015
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 540 ---
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
20. Touch Panel and Preparation Method
Therefor
(觸控面板及其製備方法)
Invention Patent Lens Changsha South Korea KR101914301B1 September 10, 2015
21. A Touch Panel and Its Preparation Method
(一種觸控面板及其製備方法)
Invention Patent Lens Changsha PRC ZL201510616127.0 September 24, 2015
22. UV Film Sensor and Preparation Method
Therefor, and Touch Control Screen
(UV 菲林感應器、其製備方法及觸控屏)
Invention Patent Lens Changsha PRC ZL201410640101.5 November 13, 2014
23. UV Film Sensor and Preparation Method
Therefor, and Touch Control Screen
(UV 薄膜傳感器及其製造方法和觸摸屏)
Invention Patent Lens Changsha Japan JP6386671B2 September 10, 2015
24. UV Film Sensor and Preparation Method
Therefor, and Touch Control Screen
(UV 薄膜傳感器及其製造方法和觸摸屏)
Invention Patent Lens Changsha South Korea KR101957192B1 September 10, 2015
25. UV Film Sensor and Preparation Method
Therefor, and Touch Control Screen
(UV 薄膜傳感器及其製
造方法和觸摸屏)
Invention Patent Lens Changsha U.S. US10698539B2 September 10, 2015
26. Pressure Touch Screen, and Display Device
(壓力觸控屏及顯示裝置)
Invention Patent Lens Changsha PRC ZL201611186164.3 December 20, 2016
27. A Touchscreen with 3D Display Function
and Its Manufacturing Method
(一種具備3D顯示功能的
觸摸屏及其製作方法)
Invention Patent Lens Changsha PRC ZL201510508058.1 August 18, 2015
28. A Strengthening Method for Ultra-thin
Glass, and Ultra-thin Glass, Flexible
Screens, and Devices
(超薄玻璃的強化方法及超薄玻璃、柔性
屏幕和設備)
Invention Patent Lens Changsha PRC ZL202110308469.1 March 23, 2021
29. Glass Strengthening Method
(玻璃強化方法)
Invention Patent Lens Changsha PRC ZL202210031638.6 January 12, 2022
30. A Tempered Glass Molten Salt and a
Processing Method for Tempered Glass
(一種鋼化玻璃熔鹽及鋼化
玻璃的處理方
法)
Invention Patent Lens Changsha PRC ZL201810619981.6 June 15, 2018
31. Anti-fingerprint Film, Glass Products, and
Their Preparation Method
(防指紋膜、玻璃製品及
其製備方法)
Invention Patent Lens Changsha PRC ZL202110470486.5 April 29, 2021
32. A Colorless Hard AR film and Its
Preparation Method
(一種無色硬質AR膜及其製備方法)
Invention Patent Lens Changsha PRC ZL201510808227.3 November 19, 2015
33. Preparation Method for Non-metal
Absorptive Gradient Films, Membrane-
equipped Devices, and Electronic
Products
(非金屬吸收漸變薄膜的製備方法、具膜
器件和電子產品)
Invention Patent Lens Changsha PRC ZL202110488326.3 May 6, 2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 541 ---
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
34. Coating Umbrella and
Coating Equipment
(鍍膜傘及鍍膜設備)
Utility Model Lens Changsha PRC ZL201720910200.X July 25, 2017
35. Method for Forming
Curved Glass
(一種曲面玻璃的成型方法)
Invention Patent Lens Changsha PRC ZL201410782315.6 December 16, 2014
36. Method for Forming
Curved Glass
(一種曲面玻璃的成型方法)
Invention Patent Lens Changsha Japan JP6542895B2 September 10, 2015
37. Method for Forming
Curved Glass
(一種曲面玻璃的成型方法)
Invention Patent Lens Changsha South Korea KR102025686B1 September 10, 2015
38. Method for Forming
Curved Glass
(一種曲面玻璃的成型方法)
Invention Patent Lens Changsha U.S. US10759689B2 September 10, 2015
39. A Glass Heat Bending Machine and Its
Heat Bending Process
(一種玻璃熱彎機及
其熱彎工藝)
Invention Patent Lens Changsha PRC ZL201710390508.0 May 27, 2017
40. Electronic Devices, Curved Lenses, and
Their Processing Methods
(電子設備、
曲面鏡片及
其加工方法)
Invention Patent Lens Changsha PRC ZL201710725434.1 August 22, 2017
41. Transfer Equipment and
Its Printing Method
(轉印設備及其印刷方法)
Invention Patent Lens Changsha PRC ZL202110465880.X April 28, 2021
42. Printing Equipment and Its Printing
Method
(印刷設備及其印刷方法)
Invention Patent Lens Changsha PRC ZL202110466733.4 April 28, 2021
43. A Method of Preparing a Gradient Color
Film
(一種漸變色薄膜的製備方法)
Invention Patent Lens Changsha PRC ZL202110000869.6 January 4, 2021
44. A Method for Polishing AG Glass,
Luminance Gradient AG Glass, and
Mobile Phone
(拋光AG玻璃的方法、亮度
漸變的AG玻璃和手機)
Invention Patent Lens Changsha PRC ZL202110396920.X April 13, 2021
45. Gradient Color Spraying
Process, Cover Plate, and Electronic
Devices
(漸變色噴塗工藝、蓋板及
電子設備)
Invention Patent Lens Changsha PRC ZL202110748393.4 July 1, 2021
46. Loading Equipment, and CNC Processing
Equipment
(上料設備及CNC 加工設備)
Invention Patent Lens Changsha PRC ZL201810398845.9 April 28, 2018
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 542 ---
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
47. Optical Fingerprint Sensor Structures and
Electronic Devices
(光學指紋傳感器結構及
電子設備)
Invention Patent Lens Changsha PRC ZL201711062368.0 November 2, 2017
48. Covers, Ultrasonic Fingerprint Sensor
Structures and Electronic Devices
(蓋板、超聲指紋傳感器結構及電子設
備)
Invention Patent Lens Changsha PRC ZL201710956811.2 October 13, 2017
49. Optical Fingerprint Sensors, Terminal
Equipment and Optical Fingerprint
Sensor Processing Technology
(光學式指紋傳感器、終端
設備及光學式指紋傳感器
加工工藝)
Invention Patent Lens Changsha PRC ZL201710796548.5 September 6, 2017
50. Optical Fingerprint Sensor Device and
Electronic Devices
(光學指紋傳感裝置與電子
設備)
Invention Patent Lens Changsha PRC ZL201710797091.X September 6, 2017
51. Fingerprint Sensor Device and Smart
Terminal
(指紋傳感裝置及智能
終端)
Invention Patent Lens Changsha PRC ZL201710797085.4 September 6, 2017
52. Fingerprint Sensor, Smart Terminal, and
Fingerprint Sensor Packaging Method
(指紋傳感器、智能終端及
指紋傳感器封裝方法)
Invention Patent Lens Changsha PRC ZL201710796564.4 September 6, 2017
53. Fingerprint Recognition Component, and
Smart Terminal
(指紋識別組件及智能終端)
Invention Patent Lens Changsha PRC ZL201710733627.1 August 24, 2017
54. A Fingerprint Recognition Module and Its
Preparation Method
(一種指紋識別模組及
其製備方法)
Invention Patent Lens Changsha PRC ZL201611095313.5 December 2, 2016
55. A Flexible Cover Plate and Its Preparation
Method, Flexible OLED Display Screen
(一種柔性蓋板及其製備方法、柔性
OLED 顯示屏)
Invention Patent Lens Changsha PRC ZL201910671706.3 July 24, 2019
56. A Method for Preparing Glass Plate with
Color Ink Pattern and the Glass Plate
(一種含彩色油墨紋路圖案的玻璃板
的製
備方法及玻璃板)
Invention Patent Lens Changsha PRC ZL201610371096.1 May 30, 2016
57. Processing Method for
Ultra-thin Glass Edges
(超薄玻璃邊緣加工方法)
Invention Patent Lens Changsha PRC ZL202211268684.4 October 17, 2022
58. A Film Sticking Device and Method for
3D Glass with Two Curved Edges
(一種用於兩對邊為曲邊的3D玻璃的貼
膜裝置及貼膜方法)
Invention Patent Lens Changsha PRC ZL201610277657.1 April 28, 2016
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 543 ---
No Patent Name Type Patent Holder
Jurisdiction of
Registration Patent Numb er Date of Re gistration
59. Method for Preparing Sapphire Lens and
Sapphire Lens
(一種藍寶石鏡片的製備方法及一種視窗
鏡片)
Invention Patent Lens Changsha U.S. US10532525B2 December 10, 2015
60. Method for Preparing Sapphire Lens and
Sapphire Lens
(一種藍寶石鏡片的製備方法及一種視窗
鏡片)
Invention Patent Lens Changsha South Korea KR102103945B1 December 10, 2015
61. A Polishing Method for Round Holes and
Its Polishing System, Polishing Device,
and Polishing Equipment
(一種圓孔的拋光方法及
其拋光系統、拋光裝置和
拋光設備)
Invention Patent Lens Intelligent
Robot
PRC ZL202110366123.7 April 6, 2021
62. A Glass Polishing Machine and Polishing
Method
(一種玻璃拋光機及拋光方法)
Invention Patent Lens Intelligent
Robot
PRC ZL202110768260.3 July 7, 2021
63. A Polishing Machine
(一種拋光機)
Invention Patent Lens Intelligent
Robot
PRC ZL202110467743.X April 28, 2021
64. A Hot Bending Production Line and Its
Loading and Unloading Equipment
(一種熱彎生產線及
其上下料設備)
Invention Patent Lens Intelligent
Robot
PRC ZL201910641169.8 July 16, 2019
65. Pad Printing Machine
(移印機)
Invention Patent Lens Intelligent
Robot
PRC ZL201910954695.X October 9, 2019
66. A Pad Printing Machine
(一種移印機)
Invention Patent Lens Intelligent
Robot
PRC ZL201910954221.5 October 9, 2019
67. A Method for Electroplating Gradient
Color
(電鍍漸變色的方法)
Invention Patent Lens Dongguan PRC ZL201711297626.3 December 8, 2017
68. Ultra-hard Anti-reflection Film and
Electronic Devices
(超硬增透膜和電子設備)
Utility Model Lens Dongguan PRC ZL202323145522.4 November 21, 2023
69. Curved Cover Plate,
Display Screen, and
Electronic Devices
(曲面蓋板、顯示屏及
電子設備)
Utility Model Lens Dongguan PRC ZL202320391195.1 March 3, 2023
70. A Middle Frame Processing Method and
Processing Equipment
(一種中框加工方法
及
加工裝置)
Invention Patent Lens Taizhou PRC ZL202111453511.5 December 1, 2021
71. Pipe Cutting Equipment and Cutting
Method
(管材切割設備及切割方法)
Invention Patent Lens Taizhou PRC ZL201810812281.9 July 23, 2018
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 544 ---
Software copyrights
As of December 31, 2024, the Group had registered the following software copyrights which
are material to our business.
No Software Name Registrant
Registration
Number
Date of Initial
Publication
1. Smart Factory Digital Twin Platform
(Abbreviation: DTP) V1.0
(智慧工廠數字孿生平台【簡稱：DTP】V1.0)
Lens System
Integration
2023SR1582859 August 28, 2023
2. Big Data Quality Analysis System V1.0
(大數據品質分析系統V1.0)
Lens System
Integration
2023SR1078065 April 28, 2023
3. Intelligent Tool Management System V1.0
(刀具智能管理系統V1.0)
Lens System
Integration
2023SR1082064 December 15, 2022
4. CNC Machine Tool Operation
Management System V1.0
(數控機床運行管理系統V1.0)
Lens System
Integration
2023SR1083560 April 21, 2023
5. Smart Energy Monitoring and Control
Platform (Abbreviation: EMS) V1.0
(智慧能源監測控制平台【簡稱：EMS】V1.0)
Lens System
Integration
2022SR0737492 March 15, 2022
6. Production Management System
(Abbreviation: PMS) V1.0
(生產管理系統
【簡稱：PMS】V1.0)
Lens System
Integration
2021SR1692472 September 21, 2019
7. AI-Based Visual Positioning System V1.0
(基於人工智能的視覺定位系統V1.0)
Lens System
Integration
2021SR1692544 November 29, 2019
8. Intelligent Warehouse Management System
(Abbreviation: WMS) V1.0
(智能倉儲管理系統【簡稱：WMS】V1.0)
Lens System
Integration
2021SR1530883 March 18, 2021
9. Product Quality Traceability
Management System V1.0
(產品質量追溯管理系統V1.0)
Lens System
Integration
2021SR1440860 December 31, 2020
10. Single Sign-On Platform
(Abbreviation: SSO) V1.0
(單點登錄平台【簡稱：SSO】V1.0)
Lens System
Integration
2021SR1440839 October 24, 2019
11. Enterprise Asset Management System
(Abbreviation: EAM) V1.0
(企業資產管理系統【簡稱：EAM】V1.0)
Lens System
Integration
2021SR0986842 February 19, 2020
12. Customer Relationship Management System
(Abbreviation: CRM) V1.0
(客戶關係管理系統【簡稱：CRM】V1.0)
Lens System
Integration
2021SR0965318 April 1, 2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 545 ---
No Software Name Registrant
Registration
Number
Date of Initial
Publication
13. Quality Management System
(Abbreviation: QMS) V1.2.0
(品質管理系統【簡稱：QMS】V1.2.0)
Lens System
Integration
2021SR0901667 December 1, 2020
14. Manufacturing Execution System
(Abbreviation: MES) V2020
(生產製造執行管理系統【簡稱：MES】
V2020)
Lens System
Integration
2021SR0901666 December 31, 2019
15. Supply Chain Relationship Management
System (Abbreviation: SRM) V1.0
(供應鏈關係管理系統【簡稱SRM】V1.0)
Lens System
Integration
2021SR0901665 December 31, 2019
16. Dynamic Environment Monitoring
Platform V1.2.6
(動環監控平台V1.2.6)
Lens System
Integration
2021SR0833776 March 25, 2021
17. Access Control Management System V1.8.1.2
(門禁管理系統V1.8.1.2)
Lens System
Integration
2021SR0764275 March 10, 2020
18. Industrial Internet Platform V1.2.0
(工業互聯網平台V1.2.0)
Lens System
Integration
2021SR0426732 November 3, 2020
19. Recruitment Management System
(Abbreviation: RMS) V1.4
(招聘管理系統【簡稱：RMS】V1.4)
Lens System
Integration
2020SR1855566 September 27, 2019
20. Human Resource Management
System V1.1.4.0
(人力資源管理系統V1.1.4.0)
Lens System
Integration
2020SR1610000 July 15, 2019
21. Electronic Contract Signing System V1.0
(電子合同簽約系統V1.0)
Lens System
Integration
2020SR1592507 May 28, 2020
22. Dart Low-Code Development Platform V1.0
(Dart 低代碼開發平台V1.0)
Lens System
Integration
2020SR0839193 July 31, 2019
23. Comprehensive Laboratory Management
System V1.0
(綜合實驗室管理系統V1.0)
the Company 2020SR0270916 September 20, 2019
24. Dormitory Management System V1.0
(宿舍管理系統V1.0)
the Company 2020SR0259407 January 15, 2019
25. Two-Factor Authentication System V1.0
(雙因子認證系統V1.0)
Lens Changsha 2020SR0279412 January 30, 2018
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 546 ---
DISCLOSURE OF INTERESTS
Disclosure of Interests of Directors, Superv isors and Chief Executive of the Company
Immediately following the completion of the Global Offering (assuming the Over-allotment
Option and the Offer Size Adjustment Option are not e xercised), the interests and/or short positions
(as applicable) of the Directors, Supervisors and the chief executive of the Company in the Shares,
underlying Shares and debentures of the Company and any interests and/or short positions (as
applicable) in shares, underlying Shares or debentures of any of the Company ’sa s s o c i a t e d
corporations (within the meaning of Part XV of t he SFO) which (i) will have to be notified to the
Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests and/or short positions (as applicable) which they are taken or deemed to have
under such provisions of the SFO), (ii) will be re quired, pursuant to Section 352 of the SFO, to be
entered in the register referred t o therein or (iii) will be required, pursuant to the Model Code for
Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Hong Kong
Listing Rules, to be notified to the Company and the Hong Kong Stock Exchange, in each case
once the H Shares are listed on the Hong Kong Stock Exchange, will be as follows:
(i) Interests in the Shares of our Company
Name of Director or
Supervisor Nature of Interest Type of Shares
Number of Shares
Held or Interested
Approximate %
of Interests in Shares of
Our Company
Immediately after the
Global Offering
Ms. Chau . . . . . . . . . . Interest in controlled
corporation (1)(2)(3)
A Shares 3,116,352,600 59.42%
Interest of spouse (4) A Shares 3,347,879 0.06%
Mr. Cheng . . . . . . . . . . Beneficial owner A Shares 3,347,879 0.06%
Interest of spouse (4) A Shares 3,116,352,600 59.42%
Mr. Rao Qiaobing . . . . . Beneficial owner A Shares 2,793,741 0.05%
Mr. Tang Jun . . . . . . . . Beneficial owner A Shares 256,279 0.005%
Mr. Chen Xiaoqun . . . . . Beneficial owner A Shares 368,239 0.01%
Ms. Zhou Xinyi . . . . . . Beneficial owner A Shares 1,446,225 0.03%
Interest of spouse
(5) A Shares 125,083 0.003%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 547 ---
Notes:
(1) As of the Latest Practicable Date, Lens Tec hnology (HK) held 2,804,509,821 A Shares. Lens
Technology (HK) was directly wholly owned by Ms. Chau. As such, Ms. Chau will be deemed to be
interested in the A Shares held by Lens Technology (HK) by virtue of the SFO.
(2) As of the Latest Practicable Date, Changsha Q unxin held 288,025,612 A Shares. Changsha Qunxin is a
limited liability company established in the PRC, which is owned as to 97.9% by Ms. Chau and 2.1%
by Mr. Cheng. As such, Ms. Chau is deemed to be interested in the A Shares held by Changsha Qunxin
by virtue of the SFO.
(3) As of the Latest Practicable Date, there were 23,817,167 A Shares repurchased and held in our
Company ’s stock repurchase account as treasury shares. Ms . Chau, directly and indirectly through Lens
Technology (HK) and Changsha Qunxin, controls more than one-third of the voting power at the
general meetings of our Company and would be taken to have an interest in such repurchased A Shares
held by our Company by virtue of the SFO.
(4) Ms. Chau is the spouse of Mr. Cheng. Therefore, each of Ms. Chau and Mr. Cheng is deemed to be
interested in the Shares held by each other by virtue of the SFO.
(5) As of the Latest Practicable Date, the spouse of Ms . Zhou Xinyi held 125,083 A Shares. Therefore, Ms.
Zhou Xinyi is deemed to be interested in the A Shares held by her spouse by virtue of the SFO.
(ii) Interests in our associated corporations
Name of Director Nature of Interest
Name of Associated
Corporation
Number of
Shares
Approximate %
of Shareholding
M s .C h a u ....... I n t e r e s ti nc o n t r o l l e d
corporation (1)
Lens Technology (HK) 100 100.00%
M r .C h e n g...... I n t e r e s to fs pouse (2) Lens Technology (HK) 100 100.00%
Notes:
(1) Lens Technology (HK), one of the Controlling Share holders, is a company incorporated in Hong Kong
with limited liability. As of the Latest Practicable Date, Lens Technology (HK) was directly wholly
owned by Ms. Chau.
(2) Ms. Chau is the spouse of Mr. Cheng. Therefore, Mr . Cheng is deemed to be interested in all the shares
that Ms. Chau is interested in by virtue of the SFO.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 548 ---
Disclosure of Interests of Substantial Shareholders
Save as disclosed below and the disclosure in the section headed ‘‘Substantial Shareholders, ’’
our Directors are not aware of any other person who will, immediately following completion of the
Global Offering (assuming the Over-allotment Opti on and the Offer Size Adjustment Option are not
exercised), and no other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing Date, ha ve an interest or short position in our Shares or
underlying Shares which would fall to be disclosed to us under the provisions of Divisions 2 and 3
of Part XV of the SFO, or, will be, directly or indirectly, interested in 10% or more of the issued
voting shares of our Company or any other member of our Group.
Member of Our Group Name of Substantial Shareholder
Approximate %
of Shareholding
Lens Intelligent Robot .......... M r .Q i uH u i s h e n g 2 0 . 0 0 %
Lens Intelligent Robot .......... M r .G o uH u a 1 5 . 0 0 %
L e n sH u a l i a n ................ H u n a nH u a l i a nC e r a m i c sC o . ,L t d . *
(湖南華聯瓷業股份有限公司)
49.00%
Changsha Yongan New Material
Company Limited*
(長沙永安新材料有限公司) .....
Shenzhen Yong ’an Fine Chemical
Engineering Company Limited*
(深圳市永安精細化工有限公司)
49.00%
FURTHER INFORMATION ABOUT DIRECTORS AND SUPERVISORS
Particulars of the Service Contracts
Each of our Directors and Supervisors has entered into a service contract with our Company.
Save as disclosed above, none of the Directors or Supervisors has or is proposed to have
entered into any service contract with any membe r of the Group (excluding contracts expiring or
determinable by any member of our Group within one year without payment of compensation other
than statutory compensation).
Remuneration of Directors and Supervisors
For details of the remuneration of Directors and Supervisors, see ‘‘Directors, Supervisors and
Senior Management — Remuneration of the Directors, Su pervisors and Senior Management ’’ and
Note 13 to ‘‘Appendix I — Accountants ’ Report ’’of this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 549 ---
Agency Fees or Commissions Received
The Underwriters will receive an underwri ting commission in connection with the
Underwriting Agreements, as detailed in ‘‘Underwriting — Underwriting Arrangements and
Expenses. ’’ Save in connection with the Underwriting Agreements, no commissions, discounts,
brokerages or other special terms have been gr a n t e db yt h eG r o u pt oa n yp e r s o n( i n c l u d i n gt h e
Directors, promoters and experts referred to in ‘‘ — Other Information — Qualifications and
Consents of Experts ’’ below) in connection with the issue or s ale of any capital or security of the
Company or any member of the Group within the two years immediately preceding the date of this
Prospectus.
Within the two years immediately preceding the date of this Prospectus, no commission has
been paid or is payable for subscription, agreeing to subscribe, procuring subscription or agreeing
to procure subscription for any share in or debentures of the Company.
Personal Guarantees
The Directors have not provided personal guara ntees in favour of lenders in connection with
banking facilities granted to the Group.
Disclaimers
(a) Save as disclosed in Note 42 to ‘‘Appendix I — Accountants ’ Report ’’ of this
Prospectus, none of the Directors, Supervisors nor any of the experts referred to in ‘‘ —
Other Information — Qualifications and Consents of Experts ’’ below has any direct or
indirect interest in the promotion of, or i n any assets which have been, within the two
years immediately preceding the date of this Prospectus, acquired or disposed of by, or
leased to, any member of the Group, or are proposed to be acquired or disposed of by, or
leased to, any member of the Group.
(b) Save in connection with the Underwriting Agreements, none of the Directors,
Supervisors nor any of the experts referred to in ‘‘Other Information — Qualifications
and Consents of Experts ’’ below is materially interested in any contract or arrangement
subsisting at the date of this Prospectus whic h is significant in relation to the business of
the Group.
(c) So far as is known to the Directors, none of the Directors or their associates or any
Shareholders who are expected to be intere sted in 5% or more of the issued share capital
of the Company has any interest in the five largest customers or the five largest suppliers
of the Group for each year/period during the Track Record Period.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 550 ---
(d) Save as disclosed in the sectioned headed ‘‘ — Disclosure of Interests — Disclosure of
Interests of Directors, Supervisors and Chief Executive of the Company, ’’ none of our
Directors, Supervisors 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 Hong Kong 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 Hong Kong Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issue rs once the H Shares are listed on the Hong
Kong Stock Exchange.
SHARE INCENTIVE SCHEME
2023 Restricted Share Incentive Plan
The following is a summary of the principal terms of the 2023 Restricted Share Incentive
Plan. The terms of the 2023 Restricted Share Incentive Plan are not subject to the provisions of
Chapter 17 of the Hong Kong Listing Rules as they do not involve any grant of restricted Shares by
our Company after the Listing.
(i) Purpose
The purpose of the 2023 Restricted Share Incentive Plan is to improve our Group ’s
incentive mechanism and to attract and retai n talents to achieve a sustained and healthy
development of our Group in order to realize our Group ’s long-term objectives. The 2023
Restricted Share Incentive Plan is implemented to align the interests of the Shareholders with
the interests of the Group and employees which w ill benefit the sustained development of our
Group.
(ii) Types
Pursuant to the 2023 Restricted Share Incenti ve Plan, there are two types of restricted
Shares, namely Type I Restricted Shares and Type II Restricted Shares. The grantees of Type I
Restricted Shares shall be entitled to receive newly issued A Shares, with certain restrictions
stipulated under the 2023 Restricted Share Incen tive Plan. The grantees of Type II Restricted
Shares shall have the right to receive A Shares repurchased by the Company from secondary
market upon the satisfaction of vesting condit ions under the 2023 Restricted Share Incentive
Plan.
The 2023 Restricted Share Incentive Plan include two parts with respect to each of the
Type I Restricted Shares (the ‘‘Type I Scheme ’’) and the Type II Restricted Shares (the
‘‘Type II Scheme ’’), respectively.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 551 ---
(iii) Administration
The 2023 Restricted Share Incentive Plan is subject to the approval of the Shareholders ’
general meeting, administration of the Board and the supervision of Supervisory Committee
and independent non-executive Directors.
(iv) Participants
The participants of the 2023 Restricted Share Incentive Plan include key personnels of
our Group such as our Directors (excluding ind ependent non-executive Directors), senior
management and core technical or business st aff. The scope of participants under the 2023
Restricted Share Incentive Plan excludes Supervisors and independent non-executive
Directors.
(v) Source and maximum number of Shares
Type I Restricted Shares are A Shares to be newly issued by our Company and Type II
Restricted Shares are A Shares repurchased by our Company from the secondary market. Type
I Restricted Shares are subject to a lock-up p eriod and will only be unlocked upon fulfilling
the unlocking conditions stipulated under the 20 23 Restricted Share Incentive Plan. Similarly,
Type II Restricted Shares are subject to a vesting period and will only be vested upon
fulfilling the vesting conditions stipulated under the 2023 Restricted Share Incentive Plan.
The maximum number of Restricted Shares tha t can be granted under the 2023 Restricted
Share Incentive Plan is 53,159,866 A Shares, including 10,631,973 Type I Restricted Shares
and 42,527,893 Type II Restricted Shares.
(vi) Term and date of grant
The date on which the Restricted Shares are granted shall be determined by the Board
after the approval by the Shareholders ’ general meeting. The grant of Restricted Shares shall
be registered and announced by the Company within 60 days after the approval of the 2023
Restricted Share Incentive Plan by the Shareholders ’ general meeting.
The Type I Restricted Share Incentive Scheme shall be effective from the completion
date of the grant of Type I Restricted Shares up to the date when all the Type I Restricted
Shares are unlocked or have been repurchased and cancelled pursuant to the 2023 Restricted
Share Incentive Plan, provided that the term of the Type I Scheme shall not exceed 48 months
in any event.
The Type II Restricted Share Incentive Sche me shall be effective from the date of the
initial grant of Type II Restricted Shares up to the date when all the Type II Restricted Shares
have been vested or lapsed pursuant to the 2023 Restricted Share Incentive Plan, provided that
the term of the Type II Scheme shall not exceed 48 months in any event.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 552 ---
The date of grant for each of the Type I Scheme and the Type II Scheme shall be
determined by the Board after the 2023 Restricted Share Incentive Plan is approved by the
Shareholders ’ general meeting.
(vii) Lock-up requirements for Directors and the senior management
If the grantee is a Director or a senior management of our Company, the Shares to be
transferred each year shall not exceed 25% of the total Shares he or she holds, and no Share
held by such Director or senior management shall be transferred within six months after
termination of his of her employment with the Company. If the grantee is a Director or senior
management of our Company, income gained through sale of Shares within six months of the
purchase or purchase of Shares within six months of the sale shall belong to our Company and
will be forfeited by the Board. If there is any change in the applicable laws and regulations on
the foregoing lock-up requirements, the gra ntee shall comply with the revised laws and
regulations.
(viii) Conditions to the grant of Restricted Shares
The Restricted Shares (including the Type I Restricted Shares and the Type II Restricted
Shares) under the 2023 Restricted Share Incentive Plan shall be granted to eligible participants
if the following conditions are fulfilled:
(a) with respect to our Company, none of the following circumstances having occurred:
(1) an audit report with an adverse opinion or a disclaimer of opinion has been
issued by the reporting account ants with respect to our Company ’s
accountants ’ report for the most recent fiscal year;
(2) an audit report with an adverse opinion or a disclaimer of opinion has been
issued by the reporting accountant with respect to internal control contained in
accountants ’ report for the most recent fiscal year;
(3) our Company has not distributed dividends in accordance with the laws and
regulations, our Articles of Associatio n or our public commitment within the
last 36 months after its listing;
(4) applicable laws and regulations prohibit the implementation of any share
incentive plan; or
(5) any other circumstances determined by the CSRC.
(b) with respect to the grantee, none of the following circumstances having occurred:
(1) the grantee has been regarded as an inappropriate person by the stock
exchange within the last 12 months;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 553 ---
(2) the grantee has been regarded as an inappropriate person by the CSRC or its
local office within the last 12 months;
(3) the grantee has been punished or prohibited from entering into the securities
market by the CSRC or its local office due to material non-compliance of laws
and regulations within the last 12 months;
(4) the grantee is not qualified to serve as a director or senior management
according to the PRC Company Law;
(5) the grantee is prohibited from participating in any share incentive plan of
listed companies according to appl icable laws and regulations; or
(6) any other circumstances determined by the CSRC.
(ix) Unlocking and vesting of Restricted Shares
The lock-up period or vesting period (where a pplicable) for Type I Restricted Shares or
Type II Restricted Shares commences from com pletion date of registration of grant to the
grantee and the interval between the grant date and the date of unlocking or vesting of the
Restricted Shares shall be 12 or 24 months.
For both types of Restricted Shares, the Re stricted Shares will be unlocked or vested
(where applicable) in tranches of 50% and 50% in each of the two lock-up or vesting periods
(where applicable) that occur between the firs t trading date after the 12-month anniversary
from the grant date and the last trading day up to the 36-month anniversary of the grant date.
The grantees shall pay the price of RMB6.34 per Share upon fulfilment of all the unlocking or
vesting conditions of the Restricted Shares to purchase A Shares pursuant to the 2023
Restricted Share Incentive Plan. On Septe mber 25, 2024, as approved by the Board and
pursuant to share adjustment mechanism under t he 2023 Restricted Share Incentive Plan, the
grant price was adjusted from RMB6.34 per Sha re to RMB6.04 per Share due to distribution
of dividend by the Company.
The number of Restricted Shares granted an d/or the grant prices will be adjusted upon
the occurrence of certain events, including, amon g others, increase of share capital by way of
capitalization of capital reserves, issue of bonus shares, subdivision of shares and issue of new
shares. Our Company may repurchase and cancel the granted but not unlocked Type I
Restricted Shares or void the granted but not vested Type II Restricted Shares upon
occurrence of certain events, including, among others, the change of the positions of the
grantee or termination of empl oyment. Subject to the price adjustment mechanisms and other
terms and conditions as set out under the 2023 Restricted Share Incentive Plan, the price
payable by our Company for the repurchase of Restricted Shares shall be equivalent to the
grant price of the relevant Restricted Shares.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 554 ---
(x) Dividend and voting rights
Upon unlocking or vesting of the A Shares by our Company, the grantees of Restricted
Shares will be entitled to exercise the right of S hareholders, including, among others, the right
to receive dividends and voting rights. Before the unlocking or vesting of the Restricted
Shares, the Restricted Shares (including the r ight to receive dividends) shall be locked and
such Restricted Shares shall not be transferred or used to guarantee or repay debts.
(xi) Outstanding Restricted Shares
As of the Latest Practicable Date, the number of outstanding Restricted Shares granted
under the 2023 Restricted Share Incentive Plan was 23,522,457, representing approximately
0.45% of the issued Shares immediately followi ng the completion of the Listing (assuming no
changes to our issued Shares between the Late st Practicable Date and the Listing Date and
before the exercise of the Over-allotment Option and the Offer Size Adjustment Option).
The following table sets forth the number of outstanding Restricted Shares granted to
Directors and senior management of our Company under the 2023 Restricted Share Incentive
Plan as of the Latest Practicable Date:
Name of
grantee Position in our Company Date of grant
Number of
outstanding
restricted Shares
Grant
Price
Lock-up/
vesting
period
Approximate
percentage of
total issued Shares
immediately
after completion
of the Global
Offering
(assuming the
Over-allotment
Option and the
Offer Size
Adjustment
Option are not
exercised)
Mr. Rao
Qiaobing . .
Executive Director and deputy
general manager
September 22, 2023 10,000 Type I
Restricted Shares
RMB6.04 Note 1 0.0002%
September 22, 2023 40,000 Type II
Restricted Shares
RMB6.04 Note 2 0.001%
Mr. Jiang Nan . Deputy general manager,
president of China region
and Board Secretary
September 22, 2023 10,000 Type I
Restricted Shares
RMB6.04 Note 1 0.0002%
September 22, 2023 40,000 Type II
Restricted Shares
RMB6.04 Note 2 0.001%
Mr. Cai
Xinfeng . . .
Deputy general manager September 22, 2023 15,000 Type I
Restricted Shares
RMB6.04 Note 1 0.0003%
September 22, 2023 60,000 Type II
Restricted Shares
RMB6.04 Note 2 0.001%
Mr. Chen
Yunhua . . .
Deputy general manager September 22, 2023 10,000 Type I
Restricted Shares
RMB6.04 Note 1 0.0002%
September 22, 2023 40,000 Type II
Restricted Shares
RMB6.04 Note 2 0.001%
Mr. Liu
Shuguang . .
Deputy general manager and
chief financial officer
September 22, 2023 10,000 Type I
Restricted Shares
RMB6.04 Note 1 0.0002%
September 22, 2023 40,000 Type II
Restricted Shares
RMB6.04 Note 2 0.001%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 555 ---
Notes:
(1) Type I Restricted Shares shall be unlocked in traches of 50% and 50% in each of the two lock-up
periods that occur between the first trading day af ter the 12-month anniversary from the grant date and
the last trading day up to the 36-month anniversary of the grant date.
(2) Type II Restricted Shares shall be vested in traches of 50% and 50% in each of the two vesting periods
that occur between the first trading day after the 12 -month anniversary from the grant date and the last
trading day up to the 36-month anniversary of the grant date.
The following table sets forth the number of outstanding Restricted Shares granted to
other grantees (excluding Directors and se nior management of our Company) under the 2023
Restricted Share Incentive Plan as of the Latest Practicable Date:
Number of Grantees Date of grant
Number of outstanding
Restricted Shares Grant Price
Lock-up/
vesting
period
Approximate
percentage of
total issued
Shares
immediately
after completion
of the Global
Offering
(assuming the
Over-allotment
Option and the
Offer Size
Adjustment
Option are not
exercised)
2,382 . . . . . . . . . . . September 22, 2023 4,649,491 Type I Restricted Shares RMB6.04 Note 1 0.09%
2,375 . . . . . . . . . . . September 22, 2023 18,597,966 Type II Restricted Shares RMB6.04 Note 2 0.35%
Notes:
(1) Type I Restricted Shares shall be unlocked in traches of 50% and 50% in each of the two lock-up
periods that occur between the first trading day af ter the 12-month anniversary from the grant date and
the last trading day up to the 36-month anniversary of the grant date.
(2) Type II Restricted Shares shall be vested in traches of 50% and 50% in each of the two vesting periods
that occur between the first trading day after the 12 -month anniversary from the grant date and the last
trading day up to the 36-month anniversary of the grant date.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 556 ---
OTHER INFORMATION
Estate Duty
The Directors have been advised that no materia l liability for estate duty is likely to fall on
the Group.
Litigation
As of the Latest Practicable Date, the Company w as not engaged in any outstanding litigation
or arbitration which may have material adverse effect on the Global Offering and, so far as the
Directors are aware, no material litigation or cl aim was pending or threatened by or against the
Company.
Sole Sponsor
The Sole Sponsor satisfies the independence c riteria applicable to sponsor set out in Rule
3A.07 of the Hong Kong Listing Rules.
Pursuant to the engagement letter entered into between the Company and the Sole Sponsor,
the Sole Sponsor ’s fees payable by the Company to the Sole Sponsor in respect of its services as
sponsor in connection with the Listing is US$500,000.
Compliance Advisor
The Company has appointed Gram Capital Limited as the Compliance Advisor upon Listing in
compliance with Rule 3A.19 of the Hong Kong Listing Rules.
Preliminary Expenses
As of the Latest Practicable Date, our Compan y has not incurred any material preliminary
expenses.
Promoters
The promoters of the Company are Lens Technology (HK) and Changsha Qunxin.
Within the two years immediately preceding the da te of this Prospectus, no cash, securities, or
other benefit has been paid, allotted or given, or h as been proposed to be paid, allotted or given, to
any of the promoters named above in connect ion with the Global Offering or the related
transactions describe d in this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


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Qualifications and Consents of Experts
The qualifications of the experts which have g iven opinions or advices which are contained in,
or referred to in, this Prospectus are as follows:
Name of Expert Qualifications
CITIC Securities (Hong Kong)
L i m i t e d ..................
A licensed corporation under the SFO to conduct Type
4 (advising on securities) and Type 6 (advising on
corporate finance) regulated activities as defined
under the SFO
D e l o i t t eT o u c h eT o h m a t s u ....... C e r t i f i e dP u b l i cA c c o u n t a n t sa n dR e g i s t e r e dP u b l i c
Interest Entity Auditor
S u n d i a lL a wF i r m............. C o m p a n y ’s PRC Legal Advisor
Frost & Sullivan (Beijing) Inc.,
S h a n g h a iB r a n c hC o . .........
Independent industry consultant
Beijing Tianzhi Certified Tax
Agents Co., Ltd. Hunan Branch . .
Transfer pricing consultant
DLA Piper Singapore Pte. Ltd. . . . . Legal advisor on tariffs
Each of the experts listed above has given and has not withdrawn their respective written
consents to the issue of this Prospectus with the inclusion of their reports and/or letters and/or
opinions and the references to their names incl uded in the form and context in which they are
respective included.
Binding Effect
This Prospectus shall have the effect, if an a pplication is made in pursuance hereof, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions) of
Sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so
far as applicable.
Bilingual Prospectus
The English language and Chinese language vers ions of this Prospectus are being published
separately, in reliance upon the exemption provided in Section 4 of the Companies Ordinance
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L
of the Laws of Hong Kong).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 558 ---
Miscellaneous
(a) save as disclosed in ‘‘ — Further Information about the Company ’’ of this section, within
the two years preceding the date of this P rospectus, no share or loan capital of the
Company or any of its subsidiary has been is sued or has been agreed to be issued fully
or partly paid either for cash or f or a consideration other than cash;
(b) no share or loan capital of the Company or any of its subsidiary is under option or is
agreed conditionally or uncond itionally to be put under option;
(c) no founder, management or deferred share s of the Company or any of its subsidiary have
been issued or have been agreed to be issued;
(d) save for the A Shares that are listed on t he Shenzhen Stock Exchange and the H Shares
to be issued in connection with the Global Offering, none of the equity and debt
securities of the Company or its subsidiary i s presently listed or dealt in on any other
stock exchange nor is any listing or permission to deal being or proposed to be sought;
(e) the Company has no outstanding convertible debt securities or debentures;
(f) none of the experts listed under ‘‘ — Qualifications and Consents of Experts ’’:
(i) is interested beneficially or non-beneficially in any shares in any member of the
Group; or
(ii) has any right or option (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in any member of the Group save in
connection with the Underwriting Agreements.
(g) the English text of this Prospectus shall prevail over their respective Chinese text;
(h) there has not been any interruption in the business of the Group which may have or has
had a significant effect on the financial position of the Group in the 12 months preceding
the date of this Prospectus; and
(i) there are no contracts for hire or hire purchase of plant to or by us for a period of over
one year which are substantial in relation to our business.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-26 –


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DOCUMENTS DELIVERED TO THE REGI STRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this Prospectus delivered to the Registrar of
C o m p a n i e si nH o n gK o n gf o rr e g i s t r a t i o nw e r e :
(a) a copy of each of the material contracts referred to in ‘‘Appendix IV — Statutory and
General Information — Further Information about the Business — Summary of Material
Contracts; ’’and
(b) the written consents referred to in ‘‘Appendix IV — Statutory and General Information
— Other Information — Qualifications and Consents of Experts ’’of this Prospectus.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be av ailable on display on the website of the Hong
Kong Stock Exchange at www.hkexnews.hk and our website at www.hnlens.com during a period
of 14 days from the date of this Prospectus:
(a) the Articles of Association;
(b) the Accountants ’ Report, the report on review of condensed consolidated financial
statements and the report on the unaudited pro forma financial info rmation prepared by
Deloitte Touche Tohmatsu, the texts of which are set out in ‘‘Appendix I —
Accountants ’ Report ’’, ‘‘Appendix IA — Report on Review of Condensed Consolidated
Financial Statements ’’ and ‘‘Appendix II — Unaudited Pro Forma Financial
Information, ’’respectively;
(c) the audited consolidated f inancial statements of the Group for the years ended December
31, 2022, 2023 and 2024;
(d) the legal opinion from Sundial Law Firm, the Company ’s PRC Legal Advisor, in respect
of, among other things, the general matters and property interests of our Group under the
PRC laws;
(e) the industry report prepared by Frost & Sul livan (Beijing) Inc., Shanghai Branch Co.
referred to in the section headed ‘‘Industry Overview ’’in this Prospectus;
(f) the transfer pricing analysis report issued by Beijing Tianzhi Certified Tax Agents Co.,
Ltd. Hunan Branch, the transfer pricing consultant of the Company;
(g) the legal opinion on applicability and impact of U.S. tariffs issued by DLA Piper
Singapore Pte. Ltd., the legal advisor to the Company on tariffs;
(h) the PRC Company Law, the PRC Securities Law, the Overseas Listing Trial Measures
and the Guidelines for the Articles of Assoc iation of Listed Comp anies issued by the
CSRC together with their unoffi cial English translations;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
– V-1 –


--- page 560 ---
(i) the service contracts between each of the Directors and Supervisors and the Company
referred to in ‘‘Appendix IV — Statutory and General Information — Further
Information ab out the Business — Particulars of the Service Contracts ’’ of this
Prospectus;
(j) the material contracts referred to in ‘‘Appendix IV — Statutory and General Information
— Further Information About the Business — Summary of Material Contracts ’’ of this
Prospectus; and
(k) the written consents referred to in ‘‘Appendix IV — Statutory and General Information
— Other Information — Qualifications and Consents of Experts ’’of this Prospectus.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND AVAILABLE ON DISPLAY
– V-2 –


--- page 561 ---
GLOBAL OFFERING
Stock Code: 6613
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
(A joint stock company incorporated in the People's Republic of China with limited liability)
藍思科技股份有限公司
Lens Technology Co., Ltd.
藍思科技股份有限公司
Lens Technology Co., Ltd.
藍思科技股份有限公司
Lens Technology Co., Ltd.
