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Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
ʮ̡
Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
ʮ̡
Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
ʮ̡
4PMF4QPOTPS
4QPOTPSPWFSBMM$PPSEJOBUPS
0WFSBMM$PPSEJOBUPST
+PJOU(MPCBM$PPSEJOBUPST
+PJOU#PPLSVOOFSTBOE+PJOU-FBE.BOBHFST
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Codej9903
GLOBAL OFFERING


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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.
Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
上 海 天 數 智 芯 半 導 體 股 份 有 限 公 司
(A joint stock company incorporated in the Peopl e’s Republic of China with limited liability)
GLOBAL OFFERING
Total number of Offer Shares under the
Global Offering
: 25,431,800 H Shares
Number of Hong Kong Offer Shares : 2,543,200 H Shares (subject to reallocation)
Number of International Offer Shares : 22,888,600 H Shares (subject to reallocation)
Offer Price : HK$144.60 per H Share, plus brokerage of 1%, SFC
transaction levy of 0.0027%, Stock Exchange
trading fee of 0.00565% and AFRC transaction levy
of 0.00015% (payable in full on application and
subject to refund on final pricing)
Nominal value : RMB1.00 per H Share
Stock code : 9903
Sole Sponsor, Sponsor-Overall Coordinator
Overall Coordinators, Joi nt Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint B ookrunners and Joint Lead Managers
⳪暲@:9)
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Li mited and Hong Kong Securities Clearing Company Limited take no responsib ility
for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for an y loss howsoever
arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in ‘‘Documents Delivered to the Registrar of Companies and Available on Di splay’’ in
Appendix VII to this prospectus, has been registered by the Registrar of Co mpanies in Hong Kong as required by sect ion 342C of the Compa nies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Com panies
in Hong Kong take no responsibility for the contents of this prospectus or any of the other documents referred to above.
The Offer Price will be HK$144.60 per Offer Share. The Sponsor-Overall Coordi nator, on behalf of the Underwriters, may, with the consent of our Compan y, reduce the
number of Offer Shares and/or the Offer Price below that stated in this pro spectus at any time on or prior to the morning of the last date for lodging appli cations under the
Hong Kong Public Offering. In such case, an announcement will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at
www.iluvatar.com and the Global Offering will be canceled and relaunched on FINI at the revised number of Offer Shares and/or the revised Offer Price a nd the requirements
under Rule 11.13 of the Listing Rules (which include the issue of a supplementa l or a new prospectus (as appropriate)), as soon as practicable followin g the decision to make
such reduction, and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. For further
information, see ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares’’.
Pursuant to the termination provisions contained in the Hong Kong Underwri ting Agreement in respect of the Hong Kong Offer Shares, the Sponsor-Overa ll
Coordinator on behalf of the Hong Kong Underwriters, have the right in certain circumstances, in its absolute discretion, to terminate the obligatio n of the Hong Kong
Underwriters pursuant to the Hong Kong Underwriting Agreement at any time prior to 8 : 00 a.m. on the Listing Date. See ‘‘Underwriting — Underwriting
Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination’’ for further details.
The Offer Shares have not been and will not be registered under the U.S. Securi ties Act or any state securities laws in the United States, and may not be of fered, sold, pledged
or transferred, except pursuant to an exemption from, or in a transaction not s ubject to, the registration requirements of the U.S. Securities Act and in accordance with any
applicable U.S. state securities laws. The Offer Shares are being offered and sold only outside of the United States in offshore transactions in relia nce on Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Publ ic Offering. We will not provide printed copies of this prospectus to the p ublic in relation
to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.iluvatar.com .
If you require a printed copy of this prospectus, you may download and print from the website addresses above.
December 30, 2025
IMPORTANT


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IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering. We
will not provide printed copies of this prospectus in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews > New Listings > New Listing Information ’’ section, and our website at
www.iluvatar.com. If you require a printed copy of this prospectus, you may download and print
from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online 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’s FINI system to
apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of this prospectus are identical
to the prospectus as registered with the Registr ar of Companies in Hong Kong pursuant to Section
342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses stated
above.
Please refer to the section headed ‘‘How to A pply for Hong Kong Offer Shares’’ in this
prospectus for further details on the procedures through which you can apply for the Hong Kong
Offer Shares.
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 100 Hong Kong Offer Shares a nd 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 a pplication 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 app lication 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 a s determined by the broker or custodian, based on
the applicable laws and regulations in Hong Kong. Y ou are responsible for complying with any such
pre-funding requirement imposed by your broker or custodian with respect to the Hong Kong Offer
S h a r e sy o ua p p l i e df o r .
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 14,605.83 2,000 292,116.58 10,000 1,460,582.91 300,000 43,817,487.30
200 29,211.65 2,500 365,145.72 20,000 2,921,165.82 400,000 58,423,316.40
300 43,817.49 3,000 438,174.87 30,000 4,381,748.74 500,000 73,029,145.50
400 58,423.32 3,500 511,204.01 40,000 5,842,331.65 600,000 87,634,974.60
500 73,029.14 4,000 584,233.17 50,000 7,302,914.56 700,000 102,240,803.70
600 87,634.97 4,500 657,262.31 60,000 8,763,497.45 800,000 116,846,632.80
700 102,240.80 5,000 730,291.45 70,000 10,224,080.36 900,000 131,452,461.90
800 116,846.63 6,000 876,349.75 80,000 11,684,663.28 1,000,000 146,058,291.00
900 131,452.46 7,000 1,022,408.04 90,000 13,145,246.19 1,100,000 160,664,120.10
1,000 146,058.29 8,000 1,168,466.33 100,000 14,605,829.10 1,271,600
(1) 185,727,722.83
1,500 219,087.44 9,000 1,314,524.62 200,000 29,211,658.20
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, b rokerage 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 will be paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the
Stock Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock
Exchange on behalf of the AFRC).
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong Public
Offering, our Company will issue an announcement to be published on the website of the Stock
Exchange at
www.hkexnews.hk and the website of our Company at www.iluvatar.com .
Date (1)
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s ............................. 9 : 0 0a . m .o n
Tuesday, December 30, 2025
Latest time to complete electronic applications
under White Form eIPO service through the designated
website at www.eipo.com.hk (2) .................................. 1 1 : 3 0a . m .o n
Monday, January 5, 2026
Application lists of the Hong Kong Public Offering
open (3) .................................................. 1 1 : 4 5a . m .o n
Monday, January 5, 2026
Latest time to (a) complete payment of White Form eIPO
applications by effecting internet banking transfer(s) or
PPS payment transfer(s) and (b) give electronic
application instructions to HKSCC (4) ............................1 2 : 0 0n o o no n
Monday, January 5, 2026
If you are instructing your broker or custodian who is a HKSCC Participant will submit
electronic application instructions on your behalf through HKSCC’s FINI system in accordance
with your instruction, you are advised to contact your broker or custodian for the earliest and
latest time for giving such instructions, as this may vary by broker or custodian .
Application lists of the Hong Kong Public Offering
close (3) .................................................1 2 : 0 0n o o no n
Monday, January 5, 2026
Announcement of the results of applications in the
Hong Kong Public Offering, the level of indications of
interest in the International Offering and the basis of
allocation of the Hong Kong Offer Shares under the
Hong Kong Public Offering to be published on the
website of the Stock Exchange at
www.hkexnews.hk and
the website of our Company at www.iluvatar.com (5) ......... n ol a t e rt h a n1 1 : 0 0p . m .o n
Wednesday, January 7, 2026
EXPECTED TIMETABLE (1)
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Results of allocations in the Hong Kong Publ ic Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
(1) A full announcement of the Hong Kong Public
Offering to be published on the website of the Stock
Exchange at
www.hkexnews.hk and the website of
our Company at www.iluvatar.com (5) ................. n ol a t e rt h a n1 1 : 0 0p . m .o n
Wednesday, January 7, 2026
(2) Results of allocations in the Hong Kong Public
Offering will be available at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a ‘‘search by ID’’ function on a 24-hour basis
f r o m .................................................. 1 1 : 0 0p . m .o n
Wednesday, January 7, 2026 to
12 : 00 midnight on
Tuesday, January 13, 2026
(3) Allocation results telephone enquiry by
c a l l i n g+ 8 5 22 8 6 28 5 5 5 ......................b e t w e e n9 : 0 0a . m .a n d6 : 0 0p . m .
on Thursday, January 8, 2026,
Friday, January 9, 2026,
Monday, January 12, 2026
and Tuesday, January 13, 2026
Despatch of H Share certificates in respect of wholly or
partially successful applications, or deposit of H Share
certificate into CCASS pursuant to Hong Kong Public
Offering, on or before
(6)(8) .......................... W e d n e s d a y ,J a n u a r y7 ,2 0 2 6
Despatch/collection of refund cheques and White Form
e-Refund payment instructions in respect of (i) wholly
or partially successful applications (if applicable) and
(ii) wholly or partially unsuccessful applications
pursuant to the Hong Kong Public Offering on or
before
(7)(8) ...................................... T h u r s d a y ,J a n u a r y8 ,2 0 2 6
Dealings in H Shares on the Stock Exchange expected to
c o m m e n c e .............................................. a t9 : 0 0a . m .o n
Thursday, January 8, 2026
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) You will not be permitted to submit your application to the White Form eIPO Service Provider 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 applic ation reference number from the designated website
EXPECTED TIMETABLE (1)
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on or before 11 : 30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12 : 00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is a ‘‘black’’ rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme
Conditions in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Monday, January 5, 2026,
the application lists will not open or close on that day. See ‘‘How to Apply for Hong Kong Offer Shares — E.
Severe Weather Arrangements’’ in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker or custodian to give electronic
application instructions to HKSCC on your behalf via FINI should see ‘‘How to Apply for Hong Kong Offer
Shares — A. Application for Hong Kong Offer Shares — 2. Application Channels’’ in this prospectus.
(5) None of the websites or any of the information contained on the websites forms part of this prospectus.
(6) H Share certificates for the Offer Shares will become valid evidence of title at 8 : 00 a.m. on the Listing Date
provided that (i) the Global Offering has become unconditional in all respects and (ii) none of the Underwriting
Agreements have been terminated in accordance with its terms.
(7) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong
identity card number or passport number, or, if the application is made by joint applicants, part of the Hong
Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may
be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund purposes.
Banks may require verification of an applicant’s Hong Kong identity card number or passport number before
encashment of the refund cheque. Inaccurate completion of an applicant’s Hong Kong identity card number or
passport number may invalidate or delay encashment of the refund cheque.
(8) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed ‘‘How to Apply for Hong Kong Offer Share s — D. Despatch/Collection of Share Certificates and
Refund of Application Monies’’ in this prospectus for details.
For applicants who apply through the White Form eIPO service and paid the application monies from a single
bank account, White Form e-Refund payment instructions (if any) will be dispatched to their application
payment bank account. For applicants who apply through the White Form eIPO service and used multi-bank
accounts to pay the application monies, refund cheque (if any) will be dispatched to the address specified in their
electronic application instruction to the White Form eIPO Service Provider 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 the sections headed ‘‘How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of Share Certificates and R efund of Application Monies’’ in this prospectus.
The above expected timetable is a summary only. See the sections headed ‘‘Structure of the
Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares’’ in this prospectus for
details of the structure and conditions of the Global Offering, as well as the application
procedures for Hong Kong Public Offering.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public Offering and
the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of an offer
to subscribe for or buy any security other than the Hong Kong Offer Shares. This prospectus
may not be used for the purpose of making, and does not constitute, an offer or a solicitation of
an offer to subscribe for or buy any security in any other jurisdiction or in any other
circumstances. No action has been taken to per mit a public offering of the Hong Kong Offer
Shares or the distribution of this prospectus in any jurisdiction other than Hong Kong. The
distribution of this prospectus for the purpose of a public offering and the offering and sale of the
Hong Kong Offer Shares in other jurisdictions are subject to r estrictions and may not be made
except as permitted under the applicable securities laws of such jurisdictions pursuant to
registration with or authorization by the rel evant securities regulatory authorities or an
exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not authorized
anyone to provide you with information that is different from what is contained in this
prospectus. Any information or representations not included in this prospectus must not be relied
on by you as having been authorized by us, the Sole Sponsor, the Sponsor-Overall Coordinator,
the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Underwriters, the Capital Market I ntermediaries, any of our or their respective
directors, officers, employees, agents, or repres entatives, or any other person or party involved in
the Global Offering. Information contained on our website
www.iluvatar.com does not form part
of this prospectus.
Page
Expected Timetable ................................................................. i i i
Contents ........................................................................... v i
Summary .......................................................................... 1
Definitions ......................................................................... 2 0
Glossary of Technical Terms ........................................................ 2 9
Forward-looking Statements ......................................................... 3 4
Risk Factors ....................................................................... 3 6
Waivers ............................................................................ 7 1
Information about this Prospectus and the Global Offering ............................ 7 7
Directors and Parties Involved in the Global Offering ................................. 8 1
Corporate Information .............................................................. 8 7
CONTENTS
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Page
Industry Overview .................................................................. 8 9
Regulatory Overview ................................................................ 1 0 3
History, Development and Corporate Structure ....................................... 1 3 2
Business ........................................................................... 1 7 4
Directors and Senior Management ................................................... 2 4 9
Substantial Shareholders ............................................................ 2 6 3
Share Capital ...................................................................... 2 7 1
Financial Information ............................................................... 2 7 4
Future Plans and Use of Proceeds ................................................... 3 3 7
Cornerstone Investors ............................................................... 3 4 1
Underwriting ....................................................................... 3 5 3
Structure of the Global Offering ..................................................... 3 6 3
How to Apply for Hong Kong Offer Shares .......................................... 3 7 1
Appendix I — Accountants’ Report ............................................... I - 1
Appendix II — Unaudited Pro Forma Financial Information ........................ I I - 1
Appendix III — Taxation and Foreign Exchange ................................... I I I - 1
Appendix IV — Summary of Principal Laws and Regulations ........................ I V - 1
Appendix V — Summary of Articles of Association ................................ V - 1
Appendix VI — Statutory and General Information ................................. V I - 1
Appendix VII — Documents Delivered to the Registrar of Companies and
Available on Display ............................................ V I I - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this prospectus.
As this is a summary, it does not contain all the information that may be important to you. You
should read the entire prospectus before you decide to invest in the Offer Shares. Moreover,
there are risks associated with any investment. Some of the particular risks of investing in the
Offer Shares are set out in the section headed ‘ ‘Risk Factors.’’ You should read the entire
prospectus carefully before you decide to invest in the Offer Shares.
OVERVIEW
We offer GPGPU products and AI computing solutions across diverse industries. Our
product portfolio primarily in cludes GPGPU chips and accelerators, as well as customized AI
computing solutions, including GPGPU servers and clusters, that combine our hardware with
proprietary software stack to address specifi c customer needs in training and inference
scenarios.
In recent years, the advancement of AI — part icularly the emergen ce of large language
models — has driven significant growth in demand for computing power. Against this
backdrop, GPGPU products and solutions have become widely adopted as the key
infrastructure for supporti ng large language models and enabling sophisticated AI
applications, due to their parallel processin g capabilities and adaptability to diverse
computational workloads. In response to the increasing demand for GPGPU driven by the
AI technology development, we have strategica lly positioned ourselves through our core
philosophy of software-hardware co-design. Our hardware architecture allows for
straightforward integration of individual chips and clustered systems, while our high-speed
multi-GPGPU technology enables scaling from single-node to large-scale deployments. Our
comprehensive software stack, including compile rs, drivers, libraries and frameworks, provides
compatibility with mainstream GPGPU progra mming ecosystem and platform, enabling easy
deployment with minimal code redevelopment or modification. Through three generations of
GPGPU architectural iterations and progr essive software stack enhancement, we have
demonstrated continuous improvements in computing performance, broad compatibility with
efficient integration, and adaptability across diverse application scenarios.
SUMMARY
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/g57
/g57
/g57
/g57
/g57
/g57
Hardware
GPGPU architecture
Instruction set
Enhanced
Efficiency
High
Compatibility
Strong
Adaptability
GPGPU Products
Libraries and frameworks
Compilers and drivers
AI Computing Solutions
Software
GPGPU Servers
GPGPU Clusters
OUR PRODUCTS AND SOLUTIONS
Our portfolio of GPGPU products include chips and accelerators for both training and
inference scenarios. Leveraging our proprieta ry GPGPU products, we also offer AI computing
solutions in the form of GPGPU servers and GPGPU clusters. Our products and solutions
deliver the following key advantages:
. Enhanced Efficiency: Optimized Performance through Innovative Design. Our GPGPU
products and solutions are designed with a focus on performance optimization and
cost efficiency. Leveraging our iterative m odular architecture and innovative design,
we deliver balanced products and solutions that meet complex computing demands
while minimizing efficiency losses.
. High Compatibility: Straightforward Int egration with Existing Environments. Our
products and solutions are wide-rang ing for broad compatibility through
hardware-software integration. By optimizing both our architecture and software
stack, our GPGPU accelerators are fully c ompatible with global mainstream GPGPU
programming ecosystems and platforms.
. Strong Adaptability: Versatile De ployment Across Evolving AI Needs. Our products
and solutions are designed multi-level adaptability by supporting diverse AI
workloads from computer vision and speech recognition to large language models
and generative AI. Our GPGPU architecture, built on a widely compatible instruction
set and modular software stack, enables effective deployment in both homogeneous
and heterogeneous computing environments.
SUMMARY
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GPGPU Products
The evolution of AI computing has created distinct demands in two scenarios: training and
inference. As AI applications grow in complexi ty, both domains face unprecedented demands —
from processing massive datasets to enabling real-time responses in deployed systems. Our
GPGPU products address these complementar y computing needs through two specialized
product lines. The TG series, our flagship training-focused line and the first domestically
mass-produced GPGPU product in China, is speci fically engineered for AI model training with
advanced compute cores and optimized multi-GP GPU architecture. Complementing this, our
ZK series, the first domestic GPG PU product designed sp ecifically for inference, specializes in
inference applications, featuring enhanced integer computing units and efficient data paths
optimized for deployment scenarios. Together, these product lines provide comprehensive
coverage of the AI computing spectrum, supporting everything from complex model
development to efficient production deployment.
As of June 30, 2025, we had shipped over 52,000 units of GPGPU products to more than
290 customers in various sectors. Our products and solutions have enabled over 900
deployments and applications in essential sectors including financial services, healthcare and
transportation, while supporting industrial digitalization initiatives across manufacturing and
retail, as well as foundational research and educational computing applications.
AI Computing Solutions
Our AI computing solutions harness the scalability of our GPGPU products and the
combined computational power of our processors, to integrate multiple GPGPU accelerators to
enable computing for demanding AI workloads and large-scale model deployments. These
solutions are designed to be compatible with industry-standard hardware and software
architectures, working in tandem with a wide range of server, storage, network switch,
operating system, and application software vendors. This compatibility has been validated
through extensive certifications, allowing us to meet diverse customer implementation needs.
We deliver these solutions in two formats: (i) purpose-built GPGPU servers that combine
multiple GPGPU accelerators with i ntegrated software stack, typic ally used to handle enterprise
AI workloads, and (ii) scalable GPGPU clusters that integrate our GPGPU products with
third-party infrastructure to support expanding computational demands.
Market Opportunities
According to Frost & Sullivan, the GPGPU market in China expanded rapidly, with
shipments reaching 1.6 million units in 2024, representing a CAGR of 72.8% from 2022 to 2024.
The market is expected to maintain strong growth, with shipments projected to grow at a CAGR
of 33.0% from 2025 to 2029. As Chinese GPGPU co mpanies’ shipments grow faster than their
international competitors, domestic market share continues to rise. The share of domestic
GPGPU products increased from 8.3% in 2022 to 17.4% in 2024, and is projected to exceed
50% by 2029. As a domestic GPGPU company, we are well positioned to capture such
expanding market opportunity and propel China ’s GPGPU industry beyond import substitution
toward domestic innovation leadership.
SUMMARY
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We prioritize fast-growing AI sectors while targeting indus tries with strong domestic
alternative demand, establishing benchmark deployments that demonstrate our capabilities.
Through collaborations with univ ersities, research institutes, and industry leaders, we develop
scenario-specific solutions and ensure broad platform comp atibility. This dual focus on
continuous technological adv ancement and ecosystem development positions us to capture the
expanding GPGPU market opportunity.
Business Performance
Our revenue reached RMB189.4 million , RMB289.0 million, RMB539.5 million,
RMB197.4 million and RMB 324.3 million i n 2022, 2023, 2024 and the six months ended
June 30, 2024 and 2025, respectively. This gro wth is driven by our consistent product and
solution iteration, mature commercialization capabilities and continuously expanding
high-quality customer base. Our total numbe r of customers increased from 22 in 2022, to 65
in 2023 and further to 181 in 2024, and from 81 in the six months ended June 30, 2024 to 106 in
the six months ended June 30, 2025. As of June 30, 2025, we had served over 290 customers in
various sectors. Our products and solutions have enabled over 900 deployments and
applications in essential sectors including financial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educational computing applications. Our GPGPU products shipment
volume increased from 7.8 thousand units in 2022 to 12.7 thousand units in 2023 and further to
16.8 thousand units in 2024, and from 4.8 thousand units in the six months ended June 30, 2024
to 15.7 thousand units in the six months ended June 30, 2025.
OUR COMPETITIVE STRENGTHS
We believe the following competitive strengths contribute to our success:
. Steering China’s GPGPU innovation, building core technology advantages
. R&D excellence driving continuous technology and product innovation
. Optimized performance and enhanced efficiency delivering optimal cost-performance
solutions
. Strong commercialization capabilities wi th a wide network of ecosystem partners and
customers
. Visionary leadership with global experience and proven technical expertise
SUMMARY
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OUR STRATEGIES
We will focus on the following key stra tegies to drive our future growth:
. Sustained R&D investment to bui ld higher technical barriers
. Continuous improvement in product efficiency, compatibility and adaptability
. Multi-dimensional enhancement of customer service to expand penetration and
industry coverage
. Attracting top R&D talent and building a robust talent pipeline
OUR CUSTOMERS AND SUPPLIERS
During the Track Record Period, our major customers primarily included cloud computing
service providers, AI model developers, research in stitutions, as well as ent erprises from sectors
such as electronics, semiconducto rs, manufacturing and consumer internet. Revenue generated
from our largest customer in each of 2022, 2023, 2024 and the six months ended June 30, 2025
accounted for 37.7%, 19.3%, 44.9% and 13.8% of our total revenue for the respective
year/period, while that of our top five customers accounted for 94.2%, 73.3%, 73.4% and
38.6% of our total revenue for the respective year/period. To the best of our knowledge, none of
our Directors, their respective associates or any shareholder who, to the knowledge of our
Directors, owned more than 5% of our issued share capital as of the Latest Practicable Date,
had any interest in any of our five largest customers, save for Customer M, which is a company
controlled by Centurium Capital th rough its controlled entities.
During the Track Record Period, our major suppliers primarily included providers of
memory components, wafer fabrication, printed c ircuit board processing services, IP cores and
design software. Purchases from our largest supplier in each of 2022, 2023, 2024 and the six
months ended June 30, 2025 accounted for 12.5%, 21.6%, 18.1% and 53.1% of our total
purchases for the respective year/period, while that of our top five suppliers accounted for
58.2%, 56.2%, 44.6% and 67.2% of our total purchases for the respective year/period. To the
best of our knowledge, none of our Directors, th eir respective associates or any shareholder
who, to the knowledge of our Directors, owned more than 5% of our issued share capital as of
the Latest Practicable Date, had any inter est in any of our five largest suppliers.
As a fabless semiconductor company, we maintain a comprehensive network of suppliers
and manufacturing partners. Our supply chain encompasses the procurement of essential
materials including wafers, memory components, and substrates, specialized R&D resources
such as IP cores and design software, as well as technical services including chip tape-out
services and commissioned research. Our main types of suppliers include: foundries, assembly
partners comprising outsourced semiconductor assembly and test (OSAT) partners and printed
circuit board (PCB) assembly partners, IP cores a nd design software providers, technical service
providers, as well as server and component providers. During the Track Record Period and as of
the Latest Practicable Date, we had not encountered any disruption of business as a result of a
shortage or any delay in the procurement of raw m aterials. While certain critical components
SUMMARY
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require extensive validation periods for any supplier changes, we maintain appropriate
inventory levels to ensure operational stability. See ‘‘Business — Our Suppliers — Supplier
Management’’ for details.
RESEARCH AND DEVELOPMENT
Research and development forms the foundation of our sustained growth and competitive
strength in the industry. We are committed to continuous innovation, guided by the principle of
integrated design and independent development encompassing both hardware and software. We
maintain a strategic ‘‘three-generation’’ R&D philosophy: one generation in mass production,
one in design, and one in pre-research, enabling continuous product advancement. Through the
iterative optimization of hardware and software, we deliver differentiated, and scalable
solutions that address evolving customer n eeds. We have established a robust and highly
coordinated R&D management system that keeps us at the forefront of technology and market
trends. Our in-house R&D capabilities are anchored by a team of highly skilled professionals
with deep expertise across the full technology stack. As of June 30, 2025, our dedicated R&D
team comprised over 480 employees. Our core R&D personnel possess invaluable experience
from major global semiconductor companies, with key leaders bringing over 20 years of industry
experience. This group has been instrumental in delivering numerous industry-defining products
to the market, earning a reputation as one of the most accomplished and respected teams in the
sector. See ‘‘Business — Research and Development’’ for details.
COMPETITION
China’s GPGPU market is highly competitive, with global technology leaders currently
dominating market share while domestic players are rapidly emerging. We face intense
competition from established international GPGPU companies with mature technology stacks
and ecosystem advantages, as well as other domestic competitors targeting various market
segments and application scenarios. Critical as pects of competition include chip architecture
capabilities, manufacturing process advancement, software stack development, and deep
understanding of AI computing requirements, which are essential for capturing market share.
The increasing domestic demand for technology alternatives, coupled with the rapid evolution
of AI computing needs, creates both opportunities and competitive pressures in the sector. See
‘‘Industry Overview’’ for details.
SUMMARY
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SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Selected Items of the Consolidated Statements o f Profit or Loss and Other Comprehensive Income
The following table sets forth selected items of our consolidated statements of profit or loss
and other comprehensive income for the years/periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
Revenue 189,369 100.0 289,041 100.0 539,511 100.0 197,431 100.0 324,263 100.0
Cost of sales (76,957) (40.6) (145,890) (50.5) (274,427) (50.9) (108,438) (54.9) (161,830) (49.9)
Gross profit 112,412 59.4 143,151 49.5 265,084 49.1 88,993 45.1 162,433 50.1
Other income and gains 33,770 17.8 20,105 7.0 44,985 8.3 33,078 16.8 39,539 12.2
Selling and distribution expenses (48,715) (25.7) (88,25 9) (30.5) (122,358) (22.7) (54,471) (27.6) (67,609) (20.9)
Administrative expenses (166,044) (87.7) (242,020) (83.7) (257,287) (47.7) (119,469) (60.5) (274,592) (84.7)
Research and development costs (456,624) (241.1) (615,884) (213.1) (772,779) (143.2) (333,717) (169.0) (451,496) (139.2)
Impairment losses on financial assets (19,025) (10.0) ( 22,198) (7.7) (31,855) (5.9) (9,191) (4.7) (1,559) (0.5)
Other expenses (2,889) (1.5) (1,312) (0.5) (840) (0.2) (830) (0.4) (4,893) (1.5)
Finance costs (6,503) (3.4) (11,007) (3.8) ( 17,383) (3.2) (8,385) (4.3) (11,139) (3.4)
Loss before tax (553,618) (292.3) (817,424) (282.8 ) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
I n c o m e t a x e x p e n s e ——————————
Loss for the year/period (553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not
be reclassified to profit or loss in
subsequent periods:
Equity investments designated at fair
value through other
comprehensive income:
Changes in fair value — — (2) (0.0) 230 (0.0) (23) (0.0) (228) (0.1)
Other comprehensive income for the year — — (2) (0.0) 230 0.0 (23) (0.0) (228) (0.1)
Total comprehensive loss for the year/
period (553,618) (292.3) (817,426) (282.8) (892, 203) (165.4) (404,015) (204.6) (609,544) (188.0)
Loss attributable to:
Owners of the parent (523,839) (276.6) (791,307) (273 .8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Non-controlling interests (29,779) (15.7) (26,117) (9.0) — — — — — —
(553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Total comprehensive loss attributable to:
Owners of the parent (523,839) (276.6) (791,309) (273 .8) (892,203) (165.4) (404,015) (204.6) (609,544) (188.0)
Non-controlling interests (29,779) (15.7) (26,117) (9.0) — — — — — —
(553,618) (292.3) (817,426) (282.8) (892,203) (165.4) (404,015) (204.6) (609,544) (188.0)
LOSS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS
OF THE PARENT
Basic
— For loss for the year/period (RMB) (3.99) (0.0) (5.43) (0.0) (5.45) (0.0) (2.48) (0.0) (3.48) (0.0)
Diluted
— For loss for the year/period (RMB) (3.99) (0.0) (5.43) (0.0) (5.45) (0.0) (2.48) (0.0) (3.48) (0.0)
SUMMARY
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Non-HKFRS Measure
We define adjusted net loss (non-HKFRS measure) as net loss for the year/period adjusted
by adding back share-based payment expenses.
To supplement our consolidated financial statements, we also use adjusted net loss
(non-HKFRS measure) as additional financial m easure, which is not required by, or presented
in accordance with HKFRS. We believe this non- HKFRS measure facilitates comparisons of
operating performance from period to period and company to company by eliminating potential
impacts of certain items. We believe this measure provides useful information to investors and
others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our presentation of adjusted net loss
(non-HKFRS measure) may not be comparable to si milarly titled measures presented by other
companies. The use of this non-HKFRS measure a s an analytical tool has limitations, and you
should not consider it in isolation from, or as a substitute for an analysis of, our results of
operations or financial condition as reported under HKFRS.
The following table reconciles our adjusted net loss (non-HKFRS measure) for the
years/periods presented in accordance with HKFRS, which is loss for the year/period:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Reconciliation of loss for the
y e a r / p e r i o dt oa d j u s t e dn e t
loss (non-HKFRS
measure)
Loss for the year/period (553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Add:
Share-based payment
expenses
(1) 120,842 63.8 207,759 71.9 247,765 45.9 107,070 54.2 295,859 91.2
Listing expenses (2) ———————— 1 3 , 6 8 6 4 . 2
Adjusted net loss
(non-HKFRS measure) (432,776) (228.5) (609,665) (210.9) (644,668) (119.5) (296,922) (150.4) (299,771) (92.4)
Notes:
(1) Share based payment expenses mainly represent the non-cash employee benefit expenses incurred in
connection with our award to management and key employees. Such expenses in any specific year/period
are not expected to result in future cash payments.
(2) Listing expenses were incurred in connection with the Global Offering.
SUMMARY
–8–


--- page 18 ---
The following table sets forth our revenue breakdown by product and service type for the
years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
GPGPU products 188,561 99.6 266,922 92.3 369,635 68.5 136,772 69.3 276,751 85.3
— Training series 188,130 99.3 221,181 76.5 269,414 49.9 115,164 58.3 189,736 58.5
— Inference series 431 0.3 45,741 15.8 100,221 18.6 21,608 10.9 87,015 26.8
AI computing solutions — — 15,523 5.4 166,213 30.8 59,805 30.3 42,644 13.2
Others
(1) 808 0.4 6,596 2.3 3,663 0.7 854 0.4 4,868 1.5
Total 189,369 100.0 289,041 100.0 539,511 100.0 197,431 100.0 324,263 100.0
(1) Primarily including technical service income and software license income.
Our revenue from GPGPU products, comprising our TG and ZK series, was RMB188.6
million, RMB266.9 million, RMB369.6 million, RMB136.8 million and RMB276.8 million in
2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, respectively, accounting for
99.6%, 92.3%, 68.5%, 69.3% and 85.3% of our total revenue in the same years/periods,
respectively. Our revenue increased in absol ute amounts during the Track Record Period,
primarily due to the increases in the shipment volume of our products and the number of
customers, as a result of the enhanced performance of our products, the increase in market
demands for advanced computing power and our established market reputation.
Our cost of sales was RMB77.0 million, RMB 145.9 million, RMB274.4 million, RMB108.4
million and RMB161.8 million in 2022, 2023, 202 4 and the six months ended June 30, 2024 and
2025, respectively, accounting for 40.6%, 50.5 %, 50.9%, 54.9% and 49.9% of our total revenue
in the same years/periods, respectively. As a fabless company, we do not incur in-house
manufacturing labor costs. Our cost of sales relating to our GPGPU products and AI computing
solutions represented fees paid to contract manufacturers under our service agreements with
them, which cover contract manufacturing se rvices fees and costs of materials used in
manufacturing our products on an integrated basis. For our AI computing solutions, we also
procured from third-party ecosystem partne rs servers, networking infrastructure and
customization services. Our cost of sales relatin g to others was insignificant during the Track
Record Period.
SUMMARY
–9–


--- page 19 ---
The following table sets forth our gross profit and gross profit margin by product and
service type for the years/periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
(RMB in thousands, except for percentages)
(Unaudited)
GPGPU products 111,998 59.4 134,048 50.2 209,056 56.6 82,291 60.2 138,358 50.0
— Training series 111,802 59.4 117,688 53.2 162,288 60.2 70,870 61.5 110,471 58.2
— Inference series 195 45.2 16,360 35.8 46,769 46.7 11,421 52.9 27,888 32.0
AI computing solutions — — 4,022 25.9 52,699 31.7 6,178 10.3 19,500 45.7
Others 414 51.3 5,081 77.0 3,329 90.9 524 61.3 4,575 94.0
Total 112,412 59.4 143,151 49.5 265,084 49.1 88,993 45.1 162,433 50.1
Our gross profit margin decreased from 2022 to 2024, primarily due to the change in our
business mix, as we launched new GPGPU products and AI computing solutions to diversify our
offerings, which affected our overall margin pro file. Our gross profit margin increased from
45.1% in the six months ended June 30, 2024 t o 50.1% in the six months ended June 30, 2025,
primarily due to the increase in revenue c ontribution from our GPGPU products. Our AI
computing solutions typically had a lower profit margin than that of our GPGPU products,
primarily because our AI computing solutions inte grated third-party products and components,
which drove up the cost of sales associated with our AI computing solutions. As our AI
computing solutions are delivered with bundled hardware with chips, the gross profit margin of
our AI computing solutions depends on the associated costs of the bundled hardware and chips,
which vary across customer projects. Therefore, the gross profit margin of our AI computing
solutions is inherently subject to fluctuation depending on specific customer demands. The gross
profit margin of other services was relatively high due to the low-cost nature of the our software
license income.
Our net loss increased during the Track Reco rd Period from RMB553.6 million in 2022 to
RMB817.4 million in 2023 and further to RM B892.4 million in 2024, and from RMB404.0
million in the six months ended June 30, 2024 to RMB609.3 million in the six months ended
June 30, 2025, despite the increase in gross profi t throughout the same years/periods, primarily
due to (i) the increase in our research and development costs, as a result of continued expansion
of our R&D capabilities through R&D team expansion, enhanced talent incentives, as well as
increased investment in software, equipment, and third-party techni cal services to support
increasing R&D activities focusing on har dware design and software development and
accelerate the rollout of i ndustry-tailored innovations; (ii) t he increase in our administrative
expenses, driven by the expansion of our administrative team and increased spending on office
and administrative support functions, to suppor t our business growth; and (iii) the increase in
our selling and distribution expenses driven by our continued efforts to expand sales and
marketing capabilities to support business growth, which included increased investment in sales
personnel and related compen sation, as well as higher spending on customer engagement
activities, such as trial deployments, in line with our broader sales and business development
initiatives. We expect to incur significant increase in net loss in 2025, primarily due to the
significant increases in our share-based compensation expenses and listing expenses and our
continued investment in the R&D of our new products.
SUMMARY
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--- page 20 ---
Summary of Consolidated State ments of Financial Position
The following table sets forth a summary of our consolidated balance sheets as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Total non-current assets 261,586 305,840 422,828 389,011
Total current assets 785,094 1,287,139 1,262,347 3,171,568
Total non-current liabilities 110,291 28,175 116,551 169,150
Total current liabilities 316,708 686,466 879,955 875,575
Net current assets 468,386 600,673 382,392 2,295,993
Total assets less current
liabilities 729,972 906,513 805,220 2,685,004
Net assets 619,681 878,338 688,669 2,515,854
Non-controlling interests (41,298) (44,399) — —
Our net current assets increased from RM B382.4 million as of December 31, 2024 to
RMB2,296.0 million as of June 30, 2025, primaril y due to the increase of RMB1,399.6 million in
cash and cash equivalents and the increase of RMB259.0 million in prepayments, other
receivables and other as sets. Such an increase was partiall y offset by an increase of RMB17.7
million in interest-bearing bank and other borrowings.
Our net current assets decreased from RMB600.7 million as of December 31, 2023 to
RMB382.4 million as of December 31, 2024, primarily due to an increase in current liabilities
and a decrease in current assets. The increase in our current liabilities was primarily due to the
increase in other payables and accruals fr om RMB109.7 million as of December 31, 2023 to
RMB187.7 million as of December 31, 2024 and the increase in interest-bearing bank and other
borrowings from RMB492.4 million as of December 31, 2023 to RMB566.1 million as of
December 31, 2024. The decrease in our current assets was primarily due to the decrease in due
from related parties from RMB184.7 million as of December 31, 2023 to nil as of December 31,
2024 and the decrease in prepayments, other receivables and other assets from RMB338.9
million as of December 31, 2023 to RMB2 02.9 million as of December 31, 2024.
Our net current assets increased from RM B468.4 million as of December 31, 2022 to
RMB600.7 million as of December 31, 2023, prima rily due to the increase in our total current
assets, partially offset by an increase in our tota l current liabilities. The increase in our total
current assets was primarily due to an increase in prepayments, other receivables and other
assets from RMB112.8 million as of December 31, 2022 to RMB338.9 million as of December
31, 2023, an increase in due from related parti es from nil as of December 31, 2022 to RMB184.7
million as of December 31, 2023, and an increas e in cash and cash equivalents from RMB219.3
million as of December 31, 2022 to RMB308.1 milli on as of December 31, 2023. The increase in
our total current liabilities was primarily due to the increase in interest-bearing bank and other
borrowings from RMB102.9 million as of December 31, 2022 to RMB492.4 million as of
December 31, 2023.
SUMMARY
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--- page 21 ---
Our net assets increased from RMB619. 7 million as of December 31, 2022 to RMB878.3
million as of December 31, 2023, primarily due t o effects of changes in (i) contribution from
shareholders of RMB820.1 million; and (ii ) share-based payment expenses of RMB207.8
million, partially offset by our loss for the year of RMB817.4 million in 2023. Our net assets
decreased to RMB688.7 million as of December 3 1, 2024, primarily due to our loss for the year
of RMB892.4 million, partially offset by effects of changes in contribution from shareholders of
RMB473.2 million and share-based payment expe nses of RMB247.8 million. Our net assets then
increased to RMB2,515.9 million as of June 30 , 2025, primarily due to issuance of shares of
RMB2,147.9 million and share-based payment of RMB295.9 million, partially offset by loss for
the period of RMB609.3 million.
Selected Items from the Consolidated Statements of Cash Flows
The following table sets forth selected it ems of our cash flows for the years/periods
indicated:
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(Unaudited)
N e tc a s hu s e di no p e r a t i n g
activities (653,846) (707,026) (617,980) (546,332) (715,589)
N e tc a s hu s e di ni n v e s t i n g
activities (183,079) (153,488) (165,979) (86,640) (51,191)
Net cash generated from financing
activities 953,161 946,481 789,469 628,939 2,168,014
Net increase in cash and
cash equivalents 116,236 85,967 5,510 (4,033) 1,401,234
Cash and cash equivalents
at beginning of the year/period 95,738 219,305 308,053 308,053 313,563
Effect of foreign exchange rate
changes 7,331 2,781 — — (1,621)
Cash and cash equivalents at end
of the year/period 219,305 308,053 313,563 304,020 1,713,176
We incurred net operating cash outflows during the Track Record Period, primarily due to
(i) our loss before tax; (ii) increase in trade a nd bills receivables, primarily in line with our
business and revenue growths; and (iii) increase in inventories, as a result of stockpiling in line
with our expanded operations and growing demands for our products. Specifically, our trade
and bills receivables turnover days and inventory turnover days were longer than our trade
payable turnover days, which contributed to our net operating cash outflows during the Track
Record Period.
SUMMARY
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--- page 22 ---
BUSINESS SUSTAINABILITY AND PATH TO PROFITABILITY
We had achieved business growth but were loss-making during the Track Record Period.
Our revenue increased from RMB189.4 million in 2022 to RMB289.0 million in 2023 and further
to RMB539.5 million in 2024. Fur thermore, our revenue increased from RMB197.4 million in
the six months ended June 30, 2024 to RMB324.3 million in the six months ended June 30, 2025.
However, we recorded net loss of RMB553.6 million, RMB817.4 million, RMB892.4 million,
RMB404.0 million and RMB609.3 million in 2022, 2023, 2024 and the six months ended June
30, 2024 and 2025, respectively, and adjusted net loss (non-HKFRS measure) of RMB432.8
million, RMB609.7 million, RMB644.7 million, RMB296.9 million and RMB299.8 million in
the same years/periods, respectively.
Reasons for Historical Loss
As a key player in China’s AI chip and GPGPU markets, our growth trajectory aligns
closely with market development and expans ion. However, AI chip and GPGPU markets are
characterized by significant upfront investme nts and long product commercialization cycles,
which posed challenges to achieving profitability during our early years of operation. We
incurred net losses during the Track Record Period, primarily attributable to (i) significant
upfront investment in research and development initiatives, (ii) limited economies of scale, (iii)
early commercialization stage, and (iv) substa ntial cost of sales and operating expenses.
Despite our net loss positions throughout the Track Record Period, our proactive
endeavors in product and solution commercialization and market expansion have contributed to
our revenue growth during the Track Record Period. Our net loss margin decreased from
292.3% in 2022 to 282.8% in 2023 and further to 165.4% in 2024, and from 204.6% in the six
months ended June 30, 2024 to 187.9% in the six months ended June 30, 2025, primarily
attributable to our improved cost control, optimized offering mix and enhanced operating
efficiency. We believe we will be able to achieve p rofitability through a combination of revenue
growth, improvement in gross profit mar gin and enhanced operating leverage.
Driving Revenue Growth
We expect that our revenue will grow further due to the following factors: (i) leveraging
industry growth potential, (ii) expanding and diversifying our product and solution offerings,
(iii) deepening relationship with existing customers, and (iv) expanding customer base.
Improving Gross Profit Margin
Our future profitability depends on our ability to increase the current level of margin
profile and introduce new products and solutions with high margin profile. Our gross profit
margin for our GPGPU products slightly increased from 50.2% in 2023 to 56.6% in 2024, as a
result of our product design improvement. During the Track Record Period, our gross profit
margin for our AI computing solutions incr eased from 25.9% in 2023 to 31.7% in 2024,
primarily due to enhanced performance of our AI computing solutions due to the adoption of
more advanced accelerators and t echnologies, and increasing market demands for AI computing
and large-scale data processing. However, our ov erall gross profit margin decreased from 59.4%
in 2022 to 49.5% in 2023 and further to 49.1% in 2024 , primarily attributable to the increase in
revenue contribution from our AI computing solutions, which typically had a lower margin
SUMMARY
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--- page 23 ---
profile that of our GPGPU products. We witnessed an increase in our gross profit margin from
45.1% in the six months ended June 30, 2024 t o 50.1% in the six months ended June 30, 2025,
primarily due to the increase in revenue contribution from our GPGPU products. We expect to
increase our gross margin profile through optimizing revenue mix and improving cost
efficiencies.
Enhancing Operating Leverage
During the Track Record Period, we incurred s ubstantial operating expenses to support
our business growth. However, as our business scales, our operating expenses, defined as the
sum of research and development costs, administrative expenses and selling and distribution
expenses, as a percentage of total revenue decreased from 354.5% in 2022 to 327.3% in 2023,
and further to 213.6% in 2024, and decreased from 257.1% in the six months ended June 30,
2024 to 244.8% in the six months ended June 30, 20 25. In the future, we will continue optimizing
our research and development as well as sales and administrative functions to support our
long-term business growth, and we expect that our operating expenses, as a percentage of our
total revenue, to continue to decrease as our business expands.
For details, see ‘‘Business — Business Sustainability and Path to Profitability.’’
RISK FACTORS
Our business and the Global Offering involve certain risks as set out in ‘‘Risk Factors’’ in
this prospectus. You should read that section in its entirety carefully before you decide to invest
in our Shares. Some of the major risks we face include:
. The industry in which we operate is highly competitive. If we fail to compete with our
competitors, our business, results of operations and financial condition may be
materially and adversely affected;
. If we are unable to develop, commercialize and mass produce new or improved
products, our business, results of operations, financial condition and competitive
position would be materially and adversely affected;
. If we fail to anticipate and adapt to technical transitions in our industry, our products
may become less competitive or obsolete;
. We have been and intend to continue investing significantly in R&D, which may
adversely affect our profitability and operating cash flow and may not generate the
results we expect to achieve;
. We depend on third-party contract manufacturers, which reduces our ability to
control our manufacturing process. Any interruption or shortage or loss of capacity
from these contract manufacturers could materially interrupt our business operations
and product offerings, which may adversely affect our business, results of operations
and financial condition;
SUMMARY
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. We may face supply chain risks, including interruptions of requisite materials,
components, equipment, and services due to re liance on a limited number of suppliers,
or failure by suppliers to achieve satisfactory yields or quality standards, which could
adversely affect our reputation, customer relationships and business operations;
. We depend on a limited number of customers for a substantial portion of our revenue,
and the loss of, or a significant reduction in sales to, one or more of our major
customers would adversely affect our busin ess, results of operations and financial
condition;
. We are subject to the risks associated with sanctions and export controls laws and
regulations, international trade policies, and developing domestic and foreign laws
and regulations on AI, semiconductor and related technologies, and our business,
financial condition and results of operations could be adversely affected; and
. We recorded prolonged trade and bills recei vable settlement cycle and inventory
turnover cycle during the Track Record P eriod, which would adversely affect our
liquidity and financial position.
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Unlike a typical founder-led company, since the beginning of the Track Record Period, our
Company’s ownership has been held by our employ ees through several spec ial purpose vehicles,
as well as a diversified base of passive financial investors. The overall management of our Group
has been entrusted to a management committee comprising our executive Directors and senior
management members (the ‘‘ Management Committee ’’), which is responsible for overseeing and
management of the day-to-day operations of our Group. The Management Committee currently
consists of twelve members, being our four executive Directors and eight senior management
members, as further described in ‘‘Directors and Senior Management — Senior Management.’’
For biographical details of the members of th e Management Committee, see ‘‘Directors and
Senior Management’’. Decisions of the Management Committee are determined by a simple
majority vote of the members present at a meet ing, with each member entitled to one vote. No
single member holds a veto right or casting vote.
Shanghai Shuqi is the general partner of each of Shanghai Xishi, Shanghai Yishi, Shanghai
Sushi, Shanghai Nashi, Shanghai Yueshi, Shanghai Yuanshi and Shanghai Qiongyu (the
‘‘Shareholding Platforms ’’). Shanghai Shuqi is responsible for exercising the voting rights of the
Shareholding Platforms in our Company and is re quired to act in accordance with the decisions
of the Management Committee. During the Track Record Period, the Shareholding Platforms,
together with Shanghai Shuqi, have constituted t he single largest group of shareholders of our
Company. As of the Latest Practicable Date, the Single Largest Group of Shareholders
collectively held approximately 23.61% of our total issued share capital. Immediately upon
completion of the Global Offering, the Single Largest Group of Shareholders will collectively
hold approximately 21.25% of our total issued share capital.
For further details, see ‘‘History, Developm ent and Corporate Structure — Single Largest
Group of Shareholders.’’
SUMMARY
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OUR PRE-IPO INVESTORS
We have concluded several rounds of Pre-IPO Investments with a broad and diversified
base of Pre-IPO Investors. For further details of the identity and background of the Pre-IPO
Investors, and the principal terms of the Pre-IPO Investments, see ‘‘History, Development and
Corporate Structure — Pre-IPO Investments.’’
Pursuant to the shareholders agreement that we entered into with the then shareholders
from December 2016 to May 2025, we granted th e Pre-IPO Investors special rights (‘‘ Special
Rights ’’) which included redemption rights and liquidation preferences rights. No Pre-IPO
Investors had exercised their redemption ri ghts or liquidation preferences rights.
On June 10, 2025, we and the Pre-IPO Investo rs entered into supplemental agreements,
agreeing that certain of the Special Rights we granted to Pre-IPO investors, including
redemption rights and liquidation preference rights, have been irrecoverably terminated and
shall be void ab initio. Taking into account the legal and regulatory framework of the
jurisdiction we are in and the governing law of t he supplemental agreements, our Directors
consider that it is appropriate to present the Pre-IPO Investments as equity during the Track
Record Period.
Had the Special Rights that we granted to the Pre-IPO Investors been accounted for as
financial liabilities measured at present value of the redemption amount prior to entering into
the supplemental agreements, then:
(i) the redemption financial liabilities, total current liabilities, net current
(liabilities)/assets and net (liabilities)/assets would have been:
As at 31 December
As at
30 June
2022 2023 2024 2025
(RMB in thousands)
Redemption financial
liabilities 2,948,553 3,938,039 5,080,904 —
Total current liabilities 3,265,261 4,624,505 5,960,859 875,575
Net current (liabilities)/
assets (2,480,167) (3,337,366) (4,698,512) 2,295,993
Net (liabilities)/assets (2,328,872 ) (3,059,701) (4,392,235) 2,515,854
SUMMARY
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(ii) the finance costs associated with the redemption financial liabilities, the net loss for
the year/period, basic and diluted loss per share would have been:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Financial costs associated
with the redemption
financial liabilities (210,881) (289,303) (444,165) (210,778) (235,526)
Net loss attributable to
owners of the parent (734,720) (1,080,610) (1,336,598) (614,770) (844,842)
Basic loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
Diluted loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
For more details, please refer to note 30(b) to the Accountant’s Report in Appendix I to
this prospectus
FUTURE PLANS AND USE OF PROCEEDS
We estimate the net proceeds of the Global O ffering which we will receive, based on the
Offer Price of HK$144.60 per Offer Share, wil l be approximately HK$3,478.6 million, after
deduction of underwriting fees and commiss ions and estimated expenses payable by us in
connection with the Global Offering. We intend to use the net proceeds of the Global Offering
for the following purposes:
. approximately 80.0%, or HK$2,782.9 mil lion, will be used for our research and
development of our products and solutions, with the detailed breakdown of the
proceeds to be allocated as follows:
. approximately 50.0%, or H K$1,739.3 million, will be used for our research,
development and commercialization of our GPGPU chips and accelerators over
the next five years;
. approximately 25.0%, or HK$869.7 milli on, will be used for the research and
development of our proprietary software stack through the expansion of our
R&D team;
. approximately 5.0%, or HK$173.9 million, will be used for the research and
development of our AI computing solutions;
. approximately 10.0%, or HK$ 347.9 million, will be used for sales and marketing over
the next five years, including expanding our sales and service network, improving the
service quality, enhancing our brand awareness and enhance our service penetration;
and
. approximately 10.0% or HK$347.9 million , will be used for working capital and
general corporate purposes.
SUMMARY
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See ‘‘Future Plans and Use of Proceeds’’ for further details.
QUALIFICATIONS FOR LISTING
Pursuant to Rule 8.05 of the Listing Rules, we mu st satisfy one of the three tests in relation
to (i) profit; (ii) market capita lization, revenue and cash flow; or (iii) market capitalization and
revenue requirements. We are able to satisfy the market capitalization and revenue test pursuant
to Rule 8.05(3) of the Listing Rules based on ( i) our revenue of RMB539.5 million for the year
ended December 31, 2024, which is over HK$50 0 million; and (ii) our expected market
capitalization at the time of the Listing, which, based on the Offer Price of HK$144.60 per Offer
Share, exceeds HK$4 billion, as required by Rule 8.05(3) of the Listing Rules.
GLOBAL OFFERING STATISTICS
The numbers in the following table are based on the assumptions that (i) the Global
Offering has been completed and 25,431,800 H Shares were issued and sold in the Global
Offering, and (ii) 254,317,736 Shares are in issue and outstanding following the completion of
Global Offering.
B a s e do na n
Offer Price of
HK$144.60
per Offer Share
Market capitalization of our Shares
(1) HK$36,774.34 million
Market capitalization of our H Shares (2) HK$35,441.74 million
Unaudited pro forma adjusted consolidated net tangible assets
attributable to owners of the Company per Share (3) HK$24.03
Notes:
(1) The calculation of market capitalization of our Shares is based on 245,101,965 H Shares and 9,215,771
Unlisted Shares expected to be in issue immediately upon completion of the Global Offering.
(2) The calculation of the market capitalization of our H Shares is based on the 245,101,965 H Shares,
comprising 25,431,800 H Shares to be issued under the Global Offering and 219,670,165 H Shares to be
converted from Unlisted Shares, expected to be in issue immediately upon completion of the Global
Offering.
(3) The unaudited pro forma adjusted consolidated net t angible assets attributable to Shareholders of the
Company per Share is arrived at after making the adjustments referred to in ‘‘Appendix II — Unaudited
Pro Forma Financial Information’’ and on the basis that 254,317,736 Shares were in issue assuming that
the Global Offering had been completed on June 30, 2025.
SUMMARY
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DIVIDEND
We did not declare or pay dividends on our Shares during the Track Record Period. We
currently expect to retain all future earnings for use in operation and expansion of our business,
and do not pay any dividends in the foreseeable future. The Company does not have any fixed
dividend policy nor pre-deter mined dividend payout ratio. The declaration and payment of any
dividends in the future will be subject to the approval of our Shareholders in a shareholder’s
meeting, our Articles of Association and the PRC Company Law, and will depend on a number
of factors, including the commercialization of our products and solutions as well as our
earnings, capital requirements, overall financi al condition and contractual restrictions. As
confirmed by our PRC Legal Advisor, any future net profit that we make will have to be applied
to make up for our historically accumulated los ses in accordance with the PRC laws, after which
we will be obliged to allocate 10% of our profit to our statutory common reserve fund until such
fund has reached more than 50% of our registered capital. We will therefore only be able to
declare dividends after (1) all our historically accumulated losses have been made up for; and (2)
we have allocated sufficient profit to our statutory common reserve fund as described above. In
light of our accumulated losses as disclosed in this prospectus, it is unlikely that we will be
eligible to pay a dividend out of our profits in the foreseeable future.
LISTING EXPENSES
The total listing expenses to be borne by us are estimated to be approximately HK$198.8
million, based on the Offer Price of HK$144.6 per H Share, accounting for approximately 5.4%
of the gross proceeds from the Global Offering. A pproximately HK$15.1 million of the listing
expenses were charged to our consolidated stat ements of profit or loss during the Track Record
Period. Out of our remaining listing expenses, approximately HK$28.8 million is expected to be
charged to our consolidated statements of profit or loss, and approximately HK$154.9 million is
expected to be deducted from equity. By nature, our listing expenses are comprised of (i)
underwriting commission of approximately HK$147.1 million, (ii) fees and expenses of sponsor,
accountants and legal advisers of approximat ely HK$31.2 million, and (iii) other fees and
expenses of approximately HK$20.5 million. The listing expenses above are the latest
practicable estimate for reference only, and t he actual amount may differ from this estimate.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our Directors confirm that there has been no material adverse change in our business,
financial condition and results of operations since June 30, 2025, being the latest balance sheet
date of our consolidated financial statements in the Accountants’ Report set out in Appendix I
to this prospectus, and up to the date of this prospectus. We have maintained stable business
operations and development, and in the nine months ended September 30, 2025, we recorded an
increase in the shipment volume of our traini ng series and inference series, reaching 9.7
thousand units and 13.8 thousand units, respectively. In the nine months ended September 30,
2025, the number of projects of our AI computing solutions was 13. We expect a significant
increase in net loss in 2025, primarily due to the i ncrease in share-based payments, investments
in research and development and the Listing expenses.
SUMMARY
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In this prospectus, unless the context otherwi se requires, the following terms shall have the
meanings set forth below. Certain technical ter ms are explained in ‘‘Glossary of Technical
Terms.’’
‘‘Accountants’ Report’’ the accountants’ report of our Company, the text of which is set out
in Appendix I
‘‘affiliate(s)’’ with respect to any speci fied 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 of Hong Kong
‘‘Articles’’ or ‘‘Articles of
Association’’
the articles of association of our Company, as amended, which shall
become effective on the Listing Date, a summary of which is set out
in Appendix V to this prospectus
‘‘Beijing Iluvatar’’ Beijing Iluvatar CoreX Semiconductor Technology Co., Ltd. ( 北京
天數智芯半導體科技有限公司), a company established in the PRC
with limited liability on September 8, 2021, is a wholly owned
subsidiary of our Company
‘‘Board’’ or ‘‘Board of
Directors’’
the board of Directors of our Company
‘‘business day’’ a day on which banks in Hong Kong are generally open to the
public for normal banking business and which is not a Saturday,
Sunday or public holiday in Hong Kong
‘‘BVI’’ the British Virgin Islands
‘‘Capital Market
Intermediaries’’
the capital market intermediaries as named in ‘‘Directors and
Parties involved in the Global Offering’’ and has the meaning
ascribed thereto under the Listing Rules
‘‘CCASS’’ the Central Clearing and Settlement System operated by HKSCC
‘‘CSRC’’ China Securities Regulatory Commission ( 中國證券監督管理委員
會)
‘‘China’’, ‘‘the PRC’’, or
‘‘Chinese Mainland’’
the People’s Republic of China, excluding, for the purpose of this
prospectus (unless otherwise indicated), the Hong Kong Special
Administrative Region, the Macau Special Administrative Region,
and the Taiwan Region
‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 622 of the Laws of Hong Kong),
as amended, supplemented, or oth erwise modified from time to time
DEFINITIONS
–2 0–


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‘‘Companies (Winding
Up and Miscellaneous
Provisions)
Ordinance’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
supplemented, or otherwise modified from time to time
‘‘Company’’, ‘‘our
Company’’ or ‘‘the
Company’’
Shanghai Iluvatar CoreX Semiconductor Co., Ltd. ( 上海天數智芯半
導體股份有限公司) (formerly known as 上海天數智芯半導體有限公
司), a joint stock company with limited liability established in China
on December 29, 2015
‘‘Cornerstone
Investor(s)’’
the cornerstone investor(s) listed in the ‘‘Cornerstone Investors’’ of
this prospectus
‘‘Director(s)’’ the director(s) of our Company
‘‘EIT’’ Enterprise income taxation
‘‘Exchange
Participant(s)’’
a person (a) who, in accordance with the Rules of the Stock
Exchange, may trade on or through the Stock Exchange; and (b)
whose name is entered in a list, register or roll kept by the Stock
Exchange as a person who may trade on or through the Stock
Exchange
‘‘Extreme Conditions’’ the occurrence of ‘‘extreme conditions’’ as announced by any
government authority of Hong Kong due to serious disruption of
public transport services , extensive flooding, major landslides,
large-scale power outage or any other adverse conditions before
Typhoon Signal No. 8 or above is replaced with Typhoon Signal
No. 3 or below
‘‘F&S’’ Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a market
research and consulting company and an Independent Third Party
‘‘F&S Report’’ an independent market research report prepared by F&S, which was
commissioned by our Company for the purpose of this prospectus
‘‘FINI’’ ‘‘Fast Interface for New Issuance,’’ an online platform operated by
HKSCC that is mandatory for admission to trading and, where
applicable, the collection and processing of specified information on
subscription in and settlement for all new listings
‘‘General Rules of
HKSCC’’
the General Rules of HKSCC as may be amended or modified from
time to time and where the context so permits, shall include the
HKSCC Operational Procedures
‘‘Global Offering’’ the Hong Kong Public Offering and the International Offering
DEFINITIONS
–2 1–


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‘‘Group’’, ‘‘our Group’’,
‘‘the Group’’, ‘‘we’’,
‘‘us’’ or ‘‘our’’
our Company and its subsidiaries, or our Company and any one or
more of its subsidiaries, as the context may require
‘‘Guide for New Listing
Applicants’’ or
‘‘Guide’’
the Guide for New Listing Applicants issued by the Stock Exchange
in December 2023, with effect from January 1, 2024, as amended,
supplemented, or otherwise modified from time to time
‘‘H Share Registrar’’ Computershare Hong Kong Investor Services Limited
‘‘H Share(s)’’ shares in the share capital of our Company with a nominal value of
RMB1.0 each, which are to be subscribed for and traded in HK
dollars and to be listed on the Stock Exchange
‘‘H Shareholder(s)’’ holder(s) of H Share(s)
‘‘HKFRS’’ Hong Kong Financial Reporting Standards
‘‘HKFRS Accounting
Standards’’
HKFRS Accounting Standards, which include all Hong Kong
Financial Reporting Standards, Hong Kong Accounting Standards
(HKASs) and Interpretations as issued by the Hong Kong Institute
of Certified Public Accountants
‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a wholly owned
subsidiary of Hong Kong Exchanges and Clearing Limited
‘‘HKSCC EIPO ’’ the application for the Hong Kong Offer Shares to be issued in the
name of HKSCC Nominees and deposited directly into CCASS to
be credited to your designated HKSCC Participant’s stock account
through causing HKSCC Nominees to apply on your behalf,
including by instructing your broker or custodian who is a
HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on
your behalf
‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly owned subsidiary of HKSCC
‘‘HKSCC Operational
Procedures’’
the operational procedures of HKSCC, containing the practices,
procedures and administrative o r other requirements relating to
HKSCC’s services and the operat ions and functions of CCASS,
FINI or any other platform, facility or system established, operated
and/or otherwise provided by or through HKSCC, as from time to
time in force
‘‘HKSCC Participant(s)’’ a participant admi tted to participate in CCASS as a direct clearing
participant, a general clearing participant, or a custodian
participant
DEFINITIONS
–2 2–


--- page 32 ---
‘‘HKSCC Systems’’ CCASS, FINI, or any other platform, facility or system established,
operated, and/or otherwise provided by or through HKSCC
‘‘Hong Kong’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the PRC
‘‘Hong Kong dollars’’,
‘‘HKD’’ or ‘‘HK$’’
Hong Kong dollars and cents, respectively, the lawful currency of
Hong Kong
‘‘Hong Kong Offer
Shares’’
the H Shares offered by our Company for public subscription at the
Offer Price pursuant to the Hon g Kong Public Offering, subject to
reallocation as described in ‘‘Structure of the Global Offering’’
‘‘Hong Kong Public
Offering’’
the offering of the Hong Kong Offer Shares for subscription by the
public in Hong Kong (subject to reallocation as described in
‘‘Structure of the Global Offering’’) at the Offer Price (plus
brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC transaction levy of
0.00015%), on and subject to the terms and conditions described in
‘‘Structure of the Global Offering — The Hong Kong Public
Offering’’
‘‘Hong Kong
Underwriters’’
the underwriters of the Hong Kong Public Offering as listed in
‘‘Underwriting — Hong Kong Underwriters’’
‘‘Hong Kong
Underwriting
Agreement’’
the underwriting agreement dated Monday, December 29, 2025
relating to the Hong Kong Public Offering entered into by our
Company, Shanghai Shuqi, the Sole Sponsor, the Sponsor-Overall
Coordinator, and the Hong Kong Underwriters, as further
described in ‘‘Underwriting’’
‘‘Iluvatar Shanghai’’ Iluvatar CoreX Inc. Shanghai ( 上海芷銳電子科技有限公司), a
company established in the PRC wi th limited liability on January
2, 2018, is a wholly owned subsidiary of our Company
‘‘Independent Third
Party(ies)’’
any entity(ies) or person(s) who, to the best of our Directors’
knowledge, information and belief, having made all reasonable
enquiries, is not a connected person of our Company within the
m e a n i n go ft h eL i s t i n gR u l e s
‘‘International Offer
Shares’’
the H Shares initially offered by our Company for placing under the
International Offering, subject to reallocation as described in
‘‘Structure of the Global Offering’’
‘‘International Offering’’ the offer of the Inte rnational Offer Shares out side the United States
in offshore transactions in relian ce on Regulation S under the U.S.
Securities Act, including to professional investors in Hong Kong, as
further described in ‘‘Structure of the Global Offering’’
DEFINITIONS
–2 3–


--- page 33 ---
‘‘International
Underwriter(s)’’
the underwriter(s) of the International Offering
‘‘International
Underwriting
Agreement’’
the underwriting agreement relating to the International Offering
expected to be entered into by, among others, our Company,
Shanghai Shuqi, the Sponsor-O verall Coordinator and the
International Underwriters on or around Monday, January 5,
2026, as further described in ‘‘Underwriting’’
‘‘Joint Global
Coordinators’’, ‘‘Joint
Bookrunners’’, or
‘‘Joint Lead
Managers’’
the joint global coordinators, joint bookrunners or joint lead
managers as named in ‘‘Directors and Parties involved in the Global
Offering’’
‘‘Latest Practicable
Date’’
December 20, 2025, being the latest practicable date for the purpose
of ascertaining certain information contained in this prospectus
prior to its publication
‘‘Listing’’ listing of our H Shares on the Main Board of the Stock Exchange
‘‘Listing Date’’ the date on which dealings in our H Shares first commence on the
Main Board of the Stock Exchange
‘‘Listing Rules’’ the Rules Governin g the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended from time to time
‘‘Main Board’’ the stock exchange (excluding the option market) operated by the
Stock Exchange, which is independent from and operated in parallel
with the GEM of the Stock Exchange
‘‘Ministry of Finance’’ or
‘‘MOF’’
the Ministry of Finance of the PRC ( 中華人民共和國財政部)
‘‘Offer Price’’ the offer price per Offer Share (exclusive of brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC
transaction levy), expressed in Hong Kong dollars, at which Hong
Kong Offer Shares are to be subscribed for pursuant to the Hong
Kong Public Offering and International Offer Shares are to be
offered pursuant to the Internatio nal Offering, as further described
in ‘‘Structure of the Global Offering — Pricing and Allocation’’
‘‘Offer Share(s)’’ the Hong Kong Offer Shares and the International Offer Shares
‘‘OIR and Export
Control Legal
Advisor’’
Hogan Lovells International LLP, the legal advisors of our
Company as to the U.S. Outbound Investment Rule and export
control
DEFINITIONS
–2 4–


--- page 34 ---
‘‘Overall Coordinators’’ the overall coordinators as named in ‘‘Directors and Parties
involved in the Global Offering’’
‘‘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 PRC ( 《中華人民共和國公司法》), as
amended and adopted by the Standing Committee of the Eighth
National People’s Congress on December 29, 1993 and effective on
July 1, 1994, which was last amended on December 29, 2023 and
became effective on July 1, 2024, as amended, supplemented or
otherwise modified from time to time
‘‘PRC Legal Advisor’’ Jingtian & Gongcheng, our legal advisor as to PRC law
‘‘PRC Securities Law’’ the Securities Law of the PRC ( 《中華人民共和國證券法》), as
amended, supplemented or other wise modified from time to time
‘‘Pre-IPO Investment(s)’’ the investmen t(s) in the Company undertaken by the Pre-IPO
Investors, the details of which are set out in ‘‘History, Development
and Corporate Structure’’
‘‘Pre-IPO Investor(s)’’ the investor(s) fr om whom the Company obtained several rounds of
investments, the details of which are set out in ‘‘History,
Development and Corporate Structure’’
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
‘‘RMB’’ or ‘‘Renminbi’’ Renminbi, the lawful currency of the PRC
‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC ( 中國國
家外匯管理局)
‘‘SAT’’ the State Administration of Taxation of the PRC ( 國家稅務總局)
‘‘SFC’’ the Securities and Futures Commission of Hong Kong
‘‘SFO’’ or ‘‘Securities and
Futures Ordinance’’
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
Kong), as amended, supplemented, or otherwise modified from time
to time
‘‘Shanghai Iluvatar
Suanli’’
Shanghai Iluvatar Suanli Electronic Technology Co., Ltd. ( 上海天數
算力電子科技有限公司), a company established in the PRC with
limited liability on June 9, 2021, is a wholly owned subsidiary of our
Company
DEFINITIONS
–2 5–


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‘‘Shanghai Nashi’’ Shanghai Nashi Business Consulting Partnership (Limited
Partnership) ( 上海納識商務諮詢合夥企業（有限合夥）), a limited
partnership established in the PRC on August 19, 2016, the
general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Qiongyu’’ Shanghai Qiongyu Business Consulting Partnership (Limited
Partnership) ( 上海琼羽商務諮詢合夥企業（有限合夥）), a limited
partnership established in the PRC on August 19, 2016, the
general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Shuqi’’ Shanghai Shuqi Business Consulting Co., Ltd. ( 上海數麒商務諮詢有
限公司), a company established in the PRC with limited liability on
June 17, 2016, which is the general partner of each of Shanghai
Sushi, Shanghai Yishi, Shanghai X ishi, Shanghai Nashi, Shanghai
Yueshi, Shanghai Yuanshi and Shanghai Qiongyu, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Sushi’’ Shangha i Sushi Business Consulting Partnership (Limited
Partnership) ( 上海溯識商務諮詢合夥企業（有限合夥）), a limited
partnership established in the PRC on August 19, 2016, the
general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Xishi’’ Shanghai Xishi Enterprise Management Consulting Partnership
(Limited Partnership) ( 上海曦識企業管理諮詢合夥
企業（有限合夥）),
a limited partnership established in the PRC on October 11, 2021,
the general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Yishi’’ Shanghai Yishi Enterprise Management Consulting Partnership
(Limited Partnership) ( 上海溢識企業管理諮詢合夥企業（有限合夥）),
a limited partnership established in the PRC on December 3, 2017,
the general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Yueshi’’ Shanghai Yueshi Enter prise Management Consulting Partnership
(Limited Partnership) ( 上海悅識企業管理諮詢合夥企業（有限合夥）),
a limited partnership established in the PRC on December 3, 2017,
the general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
‘‘Shanghai Yuanshi’’ Shanghai Yuanshi Enterp rise Management Consulting Partnership
(Limited Partnership) ( 上海源識企業管理諮詢合夥企業（有限合夥）),
a limited partnership established in the PRC on December 3, 2017,
the general partner of which is Shanghai Shuqi, and is one of the
Single Largest Group of Shareholders
DEFINITIONS
–2 6–


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‘‘Share(s)’’ ordinary shares in the capital of our Company with a nominal value
of RMB1.0 each, comprising the Unlisted Shares and H Shares
‘‘Shareholder(s)’’ holder(s) of our Share(s)
‘‘Shareholding
Platforms’’
collectively, Shanghai Sushi, Shanghai Yishi, Shanghai Xishi,
Shanghai Nashi, Shanghai Yueshi, Shanghai Yuanshi and
Shanghai Qiongyu
‘‘Single Largest Group of
Shareholders’’
refers to Shanghai Sushi, Shanghai Y ishi, Shanghai Xishi, Shanghai
Nashi, Shanghai Yueshi, Shanghai Y uanshi, Shanghai Qiongyu and
Shanghai Shuqi
‘‘SOE(s)’’ state-owned enterprise(s)
‘‘Sole Sponsor’’ Huatai Financial Holdings (Hong Kong) Limited
‘‘Sponsor-Overall
Coordinator’’
Huatai Financial Holdings (Hong Kong) Limited
‘‘sq.m.’’ square meter(s)
‘‘State Council’’ State Council of the PRC ( 中華人民共和國國務院)
‘‘Stock Exchange’’ or
‘‘Hong Kong Stock
Exchange’’
The Stock Exchange of Hong Kong Limited, a wholly-owned
subsidiary of Hong Kong Exchanges and Clearing Limited
‘‘Takeovers Code’’ the Codes on Takeovers and Mergers and Share Buy-back issued by
the SFC, as amended, supplemented or otherwise modified from
time to time
‘‘Track Record Period’’ the period compris ing the three years ended December 31, 2022,
2023, 2024 and the six months ended June 30, 2025
‘‘Underwriters’’ the Hong Kong Underwri ters and the International Underwriters
‘‘Underwriting
Agreements’’
the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
‘‘United States’’, ‘‘U.S.’’
or ‘‘US’’
the United States of America, its te rritories, its possessions, and all
areas subject to its jurisdiction
‘‘Unlisted Share(s)’’ ordinary share(s) in the share capital of the Company with a
nominal value of RMB1.00 each, w hich is/are subscribed for and
paid up in Renminbi and are unlisted Shares which are currently not
listed or traded on any stock exchange
DEFINITIONS
–2 7–


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‘‘U.S. dollars’’, ‘‘US
dollars’’, ‘‘USD’’ or
‘‘US$’’
United States dollars, the lawful currency of the United States
‘‘U.S. Securities Act’’ the United States S ecurities Act of 1933, as amended, and the rules
and regulations promulgated thereunder
‘‘VAT’’ value-added tax, which is an indirect tax levied on the value added
at each stage in selling goods or labor services of processing, repair
or replacement, selling services, i ntangible assets, or immovables, or
importing goods within the PRC
‘‘White Form eIPO ’’ the application for Hong Kong Offer Shares to be issued in the
applicant’s own name by submitting applications online through the
designated website of White Form eIPO Service Provider at
www.eipo.com.hk
‘‘White Form eIPO
Service Provider ’’
Computershare Hong Kong Investor Services Limited
‘‘%’’ per cent
In this prospectus, the terms ‘‘associate,’’ ‘‘close associate,’’ ‘‘connected person,’’ ‘‘core
connected person,’’ ‘‘connected transaction,’’ ‘‘substantial shareholder,’’ and ‘‘subsidiary’’ shall
have the meanings ascribed to such terms under the Listing Rules, unless the context otherwise
requires.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any d iscrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of PRC laws and regulations, governmental authorities,
institutions, companies, natural persons or other entities (including certain of our subsidiaries)
have been included in this prospectus in both the C hinese and English languages. In the event of any
inconsistency, the Chinese version shall prevail.
DEFINITIONS
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This glossary contains explanations of certain technical terms used in this prospectus. As
such, these terms and their meanings may not correspond to standard industry meanings or usage
of these terms.
‘‘A64SC architecture’’ a 64-bit secure computing architecture that provides enhanced
security features and memory protection for processor operations
‘‘accelerator’’ a hardware component, ty pically a card, that enhances computing
performance by transferring s pecific tasks from the central
processing unit to specialized processors, such as GPGPUs or
ASICs
‘‘AI frameworks’’ software platforms that provide pre-built components and tools for
developing artificial intelligenc e applications, such as PyTorch,
TensorFlow, PaddlePaddle and Megatron
‘‘AI models’’ programs trained on data that can recognize patterns, make
predictions, or perform specific tasks, such as language
processing, image recognition, or decision-making
‘‘API’’ application programming interface, a type of software interface
offering a service to other pieces of software
‘‘ASICs’’ application-specific integ rated circuits, specialized microchips
designed and optimized to perform a specific function or set of
functions
‘‘AWQ’’ activation-aware weight quantization, a quantization technique that
optimizes the trade-off between model accuracy and compression by
considering both activation and weight distributions during the
quantization process
‘‘Beta release’’ pre-release versions of so ftware or applications made available to a
wider audience, often including external users, for testing and
feedback
‘‘Cache’’ a hardware or software component that stores data so future
requests for the same data can be served faster
‘‘CAGR’’ compound annual growth rate
‘‘CENI’’ computing-enab led network infrastructu re, an integrated network
and computing architecture that combines advanced computing
resources with high-speed netw ork infrastructure to deliver
large-scale, deterministic, and l ow-latency comput ing services for
AI and computing applications
GLOSSARY OF TECHNICAL TERMS
–2 9–


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‘‘Codec’’ coder-decoder, a device or software that encodes or decodes digital
data streams, especially for compressing and decompressing audio
or video signals in processing applications
‘‘Compilers’’ programs that translate source code written in programming
languages into machine code that computers can execute
‘‘Drivers’’ software components that allow the operating system to
communicate with and control hardware devices
‘‘EDA’’ electronic design automation, a category of software tools that
automates the design, simulation, verification, and testing of
complex electronic systems, from individual integrated circuits to
complete circuit boards and electronic products
‘‘FFT’’ fast Fourier transform, an e fficient algorithm to compute the
discrete Fourier transform and its inverse, widely used in scientific
computing for signal processing, image analysis, and other
applications requiring frequency domain transformations
‘‘FHD’’ full high definition, a display resolution of 1920 6 1080 pixels,
commonly used in video and image applications for enhanced visual
clarity
‘‘FP8’’ eighth-precision floating point, a numeric format that uses 8 bits to
represent real numbers, increasingly adopted in AI computing for
further efficiency and reduced memory consumption
‘‘FP16’’ half-precision floating poin t, a numeric format that uses 16 bits to
represent real numbers, allowing faster computation and reduced
memory usage for AI workloads
‘‘FP32’’ single-precision floating po int, a numeric format that uses 32 bits to
represent a wide dynamic range of real numbers, commonly used for
AI training and scientific computing tasks
‘‘general purpose’’ the ability to perform a wide range of computing tasks, rather than
being optimized for a specific application or workload
‘‘GPIO’’ general-purpose input/output, an uncommitted digital signal pin on
an integrated circuit or electronic circuit board which may be used
as an input or output, or both, and is controllable by software
‘‘GPGPU’’ general-purpose computing on g raphics processing units, referring
to the use of GPUs to perform computational tasks beyond graphics
rendering, particularly in parallel processing applications
GLOSSARY OF TECHNICAL TERMS
–3 0–


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‘‘GPTQ’’ gradient post-training quanti zation, a quantization algorithm that
enables efficient deployment of l arge language models by reducing
the number of bits required to represent model weights, while
maintaining model accuracy
‘‘GPU’’ graphics processing unit, a specialized electronic circuit designed to
manipulate and alter memory to a ccelerate the creation of images in
a frame buffer intended for output to a display device
‘‘Inference engines’’ software systems that apply trained AI models to new data to
generate predictions or decisions, such as vLLM and TGI
‘‘INT8’’ integer8, a data type in co mputer science, which stores whole
numbers that can range in value from –2 63 to 2 63–1, for 18 or 19
digits of precision. Examples of other data types include INT16,
INT32 and INT64. INT8 is used to save memory space more
commonly than the other data types as it only requires a small
storage capacity. INT8 is often used as the computational precision
to test the computing power of chips because INT8 meets the
requirements of most computing tasks
‘‘IP’’ intellectual property
‘‘IP core’’ a reusable unit of logic, cell, or integrated circuit layout design that
is the intellectual property of one party
‘‘Libraries’’ collections of pre-written code, functions, and programs that can be
reused by software developers to add functionality to their
applications
‘‘Linux distributions’’ operating systems built on the Linux kernel that include specific
selections of software packages, sy stem tools, and user interfaces,
packaged for different use cases and user needs
‘‘mass production’’ stage at which a product is manufactured in large quantities on a
regular basis, following completion of all necessary design, testing,
and regulatory requirements
‘‘MFU’’ Model FLOPs Utilization, a metric indicating the effective
utilization of a GPU’s floating-point operation capacity when
running AI models, reflecting the degree of hardware and software
optimization
‘‘OCR’’ optical character recognition, a technology that converts different
types of documents, such as scanned paper documents or images
captured by a digital camera, into editable and searchable data
GLOSSARY OF TECHNICAL TERMS
–3 1–


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‘‘OSAT’’ outsourced semiconductor assembly and test, critical stages of the
production process of semiconductor products outsourced to
third-party services providers to handle the assembly, packaging
and testing of semiconductor devices
‘‘Out-of-band
management’’
a system management method that al lows administrators to monitor
and control IT equipment independently of the main data channels,
ensuring operational reliability and remote troubleshooting
‘‘PCB’’ printed circuit board, a medium used to connect electronic
components to one another in a controlled manner
‘‘PCIe’’ peripheral component interconnect express, a high-speed serial
computer expansion bus standard
‘‘PCIe Gen 5’’ fifth generation of the PCIe standard, which doubled the data
transfer rate compared to its predecessor
‘‘PET/MR correction’’ position emission tomog raphy and magnetic resonance correction, a
process that aligns and adjusts combined PET and MR imaging data
to ensure accurate diagnostic images
‘‘R&D’’ research and development
‘‘RT imaging’’ real-time imaging, a medic al imaging technique that displays images
instantaneously during examination, allowing immediate
visualization of an area as it is being scanned
‘‘SDK’’ software development kit
‘‘SoC’’ system-on-chips, an integrated circuit that integrates most or all
components of a computer or other electronic system
‘‘Tape-out’’ the final result of the desig n process for integrated circuits before
they are sent for manufacturing
‘‘TDP’’ thermal design power, the maximum amount of heat generated by a
chip or electronic component that the cooling system is designed to
dissipate under standard operating conditions, typically measured
in watts
‘‘TGI’’ text generation inference, an inference server optimized for serving
large language models, providing l ow-latency and high-throughput
text generation services
‘‘TPS’’ transactions per second, a benchmark metric used to evaluate the
processing capability of a computing system or GPU chip in
handling AI or database workloads
GLOSSARY OF TECHNICAL TERMS
–3 2–


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‘‘vLLM’’ an inference engine designed for efficient and scalable deployment
of large language models, enabling fast and memory-efficient
inference in production environments
‘‘Watt’’ a unit used to measure how much power something uses or
produces, and one watt is equivalent to one joule of energy
transferred or used per second
GLOSSARY OF TECHNICAL TERMS
–3 3–


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We have included in this prospectus forward-looking statements. Statements that are not
historical facts, including statements about our intentions, beliefs, expectations or predictions
for the future, are forwar d-looking statements.
This prospectus contains forward-looking statements that are, by their nature, subject to
significant risks and uncertainties, including the risk factors described in this prospectus.
Forward-looking statements can be identified by words such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’
‘‘would,’’ ‘‘could,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘continue,’’ ‘‘seek,’’
‘‘estimate,’’ or the negative of these terms o r other comparable terminology. Examples of
forward-looking statements include, but are not limited to, statements we make regarding our
projections, business strategy and developmen t activities as well as other capital spending,
financing sources, the effects of regulation, expe ctations concerning future operations, margins,
profitability and competition. The foregoing is not an exclusive list of all forward-looking
statements we make.
Forward-looking statements are based on our current expectations and assumptions
regarding our business, the economy and other future conditions. We give no assurance that
these expectations and assumptions will prove to have been correct. Because forward-looking
statements relate to the future, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Our results may differ materially from those
contemplated by the forward-looking statements. They are neither statements of historical fact
nor guarantees or assurances of future performa nce. We caution you therefore against placing
undue reliance on any of these forward-looking st atements. Important factors that could cause
actual results to differ materially from those in the forward-looking statements include regional,
national or global political, economic, business, competitive, market and regulatory conditions
and the following:
. our business prospects;
. our business strategies and plans to achieve these strategies;
. future developments, trends and conditions in and competitive environment for the
industries and markets in which we operate;
. general economic, political and business conditions in locations where we operate;
. our financial condition and performance;
. our capital expenditure plans;
. our dividend policy;
. changes to the regulatory environment, policies, operating conditions of and general
outlook in the industries and markets in which we operate;
. our expectations with respect to our ability to acquire and maintain regulatory
l i c e n s e so rp e r m i t s ;
. the extent and nature of, and potential for, future development of our business;
FORWARD-LOOKING STATEMENTS
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. the actions of and developments affecting our competitors;
. the actions of and developments affecting our major customers and suppliers; and
. certain statements in the sections headed ‘‘Risk Factors’’, ‘‘Industry Overview’’,
‘‘Regulatory Overview’’, ‘‘Business’’, ‘‘Financial Information’’ and ‘‘Future Plans and
Use of Proceeds’’ with respect to trends in in terest rates, foreign exchange rates,
prices, volumes, operations, margins, risk management and overall market trends.
Any forward-looking statement made by us in this prospectus speaks only as of the date on
which it is made. Factors or events that could cause our actual results to differ may emerge from
time to time, and it is not possible for us to predict all of them. Subject to the requirements of
applicable laws, rules and regulations, we undertake no obligation to update any
forward-looking statement, whether as a resul t of new information, future developments or
otherwise. 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. All forward-looking statements contained in this prospectus are
qualified by reference to th is cautionary statement.
FORWARD-LOOKING STATEMENTS
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An investment in the Offer Shares involves signif icant risks. You should carefully consider
all of the information in this prospectus, includi ng the risks and uncertainties described below,
before deciding to invest in the Offer Shares. The following is a description of what we consider
to be our material risks. Any of the following risks could have a material adverse effect on our
business, results of operations , financial condition and growth prospects. In any such event, the
market price of the Offer Shares could decline, and you may lose all or part of your investment.
Additional risks and uncertainties not presentl y known to us, or not expressed or implied below,
or that we deem immaterial, could also harm our bus iness, results of operations and financial
condition.
These factors are contingencies that may or may not occur, and we are not in a position to
express a view on the likelihood of any such cont ingency occurring. The information given is as
of the Latest Practicable Date unless otherwise st ated, 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.
We operate in a highly competitive and rapidly evolving market characterized by
continuous technological advancements and shifting customer demands. While we have
invested significant resources in the resea rch and development of our GPGPU technology
and products, our limited commercialization trac k record may make it difficult to forecast our
future results of operations or establish reliable performance indicators. We have incurred
significant net losses during the Track Record Period, and there is no assurance that we will
achieve or maintain profitability in the future.
We face various risks and uncertainties in our operations, some beyond our control, which
we have categorized into: (i) risks relating to our business and industry; (ii) risks relating to our
intellectual property rights; (iii) risks relating our financial prospects; (iv) risks relating to doing
business in the jurisdictions we operate; and (v) risks relating to the Global Offering. Additional
risks and uncertainties that are presently unknown to us or not expressed or implied below, or
that we currently deem immaterial, could harm our business, results of operations and financial
condition. You should consider our business and prospects in light of the challenges we face,
including those discussed in this section.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
The industry in which we operate i s highly competitive. If we fail to compete with our competitors,
our business, results of operations and financial condition may be materially and adversely
affected.
We primarily compete with companies that fo cus on developing and commercializing
GPGPUs. If we compete with players that have a lo nger corporate operating history than us, or
if we do not have or in the future gain more financial resources and sophisticated technological
capabilities and broader customer base and relationships than our competitors, we may not be
able to respond more quickly and effectively to new or changing opportunities, technologies,
regulatory requirements or customer demand than our competitors.
RISK FACTORS
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--- page 46 ---
We may also face competition from new entrants or players from adjacent sectors who may
offer lower prices or new technologies, and thus increase the level of competition in the future.
Increased competition could result in lower sales, price reductions, reduced margins or loss of
market share. Further, we may be required to m ake substantial additional investments in
research, development, marketing and sales , recruiting and retaining top scientists and
innovative talents, enhancing software systems compatibility, and acquiring technologies
complementary to, or necessary for, our current a nd future products in order to respond to such
competitive threats, and we cannot assure you that such measures will be effective.
If we are unable to compete successfully, or i f competing successfully requires us to take
costly actions in response to the actions of our competitors, our business, results of operations
and financial condition may be mate rially and adversely affected.
If we are unable to develop, commercialize and mass produce new or improved products, our
business, results of operations, financial conditi on and competitive position would be materially and
adversely affected.
Our business, results of operations, financial condition and competitive position depend on
our ability to develop and introduce new or improved products that integrate the latest
advancements in computing architectures, heter ogeneous computing, multi-precision training
and inference capabilities, and cloud proce ssing technologies to meet evolving customer
demands, regulatory requirements, and industry standards. While we have successfully launched
GPGPU products, we may encounter significant unexpected technical and production
challenges, or delays in completing the development and scaling the production of new
products in a cost-efficient man ner. The product development lifecycle involves multiple
complex and interconnected processes from pr oduct research and development to tape-out,
validation and mass production which can be lengthy and unpredictable, and are subject to
various risks. These include changes in customer specifications or market requirements during
development, technological advances that necessitate design modifications, challenges in
achieving desired performance metrics, and di fficulties in scaling from prototype to mass
production. We may also face supply chain disruptions such as capacity constraints at foundry
partners, raw material shortages, or sudden changes in export control regulations or trade
policies that could restrict our access to key markets or technologies. Additionally, evolving
industry standards, certification requirement s, or regulatory frameworks across different
jurisdictions could require us to modify our designs or manufacturing processes
mid-development, potentially rendering previous development work or inventory obsolete.
Any of these challenges could result in significant delays, increased costs and expenses, or the
need to revise our product development plans, which could delay our product launch schedules
or prevent us from commercializing and mass producing new products as planned.
This requires us to invest significant resources in R&D and also requires that we:
. develop performance-optimized, energy-efficient GPGPU products that enhance
computational throughput, compatibility, and deployment flexibility, differentiating
our products from those of our competitors;
. continuously improve the robustness and scalability of our computing architectures,
parallel processing capabilities, and algorithm-hardware integration to support a wide
range of applications;
RISK FACTORS
–3 7–


--- page 47 ---
. cooperate effectively with our customers, suppliers, and partners on the design and
development of new products, while managing uncertainties and risks relating to
market acceptance and product adoption;
. respond effectively to technological changes and product announcements by our
competitors; and
. adjust to changing customer requirements, market conditions, and regulatory
standards quickly and cost-effectively.
If there are delays in, or if we fail to complete when expected or at all, the development of
new GPGPU architectures or product iterations , we may not be able to satisfy our customers’
requirements, maintain existing customers or a ttract new customers, or achieve broader market
acceptance of our products, and as a result, our business, results of operations, financial
condition and competitive position woul d be materially and ad versely affected.
If we fail to anticipate and adapt to technical transitions in our industry, our products may become
less competitive or obsolete.
As the industry advances towards more advanced technologies, there is a tangible risk that
the existing market for our current products could diminish swiftly. Our competitive edge hinges
not only on our ability to keep pace with, but also anticipate, future technological
advancements. Failure to proact ively develop and integrate nex t-generation technologies into
our product lineup could result in a substantial loss of market share and revenue. This
underscores the critical need for strategic foresight in planning and developing future
technologies. We cannot guarantee that the market environment will remain unchanged, nor
can we assure that we will successfully plan for the next generation of technology in advance.
The introduction of next-generation technologies, particularly advances in semiconductor
process nodes or new computing architectures, could significantly diminish demand for our
existing products and affect our ability to comp ete with newer offerings, which may adversely
affect our business, financial condition and results of operations.
We have been and intend to continue investing significantly in R&D, which may adversely affect
our profitability and operating cash flow and may not generate the results we expect to achieve.
We have been investing heavily in our R&D efforts. Our R&D expenses amounted to
RMB456.6 million, RMB615.9 million, RMB772.8 million, RMB333.7 million and RMB451.5
million in 2022, 2023, 2024 and the six months e nded June 30, 2024 and 2025, respectively. The
industry in which we operate is subject to rapid technological changes and are evolving quickly
in terms of technological innovation. We need to invest significant resources, including financial
resources, in R&D to make technological advances in order to expand our offerings and make
our products innovative and competitive in the market. As a result, we may continue to incur
significant R&D expenses in the future.
RISK FACTORS
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However, we cannot guarantee that our efforts will deliver the benefits we anticipate or be
recognized as expected. Development activitie s are inherently uncertain, and we may not be able
to obtain and retain sufficient resources includ ing qualified R&D personnel. Even if we succeed
in our R&D efforts and generate the results we expect, we may still encounter practical
difficulties in commercializing our development results. New technologies could render our
technologies, our technological infrastructure or products that we are developing or expect to
develop in the future obsolete or unattractive, t hereby limiting our ability to recover related
product development costs, which could result in a decline in our revenues, profitability and
market share.
Our R&D efforts may not contribute to our future results of operations for several years, if
at all, and such contributions may not meet ou r expectations or even cover the costs of such
efforts, which would materially and adversely affect our business, results of operations,
financial condition and competitive position.
We depend on third-party contract manufacturers, which reduces our ability to control our
manufacturing process. Any interruption or s hortage or loss of capacity from these contract
manufacturers could materially interrupt our bus iness operations and product offerings, which may
adversely affect our business, results of operations and financial condition.
Our reliance on external contract manufactur ers exposes us to critical challenges such as
unpredictable production capacities, potential quality variations, and difficulties accessing
next-generation manufacturi ng technologies. The complex nature of GPGPU design requires
continuous technological adaptation, making contract manufacturers transitions intricate and
expensive. Industry consolidation, raw materia l volatility, and intense competition for advanced
manufacturing capacity — compounded by limited global foundry capacity, especially for
sophisticated process nodes critical to performance-optimized GPGPU technologies — could
substantially impact our ability to scale produ ction, meet customer demands, and maintain our
competitive edge in the rapidly evolving computing market. As a result, we may suffer from
delayed product deliveries, increased manufa cturing costs, compromised technological
innovation, and potential loss of market share. Moreover, our dependence on a limited
number of contract manufacturers partners i ncreases our exposure to operational risks,
including potential supply constraints, pricing pressures, and the need to qualify alternative
manufacturing sources in case of unexpected disruptions in a timely manner. In particular, our
products that were sold and generated revenue during the Track Record Period all used Supplier
F’s co-packaged integrated circuits, except Z K Gen 2. In late November 2024, due to regulatory
developments affecting international semiconductor supply arrangements, we experienced a
temporary disruption in supply from Supplier F lasting until early February 2025, during which
we did not receive shipments of certain types of c o-packaged integrated circuits used in several
of our GPGPU products. While we were able to manage this particular disruption through
inventory management and alternative arrangeme nts, any future interruption, shortage, or loss
of manufacturing capacity from our contract ma nufacturers partners could materially disrupt
our business operations and product offerings, poten tially causing significant adverse effects on
our business, financial performance, and overall market competitiveness. See ‘‘Business — Our
Suppliers — Our Major Suppliers’’ for details.
RISK FACTORS
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We may face supply chain risks, including interr uptions of requisite materials, components,
equipment, and services due to rel iance on a limited number of suppliers, or failure by suppliers to
achieve satisfactory yields or quality standards , which could adversely affect our reputation,
customer relationships and business operations.
A large number of suppliers provide materials, components, equipment and services that
are critical to our product development and operations. Our reliance on a limited number of
suppliers for key resources introduces signific ant operational vulnerabilities, potentially
impacting our ability to maintain consistent product quality, meet delivery timelines, and
sustain competitive market positioning. The semiconductor supply chain, particularly for
GPGPU technologies, faces complex challenge s, including critical shortages of advanced
substrates, specialized materials, and manufac turing components. While we attempt to diversify
our supplier base, certain special ized materials and services have limited alternative sources,
creating inherent procurement risks. Suppliers may encounter capacity co nstraints, experience
quality issues, face extended lead times, or strug gle with resource availability such as water,
silicon, electricity, and other essential inputs. These disruptions can impact various aspects of
our operations, from our R&D initiatives to production planning, as well as our contract
fulfillment capabilities, which may increase ope rational costs, and poten tially compromise our
overall financial performance and market competitiveness.
In particular, we rely on certain critical third-party technology tools, such as EDA
software, which are essential to the R&D and production of our products. IP cores represent
one of the main components required for our development of the GPGPU products, and U.S.
suppliers were important providers of these IP cores during the Track Record Period. Purchases
of IP cores and EDA software licenses sourced from the U.S. and other overseas countries
accounted for 15.3%, 2.3%, 3.1%, and 6.0% of o ur total purchases in 2022, 2023, 2024 and the
six months ended June 30, 2025, respectively. In late May 2025, major overseas EDA vendors
based in the United States introduced uncertainty regarding the availability of support and
upgrade services for semiconductor companies in Chinese Mainland. As a result, while existing
EDA software remain available for curren t customers, access to product upgrades,
maintenance, and other support services becam e uncertain. As of early July 2025, these major
EDA suppliers have confirmed the resumption of normal business operations. To further
enhance our supply chain resilience, we have implemented a multivendor strategy that
prioritizes non-U.S. vendors for new product development, with both international and
domestic suppliers progressively integrated into specific development areas. However, similar
developments in the future could materially and adversely affect our R&D activities and
product innovation, requiring us to adjust our R&D planning and potentially leading to
increased operational costs. Similar disruptions could also occur with other types of critical
suppliers, such as contract manufacturers, due to geopolitical or other external factors.
Purchases from our largest supplier for the y ears ended December 31, 2022, 2023, 2024 and
the six months ended June 30, 2025 accounted for 12.5%, 21.6%, 18.1% and 53.1%,
respectively, of our total purchase amount for the respective year/period. Purchases from our
five largest suppliers for the years ended D ecember 31, 2022, 2023, 2 024 and the six months
ended June 30, 2025 in aggregate accounted for 58.2%, 56.2%, 44.6% and 67.2%, respectively,
of our total purchase amount for the respective year/period. The stability and operational
strategies of these critical suppliers remain beyond our control, potentially exposing us to
strategic vulnerabilities. Supplier-related risks i nclude extended lead times, capacity constraints,
limited supply availability, price volatility, and potential quality or cybersecurity disruptions.
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The complexity of qualifying alternative suppliers for specialized components can lead to
prolonged production delays and increased costs, particularly given the technical sophistication
and limited global sources for critical materials and technologies essential to our product
development.
Moreover, we face additional complexities from evolving regulatory landscapes and
stakeholder expectations around responsible s ourcing practices. Our supply chain operations
are subject to international trade dynamics and global capacity conditions, affecting our
foundry cooperation and procurement strateg ies. Rapid technology advancement and evolving
compliance standards across jurisdictions may drive changes in manufacturing protocols and
technical specifications, which may necessitate product adjustm ents or updates, which can lead
to inventory obsolescence, increased process assessment costs, and the need to reassess or
diversify our supplier base. During the Trac k Record Period, we experienced inventory
obsolescence due to technologic al advancement and unforeseen external events. Following the
launch of TG Gen 2 in 2023, our strategic decision to discontinue the production of TG Gen 1
a n dr e a l l o c a t em a i nc h i pp r o d u c t i o nc a p a c i t yt oT GG e n2r e q u i r e du st oi m p a i rr a wm a t e r i a l s
previously designated for TG Gen 1 production, which contributed to an inventory write-down
of RMB15.3 million in 2023. In 2024, we recorded an inventory write-down of RMB4.79
million, which was mainly due to raw materials damage caused by an earthquake in one of our
supplier’s region. These events demonstrate how both product iteration and external factors can
impact our inventory management. Our lack of direct control over suppliers’ procurement and
employment practices also exposes us to potential financial and reputational risks. For example,
suppliers may deem it necessary to modify their operations in response to these regulatory and
market changes, which could lead extended qualif ication timelines, adjustments to inventory
carrying values and related expenses, and rea ssessment of the realizability of advance
commitments. Any of the foregoing factors could impact our production continuity and our
ability to maintain optimal inventory levels and meet customer obligations in a cost-effective
manner, which could adversely affect our reputa tion, customer relationships and business
operations.
We depend on a limited number of customers for a s ubstantial portion of our revenue, and the loss
of, or a significant reduction in sales to, one or more of our major customers would adversely affect
our business, results of operations and financial condition.
Revenue generated from our l argest customer for the years ended December 31, 2022, 2023,
2024 and the six months ended June 30, 2025 accounted for 37.7%, 19.3%, 44.9% and 13.8%,
respectively, of our total revenue for the respect ive year/period. Revenue generated from our
five largest customers for the years ended D ecember 31, 2022, 2023, 2024 and the six months
ended June 30, 2025 accounted for 94.2%, 73.3%, 73.4% and 38.6%, respectively, of our total
revenue for the respective year/period. Our business, results of operations and financial
condition for the foreseeable future may continue to depend on sales to a relatively small
number of customers. In the future, our current major customers may purchase fewer of our
products and solutions than they did in the past, may alter their purchasing patterns, or may
decide not to purchase our products at all. For example, customers and end customers that have
purchased our products and solutions in the past may decide to adopt alternative products and
solutions or develop in-house products and solutions in lieu of their purchases from us, which
may reduce their demand of our products and negatively impact our operational and financial
results. Further, the amount of revenue generated from any single major customer, or our major
customer concentration generally, may fluctuate in any given period. If our major customers
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scale back or terminate their business relationship with us, or if we are unable to negotiate
favorable contractual terms with them, or if we a re unable to secure new customers on favorable
or comparable terms or at all, our business, financial condition and results of operations may be
materially and adversely affected.
We have a limited track record in the commercialization of our products, which makes it difficult to
forecast our future results of operations, and our historical growth may not be indicative of our
future performance.
We have a limited track record in the commerci alization of our products compared to some
of our competitors. Our operations to date have focused on establishing our intellectual
property portfolio, conducting R&D activities and commercializing our products, certain of
which are at various stages of development. A s a result of our limited track record in the
commercialization of products, and particular ly in light of the rapidly evolving nature of the
industry in which we operate, it may be difficult to evaluate our current business and reliably
predict our future performance. Our historical results may not provide a meaningful basis for
evaluating our business, results of operations, financial condition and prospects, and we may
encounter unforeseen expenses, difficulties, complications, delays and other known and
unknown factors, and may not be able to achieve promising results in future periods. If we
cannot address these risks and overcome these difficulties successfully, our business and
prospects will suffer.
We are subject to the risks associated with sancti ons and export controls laws and regulations,
international trade policies, and developing dom estic and foreign laws and regulations on AI,
semiconductor and related technologies, and ou r business, financial condition and results of
operations could be adversely affected.
Certain of our products may be subject to export control and economic sanctions
regulations, including the U.S. Export Administration Regulations and various economic and
trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign
Assets Controls. If we fail to comply with these laws and regulations, we and certain of our
employees could be subject to substantial civil or criminal penalties, including the possible loss
of export privileges, fines, which may be impos ed on us and responsible employees or managers,
and, in extreme cases, the incarceration of res ponsible employees or managers. Obtaining the
necessary authorizations, including any required license, for a particular deployment may be
time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities. We
are actively taking efforts to secure such pro ducts, including licenses if necessary, and find
alternatives. However, without alternative s ources, we may not be able to securely and timely
find alternatives for such products and could result in supply chain instability. In addition,
changes in our products and solutions, or changes in applicable export control or economic
sanctions regulations may create delays in the introduction and deployment of our products and
solutions, or, in some cases, prevent the sales of our products to certain markets or end users.
Any change in export control or economic sanctions regulations, shift in the enforcement or
scope of existing regulations, or change in the co untries, governments, persons or technologies
targeted by such regulations, could also result in decreased demand for our products, or in our
decreased ability to manufacture our products , export our products or provide our services to
existing or prospective customers with international operations. Any decreased demand for our
products or limitation on our ability to export our products and provide our products could
adversely affect our business, results of operations, financial condition, and prospects.
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In addition to trade policy measures, the Uni ted States and certain other governments have
imposed and may adopt additional sanctions, ex port controls and other regulatory measures
that directly or indirectly affect China-based technology companies. These types of laws,
policies and measures may be subject to frequent changes, and their implementation,
interpretation and enforcement involve substantial uncertainties, which may be heightened by
potential national security concerns or other factors that are out of our control. Similar or more
expansive restrictions may be imposed by different jurisdictions in the future. We will need to
maintain heightened internal control and risk management policies to comply with such
restrictions, which requires significant resources and efforts. Furthermore, such potential
restrictions may materially and adversely affect our customers, our suppliers, or our ecosystem
partners’ abilities to acquire technologies, s ystems, devices or components. Any of these
developments could adversely affect our business and financial condition. In addition, our
business operations or reputation may be adversely affected if our business partners, including
our customers, are subject to sanctions.
On October 28, 2024, the U.S. Department of the Treasury (the ‘‘ Treasury ’’) issued the
Provisions Pertaining to U.S. Investments in Certain National Security Technologies and
Products in Countries of Concern (the ‘‘ Outbound Investment Rule ’’). The Outbound Investment
Rule, effective on January 2, 2025, is aimed at ex erting greater U.S. government oversight over
U.S. direct and indirect investments involving China and introduces new hurdles and
uncertainties for cross-border collaboration s, investments and funding opportunities of
entities with ties to China. It targets investments involving entities associated with ‘‘countries
of concern,’’ currently defined as only China (including Hong Kong and Macau), and imposes
investment prohibition or notification requirements on a wide range of U.S. person investment
transactions in entities in countries of concern en gaged in ‘‘covered activities’’ relating to three
sectors: (i) semiconductors and m icroelectronics, (ii) quantum information technologies, and
(iii) certain artificial intellig ence systems (together, the ‘‘rele vant sectors’’). Under the Outbound
Investment Rule, entities with meaningful ties to China and engaged in covered activities are
defined as ‘‘covered foreign persons.’’ Subject to certain exceptions, equity investments (a
‘‘covered transaction’’) by a U.S. person in a covered foreign person are subject to prohibition
or notification requirements. As advised by the OIR and Export Control Legal Advisor, we may
be deemed a ‘‘covered foreign person’’ that is e ngaged in certain activities covered under the
definition of ‘‘Notifiable Transactions’’ defined under the Outbound Investment Rule due to our
business activities. As a ‘‘covered foreign person,’’ and if U.S. persons engaged in a ‘‘covered
transaction,’’ including a transaction that involves the acquisition of our equity interests, such
U.S. persons may need to make a notification pursuant to the Outbound Investment Rule. As
confirmed by the OIR and Export Control Legal Advisor in connection with the foregoing
matters, as we do not engage in any prohibited transactions, and our products do not meet the
specified parameters prescribed for the prohibite d transactions, our integrated circuit design
activities do not meet the criteria for prohibited transactions. In addition, as further advised by
the OIR and Export Control Legal Advisor in connection with the foregoing matters, following
the completion of the Global Offering, it is expected that U.S. persons will be able to invest in
our H Shares based on the publicly traded securities exception under the Outbound Investment
Rule as long as the investments made do not affo rd a U.S. person certain rights that are not
standard minority shareholder protections. Ev en though U.S. persons’ acquisitions of certain
offer securities (such as our publicly traded H shares) will be exempted from the scope of
covered transactions, the Outbound Investment Rule could still limit our ability to raise capital
or contingent equity capital from U.S. investors prior to and after this Global Offering given
that relevant laws, regulations, and policies continue to evolve. In addition, we cannot predict
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how the Outbound Investment Rule will be enforced, and neither can we guarantee that there
will not be an expansion to the scope of the Outbound Investment Rule, a change in
interpretation to broaden its application, or an enactment of similar laws or regulations that
impinge upon our business activities in the futu re. The uncertainty in the interpretation and
enforcement of the Outbound Investment Rule may reduce U.S. investors’ interest in our equity
securities. In such a case, and if alternative investors cannot be found, the trading price and
liquidity of our H Shares may be adversely aff ected. If our ability to raise such capital is
significantly and negatively affected, it could also be detrimental to our business, financial
condition and prospects. In such case, the value of our H shares may significantly decline, or in
extreme cases, become worthless.
Potential changes to the U.S. export control regi me may impose additional compliance obligations
or restrict our access to critical technologies.
In October 2025, President Donald Trump made public statements indicating a potential
expansion of the U.S. export control regime t o cover additional categories of critical
technologies and software. While no detailed implementation framework has been published
and no such measures had been adopted as of November 2025, these statements signal the
possibility of further policy tightening or structural modifications to the existing export control
regime. Any expansion of U.S. export control restrictions to encompass products, technologies,
software or services that we provide, incorporate into our solutions, or rely on in our supply
chain could (i) limit our ability to procure essential components or EDA tools, (ii) delay product
development or delivery timelines, or (iii) require us to obtain additional licenses or undertake
costly compliance measures. We cannot predict the scope, timing or enforcement posture of
future U.S. export control actions, and any such developments could materially and adversely
affect our business, financial condition and prospects.
We may be subject to product liability claims if our products contain errors, defects, or fail to meet
performance specifications, which could result in s ubstantial costs, reputational damage and loss of
market share.
Products within the industry in which we operat e may contain errors, defects, architectural
limitations, or compatibility issu es that are difficult to detect and c orrect, particularly when first
introduced or when new versions or enhancements are released. Despite extensive testing and
validation, our products may contain such defects or limitations which we are unable to
successfully correct in a timely manner or at al l. There is also a risk that our products may not
meet specified performance requirements o r computational accuracy standards due to
limitations in hardware design, manufacturing processes, or other technical factors. Some
defects or performance issues may only be dis covered after products have been validated,
deployed and integrated into our customers’ computing infrastructure, and we may incur
substantial additional engineering expenses and costs relating to product replacement or
architectural modifications. Furthermore, the se issues could potentially lead to lawsuits,
including class actions, filed against us by o ur customers or other parties, exposing us to
potential liabilities and damages. We may also exp erience revenue loss, significant expenditures
of capital, a delay or loss in market acceptance and damage to our reputation, any of which
could adversely affect our business, results of operations and financial condition.
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Given that many of our customers use our products in processes that are critical to their
businesses, any errors, defects or performance degradation could result in significant losses to
our customers. As a result, we may incur substantial engineering expenses, costs relating to
product replacement, and potential lawsuits. Our customers may seek significant compensation
for their losses or cease conducting business with us altogether. Such claims would likely be
time-consuming and costly to defend, while potentially damaging our reputation and making it
harder to sell our products.
We generally do not accept product returns or e xchanges unless the pr oduct quality issue is
attributable to us. If we experience any deterioration in the quality of our products, we will
incur higher costs associated with returns, ex changes and warranties. We may also be required
by law to adopt new or amend existing return, exchange and warranty policies from time to
time. While these policies improve customer ex perience and promote customer loyalty, which
may in turn help us acquire and retain customer, they also subject us to additional costs and
expenses which we may not recoup through increased revenue. We cannot assure you that our
return, exchange and warranty policy will not be misused by our customers, which may
significantly increase our costs and may materially and adversely affect our business and results
of operations. If we revise these policies to reduce our costs and expenses, our customers may be
dissatisfied, which may result in loss of existing customers or failure to acquire new customers at
a desirable pace, which may materially and adv ersely affect our results of operations.
Our results of operations may be affected from period to period due to the seasonality of our
business and industry cycles.
The semiconductor industry is highly cyclical, characterized by rapid technological
advancements, evolving industry standards, sh ort product life cycles, price erosion, and
fluctuations in supply and demand. Periodic downturns in the industry have been marked by
reduced product demand, production overcapaci ty, high inventory levels, and accelerated
declines in average selling prices, all of which could adversely affect our business and operating
results. Conversely, during periods of strong industry demand, competition for access to
third-party foundry and assembly capacity may intensify. We rely on such capacity for the
manufacturing and assembly of our products, a nd there is no assurance that our third-party
contract manufacturers will be able to provide us with sufficient capacity in the future.
In addition, we also experience certain seasonal patterns in our business. In particular, our
customers typically experience lower production and sales activity during and following the
Chinese New Year holidays in the first quarter, which may in turn affect our revenue
recognition in this period. In contrast, we gen erally receive a higher volume of orders in the
second half of the year, which leads to increase d revenue contributions during that period. Our
results of operations could also suffer if we do not achieve revenue consistent with our
expectations for this seasonal demand because many of our expenses are based on anticipated
levels of annual revenue.
Due to both the cyclical nature of our industry and these seasonal patterns, our financial
condition and results of operations for future periods may fluctuate significantly, and our
historical results may not be indicative of our future operating results. This volatility could
affect our ability to plan our operations effectively and could impact the trading price of our H
Shares.
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We depend on licenses to critical third-party technologies and intellectual property, and any loss of
access or unfavorable changes to these licensing arrangements would materially and adversely
affect our business.
Our products incorporate certain third-party technologies and intellectual property that
are important for our product development and functionality, which we license through various
agreements with their respective owners. These l icensing arrangements typically involve ongoing
fees or royalties. If we are unable to maintai n or renew these licensing arrangements on
commercially reasonable terms, or if our rel ationships with these technology providers
deteriorate, we may face significant challenges in our product development process. Finding
alternative technologies or providers, where possible, could require substantial time and
resources, potentially delaying our development timeline and increasing costs. Additionally,
changes in the licensing terms, costs, or availability of these technologies could impact our
ability to maintain our competitive position in t he market. Any such disruption could materially
and adversely affect our product development capabilities, business operations, and competitive
position.
The size of the markets in which we operate and the demand for our products may not increase as
quickly as we anticipate due to a variety of factors, which would materially and adversely affect
our business, financial condition, results of operations and prospects.
We are pursuing opportunities in markets where it is difficult to predict the timing and size
of the opportunities for each of our products. Our business, results of operations, financial
condition and prospects depend on our ability to make timely investments in the correct market
opportunities in downstream applications. Even if the markets in the downstream industries
grow substantially, we cannot assure you that we will be able to pursue these opportunities.
Despite our efforts to market our products and solutions and secure new orders, there can be no
assurance that such efforts will be successful or that we will be able to obtain purchase orders
from customers as anticipated. Furthermore, even if we are able to obtain orders from our
customers, there is no assurance that the sales performance of our products or solutions will
meet our expectations or forecasts, as actual results may be affected by changes in market
conditions, customer demand, or other factors beyond our control. If one or more of these
markets experience a shift in customer demand, our products may not be able to compete as
effectively, or at all. We may not be able to adjust our inventory level in response to the change
in the demand of our downstream markets and t he price of our products may be adversely
affected. If we fail to meet the technological dev elopment, industry standards or applicable
regulatory requirements, our products may not be adopted by end customers in their computing
systems or infrastructure deployments. Given the evolving nature of the markets in which we
operate, it is difficult to predict end customer demand or the future growth of the markets in
which we operate or into which we plan to enter. If we fail to adjust accordingly to changes in
the market condition of our downstream industri es, our business, financial condition, results of
operations and prospects will be adversely affected.
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Increases in costs of the materials and other components that we use in our products would
adversely affect our business, results of operations and financial condition.
Significant changes in the markets in which we purchase materials, components, and
supplies for the production of our products may adversely affect our profitability. As a result of
the global semiconductor shortage and inflationary pressures, we may experience increases in
the cost of our products, and, therefore, our gross margin may decrease, at least in the short
term, as a result of these cost increases. Competitive and market pressures limit our ability to
recover increases in costs through increases i n prices we charge to our c ustomers. The inability
to pass on price increases to our customers when raw material or component prices increase
rapidly or are significantly higher than historic levels would adversely affect our business,
results of operations and financial condition.
Any failure to provide maintenance and suppor t services for our customers may harm our
relationships with them and ultimate ly negatively affect our business.
Our ability to provide efficient customer support and maintain product quality is critical to
our business success. As we continue to grow our operations and support our enterprise
customer base, we need to provide efficient technical support that meets the complex needs of
our customers at scale. Challenges in scaling customer support, including recruiting and
retaining qualified technical personnel, could impair our ability to meet customer demands and
maintain our market reputation. We may not be ab le to recruit or retain sufficient qualified
technical personnel with deep expertise in supporting advanced computing solutions. Potential
difficulties in responding to technical support needs, adapting to competitive service models, or
managing increased support costs may negativ ely impact our operational performance. As a
result, we may be unable to respond quickly enough to accommodate technical support demands
or maintenance requirements for essential computing deployments, which may adversely affect
our business.
If we are unable to attract, retain and motivate key i ndividuals, our business, results of operations
and financial condition would be mat erially and adversely affected.
Hiring and retaining key individuals, such as key management, technical staff, qualified
executives, developers, engineer s and sales representatives are critical to our business, in
particular, to the R&D and commercialization of our products. The competition for highly
skilled employees in our industry is increasingly intense. Significant changes in our management
team may disrupt our business as their knowledge and relationships would be difficult to
replace. For details, see ‘‘Directors and Senior Management.’’ In addition, changes in the
interpretation and application of employmen t-related laws to our workforce practices may
result in increased operating costs and less flexibility in how we meet our changing workforce
needs. To help attract, retain and motivate key individuals, employee incentives such as share
incentive schemes have been, and will continue to be, an important part of our compensation.
Our employee hiring and retention also depend on our ability to build and maintain a diverse
and inclusive workplace culture and be viewed a sa ne m p l o y e ro fc h o i c e .I fo u rs h a r e - b a s e do r
other compensation programs and workplace culture cease to be viewed as competitive, our
ability to attract, retain, and motivate key individuals would be weakened, which would in turn
materially and adversely affect our business, results of operations and financial condition.
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If we do not maintain sufficient inventory or if we do not adequately manage our inventory, we
could lose sales or experience excess inventory l evels, which could negatively affect our results of
operations and financial condition.
Changing consumer demands and uncertainty surrounding the adoption cycles of new
technologies and products could expose us to inventory risk. Demand in the GPGPU market,
especially in sectors where our products are still being validated or commercialized, may
fluctuate due to factors beyond our control. As a result, we may not always be able to align our
inventory purchases with customer requirements in a timely manner. We cannot assure you that
we will accurately predict customers’ demand to prevent under-stocking or over-stocking of our
products, which could lead to lost sales opportunities, increased inventory costs, or supply
shortages, adversely affecting our business ope rations, financial performance, and overall
market position. Our inventory turnover day s were relatively long during the Track Record
Period, amounting to 654.7 days, 596.2 days, 382.6 days and 465.8 days in 2022, 2023, 2024 and
the six months ended June 30, 2025, respectively.
To ensure adequate inventory supply, we must forecast inventory needs and expenses, place
orders sufficiently in advance with our suppliers and stock inventory based on our estimates of
future demand for particular products. Fluctuations in the adoption of our products may affect
our ability to forecast our future results of opera tions. Our ability to accu rately forecast demand
for our products could be affected by many factors, including the rapidly changing nature of the
market in which we operate, the uncertainty surrounding the market acceptance and
commercialization of our products, the emergence of new markets, the change in customer
demand for our products or for products of our competitors, health epidemics and outbreaks,
and any associated work stoppages or interruptions, unanticipated changes in general market
conditions and the weakening of economic conditions or consumer confidence in future
economic conditions. As our products become or continue to be commercialized, we may face
challenges in meeting the demands of our custom ers and end customers at a satisfactory rate,
which would negatively affect our revenue. If we f ail to accurately forecast customer demand,
we may experience excess inventory levels or a shortage of products available for sale.
Inventory levels in excess of customer demand may result in inventory write-downs or
write-offs and the sale of excess inventory at dis counted prices, which would adversely affect our
business operations and financial conditions. C onversely, if we underestimate customer demand
for our products, we may not be able to deliver products to meet our customers’ requirements,
and this could result in damage to our brand and customer relationships and adversely affect
our revenue and results of operations.
Our business and prospects depend on our ability to build our brands and reputation, which could be
harmed by negative publicity with respect to any negative publicity regarding our Company,
Directors, employees, branding or products, whether warranted or not, could adversely affect our
business.
We believe that maintaining and enhancing our brands is of significant importance to the
success of our business. Well-recognized brands ar e important to enhancing our attractiveness
to our customers. Since we operate in a highly competitive market, brand maintenance and
enhancement directly affect our ability to maintain our market position. The successful
promotion of our brand will depend on the effectiveness of our marketing efforts and amount of
word-of-mouth referrals we received from satisf ied customers. We may incur extra expenses in
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promoting our brand. However, we cannot assure you that these activities are and will be
successful or that we can achieve the brand promotion effect we expect. In addition, negative
publicity about our Company, Directors, employ ees, branding or products, whether warranted
or not, may adversely affect our brand, reputa tion and business. Certain of such negative
publicity may come from malicious harassment or unfair competition acts by third parties,
which are beyond our control.
As we continue to grow, we may not be able to e ffectively manage our growth and expand our
operations, which could negatively impact our operation performance, financial condition and
results of operations.
We have experienced significant growth in the p ast years/periods. Our revenues increased
significantly from RMB189.4 million in 202 2t oR M B 2 8 9 . 0m i l l i o ni n2 0 2 3 ,a n df u r t h e rt o
RMB539.5 million in 2024. Furthermore, our revenue increased from RMB197.4 million in the
six months ended June 30, 2024 to RMB324.3 mill ion in the six months ended June 30, 2025. We
plan to further grow our business by, among other things, investing in technology, securing
additional contracts with existing and new custo mers, strengthening our brand recognition, and
expanding our products to enable global partners. Our future operating results will depend to a
large extent on our ability to manage our expansion and growth successfully.
Risks that we face in undertaking this expansion include, among others:
. managing our supply chain to support fast business growth;
. controlling expenses and investments i n anticipation of expanded operations;
. establishing or expanding R&D and sales networks;
. implementing and enhancing administrative structure systems and processes;
. executing our strategies and bus iness initiatives successfully;
. improving our operational, financial and ma nagement controls, compliance programs
and reporting systems;
. managing a larger organization with a gr eater number of employees in different
divisions; and
. addressing new markets and potentially unforeseen challenges as they arise.
To effectively manage the expected growth of our operations, we will also be required to
refine our operational, financial and management controls and reporting systems and
procedures. Our current and planned staffing, systems, policies, procedures and controls may
not be adequate to support our future operations. If we fail to efficiently manage the expansion
of our business, our costs and expenses may i ncrease faster than we planned and we may not
respond timely to competitive challenges or o therwise successfully execute our business
strategies. Our products mix may continue to change in the future, affecting our revenue mix,
and this may have an adverse impact on our profit margin.
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Furthermore, our growth requires significant financial resources and will place significant
demands on our management. In particular, we may fund some of our expansion plans through
our internal financial resources, such as cash flows from operations, and may also seek external
equity or debt financings to implement them. If we seek debt financings for such plans, we may
incur interest costs, which may affect our profit. In addition, we may not be able to manage our
current or future operations effectively and effi ciently to compete successfully in our existing
markets or the new markets that we enter. We may also need to adjust our business plans and
growth strategies from time to time, which could involve uncertainties. If our business plans and
growth strategies fail to perform as expected, our business, results of operations and financial
condition could be material ly and adversely affected.
Acquisitions, investments or strategic alliances m ay fail and materially and adversely affect our
reputation, business, results of op erations and financial condition.
We may in the future enter into strategic alli ances with various third parties. Strategic
alliances with third parties could subject us to a number of risks, including risks associated with
sharing proprietary information, non-performance by the counterparty and an increase in
expenses incurred in establishing new strategic alliances, any of which may materially and
adversely affect our business. We may have little ability to control or monitor their actions and
to the extent strategic third parties suffer negat ive publicity or harm to their reputation from
events relating to their business, we may also su ffer negative publicity or harm to our reputation
by virtue of our association with such third parties.
In addition, we may acquire additional assets, technologies or businesses that are
complementary to our existing business. Future acquisitions and the subsequent integration of
new assets and businesses into our own would require significant attention from our
management and could result in a diversion of resources from our existing business, which in
turn could adversely affect our business. Acqu ired assets or businesses may not generate the
financial results we expect. Furthermore, we are subject to valuation risks in connection with
acquisitions. Determining the fair value of acqui red businesses, assets and liabilities involves
significant management judgment and assumptions. If our estimates prove to be inaccurate or if
business conditions change adversely following an acquisition, we may be required to record
impairment charges that could materially harm our reported financial performance. In addition,
acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances
of equity securities, the incurrence of debt, the incurrence of significant goodwill impairment
charges, amortization expenses for other intangible assets and exposure to potential unknown
liabilities of the acquired business.
Our failure to address these risks or other problems encountered in connection with our
future acquisitions and investments could cause us to fail to realize the anticipated benefits of
such acquisitions or investments, incur unanticipated liabilities and expenses and harm our
business generally. If we use our equity securities to pay for acquisitions or investments, we may
dilute the value of our Shares. If we borrow funds to finance acquisitions or investments, such
debt instruments may contain restrictive covenants that could, among other things, restrict us
from distributing dividends. Such acquisitions and investments may also lead to significant
amortization expenses related to intangible ass ets, impairment charges or write-offs. Moreover,
the costs of identifying and consummating acquisitions may be significant. In addition to
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possible shareholders’ approval, we may also have to obtain approvals and licenses from the
government authorities for the acquisitions and comply with applicable laws and regulations,
which could result in increased costs and delays.
Our distributors may have unsatisfactory per formance which is beyond our control and their
improper conduct or any changes in their business r elationships with us may adversely affect our
business, financial conditions and results of operations.
As of December 31, 2022, 2023, 2024 and June 30, 2025, there were nil, two, eight and ten
distributors in our distribution network, respectively. We have limited control over the
operations and actions of our distributors. We cannot guarantee that we will be able to
effectively manage our distributors, or that our distributors would not breach our agreements
and policies. We cannot assure you that our distrib utors will be successful in marketing, selling
and supporting our products. Furthermore, we cannot assure you that our distributors will
always be compliant with relevan t laws, regulations or our distributorship agreements. If our
distributors breach the distribution agreemen ts, fail to comply with applicable regulatory
requirements when selling our products, improperly use our brands, products or intellectual
property rights, it could damage our reputation and brand image, undermine customers’
confidence in us and reduce their long-term demands for our products.
Our distributors may also subject us to lawsuits, potential liability and reputational harm if
they misrepresent the functionality of our products and services to customers or violate laws or
our corporate policies. In addition, it cannot be certain that we will retain our existing
distributors or that we will be able to secure additional products or substitutes for them. Our
distributors may also devote more resources to the marketing, sales and support of competitive
products and services. All these could adversely affect our business, financial conditions and
results of operations.
Our insurance coverage may not be sufficient to cover all losses or potential claims by our
customers which would affect our business, results of operations and financial condition.
Pursuant to PRC regulations, we provide soci al insurance including pension insurance,
unemployment insurance, work-related injury insurance, maternity insurance and medical
insurance for our employees based in China. We also purchase supplemental commercial
medical insurance for our employees. In line wit h general market practice, we do not maintain
any business interruption insurance or product liability insurance, which are not mandatory
under PRC laws. We do not maintain key man insurance, insurance policies covering damages
to our network or information technology systems or any insurance policies for our properties.
While our Directors are of the view that the amount of our insurance coverage is in line with the
customary standard in the industry and is ade quate for our operations, it may not be adequate
to fully compensate for all kinds of losses we may suffer in the future. For example, insurance
covering losses from acts of war, terrorism, or natural disasters is ei ther unavailable or cost
prohibitive. In addition, our insurers will review our policies every year and we cannot
guarantee that our policies can be renewed on similar or other acceptable terms or at all.
Furthermore, if we suffer unexpected severe losses or losses that far exceed the policy limits, it
could materially and adversely affect our business, results of operations, financial condition and
prospects.
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Higher labor costs and inflation may adversely affect our business, results of operations, financial
condition and prospects.
While inflationary pressures have varied acr oss different regions, rising costs of raw
materials and labor remain key concerns. Price increases in raw materials procured from our
suppliers could impact our production costs. Add itionally, factors such as changes in minimum
wage laws, labor market dynamics, and intensifie d competition for skilled talent in the industry
may lead to higher labor expenses, which could put upward pressure on wages and fees paid to
employees and third-party service providers. Our ability to manage and mitigate the impact of
rising labor costs through operational efficiencies, process improvements, or technological
innovations will also significantly influence our competitiveness and financial performance.
However, there is no guarantee that we will suc ceed in effectively manag ing the impact of rising
labor costs. Moreover, higher cost for labor and raw materials might necessitate adjustments in
service pricing, potentially making our products less competitive in the market. Attempts to pass
on increased labor costs to customers throug h higher service fees could result in reduced
demand or market share loss.
We may incur additional costs to address any ESG risks, which may adversely affect our financial
performance.
To identify, manage, and mitigate ESG risks, we may incur additional costs and expenses
which could impact our financial performance. Given the nature of our business, we do not
produce any material generation o f emissions and wastes and no heavy pollutions. Nonetheless,
we monitor environmental and climate-related risks that may impact on our business, strategy
and financial performance and evaluate the magnitude of the resulting impact over the short-,
medium- and long-term horizons. We monitor a wide range of indicators such as power
consumption, emission of greenhouse gas, water consumption and waste generation to manage
our environmental and climate-related risks ar ising from our operations and are committed to
providing adequate support to our employees to nur ture a friendly and inspirational corporate
culture. This commitment may entail incurri ng substantial additional costs and would
potentially impact our profitability. See ‘‘Bus iness — Environmental, So cial and Governance.’’
In addition, the increasing ESG-related regulatory requirements, including various ESG
disclosure mandates in the jurisdictions where w e operate, may lead to rising compliance costs
and cost of sales may rise. Failure to adapt to new regulations or meet evolving industry
expectations and standards could result in consumers choosing products from other companies,
which may materially and adversely affect our r esults of operations and financial conditions.
We may become subject to legal or administrativ e proceedings and claims during the ordinary
course of our business.
We may become, from time to time, subject to legal or administrative proceedings and
claims that arise in the ordinary course of business or pursuant to governmental or regulatory
enforcement activity. Actions brought agai nst us, with or without merit, may result in
administrative measures , settlements, injunctions, fines, pen alties, negative publicity, or other
results that could have material adverse effect on our reputation, business, financial condition,
results of operations, and prospects. Even if we are successful in defend ing ourselves against
these actions, we may incur significant costs and divert management’s attention and resources in
such defense. In addition, from time to time, we may have to resort to administrative and court
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proceedings to enforce our legal rights. It is possible that the administrative and court
authorities would not interpret and enforce the s tatutory provisions and contractual terms in a
manner favorable to us, and it may be more difficult to predict the outcome of any
administrative and court proc eedings that we may be involved i n the future. Furthermore, any
litigations, legal disputes, claims or administrative proceedings which are initially not of
material importance may escalate and become important to us due to a variety of factors, such
as the facts and circumstances of the cases, the likelihood of loss, the monetary amount at stake
and the parties involved.
RISKS RELATING TO OUR INTELLECTUAL PROPERTY
We may become involved in lawsuits to protect or enforce our intellectual property, which could be
expensive, time-consuming and unsuccessful. Our patent rights relating to our products could be
found invalid or unenforceable if being challenged in court or before the CNIPA or related
intellectual property agencies in other jurisdictions.
Competitors may infringe our patent rights or misappropriate or otherwise violate our
intellectual property rights. To counter infringement or unauthorized use, litigation may be
necessary in the future to enforce or defend our intellectual property rights, to protect our trade
secrets or to determine the validity and scope of our own intellectual property rights or the
proprietary rights of others. This can be expensive and time-consuming. Any claims that we
assert against perceived infringers could also provoke these parties to assert counterclaims
against us alleging that we infringe their intellectual property rights. Many of our current and
potential competitors have the ability to dedicate substantially greater resources to enforce
and/or defend their intellectual property rights than we do. Accordingly, despite our efforts, we
may not be able to prevent third parties from infringing upon or misappropriating our
intellectual property. An adverse result in any l itigation proceeding could put our patents, as
well as any patents that may issue in the future from our pending patent applications, at risk of
being invalidated, held unenforceable or interpreted narrowly.
Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigation, some of our confidential information could be compromised by
disclosure during this type of litigation. Defendant counterclaims alleging invalidity or
unenforceability are commonplace, and can be asserted on numerous grounds. Third parties
may also raise similar claims before administrative bodies in China or abroad, even outside the
context of litigation. Such proceedings could result in revocation or amendment to our patents
in such a way that they no longer cover and pr otect our products or product candidates. The
outcome following legal assertions of invalidity and unenforceability is unpredictable.
If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we
would lose at least part, and perhaps all, of the patent protection on our products or product
candidates. Such a loss of patent protection coul d materially and adversely affect our business.
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If third parties claim that we infringe upon their intellectual property rights, we may incur
liabilities and financial penalties and may have t o redesign or disconti nue selling the products
involved.
The industry in which we operate is characterized by a large number of patents, some of
which may be of uncertain scope, validity, or enforceability. As a result, there is significant
uncertainty regarding patent protection and potential infringement risks. We cannot assure that
our business activities do not and will not infr inge, misappropriate, or otherwise violate the
intellectual property or proprietary rights of thir d parties. In recent years, intellectual property
litigation, including patent disputes, has been prevalent globally, and we may become subject to
claims or lawsuits alleging infringement of third-party patents, copyrights, or trade secrets.
For example, if we recruit employees from other technology companies, including potential
competitors, and such employees are alleged to have used, or have inadvertently used,
proprietary know-how, technology, or confidential information from their previous employers
in our research and development activities, we may face claims that such individuals have
improperly used or disclosed trade secrets or other proprietary information. If such claims result
in litigation and are resolved adversely to us, we could be subject to significant liabilities,
including damages, injunctions restricting our products or business operations, or limitations on
the enforceability of our intellectual property rights. An adverse judgment could also harm our
reputation or require us to undertake costly remediation measures, such as redesigning our
products.
Additionally, as patent applications often take years to be granted, there may be pending
applications of which we are unaware that could later result in issued patents covering aspects of
our products. If any of our products is found to infringe a valid and enforceable patent, or if we
seek to avoid potential intellectual property disputes, we may be required to obtain licenses,
which may not be available on commercially reason able terms or at all. Alternatively, we could
be required to pay substantial royalties or redesign our products to mitigate infringement risks,
which may be costly and time-consuming. Furthermore, we may be subject to indemnification
claims or other legal remedies from our customers , business partners, or th ird parties if they face
infringement allegations related to their use of our products.
Further, third parties, including non-practicing entities that focus on patent monetization,
may assert intellectual property infringement cla ims against us. Any such claims, regardless of
merit, could be costly and time-consuming to resolve, potentially resulting in litigation or
requiring us to obtain third-party licenses, which may not be available on commercially
reasonable terms or at all. As we continue to expand our products and integrate new
technologies into our portfolio, our exposure to potential intellectual property risks may
increase. Additionally, intellectual property d isputes, even if ultimately unsuccessful, could
divert management’s attention, consume significant financial resources, and adversely affect our
business relationships, reputation, and overall operations.
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Obtaining and maintaining our patent protection d epends on compliance with various procedural,
documentary, fee payment and other requirements imposed by governmental patent agencies, and
our patent protection could be reduced or eliminated for non-compliance with these requirements.
The CNIPA and various governmental patent agencies require compliance with a number
of procedural, documentary, fee payment, and other similar provisions during the patent
application process and over the lifetime of the patent. Non-compliance events, including failure
to respond to official actions within prescribed time limits, non-payment of periodic
maintenance fees, and failure to properly legalize and submit formal documents, can result in
abandonment or lapse of the patent or patent application, leading to partial or complete loss of
patent rights in the relevant jurisdiction. In any such event, our competitors might be able to
enter the market, which would materially and adversely affect our business.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability
to protect our products.
The scope of patent protection in various jurisdictions is uncertain. Changes in either the
patent laws or their interpretation in China or other countries may diminish our ability to
protect our inventions, obtain, maintain, defend, and enforce our intellectual property rights
and, more generally, could affect the value of our intellectual property or narrow the scope of
our patent rights. We cannot predict whether the patent applications we are currently pursuing
and may pursue in the future will issue as patents in any particular jurisdiction or whether the
claims of any future granted patents will provi de sufficient protection from competitors. The
coverage claimed in a patent application can be si gnificantly reduced before the patent is issued,
and its scope can be reinterpreted after issuance.
Even if patent applications we own currently or in the future issue as patents, they may not
issue in a form that will provide us with any meaningful protection, prevent competitors or
other third parties from competing with us, or otherwise provide us with any competitive
advantage. As a result, the issuance, scope, validity, enforceability and commercial value of our
patent rights are highly uncertain.
If our trademarks and trade names are not adequately protected, we may not be able to build name
recognition in our target markets and our business may be adversely affected.
Our registered or unregistered trademarks o r trade names may be challenged, infringed,
circumvented or declared generic or determine d to be infringing on other marks. We may not be
able to protect our rights to these trademarks and trade names, which we need to build name
recognition among potential partners or cust omers in our target markets. Competitors may
occasionally adopt trade names or trademarks similar to ours, thereby impeding our ability to
build brand identity and possibly leading to market confusion. In addition, there could be
potential trade name or trademark infringemen t claims brought by owners of other registered
trademarks or trademarks that incorporate v ariations of our registered or unregistered
trademarks or trade names. Over the long term, if we are unable to establish name
recognition based on our trademarks and trade names, then we may not be able to compete
effectively, and our business may be adversely affected.
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We may be unable to protect the confidentiality of our trade secrets or other proprietary
information, and we may be subject to claims that our employees or third parties have wrongfully
used or disclosed alleged trade secrets or oth er proprietary information owned by others.
In addition to our issued patent and pending patent applications, we rely on trade secrets,
including unpatented know-how, technology and other proprietary information, to protect our
products and thus maintain our competitive position. We protect these trade secrets, in part, by
entering into non-disclosure and confidentiality agreements, non-compete covenants or include
such undertakings in the agreements with partie s that have access to them. We also enter into
employment agreements with our employees that include undertakings regarding assignment of
inventions and discoveries. Nev ertheless, there can be no guarantee that an employee or a third
party will not make an unauthorized use or disclosure of our proprietary confidential
information. This might happen intentionally or inadvertently. It is possible that a competitor
will gain access to such information and make use of such information, and t hat our competitive
position will be compromised, in spite of any legal action we might take against persons making
such unauthorized disclosures. In addition, to the extent that our employees or business
partners use intellectual property owned by ot hers in their work for us, disputes may arise as to
the rights in related or resulting know-how and inventions.
Trade secrets are difficult to protect. O ur employees or business partners might
intentionally or inadvertently disclose our trade secret information to competitors, or our
trade secrets may otherwise be misappropriated. Enforcing a claim that a third party illegally
obtained and is using any of our trade secrets is expensive and time-consuming, and the outcome
is unpredictable.
We also seek to enter into agreements with our employees that obligate them to assign any
inventions created during their work for us to us. However, we may not obtain these agreements
in all circumstances and the assignment of intellectual property under such agreements may not
be self-executing. And it is possible that technology relevant to our business will be
independently developed by a person that is not a party to such an agreement. Furthermore,
if the employees who are parties to these agreements breach or violate the terms of these
agreements, we may not have adequate remedies for any such breach or violation, and we could
lose our trade secrets and inventions through such breaches or violations. We may be involved
in claims by or against us related to the ownership of such intellectual property. If we fail in
prosecuting or defending any such claims, in addition to paying monetary damages, we may lose
valuable intellectual property rights. Even if we are successful in prosecuting or defending
against such claims, litigation could result in substantial costs and be a distraction to our
management and R&D personnel.
We utilize open-source software, which m ay pose particular risks to our business.
We currently employ open-source software in our operations, primarily including
industry-standard infrastructu re, development and operational tools. Our core intellectual
property resides in hardware designs and architecture, which are developed using proprietary
design tools, and are functionally separate from open-source components. While we maintain
compliance protocols and intend to continue us ing open-source software, some licenses carry
compliance obligations that could impact our business. For example, certain open-source
software licenses could require that if we distribute our proprietary software in combination
with, or as a derivative of, open-source software, we might be obligated to disclose the source
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code of our proprietary software, permit modifi cations, or make derivative works available on
unfavorable terms or at no cost. If such obligations were triggered, it might result in the public
disclosure of our proprietary source code, which could allow our competitors or other third
parties to use and modify our proprietary software freely without spending the development
effort. Such an outcome might harm our competit ive position and could adversely affect our
product sales. There is also a risk that open-so urce software licenses may be construed in a
manner that imposes unanticipated conditions on our ability to provide products or retain
ownership of our proprietary intellectual property, particularly given that the terms of many
open-source licenses to which we are subject have not been interpreted by courts of law.
Additionally, we could face claims from third parties claiming ownership of, or demanding
release of, the derivative works that we developed using such open-source software, which could
include our proprietary source code, or otherwi se seeking to enforce the terms of, or alleging
breach of, the applicable open-source license. These claims could result in costly litigation and
could require us to make our proprietary software source code freely available, purchase a
costly license, or cease offering the implicated p roducts unless and until we can re-engineer them
to avoid using or being based on any open-source software or otherwise avoid breach of the
applicable open-source software licenses or potential infringement. This re-engineering process
could require us to expend significant additional research and development resources, and we
cannot guarantee that we will be successful.
Furthermore, certain of our products are designed to be compatible with certain
proprietary computing platforms, hardware architectures, and acceleration technologies. This
required compatibility depends on open-source tools and community-driven projects, which
exposes us to additional technical challenges and le gal risks, particularly when licensing policies
or technical specifications of these proprietary platforms change. Any loss of compatibility with
such platforms could significantly reduce the attractiveness of our products to customers and
negatively impact our business.
Additionally, the use of certain open-sour ce software can lead to greater security and
operational risks than use of third-party commercial software, as open-source licensors
generally do not provide warranties or control s on the origin of software. There is typically no
support available for open-source software, and we cannot ensure that the authors of such
open-source software will implement or push updates to address security risks or will not
abandon further development and maintenance. To the extent that our products depend upon
the successful operation of the open-source software they use, any undetected errors or defects
in this open-source software could prevent the deployment or impair the functionality of our
products, delay the introduction of new products , result in a failure of our products, and harm
our reputation. Moreover, undetected errors or defects in open-source software could render it
vulnerable to data breaches or cyberattacks a nd make our systems more vulnerable to such
attacks and breaches. We cannot be sure that all op en-source software is identified or submitted
for approval prior to use in connection with our products. Any of these risks could be difficult
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to eliminate or manage, and, if not addressed, could adversely affect our ownership of
proprietary technology, the security of our systems, or our business, results of operations, and
financial condition.
RISKS RELATING TO OUR FINANCIAL PROSPECTS
We incurred significant net losses during the Track Record Period, and we may not be able to
achieve or subsequently maintain profitability in the future.
In 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, we had net losses of
approximately RMB553.6 million, RMB817.4 million, RMB892.4 million, RMB404.0 million
and RMB609.3 million, respectively. We may continue to incur net losses in the future, as we are
in the stage of expanding our business and operations in the rapidly growing GPGPU market,
and are continuously investing in research and development. We believe that our future revenue
growth will depend on, among other factors, our ability to develop new technologies, enhance
customer experience, establish effective commercialization strategies, compete effectively and
successfully and develop new products and solutions. Accordingly, you should not rely on the
revenues of any prior period as an indication of our future performance. We also expect our
costs and expenses to increase in future periods as we continue to expand our business and
operations, and invest in research and develop ment. In addition, we expect to incur substantial
costs and expenses as a result of being a public company. If we are unable to generate adequate
revenues and manage our expenses, we may continue to incur significant losses in the future and
may not be able to achieve or subsequently maintain profitability.
We had net cash outflows from operating activities during the Track Record Period, which may
continue into the foreseeable future and expose us to liquidity risk.
In 2022, 2023, 2024 and the six months ended June 30, 2025, we had cash used in operating
activities of RMB653.8 million, RMB707.0 million, RMB618.0 million and RMB715.6 million,
respectively. We may continue to experience net cash outflows from our operating activities
from time to time. See ‘‘Financial Information — L iquidity and Capital Resources’’ for details.
Our forecast of the period through which our capital resources will support our operations is
forward-looking and involves risks and un certainties. We have based this estimate on
assumptions that may prove to be wrong, and we could exhaust our available capital
resources sooner than we currently expect.
If we are unable to maintain adequate working capital or obtain sufficient financings to
meet our capital needs, we may be unable to continue our operations according to our plan,
default on our payment obligations and fail to meet our capital expenditure requirements, which
may have a material adverse effect on our business, results of operations, financial condition
and prospects.
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We may not be able to obtain additional capital when desired, on favorable terms or at all.
A majority of our operating expenses are for R&D activities. Our capital requirements will
be subject to many factors, including, but not limited to:
. technological advancements;
. market acceptance of our products and the o verall level of sales of our products;
. R&D expenses;
. our relationships with our customers and suppliers;
. our ability to control costs;
. sales and marketing expenses;
. enhancements or any capital improvements to our infrastructure and systems;
. potential acquisitions of businesses; and
. general economic conditions, inflation, rising interest rates, and international
conflicts and their impact on the semiconductor industry in particular.
If our capital requirements are materially different from those currently planned, we may
need additional capital sooner than anticipated. Additional financing may not be available on
favorable terms, on a timely basis, or at all. If adequate funds are not available or are not
available on acceptable terms, we may be unable to continue our operations as planned, develop
or enhance our products, expand our sales and marketing programs, take advantage of future
opportunities, or respond to competitive pressures.
Share-based payments may have a material and adverse effect on our financial performance and
cause shareholding dilution to our Shareholders.
The share incentive plan was established for the benefit of our directors, senior
management and core employees as remuneration for their services provided to us and to
incentivize and reward the eligible person s who have contributed to the success of our
Company. For the principal terms of the employee incentive scheme, see ‘‘Appendix VI —
Statutory and General Information — 4. Employe e Incentive Plan.’’ In 2022, 2023, 2024 and the
six months ended June 30, 2025, we recorded an aggregate of RMB120.8 million, RMB207.8
million, RMB247.8 million and RMB295.9 millio n, respectively, in share-based payments.
To further incentivize our employees, we m ay incur additional share-based payment
expenses in the future. We believe such share -based awards are important to our ability to
attract, retain and motivate our key individuals, and we may continue to grant share-based
awards in the future. Expenses incurred with respect to such share-based payments may also
increase our operating expenses and theref ore have a negative effect on our financial
performance. Issuance of additional Shares with respect to such share-based payments may
dilute the shareholding of our Shareholders and could result in a decline in the value of our
Shares.
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Failure to fulfill our obligations in respect of contr act liabilities could adversely affect our liquidity
and financial condition.
Our contract liabilities mainly represent cash collections in advance of fulfilling
performance obligations. Our contract liabilities amounted to RMB2.2 million, RMB13.5
million, RMB28.8 million an d RMB39.9 million as of December 31, 2022, 2023 and 2024 and
June 30, 2025. See ‘‘Financial Information — Discussion of Key Items of Consolidated
Statements of Financial Position — Contract Liabilities.’’ There is no assurance that we will be
able to fulfill our obligations in respect of contract liabilities as the fulfillment of our
performance obligations is subject to various factors that are beyond our control. If we are not
able to fulfill our obligations with respect to our contract liabilities, the amount of contract
liabilities will not be recognized as revenue, and we may have to refund the advance payment
made by our customers. As a result, our liquidity and financial condition may be adversely
affected.
We are subject to risks in relation to our contracts with third parties and credit risks related to
delays in payment and defaults of customers or r elated parties, which would adversely affect our
liquidity and financial condition.
During our ordinary course of business, we enter into various contracts with third parties
and are exposed to credit risks related to paymen ts from our customers and related parties. If
any of our contractual counterparties fails to perform their obligations or materially breaches
their contracts with us, our business and opera tions may be adversely affected. As of December
31, 2022, 2023 and 2024 and June 30, 2025, our trade and bills receivables amounted to
RMB88.7 million, RMB200.4 million, RMB377.2 m illion and RMB388.9 mil lion, respectively,
and our prepayments, other receivables and o ther assets amounted to RMB120.9 million,
RMB348.7 million, RMB219.0 million and RMB466.4 million, respectively. We also
experienced an increase in our trade and bills receivables turnover days throughout the Track
Record Period from 85.6 days in 2022 to 196.7 days in 2023 and further to 211.8 days in 2024,
and then to 225.4 days in the six months ended June 30, 2025. We may not be able to collect all
such trade and notes receivables and prepaym ents and other receivables due to a variety of
factors that are beyond our control, including long payment cycle of certain of our suppliers,
adverse operating condition or financial condition of customers, and customers’ inability to pay
caused by their end users’ delay in payment. Our losses may not be fully covered by
compensation from counterparties, if at all. If o ur customers or related parties delay or default
in their payments to us, we may have to make impair ment provisions and wri te-off the relevant
receivables and hence our liquid ity and financial condition wo uld be adversely affected.
We recorded prolonged trade and bills receivable s ettlement cycle and inventory turnover cycle
during the Track Record Period, which would adversely affect our liquidity and financial position.
During the Track Record Period, we recorded pr olonged cash conversion cycle, calculated
by adding inventory turnover days and trade a nd bills receivable turnover days minus trade
payable turnover days, of 528. 0 days, 663.5 days, 552.0 days and 649.2 days in 2022, 2023, 2024
and the six months ended June 30, 2025, respect ively. Such prolonged cash conversion cycle
resulted from (i) stockpiling of raw materials in anticipation for our product manufacturing; (ii)
the higher proportion of trade receivables from customers that were granted more favorable
credit terms; and (iii) more distributed production schedule and more frequent settlement with
our suppliers. A prolonged cash conversion cycle may indicate inefficiencies in inventory
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management, slower collections from customers, or shortened payment terms with suppliers,
any of which could strain liquidity, increase working capital requirements, and reduce financial
flexibility, and adversely a ffect our financial condition.
We determine fair value of level 3 financial instrum ents based on valuation techniques and various
assumptions of unobservable inputs, which ma y fluctuate according to the changes in the
unobservable inputs.
We determine fair value of level 3 financial instruments based on valuation techniques and
various assumptions of unobservable inputs, which may fluctuate according to the changes in
the unobservable inputs. The fair value of a financial instrument is the amount that would be
received if an asset is sold or paid to transfer a lia bility in an orderly transaction between market
participants at the measurement date. In line w ith our accounting policies, we establish a fair
value hierarchy that prioritizes the inputs to va luation techniques being used to measure fair
value of our financial instrument. We determine f air value of our financi al assets and financial
liabilities that are classified in levels 1 and 2 of the fair value hierarchy based on observable
prices and inputs. Instruments classified in level 3 of the fair value hierarchy are those which
require one or more significant inputs that are not observable.
Absent evidence to the contrary, instruments classified in level 3 of the fair value hierarchy
are initially valued at transaction price. To determine fair value, we rely on judgment from our
management taking into account various factors, including the influence of macroeconomic
factors, the valuation by external appraiser and loss coverage. Many of these factors are beyond
our control and may not be available on a consistent basis. In addition, the judgment and
estimation is a subjective process and is subject to inherent imitations. We cannot assure you
that such judgment and estimation are accurate, i n which case the fair value of relevant financial
instruments may be materially and adversely affected, resulting in material and adverse impact
to our financial conditions and results of operations.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
We face risks relating to changes in global and regional macroeconomic conditions, natural
disasters, geographical tensions, regional confl icts, health epidemics and other outbreaks of
contagious diseases.
Uncertainties about global economic conditions, regulatory changes, geographic tensions
and other factors, including fluctuation of interest rates, inflation level, unemployment, labor
and healthcare costs, access to credit, consumer confidence and other macroeconomic factors
may pose risks and materially and adversely a ffect demand for our products. The escalated
Palestinian-Israeli conflict, the conflict in Ukraine and the imposition of broad economic
sanctions on Russia could raise energy price s and disrupt global markets. Unrest, terrorist
threats and the potential for war in the Mid dle East and elsewhere may increase market
volatility across the globe. The relationship between China and other countries with respect to
trade policies, treaties, governm ent regulations and tariffs, among other matters, may affect the
macroeconomic environment, both domestically and internationally, and potentially leave an
impact on the market we operate in.
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In addition, natural disasters such as floods, e arthquakes, sandstorms, snowstorms, fire or
drought, the outbreak of a widespread health epidemic or any severe epidemic disease such as
SARS, Ebola, Zika or the COVID-19, acts of wa r, terrorism or other force majeure events
beyond our control may disrupt our research and development, manufacturing and
commercialization activities and business opera tions, all of which could adversely affect our
business, results of operations, financial condition and prospects.
Changes in economic, social conditions and policies may impact our business, financial condition,
results of operations and prospects.
All of our revenue is derived from our business in the PRC during the Track Record
Period. Accordingly, our financial condition, results of operations and prospects are, to a
material extent, subject to economic and legal developments in the PRC. If the macroeconomic
condition in China experiences significant ad verse changes, demand for our products and our
ability to maintain our operations may suffer, wh ich will consequently have a material adverse
effect on our financial condition, results of operations and our future prospects.
China’s economy has experienced significan t growth over the past decades since the
implementation of reform and opening-up pol icy. In recent years, the PRC government has
implemented measures emphasizing the utilization of market forces in economic reform and the
establishment of sound corporate governance pra ctices in business enterprises. These economic
reform measures may be adaptively adjusted from industry to industry or across different
regions of the country. If the business environme nt in China changes, our business in China may
also be materially and a dversely affected.
We may face risks relating to labor relations, labor disputes, labor shortages and increases in labor
costs.
Our success depends on our ability to hire, train, retain and motivate our employees. Any
deterioration in labor relations with our empl oyees could lead to labor disputes, which may
disrupt our production and operations, adversely affecting our business and financial
performance. Despite our efforts to provide a safe working environment to avoid
occupational injuries, we may still face liability claims, negative publicity and government
investigations or interventions related to workplace safety or employee injuries. Such incidents
could result in a deterioration of our labor relations with employees and damage our reputation.
Additionally, with the growth of the economy , average wages of our employees are expected to
increase. Any significant increase in labor costs could adversely affect our profitability, business
and financial performance.
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 o bligations. The requirement and implementation of employee
benefit plans may vary in line with the differing levels of economic development in different
locations in the PRC, while the relevant government authorities may examine whether an
employer has made adequate payments of the requisite employee benefit payments. Those
employers who fail to make adequate payments as required may be subject to late payment fees,
fines and/or other penalties. During the Track Record Period and up to the Latest Practicable
Date, we had not been subject to any material adm inistrative penalty imposed by the relevant
regulatory authorities regarding PRC social insurance and housing provident funds. As advised
RISK FACTORS
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by our PRC Legal Adviser, considering, among others, the facts stated above, based on the
compliance certificates we have obtained, as well as the fact that we have not received any notice
or inquiry from relevant government authorities, the risk of us being imposed to late fees or
fines or subject to compulsory enforcement is remote. As such, such matters would not have a
material and adverse impact on our business, financial condition and results of operations.
There is no assurance, however, that new laws an d regulations or stricter interpretation or
enforcement of existing laws and regulations will not result in additional costs to our employee
benefit plans, which may adversely affect our operating results and financial condition.
We face certain risks relating to our leased pr operties, which may disrupt our operations and
relocation costs.
As of the Latest Practicable Date, we primari ly leased properties as our headquarters and
office space. Any limitations on the leased properties, defects in the lessors’ title to such
properties, or discrepancies between the registe red and actual use of the properties may impact
our use of the offices or, in extreme cases, resul t in relocation, which may adversely affect our
business operations and incur additional costs.
Pursuant to applicable PRC laws and regulations, all lease agreements are required to be
registered with the local land and real estate adm inistration bureau. As of the Latest Practicable
Date, our leased properties in China had not com pleted such lease registration procedures with
the relevant PRC government authorities. Although failure to do so does not in itself invalidate
the leases, we may be subject to fines if we fail to r ectify within the prescribed time period after
receiving notices from the relevant PRC govern ment authorities. The penalty ranges from
RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the relevant
authority. In the event that any fine is impos ed on us for our failure to register our lease
agreements, we may not be able to recover such losses from the lessors. As of the Latest
Practicable Date, we were not aware of any notice or allegation of penalty from PRC
government authorities for our failure on the registration of lease agreements.
In addition, among our leased properties in China, certain properties have title certificates
that specify approved uses or land purposes which do not align with our current office use, and
some properties lack the relevant title certifica tes from the lessors, which may expose us to the
risk of third-party claims or disputes regarding property ownership. Furthermore, some
properties have only been used for business registration purposes and have not been used for
our actual business operations. Any of these issues could subject us to additional administrative
penalties or require us to relocate, which could adversely affect our operations.
Failure to obtain or maintain any of the government grants or preferential tax treatments could
adversely affect our business, results of ope rations, financial condition and prospects.
During the Track Record Period, we benefited from government grants, many of which are
non-recurring in nature or are subject to peri odic review. In 2022, 2023, 2024 and the six months
ended June 30, 2025, the government grants we recognized as other income and gains amounted
to RMB14.2 million, RMB15.4 million, RMB39.1 million and RMB32.8 million, respectively. In
addition, a number of our PRC subsidiaries enjoy various types of preferential tax treatment
according to the prevailing PRC tax laws. For details, see Note 2.3 to the Accountant’s Report
in Appendix I to this prospectus.
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Any change or cessation of government grants and preferential tax treatments currently
enjoyed by us may adversely affect our results of operations, financial condition and prospects.
The PRC governmental authorities may decide to reduce or cancel such government grants or
preferential tax treatment, or require us to repay part or all of the government grants we
previously received at any time. As these govern ment grants are provided typically on a one-off
basis, there is no guarantee that we will continue receiving or benefiting from them in the future.
In addition, we may not be able to successfully or timely obtain the government grants or
preferential tax treatment that may become avail able to us in the future, and such failure could
adversely affect our business, results of operations, financial condition and prospects.
Any failure to comply with regulations regarding th e registration requirements for employee stock
incentive plans may subject the plan participants or us to fines and other legal or administrative
sanctions.
Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for
Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed
Company ( 國家外匯總局關於境內個人參與境外上市公司股權激勵計劃外匯管理有關問題的通
知) promulgated by SAFE on February 15, 2012, PRC citizens and non-PRC citizens who
reside in China for a continuous period of not less than one year who participate in any stock
incentive plan of an overseas publicly listed company, subject to a few exceptions, are required
to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries
of such overseas listed company, and complete certain other procedures. In addition, an
overseas entrusted institution must be retained to handle matters in connection with the exercise
or sale of stock options and the purchase or sale of shares and interests. We, our Directors,
executive officers and other employees who a re PRC citizens or who reside in the PRC for a
continuous period of not less than one year and who have been granted share-based awards will
be subject to these regulations when we become an overseas listed company upon the completion
of this offering. Failure to complete the required registrat ions may subject them to fines, and
legal sanctions and may also limit our ability to contribute additional capital into our PRC
subsidiaries and limit our PRC subsidiaries’ ability to distribute dividends to us. We also face
regulatory uncertainties that could restrict our ability to adopt additional incentive plans for
our Directors, executive officer s and employees under PRC law.
The SAT also issued certain circulars concerni ng employee share options and restricted
shares. Under these circulars, our employees working in China who exercise share options or are
granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries
have obligations to file documents related to employee share options or restricted shares with
relevant tax authorities and to withhold individual income taxes of those employees who
exercise their share options. If our employees fail to pay or we fail to withhold their income
taxes according to relevant laws and regulations, we may face sanctions imposed by the tax
authorities or other PRC g overnmental authorities.
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Adverse developments in government policies could materially and adversely affect our business,
results of operations and financial condition.
Our growth depends in part on favorable government policies in respect of the industry in
which we operate. However, such policies may be subject to changes that are beyond our
control. There can be no assurance that government policies will continue. Uncertainties and
changes in such policies may have a material adverse impact on our business, results of
operations and financial condition.
Governmental regulation of currency conversion may limit our ability to utilize our revenue
effectively and affect the value of your investment.
The conversion of Renminbi is subject to applicable laws and regulations in the PRC. We
may need to convert Renminbi into foreign currencies for the payment of dividends, if any, to
holders of our H Shares. Under the Chinese existing foreign exchange regulations, following the
completion of the Global Offering, we will be able to pay dividends in foreign currencies without
prior approval from SAFE or its local branches by complying with certain procedural
requirements. However, we may not be able to pay dividends in foreign currencies to our
Shareholders if access to foreign currencies for c urrent account transactions is restricted in the
future. Foreign exchange transactions under our capital account continue to be subject to
foreign exchange controls and require the app roval of the SAFE or its local branches. These
limitations could affect our ability to obtain fo reign exchange through equity financing, or to
obtain foreign exchange for capital expenditures.
Most of our revenue are denominated in Renminbi. Any significant revaluation of the
Renminbi may materially and adversely affect our results of operations, cash flows and financial
condition. The exchange rate of the Renminbi against the U.S. dollar and other foreign
currencies fluctuates and is affected by, among other things, the policies of the Chinese
government and changes in China and in international political and economic conditions. Since
1994, the conversion of the Renminbi into foreign currencies, including U.S. dollars, has been
based on rates set by the People’s Bank of China, which are set daily based on the previous
business day’s interbank foreign exchange market rates and current exchange rates on the world
financial markets. It is difficult to predict how market forces or government policies may impact
the exchange rate between the Renminbi and the Hong Kong dollar, the U.S. dollar or other
currencies in the future.
Changing international circumstances could result in appreciation of the Renminbi against
the U.S. dollar, the Hong Kong dollar or other fo reign currencies. If the Renminbi appreciates
against other currencies significantly, and a s we need to convert and remit the proceeds from the
Global Offering and future financing into the Renminbi for our operations, appreciation of the
Renminbi against the relevant foreign currencies would reduce the Renminbi amount we would
receive from the conversion. On the other hand, because the dividends on our H Shares, if any,
will be paid in Hong Kong dollars, any devaluation of the Renminbi against the Hong Kong
dollar could reduce the amount of any cash dividends on our H Shares in Hong Kong dollar
terms. In addition, there are limited instruments available for us to reduce our exposure to
foreign currency risk at reasonable costs. Any of the foregoing factors may materially and
adversely affect our business, results of operations, financial condition and prospects.
RISK FACTORS
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We are subject to PRC tax laws and regulations and holders of our H Shares may be subject to
PRC taxation.
As a PRC-incorporated company, under applicable PRC tax laws, we are subject to a tax
of up to 25% on our global income. Under applicable PRC tax laws, regulations and statutory
documents, non-PRC resident individuals and enterprises are subject to different tax obligations
with respect to dividends received from us or gains realized upon the sale or other disposition of
our H Shares.
Non-PRC individuals are generally subject to PRC individual income tax under the
Individual Income Tax Law of the PRC ( 《中華人民共和國個人所得稅法》) with respect to PRC
source income or gains at a rate of 20%. We are required to withhold related tax from dividend
payments paid to non-PRC resident individuals, unless specifically exempted by the tax
authority of the State Council or reduced or eliminated by an applicable tax treaty. However,
pursuant to the Circular on Cer tain Policy Questions Concerning Individual Income Tax ( 《財政
部、國家稅務總局關於個人所得稅若干政策問題的通知》) issued by the MOF and SAT on May
13, 1994, the income gained by foreign ind ividuals from divi dends and bonuses of
foreign-invested enterprises are exempted fr om individual income tax for the time being.
According to the Circular Declaring that Individual Income Tax Continues to Be
Exempted over Individual Income from Transfer of Shares issued by the MOF and the SAT ( 《財
政部國家稅務總局關於個人轉讓股票所得繼續暫免徵收個人所得稅的通知》)e f f e c t i v ea so f3 0
March 1998, income from individuals’ transfer of stocks of listed companies continued to be
temporarily exempted from individual inco me tax. On February 3, 2013, the State Council
approved and promulgated the Notice of Suggestions to Deepen the Reform of System of
Income Distribution ( 《國務院批轉發展改革委等部門關於深化收入分配制度改革若干意見的通
知》). On February 8, 2013, the General Office of th e State Council promulgated the Circular
Concerning Allocation of Key Works to Deepen the Reform of System of Income Distribution
(《國務院辦公廳關於深化收入分配制度改革重點工作分工的通知》). These documents indicate
that the PRC government is planning to ceas e foreign individual s’ tax exemption for
dividends obtained from foreign-invested enterprises, and the MOF and the SAT should be
responsible for making and implementing details of such plan. However, relevant
implementation rules or regulations have not been promulgated by the MOF and the SAT.
Considering these uncertainties, non-resident individual holders of our H Shares should be
aware that they may be obligated to pay PRC income tax on the dividends and bonuses realized
from the H Shares.
Non-PRC resident enterprises that do not have establishments or premises in the PRC, or
that have establishments or premises in the PRC but their income is not related to such
establishments or premises, are subject to PRC EIT at the rate of 10% on dividends received
from PRC companies and gains realized upon disposition of equity interests in the PRC
companies pursuant to the EIT L aw and other applicable PRC tax regulations and statutory
documents, which may be reduced or eliminated under special arrangements or applicable
treaties between the PRC and the jurisdiction where the non-resident e nterprise resides.
Pursuant to applicable regula tions, we intend to withhold tax at a rate of 10% from dividends
paid to non-PRC resident enterprise holders of our H Shares (including HKSCC Nominees and
payments through CCASS). Non -PRC resident enterprises that are entitled to be taxed at a
RISK FACTORS
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reduced rate under an applicable income tax treaty will be required to apply to the PRC tax
authorities for a refund of any amount withheld in excess of the applicable treaty rate, and
payment of any such refund will be subject to the PRC tax authorities’ verification.
There remains uncertainty as to the interpretation and application of the relevant PRC tax
laws by the PRC tax authorities, including whether and how individual income tax or EIT Law
tax on gains derived by holders of our H Shares from their disposition of our H Shares may be
collected. If any such tax is collected, the value of our H Shares may be materially and adversely
affected.
You may experience difficulties in effecting servi ce of legal process, enforcing foreign judgments or
bringing actions in China against us or our mana gement named in the document based on foreign
laws.
All of our business and operations are located in the PRC. In addition, all of our Directors
and officers reside in China and substantially all of their assets are located in China. It may be
difficult for investors to effect service of pro cess upon those persons residing in China or to
enforce against us or them in China any judgments obtained from non-PRC courts. The PRC
does not have treaties providing for the reciprocal recognition and enforcement of judgments of
courts of most other jurisdictions. As a result, recognition and enforcement in the PRC of
judgments of a court in any of these jurisdict ions outside China may be difficult or even
impossible.
On July 14, 2006, the Supreme People’s Court of the PRC and the Government of the Hong
Kong Special Administrative Region signed an Arrangement on Reciprocal Recognition and
Enforcement of Judgments in Civil and Commercial Matters ( 《最高人民法院關於內地與香港特
別行政區法院相互認可和執行當事人協議管轄的民商事案件判決的安排》) (the ‘‘ Arrangement ’’).
Under the Arrangement, a party with an enfor ceable final court judgment rendered by any
designated people’s court of China or any designated Hong Kong court requiring payment of
money in a civil and commercial case according to a written choice of court agreement, may
apply for recognition and enforcement of the judgment in the relevant people’s court of China
or Hong Kong court. A written choice of court agr eement is defined as any agreement in writing
entered into between parties after the effective date of the Arrangement in which a Hong Kong
court or a PRC court is expressly designated as the court having sole jurisdiction for the dispute.
Therefore, it may not be possible to enforce a judgment rendered by a Hong Kong court in
China if the parties in the dispute did not agree to enter into a choice of court agreement in
writing. As a result, it may be difficult or impossible for investors to effect service of process
against certain of our assets or Directors in Chi na in order to seek recogn ition and enforcement
of foreign judgments in China.
On January 18, 2019, the Supreme People’s Court of the PRC and Hong Kong entered into
an agreement regarding the scope of judgments which may be enforced between China and Hong
Kong ( 《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》) (the ‘‘ New
Arrangement ’’). The New Arrangement will broaden the scope of judgments that may be
enforced between China and Hong Kong under the Arrangement. Whereas a choice of
jurisdiction needs to be agreed in writing in the form of an agreement between the parties for the
RISK FACTORS
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selected jurisdiction to have exclusive jurisdiction over a matter under the Arrangement, the
New Arrangement provides that the court where the judgment was sought could apply
jurisdiction in accordance with the certain rules without the parties’ agreement. The New
Arrangement will replace th e Arrangement when the former becomes effective. The New
Arrangement became effective on January 29, 2 024 both in China and in Hong Kong. Under the
New Arrangement, any party concerned may apply to the relevant PRC court or Hong Kong
court for recognition and enforcement of the ef fective judgments in civil and commercial cases
subject to the conditions set forth in the New Ar rangement. Although the New Arrangement has
been signed, the outcome and effectiveness of any action brought under the New Arrangement
may still be uncertain. We cannot assure you tha t an effective judgment that complies with the
New Arrangement can be recognized and enforced in a PRC court.
RISKS RELATING TO THE GLOBAL OFFERING
No public market currently exists for our H Sha res. An active trading market for our H Shares
may not develop and the market price and trading volume of our H Shares may be volatile.
Following the completion of the Global Offering, we cannot assure you that an active
trading market for our H Shares on the Stock Exchange will develop or be sustained. The Offer
Price of our H Shares is the result of negotiations between our Company and the
Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong Underwriters),
which may not be indicative of the price at which our H Shares will be traded following the
completion of the Global Offering. The market price of our H Shares may drop below the Offer
Price at any time after completion of the Global Offering.
Factors such as fluctuations in our revenue , earnings, cash flows, new investments,
regulatory development, additions or departures of key personnel, or actions taken by
competitors could cause the market price of our H Shares or trading volume of our H Shares to
change substantially and unexpectedly. In addition, stock prices have been subject to significant
volatility in recent years. Such volatility has not a lways been directly related to the performance
of the specific companies whose shares are traded. Such volatility, as well as general economic
conditions, may materially and a dversely affect the prices of H Shares, and as a result investors
in our H Shares may incur substantial losses.
Future sales or perceived sales or conversion of significant amounts of our H Shares in the public
market following the Global Offering could mat erially and adversely affect the price of our H
Shares.
Prior to the Global Offering, there has not been a public market for our H Shares. Future
sales or perceived sales of significant amounts of our H Shares or conversion of the Unlisted
Shares, if any, by specific Shareholders subject to certain regulatory requirements, after the
Global Offering could result in a significant d ecrease in the prevailing market price of our H
Shares. Nevertheless, after these restricti ons lapse or if they are waived, future sales of
significant amounts of our H Shares in the public market or the perception that these sales, or
conversion of existing Unlisted Shares, if an y, may occur could significantly decrease the
prevailing market price of our H Shares and our ability to raise equity capital in the future.
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You will experience immediate and substantial dilution as a result of the Global Offering and may
experience further dilution if we issue additi onal Shares or equity securities in the future.
The Offer Price of the H Shares is higher than the net tangible asset value per H Share
immediately prior to the Global Offering. Therefore, purchasers of the H Shares in the Global
Offering will experience an immediate dilution. In order to expand our business, we may
consider offering and issuing additional Shares in the future. Purchasers of the H Shares may
experience dilution if we issue additional Shares in the future at a price which is lower than the
net tangible asset value per Share at that time. Furthermore, we may issue Shares through the
employee incentive platforms, which would further dilute Shareholders’ interests in our
Company.
There can be no assurance whether and when we will pay dividends in the future, and payment of
dividends is subject to applicable PRC laws.
We cannot guarantee when and in what form dividends will be paid on our Offer Shares
following the Global Offering. The declaration of dividends is proposed by the Board and is
based on, and limited by, various factors, such as our business and financial performance,
capital and regulatory requirements and general business and operation conditions. We may not
have sufficient or any profits to enable us to make dividend distributions to our Shareholders in
the future, even if our financial statements indicate that our operations have been profitable.
Investors should not place undue reliance on facts, f orecasts, estimates and other statistics in this
prospectus relating to the economy and our indust ry obtained from official or other resources.
Facts, forecasts, estimates and other statist ics in this prospectus relating to the economy
and the industry in which we operate our busines s on have been collected from materials from
official government sources. While we have exercised reasonable care in compiling and
reproducing such information and statistics derived from government publications, we cannot
assure you nor make any representation as to the accuracy or completeness of such information.
The information and statistics from official government sources have not been independently
verified by our Group, our Directors, the Sole S ponsor, Sponsor-Overall Coordinator, the
Overall Coordinators, the Joint Global Coordin ators, the Joint Bookrunners, the Joint Lead
Managers, the Capital Market Intermediaries, the Underwriters or any other party involved in
the Global Offering, and no representation is given as to its accuracy.
N e i t h e rw eo ra n yo fo u rr e s p e c t i v ea f f i l i a t e sor advisors, nor the Underwriters or any of its
affiliates or advisors, have independently verified the accuracy or completeness of such
information directly or indirectly derived from o fficial government sources. In particular, due to
possibly flawed or ineffective collection methods or discrepancies between published
information and market practice, such inform ation and statistics may not be comparable to
information and statistics produced with respect to other countries. Statistics, industry data and
other information relating to the economy and the industry derived from the official
government sources used in this prospectus ma y not be consistent with other information
available from other sources.
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If securities or industry analysts do not publish research reports about our business, or if they
adversely change their recommendations regarding our H Shares, the market price and trading
volume of our H Shares may decline.
Research reports published by securities or industry analysts about our business may
influence the trading market of our H shares. If one or more analysts who cover us downgrade
their evaluations of our H Shares, or if they issue reports with negative outlooks or
misinformation regarding our operations, it could result in a material decline in the market
price of our H Shares. If one or more of these analysts cease coverage for us or fail to publish
regular reports on us, we could lose visibility in the financial markets, which, in turn, could
adversely affect the market price or trading volume of our H shares.
Forward-looking information contained in this p r o s p e c t u si ss u b j e c tt or isks and uncertainties.
This prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘could,’’ ‘‘going forward,’’
‘‘intend,’’ ‘‘plan,’’ ‘‘project,’’ ‘‘seek,’’ ‘‘expect,’’ ‘‘may,’’ ‘‘ought to,’’ ‘‘should,’’ ‘‘would’’ or ‘‘will’’
and similar expressions. You are cautioned th at reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this prospectus should not be regarded as representations or
warranties by us that our plans and objectives will be achieved and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this prospectus, whether as a result
of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this prospectus
are qualified by reference to t his cautionary statement.
You should read the entire Prospectus carefully and should not place any reliance on any
information contained in press articles or other media regarding the Global Offering.
We strongly caution you not to rely on any information contained in press articles or other
media regarding us and the Global Offering. Prior to the publication of this prospectus, there
has been press and media coverage regarding us. Such press and media coverage may include
references to certain information that does not appear in this prospectus, including certain
operating and financial information and proj ections, 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 me dia coverage or the accuracy or completeness
of any such information or publication. We make no representation as to the appropriateness,
accuracy, completeness or reliability of any such information or publication. To the extent that
any such information is inconsistent or conflicts with the information contained in this
prospectus, we disclaim responsibility for it and you should not rely on such information.
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In preparation for the Global Offering, our Group has sought and has been granted the
following waivers from strict compliance with the relevant provisions of the Listing Rules:
WAIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Our headquarters and most of our business operations are based, managed and conducted
in the PRC. As our executive Directors play very i mportant roles in our business operation, it is
in our best interest for them to be based in t he places where our Group has significant
operations. We consider it practicably difficult and commercially unreasonable for us to arrange
for two executive Directors to be ordinarily res ide in Hong Kong, either by means of relocation
of our executive Directors to Hong Kong or appointment additional executive Directors.
Therefore, we do not have, and in the foreseeable future will not have, sufficient management
presence in Hong Kong for the purpose of satis fying the requirements under Rules 8.12 and
19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with the requirements under Rules 8.12 and 19A.15
of the Listing Rules, provided that our Group implements the following arrangements:
(a) we have appointed Mr. Yang Lei ( 楊磊)( ‘ ‘Mr. Yang ’’) and Ms. Zhang Xiao ( 張瀟)
(‘‘Ms. Zhang ’’) as our authorized representative sp u r s u a n tt oR u l e3 . 0 5o ft h eL i s t i n g
Rules. The authorized representatives will act as our Group’s principal channel of
communication with the Stock Exchange. T he authorized representatives will be
readily contactable by phone and email to promptly deal with enquiries from the
Stock Exchange, and will also be available to meet with the Stock Exchange to discuss
any matter within a reasonable period of time upon request of the Stock Exchange;
(b) when the Stock Exchange wishes to contact our Directors on any matter, each of the
authorized representatives will have al l necessary means to contact all of our
Directors (including our independent non-executive Directors) promptly at all times.
Our Group will also inform the Stock Exchange promptly in respect of any changes in
the authorized representatives. We have provided the Stock Exchange with the
contact details (i.e. mobile phone number, office phone number and email address) of
all Directors to facilitate communi cation with the Stock Exchange;
(c) all Directors who do not ordinarily reside in Hong Kong possess or can apply for
valid travel documents to visit Hong Kong and can meet with the Stock Exchange
within a reasonable period upon the request of the Stock Exchange;
WAIVERS
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(d) we have appointed Maxa Capital Limited as our compliance advisor (the ‘‘ Compliance
Advisor ’’), pursuant to Rule 3A.19 of the Listing Rules, who will have access at all
times to our authorized repr esentatives, Directors and senior management, and will
act as an additional channel of communication between the Stock Exchange and us
for the period commencing from the Listing Date to the date on which our Group
complies with Rule 13.46 of the Listing Rules in respect of its financial results for the
first full financial year commencing after the Listing Date. The Compliance Advisor
will maintain constant contact with the au thorized representatives and Directors
through various means, including regular meetings and telephone discussions
whenever necessary. Our authorized repres entatives, Directors and other officers of
our Company will provide promptly such information and assistance as the
Compliance Advisor may reasonably require in connection with the performance of
the Compliance Advisor’s duties as set forth in Chapter 3A of the Listing Rules; and
(e) we will also retain legal advisors to advi se on on-going compliance requirements as
well as other issues arising under the Listing Rules and other applicable laws and
regulations of Hong Kong after Listing.
WAIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rule 8.17 of the Listing Rules, an issuer must appoint a company secretary
who satisfies the requirements under Rule 3.28 of the Listing Rules. According to Rule 3.28 of
the Listing Rules, we must appoint an individual as the company secretary of our Company
who, by virtue of his or her academic or professional qualifications or relevant experience, is, in
the opinion of the Stock Exchange, capable of discharging the functions of company secretary.
Note 1 to Rule 3.28 of the Listing Rules prov ides that the Stock Exchange considers the
following academic or professiona l qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister (as defined in th e Legal Practitioners Ordinance) (Chapter 159
of the Laws of Hong Kong); and
(c) a certified public accountant (as defined in the Professional Accountants Ordinance)
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange
considers the following factors in assessing the ‘‘relevant experience’’ of the individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and ot her relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualificati ons in other jurisdictions.
WAIVERS
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Our Group considers that while it is important for the company secretary to be familiar
with the relevant securities regulation in Ho ng Kong, he/she also needs to have experience
relevant to our Group’s operations, nexus to the Board and close working relationship with the
management of our Group in order to perform the function of a company secretary and to take
the necessary actions in the most effective and efficient manner. It is for the benefit of our
Group to appoint a person who has been a member of the senior management for a period of
time and is familiar with our Group’s business and affairs as company secretary.
We have appointed Mr. Yang, our executive Director, and Ms. Zhang as the joint company
secretaries of our Group. Ms. Zhang is an associate member of both The Hong Kong Chartered
Governance Institute and The Chartered Governance Institute in the United Kingdom, and
therefore meets the qualification requirements under Note 1 to Rule 3.28 of the Listing Rules
and is in compliance with Rule 8.17 of the Listing Rules. Mr. Yang, however, does not possess
the qualifications set out in Rule 3.28 of the Listing Rules. We believe that Mr. Yang, by virtue
of his knowledge and experience in handling financial management and corporate development
matters, is capable of discharging his functions as a joint company secretary. We therefore
believe that it would be the best interests of our Group and of the corporate governance of our
Group to appoint Mr. Yang as a joint company secretary. For more details of Mr. Yang and
Ms. Zhang’s biographical information, see ‘‘Directors and Senior Management.’’
We have therefore applied to the Stock Exchange for, and the Stock Exchange has granted
us, a waiver from strict compliance with the r equirements under Rules 3.28 and 8.17 of the
Listing Rules on the conditions that: (i) Mr. Yang must be assisted by Ms. Zhang, who possesses
the qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary througho ut the waiver period; and (ii) the waiver can be
revoked if there are material breaches of the Listing Rules by our Group. We expect that Mr.
Yang will acquire the qualifications or relevant experience required under Rule 3.28 of the
Listing Rules prior to the end of the three-year pe riod after the Listing. We will liaise with the
Stock Exchange before the end of the three-year period to enable it to assess whether Mr. Yang,
having had the benefit of Ms. Zhang’s assistance for three years and has acquired relevant
experience within the meaning of Rule 3.28 of th e Listing Rules so that a further waiver will not
be necessary.
ALLOCATION OF H SHARES TO A CLOSE ASSOCIATE OF CERTAIN EXISTING
MINORITY SHAREHOLDERS
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of the
issuer may only subscribe for or purchase any securities for which listing is sought which are
being marketed by or on behalf of the issuer either in his or its own name or through nominees if
the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. It is provided in Rule
10.03(1) of the Listing Rules that no securities may be offered to existing shareholders on a
preferential basis and no prefer ential 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.
Paragraph 1C of Appendix F1to the Listing Rules (the ‘‘ Placing Guideline ’’) provides that
no allocations will be permitted to the existing shareholders of the applicant or their close
associates, whether in their own names or through nominees unless the conditions set out in
Rules 10.03 and 10.04 of the Listing Rules are fulfilled.
WAIVERS
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Chapter 4.15 of the Guide provides that the Stock Exchange will consider giving consent
and granting waiver from Rule 10.04 of the Listing Rules to an applicant’s existing shareholders
or their close associates to participate in an initial public offering if any actual or perceived
preferential treatment arising from their ability to influence the applicant during the allocation
process can be addressed.
XN Mountain International Limited, a Cornerstone Investor, is wholly owned by Focustar
Capital. As disclosed in ‘‘History, Development and Corporate Structure — Pre-IPO
Investments — Compliance with the Pre-IPO Investment guidance’’ of this prospectus,
Focustar Capital manages certain of the existing minority Shareholders, namely Nanjing
Xingna Heyuan Venture Capital Partnership (Limited Partnership) ( 南京星納赫源創業
投資合夥企業（有限合夥）), Nanjing Xingnafeng Enterpr ise Management Partnership
(Limited Partnership) ( 南京星納峰企業管理合夥企業（有限合夥）), FOCUSTAR CAPITAL
INVESTMENT FUND L.P. and XN Speed Intern ational Limited (collectively, the ‘‘ Existing
Minority Shareholders ’’). Accordingly, XN Mountain (the ‘‘ Close Associate ’ ’ )i sr e g a r d e da sa
close associate of the Existing Minority Shareholders. As of the Latest Practicable Date, the
Existing Minority Shareholders collectively hold 7 ,465,389 Shares, representing approximately
3.26% of the voting rights in our Company.
We have applied to the Stock Exchange for, and the Stock Exchange has granted to us, a
waiver from strict compliance with the requirements under Rule 10.04 of the Listing Rules and
the consent under paragraph 1C of the Placing Guideline to permit H Shares in the
International Offering to be placed to the Close As sociate, subject to the conditions as follows:
(a) the Close Associate to whom our Comp any may allocate the H Shares in the
International Offering, together with the Existing Minority Shareholders, holds less
than 5% of the total voting rights in our Company before Listing;
(b) each of the Close Associate and the Existing Minority Shareholder is not, and will not
be, a core connected person of our Company or any close associate of any such core
connected person immediately prior to or following the Global Offering;
(c) neither the Close Associate nor any of the Existing Minority Shareholders has the
right to appoint a Director and/or has any other special rights;
(d) allocation to the Close Associate will not a ffect our ability to satisfy the public float
requirement as prescribed by the Stock Exchange under Rule 8.08 (as amended and
replaced by Rule 19A.13A) of the Listing Rules;
(e) our Company has confirmed to the Stock Exchange that:
(i) the cornerstone investment agreement with the Close Associate (the ‘‘ Relevant
Cornerstone Investment Agreement ’’) does not contain any material terms which
are more favorable to the Close Associate than those in other cornerstone
investment agreements with other Cornerstone Investors; and
WAIVERS
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(ii) no preferential treatment has been, nor will be, given to the Close Associate by
virtue of its relationship with our Company in any allocation in the International
Offering, other than the preferential treatment of assured entitlement under the
Relevant Cornerstone Investment Agreement following the principles set out in
Chapter 4.15 of the Guide;
(f) the Overall Coordinators have confirmed to the Stock Exchange that, to the best of
their knowledge and belief, no preferenti al treatment has been, nor will be, given to
the Close Associate by virtue of its relati onship with our Company in any allocation
in the International Offering, other than the preferential treatment of assured
entitlement under the Relevant Cornersto ne Investment Agreement following the
principles set out in Chapter 4.15 of the Guide; and
(g) the Sole Sponsor has confirmed to the Stock Exchange in writing that based on the
confirmations provided to the Stock Exchange by our Company and the Overall
Coordinators (confirmations (e) and (f) mentioned above), and to the best of its
knowledge and belief, it has no reason to believe that the Close Associate has received
or will receive any preferential treatment by virtue of its relationship with our
Company in any allocation in the International Offering other than the preferential
treatment of assured entitlement under the Relevant Cornerstone Investment
Agreement following the principles set out in Chapter 4.15 of the Guide and details
of the allocation will be disclosed in this prospectus and the allotment results
announcement.
CONSENT UNDER PARAGRAPH 1C(1) OF THE PLACING GUIDELINES TO BE
GRANTED FOR ALLOCATION OF SECURITIES TO HTCI
Paragraph 1C(1) of the Placing Guideline provides that no allocations will be permitted to
‘‘connected clients’’ of the overall coordinator(s), any syndicate member(s) (other than the
overall coordinator(s)) or any dis tributor(s) (other than syndicate member(s)), without the prior
written consent of the Stock Exchange.
Chapter 4.15 of the Guide provides that the Stock Exchange will ordinarily give its consent
for allocation to connected clients if it is satisfied that: (i) the allocation to a connected client
represents genuine demand for securities of an applicant; and (ii) the connected client has not
taken and will not take advantage of its positio n to receive an allocation for its own benefit at
the expense of other placees or the public (i.e., no a ctual or perceived preferential treatment has
been given to such connected client).
In connection with the Global Offering, Huatai Financial Holdings (Hong Kong) Limited
(‘‘HTFH ’’, the ‘‘Connected Distributor ’’) acts as the Sponsor-Overall Coordinator, Overall
Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager.
Huatai Capital Investment Limited (‘‘ HTCI ’’, the ‘‘Connected Client ’ ’ )h a se n t e r e di n t oa
cornerstone investment agreement with our Co mpany, HTFH and CMB International Capital
Limited. Huatai Securities Co., Ltd. (‘‘ HTSC ’’) will enter into a back-to-back total return swap
(the ‘‘HT Back-to-back TRS ’’) with its wholly-owned subsidiary, HTCI, in connection with a
total return swap order placed by the investmen t manager acting in its capacity as investment
manager for and on behalf of the ultimate onshore investor (the ‘‘ Huatai Ultimate Client ’’) to
WAIVERS
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HTSC (the ‘‘Huatai TRS ’’). Pursuant to the HT Back-to-back TRS, HTCI will hold the Offer
Shares on a non-discretionary basis solely to hedge the HT Back-to-back TRS, while the
economic risks and returns of the underlying Offer Shares are ultimately borne by or passed to
the Huatai Ultimate Client, subject to customa ry fees and commissions. The HT Back-to-back
TRS will be fully funded by the Huatai Ultimate Client, and HTCI will not take part in any
economic return or bear any economic loss in relation to the Offer Shares, subject to customary
fees and commissions, which in effect means that HTCI will hold the beneficial interest of the
Offer Shares on behalf of the Huatai Ultimate Client. Both HTCI and HTFH are indirect
wholly-owned subsidiaries of HT SC. Accordingly, HTCI is considered a ‘‘connected client’’ of
HTFH pursuant to paragraph 1B(7) of the Placing Guideline.
We have applied to the Stock Exchange for, and the Stock Exchange has granted to us, a
consent under paragraph 1C(1) of the Placing Guideline to permit the Connected Client to
participate in the International Offering as a Cornerstone Investor on the following basis and
conditions as set out in Chapter 4.15 of the Guide:
( a ) O f f e rS h a r e st ob ep l a c e dt ot h eC o n n e c t e dC l i e n ta r eh e l do nb e h a l fo fi t s
independent third party(ies) on a non-discretionary basis;
(b) the cornerstone investment agreement with the Connected Client do not contain any
material terms which are more favorable to the Connected Client than those in other
cornerstone investment agreements;
(c) other than the preferential treatment of assured entitlement under the relevant
cornerstone investment agreement, no preferential treatment has been, nor will be,
given to the Connected Client by virtue of its relationship with the Connected
Distributor, in any allocation of Offer Shares in the International Offering;
(d) the Connected Client has confirmed that to the best of its knowledge and belief, other
than the preferential treatment of assured entitlement under the relevant cornerstone
investment agreement, it has not receive d and will not receive any preferential
treatment in any allocation of Offer Shares in the International Offering as a
Cornerstone Investor by virtue of its rela tionship with the Connected Distributor;
(e) each of our Company, the Overall Coordi nators, the Connected Distributor and the
Connected Client has provided the Stock Exchange with written confirmations in
accordance with Chapter 4.15 of the Guide; and
(f) details of the cornerstone investment have been disclosed in this prospectus and
details of the allocation will be disclosed the allotment results announcement in due
course.
WAIVERS
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DIRECTORS’ RESPONSI BILITY STATEMENT
This prospectus, for which our Directors (including any proposed director who is named as
such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Fut ures (Stock Market Listing) Rules (Chapter
571V of the Laws of Hong Kong) and the Listing Rules for the purpose of giving information
with regard to us. Our Directors, having made all reasonable enquiries, confirm that to the best
of their knowledge and belief the information contained in this prospectus is accurate and
complete in all material respects and not misleading or deceptive, and there are no other matters
the omission of which would make any statem ent herein or this prospectus misleading.
FILING PROCEDURES WITH THE CSRC
We filed with the CSRC for the application to list our H Shares on the Stock Exchange on
June 20, 2025, and the application was subsequently accepted by the CSRC. The CSRC
subsequently confirmed our completion of fili ng application procedures on December 10, 2025.
In completing such filing, the CSRC accepts no responsibility for our financial soundness, nor
for the accuracy of any of the statements made or opinions expressed in this prospectus. No
other filings are required to be completed before the listing of the H Shares on the Stock
Exchange.
UNDERWRITING AND INFORMATION 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 H Shares are offered solely on the basis of the information contained and
representations made in this prospectus and on the terms and subject to the conditions set
out herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained herein must not be relied upon as having been
authorized by our Company, the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters, the Capital Market Intermedia ries, any of their respective directors, agents,
employees or advisors or any other party involved in the Global Offering.
Neither the delivery of this prospectus nor a ny 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 th e information in this prospectus is correct as of
any subsequent time.
For details of the structure of the Global Offering, including its conditions, see ‘‘Structure
of the Global Offering’’. For the procedures for applying for our H Shares, see ‘‘How to Apply
for Hong Kong Offer Shares’’.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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INFORMATION ABOUT THIS PROSPECTUS
You should rely only on the information contained in this prospectus to make your
investment decision. We have not authorized anyone to provide you with information that is
different from what is contained in this prospectus. Any information or representation not made
in this prospectus must not be relied on by you as having been authorized by us, the
Sponsor-Overall Coordinator, the Overall Coor dinators, the Joint Global Coordinators, the
Joint Bookrunners, the Sole Sponsor, the Joint Lead Managers, any of the Underwriters, any of
our or their respective directors, officers or representatives or any other person involved in the
Global Offering. Neither the delivery of this prospectus nor any offering, sale or delivery made
in connection with the H Shares should, under any circumstances, constitute a representation
that there has been no change or development reasonably likely to involve a change in our
affairs since the date of this prospectus or i mply that the information contained in this
prospectus is correct as of any date subsequent to the date of this prospectus.
This prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this prospectus set out the terms and conditions of the Hong Kong Public Offering.
RESTRICTIONS ON OFFERS AND SALES OF THE H SHARES
Each person acquiring the H Shares under the Hong Kong Public Offering will be required
to, or be deemed by his acquisition of the H Shares to, confirm that he is aware of the
restrictions on offers of the H Shares described in this prospectus.
No action has been taken to permit a public offering of the H Shares or the general
distribution of this prospectus in any jurisdiction other than in Hong Kong. Accordingly, this
prospectus may not be used for the purposes of, a nd does not constitute, an offer or invitation in
any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or
to any person to whom it is unlawful to make such an offer or invitation. The distribution of this
prospectus and the offering of the Offer Shares in other jurisdictions are subject to restrictions
and may not be made except as permitted under the applicable securities laws of such
jurisdictions and pursuant to registration with or authorization by the relevant securities
regulatory authorities or an exemption therefrom.
APPLICATION FOR LISTING OF THE H SHARES ON THE STOCK EXCHANGE
We have applied to the Stock Exchange, and p ermission to deal in, the H Shares in issue
and to be issued pursuant to the Global Offering and the Conversion of Unlisted Shares into H
Shares. Dealings in the H Shares on the Stock Exchange are expected to commence on
Thursday, January 8, 2026. Except as otherwise d isclosed in this prospectus, no part of our
Shares is listed on or dealt in on any other stock exchange, and no such listing or permission to
list is being or proposed to be sought in the near future.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Under section 44B(l) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, if the permission for the H Shares to be listed on the Stock Exchange pursuant to
this prospectus has been refused before the expiration of three weeks from the date of the
closing of the subscription lists or such longer period not exceeding six weeks as may, within the
said three weeks, be notified to us by or on behalf of the Stock Exchange, then any allotment
made on an application in pursuance of this prospectus shall, whenever made, be void.
All the Offer Shares will be registered on our H Share register of members in order to
enable them to be traded on the Stock Exchange. None of our share or loan capital is listed or
dealt in on any other stock exchange and no such listing or permission to list is being or is
expected to be sought in the near future.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, an d permission to deal in, the H Shares on the
Stock Exchange and compliance with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligibl e securities by HKSCC for deposit , clearance and settlement in
CCASS with effect from the Listing Date or on any other date as determined by HKSCC.
Settlement of transactions between participants of the Stock Exchange is required to take place
in CCASS on the second settlement day after any trading day. All acti vities under CCASS are
subject to the General Rules of HKSCC and HKS CC Operational Procedures in effect from
time to time.
All necessary arrangements have been made fo r 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 arrang ements will affect their rights and interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
For the procedures for applying for Hong Kong Offer Shares, see ‘‘How to Apply for Hong
Kong Offer Shares’’.
H SHARE REGISTER AND STAMP DUTY
Our principal register of members will be maintained in the PRC and our H Share register
of members will be maintained by our H Share Registrar, Computershare Hong Kong Investor
Services Limited at Shops 1712–1716, 17th Floor , Hopewell Centre, 183 Queen’s Road East,
Wanchai, Hong Kong.
All Offer Shares will be registered on our H Share register of members. Dealings in the H
Shares registered on our H Share register of members will be subject to Hong Kong stamp duty.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
Persons applying for or purchasing H Shares under the Global Offering are deemed, by
their making an application or purchase, to have represented that they are not close associates
(as such term is defined in the Listing Rules) of any of our Directors or any existing
Shareholders or a nominee of any of the foregoing.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your profe ssional advisors if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding or disposing of, or dealing in, the H Shares
or exercising any rights attaching to the H Shares. We emphasize that none of our Company, the
Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediaries, any of our or their respect ive directors, officers or representatives or any
other person involved in the Global Offering accepts responsibility for any tax effects or
liabilities resulting from your subscription, purchase, holding or disposing of, or dealing in, the
H Shares or your exercise of any rights attaching to the H Shares.
EXCHANGE RATE CONVERSION
Unless otherwise specified, this prospectus contains certain translations for the
convenience purposes at the following rates:
HK$1.00 : RMB0.90675
US$1.00 : RMB7.05500
US$1.00 : HK$7.7805
No estimation is made that any amounts in HK$, RMB and US$ can be or could have been
converted at the relevant dates at the above rates or any other rates at all.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail unles s otherwise stated. However, the translated
English names of the PRC authorities, institutions , departments, facilities , certificates, titles,
laws, regulations, natural person, entities (in cluding certain of our subsidiaries) and the like
included in this prospectus are translations of their Chinese names and are included for
identification purpose only. If there is any incons istency, the names in their original languages
shall prevail.
COMMENCEMENT OF DEALING IN THE H SHARES
Dealings in the H Shares on the Stock Exchan ge are expected to commence at 9 : 00 a.m. on
Thursday, January 8, 2026.
OTHER
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures precedin g them. Any discrepancies in any table or chart
between the total shown and the sum of the amounts listed are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Address Nationality
Executive Directors
Mr. Gai Lujiang
(蓋魯江)
N o .8 ,G r o u p8
Sumin Village
Minhang District
Shanghai, China
Chinese
Mr. Sun Yile
(孫怡樂)
Room 801, No. 4
Lane 229, Hetian Road
Shanghai, China
Chinese
Mr. Liu Zheng
(劉崢)
No. 148, Lane 999
Zhenhua Road
Baoshan District
Shanghai, China
Chinese
Mr. Yang Lei
(楊磊)
Room 801, No. 22
Lane 1536, Puxiu Road
Minhang District
Shanghai, China
Chinese
Non-executive Directors
Mr. Wang Chen
(王晨)
2 0 B ,U n i t1 ,B u i l d i n g4
Tixiang Mingyuan
Futian District, Shenzhen
Guangdong, China
Chinese
Ms. Kou Xiaoxiao
(寇瀟瀟)
Room 10E, Building D
Lane 108, Hongfeng Road
Pudong New District
Shanghai, China
Chinese
Independent Non-executive
Directors
Dr. Teng Yong
(滕勇)
6B, Lane 308, Hunan Road
Xuhui District
Shanghai, China
American
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Name Address Nationality
Mr. Ren Jintao
(任今濤)
3A, Tower 6
Grand Homm
17 Sheung Shing Street
Ho Man Tin, Kowloon
Hong Kong
Chinese
Dr. Wang Yan
(王燕)
1–4–502
Tsinghua University West
Tsinghua Park
Haidian District
Beijing, China
Chinese
For detailed information of our Directors, see ‘‘Directors and senior management’’.
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Sponsor-Overall Coordinator Huatai Fi nancial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Overall Coordinators Huatai Financ ial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road, Central
Hong Kong
Joint Global Coordinators Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road, Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Guosen Securities (HK) Brokerage Company, Limited
Suites 3207–3212 on Level 32
one Pacific Place, 88 Queensway
Hong Kong
Zhongtai International Securities Limited
1 9 / F ,L iP oC h u nC h a m b e r s
189 Des Voeux Road Central
Central
Hong Kong
Joint Bookrunners Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road, Central
Hong Kong
Guosen Securities (HK) Brokerage Company, Limited
Suites 3207–3212 on Level 32
one Pacific Place, 88 Queensway
Hong Kong
Zhongtai International Securities Limited
1 9 / F ,L iP oC h u nC h a m b e r s
189 Des Voeux Road Central
Central
Hong Kong
Bowlea Securities Limited
Suite 1704, 17/F
The L.Plaza
367–375 Queen’s Road Central
Central
Hong Kong
Carnegie Hill Capital Partners Limited
Unit 6, 13th Floor
Beautiful Group Tower
74–77 Connaught Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Star River Securities Limited
Room 2102, The Galleria
9 Queen’s Road Central
Central
Hong Kong
Joint Lead Managers Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road, Central
Hong Kong
Guosen Securities (HK) Brokerage Company, Limited
Suites 3207–3212 on Level 32
one Pacific Place, 88 Queensway
Hong Kong
Zhongtai International Securities Limited
1 9 / F ,L iP oC h u nC h a m b e r s
189 Des Voeux Road Central
Central
Hong Kong
Bowlea Securities Limited
Suite 1704, 17/F
The L.Plaza
367–375 Queen’s Road Central
Central
Hong Kong
Carnegie Hill Capital Partners Limited
Unit 6, 13th Floor
Beautiful Group Tower
74–77 Connaught Road
Central
Hong Kong
Star River Securities Limited
Room 2102, The Galleria
9 Queen’s Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Capital Market Intermediaries Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road, Central
Hong Kong
Guosen Securities (HK) Brokerage Company, Limited
Suites 3207–3212 on Level 32
one Pacific Place, 88 Queensway
Hong Kong
Zhongtai International Securities Limited
1 9 / F ,L iP oC h u nC h a m b e r s
189 Des Voeux Road Central
Central
Hong Kong
Bowlea Securities Limited
Suite 1704, 17/F
The L.Plaza
367–375 Queen’s Road Central
Central
Hong Kong
Carnegie Hill Capital Partners Limited
Unit 6, 13th Floor
Beautiful Group Tower
74–77 Connaught Road
Central
Hong Kong
Star River Securities Limited
Room 2102, The Galleria
9 Queen’s Road Central
Central
Hong Kong
Legal Advisors to our Company As to Hong Kong Law:
Jingtian & Gongcheng LLP
Suites 3203–3209, 32nd Floor
Edinburgh Tower, The Landmark
15 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 95 ---
As to PRC law:
Jingtian & Gongcheng
34/F, Tower 3,
China Central Place
77 Jianguo Road
Beijing, China
As to U.S. Outbound Investment Rule and
Export Control:
Hogan Lovells
11/F, One Pacific Place
88 Queensway
Hong Kong
Legal Advisors to the Sole Sponsor
and Underwriter(s)
As to Hong Kong and U.S. Law:
Kirkland & Ellis
26th Floor, Gloucester Tower
The Landmark
15 Queen’s Road Central
Central, Hong Kong
As to PRC law:
Global Law Office
15 & 20/F, Tower 1
China Central Place
81 Jianguo Road
Chaoyang District
Beijing, China
Auditors and Reporting Accountants Ernst & Young
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
2504, Wheelock Square
1717 Nanjing West Road
Shanghai, China
Receiving Bank CMB Wing Lung Bank Limited
45 Des Voeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Headquarters and Registered Office in
the PRC
Room 101, Building 3
No. 2168 Chenhang Road
Minhang District
Shanghai, China
Principal Place of Business in Hong
Kong
40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai, Hong Kong
Company’s Website www.iluvatar.com
(Information contained on this website does not form
part of this prospectus)
Joint Company Secretaries Mr. Yang Lei ( 楊磊)
Room 101, Building 3
No. 2168 Chenhang Road
Minhang District
Shanghai, China
Ms. Zhang Xiao ( 張瀟)
(Associate member of The Hong Kong Chartered
Governance Institute and The Chartered Governance
Institute in the United Kingdom)
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wanchai, Hong Kong
Authorized Representatives Mr. Yang Lei ( 楊磊)
Room 101, Building 3
No. 2168 Chenhang Road
Minhang District
Shanghai, China
Ms. Zhang Xiao ( 張瀟)
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wanchai, Hong Kong
Audit Committee Mr. Ren Jintao ( 任今濤) (Chairperson)
Dr. Teng Yong ( 滕勇)
Dr. Wang Yan ( 王燕)
Nomination Committee Dr. Teng Yong ( 滕勇) (Chairperson)
Mr. Gai Lujiang ( 蓋魯江)
Dr. Wang Yan ( 王燕)
Remuneration Committee Dr. Wang Yan ( 王燕) (Chairperson)
Mr. Gai Lujiang ( 蓋魯江)
Mr. Ren Jintao ( 任今濤)
CORPORATE INFORMATION
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Compliance Advisor Maxa Capital Limited
Unit 2602, 26/F
Golden Centre
188 Des Voeux Road Central
Sheung Wan, Hong Kong
H Share Registrar Computershare Hon g Kong Investor Services Limited
Shops 1712–1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wan Chai, Hong Kong
Principal Bank(s) Bank of Communications Co., Ltd. Shanghai Pujiang
High Tech Park Branch
No. 2388 Chenhang Road
Minhang District
Shanghai, China
Industrial Bank Co., Ltd. Shanghai Putuo Branch
No. 301 Nanzheng Road
Putuo District
Shanghai, China
China Merchants Bank Co., Ltd. Shanghai Zhangyang
Branch
No. 810 Zhangyang Road
Pudong New District
Shanghai, China
CORPORATE INFORMATION
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--- page 98 ---
The information and statistics presented in this section and other sections of this
prospectus, unless otherwise indicated, were extracted from differe nt official government
publications and other publications, and from the independent industry report prepared by Frost
& Sullivan, an independent market research and c onsulting company that was commissioned by
us, in connection with the Global Offering. The information from official government sources has
not been independently verified by us, the Sole Sponsor, the Sponsor-Overall Coordinator, the
Overall Coordinators, the Capital Market Inter mediaries, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, an y of the Underwriters, any of our and 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.
CHINA’S ARTIFICIAL IN TELLIGENCE CHIP MARKET
Overview
In recent years, artificial intelligence (AI) h as transformed from experimental technology
into mainstream applications, driven by breakthroughs in deep learning technology, availability
of massive datasets, and significant advances in computing power. This evolution has catalyzed
widespread AI adoption across industries — from autonomous vehicles and financial services to
healthcare and industrial automation — cr eating unprecedented demand for specialized
computing hardware. The emergence of large language models and computer vision
applications has further acceler ated this transformation, pushing computational requirements
to new heights.
This surging demand has catalyzed the development of AI chips, which are integrated
circuits specifically architected for AI appl ications. These chips have become critical
components in modern computing infrastru cture, designed to efficiently process the
large-scale parallel computing tasks essential for AI algorithms, including matrix operations,
model training, and infer ence processes. Their architecture r epresents a fundamental shift from
traditional computing paradigms, optimizing for the unique characteristics of AI workloads
such as parallel processing, memory bandwidth, and energy efficiency.
Types of AI Chips
The intensive computational requirements of AI applications have driven a fundamental
evolution in processor architecture. While earl y AI workloads relied on traditional CPUs, their
architecture proved insufficient for the parallel processing demands of modern AI algorithms.
Today, two primary architectures dominate th e AI chip market: General Purpose Graphics
Processing Units (GPGPUs) and Application-Sp ecific Integrated Circuits (ASICs), apart from
GPGPUs and ASICs, other complementary architecture of AI chips include
Field-Programmable Gate Arrays (FPGAs):
. GPGPUs are graphics processing units des igned for general-purpose computing,
meaning they can perform a wide range of computing tasks rather than being limited
to specific applications have emerged as the dominant AI chip architecture, leveraging
their parallel processing capa bilities and versatility to handle diverse workloads from
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model training to inference tasks. Their mat ure software systems, extensive developer
tools, and widely-adopted programming fr ameworks have established GPGPUs as the
cornerstone of AI computing infrastructure.
. ASICs with algorithm-embedded hardware architecture, while offering superior
performance and energy efficiency for spe cific tasks, have limited adaptability to
evolving AI algorithms, which may restrict their broader adoption. Within ASICs,
there are various architectures including NPU (Neural Processing Unit), TPU (Tensor
Processing Unit), DPU (Deep learning Processing Unit) and IPU (Infrastructure
Processing Unit), etc.
. FPGAs are integrated circuits whose hardware functionality can be reconfigured after
manufacturing, offering a unique balance between programmability and
hardware-optimized performance. FPGAs particularly suitable for tasks requiring
low latency, such as real-time inference, network acceleration, and signal processing,
or in scenarios where the final algorithm o r standard is not yet solidified. FPGAs are
mainly deployed in specific applications where their unique combination of flexibility
and performance delivers decisive value.
Market Size
China’s AI chip market has experienced rema rkable growth, driven primarily by the
explosive demand for computing power — particularly from the proliferation of AI applications
and large language models that require substa ntial computational resources both in cloud and
edge computing scenarios. This growth has been further catalyzed by supportive government
policies promoting technical research and industrial development, alongside the maturation of
domestic semiconductor supply chains and su ccessful commercialization of AI applications
creating sustainable revenue streams.
In recent years, a series of supportive govern ment policies have been implemented in China
to promote the development of its GPGPU industry. For example, the ‘‘Implementation
Opinions of Seven Departments Including the Ministry of Industry and Information
Technology on Promoting the Innovative Development of Industries of the Future’’ 《工業和
信息化部等七部門關於推動未來產業創新發展的實施意見》 issued in January 2024 promotes
domestic GPGPU adoption in AI computing scenarios, while the ‘‘Implementation Plan for
Pilot Project of New Industry Standardization (2023–2035)’’ 《新產業標準化領航工程實施方案
（2023–2035 年）》issued in August 2023 focused on establishing independent AI chip standards
and ecosystem development. The ‘‘Action Plan for Stabilizing Growth in the Electronic
Information Manufacturing Industry (2023–2024)’’ 《電子信息製造業2023–2024 年穩增長
行動方
案》issued in August 2023 emphasized improving production capacity of domestic GPGPU
companies support through providing them with supply chain reinforcement and favorable tax
treatment. These policies collectively drive industry growth by creating a comprehensive
framework supporting technological advancement, standardization, and production capacity
enhancement.
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In 2024, the revenue of China AI chips reached approximately RMB217.5 billion, with a
CAGR of 80.3% from 2022 to 2024, and is expected to reach RMB898.1 billion in 2029, with a
CAGR of 29.1% from 2025 to 2029.
China AI Chips Market Size, by revenue
0
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
66.9
127.0
217.5
323.6
447.4
594.9
741.0
898.1
10.1
3.453.4
96.1
154.6
45.6
254.2
55.2
350.0
81.2
16.2
463.8
110.6
20.5
587.3
131.5
22.2
715.3
155.2
27.6
400
500
600
700
100
200
300
800
900
Unit: Billion RMB
CAGR 2022–2024 2025E–2029E
China AI Chip Total 80.3%
70.1%
115.8%
29.1%
GPGPU 29.5%
ASIC Total 27.4%
112.2%NPU 29.5%
126.2%Other ASIC 17.8%
7.4 17.3 14.323.6
Source: Annual Report of Related Public Companies, Frost & Sullivan
Notes: Given that FPGAs currently account for a relatively small share (<3%, in 2024) of the overall AI chip
market, they are not displayed as a separate segment in this chart for the sake of clarity and focus.
OVERVIEW OF CHINA’S GPGPU MARKET
Overview
GPGPUs have emerged as the fundamental co mputing backbone of AI applications,
capitalizing on their massive para llel processing capabilities, o ptimized memory architectures,
and proven scalability across diverse AI workload s. Originally designed for graphics rendering,
these processors have evolved to become the p referred choice for AI computing due to their
ability to efficiently handle the complex matrix calculations and parallel operations that
characterize AI algorithms.
The GPGPU industry is dominated by NVIDIA’s CUDA (Computing Unified Device
Architecture) platform, a global mainstre am GPGPU programming ecosystem and platform
that has become the most widely adopted platform for accelerated computing. The platform acts
like the ‘‘operating system’’ for GPGPUs — it pr ovides software tools that allow developers to
efficiently utilize GPGPU computing power. Since its introduction in 2006, developers
worldwide have relied on it to program and tr ain AI models, creating a vast technical
ecosystem. Even when new GPGPU products emerge, supporting this platform compatibility
remains critical for widespread adoption. Today, over 80% of AI scenarios depend on this
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platform to conduct R&D. As AI applications expand, alignment with such global mainstream
GPGPU programming ecosystems and platfo rms will continue to be critical for GPGPU
companies seeking to attract developer co mmunities and ensure seamless integration.
In China, the booming AI market has directly fueled unprecedented growth in the GPGPU
sector, with demand surging across various industries and applications. The market’s expansion
has been particularly driven by the rapid adoption of AI technologies in both enterprise and
consumer applications. For example, AI technologies are being deployed in financial services to
transform service modes and enhance risk-control systems with data-driven intelligence; in
healthcare to enable intelligent disease diag nosis, treatment planning and medical resource
allocation; in retail to establish full-stack in telligent systems from demand forecasting to
personalized services; and in education to facilitate precise matching of educational demands
with flexible resource alloca tion. Chinese GPGPU companies have responded by developing
chips with enhanced computing cores, support for high-precision calculations, and optimized
memory bandwidth, positioning themselves to me et the growing domestic demand for efficient
AI computing infrastructure.
Classification of GPGPU Chips
The GPGPU market has naturally segmented i nto two categories to address different
phases of the AI computing lifecycle: training and inference. This seg mentation reflects the
varying computational requirements and deployme nt scenarios across AI applications. Training
GPGPUs are designed for the int ensive computational demands of model development, while
inference GPGPUs are optimized for efficient m odel deployment and execution. This market
differentiation has enabled GPGPU companies to develop specialized products that effectively
address specific perform ance requirements and use cases, as detailed below:
Features Training Inference
Primary Function Model training, learning from large
datasets
Real-time prediction and
model deployment
Key Requirements — Large memory bandwidth
— Parallel processing capability
— Low latency
— Energy efficiency
Typical Applications — Large language model training
— Complex model development
— Cloud inference services
— Edge computing
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Supply Chain
GPGPUs, with their parallel computing power and high energy efficiency, have become a
fundamental computing backbone for AI. To meet the explosive computational demands of AI,
the GPGPU industry has developed a value chain spanning upstream wafer production and
equipment, midstream GPGPU design and manufacturing, and downstream deployment in
specialized AI scenarios — from model training t o edge-device inference — enabling efficient
parallel processing across the AI workflow.
Upstream Midstream Downstream
Raw Materials
 Semiconductor wafer
 Memory
 ...
R&D of GPGPU
Toolchains
 EDA tools
 IP cores
 ...
Training
GPGPU
Inference
GPGPU
Manufacturing of GPGPU
 Fabricating
 Packaging
 ...
Training Scenarios
 AI model training in computing clusters
 Computing centers
 ...
Inference Scenarios
 Edge AI Inference deployed in edge
environments
 cloud-based real-time AI services
 ...
Source: Frost & Sullivan report
Market Size
Driven by explosive growth in AI applications (particularly large language models), rapid
expansion of cloud computing infrastructur e, and significant advances by domestic chip
manufacturers, the GPGPU market in China r eached RMB154.6 billion in revenue in 2024,
representing a remarkable CAGR of 70.1% fr om 2022 to 2024. The market is projected to
maintain strong growth momentum, with revenue expected to reach RMB715.3 billion by 2029,
representing a CAGR of 29.5% from 2025 to 2 029. Meanwhile, domestic GPGPU companies’
revenue growth significantly outpaces foreign com petitors. The localiza tion rate refers to the
proportion of domestic GPGPU companies’ revenue in China GPGPU market’s revenue.
China’s GPGPU market localization rate contin ues to rise. From 2022 to 2024, the localization
rate increased from 2.0% to 3.6%, with projections indicating it will reach 31.0% by 2029.
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China GPGPU Market Size, by Revenue
0
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
53.4 1.0
96.1
154.6
254.2
200
100
300
400
700
800
600
500
Unit: Billion RMB
CAGR 2022–2024 2025E–2029E
GPGPU Total 70.1%
129.7%
68.7%
29.5%
Domestic Company 91.4%
Foreign Company
Localization Rate of GPGPU
20.0%
2.0% 3.2% 3.6% 6.5% 9.6% 14.9% 22.5% 31.0%
3.1
5.5
16.6
52.4 93.0 149.1
237.6
350.0 33.5
316.5
463.8
69.0
394.8
587.3
132.3
455.0
715.3
222.1
493.2
Source: Frost & Sullivan Report
The increasing localization rate of China’s GPGPU market stems from technological
advancements, robust market demand, and strong policy support. Specifically, continuous
innovation in process nodes and architectures, coupled with improved ecosystem compatibility,
has enabled domestic GPGPU companies to narrow the performance gap with global leaders.
The improving performance-to-cost ratio has a ccelerated their market acceptance. In addition,
rapid growth of AI applications has substantially expanded China’s GPGPU market. More
Chinese enterprises are exploring and adopting locally produced GPGPUs as part of their
procurement strategy, responding to both technological maturity and the evolving global
semiconductor trade environment. This market-driven transition has contributed to increased
demand and a more diverse and localized supply chain landscape. The supportive policy
environment also drives the increase in localizat ion rate. National strategies actively promote
GPGPU self-sufficiency, exemplified by China’s goal to achieve 70% chip self-sufficiency by
2025. In January 2024, seven ministries, including the Ministry of Industry and Information
Technology (MIIT), jointly issued the ‘‘Implementation Opinions on Promoting Future
Industry Innovation’’ 《關於推動未來產業創新發展的實施意見》, explicitly calling for
breakthroughs in GPU technologies to meet larg e-model training and inference demands.
Local governments have further bolstered this effort through subsidies and incentives for
regional GPGPU companies.
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Market Drivers and Future Trends
. The Rise of AI Model Complexity and Deployment: The rapid advancement of AI
technology, particularly the emergence of large-scale foundation models and
industry-specific vertical m odels (e.g., medical diagnos tics, fintech), has created
unprecedented computing demands. The g rowing complexity and expanding
parameters of these models require massive computing resources for training, while
their widespread deployment a cross industries drives incr easing inference needs. This
evolution is shifting market dynamics, wit h the inference GPGPU segment projected
to grow faster than the training segment.
. Diverse Computing Requirements Drive GPGPU Adoption: The variety of AI
workloads — from training large foundation models to running specialized vertical
applications — demands flexible, performance-optimized computing solutions.
GPGPUs have emerged as the preferred sol ution for these diverse AI workloads
due to their unique combination of parallel processing capabilities, architectural
flexibility, and mature software systems. T heir ability to efficiently handle both
training of large foundation models and infer ence across various ver tical applications,
coupled with continuous performance improvements and extensive developer tools,
has established GPGPUs as the dominant hardware accelerator for AI workloads.
. Centralized Computing Infrastructure Development: The exponential growth of AI
model parameters has rendered traditiona l single-GPGPU or small-scale computing
clusters inadequate for efficient training a nd inference. China’s AI infrastructure is
rapidly transitioning to hyperscale GPGPU clusters to support trillion-parameter
model training, driving demand for products optimized for massively parallel
computing and ultra-high bandwidth, and system-level stability.
. Acceleration of Edge Computing and Inference Demands: As AI technologies mature
and scale across industries, edge computing is poised for explosive growth, fueled by
the need for localized processing power. Th is surge directly accelerates demand for
inference GPGPUs, which enable criti cal capabilities such as real-time
decision-making, autonomous task execution, and dynamic adaptation to complex
environments. Therefore, inference GPGP U is projected to grow faster than training
GPGPU, capturing 67% of China GPGPU market by 2029. This trend presents
significant opportunities for domestic G PGPU companies amid accelerating local
substitution efforts.
. Technological Advancements by Domestic GPGPU Companies: Through continuous
breakthroughs in architecture design and manufacturing processes, domestic GPGPU
companies are rapidly enhancing their technological capabilities. This progress,
accelerated by large-scale deployments in the domestic market, has enabled local
players to significantly narrow the gap with global leaders. Bolstered by policy
support and growing market competence, these technological improvements are
driving robust expansion of China GPGPU market with accelerating domestic
substitution.
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. Growing Market Localization: With continuous technological advancements in
domestic GPGPUs, domestic GPGPU companies are gaining stronger market
competitiveness and steadily expanding t heir market share. In 2024, the localization
rate of GPGPUs exceeded 3.6%. As technol ogy matures and market recognition
improves, domestic GPGPU companies are ex pected to further increase their market
presence. It is projected that by 2029, the l ocalization rate of GPGPUs will surpass
50%, fostering a more diversified competit ive landscape in China GPGPU market and
enhancing China’s influence in the global GPGPU market.
Entry Barriers
. Technical Complexity: As a core component of performance-optimized computing
infrastructure, GPGPU development dem ands sophisticated capabilities in
architecture design, manufacturing process i ntegration, and algorithm optimization.
Success requires mastery across multiple technical domains including chip design,
software stack development, and AI computing optimization. This multi-dimensional
technical complexity, combined with ye ars of required R&D investment, makes it
highly challenging for new entrants to a chieve competitive product performance.
. Capital-Intensive Requirements: The GPGPU market demands substantial ongoing
capital investment throughout the product lifecycle. Companies must maintain
significant expenditure on essential desig n tools such as EDA licenses, sophisticated
R&D infrastructure, and high tape-out cost s for each product iteration. The need for
continuous investment in both development and production, combined with the
frequent product iterations required to remain competitive, creates a substantial
financial barrier that few new entrants can sustain.
. Manufacturing Scale Requirements: The GPGPU market requires either establishing
advanced manufacturing capabilities or s ecuring strong foundry partnerships for
access to leading-edge processes. New entrants pursuing integrated manufacturing
face massive facility investments and techni cal expertise requirements, while those
choosing a fabless model must overcome challenges in foundry qualification, capacity
allocation, and supply chain management. These requirements, along with minimum
scale commitments and complex technical i ntegration needs, create significant
barriers for potential competitors attempting to enter the market.
. R&D Talent and Capabilities: The GPGPU market is characterized by rapid
technological iteration requiring excepti onal research capabilities. The scarcity of
experienced R&D personnel with experti se across chip architecture, software
development, and AI computing creates a si gnificant barrier. Established players
benefit from stable, collaborative teams with accumulated expertise and efficient
development processes, making it diffi cult for new entrants to build and retain
competitive R&D capabilities.
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. First-Mover Advantages and Market Trust: Given the vital nature of AI computing
infrastructure, GPGPU customers impose str ingent requirements for reliability and
performance validation. First movers benefit from established customer relationships,
proven deployment track records, and accumulated industry expertise. This creates a
self-reinforcing cycle where successful dep loyments lead to deeper customer trust and
loyalty, forming barriers that new entrants cannot readily overcome.
Competitive Landscape of China GPGPU market
Foreign companies’ GPGPUs currently account for the majority of the China GPGPU
market in terms of revenue, but domestic comp anies are expected to gain increasing market
share. In 2024, in terms of revenue, three domestic companies, including our Company, were
among the top five participants in China GPGPU market. The 2024 ranking of participants in
China GPGPU market by revenue is illustrated in the figure below.
Ranking
(6)(7) Company
Domestic
Company
China GPGPU
Market Share,
2024
Domestic
GPGPU
Market
Share (1) , 2024
1 Company A (2) 6 91.9% —
2 Company B (3) 6 4.5% —
3 Company C (4) √ 0.8% 23.3%
4 Company D (5) √ 0.5% 13.5%
5 Our Company √ 0.3% 9.8%
Source: Frost & Sullivan report
Notes:
(1) Domestic GPGPU Market Share refers to the market share held by domestic companies in the revenue of
domestically produced GPGPUs within China GPGPU market.
(2) Company A is a technology company specializin g in the development of GPUs and AI computing
platforms, founded in 1993 and headquartered in the U.S., and listed on NASDAQ.
(3) Company B is a semiconductor company specializing in the design of microprocessors, GPUs, and AI
computing solutions, founded in 1969 and headquartered in the U.S., and listed on NASDAQ.
(4) Company C is a technology company specializing in t he development and sales of performance-optimized
processors, founded in 2014 and headquartered in China, and listed on the SSE Market.
(5) Company D is a GPU design company specializin g in the development of GPGPUs and AI computing
solutions, founded in 2020 and headquartered in China, and is contemplating to be listed on SSE Market.
(6) The revenue data of Company A to D is based on estimation calculated by unit sales and other available
public information, cross-checked with industry participants and experts on best effort, thus may be
different from the audited data from the above players.
(7) Available public information includes financial reports of listed companies and publicly available industry
reports, etc.
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Market Size of China Training GPGPU
During the initial AI development phase from 2022 to 2024, massive demand for AI model
training drove training GPGPUs to dominate China GPGPU market. In 2024, China training
GPGPU market reached RMB84.5 billion in revenue, with a remarkable 53.4% CAGR from
2022 to 2024. Looking ahead, China training G PGPU revenue is projected to grow at a 14.8%
CAGR from 2025 to 2029, reaching RMB231.5 billion by 2029. Concurrently, the localization
rate of training GPGPUs is expected to surge from 4.0% in 2024 to 16.8% by 2029.
China Training GPGPU Market Size, by Revenue
0
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
0.8
240
220
180
160
120
80
60
20
200
140
100
40
Unit: Billion RMB
CAGR 2022–2024 2025E–2029E
Training GPGPU Total 53.4%
104.6%
52.0%
14.8%
Domestic Company 41.6%
Foreign Company
Localization Rate of GPGPU
11.7%
2.3% 3.9% 4.0% 7.2% 8.2% 9.5% 12.4% 16.8%
2.3
3.4
9.6
35.1
57.0
81.1
123.6
12.9
145.2
17.0
162.3
27.4
194.1
38.8
192.7
35.9
59.4
84.5
133.2
158.2
179.3
221.5
231.5
Source: Frost & Sullivan report
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Competitive Landscape of China Training GPGPU market
While foreign companies currently dominate China training GPGPU market, domestic
companies are projected to significantly incre ase their market share in the coming years. In
China training GPGPU market, four of top five p articipants are domestic companies in 2024.
The 2024 ranking of participants in China training GPGPU market by revenue is illustrated in
t h ef i g u r eb e l o w .
Ranking
(3)(4) Company
Domestic
Company
China GPGPU
Market Share,
2024
Domestic
GPGPU
Market
Share (1) , 2024
1 Company A 6 96.0% —
2 Company C √ 1.1% 26.3%
3 Company D √ 0.7% 17.4%
4 Our Company √ 0.4% 10.5%
5 Company E (2) √ 0.3% 7.9%
Source: Frost & Sullivan report
Notes:
(1) Domestic Training GPGPU Market Share refers to the market share held by domestic companies in the
revenue of domestically produced training GPGPUs within China GPGPU market.
(2) Company E is an AI computing solution provider concentrating in the design of GPGPUs and AI
computing solutions, founded in 2019 and headquartered in China.
(3) The revenue data of Company A to E is based on estimation calculated by unit sales and other available
public information, cross-checked with industry participants and experts on best effort, thus may be
different from the audited data from the above players.
(4) Available public information includes financial reports of listed companies and publicly available industry
reports, etc.
Market Size of Chin a Inference GPGPU
In 2024, China inference GPGPU market reached RMB70.1 billion in revenue, with a
remarkable 100.1% from 2022 to 2024. Looking ah ead, as AI applicati ons achieve broader
industrial deployment, the inference GPGPU s egment is expected to ga in increasing market
share and dominate the market, reflecting the t echnology’s maturation and commercialization
progress. China inference GPGPU revenue is projected to grow at a 41.4% CAGR from 2025 to
2029, reaching RMB483.8 billion by 2029. Concur rently, the localization rate of inference
GPGPUs is expected to surge from 3.0% in 2024 to 37.9% by 2029.
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China Inference GPGPU Market Size, by Revenue
0
2022 2023 2024 2025E 2026E 2027E 2028E 2029E
50
100
350
400
450
500
300
250
200
150
Unit: Billion RMB
CAGR 2022–2024 2025E–2029E
Inference GPGPU Total 100.1%
203.4%
98.4%
41.4%
Domestic Company 126.9%
Foreign Company
Localization Rate of GPGPU
27.4%
1.3% 2.2% 3.0% 5.7% 10.7% 18.3% 28.7% 37.9%
0.2 0.8
2.1
6.9
17.3 35.9 68.0
114.0
20.5
171.3
52.1
232.4
104.9
260.9
183.3
300.5
17.5 36.7
70.1
120.9
191.8
284.5
365.8
483.8
Source: Public Information, Expert Interviews, Frost & Sullivan
Competitive Landscape of China Inference GPGPU market
Although foreign companies currently dominate China inference GPGPU market,
domestic companies are poised to gain substantial market influence as the inference GPGPU
segment rapidly expands and thei r technological competitiveness strengthens. In the coming
years, domestic companies are expected to captur e significantly greater market share. The 2024
ranking of participants in China inference GPGPU market by shipment volume is illustrated in
t h ef i g u r eb e l o w .
Ranking
(2)(3) Company
Domestic
Company
China GPGPU
Market Share,
2024
Domestic
GPGPU
Market
Share (1) , 2024
1 Company A 6 87.0% —
2 Company B 6 10.0% —
3 Company C √ 0.5% 18.5%
4 Our Company √ 0.3% 8.6%
5 Company D √ 0.2% 7.0%
Source: Frost & Sullivan report
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Notes:
(1) Domestic Inference GPGPU Market Share refers to the market share held by domestic companies in the
revenue of domestically produced inference GPGPUs within China GPGPU market.
(2) The revenue data of Company A to D is based on estimation calculated by unit sales and other available
public information, cross-checked with industry participants and experts on best effort, thus may be
different from the audited data from the above players.
(3) Available public information includes financial reports of listed companies and publicly available industry
reports, etc.
Historical price of semiconductor silicon wafers
Semiconductor silicon wafers are one of the materials of GPGPUs. In 2020, the global
increasing demand of semiconductor chips elevated the price of semiconductor silicon wafers
from USD0.9 per square inch to USD0.99 per square inch. From 2021, the price of
semiconductor silicon wafers has shown a descending trend with the expansion of production
capacity. Considering the sufficiency of global production capacity, the price of semiconductor
silicon wafers is predicted to maintain stability in the long-term perspective.
Price of semiconductor silicon wafers
Unit: USD per Square Inch
0.70
0.75
2020
0.90
0.99
0.94
0.96
0.94
2021 2022 2023 2024
0.80
0.85
0.90
0.95
1.00
Source: Semiconductor Equipment and Materials International (SEMI), Frost & Sullivan report
SOURCE OF INFORMATION
In connection with the Global Offering, we engaged Frost & Sullivan, an independent
market research consultant, to conduct an analysis of, and to prepare the Frost & Sullivan
Report about, the AI and GPGPU markets globally and in China. Frost & Sullivan is an
independent global consulting firm founded in 1961 in New York and its services include,
among others, industry consulting, market str ategic consulting and corporate training. In
connection with the market research services provided, we have paid a fee of RMB600,000 to
Frost & Sullivan, which we believe to be consistent with market rates.
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In compiling and preparing the Frost & Sulli van Report, Frost & Sullivan conducted (i)
primary research includes interviewing industry participants, competitors, downstream
customers and recognized third-party industr y associations; and (ii) secondary research
includes reviewing corporate annual reports, da tabases of relevant official authorities, as well
as the exclusive database established by Frost & Sullivan over the past decades. The market
projections in the Frost & Sullivan Report are based on the following key assumptions during
the forecast period: (i) the social, economic and political conditions in global and China markets
discussed will remain stable during the forecast period, (ii) government policies on global and
China markets will remain consistent during the forecast period, and (iii) global and China
markets will be driven by the factors which are stated in the Frost & Sullivan Report.
Except as otherwise noted, all the data and for ecasts contained in this section are derived
from the Frost & Sullivan Report. The commissioned report has been prepared by Frost &
Sullivan independently without the influence fr om the Company or other interested parties. Our
Directors confirm that, to the best of their knowledge, after making reasonable inquiries, there
is no material and adverse change in the market information since the date of the Frost &
Sullivan Report, which may qualify, contradict or have an impact on the information in this
section.
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THE PRC LAWS, REGULATIONS AND POLICIES
Information disclosed in this section is rel evant PRC laws, regulations and regulatory
documents in effect which have a significant impact on our operations in the PRC as of the date
of this Document (hereinafter referred to as ‘‘ PRC Laws ’’), which are subject to change in the
future, but it does not include a detailed analysis of PRC Laws related to our business activities
and operations in the PRC, or serve as all PRC Laws applicable to our operations in the PRC.
POLICIES AND REGULATIONS RELA TING TO THE INTEGRATED CIRCUIT
INDUSTRY
From 2010 to 2021, the State Council of the PRC (the ‘‘ State Council ’’) has issued a series
of regulations aimed at promoting the development of the integrated circuit industry, which
includes the Decision of the State Council on Acc elerating the Fostering and Development of
Strategic Emerging Industries ( 國務院關於加快培育和發展戰略性新興產業的決定), the Notice
of the State Council on Promulgation of Several Policies for Further Encouraging the
Development of Software and Integrated Circuit Industries ( 國務院關於印發進一步鼓勵軟件產
業和集成電路產業發展若干政策的通知), the Outline for Promoting the Development of the
National Integrated Circuit Industry ( 國家集成電路產業發展推進綱要), Made in China (2025)
(中國製造(2025)), the Notice of the State Council on Promulgation of Several Policies for
Promoting the High-quality Development of Integrated Circuit and Software Industries in the
New Era ( 國務院
關於印發新時期促進集成電路產業和軟件產業高質量發展若干政策的通知).
On June 24, 2014, the State Council promulgated the Outline for Promoting the
Development of the National Integrated Circuit Industry ( 國家集成電路產業發展推進綱要),
which stated that the development goal of the integrated circuit industry is to reach an advanced
international standard in the major links of the integrated circuit industry chain by 2030, with a
number of enterprises entering the international first tier and achieving leapfrog development.
The main tasks and development priorities are to focus on the development of integrated circuit
design industry, centering on key areas of the industry chain, strengthening integrated circuit
design, software development, system integration, content and service collaborative innovation,
and driving the development of the manufacturin g industry with the rapid growth of the design
sector.
On November 29, 2016, the State Council promulga ted the ‘‘State Council’s Notice on the
Issuance of the Development Plan for the Nation’s Strategic Emerging Industries under the
‘13th Five-Year’ Plan’’ ( 國務院關於印發‘‘十三五’’國家戰略性新興產業發展規劃的通知), with a
view to initiate the major productivity layout and planning project for integrated circuits, and
implement a series of high-impact projects to drive rapid leaps in industrial capabilities, as well
as accelerate the construction of production lines for advanced manufacturing processes,
storage devices and specialty technologies, enhance the design and development capability and
application level of key products such as safe and reliable CPUs, digital-to-analog/
analog-to-digital converter chi ps and digital signal processing chips, and promote the rapid
development of industries such as packaging and testing, key equipment and materials, support
the improvement of service level of foundries and third-party IP core companies, support
collaborative innovation between design ente rprises and manufacturing enterprises, and
promote key segments to increase industrial concentration and collaborative innovation in
the semiconductor display industry chain.
REGULATORY OVERVIEW
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On January 25, 2017, the National Deve lopment and Reform Commission (the ‘‘ NDRC ’’)
promulgated Strategic Emerging Industries Key Products and Services Guidance Catalog ( 戰略
性新興產業重點產品和服務指導目錄) (the ‘‘ Catalog ’’), which includes integrated circuit chip
design and services as a key product and servi ce in the strategic emerging industries. The
Catalog also clarifies eight industries in five major areas, which are further subdivided into 174
sub-directions under 40 key directions and nea rly 4,000 subdivided products and services.
Among them are: integrated circuit chip product s, integrated circuit materials, electric and
electronic power devices and semiconductor materials.
On March 28, 2018, the Ministry of Finance (the ‘‘ MOF’’), the State Taxation
Administration (the ‘‘ STA’’), the NDRC and the Ministr y of Industry and Information
Technology (the ‘‘ MIIT ’’) jointly promulgated the Notice on Issues Concerning Corporate
Income Tax Policies for Integr ated Circuit Manufacturers ( 關於集成電路生產企業有關企業所得
稅政策問題的通知), which grants income tax exemptions or reductions to some integrated
circuit manufacturing companies. The next year, the MOF and the STA jointly promulgated the
Announcement on Income Tax Policies for Integra ted Circuit Design and Software Enterprises
(關於集成電路設計和軟件產業企業所得稅政策的公告). Pursuant to the foregoing provisions,
integrated circuit design enterprises and softwar e enterprises satisfying the criteria shall enjoy
an incentive period with effect from their profi t-making year(s) prior to December 31, 2018, and
be exempted from enterprise income tax for the first year to the second year, and pay enterprise
income tax based on 50% off the statutory 25% ta x rate from the third year to the fifth year,
until the incentive period expires.
On July 27, 2020, the State Council announced the Notice of on Promulgation of Several
Policies for Promoting the High-quality Dev elopment of Integrated Circuit and Software
Industries in the New Era ( 國務院關於印發新時期促進集成電路產業和軟件產業高質量發展若干
政策的通知), in order to further optimize the development environment of the integrated circuit
industry and software sectors, deepen international cooperation in the industry, and enhance
the industrial innovation capability and development quality, launch a series of supporting
fiscal and taxation, investment and financing, research and development, import and export,
talents, intellectual property rights, market appl ication and international cooperation policies.
On July 27, 2020, the Notice by the MOF, the NDRC, the MIIT and Other Departments of
the Measures for the Administration of Import Tax Policies for Supporting the Development of
the Integrated Circuit Industry and the Software Industry ( 財政部、國家發展改革委、工業和信
息化部等關於支持集成電路產業和軟件產業發展進口稅收政策管理辦法的通知) became effective.
On the same day, the Notice by the MOF, the General Administration of Customs and the STA
of Import Tax Policies for Supporting the Development of the Integrated Circuit Industry and
the Software Industry ( 財政部、海關
總署、稅務總局關於支持集成電路產業和軟件產業發展進口
稅收政策的通知) took effect. The above notices relating to importing tax for the integrated
circuit industry have made some installment tax payment policies and import tariff exemption
policies.
REGULATORY OVERVIEW
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On March 11, 2021, the National People’s Congress of the PRC (the ‘‘ NPC’’) approved the
Outline of the 14th Five-Year Plan (2021–2025) fo r National Economic and Social Development
and Long-Range Objectives for 2035 ( 中華人民共和國國民經濟和社會發展第十四個五年規劃和
2035 年遠景目標綱要), which clarifies that the PRC shou ld foster advanced manufacturing
clusters and promote the innovation and development of industries such as integrated circuits,
aerospace equipment, high-tech ships and ocean engineering equipment, robots, advanced
railway equipment, advanced power equipment, engineering machinery, high-end CNC machine
tools, medicine and medical equipment.
On December 12, 2021, the State Council promulgated the Notice by the State Council of
Issuing the Plan for Development of the Digital Economy During the ‘‘14
th Five-Year’’ Period
(國務院關於印發‘‘十四五’’數字經濟發展規劃的通知), which states that during the 14 th Five-Year
Plan period, the innovation capabilities of key technologies should be strengthened, aiming at
strategic forward-looking fields such as sensors, quantum information, network
communications, integrated circ uits, key software, big data, artificial intelligence, block
chain, new materials, etc., and giving full pla y to the strengths of China’s socialist system,
new-type national mobilization system, and super-sized market to enhance foundational R&D
capabilities in digital technologies. It also sta tes that key technical shortcomings should be made
up, the organizational methods such as ‘‘selecting the best candidates via open competition
mechanism’’ should be optimized and innovated, focusing on breakthroughs in key core
technologies in the fields of high-end chips, operating systems, industrial software, core
algorithms and frameworks, and strengthening the integrated research and development of
general-purpose processors, cloud computin g systems, and key software technologies. In
addition, the competitiveness of key links in the industrial chain should be improved, and the
supply chain systems of key industries such as 5G, integrated circuits, new energy vehicles,
artificial intelligence, and indust rial Internet should be improved.
On December 11, 2020, the MOF, the General Administration of Taxation, the NDRC,
and the MIIT jointly released the ‘‘Announ cement on Enterprise Income Tax Policy for
Promoting High Quality Development of Integrated Circuit Industry and Software Industry’’
(關於促進集成電路產業和軟件產業高質量發展企業所得稅政策的公告). Pursuant to the
aforesaid regulations, key integrated circui t design enterprises an d software enterprises
encouraged by the state are exempted from enter prise income tax for the first to fifth years
starting from the profit-making year, and are s ubject to a reduced enterprise income tax rate of
10% in the succeeding years.
On March 16, 2021, in accordance with the Notice on Supporting Import Tax Policy for
the Development of Integrated Circuit Industry and Software Industry ( 財政部海關總署稅務總
局關於支持集成電路產業和軟件產業發展進口稅收政策的通知) issued by the MOF, the General
Administration of Customs and the STA, import behaviors that conform to the circumstances
listed in this regulation are exempted from imp ort duties, which is effective from 27 July 2020 to
31 December 2030.
REGULATORY OVERVIEW
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In May, 2022, the STA issued the Guidance o f Preferential Tax Policy for Software
Enterprises and Integrated Circuit Enterprises ( 軟件企業和集成電路企業稅費優惠政策指引). In
order to facilitate timely understanding of the applicable tax incentives, the above guidelines
specify the contents of the incentives, eligibility criteria and policy basis for integrated circuit
enterprises. For example, enterprises engaged in in tegrated circuit design, equipment, materials,
packaging and testing encouraged by the state are entitled to periodic red uced enterprise income
tax; key integrated circuit design enterprises e ncouraged by the state are entitled to periodic
reduced enterprise income tax; and employee tra ining fees of enterprises engaged in integrated
circuit design are deductible before tax according to the actual amount incurred.
On March 5, 2023, the first session of the 14 th NPC reviewed and approved the Report on
the Implementation of the Central and Local Budgets for 2022 and Draft Central and Local
Budgets for 2023 ( 關於2022 年中央和地方預算執行情況與2023 年中央和地方預算草案的報告),
and the Draft Central and Local Budgets for 2023 (2023 年中央和地方預算草案) (the ‘‘Draft
Budgets ’’). The Draft Budgets pointed out that the main revenue and expenditure policies for
2023 include promoting the optimization and upgrading of the industrial structure, insisting on
building industrial development on the basis of scientific and technological support, and
promoting the improvement of the industrial t echnological innovation system. In March 2024,
the 14th NPC issued the Report on the Implemen tation of the 2023 Central and Local Budget
and on the Draft 2024 Central and Local Budget ( 關於2023 年中央和地方預
算執行情況與2024 年
中央和地方預算草案的報告), which points out that the special funds for industrial foundation
reconstruction and high-quality developme nt of manufacturing industry will be RMB10.4
billion to support faster breakthroughs in basic products and core technologies and enhance the
resilience and competitiveness of the industry chain supply chain.
On April 20, 2023, the MOF and the STA jointly promulgated the Notice of the MOF and
the STA on the Weighted Deduction Policy for Value-added Tax on Integrated Circuit
Enterprises ( 財政部、稅務總局關於集成電路企業增值稅加計抵減政策的通知), which states that
from 1 January 2023 to 31 December 2027, enterpri ses engaged in the design, production, closed
beta test, equipment and materials of integrated circuits are allowed to deduct extra 15% of the
deductible input tax in the current period from the value-added tax payable.
LAWS AND REGULATIONS ON FOREIGN INVESTMENT
The establishment, operation and governanc e of corporate entities in the PRC is governed
by the Company Law of PRC ( 中華人民共和國公司法) (the ‘‘PRC Company Law ’’), which was
issued by the Standing Committee of the NPC (the ‘‘ SCNPC ’’) on 29 December 1993, last
revised on 29 December 2023 and became effectiv e on 1 July 2024. Limited liability companies
and stock limited companies established in the PRC shall be subject to the PRC Company Law.
A foreign-invested company is also subject to the PRC Company Law unless otherwise provided
by the foreign investment laws.
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On October 28, 2015, the Ministry of Commerce of People’s Republic of China (the
‘‘MOFCOM ’’) promulgated Interim Provisions on Investment Inside China by Foreign
Investment Enterprises ( 關於外商投資企業境內投資的暫行規定). According to the foregoing
provisions, where a foreign investment enterpri se purchases share ownership from investors of
the target company, and the business scope of the target company falls within the field of
Encouraged or Permitted Categories of Investment, the target company shall submit to the
original company registration organ all the ma terials prescribed by Article 6, and shall, in
accordance with relevant provisions of the ‘‘R ules on Company Registration’’, apply to the
original company registration organ for alteration of registration.
The Foreign Investment Law of the PRC ( 中華人民共和國外商投資法), which was
promulgated by the NPC on 15 March 2019 and came into effect on 1 January 2020, specifies
that the state shall implement the management s ystem of pre-entry national treatment and the
Negative List for foreign inves tment. Pre-entry national tre atment refers to the treatment
accorded to foreign investors and their investme nts at the stage of investment entry which is no
less favourable than the treatment accorded to domestic investors and their investments;
Negative List refers to a special administrative measure for the entry of foreign investment in
specific sectors as imposed by the state. The state provides national treatment to foreign
investments outside the Negative List. In addition, the Regulations on Implementing the
Foreign Investment Law of the PRC ( 中華人民共和國外商投資法實施條例)( ‘ ‘Implementation
Regulations ’’), which were promulgated by the State Council on 26 December 2019 and came
into effect on 1 January 2020, further stipulate t hat the state shall, in accordance with the needs
of the national economy and social development, formulate a catalog of industries for
encouraging foreign investment, setting out the specific industries, fields and regions in which
foreign investors will be encouraged and induced to invest.
The NDRC and the MOFCOM jointly revised and promulgated the ‘‘the Special
Administrative Measures for the Access of F oreign Investment (Negative List) (2024
Version)’’ ( 外商投資准入特別管理措施（負面清單（
2024 年版）) (the ‘‘ Negative List ’’) on 6
September 2024, which came into effect on 1 November 2024, replacing the previous
Negative List, pursuant to which, domestic enterprises engaged in business sectors prohibited
under the Negative List that seek to issue shares and list overseas shall be subject to review and
approval by the relevant national competent authorities, and foreign investors are not allowed
to participate in the operation and management of the enterprise and their shareholding ratios
shall be implemented with reference to the rele vant regulations on the management of domestic
securities investment by foreign investors.
According to the Measures for the Report ing of Foreign Investment Information ( 外商投
資信息報告辦法), which were promulgated by the MOFCO M and the State Administration for
Market Regulation (the ‘‘ SAMR ’’) on December 30, 2019, and came into effect on January 1,
2020, foreign investors or foreign-invested enterprises shall submit investment information in a
timely manner, follow the principles of truthfulness, accuracy and completeness, and shall not
make false or misleading reports or material om issions. Where a foreign-invested enterprise
invests (including multi-level i nvestment) to establish an enter prise in the PRC, the relevant
information shall be forwarded by the market supervision department to the competent
department in charge of commerce after the registration and filing with the market supervision
department and the submission of the annual report information.
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According to the Measures for the Secu rity Review of Foreign Investment ( 外商投資安全審
查辦法) (the ‘‘Measures ’’) promulgated by NDRC and MOFCOM on 19 December 2020 and
effective from 18 January 2021, foreign investm ents that have an actual or potential impact on
national security are subject to security re view in accordance with the provisions of the
Measures. Foreign investors or relevant domesti cp a r t i e sw h oi n t e n dt oi n v e s ti nt h ef o l l o w i n g
areas should proactively apply to the mechan ism’s office for a security review prior to
implementation of the investment: (1) investmen t in defense, defense support and related sectors
that have a bearing on national defense securit y, as well as investment in areas surrounding
military and defense facilities; (2) investment in important agricultural products, important
energy and resources, major equipment manufacturing, important infrastructure, important
transportation services, impor tant cultural products and services, important information
technology and Internet products and services, i mportant financial services, key technologies,
and other important sectors related to national secu rity, while obtaining actual control over the
invested enterprise.
LAWS AND REGULATIONS RELATING TO NETWORK SECURITY AND DATA
SECURITY
In recent years, PRC government authoriti es have enacted laws and regulations on
cybersecurity and data protection. We collect and store business data and transaction data
generated during or in connection with our business operations, and use information technology
systems and network in the course of our business and are therefore subject to such laws and
regulations. The Decisions on Protection of Internet Security enacted by the SCNPC ( 全國人民
代表大會常務委員會關於維護互聯網安全的決定) in 2000, as amended on August 27, 2009,
provides that, among other things, the following activities conducted through the internet, if
constituted a crime according to PRC laws, are sub ject to criminal punishment: (i) intrusion into
a strategically significant computer or system; (ii) intentionally inventing and disseminating
destructive programs, such as computer viruses, to attack the computer system and the
communications network, thereby damaging the computer system and the communications
networks; (iii) violating national regulations, suspending the computer networks or the
communication services without authorization, causing the computer network or
communication system to fail to operate normall y; (iv) leaking state secrets; (v) spreading
false commercial information; or (vi) infringin g intellectual property rights through internet.
On May 28, 2020, the NPC approved the Civil Code of the PRC ( 中華人民共和國民法典)
(the ‘‘Civil Code ’’), which has come into effect on Janu ary 1, 2021. Pursuant to the Civil Code,
the personal information of a natural person shall be protected by the law. Any organization or
individual that need to obtain personal informa tion of others shall obtain such information
legally and ensure the security of such informati on, and shall not illegally collect, use, process or
transmit personal information of others, or i llegally purchase, sell, provide or make public
personal information of others.
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On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate
jointly released the Interpretations of the Supreme People’s Court and the Supreme People’s
Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal
Cases Involving Infringement of Citizens’ Personal Information ( 最高人民法院、最高人民檢察
院關於辦理侵犯公民個人信息刑事案件適用法律若干問題的解釋) (the ‘‘Interpretations ’’), which
came into effect on June 1, 2017. It clarifies several concepts regarding the crime of
‘‘infringement of citizens’ personal information’’ stipulated by Article 253A of the Criminal
Law of the PRC ( 中華人民共和國刑法), including the ‘‘provision of citizens’ personal
information’’ and ‘‘illegally obtaining any citizen’s personal information by other methods’’.
In addition, the Interpretation s specify the standards for determining ‘‘serious circumstances’’
and ‘‘particularly serious circumstances’’ of this crime.
Pursuant to the National Security Law of the PRC ( 中華人民共和國國家安全法)i s s u e db y
the SCNPC on and effective from 1 July 2015, the te rm ‘‘National Security’’ is defined as ‘‘the
status of national regime, sovereignty, unity and territorial integrity, people’s well-being,
sustainable economic and social development, and other major national interests that are
relatively safe and free from any internal and e xternal threat, as well as the ability to ensure
continuous security. The state shall establish t he rules and mechanisms for national security
review and supervision, and conduct national security review of foreign investment, particular
materials and key technologies, network information technology products and services that
affect or may affect national security, construc tion projects that involve national security
matters, and other major matters and activities to effectively prevent and resolve national risks.
According to the Cybersecurity Law of the PRC ( 中華人民共和國網絡安全法)p r o m u l g a t e d
by the SCNPC on 7 November2016 and effective from 1 June 2017, those who build, operate or
provide services through networks shall take t echnical measures and other necessary measures
according to laws, administrative regulations and compulsory national standards to safeguard
the safe and stable operation of the networks, respond to network security incidents effectively,
prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of
network data.
Pursuant to the Data Security Law of the PRC ( 中華人民共和國數據安全法), which was
promulgated by the SCNPC on 10 June 2021 and came into effect on 1 September 2021, the state
shall establish a data classification and tiered protection system to implement categorized and
tiered safeguards for data. Entiti es carrying out data processing activities shall establish a sound
data security management system, organize data security education and training, and take
corresponding technical measures and other ne cessary measures to ensure data security, in
accordance with the provisi ons of laws and regulations.
On July 30, 2021, the State Council promulgated the Regulations on the Security
Protection of Critical Infor mation Infrastructure ( 關鍵信息基礎設施安全保護條例), or the CII
Regulations, which became effective on Septe mber 1, 2021. Pursuant to the CII Regulations,
critical information infrastructure refers to any important network facilities or information
systems of an important industry or field such as public communication and information
service, energy, transport, water conservation, finance, public services, e-government affairs,
science and technology industry for national de fense and other industries and sectors that may
seriously endanger national security, people’s livelihood and public interest in case of damage,
function loss or data leakage. In addition, relevant administration departments of each critical
industry and sector are responsible for formulat ing eligibility criteria and determining the
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critical information infrastructure in the resp ective industry or sector. The operators will be
informed about the final determination as t o whether they are categorized as critical
information infrastructure operators, or CII Os. Furthermore, the exact scope of CIIOs under
the current regulatory regime remains unclear , and the PRC governmental authorities may have
discretion in the interpretation and enforcement of these laws and regulations.
On August 20, 2021, the SCNPC issued the PRC Personal Information Protection Law ( 中
華人民共和國個人信息保護法) (the ‘‘PIPL ’’), which integrates the scattered rules with respect to
personal information rights and privacy protection. The PIPL aims at protecting the personal
information rights and interests, regulating the processing of personal information, ensuring the
orderly and free flow of personal information in accordance with the law, and promoting the
reasonable use of personal infor mation. Personal information, as defined in the PIPL, refers to
information related to identified or identifiab le natural persons and recorded by electronic or
other means, but excluding the anonymized information. The PIPL provides the circumstances
under which a personal information processo r could process personal information, which
include but not limited to, where the consent of the individual concerned is obtained and where
it is necessary for the conclusion or performance of a contract to which the individual is a
contractual party. It also stipulates certain spe cific rules with respect to the obligations of a
personal information processor, such as to inform the purpose and method of processing to the
individuals, and the obligation of the third par ty who has access to the personal information by
way of co-processing or delegation.
On November 14, 2021, the Cyberspace Administration of China (the ‘‘ CAC’’)
promulgated the Network Data Security Management Regulations (the ‘‘ Draft Regulations ’’)
(網絡數據安全管理條例（徵求意見稿）), which further expands the scope of the application for
security review, establishes the data classif ication and protection system, and defines the
relevant rules for cross-border data management. The Draft Regulations provide that data
processors conducting the following activities shall apply for cybersecurity review: (i) merger,
reorganization or spin-off of Internet platform operators that have acquired a large number of
data resources related to national security, economic development or public interests affects or
may affect national security; (ii) listing abro ad of data processors processing over one million
users’ personal information; (iii) activities wh ich affects or may affect national security; (iv)
other data processing activities that affect or may affect national security. As of the Latest
Practicable Date, the Draft Regulations had n ot been formally enacted or taken effect. On
September 30, 2024, the Administration Regulations on Network Data Security ( 《網絡數據安全
管理條例》) (the ‘‘Regulation on Cyber Data Security ’’) is published, which will come into effect
on January 1, 2025. The Regulation on Cyber Data Security reiterate the general regulations for
cyber data processing activities, rules of pe rsonal information protection, important data
security protection, network data cross-border tra nsfer management, and the responsibilities of
internet platform service providers.
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On December 28, 2021, the CAC, together with certain other PRC governmental
authorities, promulgated the Cyb ersecurity Review Measures ( 網絡安全審查辦法)t h a t
replaced the previous version and took eff ect from February 15, 2022. Pursuant to these
measures, the purchase of network products and servi ces by a critical information infrastructure
operator or the data processing activities of a n etwork platform operator that affect or may
affect national security will be subject to a cybe rsecurity review. The competent governmental
authorities may also initiate a c ybersecurity review against the operators if the authorities
believe that the network product or service or data processing activities of such operators affect
or may affect national security.
Furthermore, on July 7, 2022, the CAC promu lgated the Measures on Security Assessment
of Cross-border Data Transfer ( 數據出境安全評估辦法), which became effective on September
1, 2022. Such data export measures requires that any data processor which processes or exports
personal information exceeding certain volume threshold under such measures shall apply for
security assessment by the CAC before transfe rring any personal information abroad. The
security assessment requirement also applies to a ny transfer of important data outside of China.
Furthermore, on August 31, 2022, the CAC promulgated the Guidelines for filing the Outbound
Data Transfer Security Assessment (Version 1) ( 數據出境安全評估申報指南（第一版）), which
provides that acts of outbound data transfer include (i) overseas transmission and storage by
data processors of data generated during Chine se Mainland domestic operations; (ii) the access
to, use, download or export of the data collected and generated by data pr ocessors and stored in
Chinese Mainland by overseas institutions, organ izations or individuals; and (iii) other acts as
specified by the CAC.
On December 13, 2022, the MIIT issued the Admi nistrative Measures for Data Security in
the Industrial and Information Technology Field (Trial Implementation) ( 工業和信息化領域數
據安全管理辦法（試行）) (the ‘‘ MIIT Data Security Measures ’’), which came into effect on
January 1, 2023. The MIIT Data Security Measur es is applicable to the processing activities
carried out in the territory of the PRC of data in the field of industry and information
technology, which include, among other things, the data collected and generated in the course of
research, development and design, production and manufacturing, operation and management,
operating and maintenance and platform operation in the field of industry. Our processing
activities in the PRC of such data, for example, the data collected and generated during our
research and development, design and manufacturing of our products therefore shall comply
with the MIIT Data Security Measures. The M IIT Data Security Measures provides that
industrial and telecommunication data processors shall implement data classification and
grading, and further imposes data security obligations and responsibilities on data processors in
the field of industry and information technology, which include, among others, taking
protective measures based on the corresponding grading of data, establishing management
system covering the whole data lifecycle, and staffing data security management personnel as
needed to be in charge of the security supervision and management of data processing activities
as a whole and assisting with the industrial adm inistrative authorities in carrying out the
relevant work.
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On March 22, 2024, the CAC issued Provisions on Facilitating and Regulating
Cross-border Data Flows ( 促進和規範數據跨境流動規定). In accordance with these
provisions, data handlers who provide d ata abroad, and meet any of the following
conditions, are required to declare the security assessment of cross-border data transfer to
the national cyberspace administration authority through the provincial-level cyberspace
administration authority where the data han dlers are located: (i) c ritical information
infrastructure operators providing personal i nformation or important data abroad; (ii) data
handlers other than critical information infr astructure operator providing important data
abroad or cumulatively providing abroad persona l information (without any sensitive personal
information) of more than one million individuals, or sensitive personal information of more
than 10,000 individuals since January 1 of the current year.
In order to guide and assist data processors in submitting data export security assessments
in a standardized and orderly manner, the CA C prepared the Guidelines for Data Export
Security Assessment Application (Version 2.0) ( 數據出境安全評估申報指南（第二版）)i nM a r c h
2024, which provide specific requirements for the method, process, and materials required for
submitting a data export security assessment application and simplify the materials required to
be submitted by the data processors.
On December 8, 2022, the MIIT promulgated the Notice on Promulgation of the
Administrative Measures on Data Security in the Field of Industry and Information Technology
(for Trial Implementation) ( 工業和信息化部關於印發《工業和信息化領域數據安全管理辦法（試
行）》的通知). Pursuant to the foregoing notice, the data handlers in the field of industry and
information technology shall reg ularly sort out data, identify important data and core data in
accordance with the relevant standards and speci fications, and form the specific catalogs for
their respective entities.
LAWS AND REGULATIONS ON ENVIRONMENTAL PROTECTION
According to the Environmental Protection Law of the People’s Republic of China (
中華人
民共和國環境保護法) (the ‘‘ Environmental Protection Law ’’) promulgated by the SCNPC on
December 26, 1989, and last amended on April 24, 2014 and came into effect on January 1, 2015,
any entity that discharges or will discharge pollutants in the course of operation or other
activities must implement effective environme ntal protection measures to control and properly
handle hazardous substances such as waste gas, w aste water, waste residues, dust, malodorous
gases, radioactive substances, noise, vibration and electromagnetic radi ation generated in the
course of such activities. The State implements a pollutant discharge permit management system
in accordance with the law.
LAWS AND REGULATIONS RELATING TO INTELLECTUAL PROPERTY RIGHTS
Patents
Pursuant to the Patent Law of the PRC (the ‘‘ Patent Law ’’) promulgated by the SCNPC on
12 March 1984, last revised on 17 October 2020 and effective from 1 June 2021, and the
Implementation Rules of the Patent Law of the PRC promulgated by the State Council on 15
June 2001, last revised on 11 December 2023 and effective from 20 January 2024, there are three
types of patents, namely invention, utility mode l and design. Invention patents are valid for 20
years, while utility model patents are valid for 1 0 years and design patents are valid for 15 years,
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all starting from the date of application. After the granting of a patent for an invention or utility
model, unless otherwise provided for in the Patent Law, no entity or individual may exploit the
patent without the permission of the patentee; a fter the granting of a design patent, no entity or
individual shall, without permission of the patentee, exploit the patent, that is, they shall not
make, promise to sell, sell, or import the product incorporating its or his patented design, for
production and business purposes.
Trademarks
Pursuant to the Trademark Law of the PRC ( 中華人民共和國商標法)p r o m u l g a t e db yt h e
SCNPC on 23 August 1982, last revised on 23 April 2019 and effective on 1 November 2019, and
the Regulation on the Implementation of the Trademark Law of the PRC ( 中華人民共和國商標
法實施條例) promulgated by the State Council on 3 August 2002, last revised on 29 April 2014
and effective on 1 May 2014, trademarks approved and registered by the Trademark Office are
registered trademarks, and the trademark registrant shall have the exclusive right to use the
trademark, which is protected by law. The validit y period of a registered trademark is 10 years,
counting from the date of approval of registration.
The Trademark Office of China National Intellectual Property Administration is
responsible for trademark registration and administration in China. The period of validity of
a registered trademark shall be ten years. If a reg istrant needs to continue to use the registered
trademark after the period of validity, an applic ation for renewal of registration shall be made
every ten years. Application for renewal of reg istration shall be submitted within 12 months
prior to the expiry date. The first to file principle is adopted in the registration of trademarks in
China. Where trademark for which a registration application has been made is identical or
similar to another trademark which has already been registered or been subject to a preliminary
examination and approval for use on the same k ind of or similar commodities or services, the
application for registration of such trademark may be rejected. Applying for registration of a
trademark shall not prejudice the existing right first obtained by others, nor could any person
register in advance a trademark that has already been used by another party and has already
gained a sufficient degree of reputation through such party’s use. Using a trademark identical or
similar to the registered trademark on the same or similar commodities without the permission
of the trademark registrant constitutes an infringement on the exclusive right to use a registered
trademark. The infringer shall, in accordance with the regulations, undertake to cease the
infringement, take remedial measu res, and compensate for losses.
Copyrights
According to the Copyright Law of the PRC ( 中華人民共和國著作權法)p r o m u l g a t e db y
the SCNPC on 7 September 1990, last revised on 11 November 2020 and effective on 1 June
2021, and the Implementation Regulations of the Copyright Law of the PRC ( 中華人民共和國著
作權法實施條例) promulgated by the State Council on 2 August 2002, last revised on 30 January
2013 and effective on 1 March 2013, works of PRC citizens, legal persons or unincorporated
organizations, whether published or not, shall enjoy copyright in accordance with law. Works
refer to intellectual achievements in the field of l iterature, art and science that are original and
can be expressed in a certain form. A copyright holder shall enjoy a number of personal and
property rights, including the right of publication, the right of authorship and the right of
amendment.
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According to the Regulations on the Protection of Computer Software ( 計算機軟件保護條
例) promulgated by the State Council on 20 Decem ber 2001, last revised on 30 January 2013 and
effective on 1 March 2013, and the Measures for the Registration of Computer Software
Copyright ( 計算機軟件著作權登記辦法) promulgated by the National Copyright
Administration of the PRC on 20 February 2002, computer software refers to computer
programs and their associated documentation. Chinese citizens, legal persons or other units
shall enjoy the copyright for software they develop, regardless of whether it has been published.
Software copyright arises from the date of completion of software development. The protection
period of the software copyright of legal persons or other units shall be 50 years, ending on 31
December of the fiftieth year after the first pub lication of the software. Software which has not
been published for 50 years since the date of completion of software development shall not be
under protection.
The Regulation on the Protection of the Right to Communicate Works to the Public over
Information Networks ( 信息網絡傳播權保護條例), which was last amended on January 30, 2013
and became effective on March 1, 2013, provides sp ecific rules on fair use, statutory license, and
a safe harbor for use of copyrights and copyright management technology and specifies the
liabilities of various entities for violations, including copyright holders, libraries and Internet
service providers.
Design of Integrated Circuit Layouts
Pursuant to the Regulations on the Protectio n of Layout-Designs of In tegrated Circuits ( 集
成電路佈圖設計保護條例) (the ‘‘Regulations on the Protection ’’) issued by the State Council on 2
April 2001, and effective from 1 October 200 1, natural persons, legal persons or other
organizations in China who create layout-designs shall have exclusive rights to their designs in
accordance with the Regulations on the Protect ion. The exclusive righ ts to the layout design
arise upon registration with the intellectual property administration department of the State
Council, and layout designs that have not been registered are not protected by the Regulations
on the Protection. The protectio np e r i o df o rt h ee x c l u s i v er i g h t so fal a y o u td e s i g ni s1 0y e a r s ,
starting from the date of application for registr ation of the design or from the date of putting it
into commercial exploitation so mewhere in the world for the fir st time, whichever is earlier.
However, whether or not the design is registered or commercially used, it is no longer protected
by the Regulations on the Protection 15 years after the date of completion of the design.
Domain Names
According to the Measures for the Admi nistration of Internet Domain Names ( 互聯網域名
管理辦法) promulgated by the MIIT on 24 August 2017, which came into effect on 1 November
2017, and China ccTLD Dispute Resolution Policy (
國家頂級域名爭議解決辦法), promulgated
on June 18, 2019 and came into effect on the same date, the MIIT is responsible for the
supervision and management of China’s domain name services, and the establishment of domain
name root servers and domain name root server operation institutions, domain name
registration management institutions and domain name registration service institutions within
the territory of the PRC shall obtain permi ssion from the MIIT or the communications
administration department of the province, autonomous region or municipality directly under
the central government. Dom a i nn a m ed i s p u t e ss h a l lb es u b m i t t e dt oa no r g a n i z a t i o n
authorized by China Internet Network Information Center for resolution. No organization or
individual shall impede the safe and stable oper ation of the Internet domain name system. The
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Notice of the Ministry of Industry and Information Technology on Regulating the Use of
Domain Names in Internet Information Services ( 工業和信息化部關於規範互聯網信息服務使用
域名的通知), which was promulgated by the MIIT on November 27, 2017 and came into effect
on January 1, 2018, stipulates the obligations of Internet information service providers and
other entities to combat terrorism and maintain network security.
Trade Secret
According to the PRC Anti-Unfair Competition Law ( 中華人民共和國反不正當競爭法),
promulgated by the SCNPC in September 1993, as amended on November 4, 2017 and April 23,
2019 respectively, the term ‘‘trade secrets’’ ref ers to technical and business information that is
unknown to the public, has utility, may create busin ess interests or profits for its legal owners or
holders, and is maintained as a secret by its legal owners or holders. Under the PRC Anti-Unfair
Competition Law, business persons are prohibite df r o mi n f r i n g i n go t h e rs’ trade secrets by: (i)
obtaining the trade secrets from the legal owners or holders by any unfair methods such as theft,
bribery, fraud, coercion, electronic intrusion, or any other illicit means; (ii) disclosing, using or
permitting others to use the trade secrets obtained illegally under item above; (iii) disclosing,
using or permitting others to use the trade secrets, in violation of any contractual agreements or
any requirements of the legal owners or holders to keep such trade secrets in confidence; or (iv)
instigate, induce or assist others to violate confidentiality obligation or to violate a rights
holder’s requirements on keeping confidentiali ty of commercial secrets, so as to disclose, use or
allow others to use the commercial secrets of the rights holder. If a third party knows or should
have known of the above-mentioned illegal conduct but nevertheless obtains, uses or discloses
trade secrets of others, the third party may b e deemed to have committed a misappropriation of
the others’ trade secrets. The parties whose trade secrets are being misappropriated may petition
for administrative corrections, and regulatory au thorities may stop any illegal activities and fine
infringing parties.
LAWS AND REGULATIONS RELATING TO HOUSE LEASING
Pursuant to the Law on Administrati on of Urban Real Estate of the PRC ( 中華人民共和國
房地產管理法), which was promulgated by the SCNPC on 5 July 1994, was last revised on 26
August 2019 and came into effect on 1 January 2020, in case of house leasing, the lessor and
lessee are required to enter into a written lease contract, containing such provisions as the
leasing term, usage, rental and repair liabiliti es, as well as other rights and obligations of both
parties, and go through registration and filing procedures with the real estate administration
department.
In addition, according to the Administrative Measures for Commodity House Leasing ( 商
品房屋租賃管理辦法), which was promulgated by the Ministry of Housing and Urban-Rural
Development of the PRC on 1 December 2010 and came into effect on 1 February 2011, within
30 days after the conclusion of the house leasin g contract, the parties involved in the house
leasing shall carry out house leasing regist ration with the construction (real estate)
administrative department of the people’s government of a municipality directly under the
central government of the PRC, city or county where the house leased is located. If individuals
or entities are in violation of the above provisions, they may be ordered to make corrections
within a specified time limit b y the competent construction (real estate) department of the
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people’s government of a municipality directly under the central government, city or county. If
any individual fails to do so, a fine of less than RMB1,000 will be imposed, while if any entity
fails to do so, a fine of more than RMB1,000 but less than RMB10,000 will be imposed.
According to the Interpretation of the Supreme People’s Court on Several Issues
concerning the Application of Law in the Trial of Cases about Disputes Over Lease
Contracts on Urban Buildings (2020 revision) ( 最高人民法院關於審理城鎮房屋租賃合同糾紛案
件具體應用法律若干問題的解釋（2020 修正）), which took effect on January 1, 2021, if the
ownership of the leased premis es changes during lessee’s possession in accordance with the
terms of the lease contract, and the lessee requests the assignee to continue to perform the
original lease contract, the PRC court shall support it, except that the mortgage right has been
established before the lease of the leased premises and the ownership changes due to the
mortgagee’s realization of the mortgage right.
LAWS AND REGULATIONS RELATING TO PRODUCT QUALITY
Pursuant to the Product Quality Law of the PRC ( 中華人民共和國產品質量法)
promulgated by the SCNPC on 22 February 19 93 and last revised on 29 December 2018,
producers and sellers shall establish a sound inter nal product quality control system and strictly
adhere to a job responsibility system in relation to quality standards and quality liabilities
together with implementing corresponding examination and inspection measures. The
counterfeiting or imitation of quality marks suc h as certification mark s, falsifying the place
of origin of products, and falsifying or imitat ing the name or address of another factory or
adulteration of, or mixing of improper elements with products, passing off the sham as the
genuine or passing off the inferior as the superior is prohibited.
LAWS AND REGULATIONS RELATING TO IMPORT AND EXPORT TRADE
According to the Customs Law of the PRC ( 中華人民共和國海關法), which was
promulgated by the SCNPC on 22 January 198 7 and last revised on 29 April 2021, unless
otherwise stipulated, the declaration of import and export goods and the payment of customs
duties may be handled by the consignees or consignors of imported or exported goods or
entrusted customs declaration enterprises. T he consignee or the consignor of imported or
exported goods and the customs declaration enter prise shall go through customs declaration
and filing procedures at the relevant customs in accordance with the law.
According to the Foreign Trade Law of the PRC ( 中
華人民共和國對外貿易法)
promulgated by the SCNPC on 12 May 1994 and l ast revised on 30 December 2022, and the
Regulation of the People’s Republic of China on the Administration of the Import and Export
of Goods ( 中華人民共和國貨物進出口管理條例) promulgated by the State Council on 10
December 2001, last revised on 10 March 2024 and became effective on 1 May 2024, unless it is
clearly provided in laws or administrative regul ations to forbid or restrict the import or export
of goods, no entity or individual may establish or maintain prohibitive or restrictive measures
o v e rt h ei m p o r to re x p o r to fg o o d s .
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In accordance with the Export Control Law of the People’s Republic of China ( 中華人民共
和國出口管制法), promulgated by the Standing Committee of the National People’s Congress
on 17 October 2020, and which came into effect on 1 December 2020, China controls the export
of dual-use items, military goods, nuclear and other goods, technologies, services and other
items that are relevant to safeguarding the sec urity and interests of China and fulfilling its
international obligations in the area of non-pro liferation. In accordan ce with the provisions of
the Export Control Law and relevant laws and ad ministrative regulations, and in accordance
with export control policies, export control authorities, in conjunction with the relevant
departments and in accordance with prescribed procedures, formulate and adjust the export
control lists of controlled items, and make them public in a timely manner. In accordance with
the need to safeguard national security and interests and to fulfil international obligations such
as non-proliferation, and with the approval of the State Council, or with the approval of the
State Council or the Central Military Commissi on, the export control authorities may impose
temporary controls on goods, technologies and s ervices not included in the export control lists,
and make public ann ouncements thereof.
On July 3, 2023, the MOFCOM and the General Administration of Customs issued the
Announcement of the MOFCOM and the General Administration of Customs on Export
Control of Gallium and Germanium-Related Items (Announcement No. 23 [2023] of the
MOFCOM and the General Administration of Customs ( 商務部、海關總署關於對鎵、鍺相關物
項實施出口管制的公告)) (the ‘‘Announcement No. 23 ’’), which became effective on August 1,
2023. The Announcement No. 23 lists certain gallium and germanium-related items which are
subject to export control, and provides certain characteristics and reference HS Codes for such
items. Pursuant to the Announcement No.23, an export business operator shall, for the export
of such controlled items, apply to the MOFCOM through the competent provincial commerce
department for an export licence of dual-use items and technologies and complete the customs
formalities in accordance with the Customs Law, with such an export licence presented to the
customs office.
On December 1, 2024, the Regulations of th e PRC on the Export Control of Dual-use
Items ( 中華人民共和國兩用物項出口管制條例) (the ‘‘ Regulation on the Export Control of
Dual-use Items ’’) issued by the State Council came into effect. The Export Control List of
Dual-use Items of the PRC ( 中華人民共和國兩用物
項出口管制清單) (the ‘‘Dual-use Item List ’’)
jointly announced by the MOFCOM, the MIIT, th e General Administration of Customs and the
State Cryptography Administration (by MOFCOM Announcement 2024 No. 51) came into
effect on the same date, with the Announcement No. 23 abolished at the same time. According
to the Regulation on the Export Control of Dual-use Items, the commerce department of the
State Council shall, pursuant to the provisions of the Export Control Law and the Regulation
on the Export Control of Dual-use Items, as well as the policies for the export control of
dual-use items, formulate and adjust the expor t control list of dual-use items, together with
other related departments under the prescribed procedures, and promptly release the same. If
needed for maintaining national security and interest and fulfilling international obligations
such as nonproliferation, with the approval of the State Council or both the State Council and
the Central Military Commissio n, the commerce department of the State Council may impose
temporary control over the export of goods, technologies, and services not included in such
export control list of dual-use items, and make announcements thereof. For the export of
dual-use items specified in such export cont rol list of dual-use items or subject to the
abovementioned temporary control, exporters shall apply to the commerce department of the
State Council for licenses. The formulating of the abovementioned Dual-use Item List
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announced by MOFCOM Announcement 2024 No. 51, was to systematically integrate the
dual-use items that were already under control and establish a complete system and rules for the
list, without adjustment to the specific control scope.
On December 3, 2024, the MOFCOM issued the Announcement on Strengthening Export
Control of Relevant dual-use Items to the United States ( 關於加強相關兩用物項對美國出口管制
的公告) (the ‘‘Announcement No. 46 ’’), which became effective on the same date. Announcement
No. 46 strengthens the control over export in relation to the U.S. of dual-use items and provides
that, among others, the export of dual-use items relevant to gallium, germanium, antimony, and
ultra-hard materials to the United States in principle will not be licensed. Any organization or
individual of any country or region which transfers or provides dual-use items originating from
the PRC to any U.S. organization or individual in violation of the rules under Announcement
No. 46 will be held legally accountable in accordance with relevant laws.
Pursuant to the Administrative Provisions of the PRC on the Filing of Customs
Declaration Entities ( 中華人民共和國海關報關單位備案管理規定) promulgated by the General
Administration of Customs on 19 November 2021 and became effective on 1 January 2022,
consignees, consignors or customs declaratio n enterprises of imported or exported goods only
need to file with the Customs, and no longer need to register with the Gen eral Administration of
Customs. The filing information will be publicized through the credit publicity platform of
import and export business of Customs of the PRC.
According to the Foreign Trade Law of the PRC ( 中華人民共和國對外貿易法)
promulgated by the SCNPC on 12 May 1994 and last revised on 30 December 2022, the
requirement that foreign trade operators engaging in the import and export of goods or
technology must register with the competent department for foreign trade of the State Council
or its authorized agencies is cancelled.
LAWS AND REGULATIONS RELATING TO LABOR AND SOCIAL INSURANCE
Labor Law and Labor Contract Law
Pursuant to the Labor Law of the PRC ( 中華人民共和國勞動法) last revised by the SCNPC
on 29 December 2018, the Labor Contract Law of the PRC ( 中華人民共和國勞動合同
法)l a s t
revised by the SCNPC on 28 December 2012 and came into effect on 1 July 2013, and the
Implementation Regulations for the Labor Contract Law of the PRC ( 中華人民共和國勞動合同
法實施條例) (promulgated and became effective on Sep tember 18, 2008), a labor contract shall
be concluded when a labor relationship is established. Employers shall establish and improve
labor rules and systems in acco rdance with the law to safeguard employees’ labor rights and
fulfillment of labor obligations. A labor contract shall include the following clauses: term of
labor contract; working hours and rest periods an d off days; labor remuneration; social security;
labor protection, working conditions and occupational hazard prevention and protection; and
any other matters to be included in a labor contract as stipulated by the laws and regulations.
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Social Insurance and Housing Provident Fund
In accordance with the Social Insurance Law of the PRC ( 中華人民共和國社會保險法)l a s t
revised and put into effect by the SCNPC on 29 D ecember 2018, the Provisional Regulations on
Collection and Payment of Social Insurance Premiums ( 社會保險費徵繳暫行條例) last revised
and put into effect by the State Council on 24 March 2019, social insurance system has been
established for basic pension insurance, basic med ical insurance, work-rel ated injury insurance,
unemployment insurance and maternity insurance. Enterprises shall register social insurance
with local social insurance agency and participa te in social insurance. En terprises and employees
shall pay their social insurance premiums in full and in a timely manner.
In accordance with the Regulations on the Administration of Housing Provident Funds ( 住
房公積金管理條例) which was last revised and put into effect by the State Council on 24 March
2019, enterprises shall register at the housing provident fund management center to pay housing
provident funds and open housing provident fund accounts for their employees. Enterprises are
required to pay housing provident funds on behalf of their employees in full and in a timely
manner.
In addition, under the PRC Social Insurance Law ( 中華人民共和國社會保險法), the
Collection and Payment of So cial Insurance Premiums ( 社會保險費徵繳暫行條例), the
Unemployment Insurance Regulations ( 失業保險條例) effective in 1999, the Regulations on
Work-related Injury Insurance ( 工傷保險條例) (last amended on December 20, 2010 and became
effective on January 1, 2011), and the Regulations on the Administration of Housing Funds ( 住
房公積
金管理條例), the state shall establish social s ecurity systems such as basic pension
insurance, basic medical insurance, work injury insurance, unemployment insurance, family
planning insurance, and more, to protect the rights of citizens for obtaining material assistance
from the state and the society pursuant to the law in the circumstances of old age, illness, work
injury, unemployment, family planning, and more. Chinese employers shall register with local
social insurance agencies and register with applicable housing fund management centers and
establish a special housing fund account in an entrusted bank. Employers that do not open the
social insurance account may be ordered by the so cial security administrative authorities to
make correction within a stipulated period; where correction is not made within the stipulated
period, employers may be subject to a fine ranging from one to three times the amount of the
social security premiums payable, and the direct liable administrative staff of such employers
may by subject to a fine ranging from RMB500 to RMB3,000. Employers that do not register
the housing fund may be ordered by the housing fund management center to complete the
housing fund payment registration within a prescribed time limit, failing to do so may cause
such employers to be subjected to a f ine from RMB10,000 to RMB50,000.
LAWS AND REGULATIONS ON STOCK INCENTIVE PLANS
In February 2012, the State Administration of Foreign Exchange (the ‘‘ SAFE ’’)
promulgated the Notice on Foreign Exchange Admi nistration of PRC Residents Participating
in Stock Incentive Plans of Offshore Listed Companies ( 國家外匯管理局關於境內個人參與境外
上市公司股權激勵計劃外匯管理有關問題的通知), replacing the previous rules issued by the
SAFE in March 2007. Under this notice and other relevant rules, PRC residents who participate
in a stock incentive plan in an overseas listed c ompany are required to register with the SAFE or
its local branches and complete certain othe r procedures, subject to certain exceptions.
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Participants of a stock incentive plan who are PRC residents must retain a qualified PRC
agent, which could be a PRC subsidiary of the ove rseas listed company or another qualified
entity selected by the PRC subsidiary, to conduct the SAFE registration and other procedures
with respect to the stock incentive plan on behalf of its participants. The participants must also
retain an overseas entrusted institution to ha ndle matters in connection with their exercise of
stock options, the purchase and sale of corresponding stocks or interests, and fund transfers. In
addition, the PRC agent is required to amend t he SAFE registration with respect to the stock
incentive plan if there is any material change to the stock incentive plan, the PRC agent, or the
overseas entrusted institution or other material changes. The PRC agents must, on behalf of the
PRC residents who have the right to exercise the employee share options, apply to the SAFE or
its local branches for an annual quota for the payment of foreign currencies in connection with
the PRC residents’ exercise of the employee share options. The foreign exchange proceeds
received by the PRC residents from the sale of sha res under the stock incentive plans granted
and dividends distributed by the overseas listed companies must be remitted into the bank
accounts in China opened by the PRC agent befo re distribution to such PRC residents. In
addition, the SAFE Circular 37 provides that PR C residents who participate in a stock incentive
plan of an overseas unlisted special purpose company may register with the SAFE or its local
branches before exercising rights.
LAWS AND REGULATIONS RELATING TO TAXATION
Enterprise Income Tax (‘‘EIT’’)
Pursuant to the Enterprise Income Tax Law of the PRC ( 中華人民共和國企業所得稅法)
promulgated by the SCNPC and last revised and took effect on 29 December 2018, and the
Regulations on the Implementation of the Enterprise Income Tax Law of the PRC ( 中華人民共
和國企業所得稅法實施條例) promulgated by the State Council on 6 December 2024 and revised
and took effect on 20 January 2025, a uniform enterprise income tax rate of 25% is imposed to
both foreign invested enterprises and domestic enterprises, but tax incentives are granted to
special industries and projects. A non-resident enterprise that does not have an establishment or
place of business in the PRC, or it has an establishment or place of business in the PRC but the
income has no actual connection with such establishment or place of business, shall pay EIT on
its income derived from the PRC at an enterprise income tax rate of 10%. The enterprise income
tax rate is reduced by 20% for qualifying small low-profit enterprises. The Chinese government
provides key support to high-tech enterprises, which are subject to a reduced enterprise income
tax rate of 15%.
Value-added Tax (‘‘VAT’’)
Pursuant to the Provisional Regula tions of the PRC on Value-Added Tax ( 中華人民共和國
增值稅暫行條例), which was promulgated by the State Council, and last revised and became
effective on 19 November 2017, and the Rules for the Implementation of the Provisional
Regulations of the PRC 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 MOF, and last revised on 28 October 2011 and effective on 1 November
2011, all entities and individuals that engage in the sale of goods, the provision of processing,
repair and replacement services, and the importation of goods within the territory of the PRC
are taxpayers of VAT, and shall pay VAT. Unless stated otherwise, for payers who sell or
import goods, and provide processing, repairs and replacement services in the PRC, the tax rate
shall be 17%, and be, in certain specified circumstances, 11%, 6% and 0%.
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According to the Notice of the MOF and the STA on the Adjustment to VAT Rates ( 財政
部、稅務總局關於調整增值稅稅率的通知) which was promulgated on 4 April 2018 and came
into effect on 1 May 2018, the original rates of 17% and 11% applicable to the taxpayers who
have VAT taxable sales activities or imported g oods are adjusted to 16% and 10%, respectively.
According to the Announcement on Policies for Deepening the VAT Reform ( 關於深化增
值稅改革有關政策的公告), which was promulgated by the MOF, the STA and the General
Administration of Customs on 20 March 2019 and b ecame effective on 1 April 2019, the original
rates of 16% or 10% applicable to the general VAT payers’ sales activities or imports goods that
are subject to VAT are adjusted to 13% or 9%, respectively.
On 25 December 2024, the SCNPC promulgated the Value-added Tax Law of the PRC
(‘‘VAT Law ’’), which will come into effect on 1 January 2026, and the Provisional Regulations of
the PRC on Value-Added Tax will be repealed concurrently. Pursuant to the VAT Law, entities
and individuals (including individual industrial and commercial proprietors) selling goods,
services, intangible assets, real estate and imp orting goods within the territory of the PRC are
taxpayers of VAT and shall pay VAT in accordance with the provisions of the law. Unless stated
otherwise, for payers who sell goods, and provide processing, repairs and replacement services
and rental services of tangible movable assets a s well as import goods, the tax rate shall be 13%,
and be, in certain specified circumstances, 9%, 6% and 0%.
Taxation on dividends
Pursuant to the Individual Income Tax Law of the PRC ( 中華人民共和國個人所得稅法),
w h i c hw a sl a s ta m e n d e do nA u g u s t3 1 ,2 0 1 8b yt h eS C N P Ca n dc a m ei n t oe f f e c to nJ a n u a r y1 ,
2019, and the Regulations on Implementation of the Individual Income Tax Law of the PRC ( 中
華人民共和國個人所得稅法實施條例), which were last amended on December 18, 2018 by the
State Council and came into effect on January 1, 2019, dividends paid by PRC enterprises are
subject to an individual income tax levied at a flat rate of 20%. For a foreign individual who is
not a resident of the PRC, the receipt of divide nds from an enterprise in the PRC is normally
subject to an individual income tax of 20% unless specifically exempted by the tax authority of
the State Council or reduced by an applicable ta x treaty. In accordance with the Circular on
Certain Issues Concerning the Policies of Individual Income Tax (Cai Shui Zi [1994] No. 020)
(關於個人所得稅若干政策問題的通知（財稅字[1994]020 號）)p r o m u l g a t e db yM O Fa n dt h eS T A
on May 13, 1994 and effective from the same day, overseas individuals are, as an interim
measure, exempted from the i ndividual income tax for divi dends or bonuses received from
foreign-invested enterprises. According to the Notice of the State Council on Approving and
Relaying the Several Opinions of the NDRC and Other Departments on Deepening Reform of
the Income Distribution System ( 國務院批轉發展改革委等部門關於深化收入分配制度改革若干
意見的通知) issued by the State Council on February 3, 2013, overseas individuals are no longer
exempted from the individual income ta x for dividends or bonuses received from
foreign-invested enterprises, which is, however, not specified in the subsequent Individual
Income Tax Law of the PRC and relevant tax regulations.
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According to the Enterprise Income Tax Law of the PRC ( 中華人民共和國企業所得稅法)
(the ‘‘EIT Law ’’), which was issued on March 16, 2007 and latest amended by the SCNPC and
implemented on December 29, 2018, and the Implementation Rule for the Enterprise Income
Tax Law of the PRC ( 中華人民共和國企業所得稅法實施條例) enacted on December 6, 2007 by
the State Council and became effective on Jan uary 1, 2008, and last amended on December 6,
2024, a non-resident enterprise is general ly subject to a 10% enterprise income tax on
PRC-sourced income (including dividends receive d from a PRC resident enterprise that issues
shares in Hong Kong (China)), if such non-resident enterprise does not have an establishment or
premise in the PRC or has an establishment or p remise in the PRC but its PRC-sourced income
has no real connection with such establishment or premise. The aforesaid income tax payable
for non-resident enterprises is deducted at source, where the payer of the income is required to
withhold the income tax from the amount to be paid to the non-resident enterprise on each
payment or when it is payable on due date. The withholding tax may be reduced pursuant to
applicable treaties or agreements on avoidance of double taxation.
The Notice on the Issues Concerning With holding the Enterprise Income Tax on the
Dividends Paid by Chinese Resident Enterprises to H-Share Holders Which Are Overseas
Non-resident Enterprises ( Guo Shui Han [2008] No. 897) ( 關於中國居民企業向境外H股非居民
企業股東派發股息代扣代繳企業所得稅有關問題的通知（國稅函[2008]897 號
）)), which was issued
and implemented by the STA on November 6, 200 8, further clarifies that a PRC-resident
enterprise must withhold enterprise income tax at a rate of 10% on the dividends of 2008 and
onwards that it distributes to overseas non-res ident enterprise share holders of H Shares. In
addition, the Response to Questions on Levying Enterprise Income Tax on Dividends Derived
by Non-resident Enterprise from Holding Stock such as B Shares (Guo Shui Han [2009] No. 394)
(關於非居民企業取得B股等股票股息徵收企業所得稅問題的批覆（國稅函[2009]394 號）), which
was issued by the STA and came into effect on July 24, 2009, further provides that any
PRC-resident enterprise whose shares are listed on overseas stock exchanges must withhold and
remit enterprise income tax at a rate of 1 0% on dividends of 2008 and onwards that it
distributes to non-resident enterprises. Suc h tax rates may be further modified pursuant to the
tax treaty or agreement that the PRC has enter ed into with a relevant j urisdiction, where
applicable.
Pursuant to an Arrangement Between the Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
E v a s i o nw i t hR e s p e c tt oT a x e so nI n c o m e s(內地和香港特別行政區關於對所得避免雙重徵稅和
防止偷漏稅的安排) (the ‘‘Double Tax Avoidance Arrangement ’’), and other applicable PRC laws,
if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have
satisfied the relevant conditions and requirements under such Double Tax Avoidance
Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong
Kong resident enterprise receives from a PR C resident enterprise may be reduced to 5%.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend
Provisions in Tax Treaties ( 國家稅務總局
關於執行稅收協定股息條款有關問題的通知), or STA
Circular 81, issued on February 20, 2009 by th e STA, if the relevant PRC tax authorities
determine, in their discretions, that a compan y benefits from such reduced income tax rate due
to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust
the preferential tax treatment. According to t he Circular on Several Questions regarding the
‘‘Beneficial Owner’’ in Tax Treaties ( 國家稅務總局關於稅收協定中‘‘受益所有人’’有關問題的公
告), which was issued on February 3, 2018 by the STA and effective on April 1, 2018, when
determining the applicant’s status of the ‘‘beneficial owner’’ regarding tax treatments in
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connection with dividends, interests or royalti es in the tax treaties, several factors apply,
including without limitation: (i) whether the applicant is obligated to pay more than 50% of his
or her income in twelve months to residents in third country or region, (ii) whether the business
operated by the applicant constitutes the actual business activities, and (iii) whether the
counterparty country or region to the tax trea ties levies any tax or grant tax exemption on
relevant incomes or levies tax at an extremely low rate, will be taken into account, and it will be
analyzed according to the actual circumstances of the specific cases. T h i sc i r c u l a rf u r t h e r
provides that relevant information proving the sta tus of ‘‘beneficial owner’’ shall be retained in
the case of entitlement to dividends, interest and treaty benefits of royalty clause according to
the Administrative Measures for Entitlement to Treaty Benefits for Non-resident Taxpayers ( 國
家稅務總局關於發佈《非居民納稅人享受協定待遇管理辦法》的公告), which was promulgated by
the STA on October 14, 2019 and became effective on January 1, 2020.
LAWS AND REGULATIONS RELATING TO FOREIGN CURRENCY EXCHANGE
The legal currency of the PRC is Renminbi, whi ch is currently subject to foreign exchange
regulation and cannot be freely converted into foreign currency. The SAFE, with the
authorization of the People’s Bank of China (the ‘‘ PBOC ’’), is empowered with the functions
of administering all matters relating to foreign exchange, including the enforcement of foreign
exchange regulations.
The Foreign Exchange Control Regulations of the PRC ( 中華人民共和國外匯管理條例)
last revised by the State Council on August 5, 2008, are applicable to all activities related to the
foreign exchange receipts and disbursements a nd transactions of domestic corporations and
individuals and to the said activities of overseas corporations and individuals within the
territory of the PRC.
On June 20, 1996, the PBOC promulgated the Regulations for the Administration of
Settlement, Sale and Payment of Forei gn Exchange (Yin Fa [1996] No. 210) ( 結匯、售匯及付匯
管理規定), which abolished the then-remaining restrictions on convertibility of foreign exchange
under current items, while retaining the existing restrictions on foreign exchange transactions
under capital items.
According to the Announcement on Improving the Reform of the Renminbi (the PBOC
Announcement [2005] No. 16) ( 中國人民銀行關於完
善人民幣匯率形成機制改革的公告), issued
by the PBOC on July 21, 2005 and became effective on the same date, the PRC began to
implement a managed floating exchange rate system in which the exchange rate would be
determined based on market supply and demand and adjusted with reference to a basket of
currencies. As a result, the Renminbi exchange rate was no longer pegged to the U.S. dollar. The
PBOC would publish the closing price of the exchange rate of the Renminbi against trading
currencies such as the U.S. dollar in the interbank foreign exchange market after the closing of
the market on each working day, as the central parity of the currency against Renminbi
transactions on the following days.
According to the relevant laws and regulati ons in the PRC, PRC enterprises which need
foreign exchange for current item transacti ons may, without the approval of the foreign
exchange administrative authorities, effect payment through foreign exchange accounts opened
at designated banks that carry foreign exchang e business, on the strength of valid receipts and
proof. Foreign investment enterprises which need foreign exchange for the distribution of
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profits to their shareholders and PRC enterprises which, in accordance with regulations, are
required to pay dividends to their shareholders in foreign exchange may, after paying taxes in
according to the law, on the strength of resolut ions of the board of directors or resolutions of
shareholders on the distribution of profits, e ffect payment from foreign exchange accounts
opened at designated banks that carry foreig n exchange business, or effect exchange and
payment at designated banks.
According to the Circular of the SAFE on Issues concerning the Administration of Foreign
Exchange Involved in 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)
announced by the SAFE on December 26, 2014, the SAFE and its branch offices and
administrative offices shall oversee, regulate and inspect domestic companies regarding their
business registration, opening and use of accounts, trans-border payments and receipts,
exchange of funds and other conduct involved in overseas listing. Domestic company shall,
within 15 working days upon the end of its public offering overseas, handle registration
formalities for overseas listing with the foreign exchange authority at its place of registration
with the required materials.
According to the Circular on Reforming and Regulating Policies on the Control over
Foreign Exchange Settlement of Capital Accounts ( 國家外匯管理局關於改革和規範資本項目結
匯管理政策的通知) which was promulgated by the SAFE o n June 9, 2016, the settlement of
foreign exchange receipts under the capital acco unt (including the foreign exchange capital,
external debts and funds recovered from overseas listing, etc.) that are sub ject to discretionary
settlement as already specified by relevant policies may be handled at banks based on the
domestic institutions’ actual requirements for bu siness operation. Where the current regulations
contain any restrictive provisions on the fore ign exchange settlemen to ff o r e i g ne x c h a n g e
receipts under capital accounts of domestic ins titutions, such provisions shall prevail.
According to the Circular of the SAFE on O ptimizing Foreign Exchange Management
Service in Support of Foreign Business Development ( 國家外匯管理局關於優化外匯管理支
持涉
外業務發展的通知) issued by the SAFE on 10 April 2020, en terprises meeting the prescribed
requirements are allowed to use income under the capital accounts as capital funds, external
debts and overseas listings for domestic payment without providing banks with authenticity
certification materials in detail in advance, to the extent that funds are used for true and
law-compliant purposes and such enterprises comply with the in-force administrative provisions
on the use of income under the capital accounts.
According to the Notice on Further Deepening Reforms to Promote the Convenience of
Cross-border Trade and Investment ( 關於進一步深化改革促進跨境貿易投資便利化的通知)
(hereinafter referred to as the ‘‘ Circular 28 ’’), issued by the SAFE on December 4, 2023,
which provides that qualified high-tech, ‘‘professional, sophisticated, unique and new’’ and
technology-based small and medium-sized enterprises in Anhui and certain other areas can
borrow foreign debt on their own within an a mount not exceeding the equivalent of US$10
million. Circular 28 abolished the restriction that the cumulative remittance amount of up-front
expenses of overseas direct investment by a domes tic enterprise shall not exceed the equivalent
of US$3 million, provided that the cumulativ e remittance amount shall not exceed 15% of the
total proposed investment amount by the PRC entity. Additionally, Circular 28 restructured the
asset realization account of capital accounts to the settlement account of capital accounts. The
equity transfer consideration funds in foreig n currency received by a domestic equity transferor
(including institutions and individuals) from d omestic parties, as well as the foreign exchange
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funds raised by domestic enterprises through o verseas listing may be d irectly remitted to the
settlement account of capital accounts. Funds i n the settlement account of capital accounts may
be settled and used at discretio n. The equity transfer consideration funds received by a domestic
equity transferor from Foreig n-Invested Enterprises s which are paid with RMB funds derived
from the settlement of foreign exchange (i.e . RMB funds derived from direct settlement of
foreign exchange or from settlement account for pending payment) may be transferred directly
to the RMB account of the domestic equity transferor.
Pursuant to the Circular of Further Impr oving and Adjusting Foreign Exchange
Administration Policies on Foreign Direct Investment ( 國家外匯管理局關於進一步改進和調整
直接投資外匯管理政策的通知) promulgated by the SAFE on November 19, 2012, effective on
December 17, 2012, and last amended on December 30, 2019, the opening of various special
purpose foreign exchange accounts, such as pre -establishment expenses accounts, foreign
exchange capital accounts and guarantee accoun ts, the reinvestment of Renminbi proceeds by
foreign investors in China, and remittance o f foreign exchange profits and dividends by a
foreign-invested enterprise to its foreign shareholders no longer require the approval or
verification of the SAFE, and m ultiple capital accounts for the same entity may be opened in
different provinces.
In 2013, the SAFE promulgated the Circular on Promulgation of the Provisions on Foreign
Exchange Control on Direct Investments in China by Foreign Investors and Supporting
Documents ( 國家外匯管理局關於印發《外國投資者境內直接投資外匯管理規定》及配套文件的通
知), which was last amended on December 30, 2019, which specified that the administration
by the SAFE or its local branches on direct investment by foreign investors in China must be
conducted by way of registration and banks must process foreign exchange business relating to
direct investment in China based on the registration information provided by the SAFE and its
local branches.
On July 4, 2014, the Circular of the SAFE on Foreign Exchange Administration of
Overseas Investments and Financing and Round-Trip Investments by Domestic Residents via
Special Purpose Vehicles ( 國家外匯管理局關於境內居民通過特殊目的公司境外投融資及返程投
資外匯管理有關問題的通知) came into effect. Pursuant to such circular, domestic residents shall
apply to the SAFE to register foreign exchange for overseas investments before contributing
money to special purpose vehicles using legitimate domestic and overseas assets or rights and
interests. In the event of any alteration in the basic information, such as shareholders, name and
operating duration of the individual domestic re sidents, or key information, such as increases or
decreases in capital, or equity transfers, swaps, consolidations, or splits, the registered overseas
special purpose vehicles shall timely submit a cha nge in the registration of the foreign exchange
for overseas investments with the foreign exchange bureaus.
The Decisions on Matters including Cancelin g and Adjusting a Batch of Administrative
Approval Items (Guo Fa [2014] No. 50) ( 關於取消和調整一批行政審批項目等事項的決定（國
發[2014]50 號）) promulgated by the State Council and came into effect on October 23, 2014,
provide to cancel the approval requirement of the SAFE and its branches for the remittance and
settlement of the proceeds raised from the overse as listing of the foreign shares into renminbi
domestic accounts.
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Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration of
Overseas Listing (Hui Fa [2014] No. 54) ( 關於境外上市外匯管理有關問題的通知（匯發 [2014]54
號）) issued by the SAFE and became effective on D ecember 26, 2014, a domestic company shall,
within 15 business days of the date of the end of i ts overseas listing issuance, register the
overseas listing with the branch office of the SAF E located at its registered address; the proceeds
from an overseas listing of a domestic company may be repatriated to China or deposited
overseas, provided that the intended use of the p roceeds shall be consistent with the content of
the prospectus document or other public disclo sure documents. A domestic company (except for
bank financial institutions) shall present its certificate of overseas listing to open a dedicated
foreign exchange account at a domestic bank for its initial public offering (or follow-on
offering) and repurchase business to handle the exchange, remittance and transfer of funds for
the business concerned.
According to the Notice on Further Simplifying and Improving Policies for the Foreign
Exchange Administration of Direct Investment (Hui Fa [2015] No. 13) ( 關於進一步簡化和改進
直接投資外匯管理政策的通知（匯發[2015]13 號）) promulgated by the SAFE on February 13,
2015 and became effective on June 1, 2015, and p artially repealed on December 30, 2019, the
foreign exchange registration under domestic direct investment and the foreign exchange
registration under overseas direct investment shall be directly examined and handled by banks.
The SAFE and its branch offices shall indirectly re gulate the foreign exch ange registration of
direct investment through banks.
According to the Notice on Policies for Reforming and Regulating the Administration of
Foreign Exchange Settlement of Capital Accounts (Hui Fa [2016] No. 16) ( 關於改革和規範資本
項目結匯管理政策的通知（匯發
[2016]16 號）), promulgated by the SAFE and became effective
June 9, 2016, which was last amended on Decembe r 4, 2023, the settlement of foreign exchange
proceeds under the capital account (including foreign exchange capital funds, foreign debt
funds, funds transferred back from overseas list ings, etc.) that are sub ject to discretionary
settlement as already specified by relevant policies may be handled at banks based on the actual
business needs of the domestic institutions. The tentative percentage of foreign exchange
settlement for foreign currency proceeds in capital account of domestic institutions is 100%,
subject to adjustment of the SAFE in due time in accordance with international revenue and
expenditure situations.
The SAFE promulgated the Notice of the SAFE on Reforming the Administration of
Foreign Exchange Settlement of Capital of Foreign-Invested Enterprises ( 國家外匯管理局關於
改革外商投資企業外匯資本金結匯管理方式的通知) (the ‘‘ SAFE Circular 19 ’’) on March 30,
2015, which was last amended and effective on M arch 23, 2023. Pursuant to the SAFE Circular
19, foreign-invested enterprises are allowed, within the scope of business, to settle their foreign
exchange capital in their capital accounts, for whi ch the relevant foreign exchange authority has
confirmed monetary capital contribution rights and interests (or for which the bank has
registered the injection of the monetary capital contribution into the accounts), on a
discretionary basis according to the actual needs of their business operations.
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LAWS AND REGULATIONS RELATING TO FOREIGN DEBTS
A loan made by foreign investors as sharehol ders in a foreign-invested enterprise is
considered to be foreign debt in China and is regulated by various laws and regulations,
including the Foreign Exchange Administrative Regulation ( 中華人民共和國外匯管理條例（2008
修訂）), the Interim Provisions on the Management of Foreign Debts ( 外債管理暫行辦法) took
effect on March 1, 2003, and was last amended on September 1, 2022 and the Administrative
Measures for Registration of Foreign Debts ( 外債登記管理辦法)p r o m u l g a t e db yt h eS A F Eo n
April 28, 2013 and amended by the Notice of the SAFE on Abolishing and Amending the
Normative Documents Related to the Reform of th e Registered Capital Registration System ( 國
家外匯管理局關於廢止和修改涉及註冊資本登記制度改革相關規範性文件的通知) on May 4,
2015. Under these rules, a shareholder loan in the form of foreign debt made to a Chinese
entity does not require the prior approval of the SAFE. However, such foreign debt must be
registered with and recorded by local banks. The SAFE Circular 28 provides that a
non-financial enterprise in the pilot areas may register a permitted amount of foreign debts,
which is as twice of the non-financial enterpris e’s net assets, at the local foreign exchange
bureau. Such non-financial enterprise may borrow foreign debts within the permitted amount
and directly handle the relevant procedures in banks without registration of each foreign debt.
However, the non-financial enterprise shall re port its international income and expenditure
regularly.
LAWS AND REGULATIONS RELATING TO ANTI-UNFAIR COMPETITION AND
ANTI-MONOPOLY
Anti-unfair Competition
According to the Anti-unfair Competition Law of the PRC ( 中華人民共
和國反不當競爭法)
promulgated by the SCNPC on September 2, 1993, which was last amended on April 23, 2019
and came into effect on the same day, unfair competition refers to that the operator disrupts the
market competition order and damages the legitim ate rights and interests of other operators or
consumers in violation of the provisions set forth therein in its production and operating
activities. Operators shall abide by the principle of voluntariness, equality, impartiality,
integrity, as well as laws and business ethics during production and operating activities.
Anti-Monopoly
According to the Anti-monopoly Law of the PRC ( 中華人民共和國反壟斷法) (the
‘‘Anti-monopoly Law ’’) promulgated by the SCNPC on August 30, 2007, which was last
amended on June 24, 2022 and came into effect on August 1, 2022, the monopolistic practices
include any monopoly agreement reached by any operators, abuse of market-dominating
position by any operators and any concentration of operators which has eliminated or limited or
may eliminate or limit the market competition. Sp ecifically, competing business operators may
not enter into monopoly agreements that eliminate or restrict competition, such as by
boycotting transactions, fixing or changing the price of commodities, limiting the number of
output or selling of commodities, dividing the sales markets or the raw material procurement
markets, unless the agreement will satisfy the exemptions under the Anti-Monopoly Law, such
as improving technologies, increasing the efficiency and competitiveness of small and
medium-sized enterprises, or safeguarding le gitimate interests in cross-border trade and
economic cooperation with foreign counterparts.
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The Provisions on the Prohibition of Monopoly Agreements ( 禁止壟斷協議規定)i s s u e db y
the SAMR on March 10, 2023, and effective on A pril 15, 2023, further provided for the
prevention and prohibition of monopoly agreement-related matters, and replaced some of
anti-monopoly rules and regulations previously issued by the SAMR.
The Provisions on Prohibition of Abuse of Dominant Market Position ( 禁止濫用市場支配
地位行為規定) issued by the SAMR on March 10, 2023, and effective on April 15, 2023, further
prevents and curbs abuse of dominant market position.
The Provisions on the Review of Concentrations of Undertakings ( 經營者集中審查規定)
issued by the SAMR on March 10, 2023, and effect ive on April 15, 2023, further provides for
matters such as the declaration threshold and re view of the concentration of business operators
and the investigation of the illegal implementation of the concentration of business operators.
LAWS AND REGULATIONS RELATING TO THE ISSUANCE AND LISTING OF
SECURITIES OVERSEAS BY DOMESTIC ENTERPRISES
Securities Laws and Regulations
The Securities Law of the People’s Republic of China (the ‘‘ Securities Law ’’), which was
last revised by the SCNPC on 28 December 2019 and became effective on 1 March 2020,
comprehensively regulates the activities of t he securities market in the PRC, including the
issuance and trading of securities, acquisitions of listed companies, disclosure of information,
investor protection, stock exchanges, securities c ompanies, securities registration and clearing
institutions, securities service agencies, secu rities associations and securities regulatory
authorities. The Securities Law further stipulat es that domestic enterprises that directly or
indirectly issue securities abroad or list their securities abroad shall comply with the relevant
provisions of the State Council, and that the specific provisions for subscription and trading of
shares of domestic companies in foreign currenci es shall be separately stipulated by the State
Council. The China Securities Regulatory Commission (the ‘‘ CSRC ’’) is a securities regulatory
body established by the State Council, which is r esponsible for supervising and managing the
securities market in accordance with the law, maintaining market order and safeguarding the
legal operation of the market.
Overseas Listing
On July 6, 2021, the Opinions on Lawfully and Strictly Cracking Down Illegal Securities
Activities ( 關於依法從嚴打擊證券違法活動的意見) was promulgated, among which, it
emphasizes the need to strengthen the administrat ion over illegal securities activities and the
supervision on overseas listings by China-bas ed companies, and proposed to take effective
measures, such as promoting the construction of relevant regulatory systems to deal with the
risks and incidents faced by China-based overseas-listed companies, and provided that the
special provisions of the State Council on overseas offering and listing by those companies
limited by shares will be revised and therefo re the duties of domestic industry competent
authorities and regulatory authorities will be clarified.
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On 17 February 2023, the CSRC promulgated the Trial Administrative Measures of
Overseas Securities Offering an d Listing by Domestic Companies ( 境內企業境外發行證券和上市
管理試行辦法) (the ‘‘ Trial Measures ’’) and related guidelines, which came into effect on 31
March 2023. Pursuant to the Trial Measures, wher e a domestic enterprise in the PRC directly or
indirectly issues or lists shares overseas, it sh all file a report with the CSRC within 3 working
days after submitting the application documents for issuance and listing overseas; overseas
issuance and listing shall be prohibited under any of the following circumstances: where the
issuance and listing is prohibited by laws, administrative regulations or the relevant provisions
of the state; where the overseas issuance and listing is recognized by the relevant competent
department of the State Council in accordance with the law may jeopardize national security;
where domestic enterprises or their controlling shareholders or de facto controllers are involved
in criminal offenses of corruption, bribery, mi sappropriation of property, embezzlement of
property, or disruption of the socialist market economy order within the last three years; where
domestic enterprises suspected of committing crimes or major violations of laws and regulations
are being investigated by the law, and has not yet come to a definitive conclusion of the opinion;
where there are significant ownership disputes over the shareholdings held by controlling
shareholders or shareholders directed by controlling shareholders or de facto controllers.
The Overseas Listing Trial Measures also re quire subsequent reports to be filed with the
CSRC upon the occurrence of any of the material events after an issuer has offered and listed
securities in an overseas market, such as (i) chan ge of control; (ii) investigations or sanctions
imposed by overseas securities regulatory agencies or other relevant competent authorities; (iii)
change of listing status or transfer of listing segment; and (iv) voluntary or mandatory delisting.
W h e r ea ni s s u e r ’ sm a i nb u s i n e s sundergoes material changes after overseas offering and listing
and is therefore beyond the scope of business stated in the filing documents, such issuer shall
submit to the CSRC an ad hoc report and a relevant legal opinion issued by a domestic law firm
within three business days after occurrence of the changes.
Failure to fulfill filing procedures or offering and listing securities in an overseas market in
violation of the foregoing prohibitive provisio ns may subject PRC domestic companies to order
rectification, warnings and a fine of RMB1 million to RMB10 million. Controlling shareholders
and actual controllers of the domestic company that organize or instruct the aforementioned
violations shall be imposed a fine of RMB1 million to RMB10 million. Directly liable
persons-in-charge and other directly liable persons shall be each imposed a fine of RMB0.5
million to RMB5 million.
Pursuant to the Provisions on Strengthening the Confidentiality and Archives
Administration of Overseas Securities Issuance and Listing by Domestic Companies ( 關於加
強境內企業境外發行證券和上市相關保密和檔案管理工作的規定) (the ‘‘ Provisions on
Confidentiality ’’), which was jointly issued by the CSRC together with other relevant
authorities on 24 February 2023 and became effective on 31 March 2023, for the activities of
overseas issuance and listing of domestic enterprises, the domestic enterprises as well as
securities companies and securities service agencies providing corresponding services shall
strictly comply with the relevant laws and regulations of the PRC and the requirements of the
Provisions on Confidentiality, enhance their le gal awareness of the need to protect state secrets
and enhance archive management, and establish a sound system for confidentiality and archive
management. Necessary measures shall be taken to fulfill the responsibility of confidentiality
and archive management, and state secrets and t he working secrets of state organs shall not be
disclosed, or the state and public interests shall not be jeopardized. Where any domestic
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enterprise provides or publicly discloses to the re levant securities compan ies, securities service
institutions, overseas regulatory authorities and other entities and individuals, or provides or
publicly discloses through its overseas listed subjects documents and materials involving state
secrets and working secrets of state organs, it sh all report the same to the competent department
with examination and approval authority for approval in acco rdance with the law, and submit
the same to the secrecy administration department of the same level for filing. Domestic
enterprises providing accounting archives or copies thereof to entities and individuals including
securities companies, securities service institutions and overse as regulatory authorities shall
perform the corresponding procedures pursuant to the relevant provisions of the State. Where a
domestic enterprise provides or publicly discloses to relevant securities companies, securities
service institutions, overseas regulatory autho rities and other entiti es and individuals, or
provides or publicly discloses through its overseas listed subjects’ documents or materials the
disclosure of which would adversely affect national security or public interests, it shall strictly
fulfill the corresponding procedures in accordance with the relevant provisions of the state.
H SHARE FULL CIRCULATION
According to the Overseas Listing Trial Measures and their related guidelines, ‘‘Full
circulation’’ represents the shareholders of do mestic unlisted shares of domestic companies,
which directly offer and list securities in overse as markets, converting its domestic unlisted
shares into shares listed and traded on an overse as trading venue. The term ‘‘domestic unlisted
shares’’ refers to shares offered by a domestic c ompany but not listed or quoted for trading on
any domestic trading venues. ‘‘Full circulation’’ shall comply with relevant regulations of the
CSRC and the shareholders of domestic unlisted shares shall entrust the domestic company to
report the ‘‘Full circulation’’ with the CSRC by filing materials on certain key issues, including
whether the ‘‘Full circulation’’ has fulfilled a dequate internal decision- making procedures,
necessary internal approvals and authorizations , and whether the ‘‘Full circulation’’ involves
approval or filing procedures set out in the laws, regulations and policies for state-owned asset
administration, industry supervision and foreign investment, and if so, whether such approval
or filing procedures have been performed.
Full circulation means listing and circulation on the Stock Exchange of the domestic
Unlisted Shares (including unlisted domestic shares held by domestic shareholders prior to
overseas listing, unlisted domestic shares additionally issued after overseas listing, and Unlisted
Shares held by foreign shareholders) of H-share companies. On November 14, 2019, the CSRC
issued the Guidelines for the Full Circulation Program for 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) ,w h i c hw a sa m e n d e do nA u g u s t1 0 ,
2023, allowing certain qualified H-share companies and H-share companies intended for listing
to apply to the CSRC for full circulation. According to the Guidelines for the Full Circulation
Program for Domestic Unlisted Shares of H-share Companies, shareholders of domestic
Unlisted Shares may determine by themselves through consultation the amount and proportion
of shares, with filing to the CSRC by an H-share company commissioned for this purpose. After
the application for full circulation has been filed by the CSRC, an H-share company shall
submit a report on the relevant situation to the C SRC within 15 days after the registration with
the China Securities Depository and Clearing Corporation Limited (hereinafter referred to as
the ‘‘CSDC ’’) of the shares related to the application has been completed.
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On December 31, 2019, the CSDC and the Shenzhen Stock Exchange jointly announced the
Measures for Implementation of H-share ‘‘Full Circulation’’ Business (H 股‘‘全流通’’業務實施細
則) (the ‘‘Measures for Implementation ’’). The businesses of cross-border transfer registration,
maintenance of deposit and holding details, transaction entrustment and instruction
transmission, settlement, management of settlem ent participants, services of nominal holders,
etc. in relation to the H-share ‘‘full circulat ion business’’, are subject to the Measures for
Implementation.
In order to fully promote the reform of H Share s full circulation and clarify the business
arrangement and procedures for the relevant sh ares’ registration, custody, settlement and
delivery, the Shenzhen branch of the CSDC has promulgated China Securities Depository and
Clearing Company Limited Shenzhen Branch’s Guide to the Program for Full Circulation of H
Shares (中國證券登記結算有限責任公司深圳分公司H股全流通業務指南) on September 20, 2024,
effective from September 23, 2024, which specified the business preparation, account
arrangement, cross-border share transfer regis tration and overseas centr alized custody, etc. In
February 2020, the CSDC (Hong Kong) issued the China Securities Depository and Clearing
(Hong Kong) Company Limited’s Guide to the Program for Full Circulation of H Shares ( 中國
證券登記結算（香港）有限公司H股全流通業務指南), last amended on September 20, 2024 and
effective from September 23, 2024, to specify the relevant escrow, custody, agent service of the
CSDC (Hong Kong), arrangement for settlement and delivery, and other relevant matters.
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OVERVIEW
Our history can be traced back to 2015 when ou r Company was established. After years of
development along with several rounds of Pre-IPO Investments since 2016, we have formed
strategic partnerships with global industry players, and offer GPGPU products and AI
computing solutions across diverse industries.
BUSINESS DEVELOPMENT MILESTONES
The following table summa rizes the key milestones in our business development:
Year Milestone
2015 Our Company was founded in China.
2018 Officially launched the design of GPGPU.
Completed Series A Investment.
2019 Completed Series B Inve stment and raised over RMB350
million with a pre-money valuation of over RMB2 billion,
and introduced investors including Centurium Capital ( 大鉦資
本) and Princeville Capital.
2021 Launched China’s first GPGPU product, the first generation of
our training series TG Gen 1, and achieved mass production
and delivery.
Completed Series C Investment and raised RMB820 million
with a pre-money valuation of RMB2.5 billion to RMB3.5
billion, and introduced investors including Cedarlake Capital
(沄柏資本).
Won the first prize award in the 2021 China Integrated Circuit
Innovation and Entrepreneurship Competition ( 中國集成電路
創新創業大賽).
Recognized as a Chinese unicorn enterprise (2021 年中國獨角獸
企業) by Greatwall Strategy Consultants ( 長城戰略諮詢).
2022 Launched the first and second generations of inference series
Z KG e n1a n dZ KG e n1 X .
Completed Series C+ and Series C++ Investments and raised
over RMB900 million with a pre-money valuation of RMB5
billion and RMB7 billion respectively.
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Year Milestone
2023 Launched the second generation of training series TG Gen 2,
a n da c h i e v e dm a s sp r o d u c t i o n .
2024 Launched the third generation of training series TG Gen 3.
Recognized as a Shanghai Unico rn (Potential) Enterprise to
Receive Prioritized Service for 2024 (2024 年上海市重點服務獨
角獸（潛力）企業) by Shanghai Small and Medium-Sized
Enterprises Development Service Centre ( 上海市中小企業發展
服務中心) and Greatwall Strategy Consultants ( 長城戰略諮詢).
2025 Completed Series D Invest ment and raised over RMB1.4
billion with a pre-money valuation of RMB10 billion, and
introduced investors including HongShan ( 紅杉中國)a n d
Yuanhe Funds ( 元禾基金).
Completed Series D+ Investment and raised approximately
RMB2.05 billion with a pre-money valuation of RMB12
billion, and introduced investors including Focustar Capital
and Quzhou Intelligent Manufacturing ( 衢州智造).
OUR MAJOR SUBSIDIARIES
The following table sets out the principal business activities, place of establishment and
date of establishment of our subsidiaries that made a material contribution to our results of
operations during the Track Record Period.
Name of subsidiary
Place of
establishment
Date of
establishment
Equity interest
attributable
to our Group
Principal business
activities
Iluvatar Shanghai PRC January 2,
2018
100% Sale and
development of
GPGPU products
Shanghai Iluvatar Suanli PRC June 9, 2021 100% Sale and
development of
GPGPU products
Beijing Iluvatar PRC September 8,
2021
100% Sale and
development of
GPGPU products
and the provision
of AI computing
solutions
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ESTABLISHMENT AND SHAREHOLDING CHANGES OF OUR COMPANY
1. Establishment of our Company
On December 29, 2015, our Company was established by Mr. Li Yunpeng ( 李雲鵬) (the
‘‘Initial Shareholder ’’), Ms. Hu Rong ( 胡蓉)a n dM s .L iY a p i n g( 李亞平), who are Independent
Third Parties as of the Latest Practicable Date , as a limited liability company under the laws of
the PRC, with an initial registered capital of RMB5 million. Upon our establishment, our
Company was owned by the Initial Shareholder, Ms. Hu Rong ( 胡蓉)a n dM s .L iY a p i n g(李亞
平) as to 60%, 20% and 20% equity intere st in our Company, respectively.
2. Equity Transfers in 2016
On September 20, 2016, Ms. Hu Rong and Ms . Li Yaping transferred 20% and 5% equity
interest in our Company to the Initial Shareholder at the consideration of RMB1 million and
RMB0.25 million respectively.
On October 18, 2016, (i) Ms. Li Yaping transferred her remaining 15% equity interest in
our Company to Shanghai Huiyue Business Consulting Partnership (Limited Partnership) ( 上海
卉岳商務諮詢合夥企業（有限合夥）)( ‘ ‘Shanghai Huiyue ’’), a company majority owned by Ms. Li
Yaping at the relevant time, at the consider ation of RMB0.75 million, (ii) the Initial
Shareholder transferred his 24.6% equity interest in our Company to Shanghai Qiongyu, a
company majority owned by the Initial Sharehol der at the relevant time, at the consideration of
RMB1.23 million, and (iii) the Initial Shareholder transferred his 25% equity interest in our
Company to Shanghai Sushi and 10% equity interest in our Company to Shanghai Nashi, both
of which were established as our employee shareholding platforms, at the aggregated
consideration of RMB1.75 million.
Upon the completion of the above equity transfers, the shareholding of our Company was
as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Sushi 1,250,000 25.00
Shanghai Qiongyu 1,230,000 24.60
Shanghai Nashi 500,000 10.00
The Initial Shareholder 1,270,000 25.40
Shanghai Huiyue 750,000 15.00
Total 5,000,000 100.00
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3. Series A Investment, equity tr ansfers and capital increases
(i) Series A1 Investment and increase of registered capital through capitalization of capital
reserve
On December 12, 2016, Xinyu Jianhui Consult ing Partnership (Limited Partnership)
(新余建輝諮詢合夥企業（有限合夥）)( ‘ ‘Xinyu Jianhui ’’) subscribed for the increased
registered capital of RMB882,353 at the consideration of RMB12 million.
On March 13, 2017, our Company further increased our registered capital through
capitalization of our capital reserve from RMB5,882,353 to RMB10 million pursuant to
which then Shareholders subscribed the increased registered capital on a pro rata basis.
(ii) Series A2 Investment and increase of registered capital through capitalization of capital
reserve
On May 4, 2017, (i) Xinyu Jianhui further subscribed for the increased registered
capital of RMB0.85 million at the consideration of RMB17 million, and (ii) Shenzhen
Dongsheng Asset Management Partnership (Limited Partnership) ( 深圳市東晟資產管理合
夥企業（有限合夥）)( ‘ ‘Shenzhen Dongsheng ’’) subscribed for the increased registered capital
of RMB0.9 million at the consideration of RMB18 million.
On May 26, 2017, our Company further increased our registered capital through
capitalization of our capital reserve from RM B11.75 million to RMB50 million pursuant to
which then Shareholders subscribed the increased registered capital on a pro rata basis.
(iii) Series A3 Investment, subscription by employee shareholding platforms and equity
transfer
On July 10, 2018, Xinyu Jianhui transferred 20% equity interest in our Company to
Rizhao Tianxin Information Technology Partnership (Limited Partnership) ( 日照天芯信息
技術合夥企業（有限合夥）)( ‘ ‘Rizhao Tianxin ’’) at the consideration of RMB47 million.
On July 19, 2018, (i) the Initial Sharehol der, Shanghai Yishi, Shanghai Yueshi,
Shanghai Yuanshi, which were established as employee shareholding platforms, subscribed
for the increased registered capital of RM B405,449, RMB13,340,003, RMB2,826,815 and
RMB1,616,132 at the consideration of RMB4 05,449, RMB13,340,003, RMB2,826,815 and
RMB1,616,132 respectively based on the regis tered capital subscribed, and (ii) Yuyao
Bijiang Shengxing Management Consulting Partnership (Limited Partnership) ( 余姚碧江
盛
興管理諮詢合夥企業（有限合夥）)( ‘ ‘Yuyao Bijiang ’ ’ ) ,a n dR i z h a oP e i q i nI n f o r m a t i o n
Technology Partnership (Limited Partnership) ( 日照培勤信息技術合夥企業（有限合夥）)
(‘‘Rizhao Peiqin ’’), subscribed for the increased reg istered capital of RMB6,775,509 and
RMB8,341,657 at the consideration of RMB65 million and RMB78 million respectively.
(iv) Series A4 Investment
On November 30, 2018, Rizhao Peiqin further s ubscribed for the increased registered
capital of RMB3,917,718 at the consideration of RMB39 million.
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Upon the completion of the Series A Investment, equity transfers and capital
increases as set out above, the shareholding of our Company was as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Yishi 13,340,003 15.2941
Shanghai Sushi 9,045,000 10.3699
Shanghai Qiongyu 8,900,000 10.2037
Shanghai Nashi 3,615,000 4.1445
Shanghai Yueshi 2,826,815 3.2409
Shanghai Yuanshi 1,616,132 1.8529
Rizhao Peiqin 12,259,375 14.0552
Rizhao Tianxin 10,000,000 11.4648
The Initial Shareholder 9,590,449 10.9953
Yuyao Bijiang 6,775,509 7.7680
Shanghai Huiyue 5,425,000 6.2197
Shenzhen Dongsheng 3,830,000 4.3910
Total 87,223,283 100.0000
4. Series B Investment
On January 23, 2019, Princeville Global Pro cessing IC Investments (Hong Kong) Limited
(‘‘PVG’’) subscribed for the increased registered capital of RMB2,907,443 at the consideration
of US$10 million.
On May 22, 2019, Fujian Centurium Phase I Inve stment Partnership (Limited Partnership)
(福建大鉦一期投資合夥企業（有限合夥）)( ‘ ‘Centurium Phase I Investment Fund ’’), subscribed for
the increased registered capital of RMB8,6 78,934 at the consideration of RMB200 million.
On August 20, 2019, PVG further subscribed for the increased registered capital of
RMB2,166,045 at the consideration of US$7.45 million.
On September 17, 2019, Suzhou Bangsheng Yingxin Venture Capital Enterprise (Limited
Partnership) ( 蘇州邦盛贏新創業投資企業（有限合夥）)( ‘ ‘Suzhou Bangsheng ’’), Jiangsu Jiequan
New Engineering Bangsheng Venture Capital Fund Partnership (Limited Partnership) ( 江蘇疌
泉新工邦盛創業投資基金合夥企業（有限合夥）)( ‘ ‘Jiangsu Bangsheng
’’), Nanjing Bangsheng
Juyuan Venture Capital Partnership (Limited Partnership) ( 南京邦盛聚源創業投資合夥企業
（有限合夥）)( ‘ ‘Nanjing Bangsheng ’’) subscribed for the increased registered capital of
RMB860,000, RMB1,299,000 and RMB11,000 at the consideration of RMB19,814,400,
RMB29,928,960 and RMB253,440, respectively.
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Upon the completion of Series B Investment, the shareholding of our Company was as
follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Yishi 13,340,003 12.9332
Shanghai Sushi 9,045,000 8.7691
Shanghai Qiongyu 8,900,000 8.6286
Shanghai Nashi 3,615,000 3.5048
Shanghai Yueshi 2,826,815 2.7406
Shanghai Yuanshi 1,616,132 1.5668
Rizhao Peiqin 12,259,375 11.8855
Rizhao Tianxin 10,000,000 9.6950
The Initial Shareholder 9,590,449 9.2980
Centurium Phase I Investment Fund 8,678,934 8.4142
Yuyao Bijiang 6,775,509 6.5689
Shanghai Huiyue 5,425,000 5.2595
PVG 5,073,488 4.9188
Shenzhen Dongsheng 3,830,000 3.7132
Jiangsu Bangsheng 1,299,000 1.2594
Suzhou Bangsheng 860,000 0.8338
Nanjing Bangsheng 11,000 0.0106
Total 103,145,705 100.0000
5. Series C Investmen t and equity transfer
On July 17, 2020, the Initial Shareholder tra nsferred his 9.2980% equity interest in our
Company to Centurium Phase I Investment Fund at the consideration of RMB4,111,211, and he
ceased to be a member of the management team of our Group.
On October 26, 2020, (i) Tianjin Haihe Yunbai Industrial Investment Fund Partnership
(Limited Partnership) ( 天津海河沄柏產業投資基金合夥企業（有限合夥）)( ‘ ‘Haihe Yunbai ’’)
subscribed for the increased registered cap ital of RMB3,418,543 at the consideration of
RMB100 million, and (ii) Nanjing Youxu Equity Investment Partnership (Limited Partnership)
(南京優昫股權投資合夥企業（有限合夥）)( ‘ ‘Nanjing Youxu ’’), subscribed for the increased
registered capital of RMB16,503,313 at the consideration of RMB400 million.
On January 27, 2021, Zhuhai Yueteng Ruiwen E quity Investment Partnership (Limited
Partnership) ( 珠海悅騰睿文股權投資合夥企業（有限合夥）)( ‘ ‘Zhuhai Yueteng
’’) subscribed for
the increased registered capital of RMB3,4 18,543 at the consideration of RMB100 million.
On March 3, 2021, each of Wuhu Kuangyun Artificial Intelligence Industry Investment
Fund (Limited Partnership) ( 蕪湖曠沄人工智能產業投資基金（有限合夥）)( ‘ ‘Wuhu Kuangyun ’’)
and Guangzhou Yuying Planning Consulting Co., Ltd. ( 廣州宇盈策劃諮詢有限公司)
(‘‘Guangzhou Yuying ’’) subscribed for the increased registered capital of RMB1,709,272 at the
consideration of RMB50 million.
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On June 21, 2021, Shanghai Yunzhixin Enterp rise Management Consulting Partnership
(Limited Partnership) ( 上海沄知芯企業管理諮詢合夥企業（有限合夥）)( ‘ ‘Shanghai Yunzhixin ’’)
subscribed for the increased registered capital of RMB3,076,689 at the consideration of RMB90
million.
On December 9, 2021, Lianchuang Innovation (Chengdu) Equity Investment Fund
Partnership (Limited Partnership) ( 聯創創新（成都）股權投資基金合夥企業（有限合夥）)
(‘‘Lianchuang Innovation ’’) subscribed for the increased re gistered capital of RMB1,025,563 at
the consideration of RMB30 million.
Upon the completion of the Series C Investment and above equity transfer, the
shareholding of our Company was as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Yishi 13,340,003 9.9547
Shanghai Sushi 9,045,000 6.7496
Shanghai Qiongyu 8,900,000 6.6414
Shanghai Nashi 3,615,000 2.6976
Shanghai Yueshi 2,826,815 2.1095
Shanghai Yuanshi 1,616,132 1.2060
Centurium Phase I Investment Fund 18,269,383 13.6332
Nanjing Youxu 16,503,313 12.3153
Rizhao Peiqin 12,259,375 9.1483
Rizhao Tianxin 10,000,000 7.4623
Yuyao Bijiang 6,775,509 5.0561
Other Shareholders holding less than 5% interest 30,856,370 23.0260
Total 134,006,900 100.0000
6. Subscription by employee shareholding platforms in December 2021
On December 16, 2021, Shanghai Xishi, an emplo yee shareholding platform, subscribed for
the increased registered capital of RMB14,8 89,656 at the consideration of RMB14,889,656
based on the registered ca pital being subscribed.
7. Series C+ Investment and equity transfer
On May 9, 2022, Beijing Ruifeng Equity Investment Fund (Limited Partnership) ( 北京瑞灃
股權投資基金（有限合夥）
)( ‘ ‘Beijing Ruifeng ’’) and Xicheng Zhiyuan Digital Power Selection
(Beijing) Investment Cente r (Limited Partnership) ( 熙誠致遠數字動力精選（北京）投資中心（有限
合夥）)( ‘ ‘Xicheng Zhiyuan PE Fund ’’) subscribed for the increased registered capital of
RMB5,955,862 and RMB1,488,966 at the cons ideration of RMB200 million and RMB50
million respectively.
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On June 6, 2022, Rizhao Peiqin transferred i ts 0.5579% equity interest in our Company to
Shanghai Sushi at nil consideration to recognize the contribution of our senior management and
employees.
Upon the completion of the Series C+ Investment and above equity transfer, the
shareholding of our Company was as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Xishi 14,889,656 9.5238
Shanghai Yishi 13,340,003 8.5326
Shanghai Sushi 9,917,233 6.3433
Shanghai Qiongyu 8,900,000 5.6927
Shanghai Nashi 3,615,000 2.3122
Shanghai Yueshi 2,826,815 1.8081
Shanghai Yuanshi 1,616,132 1.0337
Centurium Phase I Investment Fund 18,269,383 11.6856
Nanjing Youxu 16,503,313 10.5559
Rizhao Peiqin 11,387,142 7.2835
Rizhao Tianxin 10,000,000 6.3963
Other Shareholders holding less than 5% interest 45,076,707 28.8323
Total 156,341,384 100.0000
8. Series C++ Investment and equity transfer
On June 16, 2022, Jupiter Technology Link Investment Company Ltd (‘‘ Jupiter
Technology ’’), Shanghai Shengyong State-owned Ent erprise Reform New Potential Private
Equity Investment Fund Partnership (Limited Partnership) ( 上海盛雍國企改革新勢能私募投資
基金合夥企業（有限合夥）)( ‘ ‘Shanghai Shengyong ’’), Sichuan Dingxiang Equity Investment Fund
Co., Ltd. ( 四川鼎祥股權投資基金有限公司)( ‘ ‘Sichuan Dingxiang ’’), Ningbo Dingyinxin Equity
Investment Partnership (Limited Partnership) ( 寧波鼎寅芯股權投資合夥企業（有限合夥）)
(‘‘Ningbo Dingyinxin ’’), Zaozhuang Xinsheng Equity Investment Partnership (Limited
Partnership) (
棗莊新晟股權投資合夥企業（有限合夥）)( ‘ ‘Zaozhuang Xinsheng ’’) and Wuhan
Jiangxia Xintuo Equity Investment Fund Mana gement Partnership (Limited Partnership) ( 武
漢江夏新拓股權投資基金管理合夥企業（有限合夥）)( ‘ ‘Jiangxia Xintuo ’’) subscribed for the
increased registered capital of RMB7,166,80 1, RMB2,903,483, RMB1,116,724, RMB915,714,
RMB670,034 and RMB446,690 at the considera tion of RMB320.885 million, RMB130 million,
RMB50 million, RMB41 million, RMB30 million and RMB20 million, respectively.
On March 30, 2023, Rizhao Tianxin transferred its 0.5050% equity interest in our
Company and Rizhao Peiqin transferred its 1. 9679% equity interest in our Company to Beijing
Zhongguancun Science City Technology Growth In vestment Partnership (Limited Partnership)
(北京中關村科學城科技成長投資合夥企業（有限合夥）)( ‘ ‘ Beijing Zhongguancun ’’) at the
consideration of RMB24,746,145.2 an d RMB96,433,028.7 respectively.
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On April 3, 2023, Beijing Zhongguancun furth er subscribed for the increased registered
capital of RMB1,753,257 at the consideration of RMB78.5 million.
Upon the completion of the Series C++ Investment and above equity transfer, the
shareholding of our Company was as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Xishi 14,889,656 8.6914
Shanghai Yishi 13,340,003 7.7869
Shanghai Sushi 9,917,233 5.7889
Shanghai Qiongyu 8,900,000 5.1951
Shanghai Nashi 3,615,000 2.1102
Shanghai Yueshi 2,826,815 1.6501
Shanghai Yuanshi 1,616,132 0.9434
Centurium Phase I Investment Fund 18,269,383 10.6643
Nanjing Youxu 16,503,313 9.6334
Rizhao Tianxin 9,143,732 5.3374
Rizhao Peiqin 8,050,359 4.6992
Other Shareholders holding less than 5% interest 64,242,641 37.4997
Total 171,314,087 100.0000
9. Series D Investment and equity transfers
On October 11, 2023, Xiamen Zhengmei Enterp rise Management Partnership (Limited
Partnership) ( 廈門鉦美企業管理合夥企業（有限合夥）)( ‘ ‘Xiamen Zhengmei ’’), Zibo Kaishu Equity
Investment Partnership ( Limited Partnership) ( 淄博凱數股權投資合夥企業（有限合夥）)( ‘ ‘Zibo
Kaishu ’’), Hangzhou Yuanqiao Zhishu Equity Investment Partnership (Limited Partnership) ( 杭
州遠橋智數股權投資合夥企業（有限合夥）)( ‘ ‘ Hangzhou Yuanqiao ’’), Guangzhou Tianmu
Artificial Intelligen ce Industry Investment Fund Partn ership (Limited Partnership) ( 廣州天目
人工智
能產業投資基金合夥企業（有限合夥）)( ‘ ‘Guangzhou Tianmu ’’), Nanjing Lianchuang
Digital Equity Investment Partn ership (Limited Partnership) ( 南京聯創數字股權投資合夥企業
（有限合夥）)( ‘ ‘Nanjing Lianchuang ’’), Ningbo Dingmaoxin Equity Investment Partnership
(Limited Partnership) ( 寧波鼎卯芯股權投資合夥企業（有限合夥）)( ‘ ‘Ningbo Dingmaoxin ’’), Hina
Growth Opportunities Fund, L.P. (‘‘ Hina Fund ’’), Gongqingcheng Baochuang Gongying Venture
Capital Fund Partnership (Limited Partnership) ( 共青城寶創共贏創業投資基金合夥企業（有限合
夥）)( ‘ ‘Gongqingcheng Baochuang ’’) and Beijing Paradigm Arti ficial Intell igence Equity
Investment Fund (Limited Partnership) ( 北京範式人工智能股權投資基金（有限合夥）)
(‘‘Paradigm Fund ’’) subscribed for the increased registered capital of RMB5,139,423,
RMB1,836,487, RMB1,713,141, RMB633,8 62, RMB342,628, RMB685,256 RMB611,052,
RMB856,570 and RMB513,942 at the considera tion of RMB300 million (of which RMB50
million was settled through the conversion of co nvertible notes in the amount of RMB50 million
at the agreed pre-money valuation of our Group which was issued to Xiamen Zhengmei in May
2023), RMB107.2 million, RMB100 million, RMB37 million, RMB20 million, RMB40 million,
RMB35.6685 million, RMB50 million and RMB30 million, respectively.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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On December 28, 2023, Xiamen Hongshan Ya heng Equity Investment Partnership
(Limited Partnership) ( 廈門紅杉雅恒股權投資合夥企業（有限合夥）) (currently known as
Xiamen Yaheng Venture Capital Fund Partnership (Limited Partnership) ( 廈門雅恒創業投資
基金合夥企業（有限合夥）)) (‘‘Xiamen Hongshan ’’) and Cuihu Tianshu (Zibo) Equity Investment
Partnership (Limited Partnership) ( 翠湖天數（淄博）股權投資合夥企業（有限合夥）)( ‘ ‘Cuihu
Tianshu ’’) subscribed for the increased registered capital of RMB2,569,712 and RMB745,216
at the consideration of RMB150 million and RMB43.5 million respectively.
On April 15, 2024, (i) Lianchuang Innovation tra nsferred its 0.1820% equity interest in our
Company and its 0.3665% equity interest in our Company to Guangzhou Tianmu and Nanjing
Lianchuang at the consideration of approxi mately RMB14.8984 million and RMB29.9999
million respectively, (ii) Guangzhou Yuyin g transferred its 0.9142% equity interest in our
Company to Shanghai Kuanqing Management Consulting Partnership (Limited Partnership)
(上海寬青管理諮詢合夥企業（有限合夥）)( ‘ ‘Shanghai Kuanqing ’’) at the consideration of RMB70
million, and (iii) Nanjing Bangsheng transferred its 0.0059% equity interest in our Company to
Ningbo Dingzhixin Equity Investment Partnership (Limited Partnership) ( 寧波鼎智芯股權投資
合夥企業（有限合夥）)( ‘ ‘Ningbo Dingzhixin ’’) at the consideration of RMB642,095.3.
On May 11, 2024, Shanghai Xishi transferred i ts 0.5727% equity interest (representing
RMB1,070,714 registered capital) in our Compan yt oN i n g b oD i n g z h i x i na tt h ec o n s i d e r a t i o no f
approximately RMB49.9999 million.
On May 22, 2024, Shanghai Linke Zhixin Pri vate Equity Investment Fund Partnership
(Limited Partnership) ( 上海臨科智芯私募投資基金合夥企業（有限合夥）)( ‘ ‘Linke Zhixin ’’)
subscribed for the increased registered cap ital of RMB5,139,423 at the consideration of
RMB300 million.
On October 21, 2024, Suzhou Industrial Park Yuanhe Dingsheng Equity Investment
Partnership (Limited Partnership) ( 蘇州工業園區元禾鼎盛股權投資合夥企業（有限合夥）)
(‘‘Suzhou Yuanhe ’’) and Chengdu Tianfu Yuanhe Jingu Venture Capital Center (Limited
Partnership) ( 成都天府元
禾金谷創業投資中心（有限合夥）)( ‘ ‘Chengdu Yuanhe ’’) subscribed for
the increased registered capital of RMB1,113 ,542 and RMB599,599 at the consideration of
RMB65 million and RMB35 million respectively.
Pursuant to a transfer agreement dated Nov ember 28, 2024, Zibo Kaishu transferred its
0.9476% equity interest in our Company to Haihe Yunbai at the consideration of approximately
RMB2 million and assuming Zibo Kaishu’s oblig ation to pay up the outstanding subscription
consideration of RMB105.2 million.
On March 14, 2025, Hunan Xiangjiang New District Guiding No. 5 Equity Investment
Partnership (Limited Partnership) ( 湖南湘江新區引導五號股權投資合夥企業（有限合夥）)
(‘‘Xiangjiang Equity Investment ’’) subscribed for the increased registered capital of
RMB1,627,484 at the consideration of RMB95 million.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Upon the completion of the Series D Investment and above equity transfers, the
shareholding of our Company was as follows:
Shareholder
Registered
capital
Equity
interest
(RMB) (%)
Shanghai Xishi 13,818,942 7.0706
Shanghai Yishi 13,340,003 6.8256
Shanghai Sushi 9,917,233 5.0743
Shanghai Qiongyu 8,900,000 4.5538
Shanghai Nashi 3,615,000 1.8497
Shanghai Yueshi 2,826,815 1.4464
Shanghai Yuanshi 1,616,132 0.8269
Centurium Phase I Investment Fund 18,269,383 9.3478
Nanjing Youxu 16,503,313 8.4441
Rizhao Tianxin 9,143,732 4.6785
Rizhao Peiqin 8,050,359 4.1191
Xiamen Zhengmei 5,139,423 2.6296
Xiangjiang Equity Investment
(Note) 1,627,484 0.8327
Other Shareholders holding less than 5% interest 82,673,605 42.3009
Total 195,441,424 100.0000
Note: The subscription of increased registered capital by Xiangjiang Equity Investment was not completed as
of the date of conversion of our Company into a joint stock company, and accordingly, as of the date of
conversion of our Company, the registered capital of our Company was RMB193,813,940. Such
subscription was settled on January 22, 2025, and the relevant industrial and commercial registration
modification formalities was completed on March 14, 2025.
10. Conversion into a joint stock company
Pursuant to the promoters’ agreement dated December 27, 2024 entered into by all the then
Shareholders and the shareholders’ resolutions da ted January 13, 2025, all promoters (being all
the then Shareholders) agreed to convert our Company from a limited liability company into a
joint stock limited company. Upon completion of the conversion, the share capital of our
Company was RMB193,813,940 divided into 1 93,813,940 Shares with a nominal value of
RMB1.00 each, which were subscribed by all the then Shareholders in proportion to their
respective equity interests in our Company before the conversion. Our Company obtained a new
business license on February 17, 2025 and was renamed as Shanghai Iluvatar CoreX
Semiconductor Co., Ltd. ( 上海天數智芯半導體股份有限公司).
11. Share transfers in February 2025
On February 18, 2025, Shanghai Kuanqing tr ansferred 575,126 Shares in our Company to
Zhejiang Biyi Electric Appliance Co., Ltd. ( 浙江比依電器股份有限公司)( ‘ ‘Zhejiang Biyi ’ ’ )a tt h e
consideration of RMB23.5 million.
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On February 26, 2025, Beijing Ruifeng transferred 947,556 Shares to Yancheng Yingwan
Kexin Linghang Equity Investment Par tnership (Limited Partnership) ( 鹽城瀛灣科新領航股權
投資合夥企業（有限合夥）)( ‘ ‘Yancheng Yingwan ’’) at the consideration of RMB44 million.
12. Series D+ Investment and share transfers
On April 27, 2025, Masterwork Holdings Limited (‘‘ Masterwork Holdings ’’) subscribed for
11,726,485 Shares at the consideration of RMB720 million.
Pursuant to a transfer agreement dated May 1, 2025, Xicheng Zhiyuan PE Fund
transferred 1,191,716 Shares to Hainan Kunjun Investment Partnership (Limited Partnership)
(海南昆峻投資合夥企業（有限合夥）)( ‘ ‘Hainan Kunjun ’’) at the consideration of RMB50 million.
Pursuant to a transfer agreement dated Ma y 9, 2025, Shanghai Kuanqing transferred
170,731 Shares to Suqian Lingrui Business Consul ting Service Partnership Enterprise (Limited
Partnership) ( 宿遷淩睿商務諮詢服務合夥企業（有限合夥）)( ‘ ‘ Suqian Lingrui ’’) at the
consideration of RMB10 million.
On May 21, 2025, FOCUSTAR CAPITAL INVESTMENT FUND L.P. (‘‘ Focustar Fund ’’)
and XN Speed International Limited (‘‘ XN Speed ’’) subscribed for 2,346,698 Shares and
1,771,757 Shares at the consideration of R MB144.086 million and RMB108,784,930
respectively.
On May 23, 2025, Interplanetary Pte. Ltd. (‘‘ Interplanetary ’’) subscribed for 492,807 Shares
at the consideration of RMB30,258,060.
On May 29, 2025, in order to reallocate the Shares held by the Shareholding Platforms,
Shanghai Xishi, Shanghai Yishi and Shanghai Sushi transferred 100,771 Shares, 1,000,000
Shares and 2,798,347 Shares to Shangh ai Yuanshi at nil-consideration.
On June 11, 2025, the following investors subscribed for new Shares at the corresponding
consideration as set out below:
Investors Shares Consideration
(Approximate
million RMB)
Xiamen Zhengmei 814,339 50.0
Sichuan Culture Industry Investm ent Fund Partnership (Limited
Partnership) ( 四川文化產業投資基金合夥企業（有限合夥）)
(‘‘Sichuan Culture Industry Fund ’’) 407,170 25.0
Sichuan Regional Collaborative Development Investment
Guidance Fund Partnership (Limited Partnership)
(四川區域協同發展投資引導基金合夥企業（有限合夥）)
(‘‘Sichuan Regional Collaborative Fund ’’) 488,604 30.0
Mianyang Gaochuang Equity Investment Fund Partnership
(Limited Partnership) ( 綿陽高創股權投資基金合夥企業
（有限合夥）)( ‘ ‘Mianyang Gaochuang ’’) 732,905 45.0
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Investors Shares Consideration
(Approximate
million RMB)
Ningbo Ruihe Yingfu Venture Capital Partnership (Limited
Partnership) ( 寧波銳合盈孚創業投資合夥企業（有限合夥）)
(‘‘Ningbo Ruihe ’’) 244,302 15.0
Ningbo Yingshi Venture Capital Partnership (Limited
Partnership) ( 寧波盈石創業投資合夥企業（有限合夥）)
(‘‘Ningbo Yingshi ’’) 244,302 15.0
Nanjing Lanpu High Quality Equity Investment Fund (Limited
Partnership) ( 南京蘭璞高質股權投資基金（有限合夥）)
(‘‘Nanjing Lanpu ’’) 781,766 48.0
Nanjing Railway Investment Jushi Hub Economic Industry
Investment Fund Partnership (Limited Partnership)
(南京鐵投巨石樞紐經濟產業投資基金合夥企業（有限合夥）)
(‘‘Nanjing Railway Investment ’’) 651,471 40.0
China Insurance Investment Trust Quality (Jiaxing) Equity
Investment Partnership (Limited Partnership)
(中保投信質力（嘉興）股權投資合夥企業（有限合夥）)
(‘‘China Insurance Investment Fund ’’) 488,604 30.0
Hunan Bofu Selected Equity Inve stment Partnership (Limited
Partnership) ( 湖南泊富精選股權投資合夥企業（有限合夥）)
(‘‘Hunan Bofu ’’) 394,140 24.2
Xiamen Hongshan 368,836 22.6
Shenzhen Digital Future Private Equity Investment Fund
Partnership (Limited Partnership) ( 深圳市數字未來私募股權
投資基金合夥企業（有限合夥）)( ‘ ‘Shenzhen Digital Future ’’) 1,628,679 100.0
Quzhou Intelligent Manufacturing Anhe Equity Investment
Partnership (Limited Partnership) ( 衢州智造安合股權投資合夥
企業（有限合夥）)( ‘ ‘Quzhou Intelligent Manufacturing ’’) 3,257,357 200.0
Nanjing Xingna Heyuan Venture Capital Partnership (Limited
Partnership) ( 南京星納赫源創業投資合夥企業（有限合夥）)
(‘‘N a n j i n gX i n g n aH e y u a n’’) 2,931,621 180.0
Nanjing Xingnafeng Enterprise Management Partnership (Limited
Partnership) ( 南京星納峰企業管理合夥企業（有限合夥）)
(‘‘Nanjing Xingnafeng ’’) 415,313 25.5
Hubei Lihe Jiacheng Investment Co., Ltd. ( 湖北利禾佳誠投資有限
責任公司)( ‘ ‘Hubei Lihe ’’) 814,339 50.0
Hainan Zhihua Investment Partnership (Limited Partnership)
(海南至華投資合夥企業（有限合夥）)( ‘ ‘Hainan Zhihua ’’) 814,339 50.0
Shanghai Dalinghao Bay Cey uan No.2 Venture Capital
Partnership (Limited Partnership) ( 上海大零號灣策源二號創業
投資合夥企業（有限合夥）)( ‘ ‘Shanghai Dalinghao Bay Ceyuan ’’) 814,339 50.0
Xi’an Xigaotou Zhiyuan Investme nt Fund Partnership (Limited
Partnership) ( 西安西高投致遠投資基金合夥企業（有限合夥）)
(‘‘Zhiyuan Fund ’’) 814,339 50.0
Total 17,106,765 1,050.3
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Upon the completion of the Series D+ Investment and above share transfers, the
shareholding of our Company was as follows:
Shareholder Shares Interest
(%)
Shanghai Xishi 13,718,171 5.9935
Shanghai Yishi 12,340,003 5.3913
Shanghai Qiongyu 8,900,000 3.8884
Shanghai Sushi 7,118,886 3.1102
Shanghai Yuanshi 5,515,250 2.4096
Shanghai Nashi 3,615,000 1.5794
Shanghai Yueshi 2,826,815 1.2350
Centurium Phase I Investment Fund 18,269,383 7.9819
Nanjing Youxu 16,503,313 7.2103
Masterwork Holdings 11,726,485 5.1233
Rizhao Tianxin 9,143,732 3.9949
Rizhao Peiqin 8,050,359 3.5172
Xiamen Zhengmei 5,953,762 2.6012
Other Shareholders holding less than 5% interest 105,204,777 45.9638
Total 228,885,936 100.0000
SINGLE LARGEST GROUP OF SHAREHOLDERS
Unlike a typical founder-led company, since the beginning of the Track Record Period, our
Company’s ownership has been held by our employ ees through several spec ial purpose vehicles,
as well as a diversified base of passive financial investors. The overall management of our Group
has been entrusted to a management committee comprising our executive Directors and senior
management members (the ‘‘ Management Committee ’’), which is responsible for overseeing and
managing the day-to-day operations of our Group. The Management Committee currently
consists of twelve members, being our four executive Directors and eight senior management
members as further described in ‘‘Directors an d Senior Management — Senior Management.’’
Employee who holds position equivalent to vice president or above will become members of the
Management Committee, and the recruitment or promotion of an employee to a position
equivalent to vice president or above requires to be approved by a majority of the Directors
(including investor-appointed non-executive Directors) at the relevant Board meetings. For
biographical details of the members of the Management Committee, see ‘‘Directors and Senior
Management’’. Pursuant to the meeting rules of the Management Committee adopted on
November 2, 2020, decisions of the Managem ent Committee are determined by a simple
majority vote of the members present at a meet ing, with each member entitled to one vote. No
single member holds a veto right or casting vote.
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Shanghai Shuqi is the general partner of each of Shanghai Xishi, Shanghai Yishi, Shanghai
Sushi, Shanghai Nashi, Shanghai Yueshi, Shanghai Yuanshi and Shanghai Qiongyu (the
‘‘Shareholding Platforms ’’). Shanghai Shuqi is responsible for exercising the voting rights of the
Shareholding Platforms in our Company and is re quired to act in accordance with the decisions
of the Management Committee. During the Track Record Period, the Shareholding Platforms,
together with Shanghai Shuqi, have constituted t he single largest group of shareholders of our
Company. At the material time during the Trac k Record Period, Shanghai Sushi, Shanghai
Nashi, Shanghai Yishi, Shanghai Yueshi, Shan ghai Yuanshi, Shanghai Xishi had the right to
nominate half of the Board. Pursuant to the Supplemental Agreements (as defined below), such
nomination right granted under the shareholders’ agreement shall be terminated upon Listing.
As of the Latest Practicable Date, they coll ectively held 54,034,125 Shares, representing
approximately 23.61% of our total issued share capital. Immediately upon completion of the
Global Offering, they will collectively hold a pproximately 21.25% of our total issued share
capital.
From Janaury 1, 2022 and up to May 21, 2025, Mr. Diao Shijing (‘‘ Mr. Diao ’’), our former
vice chairman of the Board and a former Director, was the sole shareholder and sole director of
Shanghai Shuqi. Although Shanghai Shuqi was wholly owned by Mr. Diao during this period,
the exercise of voting rights of the Shareholding Platforms by Shanghai Shuqi as their respective
general partner was required to act in acco rdance with the decisions of the Management
Committee pursuant to a confirmation date d December 16, 2021 executed by Shanghai Shuqi
and Mr. Diao. Following Mr. Diao’s retirement in May 2025, he transferred all of his equity
interest in Shanghai Shuqi to Mr. Gai Lujiang (‘‘ Mr. Gai ’’), our chairman of the Board,
executive Director and chief ex ecutive officer, and ceased to serve as its sole director. Mr. Gai
subsequently became the sole shareholder and sole director of Shanghai Shuqi on May 21, 2025.
Notwithstanding the change from Mr. Diao to M r. Gai, Shanghai Shuqi continues to exercise
the voting rights of each of the Shareholding Platforms in accordance with the decisions of the
Management Committee pursuant to a confirmation dated May 21, 2025 executed by Shanghai
Shuqi and Mr. Gai.
During the Track Record Period, Mr. Diao was beneficially interested in less than 2.02%
interest in the Company through his interest in the Direct Employee Shareholding Platforms (as
defined below). Immediately prior to the transfer of Mr. Diao’s interest in the Company on June
16, 2025, Mr. Diao held his interest in the Company through a limited partnership which in turn
held 70.7% interest in Shanghai Yuanshi. On June 16, 2025, Mr. Diao transferred his entire
interest in such limite d partnership to Li Lei ( 李妮) (an Independent Third Party). The
consideration of such transfer was ir revocably settled on August 1, 2025.
Shanghai Sushi, Shanghai Yishi and Shanghai Xishi
In recognition of the contributions of our key employees and to incentivize them to further
promote our development, Shanghai Sushi, Shangha i Yishi and Shanghai Xishi (collectively, the
‘‘Direct Employee Shareholding Platforms ’’) were established as our direct employee
shareholding platforms. The participants of our employee incentive plan shall become the
direct/indirect partners of the Direct Employee Shareholding Platforms upon the grant of
awards and the execution of the grant documents.
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All management powers of the Direct Employee Shareholding Platforms shall irrevocably
reside with the respective general partner, name ly Shanghai Shuqi. In effect, the participants of
our employee incentive plan do not have any voting rights in our Company, but they are
beneficially interested in the economic interests of our Shares through their partnership interests
in the Direct Employee Shareholding Platforms and the voting power of the Shares held by the
Direct Employee Shareholding Platforms in our Company is exercisable by Shanghai Shuqi.
None of the participants of our employee incentive plan holds 30% or more economic interest in
each of the Direct Employee Shareholding Platforms.
Set out below the economic interest in each of t he Direct Employee Shareholding Platforms
held by the individuals who are/were members of the Management Committee during the Track
Record Period and up to the Latest Practicable Date:
Name Position
Direct Employee
Shareholding
Platform
Percentage of
economic interest
in the relevant
Direct Employee
Shareholding
Platform as of the
Latest
Practicable Date
Mr. Gai Lujiang
(蓋魯江)
Executive Director, chief
executive officer and
chairman of the Board
Shanghai Xishi 21.87%
Shanghai Yishi 17.51%
Mr. Sun Yile ( 孫怡樂) Executive Director and vice
president
Shanghai Sushi 12.73%
Mr. Liu Zheng ( 劉崢) Executive Director, chief Shanghai Xishi 10.96%
operating officer Shanghai Yishi 1.30%
Mr. Yang Lei ( 楊磊) Executive Director, chief
financial officer, Board
secretary, employee
representative Director
Shanghai Xishi 0.42%
Shanghai Yishi 0.26%
Dr. Lu Chien-Ping
(呂堅平)
Vice president Shanghai Sushi 14.05%
Mr. Liu Yuan ( 劉圓) Vice president Shanghai Sushi 7.56%
Shanghai Yishi 1.62%
Mr. Shi Jiasheng Vice pres ident Shanghai Xishi 0.07%
(石加聖) Shanghai Sushi 2.09%
Shanghai Yishi 4.70%
Mr. Zou Xuan ( 鄒翾) Vice president Shanghai Xishi 4.48%
Shanghai Yishi 1.23%
Mr. Guo Wei ( 郭為) Vice president Shanghai Xishi 3.24%
Mr. Song Yu ( 宋煜) Vice president Shanghai Xishi 1.20%
Shanghai Yishi 0.32%
Mr. Liang Bin ( 梁斌) Vice president Shanghai Sushi 0.32%
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Name Position
Direct Employee
Shareholding
Platform
Percentage of
economic interest
in the relevant
Direct Employee
Shareholding
Platform as of the
Latest
Practicable Date
M s .D i n gN a(丁娜) Vice president Shanghai Sushi 4.33%
Shanghai Yishi 0.79%
Mr. Cai Quangen
(蔡全根)
Former Director and former
vice chairman of the Board
Shanghai Yishi 7.02%
Mr. Zheng Jinshan
(鄭金山)
Former Director and former
senior vice president
Shanghai Yishi 16.38%
For more details, see ‘‘— Employee Incentive Plan’’ and ‘‘Appendix VI — Statutory and
General Information — Employee Incentive Plan’’.
Shanghai Nashi, Shanghai Yueshi and Shanghai Yuanshi
Each of Shanghai Nashi, Shanghai Yueshi and Shanghai Yuanshi was f irst established as
our employee shareholding platform with the general partner of each of Shanghai Nashi,
Shanghai Yueshi and Shanghai Yuanshi being S hanghai Shuqi. Upon the transfer of limited
partnership interest in each of Shanghai Nashi , Shanghai Yueshi and Shanghai Yuanshi to third
parties, each of Shanghai Nashi, Shanghai Yueshi and Shanghai Yuanshi became an investment
holding platform.
The general partner of each of Shanghai Nashi, Shanghai Yueshi and Shanghai Yuanshi
remains to be Shanghai Shuqi. Pursuant to the partnership agreement of each of Shanghai
Nashi, Shanghai Yueshi and Shanghai Yuanshi, the general partner has the exclusive authority
to conduct partnership affairs and manage all the operations of the limited partnership. No
single limited partner has the right to change the general partner of each of Shanghai Nashi,
Shanghai Yueshi and Shanghai Yuanshi.
Shanghai Nashi has six limited partners, of which Mr. Yuan Chengjie ( 袁成杰)( a n
Independent Third Party) holds 32.5% interest and Ms. Li Yaping holds 22.1% interest, and
none of the other four limited partners, who are Independent Third Parties, holds 30% or more
interest in Shanghai Nashi.
Shanghai Yueshi has three limited partners, of which an entity controlled by the Initial
Shareholder, Mr. Zhang Ye ( 張曄) and Ms. Li Yaping holds 54.0%, 45.8% and 0.1%
respectively. Mr. Zhang Ye is a former employee of our Group.
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Shanghai Yuanshi has five limited partners, of which an entity beneficially owned by Ms.
Li Lei ( 李妮) (an Independent Third Party) holds 70.7% interest, Rizhao Peiqin holds 16.3%
interest, Shanghai Shugai Yousi Enterprise Management Consulting Partnership (Limited
Partnership) ( 上海數垓又肆企業管理諮詢合夥企業（有限合夥）)( ‘ ‘Shanghai Shugai Yousi ’’) (our
indirect employee shareholding platform which Mr. Yang Lei ( 楊磊) holds 99.9% economic
interest) holds 10.0% interest, Ms. Li Yaping holds 0.03% interest and the remaining limited
partner (an Independent Third Party) holds 2.9% interest.
Shanghai Qiongyu
Shanghai Qiongyu was initially a platform controlled by the Initial Shareholder, with the
general partner of Shanghai Qiongyu being Shanghai Shuqi. As the Group was not performing
as planned under the leadership of the Initial Shareholder, the Initial Shareholder decided to
divest his interest in Shanghai Qiongyu to restructure ownership in alignment with the
Company’s revised strategic direction and financ ing needs. The Initial Shareholder transferred
71.45% limited partnership interest to Cent urium Phase I Investment Fund on July 23, 2020.
As of the Latest Practicable Date, the genera l partner of Shanghai Qiongyu remains to be
Shanghai Shuqi. Pursuant to the partnership agreement of Shanghai Qiongyu, the general
partner has the exclusive authority to conduct partnership affairs and manage all the operations
of the limited partnership. Shanghai Qiongyu has four limited partners, of which Centurium
Phase I Investment Fund holds 71.45% limited par tnership interest and none of the other three
limited partners holds 30% or mo re interest in Shanghai Qiongyu . No single limited partner has
the right to change the general partner of Shanghai Qiongyu.
EMPLOYEE INCENTIVE PLAN
We have approved and adopted an employee incentive plan for the purpose of motivating,
retaining and rewarding talents for their c ontribution to the development of our Group and
linking the interests of the participants under the employee incentive plan with those of our
Company and our Shareholders. As of the Latest Practicable Date, all Direct Employee
Shareholding Platforms and Shanghai Shugai Yousi (collectively, the ‘‘ Employee Shareholding
Platforms ’’) being direct limited partner of Shanghai Yuanshi, were our employee shareholding
platforms.
The participants of our employee incentive plan (the ‘‘ Grantees ’’) shall become
direct/indirect partners of the Direct Employee Shareholding Platforms or direct partners of
Shanghai Shugai Yousi, upon the grant of awar ds and execution of the grant documents. The
Grantees may be required to pay a nominal ca pital contribution for the acceptance of the
awards and for registering them as a partner of t he Employee Shareholding Platforms, and the
Grantees are entitled to receive the economic inte rest based on the equivalent units of Shares as
stipulated in their respective award letter, rath er than their respective r egistered partnership
interest in the Employee Shareholding Platforms. The capital contribution made by the
Grantees to the Employee Shareholding Pla tforms shall be sourced from their own funds.
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As of the Latest Practicable Date, there were in aggregate 512 Grantees holding
partnership interest in direct or indirect level of the Employee Shareholding Platforms. For
more details, see ‘‘Appendix VI — Statutory and General Information — Employee Incentive
Plan’’.
MATERIAL ACQUISITIONS AND DISPOSALS
During the Track Record Period and up to the Latest Practicable Date, we had not
conducted any acquisitions, disposals or mergers that we consider material to us.
PRE-IPO INVESTMENTS
Overview
Since 2016, our Company obtained multiple rounds of investments from the Pre-IPO
Investors through subscriptions for increased registered capital of our Company. For further
details, see the ‘‘— Establishment and shareholding changes of our Company’’ in this section.
Principal terms of th e Pre-IPO Investments
The table below summarizes the principal terms of the Pre-IPO Investments:
Series
Date of
investment
agreements
Date of full
settlement
Pre-money
valuation
Approximate
amount raised
for our Group
Approximate
cost per Share
paid
(1)
Discount to
the Offer
Price (2)
Series A1 November 22,
2016
November
28, 2016
RMB68
million
RMB12
million
RMB1.88 (3)
(equivalent to
HK$2.07)
98.6%
Series A2 March 31, 2017 April 19,
2017
RMB200
million
RMB35
million
RMB4.70 (3)
(equivalent to
HK$5.18)
96.4%
Series A3 July 16, 2018 July 13, 2018 RMB470
million
RMB143
million (4)
RMB9.46
(equivalent to
HK$10.43)
92.8%
Series A4 November 23,
2018
October 24,
2018
RMB830
million
RMB39
million
RMB9.95
(equivalent to
HK$10.98)
92.4%
Series B January 22,
2019, May 21,
2019, August
14, 2019,
September 3,
2019
September
23, 2019
RMB2,010
million
RMB250
million and
US$17.45
million
RMB23.04
(equivalent to
HK$25.41)
82.4%
Series C April 14, 2020,
April 24, 2020,
October 19,
2020, January
22, 2021,
February 8,
2021, April 30,
2021,
November 20,
2021
May 25, 2021 RMB2,500
million to
RMB3,500
million
(5)
RMB820
million
RMB24.24
(equivalent to
HK$26.73) to
RMB29.25
(equivalent to
HK$32.26)
(5)
77.7% to
81.5%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Series
Date of
investment
agreements
Date of full
settlement
Pre-money
valuation
Approximate
amount raised
for our Group
Approximate
cost per Share
paid
(1)
Discount to
the Offer
Price (2)
Series C+ January 28,
2022, February
22, 2022
February 25,
2022
RMB5,000
million
RMB250
million
RMB33.58
(equivalent to
HK$37.03)
74.4%
Series C++ April 26, 2022,
August 2, 2022
August 30,
2022
RMB7,000
million
RMB670
million
RMB44.77
(equivalent to
HK$49.38)
65.9%
Series D July 14, 2023,
October 31,
2023,
December 29,
2023, July 23,
2024, August
19, 2024
January 22,
2025
RMB10,000
million
RMB1,410
million
RMB58.37
(equivalent to
HK$64.38)
55.5%
Series D+ April 27, 2025,
May 8, 2025
and May 14,
2025
June 4, 2025 RMB12,000
million
RMB2,050
million
RMB61.40
(equivalent to
HK$67.71)
53.2%
Notes:
(1) The equivalent cost per Share paid in HK dollars is for reference only and is calculated based on the
currency exchange rate as set out in ‘‘Information about this Prospectus and the Global Offering’’.
(2) The discount to the Offer Price is calculated based on the Offer Price of HK$144.60 per H Share.
(3) The cost per share paid is calculated based on the registered capital subscribed by the relevant Pre-IPO
Investor(s) after taking into effect of the increase in reg istered capital through the capitalization of capital
reserve took place on March 13, 2017 and May 26, 2017.
(4) The amount raised excluded the funds contributed by the Initial Shareholder and the employee
shareholding platforms on July 19, 2018, which is not pr e-IPO investment and the consideration was based
on the amount of the registered capital being subscribed.
(5) Nanjing Youxu subscribed for the increased registered capital of our Company in the amount of
RMB16,503,313 at the consideration of RMB400 million at an agreed pre-money valuation of RMB2,500
million taking into consideration Nanjing Youxu advanced a loan to the Group in April 2020 which was
later settled in October 2020. The cost per Share paid by Nanjing Youxu was approximately RMB24.24
per Share. Other Series C Pre-IPO Investors subscribed for the increased registered capital of our
Company at the agreed pre-money valuation of RMB3,5 00 million after taking into consideration of the
capital increase of Nanjing Youxu. The cost per Share paid by such other Series C Pre-IPO Investors was
RMB29.25 per Share.
Basis of consideration The basis of consideration of each tranche of the Pre-IPO
Investments was determined by the relevant Pre-IPO Investors
through arm’s length negotiations between the parties based on
the valuation of our Group at the time of the investment,
taking into account the timing of the investment, the then
status of the businesses carried out by our Group, the business
milestones achieved by our Group at the relevant time, the
outlook/growth potential and financial performance of our
Group, and the industry in which we operate in.
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Use of proceeds from the
Pre-IPO Investments
We utilized the proceeds from the Pre-IPO Investments for the
development and operations of our business, including but not
limited to strategic investments, new business and product
development, technology infras tructure, personnel recruitment
and sales and marketing, as well as other general corporate
purposes. As of the Latest Practicable Date, save for the funds
raised from the Series D+ Investment, all other funds raised
from the Pre-IPO Investments have been utilized.
Lock-up Pursuant to the PRC Company Law , all the Pre-IPO Investors
are subject to a 12-month lock-up period from the Listing
Date.
Strategic benefits of the
Pre-IPO Investments
At the time of the Pre-IPO Investments, the Directors were of
the view that our Company would benefit from the strategic or
financial value that the Pre-IPO Investors would bring to our
business, the additional capital provided by the Pre-IPO
Investors’ investments in our Company and their knowledge
relevant to our business. Our Pre-IPO Investors include
renowned professional investors, which can provide us with
professional advice on our Group’s development and improve
our corporate governance, financial reporting and internal
control.
Moreover, our Directors were of the view that our Group
could benefit from the Pre-IPO Investments as the Pre-IPO
Investors’ investments demonstrated their confidence in the
operations of our Group and served as an endorsement of our
Company’s performance, strengths and prospects.
Special rights of the Pre-IPO Investors
Certain special rights were granted to our Pre-IPO Investors under the relevant
agreements, such as anti-diluti on rights, redemption rights, liquidation preferences rights,
right to appoint directors or observers on the boa rd, rights of first refusal, and information and
inspection rights. No Pre-IPO Investors had exe rcised their redemption rights or liquidation
preferences rights. For more details (including the financial impact of the special rights), please
refer to note 30(b) to the Accountant’s Report in Appendix I to this prospectus.
On 10 June 2025, in preparation of the Listing , the Company and the Pre-IPO Investors
entered into supplemental agreements (the ‘‘ Supplemental Agreements ’’), agreeing that (i) certain
of the special rights granted to Pre-IPO Investors, being redemption rights and liquidation
preferences rights, have been irrecoverably ter minated and shall be void ab initio; and (ii) other
special rights (including, among others, the right of first refusal, tag-along right, drag-along
right, right to appoint directors and board observers and right to information) shall be
terminated upon Listing (for clarity, all speci al rights, except for redemption rights and
liquidation preferences rights, are not void ab initio pursuant to the Supplemental Agreements).
Article 143 of the Civil Code of the People’s Republic of China ( 中華人民共和國民法典)
stipulates that a civil legal act is valid if it is con ducted by parties with the requisite capacity for
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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civil conduct, is based on genuine intent, and does not contravene mandatory provisions of
laws, administrative regulations, or public order and morals. Adhering to the principle of
autonomy of will, the Company and the Pre-IPO In vestors explicitly agreed that the redemption
rights and liquidation preference rights were i rrevocably terminated and deemed void ab initio.
Through the execution of the Supplemental Agreements, while the clauses concerning
redemption rights and liquidation preference rights have never been exercised, and there were
no warranties regarding the enforceability on suc h redemption rights and liquidation preference
rights under the relevant investment agreements , both parties agreed to terminate these clauses
and to treat them as having no legal effect from the time of their execution, thereby restoring the
rights and obligations of both parties to the status quo ante as if such clauses had never been
agreed upon. This arrangement does not vi olate any mandatory provisions of laws,
administrative regulations, or public order and morals, and is thus legally valid. Based on the
above, our PRC Legal Advisor is of the view that the redemption rights and liquidation
preference rights agr eed upon by the Company and the Pre-IPO Investors have been irrevocably
terminated and shall be deemed void ab initio . Taking into account the legal and regulatory
framework of our Company’s jurisdiction a nd the governing law of the Supplemental
Agreements, the Company is of the view that it is appropriate to present the Pre-IPO
Investments as equity throughout the Track Record Period. Therefore, there is no divestment
right as of the date of first filing of the listing application with the Stock Exchange, and in
anticipation of the Global Offering, the special rights granted to the Pre-IPO Investors shall be
terminated in compliance with Chapter 4.2 of the Guide. For clarity, certain special rights, such
as right to appoint directors and right to information were exercised by relevant Pre-IPO
Investors during the Track Record Period. Howe ver, as advised by the PR C Legal Advisors, as
these rights were not void ab initio pursuant t o the Supplemental Agreements, the exercise of
these special rights by the Pre-IPO Investors have no implication on the conclusion drawn by the
PRC Legal Advisors above.
In particular, in confirming that the redemption rights and liquidation preferences rights
granted by the Company to the Pre-IPO Investors had been irrecoverably terminated and shall
be void ab initio, the Sole Sponsor has conducted due diligence work including, among others:
(i) reviewing the share subscription agreements and Shareholders’ agreements entered into by
our Company and the then Shareholders from November 22, 2016 to May 14, 2025, as well as
the Supplemental Agreements, (ii) reviewing the legal opinion issued by the PRC Legal
Advisors, and (iii) discussing with the PRC Legal Advisors and the Sole Sponsor’ PRC legal
advisors to understand the treatment of the redemption right and liquidation preferences rights
granted by the Company in the Supplemental Agreements under PRC laws. Based on the due
diligence work conducted, nothing has come to t he Sole Sponsor’s attention that would cause it
to cast doubt on the Company’s and the Company’s PRC Legal Advisor’s views above.
Compliance with the Pre-I PO Investment guidance
On the basis that (i) the consideration for th e Pre-IPO Investments was settled more than
120 clear days before the date of the Listing, an d (ii) the special rights granted to the Pre-IPO
Investors shall be terminated in compliance with Chapter 4.2 of the Guide, the Sole Sponsor has
confirmed that the Pre-IPO Investments are in compliance with Chapter 4.2 under the Guide.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Information on the Pre-IPO Investors
Set forth below is a description of all of our Pre-IPO Investors. To the best knowledge of
the Company, save for the Centurium Capital Entities (as defined below), which will hold in
excess of 10% of the issued Shares and constitute core connected persons of our Company upon
Listing, each of the Pre-IPO Investors, together wi th their respective ultimate beneficial owners,
is an Independent Third Party. To the best knowledge, information and belief of the Company
after due enquiry, the individuals as set out below are independent of each other.
Centurium Capital
Centurium Phase I Investment Fund is one of the funds established by Centurium Capital,
and Nanjing Youxu, Xiamen Zhengmei and Masterwork Holdings, serve as investment holding
platforms under the funds established by Centurium Capital. Centurium Phase I Investment
Fund, Nanjing Youxu, Xiamen Zhengmei and Maste rwork Holdings are coll ectively referred to
as the ‘‘Centurium Capital Entities ’’. Each of Centurium Phase I Investment Fund, Nanjing
Youxu and Xiamen Zhengmei is a limited partnership established under the partnership laws of
the PRC and Masterwork Holdings is a company incorporated in the Cayman islands with
limited liability. Centurium Capital is a leadin g private equity investment firm and primarily
focuses on investing into consum er, business services, healthcare and technology sectors, and is
a passive financial investor of our Company.
The general partner of Centurium Phase I Investment Fund is Xiamen Centurium Equity
Investment Partnership (Limited Partnership) ( 廈門大鉦投資合夥企業（有限合夥）), the general
partner of which is indirectly controlled by Beijing Centurium Management Advisory Co., Ltd.
(北京大鉦管理諮詢有限公司)( ‘ ‘Beijing Centurium ’’), which is indirectly wholly owned by Li Hui
(黎輝). Centurium Phase I Investment Fund has six limited partners, of which ICBC Credit
Suisse Investment Management Co., Ltd. ( 工銀瑞信投資管理有限公司)( ‘ ‘ICBC Credit Suisse
Investment ’’) holds 46.1% interest and none of the other five limited partners holds 30% or more
interest in Centurium Phase I Investment Fund. ICBC Credit Suisse Investment is ultimately
controlled by Industrial and Commercial Bank of China Limited ( 中國工商銀行股份有限公司),
a company listed on the Stock Exchange (stock code: 1398) and the Shanghai Stock Exchange
(stock code: 601398).
The general partner of Nanjing Youxu is Beiji ng Zhenglang Business Service Co., Ltd. ( 北
京鉦朗商務服務
有限公司), which is indirectly controlled by Beijing Centurium. Centurium
Phase I Investment Fund holds 99.998% interes ti nN a n j i n gY o u x ua sal i m i t e dp a r t n e r .
The general partner of Xiamen Zhengmei is Bei jing Zhengguan Business Service Co., Ltd.
(北京鉦冠商務服務有限公司), which is indirectly controlled by Beijing Centurium. Xiamen
Centurium Phase II Investment Fund Partnership (Limited Partnership) ( 廈門大鉦二期投資基金
合夥企業（有限合夥）)( ‘ ‘Centurium Phase II Investment Fund ’’) is a limited partner of Xiamen
Zhengmei holding 99.997% interest. Centurium Phase II Investment Fund has nine limited
partners, of which Nanjing Jiangbei New Area Ce nturium Phase II Venture Capital Partnership
(Limited Partnership) ( 南京江北新區大鉦二期創業投資合夥企業（有限合夥）)( ‘ ‘ Nanjing
Centurium Phase II VC ’’) holds 63.9% interest and none of the other eight limited partners
holds 30% or more interest in Centurium Phase II Investment Fund. Nanjing Centurium Phase
II VC has seven limited partners and none of which holds 30% or more interest in Nanjing
Centurium Phase II VC, and the general partner of Nanjing Centurium Phase II VC is an entity
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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indirectly controlled by Beijing Centurium. The general partner of Centurium Phase II
Investment Fund is Xiamen Centurium Enter prise Management Partnership (Limited
Partnership) ( 廈門大鉦企業管理合夥企業（有限合夥）), which is indirectly controlled by Beijing
Centurium.
Masterwork Holdings is wholly owned by Centurium Capital Partners II, L.P., the general
partner of which is indirectly wholly owned by Li Hui. None of the limited partners hold 30% or
more interest in Centurium Capital Partners II, L.P..
Hainan Shuxin
Each of Rizhao Tianxin and Rizhao Peiqin (collectively, the ‘‘ Hainan Shuxin Entities ’’) is a
limited partnership established und er the partnership laws of the PRC.
T h eg e n e r a lp a r t n e ro fe a c ho fR i z h a oT i a n x i na n dR i z h a oP e i q i ni sH a i n a nS h u x i n
Investment Partnership (Limited Partnership) ( 海南數芯投資合夥企業（有限合夥）)( ‘ ‘Hainan
Shuxin ’’) which holds 99.8% and 81.6% intere st in Rizhao Tianxin and Rizhao Peiqin
respectively. Hainan Shuxin was ow ned as to 50% each by Zhu Xiangkai ( 朱祥凱)a n dL i
Ronghui ( 李榮輝), with Li Ronghui as the general partner.
Cedarlake Capital
Each of Haihe Yunbai, Wuhu Kuangyun and Shenzhen Digital Future (collectively,
‘‘Cedarlake Capital Entities ’’) is a limited partnership established under the partnership laws of
the PRC and are funds managed by Zhuhai Youb ai Private Equity Fund Management Co., Ltd.
(珠海佑柏私募基金管理有限公司), a company ultimately controlled by Bao Yi ( 鮑毅).
The general partner of Haihe Yunbai is Tianjin Haihe Yunbai Investment Management
Co., Ltd. ( 天津海河沄柏投資管
理有限公司), which is held as to 80% by Zhuhai Youbo Private
Equity Fund Management Co., Ltd. ( 珠海佑柏私募基金管理有限公司), and which is in turn
indirectly held as to 90% by Bao Yi ( 鮑毅). Save for Tianjin Haihe Industrial Fund Partnership
(Limited Partnership) ( 天津市海河產業基金合夥企業（有限合夥）)( ‘ ‘Tianjin Haihe Industrial
Fund ’’) holding 33.7% limited partnership interest, none of the other 10 limited partners
holds 30% or more interest in Haihe Yunbai. The general partner of Tianjin Haihe Industrial
Fund is Tianjin Haihe Industrial Fund Management Co., Ltd. ( 天津市海河產業基金管理有限公
司), of which none of its shareholders hold 30% or more of its equity interests. The sole limited
partner of Tianjin Haihe Industrial Fund is Tianjin Finance Bureau ( 天津市財政局), which
holds 99.75% of the partnership interests in Tianjin Haihe Industrial Fund.
The general partner of Wuhu Kuangyun is Wuhu Kuangyun Investment Management
Center (Limited Partnership) ( 蕪湖曠沄投資管理中心（有限合夥）), which is ultimately
controlled by Wang Chen ( 王晨). Wuhu Kuangyun has nine limited partners and none of
them holds 30% or more interest in Wuhu Kuangyun.
The general partner of Shenzhen Digital Future is Shenzhen Ch engyun Enterprise
Management Co., Ltd. ( 深圳市乘沄企業管理有限責任公司), which is indirectly owned as to
50% by each of (i) Firmiana Spring Co., Limited, a company wholly owned by Bao Yi ( 鮑毅),
and (ii) Punnakkhetta Capital Limited, a company wholly owned by Chen Jia’en ( 陳家恩).
Shenzhen Digital Future has seven limited partners, of which Wuxi Digital Future Private
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Investment Fund Partnershi p( L i m i t e dP a r t n e r s h i p )(無錫數字未來私募投資基金合夥企業（有限
合夥）)( ‘ ‘Wuxi Digital Future ’’) holds 41.23% interest and none of the other six limited partners
holds 30% or more interest in Shenzhen Digital Future. Wuxi Digital Future is owned as to (i)
37.66% by Wuxi Shuzhi Future Equity Investment Partnership (Limited Partnership) ( 無錫數智
未來股權投資合夥企業（有限合夥）), which is controlled by Digital Era Hong Kong Limited, a
company owned as to 50% each by Lin Naihui ( 林乃慧) and Chen Jia’en ( 陳家恩), (ii) 32.18%
by Suzhou Yimi New Material Technology Co., Ltd. ( 蘇州壹米新材料科技有限公司), a
company indirectly controlled by Wu Yaofang ( 吳耀芳), and (iii) 30% by Wuxi Economic
Development Zone Digital Future Equity Investment Partnership (Limited Partnership) ( 無錫經
開區數創未來股權投資合夥企業（有限合夥）), which is indirectly controlled by Jiangsu Wuxi
Economic Development Zone Finance Bureau (Jiangsu Wuxi Economic Development Zone
State-owned Assets Management Office) ( 江蘇無錫經濟開發區財政局（江蘇無錫經濟開發區國有
資產管理辦公室）).
Focustar Capital
Nanjing Xingna Heyuan, Nanjing Xingnafeng, Focustar Fund and XN Speed (collectively,
‘‘Focustar Entities ’’) are entities managed by Focustar Cap ital. Focustar Capital’s investments
mainly focus on the PRC’s consumers and technology industries. Focustar Capital is controlled
and managed by Wang Jianguo ( 汪建國).
Nanjing Xingna Heyuan is a fund registered in the PRC under the PRC laws. The general
partner of Nanjing Xingna Heyuan is Nanjing X inglun Venture Capital Management Co., Ltd.
(南京星侖創業投資管理有限公司)( ‘ ‘Nanjing Xinglun ’’). None of the limited partners of Nanjing
Xingna Heyuan hold 30% or more interests in Nanjing Xingna Heyuan. Nanjing Xinglun is held
as to (i) 43% by Five Star Holdings Group Co., Ltd. ( 五星控股集團有限公司), which is in turn
directly held as to approximately 39.40% by Wang Jianguo ( 汪建國) (with no other shareholders
holding 30% or more equity interests); and (ii) 37% by Sujiu Group Jiangsu Wealth
Management Co., Ltd. ( 蘇酒集團江蘇財富管理有限公司), which is wholly owned by Jiangsu
Yanghe Brewery Joint-Stock Co., Ltd. ( 江蘇洋河酒廠股份有限公司) (a company whose shares
are listed on the Shenzhen Stock Exchange (sto ck code: 002304.SZ)). Jiangsu Yanghe Brewery
Joint-Stock Co., Ltd. is indirectly held as to approximately 34.18% by Suqian Municipal
People’s Government ( 宿遷市人民政府).
Nanjing Xingnafeng is a limited partnership established under the partnership laws of the
PRC for the purpose of investing in our Company. The general partner of Nanjing Xingnafeng
is Nanjing Xinghequan Enterprise Management Co., Ltd. ( 南京星合泉企業管理有限公司)
(‘‘Nanjing Xinghequan ’’) which holds 58.82% of the partnership interests in Nanjing
Xingnafeng. Nanjing Xinghequan is held as to 99% by Yin Jian ( 尹劍). None of the limited
partners of Nanjing Xingnafeng hold 30% or more partnership interests in Nanjing Xingnafeng.
XN Speed is a company incorporated in the BVI with limited liability for the purpose of
investing in our Company. It is held as to approximately 33.11% by Alphaone Private Ltd, and
there are no other shareholders holding 30% or more issued shares. Alphaone Private Ltd is
wholly-owned by Phang Yew Kiat.
Focustar Fund is a fund incorporated in the Ca yman Islands. There are no entities holding
30% or more of interests in the fund.
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Jupiter Technology
Jupiter Technology is a company incorporated in the BVI with limited liability and is
wholly owned by Jupiter Technology Link Holding Company Ltd. Jupiter Technology Link
Holding Company Limited primarily engages in investing in the technology sector. Jupiter
Technology Link Investment Company Ltd is an investment holding company incorporated in
the British Virgin Islands which is controlled by HOPU USD Master Fund III, L.P. (‘‘ HOPU ’’)
through its wholly owned subsidiary Jupiter Technology Link Holding Company Ltd. HOPU is
a Cayman Islands limited partnership register ed on 25 August 2017 acting through its general
partner, HOPU Investments Co. III Ltd., which is part of and managed by HOPU Investments
(an independent third party), an As ian alternative asset manager.
Yuyao Bijiang
Yuyao Bijiang is a limited partnership establ ished under the partnership laws of the PRC.
The general partner of Yuyao Bijiang is Yuya o Bijiang Enterprise Management Co., Ltd. ( 余姚
市碧江企業管理有限公司), which is controlled by Ms. Li Yaping. Yuyao Bijiang has 16 limited
partners and none of them holds 30% or more interest in Yuyao Bijiang.
Beijing Zhongguancun
Beijing Zhongguancun is a limited partnership established under the partnership laws of
the PRC. The general partner and the limited partner of Beijing Zhongguancun is Beijing
Zhongguancun Science City Technolog y Investment Management Co., Ltd. ( 北京中關村科學城
科技投資管理有限公司) and Beijing Haidian District State Owned Assets Investment Group
Co., Ltd. ( 北京市海淀區國有資產投資集團有限公司) respectively, both of which is ultimately
controlled by State-owned Assets Supervision and Administration Commission of the People’s
Government of Haidian District of Beijing ( 北京市海淀區人民政府國有資產監督管理委員會)
(‘‘Haidian SASAC ’’).
Shanghai Huiyue
Shanghai Huiyue is a limited partnership established under the partnership laws of the
PRC. The general partner of Shanghai Huiyue is Li Ronghui holding 25.7% interest. Save for Xi
Zixiang ( 奚自翔) who holds 31.0% limited partnership interest, none of the other limited
partners holds 30% or more interest in Shanghai Huiyue.
Xicheng Zhiyuan
Each of Beijing Ruifeng and Xicheng Zhiyuan PE Fund (collectively, the ‘‘ Xicheng Zhiyuan
Entities ’’) is a limited partnership establishe d under the partnership laws of the PRC.
The general partner of Beijing Ruifeng is Xicheng Zhiyuan Private Equity Fund
Management (Beijing) Co., Ltd. ( 熙誠致遠私募基金管理（北京）有限公司)( ‘ ‘Xicheng Zhiyuan ’’),
which in turn is owned as to (i) 40% by Beijing Xicheng Jinchi Investment Management Co.,
Ltd. ( 北京熙誠金馳投資管理有限公司), which is indirectly wholly owned by the State-owned
Assets Supervision and Administration Commission of the People’s Government of Xicheng
District of Beijing ( 北京市西城區人民政府國有資產監督管理委員會)( ‘ ‘ Beijing Xicheng
SASAC ’’), and (ii) 35% by Tianjin Qihang Chuangfu Enterprise Management Partnership
(Limited Partnership) ( 天津啟航創富企業管理合夥企業（有限合夥）)( ‘ ‘ Tianjin Qihang
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Chuangfu ’’). The general partner of Tianjin Qihang Chuangfu is an entity which is in turn wholly
o w n e db yX uJ u n m i n g(許峻銘), and the sole limited partner of Tianjin Qihang Chuangfu is
Zhang Dongpei ( 張東培), which holds 99.9% of the partnership interests in Tianjin Qihang
Chuangfu. The limited partner of Beijing Ruifeng is an entity wholly owned by Beijing Xicheng
SASAC holding 99.9% interest.
The general partner of Xicheng Zhiyuan PE Fund is Xicheng Zhiyuan. Xicheng Zhiyuan
PE Fund has seven limited partners, of which B eijing Xicheng Capital Holdings Co., Ltd. ( 北京
熙誠資本控股有限公司)( ‘ ‘Beijing Xicheng Capital ’’) holds 39.9% interest and none of the other
six limited partners holds 30% or more interest in Xicheng Zhiyuan PE Fund. Beijing Xicheng
Capital is indirectly wholly owned by Beijing Xicheng SASAC.
Linke Zhixin
Linke Zhixin is a limited partnership established under the partnership laws of the PRC.
The general partner of Linke Zhixin is Shanghai Lingang Kechuang Investment Management
Co., Ltd. ( 上海臨港科創投資管理有限公司), which in turn is owned as to (i) 40% by Shanghai
Lingzhi Enterprise Management C enter (Limited Partnership) ( 上海靈致企業管理中心（有限合
夥）), which is controlled by Wu Wei ( 吳巍), (ii) 30% by Shanghai Linchuang Investment
Management Co., Ltd. ( 上海臨創投資管理有限公司), which is indirectly held as to
approximately 63.15% by State-owned Assets Supervision and Administration Commission of
Shanghai (上海市國有資產監督管理委員
會)( ‘ ‘Shanghai SASAC ’’) (with no other shareholders
holding 30% or more equity interests), and (iii) 30% by Shenzhen Houwang Investment
Management Co., Ltd. ( 深圳市厚望投資管理有限公司)( ‘ ‘Shenzhen Houwang ’ ’ ) ,w h i c hi sh e l da s
to 99% by Zeng Zhijie ( 曾之傑). Linke Zhixin has three limited partners, with Shanghai
Shengmin Yaoxin Private Equity Investment F und Partnership (Limited Partnership) ( 上海盛閔
曜芯私募投資基金合夥企業（有限合夥）)( ‘ ‘Shanghai Shengmin Yaoxin ’’) holding approximately
66.66% of partnership interests and none of the other two limited partners holding 30% or more
partnership interests. The general partner of Shanghai Shengmin Yaoxin is Shanghai Guosheng
Assets Co., Ltd. ( 上海國盛資本管理有限公司)( ‘ ‘Shanghai Guosheng ’’), which is indirectly held
as to approximately 34.95% by Shanghai SASAC (with no other shareholders holding 30% or
more equity interests in Shanghai Guosheng). The two limited partners of Shanghai Shengmin
Yaoxin, each holding approximately 49.88% pa rtnership interests in Shanghai Shengmin
Yaoxin, are indirectly wholly-owned by Minhang SASAC and Shanghai SASAC, respectively.
The limited partners of Linke Zhixin are majority controlled by Shanghai SASAC or
State-owned Assets Supervision and Administration Commission of Minhang District of
Shanghai (上海市閔行區國有資產監督管理委員會)( ‘ ‘Minhang SASAC ’’).
PVG
PVG is a company incorporated in Hong Kong with limited liability and is a special
purpose vehicle established by Princeville Capital. Princeville Capital primarily invests in
technology market leaders around the world.
PVG is wholly owned by Princeville Global Processing IC Investments Limited, a limited
liability company incorporated in the BVI, which in turn is majority owned by Shanghai Electric
Hongkong Co. Limited ( 上海電氣香港有限公司)( ‘ ‘Shanghai Electric HK ’’). Shanghai Electric
HK is a wholly-owned subsidiary of Shanghai Electric Group Company Limited ( 上海電氣集團
股份有限公司), a company listed on the Stock Exchange (stock code: 2727) and Shanghai Stock
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Exchange (stock code: 601727) and is ultimat ely controlled by Shanghai SASAC. Save for
Shanghai SASAC, there are no other ultimate beneficial owners holding 30% or more interests
in Princeville Global Processing IC Investments Limited.
Shenzhen Dongsheng
Shenzhen Dongsheng is a limited partnership established under the partnership laws of the
PRC. The general partner of Shenzhen Dongsheng is Shenzhen Fuchun Investment
Management Co., Ltd. ( 深圳富春投資管理有限公司), which is ultimately controlled by Long
Tao ( 龍滔). The limited partners of Shenzhen Dongsheng are (i) Shenzhen Xiaming Information
Technology Investment and Development Partnership (Limited Partnership) ( 深圳市夏鳴信息技
術投資發展合夥企業（有限合夥）) holding 54.4% interest, the general partner of which is an
entity controlled by Dong Xiaoheng ( 董曉珩) and the limited partner of which is Jiang Huiping
(蔣惠平) holding 98.4% interest, and (ii) Beijing Fuchun Investment Management Co., Ltd. ( 北
京富春投資管理有限公司) holding 45.0% interest, which is controlled by Long Tao ( 龍滔).
Zhuhai Yueteng
Zhuhai Yueteng is a limited partnership establ ished under the partnership laws of the PRC.
The general partner of Zhuhai Yueteng is Hainan Longtu Private Equity Fund Management
Co., Ltd. ( 海南龍圖私募基金管理有限公司), which is owned as to 60% and 40% by Huang
Yiming ( 黃一洺) and Bao Jialong ( 鮑嘉
龍) respectively. The limited partner of Zhuhai Yueteng
is Qingdao Yaoye Medical Technology Co., Ltd. ( 青島耀曄醫療科技有限公司) holding 99.9%
interest, which is ultimately wholly owned by Qingdao Licang District Government Investment
Project Performance Evaluation and Sta te-owned Enterprise Service Center ( 青島市李滄區政府
投資項目績效評價和國有企業服務中心).
Quzhou Intelligent Manufacturing
Quzhou Intelligent Manufacturing is a limited partnership established under the
partnership laws of the PRC. The general partner of Quzhou Intelligent Manufacturing is
Quzhou Zhina Enterprise Management Co., Ltd. ( 衢州智納企業管理有限公司), which is
ultimately wholly owned by State-owned Assets Supervision and Administration Commission
of the People’s Government of Quzhou ( 衢州市人民政府國有資產監督管理委員會)( ‘ ‘Quzhou
SASAC ’’). Quzhou Intelligent Manufacturing is owned as to (i) 49.9% by Quzhou Zhisheng
Industrial Investment Co., Ltd. ( 衢州智盛產業投資有限公司), which is ultimately wholly owned
by Quzhou SASAC, and (ii) 49.9% by Quzhou Xin’an Zhonghe Equity Investment Fund
Partnership (Limi ted Partnership) (
衢州信安眾合股權投資基金合夥企業（有限合夥）)( ‘ ‘Quzhou
Xin’an Zhonghe Equity Investment Fund ’’). The general partner of Quzhou Xin’an Zhonghe
Equity Investment Fund is Quzhou State-owned Assets Xin’an Capital Management Co., Ltd.
(衢州市國資信安資本管理有限公司) ,w h i c hi si nt u r nu l t i m a t e l yh e l db yQ u z h o uS A S A Ca n d
Finance of Zhejiang Province ( 浙江省財政廳). None of the five limited partners holds 30% or
more interest in Quzhou Xin’an Zhonghe Equity Investment Fund.
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Shanghai Yunzhixin
Shanghai Yunzhixin is a limited partnership e stablished under the partnership laws of the
PRC. The general partner of Shanghai Yunzhixin is Shanghai Yundi Private Equity Fund
Management Co., Ltd. ( 上海沄砥私募基金管理有限公司) ,w h i c hi sh e l da st o9 9 %b yL i nN a i h u i
(林乃慧). Shanghai Yunzhixin has 10 limited partners and none of them holds 30% or more
interest in Shanghai Yunzhixin.
Xiamen Hongshan
Xiamen Hongshan is a limited partnership est ablished under the partnership laws of the
PRC. The general partner of Xiamen Hongsha n is Xiamen Hongshan Kunteng Investment
Partnership (Limited Partnership) ( 廈門紅杉坤騰投資合夥企業（有限合夥）)( ‘ ‘ Hongshan
Kunteng ’’), which is ultimately controlled by Zhou Kui ( 周逵). The limited partner of Xiamen
Hongshan is Xiamen Hongshan Peiheng Investm ent Partnership (Limited Partnership) ( 廈門紅
杉沛恆投資合夥企業（有限合夥）)( ‘ ‘Xiamen Hongshan Peiheng ’’) holding 99.99% limited
partnership interests in Xiamen Hongshan. Hangzhou Hongshan Yuanheng Equity
Investment Partnership (Limited Partnership) ( 杭州紅杉元恆股權投資合夥企業（有限合夥）
)
(‘‘Hangzhou Hongshan Yuanheng ’’) and Hangzhou Hongshan Boheng Equity Investment
Partnership (Limi ted Partnership) ( 杭州紅杉博恆股權投資合夥企業（有限合夥）)( ‘ ‘Hangzhou
Hongshan Boheng ’’) hold 58.1% and 38.7% limited partn ership interests in Xiamen Hongshan
Peiheng as limited partners respectively. Hongshan Kunteng also holds 0.0065% partnership
interests in Xiamen Hongshan Peiheng as the general partner. Hangzhou Hongshan Yuanheng
and Hangzhou Hongshan Boheng are controlled b y their general partner, Hangzhou Hongshan
Kunpeng Management Consulting Partnership (Limited Partnership) ( 杭州紅杉坤鵬管理諮詢合
夥企業（有限合夥）), which is in turn ultimately controlled by Zhou Kui ( 周逵). None of the
limited partners of Hangzhou Hongshan Yuanheng or Hangzhou Hongshan Boheng holds 30%
or more limited partnership in terests in Xiamen Hongshan.
Shanghai Shengyong
Shanghai Shengyong is a limited partnership e stablished under the partnership laws of the
PRC. The general partners of Shanghai Shengyong are Shanghai Guosheng Capital
Management Co., Ltd. ( 上海國盛資本管理有限公司)( ‘ ‘Shanghai Guosheng Capital ’’) and
Shanghai Shengpu Enterprise Management Partnership (Limited Partnership) ( 上海盛浦企業
管理合夥企業（有限合夥）)( ‘ ‘Shanghai Shengpu ’’), of which Shanghai Guosheng Capital serves as
the manager and executive partner. Shanghai Guosheng Capital is owned as to 30% by
Shanghai Guosheng (Group) Co., Ltd. ( 上海國盛（集團）有限公司) ,w h i c hi si nt u r nw h o l l y
owned by Shanghai SASAC, and there are no other shareholders holding 30% or more equity
interests in Shanghai Guosheng Capital. The general partner of Shanghai Shengpu is Zhou
Daohong ( 周道洪), and none of the limited partners hold 30% or more of the partnership
interests in Shanghai Shengpu. The limited partner of Shanghai Shengyong is Qianhai Life
Insurance Co., Ltd. ( 前海人壽保險股份有限公司)( ‘ ‘Qianhai Life Insurance ’’) holding 89.95%
interest. Qianhai Life Insurance is held as t o 51% by Shenzhen Jushenghua Company Limited
(深圳市鉅盛華股份有限公司) (with no other shareholders holding 30% or more equity interests),
which is in turn held as to (i) approximately 67.40% by Shenzhen Baoneng Investment Group
Co., Ltd. ( 深圳市寶能投資集團有限公司)( ‘ ‘Shenzhen Baoneng Investment Group ’’), which is held
as to 99.99% by Yao Zhenhua ( 姚振華); and (ii) 30% by Shenzhen Zheshang Baoneng Industrial
Investment Partnership (Limited Partnership) ( 深圳市浙商寶能產業投資合夥企業（有限合夥）)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(‘‘Shenzhen Zheshang Baoneng ’’). The general partner of Shenzhen Zheshang Baoneng is
Shenzhen Zheshang Baoneng Capital Management Co., Ltd. ( 深圳市浙商寶能資本管理有限公
司) ,w h i c hi si nt u r nh e l da st o9 9 . 9 9 %b yY a oZ h e n h u a( 姚振華). The limited partners of
Shenzhen Zheshang Baoneng are Shenzhen Baoneng Investment Group and Huafu Securities
Co., Ltd. ( 華福證券有限責任公司)( ‘ ‘Huafu Securities ’’), which hold 33.5% and 66.45% of the
partnership interests in Shenzhen Zheshang Baoneng, respectively. Huafu Securities is indirectly
held as to approximately 46.72% by Fujian Provincial Department of Finance ( 福建省財政廳),
with no other shareholders holding 30% or more equity interests.
Dingli Funds
Each of Ningbo Dingzhixin, Ningbo Dingyinxin and Ningbo Dingmaoxin (collectively, the
‘‘Dingli Funds Entities ’’) is a limited partnership established under the partnership laws of the
PRC.
The general partners of Ningbo Dingzhixin are (i) Dingli Private Equity Fund
Management (Xuzhou) Co., Ltd. ( 鼎禮私募基金管理（徐州）有限公司)( ‘ ‘Dingli Private
Equity ’’), which is controlled by Wang Er’man ( 王爾漫), and (ii) Beijing Changhe Investment
Management Co., Ltd. ( 北京長赫投資管理有限公司), which is controlled by Lian Jinjun ( 廉金
君). Ningbo Dingzhixin has eleven limited partners, of which Yuan Xiuru ( 袁秀茹) holds 34.7%
interest and none of the other ten limited partners holds 30% or more interest in Ningbo
Dingzhixin.
The general partner of Ningbo Dingyinxin is D ingli Private Equity. Ningbo Dingyinxin has
nine limited partners, of which Hainan Fusenmei Investment Co., Ltd. ( 海南富森美投資有限責
任公司)( ‘ ‘Hainan Fusenmei ’’) holds 47.7% interest and none of the other eight limited partners
holds 30% or more interest in Ningbo Dingyinxin. Hainan Fusenmei is wholly owned by
Chengdu Fusen Noble-House Industrial Co., Ltd. ( 成都富森美家居股份有限公司) (stock code:
002818), a company listed on the Shenzhen Stock Exchange and the controlling shareholder of
which is Liu Bing ( 劉兵).
The general partner of Ningbo Dingmaoxin is Dingli Private Equity. Ningbo Dingmaoxin
has thirteen limited partners, of which Yuan Xiuru ( 袁秀茹) holds 36.6% interest and none of
the other twelve limited partners holds 30 % or more interest in Ningbo Dingmaoxin.
Bangsheng
Each of Jiangsu Bangsheng and Suzhou Bangsheng (collectively, the ‘‘ Bangsheng Entities ’’)
is a limited partnership established under the partnership laws of the PRC.
The general partner of Jiangsu Bangsheng is Nanjing Bangsheng Xingong Equity
Investment Fund Management Co., Ltd. ( 南京邦盛新工股權投資基金管理有限公司)a n dt h e
general partner of Suzhou Bangsheng is Nan jing Bangsheng Investment Management
Partnership (Limi ted Partnership) ( 南京邦盛投資管理合夥企業（有限合夥）), both of which is
controlled by Nanjing Bangsheng Juhong Venture Capital Co., Ltd. ( 南京
邦盛聚鴻創業投資管
理有限公司)( ‘ ‘Bangsheng Investment Management ’’), which in turn is owned as to 44.6%, 33.8%
and 21.5% by Gao Chong ( 郜翀), Ling Mingsheng ( 淩明聖)a n dG u oX i a o p e n g( 郭小鵬)
respectively.
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Jiangsu Bangsheng has three limited partne rs, which are (i) Nanjing Bangsheng Juxin
Venture Capital Fund Partnership (Limited Partnership) ( 南京邦盛聚信創業投資基金合夥企業
（有限合夥）)( ‘ ‘Nanjing Bangsheng Juxin ’’) holding 37.1% interest, and none of the 10 limited
partners of Nanjing Bangsheng Juxin holds 30% or more interest in Nanjing Bangsheng Juxin,
(ii) Nanjing New Industry Investment Group Co., Ltd. ( 南京新工投資集團有限責任公司)
holding 37.1% interest, which is controlled by State-owned Assets Supervision and
Administration Commission of the People’s Government of Nanjing ( 南京市人民政府國有資
產監督管理委員會), and (iii) Jiangsu Provincial Gov ernment Investment Fund (Limited
Partnership) ( 江蘇省政府投資基金（有限合夥）) holding 24.7% interest, which is controlled by
Jiangsu Department of Finance ( 江蘇省財政廳).
Suzhou Bangsheng has three limited partners, of which Suzhou Bangsheng Chuangji
Venture Capital Enterprise (Limited Partnership) ( 蘇州邦盛創驥創業
投資企業（有限合夥）)
(‘‘Suzhou Bangsheng Chuangji ’’) holds 72.6% interest and none of the other two limited
partners holds 30% or more interest in Suzhou Bangsheng. Suzhou Bangsheng Chuangji has 25
limited partners and none of them holds 30% or m ore interest in Suzhou Bangsheng Chuangji.
Yuanhe Funds
Each of Suzhou Yuanhe and Chengdu Yuanhe (the ‘‘ Yuanhe Entities ’’) is a limited
partnership established under the partnership laws of the PRC.
Suzhou Yuanhe has more than 10 limited partners. The general partner of Suzhou Yuanhe
is Suzhou Industrial Park Yuanhe Gengzi Venture Capital Partnership (Limited Partnership)
(蘇州工業園區元禾耕耔創業投資合夥企業（有限合夥）), which is ultimately controlled by Xu
Qing ( 徐清).
Chengdu Yuanhe has 20 limited partners. The general partner of Chengdu Yuanhe is
Suzhou Industrial Park Chenkun Jingu Venture Capital Partnership (Limited Partnership) ( 蘇州
工業園區辰坤金谷創業投資合夥企業（有限合夥）) ,w h i c hi su l t i m a t e l yc o n t r o l l e db yX uQ i n g(徐
清).
Hangzhou Yuanqiao
Hangzhou Yuanqiao is a limited partnership e stablished under the partnership laws of the
PRC. The general partner of Hangzhou Yuanqi ao is Hangzhou Yuanqiao Zhengming Private
Equity Fund Management Co., Ltd. ( 杭州遠橋正明私募基金管理有限公
司), which is controlled
by Zhou Xiaole ( 周曉樂). Hangzhou Yuanqiao has four limited partners of which Hangzhou
Yuanqiao Zhixin Venture Capital Partnership (Limited Partnership) ( 杭州遠橋知芯創業投資合
夥企業（有限合夥）)( ‘ ‘Yuanqiao Zhixin ’’) holds 56.4% interest and none of the other three
limited partners holds 30% or more interest in Hangzhou Yuanqiao. Yuanqiao Zhixin has 15
limited partners and none of them holds 30% or more interest in Yuanqiao Zhixin.
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Xiangjiang Equity Investment
Xiangjiang Equity Investment is a limited partnership established under the partnership
laws of the PRC. The general partner of Xiangjiang Equity Investment is Hunan Guochuang
Industrial Investment Co., Ltd. ( 湖南國創產業投資有限公司), which is ultimately held as to
approximately 92.8% by State-owned Assets Sup ervision and Administration Commission of
the People’s Government of Changsha ( 長沙市人民政府國有資產監督管理委員會). Xiangjiang
Equity Investment has two limited partners, of which Hunan Xiangjiang New District Guidance
Fund Co., Ltd. ( 湖南湘江新區引導基金有限公司) holds 83.3% interest, which in turn is
controlled by Hunan Xiangjiang New District Management Committee ( 湖南湘江新區管理委員
會).
Sichuan Xingchuan
Each of Sichuan Regional Collaborative F und and Mianyang Gaochuang (collectively,
‘‘Sichuan Xingchuan Entities ’’) is a limited partnership established under the partnership laws of
the PRC. The general partner of Sichuan Regi onal Collaborative Fund is Sichuan Xingchuan
Key Project Equity Investment Fund Management Co., Ltd. ( 四川興川重點項目股權投資基金管
理有限公司)( ‘ ‘Sichuan Xingchuan ’’), which is controlled by Sichuan Department of Finance ( 四
川省財政廳). Sichuan Regional Collaborative Fund has 16 limited partners and none of which
holds 30% or more interest in Sichuan Regional Collaborative Fund.
The general partner of Mianyang Gaochuang is Sichuan Xingchuan. The limited partner of
Mianyang Gaochuang is Mianyang Yuancheng In tegration Development Group Co., Ltd. ( 綿陽
園城融合發展集團有限責任公司) holding 99.955% interest, which in turn is wholly owned by
Youxian High-tech Industria l Park Management Committee ( 遊仙高新技術產業園區管理委員
會).
Hainan Kunjun
Hainan Kunjun is a limited partnership established under the partnership laws of the PRC.
The general partner of Hainan Kunjun is Liu Xiaoyan ( 劉小燕), and the limited partner of
Hainan Kunjun is Wu Liang ( 吳亮) holding 99.98% interest.
Sichuan Dingxiang
Sichuan Dingxiang is a limited liability company established in the PRC, and is owned as
to 80% and 20% by Song Jiajun ( 宋佳駿) and Song Binyang ( 宋玢陽) respectively.
Xinxing Fund
Each of Jiangxia Xintuo and Zaozhuang Xinsheng (collectively, the ‘‘ Xinxing Fund
Entities ’’) is a limited partnership establishe d under the partnership laws of the PRC.
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The general partner of Jiangxia Xintuo is Xinxing Private Equity Fund Management Co.,
Ltd. ( 新興私募基金管理有限公司)( ‘ ‘Xinxing Fund ’’), holding 1% of the interests therein with
full discretion to exercise investment decisions in respect of assets managed by Jiangxia Xintuo.
Xinxing Fund is wholly owned by China Xinxing Asset Management Co., Ltd ( 中國新興資產管
理有限責任公司)( ‘ ‘Xinxing Asset ’’). Xinxing Asset is owned (i) as to 40% by General
Technology Group Asset Management Co., Ltd. ( 通用技術集團資產管理有限公司), a
subsidiary of China General Technology Group ( 中國通用技術集團), (ii) as to 38% by
Qiandao Technology Group Co., Ltd ( 乾道科技集團有限公司) ,w h i c hi si nt u r no w n e da st o
83.82% by Tianjin Chengze Xinghui Technology Co., Ltd. ( 天津承澤星輝科技有限公司), a
company owned as to 99% by Liu Song ( 劉松), and (iii) as to 22% by Beijing Shihua Hengyi
Technology Co., Ltd ( 北京世華恆熠科技有限公司), which is owned as to 90% by Beijing
Fengyuan Tongtai Technology Co., Ltd. ( 北京丰元通泰科技有限公司), a company owned as to
99% by Xu Shichao ( 許世超). Jiangxia Xintuo has four limited partners with Qingdao Qiandao
Yunian Investment Management Center (Limited Partnership) ( 青島乾道鈺年投資管理中心（有
限合夥）)( ‘ ‘Qiandao Yunian ’’) being the largest one, holding 45% partnership interest in Jiangxia
Xintuo, and none of the remaining three limited partners holding more than 24% partnership
interest in Jiangxia Xintuo. Qiandao Yunian is managed by Qiandao Investment Fund
Management (Beijing) Ltd. Co., ( 乾道投資基金管理有限公司)( ‘ ‘Qiandao Investment ’’) with 43
limited partners, and none of them holding more than 4.16% partnership interest in Qiandao
Yunian. Qiandao Investment is a company indirectly owned as to 60.78% by Yan Zurong ( 鄢祖
容).
The general partner of Zaozhuang Xinsheng is Xinxing Fund. The limited partner of
Zaozhuang Xinsheng is Xiamen Qingda Qianlu Technology Investment Partnership (Limited
Partnership) ( 廈門清大乾鷺科技投資合夥企業（有限合夥）)( ‘ ‘Xiamen Qingda ’’) holding 96.8%
interest. Xiamen Qingda is managed by Qianda o Investment with nine limited partners, of
which (i) Qingdao Qianyu Jinyun Investment Center (Limited Partnership) ( 青島乾予金運投資
中心（有限合夥）)( ‘ ‘Qianyu Jinyun ’’) holds 34.1% interest, and (ii) Qingdao Qianyu Jinyuan
Investment Center (Limited Partnership) ( 青島乾予金元投資中心（有限合夥）)( ‘ ‘ Qianyu
Jinyuan ’’) holds 33.0% interest, and none of the other seven limited partners holds more than
12.2% partnership interest in Xiamen Qingda. Qianyu Jinyun and Qianyu Jinyuan have 49 and
48 limited partners respectively, and none of the m holds more than 5.8% partnership interest in
Qianyu Jinyun or Qianyu Jinyuan.
Nanjing Lianchuang
Nanjing Lianchuang is a limited partnership es tablished under the partnership laws of the
PRC. The general partner of Nanjing Lianchuang is Nanjing Lianchuang Shuchan Equity
Investment Partnership (Limited Partnership) ( 南京聯創數產股權投資合夥企業（有限合夥）), the
general partner of which is Lianchuang I nnovation Private Equity Fund Management
(Chengdu) Co., Ltd. ( 聯創創新私募基金管理（成都）有限公司) (currently known as Lianchuang
Innovation Private Equity Fund Management (Beijing) Co., Ltd. ( 聯創創新私募基金管理（北京）
有限公司)), which is owned as to 50% and 40% by Zheng Yanan ( 鄭亞
南) and Unicom
Innovation Venture Capital Co., Ltd. ( 聯通創新創業投資有限公司)( ‘ ‘Unicom Innovation
Venture Capital ’’), respectively. Unicom Innovation Venture Capital is indirectly owned by
China Unicom (Hong Kong) Limited (stock code: 762), a company listed on the Stock
Exchange. Nanjing Lianchuang has four limited partners, of which Xinrong Zhihui Technology
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Development Co., Ltd. ( 新榮智匯科技發展有限公司) holds 64.4% interest, which is indirectly
owned as to 60% and 40% by Wang Jing ( 王靖) and Xiong Zhihong ( 熊志紅), respectively.
None of the other three limited partners holds 30% or more interest in Nanjing Lianchuang.
Guangzhou Tianmu
Guangzhou Tianmu is a limited partnership established under the partnership laws of the
PRC. The general partner of Guangzhou Tianmu is Beijing Tianmu Private Equity Fund
Management Co., Ltd. ( 北京天穆私募基金管理有限公司), which is controlled by Wang Qian ( 王
倩). Guangzhou Tianmu has nine limited partners, of which TRS Information Technology Co.,
Ltd. (stock code: 300229), a company listed o n the Shenzhen Stock Exchange, holds 31.8%
interest and none of the other eight limited partners holds 30% or more interest in Guangzhou
Tianmu. None of the shareholders holds 30% or more interest in TRS Information Technology
Co., Ltd.
Shanghai Kuanqing
Shanghai Kuanqing is a limited partnership established under the partnership laws of the
PRC. The general partner of Shanghai Kuanqing is Shanghai Kaishi Equity Investment
Management Center (Limited Partnership) ( 上海凱石股權投資管理中心（有限合夥）) holding
75.4% interest, which is ultimately controlled by Chen Jiwu ( 陳繼武). The limited partner of
Shanghai Kuanqing is Cheng Jie ( 程潔) holding 24.6% interest.
Yancheng Yingwan
Yancheng Yingwan is a limited partnership es tablished under the partnership laws of the
PRC. The general partner of Yancheng Yingwan is Beijing Yingwan Private Equity Fund
Management Co., Ltd. ( 北京瀛灣私募基金管理有限公司) holding 9% interest, which is
ultimately controlled by Wang Chao ( 王超). Yancheng Yingwan has seven limited partners,
of which Fujian Hengrong Venture Capital Co., Ltd. (
福建恒榮創投有限公司)( ‘ ‘Fujian
Hengrong ’’) holds 36% interest and none of the other six limited partners holds 30% or more
interest in Yancheng Yingwan. Fujian Hengrong is ultimately controlled by Xu Xing ( 許星).
Gongqingcheng Baochuang
Gongqingcheng Baochuang is a limited partnership established under the partnership laws
of the PRC. The general partner of Gongqingcheng Baochuang is Baochuang Private Equity
Investment Fund Management (Shenzhen) Co., Ltd. ( 寶創私募股權投資基金管理（深圳）有限公
司), which is controlled by Chai Pengfei ( 柴鵬飛). Gongqingcheng Baochuang has 11 limited
partners, of which Chai Pengfei holds 40.0% interest and none of the other 10 limited partners
holds 30% or more interest in Gongqingcheng Baochuang.
Hubei Lihe
Hubei Lihe is a limited company established in the PRC and is owned as to 95% and 5% by
Huang Benli ( 黃本利) and Huang Sijia ( 黃思佳) respectively.
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Hainan Zhihua
Hainan Zhihua is a limited partnership established under the partnership laws of the PRC.
The general partner of Hainan Zhihua is Hainan Zhihua Lianke Venture Capital Co., Ltd. ( 海南
至華聯科創業投資有限公司), which is controlled by Zheng Jiewen ( 鄭捷文). The limited partner
of Hainan Zhihua is Zheng Jiewen holding 95% interest.
Shanghai Dalinghao Bay Ceyuan
Shanghai Dalinghao Bay Ceyuan is a limited par tnership established under the partnership
laws of the PRC. The general partner of Sh anghai Dalinghao Bay Ceyuan is Shanghai
Dalinghao Bay Private Equity Fund Management Co., Ltd. ( 上海大零號灣私募基金管理有限公
司), which is ultimately wholly owned by Minhang SASAC. Shanghai Dalinghao Bay Ceyuan
has 11 limited partners, of which Shanghai Minhang Financial Investment Development Co.,
Ltd. (上海閔行金融投資發展有限公司)( ‘ ‘Shanghai Minhang Financial Investment ’’) holds 66.4%
interest and none of the other 10 limited partners holds 30% or more interest in Shanghai
Dalinghao Bay Ceyuan. Shanghai Minhang Fina ncial Investment is wholly owned by Minhang
SASAC.
Zhiyuan Fund
Zhiyuan Fund is a limited partnership established under the partnership laws of the PRC.
The general partner of Zhiyuan Fund is Xi’an H igh-tech Industry Venture Capital Co., Ltd. ( 西
安高新技術產業風險投資有限責任公司), which is controlled by Xi’an High-tech Industrial
Development Zone Management Committee ( 西安高新技術產業
開發區管理委員會)( ‘ ‘Xi’an
High-tech Management Committee ’’). Zhiyuan Fund has three limited partners, of which (i)
49% is owned as to Xi’an Xigao Investment Foundation Investment Fund Partnership (Limited
Partnership) ( 西安西高投基石投資基金合夥企業（有限合夥）), which is controlled by Xi’an
High-tech Management Committee, and (ii) 30% is owned as to Xi’an Innovation Investment
Fund Partnership (Limited Partnership) ( 西安市創新投資基金合夥企業（有限合夥）), which is
ultimately controlled by Xi’an Finance Bureau ( 西安市財政局) and (iii) 20% is owned as to
Xi’an High-tech Emerging Industry Investme nt Fund Partnership (Limited Partnership) ( 西安高
新新興產業投資基金合夥企業（有限合夥）), which is controlled by Xi’an High-tech Management
Committee.
Nanjing Lanpu
Nanjing Lanpu is a limited partnership established under the partnership laws of the PRC.
The two general partners of Nanjing Lanpu are (i) Nanjing Lanpu Capital Management Co.,
Ltd. ( 南京蘭璞資本
管理有限公司), a company controlled by Beijing Lanpu Capital Management
Co,. Ltd. ( 北京蘭璞資本管理有限公司), which in turn is indirectly owned as to 50% by each of
Zhou Ziyong ( 周子雍) and Song Yanjie ( 宋硯捷), and (ii) Nanjing Yangzi River Investment
Fund Management Co., Ltd. ( 南京楊子江投資基金管理有限公司), which is ultimately wholly
owned by Nanjing Jiangbei New Area Managemen t Commission (Nanjing High-tech Industrial
Development Zone Management Committee, Chin a (Jiangsu) Free Trade Test Area Nanjing
Area Management Committee) ( 南京市江北新區管理委員會（南京高新技術產業開發區管理委員
會、中國（江蘇）自由貿易試驗區南京片區管理委員會）)( ‘ ‘ Nanjing Jiangbei Management
Committee ’’). Nanjing Lanpu has four limited partners, of which (i) Nanjing Jiangbei New
Area High Quality Development Industrial Investment Fund (Limited Partnership) ( 南京江北新
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區高質量發展產業投資基金（有限合夥）) holds 59.7% interest, which is ultimately controlled by
Nanjing Jiangbei Management Committee, and (ii) Nanjing Yanchuang Investment
Development Co., Ltd. ( 南京研創投資發展有限公司) holds 35% interest, which is ultimately
controlled by Nanjing Jiangbei Management Committee, and none of the other two limited
partners holds 30% or more interest in Nanjing Lanpu.
Cuihu Tianshu
Cuihu Tianshu is a limited partnership established under the partnership laws of the PRC.
The general partner of Cuihu Tianshu is Beijing Guoding Shichuang Investment Management
Co., Ltd. ( 北京國鼎實創投資管理有限公司), which is ultimately controlled by Liu Zhong ( 劉鐘).
Cuihu Tianshu has three limited partners, of which Beijing Cuihu Original Innovation No. 1
Venture Capital Fund (Limited Partnership) ( 北京翠湖原始創新一號創業投資基金（有限合夥）)
holds 71.1% interest, which in turn is owne d as to (i) 43.4% by Tianjin Huashenghetai
Enterprise Management Co., Ltd. ( 天津華盛和泰企業管理有限責任公司), which is ultimately
controlled by China Vered Financial Holding Corporation Limited ( 中薇金融控股有限公司)
(stock code: 245), a company listed on the Stock Exchange and none of the shareholders holds
30% or more interest in China Vered Financial Holding Corporation Limited, and (ii) 32.5% by
Beijing Shichuang Environmental P rotection Development Co., Ltd. ( 北京實創環保發展有限公
司), which is ultimately controlled by Haidian SASAC.
Nanjing Railway Investment
Nanjing Railway Investment is a limited partnership established under the partnership
laws of the PRC. The general partners of Nanjing Railway Investment are (i) Nanjing Jiaokong
Private Equity Fund Management Co., Ltd. ( 南京交控私募基金管理有限公司), which is
ultimately wholly owned by State-owned Assets Supervision and Administration Commission
of Nanjing ( 南京市國有資產監督管理委員會)( ‘ ‘Nanjing SASAC ’’), and (ii) Nanjing Jushi
Venture Capital Co., Ltd. ( 南京巨石創業投資有限公司) holding 20% interest, which is wholly
owned by Nanjing Securities Co., Ltd. ( 南京證券股份有限公司) (stock code: 601990), a
company listed on the Shanghai Stock Exchange and none of the shareholders holds 30% or
more interest in Nanjing Securities Co., Ltd. . Nanjing Railway Investment has four limited
partners, of which Nanjing Railway Construction Investment Co., Ltd. ( 南京鐵路建設投
資有限
責任公司), a company ultimately wholly owned by Nanjing SASAC, holds 50% interest, and
none of the other three limited partners holds 30% or more interest in Nanjing Railway
Investment.
Hina Fund
Hina Fund is an exempted limited partnersh ip registered in the Cayman Islands, whose
general partner is The Hina Group Holdings, which in turn is controlled by Chen Hong ( 陳宏).
There are seven limited partners of Hina Fund and none of which holds 30% or more interest in
Hina Fund. Hina Fund is a private equity fund with a focus on investment in growth to
late-stage new economy companies in Greater China.
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Zhejiang Biyi
Zhejiang Biyi (stock code: 603215) is a joint stock company established in the PRC and is
listed on the Shanghai Stock Exchange. The controlling shareholder of which Zhejiang Biyi is
Wen Jiwang ( 聞繼望).
Paradigm Fund
Paradigm Fund is a limited partnership established under the partnership laws of the PRC.
The general partner of Paradigm Fund is Beij ing Paradigm Private Equity Investment
Management Co., Ltd. ( 北京範式私募基金管理有限公司), which is owned as to 40.1%, 30.0%
and 29.9% by Dai Yilun ( 戴逸倫), Xiong Fei ( 熊飛) and Dai Wenyuan ( 戴文淵). Paradigm Fund
has six limited partners, of which Paradig m Pilot Technology (Shenzhen) Co., Ltd. ( 範式領航
（深圳）技術有限公司) holds 39.4% interest and none of the other five limited partners holds
30% or more interest in Paradigm Fund. Paradigm Fund is ultimately controlled by Dai Yilun
(戴逸倫).
Interplanetary
Interplanetary is a company incorporated in the Singapore with limited liability and is
controlled by Lim Jun Hong ( 林俊宏).
China Insurance Investment Fund
China Insurance Investment Fund is a limited partnership established under the
partnership laws of the PRC. The general partner of China Insurance Investment Fund is
China Insurance Investment Co., Ltd. ( 中保投資有限責任公司), which has 46 shareholders
comprising 28 insurance companies, 15 insuran ce asset management companies and three social
capital foundation, none of which holds more than 4% interest. The limited partner of China
Insurance Investment Fund is Hunan Shengli Investment Co., Ltd. ( 湖南盛力投資有限責任公
司), which is ultimately wholly owned by Hunan People’s Government (
湖南省人民政府).
Shanghai Ruihe
Each of Ningbo Ruihe and Ningbo Yingshi (collectively, the ‘‘ Shanghai Ruihe Entities ’’) is
a limited partnership established under the partnership laws of the PRC. The general partner of
Ningbo Ruihe is Shanghai Ruihe Xinxin Venture Capital Management Co., Ltd. ( 上海銳合新信
創業投資管理有限公司)( ‘ ‘Shanghai Ruihe ’’), which is controlled by Yu Yiming ( 俞以明). Ningbo
Ruihe has 11 limited partners and none of the which holds 30% or more interest in Ningbo
Ruihe.
The general partner of Ningbo Yingshi is Shanghai Ruihe. Ningbo Yingshi has three
limited partners, which are Yu Yiming ( 俞以明), Wang Lin ( 王林)a n dZ h a n gH a i t a o(張海濤)
each holding 32.7% interest.
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Sichuan Culture Industry Fund
Sichuan Culture Industry Fund is a limited partnership established under the partnership
laws of the PRC. The general partner of Sichuan Culture Industry Fund is Sichuan Wentou
Culture Industry Private Equity Fund Management Co., Ltd. ( 四川文投文化產業私募基金管理
有限公司), which is ultimately controlled by Sichuan Culture Industry Investment Group Co.,
Ltd. ( 四川文化產業投資集團有限責任公司)( ‘ ‘Sichuan Culture Industry Investment ’’), which is
owned as to 36.7% by Sichuan Department of Finance ( 四川省財政廳) and 63.3% by Sichuan
Development Holdings Co., Ltd. ( 四川發展（控股）有限責任公司) ,w h i c hi nt u r ni so w n e da st o
90% by State-owned Assets Supervision and Administration Commission of Sichuan ( 四川省政
府國有資產監督管理委員會) and 10% by Sichuan Department of Finance ( 四川省財政廳).
Sichuan Culture Industry Fund has four limited partners, of which Sichuan Culture Industry
Investment holds 39.96% interest and none of t he other three limited partners holds 30% or
more interest in Sichuan Culture Industry Fund.
Hunan Bofu
H u n a nB o f ui sal i m i t e dp a r t n e r s h i pe s t a b l i shed under the partnership laws of the PRC.
The general partner of Hunan Bofu is Hunan Bofu Fund Management Co., Ltd. ( 湖南泊富基金
管理有限公司), which is wholly owned by Central South Publishing & Media Group Co., Ltd.
(中南出版傳媒集團股份有限公司) (stock code: 601098) (‘‘ Central South Media ’’), which is listed
on the Shanghai Stock Exchange and is ultimately controlled by Hunan People’s Government
(湖南省人民政府). Hunan Bofu has three limited partners, of which (i) Zhang Yueqing ( 章月慶)
holds 39.98% interest, (ii) Hunan Lianghu Cu lture Venture Capital P artnership (Limited
Partnership) ( 湖南兩湖文化創業投資合夥企業（有限合夥）) holds 39.98% interest, which is
ultimately owned as to 49.5% by each of Central South Media and Changjiang Publishing &
Media Co., Ltd. ( 長江出版傳媒股份有限公司) (stock code: 600757), a company listed on the
Shanghai Stock Exchange and is ultimately controlled by the Publicity Department of the Hubei
Provincial Committee of the Communist Party of C hina (Information Office of the People’s
Government of Hubei Province, Hubei Provincial Press and Publication Bureau (Hubei
Provincial Copyright Bureau), Hubei Provincial Film Bureau, Office of the Guiding Committee
for Spiritual Civilization Construction of Hubei Province) ( 中共湖北省委宣傳部（湖北省人民
政
府新聞辦公室、湖北省新聞出版局（湖北省版權局）、湖北省電影局、湖北省精神文明建設指導委
員會辦公室）), and (iii) Li Xingming ( 李興明) holds 19.99% interest.
Suqian Lingrui
Suqian Lingrui is a limited partnership established under the partnership laws of the PRC.
The general partner of Suqian Lingrui is Du Beili ( 杜貝利) holding 60% interest. The limited
partner of Suqian Lingrui is Xu Qing ( 徐氫) holding 40% interest.
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CAPITALIZATION OF OUR COMPANY
The table below is a summary of the capitalization of our Company as of the date of this
prospectus and the Listing Date:
Shareholders
Number of
Shares as of
the Latest
Practicable
Date
Shareholding
percentage as
of the Latest
Practicable
Date
Number of
Unlisted
Shares upon
completion of
the Global
Offering
Number of H
Shares upon
completion of
the Global
Offering
Shareholding
percentage of
total issued
Shares upon
completion of
the Global
Offering
Shareholding Platforms 54,034,125 23.61% — 54,034,125 21.25%
Centurium Capital Entities 52,452,943 22.92% — 52,452,943 20.62%
Hainan Shuxin Entities 17,194,091 7.51% — 17,194,091 6.76%
Cedarlake Capital Entities 8,592,981 3.75% — 8,592,981 3.38%
Focustar Entities 7,465,389 3.26% — 7,465,389 2.94%
Jupiter Technology 7,166,801 3.13% — 7,166,801 2.82%
Yuyao Bijiang 6,775,509 2.96% — 6,775,509 2.66%
Beijing Zhongguancun 5,946,308 2.60% — 5,946,308 2.34%
Shanghai Huiyue 5,425,000 2.37% — 5,425,000 2.13%
Xicheng Zhiyuan Entities 5,305,556 2.32% 2,504,153 2,801,403 2.09%
Linke Zhixin 5,139,423 2.25% 2,055,769 3,083,654 2.02%
PVG 5,073,488 2.22% — 5,073,488 1.99%
Shenzhen Dongsheng 3,830,000 1.67% — 3,830,000 1.51%
Zhuhai Yueteng 3,418,543 1.49% 3,418,543 — 1.34%
Quzhou Intelligent
Manufacturing 3,257,357 1.42% — 3,257,357 1.28%
Shanghai Yunzhixin 3,076,689 1.34% — 3,076,689 1.21%
Xiamen Hongshan 2,938,548 1.28% — 2,938,548 1.16%
Shanghai Shengyong 2,903,483 1.27% — 2,903,483 1.14%
Dingli Funds Entities 2,682,684 1.17% — 2,682,684 1.05%
Bangsheng Entities 2,159,000 0.94% — 2,159,000 0.85%
Yuanhe Entities 1,713,141 0.75% — 1,713,141 0.67%
Hangzhou Yuanqiao 1,713,141 0.75% — 1,713,141 0.67%
Xiangjiang Equity
Investment 1,627,484 0.71% — 1,627,484 0.64%
Sichuan Xingchuan Entities 1,221,509 0.53% 1,221,509 — 0.48%
Hainan Kunjun 1,191,716 0.52% — 1,191,716 0.47%
Sichuan Dingxiang 1,116,724 0.49% — 1,116,724 0.44%
Xinxing Fund Entities 1,116,724 0.49% — 1,116,724 0.44%
Nanjing Lianchuang 1,027,884 0.45% — 1,027,884 0.40%
Guangzhou Tianmu 974,169 0.43% — 974,169 0.38%
Shanghai Kuanqing 963,415 0.42% 15,797 947,618 0.38%
Yancheng Yingwan 947,556 0.41% — 947,556 0.37%
Gongqingcheng Baochuang 856,570 0.37% — 856,570 0.34%
Hubei Lihe 814,339 0.36% — 814,339 0.32%
Hainan Zhihua 814,339 0.36% — 814,339 0.32%
Shanghai Dalinghao Bay
Ceyuan 814,339 0.36% — 814,339 0.32%
Zhiyuan Fund 814,339 0.36% — 814,339 0.32%
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Shareholders
Number of
Shares as of
the Latest
Practicable
Date
Shareholding
percentage as
of the Latest
Practicable
Date
Number of
Unlisted
Shares upon
completion of
the Global
Offering
Number of H
Shares upon
completion of
the Global
Offering
Shareholding
percentage of
total issued
Shares upon
completion of
the Global
Offering
Nanjing Lanpu 781,766 0.34% — 781,766 0.31%
Cuihu Tianshu 745,216 0.33% — 745,216 0.29%
Nanjing Railway Investment 651,471 0.28% — 651,471 0.26%
Hina Fund 611,052 0.27% — 611,052 0.24%
Zhejiang Biyi 575,126 0.25% — 575,126 0.23%
Paradigm Fund 513,942 0.22% — 513,942 0.20%
Interplanetary 492,807 0.22% — 492,807 0.19%
China Insurance Investment
Fund 488,604 0.21% — 488,604 0.19%
Shanghai Ruihe Entities 488,604 0.21% — 488,604 0.19%
Sichuan Culture Industry
Fund 407,170 0.18% — 407,170 0.16%
Hunan Bofu 394,140 0.17% — 394,140 0.15%
Suqian Lingrui 170,731 0.07% — 170,731 0.07%
Other public Shareholders — — — 25,431,800 10.00%
Total 228,885,936 100.00% 9,215,771 245,101,965 100.00%
PUBLIC FLOAT
As of the Latest Practicable Date, the 9,215, 771 Unlisted Shares held by our Shareholders
(comprising (i) the 2,504,153 Unlisted Shares held by Xicheng Zhiyuan Entities, representing
approximately 1.09% of our total issued Shares as of the Latest Practicable Date or
approximately 0.98% of our total issued Shares upon completion of the Global Offering; (ii)
the 2,055,769 Unlisted Shares held by Linke Zhixin, representing approximately 0.90% of our
total issued Shares as of the Latest Practicable Date or approximately 0.81% of our total issued
Shares upon completion of the Global Offering; (iii) the 3,418,543 Unlisted Shares held by
Zhuhai Yueteng, representing approximately 1.49% of our total issued Shares as of the Latest
Practicable Date or approximately 1.34% of our total issued Shares upon completion of the
Global Offering; (iv) the 1,221,509 Unlisted Shares held by Sichuan Xingchuan Entities,
representing approximately 0.53% of our total issued Shares as of the Latest Practicable Date or
approximately 0.48% of our total issued Shares upon completion of the Global Offering; and (v)
the 15,797 Unlisted Shares held by Shanghai Kuanqing, representing approximately 0.01% of
our total issued Shares as of the Latest Practicable Date or approximately 0.01% of our total
issued Shares upon completion of the Global Offering), representing in aggregate approximately
4.03% of our total issued Shares, or approximately 3.62% of our total issued Shares upon
completion of the Global Offering, will not be considered as part of the public float for the
purpose of Rule 19A.13A of the Listing Rules as these Shares are Unlisted Shares which will not
be converted into H Shares and listed upon completion of the Global Offering.
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As of the Latest Practicable Date, the 106,487,068 Unlisted Shares held by the
Shareholding Platforms and the Centurium Capital Entities, representing 46.52% of our total
issued Shares, or approximately 41.87% of our total issued Shares upon completion of the
Global Offering, will be converted into H Shares and listed upon completion of the Global
Offering. As these Shareholders will hold in ex cess of 10% of the issued Shares and constitute
core connected persons of our Company upon Listing, the H Shares held by them will not be
counted towards the public float for the purpos e of Rule 19A.13A of the Listing Rules after the
Listing.
Pursuant to Rule 19A.13A of the Listing Rules, based on an Offer Price of HK$144.60 per
Offer Share, our expected market capitalization upon the Listing is HK$36,774 million, and the
minimum prescribed public float percen tage applicable to our Shares is 12.24%.
Based on the above, it is expected that immediately following completion of the Global
Offering, the total number of listed H Shares (including H Shares to be converted from Unlisted
Shares) of our Company held by the public represents 54.50% of the total number of issued
Shares of our Company. Therefore, our Company will be able to meet the minimum public float
requirement under Rule 19A.13A of the Listing Rules.
FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC issuer
with no other listed shares at the time of listing, this will normally mean that the portion of H
shares for which listing is sought that are held by the public and not subject to any disposal
restrictions (whether under contract, the Listing Rules, applicable laws or otherwise), at the
time of listing, must: (a) represent at least 10% of the total number of issued shares in the class
to which H shares belong at the time of listing (e xcluding treasury shares), with an expected
market value at the time of listing of not less than HK$50 million; or (b) have an expected
market value at the time of listing of not less than HK$600 million.
Based on the Offer Price of HK$144.6 per Shar e, the expected market value of the H Shares
being held by the public and not subject to any disposal restrictions at the time of Listing under
Rule 19A.13C of the Listing Rules would amount to approximately HK$2,095.3 million. Hence,
our Company will satisfy the free float requirement under Rule 8.08A (as amended and replaced
by Rule 19A.13C) of the Listing Rules upon Listing.
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CORPORATE STRUCTURE
Corporate Structure Immediat ely Before the Global Offering
The following chart sets forth our simplified corporate structure immediately prior to the
completion of the Global Offering (assuming no changes are made to our issued share capital
between the Latest Practicable Date and the date of the Global Offering):
100%
23.61%
Hainan Shuxin Entities Other existing
Shareholders(1)Shareholding Platforms Centurium Capital
Entities
22.92% 7.51% 45.96%
100%100%
Shanghai Iluvatar
Suanli Iluvatar Shanghai Beijing Iluvatar Other subsidiaries(2)
Our Company
Notes:
(1) None of these existing Shareholders holds more than 5% shareholding in our Company. See ‘‘—
Capitalization of our Company’’ for interest of our other existing Shareholders in our Company and ‘‘—
Pre-IPO Investments — Information on the Pre-IPO Investors’’ for the background of the Pre-IPO
Investors.
(2) Other subsidiaries of our Group are limited liabilities companies established in the PRC, the business of
which did not make a material contribution to our results of operations during the Track Record Period.
Corporate Structure Immedi ately After the Global Offering
The following chart sets forth our simplified corporate structure immediately after the
completion of the Global Offering (assuming that no changes are made to our issued share
capital between the Latest Practicable Date and the date of the Global Offering):
100%
21.25% 20.62% 6.76% 41.37%
100%100%
10.00%
Shanghai Iluvatar
Suanli Iluvatar Shanghai Beijing Iluvatar Other subsidiaries(2)
Hainan Shuxin Entities Other existing
Shareholders(1)Shareholding Platforms Centurium Capital
Entities
Other public
Shareholders
Our Company
Notes: See ‘‘— Corporate Structure — Corporate Structure Immediately Before the Global Offering’’.
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OVERVIEW
We offer GPGPU products and AI computing solutions across diverse industries. Our
product portfolio primarily in cludes GPGPU chips and accelerators, as well as customized AI
computing solutions, including GPGPU servers and clusters, that combine our hardware with
proprietary software stack to address specifi c customer needs in training and inference
scenarios.
In recent years, the advancement of AI — part icularly the emergen ce of large language
models — has driven significant growth in demand for computing power. As AI technologies
continue to evolve, their transformative impact is increasingly extending across a wide range of
industries, including essential sectors such as fin ancial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educational computing applications. Against this backdrop, GPGPU
products and solutions have become widely adopted as the key infrastructure for empowering
large language models and enabling sophisticated AI applications, due to their parallel
processing capabilities and adaptability to dive rse computational workloads. To further unlock
the value of GPGPUs, leading industry players have developed comprehensive software systems
and programming frameworks, which have evolve d into a unified, industry-standard ecosystem
for AI development and are now broadly embraced by developers worldwide.
In response to the increasing demand for GPGPU driven by the AI technology
development, we have strategically positioned ourselves through our core philosophy of
software-hardware co-des ign. Our hardware architecture allows for straightforward integration
of individual chips and clustered systems, while our high-speed multi-GPGPU technology
enables scaling from single-node to large-scale deployments. Our comprehensive software stack,
including compilers, drivers, libraries and frameworks, provides compatibility with mainstream
GPGPU programming ecosystems and platforms, enabling easy deployment with minimal code
redevelopment or modification. Through three generations of GPGPU architectural iterations
and progressive software stack enhancement, we have demonstrated continuous improvements
in computing performance, broad compatibility with efficient integration, and adaptability
across diverse application scenarios.
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/g57
/g57
/g57
/g57
/g57
/g57
Hardware
GPGPU architecture
Instruction set
Enhanced
Efficiency
High
Compatibility
Strong
Adaptability
GPGPU Products
Libraries and frameworks
Compilers and drivers
AI Computing Solutions
Software
GPGPU Servers
GPGPU Clusters
Strong Research and Development Capabilit ies Supporting Product Leadership
We specialize in the research, design, and deployment of advanced GPGPU products and
AI computing solutions across diverse industries. Our core R&D personnel possess invaluable
experience from major global semiconductor companies, with key department leaders bringing
over 20 years of industry experience. As of J une 30, 2025, our R&D team comprised over 480
professionals, more than one-third of whom have spent over ten years in chip design and
software development. Our robust R&D team provides a solid foundation for the continuous
iteration and upgrade of our products. To date, our GPGPU products have undergone three
generations of GPGPU architectural iterations.
Our Products and Solutions
AI Computing Solutions
GPGPU Products
Inference Series
Training Series
GPGPU ClustersGPGPU Servers
Chips and AcceleratorsChips and Accelerators
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Our portfolio of GPGPU products include chips and accelerators for both training and
inference scenarios. Leveraging our proprieta ry GPGPU products, we also offer AI computing
solutions in the form of GPGPU servers and GPGPU clusters. Our products and solutions
deliver the following key advantages:
. Enhanced Efficiency: Optimized Performance through Innovative Design. Our GPGPU
products and solutions are designed with a focus on performance optimization and
cost efficiency. Leveraging our iterative m odular architecture and innovative design,
we deliver balanced products and solutions that meet complex computing demands
while minimizing efficiency losses. This enables us to deliver optimal computing value
for our customers’ intensive processing requirements.
. High Compatibility: Straightforward Int egration with Existing Environments. Our
products and solutions are wide-rang ing for broad compatibility through
hardware-software integration. By optimizing both our architecture and software
stack, our GPGPU accelerators are fully c ompatible with global mainstream GPGPU
programming ecosystems and platforms. This allows customers to adopt our products
with minimal redevelopment and modification over existing code base with near-zero
migration cost, enabling rapid deployment and straightforward integration into a
variety of AI environments. Our open technol ogy approach ensures straightforward
integration across diverse t echnical infrastructures.
. Strong Adaptability: Versatile De ployment Across Evolving AI Needs. Our products
and solutions are designed multi-level adaptability by supporting diverse AI
workloads from computer vision and speech recognition to large language models
and generative AI. Our GPGPU architecture, built on a widely compatible instruction
set and modular software stack, enables effective deployment in both homogeneous
and heterogeneous computing environments. Customers can quickly integrate new
a l g o r i t h m sa n dA Ia p p l i c a t i o n sa st h e ye m erge, typically requiring only software
updates rather than hardware changes. This a rchitectural flexibility ensures our
products and solutions remain capable of providing sustained computing support
across diverse AI applications and scaling requirements.
GPGPU Products
The evolution of AI computing has created distinct demands in two scenarios: training and
inference. Training requires intensive computational power for model development and
optimization, while inference focuses on efficient model deployment and execution under
real-world constraints. As AI applications grow in complexity, both domains face
unprecedented demands — from processing massive datasets to enabling real-time responses
in deployed systems.
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Our GPGPU products address these complementary computing needs through two
specialized product lines. The TG series, our f lagship training-focused line and the first
domestically mass-produced GPGPU product in C hina, is specifically e ngineered for AI model
training with advanced compute cores an d optimized multi-GPGPU architecture.
Complementing this, our ZK series, the first domestic GPGPU product designed specifically
for inference, specializes in inference applications, featuring enhanced integer computing units
and efficient data paths optimized for deploym ent scenarios. Togeth er, these product lines
provide comprehensive coverage of the AI computing spectrum, supporting everything from
complex model development to efficient production deployment.
Built on our innovative architecture that emphasizes modular design, mainstream
ecosystem compatibility, and long-term adaptability, our products and solutions deliver
exceptional performance while maximizing efficiency across diverse computing scenarios. As of
June 30, 2025, we had shipped over 52,000 units of GPGPU products to more than 290
customers in various sectors. Our products and solutions have enabled over 900 deployments
and applications in essential sectors including fi nancial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educa tional computing applications.
AI Computing Solutions
Our AI computing solutions harness the scalability of our GPGPU products and the
combined computational power of our processors, to integrate multiple GPGPU accelerators to
enable computing for demanding AI workloads and large-scale model deployments. These
solutions are designed to be compatible with industry-standard hardware and software
architectures, working in tandem with a wide range of server, storage, network switch,
operating system, and application software vendors. This compatibility has been validated
through extensive certificati ons, allowing us to meet diverse customer implementation needs.
We deliver these solutions in two formats: (i) Purpose-built GPGPU servers that combine
multiple GPGPU accelerators with an integrate d software stack, deliv ering pre-configured
computing solutions typically used for enterprise AI workloads and large language model
deployments; and (ii) Scalable GPGPU clusters that integrate our GPGPU products and
software stack with third-party servers, storage , and/or networking infrastructure to support
flexible model deployment and expanding computational demands.
Market Opportunities
The AI technology revolution has triggered unprecedented demand for computing power,
driving robust growth in advanced AI chips globally. In China, the rapid emergence of large
language models is dramatically expanding dema nd for AI computing infrastructure. According
to Frost & Sullivan, China’s AI chip shipments are projected to grow from approximately 2.5
million units in 2024 to 11.4 million uni ts by 2029, representing a CAGR of 32.1%.
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The GPGPU market represents a key segment w ithin the AI chip industry. Characterized
by their parallel computing power, compatibility and adaptability, GPGPU products are
increasingly being adopted in a wide variety of AI applications. According to Frost & Sullivan,
the GPGPU market in China expanded rapidly, with shipments reaching 1.6 million units in
2024, representing a CAGR of 72.8% from 2022 to 2024. The market is expected to maintain
strong growth, with shipments projected t o grow at a CAGR of 33.0% from 2025 to 2029. As
Chinese GPGPU companies’ shipments grow fas ter than their international competitors,
domestic market share continues to rise. The share of domestic GPGPU products increased
from 8.3% in 2022 to 17.4% in 2024, and is p rojected to exceed 50% by 2029. As a widely
recognized domestic GPGPU company, we are w ell positioned to capture such expanding
market opportunity and propel China’s GPGPU industry beyond import substitution toward
domestic innovation leadership.
We offer GPGPU products and AI computing solutions across diverse industries. We
prioritize fast-growing AI sectors while target ing industries with strong domestic alternative
demand, establishing benchmark deployments that demonstrate our capabilities. Through
collaborations with universities, research i nstitutes, and industry leaders, we develop
scenario-specific solutions and ensure broad platform comp atibility. This dual focus on
continuous technological adv ancement and ecosystem development positions us to capture the
expanding GPGPU market opportunity.
Business Performance
Our revenue has shown a significant upward trend during the Track Record Period,
reaching RMB189.4 million, RMB289.0 millio n and RMB539.5 million in 2022, 2023 and 2024,
respectively, representing a CAGR of 68.8%. F urthermore, our revenue increased by 64.2%
from RMB197.4 million in the six months ended June 30, 2024 to RMB324.3 million in the six
months ended June 30, 2025. This growth is dri ven by our consistent product and solution
iteration, mature commercialization capabilities and continuously expanding high-quality
customer base. Our total number of customers increased from 22 in 2022, to 65 in 2023 and
further to 181 in 2024 and from 81 in the six months ended June 30, 2024 to 106 in the six
months ended June 30, 2025. As of June 30, 2025, we had served over 290 customers in various
sectors. Our products and solutions have enabled over 900 deployments and applications in
essential sectors including financial services, h ealthcare and transportation, while supporting
industrial digitalization initiatives across manufacturing and retail, as well as foundational
research and educational computing applications. Our GPGPU products shipment volume
increased from 7.8 thousand units in 2022 to 12.7 thousand units in 2023 and further to 16.8
thousand units in 2024 and from 4.8 thousand units in the six months ended June 30, 2024 to
15.7 thousand units in the six months ended June 30, 2025.
OUR COMPETITIVE STRENGTHS
Steering China’s GPGPU Innovation, Building Core Technology Advantages
Among China’s chip designers, we are the first to achieve mass production of inference
GPGPU chips, to mass produce training GPGPU chips, and to accomplish these milestones
using advanced 7nm process technology, accor ding to Frost & Sullivan. Through sustained
advancement, we have successf ully completed multiple generations of GPGPU architecture
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iteration, driving continuous advancement in both hardware design and software performance
optimization. Our proprietary instruction s et architecture, specifi cally enhanced for AI
computing applications, forms the foundation of our technology platform.
Our commitment to independent innovation over the years has enabled us to accumulate a
comprehensive portfolio of core intellectual property. This spans critical components including
computing units, cache systems, data tr ansmission architectures, compilers,
performance-optimized libraries, and sys tem connection protocols. Our proprietary
instruction set architecture is specifically e nhanced for AI computing applications, forming
the foundation of our technology platform. Through close collaboration with customers, many
of whom are major players in their respective industries, we continuously evolve our
architecture to meet emerging application requirements while ensuring high compatibility
with their existing infrastructure and applications.
Leveraging our robust IP portfolio and proprietary GPGPU architecture, we have
developed a comprehensive GPGPU product line that delivers optimized computational
efficiency through advanced design, ensures broad compatibility across global mainstream
GPGPU programming ecosystems and platform s, and demonstrates strong adaptability to
diverse computing requirements. These products maintain robust performance characteristics
across standalone units and scaled deployments, enabled by our proprietary communication
protocols and innovative system architectur e. Building upon this foundation, we offer
sophisticated AI computing solutions that can be precisely configured to address specific
deployment scenarios and customer requirements. Our products and solutions have enabled
over 900 deployments and applications in essen tial sectors including financial services,
healthcare and transportation, while supporting industrial digitalization initiatives across
manufacturing and retail, as well as foundational research and educational computing
applications.
R&D Excellence Driving Continuous Technology and Product Innovation
Our R&D excellence is built on an integrate d hardware-software framework that has been
core to our operations since our first chip development. This closed-loop approach ensures
effective collaboration between hardware and software teams, driving continuous improvements
in product performance and user experience. Through our ‘‘three-generation’’ development
philosophy — one generation in mass production, one in design, and one in pre-research — we
maintain a robust pipeline of both technological and product advancements.
Our R&D capabilities are powered by an exceptional R&D team of over 480 professionals
as of June 30, 2025. Our core R&D personnel possess invaluable experience from major global
semiconductor companies, with key leaders bringing over 20 years of industry experience. More
than one-third of our R&D staff have over a decade of experience in chip design and GPGPU
software development. This deep expertise drives our ability to deliver advanced GPGPU
products with optimized efficiency through innov ative architecture design, ensure wide-ranging
compatibility through hardware-software integ ration, and enable strong adaptability across
diverse AI workloads.
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Since our TG Gen 1 launch in March 2021, we have successfully brought three generations
of architecture to mass production, each marking significant advancements in our core product
capabilities. Each iteration has driven substan tial improvements in computational efficiency
through enhanced architecture design, expand ed compatibility through broader framework
support, and strengthened adaptability thr ough more flexible deployment options. This
continuous evolution of our product portfolio has enabled us to ship over 52,000 units of
GPGPU products to more than 290 customers in various sectors as of June 30, 2025. Our
products and solutions have enabled over 900 deployments and applications in essential sectors
including financial services, healthcare and transportation, while supporting industrial
digitalization initiatives across manufacturin g and retail, as well as foundational research and
educational computing applications.
Optimized Performance and Enhan ced Efficiency Delivering Opti mal Cost-Performance Solutions
Our market leadership is built on a foundation of optimized performance and
cost-efficiency, achieved through strategic d esign principles that optimize both technical
capabilities and customer value. This commitment manifests across our entire product portfolio,
from individual units to large-scale cluster depl oyments, delivering measurable advantages in
key performance metrics. The combination of optimized efficiency, high compatibility, and
strong adaptability positions us uniquely in the market to deliver optimal cost-performance
solutions that meet evolving customer needs.
At the core of our technical capabilities is high product operational efficiency. Our
single-card implementations deliver competitive performance in large language models with
around 70 billion parameters, positioning us among industry leaders. In cluster deployments,
our solutions demonstr ate robust scalability, significant ly accelerating performance while
maintaining consistent uptime. This performance extends across both homogeneous and
heterogeneous training configurations, with accuracy variations contained within 0.6%.
We have established a significant technological milestone as China’s first company to
achieve full compatibility with global mainstream GPGPU programming ecosystems and
platforms through our proprietary software stack, according to Frost & Sullivan. This
comprehensive solution supports leading AI frameworks enabling efficient integration across
diverse AI applications. Our foundational softw are stack design, refined through extensive
developer feedback, provides a robust development environment that eliminates the traditional
trade-off between compatibility and performance.
Our ‘‘deploy once, adapt continuously’’ approach further enhances solution efficiency
through strong adaptation capa bilities. We achieve same-day implementation for mature
applications, one-week turnaround for iterative versions, and two-week deployment for complex
new models. This rapid adaptation is supported by monthly beta releases that maintain pace
with open-source developments, ensuring immediate access to emerging AI capabilities while
maintaining operational stability. The combination of rapid deployment, efficient adaptation,
and continuous optimization delivers compell ing cost advantages wh ile maximizing solution
performance across diverse application scenarios.
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Strong Commercialization Capabilities with a Wide Network of Ecosystem Partners and
Customers
Our commercial success is built on a comprehen sive ecosystem strategy and proven market
execution capabilities , which have been systematically developed since our first customer
deployments in 2021. This foundation combines technological leadership with strategic
partnership networks, enabling broad market penetration while ensuring efficient integration
across the computing technology stack.
Our market expansion follows a methodical approach, validated by consistent growth in
customer adoption and deployment scale. As of June 30, 2025, we had shipped over 52,000 units
of GPGPU products to more than 290 customers in various sectors. Our products and solutions
have enabled over 900 deployments and applications in essential sectors including financial
services, healthcare and transpor tation, while supporting industrial digitalization initiatives
across manufacturing and retail, as well as fo undational research and educational computing
applications.
At the foundation of our commercial capabilities lies our comprehensive ecosystem
compatibility strategy. Through strategic colla borations across the technology stack, we have
established robust integration pathways with ke y industry players. This includes partnerships
with CPU manufacturers spanning x86, ARM, and RISC-V architect ures; server vendors
supporting OAM, PCIe, and high-density integra ted systems; and major operating system and
cloud service providers. These relationships enable us to deliver quality products and computing
solutions characterized by efficient integrati on, rapid deployment, and comprehensive support
across all application scenarios.
Our commercial achievements reflect the str ength of our ecosystem strategy and market
execution capabilities. The breadth of our deploy ments across diverse sectors, coupled with the
depth of our technology partnerships, demonstrates our ability to deliver comprehensive
computing solutions while maintaining the highest standards of technical integration and
support.
Visionary Leadership with Global Experience and Deep Technical Expertise
The foundation of our competitive advantage lies in our exceptional leadership team,
which combines Fortune Global 500 executive expe rience with strategic vision. Mr. Gai Lujiang,
our chief executive officer, draws on nearly two d ecades of experience at various first-tier global
professional service companies to drive international standard s of governance and strategic
growth. Mr. Liu Zheng, our chief operating officer, brings extensive leadership experience from
one of China’s largest state-owned telecommunications groups, where he was deeply involved in
major infrastructure development and digital transformation initiatives across Asian markets.
Our R&D leadership consists of experts fro m world-leading technology companies. Mr.
Sun Yile, our vice president, has more than 20 yea rs of chip development experience, including
deep expertise in GPGPU architecture development from global technology leader AMD.
Together, this blend of business acumen and technical expertise drives both operational
excellence and strategic growth, strengthening o ur market leadership and driving China’s next
generation of computing innovation.
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OUR STRATEGIES
Sustained R&D Investment to Build Higher Technical Barriers
We are committed to comprehensive cove rage across cloud, edge, and on-device
application scenarios through sustained R&D in vestment. Our systematic approach combines
technical innovation with strategic partnerships to create an open and sustainable technology
platform that accel erates application deployment and c ontinuous innovation. Our focus spans
continuous optimization of single-chip efficien cy, enhanced operation of l arge-scale clusters,
and systematic reduction of operational losses to drive the large-scale adoption of our solutions.
We strengthen our technical barriers through strategic software development,
implementing modular full-stack restructuring to accelerate independent iteration of key
components. By introducing support for emergi ng computing paradigms and expanding our AI
model ecosystem, we deliver efficient accelerat ion solutions from lightweight to large language
models, enabling rapid alignment with customer needs through flexible technology integration.
For more details regarding our R&D plan on our proprietary software stack, see ‘‘— Research
and Development — Software Stack Enhancement and Ecosystem Development.’’
We will also continue to build comprehensive ecosystem partnerships through targeted
collaboration with universities, research institutes, and industry partners. Through joint R&D
initiatives with leading enterprises, we develop scenario-based solutions and drive
cross-platform compatibility c ertification. Our active engagement with the global open-source
community promotes two-way code compatibility and integration with global mainstream
GPGPU programming ecosystems and platforms, while our developer community programs
foster technical exchange and sustainable technology empowerment.
Continuous Improvement in Product Efficiency, Compatibility and Adaptability
Our modular and scalable architectural approach forms the foundation of our
advancement strategy, enabling systematic i nnovation across our entire technology stack.
Through this architectural framework, we can continuously iterate and enhance our core
capabilities while maintaining the flexibili ty to address emerging market opportunities.
Building on this foundation, we focus on advancing computational efficiency through
iterative chip design improvements, expandin g ecosystem compatibility through flexible
software integration, and strengthening deployment adaptability across diverse computing
environments. This architecturally-driven approach enables us to optimize solutions for
large-scale cloud training clusters, specialized edge computing applications, and emerging
on-device AI requirements, while maintaining consistent performance and efficiency. Through
continuous innovation guided by our architectural principles, we aim to further strengthen our
market leadership while capturing new opportunities in the rapidly evolving AI computing
landscape.
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Multi-Dimensional Enhancement of Customer Service to Expand Penetration and Industry
Coverage
Customer success and market penetration are fundamental drivers of our sustainable
growth. Through systematic enhancement of our service capabilities and strategic industry
expansion, we build lasting partnerships that create value across diverse sectors.
We systematically deepen engagement with existing customers through comprehensive
post-deployment support and regular feedback collection. Working closely with ecosystem
partners, we develop targeted solutions that drive scenario adoption and increase service
penetration, supporting our customers’ progre ssion from pilot procurement to large-scale
deployment.
We will continue to deepen our industry penetration by focusing on essential sectors
including financial services, healthcare and transportation, while supporting industrial
digitalization initiatives across manufacturin g and retail, as well as foundational research and
educational computing applications. We will als o continuously seek to expand our coverage into
fast-iterating adjacent s ectors, especially those with strong d emand for domestic alternatives.
Our multi-dimensional customer management approach enables both vertical depth and
horizontal replication across industry, strategic, and commercial segments.
We also seek to strengthen our market positi on through strategic partnerships with
industry leaders, establishing benchmark depl oyments that demonstrate our capabilities. We
integrate our R&D, delivery, and market opera tion capabilities to provide comprehensive
lifecycle support for t op-tier customers, while leveraging these successful deployments to
develop diversified custom er acquisition channels.
Attracting Top R&D Talent and Building a Robust Talent Pipeline
Talent is our most valuable asset. We are committed to enhancing our attractiveness to top
professionals through institutional innovatio n, company operations, compensation, and team
building, striving to create a platform that maximizes the potential of outstanding talent.
We actively recruit top talent in R&D and across industries to strengthen our capabilities
in technology development, algorithm innovation, chip and system architecture design, and
scenario optimization. We focus both on attracting world-class t alent to maintain our leadership
in technology and management and on cultivati ng internal talent to en sure a robust talent
pipeline. At the same time, we provide ongoing incentive programs for outstanding teams,
ensuring a competitive and attractive pl atform to support our strategic goals.
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OUR PRODUCTS AND SOLUTIONS
Overview
We specialize in the research, design, and deployment of advanced GPGPU products and
AI computing solutions. Our AI computin g acceleration technology leverages GPGPU
architecture for parallel computational tasks, making them ideal for AI computing scenarios
in the AI era. We offer various GPGPU chips and accelerators, along with our proprietary and
full-stack software development k its including driver compiler, p erformance-optimized libraries,
AI training frameworks and inference engines, enabling powerful AI applications across
training and inference scenario s. Leveraging our advanced tech nology and industry expertise,
we provide enterprises across various sectors w ith AI computing solutions. Our AI computing
solutions harness the scalability and the combined computational power of our GPGPU
products, enabling computing for demanding AI workloads and large-scale model deployments.
We have adopted flexible commercialization models primarily comprising product sales and
solutions deployment.
Under our product business, we primarily d evelop and sell GPGPU accelerators. These
accelerators integrate our GPGPU chips wit h memory modules, PCB, and other critical
components, forming complete co mputing accelerators that are re ady for direct application in
the end computing systems. We also offer discrete GPGPU chips to other GPGPU accelerator
manufacturers. Operating as a fabless semiconductor company, we focus on the research, design
and sales of our GPGPU products while partnering with leading foundries and packaging
companies for manufacturing. This fabless business model allows us to concentrate on our core
competencies in design and dev elopment while leveraging the expertise of specialized
manufacturing partners thr oughout the production chain.
For our solutions business, we deliver comprehensive AI computing solutions that harness
the scalability of our GPGPU products and the combined computational power of our
processors, to integrate multiple GPGPU accel erators to enable computing for demanding AI
workloads and large-scale model deployments. Our service capabilities range from initial
architecture design and hardware integration to software optimization and post-deployment
support, supported by specialist teams. Leveragin g these capabilities, we can collaborate with
customers to design and implement customized dep loyments that align with their computational
needs and business objectives. We deliver our AI computing solutions in two formats: GPGPU
servers, which are purpose-built AI systems with multiple GPGPU accelerators and integrated
software, and GPGPU clusters, which extend be yond single systems by combining our GPGPU
products with third-party servers, storag e, and/or networking infrastructure.
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The following diagram illustrates our collaboration with our suppliers and ecosystem
partners to enable the provision of our products and solutions:
Suppliers and Ecosystem Partners Industries Served
Financial Services
Healthcare
Retail
Education
etc.
Our Company
GPGPU
Products
AI Computing
Solutions
GPGPU Chips
GPGPU
Accelerators
Storage and
Servers
Foundries(1)
OSAT Partners(2)
PCB Assembly
Partners (3)
Ecosystem
Partners (4)
Notes:
(1) Chip manufacturing: We engage leading foundries to manufacture our GPGPU chips.
(2) Chip packaging and testing: Our OSAT partners handle the critical steps of chip packaging and testing,
including the manufacturing of our substrate designs and integrating them with chips and memory
components.
(3) Board design: PCB assembly partners manages the board assembly process, where they manufacture our
designed circuit boards and integrate GPGPU chips with electronic and structural components to create
server-ready accelerators.
(4) System integration: Our ecosystem partners integrate our accelerators with CPU servers and storage
solutions to deliver complete computing systems.
We employ a systematic approach to GPGPU development that centers on
hardware-software co-design, ensuring our products deliver both performance and
practicality. Through this approach, we system atically analyze workload requirements and
performance bottlenecks to deliver GPGPUs with fully optimized hardware and software
capabilities. We provide comprehensive software tools including specialized function libraries
and development utilities, continuously enhanced to address emerging AI workload
requirements. This hardware-software coordinated development approach ensures our
products deliver optimized performance while providing the flexibility and compatibility
needed for complex AI deployments.
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Our GPGPU Products
The evolution of AI computing demands has gradually diverged into two different
computational scenarios with distinct emphasis: training and inference. The former requires
intensive computational power to ensure model f lexibility while maximizing performance; the
latter emphasizes efficient model deployment and execution, delivering optimal performance
under broader constraints (such as power consumption) to ensure commercial value. The
increasing complexity of AI applications continues to drive unprecedented demands in both
domains — from processing massive datasets f or model optimization to enabling real-time
responses in deployed systems. Our GPGPU prod uct portfolio, through our TG and ZK series,
addresses these complementary computing needs.
Our GPGPU architecture reflects years of technological innovation and iterative
advancements, delivering three key advanta ges. Our modular design enables exceptional
performance while maximizing efficiency across diverse computing scenarios. In addition, the
architecture is designed for efficient com patibility with global mainstream GPGPU
programming ecosystems and platforms. Our unified architecture approach ensures long-term
adaptability, supporting evolving AI models and future-proof investments without requiring
frequent hardware replacement.
Building on these architectural advantages, we have successfully commercialized multiple
generations of our GPGPU product lines, including three generations of our training-focused
TG series and two generations of our inference -focused ZK series. Each iteration advances our
core capabilities in performance, ecosystem compa tibility, and adaptabili ty, while maintaining
our foundational emphasis on modular design and architectural efficiency. Our GPGPU
products shipment volume increased from 7.8 thousand units in 2022 to 12.7 thousand units in
2023 and further to 16.8 thousand units in 2024 and from 4.8 thousand units in the six months
ended June 30, 2024 to 15.7 thousand units in the six months ended June 30, 2025. As of June 30,
2025, we had shipped over 52,000 units of GPGPU products to more than 290 customers in
various sectors. Our products and solutions have enabled over 900 deployments and
applications in essential sectors including financial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educa tional computing applications.
TG Series
The TG series, our flagship training-focused product line, has demonstrated significant
advancement since its inception. TG Gen 1, l aunched in March 2021, marked a significant
milestone as China’s first domestically mass-produced GPGPU product to achieve mass
production. This series is specifically designe d to meet AI model training demands, featuring
performance-optimized compute cores, memor y components, and optimized architecture to
support multi-GPGPU systems, delivering excepti onal efficiency for large-scale model training
workloads. The architecture prioritizes training-specific requirements such as sustained
computing throughput and robust data processing capabilities, delivering powerful
performance for complex AI training workloads. Our TG series products have been
successfully deployed in AI computing environments, with widespread adoption across AI
research institutions, cloud computing cente rs, foundational model developers, research
laboratories, and enterprises requiring subs tantial computing power for AI model training
and fine-tuning.
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The key advantages of our TG series products include:
. Optimized Performance for Large-scale AI Training: Delivers advanced computing
capabilities optimized for AI m odel training, with each gener ation marking significant
performance improvements in complex AI workloads.
. Advanced Multi-GPGPU S caling Architecture: Built with optimized multi-GPGPU
architecture and peer-to-peer communica tion capabilities, enabling efficient
large-scale cluster operations and multi-GPGPU parallel collaboration.
. Comprehensive Framework Compatibility: Supports mainstream industry deep
learning frameworks, model acceleratio n operators and large-scale cluster
scheduling, facilitating efficient integration into existing AI development workflows.
We have successfully achieved mass production and sales of two products in the TG series,
T GG e n1a n dT GG e n2 ,a n dl a u n c h e dat h i r dp r o d u c t ,T GG e n3 .T h es h i p m e n tv o l u m eo fo u r
training series decreased from 7.7 thousand units in 2022 to 7.0 thousand units in 2023, and
remained stable at 7.0 thousand units in 2024, and increased from 2.9 thousand units in the six
months ended June 30, 2024 to 6.2 thousand units in the six months ended June 30, 2025. The
average sales price of our training series, calculated by dividing our revenue from training series
in a given period by the number of training GPGPU products sold in the period, increased from
RMB24.4 thousand in 2022 to RMB31.8 thousand i n 2023 and further to RMB38.6 thousand in
2024, and decreased from RMB39.5 thousand in the six months ended June 30, 2024 to
RMB30.4 thousand in the six months ended June 30, 2025.
TG Gen 1
We launched TG Gen 1 in March 2021 and achieved mass production in September 2021.
As the first mass-produced domestic GPGPU product in China, TG Gen 1 marked a notable
advancement in the AI training ma rket, establishing our first-m over advantage in this sector.
Manufactured using 7nm process technology, it delivers optimized performance in a smaller
package.
TG Gen 1 supports a comprehensive general-pur pose instruction set with mixed-precision
capabilities and both vector and tensor computin g, allowing it to efficiently switch between
different levels of calculation precision and process multiple data types simultaneously. Its
peer-to-peer communication enables multiple c hips to work together directly for expanded
computing power. At the time of its mass production, TG Gen 1 achieved top-tier domestic
performance in processing the prevalent AI wo rkloads of that time, such as ResNet-50 and
YOLO.
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TG Gen 2
We launched TG Gen 2 in September 2023 and achieved mass production in the fourth
quarter of 2023. This next-generation design d elivers notably improved AI performance,
marking a significant improvement in comput ing metrics compared to its predecessor.
TG Gen 2 features expanded-capacity high-speed memory and operates at 350W TDP.
With enhanced integer performance and architect ure efficiency, it deliver s improved application
performance compared to the prior generat ion. TG Gen 2 broadly supports mainstream
industry deep learning frameworks, model accel eration operators, and large-scale cluster
scheduling. It has been deployed for mainstream large language model training and
general-purpose computing applications both domestically and internationally.
TG Gen 3
We launched TG Gen 3 in the third quarter of 2024. This latest generation delivers further
enhanced computing performance, with signi ficant advancements in large-scale cluster
efficiency and connectivity. We anticipate to commence mass production of TG Gen 3 in the
first quarter of 2026. However, our ability to meet this timeline is subject to various
uncertainties and risks relating to product development and commercialization. For details, see
‘‘Risk Factors — Risks Relating to our Business and Industry — If we are unable to successfully
develop, commercialize and mass produce new or improved products in a timely manner, our
business, results of operations, financial condition and competitive position would be materially
and adversely affected.’’
TG Gen 3 supports advanced precision re quirements for large AI model computing,
features increased memory capacity, and impleme nts the latest international standard interfaces
including PCIe Gen5. The chip significantly improves peer-to-peer communication bandwidth
and supports a multi-card architecture.
Our deeply optimized hardware architectur e and software stack integration deliver
enhanced parallel communication and notably improved energy effi ciency. The platform
further improves the linear acceleration ratio of large-scale clusters, enabling more efficient
operation of multi-adapter configurations.
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Next Generation TG Products
Development of the next-generation TG series is currently underway, with future products
designed to enhance performance capabilities , particularly for large-scale AI training
applications.
ZK Series
The ZK series is our specialized product line designed for cloud and edge inference
applications. Launched in December 2022, it marked China’s first GPGPU specifically designed
for inference tasks. The series features crucial optimizations for efficient inference, including
enhanced integer computing units and optimi zed data paths. It achieves optimized end-user
application performance through quantization technology and supports comprehensive
connection over cost-effective PCIe standard, e nabling cost-effective cluster inference
processing. The architecture prioritizes inference-specific requirements such as low latency,
high throughput, and optimal power efficiency, de livering excellent performance-to-cost ratio
for large language model inference tasks. Our ZK series products have been successfully
deployed across diverse computing environmen t s ,w i t hp r o v e np e r f o r mance in enterprise AI
deployments, production-scale serving of large language models, real-time video processing and
analysis, medical imaging analysis, and various scenarios requiring efficient and stable inference
capabilities.
The key advantages of our ZK series products include:
. Optimized Edge and Cloud Inference Performance: Purpose-built architecture
featuring enhanced integer computing units and optimized data paths, delivering
optimized performance-per-watt ac ross diverse deployment scenarios.
. Advanced Quantization Support for Fast Deployment: Comprehensive support for
leading quantization algorithms including GPTQ, AWQ, and SmoothQuant, enabling
efficient large language m odel deployment through sophisticated mixed precision
optimization.
. Comprehensive Video Processing Capabilities: Integrated solution supporting
multi-channel FHD decoding and comprehensive image codec support, optimized
for video and image analysis applications.
During the Track Record Period, we achieve d mass production and sales of two products
in the ZK series, ZK Gen 1 and ZK Gen 1X. The shipment volume of our inference series
increased significantly from 38 units in 2022 to 5.7 thousand units in 2023 and further to 9.8
thousand units in 2024, and increased from 1.9 thousand units in the six months ended June 30,
2024 to 9.5 thousand units in the six months ended June 30, 2025. The average sales price of our
inference series, calculated by dividing our revenue from inference series in a given period by the
number of inference GPGPU products sold in the period, decreased from RMB11.4 thousand in
2022 to RMB8.0 thousand in 2023, and increased to RMB10.2 thousand in 2024, and the
average sales price of our inference series decreased from RMB11.4 thousand in the six months
ended June 30, 2024 to RMB9.2 thousand in the six months ended June 30, 2025.
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ZK Gen 1
We launched ZK Gen 1 in December 2022 and achieved mass production in February 2023.
As the first domestic GPGPU product in China focused on AI inference applications, our ZK
Gen 1 delivers optimized efficiency for edge computing and standalone work stations,
supporting high-power applications (generally where power consumption >150W) such as AI
inference on single or multiple servers, visual recognition in commercial retail environments,
document recognition, and other offline scenarios with low latency requirements.
The ZK Gen 1 achieves its optimized performance through advanced hardware
specifications, delivering advanced both floating point and integer computing power. The
chip features large-capacity high-speed memory and operates with a 150W TDP design. Our
PCIe-based proprietary peer-to -peer protocol provides 64GB/s bi-directional bandwidth.
The ZK Gen 1’s software stack features compre hensive inference optimizations, with broad
support for mainstream quantization algorithms including GPTQ, AWQ, and SmoothQuant, as
well as inference engines such as vLLM and TGI. In video processing, the ZK Gen 1 supports
128-channel FHD decoding with comprehensive image codec support, making it ideal for edge
AI scenarios involving video and image analysis. This enables full support for not only large
language models, but also practical business solutions like OCR document processing and
workflow optimization.
ZK Gen 1X
We launched ZK Gen 1X in December 2022 and a chieved mass produ ction in February
2023. As a specialized edge and client-edge inf erence solution, ZK Gen 1X complements our ZK
series by targeting low-power AI applications (generally where power consumption <75W),
while maintaining full compatibility with its higher-powered counterpart. It is suited for
low-power applications such as embedded AI in compact industrial computers, real-time video
and speech processing with local data privacy requirements in vending machines, mobile
devices, and other edge-side embedded systems.
The ZK Gen 1X is engineered for optimal edge and client-edge computing efficiency,
featuring a high-efficiency 75W TDP design a nd high-speed memory. It retains ZK Gen 1’s
advanced PCIe foundation and comprehensive vi deo processing features, achieving optimized
performance-per-watt for edge scenarios. ZK Gen 1X integrates the complete AI workflow,
streamlining the process from video decoding to AI inference and result storage, enabling more
efficient deployment and faster application launch in edge and client-edge computing
environments.
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Next Generation ZK Products
The next generation of ZK products is continuously under active development, with
optimizations specifically t argeting emerging/latest large language models. Through
hardware-software design, we are enhancing the a rchitecture to address the current challenge
of computational efficiency in large language m odels. The new generation will expand support
for lower-precision data types and mixed-precision computing, aligning with the industry trend
toward reduced precision. Combined with improvements in computing power and bandwidth,
and collaboration with ecosystem partners, these advancements aim to deliver robust
performance and cost-effectiveness.
Our AI Computing Solutions
Our AI computing solutions harness the combined computational power of multiple
GPGPUs, enabling them to work together as a un ified system. These solutions address the
ever-growing demand for AI computing, and large-scale data processing by delivering optimized
speed and efficiency. We offer these capabilities in two distinct formats to address different
deployment needs:
. GPGPU Servers. Our GPGPU servers are purpose-bui lt AI infrastructure solutions
that combine multiple GPGPU accelerators with an integrated software stack,
delivering pre-configured computing solutions typically used for enterprise AI
workloads and large language model deployments, enabling quick deployment and
straightforward AI model management.
. GPGPU Clusters. Our GPGPU clusters scale beyond single-system deployments,
integrating our GPGPU products and softw are stack with third-party servers,
storage, and/or networking infrastructu re. This solution features comprehensive
system-level optimization and software i ntegration, supporting flexible model
deployment and expanding computationa l demands, such as large-scale training
and high-throughput inference.
In both formats of the AI computing solutions, the software plays a crucial role by
enabling efficient use of the hardware, simplifying deployment, and providing tools for
managing AI workloads. The key difference in the two formats lies in their scale, complexity,
and the level of user involvement required: the GPGPU server solution is simpler and more
turnkey, while the GPGPU cluster solution is more powerful and flexible, suitable for
organizations with greater tech nical resources and more intensi ve AI computational demands.
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Whether deployed as a GPGPU server or GPG PU cluster solution, our AI computing
solutions serve as the backbone for tackling complex workloads. The number of projects of our
AI computing solutions was six, 26, 11 and 10 in 2023, 2024 and the six months ended June 30,
2024 and 2025, respectively. The average sales p rice of our AI computing solutions, calculated
by dividing our revenue from AI computing solutions in a given period by the number of
projects in the period, increased from RMB2.6 million in 2023 to RMB6.4 million in 2024, and
decreased from RMB5.4 million in the six months ended June 30, 2024 to RMB4.3 million in the
six months ended June 30, 2025.
Key Technologies
Developing reliable multi-GPGPU solutions requires addressing several technical
challenges to ensure efficient processor collaboration. Our solutions enable GPGPU products
to share data at exceptional speeds with ultra-low latency. This ensures efficient task division
and processing without bottleneck s, even under the most demanding workloads. This facilitates
efficient task schedulin g, load balancing, and parallel processing, eliminating bottlenecks even
in the most demanding, large-scale workloads. Our software stack is optimized for overlapping
inter-GPGPU collaboration and computational workloads, ensuring maximum performance
while maintaining compatibility with popular AI programming frameworks and computing
platforms.
To address critical challenges in heat dis sipation, power effi ciency, and workload
balancing, our systems incorp orate state-of-the-art cooling m echanisms, energy-efficient
power distribution designs, and intelligent workload management to ensure stable and
reliable performance in high-density, multi-GPGPU configurations. By combining advanced
hardware technologies, a scal able architecture, and enterpr ise-grade reliability, our
multi-GPGPU solutions empower customers to tackle complex AI workloads and push the
boundaries of innovation in AI research, training, and deployment.
Target Customers and Applications
Our AI computing solutions serve a broad range of organizations requiring advanced
computing capabilities, from ente rprises and research institutions to cloud service providers and
beyond. Our total number of customers increa sed from 22 in 2022, to 65 in 2023 and further to
181 in 2024 and from 81 in the six months ended June 30, 2024 to 106 in the six months ended
June 30, 2025. As of June 30, 2025, we have served over 290 customers in various sectors. Our
solutions excel in AI training applications wh ere massive datasets and complex algorithms
demand extensive processing capabilities, whi le also supporting large-scale inference in
real-time applications, including natural lan guage processing and re commendation systems.
Our systems serve scientific s imulations and medical imaging, where speed and precision are
critical.
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Our AI computing solutions provide a range of compelling advantages, designed to meet
the growing demands of modern computing needs:
. Enhanced Performance: Leveraging advanced multi-GPGPU technologies, our
solutions enable ultra-fast data transf er and communication between GPUs. This
minimizes latency and eliminates bottlenecks, ensuring optimal utilization of
computing resources, even during large-s cale, complex workloads such as training
large language models or running high-resolution simulations.
. High Scalability: Our multi-GPGPU solutions are bu ilt with scalability at their core,
allowing customers to expand their computational capacity as their needs grow. From
small-scale AI development to large-scale production environments, our systems
effortlessly scale to accommodate the increasing computational demands of
contemporary AI and data analytics workloads.
. Integrated Hardware and Software Systems: By offering a fully integrated ecosystem,
our solutions ensure high compatibility with global mainstream GPGPU
programming ecosystems and platforms. This integration streamlines deployment,
reduces development time, and simplifie s system management, enabling developers
and organizations to focus on innova tion rather than infrastructure.
. Engineered for Mission-Critical Reliability: Our multi-GPGPU solutions maintain
consistent performance even under the most demanding workloads, where precision,
speed, and stability are non-negotiable. Advanced cooling systems, optimized power
distribution, and intelligent workload management ensure uninterrupted operation,
making them ideal for applications from real-time medical imaging to autonomous
vehicle simulations.
By combining optimized performance, scalab ility, integration, and reliability, our
multi-GPGPU solutions empower organizations to tackle the most complex computational
challenges and drive innovation across industries.
Software Stack and Optimization
Our software stack represents a comprehensive solution developed for TG and ZK series
products, encompassi ng compilers, drivers, pe rformance-optimized libraries, developer tools,
AI frameworks, inference engines, and cloud- native support modules. This integrated suite
ensures core functionality and performance through proprietary software components, enabling
direct access to optimized algori thm implementations for AI operators, linear algebra, matrix
multiplication, convolution, and linear equation solving.
The development of this software systems was driven by the evolution of AI computing
needs. As AI training demands increasingly flexible and larger cluster scales, while inference
deployment focuses on cost-effectiveness, diffe rent systems have emerged in the open-source
community to meet varied developer requirements. The transition of IDC server operations
toward cloud computing has created new demands for AI computing power management,
requiring solutions that integrate effectivel y with existing platforms and infrastructure.
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Our solution’s distinctive strength lies in its comprehensive compatibility and optimization
approach. At the driver level, it supports major L inux distributions including Ubuntu, CentOS,
and Kylin, while maintaining compatibility with x86 and ARM architectures. The software
stack has been adapted for leading AI frameworks including PyTorch, TensorFlow and
PaddlePaddle as well as large language model inference engines such as vLLM, TGI, and
TensorRT. Our solution’s development tools match current developer practices, enabling
efficient debugging and performance tuning wh ile maintaining ecosystem compatibility at the
SDK level. The cloud-native tools and plug-ins also meet the requirement for efficient AI
computing cluster operations.
The software stack enables near-zero cost mi gration from mainstream ecosystems while
maintaining enhanced model performance and computing power utilization rates. This robust
integration has been validated through extensive product and compatibilit y certifications from
technical partners. Protected by more than 100 softw are copyrights, the solution allows efficient
deployment across various computing environments while supporting flexible development of
computational acceleration applications. The continuous enhancement of software capabilities
maximizes GPGPU performance and expands application support, ensuring products remain at
the forefront of AI computing solutions.
INDUSTRY APPLICATIONS
Our Go-to Market Strategy
We adopt a flexible go-to-market strategy that enables us to deliver customized products
and solutions tailored to our customers’ specifi c requirements across various sectors including
essential sectors such as financial services, hea lthcare and transportation, while supporting
industrial digitalization initiatives across manufacturing and retail, as well as foundational
research and educational computing applicati ons. Our delivery model encompasses two main
approaches: product sales and solutions depl oyment. In our product business, we primarily
offer GPGPU accelerator, while also providing discrete GPGPU chips when required by
customers. For our solutions business, we work closely with customers to design and implement
customized deployments that are highly compatible with their existing infrastructure and
applications. This dual-track approach, suppo rted by close collaboration between our sales and
R&D teams, allows us to maintain high customer satisfaction while effectively addressing
diverse market demands.
Broad Industry Adoption
As AI continues to transform business operati ons globally, organizations require robust
computing infrastructure to harness its potential. Our comprehensive portfolio of GPGPU
products and solutions addresses the distinct technological requirements across industries,
combining GPGPU innovation with deep domain expertise to enable practical AI deployment at
scale. The following examples from selected sectors with increasing AI computing demands
illustrate our proven capabilities, though our solutions extend well beyond these industries to
serve diverse enterprise needs:
. Financial Services: In the financial services sector, institutions face mounting
challenges in processing complex market data and executing sophisticated trading
strategies while maintaining regulato ry compliance. Our GPGPU products and
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solutions can play a vital role in quantitat ive trading applications, where we have
developed specialized capabilities for processing large-scale market data and
executing algorithmic trading strategies. Using advanced models including DQN
and LSTM, our GPGPU products and solutions enable the provision of
high-precision market forecasting and tr ading signal generation. For example, by
leveraging the parallel computing power of our GPGPU accelerators, financial
institutions can efficiently train and deploy time-series prediction models such as
LSTM on large volumes of historical and high-frequency financial data. These models
are widely used to forecast market price t rends and volatility — for instance, in
foreign exchange trading scenarios. Our solutions help enable faster model
development cycles, higher prediction accuracy, and more responsive trading
systems in practical proof-of-concept collaborations with securities firms. Beyond
trading, they also support comprehensive financial services including intelligent
conference systems, automated researc h report generation, and smart approval
processes, enabling financial institutions to streamline operations across their
business functions.
. Healthcare: In healthcare, medical institutions face growing demands to modernize
their diagnostic capabilities and clinical workflows through ad vanced AI computing.
Our GPGPU products and solutions can be applied in two key scenarios: medical
imaging analysis and intelligent clinical support. For imaging, we have developed
integrated platforms that combine deep learning capabilities with specialized
hardware acceleration, enabling comprehensive analysis from RT imaging and
landmark detection to PET/MR correction. For clinical applications, our GPGPU
products and solutions can support large-scale language models for intelligent
consultation and decision support, enablin g structured electronic health records
management and automated medical documentation while maintaining real-time
performance in demanding hospital environments. Specifically, intelligent
consultation and decision support are achieved by enabling advanced models to
analyze patient symptoms, interpret clinic al test results, and reference vast medical
knowledge bases. This allows healthcare professionals to obtain evidence-based
insights and recommendations during the di agnosis and treatment process, thereby
supporting clinical decision-making and enhancing patient care quality.
. Retail: The retail sector is undergoing a dramati c transformation as businesses seek to
enhance customer experience and optimize operations through AI-powered solutions.
Our GPGPU products and solutions have been used to support smart store operations
and intelligent shopping experiences. In s mart stores, they enable comprehensive
digitalization through IoT platforms and business analytics, achieving significant
improvement in inspection efficiency. For shopping experience enhancement, our
GPGPU products and solutions power smart cart solutions that can achieve over
99.5% accuracy in autonomous product recognition, enabling features from
automatic identification to contactless checkout, all while providing valuable
consumer behavior insights to retailers. Specifically, our GPGPU products and
solutions combine AI-driven video analysi s with real-time IoT data aggregation and
act as gateways between store devices and central platforms, enabling efficient
monitoring and analytics for store operations.
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. Education: In education, particularly in higher education, institutions face growing
demands to modernize their teaching and research capabilities through advanced
computing power. Our GPGPU products and solutions are capable of facilitating
scientific research computing and classroom teaching applications. For research, they
incorporate PINN (Physics-Informed Neural Networks) based on A64SC architecture
to enable complex simulations including computational fluid dynamics and
Navier-Stokes equations processing. This means our GPGPU products and
solutions can efficiently support the large-scale numerical simulations often
required in research areas such as molecula r dynamics, protein folding, atmospheric
science, and geological exploration, whe re advanced computation is critical. For
teaching environments, we integrate our GPGPU products and solutions with
development tools and simulation modules to create hands-on learning experiences
while advancing institutional research capabilities. This enables real-time interactive
experiments and computational visualizations in the classroom, helping students gain
practical experience and a deeper understanding of computational methods.
These examples illustrate the practical bene fits arising from high compatibility and
adaptability of our products and solutions, which have enabled over 900 deployments and
applications in essential sectors including financial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educational computing applications. With our portfolio of highly
scalable GPGPU products as well as AI computing solutions in the form of GPGPU servers and
clusters, we offer substantial optionality to en able organizations of all sizes to harness the
potential of AI and AI computing. As technology requirements evolve, our ongoing innovation
ensures we remain at the forefront of enterprise d igital transformation, particularly in sectors
where computational demands and market o pportunities are rapidly expanding.
CORE PROPRIETARY TECHNOLOGIES
Our success as a domestic GPGPU provider is underpinned by a fully self-developed
technology system, spanning proprietary IP and hardware, comprehensive software systems,
and computing cluster technologies. Through independent and sustained innovation, we have
established a robust foundation that empowers performance-optimized, scalable, and
commercially proven products for the most demanding AI and computing workloads as well
as future application evolution. Driven by ongoing innovation and large-scale commercial
implementation, our proprietary technology system forms the cornerstone of our industry
leadership and sustainable growth.
Hardware Technologies
Our hardware innovation is centered on a self-developed GPGPU core and architecture,
with a primary focus on achieving the highest ex ecution efficiency to deliver notably improved
application performance per watt and per unit area.
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Compute Core Design
The compute core supports unified deployment for AI training and inference, with over 800
custom instructions ensuring broad model comp atibility and adaptability to ever-evolving
computational requirements. Extensive mixed-precision capabilities — including FP32, FP16,
INT8, as well as FP8 and other new precision ty pes — enable optimal precision-performance
tradeoffs, fully meeting mainstream AI model requirements for both training and inference.
Memory Subsystem
Our memory subsystem features a multi-level, m ulti-modal cache hierarchy and integrates
memory modules. The carefully engineered cach e hierarchy balances low-latency, high-speed
access from near-memory to off-chip memory, providing the compute core with robust data
pathways. Advanced multi-layer packaging technology enables sophisticated chiplet integration
and signal integrity, supporting high-density packaging and enhanced system scalability.
Coupled with proprietary data compression and scheduling algorithms, our hardware delivers
outstanding throughput and resource utiliz ation for large-scale AI workloads. These
innovations have seen widespread deployment across leading industry AI platforms.
On-Chip and Peer-to-Peer Network Systems
Our on-chip and peer-to-peer network system s enable low-latency communication from
within a single chip, between multiple chips, an d across GPGPU accelerators in large-scale
clusters. The fully-switched ar chitecture at each level maintains near-linear scalability as the
system expands, with highly efficient resource utilization. The on-chip network adopts a
topology with synchronized chip-level clocki ng to ensure high-effici ency transmission and
switching bandwidth per unit area. Peer-to-p eer connectivity is powered by our proprietary
fully-connected switching system, supporting larg e-scale deployments. This architecture allows
users to flexibly deploy and scale large AI models as if operating a single unified chip. In
addition, we support peer-to-peer communication technologies, which further enable the
expansion of cluster scale to thousands or even tens of thousands of cards.
Leveraging these core and related technologies, our hardware consistently delivers
enhanced operational efficien cy — measured as application performance per unit of compute
— providing customers with scalable and continuously upgradable solutions.
Software Technologies
Our fully featured software stack is a key factor in realizing the value of our products. Our
system-level software includes compilers, drive rs, performance-optimized libraries, developer
tools, AI frameworks, inference engines, and cloud-native support modules, all of which are
optimized for our hardware. Our drivers support major Linux distributions across x86 and
ARM architectures, while maintaining com patibility with global mainstream GPGPU
programming ecosystems and platforms. Buildi ng on this foundation, our products integrate
efficiently with leading AI frameworks like PyTorch, TensorFlow, and PaddlePaddle, as well as
specialized frameworks like Megatron and i nference engines such as vLLM, TGI, and
TensorRT.
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A key strength of our software stack lies in its remarkable performance optimization
capabilities and exceptional hardware utilizatio n. Through a holistic software-defined hardware
methodology, we systematically decompose t he performance hotspots and flexibility
requirements of AI and parallel computing acceler ation applications. This approach clearly
delineates the functions and performance targ e t st ob ea c h i e v e da te a c hs o f t w a r ea n dh a r d w a r e
layer. As new computing paradigms emerge, our software framework and algorithm libraries are
designed to leverage the inhere nt flexibility and general-purpose capabilities of our GPGPU
hardware.
We also provide proprietary acceleration libraries for linear algebra, FFT, neural
networks, and other computational tasks, with lo w-level, fine-grained optimizations for key
algorithms, maximizing hardwar e utilization and overall system efficiency. This approach has
enabled execution of over 450 AI models, establishing a robust foundation for our expanding
ecosystem.
For deployment adaptability, our software platform also supports highly compatible and
efficient integration in both homogeneous and h eterogeneous hybrid cluster environments,
enabling customers to build flexible, scalable, and efficient AI infrast ructure. To accelerate
customer success, we provide open-source access to training and inference scripts for compatible
models through our developer community. This comprehensive software system has facilitated
over 900 deployments and applications in essen tial sectors including financial services,
healthcare and transportation, while supporting industrial digitalization initiatives across
manufacturing and retail, as well as foundational research and educational computing
applications.
Computing Cluster Technologies
We have also developed comprehensive infrastructure solutions for large-scale AI
deployments. Our technology focuses on three core pillars: (i) delivering near-linear
performance scalability as cluster size increases, enabling exceptional scalability; (ii)
providing fault tolerance and extended system uptime, ensuring reliable and uninterrupted
operation even under critical workloads; and (iii) supporting rapid migration of AI cluster
training or inference applications from leadin g AI frameworks to our infrastructure while
maintaining consistent model accuracy. At the core of this capability is an integrated
hardware-software optimization technology, which ensures the effective execution of
large-scale AI computing tasks.
We have also adopted advanced power management and system control technologies,
including integrated out-of-band management, dynamic voltage and frequency adjustment, and
comprehensive monitoring. These innovation s allow us to achieve a strong balance between
optimized performance per watt and operational reliability, supporting stable operations even
under high-density workloads. Our capabilities have been validated in large-scale and
mission-critical environments.
With the rise of generative large language m odels, we are actively engaging with ecosystem
partners, and the next generation of high-density cabinet designs — tailored for large language
model applications — is steadily progressing. Through continuous innovation and large-scale
deployment, our proprietary technology platform forms the foundation of our industry
leadership and sustainable growth.
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RESEARCH AND DEVELOPMENT
Our R&D Philosophy
Research and development forms the foundation of our sustained growth and competitive
strength in the industry. We are committed to continuous innovation, guided by the principle of
integrated design and independent development encompassing both hardware and software. Our
R&D efforts are driven by a dedication to technological advancement, a pursuit of high
engineering standards, and a philosophy that e mphasizes collaborative teamwork. We maintain
a strategic ‘‘three-generation’’ R&D philoso phy: one generation in mass production, one in
design, and one in pre-research, enabling continuous product advancement. Through the
iterative optimization of hardware and software, we deliver differentiated, and scalable
solutions that address evolving customer needs. This philosophy is embedded in our
organizational culture and underpins our long-term investment in R&D talent, infrastructure,
and technology platforms.
Our approach emphasizes anticipating techno logy trends, proactively addressing market
demands, and fostering a culture of collaboration and creativity. We prioritize the development
of general architectures, compute engines, m emory subsystems, and software platforms to
support demanding AI training, inference, and AI computing applications. Through this holistic
and forward-looking strategy, we have become an established innovator in China’s GPGPU
industry, with our products and solutions widely adopted across multiple sectors.
Our R&D Process
We have established a robust and highly coo rdinated R&D management system that keeps
us at the forefront of technology and market trends. Building upon our progressive development
philosophy, our process operates as a rolling innovation pipeline, ensuring that new product
generations are planned, developed, and brought to mass production in a phased manner. This
model enables us to respond swiftly to new opportunities and challenges.
Each product generation follows a compreh ensive development cycle, beginning with
in-depth market research and technical feasibility studies to define product specifications and
address anticipated customer requirements. C ross-functional teams engage in architecture and
functional design, leveraging our expertise in both hardware and software. Rigorous internal
reviews and validation checkpoints are conducted at each stage, from concept design, simulation
and prototyping to engineering sample producti on and extensive testing. Only after passing
stringent quality and performance benchmar ks does a product proceed to mass production and
commercial launch.
Our R&D processes are overseen by dedicated committees responsible for strategic
alignment, technical direction, and quality assurance. This structure enables us to efficiently
transition innovations from concept to large-scale deployment, maintaining high standards of
reliability, compatibility, and performance. The collaborative workflow between hardware and
software teams, together with close engagement with supply chain and customer support,
ensures our products are technologically advanced a n dw e l l - a d a p t e dt or e a l - w o r l da p p l i c a t i o n s .
Our R&D process has been validated through the successful launch and commercialization of
multiple product generations.
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Key R&D Projects
Our R&D activities encompass comprehensive development to enhance our product
architecture, computing efficiency, and platform compatibility. The following table sets forth
details of our key strategic projects.
Z KG e n2 Z KG e n3 T GG e n4 T GG e n5
Project Objective D e v e l o p m e n to fa n
inference-focused GPGPU
product supporting
mixed-precision computing
(FP32/FP16/BF16/INT8).
Development of
next-generation
inference-focused GPGPU
product, featuring enhanced
specifications and
performance improvements
over current product line.
Development of advanced
training-focused GPGPU
product customized for
computing center
requirements.
Development of a flagship
next-generation
training-focused GPGPU
product, with optimized
specifications for advanced
and cost-effective deployment
across computing scenarios.
Commencement of
Research
2023, Quarter 2 2024, Quarter 2 2024, Quarter 4 2024, Quarter 2
Expected Launch* 2025, Quarter 4 2026, Quarter 1 2026, Quarter 2 2027, Quarter 1
Expected Mass
Production *
2025, Quarter 4 2026, Quarter 2 2026, Quarter 3 2027, Quarter 2
Product
Positioning
Advanced AI inference and
general-purpose computing
product with low cost for edge
and end computing markets
Advanced AI inference,
training and general-purpose
computing product, optimized
for inference workloads, for
cloud computing markets
Advanced AI training,
inference, and general-purpose
computing product, optimized
for training workloads, for
cloud computing markets
Advanced AI training,
inference, and general-purpose
computing product, optimized
for training workloads, with
significantly improved
computing performance
compared to previous
generation products for cloud
computing markets
Selected Product
Features
. Integrated video codec
functionality at chip level
. Large on-board memory
supporting higher
parameter count models
. Low power double data
rate memory solution for
optimized
cost-performance ratio
. Significant improvement in
performance over previous
generation product
. High performance-to-cost
ratio for mainstream large
model inference and
training applications
. Comprehensive upgrades in
compute power,
bandwidth, and storage
over previous generation
product
. Improved architecture
supporting cloud-scale AI
training and inference
workloads
. Software ecosystem
compatibility for enterprise
cloud environments
. Improvements in compute
performance from previous
generation product
. Enhanced coverage of
support for mainstream
and emerging precision
formats
. Flexible packaging
configurations to ensure
compatibility with wider
deployment scenarios, such
as multimodal large
language model training
and inference, industrial
application acceleration,
and emerging advanced
computing applications
* Expected timing may change according to actual developmen t progress, which is subject to various uncertainties and
risks. For details, see ‘‘Risk Factors — Risks Relating to our Business and Industry — If we are unable to successfully
develop, commercialize and mass produce new or improved products in a timely manner, our business, results of
operations, financial condition and competitive posit ion would be materially and adversely affected.’’
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The development budget for each of our R&D p rojects typically encompasses several
essential components, with personnel expenses usu ally representing the lar gest allocation. Other
costs include mask tape-out fees, IP cores and so ftware design licensing f ees, research equipment
investments, and technical service fees. Our ongoing projects will be funded through both
internal resources and external fundraising, including the expected net proceeds from this
Global Offering, except for our R&D of ZK Gen 2 which will be internally funded and is set to
launch in the fourth quarter of 2025.
We believe our R&D project pipeline positions us strongly to capture market demand.
Each project represents significant architectura l advancement and performance scaling, building
upon our proven success with c urrent products deployed across major domestic computing
centers. For instance, while earlier generations focused on optimizing either training (which
requires high-precision calculations and massive parallel processing) or inference (which needs
simpler forward-pass calculations) workloads, our newer generation products aim to effectively
support both capabilities. The systematic pr ogression in compute capabilities, memory
bandwidth, and precision format support, coupled with our commitment to software
ecosystem compatibility, addresses the grow ing domestic high-performance computing
requirements. Our demonstrated ability to achieve substantial generational improvements
while maintaining competitive cost structures provides a compelling foundation for market
expansion. For details, see ‘‘— Business Sustain ability and Path to Profitability’’ and ‘‘Future
Plans and Use of Proceeds’’.
Software Stack Enhancement and Ecosystem Development
Our software stack R&D strategy centers on s trengthening technical barriers through
strategic software development. Through modul ar full-stack restructuring, we accelerate
independent iteration of key components while maintaining system stability. Our
development roadmap encompasses support for emerging computing paradigms and an
expanding AI model ecosystem, enabling us to del iver efficient acceleration solutions across
diverse AI applications. This comprehensive approach ensures rapid alignment with customer
needs through flexible technology integration, positioning us to adapt quickly to evolving
market demands and technical requirements. Specifically:
. Implementing modular full-stack restructuring: The AI software stack integrates
multiple software components including serving frameworks, inference engines,
training frameworks, high- performance libraries, compilers, and drivers. As AI
adoption grows, these components and so ftware layers evolve at varying paces. To
maintain stability of low-level software components while keeping pace with rapidly
evolving AI algorithms, we are enhancing our software stack R&D with a ‘‘high
cohesion, low coupling’’ approach. This requires focused development and testing to
ensure compatibility between different versions of software components. The AI
software ecosystem’s shift toward P ython-centric development makes a
well-decoupled software stack essent ial for adapting to these changes.
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. Support for emerging computing paradigms: With generative AI emerging as the
dominant force in modern AI applications, we are focusing our engineering efforts on
performance optimization and operational efficiency. Advanced LLM inference
requires new computing paradigms, particularly in areas like prefill and decoding
operations, which demand innovative approaches to data flow design, parallelism,
and AI operation implementation. Scal ing up has become a central focus in AI
infrastructure, driving new software compute paradigms for both inference and
training applications. The growing use of low-precision data in AI models to
maximize GPGPU computing power necessitates novel algorithms and
implementations in high-performance libraries and compilers. We aim to deliver
high-quality performance for these new-era AI compute paradigms.
. Expanding AI model ecosystem: While LLMs currently dominate the field, other
promising AI models like Mamba and JEPA are rapidly advancing. Diffusion models
for image and video generation have achieved production-ready status. Additionally,
numerous industry-specific AI models lever age proprietary data through vertical
fine-tuning. Our goal is to expand support across this diverse AI model landscape
while maintaining production-grade performance. This approach strengthens our
commercial delivery capabilities and positions us to adapt to emerging AI models.
Our In-house R&D Power
Our in-house R&D capabilities are anchored by a team of highly skilled professionals with
deep expertise across the full technology stack. This group has been instrumental in delivering
numerous industry-defining products to the market, earning a reputation as one of the most
accomplished and respected teams in the sector. T heir longstanding collaboration and collective
expertise serve as the foundation for our sustained technological leadership.
As of June 30, 2025, our dedicated R&D team comprised over 480 employees. More than
one-third of our R&D team members have ov er a decade of industry experience, and
approximately 70% hold master’s degrees or high er. Our team includes experts in architecture,
GPGPU IP and chip design, foundational softw are, AI algorithms, and collaborative
hardware-software product design. Our core R&D personnel possess invaluable experience
from major global semiconductor companies, with key leaders bringing over 20 years of industry
experience.
We have built a strong technical backbone, supported by over 200 mid-level and senior
engineers, fostering a culture of excellence a nd innovation. We attract and retain top talent
through competitive remuneration, comprehensive welfare, and long-term incentives, including
equity and patent awards. Employee agreements feature robust confidentiality, intellectual
property, and non-compete provisions to protect our technology assets.
Our R&D organization is structured around the product development process, with
dedicated teams responsible for architecture, hardware and software, product design, and
quality assurance. We maintain close collaboration with leading research institutes and industry
partners, further enhancing our innovation capabilities. While core R&D is conducted in-house,
we selectively engage third-party service provi ders for standardized or specialized tasks, always
retaining full ownership of our intellectual property and maintaining strict quality control.
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This combination of world-class talent, disciplined management, and a culture of
innovation enables us to deliver advanced, reliable, and commercially successful products,
supporting our leadership in China’s GPGPU industry and empowering the digital
transformation of our customers.
SALES AND MARKETING
Our Sales Network
We have established an efficient sales network focused on direct sales to serve our diverse
customer base. Our network enables comprehensive market coverage while maintaining high
standards of technical support and customer servic e across different deployment scenarios. The
following table sets forth a breakdown of our revenue by sales channel in absolute amounts and
as percentages of our total revenue for the years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 (except for percentages)
(Unaudited)
Direct sales 189,369 100.0% 288,125 99.7% 511,086 94.7% 181,987 92.2% 254,703 78.5%
Distributor sales — — 916 0.3% 28,425 5.3% 15,444 7.8% 69,560 21.5%
Total 189,369 100.0% 289,041 100.0% 539,511 100.0% 197,431 100.0% 324,263 100.0%
Direct Sales
We maintain a robust direct sales operation as a key part of our commercial strategy. Our
dedicated sales team engages in direct commerc ial negotiations and provides comprehensive
technical support, enabling us to build strong , lasting relationships with our customers. This
direct sales approach allows us to fully demons trate the capabilities of our GPGPU products
and solutions while maintaining close coo rdination between our sales and R&D teams.
Our direct sales team combines deep technica l expertise with strong commercial acumen,
providing comprehensive pre-sale consultation, implementation support, and ongoing technical
services. This hands-on approach enables us to understand customer requirements intimately,
gather product performance feedback, and continuously refine our solutions. Our R&D teams
work closely with customers to optimize system performance and provide timely support,
establishing us as a trusted technology partner. In 2022, 2023, 2024 and the six months ended
June 30, 2024 and 2025, the contribution of direct sales to total revenue was 100.0%, 99.7%,
94.7%, 92.2% and 78.5%, respectively, with the res t reflecting contribution from distributors.
Distributor Sales
We commenced sales through distributors s ince 2023 to increase customer outreach,
facilitate regional sales and increase market shar e. Our distribution arrangements are structured
to align with market practices and specific bus iness needs. By adopting this distributor model,
we are able to leverage our distributors’ establ ished network to expand the market reach of our
GPGPU products and solutions. As our product and solution offerings expand and market
demand grows, we strategically intensified our distribution efforts to capture broader market
opportunities. Distributors’ specialized loca l market knowledge and established customer
relationships enable us to more efficiently pen etrate new geographic markets and customer
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segments, particularly for emergi ng applications and smaller-scale customers where direct sales
would be less cost-effective. The execution of our distribution channel strategy resulted in
distributor sales increasing from nil to 5.3% of our total revenue in FY2022, FY2023 and
FY2024 to 21.5% of our total revenue in the six months ended June 30, 2025. According to
Frost & Sullivan, engaging distributors to facilitate market penetration and expand sales
coverage is a common market practice of semiconductor companies.
The following table sets forth the movements in the number of our distributors during the
Track Record Period.
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Number of distributors at
the beginning of the year/
period — — 2 8
Addition of new
distributors
(1) —262
Termination of existing
distributors (2) ————
Number of distributors at
the end of the year/period — 2 8 10
Notes:
(1) Represents the number of distributors from whom we generated revenue in the corresponding year/period
but did not generate any revenue from in the preceding year/period.
(2) Represents the number of distributors from whom we did not generate any revenue in the corresponding
year/period but did generate revenue from in the preceding year/period.
As part of our commitment to maintaining high standards, we have implemented rigorous
selection criteria for new distributors, including factors such as their distribution capabilities,
market knowledge, financial stability, credit history and reputation, to ensure they are fully
equipped to represent our brand and promote our products effectively.
We primarily regulate the conduct of our distributors through distribution agreements. Set
forth below is a summary of the key terms of our distribution agreements.
. Term: The term of our standard distribution agreements is typically one year.
. Pricing: We have the right to determine and adjust the product price based on market
conditions and other relevant factors, and the final price shall be as expressly
stipulated in the purchase order duly execu ted by both parties. We do not mandate the
distributors’ selling price to the customers.
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. Payment: Distributors generally make payment to us after products have been sold
and delivered to the customer, and upon t he issuance of a consignment list by the
distributor confirming the completion of del ivery to the customer. The standard credit
period granted to customers is generally one to three months from the date of
delivery.
. Warranty: We typically provide a warranty period of three years since the product
delivery date.
. Anti-corruption and anti-bribery obligations: Both parties shall comply with applicable
anti-bribery and anti-money laundering laws, avoid conflicts of interest, and refrain
from offering or accepting any improper benefits. Any violation may result in
immediate termination of agreements and liability for damages.
. No minimum sales targets: Our distribution agreements do not impose any minimum
sales targets on our distributors.
. Inventory management: Distributors are required to provide us with a monthly report
detailing their product shipments.
. Product return and exchange: All returns are governed by the terms set out in the
relevant sales contracts between us and distributors. Quality-related returns are
subject to our internal review and approval before any refund is processed. For unsold
products, returns are permitted only upon mutual agreement between us and the
distributor, with specific terms to be documented in a supplemental agreement.
. Termination: We have the right to terminate the distribution agreements in the event
of material breach of contract by our distributors.
During the Track Record Period, we did not have any sub-distributors. In line with market
practice, we primarily entered into consignment agreements with our distributors. Under
consignment arrangements, we retain control of the products and bear the relevant legal risks
until the products are sold and delivered to the c ustomer, at which time revenue is recognized.
As a result, we believe that the sales to distributors reflect the actual market demands for our
products. To the best knowledge of our Director s, during the Track Record Period, all of our
distributors were Independent Third Parties, and none of our distributors were wholly-owned or
majority controlled by our current or former employees. During the Track Record Period and
up to the Latest Practicable Date, we did not provide any advance or financial assistance to any
of our distributors.
During the Track Record Period, to the best of our knowledge, there was no material
non-compliance with the terms and conditions of our agreements with distributors, and we were
not involved in any material disputes or liti gation proceedings with our distributors.
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Marketing
Marketing plays a strategic role in supporting our operations and market position. We rely
primarily on industry reputation and technical excellence and focus on building credibility
through participation in key industry events, t echnical conferences, and targeted engagement
with the computing and AI communities. Word-o f-mouth referrals from satisfied customers and
successful deployments form a significant part of our market presence. While we maintain a
professional digital presence, our emphasis is on d elivering substantive technical documentation
and support materials that demonstrate our produc ts’ capabilities and performance advantages.
This focused approach reflects our commitment to establishing ourselves as a trusted provider
of AI computing solutions through t echnical merit and proven results.
Pricing
Our pricing strategy is grounded in a comprehensive evaluation of market conditions,
product positioning, cost structures, and customer specifications. For GPGPU products, we
employ market-based pricing that considers factors including product performance, competitive
positioning, market supply-demand dynamics, and customer purchase volumes, allowing us to
effectively serve different market segments thro ugh a tiered pricing approach. For AI computing
solutions, we adopt a more customized, project-based pricing methodology. The pricing is
determined by considering multiple factors including project scale and requirements,
implementation scope, and market conditions, while maintaining competitive positioning in
the solutions market.
We maintain pricing flexibility through regular reviews and adjustments based on market
conditions, enabling us to respond effectively to competitive dynamics and market changes. This
approach allows us to balance market penetration objectives with sustainable margins across
our product portfolio, while remaining adaptable to evolving market conditions and customer
needs.
OUR CUSTOMERS
Major Customers
During the Track Record Period, our major customers primarily included cloud computing
service providers, AI model developers, research in stitutions, as well as ent erprises from sectors
such as electronics, semiconduc tors, manufacturing and consumer internet. During the Track
Record Period, our revenue from sales of GPGPU products and AI computing solutions were
generated in Chinese Mainland and Hong Kong, and the tariff regimes did not have impact on
our revenue and financial performance. To monitor and mitigate impact from tariffs on our
sales, we have designated responsible personnel to track updates to U.S. and Chinese tariff
schedules and integrated tariff compliance ch eckpoint into our sales management. The salient
terms of our agreements with these c ustomers include the following:
. Service scope and pricing: We supply GPGPU products to our customers according to
their specific requirements. The contract typically specifies the scope of supply,
technical standards, deliver y schedule, and acceptance criteria. Pricing is determined
based on the product type, project scale, and other terms as negotiated by both
parties.
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. Principal rights and obligations of parties involved:
o Product delivery and acceptance: We are responsible for the timely delivery of
products in accordance with the contractual requirements. Customers are
responsible for product inspection and acceptance upon delivery, and for
timely payment as stipulated in the contract.
o Warranty and after-sales service: We generally provide a standard product
warranty, under which we offer repair, re placement, or technical support services
for defective products identified within the warranty period. The standard
warranty period is 36 months from the date of delivery.
o Confidentiality: Both parties are obligated to maintain confidentiality regarding
technical information, pricing, and other confidential business matters obtained
in the course of cooperation.
. Payment terms: Payments are typically arranged on a milestone or delivery basis, with
schedules and methods detailed in the agreement. For AI computing solutions,
payments are generally structured in two tranches: an initial payment ranging from
20% to 50% prior to delivery, and the remaining balance payable within one to six
months following customer acceptance and in voice issuance. The credit terms offered
to our customers vary depending on the specific contract and typically include
arrangements such as advance payments, mil estone-based installments, payments
upon delivery or acceptance inspection, or settlement within an agreed period after
invoicing. The credit period granted to our customers generally ranges from one to
nine months, which is in line with industr y norm according to Frost & Sullivan.
. Intellectual property: Unless otherwise agreed, all intellectual property rights relating
to proprietary technology, software, and documentation provided under the
agreement remain with us. Customers are prohibited from reverse engineering,
sublicensing, or unauthorized use of our intellectual property.
. Term and termination: The agreements specify the validity period and termination
conditions, including provisions for early termination due to material breach, force
majeure, or by mutual agreement.
Revenue generated from our largest cust omer in each of 2022, 2023, 2024 and the six
months ended June 30, 2025 accounted for 37.7%, 19.3%, 44.9% and 13.8% of our total
revenue for the respective year/period, while that of our top five customers accounted for
94.2%, 73.3%, 73.4% and 38.6% of our total re venue for the respective year/period. The
decrease in customer concentration reflects our successful customer base expansion and market
diversification strategy during the Track Record Period. We have been actively broadening our
customer portfolio across different industry ver ticals to reduce reliance on any single customer
or market segment. Furthermore, customer concentration data in 2024 and the six months
ended June 30, 2025 was also affected by season al factors. Revenue is typically more widely
distributed among our customers in the first half of the year, while major customers tend to
make larger purchases in the second half for year-end project completions and inventory
build-up, leading to higher revenue concentration. This seasonal pattern is not uncommon in the
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industry and affects the revenue concentration r atio when comparing a six-month period against
a full year. The following tables set forth certa in information of our top five customers during
the Track Record Period.
Rank Customer Sales Amount
% of Total
Revenue
Business
Relationship
Since
Products/Services
Purchased
(RMB’000) (%)
For the Six Months Ended June 30, 2025
1C u s t o m e r A (1) 44,779 13.8 2023 GPGPU products
2C u s t o m e r B (2) 22,633 7.0 2024 GPGPU products
3C u s t o m e r C (3) 21,248 6.6 2025 AI computing solutions
4C u s t o m e r D (4) 18,372 5.7 2024 GPGPU products
5C u s t o m e r E (5) 18,223 5.6 2024 GPGPU products
Total 125,254 38.6
Note:
(1) Customer A is an enterprise specializing in the development of IT products and the provision of IT
services and system integration.
(2) Customer B is a leading technology enterprise engaged in the development and manufacturing of
electronic components and computer hardware.
(3) Customer C is a globally leading provider of optoelectronic hybrid computing.
(4) Customer D is a manufacturer established in 2010 and focuses on computing center products and services.
(5) Customer E is a provider focusing on AI computing solutions.
Rank Customer
Sales
Amount
% of Total
Revenue
Business
Relationship
Since
Products/Services
Purchased
(RMB’000) (%)
For the Year Ended December 31, 2024
1C u s t o m e r F (1) 242,181 44.9 2022 GPGPU products
2C u s t o m e r G (2) 46,912 8.7 2024 AI computing solutions
3C u s t o m e r H (3) 41,483 7.7 2024 GPGPU products
4C u s t o m e r I (4) 39,498 7.3 2024 AI computing solutions
5C u s t o m e r B (5) 25,760 4.8 2024 AI computing solutions
Total 395,834 73.4
Notes:
(1) Customer F is a leading technology company focusing on the development and provision of information
technology infrastructure and electronic compone nts. Customer F is listed on the Shenzhen Stock
Exchange.
(2) Customer G is a diversified enterprise engaged in computer and electronic device businesses.
(3) Customer H is a technology company specializing in computer networks, electrical devices and related
services.
(4) Customer I is a service provider focusing on computer-related businesses.
(5) Customer B is a leading technology enterprise engaged in the development and manufacturing of
electronic components and computer hardware.
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Rank Customer
Sales
Amount
% of Total
Revenue
Business
Relationship
Since
Products/Services
Purchased
(RMB’000) (%)
For the Year Ended December 31, 2023
1C u s t o m e r J (2) 55,752 19.3 2023 GPGPU products
2C u s t o m e r F (1) 51,423 17.8 2022 GPGPU products
3C u s t o m e r K (3) 35,619 12.3 2022 GPGPU products
4C u s t o m e r L (4) 35,398 12.2 2022 GPGPU products
5C u s t o m e r M (5) 33,850 11.7 2023 GPGPU products
Total 212,042 73.3
Notes:
(1) Customer F is a leading technology company focusing on the development and provision of information
technology infrastructure and electronic compone nts. Customer F is listed on the Shenzhen Stock
Exchange.
(2) Customer J is an AI-focused company dedicated to the research, development, and commercialization of
AI technologies and applications across various industries. Customer J is a wholly owned subsidiary of a
company listed on the Shenzhen Stock Exchange.
(3) Customer K is a company specializing in computing power solutions.
(4) Customer L is a high-tech enterprise established in 2017 and headquartered in Jiangsu province, engaged
in electronic information and computer-related businesses. In 2022, the Company invested in a subsidiary
of Customer L, details of which have been set forth in the ‘‘Financial Information’’ section of this
prospectus. During the Track Record Period, we sold GPGPU products to Customer L, amounting to
RMB85.1 million in aggregate, representing 6.3% of our total sales for the same period.
(5) Customer M is a leading beverage chain enterprise in China.
Rank Customer
Sales
Amount
% of Total
Revenue
Business
Relationship
Since
Products/Services
Purchased
(RMB’000) (%)
For the Year Ended December 31, 2022
1C u s t o m e r N (1) 71,427 37.7 2021 GPGPU products
2C u s t o m e r L (2) 44,248 23.4 2022 GPGPU products
3C u s t o m e r O (3) 30,973 16.4 2022 GPGPU products
4C u s t o m e r P (4) 24,779 13.1 2022 GPGPU products
5C u s t o m e r Q (5) 6,832 3.6 2022 GPGPU products
Total 178,259 94.2
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Notes:
(1) Customer N is a technology company engaged in integrated circuit-related businesses.
(2) Customer L is a high-tech enterprise established in 2017 and headquartered in Jiangsu province, engaged
in electronic information and computer-related businesses. In 2022, the Company invested in a subsidiary
of Customer L, details of which have been set forth in the ‘‘Financial Information’’ section of this
prospectus. During the Track Record Period, we sold GPGPU products to Customer L, amounting to
RMB85.1 million in aggregate, representing 6.3% of our total sales for the same period.
(3) Customer O is a provider of integrated circuit solutions.
(4) Customer P is a provider of AI computing solutions.
(5) Customer Q is an enterprise engaged in computer and server-related businesses.
During each year/period of the Track Record Period, the majority of our revenue was
generated from sales to a small group of customers. We believe this is in line with market
practice, particularly in the AI era, where the explosive demand for computing power has driven
major technology players, including those in the internet, cloud computing, and semiconductor
industries, to significantly increase their procurement of GPGPUs. These companies often make
substantial purchases either on a project basis to meet the intensive computational requirements
of specific initiatives, or periodically to upgrade and expand their infrastructure, ensuring they
can keep pace with the rapidly evolving demands of AI applications and workloads. See the
s e c t i o nh e a d e d‘ ‘ R i s kF a c t o r s—R i s k sR e l a t e dt oO u rB u s i n e s sa n dI n d u s t r y—W ed e p e n do na
limited number of customers for a substantial portion of our revenue, and the loss of, or a
significant reduction in sales to, one or more of our major customers would adversely affect our
business, results of operations and financial condition’’ in this Prospectus.
The composition of our five largest customers has evolved during the Track Record Period,
reflecting the dynamic nature of the semiconductor industry. The end-application markets that
we serve face rapid diversification, with new use cases and application scenarios continuously
emerging across sectors such as large language models, industrial automation, and education.
This diversification leads to shifts in demand patterns among different customer segments. In
addition, we have been proactively developing new customer relationships as part of our market
expansion strategy. As new customers complete their product validation and qualification
processes and begin volume purchases, they may become major revenue contributors, thereby
changing the composition of our largest customer group. Changes in our product portfolio,
including new product series targeting different market segments, have als o contributed to shifts
in customer composition as different cust omers adopt these products at varying times.
To the best of our knowledge, none of our Directors, their respective associates or any
shareholder who, to the knowledge of our Directors, owned more than 5% of our issued share
capital as of the Latest Practicable Date, had any interest in any of our five largest customers,
save for Customer M, which is a company controlled by Centurium Capital through its
controlled entities. During the Track Record P eriod, we sold GPGPU products to Customer M,
amounting to RMB33.9 million in aggregate, repr esenting 2.5% of our total sales for the same
period. All such transactions were conducted i n the ordinary course of business under normal
commercial terms and on an arm’s-length basis. To the best of our knowledge, save for
Customer M, all of our customers during the Track Record Period were Independent Third
Parties.
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OUR SUPPLIERS
As a fabless semiconductor company, we maintain a comprehensive network of suppliers
and manufacturing partners. Our supply chain encompasses the procurement of essential
materials including wafers, memory components, and substrates, specialized R&D resources
such as IP cores and design software, as well as technical services including chip tape-out
services and commissioned research. During the Track Record Period, we did not procure any
raw materials originated in the United States, and our procurement of products or services did
not subject us to any U.S. or Chinese tariffs. During the Track Record Period, we procured
some IP cores and EDA tools from U.S.-based suppliers. Such procurements were conducted
through two methods: software licensing or optical disc importation. As advised by the PRC
Legal Advisor, procurements via software li censing are not subject to tariff regimes — the
reason being that tariffs generally apply to the cross-border importati on of tangible goods,
rather than electronically transmitted softwar e or intangible technology. Pursuant to Article 2
of the Tariff Law of the People’s Republic of China ( 中華人民共和國關稅法) (the ‘‘Tariff Law ’’),
China levies tariffs on goods permitted to be i mported. However, IP cores and EDA software,
which do not constitute ‘‘goods’’ as defined under the Tariff Law, fall outside the scope of
taxation thereunder. In addition, the Import and Export Tariff Schedule of the People’s
Republic of China ( 中華人民共和國進出口稅則) specifies the tariff items and rates for dutiable
goods, and IP cores and EDA software are not included therein. Therefore, as advised by the
PRC Legal Advisor, our procurement of IP cores and EDA software through software licensing
was not subject to PRC tariffs. Procurements via optical disc importati on are subject to tariff
regimes, but exemption may be applied for in accordance with the provisions of the
Announcement of the Tariff Commission of the State Council on Carrying Out the
Market-Oriented Procurement Exclusion Work for Commodities Subject to Additional
Tariffs on Imports from the United States. All IP cores and EDA software we purchased
from the United States via optical disc importation during the Track Record Period have
obtained such exemption from additional tariffs. Considering the above, during the Track
Record Period, China’s arrangements for imposing additional tariffs on U.S. products did not
have impact on our cost of sales or financial performance. To monitor and mitigate impact from
U.S. and Chinese tariffs on our procurement, we have designated responsible personnel to track
updates to U.S. and Chinese tariff schedules and regularly review the categories and origins of
procurement to avoid unnecessary exposure to tariff regimes.
Supplier Management
We maintain stringent protocols for selecting and managing suppliers of critical
components, including wafers, memory components, and substrates that constitute the
majority of our material costs. Our selection cri teria emphasize techno logical capabilities,
production stability, and quality assurance standards, with key suppliers required to maintain
ISO9001 certification and demonstrate consist ent quality management systems. Our supplier
management framework includes regular performance evaluations, focusing on quality metrics,
delivery reliability, and technical capabilities, with immediate corrective action plans required
for any issues identified.
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To mitigate potential supply chain disruption risks, we have implemented a comprehensive
risk management system. We maintain active engagement with an diverse pool of qualified
suppliers, ensuring at least one backup options for each key supplier category where feasible.
We secure production capacity commitments well in advance through framework agreements,
typically one to two months ahead of projected needs. During the Track Record Period and up
to the Latest Practicable Date, there had been no material changes to the terms of our
agreements with our major suppliers. For specialized components where supplier options are
technically constrained, we have developed particularly robust relationships with
industry-leading suppliers and implemented enhanced monitoring systems to ensure supply
stability.
Our inventory management strategy involves maintaining strategic safety stock levels
typically ranging from three to six months of projected usage, calibrated to each component’s
lead time, market availability, and histori cal consumption patterns. We conduct periodic
reviews of inventory positions against target thresholds and adjust our buffer stock levels based
on supplier performance metrics and market conditions.
During the Track Record Period and up to t he Latest Practicable Date, save for a
temporary suspension of services by certain overseas EDA suppliers from May 2025 to July 2025
and a temporary suspension of certain shipments by Supplier F from late November 2024 to
early February 2025, we had not encountered any suspension or termination of relationships
with major suppliers, nor experienced any material disputes or business disruptions due to
supply chain issues. While certain critical services and components require extensive validation
periods for any supplier changes, our robust supplier relationships, inventory management
policies and supplier diversifica tion strategies help ensure operational stability. Through this
comprehensive management approach, we maintain strong relationships with our supplier base
while ensuring consistent access to high-quality services and components that meet our exacting
standards.
To the Company’s knowledge, during the Track Record Period, save for the transactions
and arrangements made in the ordinary course of business, none of the Company’s foundries
and assembly partners or their ultimate beneficial owners or directors had any other past or
present relationships (family, business, employment, trust, financing or otherwise) with the
Company or its subsidiaries, their shareholders ,d i r e c t o r s ,s u p e r v i s o r so rs e n i o rm a n a g e m e n t ,o r
any of their respective associates.
Foundries
As a fabless semiconductor company, we engage leading foundries to manufacture our
GPGPU chips and co-packaged integrated circuit s using advanced process nodes, utilizing our
proprietary designs and specifications. For each year/period of the Track Record Period, our
procurement of foundry services accounted for approximately 2% to 18% of our total
purchases.
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The salient terms of our agreements with foundries are set out below:
. Scope of supply: The wafer foundries are responsible for manufacturing wafers in
accordance with the specification s required in the purchase order.
. Payment: We are generally required to pay in advance for our purchases from wafer
foundries.
. Term and termination: The agreements with wafer foundries generally have a term of
one year, with an option for automatic one-year extension. Either party may
terminate the agreements by giving the other party a 30-day prior written notice.
We maintain close oversight of the manufactu ring process, providing technical support and
quality control throughout the production cycle. This manufacturing model enables us to
maintain production flexibility while focusing on our core strengths in chip design and
development. We actively manage key manufacturing risks including potential capacity
constraints, geopolitical factors affecting technology transfer, and evolving regulatory
requirements for advanced processes. In pa rticular, the global foundry market is
characterized by high technologi cal barriers to entry and signi ficant concentration among a
few leading providers, particularly for cutti ng-edge process nodes. However, there remains
qualified manufacturers domestically and abroad with comparable technical capabilities and
production processes across our manufacturing requirements, although the qualification and
on-boarding of new manufacturing partners requires time and resources due to the technical
complexity of our products. We have established a diverse foundry supplier network, initially
beginning our cooperation with Supplier F before strategically expanding to include several
other foundry partners, guided by our supplier pool policies which emphasize technological
capabilities, production capacity, and reliability.
While we believe our supplier relationships are stable, the concentrated nature of the
foundry market and technical complexity of our products may expose us to certain supply chain
risks. To mitigate supply risks and ensure stable supply of foundry manufacturing services, we
have implemented comprehensi ve measures including: (i) maintaining relationships with
multiple qualified supp liers for each key manufacturing ste p, with real-time mo nitoring access
to foundry production systems; (ii) providing rolling forecasts and advance production
schedules to suppliers to help them better plan cap acity and secure necessa ry materials; (iii)
maintaining dedicated communication channels with suppliers for production scheduling,
capacity planning, and technical support; and (iv) conducting regular supplier performance
reviews with established quality metrics and improvement protocols, while maintaining
qualified supplier lists that meet evolving regulatory and technical requirements. Through
these measures, we have maintained manufacturing stability without material disruptions while
ensuring compliance with industry regulations and technical standards.
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Assembly Partners
We engage assembly partners across two main categories to support our manufacturing
process: (i) Outsourced Semiconductor Assembly and Test (OSAT) partners who handle the
critical steps of chip packaging and testing, implementing comprehensive quality control
procedures to ensure each GPGPU chip meets our exacting standards; and (ii) Printed Circuit
Board (PCB) Assembly partners who manage the board assembly process for our GPGPU
accelerator, from component sourcing to final i ntegration, including the procurement and
assembly of key components such as PCBs, power supplies, and structural elements. For each
year/period of the Track Record Period, our procurement of assembly services accounted for
approximately 4% to 14% of our total purchases.
The salient terms of our agreements with assembly partners are set out below:
. Scope of supply: We are responsible for providing wafers and substrates to the
assembly partners, and the assembly partners are tasked with processing and
assembling in accordance wi th our specifications speci fied in the purchase order.
The assembly partners shall also conduct subsequent testing.
. Quality control: We typically set an assembly yield rate in the agreements with
assembly contractors.
. Payment: We are generally required to make full payment within one months after the
end of each month or within the agreed-upon time limit in the purchase order.
. Term and termination: The agreements with assembly contractors generally have a
term of five years and may be renewed unless either party gives a 30-day prior notice
of non-renewal.
IP Cores and Design Software Providers
We maintain close relationships with suppli ers of IP cores and design software, including
EDA suppliers, that enable our GPGPU development. The IP cores we procure are primarily
interface and auxiliary IP cores, which are u sed to support specific functions within our
products. For each year/period of the Track Record Period, our procurement of IP cores and
design software services accounted for approximately 6% to 17% of our total purchases.
The salient terms of our agreements with IP cores and design software providers are set out
below:
. Scope of license: Providers typically grant us non-exc lusive, non-transferable licenses
to use specified IP cores and design softwar e, which generally also include related
documentation, technical support, and software updates. These licenses are generally
limited to use within Chinese Mainland, and prohibit reverse engineering,
unauthorized distribution, and sublicensing, and require compliance with license
management systems.
. Payment: License fees are generally structured in multiple installments, with payments
required in advance of each license period . A typical payment structure consists of
installments paid annually over the license term.
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. IP rights: The agreements typically define ownership of background IP and specify
our rights to use the licensed technology for design purposes. Any improvements or
modifications developed during the license term are subject to specific ownership and
usage provisions.
. Data protection: Agreements typically require co mpliance with applicable data
protection laws, including implementation of security measures for data processing,
storage, and access control.
. Term and termination: License term is typically 12–36 months from the license
effective date, with provisions for renewal . Either party may terminate the agreement
by providing written notice typically one month in advance.
We have developed mutual-beneficial relationships with major EDA suppliers and have
maintained strong and stable relationships exceeding four years with our major IP cores and
design software providers. The majority of our critical EDA software licenses maintain validity
beyond one year, with renewal negotiations conducted periodically as appropriate. Many
leading providers in the market are U.S.-based companies (whose IP cores and EDA software
we currently use for certain key development processes), and we maintain comprehensive
licensing agreements and technol ogy access arrangements in compliance with export control
requirements. For critical overseas-sourced ED A software, we have recently secured license
renewals extending for at least three years, providing stability to our development capabilities.
While the concentrated nature of the EDA industry and export control considerations may
present certain risks to our operations, we activ ely manage these relationships through careful
compliance with licensing terms and export control requirements. To further enhance our
supply chain resilience, we have implemented a multi-vendor strategy that prioritizes non-U.S.
vendors for new product development, with both international and domestic suppliers
progressively integrated int o specific development areas. Since 2022, we have successfully
onboarded several domestic suppliers who meet our rigorous technical requirements and quality
standards for specific development processes. As of the Latest Practicable Date, we had not
experienced material impediments in accessing th ese essential tools and technologies. Save for a
temporary suspension of services by certain overseas EDA suppliers from May 2025 to July 2025
and a temporary suspension of certain shipments by Supplier F from late November 2024 to
early February 2025, we had not encountered any suspension or termination of relationships
with major suppliers, nor experienced any material disputes or business disruptions due to
supply chain issues during the Track Record Period and up to the Latest Practicable Date. See
‘‘Risk Factors — Risks Related to Our Business and Industry — We rely on third-party IP cores
and design software for our chip development, and any limitation on the availability of these
technologies could adversely impact our ability to develop and launch new products.’’
Technical Service Providers
Our technical service partners complement our internal capabilities with specialized
expertise in areas such as advanced testing pro cedures, optimization services, and specific
technical development projects. These partne rs provide both continuous support services and
targeted research and development work based on our needs. We have maintained relationships
ranging from one to three years with our key technical service providers.
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The salient terms of our agreements with technical service providers are set out below:
. Scope of services: Provider agrees to deliver specifi ed technical services, which may
include advanced testing, optimization, and related technical support. Provider
typically submits a detailed service delivery plan for our approval, outlining
methodologies, timelines and deliverables. Services will be performed in accordance
with the agreed plan.
. Payment: Service fees are typically paid in installments based on agreed project
milestones, which are usually structured to align with key deliverables, with an initial
payment upon contract signing, interim payments upon achievement of specified
milestones, and a final payment upon project completion and acceptance.
. IP and confidentiality: Where applicable, the agreemen ts typically provide that work
products and related IP rights developed during the service period will belong to us.
The provider must maintain confidentiality of all project-related information, ensure
their work does not infringe any third-par ty rights, and may not disclose any project
materials or results to thir d parties without our consent.
. Term and termination: Agreements typically continue until completion of the specified
services or deliverables. Either party may terminate with 30 days’ written notice under
specified circumstances, or immediately for material breach by the other party, with
the non-breaching party being entitled to compensation for proven losses.
Server and Component Providers
We work with established server and component providers to maintain our computing
infrastructure essential for chip design and development operations. We have maintained
relationships extending beyond two years with ou r key infrastructure an d component providers.
The salient terms of our agreements with infrastructure and component providers are set
out below:
. Scope of supply: Providers supply us with server hardware, components, and related
equipment. The scope typically includes delivery and may also include installation
according to our technical specifications.
. Payment: Payment of the total amount is typically due within 30 days after delivery
and receipt of proper documentation.
. Termination: Either party may terminate the agreement by providing written notice
typically one month in advance. A party may terminate immediately in cases of
material breach by the other pa rty, which typically includes violations of contractual
obligations, providing false information during performance, or other specified
defaults.
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Our Major Suppliers
During the Track Record Period, our major suppliers primarily included providers of
memory components, wafer fabrication, printed c ircuit board processing services, IP cores and
design software. Purchases from our largest supplier in each of 2022, 2023, 2024 and the six
months ended June 30, 2025 accounted for 12.5%, 21.6%, 18.1% and 53.1% of our total
purchases for the respective year/period, while that of our top five suppliers accounted for
58.2%, 56.2%, 44.6% and 67.2% of our total purchases for the respective year/period. The
following tables set forth certain information of our top five suppliers during the Track Record
Period.
Rank Supplier
Purchase
Amount
% of Total
Purchase
Business
Relationship
Since
Products/Services
Supplied
(RMB’000) (%)
For the Six Months Ended June 30, 2025
1 Supplier A (1) 259,334 53.1 2022 Memory components
2 Supplier B (2) 23,968 4.9 2022 IP cores and design
software
3 Supplier C (3) 17,772 3.6 2024 IT facilities
4 Supplier D (4) 13,827 2.8 2024 Board-level components
5 Supplier E (5) 13,814 2.8 2020 Printed circuit board
processing services
Total 328,716 67.2
Note:
(1) Supplier A is a leading distributor of storage and memory solutions established in 2002. The increase in
purchases from Supplier A during this period was prim arily to meet anticipated substantial growth in
customer demand in the second half of the year, while ensuring buffer inventory.
(2) Supplier B is a global leader in electronic design software industry.
(3) Supplier C is a computing and network equipment provider established in 2007.
(4) Supplier D is a leading distributor of electronic components established in 2017.
(5) Supplier E is a leading manufacturer of computing and electronic products established in 1997 and listed
on the Hong Kong Stock Exchange.
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Rank Supplier
Purchase
Amount
% of Total
Purchase
Business
Relationship
Since
Products/Services
Supplied
(RMB’000) (%)
For the Year Ended December 31, 2024
1 Supplier A (1) 157,486 18.1 2022 Memory components
2 Supplier F (2) 109,069 12.6 2019 Wafer fabrication
3 Supplier E (3) 49,204 5.7 2020 Printed circuit board
processing services
4 Supplier G (4) 38,151 4.4 2019 IP cores and design
software
5 Supplier H (5) 33,363 3.8 2024 IT facilities
Total 387,273 44.6
Notes:
(1) Supplier A is a leading distributor of storage and memory solutions established in 2002.
(2) Supplier F is a global leader in semiconductor foundry services established in 1987 and listed on the
Taiwan Stock Exchange and the New York Stock Exchange.
(3) Supplier E is a leading manufacturer of computing and electronic products established in 2012 and listed
on the Hong Kong Stock Exchange.
(4) Supplier G is a leading electronic design software company established in 1986 and listed on NASDAQ
Stock Exchange.
(5) Supplier H is a computing and network equipment provider established in 2017.
Rank Supplier
Purchase
Amount
% of Total
Purchase
Business
Relationship
Since
Products/Services
Supplied
(RMB’000) (%)
For the Year Ended December 31, 2023
1 Supplier F (1) 98,995 21.6 2019 Wafer fabrication and
tape-out services
2 Supplier A (2) 78,139 17.0 2022 Memory components
3 Supplier E (3) 38,483 8.4 2020 Printed circuit board
processing services
4 Supplier I (4) 24,891 5.4 2021 Chip packaging and
testing services
5 Supplier J (5) 17,386 3.8 2023 IP cores
Total 257,894 56.2
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Notes:
(1) Supplier F is a global leader in semiconductor foundry services established in 1987 and listed on the
Taiwan Stock Exchange and the New York Stock Exchange.
(2) Supplier A is a leading distributor of storage and memory solutions established in 2002.
(3) Supplier E is a leading manufacturer of computing and electronic products established in 2012 and listed
on the Hong Kong Stock Exchange.
(4) Supplier I is a leading OSAT provider established in 2021.
(5) Supplier J is an IP solutions provider established in 2020.
Rank Supplier
Purchase
Amount
% of Total
Purchase
Business
Relationship
Since
Products/Services
Supplied
(RMB’000) (%)
For the Year Ended December 31, 2022
1 Supplier G (1) 78,035 12.5 2019 IP cores and design
software
2 Supplier K (2) 77,347 12.3 2020 Memory components
3 Supplier E (3) 75,089 12.0 2020 Printed circuit board
processing services
4 Supplier F (4) 72,979 11.6 2019 Wafer fabrication and
tape-out services
5 Supplier I (5) 61,647 9.8 2021 Chip packaging and
testing services
Total 365,097 58.2
Notes:
(1) Supplier G is a leading electronic design software company established in 1986 and listed on NASDAQ
Stock Exchange.
(2) Supplier K is a leading electronic components distributor established in 2005 and listed on the Taiwan
Stock Exchange.
(3) Supplier E is a leading manufacturer of computing and electronic products established in 2012 and listed
on the Hong Kong Stock Exchange.
(4) Supplier F is a global leader in semiconductor foundry services established in 1987 and listed on the
Taiwan Stock Exchange and the New York Stock Exchange.
(5) Supplier I is a leading OSAT provider established in 2021.
During the Track Record Period, we did not rely on any single supplier for our critical
materials, services, technologies or intellectual property. The major suppliers and their
respective procurement contributions varied from year to year during the Track Record
Period, with such variance and distributio n being consistent with industry practice.
To the best of our knowledge, none of our Directors, their respective associates or any
shareholder who, to the knowledge of our Directors, owned more than 5% of our issued share
capital as of the Latest Practicable Date, had any interest in any of our five largest suppliers.
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We maintain strong relationships with our key suppliers while actively managing supply
chain risks in the semiconductor industry. These supplier relationships have enabled us to
achieve significant manufacturing milestone s, including successful mass production of our
products and the establishment of robust inve ntory positions across our product portfolio.
However, we are exposed to supply chain risks arising from evolving international trade and
regulatory requirements affecting the semiconductor industry. For example, the U.S.
Department of Commerce issued an ‘‘Is Informed’’ letter to Supplier F in November 2024,
imposing immediate export restrictions to prevent Supplier F’s shipment of certain types of
advanced semiconductor products to China, particularly those used in AI applications. As
confirmed by the OIR and Export Control Legal Advisor, such ‘‘Is Informed’’ letter is not
publicly available and, consistent with Part 744 of the EAR, the ‘‘Is Informed’’ letter, as
opposed to broader revisions to the EAR, direct ly imposes restrictions on the recipient of the
letter (i.e., Supplier F) but not third-parties such as us. Consistent with the ‘‘Is Informed’’
Letter, we understand that Supplier F did not proceed with further shipments of relevant
affected items to China, which included certain sh ipments of co-packaged integrated circuits to
us, thus avoiding any violations of the EAR pursuant to the ‘‘Is Informed’’ letter. Following the
promulgation of the Interim Final Rule by BIS on January 16, 2025 (the ‘‘ January Interim Final
Rule ’’), it is presumed that ‘‘applicable advanc ed logic ICs’’ are classified as ECCN 3A090.a
(designed or marketed for data-center) and the refore require worldwide BIS authorization
(export license) unless one of three routes to overcome such presumption is satisfied, one of
which was that an approved OSAT packages and provides an attestation as to the aggregated
approximated transistor count is below certain th resholds (e.g., under 30 billion; or, if no high
HBM is present, under 35 billion for shipments completed in 2027 and under 40 billion in 2029
and thereafter). In early February 2025, we provided the requisite attestation issued by an
approved OSAT to Supplier F, pursuant to which Supplier F was able to resume shipment of
our products covered thereunder. It is the vi ew of the OIR and Export Control Legal Advisor
that the aforesaid arrangement of supply of co-packaged integrated circuits by Supplier F to us
does not represent a violation of the January Interim Final Rule and the EAR because we have
engaged approved OSATs as requi red under the January Interi m Final Rule and the EAR to
provide the requisite approved OSAT attestat i o no nt h ec o - p a c k a g e di n t e g r a t e dc i r c u i t s
supplied to us and to prove that such co-packaged integrated circuits were not subject to the
3A090.a presumption under the January Interim Final Rule. As such, it is the view of the OIR
and Export Control Legal Advisor that such activities do not represent a violation of the EAR.
As a result of the foregoing, we experienced a temporary disruption in supply of certain
types of co-packaged integrated circuits used for several of our products from late November
2024 to early February 2025. This temporary supp ly interruption did not materially affect our
operations primarily because we h ad proactively built up and maintained sufficient inventory
levels to fulfill customer commi tments; the timing of the disru ption coincided with typical
seasonal industry slowdowns in customer dema nd; and importantly, we had already initiated
and made substantial progress in implementing alternative supply arrangements as part of our
routine supply chain risk management strategy. S ee also, ‘‘Risk Factors — Risks Relating to our
Business and Industry — We depend on third-party contract manufacturers, which reduces our
ability to control our manufacturing process. A ny interruption or shortage or loss of capacity
from these contract manufacturers could materially interrupt our business operations and
product offerings, which may adversely affect our business, results of operations and financial
condition.’’
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To further enhance our supply chain resilience, we have implemented a multi-vendor
strategy to diversify our supplier base across multiple regions. We will continue to maintain
strong collaborative relationships with our key suppliers, including Supplier F, characterized by
close ongoing communication and long-term partnership agreements, with no current
indications of any material disruption to our ongoing business relationships. We have also
commenced small-batch trial production with an alternative foundry and have put in place
comprehensive backup plans through ongoing engagement with additional alternative
foundries. Our backup foundry arrangements have demonstrated adequate capacity, quality,
and cost parameters to provide necessary o perational safeguards while supporting our
continued business growth. These arrangements are expected to be capable of manufacturing
all our products under development, including next-generation products. The establishment of
multiple foundry relationships enables us to maintain operational flexibility. Through our
proactive supplier management strategy, including regular engagement on capacity planning,
ongoing monitoring of regulatory requirements, and systematic review of procurement sources,
we have established a resilient supply chain framework that we believe will effectively support
our business growth and operational needs. See also, ‘‘— Our Suppliers — Supplier
Management’’ and ‘‘— Our Suppliers — Foundries.’’
OVERLAPPING OF CUSTOMERS AND SUPPLIERS
Customer K, one of our largest customers in 2023, also acted as our supplier in the same
year. Customer K specializes in computing power solutions, providing computing infrastructure
and services to support digital transformation and AI-driven workload s for industry clients.
Revenue generated from sales of our GPGPU products to Customer K accounted for 12.3% of
our total revenue in 2023. We procured IDC servers from Customer K to support our R&D
activities, amounting to nil, RMB4.0 million, RMB4.4 million and RMB2.4 million in 2022,
2023, 2024 and the six months ended June 30, 2025, r espectively, representing nil, 0.9%, 0.5%
and 0.5% of our total purchases for the respective years/periods. Revenue generated from
Customer K was RMB0.1 million, RMB35.6 million, nil and nil in 2022, 2023, 2024 and the six
months ended June 30, 2025, respectively, representing 0.1%, 12.3%, nil and nil of our total
revenue for the respective years/periods.
Customer C, one of our largest customers in the six months ended June 30, 2025, also acted
as our supplier in the same period. Customer C is a globally leading provider of optoelectronic
hybrid computing. Revenue generated from sales of our AI computing solutions to Customer C
was RMB21.2 million in the six months ended June 30, 2025, representing 6.6% of our total
revenue for the period. We did not generate revenue from Customer C in 2022, 2023 and 2024.
We procured optical interconnect products from Customer C for use in connection with our
delivery of computing solutions for certain projects, amounting to nil, nil, RMB5.1 million and
RMB3.2 million in 2022, 2023, 2024 and the six months ended June 30, 2025, respectively,
representing nil, nil, 0.60% and 0.65% of our total purchases for the respective years/period.
Negotiations of the terms of our sales to and pur chases from this overlapping customer and
supplier were conducted on an individual basis and the sales and purchases were neither
inter-connected nor inter-conditional with each other. Our Directors confirmed that all of our
sales to and purchases from the overlappin g customer and supplier were conducted in the
ordinary course of business under normal commercial terms and on an arm’s-length basis.
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LOGISTICS AND INVENTORY MANAGEMENT
Logistics
We have established a robust logistics and warehousing system to support the efficient
distribution and quality control of our products . Our primary warehouse is located in Shanghai,
which serves as our central hub for inventory storage and dispatch. In addition, we leverage
supplementary storage facilities at the manufacturing sites of our key manufacturing partners in
eastern and southern China, further enhancing our regional coverage capabilities.
For product delivery, we coordinate closely wit h our manufacturing partners and reputable
third-party logistics service providers to ensure the timely and secure transportation of goods to
customers across various regions. Depending on customer requirements and order size, finished
products are delivered either directly from our Shanghai warehouse or dispatched from our
manufacturing partners’ facilities to the desig nated venues specified by customers. Throughout
the logistics process, we maintain stringent oversight and quality control measures to ensure
product integrity and traceability at every stage of the supply chain.
Inventory Management
Our inventories primarily comprise finishe d products, semi-finished products, and raw
materials. We have implemented a comprehensive inventory management system designed to
maintain accurate and up-to-d ate inventory records across all storage locations. Our
procurement and inventory planning process is highly structured, commencing with target
setting and production planning, and extending th rough delivery scheduling and post-delivery
reconciliation. We conduct regular inventory reviews and physical counts at least twice a year,
covering both our Shanghai warehouse and our manufacturing partners’ facilities.
To mitigate the risk of inventory obsolescence , we proactively monitor inventory aging and
undertake periodic assessments with our supply management and business operations teams.
F o rl e g a c yp r o d u c t so ri n v e n t o r yh e l df o ro v er a year, we implement targeted clearance
strategies to optimize inventory turnover. Ad ditionally, we closely track market trends and
demand forecasts, and may strategically pre-stock essential raw materials to mitigate the risk of
supply disruptions.
Through these integrated logistics and inve ntory management practices, we are able to
maintain efficient product distribution, ensure t imely order fulfillment, and exercise effective
control over inventory levels, thereby supporting our overall operational stability and customer
satisfaction.
QUALITY CONTROL
We are committed to upholding the highest standards of quality across our products and
solutions, recognizing that robust quality management is essential to our reputation and
long-term competitiveness. To this end, we have established a comprehensive quality
management system that provides the organiz ational framework and operational standards
for the continuous improvement of our products, processes, and customer service.
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R&D Activities
Throughout our research and development proc ess, we adhere strictly to all relevant laws,
regulations, industry practices, and our internal quality control protocols. Our R&D activities
are subject to a rigorous, multi-stage evaluation and validation process designed to ensure that
every product and solution meets our stringent quality benchmarks. Specifically, at the start-up
phase of each project, we engage in detailed cons ultations to understand customer requirements
and assess project feasibility. During the planning phase, we develop comprehensive project
plans and technical proposals based on in-depth analysis. The execution and monitoring phase
involves the implementation of technical solutions, with extensive testing and validation
conducted to confirm product performance and reliability. In the closing phase, we summarize
the lessons learned and integrate feedback to drive ongoing improvement. This systematic
approach to R&D quality control ensures that only products meeting our high standards
progress to mass production and commercial release.
Supply Chain Management
Quality assurance extends throughout our ent ire supply chain. We have established robust
policies and detailed procedures to ensure the quality of components and raw materials sourced
from our suppliers. In selecting and evaluating suppliers, we conduct thorough due diligence,
taking into account their reputation, credentials, service capabilities, product quality, and
delivery performance. All suppliers are required to comply with our internal supply
management policies and quality requirements.
Our quality control team is responsible for communicating with suppliers regarding
technical standards and specifications, and for conducting thorough inspection of product
samples to verify compliance with our design requirements. We may also conduct regular or ad
hoc on-site inspections at suppliers’ facilities and require prompt corrective action for any
identified quality issues. These procedures al low us to maintain a high level of consistency and
reliability in the materials incorporated into our products.
Product Returns and Recalls
We have implemented comprehensive procedures for the identification and control of
non-conforming products. Our approach involv es close coordination between our product-line,
technology, and customer service departments t o ensure prompt response and resolution of any
quality-related issues. When non-conforming products are identified, our teams implement
rectification measures, monitor outcomes, and provide personnel training and process
optimization as needed. Custo mer service managers mainta in direct communication with
customers and work in collaboration with product quality managers to analyze issues, issue
reports, and follow up with relevant departmen ts to ensure corrective actions are taken and
further improvements are achieved.
Our systematic quality management procedur es are designed to prevent non-conforming
products from being delivered or used by customers. During the Track Record Period and up to
the Latest Practicable Date, we have not experi enced any material produc t returns or recalls,
reflecting the effectiveness of our quality control system and our commitment to product
excellence.
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COMPETITION
China’s GPGPU market is highly competitive, with global technology leaders currently
dominating market share while domestic players are rapidly emerging. We face intense
competition from established international GPGPU companies with mature technology stacks
and ecosystem advantages, as well as other domestic competitors targeting various market
segments and application scenarios. Critical as pects of competition include chip architecture
capabilities, manufacturing process advancement, software stack development, and deep
understanding of AI computing requirements, which are essential for capturing market share.
The increasing domestic demand for technology alternatives, coupled with the rapid evolution
of AI computing needs, creates both opportunities and competitive pressures in the sector. See
‘‘Industry Overview’’ for details.
INFORMATION SECURITY AND DATA PRIVACY
In the course of our business operations, we c ollect, store and process business data and
transaction data. Given that we only make transac tions with enterprises, our business generally
does not involve the collection or processing of customers’ personal information.
To reinforce our data secu rity and protection measu res, we have implemented a
comprehensive approach that includes stringent data encryption, secure data storage
protocols, and strict transmission policies to ensure the confidentiality and integrity of
sensitive information. Moreover, we implemented a robust information backup management
system, which sets forth the guiding principle s, detailed procedures and mechanisms for data
recovery. In addition, we formulated a scheme on information security management to set out
the general guidance and principles of our information security management, under which we
established a series of policies and procedures, including among others, policies on system
operation management, password management and corporate trade secret protection and
procedures on document control and confidentiality management. These systems, policies and
procedures collectively form a solid framew ork that safeguards our data and upholds our
stringent standards for information security.
INTELLECTUAL PROPERTY
Since our inception, we have internally developed a variety of intellectual property rights.
As of June 30, 2025, we have 65 granted patents, inc luding 56 invention related patents, as well
as 207 trademarks both in China and overseas. We also own 113 copyrights, including both
software and design copyrights, as of June 30, 2025. We also own six domain names in China for
our website, as of June 30, 2025. In addition, we co-owned 1 patent application with third
parties in China, as of June 30, 2025. Considering the supplemental nature of such patent
applications, none of these applications would have a material adverse impact on our operations
if they were unsuccessful or subj ect to any disputes. See ‘‘Appendix VI — Statutory and General
Information — 2. Further Information About the Business of the Company — B. Intellectual
Property Rights’’ for details of our mat erial intellectual property rights.
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We believe that our intellectual property portfolio is critical to strengthening our
technological leadership and maintaining subs tantial barriers to entry. We intend to continue
expanding our intellectual property assets by developing more advanced algorithms, software
frameworks and high-efficiency GPGPU archit ectures, which are expected to bring sustained
value to participants in our ecosystem.
The following table sets forth our key technologies, their significance to our business, the
status of intellectual property protection, and their technological advancement:
No. Core Technology Significance
Intellectual Property
Protection Advancement
1 GPGPU Core
Architecture Design
Forms the technological
foundation and core
competitiveness of
our key products,
supporting major
applications in AI
and computational
workloads
21 granted patents,
20 pending
applications
Leading
domestically and
internationally
2 GPGPU System
Control
Microarchitecture
Design
Ensures product
reliability and
supports large-scale
cluster deployment,
enhancing
system-level
management and
energy efficiency
1 granted patent,
13 pending
applications
Leading
domestically and
internationally,
enabling
large-scale
GPGPU clusters
and high-power
management
3 GPGPU Video and
Image Codec
Microarchitecture
Design
Provides high-efficiency
processing
capabilities for
multimedia and AI
scenarios
1 granted patent,
1 pending
application
Leading
domestically and
internationally,
supporting
concurrent
high-channel
video processing
4 Adaptive Performance
and Power
Optimization
Realizes dynamic
balance between high
performance and
power efficiency,
strengthening
product
competitiveness
1 granted patent,
4 pending
applications
Delivers significant
performance
improvement,
industry advanced
5G P U D r i v e r a n d
Compiler
Technology
Ensures compatibility
with mainstream
ecosystems, lowering
customer migration
barriers
1 granted patent,
4 pending
applications,
3 software
copyrights
Broad compatibility
with major
operating systems
and applications
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No. Core Technology Significance
Intellectual Property
Protection Advancement
6 High-performance
General-purpose
Computing
Ecosystem
Compatibility
Technology
Improves ecosystem
compatibility and
usability, facilitating
seamless customer
migration
6 granted patents,
7 pending
applications,
3 software
copyrights
Fully compatible
with mainstream
GPGPU
ecosystems, highly
user-friendly
7 High-performance
Secure Computing
Technology based on
GPGPU
Meets high security
requirements in
finance, cloud
computing and other
sectors, expanding
application scenarios
5 pending patent
applications
The first domestic
supplier
supporting
GPU-TEE secure
computing
8 GPGPU
Heterogeneous
Application
Platform
Enables integrated
hardware and
software delivery,
enhancing customer
experience and
resource utilization
6 granted patents,
19 pending
applications,
15 software
copyrights
One-stop solution,
highly efficient
resource
scheduling
9 GPGPU Large Model
Cluster Inference
Service Optimization
Provides cost-effective
training and inference
services for large
model applications
5 pending patent
applications
Solves deployment
and scheduling for
large models,
leading
domestically
During the Track Record Period and up to the Latest Practicable Date, we did not have
any material disputes or any other pending legal proceedings regarding intellectual property
rights with third parties.
EMPLOYEES
As of June 30, 2025, we had a total number of 685 full-time employees, all of whom were
based in Chinese Mainland. The following table sets forth the number of our full-time
employees by function as of June 30, 2025.
Function
Number of
Employees Percentage
Research and Development 484 70.6%
Sales and Marketing 110 16.1%
General Administration 91 13.3%
Total 685 100.0%
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Our success is underpinned by our ability to attr act, retain, and motivate highly qualified
personnel, and we regard our talent pool as a core strength of the Company. We adopt high
standards and rigorous procedures in our recruitment process to ensure the quality of new hires.
We recruit employees primarily through on-ca mpus job fairs, industry referrals, online
recruitment channels, and, where appropriate, s pecialized talent agencies, in order to meet
our evolving business needs.
We offer competitive salaries, performance-based cash bonuses, and other incentives to our
employees. In addition, we have adopted share-based incentive plans for eligible employees to
further align individual performance with our long-term success. Our compensation and benefits
packages are designed to attract and retain top t alent in a highly competitive labor market.
To support the ongoing professional development of our employees, we provide new
employee orientation programs as well as regular on-the-job training and continuing education
opportunities. These programs are aimed at enhancing the skills and knowledge of our
workforce, fostering a culture of innovation and excellence, and supporting the long-term
growth of our business.
In full compliance with PRC l aws and regulations, we participate in various employee
social security plans organized by relevant government authorities, including housing, pension,
medical, work-related injury, maternity, and unemployment benefit plans, with contributions
made at specified rates based on employee salaries.
We enter into standard employment contracts and confidentiality agreements with all
employees in accordance with market practice. For key personnel, we typically include
non-compete covenants which restrict compe titive activities durin ge m p l o y m e n ta n df o ra
period of up to two years following termination, with appropriate compensation provided
during the restriction period. We also generally require core employees to sign proprietary
information and inventions agreements, ensuring that all rights, title, and interests in inventions
or works created during their emp loyment are vested in our Company.
Upon commencement of employment, each employee receives an employee handbook that
outlines our human resources policies, compliance requirements, compensation, benefits,
performance assessment, and training and development programs.
Our employees have established a labor union in accordance with the relevant PRC labor
laws. We believe that we maintain a good working relationship with our employees. During the
Track Record Period and up to the Latest Practicable Date, we had not experienced any
material labor disputes, work stoppages, or significant difficulties in recruiting or retaining staff
for our operations. No collective bargaining agreement has been put in place.
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INSURANCE
We maintain insurance coverage over our daily operations. Our insurance policies
primarily include employee-related insurance an d product liability insurance, which we believe
have covered major risks in our daily operations. We believe our insurance policy as a whole is
in line with the general market practice and com plies with the relevant rules and regulation in
China. See the section headed ‘‘Risk Factors — Risks Related to Our Business and Industry —
Our insurance coverage may not be sufficient t o cover all losses or potential claims by our
customers which would affect our business, results of operations and financial condition’’ in this
Prospectus. During the Track Record Period, w e did not make any material insurance claim in
relation to our business.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We believe our sustained growth lies in our contribution to the society. Since our inception,
we have adopted as our long-term strategic goa l to promote environmental sustainability,
support and participate in socially responsible projects, and adhere to a high standard of
corporate governance.
ESG Governance
We attach great importance to envir onment, social and governance (‘‘ ESG’’) and strive to
build a sustainable ecosystem comprising of our employees, business partners and customers.
Our Board is fully responsible for setting up ESG policies and strategies, overseeing
ESG-related issues, monitoring and reviewin g of progress made against targets to ensure
mechanism effectiveness, and fostering a culture of acting in accordance with our core ESG
values. To strengthen our sustainability capabilities, improve our governance structure and
enhance our ESG performance, we expect to esta blish an ESG committee, which is responsible
for overseeing ESG-related issues and guiding the development of our ESG initiatives. The ESG
committee consists of senior executives, heads o f various functional dep artments and staff with
a solid understanding of current and emerging ESG-related issues, and will report directly to
our Board on all the ESG-related matters. The duties and responsibilities of the ESG committee
include the following:
. Develop and implement ESG framework, po licies and initiatives aligned with our
long-term business strategy, and reg ularly review and adjust as needed;
. Ensure compliance with the latest ESG-rel ated laws and regulations, and update ESG
policies promptly based on regulatory changes;
. Identify, assess and manage material ESG-related risks on a regular basis, and
implement timely measures to mitigate potential impacts;
. Engage external ESG experts when necessa ry to provide professional advice and
support in fulfilling our ESG targets;
. Review and monitor the effectiveness of our stakeholder communication channels and
collect their feedback to optimize our ESG strategies;
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. Arrange ongoing ESG training for dire ctors and senior management to ensure
awareness of the latest trends and compliance requirements on ESG-related matters;
. Prepare annual ESG Report and ESG-relate d risk and opportunity assessment report
for the Board’s approval; and
. Monitor and evaluate our performance and progress against ESG targets and
regularly report to the Board.
Environmental Protection
Our foundational commitment lies in providing practicable solutions that drive the
sustainable development of society as a whole. With this in mind, we prioritize eco-conscious
practices and integrate sustainability into every aspect of our business operations. To achieve
this, we take proactive and effective measures t o control and reduce pollutant emissions and
energy consumption, seeking to make a positive impact on both the environment and the
communities that we serve.
GHG Emissions and Energy Consumption Management
The major sources of our greenhouse gas (‘‘ GHG’’) emissions and energy consumption
from our day-to-day operations primarily include electricity consumption. To manage our
energy consumption and reduce GHG emissions, we have implemented relevant policies and
conducted a series of campaigns, including tem perature control in office areas. We will also
consider adopting energy-effi cient lighting systems and engaging employees through
sustainability training and awareness programs to foster a culture of environmental
responsibility.
The following table sets out the breakdown of GHG emissions and our electricity
consumption for the years/periods indicated.
For the year ended
December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
GHG Emissions
Scope 1 and Scope 2 GHG
emissions (t-CO2
e) 455.67 766.32 971.08 441.18 489.57
Scope 1 and Scope 2 GHG
emissions intensity (t-CO2 e/
RMB’ million in revenue) 2.41 2.63 1.8 2.23 1.51
Scope 3 GHG emissions intensity
(t-CO2 e/RMB’ million in
revenue) 0.40 0.19 0.19 0.25 0.18
Scope 1 GHG emissions (t-CO2 e)—————
Scope 2 GHG emissions (t-CO2 e) 455.67 766.32 971.08 441.18 489.57
Scope 3 GHG emissions (t-CO2 e) 75.21 55.00 104.13 49.34 58.73
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For the year ended
December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
Energy Consumption
Electricity consumption (MWh) 799 1,235 1,565 711 789
Electricity consumption intensity
(MWh/RMB’ million in
revenue) 4.22 4.25 2.9 3.6 2.43
Comprehensive energy
consumption equivalent value
(tce) 897.20 1,386.78 1,757.34 789.38 885.97
In alignment with our commitment to sustainability, we have set quantitative GHG
emission reduction targets for the next three years covering Scope 1, Scope 2, and Scope 3
emissions. We do not generate direct GHG emissions under Scope 1 from our own operations.
For Scope 2, our goal is to reduce the carbon emis sion intensity of purchased electricity by 10%
by the end of 2026 compared to the 2024 baseline. To achieve this, we plan to sign renewable
energy power purchase agreements so that gre en electricity accounts for 20% of our total
electricity consumption, and to implement an en ergy management system in our office buildings
to reduce total electricity usage by 10%. For Scope 3 emissions, mainly from procurement,
supply chain transportation, and business trave l, we will prioritize working with low-carbon
logistics providers and optimize transportation routes through digital platforms to reduce
empty load rates by 10%. We will also promote a ‘‘t ravel only when necessary’’ policy, replacing
20% of domestic business flights with video c onferencing, and encourage employees to use
public transportation and carpooling through subsidies and incentive programs. We will
regularly monitor our progress towards these t argets and continue to seek new opportunities to
further reduce GHG emissions across our operations and value chain.
Water Consumption Management
We closely monitor water consumption levels at our production facilities and offices and
have implemented various policies and measures to conserve water resources. These include
timely repairing any dripping faucets to minimize water wastage and posting reminder stickers
in restrooms to raise employees’ awareness on water conservation. Through these efforts, we
target to further promote water-saving practices and reduce overall water usage. The following
table sets out our water consumption for the years/periods indicated.
For the year ended
December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
Water Consumption
Water consumption (t) 686.84 1,050.76 1,280.03 596.27 661.94
Water consumption intensity
(t/RMB’ million in revenue) 3 .63 3.61 2.37 3.02 2.04
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Waste Management
We are fully committed to sustainable waste man agement practices, ensuring that all waste
is handled with the utmost care and efficien cy. We do not produce hazardous waste, and the
general waste we generate primarily include s screws and domestic garbage, all of which is
carefully collected and stored for di sposal by licensed third parties.
To further promote sustainability, we actively encourage recycling and waste sorting
within our operations. By implementing effective waste management measures, we have
achieved significant improvements in waste recycling, reflecting our dedication to minimizing
waste and optimizing resource recovery. By reg ularly monitoring waste generation and waste
recycling rate, we strive to minimize environmen tal impact and enhance sustainability efforts
throughout our operations.
Workforce Welfare and Diversity
Within our organization, we are committed to creating an open and inclusive workplace
that promotes equality. We hire employees based on their merits and it is our corporate policy
to offer equal opportunities to them regardless of gender, age, race, religion or any other social
or personal characteristics. We actively promo te gender equality, par ticularly in management
and technical positions, by providing female employees with ample career development
opportunities to help them achieve their professional aspirations. We also value age diversity,
with a team structure that combines experienced senior staff and dynamic younger employees.
This balance ensures the integration of industry exp ertise with innovative perspectives, fostering
a workforce that supports our sustainable dev elopment. We adhere to a fair and transparent
employee management system and strive to enhance gender and age diversity of our workforce.
We established human resources management policies that systematically outline the
recruitment processes, promotio n procedures, dismissal/resigna tion processes, performance
evaluation approaches, retention strategies, sal ary and benefits procedures, employee training,
etc. We implement a merit-based hiring approa ch so make sure our recruitment is based on the
principles of openness, fairness and equity.
Community Engagement
During the Track Record Peri od, we actively engaged with the community through various
initiatives focused on education, public we lfare, and technology empowerment. We made
donations of semiconductor products and AI co mputing resources to leading universities to
support research and talent development, and provided scholarships to encourage academic
excellence in microelectronics an d related fields. In addition, we participated in local charitable
projects, including initiatives supporting individuals with autism.
Looking ahead, we will continue to strengthen collaboration with academic institutions by
co-establishing joint laboratories to nurture digital skills and help bridge the education gap. We
also intend to further expand our community support by providing a ccessible computing
resources to developers, promoting technological innovation, and fostering inclusive growth
within the industry.
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Anti-corruption and Anti-bribery
We have implemented a set of policies to ensure our operations comply with applicable
anti-bribery and anti-corruption regulations in jurisdictions where we operate. The policies
explain potential bribery and corruption conduct and our anti-bribery and anti-corruption
measures. Improper payments prohibited by the pol icy include bribes, kickbacks, excessive gifts
or facilitation payment, or any other payment made or offered to obtain an undue business
advantage. Our legal department is responsible for investigating the reported incidents and
taking appropriate measures as necessary. We conduct background check procedures before
hiring any third party and ensure that the hiring procedure is implemented fully in accordance
with the anti-bribery and anti-corruption polic ies. We also have regular trainings for employees
regarding anti-bribery and anti-corruption policies to facilitate better implementation.
PROPERTIES
Our headquarter is located in Shanghai, China. As of the Latest Practicable Date, we
operated our business operations through 11 lea sed properties with an aggregate gross floor
area of approximately 15,900 square meters. Our leased properties are used for non-property
activities as defined under Rule 5.01(2) of the Listing Rules and are principally used for office
and research and development purposes.
As of the Latest Practicable Date, our leased properties in China had not completed lease
registration procedures with the relevant PRC government authorities. Pursuant to the
applicable laws and regulations in China, property lease agreements for leased properties
must be registered with the relevant real estate a dministration bureaus in China. As advised by
our PRC Legal Advisor, the lack of registrati on does not affect the validity of the lease
agreements, but we may be subject to fines from RMB1,000 to RMB10,000 for each such lease
agreement for failure to register. As of the Late st Practicable Date, we had not been subject to
any administrative penalties by th e relevant competent authorities.
As of the Latest Practicable Date, the actual land use of two of our leased properties used
for our business operations was inconsistent with its approved land use as specified in its land
use right certificate. If the owner of this property is required by government authorities to
rectify such land use, we may have to relocate an d bear relocation costs and other additional
expenses. As of the Latest Practicable Date, we were not aware of any such rectification request
by government authorities. As advised by our PR C Legal Advisor, under relevant PRC laws and
regulations, it is the lessor (not the tenants) that will be subject to administrative punishment or
penalties due to the lessors’ failure to fulfill t he responsibility to ensure that the actual use is
consistent with the approved use. We would not be subject to any penalty therefrom, but we
may not be able to continue leasing such property. Furthermore, one of our leased properties
lacks the relevant title certificates from t he lessors, which may expose us to the risk of
third-party claims or disputes regarding property ownership. If we are unable to continue using
such leased properties, the potential relocation will not lead to business disruption or undue
burdensome, since we believe we are able to seek alternative leased properties in other areas (if
necessary) without material adverse effects on the business operations and the relocation costs
are not expected to be significant.
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As of the Latest Practicable Date, none of the properties leased by us had a carrying
amount of 15% or more of our consolidated total assets. Therefore, according to Chapter 5 of
the Listing Rules and section 6(2) of the Companies (Exemption of Companies and Prospectuses
from Compliance with Provisions) Notice (Cap. 32L of the Laws of Hong Kong), this
prospectus is exempted from compliance with the requirements of section 342(1)(b) of the
Companies (Winding Up and Miscellaneous Provi sions) Ordinance in relation to paragraph
34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance which requires a valuation report with respect to all our Group’s interests in land or
buildings.
LICENSES, PERMITS AND APPROVALS
We are subject to regular inspections, revie ws and audits by local regulators and are
required to maintain the licenses, permits, a pprovals and certifications necessary for our
business operations. During the Track Record Period and up to the Latest Practicable Date, we
had obtained all requisite licenses, permits and approvals from the relevant government
authorities that are material for our business operations in the jurisdictions where we operate
and we have the up-to-date understanding with the applicable requirements.
LEGAL PROCEEDING AND COMPLIANCE
Legal Proceedings
We may from time to time be subject to various legal or administrative claims and
proceedings arising in the ordinary course of our business. We are currently not a defendant to
any material legal or administrative proceedin gs and we were not involved in any material legal
proceedings and litigations as defendant during the Track Record Period and up to the Latest
Practicable Date.
Compliance
During the Track Record Period and up to the Latest Practicable Date, we had not been
and were not involved in any material non-compliance incidents that have led to fines,
enforcement actions, or other penalties that could, individually or in the aggregate, have a
material adverse effect on our business, financial condition and results of operations. As advised
by our PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable
Date, we have complied with the relevant PRC la ws and regulations in al l material respects.
Based on information provided by us regardin g our business and operations, including its
GPGPU products, R&D activities, historical transactions with customers and suppliers, the
OIR and Export Control Legal Advisor has advised us that our transactions did not represent a
violation of U.S. Export Administration Regulations (‘‘ EAR’’) or U.S. sanctions regulations.
Our internal control measures, if properly followed, appear adequate and effective to mitigate
future risk of violations. As further advised b y the OIR and Export Control Legal Advisor, we
are a covered foreign person under the U.S. Outbound Investment Rules, and investments by
U.S. persons in us would likely constitute ‘‘notifiable transactions’’ under the Outbound
Investment Rules because we engage in activities involving semiconductors, a covered activity of
the Outbound Investment Rule; and further, investments by U.S. persons in us would likely not
constitute ‘‘prohibited transactions’’ under the Outbound Investment Rules because the
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integrated circuits we design and our activi ties do not meet the criteria for ‘‘prohibited
transactions’’ as prescribed under the Outbound Investment Rules. As further advised by our
OIR and Export Control Legal Advisor, following the completion of the Global Offering, it is
expected that U.S. persons will be able to invest in our H Shares based on the publicly traded
securities exception under the Outbound Investment Rule as long as the investments made do
not afford a U.S. person certain rights that are not standard minority shareholder protections.
U.S. persons subscribing Shares in the Global O ffering, instead of the Company, will bear the
obligation to report notifiable transaction s to the U.S. Department of the Treasury, if
necessary. Under the Outbound Investment Rule, prohibited transactions include (i) fabrication
of certain advanced semiconductors meeting the specifications under the Outbound Investment
Rule; (ii) development or production of EDA software, front-end semiconductor fabrication
equipment and advanced packaging equipment, or chips designed to operate at or below 4.5
Kelvin or those that exceed specified performa nce thresholds; and (iii) the development,
installation, sales, or production of supercomputers that exceed certain specifications. As
confirmed by our OIR and Export Control Legal Advisor, as we do not engage in any
prohibited transactions, and our products do not meet the specified parameters prescribed for
the prohibited transactions, our integrated circuit design activities do not meet the criteria for
prohibited transactions. See ‘‘Risk Factors — Risks Related to Our Business and Industry —
We are subject to the risks associated with sanctions and export controls laws and regulations,
international trade policies, and developing domestic and foreign laws and regulations on AI,
semiconductor and related technologies, and our business, financial condition and results of
operations could be adversely affected.’’ During the Track Record Period and up to the Latest
Practicable Date, we did not experience any incident relating to the Outbound Investment Rules
that resulted in material adverse impact on our operations or investment activities. For the
foregoing reasons, our Directors are of the view that the Outbound Investment Rules would not
have any material impact on the Company’s opera tions, financial perfo rmance, Global Offering
or investment prospects. The Sole Sponsor has conducted due diligence work including, among
others: (i) reviewing the legal memorandum issued by our OIR and Export Control Legal
Advisor; (ii) discussing with our OIR and Export Control Legal Advisor and the Company to
understand the impact of the Outbound Investment Rules on the Company’s operations,
financial performance or investment prospects; and (iii) conducting background searches and
public searches on the Group. Based on the due di ligence work conducted, nothing has come to
the Sole Sponsor’s attention that would caus e it to cast doubt on the Directors’ views above.
As part of our management of the risks associated with our EAR compliance, we consider
these rules in the design, manufacture, procurement and sales of our products. During the Track
Record Period and up to the Latest Practicable Dat e, we did not experience any incident relating
to EAR that resulted in material adverse impact on our operations, and the EAR has not caused
material interruption to our business, and the refore the restrictions imposed by the EAR have
not negatively impacted our operations or financial performance. Based on the view of our OIR
and Export Control Legal Advisor and the following factors, our Directors are of the view that
the restrictions imposed by the EAR have not and are not expected to materially and adversely
impact our business activ ities or expansion plans:
. We have maintained stable operations and supply arrangements through multiple
rounds of U.S. export control updates in r ecent years. This historical track record
indicates that our operations are resilient to potential changes in export control
measures.
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. We are actively diversifying our supplier base and promoting the use of domestic
alternatives to reduce relian ce on foreign technologies.
. We have in place a comprehensive legal and c ompliance framework to identify, assess
and prevent risks associated with export control and related restrictions. Specifically,
we have adopted measures to mitigate potential risks, including periodic review of
supply chain exposure to export-controlled i tems, requiring contractual undertakings
from business partners regarding compliance with applicable export control and
sanctions laws, maintaining dialogue with external legal advisors on regulatory
developments, and establishing internal training and escalation procedures to ensure
timely identification and handlin g of potential compliance issues.
The Sole Sponsor has conducted due diligence work including, among others: (i) discussing
with the Company to understand the Group’s product offerings and the impact of EAR
restrictions on the Group’s operations; (ii) reviewing the legal memorandum issued by our OIR
and Export Control Legal Advisor; (iii) conducted third-party due diligence interviews with the
Company’s major customers and suppliers; and (iv) conducting background searches and/or
public searches on the Group and its major customers and suppliers. Based on the due diligence
work conducted, nothing has come to the Sole Sponsor’s attention that would cause it to cast
doubt on the Directors’ views above.
RISK MANAGEMENT AND INTERNAL CONTROL
It is the responsibility of our Board to ensure t hat we maintain sound and effective internal
controls and risk management system to safeguard our shareholders’ investment and our assets.
The objectives of our risk management system are to: (i) identify potential events that may
impact us, ensuring relevant risks are control led within acceptable and appropriate levels
relative to our objectives; (ii) fa cilitate accurate and reliable communication of information to
both internal and external stakeholders of our Company; (iii) ensure compliance with our
business operations; (iv) enhance the efficiency and effectiveness of our business activities,
thereby reducing uncertainties in achieving operational goals; and (v) establish crisis
management plans for significant risks to pr otect our Company from substantial losses due
to catastrophic risks or human errors.
Our audit committee is responsible for reviewing the regulations and primary objectives
related to risk management, submitting an annual comprehensive risk management report to the
Board, reviewing risk management strategies and solutions for significant risks, and addressing
other matters related to comprehensive risk management as authorized by the Board. Our
internal audit department is tasked with implementing our risk management policies and
systems. Other departments and business units ar e supervised by the internal audit department
in their risk management efforts.
The typical operating procedures of our risk management work include the following: (i)
collecting information related to risk management, including historical data and future
forecasts. Specifically, in terms of strategic risk, we extensively gather cases where domestic and
international companies have suffered losses due to uncontrolled strategic risks; in financial
risk, we collect cases of financial crises caused by uncontrolled financial ri sks; in market risk, we
gather cases where companies have suffered losses due to neglecting market risks and lacking
response measures; in operational risk, we col lect information relevant to our Company and
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industry; and in legal risk, we gather cases where companies have suffered losses due to
neglecting legal and regulator y risks and lacking response measures; (ii) assessing the
significance and likelihood (or frequency and probability) of risks; (iii) senior management
assists the Board in determining a unified risk appetite and tolerance based on business
characteristics, and establishes risk warning lines and corresponding countermeasures; (iv)
senior management formulates risk management solutions for significant risks based on risk
management strategies; and (v) senior manage ment supervises the implementation of risk
management, making timely improvements b ased on changes and any deficiencies. Our
approach also involves the continuous enhancement of internal control mechanisms and regular
reviews of our risk management policies and internal control measures to maintain their
effectiveness and adequacy, ensuring that our operations align with industry standards and
regulatory requirements.
IMPACT OF COVID-19
On January 30, 2020, the World Health Orga nization (WHO) declared the outbreak of
COVID-19 a public health emergency of international concern, followed by its classification as a
global pandemic on March 11, 2020. Despite a re surgence of cases in various regions during
2022, our established health and safety protocol s — including remote work arrangements, social
distancing, mask requirements, and site-specif ic measures — enabled us to adapt effectively to
changing conditions. Our production, supply chain, and daily activities remained stable
throughout this period. On the basis of the foregoing, our Directors are of the view that the
COVID-19 pandemic did not have any material adverse impact on our business operations or
financial performance. As conditions have now largely normalized, we do not anticipate any
material adverse impact on our operations going forward.
AWARDS AND RECOGNITION
We have received recognition for the quality and popularity of our business. The following
table sets forth some sign ificant awards and recognition we have received.
Award/Recognition Award Year Awarding Institution/Authority
First prize award, 2021 China
Integrated Circuit
Innovation and
Entrepreneurship
Competition
2021 Organizing Committee of the 2021
China Integrated Circuit
Innovation and
Entrepreneurship Competition
Leading Scientific and
Technological Achievement
Award, World Internet
Conference
2021 Organizing Committee of World
Internet Conference Wuzhen
Summit
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Award/Recognition Award Year Awarding Institution/Authority
SAIL AWARD TOP30,
World Artificial
Intelligence Conference
2021 Organizing Committee of World
Artificial Intelligence Conference
Outstanding Technological
Innovation Product, 17th
‘‘China Chip’’ Awards
2022 China Electronics Information
Industry Development Research
Institute
Shanghai Science and
Technology Little Giant
Enterprise
2023 Shanghai Federation of Trade
Unions, Shanghai Municipal
Human Resources and Social
Security Bureau
Minhang District Science and
Technology Little Giant
Enterprise
2023 Minhang District Science and
Technology Commission,
Minhang District Economic
Commission
Shanghai Unicorn (Potential)
Enterprise to Receive
Prioritized Service
2024 Shanghai Small and Medium-Sized
Enterprises Development Service
Centre, Great Wall Strategy
Consultants
Second Pri ze, Shanghai
Computing Network
High-Quality Development
Benchmark Application
Case Competition
2025 Shanghai Computing Network
Association
Science and Technology
Innovation Golden Bull
Award
2025 China Securities Journal
BUSINESS SUSTAINABILITY AND PATH TO PROFITABILITY
We had achieved business growth but were loss-making during the Track Record Period.
Our revenue increased from RMB189.4 million in 2022 to RMB289.0 million in 2023 and further
to RMB539.5 million in 2024. Fur thermore, our revenue increased from RMB197.4 million in
the six months ended June 30, 2024 to RMB324.3 million in the six months ended June 30, 2025.
However, we recorded net loss of RMB553.6 million, RMB817.4 million, RMB892.4 million,
RMB404.0 million and RMB609 .3 million in 2022, 2023, 2024 and six months ended June 30,
2024 and 2025, respectively, and adjusted net lo ss (non-HKFRS measure) of RMB432.8 million,
RMB609.7 million, RMB644.7 million, RMB296. 9 million and RMB299.8 million in the same
years/periods, respectively.
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Reasons for Historical Loss
As a key player in China’s AI chip and GPGPU markets, our growth trajectory aligns
closely with market development and expans ion. However, AI chip and GPGPU markets are
characterized by significant upfront investme nts and long product commercialization cycles,
which posed challenges to achieving profitability during our early years of operation. We
incurred net losses during the Track Record Peri od, primarily attributable to the following
reasons.
. Significant upfront investment in res earch and development initiatives. The AI chip and
GPGPU markets are capital- and technolo gy-intensive, and require significant
investments in, among others, architecture design and verification, software stack
development, model training and performance tuning, supply chain, and ecosystem
development. With our strong conviction to driving computation innovation, we have
consistently prioritized R&D to enhance our competitiveness and leadership in the AI
chip and GPGPU domains. During the Tra ck Record Period, we made significant
investments to advance our core technology stack, spanning proprietary hardware,
comprehensive software systems and computing cluster technologies, as well as to
build a skilled team to address the complex demands of our customers and adapt to
market trends, which are critical to deliver ing performance-optimized products and
solutions that align with contemporary technological standards. Our research and
development costs were RMB456.6 million, RMB615.9 million, RMB772.8 million,
RMB333.7 million and RMB451.5 million in 2022, 2023, 2024 and six months ended
June 30, 2024 and 2025, respectively, accounting for 241.1%, 213.1%, 143.2%,
169.0% and 139.2% of our total revenue in th e same years/periods, respectively. Our
R&D spending primarily focused on developing new products and solutions, as well
as enhancing existing ones to better serve our customers’ evolving needs. While these
efforts are essential to our long-term comp etitiveness, they have not yet resulted in
significant revenue growth and contributed to our net losses during the Track Record
Period.
. Limited economies of scale. We have achieved substantial growth during the Track
Record Period. We generated economies of scale through streamlined R&D process,
technology reuse and organization structur e optimization. Our operating expenses,
defined as the sum of research and development costs, administrative expenses and
selling and distribution expenses, as a pe rcentage of total revenue decreased from
354.5% in 2022 to 327.3% in 2023, and further to 213.6% in 2024, and decreased from
257.1% in the six months ended June 30, 2024 to 244.8% in the six months ended June
30, 2025. Despite the decrease in our operating expenses as a percentage of our total
revenue, the benefits of economies of scale t ake time to materialize, particularly given
the substantial upfront investments required in such a fast-moving and highly
competitive industry.
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. Early commercialization stage. The development and commercialization of GPGPU
products typically involve a multi-year, capital-intensive process, including
architecture design, IP integration, syst em validation, software stack development,
and close collaboration with customers for tuning and qualification. As a result,
domestic GPGPU companies are at an early s tage of product commercialization. We
had also devoted significant resources to completing pre-commercialization
development and preparing our products for deployment. Although we successfully
launched our GPGPU products in 2021, we are still at a relatively early stage of
commercialization of our GPGPU products and AI computing solutions. TG Gen 1
a n dT GG e n2a c h i e v e dm a s sp r o d u c t i o ni nSeptember 2021 and the fourth quarter of
2023, respectively. We launched ZK serie s in December 2022, which was specifically
designed for inference tasks, with bo th ZK Gen 1 and ZK Gen 1X achieving mass
production in February 2023. We further started to offer our AI computing solutions
in 2023 to address growing market demands for AI training and large-scale data
processing. Therefore, most of our GPGPU products and AI computing solutions are
still in early stages of commercialization and market penetration. As such, our current
revenue scale is insufficient to fully offset our historical investments and operating
expenses. Our profitability continues to be affected by limited production volume,
limited customer base and the absence of scale-driven cost efficiencies.
. Substantial cost of sales and operating expenses. In 2022, 2023, 2024 and the six
months ended June 30, 2024 and 2025, our cost of sales was RMB77.0 million,
RMB145.9 million, RMB274.4 million, RM B108.4 million and RMB161.8 million,
respectively, accounting for 40.6%, 50.5%, 50.9%, 54.9% and 49.9% of our total
revenue in the same years/periods, respectively. The rising cost of sales was in part,
due to the expansion of our business scale that led to a corresponding increase in
procurement. Concurrently, we also witnessed changes in operating expenses,
including expenses related to selling, administrative and R&D activities. For
instance, our administrative expenses increased from RMB166.0 million in 2022 to
RMB242.0 million in 2023 and further to RMB257.3 million in 2024, and from
RMB119.5 million in the six months ende d June 30, 2024 to RMB274.6 million in the
six months ended June 30, 2025. The incre ase was primarily attributable to our
strengthened administrative team and capabilities to support our business growth.
Our selling and distribution expenses increased from RMB48.7 million in 2022 to
RMB88.3 million in 2023 and further to RMB122.4 million in 2024, and from
RMB54.5 million in the six months ended J une 30, 2024 to RMB67.6 million in the six
months ended June 30, 2025. The increase was primarily attributable to our sales
network development and customer acquisition initiatives. While our operating
expenses may not result in immediate revenue growth, they are critical to building the
foundation for long-term success and sustainable competitiveness.
Despite our net loss positions throughout the Track Record Period, our proactive
endeavors in product and solution commercialization and market expansion have contributed to
our revenue growth during the Track Record Period. Our net loss margin decreased from
292.3% in 2022 to 282.8% in 2023 and further to 165.4% in 2024, and from 204.6% in the six
months ended June 30, 2024 to 187.9% in the six months ended June 30, 2025. The decrease was
primarily attributable to our improved cost control, optimized offering mix and enhanced
operating efficiency. We believe we will be able to achieve profitability through a combination
of revenue growth, improvement in gross profit margin and enhanced operating leverage.
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Driving Revenue Growth
We expect that our revenue will grow further due to the following factors.
. Leveraging industry g rowth potential. China’s AI chip and GPGPU markets are still at
a nascent development stage. Mounting demand for computing power and
technological advancements provide substantial industry growth potential.
According to Frost & Sullivan, the si ze of China’s AI chip market reached
approximately RMB217.5 billion in rev enue, with a CAGR of 80.3% from 2022 to
2024, and is expected to reach RMB898.1 billion in 2029, with a CAGR of 29.1%
from 2025 to 2029. The size of China’s GP GPU market reached RMB154.6 billion in
revenue in 2024, representing a remarkable CAGR of 70.1% from 2022 to 2024. The
market is projected to maintain strong growth momentum, with revenue expected to
reach RMB715.3 billion by 2029, repres enting a CAGR of 30.1% from 2025 to 2029.
We have established first-mover advantag es and, among China’s chip designers, we
are the first to achieve mass production of inference GPGPU chips, to mass produce
training GPGPU chips, and to accompli sh these milestones using advanced 7nm
process technology, according to Frost & Sullivan. Our market leadership is built on a
foundation of optimized performance and cost-efficiency, achieved through strategic
design principles that optimize both technical capabilities and customer value.
Specifically, we employ a systematic app roach to GPGPU development that centers
on hardware-software co-design, ensurin g our products deliver both performance and
practicality. Through this approach, we systematically analyze workload
requirements and performance bottleneck s to deliver GPGPUs with fully optimized
hardware and software capabilities. We provide comprehensive software tools
including specialized function libraries and development utilities, continuously
enhanced to address emerging AI workload requirements. This hardware-software
coordinated development approach ensures our products deliver optimized
performance while providing the flexibility and compatibility needed for complex
AI deployments. This commitment manifests across our entire product portfolio,
from individual units to large-scale clust er deployments, delivering measurable
advantages in key performance metrics. The combination of optimized efficiency,
high compatibility, and strong adaptability positions us uniquely in the market to
deliver optimal cost-performance solu tions that meet evolving customer needs.
Furthermore, our growing customer base provides a solid foundation for
commercialization and enables us to penetrate more deeply across different sectors,
thereby driving sustai ned revenue growth.
As a well-established GPGPU and AI computing solutions provider with steadfast
dedication to product development and technology innovation, as well as continuous
expansion of customer base and industry co verage, we believe we are well positioned
to drive China’s GPGPU industry beyond import substitution toward domestic
innovation leadership, while capturin g a larger market share by developing
next-generation products that offer opt imized cost-performance advantages,
enabling broader adoption across AI and computing applications, achieving further
revenue and profit growth.
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. Expanding and diversifying our product and solution offerings . To drive sustained
revenue growth and deepen our market penetration, we remain committed to
continuous innovation across our product lines and strategic expansion of our
solution portfolio. We launched our tra ining product series, TG series, in March
2021, and our TG Gen 1 was China’s first domestically mass-produced GPGPU
product to achieve mass production. We then launched TG Gen 2 in September 2023
with enhanced integer performance and arc hitecture efficiency to deliver improved
application performance. As a result of our product innovation and iteration with
enhanced performance, the average sales price of our training series increased from
RMB24.4 thousand in 2022 to RMB38.6 thousand in 2024, and our revenue from
training series increased from RMB188. 1 million in 2022 to RMB221.2 million in 2023
and further to RMB269.4 million in 2024, and from RMB115.2 million in the six
months ended June 30, 2024 to RMB189.7 million in the six months ended June 30,
2025.
We expanded our product portfolio and introduced ZK series, comprising our ZK
Gen 1 and ZK Gen1X, designed for inference applications, marking China’s first
GPGPU specifically designed for inference tasks. Our revenue from inference series
i n c r e a s e df r o mR M B 0 . 4m i l l i o ni n2 0 2 2t oR M B 4 5 . 7m i l l i o ni n2 0 2 3a n df u r t h e rt o
RMB100.2 million in 2024, and from RMB21.6 million in the six months ended June
30, 2024 to RMB87.0 million in the six months ended June 30, 2025.
We plan to continue to iterate on our pr oduct lines for training and inference
scenarios.
For instance, our development of the n ext-generation TG series is currently
underway, with future products designed to enhance performance capabilities,
particularly for large-scale AI training ap plication. We are also actively developing
the next generation of ZK products, with optimizations speci fically targeting
emerging and latest large language models. We aim to optimize our product
architecture to achieve higher cost-perfo rmance advantages for our customers. We
also plan to introduce new product categories in response to market dynamics and
customer needs. For instance, recognizin g the growing demands for onboard compute
capabilities of robotic devices to support AI-based perception, navigation,
decision-making, and control across industrial automation, logistics, service
robotics, and smart manufacturing, we plan to develop GPGPU products for edge
and on-device applications in robotics systems to support real-time, low-latency
inference and sensor data processing. We believe we are well equipped with our
existing GPGPU design and software stack capabilities to develop competitive
products tailored for edge and on-device computing in robotics. Our ongoing key
R&D projects include our development of (i) ZK Gen 2, our advanced AI inference
and general-purpose computing product with low cost for edge and end computing
markets; (ii) ZK Gen 3, our advanced AI in ference, training and general-purpose
computing product, optimized for inference workloads, for cloud computing markets,
(iii) TG Gen 4, our advanced AI training, i nference and general-purpose computing
products, optimized for training workloads, for cloud computing markets, and (iv)
TG Gen 5, our advanced AI training, inference, and general-purpose computing
product, optimized for training workloads, with significantly improved computing
performance compared to previous generation of products for cloud computing
markets. See ‘‘Research and Development — R&D projects’’ for details.
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Furthermore, we launched our AI computin g solutions to assist enterprise and
research institution customers in tackling complex workloads. Building on the solid
financial performance of our AI computing solutions during the Track Record Period,
with a revenue increase from RMB15.5 mil lion in 2023 to RMB166.2 million in 2024
and an increase in gross profit margin from 25.9% in 2023 to 31.7% in 2024, we also
plan to further promote the adoption of our AI computing solutions across various
use cases and enhance their adaptability and AI training and large-scale data
processing capabilities to capture increasing market demand. Specifically, we plan to
expand the application of our AI computing solutions to scenarios demanding
high-performance compute, such as intell igent devices like robots and automotive.
The robotics industry in China is undergoing a new upgrade cycle, with leading
manufacturers accelerating the transition toward more advanced, humanoid, and
embodied-intelligence products. Meanwhile, the rising public visibility and
commercialization of intelligent robots in various scenarios have further increased
market attention and customer adoption. Together, these trends are driving the
continuous expansion of the market for AI a pplications in robotics and, by extension,
the demand for scalable computing infrastructure capable of supporting complex
perception, decision-making, and control model. At the same time, the advancement
of intelligent-driving and autonomous-vehicle technologies continues to fuel demand
for robust AI training and inference capabilities, particularly for model development
and validation in centralized computing environments.
Although our GPGPU products and AI solutions are applied across different
industries, their fundamental design principl es are highly reusable. The instruction set
and architecture of our GPGPU products are largely consistent across applications, as
they are optimized to support a wide rang e of AI and general-purpose computing
algorithms. While configurations such as computing power, memory, interconnect
ratios and power efficiency vary among use scenarios, these adjustments are
implemented under a unified hardware-software architecture. Leveraging our
extensive experience in developing multiple generations of products across edge and
on-device environments, and in both high- and low-power designs, we are well
positioned to extend our existing technologies to robotics and automotive
applications without significant incremental R&D efforts. We have internally
initiated the R&D for product capabilities for edge and on-device computing
applied to embodied intelligence and vehicle-road coordination scenarios. We believe
our AI computing solutions are well-suited to address both inference and training
scenarios, offering the parallel processing performance required for real-time
responsiveness as well as the computational scale necessary for iterative model
development.
By executing our product development s trategy and expanding adoption across
industries, we are well-positioned to translate our innovation into meaningful and
sustained revenue growth.
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. Deepening relationship with existing customers . Our future growth depends
significantly on our ability to deepen relationships with our existing customers that
span across industries such as financial se rvices, healthcare, retail and education
sectors. By reinforcing customer trust and e xpanding collaboration, we are positioned
to scale the deployment of our GPGPU products and AI computing solutions
alongside the increasing demand for computing power in their evolving applications.
Customers that have realized tangible performance gains using our GPGPU products
in a specific workload often explore broader integration of our products and solutions
into other use cases. Repeat purchases from these customers are primarily driven by
their need for capacity expansion, as well as the technical barriers and switching costs
associated with our products and solutions. As a result, customer loyalty and
long-term relationships are further strengthened. In 2022, 2023, 2024 and the six
months ended June 30, 2024 and 2025, the number of repeated customers was one,
eight, 28, 20 and 42, respectively, account ing for 4.6%, 12.3%, 15.5%, 24.7% and
39.6% of our total customer base in the same periods, respectively, with a revenue
contribution of 37.7%, 47.5%, 47.6%, 64.0% and 58.0% of our total revenue in the
same periods, respectively, which demonstrated the strength of our customer base and
our continued market competitiveness. Going forward, we plan to enhance our
capabilities to support existing customers by (i) improving the compatibility and
adaptability of our products and solutions to deliver deeper technical integration and
lifecycle support for our customers, (ii) leveraging digital analysis tools to track client
interactions, preferences, and service histories, (iii) enhancing client communication
with regular check-ins and improve feedback systems, and (iv) continuously
monitoring and analyzing client data for better solution and service delivery.
Specifically, we intend to enhance the flexibility and scalability of our AI
computing solutions so that they can be more easily integrated into customers’
diverse application scenarios. For example , in the intelligent retail sector, we have
developed modular solutions that combine AI computing, network, and storage
capabilities to support unified management of in-store IoT devices and multi-scenario
access. By improving integration with cus tomers’ systems and providing tailored
configuration and software adaptation s ervices, we enable customers to reduce
deployment costs and improve operational efficiency. These efforts have helped us
strengthen long-term cooperation with existing customers in the intelligent retail
sector. Our initiative to enhance custome r communication focuses on establishing a
more proactive customer-management process. Through regular communication with
customers, we are able to obtain feedback on our products and incorporate such
feedback into our R&D process to enhance product performance. During these
interactions, we also update customers on the latest improvements and
model-adaptation capabilities of our products, which naturally lead to new sales
opportunities as customers’ needs evolve.
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. Expanding customer base . We plan to further grow our customer base by leveraging
our flexible product architecture and robus t software development capability to
support a wide range of industry-specific computing needs. Our GPGPU products and
solutions are designed to be highly configurable and modular, allowing customers to
select and combine components, such as t raining or inference accelerators and
supporting software toolchains, based on their performance, cost, and deployment
requirements. This flexibility enables u s to address the diverse needs of customers
including cloud computing service providers, AI model developers, and enterprise
across industries with AI computing demands. See ‘‘— Industry Applications’’ for
details. In particular, our proprietary software stack, including compilers, AI
frameworks, and developer tools, plays a critical role in enabling deep
customization. By enabling compatibility with customers’ existing infrastructure
and applications, we empower enterprises a nd developers to accelerate adoption and
shorten time-to-deployment, which pos itions us to win customers with varying
technical maturities and computing demands.
To further boost market visibility and cus tomer engagement, we intend to intensify
our marketing efforts through participation in key industry events, technical
conferences and targeted engagement with the computing and AI communities. The
AI industry is characterized by a highl y interconnected ecosystem, where chip
designers, computing solution providers, cloud and data center operators, model
developers, and end-application enterprises maintain close technical and commercial
collaboration. Industry events therefore s erve as an effective platform for companies
across the value chain to exchange information, explore collaboration, and identify
business opportunities. By showcasing our GPGPU products and AI computing
solutions and engaging with potential cus tomers at such events, we can directly
expand our market exposure and customer reach. We have participated in major
events such as the World Arti ficial Intelligence Confer ence, the World Computing
Conference, the China Computing Power Co nference, the World Integrated Circuit
Conference, and IC China, as well as various seminars and technical exchanges related
to artificial intelligence, int egrated circuits, and AI applications in vertical industries
such as finance and education. Participation in these events not only facilitates
potential customer acquisition and partnership development but also helps enhance
our reputation and industry influence. As a result of the foregoing efforts, our
customer base for GPGPU products increase d during the Track Record Period from
22 in 2022 to 56 in 2023 and further to 158 in 2024, and from 70 in the six months
ended June 30, 2024 to 95 in the six months ended June 30, 2025; and our customer
base for AI computing solutions increased from five in 2023 to 21 in 2024, and
remained stable at 10 in the six months ended June 30, 2024 and 2025.
Improving Gross Profit Margin
Our future profitability depends on our ability to increase the current level of margin
profile and introduce new products and solutions with high margin profile. Our gross profit
margin for our GPGPU products slightly increased from 50.2% in 2023 to 56.6% in 2024, as a
result of our product design improvement. During the Track Record Period, our gross profit
margin for our AI computing solutions incr eased from 25.9% in 2023 to 31.7% in 2024,
primarily due to enhanced performance of our AI computing solutions due to the adoption of
more advanced accelerators and t echnologies, and increasing market demands for AI computing
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and large-scale data processing. However, our ov erall gross profit margin decreased from 59.4%
in 2022 to 49.5% in 2023 and further to 49.1% in 2024 , primarily attributable to the increase in
revenue contribution from our AI computing solutions, which typically had a lower margin
profile that of our GPGPU products. We witnessed an increase in our gross profit margin from
45.1% in the six months ended June 30, 2024 t o 50.1% in the six months ended June 30, 2025,
primarily due to the increase in revenue contribution from our GPGPU products. We expect to
increase our gross margin profile through the following initiatives.
. Optimizing revenue mix. We plan to further improve our gross profit margin by
optimizing our revenue mix and enhancing the profitability of both our product and
solution businesses. We are working on i mproving the margin profile of GPGPU
products by introducing new products incorporating more advanced technologies that
would allow us to charge higher pricing through ongoing product innovation and
iteration, including optimizing hardware architecture, improving software
performance, and enhancing ease of deployment. Both our training and inference
series recorded an increase in gross pro fit margin from 2023 to 2024, primarily
attributable to the sales of newly introduced products with enhanced technological
performance and pricing. Specifically, the gross profit margin of our training series
increased from 53.2% in 2023 to 60.2% in 2024, primarily because we began mass
production of TG Gen 2 in the fourth quarter of 2023 and its sales volume increased
significantly in 2024 as market adoption a ccelerated. Although the overall shipment
volume of our training series remained relatively stable at 7.0 thousand units in 2023
and 2024, respectively, a larger portion of the sales were attributed to TG Gen 2,
which was priced higher owing to its advanced technological performance and
stronger market positioning. The revenue contribution from TG Gen 2, as a
percentage of our total revenue from our tr aining series, increased from 30.1% in 2023
to 87.9% in 2024. For the inference series, both ZK Gen 1 and ZK Gen 1X entered
mass production in February 2023. However, ZK Gen 1 was positioned at a higher
price point compared with the lower -power ZK Gen 1X. From 2023 to 2024, the
shipment volume of ZK Gen 1 increased significantly and exceeded that of ZK Gen
1X, leading to a larger revenue contribution from ZK Gen 1. The revenue
contribution from ZK Gen 1, as a percentage of our total revenue from our
inference series, increased from 17.9% in 2023 to 93.1% in 2024. As a result, the gross
profit margin of our inference series increased from 35.8% in 2023 to 46.7% in 2024.
Therefore, our past performance demonstra tes that higher-performance products are
associated with higher gross margins for both our training and inference series.
Building on this trend, we intend to further enhance the overall performance and
technological sophistication of our product portfolio, so as to strengthen our pricing
capability and improve overall gro ss profit margin going forward.
For our solution business, which typically has a lower gross margin due to the
integration of third-party components, we p lan to improve cost control through better
design standardization and deeper cooperation with ecosystem partners to reduce
external procurement costs. Specific measures we intend to adopt include: (i)
developing standardized solution blueprints for commonly served workloads, such
as AI model training, video analytics and e dge inference, to reduce customization and
simplify component sourcing; (ii) promotin g reusability of internal software modules
and integration layers, thereby reducing engineering and validation overhead in
deploying new solutions; (iii) consolidating third-party component selection to a
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vetted group of suppliers, enabling greater bargaining power through volume
purchases; and (iv) establishing long-te rm strategic procurement agreements with
suppliers of key third-party components to secure favorable pricing and supply
continuity. As a result, the gross profit margin of our AI computing solutions
increased from 25.9% in 2023 to 31.7% in 2024, and increased from 10.3% in the six
months ended June 30, 2024 to 45.7% in the six months ended June 30, 2025.
We also plan to develop new products and solutions with better margin potential by
targeting use cases with stronger demand for performance and customization. To
achieve this, we plan to (i) prioritize v erticals and applications where compute
performance is essential and pricing sensitivity is lower, such as advanced AI model
training or financial risk modelling, which enables us to command premium pricing;
(ii) build configurable core product frameworks that allow for modular customization
without requiring full redesigns for each customer; (iii) focus on high-margin
customization layers, such as proprietary software toolchains, model optimization
libraries, or workload orchestration featur es; and (iv) establish early engagement with
clients in target verticals to align customization scope with scalable design principles
and commercial viability.
We believe the above initiatives will help us further increase gross profit margin of our
GPGPU products and AI computing solutions, thereby improving our overall gross
margin.
. Improving cost efficiencies. We are actively pursuing cost reduction measures aimed at
lowering the unit cost of our products without compromising performance or
reliability. One of our key initiatives is to optimize product design and architectural
complexity, which can significantly reduc e validation and manufacturing costs. In
addition, we aim to consolidate material and component procurement across product
lines, allowing us to negotiate more favorable pricing with foundry, packaging, and
component suppliers through increased order volumes and improved bargaining
power. These initiatives are expected to enhance cost efficiency throughout our supply
chain and reduce our overall cost of sales, thereby supporting margin expansion as we
scale.
Enhancing Operating Leverage
During the Track Record Period, we incurred s ubstantial operating expenses to support
our business growth. However, as our business scales, our operating expenses, defined as the
sum of research and development costs, administrative expenses and selling and distribution
expenses, as a percentage of total revenue decreased from 354.5% in 2022 to 327.3% in 2023,
and further to 213.6% in 2024, and from 257.1% in the six months ended June 30, 2024 to
244.8% in the six months ended June 30, 2025. In the future, we will continue optimizing our
research and development as well as sales and administrative functions to support our long-term
business growth, and we expect that our operating expenses, as a percentage of our total
revenue, to continue to decrease as our business expands.
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. Research and development costs. During the Track Record Period, we allocated
significant resources on developing R&D capabilities to support the development of
technology foundations underlying our GPGPU product and AI application
computing solution offerings. Our research and development costs were RMB456.6
million, RMB615.9 million, RMB772.8 million, RMB333.7 million and RMB451.5
million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, accounting for 241.1%, 213.1%, 143.2%, 169.0% and 139.2% of our
total revenue in the same years/periods, respectively. As we remain dedicated to
product and technology innovation and intend to maintain a high level of R&D
investment to support long-term growth, we expect our research and development
costs to increase in absolute amounts but to decline as a percentage of our total
revenue over time. To optimize our research and development expenses, we plan to (1)
leverage existing technologies and core components across different product lines,
including reusing proprietary architectu res, software toolchains, and compiler
frameworks across both training and infe rence products, and adapting existing
designs for new use cases through modularization and parameter tuning, to reduce
incremental research and development cos ts, enhance development efficiency and
accelerate launch of new products; (2) improve personnel efficiency by refining team
structures to reduce functional silos, adopting agile development frameworks to
improve iteration speed, implementing centralized project tracking systems to reduce
redundant efforts, and promoting cross-functional collaboration among hardware,
software and algorithm teams to better align project goals and resource allocation;
and (3) explore co-development opportunities with ecosystem partners, including joint
research initiatives to share early-stage development burden, tap into external
expertise, and accelerate product validat ion for industry-specific use cases while
maintaining internal cost discipline.
. Administrative expenses. Our administrative expenses amounted to RMB166.0
million, RMB242.0 million, RMB257.3 million, RMB119.5 million and RMB274.6
million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, accounting for 87.7%, 83.7%, 47.7%, 60.5% and 84.7% of our revenue
in the same years/periods, res pectively. The increase in our administrative expenses
was primarily attributable to the inc reases in the headcount and average
compensation level of our administrative personnel during the Track Record
Period. Going forward, we plan to monitor our administrative expenses and
promote operational efficiencies by streamlining our organization structure and
digitalizing internal processes. Specificall y, we intend to (1) implement digital systems
and workflow automation tools to centralize internal management, reduce manual
processing, and improve visibility over adm inistrative tasks; (2) continuously assess
and optimize organizational layers and re porting lines to maintain a lean management
structure as we scale; and (3) outsource selected non-core functions to qualified
third-party providers to reduce fixed costs and improve efficiency.
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. Selling and distribution expenses. Our selling and distribut ion expenses were RMB48.7
million, RMB88.3 million, RMB122.4 m illion, RMB54.5 million and RMB67.6
million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, accounting for 25.7%, 30.5%, 22.7%, 27.6% and 20.9% of our total
revenue in the same years/periods, respectively. The increase in our selling and
distribution expenses was primarily attributable to the increases in the headcount and
average compensation level of our sales and marketing personnel during the Track
Record Period. We intend to improve our op erating efficiency with respect to our
selling and distribution activities. We will enhance customer acquisition efficiency,
primarily driven by (1) deepening relations hip with existing customers and exploring
their needs for potential cross-selling and up-selling opportunities; (2) enhancing
branding to increase sales efficiency; and (3) improving effici ency of our sales and
marketing activities. Specifically, we plan to control sales and distribution expenses
by (1) expanding market reach and customer acquisition capacity without
proportionally increasing internal sales resources by strengthening partnership
channels, such as collaborating ecosyste m partners and participants in the AI and
related industries, whose products or solu tions integrate with our products; (2)
leveraging successful deployments as reference cases and enabling prospective
customers with similar computing needs to better understand the value proposition
of our products and solutions, thereby improving sales efficiency and shortening
decision cycles; (3) implementing digital l ead qualification tools, such as CRM-based
scoring and usage-pattern analysis, to prioritize high-quality leads and reduce manual
outreach efforts; and (4) applying data -driven marketing optimization to
continuously assess return on marketing investments and shift resources toward the
most cost-effective channels.
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BOARD OF DIRECTORS
The Board consists of nine Directors, including four executive Directors, two
non-executive Directors and three independent non-executive Directors. Our Board is
responsible for and has been granted general powers for the management and conduct of our
business.
The Directors are elected for a term of three years and are subject to re-election upon
retirement. The following table sets forth c ertain information regarding the Directors.
Name Age
Date of joining
our Group
Date of
appointment as
a Director Position Responsibilities
Relationship
with other
Directors and
senior
management
Mr. Gai Lujiang
(蓋魯江)
44 July 1, 2020 October 19,
2020
Executive Director, chief
executive officer and
chairman of the Board
Day-to-day management
and overall strategic
planning of our Group
Nil
Mr. Sun Yile
(孫怡樂)
45 January 2,
2018
January 13,
2025
Executive Director and
vice president
Responsible for chip
R&D of our Group
Nil
Mr. Liu Zheng
(劉崢)
51 September 1,
2020
December 29,
2023
Executive Director, chief
operating officer
Overall management of
marketing, sales and
operation of our Group
Nil
Mr. Yang Lei
(楊磊)
41 September 14,
2022
May 30, 2025 Executive Director, chief
financial officer, Board
secretary, employee
representative Director
Overseeing the overall
financial, investment
and financing affairs of
our Group, and Board
related matters
Nil
Mr. Wang Chen
(王晨)
42 October 31,
2023
October 31,
2023
Non-executive Director Providing professional
opinion and judgment to
the Board
Nil
Ms. Kou
Xiaoxiao
(寇瀟瀟)
44 December 29,
2023
December 29,
2023
Non-executive Director Providing professional
opinion and judgment to
the Board
Nil
Dr. Teng Yong
(滕勇)
55 May 30, 2025 May 30, 2025 Independent
non-executive Director
Supervising and providing
independent advice on
the operation and
management to the
Board
Nil
DIRECTORS AND SENIOR MANAGEMENT
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Name Age
Date of joining
our Group
Date of
appointment as
a Director Position Responsibilities
Relationship
with other
Directors and
senior
management
Mr. Ren Jintao
(任今濤)
47 May 30, 2025 May 30, 2025 Independent
non-executive Director
Supervising and providing
independent advice on
the operation and
management to the
Board
Nil
Dr. Wang Yan
(王燕)
58 May 30, 2025 May 30, 2025 Independent
non-executive Director
Supervising and providing
independent advice on
the operation and
management to the
Board
Nil
Executive Directors
Mr. Gai Lujiang ( 蓋魯江), aged 44, is an executive Director, the chief executive officer of
our Group and the chairman of the Board. Mr. Gai joined our Group in July 2020, and was
appointed as a Director in October 2020. He was r e-designated as an executive Director in May
2025 and is primarily responsible for day-to-day management and overall strategic planning of
our Group.
Prior to joining our Group in July 2020, Mr. Gai has approximately 17 years of experience
in finance and investment. From September 2003 to December 2004, he served as an accountant
of Baker Tilly International Certified Public Accountants Co., Ltd. ( 天職國際會計師事務所有限
公司). From April 2005 to December 2006, he served as a senior accountant of
PricewaterhouseCoopers Zhongtian CPA Co., Ltd. ( 普華永道中天會計師事務所有限公司).
From August 2007 to May 2014, he served as a se nior manager of Deloitte Touche Tohmatsu
CPA Co., Ltd. Beijing Branch ( 德勤華永會計師事務所有限公司北京分所). He served as an
assistant to the chairman in Beijing Titan Source Natural Gas Resources Technology Co., Ltd.
(北京泰坦通源天然氣資源技術有限公司) from May 2014 to April 2015. From February 2016 to
June 2020, Mr. Gai served as the partner and hea d of risk control of Beijing Zhongjin Taian
Asset Management Co., Ltd. ( 北京中金泰安資產管理有限
公司), an investment company
focusing on asset management, investment m anagement and investment consultation.
Mr. Gai obtained his bachelor’s degree from Central University of Finance and Economics
(中央財經大學) in China in economics in June 2003. Mr. Gai obtained the qualification of
Certified Public Accountant in the PRC.
Mr. Gai was appointed as the chairman of the presidium of the AI Committee of the
All-China Federation of Industry and Commerce (ACFIC) ( 中華全國工商聯合會) in November
2024.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Sun Yile ( 孫怡樂), aged 45, is an executive Director and a vice president of our Group.
He joined our Group in January 2018 as a senior ha rdware engineer. He was appointed as a vice
president in March 2023 and as a Director of th e Group on January 2025. He was re-designated
as an executive Director in May 2025 and is primarily responsible for chip R&D of our Group.
Prior to joining our Group, Mr. Sun accumulated 14 years of extensive experience in GPU
chip design. From April 2004 to March 2006, he worked as an engineer at MacroSynergy
Technology (Shanghai) Co., Ltd. ( 遠弘科技（上海）有限公司). From March 2006 to October
2006, he worked as an engineer at ATI Visual Technology (Shanghai) Co., Ltd. ( 亞鼎視頻科技
（上海）有限公司). From October 2006 to December 2017, he worked as a senior manager at
Advanced Micro Devices (Shanghai) Co., Ltd. ( 超威半導體（上海）有限公司), which is a
subsidiary of Advanced Micro Devices, Inc., a company listed on NASDAQ (stock code:
AMD).
Mr. Sun obtained his bachelor’s degree in microelectronics from Tsinghua University ( 清華
大學) in July 2001 and master’s degree in electr onic science and technology from Tsinghua
University in China in January 2004.
Mr. Liu Zheng ( 劉崢), aged 51, is an executive Directo r and the chief operating officer of
our Group. Mr. Liu joined our Group in September 2020, and was appointed as a Director of
the Group in December 2023. He was re-design ated as an executive Director of our Group in
May 2025 and is primarily responsible for ove rall management of marketing, sales and
operation of our Group.
With more than 26 years of experience in the telecommunications industry, Mr. Liu served
as a technician in project development of telecommunication operation department in Shanghai
Post and Telecommunications Administration, Pudong branch ( 上海市郵電管理局浦東新區電信
運行部) (later merged into Shanghai Telephone Bureau Pudong branch ( 上
海市電話局浦東新區
局)) from September 1993 to January 1996. He s erved as a computer technology engineer of
China United Network Communications Group Co., Ltd. Shanghai Branch ( 中國聯合通信有限
公司上海分公司) from January 1996 to February 2000 an d served as a customer service engineer
of Beijing Bel-Star Electronic Sys tems Co., Ltd. (Shanghai Office) ( 北京百星電子系統有限公司
（上海辦事處）) from March 2000 to July 2001. He served as a manager of China Netcom
Corporation Group Co., Ltd. Shanghai Branch ( 中國網通（集團）有限公司上海市分公司)
(currently known as China United Network Communications Group Co., Ltd. ( 中國聯合網路
通信集團有限公司)) from August 2001 to October 2016. Mr. Liu also served as the vice
president of China-ASEAN Information Harbor Co., Ltd. ( 中國 — 東盟信息港股份有限公司)
from November 2016 to September 2017 and as the general manager of China Unicom
Innovation and Entrepreneurship Investment (Shanghai) Co., Ltd. ( 聯通創新創業投資（上海）有
限公司) from September 2017 to August 2020.
Mr. Liu Zheng obtained his bachelor’s degree in computer network from Fudan University
(復旦大學) in China in July 2006. He subsequently obtained his master’s degree in software
engineering from Fudan University in June 2014. Mr. Liu also obtained his EMBA from the
French Ecole de Management de Lyon in France in February 2016.
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Mr. Yang Lei ( 楊磊), aged 41, is an executive Director, t he chief financial officer, Board
secretary and employee representative Dir ector of our Group. Mr. Yang joined our Group in
September 2022. He was appointed as an executive Director and the employee representative
Director of our Group in May 2025 and is primaril y responsible for the oversight of the overall
financial, investment and financing affairs of our Group, and Board related matters.
Prior to joining our Group, Mr. Yang has more than 16 years of extensive experience in
finance, audit, risk control, and investmen t banking. From July 2006 to June 2012, Mr. Yang
served as an assistant manager at Deloitte Touc he Tohmatsu Certified Public Accountants LLP
(德勤華永會計師事務所有限公司). From June 2012 to March 2013, he worked at Home Depot
Investment Management (Shanghai) Co., Ltd. ( 家得寶投資管理（上海）有限公司) as an internal
audit manager. From May 2013 to May 2021, Mr . Yang served as an audit senior vice general
manager of the China Fortune Land Development Co., Ltd. ( 華夏幸福基業股份有限公司). He
worked as an executive director of the investment banking department at Tianfeng Securities
Co., Ltd. ( 天風證券股份有限公司), a company listed on the Shanghai Stock Exchange (stock
code: 601162) from May 2021 to June 2022.
Mr. Yang obtained his bachelor’s degree in finance from the University of International
Business and Economics ( 對外經濟貿易大學) in China in July 2006 and his MBA degree from
Tsinghua University in China in June 2020. Mr. Yang obtained qualification of Certified Public
Accountant in the PRC in April 2014.
Non-executive Directors
Mr. Wang Chen ( 王晨), aged 42, was appointed as a Director of our Group in October
2023. He was re-designated as a non-executive Director of our Group in May 2025 and is
primarily responsible for providing prof essional opinion and judgment to the Board.
Mr. Wang served as a senior manager of Istithmar World Shanghai Representative Office
(迪拜投資股份有限公司上海代表處), a Dubai sovereign fund focusing on investment and merger
activities in the Greater China region, from January 2007 to October 2011. He then worked at
Shanghai Fosun High Technology (Group) Co., Ltd. ( 上海復星高科技（集團）有限公司)f r o m
November 2011 to June 2013. From December 201 5 to November 2018, he served as the deputy
director of Shanghai Cedarlake Investment Management Co., Ltd. ( 上海沄柏投資管理有限公
司). Since December 2018, Mr. Wang has been serving as an executive director and a manager of
Zhuhai Youbai Private Equity Fund Management Co., Ltd. ( 珠海佑柏私募基金管理有限公司), a
fund focusing on private equity investment.
Mr. Wang obtained his bachelor’s degree in finance from Shanghai University of Finance
and Economics ( 上海財經大學) in China in June 2006. He obtained his MBA degree from the
Johns Hopkins University in the U.S. in May 2015.
Ms. Kou Xiaoxiao ( 寇瀟瀟), aged 44, was appointed as a Director of our Group in
December 2023. She was re-designated as a non-executive Director of our Group in May 2025
and is primarily responsible for providing pro fessional opinion and judgment to the Board.
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From June 2018 to April 2021, Ms. Kou served as a managing director of Shanghai
Envision Investment Co., Ltd. ( 上海捷寶投資有限公司), a company focused on industrial
investment, investment management and consult ing. Since May 2021, she has been serving as an
investment director of Shanghai Lingang Tech nology Innovation Investment Management Co.,
Ltd. ( 上海臨港科創投資管理有限公司), a company focused on investment in the hard
technology sector.
Ms. Kou obtained her bachelor’s degree in Ji angxi University of Finance and Economics
(江西財經大學) in China in 2004. She obtained her MBA degree from Fudan University in June
2011.
Independent Non-executive Directors
Dr. Teng Yong ( 滕勇), aged 55, has been appointed as an independent non-executive
Director of our Group in May 2025. He is primarily responsible for supervising and providing
independent advice on the operati on and management to the Board.
Dr. Teng served as a consulting principal at A.T. Kearney (Shanghai) Management
Consulting Co., Ltd. ( 科爾尼（上海）企業諮詢有限公司) from February 2008 to June 2014. He
then joined HM Clipper Management Ltd. ( 立匯企業管理諮詢（上海）有限公司) as a director in
June 2014. From May 2016 to May 2020, he serv ed as a partner at LEK C onsulting Limited ( 艾
意凱諮詢（上海）有限公司). He was a partner at Oliver Wyman (Shanghai) Consulting Co., Ltd.
(奧緯企業管理諮詢（上海）有限公司) from July 2020 to August 2021. From September 2021 to
February 2025, he returned to A.T. Kearney (Shanghai) Management Consulting Co., Ltd. as a
partner and served concurrently as a director of its Hong Kong branch. Since March 2025, Dr.
Teng has been serving as a director and the general manager of Shanghai Kedali Technology
Consulting Co., Ltd. ( 上海科達理技術諮詢有限公司).
Dr. Teng obtained his bachelor’s degree an d master’s in aircraft design from Nanjing
University of Aeronautics and Astronautics ( 南京航空航天大學) (formerly known as Nanjing
Institute of Aeronautics ( 南京航空學院)) in July 1992 and April 1995 in China. Dr. Teng
obtained his PhD in mechanical and aerospace en gineering from the University of Virginia in
the U.S. in January 1999 and obtained his MBA degree from Cornell University in the U.S. in
May 2004.
Mr. Ren Jintao ( 任今濤), aged 47, has been appointed as an independent non-executive
Director of our Group in May 2025. He is primarily responsible for supervising and providing
independent advice on the operati on and management to the Board.
Mr. Ren currently served as the chief financi al officer of Cheetah Mobile Inc., a company
listed on the New York Stock Exchange (stock code: CMCM) since January 2020. Mr. Ren
worked at KPMG Huazhen LLP as a manager in audit department from August 2000 to
November 2005. From December 2005 to May 2013, Mr. Ren worked at Renren Inc., a
c o m p a n yl i s t e do nt h eN e wY o r kS t o c kE x c h a nge (stock code: RENN) as its senior finance
director. From September 2014 to September 2015 , Mr. Ren served as the chief financial officer
at Beijing Chukong Technology Co., Ltd. ( 北京觸控科技有限公司). From September 2015 to
January 2020, he served as the chief financia l officer at Renren Inc. (currently known as
Moatable, Inc.), a company listed on New York Stock Exchange (stock code: MTBL). From
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June 2018 to January 2020, Mr. Ren also served as the chief financial officer at Kaixin Auto
Holdings, a company listed on NASDAQ (stock code: KXIN) and was a subsidiary of Renren
Inc. at the relevant time.
Mr. Ren obtained a bachelor’s degree in international accounting from Renmin University
of China ( 中國人民大學) in China in July 2000. Mr. Ren holds multiple qualification in
accounting, he obtained his qualification of Certified Public Accountant in the PRC in March
2006, his qualification for Certified Public Accountant from Washington State Board of
Accountancy in the U.S. in October 2013, a nd his Chartered Professional Accountant
qualification from Chartered Professional Accountants of Alberta in Canada in January 2017.
Dr. Wang Yan ( 王燕), aged 58, has been appointed as an independent non-executive
Director of our Group in May 2025. She is primarily responsible for supervising and providing
independent advice on the operati on and management to the Board.
Dr. Wang is currently a professor at the school of integrated circuits in Tsinghua
University. She joined Tsinghua University in 1999, and was appointed as a professor in 2004.
Dr. Wang obtained a bachelor’s and master’s degree in electronic engineering from Xi’an
Jiaotong University ( 西安交通大學) in 1988 and 1991, respectively. She obtained her Ph.D. in
semiconductor physics and devices from the Institute of Semiconductors of the Chinese
Academy of Sciences ( 中國科學院半導體研究所) in 1995. She was involved in several national
and corporate projects. She won first prize for technological progress by China Simulation
Federation（中國仿真學會）in 2018. As an academic and doctora l supervisor, she had published
more than 200 academic papers in renowned domestic and international journals and
conferences and has guided many students to win best paper awards at top international
conferences.
SENIOR MANAGEMENT
The following table sets out certain information regarding the senior management of our
Group.
Name Age
Date of
joining our
Group
Date of
appointment
as a senior
management
member Position Responsibilities
Mr. Gai Lujiang
(蓋魯江)
44 July 1, 2020 July 1, 2020 Executive Director,
chief executive officer
and chairman of the
Board
Day-to-day management
and overall strategic
planning of our
Group
Mr. Sun Yile
(孫怡樂)
45 January 2,
2018
January 2,
2018
Executive Director and
vice president
Responsible for chip
R&D of our Group
Mr. Liu Zheng
(劉崢)
51 September
1, 2020
March 15,
2021
Executive Director,
chief operating officer
Overall management of
marketing, sales and
operation of our
Group
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Name Age
Date of
joining our
Group
Date of
appointment
as a senior
management
member Position Responsibilities
Mr. Yang Lei
(楊磊)
41 September
14, 2022
March 17,
2023
Executive Director,
chief financial officer,
Board secretary,
employee
representative
Director
Overseeing the overall
financial, investment
and financing affairs
of our Group, and
Board related matters
Dr. Lu Chien-Ping
(呂堅平)
62 September
1, 2021
September
1, 2021
Vice president Overall management of
Iluvatar Research
Institute of our Group
Mr. Liu Yuan
(劉圓)
44 March 5,
2018
March 5,
2018
Vice president Responsible for the chip
mass production and
implementation of
our Group
Mr. Shi Jiasheng
(石加聖)
41 November
1, 2018
November
1, 2018
Vice president Responsible for software
research and
development of our
Group
Mr. Zou Xuan
(鄒翾)
44 September
10, 2018
September
10, 2018
Vice president Product line and supply
chain management of
our Group
Mr. Guo Wei
(郭為)
48 August 23,
2021
August 30,
2021
Vice president Overseeing solution
development and IT
support of our Group
Mr. Song Yu
(宋煜)
46 January 1,
2022
January 1,
2022
Vice president Overseeing customer and
technical support
department of our
Group
Mr. Liang Bin
(梁斌)
58 June 7,
2018
1
June 7, 2018 Vice president Technology
collaboration and
development of our
Group
Ms. Ding Na
(丁娜)
46 April 6,
2023
April 14,
2023
Vice president Human resource and
administrative affairs
of our Group
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Note:
1. Mr. Liang Bin has joined our Group as a vice president from June 2018 to May 2021, and later re-joined
our Group again in July 2022 as a vice president.
For biographical details of Mr. Gai Lujiang, Mr. Sun Yile, Mr. Liu Zheng and Mr. Yang
Lei, see ‘‘— Board of Directors’’.
D r .L uC h i e n - P i n g(呂堅平), age 62, is a vice president of our Company. He is primarily
responsible for the overall management of Iluvatar Research Institute ( 天數研究院)o fo u r
Group. Dr. Lu joined our Group in September 2021 and has since held several key positions
including: (i) head of Iluvatar R esearch Institute since Septemb er 2021; and (ii) a Director from
July 2022 to October 2023. He served as a senior architect and manager in NVIDIA from July
2002 to June 2011. Dr. Lu served as a senior director in MediaTek USA Inc. from June 2011 to
July 2015 and a senior manager in Intel Corporat ion from July 2015 to January 2016. He served
as an engineering vice president in NOVUMIND INC. from January 2016 to September 2017
and a R&D and operating vice president in Samsung Advanced Computing Labs from
September 2017 to May 2019. He rejoined NO VUMIND INC. in May 2019 and served as the
chief technology officer until April 2021.
Dr. Lu obtained his bachelor’s degree and mas ter’s degree in electrical engineering from
National Taiwan University in June 1985 and J une 1989, respectively. He obtained his doctor’s
degree in computer science from Yale University in the U.S. in May 1996.
Mr. Liu Yuan ( 劉圓), aged 44, is a vice president of our Company. He is principally
responsible for the chip mass production and implementation of our Group. Mr. Liu joined our
Group in March 2018 as a senior hardware engineer, and was appointed as a vice president in
August 2023. Prior to joining our Group, Mr. Liu worked at Advanced Micro Devices
(Shanghai) Co., Ltd., which is a subsidiary of Advanced Micro Devices, Inc., a company listed
on NASDAQ (stock code: AMD), from July 2007 t o March 2018 as PMTS ASIC/layout design
engineer.
Mr. Liu obtained his bachelor’s degree in electronic information science and technology
degree from Fudan University in July 2003 and mas ter’s degree in microelectronics and solid
state electronics from Fudan University in July 2007.
Mr. Shi Jiasheng ( 石加聖), aged 41, is a vice president of our Company. He is primarily
responsible for software research and development of our Group. Mr. Shi joined our Group in
November 2018 and has since held several key pos itions within our Group including: (i) senior
hardware engineer from November 2018 to Septem ber 2020, (ii) senior software engineer from
October 2020 to November 2021, (iii) vice preside nt of the software research and development
department from November 2021 to August 2023, and (iv) our Group’s vice president since
August 2023. Prior to joining our Group, Mr. Shi served as a software engineer at Huiguo
(Shanghai) Software Technology Co., Ltd. ( 慧國（上海）軟件科技有限公司)f r o mJ u l y2 0 0 9t o
March 2012. He also served as a senior softw are engineer at Advanced Micro Devices
(Shanghai) Co., Ltd. from March 2012 to February 2016, which is a subsidiary of Advanced
Micro Devices, a company listed on NASDA Q (stock code: AMD). From March 2016 to
October 2017, he worked at Shanghai Chaiminghuang Information Technology Co., Ltd. ( 上海
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拆名晃資訊科技有限公司). And later Mr. Shi worked at Jaunt (Shanghai) Virtual Reality
Technology Co., Ltd. ( 卓拓維（上海）虛擬現實信息科技有限公司)f r o mN o v e m b e r2 0 1 7t o
October 2018 as a senior software engineer.
Mr. Shi obtained his bachelor’s degree in microelectronics from Fudan University in July
2006 and his master’s degree in electronic engi neering from the University of Rochester in the
U.S. in March 2008.
Mr. Zou Xuan ( 鄒翾), aged 44, is a vice president of our Company. He is primarily
responsible for product line and supply chain management of our Group. He joined our group
in September 2018 as the chip development supervisor and was appointed as a vice president in
March 2021. Prior to joining our Group, Mr. Zou worked at the China chip design center of
International Business Machines (China) Co ., Ltd. (IBM) from October 2006 to June 2015.
From July 2015 to September 2018, he worked at Gl obal Foundries Semic onductor Technology
(Shanghai) Co., Ltd. ( 格羅方德半導體科技（上海）有限公司).
Mr. Zou obtained his master’s degree in mech anical electronic engineering from Harbin
Institute of Technology ( 哈爾濱工業大學) in China in July 2006.
Mr. Guo Wei ( 郭為), aged 48, is a vice president of our Company. He is primarily
responsible for overseeing solution development and IT support of our Group. He joined our
Group in August 2021 as a vice president. Earlier in his career, he worked as an engineer at
Putian Information Techno logy Research Institute ( 普天信息技術研究院) from April 2003 to
April 2004. Mr. Guo held the position of software director at Spreadtrum Communications
(Shanghai) Co., Ltd. ( 展
訊通信（上海）有限公司北京分公司) since 2004. Prior to joining our
Group, Mr. Guo served as an assistant general manager of mobile phone R&D center at
Shenzhen Baoneng Communication Co., Ltd. ( 深圳市寶能通訊技術有限公司) from March 2021
to August 2021.
Mr. Guo obtained his bachelor’s degree in information electronics technology and master’s
degree in electronic science and tec hnology from Zhejiang University ( 浙江大學)i nC h i n ai n
June 2000 and March 2003, respectively. He was certified as a senior engineer by the Beijing
Municipal Human Resources and Social Security Bureau ( 北京市人力資源和社會保障局)i n
September 2023.
M r .S o n gY u( 宋煜), aged 46, is a vice president of our Company. He is primarily
responsible for overseeing customer and technical support department of our Group. Mr. Song
joined our Group in January 2022 and has since served as the head of customer and technical
support department, focusing on formulating and executing delivery plans to meet customer
needs. He was appointed as a vice president in September 2024. Prior to joining our Group, Mr.
Song served as a software engineer at Beijing Tongce Technology Co., Ltd. ( 北京通測科技有限
責任公司) from August 2001 to June 2003. He worked at Coolsand Technologies (Beijing) Inc.
(互芯集成電路（北京）有限公司) from March 2004 to December 2004. Mr. Song worked at
Motorola, Inc., a company listed on New York Stock Exchange (stock code: MOT) from
February 2005 to April 2011. From May 2011 to April 2018, he served as a software architect at
IBM (China) Investment Company Limited ( 國
際商業機器（中國）投資有限公司). He then served
as a product director at Intelligence Qubic (Beijing) Technology Co., Ltd. ( 探智立方（北京）科技
有限公司) from April 2018 to January 2022.
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Mr. Song obtained his bachelor’s degree in electronic information engineering from China
University of Geosciences ( 中國地質大學) in China in June 2001.
Mr. Liang Bin ( 梁斌), aged 58, is a vice president of our Company. He is primarily
responsible for the technology collaboration and development of our Group. He served as a vice
president from June 2018 to May 2021, and later re-joined our Group again in July 2022 as a
vice president. He served as principal solutions architect at Oracle Corp. until June 2017. From
June 2017 to June 2018, he was a director at Inspyrus, Inc. He later held the position of vice
president at Shanghai Biren Technology Co., Ltd. ( 上海壁仞科技股份有限公司) (formerly
known as Shanghai Biren Intelligent Technology Co., Ltd. ( 上海壁仞智能科技有限公司)) from
July 2021 to July 2022.
Mr. Liang obtained his bachelor’s degree in radio technology and information systems
from Tsinghua University in China in July 1990 and master’s degree in science from Rutgers
University in the U.S. in May 1997.
M s .D i n gN a( 丁娜), aged 46, is a vice president of our Company. She is primarily
responsible for the human resource and adminis trative affairs of our Group. Ms. Ding joined
o u rG r o u pi nA p r i l2 0 2 3a sav i c ep r e s i d e n tu n t i lJanuary 2025. She served as a supervisor of our
Group from January 2025 to May 2025, and was re -appointed as a vice p resident of our Group
in May 2025. Prior to joining our Group, she served as an administration trainee of Nestle ´
(China) Ltd. ( 雀巢（中國）有限公司) from August 2006 to April 2008. She worked as a human
resource specialist of Marsh (Beiji ng) Insurance Brokers Co., Ltd. ( 達信（北京）保險經紀有限公
司) from April 2008 to May 2010. From June 2010 to November 2016, she served as a human
resource partner of International Business Machines (China) Co., Ltd. Beijing Branch (IBM) ( 國
際商業機器（中國）有限
公司北京分公司). From November 2016 to April 2020, she served as the
human resource director of Beijing Didi Infinity Technology and Development Co., Ltd. ( 北京
嘀嘀無限科技發展有限公司). From April 2020 to September 2021, Ms. Ding worked as the head
of human resource department of MiniCake (Beijing) Technology Co., Ltd. ( 迷你高（北京）科技
有限公司).
Ms. Ding obtained her bachelor’s degree in ma rketing from University of International
Business and Economics in July 2003. Ms. Ding obtained her master’s degree in management
from University of International Business and Economics in June 2006.
JOINT COMPANY SECRETARIES
Mr. Yang Lei has been appointed as our joint com pany secretary. For biographical details
of Mr. Yang Lei, see ‘‘— Board of Directors’’.
Ms. Zhang Xiao ( 張瀟) has been appointed as our joint company secretary. Ms. Zhang, is
an assistant vice president of SWCS Corporate Services Group (Hong Kong) Limited, a
professional services provider specializing in corporate services, and has over ten years of
experience in the corporate secretarial fie ld. Ms. Zhang has been admitted as an associate
member of both The Hong Kong Chartered Gov ernance Institute and The Chartered
Governance Institute in the United Kingdom in 2019.
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Ms. Zhang obtained a bachelor’s degree in computer science from The Chinese University
of Hong Kong in December 2010, a master’s degree in corporate governance from The Open
University of Hong Kong (currently known as Hong Kong Metropolitan University) in
November 2018 and a master’s degree in Accountancy from Hong Kong Baptist University in
October 2024.
BOARD COMMITTEES
In accordance with the Corporate Govern ance Code as set out in Appendix C1 to the
Listing Rules (the ‘‘ Corporate Governance Code ’’), our Group has established three committees
on the Board, including an audit committee, a remuneration committee and a nomination
committee.
Audit Committee
Our Company has established an audit committee with written terms of reference in
compliance with Rule 3.21 of the Listing Rule s and the Corporate Governance Code as set out
in Appendix C1 to the Listing Rules. The Audit Committee consists of three members, namely
Mr. Ren Jintao, Dr. Teng Yong and Dr. Wang Yan. Mr. Ren Jintao has been appointed as the
chairman of the audit committee. The primary duties of the audit committee are to review and
supervise the financial reporting process and in ternal control system of our Group, oversee the
audit process, review and oversee the existing and potential risks of our Group and perform
other duties and responsibilities as assigned by our Board.
Remuneration Committee
Our Company has established a remuneration committee with written terms of reference in
compliance with Rule 3.25 of the Listing Rule s and the Corporate Governance Code as set out
in Appendix C1 to the Listing Rules. The remun eration committee has three members, namely
Dr. Wang Yan, Mr. Gai Lujiang and Mr. Ren Jintao. Dr. Wang Yan has been appointed as the
chairman of the remuneration committee. The p rimary duties of the remuneration committee
are to establish and review the policy and structure of the remuneration for our Directors and
senior management and make recommendations on employee benefit arrangement.
Nomination Committee
Our Company has established a nomination committee with written terms of reference in
compliance with the Corporate Governance Code as set out in Appendix C1 to the Listing
Rules. The Nomination Committee has three members, namely Dr. Teng Yong, Mr. Gai Lujiang
and Dr. Wang Yan. Dr. Teng Yong has been appointed as the chairman of the Nomination
Committee. The primary duties of the Nominat ion Committee are to make recommendations to
our Board on the appointment and removal of Directors of our Company.
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BOARD DIVERSITY POLICY
The Board has adopted a board diversity policy (the ‘‘ Board Diversity Policy ’’) to enhance
the effectiveness of our Board and to maintain high standard of corporate governance. The
Board Diversity Policy sets out the criteria in selecting candidates to our Board, including but
not limited to gender, age, cultural and educational background, ethnicity, professional
experience, skills, knowledge, and length of ser vice. The ultimate decision will be based on merit
and contribution that the selected candidates will bring to our Board.
Our Directors have a balanced mixed of knowled ge and skills, including but not limited to
semiconductor, overall business management, finance and accounting. They obtained degrees in
diversified majors including computer scien ce, software engineering, electronic engineering,
business administration, accountancy, finance and mechanical and aerospace engineering. The
Board is of the view that our Board satisfies the Board Diversity Policy. In addition, our Board
has a wide range of age, ranging from 40 years old to 58 years old. Two of our Directors are
female. While we recognize that the gender diversity at our Board level can be improved given
the majority of our Directors are male, we will continue to apply the appointment criteria based
on competence and with reference to the overall di versity policy. Our Board will also ensure that
appropriate balance of gender diversity is achiev ed with reference to inves tors’ expectation, and
international and local recommended best practices.
The Nomination Committee is responsible for r eviewing the diversity of the Board. After
Listing, the Nomination Committee will monitor a nd evaluate the implementation of the Board
Diversity Policy from time to time to ensure its continued effectiveness. The Nomination
Committee will also include in successive annual reports a summary of the Board Diversity
Policy, including any measurable objectives set for implementing the Board Diversity Policy and
the progress on achieving these objectives.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Except as disclosed in this prospectus, none of our Directors had interests in any other
companies as of the Latest Practicable Date that may, directly or indirectly, compete with our
business and would require disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to
under Rule 3.09D of the Listing Rules on May 30, 2025, and (ii) understands his or her
obligations as a director of a listed company under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors confirms (i) his/her independence as
r e g a r d se a c ho ft h ef a c t o r sr e f e r r e dt oi nR u l e3 . 1 3 ( 1 )t o( 8 )o ft h eL i s t i n gR u l e s ,( i i )t h a th e / s h e
has no past or present financial or other interest in the business of our Group or its subsidiaries
or any connection with any core connected person of our Group under the Listing Rules as of
the Latest Practicable Date, and (iii) that there are no other factors that may affect his/her
independence at the time of his/her appointment.
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Interests of Directors and senior management
Except as disclosed in this pr ospectus, as of the Latest Practicable Date, each of the
Directors and senior management (i) did not hold other positions in our Group as of the Latest
Practicable Date; (ii) had no other relati onship with any of the Directors and senior
management as of the Latest Practicable Date ; and (iii) did not hold any other directorship
in listed companies in the three years prior to the Latest Practicable Date. For the Directors’
interests in the Shares within the meaning of Part XV of the SFO, see ‘‘Appendix VI —
Statutory and General Information.’’
DEVIATION FROM CORPORATE GOVERNANCE CODE
Pursuant to code provision C.2.1 in the Corporate Governance Code as set out in
Appendix C1 to the Listing Rules, the roles of ch airman and chief executive should be separate
and should not be performed by the same individual.
Mr. Gai Lujiang is currently serving as the chairman of the Board as well as the chief
executive officer of our Group. He has been primaril y involved in developing overall corporate
and business strategies of our Group and making s ignificant business and operational decisions
of our Group. Our Directors consider that vesting the roles of both the chairman of the Board
and the chief executive officer of our Group in Mr. Gai Lujiang is beneficial to the business
prospects of our Group by ensuring consistent leadership to our Group as well as prompt and
effective decision making and implementation. In addition, our Directors believe that this
structure will not impair the balance of power and authority between the Board and the
management of our Group, given that: (i) decision to be made by our Board requires approval
by at least a majority of our Directors; (ii) Mr. Gai Lujiang and the other Directors are aware of
and undertake to fulfil their fiduciary duties as Directors, which require, among other things,
that he acts for the benefit and in the best interests of our Company and will make decisions for
our Company accordingly; (iii) the balance of power and authority is ensured by the operations
of the Board, which consists of four executiv e Directors (including Mr. Gai Lujiang), two
non-executive Directors and three independent no n-executive Directors, and has a fairly strong
independence element; and (iv) the overall strategic and other key business, financial, and
operational policies of our Company are made collectively after thorough discussion at both the
Board, and senior management levels.
We will continue to review our corporate governance policies and compliance with the
Listing Rules and will adhere to the relevant pri nciples as set out in the Corporate Governance
Code after the Listing.
DIRECTORS’ REMUNERATION
Our Company offers executive Directors and senior management members, who are also
employees, compensation in the form of salaries, bonuses, pension scheme contribution and
share-based payment. The independent non-executive Directors receive compensation based on
their responsibilities.
The aggregate amounts of remuneration paid to the Directors for the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025 were approximately
RMB55.3 million, RMB107.1 million, RMB70.2 m illion and RMB156.4 million, respectively.
DIRECTORS AND SENIOR MANAGEMENT
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The five highest paid individuals of our Gr oup for the years ended December 31, 2022,
2023 and 2024 and the six months ended June 30, 2025, included three, three, three and three
Directors, respectively. The aggregate amounts of remuneration paid to the five highest paid
individuals for the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025 were approximately RMB64.1 million, RMB123.2 million, RMB90.4 million and
RMB176.6 million, respectively.
It is estimated that remuneration (without taki ng account share-based payment) equivalent
to approximately RMB11.6 million in aggregate will be paid to the Directors by our Company
for the year ending December 31, 2025, based on the arrangements in force as of the date of the
prospectus.
No remuneration was paid by our Group to the Directors or the five highest paid
individuals as inducement to join or upon joining our Group or as a compensation for loss of
office during the Track Record Period. Furth ermore, none of the Directors had waived or
agreed to waive any remuneration during the Track Record Period.
COMPLIANCE ADVISOR
Our Group appointed Maxa Capital Limited as the compliance advisor pursuant to Rule
3A.19 of the Listing Rules, and the compliance advisor will advise our Company in the
following circumstances:
. before the publication of any regulatory announcement, circular or financial report;
. where a transaction, which might be a n otifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares, and share
repurchases;
. where our Company proposes to use the p roceeds of the Global Offering in a manner
that is different from that detailed in this prospectus or where our business activities,
developments or results deviate from any for ecasts, estimates or other information in
this prospectus; and
. where the Stock Exchange makes an in quiry of our Company regarding unusual
movements in the price or trading volume of the Shares, the possible development of a
false market in the Shares or any other matters.
The terms of the appointment of the compliance advisor will commence on the Listing Date
and end on the date when our Group distributes the annual report of its financial results for the
first full financial year comme ncing after the Listing Date.
DIRECTORS AND SENIOR MANAGEMENT
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So far as our Directors are aware, immediately upon Listing, the following persons will
have interests and/or short positions in the Shares or underlying shares of our Company which
would fall to be disclosed pursuant to the prov isions of Divisions 2 and 3 of Part XV of the SFO,
or, directly or indirectly, be interested in 10% or more of the nominal value of any class of share
capital carrying the rights to vote in all circu mstances at general meetings of our Company:Name of shareholder Nature of interest
Number of
Shares held
upon
completion of
the Global
Offering
Approximate
percentage of
shareholding in
the Unlisted
Shares/H
Shares (as
appropriate)
immediately
after the Global
Offering (1)
Approximate
percentage of
shareholding in
the total share
capital of our
Company
immediately
after the Global
Offering (1)
Shanghai Xishi (2) Beneficial interest 13,718,171
H Shares
5.60% 5.39%
Shanghai Shuqi (2) Interest in controlled
corporation
54,034,125
H Shares
22.05% 21.25%
Mr. Gai Lujiang (2) Interest in controlled
corporation
54,034,125
H Shares
22.05% 21.25%
Fujian Centurium Phase I
Investment Partnership (Limited
Partnership) (‘‘Centurium Phase I
Investment Fund ’’)
(3)(4)(6)
Beneficial interest 18,269,383
H Shares
7.45% 7.18%
Interest in controlled
corporation
25,403,313
H Shares
10.36% 9.99%
Nanjing Youxu Equity Investment
Partnership (Limited Partnership)
(‘‘Nanjing Youxu ’’)
(4)
Beneficial interest 16,503,313
H Shares
6.73% 6.49%
Mr. Li Hui (3)(4)(5)(6)(7) Interest in controlled
corporation
61,352,943
H Shares
25.03% 24.12%
Mr. Sha Wangyang (3)(4)(6)(7) Interest in controlled
corporation
49,626,458
H Shares
20.25% 19.51%
Industrial and Commercial Bank of
China Limited (‘‘ICBC ’’)(3)(4)(6)
Interest in controlled
corporation
43,672,696
H Shares
17.82% 17.17%
Hainan Shuxin Investment
Partnership (Limited Partnership)
(‘‘Hainan Shuxin ’’)(8)
Interest in controlled
corporation
17,194,091
H Shares
7.02% 6.76%
Mr. Zhu Xiangkai (8) Interest in controlled
corporation
17,194,091
H Shares
7.02% 6.76%
Mr. Li Ronghui (8)(9) Interest in controlled
corporation
22,619,091
H Shares
9.23% 8.89%
SUBSTANTIAL SHAREHOLDERS
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Name of shareholder Nature of interest
Number of
Shares held
upon
completion of
the Global
Offering
Approximate
percentage of
shareholding in
the Unlisted
Shares/H
Shares (as
appropriate)
immediately
after the Global
Offering (1)
Approximate
percentage of
shareholding in
the total share
capital of our
Company
immediately
after the Global
Offering (1)
Beijing Ruifeng Equity Investment
Fund (Limited Partnership)
(‘‘Beijing Ruifeng ’’)
(10)
Beneficial interest 2,504,153
H Shares
1.02% 0.98%
2,504,153
Unlisted
Shares
27.17% 0.98%
Beijing Financial Street Capital
Operation Group Co., Ltd.
(‘‘Beijing Financial Street
Capital ’’)
(10)
Interest in controlled
corporation
2,801,403
H Shares
1.02% 1.10%
2,504,153
Unlisted
Shares
27.17% 0.98%
Mr. Xu Junming (10) Interest in controlled
corporation
2,801,403
H Shares
1.02% 1.10%
2,504,153
Unlisted
Shares
27.17% 0.98%
Mr. Zhang Dongpei (10) Interest in controlled
corporation
2,801,403
H Shares
1.02% 1.10%
2,504,153
Unlisted
Shares
27.17% 0.98%
Shanghai Linke Zhixin Private
Equity Investment Fund
Partnership (Limited Partnership)
(‘‘Linke Zhixin ’’)
(11)
Beneficial interest 3,083,654
H Shares
1.26% 1.21%
2,055,769
Unlisted
Shares
22.31% 0.81%
Ms. Wu Wei (11) Interest in controlled
corporation
3,083,654
H Shares
1.26% 1.21%
2,055,769
Unlisted
Shares
22.31% 0.81%
SUBSTANTIAL SHAREHOLDERS
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Name of shareholder Nature of interest
Number of
Shares held
upon
completion of
the Global
Offering
Approximate
percentage of
shareholding in
the Unlisted
Shares/H
Shares (as
appropriate)
immediately
after the Global
Offering (1)
Approximate
percentage of
shareholding in
the total share
capital of our
Company
immediately
after the Global
Offering (1)
Shanghai Guosheng Capital
Management Co., Ltd. (‘‘ Shanghai
Guosheng Capital ’’)(11)
Interest in controlled
corporation
3,083,654
H Shares
1.26% 1.21%
2,055,769
Unlisted
Shares
22.31% 0.81%
Shanghai Dalinghao Bay Investment
Development (Group) Co., Ltd.
(‘‘Shanghai Dalinghao Bay
Investment ’’)
(11)(12)
Interest in controlled
corporation
3,897,993
H Shares
1.59% 1.53%
2,055,769
Unlisted
Shares
22.31% 0.81%
Shanghai Guosheng (Group) Co.,
Ltd. (‘‘Shanghai Guosheng
Group ’’)(11)
Interest in controlled
corporation
3,083,654
H Shares
1.26% 1.21%
2,055,769
Unlisted
Shares
22.31% 0.81%
Sichuan Regional Collaborative
Development Investment
Guidance Fund Partnership
(Limited Partnership) (‘‘ Sichuan
Regional Collaborative Fund ’’)
(13)
Beneficial interest 488,604
Unlisted
Shares
5.30% 0.19%
Mianyang Gaochuang Equity
Investment Fund Partnership
(Limited Partnership) (‘‘ Mianyang
Gaochuang ’’)
(13)
Beneficial interest 732,905
Unlisted
Shares
7.95% 0.29%
Sichuan Industrial Revitalization
Fund Investment Group Co., Ltd.
(‘‘Sichuan Industrial
Revitalization ’’)
(13)
Interest in controlled
corporation
1,221,509
Unlisted
Shares
13.25% 0.48%
Mianyang Yuancheng Integration
Development Group Co., Ltd.
(‘‘Mianyang Yuancheng ’’)
(13)
Interest in controlled
corporation
732,905
Unlisted
Shares
7.95% 0.29%
SUBSTANTIAL SHAREHOLDERS
–2 6 5–


--- page 275 ---
Name of shareholder Nature of interest
Number of
Shares held
upon
completion of
the Global
Offering
Approximate
percentage of
shareholding in
the Unlisted
Shares/H
Shares (as
appropriate)
immediately
after the Global
Offering (1)
Approximate
percentage of
shareholding in
the total share
capital of our
Company
immediately
after the Global
Offering (1)
Zhuhai Yueteng Ruiwen Equity
Investment Partnership (Limited
Partnership) (‘‘Zhuhai
Yueteng ’’)
(14)
Beneficial interest 3,418,543
Unlisted
Shares
37.09% 1.34%
Mr. Huang Yiming (14) Interest in controlled
corporation
3,418,543
Unlisted
Shares
37.09% 1.34%
Mr. Bao Jialong (14) Interest in controlled
corporation
3,418,543
Unlisted
Shares
37.09% 1.34%
Qingdao Licang District State-owned
Enterprise Service Center
(‘‘Qingdao Licang ’’)(14)
Interest in controlled
corporation
3,418,543
Unlisted
Shares
37.09% 1.34%
Notes:
(1) The calculation is based on the total number of 9,215,771 Unlisted Shares in issue, 219,670,165 H Shares
to be converted from Unlisted Shares in issue and 25,431,800 H Shares to be issued pursuant to the Global
Offering.
(2) The general partner of Shanghai Xishi is Shanghai Shuqi. Accordingly, Shanghai Shuqi is deemed to be
interested in the Shares to be held by Shanghai Xishi upon completion of the Global Offering under the
SFO.
In addition, the general partner of each of Shanghai Yishi, Shanghai Qiongyu, Shanghai Sushi, Shanghai
Yuanshi, Shanghai Nashi and Shanghai Yueshi is also Shanghai Shuqi. Accordingly, Shanghai Shuqi is
deemed to be interested in the 12,340,003 H Shares, 8,900,000 H Shares, 7,118,886 H Shares, 5,515,250 H
Shares, 3,615,000 H Shares and 2,826,815 H Shares to be held by Shanghai Yishi, Shanghai Qiongyu,
Shanghai Sushi, Shanghai Yuanshi, Shanghai Nashi and Shanghai Yueshi, respectively upon completion
of the Global Offering under the SFO.
Mr. Gai Lujiang is the sole shareholder and sole director of Shanghai Shuqi, and is therefore deemed to be
interested in the H Shares held by each of the Shareholding Platforms under the SFO. For details, see
‘‘History, Development and Corporate Structure — Single Largest Group of Shareholders’’ in this
prospectus.
SUBSTANTIAL SHAREHOLDERS
–2 6 6–


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(3) The general partner of Centurium Phase I Investment Fund is Hainan Centurium Equity Investment Fund
Center (Limited Partnership) (‘‘ Hainan Centurium ’’), the general partner of which is Xiamen Centurium
Private Equity Fund Management Co., Ltd. (‘‘ Xiamen Centurium ’ ’ ) ,w h i c hi nt u r ni sw h o l l yo w n e db y
Khorgos Centurium Business Service Co., Ltd. (‘‘ Khorgos Centurium ’’). Khorgos Centurium is a wholly
owned subsidiary of Beijing Centurium Management Advisory Co., Ltd. (‘‘ Beijing Centurium ’’), which in
turn is wholly owned by Centurium Capital Management (HK) Ltd (‘‘ Centurium HK ’’) and in turn wholly
owned by Centurium Capital Management Ltd (‘‘ CCML ’’), which in turn is wholly owned by Centurium
Holdings Ltd. (‘‘Centurium Holdings ’’), which in turn is wholly owned by Centurium Holdings (BVI) Ltd.
(‘‘Centurium BVI ’’) and in turn is wholly owned by Mr. Li Hui. The limited partner of Hainan Centurium
is Pingxiang Zhengqin Information Technology Partnership (Limited Partnership) (‘‘ Pingxiang
Zhengqin ’’) holding 90.1% interest, which in turn is owned as to 50% by each of Hainan Zhengyou
Enterprise Management Partnership (Limited Partnership) (‘‘ Hainan Zhengyou ’’) and Hainan
Zhengchuang Equity Investment Partnership (Limited Partnership (‘‘ Hainan Zhengchuang ’’). The
limited partner of Hainan Zhengyou holding 99.95% interest is Hainan Zhengchuang, and the general
partner of each of Hainan Zhengyou and Hainan Zhengchuang is Mr. Sha Wangyang who holds 97.5%
interest in Hainan Zhengchuang.
ICBC Credit Suisse Investment Management Co., Ltd. (‘‘ ICBC Credit Suisse Investment ’’) holds 46.1%
interest limited partnership in Centurium Phase I Investment Fund. ICBC Credit Suisse Investment is
wholly owned by ICBC Credit Suisse Fund Management Co., Ltd. (‘‘ ICBC Credit Suisse Fund
Management ’’), which in turn is controlled by ICBC, a company listed on the Stock Exchange (stock
code: 1398) and the Shanghai Stock Exchange (stock code: 601398).
Accordingly, each of Hainan Centurium, Xiamen Ce nturium, Khorgos Centurium, Beijing Centurium,
Centurium HK, CCML, Centurium Holdings, Centurium BVI, Mr. Li Hui, Pingxiang Zhengqin, Hainan
Zhengyou, Hainan Zhengchuang, Mr. Sha Wangyang, ICBC Credit Suisse Investment, ICBC Credit
Suisse Fund Management and ICBC is deemed to be interested in the H Shares to be held by Centurium
Phase I Investment Fund upon completion of the Global Offering under the SFO.
(4) The general partner of Nanjing Youxu is Beijing Zhenglang Business Service Co., Ltd. (‘‘ Beijing
Zhenglang ’’), which in turn is wholly owned by Beijing Zhengjia Business Service Co., Ltd. (‘‘ Beijing
Zhengjia ’’), a company wholly owned by Beijing Centurium. The limited partner of Nanjing Youxu is
Centurium Phase I Investment Fund holding 99.9975% interest. Accordingly, each of Beijing Zhenglang,
Beijing Zhengjia, Hainan Centurium, Xiamen Centu rium, Khorgos Centurium, Beijing Centurium,
Centurium HK, CCML, Centurium Holdings, Centurium BVI, Mr. Li Hui, Pingxiang Zhengqin, Hainan
Zhengyou, Hainan Zhengchuang, Mr. Sha Wangyang, ICBC Credit Suisse Investment, ICBC Credit
Suisse Fund Management and ICBC is deemed to be interested in the H Shares to be held by Nanjing
Youxu upon completion of the Global Offering under the SFO.
(5) Masterwork Holdings Limited (‘‘ Masterwork Holdings ’’) will hold 11,726,485 H Shares upon completion
of the Global Offering. Masterwork Holdings is wholly owned by Centurium Capital Partners II, L.P.
(‘‘Centurium Capital Fund II ’’), the general partner of which is Centurium Capital Partner II GP Ltd.
(‘‘Centurium Capital Fund II GP ’ ’ ) ,w h i c hi nt u r ni sw h o l l yo w n e db yC e n t u r i u mH o l d i n g sa n di nt u r n
wholly owned by Centurium BVI, a company wholly owned by Mr. Li Hui. Accordingly, each of
Centurium Capital Fund II, Centurium Capital Fund II GP, Centurium Holdings, Centurium BVI and
Mr. Li Hui is deemed to be interested in the H Shares to be held by Masterwork Holdings upon
completion of the Global Offering under the SFO.
(6) Centurium Phase I Investment Fund holds 71.45% interest in Shanghai Qiongyu. Accordingly, each of
Centurium Phase I Investment Fund, Hainan Centurium, Xiamen Centurium, Khorgos Centurium,
Beijing Centurium, Centurium HK, CCML, Centurium Holdings, Centurium BVI, Mr. Li Hui, Pingxiang
Zhengqin, Hainan Zhengyou, Hainan Zhengchuang, Mr. Sha Wangyang, ICBC Credit Suisse Investment,
ICBC Credit Suisse Fund Management and ICBC is deemed to be interested in the 8,900,000 H Shares to
be held by Shanghai Qiongyu upon completion of the Global Offering under the SFO.
SUBSTANTIAL SHAREHOLDERS
–2 6 7–


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(7) Xiamen Zhengmei Enterprise Management Partnership (Limited Partnership) (‘‘ Xiamen Zhengmei ’’) will
hold 5,953,762 H Shares upon completion of the Global Offering. The general partner of Xiamen
Zhengmei is Beijing Zhengguan Business Service Co., Ltd. (‘‘ Beijing Zhengguan ’’), which is wholly owned
by Beijing Zhengjia.
Xiamen Centurium Phase II Investment Fund Partnership (Limited Partnership) (‘‘ Centurium Phase II
Investment Fund ’’) is a limited partner of Xiamen Zhengmei holding 99.997% interest. The general partner
of Centurium Phase II Investment Fund is Xiamen Centurium Enterprise Management Partnership
(Limited Partnership) (‘‘ Xiamen Centurium Enterprise Management ’’), (i) the general partner of which is
Xiamen Centurium, and (ii) the limited partner holding 99.9% interest of which is Pingxiang Zhengping
Information Technology Partnership (Limited Partnership) (‘‘ Pingxiang Zhengping ’’), respectively. The
general partner of Pingxiang Zhengping is Hainan Zhenghua Investment Partnership (Limited
Partnership) (‘‘ Hainan Zhenghua ’’) and the limited partner of Pingxiang Zhengping holding 99.8%
interest of which is Hainan Zhengyu Enterprise Management Partnership (Limited Partnership) (‘‘ Hainan
Zhengyu ’’). The limited partner of Hainan Zhenghua holding 90.9% of which is Hainan Zhengyu. The
general partner of each of Hainan Zhenghua and Hainan Zhengyu is Mr. Sha Wangyang who holds 99.9%
interest in Hainan Zhengyu.
Nanjing Jiangbei New Area Centurium Phase II Venture Capital Partnership (Limited Partnership)
(‘‘Nanjing Centurium Phase II VC ’’) is a limited partner of Centurium Phase II Investment Fund holding
63.9% interest, the general partner of which is Nanjing Zhengguan Equity Investment Partnership
(Limited Partnership) (‘‘ Nanjing Zhengguan ’’), the general partner of which is Xiamen Centurium and the
limited partner holding 99.9% interest of which is Xiamen Centurium Enterprise Management.
Accordingly, each of Beijing Zhengguan, Beijing Zhengjia, Beijing Centurium, Centurium HK, CCML,
Centurium Holdings, Centurium BVI, Mr. Li Hui, Centurium Phase II Investment Fund, Xiamen
Centurium Enterprise Management, Xiamen Centurium, Khorgos Centurium, Pingxiang Zhengping,
Hainan Zhenghua, Hainan Zhengyu, Mr. Sha Wangyang, Nanjing Centurium Phase II VC and Nanjing
Zhengguan are deemed to be interested in the H Shares to be held by Xiamen Zhengmei upon completion
of the Global Offering under the SFO.
(8) Rizhao Tianxin Information Technology Partnership (Limited Partnership) (‘‘ Rizhao Tianxin ’’) and
Rizhao Peiqin Information Technology Partnership (Limited Partnership) (‘‘ Rizhao Peiqin ’’) will hold
9,143,732 H Shares and 8,050,359 H Shares respectively upon completion of the Global Offering.
The general partner of each of Rizhao Tianxin and Rizhao Peiqin is Hainan Shuxin Investment
Partnership (Limited Partnership) (‘‘ Hainan Shuxin ’’) which holds 99.8% and 81.6% interest in Rizhao
Tianxin and Rizhao Peiqin respectively. Hainan Shuxin was owned as to 50% each by Mr. Zhu Xiangkai
and Mr. Li Ronghui with Mr. Li Ronghui as the general partner.
Accordingly, each of Hainan Shuxin, Mr. Zhu Xiangkai and Mr. Li Ronghui is deemed to be interested in
the H Shares to be held by Rizhao Tianxin and Rizhao Peiqin upon completion of the Global Offering
under the SFO.
(9) The general partner of Shanghai Huiyue Business Consulting Partnership (Limited Partnership)
(‘‘Shanghai Huiyue ’’) is Mr. Li Ronghui holding 25.7% interest. Accordingly, Mr. Li Ronghui is
deemed to be interested in the 5,425,000 H Shares to be held by Shanghai Huiyue under the SFO.
SUBSTANTIAL SHAREHOLDERS
–2 6 8–


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(10) The general partner of Beijing Ruifeng is Xicheng Zhiyuan Private Equity Fund Management (Beijing)
Co., Ltd. (‘‘Xicheng Zhiyuan ’’), which in turn is owned as to (i) 40% by Beijing Xicheng Jinchi Investment
Management Co., Ltd. (‘‘ Beijing Xicheng Jinchi ’’), which in turn is wholly owned by Beijing Xicheng
Capital Holdings Co., Ltd. (‘‘ Beijing Xicheng Capital ’’), which in turn is wholly owned by Beijing
Financial Street Capital, which in turn is wholly owned by the State-owned Assets Supervision and
Administration Commission of the People’s Gover nment of Xicheng District of Beijing, and (ii) 35% by
Tianjin Qihang Chuangfu Enterprise Manage ment Partnership (Limited Partnership) (‘‘ Tianjin Qihang
Partnership ’’), the general partner of which is Tianjin Qihang Chuangfu Consulting Co., Ltd. (‘‘ Tianjin
Qihang Consulting ’’) (a company wholly owned by Mr. Xu Junming) and the limited partner of which is
Mr. Zhang Dongpei holding 99.9% interest. The limited partner of Beijing Ruifeng is Beijing Financial
Street Capital holding 99.9% interest. Accordingly, each of Xicheng Zhiyuan, Beijing Xicheng Jinchi,
Beijing Xicheng Capital, Beijing Financial Street Capital, Tianjin Qihang Partnership, Tianjin Qihang
Consulting, Mr. Xu Junming and Mr. Zhang Dongpei is deemed to be interested in the H Shares and
Unlisted Shares to be held by Beijing Ruifeng upon completion of the Global Offering under the SFO.
Xicheng Zhiyuan Digital Power Selection (Beijing) Investment Center (Limited Partnership) (‘‘ Xicheng
Zhiyuan PE Fund ’’) will hold 297,250 H Shares upon completion of the Global Offering. The general
partner of Xicheng Zhiyuan PE Fund is Xicheng Zhiyuan. Accordingly, each of Xicheng Zhiyuan, Beijing
Xicheng Jinchi, Beijing Xicheng Capital, Beijing Financial Street Capital, Tianjin Qihang Partnership,
Tianjin Qihang Consulting, Mr. Xu Junming and Mr . Zhang Dongpei is deemed to be interested in the H
Shares to be held by Xicheng Zhiyuan PE Fund upon completion of the Global Offering under the SFO.
(11) The general partner of Linke Zhixin is Shanghai Lingang Kechuang Investment Management Co., Ltd.
(‘‘Shanghai Lingang ’’), which in turn is owned as to 40% by Shanghai Lingzhi Enterprise Management
Center (Limited Partnership) (‘‘ Shanghai Lingzhi ’’), the general partner of which is Lingsheng (Shanghai)
Business Consulting Co., Ltd. (‘‘ Lingsheng Shanghai ’’), a company wholly owned by Ms. Wu Wei, who is
also the limited partner of Shanghai Lingzhi holding 97.06% interest. Shanghai Shengmin Yaoxin Private
Equity Investment Fund Partnership (Limited Partnership) (‘‘ Shanghai Shengmin ’’) is a limited partner of
Linke Zhixin holding 66.66% interest, the general partner of which is Shanghai Guosheng Capital. The
limited partners of Shanghai Shengmin are (i) Shanghai Minhang Financial Investment Development Co.,
Ltd. (‘‘Shanghai Minhang Financial ’’) holding 49.88% interest, which in turn is wholly owned by Shanghai
Dalinghao Bay Investment, which is wholly owned by State-owned Assets Supervision and Administration
Commission of Minhang District of Shanghai, and (ii) Shanghai Guosheng Group holding 49.88%
interest, which is wholly owned by State-owned Assets Supervision and Administration Commission of
Shanghai. Accordingly, each of Shanghai Lingang, Shanghai Lingzhi, Lingsheng Shanghai, Ms. Wu Wei,
Shanghai Shengmin, Shanghai Guosheng Capital, Shanghai Minhang Financial, Shanghai Dalinghao Bay
Investment and Shanghai Guosheng Group is deemed to be interested in the H Shares and the Unlisted
Shares to be held by Linke Zhixin upon completion of the Global Offering under the SFO.
(12) Shanghai Dalinghao Bay Ceyuan No.2 Venture Capital Partnership (Limited Partnership) (‘‘ Shanghai
Dalinghao Bay Ceyuan ’’) will hold 814,339 H Shares upon completion of the Global Offering. The general
partner of Shanghai Dalinghao Bay Ceyuan is Shanghai Dalinghao Bay Private Equity Fund Management
Co., Ltd. (‘‘ Shanghai Dalinghao Bay PE Fund ’’), which is wholly owned by Shanghai Dalinghao Bay
Investment. Accordingly, each of Shanghai Dalinghao Bay PE Fund and Shanghai Dalinghao Bay
Investment is deemed to be interested in the H Shares to be held by Shanghai Dalinghao Bay Ceyuan upon
completion of the Global Offering under the SFO.
(13) The general partner of Sichuan Regional Collaborative Fund is Sichuan Xingchuan Key Project Equity
Investment Fund Management Co., Ltd. (‘‘ Sichuan Xingchuan ’’), which is wholly owned by Sichuan
Industrial Revitalization, which is owned as to 83% by Sichuan Department of Finance. The general
partner of Mianyang Gaochuang is Sichuan Xingchuan. Accordingly, each of Sichuan Xingchuan and
Sichuan Industrial Revitalization is deemed to be interested in the Unlisted Shares to be held by Sichuan
Regional Collaborative Fund and Mianyang Gaochuang upon completion of the Global Offering under
the SFO.
SUBSTANTIAL SHAREHOLDERS
–2 6 9–


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The limited partner of Mianyang Gaochuang is Mianyang Yuancheng holding 99.955% interest, which in
turn is wholly owned by Youxian High-tech Industrial Park Management Committee. Accordingly,
Mianyang Yuancheng is deemed to be interested in the Unlisted Shares to be held by Mianyang
Gaochuang upon completion of the Global Offering under the SFO.
(14) The general partner of Zhuhai Yueteng is Hainan Longtu Private Equity Fund Management Co., Ltd.
(‘‘Hainan Longtu ’’), which is owned as to 60% and 40% by Mr. Huang Yiming and Mr. Bao Jialong
respectively. The limited partner of Zhuhai Yueteng is Qingdao Yaoye Medical Technology Co., Ltd.
(‘‘Qingdao Yaoye ’’) holding 99.9% interest, which is wholly owned by Qingdao Ronghai State-owned
Capital Investment and Operation Co., Ltd. (‘‘ Qingdao Ronghai ’’), which in turn is wholly owned by
Qingdao Licang. Accordingly, each of Hainan Longtu, Mr. Huang Yiming, Mr. Bao Jialong, Qingdao
Yaoye, Qingdao Ronghai and Qingdao Licang is deemed to be interested in the Unlisted Shares to be held
by Zhuhai Yueteng upon completion of the Global Offering under the SFO.
Save as disclosed herein, our Directors are not aware of any persons who will, immediately
following completion of the Global Offering, have interests or short positions in Shares or
underlying Shares which would fall to be disclosed under the provisions of Divisions 2 and 3 of
Part XV of the SFO or, will be, directly or indirectly, interested in 10% or more of the nominal
value of any class of share capital carrying rights to vote in all circumstances at general meetings
of our Company.
SUBSTANTIAL SHAREHOLDERS
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This section presents certain information reg arding our share capital prior to and following
the completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, our registered share capital was RMB228,885,936
comprising 228,885,936 Unlisted Shar es with a nominal value of RMB1.00 each.
UPON COMPLETION OF THE GLOBAL OFFERING
The share capital of our Company immedi ately after the Global Offering and the
Conversion of Unlisted Shares into H Shares will be as follows:
Description of Shares (1) Number of Shares
Approximate
percentage of the
enlarged issued
share capital after
the Global Offering
Unlisted Shares 9,215,771 3.62%
H Shares converted from Unlisted Shares (2) 219,670,165 86.38%
H Shares to be issued pursuant to the Global
Offering 25,431,800 10.00%
Total 254,317,736 100.00%
Notes:
(1) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary shares in the share capital of
our Company and are regarded as one class of Shares.
(2) For details of the identities of the Shareholders whose Shares will be converted into H Shares upon
Listing, see ‘‘History, Development and Corporate Structure — Public Float’’ and ‘‘History, Development
and Corporate Structure — Capitalization of our Company.’’
PUBLIC FLOAT REQUIREMENTS
Rules 8.08(1)(a) and (b) of the Listing Rules require there to be an open market in the
securities for which listing is sought and for a sufficient public float of an issuer’s listed
securities to be maintained. This normally means that (i) at least 25% of the issuer’s total issued
share capital must at all times be held by the public; and (ii) where an issuer has one class of
securities or more apart from the class of secu rities 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 issued share capital.
I nl i g h to ft h ea b o v e ,a tt h et i m eo ft h eL i s t i ng, at least 25.0% of the total issued share
capital of our Company shall be held by the public (as defined in the Listing Rules).
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RANKING
Upon completion of the Global Offering, our Company would have Unlisted Shares and H
Shares. Both Unlisted Shares and H Shares are ordinary shares in the share capital of our
Company and are regarded as one class of Shares. However, except for certain qualified
domestic institutional investors in the PRC, qualified PRC investors under the Shanghai —
Hong Kong Stock Connect or the Shenzhen — Hong Kong Stock Connect and other persons
who are entitled to hold our H Shares pursuant to relevant PRC laws and regulations or upon
approvals of any competent authorities, H Shares generally cannot be subscribed by or traded
between legal or natural persons of the PRC. Unlisted Shares and H Shares 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
the H Shares are to be paid by us in Renminbi, Hong Kong dollars or in the form of H Shares.
CONVERSION OF OUR UNLISTED SHARES INTO H SHARES
Our Unlisted Shares are unlisted Shares which are currently not listed or traded on any
stock exchange.
According to stipulations by the State Counci l securities regulatory authority and the
Articles of Association, the Unlisted Shares may be converted into H Shares. Such converted
S h a r e sm a yb el i s t e do rt r a d e do na no v e r s e a ss t o ck exchange provided that the conversion and
trading of such converted Shares shall only be e ffected after all requisite internal approval
process have been duly completed and the approval from the relevant PRC regulatory
authorities (including the CSRC) and the releva nt overseas stock exchange have been obtained.
In addition, such conversion and trading shall in all respects comply with the regulations
prescribed by the State Council securities regulatory authority and the regulations, requirements
and procedures prescribed by the r elevant overseas stock exchange.
If any of the Unlisted Shares are to be converted to H Shares and to be traded on the Stock
Exchange, such conversion requires the approval of the relevant PRC regulatory authorities,
including the CSRC. Approval of the Stock Exchange is required for the listing of such
converted Shares on the Stock Exchange. Subject to fulfilling the procedures below, our
Company may apply for the listing of all or any portion of the Unlisted Shares on the Stock
Exchange as H Shares before any proposed conversion so that the conversion process can be
completed promptly upon notice to the Stock Exchange and delivery of shares for entry on the
H Share register. As any listing of additional Shares after our Company’s initial listing on the
Stock Exchange is ordinarily considered by the Stock Exchange to be a purely administrative
matter, it does not require prior application for listing as at the time of our Company’s initial
listing in Hong Kong. A vote by our Shareholders in general meeting is not required for the
listing and trading of the converted Shares on a n overseas stock exchange. Any listing of the
converted Shares on the Stock Exchange after the initial listing is subject to prior notification by
way of announcement to inform Shareholders and the public of any proposed conversion.
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After all the requisite approvals have been obtained, the relevant Unlisted Shares will be
withdrawn from the Unlisted Share register, and our Company will re-register such Shares on
the H Share register maintained in Hong Kong an d instruct the H Share Registrar to issue H
Share certificates. Registration on the H Share register of our Company will be on the
conditions that (i) the H Share Registrar lodges with the Stock Exchange a letter confirming the
entry of the relevant H Shares on the H Share register and the due dispatch of H Share
certificates; and (ii) the admission of the H Shares to be traded on the Stock Exchange complies
with the Listing Rules and the General Rules of HKSCC and the HKSCC Operational
Procedures in force from time to time. Until the converted Shares are re-registered on the H
Share register of our Company, such Shares would not be listed as H Shares.
RESTRICTIONS OF SHARE TRANSFER
In accordance with the PRC Company Law, the shares issued prior to any public offering
of shares by a company cannot be transferred within one year from the date on which such
publicly offered shares are listed and traded on the relevant stock exchange. As such, the Shares
issued by our Company prior to the issue of H Shares will be subject to such statutory
restriction on transfer within a period of one year from the Listing Date.
Shares transferred by our Directors and members of the senior management each year
during their term of office shall not exceed 25% o f their total respective shareholdings in our
Company unless otherwise permitted by applicable laws and regulations. The Shares that the
aforementioned persons hold in our Company cannot be transferred within half a year after they
leave their positions as Directors and member s of the senior management in our Company. The
Articles of Association may contain other restrictions on the transfer of the Shares held by our
Directors and members of senior management of our Company.
SHAREHOLDERS’ GENERAL MEETINGS
For details of circumstances under which Shareholders’ general meeting are required, see
‘‘Appendix V — Summary of Articles of Association’’ to this prospectus.
REGISTRATION OF SHARES NOT LISTED ON AN OVERSEAS STOCK EXCHANGE
According to the Guidelines for the ‘‘Full Circulation’’ Program for Domestic Unlisted
Shares of H-share Listed Companies ( 《H股公司境內未上市股份申請‘‘全流通’’業務指引》)i s s u e d
by the CSRC, the domestic shareholders of unlisted shares shall handle share transfer
registration business in accordance with the r elevant business rules of the China Securities
Depository and Clearing Co., Limited (‘‘ CSDC ’’). H-share companies should submit relevant
status reports to the CSRC within 15 days a fter the shares involved in the application
completing the transfer registration in CSDC.
SHAREHOLDERS’ APPROVAL FOR THE GLOBAL OFFERING
Approval from holders of the Shares is required for the Company to issue H Shares and
seek the listing of H Shares on the Hong Kong Stock Exchange. The Company has obtained
such approval at the Shareholders’ meeting held on May 30, 2025.
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You should read the following discussion and a nalysis in conjunction with our consolidated
financial information, together with the accompanying notes, included in the Accountants’
Report set out in Appendix I to this prospectus. Our consolidated financial information has been
prepared in accordance with HKFRS Accounting Standards, which may differ in material
aspects from generally accepted accounting princip les in other jurisdictions. You should read the
entire Accountants’ Report and not rely solely o n the information contained in this section.
The following discussion and analysis contain f orward-looking statements that reflect our
current views with respect to future events and financial performance. These statements are
based on assumptions and analyzes made by us in light of our experience and perception of
historical trends, current conditions and expect ed future developments, as well as other factors
that we believe are appropriate under the circum stances. However, our actual performance may
differ materially from those anticipated in thes e forward-looking statements, as a result of
various risks and uncertainties over which w e do not have full control. For details, see
‘‘Forward-looking Statements’’ and ‘‘Risk Factors.’’
OVERVIEW
We offer GPGPU products and AI computing solutions across diverse industries. Our
product portfolio primarily in cludes GPGPU chips and accelerators, as well as customized AI
computing solutions, including GPGPU servers and clusters, that combine our hardware with
proprietary software stack to address specifi c customer needs in training and inference
scenarios. According to Frost & Sullivan, am ong China’s chip designers, we are the first to
achieve mass production of inference GPGPU c hips, to mass produce training GPGPU chips,
and to accomplish these milestones using advanced 7nm process technology.
Our revenue reached RMB189.4 million , RMB289.0 million, RMB539.5 million,
RMB197.4 million and RMB 324.3 million i n 2022, 2023, 2024 and the six months ended
June 30, 2024 and 2025, respectively. This gro wth is driven by our consistent product and
solution iteration, mature commercialization capabilities and continuously expanding
high-quality customer base. Our total numbe r of customers increased from 22 in 2022, to 65
in 2023 and further to 181 in 2024 and from 81 in the six months ended June 30, 2024 to 106 in
the six months ended June 30, 2025. As of June 30, 2025, we had served over 290 customers in
various sectors. Our products and solutions have enabled over 900 deployments and
applications in essential sectors including financial services, healthcare and transportation,
while supporting industrial digitalization initiatives across manufacturing and retail, as well as
foundational research and educational computing applications. Our GPGPU products shipment
volume increased from 7.8 thousand units in 2022 to 12.7 thousand units in 2023 and further to
16.8 thousand units in 2024, and from 4.8 thousand units in the six months ended June 30, 2024
to 15.7 thousand units in the six months ended June 30, 2025.
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BASIS OF PREPARATION
Our consolidated financial information h as been prepared in a ccordance with HKFRS
Accounting Standards, which include all Hong Kong Financial Reporting Standards, Hong
Kong Accounting Standards (HKASs) and Interpretations as issued by the Hong Kong Institute
of Certified Public Accountants. All HKFRS Accounting Standards effective for the accounting
period commencing from January 1, 2025, together with the relevant transitional provisions,
have been consistently applied by us in the preparation of the consolidated financial
information throughout the Track Record Peri od. The revised and new accounting standards
and interpretations issued but not yet effectiv e for the Track Record Period are set out in Note
2.2 to the Accountants’ Report included in Appendix I to this prospectus.
Further details of the material accounting policy information are set out in Note 2.3 to the
Accountants’ Report. The consolidated financia l information also comp lies with the relevant
disclosure requirements of the Listing Rules. The accounting policies set out in the Accountants’
Report have been applied consistently throughout the years presented.
For ordinary shares issued to investors (collectively the ‘‘ pre-IPO Investors ’’) from whom
the Company obtained several rounds of investments (collectively the ‘‘ pre-IPO Investments ’’),
pursuant to the supplemental agreements entered into between the Company and the pre-IPO
Investors in relation to the termination of cer tain of special rights granted by the Company,
including redemption rights and liquidation preferences rights, which are void ab initio as
described in note 30(b) to the Accountants’ Report included in Appendix I to this prospectus,
having taking into account the legal and regulatory framework of the Company’s jurisdiction
and the governing law of the supplementary agreements, the Directors considered that it is
appropriate to present the Pre-IPO Investments as equity throughout the Track Record Period.
For the details of financial impacts, see note 30(b) to the Accountants’ Report included in
Appendix I to this prospectus.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are exp ected to continue to be, materially affected
by a number of key factors, including the following:
Industry Trends and Market Demand for GPGPU Products and AI Computing Solutions
Our business and results of operations are driven by the demand for GPGPU products and
AI computing solutions, which in turn is dependent on the growth of the AI chip and GPGPU
markets. Our business and operating results are also affected by general factors affecting the AI
chip and GPGPU markets, including global demand, evolution and market acceptance of AI
chip and GPGPU products, the competitive landscape, and the relevant laws and regulations,
governmental policies and initiatives. The development of AI applications and the
commercialization of large language models have stimulated market demand for computing
power, which has greatly driven the growth of China’s AI chip market. According to Frost &
Sullivan, the size of China’s AI chip market, reached approximately RMB217.5 billion in
revenue, with a CAGR of 80.3% from 2022 to 2024, and is expected to reach RMB898.1 billion
in 2029, with a CAGR of 29.1% from 2025 to 2029. The size of China’s GPGPU market reached
RMB154.6 billion in revenue in 2024, represent ing a remarkable CAGR of 70.1% from 2022 to
2024. The market is projected to maintain stro ng growth momentum, with revenue expected to
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reach RMB715.3 billion by 2029, represen ting a CAGR of 30.1% from 2025 to 2029. The
increasing AI-driven training and inferenc e demands and technological advancements of
GPGPU products and AI computing solutions have led to rising demand for our products and
solutions. We experienced substantial revenue growth during the Track Record Period, and we
expect to continue to benefit from these positive market trends. See ‘‘Industry Overview’’ for a
detailed discussion on China’s AI chip and GPGPU markets.
Competitiveness of Our Offerings and Technology Leadership
Our operating performance is closely tied to the performance of our GPGPU products and
AI computing solutions. The competitiveness of GPGPU products and AI computing is dictated
by technology innovation and robust product and solution performance. We have launched a
series of products under each of our core product series with enhanced performance. The TG
series, our flagship training-focused produc t line, is specifically d esigned to meet AI model
training demands, featuring performance-optimized compute cores, memory configurations,
and optimized architecture to support multi-GPGPU systems, delivering exceptional efficiency
for large-scale model training workloads. The ZK series is our specialized product line designed
for cloud and edge inference applications, and features crucial optimizations for efficient
inference, including enhanced integer computing units and optimized data paths. We are in the
process of developing next-generation TG produ ct with enhanced performance capabilities,
particularly for large-scale AI training applications. We also offer AI computing solutions, to
address the growing demand for AI computing and large-scale data processing. Going forward,
we expect to continue enriching our product and solution portfolio by introducing new products
and solutions and upgrading existing offerings to remain competitive and appealing to
customers with diverse computing demands.
Continued investment in R&D is essential to sustaining our competitive edge. We prioritize
the development of general architectures, compute engines, memory subsystems, and software
platforms to support demanding AI training, inference, and AI computing applications. We
incurred research and development costs of RMB456.6 million, RMB615.9 million, RMB772.8
million, RMB333.7 million and RMB451.5 million in 2022, 2023, 2024 and the six months ended
June 30, 2024 and 2025, respectively, accounting for 241.1%, 213.1%, 143.2%, 169.0% and
139.2% of our total revenue in the same periods, respectively. We believe that our consistent
R&D efforts can continue to create entry barriers and enhance our market leadership, which in
turn will enable us to achieve sustainable business growth. However, such investments on our
R&D capability will increase our research an d development costs in absolute amounts, which
may impact our results of operations and financial condition, but we expect our research and
development costs, as a percentage of our revenue, to decrease as our business scales and R&D
efficiency improves.
Our Business and Revenue Mix
Our gross profit margin fluctuated during the Track Record Period, primarily because our
revenue from our AI computing solutions, as a percentage of our total revenue, increased from
nil in 2022 to 5.4% in 2023 and further to 30.8% in 2024 and decreased from 30.3% in the six
months ended June 30, 2024 to 13.2% in the si x months ended June 30, 2025. Our AI computing
solutions typically had a lower profit margin compared to that of our GPGPU products,
primarily because our AI computing solutions inte grated third-party products and components,
which drove up the cost of sales associated with our AI computing solutions. Therefore, any
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significant change in our revenue composition will likely affect our profitability and results of
operations. Going forward, we intend to conti nue to increase the profitability of our GPGPU
products and AI computing solutions through ongoing product innovation and iteration and
targeting use cases with stronger demand for performance and customization.
Commercial Scale and Customer Base
As a GPGPU company, our financial performance is highly dependent upon our ability to
maintain and expand our customer base across multiple verticals. Since our inception, we have
focused on translating our adva nced technologies into marke t-proven products and achieving
broad commercial adoption across multiple application scenarios. We achieved fast growths in
terms of our product shipment volume and the number of customers. For our GPGPU products,
our shipment volume increased from 7.8 thousand units in 2022 to 12.7 thousand units in 2023
and further to 16.8 thousand units in 2024, and f rom 4.8 thousand units in the six months ended
June 30, 2024 to 15.7 thousand units in the six months ended June 30, 2025. The number of
customers increased from 22 in 2022 to 56 in 2023 and further to 158 in 2024, and from 70 in the
six months ended June 30, 2024 to 95 in the six months ended June 30, 2025. For our AI
computing solutions, the number of customers increased from 5 in 2023 to 21 in 2024, and
remained stable at 10 in the six months ended June 30, 2024 and 2025. The breadth and quality
of our customer base, spanning across various in dustries, are critical to scaling our business,
enhancing our brand reputation, and generat ing recurring revenue. We strive to deepen our
relationship with existing customers through continuous exploration of their product needs and
provide comprehensive solutions to drive exten sive scenario adoption and increase service
penetration. We also plan to expand our customer base by establishing connections with quality
companies in industry sectors that we already cove red and tapping into fast-iterating, AI-driven
industries.
Maintaining close partnerships with key industry players, and continuously expanding our
customer and ecosystem network, are essential for mitigating business volatility and driving
sustainable growth. We will continuously rely on our sales network to execute and implement
our customer retention and development strategi es, and we may increase investment on our sales
team expansion and technical ser vice capability improvement t o effect optimal sales results.
Cost Structure and Operational Efficiency
Under our fabless business model, we outsource chip fabrication and assembly to contract
manufacturers to focus our internal resources on product design and innovation. In 2022, 2023,
2024 and the six months ended June 30, 2024 and 202 5, our cost of sales, representing primarily
fees paid to contract manufacturers, was RMB77.0 million, RMB145.9 million, RMB274.4
million, RMB108.4 million and RMB161.8 million, respectively, accounting for 40.6%, 50.5%,
50.9%, 54.9% and 49.9% of our total revenue in the same years, respectively. Supply chain
stability is critical for fabless semiconductor companies like us, as we engage third-party
foundries, packaging and testing service provi ders, and other upstream partners for timely and
reliable production. To ensure continuity a nd resilience in our supply chain, we have sourced
multiple suppliers for most raw materials used in our operations. We also maintain appropriate
inventory stock and adjust production pla nning based on demand forecasts and market
conditions to mitigate potential disruptions.
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Our ability to manage and control our operating expenses is also critical to the success of
our business. During the Track Record Period, we in curred substantial administrative expenses
of RMB166.0 million, RMB242.0 million, RMB257.3 million, RMB119.5 million and
RMB274.6 million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, accounting for 87.7%, 83.7%, 47.7%, 60.5% and 84.7% of our total revenue in the
same periods, respectively. Our selling and distribution expenses were RMB48.7 million,
RMB88.3 million, RMB122.4 million, RMB54.5 million and RMB67.6 million in 2022, 2023,
2024 and the six months ended June 30, 2024 and 2025, respectively, accounting for 25.7%,
30.5%, 22.7%, 27.6% and 20.9% of our total revenue in the same periods, respectively.
Specifically, we incurred substantial share -based payment expenses of RMB120.8 million,
RMB207.8 million, RMB247.8 million, RMB107. 1 million and RMB295.9 million in 2022, 2023,
2024 and the six months ended June 30, 2024 and 2025, respectively, accounting for 63.8%,
71.9%, 45.9%, 54.2% and 91.2% of our total revenue in the same periods, respectively. We
expect the absolute amounts of our operating expenses to continue to increase along with our
business growth in the future. However, as we expand our business, improve our operating
efficiency and benefit from economies of scale, we expect our operating expenses to decrease as
a percentage of our total revenue.
MATERIAL ACCOUNTING POLICIES AND CRITICAL JUDGMENTS AND ESTIMATES
The preparation of consolidated financial information in conformity with HKFRS
Accounting Standards require s management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and
expenses. The estimates and associated assump tions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of
which form the basis of making judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actua l results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the perio d in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
Set out below are a summary of the material accounting policies, judgments and estimates
which we believe are most important for underst anding our results of operations and financial
condition. See Notes 2.3 and 3 to the Accountants’ Report set out in Appendix I to this
prospectus for a detailed description of our material accounting policies, judgments and
estimates.
Revenue Recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which we expect to
be entitled in exchange for those goods or services.
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When the consideration in a contract includes a variable amount, the amount of
consideration is estimated to which we will be entitled in exchange for transferring the goods or
services to the customer. The v ariable consideration is estimated at contract inception and
constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognized wi ll not occur when the associated uncertainty with the variable
consideration is subsequently resolved.
Sale of GPGPU products
Revenue from sale of GPGPU products primarily arises from sale of GPGPU chips and
accelerators which is recognized at the point in time when control of the products is transferred
to the customer and the collection of the consideration is probable, generally on the acceptance
of the products.
Sale of AI computing solutions
Revenue from sale of AI computing solutions, which usually include multiple elements of
hardware, software and associated services.
The solutions provide the customer with a com bination of hardware, software, deployment
and professional services as we provide significan t integration services to integrate the hardware
and the software to meet the customer’s uniqu e specifications and are accounted for as one
performance obligation. Solutions revenue der ived from hardware and software is recognized at
a point in time upon acceptance by customer.
Services and others
Services revenue and other revenue mainly generated from provision of technology
services. The revenue generated from the tech nology services is recogn ized at a point in time
upon the acceptance of such services by customers as customers are usually unable to obtain
benefit when we are performing the services.
Fair Value Measurement
We measure our wealth management products and equity investment at fair value at the
end of each period of the Track Record Period. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measur ement is based on the presumption that the
transaction to sell the asset or transfer the liabil ity takes place either in the principal market for
the asset or liability, or in the absence of a principal market, in the most advantageous market
for the asset or liability. The principal or the most advantageous market must be accessible by
us. The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.
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We use valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair val ue, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Accountants’
Report in Appendix I are categorized within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 — based on valuation techniques for whi ch the lowest level input that is significant
to the fair value measurement is obser vable, either directly or indirectly;
Level 3 — based on valuation techniques for whi ch the lowest level input that is significant
to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the Accountants’ Report in Appendix I on a
recurring basis, we determine whether transfers have occurred between levels in the hierarchy by
reassessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of ea ch period of the Track Record Period.
Research and development costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only
when we can demonstrate the technical feasibility of completing the intangible asset so that it
will be available for use or sale, its intention to c omplete and its ability to use or sell the asset,
how the asset will generate future economic benefits, the availability of resources to complete
the project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
Investments and Other Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized
cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initia l recognition depends on the financial asset’s
contractual cash flow characteristics and o ur business model for managing them. With the
exception of trade receivables that do not cont ain a significant financing component or for
which we have applied the practical expedient of not adjusting the effect of a significant
financing component, we initially measure a financial asset at its fair value plus in the case of a
financial asset not at fair value through profit o r loss, transaction costs. Trade receivables that
do not contain a significant financing component or for which we have applied the practical
expedient are measured at the transaction pr ice determined under HKFRS 15 in accordance
with the policies set out for ‘‘— Revenue recognition.’’
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In order for a financial asset to be classifie d and measured at amortized cost or fair value
through other comprehensive income, it needs to give rise to cash flows that are solely payments
of principal and interest (‘‘ SPPI ’’) on the principal amount outstanding. Financial assets with
cash flows that are not SPPI are classified and measured at fair value through profit or loss,
irrespective of the business model.
Our business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortized cost are held within a bus iness model with the
objective to hold financial assets in order to coll ect contractual cash flows, while financial assets
classified and measured at fair value through other comprehensive income are held within a
business model with the objective of both holding to collect contractual cash flows and selling.
Financial assets which are not held within the aforementioned business models are classified and
measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace are recognized on the trade
date, that is, the date that we commit to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subseque ntly measured using the effective interest
method and are subject to impairment. Gains a nd losses are recognized in profit or loss when
the asset is derecognized, modified or impaired.
Financial assets designated at fair value through o ther comprehensive incom e (equity investments)
Upon initial recognition, we can elect to clas sify irrevocably its equity investments as
equity investments designated at fair value through other comprehensive income when they meet
the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held
for trading. The classification is determin ed on an instrument-by-instrument basis.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit o r loss are carried in the statement of financial
position at fair value with net changes in f air value recognized in profit or loss.
This category includes wealth management products, and equity investments which we had
not irrevocably elected to classify at fair value through other comprehensive income. Dividends
on the equity investments are also recognized as other income in profit or loss when the right of
payment has been established.
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Derecognition of financial assets
A financial asset (or, where applicable, a pa rt of a financial asset or part of a group of
similar financial assets) is primarily dereco gnized (i.e., removed from our consolidated
statement of financial position) when:
. the rights to receive cash flows from the asset have expired; or
. we have transferred our rights to receive c ash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party
under a ‘‘pass-through’’ arrangement; and ei ther (a) we have transferred substantially
all the risks and rewards of the asset, or (b) we have neither transferred nor retained
substantially all the risks and rewards of the asset, but have transferred control of the
asset.
When we have transferred our rights to receive cash flows from an asset or has entered into
a pass-through arrangement, we evaluate if, an d to what extent, we have retained the risk and
rewards of ownership of the asset. When we have neither transferred nor retained substantially
all the risks and rewards of the asset nor transferred control of the asset, we continue to
recognize the transferred asset to the extent of our continuing involvement. In that case, we also
recognize an associated liability. The transferre d asset and the associated liability are measured
on a basis that reflects the rights and obligations that we have retained.
Continuing involvement that takes the form o f a guarantee over the transferred asset is
measured at the lower of the original carryin g amount of the asset and the maximum amount of
c o n s i d e r a t i o nt h a tw ec o u l db er e q u i r e dt or e p a y .
Impairment of financial assets
We recognize an allowance for expected credit losses (‘‘ ECLs ’’) for all debt instruments not
held at fair value through profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximati on of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integra l to the contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possib le within the next 12 months (a 12-month ECL).
For those credit exposures for which there has b een a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life
of the exposure, irrespective of the ti ming of the default (a lifetime ECL).
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At each reporting date, we assess whether the credit risk on a financial instrument has
increased significantly since initial recognit ion. When making the assessment, we compare the
risk of a default occurring on the f inancial instrument as at the reporting date with the risk of a
default occurring on the financial instrument as at the date of initial recognition and considers
reasonable and supportable information that is available without undue cost or effort, including
historical and forward-looking information. We may consider that there has been a significant
increase in credit risk when contractua l payments are more than 30 days past due.
We may consider a financial asset in default when contractual payments are 90 days past
due. We may consider a financial asset to be in de fault when internal or external information
indicates that we are unlikely to receive the outstanding cont ractual amounts in full before
taking into account any credit enhancements held by us.
A financial asset is written off when there is n o reasonable expectation of recovering the
contractual cash flows.
Financial assets at amortized cost are subject to impairment under the general approach
and they are classified within th e following stages for measurement of ECLs, except for trade
and bills receivables which apply the si mplified approach as detailed below:
Stage 1 — Financial instruments for which credi t risk has not increased significantly since
initial recognition and for which the loss allowance is measured at an amount
e q u a lt o1 2 - m o n t hE C L s ;
Stage 2 — Financial instruments for which credit risk has increased significantly since
initial recognition but that are not credit-impaired financial assets and for
which the loss allowance is measured at an amount equal to lifetime ECLs;
Stage 3 — Financial assets that are credit-imp aired at the reporting date (but that are not
purchased or originated credit-impaire d) and for which the loss allowance is
measured at an amount equal to lifetime ECLs.
For trade receivables that cont ain a significant financing component, we choose as our
accounting policy to adopt the general approach in calculating ECLs with policies as described
above.
Simplified approach
For trade and bill receivables that do not cont ain a significant financing component or
when we apply the practical expedient of not adjusting the effect of a significant financing
component, we apply the simplified approach in calculating ECLs. Under the simplified
approach, we do not track changes in credit risk , but instead recognize a loss allowance based
on lifetime ECLs at the end of each period of the Track Record Period. We have established a
provision matrix that is based on its histori cal credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
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Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on
the weighted average basis and, in the case of work in progress and finished goods, comprises
direct materials, direct labor and an appropriate proportion of overheads. Net realizable value
is based on estimated selling prices less any es timated costs to be incurred to completion and
disposal.
Share-based payments
We operate an employee share scheme. Our employees (including directors) receive
remuneration in the form of share-based paym ents, whereby employees render services in
exchange for equity instruments (‘‘equity-settled transactions’’).
The cost of equity-settled transactions with em ployees for grants is measured by reference
to the fair value at the date at which they are granted, further details of which are given in note
31 to the Accountants’ Report included in Appendix I to this prospectus.
The cost of equity-settled transactions is reco gnized in employee benefit expense, together
with a corresponding increase in equity, over the period in which the performance and/or service
conditions are fulfilled. The cumulative expense r ecognized for equity-settled transactions at the
end of each of the Track Record Period until the vesting date reflects the extent to which the
lock-up restricted period has expired and our best estimate of the number of equity instruments
that will ultimately vest. The charge or credit to profit or loss for a period represents the
movement in the cumulative expense recognized as at the beginning and end of that period.
Service conditions are not taken into account when determining the grant date fair value of
awards, but the likelihood of the conditions being met is assessed as part of our best estimate of
the number of equity instruments that will ultimately vest. Market performance conditions are
reflected within the grant date fair value. Any other conditions attached to an award, but
without an associated service requirement, a re considered to be non-vesting conditions.
Non-vesting conditions are reflected in the fair value of an award and lead to an immediate
expensing of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is r ecognized. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the market
or non-vesting condition is satisfied, provid ed that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled awar d are modified, as a minimum an expense is
recognized as if the terms had not been modified, if the original terms of the award are met. In
addition, an expense is recognized for any modifi cation that increases the total fair value of the
share-based payments, or is otherwise benefi cial to the employee as m easured at the date of
modification.
Where an equity-settled award is canceled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognized for the award is recognized immediately.
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This includes any award where non-vesting conditions within the control of either we or the
employee are not met. However, if a new award is substituted for the canceled award, and is
designated as a replacement award on the date that it is granted, the canceled and new awards
are treated as if they were a modification of the o riginal award, as described in the previous
paragraph.
Fair value of unlisted equity investments
The unlisted equity investments have been valued based on appropriate valuation
techniques including the latest transaction pri ce and asset-based valuation as detailed in note
37 to the Accountants’ Report in Appendix I to this prospectus.
Write-down of Inventories
Our inventories are stated at the lower of cost and net realizable value. We write down our
inventories based on estimates of the realizable value with reference to the aging and conditions
of the inventories, together with the economic circumstances on the marketability of such
inventories. Inventories will be reviewe d annually for write-down, if appropriate.
Impairment of non-financial assets
We assess whether there are any indicators of impairment for all non-financial assets
(including the right-of-u se assets) at the end of each reporting period. Other non-financial assets
are tested for impairment when there are indicators that the carrying amounts may not be
recoverable. An impairment exists when the carry ing value of an asset or a cash-generating unit
exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its
value in use. The calculation of the fair value less costs of disposal is based on available data
from binding sales transactions in an arm’s length transaction of similar assets or observable
market prices less incremental costs for disposi ng of the asset. When value in use calculations
are undertaken, we must estimate the exp ected future cash flows from the asset or
cash-generating unit and choose a suitable discount rate in order to calculate the present
v a l u eo ft h o s ec a s hf l o w s .
We operate as a single cash generating units (‘‘ CGU’’). Our non-financial assets were
mainly comprised of property, plant and equipment (‘‘ PPE’’), which are mainly electronic
equipment, leasehold improvements and furn iture and others, right-of-use assets (‘‘ ROU’’),
which is mainly lease arrangement of our office premises and machinery and intangible assets
(‘‘IA’’), which are mainly licensed IP and software.
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We have assessed at the end of each year/per iod during the Track Record Period whether
there is any indication that our non-financial assets may be impaired by considering all the
external and internal sources of informat ion in accordance with HKAS 36 Impairment of
Assets:
. Our net losses during the Track Record Pe riod were primarily attributable to the
substantial R&D expenses, administrativ e expenses and selling and distribution
expenses incurred as our business expande d rapidly. The overall market trend for
China’s GPGPU products has experienced ra pid growth in recent years. Capitalizing
on this trend following the launch of our first GPGPU product in late 2021, we have
continuously expanded our operations and broadened our product portfolio through
sustained R&D efforts and the introduction of new products. The expansion
contributed to substantial revenue growth, increasing from RMB189.4 million in
2022 to RMB289.0 million in 2023 and reaching RMB539.5 million in 2024.
Consequently, our gross profit during t h eT r a c kR e c o r dP e r i o dd e m o n s t r a t e da
clear upward trend, rising from RMB112. 4 million in 2022 to RMB143.2 million in
2023 and further to RMB265.1 million in 2024. Our net losses during the Track
Record Period were primarily attributable to the significant investment in R&D
activities and the share-based payments, which is aligned with our growth strategy.
While these strategic investments resulted in reported net losses, the overall financial
performance remained consistent with our expectations.
. We have assessed and do not notice any observable indications that our non-financial
assets’ value in the CGU has declined durin g the Track Record Period significantly
more than would be expected as a result of the passage of time or normal use.
. We have assessed and do not notice any significant changes with an adverse effect on
the CGU that have taken place during the period in the technological, market,
economic or legal environment in which the CGU operates or in the market to which
its non-financial assets are dedicated.
. We have assessed and do not notice any signi ficant changes on market interest rate
t h a ta r el i k e l yt oa f f e c tt h ed i s c o u n tr a t eu s e di nc a l c u l a t i n gt h ev a l u ei nu s eo ft h e
CGU and decrease its recove rable amount materially.
. We have assessed and do not notice any evidence from internal reporting indicate that
the economic performance of our non-financial assets in the CGU will be worse than
expected.
. Our assets in the CGU are in good condition. There is no significant obsolescence or
physical damage of our non-financial assets. Nor will these assets become idle or be
discontinued.
Based on the above assessment and analysis, our Directors concluded that no impairment
indicators existed for the non-financial assets were identified at the end of each year/period
during the Track Record Period.
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DESCRIPTION OF SELECTED ITEMS OF OUR CONSOLIDATED STATEMENTS OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
The following table sets forth selected items of our consolidated statements of profit or loss
and other comprehensive income for the years/periods indicated, derived from our consolidated
statements of profit or loss and other comprehensive income set out in the Accountants’ Report
included in Appendix I to this prospectus. Our historical results presented below are not
necessarily indicative of the results that may be expected for any future period.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
Revenue 189,369 100.0 289,041 100.0 539,511 100.0 197,431 100.0 324,263 100.0
Cost of sales (76,957) (40.6) (145,890) (50.5) (274,427) (50.9) (108,438) (54.9) (161,830) (49.9)
Gross profit 112,412 59.4 143,151 49.5 265,084 49.1 88,993 45.1 162,433 50.1
Other income and gains 33,770 17.8 20,105 7.0 44,985 8.3 33,078 16.8 39,539 12.2
Selling and distribution expenses (48,715) (25.7) (88,25 9) (30.5) (122,358) (22.7) (54,471) (27.6) (67,609) (20.9)
Administrative expenses (166,044) (87.7) (242,020) (83.7) (257,287) (47.7) (119,469) (60.5) (274,592) (84.7)
Research and development costs (456,624) (241.1) (615,884) (213.1) (772,779) (143.2) (333,717) (169.0) (451,496) (139.2)
Impairment losses on financial assets (19,025) (10.0) ( 22,198) (7.7) (31,855) (5.9) (9,191) (4.7) (1,559) (0.5)
Other expenses (2,889) (1.5) (1,312) (0.5) (840) (0.2) (830) (0.4) (4,893) (1.5)
Finance costs (6,503) (3.4) (11,007) (3.8) ( 17,383) (3.2) (8,385) (4.3) (11,139) (3.4)
Loss before tax (553,618) (292.3) (817,424) (282.8 ) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
I n c o m e t a x e x p e n s e ——————————
Loss for the year/period (553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not
be reclassified to profit or loss in
subsequent periods:
Equity investments designated at fair
value through other
comprehensive income:
Changes in fair value — — (2) (0.0) 230 (0.0) (23) (0.0) (228) (0.1)
Other comprehensive income for the year/
period — — (2) (0.0) 230 0.0 (23) (0.0) (228) (0.1)
Total comprehensive loss for the year/
period (553,618) (292.3) (817,426) (282.8) (892, 203) (165.4) (404,015) (204.6) (609,544) (188.0)
Loss attributable to:
Owners of the parent (523,839) (276.6) (791,307) (273 .8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Non-controlling interests (29,779) (15.7) (26,117) (9.0) — — — — — —
(553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Total comprehensive loss attributable to:
Owners of the parent (523,839) (276.6) (791,309) (273 .8) (892,203) (165.4) (404,015) (204.6) (609,544) (188.0)
Non-controlling interests (29,779) (15.7) (26,117) (9.0) — — — — — —
(553,618) (292.3) (817,426) (282.8) (892,203) (165.4) (404,015) (204.6) (609,544) (188.0)
LOSS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS
OF THE PARENT
Basic
— For loss for the year/period (RMB) (3.99) (0.0) (5.43) (0.0) (5.45) (0.0) (2.48) (0.0) (3.48) (0.0)
Diluted
— For loss for the year/period (RMB) (3.99) (0.0) (5.43) (0.0) (5.45) (0.0) (2.48) (0.0) (3.48) (0.0)
For details on the accounting treatment of red emption rights and liquidation preference
rights of pre-IPO investments, see note 30(b) to the Accountants’ Report included in Appendix I
to this prospectus.
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NON-HKFRS MEASURE
We define adjusted net loss (non-HKFRS measure) as net loss for the year/period adjusted
by adding back share-based payment expenses.
To supplement our consolidated financial statements, we also use adjusted net loss
(non-HKFRS measure) as additional financial m easure, which is not required by, or presented
in accordance with HKFRS. We believe this non- HKFRS measure facilitates comparisons of
operating performance from period to period and company to company by eliminating potential
impacts of certain items. We believe this measure provides useful information to investors and
others in understanding and evaluating our consolidated results of operations in the same
manner as they help our management. However, our presentation of adjusted net loss
(non-HKFRS measure) may not be comparable to si milarly titled measures presented by other
companies. The use of this non-HKFRS measure a s an analytical tool has limitations, and you
should not consider it in isolation from, or as a substitute for an analysis of, our results of
operations or financial condition as reported under HKFRS.
The following table reconciles our adjusted net loss (non-HKFRS measure) for the
years/period presented in accordance with HKFRS, which is loss for the year/period:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Reconciliation of loss for the
y e a r / p e r i o dt oa d j u s t e dn e t
loss (non-HKFRS
measure)
Loss for the year/period (553,618) (292.3) (817,424) (282.8) (892,433) (165.4) (403,992) (204.6) (609,316) (187.9)
Add:
Share-based payment
expenses
(1) 120,842 63.8 207,759 71.9 247,765 45.9 107,070 54.2 295,859 91.2
Listing expenses (2) ———————— 1 3 , 6 8 6 4 . 2
Adjusted net loss
(non-HKFRS measure) (432,776) (228.5) (609,665) (210.9) (644,668) (119.5) (296,922) (150.4) (299,771) (92.4)
Note:
(1) Share based payment expenses mainly represent the non-cash employee benefit expenses incurred in
connection with our award to management and key employees. Such expenses in any specific year/period
are not expected to result in future cash payments.
(2) Listing expenses were incurred in connection with the Global Offering.
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DESCRIPTION OF SELECTED COMPONEN TS OF CONSOLIDATED STATEMENTS OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Revenue
Our revenue was RMB189.4 million, RMB2 89.0 million, RMB539. 5 million, RMB197.4
million and RMB324.3 million in 2022, 2023, 202 4 and the six months ended June 30, 2024 and
2025, respectively. During the Track Record Period, we generated substantially all of our
revenue in China. Our revenue was primarily de rived from our GPGPU products, including our
products under the TG series and ZK series, with a growing contribution from our AI
computing solutions. The following table sets forth our revenue breakdown by product and
service type for the years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
GPGPU products 188,561 99.6 266,922 92.3 369,635 68.5 136,772 69.3 276,751 85.3
— Training series 188,130 99.3 221,181 76.5 269,414 49.9 115,164 58.3 189,736 58.5
— Inference series 431 0.3 45,741 15.8 100,221 18.6 21,608 10.9 87,015 26.8
AI computing solutions — — 15,523 5.4 166,213 30.8 59,805 30.3 42,644 13.2
Others
(1) 808 0.4 6,596 2.3 3,663 0.7 854 0.4 4,868 1.5
Total 189,369 100.0 289,041 100.0 539,511 100.0 197,431 100.0 324,263 100.0
(1) Primarily including technical service income and software license income. Our revenue from others
fluctuated during the Track Record Period, primarily due to changes in customer demand.
Our revenue from GPGPU products, comprising our TG and ZK series, was RMB188.6
million, RMB266.9 million, RMB369.6 million, RMB136.8 million and RMB276.8 million in
2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, respectively, accounting for
99.6%, 92.3%, 68.5%, 69.3% and 85.3% of our total revenue in the same years/periods,
respectively. Our revenue increased in absol ute amounts during the Track Record Period,
primarily due to the increases in the shipment volume of our products and the number of
customers, as a result of the enhanced performance of our products, the increase in market
demands for advanced computing power and our established market reputation. The increase in
shipments of our GPGPU products during the Track Record Period was primarily driven by two
key factors. First, the continued growth of AI applications has significantly expanded market
demand, particularly in areas such as LLM training, cloud-based AI inference services and edge
computing. This trend has been supported by the rapid commercialization of generative AI
technologies, national policies promoting AI infrastruct ure development and accelerating
digital transformation across sectors including in ternet technology, financial services, retail and
education, leading customers to increase procur ement to scale their AI compute infrastructure
and enhance GPU capacity. However, our revenue from GPGPU products decreased as a
percentage of our total revenue from 2022 to 2024, primarily due to the increase in revenue
contribution from our AI computing solutions as we developed and launched our AI computing
solutions in 2023 and expanded sales in 2024. Ou r revenue from GPGPU products increased as a
percentage of our total revenue from 69.3% in the six months ended June 30, 2024 to 85.3% in
the six months ended June 30, 2025, primarily because revenue from AI computing solutions
declined in the six months ended June 30, 2025, due to a large customer order in the first half of
2024 which led to a high revenue base.
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Our revenue from training series increa sed during the Track Record Period from
RMB188.1 million in 2022 to RMB221.2 million in 2023 and further to RMB269.4 million in
2024, and from RMB115.2 million in the six m onths ended June 30, 2024 to RMB189.7 million
in the six months ended June 30, 2025. The shipm ent volume of our training series decreased
from 7.7 thousand units in 2022 to 7.0 thousand units in 2023, primarily due to (i) intensified
market competition as new training products from other market players entered the mass
production stage in 2023; and (ii) the reallocation of our internal sales and marketing resources
as we commenced active market promotion of our ZK series that entered the mass production
stage in 2023. The shipment volume of our training series remained stable at 7.0 thousand units
in 2024, and increased from 2.9 thousand units in the six months ended June 30, 2024 to 6.2
thousand units in the six months ended June 30, 2025, primarily due to (i) the increase in
customer demand of our products, especially TG Gen 2, for its enhanced performance; (ii) our
enhanced sales efforts for our training series; and (iii) our accelerated sales of TG Gen 1
inventories. The average sales price of our training series, calculated by dividing our revenue
from training series in a given period by the number of training GPGPU products sold in the
period, increased from RMB24.4 thousand in 2022 to RMB31.8 thousand in 2023 and further to
RMB38.6 thousand in 2024, driven by the launch and expanded sales of TG Gen 2, which had a
higher pricing than that of TG Gen 1 due to its enhanced performance, and decreased from
RMB39.5 thousand in the six months ended June 30, 2024 to RMB30.4 thousand in the six
months ended June 30, 2025, primarily due to the lowering of the sales prices of TG Gen 1 to
accelerate its sales.
Our revenue from inference series increas ed from RMB0.4 million in 2022 to RMB45.7
million in 2023 and further to RMB100.2 milli on in 2024, and from RMB21.6 million in the six
months ended June 30, 2024 to RMB87.0 million in the six months ended June 30, 2025. The
shipment volume of our inference series increas ed significantly from 38 units in 2022 to 5.7
thousand units in 2023 and further to 9.8 thousand units in 2024, and increased from 1.9
thousand units in the six months ended June 30, 2024 to 9.5 thousand units in the six months
ended June 30, 2025. The average sales price of ou r inference series, calculated by dividing our
revenue from inference series in a given period by the number of inference GPGPU products
sold in the period, decreased from RMB11.4 thousand in 2022 to RMB8.0 thousand in 2023,
and increased to RMB10.2 thousand in 2024, primarily due to the increase in revenue
contribution from ZK Gen 1 with higher pricing as a result of its enhanced performance. The
average sales price of our inference series decreased from RMB11.4 thousand in the six months
ended June 30, 2024 to RMB9.2 thousand in the six months ended June 30, 2025, primarily due
to the lowering of the sales prices of ZK series to accelerate sales.
Our revenue from AI computing solutions was nil, RMB15.5 million, RMB166.2 million,
RMB59.8 million and RMB42.6 million in 2022, 2023, 2024 and the six months ended June 30,
2024 and 2025, respectively, accounting for nil, 5.4%, 30.8%, 30.3% and 13.2% of our total
revenue in the same years/periods, respectivel y. Our revenue from AI computing solutions, as a
percentage of our total revenue, increased from 5.4% in 2023 to 30.8% in 2024, primarily due to
the increase in customer demand of our AI computing solutions since their launch in late 2023,
and decreased from 30.3% in the six months e nded June 30, 2024 to 13.2% in the six months
ended June 30, 2025, primarily because revenue from AI computing solutions declined in the six
months ended June 30, 2025, due to a large customer order in the first half of 2024 which led to a
high revenue base. As our AI computing solutions are highly customizable, the specific
configuration and component mix vary signif icantly depending on project demands, and as a
result, the average sales price of our AI computing solutions can fluctuate materially depending
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on the performance level and scale of each deplo yment. As a result, the average sales price of
our AI computing solutions, calculated by dividing our revenue from AI computing solutions in
a given period by the number of projects in the period, increased from RMB2.6 million in 2023
to RMB6.4 million in 2024, and decreased from RMB5.4 million in the six months ended June
30, 2024 to RMB4.3 million in the six months ended June 30, 2025. The number of projects of
our AI computing solutions was six, 26, 11 and 10 in 2023, 2024 and the six months ended June
30, 2024 and 2025, respectively.
Cost of Sales
Our cost of sales was RMB77.0 million, RMB 145.9 million, RMB274.4 million, RMB108.4
million and RMB161.8 million in 2022, 2023, 202 4 and the six months ended June 30, 2024 and
2025, respectively, accounting for 40.6%, 50.5 %, 50.9%, 54.9% and 49.9% of our total revenue
in the same years/periods, respectively. As a fabless company, we do not incur in-house
manufacturing labor costs. Our cost of sales relating to our GPGPU products and AI computing
solutions represented fees paid to contract manufacturers under our service agreements with
them, which cover contract manufacturing se rvices fees and costs of materials used in
manufacturing our products on an integrated basis. For our AI computing solutions, we also
procured from third-party ecosystem partne rs servers, networking infrastructure and
customization services. The following table sets forth the breakdown of our cost of sales by
business lines in absolute amounts and as a percentage of total cost of sales for the years/periods
indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
GPGPU products 76,563 99.5 132,874 91.1 160,579 58.5 54,481 50.2 138,393 85.5
— Training series 76,327 99.2 103,493 70.9 107,125 39.0 44,293 40.8 79,265 49.0
— Inference series 236 0.3 29,381 20.2 53,453 19.5 10,188 9.4 59,127 36.5
AI computing solutions — — 11,501 7.9 113,514 41.4 53,627 49.5 23,145 14.3
Others 394 0.5 1,515 1.0 334 0.1 330 0.3 292 0.2
Total 76,957 100.0 145,890 100.0 274,427 100.0 108,438 100.0 161,830 100.0
The following table sets forth the breakdown of our cost of sales by nature in absolute
amounts and as a percentage of total cost of sales for the years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB % RMB % RMB % RMB % RMB %
(RMB in thousands, except for percentages)
(Unaudited)
Contract manufacturing
costs 76,563 99.5 135,756 93.1 182,459 66.5 59,112 54.6 149,069 92.1
Other third-party
procurement costs — — 8,619 5.9 91,634 33.4 48,996 45.2 12,469 7.7
Others 394 0.5 1,515 1.0 334 0.1 330 0.3 292 0.2
Total 76,957 100.0 145,890 100.0 274,427 100.0 108,438 100.0 161,830 100.0
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Gross Profit and Gross Profit Margin
We recorded gross profit of RMB112.4 millio n, RMB143.2 million, RMB265.1 million,
RMB89.0 million and RMB162.4 million in 2022, 2023, 2024 and the six months ended June 30,
2024 and 2025, respectively, representing gros s profit margin of 59.4%, 49.5%, 49.1%, 45.1%
and 50.1% in the same years/periods, respectiv ely. The following table sets forth our gross
profit and gross profit margin by product and service type for the years/periods indicated:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
Gross
Profit
Gross
Profit
Margin
(%)
(RMB in thousands, except for percentages)
(Unaudited)
GPGPU products 111,998 59.4 134,048 50.2 209,056 56.6 82,291 60.2 138,358 50.0
— Training series 111,802 59.4 117,688 53.2 162,288 60.2 70,870 61.5 110,471 58.2
— Inference series 195 45.2 16,360 35.8 46,769 46.7 11,421 52.9 27,888 32.0
AI computing solutions — — 4,022 25.9 52,699 31.7 6,178 10.3 19,500 45.7
Others 414 51.3 5,081 77.0 3,329 90.9 524 61.4 4,575 94.0
Total 112,412 59.4 143,151 49.5 265,084 49.1 88,993 45.1 162,433 50.1
Our gross profit margin decreased from 2022 to 2024, primarily due to the change in our
business mix, as we launched new GPGPU products and AI computing solutions to diversify our
offerings, which affected our overall margin pro file. Our gross profit margin increased from
45.1% in the six months ended June 30, 2024 t o 50.1% in the six months ended June 30, 2025,
primarily due to the increase in revenue c ontribution from our GPGPU products. Our AI
computing solutions typically had a lower profit margin than that of our GPGPU products,
primarily because our AI computing solutions inte grated third-party products and components,
which drove up the cost of sales associated with our AI computing solutions. As our AI
computing solutions are delivered with bundled hardware with chips, the gross profit margin of
our AI computing solutions depends on the associated costs of the bundled hardware and chips,
which vary across customer projects. Therefore, the gross profit margin of our AI computing
solutions is inherently subject to fluctuation depending on specific project demands. The gross
profit margin of others was relatively high due to the low-cost nature of our software license
income.
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Other Income and Gains
During the Track Record Period, our other i ncome and gains primarily consisted of (1)
government grants, mainly representing non-recurring subsidies received from various local
authorities in relation to our R&D initiatives that qualified as activities within the integrated
circuit industry; (2) interest income from our bank deposits; (3) foreign exchange gains, net; (4)
gains on disposal of wealth investment products; ( 5) fair value gains, net, from financial assets
at fair value through profit or loss; and (6) others. The following table sets forth a breakdown of
our other income and gains for the years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Government grants
related to:
— Assets — — 135 0.7 10,094 22.4 3,915 11.8 12,915 32.7
— Income 14,196 42.0 15,306 76.1 28,979 64.4 25,174 76.1 19,920 50.4
Interest income 4,005 11.9 3,754 18.7 4,125 9.2 2,795 8.4 5,852 14.8
Foreign exchange gains, net 14,062 41.6 — — — — — — — —
Gain on disposal of wealth
i n v e s t m e n t p r o d u c t s 1 , 1 1 3 3 . 3————————
Fair value gains, net
— Financial assets at fair
value through profit or
loss — — 695 3.5 844 1.9 390 1.2 — —
Others 394 1.2 215 1.1 943 2.1 804 2.4 852 2.2
Total 33,770 100.0 20,105 100.0 44,985 100.0 33,078 100.0 39,539 100.0
Selling and Distribution Expenses
Our selling and distribution expenses primar ily consisted of (1) employee compensation
expenses, representing wages, benefits and share-based compensation for our selling and
distribution personnel; (2) depreciation and amortization; (3) office and travel expenses; (4)
marketing and promotion expenses; and (5) others, mainly including consulting service fees. Our
selling and distribution expenses were RMB48.7 million, RMB88.3 million, RMB122.4 million,
RMB54.5 million and RMB67.6 million in 2022, 2023, 2024 and the six months ended June 30,
2024 and 2025, respectively, accounting for 25.7%, 30.5%, 22.7%, 27.6% and 20.9% of our
total revenue in the same years /periods, respectively. Our share-based payment expenses
included in the selling and distribution expenses were RMB1.5 million, RMB4.7 million,
RMB7.5 million, RMB2.9 million and RMB8.3 million in 2022, 2023, 2024 and the six months
ended June 30, 2024 and 2025, respectively. The following table sets forth a breakdown of our
selling and distribution expenses by nature in absolute amounts and as percentages of the total
selling and distribution expenses for the years/periods indicated.
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For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Employee compensation
expenses 37,774 77.5 69,664 78.9 96,555 78.9 44,371 81.5 55,005 81.4
Depreciation and
amortization 1,388 2.8 4,410 5.0 10,248 8.4 4,481 8.2 6,933 10.3
Office and travel expenses 1,952 4.0 7,253 8.2 7,946 6.5 2,741 5.0 3,501 5.2
Marketing and promotion
expenses 7,333 15.1 5,191 5.9 7,507 6.1 2,709 5.0 1,955 2.9
Others 268 0.6 1,741 2.0 102 0.1 169 0.3 215 0.3
Total 48,715 100.0 88,259 100.0 122,358 100.0 54,471 100.0 67,609 100.0
Administrative Expenses
Our administrative expenses primarily consis ted of (1) employee compensation expenses,
representing wages, benefits and share-based comp ensation for our administrative personnel; (2)
listing expenses incurred in relation to the Global Offering; (3) depreciation and amortization;
(4) office and travel expenses; (5) property manag ement and decoration expenses; and (6) others,
mainly including hospitality, recruitment and audit expenses. Our administrative expenses
amounted to RMB166.0 million, RMB242.0 milli on, RMB257.3 million, RMB119.5 million and
RMB274.6 million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, accounting for 87.7%, 83.7%, 47.7%, 60.5% and 84.7% of our revenue in the same
years/periods, respectively. Our share-based payment expenses included in the administrative
expenses were RMB69.7 million, RMB135.4 million, RMB138.6 million, RMB64.1 million and
RMB194.3 million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively. The following table sets forth a breakdown of our administrative expenses by
nature in absolute amounts and as percentages o f the total administrative expenses for the
years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Employee compensation
expenses 128,021 77.1 197,434 81.6 213,328 83.0 99,508 83.4 235,918 85.8
L i s t i n g f e e s ———————— 1 3 , 6 8 6 5 . 0
Depreciation and
amortization 16,135 9.7 22,605 9.3 20,030 7.8 10,211 8.5 9,646 3.5
Office and travel expenses 6,512 3.9 6,758 2.8 8,847 3.4 4,100 3.4 3,517 1.3
Property management and
decoration expenses 4,765 2.9 5,049 2.1 4,947 1.9 1,849 1.5 2,348 0.9
Others 10,611 6.4 10,174 4.2 10,136 3.9 3,801 3.2 9,477 3.5
Total 166,044 100.0 242,020 100.0 257,287 100.0 119,469 100.0 274,592 100.0
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Research and Development Costs
Our research and development costs primarily consisted of (1) employee compensation
expenses, representing wages, benefits and sha re-based compensation for our research and
development personnel; (2) technical service fees, material consumption and tape-out expenses,
comprising service fees incurred for carrying out our R&D activities, as well as procurement
costs of wafers, molds, engineering materia ls and consumables used in the R&D stage and
expenses incurred for the tape-out process when a chip design is finalized and sent to the
foundry for photomasking; (3) depreciation and amortization; and (4) others, mainly including
network costs and traveling expenses. Our research and development costs were RMB456.6
million, RMB615.9 million, RMB772.8 million, RMB333.7 million and RMB451.5 million in
2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, respectively, accounting for
241.1%, 213.1%, 143.2%, 169.0% and 139.2% of o ur total revenue in the s ame years/periods,
respectively. Our share-based payment expenses i ncluded in the research and development costs
were RMB49.7 million, RMB67.7 million, RMB 101.7 million, RMB40.0 million and RMB93.2
million in 2022, 2023, 2024 and the six months e nded June 30, 2024 and 2025, respectively. The
following table sets forth a breakdown of our research and development costs by nature in
absolute amounts and as percentages of the total research and development costs for the
years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Employee compensation
expenses 282,788 61.9 372,992 60.5 469,397 60.7 214,274 64.2 299,606 66.4
Technical service fees,
material consumption and
tape-out expenses 100,370 22.0 150,626 24.5 177,380 23.0 64,077 19.2 77,531 17.2
Depreciation and
amortization 72,581 15.9 90,850 14.8 124,232 16.1 54,353 16.3 73,729 16.3
Others 885 0.2 1,416 0.2 1,770 0.2 1,013 0.3 630 0.1
Total 456,624 100.0 615,884 100.0 772,779 100.0 333,717 100.0 451,496 100.0
Impairment Losses on Financial Assets
Our impairment losses on financial assets primarily represented provisions made for
expected credit losses on trade a nd bills receivables and other rece ivables. Our impairment losses
on financial assets were RMB19.0 million, RMB22.2 million, RMB31.9 million, RMB9.2
million and RMB1.6 million in 2022, 2023, 2024 and the six months ended June 30, 2024 and
2025, respectively, accounting f or 10.0%, 7.7%, 5.9%, 4.7% and 0.5% of our total revenue in
the same years/periods, respectively.
Other Expenses
Our other expenses represented foreign exch ange loss and non-operating expenses. We had
other expenses of RMB2.9 million, RMB1.3 million, RMB0.8 million, RMB0.8 million and
RMB4.9 million in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively, representing 1.5%, 0.5%, 0.2% , 0.4% and 1.5% of our total revenue in the same
years/periods, respectively.
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Finance Costs
Our finance costs primarily consisted of int erest on bank and other borrowings, lease
liabilities and long-term payables. We recorded finance costs of RMB6.5 million, RMB11.0
million, RMB17.4 million, RMB8.4 million and RMB11.1 million in 2022, 2023, 2024 and the
six months ended June 30, 2024 and 2025, respectively, representing 3.4%, 3.8%, 3.2%, 4.3%
and 3.4% of our total revenue in the same years/per iods, respectively. Th ef o l l o w i n gt a b l es e t s
forth a breakdown of our finance costs by nature for the years/periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
R M B%R M B%R M B%R M B%R M B%
(RMB in thousands, except for percentages)
(Unaudited)
Interest on bank and other
borrowings 5,234 80.5 9,609 87.3 15,754 90.6 7,796 93.0 9,452 84.9
Interest on lease liabilities 728 11.2 447 4.1 906 5.2 198 2.4 702 6.3
Interest on long-term
payables 541 8.3 951 8.6 723 4.2 391 4.7 985 8.8
Total 6,503 100.0 11,007 100.0 17,383 100.0 8,385 100.0 11,139 100.0
Income Tax Expense
Under the Law of the PRC on Enterprise Income Tax (the ‘‘ EIT Law ’’) and the
Implementation Regulation of the EIT Law, the EIT rate of our PRC subsidiaries is 25% unless
they are subject to preferential tax. Certain o f our subsidiaries in the PRC have been approved
as high and new technology enterprises (‘‘ HNTE ’’) under relevant tax rules and regulations, and
accordingly, are subjected to a preferential E IT rate of 15% during the Track Record Period.
Certain of our subsidiaries are approved as small and micro enterprises, and accordingly, they
were subject to a reduced prefer ential EIT rate of 2.5% to 5% during the Track Record Period
according to the applicable EIT Law.
We did not incur income tax expenses during the Track Record Period, primarily due to
our loss before tax. As of the Latest Practicable Date and during the Track Record Period, we
had fulfilled all our tax obligations and did not have any unresolved tax disputes.
Loss for the Year/Period
A sar e s u l to ft h ef o r e g o i n g ,w eh a dn e tl o s ses of RMB553.6 million, RMB817.4 million,
RMB892.4 million, RMB404.0 million and RMB6 09.3 million in 2022, 2023, 2024 and the six
months ended June 30, 2024 and 2025, respectively.
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YEAR TO YEAR COMPARISON O F RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Revenue
Our revenue increased by 64.2% from RMB197.4 million for the six months ended June 30,
2024 to RMB324.3 million for the six months ended June 30, 2025. The number of repeated
customers was 20 and 42 in the six months ended June 30, 2024 and 2025, respectively,
accounting for 24.7% and 39.6% of our total cust omer base in the same periods, respectively,
and contributing to 64.0% and 58.0% of our total revenue in the same periods, respectively. The
increase in the proportion of repeated custome rs but a decline in their revenue contribution
indicated that new customers a re driving stronger purchasing demand, primarily due to
large-scale initial deployments, higher-value use cases and product mix upgrades, while repeated
customers are in a more stable and incremental procurement phase.
. GPGPU products . Our revenue from GPGPU products increased significantly from
RMB136.8 million for the six months ended June 30, 2024 to RMB276.8 million for
the six months ended June 30, 2025, primarily due to the increase in the shipment
volume of our GPGPU products from 4.8 thousand units in the six months ended
June 30, 2024 to 15.7 thousand units in the six months ended June 30, 2025. Such
increase was primarily attributable to (1 ) the increase in the number of customers
from 70 in the six months ended June 30, 2024 to 95 in the six months ended June 30,
2025, driven by (1) the strong competitiveness and advanced performance of our
product; and (2) our ongoing efforts in market development and strategic emphasis on
acquiring and scaling relationships with key customers.
. Training series . Our revenue from training series increased from RMB115.2
m i l l i o ni nt h es i xm o n t h se n d e dJ u n e3 0 ,2 0 2 4t oR M B 1 8 9 . 7m i l l i o ni nt h es i x
months ended June 30, 2025, primarily driven by the increase in shipment volume
of our training series products from 2.9 thousand units in the six months ended
June 30, 2024 to 6.2 thousand units in the six months ended June 30, 2025, as a
result of (i) the increase in customer demand of our products, especially TG Gen
2, for its enhanced performance; (ii) our enhanced sales efforts of our training
series; and (iii) our accelerated sales of TG Gen 1 inventories.
. Inference series . Our revenue from inference series increased from RMB21.6
million in the six months ended June 30, 2024 to RMB87.0 million in the six
months ended June 30, 2025, primarily driven by the increase in shipment volume
of our inference series products from 1.9 thousand units in the six months ended
June 30, 2024 to 9.5 thousand units in the six months ended June 30, 2025, as a
result of (i) the increase in market demand for inference products; and (ii) our
enhanced sales efforts of our inference series.
. AI computing solutions . Our revenue generated from AI computing solutions
decreased by 28.7% from RMB59.8 million for the six months ended June 30, 2024
to RMB42.6 million for the six months ended June 30, 2025, primarily due to a large
customer order in the first half of 2024 which led to a high revenue base.
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Cost of Sales
Our cost of sales increased by 49.2% from RMB108.4 million for the six months ended
June 30, 2024 to RMB161.8 million for the six mo nths ended June 30, 2025, generally in line
with our revenue increase.
Gross Profit and Gross Profit Margin
Our gross profit increased by 82.5% from RMB89.0 million for the six months ended June
30, 2024 to RMB162.4 million for the six months ended June 30, 2025, primarily due to revenue
increase in our GPGPU products. Our gross profit margin increased from 45.1% for the six
months ended June 30, 2024 to 50.1% for the six months ended June 30, 2025.
. GPGPU products. Our gross profit margin relating to our GPGPU products decreased
from 60.2% for the six months ended June 30, 2024 to 50.0% for the six months ended
June 30, 2025.
. Training series . Our gross profit margin for trai ning series decreased from 61.5%
in the six months ended June 30, 2024 to 58.2% in the six months ended June 30,
2025, primarily due to our lowering of sales price of TG Gen 1 to accelerate
inventory sales. The average sales price o f our training series products decreased
from RMB39.5 thousand in the six months ended June 30, 2024 to RMB30.4
thousand in the six months ended June 30, 2025. As of the Latest Practicable
Date, our inventory of TG Gen 1 had not been fully consumed, and as of June
30, 2025 and October 31, 2025, the carrying value of our TG Gen 1 inventory was
RMB46.8 million and RMB19.7 million, respectively, accounting for 9.5% and
2.7% of our total inventory as of the same dates, respectively.
. Inference series . Our gross profit margin for in ference series decreased from
52.9% in the six months ended June 30, 2024 to 32.0% in the six months ended
June 30, 2025, primarily due to our lowering of sales price of ZK Gen 1 and ZK
Gen 1X to accelerate inventory sales. The average sales price of our inference
series products decreased from RMB11.4 thousand in the six months ended June
30, 2024 to RMB9.2 thousand in the six months ended June 30, 2025. The
decrease in the average sales price of our inference series was primarily
attributable to intensified market competition as new inference products from
other market players entered the mass production stage since late 2024. Given
that our ZK Gen 1 and ZK Gen 1X models had been on the market for nearly
three years, we adjusted pricing to mainta in competitiveness and to position our
next-generation product of the ZK series at a distinct performance and price
level.
. AI computing solutions . Our gross profit margin rel ating to our AI computing
solutions increased from 10.3% for the six months ended June 30, 2024 to 45.7% for
the six months ended June 30, 2025, primarily due to a decrease in the proportion of
third-party procured components used in our solutions, as a result of customer
demand favoring configurations that re quire less reliance on externally sourced
components.
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Other Income and Gains
Our other income and gains remained relatively stable at RMB33.1 million for the six
months ended June 30, 2024 and RMB39.5 mill ion for the six months ended June 30, 2025.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 24.1% from RMB54.5 million for the six
months ended June 30, 2024 to RMB67.6 mill ion for the six months ended June 30, 2025,
primarily due to (i) an increase of RMB10.6 million in employee compensation expenses, as a
result of the increase in the average compensati on and share-based compensation to our selling
and distribution personnel; and (ii) an increase of RMB2.5 million in depreciation and
amortization, as a result of the increase in th e number of GPGPU accelerators used in trial
deployment, in line with our business growth.
Administrative Expenses
Our administrative expenses increased sign ificantly from RMB119.5 million for the six
months ended June 30, 2024 to RMB274.6 million for the six months ended June 30, 2025,
primarily due to an increase of RMB136.4 milli on in employee compensation expenses, as a
result of the increases in headcount of and share-based compensation to our administrative
personnel.
Research and Development Costs
Our research and development costs increa sed by 35.3% from RMB333.7 million for the
six months ended June 30, 2024 to RMB451.5 mi llion for the six months ended June 30, 2025,
primarily due to (i) an increase of RMB85.3 million in employee compensation expenses, as a
result of the increases in headcount of and share-based compensation to our R&D personnel; (ii)
an increase of RMB19.4 million in depreciation a nd amortization, as a result of the increases of
R&D equipment and IP procurement in line with the increase in the number of R&D projects;
and (iii) an increase of RMB13.5 million in tech nical service fees, material consumption and
tape-out expenses, as a result of the increase in the number of R&D projects under development
and the corresponding increase in procurement of technical services to develop industry-tailored
functions.
Impairment Losses on Financial Assets
Our impairment losses on financial assets de creased by 83.0% from RMB9.2 million for the
six months ended June 30, 2024 to RMB1.6 milli on for the six months ended June 30, 2025, in
relation to our trade receivables.
Other Expenses
Our other expenses increased from RMB0.8 million for the six months ended June 30, 2024
to RMB4.9 million for the six months ended June 30, 2025, primarily due to foreign currency
exchange loss.
FINANCIAL INFORMATION
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Finance Costs
Our net finance costs increased from RMB8.4 million for the six months ended June 30,
2024 to RMB11.1 million for the six months ended June 30, 2025, as a result of additional bank
borrowings.
Loss for the Period
As a result of the foregoing, our loss for th e period was RMB404.0 million for the six
months ended June 30, 2024 and RMB609.3 million for the six months ended June 30, 2025,
respectively.
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023
Revenue
Our revenue increased by 86.7% from RMB289.0 million in 2023 to RMB539.5 million in
2024. The number of repeated customers was 8 and 28 in 2023 and 2024, respectively,
accounting for 12.3% and 15.5% of our total cust omer base in the same periods, respectively,
and revenue contribution from repeated customers remained relatively stable at 47.5% and
47.6% in the same periods, respectively.
. GPGPU products . Our revenue from GPGPU products increased by 38.5% from
RMB266.9 million in 2023 to RMB369.6 millio n in 2024, primarily due to the increase
in the shipment volume of our GPGPU products from 12.7 thousand units in 2023 to
16.8 thousand units in 2024. Such increas e was primarily attributable to (1) the
increase in the number of customers from 56 in 2023 to 158 in 2024, driven by the
strong competitiveness and advanced performance of our product, as well as our
enhanced brand recognition; (2) our launch of new products in late 2023 and their
expanded sales in 2024; and (3) the surging market demand for our products, driven
by the rapid advancement in AI technologies and large language models, and the
growth in demand for computing power.
. Training series . Our revenue from training series increased from RMB221.2
million in 2023 to RMB269.4 million in 2024, primarily driven by the launch and
the increase in sales volume of TG Gen 2, as a result of its enhanced application
performance, as well as the higher pricing of TG Gen 2. The average sales price
of our training series products increased from RMB31.8 thousand in 2023 to
RMB38.6 thousand in 2024, while the sales volume of our training series
products remained stable at 7.0 thousan d units in 2023 and 2024, respectively.
. Inference series . Our revenue from inference series increased from RMB45.7
million in 2023 to RMB100.2 million in 2024, primarily driven by the increase in
shipment volume of our inference series products from 5.7 thousand units in
2023 to 9.8 thousand units in 2024, as a result of surging market demand for
inference applications.
FINANCIAL INFORMATION
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. AI computing solutions . Our revenue from AI computing solutions increased
significantly from RMB15.5 million in 2023 to RMB166.2 million in 2024,
primarily due to (1) our enhanced capability to deliver AI computing solutions at
scale as a result of our earlier-stage validation efforts, long-term investment in both
hardware and software infrastructure, and the upgrade of our GPGPU products
integrated in our AI computing solutions; and (2) the increase in the number of
customers of our AI computing solutions from 5 in 2023 to 21 in 2024, alongside with
the increase in average customer spending , driven by the rising market demands for
advanced computing power, the enhancement of implementation capability of our
solutions, and our enhanced sales efforts in 2024.
Cost of Sales
Our cost of sales increased by 88.1% from RMB145.9 million in 2023 to RMB274.4 million
in 2024, primarily attributable to (1) an increase of RMB102.0 million in our cost of sales
relating to our AI computing solutions, and (2) an increase of RMB27.7 million in cost of sales
relating to our GPGPU products, both in line with our revenue growths.
Gross Profit and Gross Profit Margin
Our gross profit increased by 85.2% from RMB143.2 million in 2023 to RMB265.1 million
in 2024, primarily due to our revenue growth. Our gross profit margin slightly decreased from
49.5% in 2023 to 49.1% in 2024, primarily due to th e increase in revenue contribution from our
AI computing solutions, which typically had a lower profit margin.
. GPGPU products . Our gross profit margin relating to our GPGPU products increased
from 50.2% in 2023 to 56.6% in 2024, primarily due to (1) lowered unit cost of our
GPGPU products as a result of our product design improvement, and (2) the increase
of sales of certain types of products with higher prices as a result of the wide market
popularity of such products.
. Training series . Our gross profit margin for trai ning series increased from 53.2%
in 2023 to 60.2% in 2024, primarily driven by the expanded sales of TG Gen 2,
which had a better margin profile due to hi gher pricing. The average sales price
of our training series products increased from RMB31.8 thousand in 2023 to
RMB38.6 thousand in 2024.
. Inference series . Our gross profit margin for inference series increased from
35.8% in 2023 to 46.7% in 2024, primarily driven by the expanded sales of ZK
Gen 1, which had a better margin profile due to higher pricing. The average sales
price of our inference series products increased from RMB8.0 thousand in 2023
to RMB10.2 thousand in 2024.
. AI computing solutions . Our gross profit margin rel ating to our AI computing
solutions increased from 25.9% in 2023 to 31.7% in 2024, primarily due to (1)
enhanced performance of our AI computing solutions due to the adoption of more
advanced accelerators and technologies, a nd (2) increasing market demands for AI
computing and large-scale data processing.
FINANCIAL INFORMATION
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Other Income and Gains
Our other income and gains increased from RMB20.1 million in 2023 to RMB45.0 million
in 2024, primarily due to an increase of RMB23.6 million in government grants from local
authorities, as a result of our increased R&D activities.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 38.6% from RMB88.3 million in 2023 to
RMB122.4 million in 2024, primarily due to (1) an increase of RMB26.9 million in employee
compensation, as a result of the increases in th e headcount and average compensation level of
our selling and distribution personnel to s upport our enhanced sales efforts, as well as
share-based payment to incentivize our selling an d distribution personnel for enhanced sales and
marketing activities; (2) an increase of RMB5.8 million in depreciation and amortization, as a
result of the increase in the number of GPGPU accelerators used in trial deployment, in line
with our business growth.
Administrative Expenses
Our administrative expenses increased by 6.3% from RMB242.0 million in 2023 to
RMB257.3 million in 2024, primarily due to (1) an increase of RMB15.9 million in employee
compensation expenses, as a result of the increases in the headcount and average compensation
level of our administrative personnel to support our business growth; and (2) an increase of
RMB2.1 million in office and travel fees, as a result of our expanded business operations and
employee activities.
Research and Development Costs
Our research and development costs increa s e db y2 5 . 5 %f r o mR M B 6 1 5 . 9m i l l i o ni n2 0 2 3t o
RMB772.8 million in 2024, primarily due to (1) an increase of RMB96.4 million in employee
compensation expenses, as a result of the increases in the headcount and average compensation
level of our R&D personnel, as well as share-based payment to incentivize our R&D personnel
and support our R&D activities; (2) an increase of RMB33.4 million in depreciation and
amortization, as a result of the increases in t he software, equipment and IP used in our R&D
activities; and (3) an increase of RMB26.8 mi llion in technical service fees, material
consumption and tape-out expenses, as a result of the increase in the number of R&D
projects under development and the correspondi ng increase in procurement of technical services
to develop industry-tailored functions.
Impairment Losses on Financial Assets
Our impairment losses on financial assets increased by 43.5% from RMB22.2 million in
2023 to RMB31.9 million in 2024, in rela tion to our other receivables in 2024.
Other Expenses
Our other expenses was RMB1.3 milli on in 2023 and RMB0.8 million in 2024.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs increased by 57.9% from R MB11.0 million in 2023 to RMB17.4 million
in 2024, primarily due to an increase of RMB6.1 million in interest on bank and other
borrowings, as a result of our additional bank borrowings.
Loss for the Year
As a result of the foregoing, our loss for the year increased by 9.2% from RMB817.4
million in 2023 to RMB892.4 million in 2024.
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022
Revenue
Our revenue increased by 52.6% from RMB189.4 million in 2022 to RMB289.0 million in
2023. We had one and eight repeated customers i n 2022 and 2023, respectively, accounting for
4.6% and 12.3% of our total customer base in the same periods, respectively, and revenue
contribution from repeated customers increa sed from 37.7% in 2022 to 47.5% in 2023 in the
same periods, respectively.
. GPGPU products . Our revenue from GPGPU products increased by 41.6% from
RMB188.6 million in 2022 to RMB266.9 millio n in 2023, primarily due to the increase
in the shipment volume of our GPGPU products from 7.8 thousand units in 2022 to
13.1 thousand units in 2023. Such increas e was primarily attributable to (1) the
increase in the number of customers from 22 in 2022 to 56 in 2023, driven by the
established competitiveness and advanced performance of our product and our
enhanced brand recognition; (2) our mass production of ZK series in the first quarter
of 2023; and (3) the surging market demand for our products, driven by the rapid
advancement of AI technologies and large language models and the growth in demand
for computing power.
. Training series . Our revenue from training series increased from RMB188.1
million in 2022 to RMB221.2 million in 2023, primarily driven by the launch and
the increase in sales volume of TG Gen 2, as a result of its enhanced application
performance, as well as the higher pricing of TG Gen 2. The average sales price
of our training series products increased from RMB24.4 thousand in 2022 to
RMB31.8 thousand in 2023, while the sales volume of our training series
products decreased from 7.7 thousand units in 2023 to 7.0 thousand units in
2024.
. Inference series . Our revenue from inference se ries increased from RMB0.4
million in 2022 to RMB45.7 million in 2023, primarily driven by the launch of
ZK series in December 2022 and the mass p roduction in the first quarter of 2023,
as reflected by the increase in the shipment volume of our inference series
products from 38 units in 2022 to 5.7 thousand units in 2023.
. AI computing solutions . Our revenue from AI computing solutions increased from nil
in 2022 to RMB15.5 million in 2023, as we launched our AI computing solutions in
2023.
FINANCIAL INFORMATION
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Cost of Sales
Our cost of sales increased by 89.6% from RMB77.0 million in 2022 to RMB145.9 million
in 2023, faster than our revenue growth in the same p eriod, primarily due to (1) the introduction
of new products at competitive pricing to a ccelerate market penetration and expand our
customer base; and (2) provision of obsolete ma t e r i a l si nr e l a t i o nt oo u rT GG e n1 ,a sar e s u l to f
changes in our production planning and anticipated demand level.
Gross Profit and Gross Profit Margin
Our gross profit increased by 27.3% from RMB112.4 million in 2022 to RMB143.2 million
in 2023, generally in line with our revenue growth. Our gross profit margin decreased from
59.4% in 2022 to 49.5% in 2023, primarily attributable to the decrease in gross profit margin for
our GPGPU products.
. GPGPU products. Our gross profit margin decreased from 59.4% in 2022 to 50.2% in
2023, primarily attributable to (1) the in troduction of new products at competitive
pricing to accelerate market penetration and expand our customer base; and (2)
provision in relation to obsolete materials.
. Training series . Our gross profit margin for trai ning series decreased from 59.4%
in 2022 to 53.2% in 2023, primarily due to th e provision for obsolete materials in
relation to our TG Gen 1.
. Inference series . Our gross profit margin for in ference series decreased from
45.2% in 2022 to 35.8% in 2023. Our inference series was newly launched in
2022, and the sales in 2022 were limited i n volume and mainly comprised pilot
transactions, and as such, such sales pri ces, as well as the gross profit margin, of
our inference series in 2022 were not repr esentative of our inference series’
normal market performance. The average sales price of our inference series
decreased from RMB11.4 thousand in 2022 to RMB8.0 thousand in 2023.
. AI computing solutions. Our gross profit margin for AI computing solutions was
25.9% in 2023.
Other Income and Gains
Our other income and gains decreased from R MB33.8 million in 2022 to RMB20.1 million
in 2023, primarily due to a decrease of RMB1 4.1 million in foreign exchange gains.
FINANCIAL INFORMATION
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Selling and Distribution Expenses
Our selling and distribution expenses increased by 81.2% from RMB48.7 million in 2022 to
RMB88.3 million in 2023, primarily due to (1 ) an increase of RMB31.9 million in employee
compensation, as a result of the increases in th e headcount and average compensation level of
our selling and distribution personnel; and (2) an increase of RMB5.3 million in office and
travel expenses as a result of our enhanced sales and marketing efforts.
Administrative Expenses
Our administrative expenses increased by 45.8% from RMB166.0 million in 2022 to
RMB242.0 million in 2023, primarily due to (1) an increase of RMB69.4 million in employee
compensation expenses, as a result of the i ncreases in the share-based payment to our
administrative personnel; and (2) an incr ease of RMB6.5 million in depreciation and
amortization, as a result of the increase in our office leases and electronic equipment.
Research and Development Costs
Our research and development costs increa s e db y3 4 . 9 %f r o mR M B 4 5 6 . 6m i l l i o ni n2 0 2 2t o
RMB615.9 million in 2023, primarily due to (1) an increase of RMB90.2 million in employee
compensation expenses, as a result of the increases in the headcount of our research and
development personnel, as well as share-based payment to our R&D personnel to support our
R&D activities; (2) an increase of RMB50.3 mi llion in technical service fees, material
consumption and tape-out expenses, as a result of the tape-out expense incurred for our
products; and (3) an increase of RMB18.3 million in depreciation and amortization, as a result
of the increases in the software, equi pment and IP used in our R&D activities.
Impairment Losses on Financial Assets
O u ri m p a i r m e n tl o s s e so nf i n a n c i a la s s e t si n c r e a s e df r o mR M B 1 9 . 0m i l l i o nt oR M B 2 2 . 2
million in 2023, primarily due to the incr ease in our trade and bills receivables.
Other Expenses
Our other expenses decreased by 54.6% from RMB2.9 million in 2022 to RMB1.3 million
in 2023, primarily in relation to the winding-up in 2022 of two of our subsidiaries which did not
engage in any actual businesses.
Finance Costs
Our finance costs increased by 69.3% from RMB6.5 million in 2022 to RMB11.0 million in
2023, primarily due to an increase of RMB4.4 mill ion in interest on bank and other borrowings,
as a result of our additional bank borrowings.
Loss for the Year
As a result of the foregoing, our loss for the year increased by 47.7% from RMB553.6
million in 2022 to RMB817.4 million in 2023.
FINANCIAL INFORMATION
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DISCUSSION OF KEY ITEMS OF CONSOL IDATED STATEMENTS OF FINANCIAL
POSITION
The following table sets forth a summary of our consolidated balance sheets as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Non-current assets
Property, plant and equipment 84,476 105,946 127,995 131,115
Right-of-use assets 17,903 8,550 40,658 14,674
Intangible assets 101,061 74,575 140,667 141,946
Financial assets at fair value
through profit or loss (‘‘ FVPL ’’) 50,000 90,695 96,539 96,176
Equity investments designated at
fair value through other
comprehensive income — 598 828 600
Long-term trade receivables — 15,718 — —
Prepayments, other receivables and
other assets 8,146 9,758 16,141 4,500
261,586 305,840 422,828 389,011
Current assets
Inventories 244,020 232,604 342,643 494,920
Trade and bills receivables 88, 707 200,436 377,176 388,946
Prepayments, other receivables and
other assets 112,761 338,921 202,851 461,925
Financial assets at fair value
through profit or loss (‘‘ FVPL ’’) 8,779 — — 50,118
Due from related parties — 184,700 — —
Restricted cash 92,678 61 61 42,568
Pledged time deposits 18,844 — — —
Cash and cash equivalents 219,305 308,053 313,563 1,713,176
Long-term trade receivables due
within one year — 22,364 26,053 19,915
785,094 1,287,139 1,262,347 3,171,568
FINANCIAL INFORMATION
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As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Current liabilities
Trade payables 85,256 18,157 45,645 29,884
Other payables and accruals 92,725 109,696 187,651 153,119
Contract liabilities 2,232 13,528 28,756 39,947
Deferred government grants 248 35,014 2,272 2,355
Lease liabilities 13,788 3,705 17,979 10,442
Long-term payables due within one
year 19,529 13,949 31,592 56,016
Interest-bearing bank and other
borrowings 102,930 492,417 566,060 583,812
316,708 686,466 879,955 875,575
Net current assets 468,386 600,673 382,392 2,295,993
Total assets less current liabilities 729,972 906,513 805,220 2,685,004
Non-current liabilities
Interest-bearing bank and other
borrowings 50,000 — 42,000 83,500
Deferred government grants 44,670 26,041 45,106 71,900
Lease liabilities 1,935 1,859 15,156 3,931
Long-term payables 13,686 275 14,289 9,819
110,291 28,175 116,551 169,150
Net assets 619,681 878,338 688,669 2,515,854
For details on the accounting treatment of red emption rights and liquidation preference
rights of pre-IPO investments, see note 30(b) to the Accountants’ Report included in Appendix I
to this prospectus.
FINANCIAL INFORMATION
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Property, Plant and Equipment
Our property, plant and equipment primarily consisted of (1) electronic equipment,
including servers and GPGPU accelerators for t rial deployment; (2) furniture and others,
primarily representing furniture used in our offi ce premises; and (3) leasehold improvements.
The following table sets forth the breakdown of our property, plant and equipment as of the
dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Electronic equipment 72,873 90,263 114,209 118,572
Furniture and others 3,403 7,633 10,551 11,172
Leasehold improvement 8,200 8,050 3,235 1,371
Total 84,476 105,946 127,995 131,115
Our property, plant and equi pment increased from RMB84.5 million as of December 31,
2022 to RMB105.9 million as of December 31, 2023, and further to RMB128.0 million as of
December 31, 2024, primarily due to the increases in electronic equipment, mainly attributable
to the increases in servers and GPGPU accelerators, driven by our expanded business
operations. Our property, plant and equipment increased to RMB131.1 million as of June 30,
2025, primarily due to an increase of RMB4.4 million in electronic equipment, as a result of the
increases in servers, R&D equipment and GPGP U accelerators used in internal and customer
trial deployments; partial ly offset by depreciation.
Right-of-use Assets
Our right-of-use assets primarily consisted of buildings and machinery. The following table
sets forth the breakdown of our right-o f-use assets as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Buildings 17,903 8,550 14,880 14,674
Machinery — — 25,778 —
Total 17,903 8,550 40,658 14,674
Our right-of-use assets decreased from R MB17.9 million as of December 31, 2022 to
RMB8.6 million as of December 31, 2023, primarily due to depreciation. Our right-of-use assets
then increased to RMB40.7 million as of Dece mber 31, 2024, primarily due to (1) addition of
leased equipment to support our expanded R&D activities; and (2) lease renewals for buildings.
Our right-of-use assets decreased to RMB14.7 mi llion as of June 30, 2025, primarily due to full
settlement of a finance lease related to emulation machines.
FINANCIAL INFORMATION
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Intangible Assets
Our intangible assets primarily consisted of licensed IP and software, primarily used in our
R&D projects. Our software was primarily u sed for product design and office uses. The
following table sets forth the breakdown of our intangible assets as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Licensed IP 49,227 44,238 86,555 81,563
Software 51,834 30,337 54,112 60,383
Total 101,061 74,575 140,667 141,946
Our purchase schedule for intangible assets is largely dictated by the useful life of our
existing intangible assets. Our intangible assets decreased from RMB101.1 million as of
December 31, 2022 to RMB74.6 million as of Decem ber 31, 2023, primarily due to the decrease
of RMB21.5 million in software, as a result of amortization. Our intangible assets then
increased to RMB140.7 million as of Decembe r 31, 2024, primarily due to the increase of
RMB42.3 million in licensed IP for our new R&D projects. Our intangible assets remained
relatively stable at RMB141.9 million as of June 30, 2025.
Financial Assets at Fair Value Through Profit or Loss (‘‘FVPL’’)
During the Track Record Period, our financial assets at FVPL consisted of unlisted equity
investment and wealth management products. The following table sets forth the breakdown of
our financial assets at FVPL as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Current
Wealth management products 8,779 — — 50,118
Non-current
Unlisted equity investment 50,000 90,695 96,539 96,176
Total 58,779 90,695 96,539 146,294
FINANCIAL INFORMATION
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As of December 31, 2022, 2023 and 2024, we had w ealth management products of RMB8.8
million, nil and nil, respectively. Such decreases were primarily due to the redemption of our
wealth management products. Our wealth management products increased to RMB50.1 million
as of June 30, 2025. As part of our cash management policy, we purchase wealth management
products to better utilize our idle cash without i nterfering with our business operations or
capital expenditures. During the Track R ecord Period, we purchased wealth management
products issued by reputable banks in the PRC. Ou r unlisted equity investment increased from
RMB50.0 million as of December 31, 2022 to RM B90.7 million as of December 31, 2023,
primarily due to our investment in a subsidiary of Customer L (one of our five largest customers
in 2022 and 2023), which engaged in a data infras tructure development project, for potential
business opportunities. Our aggregate amount of investment in such company was RMB90.0
million. See Note 20 to the Accountants’ Report set out in Appendix I to this prospectus for
details. Our unlisted equity investment then increased to RMB96.5 million as of December 31,
2024, primarily due to the increase in our investment in certain fund. Our unlisted equity
investment remained relatively stab le at RMB96.2 million as of June 30, 2025.
We have formulated policies setting out the approval process for the purchase of funds and
wealth management products, and the responsibl e person/department for the enforcement of the
policies. Our investment decisions are made on a case-by-case basis and after due and careful
consideration of our cash flow and operational needs. Each transaction for the purchase of
funds and wealth management products is revi ewed by in-house legal staff, subject to the
approval of our chief financial officer.
The fair value of our unlisted equity investments was determined by using appropriate
valuation techniques including the latest transaction price and the asset-based approach as of
December 31, 2022, 2023 and 2024 and June 30, 2025. We classify the fair value of the
investments using the latest transaction price as level 2 and the fair value of the investments
using asset-based approach as level 3. The unobs ervable inputs in level 3 valuation include net
asset value of the investee companies. An increase/decrease of 1% in net asset value would result
in a corresponding increase/decrease in the fair value of the investments by RMB0.4 million,
RMB0.9 million, RMB1.0 million and RMB0.1 million as of December 31, 2022, 2023 and 2024
and June 30, 2025, respectively. The Directors bel ieve that the estimated fair values resulting
from the valuation techniques, which are record ed in the consolidated statement of financial
position, and the related changes in fair values, are reasonable, and that they were the most
appropriate values.
FINANCIAL INFORMATION
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During the years ended December 31, 2022, 2023 and 2024, there were no transfers of fair
value measurements between level 1 and level 2 and no transfers into or out of level 3 for both
financial assets and financial liabilities. During the six months ended June 30, 2025, there was
no transfers of fair value measurements between l evel 1 and level 2 for both financial assets and
financial liabilities. During the six months en ded June 30, 2025, equity transactions occurred for
certain unlisted equity investments and theref ore the relevant recent transaction prices were
used to determine the fair value of the respective investments as of June 30, 2025. Consequently,
the valuation technique for the relevant financial assets was changed and the fair value
measurement was transferred from level 3 to l evel 2. We will comply with requirements under
Chapter 14 of the Listing Rules and disclose the details of our investments or other notifiable
transactions to the extent necessary an d as appropriate after the Global Offering.
Long-term Trade Receivables
During the Track Record Period, our long-term tr ade receivables, representing outstanding
installment payments due from certain cust omer who opted for installment payment
arrangements, increased from nil as of December 31, 2022 to RMB38.1 million as of
December 31, 2023, primarily due to sales to certain customer who opted for installment
payment arrangements. Our long-term trade recei vables then decreased to RMB26.1 million as
of December 31, 2024 and further to RMB19.9 million as of June 30, 2025, as a result of partial
payment by the relevant customer. The installme nt payment arrangement with this particular
customer was made on a one-off basis in alignment with the customer’s underlying commercial
model. As a strategic-account customer, this customer operates under a recurring cash flow
model, with costs distributed over the duratio n of its service contracts. To accommodate this
structure and support customer deployment of our products, we agreed to a customized
payment schedule that aligned with their cash f low cycle. This arrangement was exceptional in
nature and tailored to this customer’s specific operational and financial framework. We do not
expect to enter into similar installment arrangements with other customers going forward.
FINANCIAL INFORMATION
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Prepayments, Other Receivables and Other Assets
During the Track Record Period, our prepaym ents, other receivables and other assets
primarily consisted of (1) prepayments to our c ontract manufacturers and technical service
providers; (2) value-added tax recoverable; (3) deposits and other receivables, primarily in
relation to procurement arrangement with s uppliers; (4) receivable f rom shareholders; (5)
prepayment for long-term assets, representin g servers and IP; and (6) contract assets,
representing warranty deposits. The following table sets forth the breakdown of our
prepayments, other receivables and other assets as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Current
Prepayments 56,570 195,673 104,554 391,152
Value-added tax recoverable 22,320 33,212 63,135 43,219
Deposits and other receivables 33,871 4,836 48,962 39,883
Deferred listing expense — — — 1,471
Receivable from shareholders — 105,200 — —
112,761 338,921 216,651 475,725
Impairment allowance — — (13,800) (13,800)
Total — current 112,761 338,921 202,851 461,925
Non-current
Deposits and other receivables 3,934 497 3,242 1,880
Prepayment for long-term assets 4,212 6,678 10,349 491
Contract assets — 2,583 2,550 2,129
Total — non-current 8,146 9,758 16,141 4,500
FINANCIAL INFORMATION
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Our prepayments, other receiva bles and other assets increa sed from RMB120.9 million as
of December 31, 2022 to RMB348.7 million as o f December 31, 2023, primarily due to an
increase of RMB139.1 million in prepayments for contract manufacturing of TG Gen 2 and an
increase of RMB105.2 million in receivables from shareholders, representing unpaid capital
contributions from certain shareholder. Our pre payments, other receivables and other assets
then decreased to RMB219.0 million as of Decem ber 31, 2024, primarily due to a decrease of
RMB105.2 million in receivabl es from shareholders and a decrease of RMB91.1 million in
prepayments, as a result of partial recategorization of our prepayments to other receivables due
to supplier refund, as the relevant supplier was unable to fulfill its obligation under its supply
contract with us as a result of its impaired capaci ty; partially offset by an increase of RMB44.1
million in deposits and other receivables, as a result of the recategorization of the prepayments
subject to supplier refund. Our prepayments, o ther receivables and other assets increased
significantly to RMB466.4 million as of J une 30, 2025, primarily due to an increase of
RMB286.6 million in prepayments as a result of the increase in the number of our R&D projects
and prepaid contract manufacturing to support the anticipated growth in product sales in the
second half of 2025, partially offset by a decr ease in RMB19.9 million in value-added tax
recoverable.
As of October 31, 2025, RMB106.1 million, or approximately 23.0% of the current portion
of our prepayments, other receivables and other assets as of June 30, 2025 had been
subsequently settled.
Inventories
Our inventories primarily consisted of (1) raw materials, including wafers, memory
components, and substrates used in the manufacturing of our products; (2) work in progress,
representing semi-finished products; and (3) finished goods. Our GPGPU products do not have
a predefined shelf life or expiration period. The following table sets forth the breakdown of our
inventories as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Raw materials 12,496 23,589 33,514 308,399
Work in progress 167,922 65,697 166,536 107,927
Finished goods 63,602 143,318 142,593 78,594
Total 244,020 232,604 342,643 494,920
FINANCIAL INFORMATION
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Our inventories decreased from RMB244.0 million as of December 31, 2022 to RMB232.6
million as of December 31, 2023, primarily attr ibutable to the timing of our procurement
activities. In particular, we initiated bul k purchases towards the end of 2023, for which
payments had been made and recorded as prepayments, while the relevant goods had not yet
been delivered and therefore were not recogn ized as inventories as of December 31, 2023. Such
decrease was partially offset by an increase of RMB79.7 million in finished goods, as a result of
the increase in product stockpiling for sale s. Our inventories then increased to RMB342.6
million as of December 31, 2024, primarily due to stockpiling in line with our expanded
operations and growing demand for our products. Our inventories increased to RMB494.9
million as of June 30, 2025, primarily due to an increase of RMB274.9 million in raw materials,
as a result of the stockpiling of raw materials to support product sales in the second half of 2025,
partially offset by a decrease of RMB64.0 million in finished goods, as a result of sales of
inventory products and a decrease of RMB58.6 million in work in progress, as a result of
consumption of work in progress that were transferred into finished goods upon completion and
subsequently delivered to customers. The following table sets forth an aging analysis of our
inventories.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Within one year 241,937 204,025 281,424 453,466
One year to two years 2,083 26,630 38,172 35,987
Two to three years — 1,949 23,047 5,067
Over three years — — — 400
Total 244,020 232,604 342,643 494,920
The following table sets forth our inventory turnover days for the years/period indicated.
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Inventory turnover days
(1) 654.7 596.2 382.6 465.8
(1) Inventory turnover days for each year/period equals the average of the beginning and ending balance of
inventories for that year/period divided by the cost of sales for the relevant year/period and multiplied by
365 days (for a year) or 180 days (for the six-month period).
FINANCIAL INFORMATION
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Our inventory turnover days decreased fro m 654.7 days in 2022 and 596.2 days in 2023,
and decreased to 382.6 days in 2024, primaril y due to the increase in our product sales that
accelerated inventory turnover, driven by the in crease in customer demand for our products.
Furthermore, our inventory turnover days increased to 465.8 days for the six months ended June
30, 2025, primarily due to our raw material stockpiling to ensure stable product supply, in
anticipation of a significant rise in customer demand in the second half of 2025. According to
Frost & Sullivan, the number of our inventor y turnover days in 2024 was consistent with
industry norm. Our relatively long inventory turnover days throughout the Track Record Period
was primarily because (i) we had been in an active ramp-up phase from 2022 to 2024 to meet
growing customer demand for our products, and to ensure timely delivery and supply chain
stability, we maintained a strategically high lev el of inventory; and (ii) our products typically
have a long production cycle of approximately nine to 10 months, and we generally deliver and
sell our products within three to six months after completion of the production process, and
such long production and sales cycle results in a high inventory balance as of each period end.
However, as the increase in our sales volume had surpassed the increase in our inventory level,
our inventory turnover days demonstrated a gradual downward trend, reflecting improved
operational efficiency. To imp rove our inventory turnover, we have adopted a series of
demand-driven inventory management measures . Specifically, we enhance demand forecasting
by coordinating closely with sales and marketing teams and adjusting procurement volumes
based on seasonality and market trends; and we enter into long-term framework agreements
with key customers and secure production capaci ty in advance accordingly, thereby reducing the
risk of overstocking and improving inventory efficiency. Moreover, we continuously monitor
aging inventories to identify potential obsolescence risks. In the event of inventory
accumulation, we implement responsive measures such as establishing cross-departmental
coordination among our sales, production, procurement and finance teams to develop and
execute action plans aimed at reducing exces s inventories. Our inventory management,
especially with respect to finished goods, demonstrated notable improvement. From 2023 to
2024, our revenue increased by 86.7%, while our finished goods slighted decreased from
RMB143.3 million as of December 31, 2023 to R MB142.6 million as of December 31, 2024,
indicating that our sales efforts and delivery capacity had kept pace with rapid business growth.
As of June 30, 2025, our finished goods had further decreased by 44.9% to RMB78.6 million,
reflecting our active measures to accelerate sal es of finished products a nd optimize inventory
levels. Fluctuations in raw materials and wor k-in-progress inven tories mainly reflect
adjustments to production schedules and procurement planning in response to market
dynamics, rather than inefficiencies in inventory management.
As of October 31, 2025, RMB106.9 million, or approximately 21.6% of our inventories as
of June 30, 2025 had been subsequently consum ed or used. Our Directors are of the view that,
despite the relatively low subsequent settlement rate, sufficient provision has been made for the
following reasons. A substantial portion of our in ventories consists of raw materials, which are
scheduled to be consumed in the normal course of production pursuant to our established
manufacturing plans. These raw materials will be processed into finished products and sold in
the ordinary course of business. Our products do not have predefined expiration periods, and its
production and sales cycles are relatively long. As a result, the subsequent settlement rate may
appear low during certain interim periods. Taking into account the nature of the inventories, the
ongoing production schedules, and the absence of product shelf-life constraints, we consider the
current level of inventory provision to be adequate.
FINANCIAL INFORMATION
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Trade and Bills Receivables
Our trade and bills receivables mainly repr esented outstanding amounts due from our
customers for products and solutions we have sold. The credit period granted to our customers
was generally one to 12 months during the Track Record Period. The following table sets forth
the breakdown of our trade and bills r eceivables as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Trade receivables 107,025 240,599 435,504 448,455
Bills receivables 720 — — —
Impairment (19,038) (40,163) (58,328) (59,509)
Total 88,707 200,436 377,176 388,946
Our trade and bills receivables increased fr om RMB88.7 million as of December 31, 2022
to RMB200.4 million as of December 31, 2023, an d further increased to RMB377.2 million as of
December 31, 2024, primarily due to (i) our business and revenue growths; and (ii) the
concentrated purchases by our customers durin g the fourth quarter of a given year, which led to
an increased balance of trade r eceivables as of each year end. Ou r trade and bills receivables
increased from RMB377.2 million as of Decembe r 31, 2024 to RMB388.9 million as of June 30,
2025, primarily due to our business and revenue growths.
As of the Latest Practicable Date, we had not granted any credit term extensions for any
customer orders. During the Track Record Perio d, credit terms granted by us was progressively
tightened, and in the earlier stage of our business, we extended more favorable terms to
incentive customer purchases, whereas we are now adopting shorter credit term as part of our
ongoing working capital management. To ensure e ffective management of our trade receivables,
we have established tiered collection measures based on payment status: (i) for accounts that
approach due date, our sales team initiates proac tive communication with the relevant customer
to facilitate timely payment; (ii) for accounts th at are slightly overdue, we issue formal payment
reminder letters; (iii) for accounts that are significantly overdue and show no indication of
repayment, we engage third-party legal counsel to issue demand or initiate legal proceedings.
We apply the simplified approach in calculat ing ECLs for trade and bi lls receivables. Trade
and bills receivables relating to customers with kno wn financial difficulties or significant doubt
on collection are assessed indivi dually for impairment allowance. The remaining trade and bills
receivables are grouped and collectively assessed for impairme nt allowance. Under the collective
approach, an impairment analysis is performed at each reporting date using a provision matrix
to measure ECLs. The provision rates are based on the aging analysis for grouping of customers
that have similar loss patterns. The calculation reflects the probability-weighted outcome, the
time value of money and reasonable and suppo rtable information that is available at the
reporting date about past events, current conditions and forecasts of future economic
conditions. Generally, trade and bills receiva bles are written off according to management’s
approval. Our Directors are of the view that sufficient provision has been made based on our
accounting policy. Specifically, for trade and bi ll receivables as of December 31, 2022, the credit
FINANCIAL INFORMATION
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loss allowance rate applied to high tech indu stries was 1.07% and applied to trade and bill
receivables aging up to one year was 17.83%. Fo r trade and bill receivables as of December 31,
2023, the credit loss allowance rate applied to high tech industries was 1.21% and applied to
trade and bill receivables aging up to one year and between one year and two years was 18.01%
and 27.42%, respectively. For trade and bill rec eivables as of December 31, 2024, the credit loss
allowance rate applied to high tech and telecommunications industries was 1.32% and 1.93%,
respectively, and applied to trade and bill recei vables aging up to one year, between one year
and two years and between two to three years w as 19.06%, 29.02% and 44.40%. respectively.
For trade and bill receivables as of June 30, 2025, the credit loss allowance rate applied to high
tech, telecommunications and se rvices industries was 1.30%, 1.91% and 2.00%, respectively,
and applied to trade and bill recei vables aging up to one year, between one year and two years
and between two to three years was 14.19%, 30.58% and 43.99%. respectively. During the
Track Record Period, there was no significant flu ctuation of our overall expected credit loss
rates. As of December 31, 2022, 2023 and 202 4 and June 30, 2025, we recorded impairment
losses for trade and bills recei vables of RMB19.0 million, RMB 40.2 million, RMB58.3 million
and RMB59.5 million, respectively. We have a dopted trade and bills receivable management
and collection policies and meas ures, including overseeing trad e and bills receivables, regularly
reviewing overdue balances, and assigning designated personnel to follow up on outstanding
receivables on a r egular basis.
The following table sets forth an aging analys is of our trade and bills receivables, net of
impairment loss, based on the revenue recognition date and net of loss allowance as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Within one year 88,707 137,493 314,927 329,366
One year to two years — 62,943 30,734 27,940
Two to three years — — 31,515 31,640
Total 88,707 200,436 377,176 388,946
The following table sets forth the amount of t rade and bills receivables, net of impairment
loss, overdue for more than three months by aging profile as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousand)
Within one year 2,847 5,175 38,374 121,870
One year to two years — 50,981 30,464 27,940
Two to three years — — 31,515 31,640
Total 2,847 56,156 100,353 181,450
FINANCIAL INFORMATION
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The majority of such trade and bills recei vables overdue for over three months were
attributable to customers that are primarily of l isted companies, telecom operator, or high-tech
companies engaged in AI, semiconductor and other capital-intensive technology businesses.
These customers typically procure our products either as part of their capital expenditure
programs, which are subject to lengthy interna l approval, acceptance testing and budget
allocation procedures, or as components integr ated into their own end-products, in which case
their payment schedules are naturally aligned wi th their downstream sales and settlement cycles.
As a result, their actual payment cycles may e xtend beyond the contractual credit terms in
certain periods, and delays of several months are not uncommon in the industry, reflecting
timing alignment across their commercial cycles rather than credit risk. These customers have
demonstrated stable operating track record s and sound credit profiles, and we have not
experienced any material difficulties in coll ection and has been routinely receiving payments
from these customers. Based on the above, the Directors are of the view that our trade and bills
receivables overdue for over thr ee months are recoverable.
The following table sets forth turnover days for our trade and bills receivables and long
term trade receivables for the years/period indicated.
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade and bill receivables turnover
days
(1) 85.6 196.7 211.8 225.4
(1) Trade and bills receivables turnover days for each year/period equals the average of the beginning and
ending balance of trade and bill receivables and long-term trade receivables due within one
year/six-month, net of impairment loss, for that year/period divided by the revenue for the relevant
year/period and multiplied by 365 days (for a year) or 180 days (for the six-month period).
FINANCIAL INFORMATION
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The turnover days for our trade and bill r eceivables and long-te rm trade receivables
increased from 85.6 days in 2022 to 196.7 days i n 2023, primarily due to our business and
revenue growths in 2023. We recorded relatively short turnover days in 2022, primarily because
we only began to generate a significant portion of our revenue and commenced large-scale
delivery of our GPGPU products in the second half of the year. The turnover days for our trade
and bill receivables and long-term trade receiva bles then increased from 196.7 days in 2023 to
211.8 days in 2024, primarily attributable to th e higher proportion of trade receivables from
customers that were granted more favorable credit terms. In the early stage of our business
development, given our relatively smaller scale at that time, we offered longer credit periods to
certain strategic customers to support market exp ansion and strengthen business relationships.
As our business grew, we continued to grant comparatively favorable credit terms primarily to
well-established domestic enterprises, including leading server manufacturers and certain large
state-owned enterprises, in light of their strong credit profiles and long-term cooperation
potential. As of December 31, 2023 and 2024, trad e receivables attributab le to such customers
were RMB65 million and RMB245 million, resp ectively, accounting for 27.2% and 56.2% of
our total trade receivables as of the same dates, respectively. As of September 30, 2025, RMB65
million and RMB149 million, of trade receivables attribut able to such customers as of
December 31, 2023 and 2024, respectively, were se ttled. The turnover days for our trade and bill
receivables and long-term trade receivables i ncreased to 225.4 days for the six months ended
June 30, 2025, primarily because customers typi cally settle their outstanding balances toward
the end of the year, and a larger portion of receivables remained outstanding as of June 30. In
addition, we have taken several steps to improv e trade receivable turnov er rates, including (i)
implementing a differentiated credit policy under which credit terms are tailored based on the
creditworthiness of each customer; (ii) increasing the proportion of upfront payments required
from certain customers to reduce reliance on post-d elivery collection; and (iii) actively pursuing
historical receivables and negotiating s ettlement agreement when appropriate.
As confirmed by Frost & Sullivan, prolonged settlement cycles are not uncommon in the
chip industry, particularly in the GPU segment. Purchases of GPU products generally constitute
capital expenditure investments for our customer s, rather than ordinary operating purchases.
Capital expenditure procurement is closely tied to projects of long deployment and return
cycles, such as the construction of AI computing clusters, data centers, or large-scale model
training environments. These projects gener ally require phased planning, progressive
installation and system integration before they can be fully put into productive use and begin
generating economic returns. As a result, custom ers generally seek extended credit periods to
align cash outflows with deployment milestones and capital expenditure budgeting cycles. In
addition, key customers in this sector — includi ng state-owned enterprises, large internet
technology companies, cloud service providers, and emerging AI model companies — typically
adopt centralized procurement, structured approval and payment processes, and staged
acceptance mechanisms, all of w hich naturally lead to longer settlement terms compared with
typical consumer or operating-expense transactions.
FINANCIAL INFORMATION
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During the Track Record Period and up to the Latest Practicable Date, we had not
encountered any material difficulties in colle cting overdue trade receivables from customers,
and we had continued to collect payments across all aging groups of our trade receivables on an
ongoing basis. As of September 30, 2025, RM B63.8 million, RMB173.9 million, RMB245.1
million and RMB190.6 million, or approximat ely 72.5%, 86.8%, 65.0% and 49.0% of our trade
and bills receivables as of December 31, 2022, 2023 and 2024 and June 30, 2025 had been
subsequently settled. Our Directors are of the view that, despite the relatively low subsequent
settlement rate, there is no recove rability issue for our trade and b ills receivables , and sufficient
provision has been made, by taking into account our comprehensive credit risk management
measures, historical experience in transacting with relevant customers, and their financial
position.
Cash and Cash Equivalents
Our cash and cash equivalents represented cash at bank and on hand, net of restricted cash.
Our cash and cash equivalents increased fro m RMB219.3 million as of December 31, 2022 to
RMB308.1 million as of December 31, 2023, and f urther increased to RMB313.6 million as of
December 31, 2024, primarily due to our active cash management to maintain our liquidity and
a stable cash position. Our cash and cash equivalents increased significantly to RMB1,713.2
million as of June 30, 2025, primarily due to contribution from shareholders.
Trade Payables
Our trade payables primarily represented outstanding amounts due to our contract
manufacturers. Our trade payables were RMB85.3 million, RMB18.2 million, RMB45.6 million
and RMB29.9 million as of December 31, 2022, 2023 , 2024 and June 30, 20 25, respectively, the
outstanding balance of which was affected by our procurement and production schedules. For
suppliers who grant us a credit period, the typical term ranges from one to six months. We did
not experience material changes in the credit period granted by the suppliers during the Track
Record Period.
Our trade payables decreased from RMB85.3 million as of December 31, 2022 to RMB18.2
million as of December 31, 2023, primarily in relat ion to our manufacturing schedules. In 2022,
a significant portion of production occurred in the fourth quarter, resulting in a higher trade
payable balance at the year end. However, in 2023, as our production activities were scheduled
more consistently throughout the year, and w e settled trade payables with suppliers more
frequently throughout the year, we did not accumulate a similarly large amount of trade
payables near the year end. Our trade payables then increased to RMB45.6 million as of
December 31, 2024, primarily due to our business growth as a result of expanded sales of our
GPGPU products and AI computing solutions in 2024. Our trade payables decreased to
RMB29.9 million as of June 30, 2025, primarily due to partial payment.
FINANCIAL INFORMATION
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The following table sets forth the aging anal ysis of our trade payables based on the invoice
date as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Within 1 year 85,256 18,141 45,629 29,878
1 year to 2 years — 16 — 6
2–3 years — — 16 —
Total 85,256 18,157 45,645 29,884
The following table sets forth our trade pa yables turnover days for the years/period
indicated.
For the year ended December 31,
For the
six months
ended
June 30,
2022 2023 2024 2025
Trade payables turnover days
(1) 212.3 129.4 42.4 42.0
(1) Trade payables turnover days for each year/period equals the average of the beginning and ending balance
of trade payables for that year/period divided by the cost of sales for the relevant year/period and
multiplied by 365 days (for a year) or 180 days (for the six-month period).
Our trade payables turnover days were generally within the credit period granted by our
suppliers, and decreased from 212.3 days in 202 2 to 129.4 days in 2023, primarily because our
production activities were scheduled more consistently throughout 2023, and we settled with
suppliers more frequently, leading to lower trade payable balance as of December 31, 2023, as
compared to the relatively large trade payab le balance as of December 31, 2022, as a result of
concentration of manufacturing during the fou rth quarter of 2022. Our trade payables turnover
days further decreased to 42.4 days in 2024, pri marily because the incr ease in our cost of sales
outpaced the increase in our trade payables, and at the same time, our more consistent
production and procurement schedule allowed us to settle trade payables more regularly
throughout the year. Our trade payables turnover days remained relatively stable at 42.4 days in
2024 and 42.0 days for the six months ended June 30, 2025. According to Frost & Sullivan, our
trade payables turnover days were consistent wi th industry norms, and it is also consistent with
industry norms that our trade payables turnover d ays were substantially shorter than our trade
and bills receivables turnover d ays and inventory turnover days.
As of October 31, 2025, RMB24.5 million, or 81.9% of our trade payables as of June 30,
2025 had been subsequently settled.
FINANCIAL INFORMATION
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Other Payables and Accruals
Our other payables and accruals consisted of (1) salary payables; (2) payable for purchase
of intangible assets and property, plant a nd equipment; (3) payable for research and
development costs; (4) other tax payables; and (5) others, representing payables for
administrative and technical service fees. The following table sets forth a breakdown of our
other payables and accruals as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Salary payables 66,552 73,948 120,563 85,951
Payable for purchase of intangible
assets and property, plant and
equipment 4,965 2,938 27,687 29,668
Payable for research and
development costs 4,828 12,417 15,066 10,939
Other tax payables 6,037 6,756 7,489 9,595
Other payables and accruals 10,343 13,637 16,846 16,966
Total 92,725 109,696 187,651 153,119
Our other payables and accru als increased from RMB92.7 million as of December 31, 2022
to RMB109.7 million as of December 31, 2023, prim arily due to an increase of RMB7.6 million
in payable for research and development costs, as a result of the increase in technical service fees
in line with our business growth, and an increase of RMB7.4 million in salary payables, as a
result of the increases in the headcount of our employees. Our other payables and accruals then
increased to RMB187.7 million as of December 3 1, 2024, primarily due to (1) the increase of
RMB46.6 million in salary payables, as a result of the increase in compensation level for our
employees; and (2) the increase of RMB24.7 milli on in payable for purchase of intangible assets
and property, plant and equipment, as a result of the increase in procurement of licensed IP and
software in relation to our R&D activities. Our other payables and accruals decreased to
RMB153.1 million as of June 30, 2025, primarily due to a decrease of RMB34.6 million in salary
payables as a result of payment of year-end bonuses.
As of October 31, 2025, RMB66.4 million, or 43.4% of our other payables and accruals as
of June 30, 2025 had been subsequently settled.
Contract Liabilities
Our contract liabilities cons isted of short-term advances received from customers of our
GPGPU products. Our contract liabilities incr eased from RMB2.2 million as of December 31,
2022 to RMB13.5 million as of December 31, 2023 and further to RMB28.8 million as of
December 31, 2024 and RMB39.9 million as of June 30, 2025, generally in line with our revenue
increase.
FINANCIAL INFORMATION
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As of October 31, 2025, RMB4.8 million, or 12.0% of our contract liabilities as of June 30,
2025 had been recognized as revenue.
Long-term Payables
Our long-term payables consisted of install ment payables for our intangible assets. Our
current and non-current long-term payables dec reased from RMB33.2 million as of December
31, 2022 to RMB14.2 million as of December 31, 20 23, primarily due to our payment settlement.
Our long-term payables then increased to RMB4 5.9 million as of December 31, 2024 and further
to RMB65.8 million as of June 30, 2025, primari ly due to the increase in the number of licensed
IP and software, driven by the increase in our R&D activities.
SHARE CAPITAL AND TOTAL EQUITY
Our share capital amounted to RMB171.3 mil lion, RMB186.2 million, RMB193.8 million
and RMB228.9 million as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively,
and our total equity amounted to RMB619.7 mil lion, RMB878.3 million, RMB688.7 million
and RMB2,515.9 million as of th e same dates, respectively.
Pursuant to the shareholders agreement that we entered into with the then shareholders
from December 2016 to May 2025, we granted th e Pre-IPO Investors special rights (‘‘ Special
Rights ’’) which included redemption rights and liquidation preferences rights. No Pre-IPO
Investors had exercised their redemption ri ghts or liquidation preferences rights.
On June 10, 2025, we and the Pre-IPO Investo rs entered into supplemental agreements,
agreeing that certain of the Special Rights we granted to Pre-IPO investors, including
redemption rights and liquidation preference rights, have been irrecoverably terminated and
shall be void ab initio . Taking into account the legal and regulatory framework of the
jurisdiction we are in and the governing law of t he supplemental agreements, our Directors
consider that it is appropriate to present the Pre-IPO Investments as equity during the Track
Record Period. For details on the accounting treatment of redemption rights and liquidation
preference rights of pre-IPO investments, see no te 30(b) to the Accountants’ Report included in
Appendix I to this prospectus.
FINANCIAL INFORMATION
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Had the Special Rights that we granted to the Pre-IPO Investors been accounted for as
financial liabilities measured at present value of the redemption amount prior to entering into
the supplemental agreements, then:
(i) the redemption financial liabilities, total current liabilities, net current
(liabilities)/assets and net (liabilities)/assets would have been:
As of December 31,
As of
June 30,
2022 2023 2024 2025
(RMB in thousands)
Redemption financial
liabilities 2,948,553 3,938,039 5,080,904 —
Total current liabilities 3,265,261 4,624,505 5,960,859 875,575
Net current (liabilities)/
assets (2,480,167) (3,337,366) (4,698,512) 2,295,993
Net (liabilities)/assets (2,328,872 ) (3,059,701) (4,392,235) 2,515,854
(ii) the finance costs associated with the redemption financial liabilities, the net loss for
the year/period, basic and diluted loss per share would have been:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
(RMB in thousands)
(unaudited)
Financial costs associated
with the redemption
financial liabilities (210,881) (289,303) (444,165) (210,778) (235,526)
Net loss attributable to
owners of the parent (734,720) (1,080,610) (1,336,598) (614,770) (844,842)
Basic loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
Diluted loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of cash during the Track Record Period were to fund our working capital
requirements and other recurring expenses. During the Track Record Period, we financed our
operations and other capital requirements primarily through sales of our products and
solutions, capital contributions from our Shareholders and bank borrowings.
Our anticipated cash needs primarily incl ude costs associated with the research and
development of our products and solutions, the expansion of our sales network and business
operations. We expect to fund our future working capital and other cash requirements with
existing cash and cash equivalents, income generated from our products and solutions, the net
proceeds from Global Offering and, when necessary, bank and other borrowings.
As of October 31, 2025, the most recent practicable date for determining our indebtedness,
we had cash and cash equivalents of RMB1,201.4 million.
FINANCIAL INFORMATION
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We had cash outflows from our operating activities during the Track Record Period.
Specifically, our trade and bills receivables t urnover days and inventory turnover days were
substantially longer than our trade payable turnover days, which contributed to our net
operating cash outflows during the Track Record Period. We expect to improve our net
operating cash flows through (i) increasing revenue by expanding and diversifying our product
and solution offerings, deepening relationship with existing customers, and expanding our
customer base; (ii) optimizing cost structure and improving operatin g efficiency to maintain
operating expenses at a reasonable level comparable to our revenue scale; and (iii) improving
working capital efficiency through enhanced receivables collection, better inventory
management to ensure sufficient supply to meet the growing downstream demands, and
effective and prudent utilization of financial re sources. See ‘‘Business — Business Sustainability
and Path to Profitability’’ for details. Speci fically, to enhance recei vables collection and
inventory management, we have adopted the following measures: (i) strengthening credit risk
management and payment terms discipline, includi ng setting clearer credit policies, tightening
credit limits for new customers or customers with unestablished credit profiles, and adopting
progressive payment schedules to accelerat e cash inflow; (ii) implementing centralized
receivables monitoring to track outstanding p ayments and enable proactive follow-up by the
finance and sales teams to reduce average collection periods; (iii) introducing demand
forecasting and production planning tools to better align inventory procurement with actual
order pipelines, thereby reducing inventory holding periods and minimizing the risk of excess or
obsolete stock; (iv) establishing supplier agreements that allow for phased deliveries to better
align procurement timing with customer delivery schedules and reduce upfront cash outlay; and
(v) enhancing internal coordination between sales, R&D, and procurement teams, enabling
tighter control over delivery timelines and associated inventory requirements. Considering our
internal resources, our cash flow from operations and the estimated net proceeds from the
Global Offering, our Directors confirm that the working capital available to us is sufficient at
present and for at least the next 12 months from the date of this prospectus.
Current Assets and Current Liabilities
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB in thousands)
(Unaudited)
Current assets
Inventories 244,020 232,604 342,643 494,920 730,093
Trade and bills receivables 88,707 200,436 377,176 388,946 347,248
Prepayments, other receivables and
other assets 112,761 338,921 202,851 461,925 577,591
Financial assets at fair value
through profit or loss (‘‘ FVPL ’’) 8,779 — — 50,118 100,000
Due from related parties — 184,700 — — —
Restricted cash 92,678 61 61 42,568 150,000
Pledged time deposits 18,844 — — — —
Cash and cash equivalents 219,305 308,053 313,563 1,713,176 1,201,346
Long-term trade receivables due
within one year — 22,364 26,053 19,915 14,044
Total current assets 785,094 1,287,139 1,262,347 3,171,568 3,120,322
FINANCIAL INFORMATION
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As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB in thousands)
(Unaudited)
Current liabilities
Trade payables 85,256 18,157 45,645 29,884 55,556
Other payables and accruals 92,725 109,696 187,651 153,119 211,158
Contract liabilities 2,232 13,528 28,756 39,947 14,822
Deferred government grants 248 35,014 2,272 2,355 3,742
Lease Liabilities 13,788 3,705 17,979 10,442 6,850
Long term payables due within one
year 19,529 13,949 31,592 56,016 63,535
Interest-bearing bank and other
borrowings 102,930 492,417 566,060 583,812 622,486
Total current liabilities 316,708 686,466 879,955 875,575 978,149
Net current assets 468,386 600,673 382,392 2,295,993 2,142,173
Our net current assets decreased from RMB2,296.0 million as of June 30, 2025 to
RMB2,142.2 million as of October 31, 2025, primar ily due to the decrease in current assets. The
decrease in current assets was primarily due to a decrease of RMB511.8 million in cash and cash
equivalents to support our daily operations, and a decrease of RMB41.7 million in trade and
bills receivables, as a result of customer payment.
Our net current assets increased from RM B382.4 million as of December 31, 2024 to
RMB2,296.0 million as of June 30, 2025, primar ily because the increase in current assets
outpaced the decrease in current l iabilities. The increase in our current assets was primarily due
to the increase in cash and cash equivalents fr om RMB313.6 million as of December 31, 2024 to
RMB1,713.2 million as of June 30, 2025 and the in crease in prepayments, other receivables and
other assets from RMB202.9 million as of D ecember 31, 2024 to RMB461.9 million as of June
30, 2025. Such an increase was partially offset by an increase in interest-bearing bank and other
borrowings from RMB566.1 million as of December 31, 2024 to RMB583.8 million as of June
30, 2025.
Our net current assets decreased from RMB600.7 million as of December 31, 2023 to
RMB382.4 million as of December 31, 2024, primarily due to an increase in current liabilities
and a decrease in current assets. The increase in our current liabilities was primarily due to the
increase in other payables and accruals fr om RMB109.7 million as of December 31, 2023 to
RMB187.7 million as of December 31, 2024 and the increase in interest-bearing bank and other
borrowings from RMB492.4 million as of December 31, 2023 to RMB566.1 million as of
December 31, 2024. The decrease in our current assets was primarily due to the decrease in due
from related parties from RMB184.7 million as of December 31, 2023 to nil as of December 31,
2024 and the decrease in prepayments, other receivables and other assets from RMB338.9
million as of December 31, 2023 to RMB2 02.9 million as of December 31, 2024.
FINANCIAL INFORMATION
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Our net current assets increased from RM B468.4 million as of December 31, 2022 to
RMB600.7 million as of December 31, 2023, prima rily due to the increase in our total current
assets, partially offset by an increase in our tota l current liabilities. The increase in our total
current assets was primarily due to an increase in prepayments, other receivables and other
assets from RMB112.8 million as of December 31, 2022 to RMB338.9 million as of December
31, 2023, an increase in due from related parti es from nil as of December 31, 2022 to RMB184.7
million as of December 31, 2023, and an increas e in cash and cash equivalents from RMB219.3
million as of December 31, 2022 to RMB308.1 milli on as of December 31, 2023. The increase in
our total current liabilities was primarily due to the increase in interest-bearing bank and other
borrowings from RMB102.9 million as of December 31, 2022 to RMB492.4 million as of
December 31, 2023.
Cash Flows
The following table sets forth a summary of our cash flows for the years/periods indicated.
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
(RMB in thousands)
(Unaudited)
N e tc a s hu s e di no p e r a t i n g
activities (653,846) (707,026) (617,980) (546,332) (715,589)
N e tc a s hu s e di ni n v e s t i n g
activities (183,079) (153,488) (165,979) (86,640) (51,191)
Net cash generated from financing
activities 953,161 946,481 789,469 628,939 2,168,014
Net increase in cash and
cash equivalents 116,236 85,967 5,510 (4,033) 1,401,234
Cash and cash equivalents
at beginning of the year/period 95,738 219,305 308,053 308,053 313,563
Effect of foreign exchange rate
changes 7,331 2,781 — — (1,621)
Cash and cash equivalents at end
of the year/period 219,305 308,053 313,563 304,020 1,713,176
Operating Activities
Net cash used in operating activities was RMB715.6 million in the six months ended June
30, 2025, primarily due to our loss before tax of RMB609.3 million, as adjusted by (1) certain
non-cash and non-operating items, primarily including share-based payment expenses of
RMB295.9 million for key employees to enhance their commitment, depreciation of items of
property, plant and equipment of RMB39.9 million and amortization of intangible assets of
RMB39.0 million; and (2) changes in working capital that negatively affected the cash flow from
operating activities, primarily including an increase of RMB246.0 million in prepayments, other
receivables and other assets as a result of the increase in the number of our R&D projects and
prepaid contract manufacturing to support the anticipated growth in product sales in the second
half of 2025, and an increase of RMB153.2 million in inventories as a result of the stockpiling of
FINANCIAL INFORMATION
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raw materials to support product sales in the seco nd half of 2025; partially offset by (3) changes
in working capital that positively affected the c ash flow from operating activities, primarily an
increase in contract liabilities of RMB11.2 million in line with our revenue increase.
Net cash used in operating activities was R MB618.0 million in 2024, primarily due to our
loss before tax of RMB892.4 million, as adjusted by (1) certain non-cash and non-operating
items, primarily including share-based paymen t expense of RMB247.8 million and depreciation
of property, plant and equipment of RMB70.7 million; and (2) changes in working capital that
negatively affected the cash flow from operating activities, primarily including increase in
inventories of RMB114.8 million and an incre ase in trade and bills receivables of RMB194.9
million, in line with our expanded operations a nd growing demand for our products; partially
offset by (3) changes in working capital that po sitively affected the cash flow from operating
activities, primarily including an increase i n other payables and accruals of RMB53.2 million.
Net cash used in operating activities was R MB707.0 million in 2023, primarily due to our
loss before tax of RMB817.4 million, as adjusted by (1) certain non-cash and non-operating
items, primarily including share-based payment expense of RMB207.8 million and amortization
of intangible assets of RMB56.5 million; and (2) changes in working capital that negatively
affected the cash flow from opera ting activities, primarily incl uding an increase in prepayments,
other receivables and other assets of RMB120.1 million and an increase in trade and bills
receivables of RMB132.9 million, both in line wit h our business and revenue growths; partially
offset by (3) changes in working capital that po sitively affected the cash flow from operating
activities, primarily including a decrease in restricted cash of RMB92.6 million, which was
recategorized into cash and cash equi valents upon the release of restriction.
Net cash used in operating activities was R MB653.8 million in 2022, primarily due to our
loss before tax of RMB553.6 million, as adjusted by (1) certain non-cash and non-operating
items, primarily including share-based payment expense of RMB120.8 million and amortization
of intangible assets of RMB51.8 million; and (2) changes in working capital that negatively
affected the cash flow from operati ng activities, primarily including an increase in inventories of
RMB212.0 million, as a result of the increase in product stockpiling for sales, and an increase in
trade and bills receivables of RMB107.6 million, in line with our business and revenue growths;
partially offset by (3) changes in working capit al that positively affected the cash flow from
operating activities, primarily including an increase in trade payables of RMB81.0 million, as a
result of the stockpiling toward the end of 2022.
Investing Activities
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 sw a sR M B 5 1 . 2m i l l i o ni nt h es i xm o n t h se n d e dJ u n e3 0 ,
2025, primarily due to our purchase of wealth management products of RMB50.0 million.
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 sw a sRMB166.0 million in 2024, primarily due to
purchase of intangible assets of RMB92.6 million and purchases of property, plant and
equipment of RMB84.8 million.
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 sw a sRMB153.5 million in 2023, primarily due to
purchases of property, plant and equipment of RMB70.7 million and purchase of intangible
assets of RMB57.8 million.
FINANCIAL INFORMATION
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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 sw a sRMB183.1 million in 2022, primarily due to
purchases of property, plant and equipment of RMB82.2 million and purchase of intangible
assets of RMB73.4 million.
Financing Activities
Net cash from financing activities was RMB2,168.0 million in the six months ended June
30, 2025, primarily due to proceeds fro m shareholders of RMB2,152.4 million.
Net cash from financing activities was RMB789.5 million in 2024, primarily due to
proceeds from new bank loans of RMB730.0 mi llion and proceeds fro m shareholders of
RMB728.4 million, partially offset by repayment of bank loans of RMB614.5 million.
Net cash from financing activities was RMB946.5 million in 2023, primarily due to
proceeds from shareholders of RMB564.9 million and proceeds from new bank loans of
RMB448.0 million, partially offset by repayment of bank loans of RMB108.1 million.
Net cash from financing activities was RMB953.2 million in 2022, primarily due to
proceeds from shareholders of RMB935.0 million and proceeds from new bank loans of
RMB203.7 million, partially offset by repayment of bank loans of RMB142.4 million.
INDEBTEDNESS
As of December 31, 2022, 2023, 2024 and June 30, 2025, and October 31, 2025, the most
recent practicable date for determining our indebt edness, except as disclosed in the table below,
we did not have any material indebtedness.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB in thousands)
(Unaudited)
Current
Interest-bearing bank and other
borrowings 102,930 492,417 566,060 583,812 622,486
Lease liabilities 13,788 3,705 17,979 10,442 6,850
Subtotal 116,718 496,122 584,039 594,254 629,336
Non-current
Interest-bearing bank and other
borrowings 50,000 — 42,000 83,500 170,500
Lease liabilities 1,935 1,859 15,156 3,931 3,986
Subtotal 51,935 1,859 57,156 87,431 174,486
Total 168,653 497,981 641,195 681,685 803,822
FINANCIAL INFORMATION
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Interest-bearing Bank and Other Borrowings
As of December 31, 2022, 2023, 2024 and June 30, 2025, we had interest-bearing bank and
other borrowings of RMB152.9 million, RMB492.4 million, RMB608.1 million and RMB667.3
million, respectively. During the Track R ecord Period, our bank borrowings came from
commercial banks and financial institutions bearing effective interest rates in the range of
2.30% to 4.03% per annum. Our borrowings were primarily used to finance our increased
working capital requirements driven by our business expansion during the Track Record Period.
The followings table sets forth our bank and other borrowings as of the dates indicated.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB in thousands)
(Unaudited)
Current
Bank loans — secured 18,866 — 50,047 50,038 40,114
Bank loans — unsecured 84,012 388,303 490,449 482,383 492,989
Current portion of long-term bank
loans — unsecured 52 104,114 25,564 51,391 89,383
Subtotal 102,930 492,417 566,060 583,812 622,486
Non-current
Bank loans — secured 50,000 — 42,000 83,500 170,500
Subtotal 50,000 — 42,000 83,500 170,500
Total 152,930 492,417 608,060 667,312 792,986
As of October 31, 2025, we had borrowings of RMB793.0 million, which bearing effective
interest rates in the range of 2.2% to 3.1% per annum. As of the Latest Practicable Date, we had
committed unutilized bank facilities of RMB1,358.7 million.
Lease Liabilities
During the Track Record Period, our lease liabilities were primarily in relation to our lease
of office premises and machinery. The following table sets forth the details of our lease liabilities
as of the dates indicated.
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
(RMB in thousands)
(Unaudited)
Current 13,788 3,705 17,979 10,442 6,850
Non-current 1,935 1,859 15,156 3,931 3,986
Total 15,723 5,564 33,135 14,373 10,836
FINANCIAL INFORMATION
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Save as discussed above, as of October 31, 2025, the most recent practicable date for
determining our indebtedness, we did not have any material mortgages, charges, debentures,
loan capital, debt securities, loans, bank overdra fts or other similar indebtedness, finance lease
or hire purchase commitments, liabilities under acceptances (other than normal trade bills),
acceptance credits, which were either guaran teed, unguaranteed, secured or unsecured, or
guarantees or other contingent liabilities. Our Directors also confirm that there had not been
any material change in our indebtedness since October 31, 2025 and up to the date of this
prospectus.
D u r i n gt h eT r a c kR e c o r dP e r i o da n du pt ot h eLatest Practicable Date, there were no
material covenants on any of our outstanding debts which could significantly limit our ability to
undertake additional debt or equity financing, nor was there any breach of covenants. Our
Directors further confirm that we did not experience difficulty in obtaining borrowings, default
in repayment of borrowings or lessors during the Track Record Period and up to the Latest
Practicable Date.
CAPITAL EXPENDITURE
During the Track Record Period, our capital expenditures primarily related to our
purchases of IP, software, R&D servers and other R&D equipment. In 2022, 2023 and 2024 and
the six months ended June 30, 2024 and 2025, our capital expenditure sa m o u n t e dt oR M B 1 5 5 . 6
million, RMB128.5 million, RMB177.4 million, RMB91.8 million and RMB41.6 million,
respectively. These purchases were primarily for our R&D activities. We intend to fund our
future capital expenditure requirements with net proceeds from the Global Offering, our cash
and cash equivalents, and, i f necessary, bank borrowings.
CAPITAL COMMITMENTS
O u rc a p i t a lc o m m i t m e n t sa tt h ee n do fe a c hy e a rd u r i n gt h eT r a c kR e c o r dP e r i o dp r i m a r i l y
related to contracted but not provided commit ments for purchase of property, plant and
equipment and intangible assets. As of Decem ber 31, 2022, 2023 and 2024 and June 30, 2025,
our capital commitments amounted to RMB4.0 million, RMB1.6 million, RMB56.4 million and
RMB35.3 million, respectively.
CONTINGENT LIABILITIES
As of December 31, 2022, 2023, 2024 and Jun e 30, 2025, we did not have any material
contingent liabilities. Our Directors confirm that there has been no material change in our
contingent liabilities since June 30 , 2025 to the date of this prospectus.
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time during our ordinary
course of business and on terms of transactions wit h other entities that are not related parties.
During the Track Record Period, we entered into a number of related party transactions. For
details of our related party tr ansactions, see Note 35 to the Accountants’ Report in Appendix I
to this prospectus. Our Directors are of the view t hat each of the related party transactions was
conducted in the ordinary and usual course of business and on normal commercial terms
FINANCIAL INFORMATION
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between the relevant parties and does not distort our Track Record Period results or make our
historical results not reflective of future performance. We did not have non-trade related
balance with related parties as of June 30, 2025.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates or for the years/period
indicated.
As of/For the year ended December 31,
As of/
For the
six months
ended
June 30,
2022 2023 2024 2025
Gross profit margin (%) (1) 59.4 49.5 49.1 50.1
Current ratio (2) 2.5 1.9 1.4 3.6
Quick ratio (3) 1.7 1.5 1.0 3.1
N e td e b tt oe q u i t yr a t i o(4) (0.1) 0.2 0.5 (0.4)
(1) Gross profit margin is calculated by dividing gross profit by our revenue for the year/period indicated.
(2) Current ratio is calculated by dividing current assets by current liabilities as of the date indicated.
(3) Quick ratio is calculated by dividing current assets less inventories by current liabilities as of the date
indicated.
(4) Net debt to equity ratio is calculated by dividing total indebtedness less cash and cash equivalents by total
equity as of the date indicated.
Analysis of Key Financial Ratios
Gross Profit Margin
See ‘‘— Year to Year Comparison of Results of Operations’’ for a discussion of the factors
affecting our gross profit margi n during the Track Record Period.
Current and Quick Ratios
Our current ratio decreased from 2.5 as of December 31, 2022 and 1.9 as of December 31,
2023, primarily due to the increase in interest-bearing bank and other borrowings, while our
quick ratio remained relatively stable at 1.7 as of December 31, 2022 and 1.5 as of December 31,
2023.
FINANCIAL INFORMATION
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Our current ratio decreased from 1.9 as of December 31, 2023 to 1.4 as of December 31,
2024, and our quick ratio decreased from 1.5 as of December 31, 2023 to 1.0 as of December 31,
2024, primarily due to the increases in other payables and accruals and interest-bearing bank
and other borrowings.
Our current ratio increased from 1.4 as o f December 31, 2024 to 3.6 as of June 30, 2025,
and our quick ratio increased from 1.0 as o f December 31, 2024 to 3.1 as of June 30, 2025,
primarily due to the increase in cash and cash equivalents.
N e tD e b tt oE q u i t yR a t i o
We had a negative net debt to equity ratio of 0.1 as of December 31, 2022, as compared to a
positive net debt to equity ratio of 0.2 as of De cember 31, 2023, and our net debt to equity ratio
further increased to 0.5 as of December 31, 2 024, primarily due to the increase in our bank
borrowings to support our operations. We had a negative net to debt ratio of 0.4 as of June 30,
2025, primarily due to the increase in cash and ca sh equivalents, representing proceeds from
shareholders.
QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISKS
We are exposed to a variety of market and other financial risks, including interest risk,
foreign currency risk, credit risk and liquidity risk. We manage and monitor these exposures to
ensure that appropriate measures are impl emented on a timely and effective manner.
Interest Rate Risk
Our exposure to the risk of changes in market i nterest rates relates primarily to our bank
borrowings with a floating interest rate. The following table demonstrates the sensitivity to a
reasonably possible change in interest rates, with all other variables held c onstant, of our profit
or loss after tax through the impact on floating rate borrowings and our equity.
Increase/
(decrease) in basis
points
(Decrease)/
increase in loss
before tax
(Decrease)/
increase in equity
(RMB in thousands)
December 31, 2022
RMB 100/(100) (529)/529 (529)/529
December 31, 2023
RMB 100/(100) (1,315)/1,315 (1,315)/1,315
December 31, 2024
RMB 100/(100) (1,923)/1,923 (1,923)/1,923
June 30, 2025
RMB 100/(100) (1,401)/1,401 (1,401)/1,401
FINANCIAL INFORMATION
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Foreign Currency Risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency
exchange rates fluctuations in exchange rates between Renminbi and other currencies in which
we conduct business may affect our financial condition and results of operations. We seek to
limit our exposure to foreign curr ency risk by minimizing our net foreign currency position. The
following table demonstrates the sensitivity to a reasonably possible change in U.S. dollars and
Renminbi exchange rates, with all other variables held constant, of our loss before tax (due to
changes in the fair value of monetary assets and liabilities) and our equity.
(Decrease)/
increase in
foreign exchange
rate %
(Decrease)/
increase in loss
before tax
Decrease/
(increase) in
equity
(RMB in thousands)
December 31, 2022
If Renminbi strengthens
against U.S. dollars 5% 4,283 4,283
If Renminbi weakens against
U.S. dollars (5%) (4,283) (4,283)
December 31, 2023
If Renminbi strengthens
against U.S. dollars 5% (305) (305)
If Renminbi weakens against
U.S. dollars (5%) 305 305
December 31, 2024
If Renminbi strengthens
against U.S. dollars 5% (1,144) (1,144)
If Renminbi weakens against
U.S. dollars (5%) 1,144 1,144
June 30, 2025
If Renminbi strengthens
against U.S. dollars 5% 37,184 37,184
If Renminbi weakens against
U.S. dollars (5%) (37,184) (37,184)
Credit Risk
We trade only with recognized and creditworthy third parties and there is no requirement
for collateral. It is our policy that all customers who wish to trade on credit terms are subject to
credit verification procedur es. In addition, receiva ble balances are monitored on an ongoing
basis and our exposure to bad debts is not significant.
FINANCIAL INFORMATION
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Liquidity Risk
We monitor our exposure to liquidity ris k by regularly monito ring short-term and
long-term liquidity requirements, as well as compliance with borrowing agreements to ensure
that adequate cash reserves and readily realizable liquidity are maintained. Our liquidity is
primarily dependent on our ability to maintain adequate cash inflows from operations to meet
its debt obligations as they fall due, and our ability to obtain external financing to meet
committed future capital expenditure.
DIVIDENDS
We did not declare or pay dividends on our Shares during the Track Record Period. We
currently expect to retain all future earnings for use in operation and expansion of our business,
and do not pay any dividends in the foreseeable future. We do not have any fixed dividend
policy nor pre-determined dividend payout ratio. The declaration and payment of any dividends
in the future will be subject to the approval of our Shareholders in a shareholder’s meeting, our
Articles of Association and the PRC Company Law, and will depend on a number of factors,
including the commercialization of our products and solutions as well as our earnings, capital
requirements, overall financial condition and contractual restrictions. As confirmed by our PRC
Legal Advisor, any future net profit that we m ake will have to be applied to make up for our
historically accumulated losses in accordance with the PRC laws, after which we will be obliged
to allocate 10% of our profit to our statutory common reserve fund until such fund has reached
more than 50% of our registered capital. We will therefore only be able to declare dividends
after (1) all our historically accumulated losse s have been made up for; and (2) we have allocated
sufficient profit to our statutory common reserve fund as described above. In light of our
accumulated losses as disclosed in this prospectus, it is unlikely that we will be eligible to pay a
dividend out of our profits in the foreseeable future.
DISTRIBUTABLE RESERVES
As of June 30, 2025, we did not have any reserves available for distribution to our
Shareholders.
LISTING EXPENSES
The total listing expenses to be borne by us are estimated to be approximately HK$198.8
million, based on the Offer Price of HK$144.6 per H Share, accounting for approximately 5.4%
% of the gross proceeds from the Global Offeri ng. Approximately HK$15.1 million of the
listing expenses were charged to our consolidat ed statements of profit or loss during the Track
Record Period. Out of our remaining listing expenses, approximately HK$28.8 million is
expected to be charged to our consolidated stat ements of profit or loss, and approximately
HK$154.9 million is expected to be deducted fro m equity. By nature, our listing expenses are
comprised of (i) underwriting commission of a pproximately HK$147.1 million, (ii) fees and
expenses of sponsor, accountants and legal advisers of approximately HK$31.2 million, and (iii)
other fees and expenses of approximately HK$20.5 million. The listing expenses above are the
latest practicable estimate for reference o nly, and the actual amount may differ from this
estimate.
FINANCIAL INFORMATION
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UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
See ‘‘Appendix II — Unaudited Pro Forma Financial Information.’’
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate
and after due and careful consideration, our Directors confirm that there has been no material
adverse change in our business, financial condition and results of operations since June 30, 2025,
being the latest balance sheet date of our consolidated financial statements in the Accountants’
Report set out in Appendix I to this prospect us, and up to the date of this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, they were not aware of any
circumstance that would give rise to a disclosu re requirement under Rules 13.13 to 13.19 of the
Listing Rules.
FINANCIAL INFORMATION
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FUTURE PLANS
See the section headed ‘‘Business — Our Strateg ies’’ for a detailed description of our future
plans.
USE OF PROCEEDS
Based on the Offer Price of HK$144.60 per Offer Share, we estimate that we will receive net
proceeds of approximately HK$3,478.6 million from the Global Offering after deduction of
underwriting fees and commissions and estimated expenses payable by us in connection with the
Global Offering:
We intend to use the net proceeds as follows:
(a) approximately 80.0%, or HK$2,782.9 mil lion, will be used for our research and
development of our products and solutions. Including:
(i) approximately 50.0%, or HK$1,739.3 m illion, will be used for our research,
development and commercialization of our GPGPU chips and accelerators over
the next five years.
We will continuously optimize and inn ovate GPGPU chips and accelerators to
achieve ongoing improvements in efficiency and computing power through the
continuous investment in training and inference technologies. We will also
continuously promote our GPGPU chips an d accelerators optimized for cloud,
edge, and on-device applic ations. The breakdown of the proceeds to be allocated
as follows:
. approximately 30.0%, or HK$1,043.6 million, will be used for the
expansion of our R&D team to develop GPGPU chips and accelerators.
We aim to attract more talents, including scientists and engineers from
around the world for product design and development. We believe that the
expansion of our R&D team will greatly improve our capability in the
development of GPGPU chips and accelerators. We plan to recruit
additional digital design engineers, di gital verification engineers and SOC
implement and mass production engineers for the research, development
and commercialization of our next generations of GPGPU chips and
accelerators.
. approximately 20.0%, or HK$695.7 million, will be used for the
procurement of software, IP cores, tape-out service and R&D materials.
These products/services allow us to facilitate the optimization of our chip
architecture, enhancing performanc e and efficiency, and efficiently
transition from design to fabricatio n, ensuring our innovative designs are
accurately realized in mass production.
FUTURE PLANS AND USE OF PROCEEDS
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(ii) approximately 25.0%, or HK$869.7 mi llion, will be used for the research and
development of our proprietary software stack through the expansion of our
R&D team.
Our proprietary software stack is inte gral to the advancement of our GPGPU
chips and accelerators. We will foc us on modular full-stack software
restructuring to accelerate independent iteration of key components. We will
introduce support for emerging computing paradigms and expand our AI model
ecosystem continuously, which allows us to deliver efficient acceleration
solutions from lightweight to large language models, and allows us to expand
application scenarios. Specifically:
. Implementing modular full -stack restructuring. The AI software stack
integrates multiple software components including serving frameworks,
inference engines, training frameworks, high-performance libraries,
compilers, and drivers. As AI adopt ion grows, these components and
software layers evolve at varying paces. T o maintain stability of low-level
software components while keeping pace with rapidly evolving AI
algorithms, we are enhancing our software stack R&D with a ‘‘high
cohesion, low coupling’’ approach. This requires focused development and
testing to ensure compatibility between different versions of software
components. The AI software ecosyst em’s shift toward Python-centric
development makes a well-decoupled software stack essential for adapting
to these changes.
. Support for emerging computing paradigms . As generative AI leads modern
AI applications, significant engineering efforts focus on optimization and
profitability. Prefill decoding disaggregation is an advanced LLM inference
compute paradigm, demanding new approaches to data flow design,
parallelism, and AI operation implementation. Scaling up has become a
central focus in AI infrastructure, dr iving new software compute paradigms
for both inference and training applications. The growing use of
low-precision data in AI models to maximize GPGPU computing power
necessitates novel algorithms and implementations in high-performance
libraries and compilers. We aim to deliver high-quality performance for
these new-era AI compute paradigms.
. Expanding AI model ecosystem. While LLMs currently dominate the field,
other promising AI models like Mamba and JEPA are rapidly advancing.
Diffusion models for image and video generation have achieved
production-ready status. Additiona lly, numerous industry-specific AI
models leverage proprietary data through vertical fine-tuning. Our goal is
to expand support across this diverse AI model landscape while maintaining
production-grade performance. This approach strengthens our commercial
delivery capabilities and positions us to adapt to emerging AI models.
FUTURE PLANS AND USE OF PROCEEDS
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Additionally, we will continuously enhance the richness of our software stack
and upgrade our compiler architecture to improve the overall performance of
our computing platform. To further strengthen our capabilities, we will establish
a joint hardware-software pre-resea rch mechanism. This will enable early
software stack adaptation during the nex t generation product definition phase,
facilitating a deeper integration of har dware technologies with our software
solutions. Through the development of a more flexible software stack, it will
enable us to respond swiftly to evolving customer demands.
We plan to recruit additional product managers, software engineers and test
engineers for the purpose of the research and development of our software stack.
(iii) approximately 5.0%, or HK$173.9 m illion, will be used for the research and
development of our AI computing solutions. We will continuously explore our
client’s product needs, deepen our industry penetration and expand our industry
coverage in sectors benefiting from fast-iterating adjacent sectors and/or strong
demand for domestic alternatives, such as financial services, healthcare and
transportation, foundational research and educational computing applications.
We aim to provide these customers with fl exible architecture that can support
integration with various third-party infrastructure components while
maintaining optimized performance. In particular, the proceeds will be used
on the expansion of our R&D team by recruiting additional solution engineers,
and the establishment of a broader collaborative research and development
mechanisms with universities, research institutions, upstream and downstream
suppliers, and customers througho ut the supply chain to explore the
development of a more open and fully adaptable ecosystem.
(b) approximately 10.0%, or HK$347.9 million , will be used for sales and marketing over
t h en e x tf i v ey e a r s, specifically:
. approximately 8.0%, or HK$278.3 million, will be allocated to sales team
construction and expansion. We plan to recruit additional marketing and sales
personnel and technical support staff with industry knowledge over the next two
years, and target to increase headc ount to approximately 130 by 2027; and
. approximately 2.0%, or HK$69.6 million, will be allocated to sales and
marketing-related expenses, such as advertising, promotion, and
brand-building activities, as well as i mproving our sales and customer service
processes. We plan to improve our service quality by conducting more frequent
customer visits, establishing customer feedback channels, and setting up a tiered
response mechanism throughout the next five years, with the effectiveness of the
aforesaid being subject to annual ass essment and refinement based on key
performance indicators. We also plan to enhance our brand awareness and
service penetration by optimizing brand promotion content, strengthening
official channels, and participating in major AI and computing industry
exhibitions, conferences, and forums throughout the next five years.
FUTURE PLANS AND USE OF PROCEEDS
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(c) approximately 10.0% or HK$347.9 milli on, will be used for working capital and
general corporate purposes.
To the extent our net proceeds are either more or less than expected, we will increase or
decrease the allocation of the net proceed s to the above purposes on a pro rata basis.
If any part of our development plan does not proceed as planned for reasons such as
changes in government policies that would render the development of any of our plans not
viable, or the occurrence of force majeure events , we will carefully evaluate the situation and
may reallocate the net proceeds from the Global Offering.
To the extent that the net proceeds from the Glob al Offering are not immediately required
for the above purposes and to the extent permitted by the relevant law and regulations, we will
only place the net proceeds from the Global Offeri ng in short-term interest-bearing accounts at
licensed commercial banks and/or other authorized financial institutions as defined under the
Securities and Futures Ordinance or applicable la ws and regulations in other jurisdictions. We
will make an appropriate announcement if there is any change to the above proposed use of
proceeds or if any amount of the proceeds will be used for general corporate purpose.
FUTURE PLANS AND USE OF PROCEEDS
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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, pursuant to which the Cornerstone Investors have agreed to, subject to
certain conditions, subscr ibe, or cause their designated entities to subscribe, at the Offer Price
for such number of Offer Shares (rounded down to the nearest whole board lot of 100 H Shares)
as set out in the table below (the ‘‘ Cornerstone Placing ’’).
Based on the Offer Price of HK$144.6 per Offe r Share, the total number of Offer Shares to
be subscribed by the Cornerstone Investors would be 10,940,300 Offer Shares, representing
approximately 43.02% of the Offer Shares to b e issued pursuant to the Global Offering and
approximately 4.30% of our total issued shar e capital immediately upon completion of the
Global Offering.
We believe that the Cornerstone Placing provides an impression of commitment,
confidence and interests of the Cornerstone Investors in our Group’s business and prospects
and helps raise the profile of our Company. Our Company became acquainted with each of the
Cornerstone Investors through introduction by t he Company’s business partners or the Overall
Coordinators.
The Cornerstone Placing will form part of the International Offering, and, save as
otherwise obtained consent from the Stock Exchange, the Cornerstone Investors and their
respective close associates will not subscribe for any Offer Shares under the Global Offering
(other than pursuant to the Cornerstone Inv estment Agreements). 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 and will be counted towards the public float of our Company under Rule 8.08 (as
amended and replaced by Rule 19A.13A) of the Listing Rules. The three largest public
Shareholders will not hold more than 50% of the Shares held in public hands at the time of the
Listing in compliance with Rule 8.08(3) of the Listing Rules.
Immediately following the completion of the Global Offering, the Cornerstone Investors
will not, by virtue of their cornerstone investments, have any Board representation in our
Company; and none of the Cornerstone Investors will become a substantial Shareholder of our
Company. Other than a guaranteed allocation of the relevant Offer Shares at the final Offer
Price, the Cornerstone Investors do not have any preferential rights under each of their
respective Cornerstone Investment Agreements, a s compared with other public Shareholders. As
confirmed by each of the Cornerstone Investors, there are no side arrangements or agreements
between our Company and the Cornerstone Investors or any benefit, direct or indirect,
c o n f e r r e do nt h eC o r n e r s t o n eI n v e s t o r sb yv i r t u eo fo ri nr e l a t i o nt ot h eG l o b a lO f f e r i n g ,o t h e r
than a 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.
CORNERSTONE INVESTORS
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One of the Cornerstone Investors, XN Mountain is a close associate of the existing
minority Shareholders. The Stock Exchange has granted a waiver from strict compliance with
the requirements under Rule 10.04 and consent under Paragraph 5(2) of Appendix F1 to the
Listing Rules and paragraph 17 of Chapter 4.15 of the Guide for New Listing Applicants to
permit H Shares in the International Offering to be placed to certain existing minority
Shareholders. For further detai ls, see ‘‘Waivers from Strict Compliance with the Listing Rules
— Allocation of H Shares to Existing Minority Shareholders and/or Their Close Associates’’
To the best knowledge, information and belief of our Company, (i) save for XN Mountain,
each of the Cornerstone Investors and their res pective ultimate beneficial owner(s) is an
Independent Third Party; (ii) none of the Cornerstone Investors or their respective ultimate
beneficial owner(s) is accustomed to take instructions from our Company, Directors,
Supervisors, chief executive, Controlling Shareholders, substantial Shareholders or existing
Shareholders or any of their subsidiaries or thei r respective close associates in relation to the
acquisition, disposal, voting or other disposition of the Offer Shares; and (iii) none of the
subscription of the Offer Shares by the Cornerstone Investors is financed directly or indirectly
by our Company, Directors, Supervisors, chief executive, Controlling Shareholders, substantial
Shareholders or existing Shareholders or any of their subsidiaries or their respective close
associates.
To the best knowledge of the Company and 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 Cornerston e Investors and/or thei r close associates may
participate in the International Offering as pla cees and subscribe for further Offer Shares in the
Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow
the Cornerstone Investors and/or their close associates to participate in the International
Offering as placees pursuant to Chapter 4.15 of t he Guide for New Listing Applicants. Whether
such Cornerstone Investors and/or their close associates will place orders in the International
Offering are uncertain and will be subject to the final investment decisions of such investors and
the terms and conditions of the Global Offering.
To the best knowledge of our Company and as confirmed by each of the Cornerstone
Investors, each of the Cornerstone Investors makes independent investment decisions, and their
subscription under the Cornerstone Placing would be financed by their own internal resources
and they have sufficient funds to settle their respective investment under the Cornerstone
Placing. Each of the Cor nerstone Investors has confirmed t hat all necessary approvals have been
obtained with respect to the Cornerstone Placing and that no specific approval from any stock
exchange or its shareholders or other regulatory authorities 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 Stock Exchange. There
will be no delayed delivery of the Offer Shares and no deferred settlement of the Offer Shares to
be subscribed by the Cornerstone Investor s pursuant to the Cornerstone Investment
Agreements.
CORNERSTONE INVESTORS
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The total number of Offer Shares to be subscribed by the Cornerstone Investors may be
affected by reallocation of the Offer Shares bet ween 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 sectio nh e a d e d‘ ‘ S t r u c t u r eo fthe Global Offering —
The Hong Kong Public Offering — Reallocation’’ in this prospectus, our Company and the
Overall Coordinators have the absolute discretion, but not obliged, to deduct the number of
Offer Shares to be subscribed by the Corners tone Investors in order to satisfy the public
demands under the Hong Kong Public Offering pursuant to Practice Note 18 of the Listing
Rules. Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors
will be disclosed in the allotment results announcement of our Company to be published on or
around January 7, 2026.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Inves tors set forth below has been provided by the
Cornerstone Investors in connectio n with the Cornerstone Placing.
ZTE HK
ZTE (H.K.) LIMITED (‘‘ ZTE HK ’’) is a limited company incorporated in Hong Kong and
is primarily engaged in information technology business. ZTE HK is a wholly-owned subsidiary
of ZTE Corporation, a company whose shares are listed on both the Shenzhen Stock Exchange
(stock code: 000063.SZ) and the Hong Kong Stock Exchange (stock code: 00763.HK)).
XN Mountain
XN Mountain is a company incorporated in the British Virgin Islands with limited
liability, which is wholly owned by Focustar Capital. Focustar Capital is owned as to 60% by
Mr. Wang Jianguo and 40% by Mr. Yin Jian. Focustar Capital’s investments primarily focus on
the PRC’s consumer and technology industries, and it manages certain of our existing
Shareholders, namely Nanjing Xingna Heyuan, Nanjing Xingnafeng, Focustar Fund and XN
Speed. For more details, please refer to the s ection headed ‘‘History, Development and
Corporate Structure’’. Therefore, XN Mountain is a close associate of our existing
Shareholders.
Wind Sabre Fund SPC
Wind Sabre Fund SPC on behalf of and for the account of Wind Sabre Opportunities Fund
SP is a fund established in the Cayman Islands. Wind Sabre Fund SPC is a segregated portfolio
company incorporated in the Cayman Islands with limited liabilities and is an Independent
Third Party. Wind Sabre Opportunities Fund SP is a segregated portfolio of Wind Sabre Fund
SPC. Wind Sabre Fund SPC is controlled by Wind Sabre Capital Limited as the investment
manager, which is a company incorporated in Hong Kong and licensed to carry out type 9 (asset
management) regulated activities under the SFO in Hong Kong by the SFC. Other than Well
Smart Developments Limited, which holds 77.86% interest in Wind Sabre Opportunities Fund
SP and is wholly owned by Chow Tai Fook (Nominee) Limited, an Independent Third Party, no
other investors hold 30% or more interest in Wind Sabre Opportunities Fund SP. No single
ultimate beneficial owner holds 30% or more interest in Chow Tai Fook (Nominee) Limited.
CORNERSTONE INVESTORS
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Wind Sabre Opportunities Fund SP will hold the beneficial interest of the Offer Shares on a
discretionary basis for and on behalf of its clients. To the best knowledge of our Company,
Wind Sabre Opportunities Fund SP is an Independent Third Party.
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 UBS AG Hong Kong Branch, 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) UBS (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 seg regated accounts and mandates. As confirmed by
UBS AM Singapore, no single ultimate beneficial owner holds 30% or more interest in those
funds. UBS AM Singapore will hold the beneficial interest of the Offer Shares on a discretionary
basis for and on behalf of its clients.
UBS AM Singapore is a wholly owned subsi d i a r yo fU B SA s s e tM a n a g e m e n tA G ,a n
investment management company, which is wholly ultimately owned by UBS Group AG, which
is a company organized under Swiss law as a co rporation 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).
Teamsun HK
Teamsun Technology (HK) Limited (‘‘ Teamsun HK ’’) is a company incorporated in Hong
Kong in 2004. It principally engages in the busines s of system integration, application software
development and network communication products sales. Teamsun HK is the wholly owned
subsidiary of Beijing Teamsun Technology Co., Ltd (‘‘ Beijing Teamsun ’’), who principally
engages in the business of system integration, pr oductized IT services, application software
development, and AI related products and services. Beijing Teamsun is listed on the Shanghai
Stock Exchange (stock code: 600410.SH). Save for Beijing Teamsun, no other individual or
entity has 30% or more beneficial interest in Teamsun HK.
Qin Wan
Qin Wan Investment Limited (‘‘ Qin Wan ’’) is a limited company incorporated in the British
Virgin Islands and is primarily engaged in inves tment activities, focusing on the upstream and
downstream industry chain of the artificial intelligence sector. It is a discretionary investment
fund, of which investment decisions are made with the approval and the consent of Mr. Zhuang
Yong in his capacity as a shareholder.
Qin Wan is held by Mr. Wang Jian, Mr. Zhuang Yong, Mr. Zhang Bin, and Mr. Zheng
Haoran, each of whom is an Independent Thir dP a r t y ,a st o5 1 % ,2 0 % ,2 0 %a n d9 %e q u i t y
interests, respectively. Mr. Wang Jian has a pproximately 18 years of banking experience,
formerly serving as the vice president of the Zhuhai Branch of China Merchants Bank. Mr.
Zhuang Yong is a Senior Vice President of Beijing Kingsoft Office Software, Inc. (stock code:
CORNERSTONE INVESTORS
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688111.SH), a leading Chinese office software pro vider listed on the Shanghai Stock Exchange.
Mr. Zhang Bin previously served as an executive director and chief financial officer of Shenzhen
Hepalink Pharmaceutical Group (stock code: 002399.SZ), a phar maceutical company listed on
the Shenzhen Stock Exchange.
OCM
OCM Limited (‘‘ OCM’’) is an investment company incorporated in Hong Kong and is
principally engaged in equity investments. OCM is wholly owned by Mr. Li Mingyuan, an
Independent Third Party. Mr. Li Mingyuan has act ively invested in the technology enterprises
listed on NASDAQ and other exchanges, including UP Fintech Holding Limited (NASDAQ:
TIGR).
Ocean Fine Industrial
Ocean Fine Industrial Limited (‘‘ Ocean Fine Industrial ’’) is a company incorporated in
Hong Kong in 2003, principally engaged in the provision of import and export of semiconductor
and electronic component testing services. It is a wholly owned subsidiary of Tongfu
Microelectronics Co., Ltd. ( 通富微電子股份有限公司)( ‘ ‘Tongfu ’’), a company listed on
Shenzhen Stock Exchange (stock code: 002156.SZ). Tongfu is an integrated circuit packaging
and testing service provider, offering global cus tomers a one-stop service from design simulation
to packaging and testing.
Huatai OTC Swaps — Hengxin Fund Management
HTCI and HTSC will enter into a back-to-back total return swap transaction (the ‘‘ Huatai
OTC Swap ’’) in connection with a total return swap order placed by Jiujiu Hengxin (Xiamen)
Private Fund Management Co., Ltd. (‘‘ Hengxin Fund Management ’’), acting in its capacity as
investment manager for and on behalf of Huatai Ultimate Client to HTSC (the ‘‘ Client TRS ’’),
pursuant to which the HTCI will hold the beneficial interest of the Offer Shares on a
non-discretionary basis for and on behalf of the Huatai Ultimate Client to hedge the Huatai
OTC Swap in connection with the Client TRS, while the economic risks and returns of the
underlying Offer Shares are ultimately pa ssed to the Huatai Ultimate Client, subject to
customary fees and commissions. HTCI is considered as a ‘‘connected client’’ of Huatai
Financial Holdings (Hong Kong) Limited pursuant to paragraph 1B(7) of the Placing
Guidelines for Equity Securities (Appendix F1 of the Listing Rules). The Company has
applied to the Stock Exchange for, and the Stock Exchange has granted, its consent under
paragraph 1C of Appendix F1 to the Listing Rules to permit us to allocate the Offer Shares to
HTCI. See ‘‘Waivers — Consent under paragraph 1 c(1) of the placing guidelines to be granted
for allocation of securities to HTCI.’’
The Huatai OTC Swap will be fully funded by the Huatai Ultimate Client. During the
terms of the Huatai OTC Swap, all economic returns of the Offer Shares subscribed by the
HTCI will be passed to the Huatai Ultimate Client and all economic loss shall be borne by the
Huatai Ultimate Client through the Huatai OT C Swap and the Client TRS, and the HTCI will
not take part in any economic return or bear any economic loss in relation to the Offer Shares,
subject to customary fees and commissions.
CORNERSTONE INVESTORS
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Huatai OTC Swap is linked to the Offer Shares and the Huatai Ultimate Client may, after
expiration of the lock-up period beginning from the date of the relevant cornerstone agreement
and ending on the date which is six months from th e Listing Date, request to early terminate the
Huatai OTC Swap at its own discretions, upon which HTCI may dispose of the Offer Shares on
the secondary market and the Huatai Ultimate Cl ient will receive a final settlement amount of
the Huatai OTC Swap in cash in accordance wi th the terms and conditions of the Huatai OTC
Swap and the Client TRS. Despite that HTCI will hold the legal title of the Offer Shares by
itself, it will not exercise the voting rights attaching to the relevant Offer Shares during the terms
of the Huatai OTC Swap.
The Huatai Ultimate Client is a domestic private securities investment fund managed by
Hengxin Fund Management in its capacity as fund manager. Hengxin Fund Management is a
private fund management company registered with the Asset Management Association of
China. Hengxin Fund Management was filed and established on September 9, 2016, with a fund
size of over RMB500 million. Its principal business is private securities investment, with over
90% of its investment portfolio invested in the secondary stock market. The investment strategy
focuses on companies with strong fundamenta ls and long-term growth potential, without
limitation to speci fic industries.
The Huatai Ultimate Client has one investor holding 30% or more of the interests, namely
Mr. Zheng Youxin, who currently holds 68.74% beneficial interest. Save for Mr. Zheng Youxin,
no other individual or entity has 30% or more benef icial interest in the Huatai Ultimate Client.
To the best of the HTCI’s knowledge after havi ng made all reasonable inquiries, each of
Hengxin Fund Management and the Huatai Ultima te Client is an Independent Third Party of
HTCI and the companies which are members of the same group of HTCI.
Fourth Paradigm
Fourth Paradigm International Limited (‘‘ Fourth Paradigm ’’) is a wholly-owned subsidiary
of Beijing Fourth Paradigm Technology Co., Ltd. (‘‘ Beijing Fourth Paradigm ’’), which is a joint
stock limited liability company incorporated in the PRC with its H shares listed on the Main
Board of the Stock Exchange (stock code: 6682.HK).
Fourth Paradigm is a leading AI company sp ecializing in develop ing and delivering
innovative AI solutions to address complex industry challenges, enhance efficiency, drive
technological advancements and empower cu stomers to create greater business value.
While Dr. Dai Wenyuan is the controlling shareholder of Beijing Fourth Paradigm, Fourth
Paradigm only holds 29.9% interest in Bei jing Paradigm Private Equity Investment
Management Co., Ltd., which is the gener al partner of Paradigm Fund, an existing
shareholder of the Company. Accordingly, to the best knowledge of our Company, Fourth
Paradigm is independent from and is not considered as a close associate of the Company or any
of its shareholders.
CORNERSTONE INVESTORS
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Engine International
Engine International Technology Co., Limited (‘‘ Engine International ’’), established in
Hong Kong on September 25, 2019, and is a wholly-owned subsidiary of Enginetech Computer
Co., LTD ( 安擎計算機信息股份有限公司)( ‘ ‘Enginetech ’’). Engine International primarily serves
as the business platform and window of Enginetech in Hong Kong, undertaking tasks such as
connecting with international markets, expanding trade, and executing procurement functions.
The ultimate beneficial owner of Engine International is Mr. Yu Yueyuan, holding 62.73% of
the shares in Engine International. Mr. Yu Yueyuan is a director of Enginetech, responsible for
business and technology development. Save for Mr. Yu Yueyuan, no other individual or entity
has 30% or more beneficial interest in Engine International.
To the best knowledge of our Company, each of Engine International and Mr. Yu
Y u e y u a ni sa nI n d e p e n d e n tT h i r dP a r t y .
Duckling Fund
Duckling Fund, L.P. (‘‘ Duckling Fund ’’) is an exempted limited partnership registered
under the laws of Cayman Islands. The general partner of Duckling Fund is Grandiflora Hook
GP Limited, which is 100% ultimately controll ed by Mr. Eric Li. The only limited partner of
Duckling Fund is Lionet Fund, L.P., which is a fund focusing on logistics, healthcare,
telecommunication, media, technology and consumer industries investment. The general partner
of Lionet Fund, L.P. is Grandiflora Hook GP Limited. Lionet Fund, L.P. has more than 15
limited partners, none of which holds 30% or more partnership interest in Lionet Fund, L.P.
Duckling Fund will hold the beneficial interest of the Offer Shares on a discretionary basis for
and on behalf of its clients. To the best knowledge of our Company, Ducking Fund is an
Independent Third Party.
DeepRoot Alpha
DeepRoot Alpha Ltd (‘‘ DeepRoot Alpha ’’) is a business company incorporated in the
British Virgin Islands with limited liability. It is the investment holding vehicle of DeepRoot
Partners Ltd (‘‘ DeepRoot Partners ’’), which holds 100 management shares (non-participating,
non-redeemable, voting shares of DeepRoot Alpha) in DeepRoot Alpha.
DeepRoot Partners is a business company incorporated in the British Virgin Islands and is
owned as to 80% by Ms. Ma Hailan. DeepRoot Pa rtners acts as the investment manager of
DeepRoot Alpha, and its investments primarily focus on companies with high growth potential.
The beneficial interests in DeepRoot Alpha, th rough participating shares (participating,
redeemable, non-voting shares in the capital of DeepRoot Alpha), are held by XN Crane
International Limited (‘‘ XN Crane ’’) as to 28.57% and several entities. None of the shareholders
of DeepRoot Alpha holds 30% or more of the beneficial interests.
Although Mr. Yin Jian is the sole shareholder of XN Crane and the ultimate controlling
shareholder of Nanjing Xingnafeng, one of the Company’s existing shareholders, XN Crane
does not constitute a fellow subsidiary of a holding company of DeepRoot Alpha. Accordingly,
to the best knowledge of our Company, DeepRoot Alpha is independent from and is not
considered as a close associate of the Company or any of its shareholders.
CORNERSTONE INVESTORS
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China Universal (HK)
China Universal Asset Management (Hong Kong) Company Limited (‘‘ China Universal
(HK) ’’), founded in November 2009, is a wholly ow ned subsidiary of China Universal Asset
Management Company Limited. China Universa l (HK) is among the first group of Chinese fund
management company subsidiaries established outside of the Chinese Mainland. China
Universal (HK) is licensed by the SFC to carr y on type 1 (dealing in securities), type 4
(advising on securities) and type 9 (asset manage ment) regulated activities under Part V of the
SFO. China Universal (HK) manages investment funds, provides investment advisory services,
and manages discretionary accounts. Save as Or ient Securities Company Limited, a company
holding 35.41% of the shareholding interests of China Universal Asset Management Company
Limited, the shares of which are listed on the Shanghai Stock Exchange (stock code: 600958)
and Hong Kong Stock Exchange (stock: code 3958), there is no other shareholder holding 30%
or more shareholding interests of China Universal Asset Management Company Limited.
As confirmed by China Universal (HK), the subscription of the Offer Shares as a
cornerstone investor will be made by it in its capacity as the investment manager for and on
behalf of the fund and discretionary investment account. China Universal (HK) will subscribe
the shares for and on behalf of both Better Supply Chain (HK) Holdings Co. Limited and China
Universal Special Situation Fund SPC-CUAM Flexible Strategy Fund SP. The ultimate
beneficial owner of Better Supply Chain (HK) Holdings Co. Limited is Peng Zimei. The ultimate
beneficial owners of China Universal Special Situation Fund SPC-CUAM Flexible Strategy
Fund SP include securities company, investment funds and other corporate clients. There is no
single entity holding 30% or more interest in China Universal Special Situation Fund SPC-
CUAM Flexible Strategy Fund SP.
To the best knowledge of our Company, China Universal (HK) is an Independent Third
Party.
China Orient International
China Orient International Asset Management Limited (‘‘ China Orient International ’’) acts
as the investment manager of China Orient Enhanced Income Fund (‘‘ China Orient EIF ’’) and
China Orient Multi-Strategy Master Fund (‘‘ China Orient MSMF ’’), both being registered in the
Cayman Islands. China Orient International w as incorporated in Hong Kong with limited
liability and is licensed with the SFC to carry on b usiness in type 1 (dealing on securities), type 4
(advising on securities) and type 9 (asset manage ment) regulated activities under the SFO. China
Orient International Fund Management Limited, a company incorporated in the Cayman
Islands with limited liability, is the sole management shareholder of China Orient EIF and
China Orient MSMF. China Orient Asset Management (International) Holding Limited holds
30% or more interests in the funds. Both China Or ient International Fund Management Limited
and China Orient International are wholly-owned subsidiaries of China Orient Asset
Management (International) Holding Limited. China Orient Asset Management
(International) Holding Limited is ultimately controlled by Central Huijin Investment Ltd, a
state-owned investment company, establish ed in December 2003 and mandated to exercise the
rights and the obligations as an investor in major state-owned financial enterprises, on behalf of
the People’s Republic of China. China Orient EIF and China Orient MSMF will hold the
beneficial interest of the Offer Shares on a discre tionary basis for and on behalf of their clients.
CORNERSTONE INVESTORS
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To the best knowledge of our Company, each of China Orient International, China Orient
EIF and China Orient MSMF is an Independent Third Party.
China AMC (HK)
China Asset Management (Hong Kong) Limited (‘‘ China AMC (HK) ’’) was established and
incorporated in Hong Kong in September 2008. It is a wholly-owned subsidiary of China Asset
Management Co., Ltd. (‘‘ China AMC ’’). China AMC is a qualified domestic institutional
investor and provides a full range of services to retail and institutional investors at home and
abroad, covering equity, fixed income, money ma rkets, etc.. With US$20.6 billion in Assets
under Management (including that of subsidiaries) as of July 31, 2025, it is one of the largest
asset managers in China. China AMC provides services to the National Social Security Fund,
corporate pensions, separate a ccounts, sovereign funds in Europe, America, and Asia, central
banks, pensions, banks, asset managers, securities companies and other overseas institutional
clients. CITIC Securities Co., Ltd. (‘‘ CITIC Securities ’’), whose shares are listed on both the
Shanghai Stock Exchange (stock code: 600030.SH) and the Stock Exchange (stock code:
06030.HK), holds 62.2% interests in China AMC. Other than CITIC Securities, there is no
other shareholder holding 30% or more shareholding interests of China AMC. China AMC
(HK) has participated in the Global Offering for and on behalf of certain mutual funds and
mandate accounts. The underlying investors of such mutual funds and mandate accounts are
Independent Third Parties.
China AMC (HK) provides diverse asset management services, offering equity, fixed
income, ETFs, hedge funds, leveraged/inverse products, segregated accounts, and innovative
tokenized funds, catering to retail and institutional clients with expertise in Greater China and
global markets. China AMC(HK) will hold the beneficial interest of the Offer Shares on a
discretionary basis for and on behalf of its clients.
To the best knowledge of our Company, China AMC (HK) and China AMC are
Independent Third Parties.
CFIG
CFIG Holdings Limited (‘‘ CFIG ’’) is a limited company incorporated in Hong Kong. It is
wholly owned by Sino IC Leasing Co., Ltd. (‘‘ Sino IC Leasing ’’). None of Sino IC Leasing’s
shareholders holds 30% or more of its equity.
CFIG operates as an investment holding platform with its principal business being equity
investments. As of December 31, 2024, CFIG’s long-term equity investments amounted to
approximately US$65 million, with total assets o f approximately US$230 million. Its investment
portfolio consists of equity investments in sectors such as semiconductors and advanced
manufacturing. Sino IC Leasing is a domestic financial leasing company focused on the
integrated circuit industry.
To the best knowledge of our Company, both CFIG and Sino IC Leasing are Independent
Third Parties.
CORNERSTONE INVESTORS
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Alphahill Capital
Alphahill Capital Limited (‘‘ Alphahill Capital ’’), on a discretionary basis, acting for and on
behalf of Alphahill Future Fund, Manifold Master Fund and York House Investment Limited
in the capacity as the investment manager, is a licensed corporation incorporated in Hong
Kong. It is regulated by the SFC and holds licences for type 4 (advising on securities) and type 9
(asset management) regulated activities. The pr incipal business of Alphahill Capital is asset
management.
Alphahill Capital has sole discretion over the investment decision in the investment funds.
Alphahill Future Fund has a total of 9 limited partners, and is held approximately 39% by
Maverick Asia Limited (‘‘ Maverick ’’) and 31% by Mr. Lai Shenjun. The ultimate beneficial
owner of Maverick is Wang Xinting, an Independent Third Party, who holds 50% interest of
Maverick and no other person holds 30% or more interest of Maverick. There are 16 limited
partners in Manifold Master Fund, none of which holds 30% or more interest. York House
Investment Limited is wholly owned by Mr. Leung Chi Kit. Save for Mr. Leung Chi Kit, no
other person holds 30% or more interest of York House Investment Limited.
The table below sets forth the details of the Cornerstone Placing:
B a s e do nt h eO f f e rP r i c eo f
HK$144.6 per H Share
Cornerstone Investor
Total investment
amount
Number of Offer
Shares (1)
Approximate % of the
total Offer Shares
Approximate % of the
total issued Shares
immediately upon the
completion of the
Global Offering
ZTE HK RMB20,000,000 (3) 151,000 0.59 0.06
XN Mountain US$17,000,000 (2) 914,700 3.60 0.36
Wind Sabre US$20,000,000 (2) 1,076,100 4.23 0.42
UBS AM Singapore US$10,000,000 (2) 538,000 2.12 0.21
Teamsun HK HK$33,000,000 (2) 228,200 0.90 0.09
Qin Wan RMB100,000,000 (2) 762,600 3.00 0.30
OCM US$10,000,000 (3) 532,700 2.09 0.21
Ocean Fine Industrial US$10,000,000 (2) 537,100 2.11 0.21
Huatai OTC Swaps —
Hengxin Fund
Management US$21,000,000
(2) 1,129,900 4.44 0.44
Fourth Paradigm HK$100,000,000 (2) 691,500 2.72 0.27
Engine International RMB30,000,000 (2) 228,800 0.90 0.09
Duckling Fund US$20,000,000 (2) 1,076,100 4.23 0.42
DeepRoot Alpha US$4,000,000 (2) 215,200 0.85 0.08
China Universal (HK) US$20,000,000 (2) 1,076,100 4.23 0.42
China Orient EIF US$7,000,000 (2) 376,600 1.48 0.15
China Orient MSMF US$3,000,000 (2) 161,400 0.63 0.06
China Orient Subtotal HK$77,805,349 538,000 2.12 0.21
China AMC (HK) US$6,000,000
(2) 322,800 1.27 0.13
CFIG RMB15,000,000 (2) 114,400 0.45 0.04
Alphahill Capital US$15,000,000 (2) 807,100 3.17 0.32
Total HK$1,583,195, 754 10,940,300 43.02 4.30
CORNERSTONE INVESTORS
–3 5 0–


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Notes:
(1) Subject to rounding down to the nearest whole board lot of 100 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 exact number of H Shares to be subscribed by the Cornerstone Investors
will be subject to the exchange rate as prescribed in the relevant cornerstone investment agreement.
(2) The investment amount excludes brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee, and is calculated based on the exchange rate set out in the section headed
‘‘Information about this Prospectus and the Global Offering — Exchange Rate Conversion’’ in this
Prospectus.
(3) The investment amount includes brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee, and is calculated based on the exchange rate set out in the section headed
‘‘Information about this Prospectus and the Global Offering — Exchange Rate Conversion’’ in this
Prospectus.
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:
(a) the Underwriting Agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agre ements, and neither of the aforesaid
Underwriting Agreements having been terminated;
(b) the Offer Price having been agreed upon between our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(c) the Stock Exchange having granted the approval for the listing of, and permission to
deal in, the H Shares (including the H Shares subscribed for by the Cornerstone
Investors) as well as other applicable waivers and approvals, and such approval,
permission or waiver having not been revoked prior to the commencement of dealings
in the H Shares on the Stock Exchange;
(d) the CSRC having accepted the CSRC filing s and published the filing results on its
website, and such notice of acceptance and/or filing results published not having
otherwise been rejected, withdrawn, revoked or invalidated prior to the
commencement of dealings in the H Shares on the Stock Exchange;
(e) no laws shall have been enacted or promu lgated by any governmental authority which
prohibits the consummation of the transactions contemplated in the Global Offering
or in the respective Cornerstone Investme nt Agreements and there shall be no orders
or injunctions from a court of competent jurisdiction in effect precluding or
prohibiting consummation of such transactions; and
CORNERSTONE INVESTORS
–3 5 1–


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(f) the respective representations, warrant ies, acknowledgements, undertakings and
confirmations of the relevant Cornerstone Investor under the respective
Cornerstone Investment Agreement are a ccurate and true in all respects and not
misleading or deceptive and that there is no material breach of the Cornerstone
Investment Agreement on the part of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that without the prior written consent of our
Company, the Sole Sponsor and the Overall Coordinators, it will not, whether directly or
indirectly, at any time during the period o f six months from the Listing Date (the ‘‘ Lock-up
Period ’’), dispose of, in any way, any Offer Shares or any interest in any company or entity
holding such Offer Shares that they have purchased pursuant to the relevant Cornerstone
Investment Agreement, save for certain limite d circumstances, such as transfers to any of its
wholly-owned subsidiaries who will be bound by the same obligations of such Cornerstone
Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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HONG KONG UNDERWRITERS
Huatai Financial Holdings (Hong Kong) Limited
CMB International Capital Limited
Guosen Securities (HK) Brokerage Company, Limited
Zhongtai International Securities Limited
Bowlea Securities Limited
Carnegie Hill Capital Partners Limited
Star River Securities 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 Offeri ng is expected to be fully underwritten by the
International Underwriters.
The Global Offering comprises the Hong Kong Public Offering of initially 2,543,200 Hong
Kong Offer Shares and the International Offering of initially 22,888,600 International Offer
Shares, subject, in each case, to reallocation on the basis as described in ‘‘Structure of the
Global Offering’’.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agr eement, our Company is offering initially
2,543,200 Hong Kong Offer Shares (subject to reallocation) for subscription by way of the Hong
Kong Public Offering on and subject to the terms and conditions of this prospectus and the
Hong Kong Underwriting Agreement at the Offer Price.
Subject to (i) the Listing Committee granting approval for the listing of, and permission to
deal in, the H Shares pursuant to the Global Offering on the Main Board of the Stock Exchange
and such approval not having been withdrawn; and (ii) certain other conditions set out in the
Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally and
not jointly to apply or procure applications, on the terms and conditions of this prospectus, for
their respective applicable proportions of the Hong Kong Offer Shares which are being offered
but are not taken up under the Hong Kong Public Offering.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been signed and becoming unconditional and not
having been terminated in accordance with its terms.
UNDERWRITING
–3 5 3–


--- page 363 ---
Grounds for Termination
The Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong Underwriters
and the Capital Market Intermediaries) shall be e ntitled, in its absolute discretion and by giving
notice to our Company, to terminate the Hong Kong Underwriting Agreement with immediate
effect if prior to 8 : 00 a.m. on the Listing Date:
(i) there shall develop, occur, exist or come into effect:
(a) any new law or regulation or any change or development involving a prospective
change or any event or series of events or circumstances likely to result in a
change or a development involving a prospective change in existing laws or
regulations, or the interpretation or application thereof by any court or any
competent Authority (as defined in the Hong Kong Underwriting Agreement) in
or affecting Hong Kong, the PRC, the Uni ted States, the United Kingdom, the
European Union (or any member thereof), Japan, or other jurisdictions relevant
to our Group or the Global Offering (each a ‘‘ Relevant Jurisdiction ’’ and
collectively, the ‘‘ Relevant Jurisdictions ’’); or
(b) any change or development involving a prospective change, or any event or series
of events or circumstances likely to result in a change or prospective change, in
any local, national, regional or international financial, political, military,
industrial, economic, fiscal, legal, r egulatory, currency, credit or market
conditions or sentiments, Taxation (as defined in the Hong Kong
Underwriting Agreement), equity secu rities or currency exchange rate or
controls or any monetary or trading settlement system, or foreign investment
regulations (including, without limitation, a devaluation of the Hong Kong
dollar, United States dollar or Renminbi against any foreign currencies, a change
in the system under which the value of the Hong Kong dollar is linked to that of
the United States dollar or the Renminbi is linked to any foreign currency or
currencies) or other financial markets (including, without limitation, conditions
and sentiments in stock and bond markets, money and foreign exchange markets,
the inter-bank markets and credit m arkets) in or affecting any Relevant
Jurisdictions, or affecting an inv estment in the Offer Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a regional,
national or international emergency or war , calamity, crisis, economic sanctions,
strikes, labor disputes, other industrial actions, lock-outs, fire, explosion,
flooding, tsunami, earthquake, volcanic eruption, civil commotion, riots,
rebellion, public disorder, paralysis in government operations, acts of war,
epidemic, pandemic, outbreak or escalation, mutation or aggravation of diseases
(including without limitation COVID-19, SARS, MERS, H5N1, H1N1, swine or
avian influenza or such related/mutated forms), accident or interruption or delay
in transportation, local, national, regional or international outbreak or
escalation of hostilities (whether or not war is or has been declared), act of
God or act of terrorism (whether or not responsibility has been claimed)) in or
affecting any of the Relevant Jurisdictions; or
UNDERWRITING
–3 5 4–


--- page 364 ---
(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 (A) the trading in shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange, the
Shenzhen Stock Exchange, the Tokyo Stock Exchange, the New York Stock
Exchange, the NASDAQ Global Market or the London Stock Exchange; or (B)
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 Jurisdictions or any disruption in commercial
banking or foreign exchange trading or secu rities settlement or clearing services,
procedures or matters in or affecting any of the Relevant Jurisdictions; or
(f) other than with the prior written conse nt of the Sponsor-Overall Coordinator,
the issue or requirement to issue by our Company of a supplement or amendment
to this prospectus or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC; or
(g) the commencement by any Authority (as defined in the Hong Kong
Underwriting Agreement) or other regulatory or political body or organization
of any public action or investigation against a member of our Group or a
director or a senior management member of any member of our Group or
announcing an intention to take any such action; or
(h) save as disclosed in this prospectus, the imposition of sanctions or export
controls in whatever form, directly or indirectly, on any member of our Group or
Shanghai Shuqi or 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
(i) 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
(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 (as defined in the Hong Kong
Underwriting Agreement) or any aspect of the Global Offering with the Listing
Rules or any other applicable Laws (as defined in the Hong Kong Underwriting
Agreement); or
(k) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threaten ed, instigated or announced against any
member of our Group or Shanghai Shuqi or any Director or senior management
members as named in this prospectus; or
UNDERWRITING
–3 5 5–


--- page 365 ---
(l) any contravention by any member of our Group or any Director of the Listing
Rules or applicable Laws (as defined in the Hong Kong Underwriting
Agreement); 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, which, in any such case
individually or in the aggregate, in the sole and absolute opinion of the Sole
Sponsor and the Sponsor-Overall Coordi nator (for itself and on behalf of the
Hong Kong Underwriters):
(A) has or will or may have a material adverse effect, whether directly or
indirectly, on the assets, liabilities, b usiness, general affairs, management,
prospects, shareholders’ equity, profits, losses, results of operations,
position or condition, financial or otherwise, or performance of our
Company or our Group as a whole;
(B) has or will or may have a material adverse effect on the success of the
Global Offering or the level of applications under the Hong Kong Public
Offering or the level of indications of interest under the International
Offering; or
(C) makes or will make or may make it impracticable, inadvisable, inexpedient
or incapable for any material part of the Hong Kong Underwriting
Agreement, the Hong Kong Public O ffering or the Global Offering to be
performed or implemented as envisaged, or for the Hong Kong Public
Offering and/or the Global Offering to proceed, or to market the Global
Offering or the delivery or distribution of the Offer Shares on the terms and
in the manner contemplated by the Offering Documents (as defined in the
Hong Kong Underwriting Agreement); or
(D) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of
performance in accordance with its terms or preventing the processing of
applications and/or payments pursuant to the Global Offering or pursuant
to the underwriting thereof; or
UNDERWRITING
–3 5 6–


--- page 366 ---
(ii) there has come to the notice of the Sole Sp onsor and the Sponsor-Overall Coordinator
(for itself and on behalf of the Hong Kong Underwriters) that:
(a) any statement contained in any of the Offering Documents (as defined in the
Hong Kong Underwriting Agreement), th e CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) and/or any notices, announcements,
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) (the ‘‘ Global Offering
Documents ’’) was, when it was issued, or has become untrue, incorrect,
inaccurate in any material respect or misleading; or that any estimate,
forecast, expression of opinion, intention or expectation contained in any such
documents, was, when it was issued, or has become unfair or misleading in any
respect or based on untrue, dishonest or unreasonable assumptions or given in
bad faith; or
(b) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission or misstatement in any Global Offering Documents; or
(c) any breach of, or any event or circumstance rendering untrue or incorrect in any
material respect or misleading, any of the representations, warranties and
undertakings given by our Company or Shanghai Shuqi in the Hong Kong
Underwriting Agreement or the Intern ational Underwriting Agreement; or
(d) any event, act or omission which gives rise or is likely to give rise to any liability
of any of the Indemnifying Parties pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
(e) any breach of any of the obligations or undertakings imposed upon our
Company or any member of Shanghai Shuqi or any cornerstone investor (as
applicable) to the Hong Kong Underwriting Agreement, the International
Underwriting Agreement or the Cornerstone Investment Agreements (as defined
in the Hong Kong Underwriting Agreement); or
(f) there is any change or development involving a prospective change, constituting
or having a Material Adverse Effect (as defined in the Hong Kong Underwriting
Agreement); or
(g) that the chairman of the Board, any Director or any member of senior
management of our Company named in this prospectus seeks to retire, or is
removed from office or vacating his/her office; or
(h) any Director or any member of senio r management of our Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
or taking directorship of a company; or
UNDERWRITING
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--- page 367 ---
(i) 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
(j) that the approval by the Listing Committee of the listing of, and permission to
deal in, the H Shares in issue and to be issued pursuant to the Global Offering is
refused or not granted, other than subject to customary conditions, on or before
the Listing Date, or if granted, the ap proval is subsequently withdrawn,
cancelled, qualified (other than by customary conditions), revoked or withheld;
or
(k) any person (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 which it respectively appears; or
(l) any prohibition on our Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(m) any person (other than the Sole Sponsor and the Sponsor-Overall Coordinator)
has withdrawn or sought to withdraw its consent to being named in any of the
Offering Documents (as defined in the Hong Kong Underwriting Agreement) or
to the issue of any of the Offering Documents (as defined in the Hong Kong
Underwriting Agreement); or
(n) an order or petition is presented for the 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 of 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 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
(o) (A) the notice of acceptance of the CS RC Filings (as defined in the Hong Kong
Underwriting Agreement) issued by th e CSRC and/or the results of the CSRC
Filings (as defined in the Hong Kong Underwriting Agreement) published on the
website of the CSRC is rejected, withdrawn, revoked or invalidated; or (B) other
than with the prior written consent of the Sponsor-Overall Coordinator, the
issue or requirement to issue by our Company of a supplement or amendment to
the CSRC Filings (as defined in the H ong Kong Underwriting Agreement)
pursuant to the CSRC Rules (as defined in the Hong Kong Underwriting
Agreement) or upon any requirement or request of the CSRC; or (C) any
non-compliance of the CSRC Filings (as defined in the Hong Kong Underwriting
Agreement) with the CSRC Rules (as d efined in the Hong Kong Underwriting
Agreement) or any other applicable Laws (as defined in the Hong Kong
Underwriting Agreement); or
UNDERWRITING
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(p) (A) a material portion of the orders placed or confirmed in the bookbuilding
process; or (B) any investment commitment made by any Cornerstone Investors
under the Cornerstone Investment Agreements (as defined in the Hong Kong
Underwriting Agreement) signed with such Cornerstone Investors, has been
withdrawn, terminated or cancelled; or the payment of the relevant order or
investment amount has not been received or settled in the stipulated time and
manner or otherwise.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the Stock
Exchange that it will not issue any further Shares o r securities convertible into equity securities
of our Company (whether or not of a class already listed) or enter into any agreement to such an
issue within six months from the Listing Date (whether or not such issue of Shares or securities
will be completed within six months from the Listing Date), except for (a) pursuant to the
Global Offering; or (b) under any of the circumstances provided under Rule 10.08 of the Listing
Rules.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company has undertaken to
each of the Sole Sponsor, the Sponsor-Overall Coor dinator, the Overall Coordinators, the Joint
Global Coordinators, the Capital Market Intermediaries, the Joint Bookrunners, the Joint Lead
Managers and the Hong Kong Underwriters that except pursuant to the Global Offering, 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 ’’), it will not, without the
prior written consent of the Sole Sponsor and the Sponsor-Overall Coordinator (for itself and
on behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of
the Listing Rules:
(i) allot, issue, sell, accept subscription for , offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charg e, pledge, hypothecate, lend, grant or sell
any option, warrant, contract or right to sub scribe 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 indirectly, conditionally or unconditionally,
or repurchase, any legal or beneficial interest in the share capital 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 warra nts or other rights to purchase any share
capital or other securities of our Company, as applicable), or deposit any share capital
or other securities of our Company, as applicable, with a depositary in connection
with the issue of depositary receipts; or
UNDERWRITING
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(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of the
Shares or any other securities of our Company, or any interest in any of the foregoing
(including, without limitation, any secur ities convertible into or exchangeable or
exercisable for or that represent the right t o receive, or any warrants or other rights to
purchase, any Shares); or
(iii) enter into any transaction with the same economic effect as any transaction described
in paragraphs (i) and (ii) above; or
(iv) offer to or agree to do any of the foregoin g specified in paragraphs (i), (ii) and (iii)
above, or announce any intention to do so,
in each case, whether any of the foregoing trans actions is to be settled by delivery of share
capital or such other securities, in cash or otherwise (whether or not the issue of such share
capital or other securities will be completed within the First Six Month Period). Our Company
further agrees that, in the event our Company is allowed to enter into any of the transactions
described in paragraphs (i), (ii) and (iii) above or offers to or agrees to or announces any
intention to effect any such transaction during the period of six months commencing on the date
on which the First Six Month Period expires, it 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 Shares or other securities of our Company.
Pursuant to the Hong Kong Underwriting Agreement, Shanghai Shuqi has also undertaken
to each of the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the
Joint Global Coordinators, the Capital Market Intermediaries, the Joint Bookrunners, the Joint
Lead Managers and the Hong Kong Underwriters that it shall procure our Company to comply
with the undertakings set out above.
INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering , it is expected that our Company will enter
into the International Underwriting Agreem ent with the Sole Sponsor, the Sponsor-Overall
Coordinator and the International Underwriters. Under the International Underwriting
Agreement, the International Underwriters will, subject to certain conditions set out therein,
severally and not jointly, agree to procure subscribers or purchasers for, or to purchase, their
respective proportions of the International Offer Shares being offered under the International
Offering (subject to, among other, any reallocat ion between the International Offering and the
Hong Kong Public Offering).
It is expected that the International Underwri ting Agreement may be terminated on similar
grounds as those in the Hong Kong Underwriting Agreement. Potential investors should note
that if the International Underwriting Agreement is not entered into, or is terminated, the
Global Offering will not proceed.
Our Company has agreed to indemnify the International Underwriters against certain
liabilities, including liabilities under the U.S. Securities Act.
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UNDERWRITING COMMISSIONS A ND LISTING EXPENSES
The Underwriters and the Capital Market Int ermediaries will recei ve an underwriting
commission equal to 3.0% of the aggregate Offer Price payable for the Offer Shares, out of
which they will pay any sub-underwriting commissions and other fees (the ‘‘ Fixed Fees ’’). Our
Company may, at our sole and absolute discretion, pay to one or more Underwriters or Capital
Market Intermediaries an addi tional incentive fee up to 1.0% of the Offer Price payable for the
Offer Shares. For the purpose of disclosure of the ratio of fixed and discretionary fees payable
(the ‘‘Fee Split Ratio ’’) as required under paragraph 3B o f Appendix D1A to the Listing Rules,
the Fee Split Ratio will be approximately 57 : 43 (on the basis that the discretionary fees will be
fully paid). For any unsubscribed Hong Kong Offer Shares reallocated to the International
Offering, the underwriting commission will not be paid to the Hong Kong Underwriters but will
instead be paid, at the rate applicable to the International Offering, to the relevant International
Underwriters. The Sole Sponsor is entitled to sponsor fee in the amount of US$850,000.
The aggregate underwriting commissions an d fees (including the incentive fees and
assuming full payment), together with the Stock Ex change listing fees, the SFC transaction levy,
AFRC transaction levy the Stock Exchange tra ding fee, legal and other professional fees,
printing and other expenses relating to the Glo bal Offering, are estimated to be approximately
HK$198.8 million (based on the Offer Price of HK$ 144.60 per Offer Share, and the full payment
of the discretionary incentive fee) in aggregate, and are to be borne by us.
ACTIVITIES BY SYNDICATE MEMBERS
We describe below a variety of activities that each of the Underwriters and the Capital
Market Intermediaries of the Hong Kong Publ ic Offering and the International Offering
(together, the ‘‘Syndicate Members ’’) and their affiliates, may individually undertake, and which
do not form part of the underwriting process. Wh en engaging in any of these activities, it should
be noted that the Syndicate Members are subject to restrictions, including the following:
(a) under the agreement among the Syndicate Members, all of them must not make bids
or purchases or effect any other transactions (including but not limited to issuing any
option or derivative or structured product which has, as its underlying asset, any
Offer Shares), whether in the open market or otherwise, for the purpose of or with a
view to creating actual, or apparent, active trading in the Offer Shares or raising,
stabilizing or maintaining the price of the O ffer Shares to or at levels other than those
which might otherwise prevail in the open market; and
(b) all of them must comply with all applicable laws and regulations, including the market
misconduct provisions of the SFO, including the provisions prohibiting insider
dealing, false trading, price rigging and stock market manipulation.
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 man agement, trading, hedging, investing and other
activities for their own account and for the acco unts of others. In relation to the H Shares, those
UNDERWRITING
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activities could include acting as agent for buye rs and sellers of the H Shares, entering into over
the counter or listed derivative transactions or listed or unlisted securities transactions
(including issuing securities such as derivative warrants listed on a stock exchange) which have
the H Shares as their or part of their underlying assets. Those activities may require hedging
activity by those entities involving, directly or indirectly, buying and selling the H Shares. All
such 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 the Syndicate Member s or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the exchange may require the issuer of those securities (or one
of its affiliates or agents) to act as a market maker o r liquidity provider in the security, and this
will also result in hedging activity in the H Shares in most cases.
These activities may affect the market price or value of the H Shares, the liquidity or
trading volume in the H Shares, and the volatility of the H Shares’ share price, and the extent to
which this occurs from day to day cannot be estimated.
UNDERWRITERS’ AND CAPITAL MARKET INT ERMEDIARIES’ INTEREST IN OUR
GROUP
Except as disclosed in this prospectus and the obligations under the Hong Kong
Underwriting Agreement and the International Underwriting Agreement, none of the
Underwriters and the Capital Market Intermediaries has any shareholding interest in any
member of our Group or any right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in 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 Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence cr iteria applicable to sponsors as set out in
Rule 3A.07 of the Listing Rules.
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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:
(i) the Hong Kong Public Offering of initially 2,543,200 Offer Shares (subject to
reallocation) in Hong Kong, as described in ‘‘— The Hong Kong Public Offering’’
below in this section; and
(ii) the International Offering of initially 22,888,600 Offer Shares (subject to reallocation)
outside the United States in offshore transac tions in reliance on Regulation S and the
applicable laws of the jurisdiction where those offers and sales occur, as described in
‘‘— The International Offering’’ below in this section.
Investors may either apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering, or apply for or indica te an interest for the Internat ional Offer Shares under the
International Offering, but may not do both.
The 25,431,800 Offer Shares in the Global Offering will represent approximately 10.0% of
our enlarged share capital immediately after the completion of the Global Offering. The
underwriting arrangements, and the respectiv e Underwriting Agreements, are summarized in the
section headed ‘‘Underwriting’’ in this prospectus.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in ‘‘— The Hong Kong Public
Offering — Reallocation’’ below in this section.
References in this prospectus to applications, application or subscription monies or
procedure for applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 2,543,200 Offer Shares for subscription by the public in
Hong Kong at the Offer Price, representing approximately 10% of the total number of Offer
Shares initially available under the Global Offering. Subject to the reallocation of Offer Shares
between the International Offering and the Hong Kong Public Offering. The Hong Kong Offer
Shares will represent app roximately 1.0% of our Company’s enlarged share capital immediately
after completion of the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as
to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities which regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in ‘‘—
Conditions of the Global Offering’’ below in this section.
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Allocation
Allocation of the Hong Kong Offer Shares to applicants under the Hong Kong Public
Offering will be based on the level of valid a pplications 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. We may, if necessary, allocate the Hong Kong Offer
Shares on the basis of balloting, which would me an that some applicants may receive a higher
allocation than others who have applied for the same number of Hong Kong Offer Shares and
those applicants who are not successful in th e ballot may not receive any Hong Kong Offer
Shares.
For allocation purposes only, the total number of the Hong Kong Offer Shares available
under the Hong Kong Public Offering (after taking account of any reallocation referred to
below) is to be divided equally into two pools (subject to reallocation at odd lot size): pool A
and pool B, both of which are available on an equi table basis to successful applicants with any
odd board lots being allocated to pool A:
Pool A: the Offer Shares will be allocated on an equitable basis to applicants
who have applied for the Hong Kong Offer Shares with an aggregate
subscription price of HK$5 million (excluding the brokerage, the SFC
transaction levy, AFRC transact ion levy and the Stock Exchange
trading fee payable) or less; and
Pool B: the Offer Shares will be allocated on an equitable basis to applicants
who have applied for the Hong Kong Offer Shares with an aggregate
subscription price of more than HK$5 million (excluding the
brokerage, the SFC transaction levy, AFRC transaction levy and the
Stock Exchange trading fee payable) and up to the total value of pool
B.
Applicants 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 the pool and be allocated accordingly.
For the purpose of this subsection only, the ‘‘subscription price’’ for the Offer Shares
means the price payable on application therefor . Applicants can only receive an allocation of
Hong Kong Offer Shares from either pool A or pool B but not from both pools. Multiple or
suspected multiple applications under the Hong Kong Public Offering and any application for
more than approximately 50% of the Hong Kong Offer Shares initially comprised in the Hong
Kong Public Offering (being 1,271,600 Hong Kong Offer Shares) will be rejected.
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Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocat ion under the Listing Rules. 2,543,200 Offer
Shares are initially available in the Hong Kong Public Offering, representing approximately
10% of the Offer Shares initially available for su bscription under the Global Offering. Pursuant
to Chapter 4.14 of the Guide for New Listing Ap plicants issued by the Stock Exchange, if the
Offer Shares under the International Offering are fully subscribed or over-subscribed and if the
Hong Kong Public Offering is not fully subscribed for, the Sponsor-Overall Coordinator (for
itself and on behalf of the Underwriters) has the authority to reallocate all or any unsubscribed
Hong Kong Offer Shares to the International Offering in such proportions as the
Sponsor-Overall Coordina tor deems appropriate.
If (i) the Offer Shares under the International Offering are fully subscribed or
over-subscribed, and if the number of Offer Shares validly applied for in the Hong Kong
Public Offering represents more than 100% of the number of Hong Kong Offer Shares initially
available under the Hong Kong Public Offering; or (ii) the Offer Shares under the International
Offering are not fully subscribed, and if the number of Offer Shares validly applied for in the
Hong Kong Public Offering represents more than 100% of the number of Hong Kong Offer
Shares initially available under the Hong Kong Public Offering, the Sponsor-Overall
Coordinator (for itself and on behalf of the Underwriters) may, at its discretion, reallocate
the Offer Shares initially allocated for the International Offering to the Hong Kong Public
Offering to satisfy valid applications under the Hong Kong Public Offering, provided that the
total number of Hong Kong Offer Shares available under the Hong Kong Public Offering
following such reallocation shall not be more than 3,814,700 Offer Shares, representing
approximately 15% of the total number of Offer Shares initially available under the Global
Offering, in accordance with Chapter 4.14 of the Guide for New Listing Applicants issued by the
Stock Exchange. If both the International Offer Shares and Hong Kong Offer Shares are
under-subscribed, the Global Offering will not proceed unless the shortfall is taken up by the
Underwriters.
Subject to the above, the Sponsor-Overall Coordinator (for itself and on behalf of the
Underwriters) shall have the discretion to reallocate Offer Shares from the International
Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong
Public Offering, regardless of whether any reallocation pursuant to paragraph 4.2(b) of Practice
Note 18 of the Listing Rules is triggered. In each case, the additional Offer Shares reallocated to
the Hong Kong Public Offering will be allocated between pool A and pool B in equal proportion
and the number of Offer Shares allocated to the International Offering will be correspondingly
reduced in such manner as the Sponsor-Overall Coordinator deems appropriate.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide and the provision of paragraph 4.2(b) of Practice Note 18 of the Listing Rules, no
mandatory clawback or reallocation mechanism is required to increase the number of Offer
Shares under the Hong Kong Public Offering to a certain percentage of the total number of
Offer Shares offered under the Global Offering.
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Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him or her that he or she and any
person(s) for whose benefit he or 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 under the
International Offering is liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
The listing of the Offer Shares on the Stock Exchange is sponsored by the Sole Sponsor.
Applicants under the Hong Kong Public Offering are required to pay, on application (subject to
application channel), the Offer Price of HK$144.60 per Offer Share in addition to any
brokerage, SFC transaction levy, AFRC transa ction levy and the Stock Exchange trading fee
payable on each Offer Share, amounting to a tot al of HK$14,605.83 for one board lot of 100 H
Shares. Further details are set out below in the section headed ‘‘How to Apply for Hong Kong
Offer Shares’’ in this prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares Offered
Subject to the reallocation as described abov e, our Company will be initially offering for
subscription under the International Offering 22,888,600 Offer Shares, representing
approximately 90% of the Offer Shares initial ly available under the Global Offering and
approximately 9.0% of our enlarged issued share capital immediately after completion of the
Global Offering.
Allocation
The International Offering will include selective marketing of the International Offer
Shares to institutional and professional investors and other investors anticipated to have a
sizeable demand for such International Offer Sha res in other jurisdictions outside the United
States in reliance on Regulation S. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities which regularly invest in shares and other securities.
Prospective professional, institutional and othe r investors will be required to specify the number
of International Offer Shares under the International Offering they would be prepared to
acquire. This process, known as ‘‘book-building’’, is expected to continue up to, and to cease on
or around, the last day for lodging applications under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Allocation of International Offer Shares pursuant to the International Offering will be
determined by the Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters)
and will be based on a number of factors, including the level and timing of demand, the total size
of the relevant investor’s invested assets or e quity 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 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 to the benefit of our
Company and our Shareholders as a whole.
The Sponsor-Overall Coordinator (for itself and on behalf of the Underwriters) may
require any investor who has been offered the International Offer Shares under the
International Offering and who has made an application under the Hong Kong Public
Offering to provide sufficient information to th e Sponsor-Overall Coordinator so as to allow it
to identify the relevant application under the Hong Kong Public Offering and to ensure that
they are excluded from any application of the O ffer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the arrangement describ ed in the sub-section headed ‘‘— The Hong Kong
Public Offering — Reallocation’’ above.
PRICING AND ALLOCATION
The Offer Price will be HK$144.60 per Offer Share. If you apply for the Offer Shares under
the Hong Kong Public Offering, you must pay the Offer Price of HK$144.60 per Offer Share,
plus 1.0% brokerage, 0.0027% SFC transaction levy, 0.00015% AFRC transaction levy and
0.00565% Stock Exchange trading fee, amounting to a total of HK$14,605.83 for one board lot
of 100 H Shares.
The International Underwriter will be solicit ing from prospective investors indications of
interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepare d to acquire at the Offer Price. This process,
known as ‘‘book-building’’, is expected to continue up to, and to cease on or around, the last day
for lodging applications under the Hong Kong Public Offering.
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The Sponsor-Overall Coordinator (for itself and on behalf of the Hong Kong
Underwriters) may, where considered appropriat e, based on the level of interest expressed by
prospective investors during the book-buildi ng process, and with the prior consent of our
Company, reduce the number of Offer Shares and/or the Offer Price below that stated in this
prospectus prior to the morning of the last day for lodging applications under the Hong Kong
Public Offering. In such case, an announcement will be published on the websites of the Stock
Exchange at
www.hkexnews.hk and our Company at www.iluvatar.com and the Global Offering
will be canceled and relaunched on FINI at the revised number of Offer Shares and/or the
revised Offer Price and the requirements under Rule 11.13 of the Listing Rules (which include
the issue of a supplemental or a new prospectus (as appropriate)), as soon as practicable
following the decision to make such reduction, and in any event not later than the morning of
the day which is the last day for lodging applications under the Hong Kong Public Offering. The
supplemental or new Prospectus should include at least the following: updated (i) revised Offer
Price and market capitalization; (ii) listing timetable and underwriting obligations; (iii)
unaudited pro forma and adjusted net tangible a ssets; and (iv) use of proceeds and confirmation
of the working capital adequacy base d on the revised estimated proceeds.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any notice of a reduction in the number of Offer Shares and/or the
Offer Price may not be made until the last day for lodging applications under the Hong Kong
Public Offering. Such notice will also include confirmation or revision, as appropriate, of the
working capital statement and the Global Offe ring statistics as currently set out in this
prospectus, and any other financial information which may change as a result of any such
reduction. In the absence of any such notice so published, the number of Offer Shares will not be
reduced and/or the Offer Price, will be at HK$144.60.
The Offer Price, the indication of the level of i nterest in the International Offering, the
basis of allotment of the Offer Shares available under the Hong Kong Public Offering and the
results of allocations in the Hong Kong Public Offering are expected to be made available in a
variety of channels in the manner described in the section headed ‘‘How to Apply for Hong
Kong Offer Shares — D. Despatch/Collection of S hare Certificates and Refund of Application
Monies’’ in this prospectus.
UNDERWRITING AGREEMENT
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 b eing signed and becoming unconditional.
We expect to enter into the International Underwriting Agreement relating to the
International Offering on or around Monday, Jan uary 5, 2026. The underwr iting arrangements
under the Hong Kong Underwriting Agreement and the International Underwriting Agreement
are summarized in the section headed ‘‘Underwriting’’ in this prospectus.
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CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Hong Kong Offer Shares is conditional on, among
others:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering on the Main
Board of the Stock Exchange and such approval not subsequently having been
withdrawn or revoked prior to the Listing Date; and
(b) the obligations of the Hong Kong Underwriters and the Capital Market
Intermediaries under the Hong Kong Underwriting Agreement and the obligations
of the International Underwriters and the Capital Market Intermediaries under the
International Underwriting Agreement becoming unconditional and not having been
terminated in accordance with the t erms of the respective agreements,
in each case on or before the dates and tim es specified in the Hong Kong Underwriting
Agreement and/or the International Underwriting Agreement, as the case may be (unless and to
the extent such conditions are validly waived on or before such dates and times) and in any event
not later than 30 days after the date of this prospectus.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or wai ved prior to the times and dates specified, the
Global Offering will lapse, and the Stock Exchange will be notified immediately. Notice of the
lapse of the Hong Kong Public Offering will be published by our Company on the website of the
Stock Exchange (
www.hkexnews.hk ) and on the website of our Company ( www.iluvatar.com )o n
the next day following such lapse. In such a situation, all application monies will be returned,
without interest, on the terms set forth in the section headed ‘‘How to Apply for Hong Kong
Offer Shares — D. Despatch/Collection of Share Certificates and Refund of Application
Monies’’ in this prospectus. In the meantime, all application monies will be held in separate
bank account(s) with the recei ving banks or other bank(s) in Hong Kong licensed under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in, the H Shares in issue and to be issued by us pursuant to the Global
Offering.
Except that we have applied for the Listing on the Stock Exchange, 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.
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H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made to enable the H Shares to be admitted into
CCASS. If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
our Company complies with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible secu rities by HKSCC for deposit, clear ance and settlement in CCASS with
effect from the date of commencement of dealings in the H Shares on the Stock Exchange or any
other date HKSCC chooses. Settlement of tra nsactions between participants of the Stock
Exchange is required to take place in CCASS on the second settlement day after any trading
day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8 : 00
a.m. in Hong Kong on Thursday, January 8, 2026, it is expected that dealings in our H Shares
on the Stock Exchange will commence at 9 : 00 a.m. on Thursday, January 8, 2026.
Our H Shares will be traded in board lots of 100 H Shares each and the stock code of the H
Shares is 9903.
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IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic applicati on process for the Hong Kong Public Offering
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the ‘‘HKEXnews > New Listings > New Listing Information’’ section, and our website at
www.iluvatar.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
. h a v eaH o n gK o n ga d d r e s s(for the White Form eIPO service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by
the Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
. are an existing Shareholder or close associates; or
. are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9 : 00 am on Tuesday, December 30,
2025 and end at 12 : 00 noon on Monday, January 5, 2026 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
White Form
eIPO service
www.eipo.com.hk Applicants who would like
to receive a physical
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and issued
in your own name.
From 9 : 00 a.m. on
Tuesday, December 30,
2025 to 11 : 30 a.m. on
Monday, January 5,
2026, Hong Kong
time. The latest time
for completing full
payment of application
monies will be 12 : 00
noon on Monday,
January 5, 2026, Hong
Kong time.
HKSCC EIPO
channel
Your broker or custodian
who is a HKSCC
Participant will submit
electronic application
instructions on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Applicants who would not
like to receive a physical
Share certificate. Hong
Kong Offer Shares
successfully applied for
will be allotted and issued
i nt h en a m eo fH K S C C
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.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait
until the last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the
White Form eIPO service to make an application for Hong Kong Offer Shares, an actual
application shall be deemed to have been made. If you are a person for whose benefit the
electronic application instructions are given, you shall be deemed to have declared that
only one set of electronic application instructions has been given for your benefit. If you
are an agent for another person, you shall be deemed to have declared that you have only
given one set of electronic application instructions for the benefit of the person for whom
you are an agent and that you are duly authorized to give those instructions as an agent.
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For the avoidance of doubt, giving an application instruction under the White Form
eIPO service more than once and obtaining different application reference numbers
without effecting full payment in respect of a particular reference number will not
constitute an actual application.
If you apply through the White Form eIPO service, you are deemed to have
authorized the White Form eIPO Service Provider to apply on the terms and conditions in
this prospectus, as supplemented and amended by the terms and conditions of the White
Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each
of you jointly and severally) are deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to
apply for Hong Kong Offer Shares on your behalf and to do on your behalf all the things
stated in this prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instructions given by you or for your benefit
to HKSCC (in which case an application will be made by HKSCC Nominees on your
behalf) provided such application instruction has not been withdrawn or otherwise
invalidated before the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken
by HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or
for any breach of the terms and conditions of this prospectus.
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
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
. Identity document number
. Full name(s)
2 as shown on your
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
. Identity document number
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Notes:
(1) If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong address. You are also required to declare
that the identity information provided by you follows the requirements as described in Note 2
below. In particular, where you cannot provide a HKID number, you must confirm that you do not
hold a HKID card.
(2) The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both
English and Chinese names must be used. Otherwise, either English or Chinese names will be
accepted. The order of priority of the applicant’s identity document type must be strictly followed
and where an individual applicant has a valid HKID card (including both Hong Kong Residents
and Hong Kong Permanent Residents), the HKID number must be used when making an
application to subscribe for Hong Kong Offer Shares. Similarly for corporate applicants, a LEI
number must be used if an entity has a LEI certificate.
(3) If the applicant is a trustee, the client identification data (‘‘ CID’’) of the trustee, as set out above,
will be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS),
the CID of the asset management company or the individual fund, as appropriate, which has opened
a trading account with the broker will be required, as above.
(4) The maximum number of joint applicants on FINI is capped at 4 in accordance with market
practice.
(5) If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and
(ii), the identity document number, for each of the beneficial owners or, in the case(s) of joint
beneficial owners, for each joint beneficial owner. If you do not include this information, the
application will be treated as being made for your benefit.
(6) If you are applying as an unlisted company and (i) the principal business of that company is dealing
in securities; and (ii) you exercise statutory control over that company, then the application will be
treated as being for your benefit and you should provide the required information in your
application as stated above.
‘‘Unlisted company’’ means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
‘‘Statutory control’’ means you:
. control the composition of the board of directors of the company;
. control more than half of the voting power of the company; or
. hold more than half of the issued share capital of the company (not counting any part of it
which carries no right to participate beyond a specified amount in a distribution of either
profits or capital).
For those applying through HKSCC EIPO channel, and making an application under
a power of attorney, we and the Sponsor-O verall Coordinator, as our agent, have
discretion to consider whether to accept it on any conditions we think fit, including
evidence of the attorney’s authority.
Failing to provide any required information may result in your application being
rejected.
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4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 100 H Shares
Permitted number of
Hong Kong Offer
Shares for
application and
amount payable on
application/
successful allotment
: Hong Kong Offer Shares are available for
application in specified board lot sizes only.
Please refer to the amount payable associated
with each specified board lot size in the table
below.
The Offer Price is HK$144.60 per Share. If you are
applying through the HKSCC EIPO channel, your
broker or custodian may require you to pre-fund
your application in such amount as determined by
the broker or custodian, based on the applicable
laws and regulations in Hong Kong. You are
responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Offer
Shares you applied for.
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to c ause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee an d the AFRC transaction
levy by debiting the relevant nominee bank
account at the Designated Bank for your broker
or custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you
have selected. You must pay the respective
maximum amount payable on application in full
upon application for Hong Kong Offer Shares.
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--- page 385 ---
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
100 14,605.83 2,000 292,116.58 10,000 1,460,582.91 300,000 43,817,487.30
200 29,211.65 2,500 365,145.72 20,000 2,921,165.82 400,000 58,423,316.40
300 43,817.49 3,000 438,174.87 30,000 4,381,748.74 500,000 73,029,145.50
400 58,423.32 3,500 511,204.01 40,000 5,842,331.65 600,000 87,634,974.60
500 73,029.14 4,000 584,233.17 50,000 7,302,914.56 700,000 102,240,803.70
600 87,634.97 4,500 657,262.31 60,000 8,763,497.45 800,000 116,846,632.80
700 102,240.80 5,000 730,291.45 70,000 10,224,080.36 900,000 131,452,461.90
800 116,846.63 6,000 876,349.75 80,000 11,684,663.28 1,000,000 146,058,291.00
900 131,452.46 7,000 1,022,408.04 90,000 13,145,246.19 1,100,000 160,664,120.10
1,000 146,058.29 8,000 1,168,466.33 100,000 14,605,829.10 1,271,600
(1) 185,727,722.83
1,500 219,087.44 9,000 1,314,524.62 200,000 29,211,658.20
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the
Exchange Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock
Exchange trading fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the
SFC transaction levy, collected by the Stock Exchange on behalf of the SFC; and in the case of the
AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying
investor in your application as required under the paragraph headed ‘‘— A. Application for
Hong Kong Offer Shares — 3. Information Req uired 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 ben efit you have made the application shall
not apply for any International Offer Shares.
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6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or
the Overall Coordinators, as our agents, to execute any documents for you and
to do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the name of HKSCC Nominees as required
by the Articles of Association, and (if you are applying through the HKSCC
EIPO channel) to deposit the allotted Hong Kong Offer Shares directly into
CCASS for the credit of your designated HKSCC Participant’s stock account on
your behalf;
(ii) confirm that you have read and understand the terms and conditions and
application procedures set out in this prospectus and the designated website of
the White Form eIPO service (or as the case may be, the agreement you entered
into with your broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the
arrangements, undertakings and warranties under the participant agreement
between your broker or custodian and HKSCC and observe the General Rules of
HKSCC and the HKSCC Operational Procedures for giving application
instructions to apply for Hong Kong Offer Shares;
(iv) confirm that you are aware of the restr ictions 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 pro spectus and any supplement to it and have
relied only on the information and representations contained therein in making
your application (or as the case may be, causing your application to be made)
and will not rely on any other information or representations;
(vi) agree that the Relevant Persons
1, the H Share Registrar and HKSCC will not be
liable for any information and representations not in this prospectus and any
supplement to it;
1 Relevant Persons would include the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediates and any of their or the Company’s respective directors, officers, employees, partners,
agents or representatives and any other parties involved in the Global Offering.
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--- page 387 ---
(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 applicat i o nt ou s ,t h eR e l e v a n tP e r s o n s ,t h eH
Share Registrar, HKSCC, HKSCC Nominees, the 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 ‘ ‘— G. Personal Data — 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 b ecause 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 th et i m ea n di nt h em a n n e ra ss p e c i f i e di n
the paragraph headed ‘‘— B. Publication of Results’’ in this section;
(x) confirm that you are aware of the situat ions specified in the paragraph headed
‘‘— C. Circumstances In Which You Wi ll Not Be Allocated Hong Kong Offer
Shares’’ in this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of
it and the resulting contract will be governed by and construed in accordance
with the laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the Articles of Association and laws
of any place outside Hong Kong that apply to your application and that neither
we nor the Relevant Persons will breach any law inside and/or outside Hong
Kong as a result of the acceptance of your offer to purchase, or any action
arising from your rights and obligations under the terms and conditions
contained in this prospectus;
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(xiii) confirm that (a) your application or HKSCC Nominees’ application on your
behalf is not financed directly or indirectly by the Company, any of the directors,
chief executives, substantial Shareholder(s) or existing shareholder(s) of the
Company or any of its subsidiaries or any o f their respective close associates; and
(b) you are not accustomed or will not be accustomed to taking instructions from
the Company, any of the directors, chief executives, substantial shareholder(s) or
existing shareholder(s) of the Company or any of its subsidiaries or any of their
respective close associates in relation to the acquisition, disposal, voting or other
disposition of the Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on
your declarations and representations in deciding whether or not to allocate any
Hong Kong Offer Shares to you and that you may be prosecuted for making a
false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(xvii) declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for whose
benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other
application has been or will be made for your benefit by giving electronic
application instructions to HKSCC directly or indirectly or through the
application channel of the H Share Registrar or by any one as your agent or
by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent
for or for the benefit of that person or by that person or by any other person as
agent for that person by giving electronic application instructions to HKSCC
and (2) you have due authority to give electronic application instructions on
behalf of that other person as its agent.
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B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfull y allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website The designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )w i t ha
‘‘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
d i s p l a y e do nt h e‘ ‘ A l l o t m e n tR e s u l t s ’ ’
page of the White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
24 hours, from 11 : 00 p.m.
and Wednesday, January
7, 2026 to 12 : 00
midnight on Tuesday,
January 13, 2026 (Hong
Kong time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.iluvatar.com which will provide
links to the above mentioned websites of
t h eHS h a r eR e g i s t r a r .
No later than 11 : 00 p.m.
on Wednesday,
January 7, 2026
(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 Thursday,
January 8, 2026,
Friday, January 9, 2026,
Monday, January 12,
2026, and Tuesday,
January 13, 2026
For those applying through HKSCC EIPO channel, you may also check with your
broker or custodian from 6 : 00 p.m. on Tu esday, January 6, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and r eview the allotment result from 6 : 00
p.m. on Tuesday, January 6, 2026 on a 24-hour basis and should report any discrepancies
on allotments to HKSCC as soon as practicable.
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Allocation Announcement
We expect to announce the level of indications of interest in the International
Offering, the level of applications in the Hong Kong Public Offering and the basis of
allocations of Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.iluvatar.com by no later than 11 : 00 p.m. on
Wednesday, January 7, 2026 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying 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 accep t any application, or to accept only part of
any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
. within three weeks from the closing date of the application lists; or
. within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
. you make multiple applications or suspected multiple applications. You may
refer to the paragraph headed ‘‘— A. Application for Hong Kong Offer Shares
— 5. Multiple Applications Prohibited’’ in this section on what constitutes
multiple applications;
. your application instruction is incomplete;
. your payment (or confirmation of funds, as the case may be) is not made
correctly;
. the Underwriting Agreements do not beco me unconditional or are terminated;
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. we or the Overall Coordinators believe that by accepting your application, it or
we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the
Receiving Bank will collect the portion of these funds required to settle each HKSCC
Participant’s actual Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to det ermine the cause of failure and request such
defaulting HKSCC Participant to recti fy 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 reall ocated to the International Offering. Hong
Kong Offer Shares applied for by you through the broker or custodian may be affected to
the extent of the settlement failure. In the extreme case, you will not be allocated any Hong
Kong Offer Shares due to the money settlement failure by such HKSCC Participant. None
of us, the Relevant Persons, the H Share Registrar and HKSCC is or will be liable if Hong
Kong Offer Shares are not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one Share certificate for all Ho ng Kong Offer Shares allotted to you under
the Hong Kong Public Offering (except pursuant to applications made through the HKSCC
EIPO channel where the Share certificates will b e deposited into CCASS as described below).
No temporary document of title will be issu ed in respect of the Shares. No receipt will be
issued for sums paid on application.
Share certificates will only become valid evide nce of title at 8 : 00 a.m. on the Listing Date,
provided that the Global Offering has become unconditional and the right of termination
described in the section headed ‘‘Underwriting’’ has not been exercised. Investors who trade
Shares prior to the receipt of Share certificate s or the Share certificates becoming valid do so
entirely at their own risk.
The right is reserved to retain any Share certi ficate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
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--- page 392 ---
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 3
For physical share
certificates of 900,000
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’s Road East,
Wan Chai, Hong Kong
Time: from 9 : 00 a.m. to 1 : 00
p.m. on Thursday,
January 8, 2026
(Hong Kong time)
If you are an individual, you
must not authorise any
other person to collect for
you. If you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
Both individuals and
authorised representatives
must produce, at the time of
collection, evidence of
identity acceptable to the
Hong Kong Share
Registrar.
Note: If you do not collect your
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
Share certificate(s) will be
issued in the name of
HKSCC Nominees,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account.
No action by you is required
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--- page 393 ---
White Form eIPO service HKSCC EIPO channel
For physical share
certificates of less than
900,000 Offer Shares
issued under your own
name
Your Share certificate(s) will
be sent to the address
specified in your
application instructions by
ordinary post at your own
risk
Time: Wednesday,
January 7, 2026
Refund mechanism for surplus application monies paid by you
Date Thursday, January 8, 2026 Subject to the arrangement
between you and your
broker or custodian
Responsible party H Share Registrar Your broker or custodian
Application monies paid
through single bank
account
White Form e-Refund
payment instructions to
your designated bank
account
Your broker or custodian will
a r r a n g er e f u n dt oy o u r
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 Monday, January 5, 2026 if, there
is/are:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. an ‘‘extreme conditions’’ announcement issued after a super typhoon (‘‘ Extreme
Conditions ’’),
(collectively, ‘‘Severe Weather Signals ’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Monday, January
5, 2026.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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Instead they will open between 11 : 45 a.m. and 12 : 00 noon and/or close at 12 : 00
noon on the next business day which does not have Severe Weather Signals in force at any
time between 9 : 00 a.m. and 12 : 00 noon.
Prospective investors should be aware that a postponement of the opening/closing of
the application lists may result in a delay in the listing date. Should there be any changes to
the dates mentioned in the section headed ‘‘Expected Timetable’’ in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.iluvatar.com of the revised timetable.
If a Severe Weather Signal is hoisted on Wednesday, January 7, 2026, the H Share
Registrar will make appropriate arrangements for the delivery of the share certificates to
the CCASS Depository’s service counter so that they would be available for trading on
Thursday, January 8, 2026.
If a Severe Weather Signal is hoisted on We dnesday, January 7, 2026 : for physical
share certificates of less than 900,000 Hong Kong Offer Shares issued under your own
name, you may collect your Share certificate in person from the H Share Registrar’s office
after the Severe Weather Signal is lowered or cancelled (e.g. in the afternoon of
Wednesday, January 7, 2026 or on Thursday, January 8, 2026).
If a Severe Weather Signal is hoisted on Thu rsday, January 8, 2026 : for physical share
certificates of 900,000 or more of Hong Kong Offer Shares issued under your own name,
despatch will be made by ordinary post when the post office re-opens after the Severe
Weather Signal is lowered or cancelled (e. g. in the afternoon of Thursday, January 8, 2026
or on Friday, January 9, 2026).
Prospective investors should be aware tha t if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the Shares
will be accepted as eligible securities by HKSCC fo r deposit, clearance and settlement in CCASS
with effect from the date of commencement of d ealings in the Shares or any other date HKSCC
chooses. Settlement of transactions between Ex change 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 Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–3 8 5–


--- page 395 ---
G. PERSONAL DATA
The following Personal Information Collect ion Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving applic ation instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection State ment informs the applicant for, and holder
of, Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
R e g i s t r a ri nr e l a t i o nt op e r s o n a ld a t aa n dt h ePersonal Data (Privacy) Ordinance (Chapter
486 of the Laws of Hong Kong).
2. Reasons for the Collection of Your Personal Data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to
ensure that personal data supplied to the Company or its agents and the H Share Registrar
is accurate and up-to-date when applying for Hong Kong Offer Shares or transferring
Hong Kong Offer Shares into or out of their names or in procuring the services of the H
Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of
the Company or the H Share Registrar to effect tr a n s f e r so ro t h e r w i s er e n d e rt h e i rs e r v i c e s .
It may also prevent or delay registration or transfers of Hong Kong Offer Shares which you
have successfully applied for and/or the des patch of Share certificate(s) to which you are
entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means)
for the following purposes:
. processing your application and refund cheque and White Form e-Refund
payment instruction(s), where applicable, verification of compliance with the
terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Offer Shares;
. compliance with applicable laws and regulations in Hong Kong and elsewhere;
. registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
HOW TO APPLY FOR HONG KONG OFFER SHARES
–3 8 6–


--- page 396 ---
. maintaining or updating the register of members of the Company;
. verifying identities of applicants for and holders of the Shares and identifying
any duplicate applications for the Shares;
. facilitating Hong Kong Offer Shares balloting;
. establishing benefit entitlements of holders of the Shares, such as dividends,
rights issues, bonus issues, etc.;
. distributing communications from the Company and its subsidiaries;
. compiling statistical information and profiles of the holder of the Shares;
. disclosing relevant information to fa cilitate claims on entitlements; and
. any other incidental or associated purposes relating to the above and/or to
enable the Company and the H Share Registrar to discharge their obligations to
applicants and holders of the Shares and/or regulators and/or any other
purposes to which applicants and holders of the 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 th e extent necessary for achieving any of the
above purposes, disclose, obtain or transfer (whether within or outside Hong Kong) the
personal data to, from or with any of the following:
. the Company’s appointed agents such as f inancial advisers , receiving bank and
overseas principal share registrar;
. HKSCC or HKSCC Nominees, who will use the personal data and may transfer
the personal data to the H Share Registrar for the purposes of providing its
services or facilities or performing its f unctions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
. any agents, contractors or third-party service providers who offer
administrative, telecomm unications, computer, payment or other services to
the Company or the H Share Registrar in connection with their respective
business operation;
. the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
including for the purpose of the Stock Exchange’s administration of the Listing
Rules and the SFC’s performance of its statutory functions; and
HOW TO APPLY FOR HONG KONG OFFER SHARES
–3 8 7–


--- page 397 ---
. any persons or institutions with which the holders of Hong Kong Offer Shares
have or propose to have dealings, such as their bankers, solicitors, accountants
or brokers etc.
5. Retention of Personal Data
The Company and the H Share Registrar will keep the personal data of the applicants
and holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for
which the personal data were collected. Personal data which is no longer required will be
destroyed or dealt with in accordance with the Personal Data (Privacy) Ordinance
(Chapter 486 of the Laws of Hong Kong).
6. Access to and Correction of Personal Data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain
whether the Company or the H Share Registrar hold their personal data, to obtain a copy
of that data, and to correct any data that is inaccurate. The Company and the H Share
Registrar have the right to charge a reasonable fee for the processing of such requests. All
requests for access to data or correction of d ata should be addressed to the Company and
the H Share Registrar, at their registered address disclosed in the section headed
‘‘Corporate Information’’ in this prospect us 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
–3 8 8–


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The following is the text of a report received from the Company’s reporting accountants,
Ernst & Young, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this
Prospectus.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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佭␃凖儮⍠㣅ⱛ䘧

㰳
໾সഞϔᑻῧ
Tel 䳏䁅: +852 2846 9888
Faxⳳ: +852 2868 4432
ey.com
ACCOUNTANTS’ REPORT ON HISTORI CAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHANGHAI ILUVATAR COREX SEMICONDUCTOR CO., LTD., AND
HUATAI FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial i nformation of Shanghai Iluvatar CoreX
Semiconductor Co., Ltd. (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set
out on pages I-4 to I-114, which comprises the consolidated statements of profit or loss and
other comprehensive income, statements of changes in equity and statements of cash flows of
the Group for each of the years ended 31 December 2022, 2023 and 2024 and the six months
ended 30 June 2025 (the ‘‘Relevant Periods’’), an d the consolidated statements of financial
position of the Group and the statements of financial position of the Company as at 31
December 2022, 2023 and 2024 and 30 June 2025 and 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-114 forms an integral part of this
report, which has been prepared for inclusion in the prospectus of the Company dated 30
December 2025 (the ‘‘Prospectus’’) in connection with the initial listing of the shares of the
Company on the Main Board of The Stock Exchange of Hong Kong Limited (the ‘‘Stock
Exchange’’).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsib le for the preparation of the Historical
Financial Information that gives a true and fair v iew in accordance with the basis of preparation
set out in note 2.1 to the Historical Financial Information, and for such internal control as the
directors determine is necessary to enable th e preparation of the Historical Financial
Information that is free from material misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial
Information in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (‘‘HKICPA’’). This standard requires that we comply with ethical standards and
plan and perform our work to obtain reasonable assurance about whether the Historical
Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1–


--- page 399 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement of
the Historical Financial Information, whet her due to fraud or error. In making those risk
assessments, the reporting accountants consid er internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in note 2.1 to the Historical Financial Information in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of t he entity’s internal co ntrol. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the
Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the
Company as at 31 December 2022, 2023 and 2024 and 30 June 2025 and of the financial
performance and cash flows of the Group for each of the Relevant Periods in accordance with
the basis of preparation set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative f inancial information of the Group which
comprises the consolidated statement of pro fit or loss and other comprehensive income,
statement of changes in equity and statement of cash flows for the six months ended 30 June
2024 and other explanatory information (the ‘‘Int erim Comparative Financial Information’’).
The directors of the Company are responsible fo r the preparation of the Interim Comparative
Financial Information in accordance with the basis of preparation set out in note 2.1 to the
Historical Financial Information. Our responsibility is to express a conclusion on the Interim
Comparative Financial Information based on our review. We conducted our review in
accordance with Hong Kong Stan dard on Review Engagements 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the Entity issued by the
HKICPA. A review consists of making inquiries, p rimarily of persons responsible for financial
and accounting matters, and applying analytic al and other review procedures. A review is
substantially less in scope than an audit conduct ed in accordance with Hong Kong Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we do not express an
audit opinion. Based on our review, nothing has come to our attention that causes us to believe
that the Interim Comparative Financial Information, for the purposes of the accountants’
report, is not prepared, in all material respects, in accordance with the basis of preparation set
out in note 2.1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2–


--- page 400 ---
Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange and
the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which states that no dividends
have been paid by the Company in respect of the Relevant Periods.
Ernst & Young
Certified Public Accountants
Hong Kong
30 December 2025
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3–


--- page 401 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of
this accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the
Historical Financial Information is based, were audited by Ernst & Young in accordance
with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified
Public Accountants (the ‘‘Underlying Financial Statements’’).
The Historical Financial Information is presented in Renminbi (‘‘RMB’’) and all
values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4–


--- page 402 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
REVENUE 5 189,369 289,041 539,511 197,431 324,263
Cost of sales (76,957) (145,890) (274,427) (108,438) (161,830)
Gross profit 112,412 143,151 265,084 88,993 162,433
Other income and gains 5 33,770 20,105 44,985 33,078 39,539
Selling and distribution expenses (48,715) (88,259) (122,358) (54,471) (67,609)
Administrative expenses (166,044) (242,020) (257,287) (119,469) (274,592)
Research and development costs (456,624) (615,884) (772,779) (333,717) (451,496)
Impairment losses on financial assets (19,025) (22,198) (31,855) (9,191) (1,559)
Other expenses (2,889) (1,312) (840) (830) (4,893)
Finance costs 7 (6,503) (11,007) (17,383) (8,385) (11,139)
LOSS BEFORE TAX 6 (553,618) (817,424) (892,433) (403,992) (609,316)
I n c o m e t a x e x p e n s e 1 0 —————
LOSS FOR THE YEAR/PERIOD (553,618) (817,424) (892,433) (403,992) (609,316)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not
be reclassified to profit or loss in
subsequent periods:
Equity investments designated at fair
value through other comprehensive
income:
Changes in fair value — (2) 230 (23) (228)
OTHER COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD — (2) 230 (23) (228)
TOTAL COMPREHENSIVE LOSS FOR
THE YEAR/PERIOD (553,618) (817,426) (892,203) (404,015) (609,544)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5–


--- page 403 ---
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss attributable to:
Owners of the parent 12 (523,839) (791,307) (892,433) (403,992) (609,316)
Non-controlling interests (29,779) (26,117) — — —
(553,618) (817,424) (892,433) (403,992) (609,316)
Total comprehensive loss attributable to:
Owners of the parent (523,839) (791,309) (892,203) (404,015) (609,544)
Non-controlling interests (29,779) (26,117) — — —
(553,618) (817,426) (892,203) (404,015) (609,544)
LOSS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS
OF THE PARENT
Basic
— For loss for the year/period (RMB) (3.99) (5.43) (5.45) (2.48) (3.48)
Diluted
— For loss for the year/period (RMB) (3.99) (5.43) (5.45) (2.48) (3.48)
For the details of Pre-IPO Investments, please refer to note 30(b) to this report.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6–


--- page 404 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 13 84,476 105,946 127,995 131,115
Right-of-use assets 14 17,903 8,550 40,658 14,674
Intangible assets 15 101,061 74,575 140,667 141,946
Financial assets at fair value
through profit or loss 20 50,000 90,695 96,539 96,176
Equity investments designated at
fair value through other
comprehensive income 16 — 598 828 600
Long-term trade receivables 22 — 15,718 — —
Prepayments, other receivables
and other assets 19 8,146 9,758 16,141 4,500
Total non-current assets 261,586 305,840 422,828 389,011
CURRENT ASSETS
Inventories 17 244,020 232,604 342,643 494,920
Trade and bills receivables 18 88,707 200,436 377,176 388,946
Prepayments, other receivables
and other assets 19 112,761 338,921 202,851 461,925
Financial assets at fair value
through profit or loss 20 8,779 — — 50,118
Due from related parties 35 — 184,700 — —
Restricted cash 21 92,678 61 61 42,568
Pledged time deposits 21 18,844 — — —
Cash and cash equivalents 21 219,305 308,053 313,563 1,713,176
Long-term trade r eceivables due
within one year 22 — 22,364 26,053 19,915
Total current assets 785,094 1,287,139 1,262,347 3,171,568
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7–


--- page 405 ---
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
CURRENT LIABILITIES
Trade payables 23 85,256 18,157 45,645 29,884
Other payables and accruals 24 92,725 109,696 187,651 153,119
Contract liabilities 25 2,232 13,528 28,756 39,947
Deferred government grants 28 248 35,014 2,272 2,355
Lease liabilities 14 13,788 3,705 17,979 10,442
Long-term payables due within
one year 29 19,529 13,949 31,592 56,016
Interest-bearing bank and other
borrowings 26 102,930 492,417 566,060 583,812
Total current liabilities 316,708 686,466 879,955 875,575
NET CURRENT ASSETS 468,386 600,673 382,392 2,295,993
TOTAL ASSETS LESS
CURRENT LIABILITIES 729,9 72 906,513 805,220 2,685,004
NON-CURRENT LIABILITIES
Interest-bearing bank and other
borrowings 26 50,000 — 42,000 83,500
Deferred government grants 28 44,670 26,041 45,106 71,900
Lease liabilities 14 1,935 1,859 15,156 3,931
Long-term payables 29 13,686 275 14,289 9,819
Total non-current liabilities 110,291 28,175 116,551 169,150
Net assets 619,681 878,338 688,669 2,515,854
EQUITY
Equity attributable to owners of
the parent
Paid-in capital/Share capital 30 171,314 186,216 193,814 228,886
Treasury shares 30 (31,854) (28,616) (40,846) (39,649)
Reserves 32 521,519 765,137 535,701 2,326,617
660,979 922,737 688,669 2,515,854
Non-controlling interests (41,298) (44,399) — —
Total equity 619,681 878,338 688,669 2,515,854
For the details of Pre-IPO Investments, please refer to note 30(b) to this report.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8–


--- page 406 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Year ended 31 December 2022
Attributable to owners of the parent
Paid-in capital Treasury shares Capital reserve
Share-based
payment reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Exchange
fluctuation
reserve
Accumulated
losses Total
Non-controlling
interests Total equity
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 30 Note 32 Note 31 Note 32
At 1 January 2022 148,897 (32,621) 1,324,313 229,548 — (1,320) (1,535,453) 133,364 (12,581) 120,783
L o s s f o r t h e y e a r —————— ( 5 2 3 , 8 3 9 ) ( 5 2 3 , 8 3 9 ) ( 2 9 , 7 7 9 ) ( 5 5 3 , 6 1 8 )
Total comprehensive loss
f o r t h e y e a r —————— ( 5 2 3 , 8 3 9 ) ( 5 2 3 , 8 3 9 ) ( 2 9 , 7 7 9 ) ( 5 5 3 , 6 1 8 )
Contribution from
s h a r e h o l d e r s 3 2 2 2 , 4 1 7— 9 1 2 , 5 8 9———— 9 3 5 , 0 0 6— 9 3 5 , 0 0 6
Expense in relation to
c a p i t a l i n j e c t i o n 3 2 —— ( 5 , 7 1 4 ) ———— ( 5 , 7 1 4 ) — ( 5 , 7 1 4 )
Share-based payment
expenses 31 — — — 120,842 — — — 120,842 — 120,842
Restricted shares vested
d u r i n g t h e y e a r — 7 6 7 ( 7 6 7 ) ———————
Wind up of subsidiaries — — — — — 1,320 — 1,320 1,062 2,382
At 31 December 2022 171,314 (31,854) 2,230,421* 350,390* —* —* (2,059,292)* 660,979 (41,298) 619,681
Year ended 31 December 2023
Attributable to owners of the parent
Paid-in capital Treasury shares Capital reserve
Share-based
payment reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Accumulated
losses Total
Non-controlling
interests Total equity
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 30 Note 32 Note 31 Note 32
At 1 January 2023 171,314 (31,854) 2,230,421 350,390 — (2,059,292) 660,979 (41,298) 619,681
L o s s f o r t h e y e a r ————— ( 7 9 1 , 3 0 7 ) ( 7 9 1 , 3 0 7 ) ( 2 6 , 1 1 7 ) ( 8 1 7 , 4 2 4 )
Other comprehensive income for the year:
Changes in fair value of equity
investments at fair value through
other comprehensive income, net
of tax 32 — — — — (2) — (2) — (2)
Total comprehensive loss for the year — — — — (2) (791,307) (791,309) (26,117) (817,426)
Contribution from shareholders 32 9,763 — 810,333 — — — 820,096 — 820,096
Expense in relation to capital injection 32 — — (2,132) — — — (2,132) — (2,132)
Share-based payment expenses 31 — — — 207,759 — — 207,759 — 207,759
Acquisition of non-controlling interests 32 — — (23,016) — — — (23,016) 23,016 —
Restricted shares vested during the year — 3,238 (3,238) — — — — — —
Conversion of convertible liabilities 32 5,139 — 45,221 — — — 50,360 — 50,360
At 31 December 2023 186,216 (28,616) 3,057,589* 558,149* (2)* (2,850,599)* 922,737 (44,399) 878,338
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9–


--- page 407 ---
Year ended 31 December 2024
Attributable to owners of the parent
Paid-in capital Treasury shares Capital reserve
Share-based
payment reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Accumulated
losses Total
Non-controlling
interests Total equity
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 30 Note 32 Note 31 Note 32
At 1 January 2024 186,216 (28,616) 3,057,589 558,149 (2) (2,850,599) 922,737 (44,399) 878,338
L o s s f o r t h e y e a r ————— ( 8 9 2 , 4 3 3 ) ( 8 9 2 , 4 3 3 ) — ( 8 9 2 , 4 3 3 )
Other comprehensive income for the year:
Changes in fair value of equity
investments at fair value through
other comprehensive income, net
o f t a x 3 2 ———— 2 3 0— 2 3 0— 2 3 0
Total comprehensive loss for the year — — — — 230 (892,433) (892,203) — (892,203)
Contribution from shareholders 32 7,598 — 465,610 — — — 473,208 — 473,208
Expense in relation to capital injection 32 — — (3,622) — — — (3,622) — (3,622)
Share-based payment expenses 31 — — — 247,765 — — 247,765 — 247,765
Restricted shares vested during the year — 2,587 (2,587) — — — — — —
S h a r e s r e p u r c h a s e d — ( 1 4 , 8 1 7 ) ———— ( 1 4 , 8 1 7 ) — ( 1 4 , 8 1 7 )
Acquisition of non-controlling interests 32 — — (44,399) — — — (44,399) 44,399 —
At 31 December 2024 193,814 (40,846) 3,472,591* 805,914* 228* (3,743,032)* 688,669 — 688,669
Six months ended 30 June 2024
Attributable to owners of the parent
Paid-in capital Treasury shares Capital reserve
Share-based
payment reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Accumulated
losses Total
Non-controlling
interests Total equity
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 30 Note 32 Note 31 Note 32
At 1 January 2024 186,216 (28,616) 3,057,589 558,149 (2) (2,850,599) 922,737 (44,399) 878,338
L o s s f o r t h e p e r i o d ( u n a u d i t e d ) ————— ( 4 0 3 , 9 9 2 ) ( 4 0 3 , 9 9 2 ) — ( 4 0 3 , 9 9 2 )
Other comprehensive income for the period
(unaudited):
Changes in fair value of equity
investments at fair value through
other comprehensive income, net
of tax (unaudited) — — — — (23) — (23) — (23)
Total comprehensive loss for the period
(unaudited) — — — — (23) (403,992) (404,015) — (404,015)
Contribution from shareholders (unaudited) 5,885 — 366,448 — — — 372,333 — 372,333
Expense in relation to capital injection
(unaudited) — — (792) — — — (792) — (792)
Share-based payment expenses (unaudited) — — — 107,070 — — 107,070 — 107,070
Restricted shares vested during the period
(unaudited) — 1,633 (1,633) — — — — — —
S h a r e s r e p u r c h a s e d ( u n a u d i t e d ) 6 — ( 1 , 9 1 6 ) ———— ( 1 , 9 1 6 ) — ( 1 , 9 1 6 )
Acquisition of non-controlling interests
(unaudited) — — (44,399) — — — (44,399) 44,399 —
At 30 June 2024 (unaudited) 192,101 (28,899) 3,377,213 665,219 (25) (3,254,591) 951,018 — 951,018
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 0–


--- page 408 ---
Six months ended 30 June 2025
Attributable to owners of the parent
Paid-in capital/
share capital Treasury shares Capital reserve
Share-based
payment reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Accumulated
losses Total
Non-controlling
interests Total equity
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 30 Note 30 Note 32 Note 31 Note 32
At 1 January 2025 193,814 (40,846) 3,472,591 805,914 228 (3,743,032) 688,669 — 688,669
L o s s f o r t h e p e r i o d ————— ( 6 0 9 , 3 1 6 ) ( 6 0 9 , 3 1 6 ) — ( 6 0 9 , 3 1 6 )
Other comprehensive income
for the period:
Changes in fair value of equity
investments at fair value through
other comprehensive income, net
of tax 32 — — — — (228) — (228) — (228)
Total comprehensive loss for the period — — — — (228) (609,316) (609,544) — (609,544)
Issuance of shares 32 35,072 — 2,112,815 — — — 2,147,887 — 2,147,887
Conversion into a joint-stock company 32 — — (2,555,069) (507,458) — 3,062,527 — — —
Share issue expenses 32 — — (5,794) — — — (5,794) — (5,794)
Share-based payment expenses 31 — — — 295,859 — — 295,859 — 295,859
Restricted shares vested during the period — 2,819 (2,819) — — — — — —
Shares repurchased — (1,622) 399 — — — (1,223) — (1,223)
At 30 June 2025 228,886 (39,649) 3,022,123* 594,315* —* (1,289,821)* 2,515,854 — 2,515,854
* These reserve accounts comprise the consolidated reserves of RMB521,519,000, RMB765,137,000,
RMB535,701,000 and RMB2,326,617,000 in the consolidated statements of financial position as of 31 December
2022, 2023 and 2024 and 30 June 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 1–


--- page 409 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss before tax (553,618) (817,424) (892,433) (403,992) (609,316)
Adjustments for:
Finance costs 7 6,503 11,007 17,383 8,385 11,139
Interest income 5 (4,005) (3,754) (4,125) (2,795) (5,852)
Gain on disposal of wealth investment
products 5 (1,113) — — — —
Loss on disposal of items of property,
plant and equipment 13 34 4,547 1,263 1,261 57
Loss on deregistration of subsidiaries 2,382 — — — —
Depreciation of items of property, plant
and equipment 13 27,914 47,977 70,653 33,502 39,948
Depreciation of right-of-use assets 14 10,636 13,752 14,946 5,691 11,314
Amortisation of intangible assets 15 51,810 56,538 69,374 30,160 39,046
Amortisation of deferred government
grants 5 — (135) (10,094) (3,915) (12,915)
Provision/(reversal of provision) for
trade and bills receivables, net 18 19,023 21,125 18,165 (4,592) 1,181
Provision for prepayments, other
receivables and other assets, net 19 — — 13,800 13,800 —
Provision/(reversal of provision) for
long-term trade receivables, net 22 — 468 (121) (79) (81)
Impairment of inventories 6 — 15,269 4,792 4,792 934
Fair value (gains)/loss on financial assets
at fair value through profit or loss — (695) (844) (390) 245
Fair value losses on convertible
liabilities 6 — 360 — — —
Share-based payment expenses 6 120,842 207,759 247,765 107,070 295,859
(319,592) (443,206) (449,476) (211,102) (228,441)
continued/…
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 2–


--- page 410 ---
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Increase in trade and bills receivables (107,593) (132,854) (194,905) (97,287) (12,951)
(Increase)/decrease in prepayments, other
receivables and other assets (38,083) (120,106) 14,357 (160,945) (245,962)
(Increase)/decrease in amounts due from
related parties — (30,600) 30,600 30,600 —
Increase in inventories (211,953) (3,853) (114,831) (118,203) (153,211)
Increase/(decrease) in trade payables 80,989 (67,099) 27,488 5,223 (15,761)
(Increase)/decrease in long-term trade
receivables — (38,185) 13,110 9,087 6,461
Increase/(decrease) in other payables and
accruals 16,063 16,217 53,206 4,935 (39,446)
(Decrease)/increase in contract liabilities (9,297) 11,296 15,228 5,001 11,191
Increase/(decrease) in deferred government
grants 24,293 5,358 (15,922) (15,961) (572)
(Increase)/decrease in restricted cash (92,678) 92,617 — — (42,507)
Cash used in operating activities (657,851) (710,415) (621,145) (548,652) (721,199)
Interest received 4,005 3,389 3,165 2,320 5,610
Net cash flows used in operating activities (653,846) (707,026) (617,980) (546,332) (715,589)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of items of property, plant and
equipment (82,172) (70,681) (84,835) (41,903) (23,494)
Purchase of intangible assets (73,396) (57,800) (92,583) (49,926) (18,061)
Receipt of government grants for property,
plant and equipment 10,155 10,914 12,339 6,089 40,364
Proceeds from disposal of wealth
investment products 12,334 8,779 — — —
Purchase of wealth management products — — — — (50,000)
Purchase of unlisted equity investments (50,000) (40,600) (5,000) (5,000) —
(Increase)/decrease in amounts due from
related parties — (4,100) 4,100 4,100 —
Net cash flows used in investing activities (183,079) (153,488) (165,979) (86,640) (51,191)
continued/…
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 3–


--- page 411 ---
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from shareholders 935,006 564,896 728,408 627,533 2,152,434
Expense in relation to capital injection (5,714) (2,132) (3,622) (792) —
Share issue expense — — — — (5,794)
Proceeds from convertible liabilities issued — 50,000 — — —
Purchase of treasury shares — — (14,817) (1,916) (1,223)
New bank loans 203,687 448,000 730,000 400,000 422,000
Repayment of bank loans (142,401) (108,149) (614,500) (384,000) (362,700)
Placement of pledged time deposits (18,844) — — — —
Withdrawal of pledged time deposits — 18,844 — — —
Interest paid (6,026) (10,420) (16,517) (8,055) (10,202)
Payment of listing expenses — — — — (1,471)
Principal portion of lease payments (12,547) (14,558) (19,483) (3,831) (25,030)
Net cash flows generated from financing
activities 953,161 946,481 789,469 628,939 2,168,014
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 116,236 85,967 5,510 (4,033) 1,401,234
Cash and cash equivalents at beginning of
year/period 95,738 219,305 308,053 308,053 313,563
Effect of foreign exchange rate changes, net 7,331 2,781 — — (1,621)
CASH AND CASH EQUIVALENTS AT
END OF YEAR/PERIOD 219,305 308,053 313,563 304,020 1,713,176
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 4–


--- page 412 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 13 58,287 80,026 111,713 119,046
Right-of-use assets 14 10,577 2,351 38,272 7,698
Intangible assets 15 92,936 47,062 90,168 94,739
Financial assets at fair value
through profit or loss 20 — — 4,915 6,176
Equity investments designated at
fair value through other
comprehensive income 16 — 598 828 600
Prepayments, other receivables
and other assets 19 6,822 9,260 15,199 3,014
Investments in subsidiaries 1 1,000 109,000 90,000 185,000
Total non-current assets 169,622 248,297 351,095 416,273
CURRENT ASSETS
Inventories 17 84,945 195,030 293,788 457,951
Trade and bills receivables 18 20,769 83,947 195,002 235,810
Prepayments, other receivables
and other assets 19 40,363 316,696 132,171 393,270
Financial assets at fair value
through profit or loss 20 8,779 — — 50,118
Due from related parties 35 382,951 719,788 593,779 653,208
Restricted cash 21 83,180 61 61 1,374
Pledged time deposits 21 18,844 — — —
Cash and cash equivalents 21 216,240 298,254 298,313 1,621,876
Total current assets 856,071 1,613,776 1,513,114 3,413,607
CURRENT LIABILITIES
Trade payables 23 27,178 14,406 42,052 23,662
Other payables and accruals 24 52,697 69,758 126,196 100,310
Contract liabilities 25 2,232 11,361 17,712 6,984
Deferred government grants 28 248 35,014 2,272 —
Lease liabilities 14 8,695 323 16,123 7,784
Long-term payables due within
one year 29 19,457 13,949 9,737 24,289
Interest-bearing bank and other
borrowings 26 102,930 492,417 506,003 523,766
Due to related parties 35 78,916 290,984 343,063 431,629
Total current liabilities 292 ,353 928,212 1,063,158 1,118,424
NET CURRENT ASSETS 563,718 685,564 449,956 2,295,183
TOTAL ASSETS LESS
CURRENT LIABILITIES 733,3 40 933,861 801,051 2,711,456
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 5–


--- page 413 ---
As at 31 December
As at
30 June
2022 2023 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Interest-bearing bank and other
borrowings 26 50,000 — 42,000 83,500
Deferred government grants 28 34,670 10,041 24,006 47,427
Lease liabilities 14 321 — 15,133 120
Long-term payables 29 13,686 275 9,307 9,819
Total non-current liabilities 98,677 10,316 90,446 140,866
Net assets 634,663 923,545 710,605 2,570,590
EQUITY
Paid-in capital/Share capital 30 171,314 186,216 193,814 228,886
Reserves 32 463,349 737,329 516,791 2,341,704
Total equity 634,663 923,545 710,605 2,570,590
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 6–


--- page 414 ---
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
Shanghai Iluvatar CoreX Semiconductor Co., Ltd. (the ‘‘Company’’, formerly known as ‘‘ 上海天數智芯半導體有
限公司’’) was established as a limited liability company in the People’s Republic of China (the ‘‘PRC’’) on 29 December
2015. Upon approval at the shareholders’ general meeting held on 13 January 2025, the Company was converted into a
joint stock company with limited liability under the Comp any Law of the PRC and was renamed as Shanghai Iluvatar
CoreX Semiconductor Co., Ltd. (‘‘ 上海天數智芯半導體股份有限公司’’). The registered office of the Company is
located at Room 101, Building 3, No. 2168 Chenhang Road, Minhang District, Shanghai.
During the Relevant Periods, the Company and its subsidiaries (together, the ‘‘Group’’) were principally
engaged in offering advanced general-purpose graphics processing unit (‘‘GPGPU’’) products and computing solutions
optimised for AI applications across diverse industries.
As at the date of this report, the Company had direct and indirect interests in its principal subsidiaries, all of
which are private limited liability companies, the particulars of which are set out below:
Name* Notes
Place and
date of establishment
Registered
paid-in capital
Percentage of equity
attributable to
the Company Principal activities
Direct Indirect
Beijing Iluvatar CoreX
Semiconductor Technology
Co., Ltd.*
(‘‘北京天數智芯半導體科技
有限公司’’)
(‘‘Beijing Iluvatar’’)
(a) Beijing
8 September 2021
RMB10,000,000 100 — Sale and
development of
GPGPU products
and the provision of
computing solutions
for AI applications
Shanghai Iluvatar Suanli
Electronic Technology Co.,
Ltd.*
(‘‘上海天數算力電子科技
有限公司’’)
(‘‘Shanghai Iluvatar
Suanli’’)
(b) Shanghai
9 June 2021
RMB90,000,000 100 — Development of
GPGPU products
Iluvatar CoreX Inc. Shanghai*
(‘‘上海芷銳電子科技
有限公司’’)
(‘‘Iluvatar Shanghai’’)
(c) Shanghai
2 January 2018
RMB20,000,000 100 — Sale and development
of GPGPU products
The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected
the results for the relevant periods or formed a substantial portion of the net assets of the Group. To give details of
other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.
Notes:
(a) The statutory financial statements of the ent ity for the year ended 31 December 2022 prepared in
accordance with PRC accounting principles and regulations were audited by Baker Tilly Tiancheng
Certified Public Accountants, a certified public accounting firm registered in the PRC. The statutory
financial statements of the entity for the year ended 31 December 2023 prepared in accordance with PRC
accounting principles and regulations were audited by Beijing Bochen Yiheng Certified Public
Accountants (General Partnership), a certified public accounting firm registered in the PRC. The
statutory financial statements of the entity for the year ended 31 December 2024 prepared in accordance
with PRC accounting principles and regulations we re audited by Shanghai Honghua Certified Public
Accountants Co., Ltd., a certified public accounting firm registered in the PRC.
(b) No audited financial statements have been prepared for the entity for the years ended 31 December 2022,
2023 and 2024 as the entity was not subject to any statutory audit requirements under the relevant rules
and regulations in its jurisdiction of establishment.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 7–


--- page 415 ---
(c) The statutory financial statements of the entity for the years ended 31 December 2022 and 2023 prepared
in accordance with PRC accounting principles and regulations were audited by Baker Tilly Tiancheng
Certified Public Accountants, a certified public accounting firm registered in the PRC. The statutory
financial statements of the entity for the year ended 31 December 2024 prepared in accordance with PRC
accounting principles and regulations were audited by Shanghai Honghua Certified Public Accountants
Co., Ltd., a certified public accounting firm registered in the PRC.
* The English names of these companies represent the best effort made by the directors of the Company to
translate the Chinese names as these companies have not been registered with any official English names.
Investment in subsidiaries — the Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments, at cost 14,700 127,000 112,000 207,000
Deemed investment arising from
share-based payment 158,041 269,237 407,893 564,462
Impairment (171,741) (287,237) (429,893) (586,462)
Total 1,000 109,000 90,000 185,000
2.1 BASIS OF PREPARATION
For ordinary shares issued to investors (collectively the ‘‘pre-IPO Investors’’) from whom the Company obtained
several rounds of investments (collectively the ‘‘pre-IPO Investments’’), pursuant to the supplemental agreements
entered into between the Company and the pre-IPO Investors in relation to the termination of certain of special rights
granted by the Company, including redemption rights and liquidation preferences rights, which are void ab initio as
described in note 30(b) to this report, having taking into account the legal and regulatory framework of the Company’s
jurisdiction and the governing law of the supplementary agreements, the directors considered that it is appropriate to
present the Pre-IPO Investments as equity throughout the Rel evant Periods. For the details of financial impacts, see
note 30(b) of this report.
The Historical Financial Information has been prepared in accordance with HKFRS Accounting Standards,
which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (HKASs) and
Interpretations as issued by the Hong Kong Institute of Certified Public Accountants. All HKFRS Accounting
Standards effective for the accounting period commencing f rom 1 January 2025, together with the relevant transitional
provisions, have been consistently applied by the Group in the preparation of the Historical Financial Information
throughout the Relevant Periods and in the period covered by the Interim Comparative Financial Information.
The Historical Financial Information has been prepared under the historical cost convention except for certain
financial instruments which have been measured at fair value.
The Historical Financial Information is presented in RMB and all values are rounded to the nearest thousand
except when otherwise indicated.
Basis of consolidation
The Historical Financial Information includes the financial statements of the Company and its
subsidiaries (collectively referred to as the ‘‘Group’’) for the Relevant Periods. A subsidiary is an entity
(including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee (i.e., existing rights that give the Group the current
ability to direct the relevant activities of the investee).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 8–


--- page 416 ---
Generally, there is a presumption that a majority of voting rights results in control. When the Company
has less than a majority of the voting or similar rights of a n investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepa red for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. All intra-group assets and liabilities, equity, inc ome, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control described above. A change in the ownership interest of a
subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
any non-controlling interest and the exchange fluctuation reserve; and recognises the fair value of any investment
retained and any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised
in other comprehensive income is reclassified to profit or lo ss or retained profits, as appropriate, on the same basis as
would be required if the Group had directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE HKFRS ACCOUNTING STANDARDS
The Group has not applied the following new and revised HKFRS Accounting Standards that have been issued
but are not yet effective, in the Historical Financial Information. The Group intends to apply these new and revised
HKFRS Accounting Standards, if applicable, when they become effective.
HKFRS 18 Presentation and Disclosure in Financial Statements
2
HKFRS 19 Subsidiaries without Public A ccountability: Disclosures 2
Amendments to HKFRS 9 and
HKFRS 7
Amendments to the Classification and Measurement of Financial
Instruments 1
Amendments to HKFRS 9 and
HKFRS 7
Contracts Referencing Nature-dependent Electricity 1
Amendments to HKFRS 10 and
HKAS 28
Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture 3
Annual Improvements to
HKFRS Accounting Standards —
Volume 11
Amendments to HKFRS 1, HKFRS 7, HKFRS 9, HKFRS 10 and
HKAS 7
1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 9–


--- page 417 ---
The Group is in the process of making an assessment of the impact of these new and revised HKFRS Accounting
Standards upon initial application. HKFRS 18 introduces new requirements for presentation within the statement of
profit or loss and other comprehensive income, including specified totals and subtotals. Entities are required to classify
all income and expenses within the statement of profit or loss and other comprehensive income into one of the five
categories: operating, investing, financing, income taxes and discontinued operations and to present two new defined
subtotals. It also requires disclosures about management-d efined performance measures in a single note and introduces
enhanced requirements on the grouping (aggregation and disaggregation) and the location of information in both the
primary financial statements and the notes. The new requirements are expected to impact the Group’s presentation of
the statement of profit or loss and other comprehensive income and disclosures of the Group’s financial performance.
So far, the Group considers that other new and amended standards listed above are unlikely to have a significant
impact on the Group’s results of operations and financial position.
2.3 MATERIAL ACCOUNTING POLICY INFORMATION
Fair value measurement
The Group measures its wealth management products and equity investment at fair value at the end of
each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the
principal market for the asset or liability, or in the absence of a principal market, in the most advantageous
market for the asset or liability. The principal or the most advantageous market must be accessible by the
Group. The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its hi ghest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Historical Financial
Information are categorised within the fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based
on the lowest level input that is significant to the fair value measurement as a whole) at the end of each of the
Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 0–


--- page 418 ---
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required
(other than inventories, deferred tax assets and financial assets), the asset’s recoverable amount is estimated. An
asset’s recoverable amount is the higher of the asset’s or c ash-generating unit’s value in use and its fair value less
costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets, in which case the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate asset
(e.g., a headquarters building) is allocated to an individual cash-generating unit if it can be allocated on a
reasonable and consistent basis or, otherwise, to the smallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. An impairment loss is charged to profit or loss in the period in which it arises in those expense categories
consistent with the function of the impaired asset.
An assessment is made at the end of each of the reporting period as to whether there is an indication that
previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists,
the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is
reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset,
but not to an amount higher than the carrying amount that would have been determined (net of any
depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of
such an impairment loss is credited to profit or loss in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or
fellow subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third
entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group
or an entity related to the Group; and the sponsoring employers of the post-employment
benefit plan;
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(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management
personnel services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.
When an item of property, plant and equipment is classified as held for sale or when it is part of a disposal group
classified as held for sale, it is not depreciated and is accounted for in accordance with HKFRS 5, as further
explained in the accounting policy for ‘‘Non-current assets and disposal groups held for sale’’. The cost of an
item of property, plant and equipment comprises its purchase price and any directly attributable costs of
bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as
repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations
where the recognition criteria are satisfied, the expendi ture for a major inspection is capitalised in the carrying
amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to
be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and
depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant
and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose
are as follows:
Electronic equipment 33.00% to 47.50%
Furniture and others 9.50% to 25.00%
Leasehold improvements 33.33% to 44.44%
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is
allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful
lives and the depreciation method are reviewed, and adjusted if appropriate, at the end of each of the reporting
period.
An item of property, plant and equipment including any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any
gain or loss on disposal or retirement recognised in profit or loss in the year the asset is derecognised is the
difference between the net sales proceeds and the carrying amount of the relevant asset.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The useful lives of
intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently
amortised over the useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation peri od and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at each financial year end.
Licensed IP
Purchased licensed IP is stated at cost less any impairment losses and is amortised on the straight-line
basis over its estimated useful life of 3 to 5 years.
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Software
Software is stated at cost less any impairment losses and is amortised on the straight-line basis over its
estimated useful life of 2 to 10 years.
Research and development costs
All research costs are charged to profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the
Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for
use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future
economic benefits, the availability of resources to complete the project and the ability to measure reliably the
expenditure during the development. Product development expenditure which does not meet these criteria is
expensed when incurred.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:
Buildings 2 to 4 years
Machinery 3 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, var iable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The
variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in
which the event or condition that triggers the payment occurs.
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In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate imp licit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments
resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying
asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (that is those leases that have a lease term of 12 months or less from the commencement date and do
not contain a purchase option). It also applies the recognition exemption for leases of low-value assets to leases
of office equipment and laptop computers that are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade receivables
that do not contain a significant financing component or for which the Group has applied the practical
expedient of not adjusting the effect of a significant financing component, the Group initially measures a
financial asset at its fair value plus in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under HKFRS 15 in
accordance with the policies set out for ‘‘Revenue recognition’’ below.
In order for a financial asset to be classified and measured at amortised cost or fair value through other
comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest
(‘‘SPPI’’) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified
and measured at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or bot h. Financial assets classified and measured at amortised
cost are held within a business model with the objective to hold financial assets in order to collect contractual
cash flows, while financial assets classified and measured at fair value through other comprehensive income are
held within a business model with the objective of both holding to collect contractual cash flows and selling.
Financial assets which are not held within the aforementioned business models are classified and measured at
fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established
by regulation or convention in the marketplace are recognised on the trade date, that is, the date that the Group
commits to purchase or sell the asset.
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Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and
are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
Financial assets designated at fair value through oth er comprehensive income (equity investments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
investments designated at fair value through other comprehensive income when they meet the definition of
equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position
at fair value with net changes in fair value recognised in profit or loss.
This category includes wealth management products, and equity investments which the Group had
not irrevocably elected to classify at fair value through other comprehensive income. Dividends on the
equity investments are also recognised as other income in profit or loss when the right of payment has
been established.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position)
when:
. the rights to receive cash flows from the asset have expired; or
. the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘‘pass-through’’ arrangement; and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership
of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor
transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the
Group’s continuing involvement. In that case, the Group also recognises an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group
has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the Group
could be required to repay.
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Impairment of financial assets
The Group recognises an allowance for expected credit losses (‘‘ECLs’’) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows from the
sale of collateral held or other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Group compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable information that is
available without undue cost or effort, including historical and forward-looking information. The Group
considers that there has been a significant increase in credit risk when contractual payments are more than 30
days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due. The
Group may consider a financial asset to be in default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are
classified within the following stages for measurement of ECLs, except for trade and bills receivables which
apply the simplified approach as detailed below:
Stage 1 — Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to 12-month
ECLs
Stage 2 — Financial instruments for which credit risk has increased significantly since initial recognition
but that are not credit-impaired financial assets and for which the loss allowance is measured
at an amount equal to lifetime ECLs
Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal
to lifetime ECLs
For trade receivables that contain a significant financing component, the Group chooses as its accounting
policy to adopt the general approach in calculating ECLs with policies as described above.
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Simplified approach
For trade and bill receivables that do not contain a significant financing component or when the Group
applies the practical expedient of not adjusting the effect of a significant financing component, the Group
applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at the end of each of the
reporting period. The Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Classification as equity and financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of financial liability and equity instrument.
A financial liability is any liability that is (a) a contractual obligation (i) to deliver cash or another
financial asset to another entity; or (ii) to exchange fina ncial assets or financial liabilities with another entity
under conditions that are potentially unfavourable to the entity; or (b) a contract that will or may be settled in
the entity’s own equity instruments and is: (i) a non derivative for which the entity is or may be obliged to deliver
a variable number of the entity’s own equity instrumen ts; or (ii) a derivative that will or may be settled other
than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own
equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as loans and borrowings or payables, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade payables, certain other payables and accruals, amounts due
to related parties, and interest-bearing bank and other borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing borrowings are
subsequently measured at amortised cost, using the effective interest rate method unless the effect of
discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as through the effective interest rate
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation
is included in finance costs in profit or loss.
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Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or
expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantia lly modified, such an exchange or modification is treated
as a derecognition of the original liability and a recognition of a new liability, and the difference between the
respective carrying amounts is recognised in profit or loss.
Treasury shares
Own equity instruments which are reacquired and held by the Company or the Group (treasury shares) are
recognised directly in equity at cost. No gain or loss is recognised in profit or loss on the purchase, sale, issue or
cancellation of the Group’s own equity instruments.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted
average basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour
and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any
estimated costs to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and
short-term highly liquid deposits with a maturity of generally within three months that are readily convertible
into known amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of
meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on
hand and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on
demand and form an integral part of the Group’s cash management.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or
loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in
which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of each
reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
. when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences; and
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. in respect of taxable temporary differences associated with investments in subsidiaries and
associates, when the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences, and the carryforward of
unused tax credits and unused tax losses can be utilised, except:
. when the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences; and
. in respect of deductible temporary differences associated with investments in subsidiaries and
associates, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting
period and are recognised to the extent that it has become probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of each reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable
right to set off current tax assets and current tax liabilitie s and the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable
entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and
settle the liabilities simultaneously, in each future period i n which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant
will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it
is recognised as income on a systematic basis over the periods that the costs, for which it is intended to
compensate, are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released
to profit or loss over the expected useful life of the relevant asset by equal annual instalments or deducted from
the carrying amount of the asset and released to profit or loss by way of a reduced depreciation charge.
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Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred to
the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated
to which the Group will be entitled in exchange for transferring the goods or services to the customer. The
variable consideration is estimated at contract incept ion and constrained until it is highly probable that a
significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated
uncertainty with the variable consideration is subsequently resolved.
(a) Sale of GPGPU products
Revenue from sale of GPGPU products primarily arises from sale of GPGPU chips and accelerators
which is recognised at the point in time when control of the products is transferred to the customer and the
collection of the consideration is probable, generally on the acceptance of the products.
(b) Sale of AI computing solutions
Revenue from sale of AI computing solutions, which usually include multiple elements of hardware,
software and associated services.
The solutions provide the customer with a combination of hardware, software, deployment and
professional services as the Group provides significant integration services to integrate the hardware and the
software to meet the customer’s unique specifications and are accounted for as one performance obligation.
Solutions revenue derived from hardware and software is recognised at a point in time upon acceptance by
customer.
(c) Services and others
Services revenue and other revenue mainly generated from provision of technology services. The revenue
generated from the technology services is recognised at a point in time upon the acceptance of such services by
customers as customers are usually unable to obtain benefit when the Group is performing the services.
Other income
Interest income is recognised on an accrual basis using the effective interest rate method by applying the
rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or
a shorter period, when appropriate, to the net carrying amount of the financial asset.
Contract assets
If the Group performs by transferring goods or services to a customer before being unconditionally
entitled to the consideration under the contract terms, a contract asset is recognised for the earned consideration
that is conditional. Contract assets are subject to impairment assessment, details of which are included in the
accounting policies for impairment of financial assets. They are reclassified to trade receivables when the right to
the consideration becomes unconditional.
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Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier)
from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as
revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to
the customer).
Share-based payments
The Company operates an employee share scheme. Employees (including directors) of the Group receive
remuneration in the form of share-based payments, whereby employees render services in exchange for equity
instruments (‘‘equity-settled transactions’’).
The cost of equity-settled transactions with employees for grants is measured by reference to the fair value
at the date at which they are granted, further details of which are given in note 31 to the Historical Financial
Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are
fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period
until the vesting date reflects the extent to which the lock-up restricted period has expired and the Group’s best
estimate of the number of equity instruments that will ultimately vest. The charge or credit to profit or loss for a
period represents the movement in the cumulative expense recognised as at the beginning and end of that period.
Service conditions are not taken into account when dete rmining the grant date fair value of awards, but
the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market per formance conditions are reflected within the grant date
fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting cond itions are reflected in the fair value of an award and
lead to an immediate expensing of an award unless there are also service and/or performance conditions.
For awards that do not ultimately vest because non-market performance and/or service conditions have
not been met, no expense is recognised. Where awards include a market or non-vesting condition, the
transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied,
provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for
any modification that increases the total fair value of the s hare-based payments, or is otherwise beneficial to the
employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately.
This includes any award where non-vesting conditions within the control of either the Group or the
employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a
replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph.
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Other employee benefits
Social pension plans
The Group has social pension plans for its employees arranged by local government labour and security
authorities. The Group makes contributions on a monthly basis to the social pension plans. The contributions
are charged to profit or loss as they become payable in accordance with the rules of the social pension plans. The
Group’s liability in respect of these funds is limited to the contributions payable in each reporting period.
Housing fund and other social insurances
The Group has participated in defined social security contribution schemes for its employees pursuant to
the relevant laws and regulations of the PRC. These include a housing fund, basic medical insurance,
unemployment insurance, injury insurance and maternity insurance. The Group makes monthly contributions to
the housing fund and other social insurances. The contributions are charged to profit or loss on an accrual basis.
The Group’s liability in respect of these funds is limited to the contributions payable in each reporting period.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets
are substantially ready for their intended use or sale. All other borrowing costs are expensed in the period in
which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds.
Events after the reporting period
If the Group receives information after the reporting period, but prior to the date of authorisation for
issue, about conditions that existed at the end of the reporting period, it will assess whether the information
affects the amounts that it recognises in its financial statements. The Group will adjust the amounts recognised
in its financial statements to reflect any adjusting events after the reporting period and update the disclosures
that relate to those conditions in light of the new information. For non-adjusting events after the reporting
period, the Group will not change the amounts recognised in its financial statements, but will disclose the nature
of the non-adjusting events and an estimate of their financial effects, or a statement that such an estimate cannot
be made, if applicable.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency.
Each entity in the Group determines its own functional currency and items included in the financial statements
of each entity are measured using that functional currency. Foreign currency transactions recorded by the
entities in the Group are initially recorded using their respective functional currency rates prevailing at the dates
of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the
functional currency rates of exchange ruling at the end of each of the Relevant Periods. Differences arising on
settlement or translation of monetary items are recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain
or loss arising on translation of a non-monetary item measured at fair value is treated in line with the
recognition of the gain or loss on change in fair value of t he item (i.e., translation difference on the item whose
fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other
comprehensive income or profit or loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary lia bility relating to an advance consideration, the date
of initial transaction is the date on which the Group init ially recognises the non-monetary asset or non-monetary
liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group
determines the transaction date for each payment or receipt of the advance consideration.
The functional currencies of certain overseas subsidiaries are currencies other than RMB. As at the end of
the reporting period, the assets and liabilities of these entities are translated into RMB at the exchange rates
prevailing at the end of the reporting period and their statements of profit or loss are translated into RMB at the
exchange rates that approximate to those prevailing at the dates of the transactions.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements,
estimates and assumptions that affect the reported amount s of revenues, expenses, assets and liabilities, and their
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or
liabilities affected in the future.
Judgements
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of
future taxable profits, together with future tax planning strategies.
The Group has tax losses of RMB2,382,156,000, RMB3,322,656,000, RMB4,465,169,000 and
RMB5,007,107,000 carried forward for the years ended 31 December 2022, 2023 and 2024 and the six months
ended 30 June 2025, respectively. These losses related to the entities of the Group that have a history of losses,
have not expired, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries have
neither any taxable temporary difference nor any tax planning opportunities available that could partly support
the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot
recognise deferred tax assets on the tax losses carried forward.
If the Group had been able to recognise all unrecognised deferred tax assets, the profit and equity would
have increased by RMB371,386,000, RMB524,378,000, RM B717,244,000 and RMB820,217,000 for the years
ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025, respectively. Further details on
deferred taxes are disclosed in note 27 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of
each reporting period, that have a significant risk of ca using a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are described below:
Provision for expected credit losses on trade and bills receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade and bills receivables and contract
assets. The provision rates are based on the ageing or credit rating of groupings of various customer
segments that have similar loss patterns.
The provision matrix is initially based on the Group’s historical observed default rates. The Group
will calibrate the matrix to adjust the historical credit loss experience with forward-looking information.
For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate
over the next year which can lead to an increased number of defaults in the manufacturing sector, the
historical default rates are adjusted. At each reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation among historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in
circumstances and forecast economic conditions. The Group’s historical credit loss experience and
forecast of economic conditions may also not be representative of a customer’s actual default in the
future. The information about the ECLs on the Group’s trade and bill receivables and contract assets is
disclosed in note 18 and note 19 to the Historical Financial Information, respectively.
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an
incremental borrowing rate (‘‘IBR’’) to measure lease liabilities. The IBR is the rate of interest that the
Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what the Group ‘‘would have to pay’’, which requires estimation when no observable
rates are available (such as for subsidiaries that do not enter into financing transactions) or when it needs
to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market
interest rates) when available and is required to make certain entity-specific estimates (such as the
subsidiary’s stand-alone credit rating).
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets
(including the right-of-use assets) at the end of each reporting period. Other non-financial assets are tested
for impairment when there are indicators that the carrying amounts may not be recoverable. An
impairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation of
the fair value less costs of disposal is based on available data from binding sales transactions in an arm’s
length transaction of similar assets or observable market prices less incremental costs for disposing of the
asset. When value in use calculations are undertaken, management must estimate the expected future cash
flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the
present value of those cash flows.
APPENDIX I ACCOUNTANTS’ REPORT
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Fair value of unliste d equity investments
The unlisted equity investments have been valued based on appropriate valuation techniques
including the latest transaction price and asset-based valuation as detailed in note 37 to the Historical
Financial Information. The fair values of the unlisted equity investments at 31 December 2022, 2023 and
2024 and 30 June 2025 were RMB50,000,000, RMB91,293,000, RMB97,367,000 and RMB96,776,000,
respectively. Further details are included in note 16 and note 20 to the Historical Financial Information.
Write-down of inventories
The Group’s inventories are stated at the lower of cost and net realisable value. The Group writes
down its inventories based on estimates of the realisable value with reference to the ageing and conditions
of the inventories, together with the economic circumstances on the marketability of such inventories.
Inventories will be reviewed annually for write-down, if appropriate. Further details of the inventories are
set out in note 17 to the Historical Financial Information.
4. OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into one single business unit that is the sale of and
development of GPGPU products and AI computing solutions. Management reviews the overall results and financial
position of the Group as a whole based on the same accounting policies set out in note 2.3. Accordingly, the Group has
only a single operating segment and no further analysis of the single segment is presented.
Geographical information
As the Group generated all of its revenues in the PRC and its non-current assets were located in the PRC
during the Relevant Periods, no geographical information is presented.
Information about major customers
The major customers from which the revenue amounted to 10% or more of the Group’s revenue for the
Relevant Periods and the six months ended 30 June 2024 are set out below:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
C u s t o m e r A **** 4 4 , 7 7 9
Customer F * 51,423 242,181 112,561 *
C u s t o m e r J * 5 5 , 7 5 2***
C u s t o m e r K * 3 5 , 6 1 9***
C u s t o m e r L 4 4 , 2 4 8 3 5 , 3 9 8***
C u s t o m e r M * 3 3 , 8 5 0***
C u s t o m e r N 7 1 , 4 2 7****
C u s t o m e r O 3 0 , 9 7 3****
C u s t o m e r P 2 4 , 7 7 9****
Customer I * * * 39,498 *
* Representing the amounts less than 10% of the Group’s total revenue.
APPENDIX I ACCOUNTANTS’ REPORT
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5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with
customers 189,369 289,041 539,511 197,431 324,263
Revenue from contracts with customers
(i) Disaggregated revenue information
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Types of goods or services
Sale of GPGPU products 188,561 266,922 369,635 136,772 276,751
Sale of AI computing solutions — 15,523 166,213 59,805 42,644
Services and others 808 6,596 3,663 854 4,868
Total 189,369 289,041 539,511 197,431 324,263
Timing of revenue recognition
Goods or service transferred at
a point in time 189,369 289,041 539,511 197,431 324,263
The following table shows the amounts of revenue recognised in each of the Relevant Periods and the six
months ended 30 June 2024 that were included in the contract liabilities at the beginning of each of the Relevant
Periods and recognised from performance obligations satisfied in previous years:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Sale of GPGPU products 11,528 2,232 13,528 9,732 16,904
(ii) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sale of GPGPU products
The performance obligation is satisfied upon the acceptance of GPGPU chips and accelerators by
customers and payment is generally due within 30 to 365 days from delivery, except for certain sales
orders, where payment in advance is required.
APPENDIX I ACCOUNTANTS’ REPORT
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Sale of AI computing solutions
The performance obligation is satisfied upon the acceptance of solutions by customers and payment
is generally due within 30 to 90 days from delivery, except for certain sales orders, where payment in
advance is required.
Services and others
Service revenue and other revenue are mainly generated from provision of technology services.
Based on the terms of contracts, the performance obligation is satisfied at the point in time as the services
are accepted and payment is generally due within 30 to 60 days from acceptance by customers.
All the amounts of transaction prices allocated to the remaining performance obligations as at the
end of each of the Relevant Periods are expected to be recognised as revenue within one year.
Other income and gains
An analysis of other income and gains is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Government grants related to
— Assets (i) — 135 10,094 3,915 12,915
— Income 14,196 15,306 28,979 25,174 19,920
Interest income 4,005 3,754 4,125 2,795 5,852
Foreign exchange gains, net 14,062 — — — —
Gain on disposal of wealth
investment products 1,113 — — — —
Fair value gains, net
— Financial assets at fair value
through profit or loss — 695 844 390 —
Others 394 215 943 804 852
Total 33,770 20,105 44,985 33,078 39,539
(i) The Group has received certain government grants mainly related to electronic equipment and
licensed IP. The grants related to assets were recognised in profit or loss over the useful lives of the
relevant assets. Details of these grants related to assets are set out in note 28.
APPENDIX I ACCOUNTANTS’ REPORT
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6. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Year ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of inventories sold* 76,957 145,890 274,427 108,438 161,830
Depreciation of property, plant
and equipment 13 27,914 47,977 70,653 33,502 39,948
Depreciation of right-of-use assets 14 10,636 13,752 14,946 5,691 11,314
Amortisation of intangible assets 15 51,810 56,538 69,374 30,160 39,046
Lease payments not included in the
measurement of lease liabilities 14 9995 2 3
L i s t i n g e x p e n s e ———— 1 3 , 6 8 6
Auditor’s remuneration 332 696 925 230 330
Employee benefit expense
(including directors’,
supervisors’ and chief
executive’s remuneration
(note 8)):
— Wages and salaries 278,684 358,624 442,539 210,922 246,476
— Pension scheme contributions 49,057 73,686 88,976 40,161 48,220
— Share-based payment expense 120,842 207,759 247,765 107,070 295,859
448,583 640,069 779,280 358,153 590,555
Foreign exchange differences, net (14,062) 820 476 580 4,061
Fair value losses on convertible
liabilities — 360 — — —
Impairment of trade and bills
receivables, net 18 19,023 21,125 18,165 (4,592) 1,181
Impairment of prepayments, other
receivables and other assets, net 19 — — 13,800 13,800 —
Impairment of long-term trade
receivables, net 22 — 468 (121) (79) (81)
Write-down of inventories to net
realisable values — 15,269 4,792 4,792 934
* Cost of inventories sold includes write-down of inventories to net realisable values, which is disclosed
separately above.
APPENDIX I ACCOUNTANTS’ REPORT
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7. FINANCE COSTS
An analysis of finance costs is as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on bank and other borrowings 5,234 9,609 15,754 7,796 9,452
Interest on lease liabilities 728 447 906 198 702
Interest on long-term payables 541 951 723 391 985
Total 6,503 11,007 17,383 8,385 11,139
For the details of Pre-IPO Investments, please refer to note 30(b) to this report.
8. DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVE’S REMUNERATION
The remuneration of directors, supervisors and the chief executive of the Company recorded in each of the
Relevant Periods and the six months ended 30 June 2024 is set out below:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fees — — — — 132
Other emoluments:
Salaries, allowances and benefits in
kind 9,867 10,774 8,639 4,319 4,583
Performance related bonuses 2,105 1,062 2,737 1,368 1,247
Pension scheme contributions 519 568 689 343 404
Share-based payment expenses 44,117 96,144 59,610 22,930 153,908
Subtotal 56,608 108,548 71,675 28,960 160,142
Total 56,608 108,548 71,675 28,960 160,274
During the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2024 and 2025,
certain directors were granted restricted shares in respect of their services to the Group, further details of which are set
out in note 31 to the Historical Financial Information. The f air value of such restricted shares determined as at the
date of grant has been recognised in profit or loss over the vesting or service period. The relevant amounts included in
the Historical Financial Information for the years ended 31 December 2022, 2023 and 2024 and the six months ended
30 June 2024 and 2025 are included in the above directors’, supervisors’ and chief executives’ remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
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(a) Independent non-executive directors
The fees paid to independent non-executive directors during the Relevant Periods are set out below:
Six months
ended 30 June
2025
RMB’000
Mr. TENG Yong 33
Mr. LIANG Weidong 33
Mr. REN Jintao 33
Ms. WANG Yan 33
Total 132
Mr. TENG Yong, Mr. LIANG Weidong, Mr. REN Jintao and Ms. WANG Yan were appointed as the
independent non-executive directors on 30 May 2025.
(b) Directors and supervisors
The remuneration of each of the directors, supervisors and the chief executive of the Company during the
Relevant Periods and the six months ended 30 June 2024 is set out below:
Year ended 31 December 2022
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Pension scheme
contributions
Share-based
payment
expenses
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. GAI Lujiang (i) 1,562 600 68 10,777 13,007
Mr. CAI Quangen (xvi) 2,092 349 — 13,509 15,950
Mr. DIAO Shijing (ii) 2,400 400 167 19,055 22,022
Mr. ZHENG Jinshan (xvi) 2,327 660 142 420 3,549
M r . L I N X i a o q i n ( x v i ) —————
M r . C H E N G u i y i( i i i ) —————
M r . L I R o n g h u i ( i i i ) —————
M r . B A O Y i ( i v ) —————
M s . N i n g C h i n g R a c h e l ( v ) —————
M r . S U I Z i h a n g ( v i ) —————
M r . L I M S Z E H A N ( v i i ) —————
Dr. Lu Chien-Ping (viii) 800 — — — 800
M r . X I J i a n p e n g ( v i i i ) —————
Subtotal 9,181 2,009 377 43,761 55,328
Supervisors:
M r . L O N G X i a o b o ( x i ) —————
Mr. GUO Xiaopeng (xviii) —————
Ms. ZHANG Liwen (xvii) 686 96 142 356 1,280
Subtotal 686 96 142 356 1,280
Total 9,867 2,105 519 44,117 56,608
APPENDIX I ACCOUNTANTS’ REPORT
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Year ended 31 December 2023
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Pension scheme
contributions
Share-based
payment
expenses
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. GAI Lujiang (i) 2,210 400 88 34,174 36,872
Mr. CAI Quangen (xvi) 2,092 175 — 13,509 15,776
Mr. DIAO Shijing (ii) 2,400 400 152 47,596 50,548
Mr. ZHENG Jinshan (xvi) 1,988 — 164 420 2,572
M r . L I N X i a o q i n ( x v i ) —————
M r . B A O Y i ( i v ) —————
M r . S U I Z i h a n g ( v i ) —————
M r . L I M S Z E H A N ( v i i ) —————
Dr. Lu Chien-Ping (viii) 1,378 — — — 1,378
M r . X I J i a n p e n g ( v i i i ) —————
M r . W A N G C h e n ( i x ) —————
M r . L I U Z h e n g ( x ) —————
M s . K O U X i a o x i a o ( x ) —————
Subtotal 10,068 975 404 95,699 107,146
Supervisors:
Mr. GUO Xiaopeng (xviii) —————
M r . L O N G X i a o b o ( x i ) —————
M s . L I A O C h e n x i ( x i i ) —————
Ms. ZHANG Liwen (xvii) 706 87 164 445 1,402
Subtotal 706 87 164 445 1,402
Total 10,774 1,062 568 96,144 108,548
APPENDIX I ACCOUNTANTS’ REPORT
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Year ended 31 December 2024
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Pension scheme
contributions
Share-based
payment
expenses
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. GAI Lujiang (i) 2,410 900 167 13,565 17,042
Mr. CAI Quangen (xvi) 1,243 80 — 4,631 5,954
Mr. DIAO Shijing (ii) 2,400 900 160 29,147 32,607
Mr. ZHENG Jinshan (xvi) 16 — 28 (1,182) (1,138)
M r . L I N X i a o q i n ( x v i ) —————
M r . S U I Z i h a n g ( v i ) —————
M r . L I M S Z E H A N ( v i i ) —————
M r . W A N G C h e n ( i x ) —————
Mr. LIU Zheng (x) 1,810 750 167 13,004 15,731
M s . K O U X i a o x i a o ( x ) —————
Subtotal 7,879 2,630 522 59,165 70,196
Supervisors:
Mr. GUO Xiaopeng (xviii) —————
M s . L I A O C h e n x i ( x i i ) —————
Ms. ZHANG Liwen (xvii) 760 107 167 445 1,479
Subtotal 760 107 167 445 1,479
Total 8,639 2,737 689 59,610 71,675
APPENDIX I ACCOUNTANTS’ REPORT
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Six months ended 30 June 2024 (unaudited)
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Pension scheme
contributions
Share-based
payment
expenses
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. GAI Lujiang (i) 1,205 450 83 4,534 6,272
Mr. CAI Quangen (xvi) 621 40 — 4,503 5,164
Mr. DIAO Shijing (ii) 1,200 450 80 8,485 10,215
Mr. ZHENG Jinshan (xvi) 8 — 14 (1,182) (1,160)
M r . L I N X i a o q i n ( x v i ) —————
M r . S U I Z i h a n g ( v i ) —————
M r . L I M S Z E H A N ( v i i ) —————
M r . W A N G C h e n ( i x ) —————
Mr. LIU Zheng (x) 905 375 83 6,367 7,730
M s . K O U X i a o x i a o ( x ) —————
Subtotal 3,939 1,315 260 22,707 28,221
Supervisors:
Mr. GUO Xiaopeng (xviii) —————
M s . L I A O C h e n x i ( x i i ) —————
Ms. ZHANG Liwen (xvii) 380 53 83 223 739
Subtotal 380 53 83 223 739
Total 4,319 1,368 343 22,930 28,960
APPENDIX I ACCOUNTANTS’ REPORT
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Six months ended 30 June 2025
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Pension scheme
contributions
Share-based
payment
expenses
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Directors:
Mr. GAI Lujiang (i) 1,205 450 84 45,708 47,447
Mr. CAI Quangen (xvi) 35 — — 11 46
Mr. DIAO Shijing (ii) 1,000 — 68 91,591 92,659
Mr. SUN Yile (xiii) 713 207 84 4,935 5,939
M r . S U I Z i h a n g ( v i ) —————
M r . L I M S Z E H A N ( v i i ) —————
M r . W A N G C h e n ( i x ) —————
Mr. LIU Zheng (x) 905 375 84 7,855 9,219
M s . K O U X i a o x i a o ( x ) —————
Mr. YANG Lei (xiv) 121 40 14 867 1,042
Subtotal 3,979 1,072 334 150,967 156,352
Supervisors:
Mr. GUO Xiaopeng (xviii) —————
M s . L I A O C h e n x i ( x i i ) —————
Ms. DING Na (xv) 604 175 70 2,941 3,790
Subtotal 604 175 70 2,941 3,790
Total 4,583 1,247 404 153,908 160,142
(i) Mr. GAI Lujiang was appointed as a director on 19 October 2020 and was appointed as the chief
executive on 19 April 2023. He was re-designated as an executive director on 30 May 2025.
(ii) Mr. DIAO Shijing was the chief executive from 7 May 2021 to 19 April 2023, and has tendered his
resignation as a director with effect from 20 May 2025.
(iii) Mr. CHEN Guiyi and Mr. LI Ronghui tendered their resignations as directors with effect from 22
February 2022.
(iv) Mr. BAO Yi tendered his resignation as a director with effect from 31 October 2023.
(v) Ms. Ning Ching Rachel tendered her resignation as a director with effect from 29 April 2022.
(vi) Mr. SUI Zihang was appointed as a director on 22 February 2022, and tendered his resignation with
effect from 22 May 2025.
(vii) Mr. LIM SZE HAN was appointed as a director on 29 April 2022 and tendered his resignation with
effect from 16 June 2025.
(viii) Dr. Lu Chien-Ping and Mr. XI Jianpeng were appointed as directors on 8 July 2022 and tendered
their resignations as directors with effect from 31 October 2023.
APPENDIX I ACCOUNTANTS’ REPORT
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(ix) Mr. WANG Chen was appointed as a director on 31 October 2023 and was re-designated as a
non-executive director on 30 May 2025.
(x) Mr. LIU Zheng and Ms. KOU Xiaoxiao were appointed as directors on 29 December 2023. Mr.
LIU Zheng and Ms. Kou Xiaoxiao was re-designated as an executive director and a non-executive
director, respectively, on 30 May 2025.
(xi) Mr. LONG Xiaobo tendered his resignation as a supervisor with effect from 31 October 2023.
(xii) Ms. LIAO Chenxi was appointed as a supervisor on 31 October 2023 and tendered her resignation
with effect from 30 May 2025.
(xiii) Mr. SUN Yile was appointed as a director on 13 January 2025.
(xiv) Mr. YANG Lei was appointed as a director on 30 May 2025.
(xv) Ms. DING Na was appointed as a supervisor on 13 January 2025 and tendered her resignation with
effect from 30 May 2025.
(xvi) Mr. CAI Quangen, Mr. ZHENG Jinshan and Mr. LIN Xiaoqin tendered their resignations as
directors with effect from 13 January 2025.
(xvii) Ms. ZHANG Liwen tendered her resignation as a supervisor with effect from 13 January 2025.
(xviii) Mr. GUO Xiaopeng tendered his resignation as a supervisor with effect from 30 May 2025.
There was no arrangement under which a director or a supervisor waived or agreed to waive any
remuneration during the Relevant Periods and the six months ended 30 June 2024.
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the year ended December 31 2022, 2023 and 2024 and the six months
ended 30 June 2024 and 2025 included three, three, three, four, and three directors, respectively, details of whose
remuneration are set out in note 8 to the Historical Financial Information.
Details of the remuneration for the remaining two, two, two, one, and two highest paid employees who are
neither directors, supervisors nor the chief executive of the Company during the year ended December 31 2022, 2023
and 2024 and the six months ended 30 June 2024 and 2025 are as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances and benefits in
kind 2,922 3,172 2,317 725 1,157
Performance related bonuses 710 498 480 240 240
Pension scheme contributions 207 162 161 80 82
Share incentive plan expenses 9,239 16,201 22,034 3,297 25,800
Total 13,078 20,033 24,992 4,342 27,279
APPENDIX I ACCOUNTANTS’ REPORT
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The numbers of non-director, non-supervisors and non-chief executive highest paid employees whose
remuneration fell within the following bands are as follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
(unaudited)
HKD4,500,001 to HKD5,000,000 1 — — 1 —
HKD5,500,001 to HKD6,000,000 — 1 — — —
HKD6,500,001 to HKD7,000,000 — — — — 1
HKD10,500,001 to HKD11,000,000 1 — — — —
HKD11,000,001 to HKD11,500,000 — — 1 — —
HKD15,500,001 to HKD16,000,000 — — 1 — —
HKD16,500,001 to HKD17,000,000 — 1 — — —
HKD22,500,001 to HKD23,000,000 — — — — 1
T o t a l 22212
During the year ended December 31 2022, 2023 and 2024 and the six months ended 30 June 2024 and 2025,
restricted shares were granted to two, two, two, one, and two non-director, non-supervisors and non-chief executive
highest paid employees in respect of their services to the Group, further details of which are included in the disclosures
in note 31 to the Historical Financial Information. The fair value of such restricted shares determined as at the date of
grant has been recognised in profit or loss over the vesting period. The relevant amounts included in the Historical
Financial Information for the Relevant Periods and the six months ended 30 June 2024 are included in the above
non-director, non-supervisors and non-chief executive highest paid employees’ remuneration disclosures.
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the countries or
jurisdictions in which members of the Group are domiciled and operate.
Under the Law of the PRC on Enterprise Income Tax (the ‘‘EIT Law’’) and the Implementation Regulation of
the EIT Law, the EIT rate of the PRC subsidiaries is 25% except for the ones which were subject to preferential tax as
set out below:
Certain subsidiaries of the Company in the PRC have been approved as High and New Technology Enterprises
(‘‘HNTE’’) under relevant tax rules and regulations, and a ccordingly, were subjected to a preferential EIT rate of 15%
during the Relevant Periods and the six months ended 30 June 2024.
Certain subsidiaries of the Company in the PRC are approved as Small and Micro Enterprises, and accordingly,
they were subject to reduced preferential EIT rates of 2.5% to 5% during the Relevant Periods and the six months
ended 30 June 2024 according to the applicable EIT Law.
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
C u r r e n t —————
Deferred (note 27) —————
T o t a l —————
APPENDIX I ACCOUNTANTS’ REPORT
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A reconciliation of the tax credit applicable to loss before tax using the statutory rates for the jurisdictions in
which the Company and its subsidiaries are domiciled and operate to the tax expense at the effective tax rate, is as
follows:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss before tax (553,618) (817,424) (892,433) (403,992) (609,316)
Tax at the statutory tax rate of 25% (138,405) (204,356) (223,108) (100,998) (152,329)
Effect of different tax rates of the
subsidiaries 65,771 94,150 90,943 40,913 58,422
Expenses not deductible for tax* 14,563 24,998 37,333 16,183 45,666
Additional deductible allowance for
research and development costs (39,793) (65,254) (82,932) (36,779) (46,890)
Effect of deductible temporary
difference not recognised 23,133 15,244 5,194 7,091 12,140
Tax losses not recognised 74,731 135,218 172,570 73,590 82,991
Tax charge at the Group’s effective
r a t e —————
* Expenses not deductible for tax mainly represent expenses that exceed the tax-deductible limitation such as
entertainment and non-deductible share-based paymen t expenses. These expenses are not to be deductible for
tax.
11. DIVIDENDS
The board of directors did not recommend the payment of any dividend during the Relevant Periods and the six
months ended 30 June 2024.
APPENDIX I ACCOUNTANTS’ REPORT
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12. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic loss per share amounts is based on the loss for the Relevant Periods and the six
months ended 30 June 2024 attributable to ordinary equity holders of the parent, and the weighted average numbers of
ordinary shares outstanding during the Relevant Periods and the six months ended 30 June 2024.
The weighted average numbers of ordinary shares outstanding during the Relevant Periods and the six months
ended 30 June 2024 were determined assuming that the Company’s paid-in capital had been fully converted into share
capital at the same conversion ratio of 1 : 1 as upon transformation into a joint stock company in January 2025.
The calculation of basic and diluted loss per share amounts is based on:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
(unaudited)
Loss
Loss attributable to ordinary equity
holders of the parent, used in the
basic and diluted loss per share
calculation (RMB’000) (523,839) (791,307) (892,433) (403,992) (609,316)
Shares
Weighted average number of ordinary
shares outstanding during the year/
period used in the basic and diluted
loss per share calculation 131,269,938 145,852,104 163,822,289 162,648,957 175,300,638
As the Group incurred losses during the Relevant Periods and the six months ended 30 June 2024, the potential
ordinary shares were not included in the calculation of diluted loss per share amounts as the potential ordinary shares
had an anti-dilutive effect on the basic loss per share amount s. Accordingly, the diluted loss per share amounts for the
years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025 were the same as the basic loss
per share amounts. The weighted average numbers of shares were after taking into account the effect of treasury shares
held.
For the details of Pre-IPO Investments, please refer to note 30(b) to this report.
APPENDIX I ACCOUNTANTS’ REPORT
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13. PROPERTY, PLANT AND EQUIPMENT
The Group
Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022 :
Cost 54,077 2,336 11,059 67,472
Accumulated depreciation and
impairment (31,676) (177) (1,620) (33,473)
Net carrying amount 22,401 2,159 9,439 33,999
At 1 January 2022, net of
accumulated depreciation and
impairment 22,401 2,159 9,439 33,999
Additions 73,944 1,788 2,693 78,425
Disposals (16) (18) — (34)
Depreciation provided during the
year (23,456) (526) (3,932) (27,914)
At 31 December 2022, net of
accumulated depreciation and
impairment 72,873 3,403 8,200 84,476
At 31 December 2022 :
Cost 127,450 4,086 13,752 145,288
Accumulated depreciation and
impairment (54,577) (683) (5,552) (60,812)
Net carrying amount 72,873 3,403 8,200 84,476
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023 :
Cost 127,450 4,086 13,752 145,288
Accumulated depreciation and
impairment (54,577) (683) (5,552) (60,812)
Net carrying amount 72,873 3,403 8,200 84,476
At 1 January 2023, net of
accumulated depreciation and
impairment 72,873 3,403 8,200 84,476
Additions 62,230 5,625 6,139 73,994
Disposals (4,547) — — (4,547)
Depreciation provided during the
year (40,293) (1,395) (6,289) (47,977)
At 31 December 2023, net of
accumulated depreciation and
impairment 90,263 7,633 8,050 105,946
At 31 December 2023 :
Cost 183,383 9,710 19,891 212,984
Accumulated depreciation and
impairment (93,120) (2,077) (11,841) (107,038)
Net carrying amount 90,263 7,633 8,050 105,946
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024 :
Cost 183,383 9,710 19,891 212,984
Accumulated depreciation and
impairment (93,120) (2,077) (11,841) (107,038)
Net carrying amount 90,263 7,633 8,050 105,946
At 1 January 2024, net of
accumulated depreciation and
impairment 90,263 7,633 8,050 105,946
Additions 88,071 5,005 889 93,965
Disposals (1,259) (4) — (1,263)
Depreciation provided during the
year (62,866) (2,083) (5,704) (70,653)
At 31 December 2024, net of
accumulated depreciation and
impairment 114,209 10,551 3,235 127,995
At 31 December 2024 :
Cost 269,237 14,704 20,781 304,722
Accumulated depreciation and
impairment (155,028) (4,153) (17,546) (176,727)
Net carrying amount 114,209 10,551 3,235 127,995
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
30 June 2025
At 1 January 2025 :
Cost 269,237 14,704 20,781 304,722
Accumulated depreciation and
impairment (155,028) (4,153) (17,546) (176,727)
Net carrying amount 114,209 10,551 3,235 127,995
At 1 January 2025, net of
accumulated depreciation and
impairment 114,209 10,551 3,235 127,995
Additions 20,102 2,078 — 22,180
Transfers from right-of-use assets
(note 14) 20,945 — — 20,945
Disposals (11) (46) — (57)
Depreciation provided during the
period (36,673) (1,411) (1,864) (39,948)
At 30 June 2025, net of accumulated
depreciation and impairment 118,572 11,172 1,371 131,115
At 30 June 2025 :
Cost 309,931 16,716 20,781 347,428
Accumulated depreciation and
impairment (191,359) (5,544) (19,410) (216,313)
Net carrying amount 118,572 11,172 1,371 131,115
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022 :
Cost 23,939 1,837 10,919 36,695
Accumulated depreciation and
impairment (14,038) (118) (1,574) (15,730)
Net carrying amount 9,901 1,719 9,345 20,965
At 1 January 2022, net of
accumulated depreciation and
impairment 9,901 1,719 9,345 20,965
Additions 50,830 1,471 2,164 54,465
Disposals (8) — — (8)
Depreciation provided during the
year (12,903) (402) (3,830) (17,135)
At 31 December 2022, net of
accumulated depreciation and
impairment 47,820 2,788 7,679 58,287
At 31 December 2022 :
Cost 74,619 3,308 13,083 91,010
Accumulated depreciation and
impairment (26,799) (520) (5,404) (32,723)
Net carrying amount 47,820 2,788 7,679 58,287
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023 :
Cost 74,619 3,308 13,083 91,010
Accumulated depreciation and
impairment (26,799) (520) (5,404) (32,723)
Net carrying amount 47,820 2,788 7,679 58,287
At 1 January 2023, net of
accumulated depreciation and
impairment 47,820 2,788 7,679 58,287
Additions 44,497 5,217 6,139 55,853
Disposals (6) — — (6)
Depreciation provided during the
year (26,849) (1,161) (6,098) (34,108)
At 31 December 2023, net of
accumulated depreciation and
impairment 65,462 6,844 7,720 80,026
At 31 December 2023 :
Cost 119,105 8,525 19,222 146,852
Accumulated depreciation and
impairment (53,643) (1,681) (11,502) (66,826)
Net carrying amount 65,462 6,844 7,720 80,026
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024 :
Cost 119,105 8,525 19,222 146,852
Accumulated depreciation and
impairment (53,643) (1,681) (11,502) (66,826)
Net carrying amount 65,462 6,844 7,720 80,026
At 1 January 2024, net of
accumulated depreciation and
impairment 65,462 6,844 7,720 80,026
Additions 81,913 4,855 146 86,914
Disposals (11) — — (11)
Depreciation provided during the
year (48,099) (1,820) (5,297) (55,216)
At 31 December 2024, net of
accumulated depreciation and
impairment 99,265 9,879 2,569 111,713
At 31 December 2024 :
Cost 200,960 13,380 19,368 233,708
Accumulated depreciation and
impairment (101,695) (3,501) (16,799) (121,995)
Net carrying amount 99,265 9,879 2,569 111,713
APPENDIX I ACCOUNTANTS’ REPORT
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Electronic
equipment
Furniture and
others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000
30 June 2025
At 1 January 2025 :
Cost 200,960 13,380 19,368 233,708
Accumulated depreciation and
impairment (101,695) (3,501) (16,799) (121,995)
Net carrying amount 99,265 9,879 2,569 111,713
At 1 January 2025, net of
accumulated depreciation and
impairment 99,265 9,879 2,569 111,713
Additions 17,786 1,956 — 19,742
Transfers from right-of-use assets
(note 14) 20,945 — — 20,945
Disposals (482) — — (482)
Depreciation provided during the
period (29,959) (1,274) (1,639) (32,872)
At 30 June 2025, net of accumulated
depreciation and impairment 107,555 10,561 930 119,046
At 30 June 2025 :
Cost 237,978 15,336 19,368 272,682
Accumulated depreciation and
impairment (130,423) (4,775) (18,438) (153,636)
Net carrying amount 107,555 10,561 930 119,046
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 454 ---
14. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The Group as a lessee
The Group has lease contracts mainly for various items of buildings and machinery used in its operations.
Leases of buildings generally have lease terms between 2 and 4 years, while machinery generally have lease terms
of 3 years. Other equipment generally has lease terms of 12 months or less and/or is individually of low value.
Generally, the Group is restricted from assigning and subleasing the leased assets outside the Group.
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use a ssets and the movements during each of the Relevant
Periods are as follows:
The Group
Buildings Machinery Total
RMB’000 RMB’000 RMB’000
As at 1 January 2022 1,129 — 1,129
Additions 27,410 — 27,410
Depreciation charge (10,636) — (10,636)
As at 31 December 2022 and 1 January 2023 17,903 — 17,903
Additions 4,399 — 4,399
Depreciation charge (13,752) — (13,752)
As at 31 December 2023 and 1 January 2024 8,550 — 8,550
Additions 18,054 29,000 47,054
Depreciation charge (11,724) (3,222) (14,946)
As at 31 December 2024 and 1 January 2025 14,880 25,778 40,658
Additions 6,554 — 6,554
Depreciation charge (6,481) (4,833) (11,314)
Disposals (279) — (279)
Transfer to property, plant and equipment
(note 13) — (20,945) (20,945)
As at 30 June 2025 14,674 — 14,674
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 455 ---
The Company
Buildings Machinery Total
RMB’000 RMB’000 RMB’000
As at 1 January 2022 249 — 249
Additions 16,417 — 16,417
Depreciation charge (6,089) — (6,089)
As at 31 December 2022 and 1 January 2023 10,577 — 10,577
Depreciation charge (8,226) — (8,226)
As at 31 December 2023 and 1 January 2024 2,351 — 2,351
Additions 18,056 29,000 47,056
Depreciation charge (7,913) (3,222) (11,135)
As at 31 December 2024 and 1 January 2025 12,494 25,778 38,272
Additions — — —
Depreciation charge (4,796) (4,833) (9,629)
Transfer to property, plant and equipment
(note 13) — (20,945) (20,945)
As at 30 June 2025 7,698 — 7,698
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during each of the Relevant Periods are as
follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period 750 15,723 5,564 33,135
New leases 27,407 4,399 41,251 6,554
Accretion of interest recognised during
the year/period 728 447 906 702
Payments (13,162) (15,005) (14,586) (25,732)
Disposals — — — (286)
Carrying amount at the end of the year/
period 15,723 5,564 33,135 14,373
Analysed into:
Current portion 13,788 3,705 17,979 10,442
Non-current portion 1,935 1,859 15,156 3,931
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 456 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period 144 9,016 323 31,256
New leases 16,417 — 41,251 —
Accretion of interest recognised during
the year/period 394 251 746 688
Payments (7,939) (8,944) (11,064) (24,040)
Carrying amount at the end of the year/
period 9,016 323 31,256 7,904
Analysed into:
Current portion 8,695 323 16,123 7,784
Non-current portion 321 — 15,133 120
The maturity analysis of lease liabilities is disclosed in note 38 to the Historical Financial Information.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities 728 447 906 198 702
Depreciation charge of
right-of-use assets 10,636 13,752 14,946 5,691 11,314
Expense relating to leases of
l o w - v a l u e a s s e t s 9995 2 3
Total amount recognised in
profit or loss 11,373 14,208 15,861 5,894 12,039
The Company
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on lease liabilities 394 251 746 101 688
Depreciation charge of
right-of-use assets 6,089 8,226 11,135 3,556 9,629
Total amount recognised in
profit or loss 6,483 8,477 11,881 3,657 10,317
(d) The total cash outflow for leases is disclosed in note 33 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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15. INTANGIBLE ASSETS
The Group
Licensed IP Software Total
RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022 :
Cost 128,980 20,812 149,792
Accumulated amortisation (89,568) (12,962) (102,530)
Net carrying amount 39,412 7,850 47,262
Cost at 1 January 2022, net of accumulated
amortisation 39,412 7,850 47,262
Additions 47,754 57,855 105,609
Amortisation provided during the year (37,939) (13,871) (51,810)
At 31 December 2022 49,227 51,834 101,061
At 31 December 2022 :
Cost 176,734 78,667 255,401
Accumulated amortisation (127,507) (26,833) (154,340)
Net carrying amount 49,227 51,834 101,061
31 December 2023
At 1 January 2023 :
Cost 176,734 78,667 255,401
Accumulated amortisation (127,507) (26,833) (154,340)
Net carrying amount 49,227 51,834 101,061
Cost at 1 January 2023, net of accumulated
amortisation 49,227 51,834 101,061
Additions 26,862 3,190 30,052
Amortisation provided during the year (31,851) (24,687) (56,538)
At 31 December 2023 44,238 30,337 74,575
At 31 December 2023 :
Cost 203,596 81,857 285,453
Accumulated amortisation (159,358) (51,520) (210,878)
Net carrying amount 44,238 30,337 74,575
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 0–


--- page 458 ---
Licensed IP Software Total
RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024 :
Cost 203,596 81,857 285,453
Accumulated amortisation (159,358) (51,520) (210,878)
Net carrying amount 44,238 30,337 74,575
Cost at 1 January 2024, net of accumulated
amortisation 44,238 30,337 74,575
Additions 80,268 55,198 135,466
Amortisation provided during the year (37,951) (31,423) (69,374)
At 31 December 2024 86,555 54,112 140,667
At 31 December 2024 :
Cost 283,864 137,055 420,919
Accumulated amortisation (197,309) (82,943) (280,252)
Net carrying amount 86,555 54,112 140,667
30 June 2025
At 1 January 2025 :
Cost 283,864 137,055 420,919
Accumulated amortisation (197,309) (82,943) (280,252)
Net carrying amount 86,555 54,112 140,667
Cost at 1 January 2025, net of accumulated
amortisation 86,555 54,112 140,667
Additions 15,035 25,290 40,325
Amortisation provided during the period (20,027) (19,019) (39,046)
At 30 June 2025 81,563 60,383 141,946
At 30 June 2025 :
Cost 298,899 161,263 460,162
Accumulated amortisation (217,336) (100,880) (318,216)
Net carrying amount 81,563 60,383 141,946
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 1–


--- page 459 ---
The Company
Licensed IP Software Total
RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022 :
Cost 64,212 20,520 84,732
Accumulated amortisation (36,555) (12,865) (49,420)
Net carrying amount 27,657 7,655 35,312
Cost at 1 January 2022, net of accumulated
amortisation 27,657 7,655 35,312
Additions 47,754 57,418 105,172
Amortisation provided during the year (33,909) (13,639) (47,548)
At 31 December 2022 41,502 51,434 92,936
At 31 December 2022 :
Cost 111,966 77,938 189,904
Accumulated amortisation (70,464) (26,504) (96,968)
Net carrying amount 41,502 51,434 92,936
31 December 2023
At 1 January 2023 :
Cost 111,966 77,938 189,904
Accumulated amortisation (70,464) (26,504) (96,968)
Net carrying amount 41,502 51,434 92,936
Cost at 1 January 2023, net of accumulated
amortisation 41,502 51,434 92,936
Additions — 3,190 3,190
Amortisation provided during the year (24,619) (24,445) (49,064)
At 31 December 2023 16,883 30,179 47,062
At 31 December 2023 :
Cost 111,966 81,128 193,094
Accumulated amortisation (95,083) (50,949) (146,032)
Net carrying amount 16,883 30,179 47,062
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 2–


--- page 460 ---
Licensed IP Software Total
RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024 :
Cost 111,966 81,128 193,094
Accumulated amortisation (95,083) (50,949) (146,032)
Net carrying amount 16,883 30,179 47,062
Cost at 1 January 2024, net of accumulated
amortisation 16,883 30,179 47,062
Additions 42,490 55,198 97,688
Amortisation provided during the year (23,304) (31,278) (54,582)
At 31 December 2024 36,069 54,099 90,168
At 31 December 2024 :
Cost 154,456 136,326 290,782
Accumulated amortisation (118,387) (82,227) (200,614)
Net carrying amount 36,069 54,099 90,168
30 June 2025
At 1 January 2025 :
Cost 154,456 136,326 290,782
Accumulated amortisation (118,387) (82,227) (200,614)
Net carrying amount 36,069 54,099 90,168
Cost at 1 January 2025, net of accumulated
amortisation 36,069 54,099 90,168
Additions 6,604 25,290 31,894
Amortisation provided during the period (8,317) (19,006) (27,323)
At 30 June 2025 34,356 60,383 94,739
At 30 June 2025 :
Cost 161,060 161,263 322,323
Accumulated amortisation (126,704) (100,880) (227,584)
Net carrying amount 34,356 60,383 94,739
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 3–


--- page 461 ---
16. EQUITY INVESTMENTS DESIGNATED AT FAI R VALUE THROUGH OTHER COMPREHENSIVE
INCOME
The Group and the Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at fair
value through other comprehensive
income
— Unlisted equity investments — 598 828 600
Total — 598 828 600
During 2023, the Group invested RMB600,000 for approximately 7.8125% equity interests in a private
company, which was established in the PRC and principally engaged in the development of unit chip ecosystem.
The investment is not held for trading but for long-term strategic purposes. The fair values of the equity
investment at 31 December 2023 and 2024 and 30 June 2025 were RMB598,000, RMB828,000 and RMB600,000,
respectively.
17. INVENTORIES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials 12,496 23,589 33,514 308,399
Work in progress 167,922 65,697 166,536 107,927
Finished goods 63,602 143,318 142,593 78,594
Total 244,020 232,604 342,643 494,920
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials 2,909 22,527 28,981 305,046
Work in progress 57,952 60,849 157,450 97,923
Finished goods 24,084 111,654 107,357 54,982
Total 84,945 195,030 293,788 457,951
APPENDIX I ACCOUNTANTS’ REPORT
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18. TRADE AND BILLS RECEIVABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables 107,025 240,599 435,504 448,455
Bills receivable 720 — — —
Impairment (19,038) (40,163) (58,328) (59,509)
Total 88,707 200,436 377,176 388,946
The Group’s trading terms with its customers are mainly on credit. The credit term is generally one to
twelve months. The Group seeks to maintain strict control over its outstanding receivables and has a credit
control process to minimise credit risk. The Group does not hold any collateral or other credit enhancements
over its trade receivable balances. Trade receivables are non-interest-bearing.
The Group’s bills receivable were all aged within six months and were neither past due nor impaired.
An ageing analysis of the Group’s trade and bills receivables, based on the revenue recognition date and
net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 88,707 137,493 314,927 329,366
1 to 2 years — 62,943 30,734 27,940
2 to 3 years — — 31,515 31,640
Total 88,707 200,436 377,176 388,946
The movements in the loss allowance for impairment of trade and bills receivables are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period 15 19,038 40,163 58,328
Impairment losses, net 19,023 21,125 18,165 1,181
At the end of the year/period 19,038 40,163 58,328 59,509
The Group applies the simplified approach in calculating ECLs for trade and bills receivables. Trade and
bills receivables relating to customers with known financial difficulties or significant doubt on collection are
assessed individually for impairment allowance. The remaining trade and bills receivables are grouped and
collectively assessed for impairment allowance. Unde r the collective approach, an impairment analysis is
performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates
are based on the ageing analysis for grouping of customers that have similar loss patterns. The calculation
reflects the probability-weighted outcome, the time va lue of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions and forecasts of future economic
conditions. Generally, trade and bills receivables are written off according to management’s approval.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 5–


--- page 463 ---
During the Relevant Periods, there was no significant fluctuation of the overall expected credit loss rates,
so the Group adopted similar expected credit loss rate.
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a
provision matrix:
The Group
As at 31 December 2022
Expected
credit loss rate
(%)
Gross carrying
amount
Expected
credit losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.07 280 (3) 277
For credit loss allowance measured by
aging
— Up to 1 year 17.83 106,745 (19,035) 87,710
Total 107,025 (19,038) 87,987
As at 31 December 2023
Expected
credit loss rate
(%)
Gross carrying
amount
Expected
credit losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.21 67,442 (818) 66,624
For credit loss allowance measured by
aging
— Up to 1 year 18.01 86,434 (15,565) 70,869
— 1 year to 2 years 27.42 86,723 (23,780) 62,943
173,157 (39,345) 133,812
Total 240,599 (40,163) 200,436
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 6–


--- page 464 ---
As at 31 December 2024
Expected
credit loss rate
(%)
Gross carrying
amount
Expected
credit losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.32 214,898 (2,828) 212,070
— Telecommunications 1.93 30,462 (588) 29,874
245,360 (3,416) 241,944
For credit loss allowance measured by
aging
— Up to 1 year 19.06 90,165 (17,182) 72,983
— 1 year to 2 years 29.02 43,298 (12,564) 30,734
— 2 years to 3 years 44.40 56,681 (25,166) 31,515
190,144 (54,912) 135,232
Total 435,504 (58,328) 377,176
As at 30 June 2025
Expected
credit loss rate
(%)
Gross carrying
amount
Expected
credit losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.30 182,710 (2,383) 180,327
— Telecommunications 1.91 13,128 (251) 12,877
— Services-Business 2.00 499 (10) 489
196,337 (2,644) 193,693
For credit loss allowance measured by
aging
— Up to 1 year 14.19 169,608 (24,059) 145,549
— 1 year to 2 years 30.58 26,019 (7,956) 18,063
— 2 years to 3 years 43.99 56,491 (24,850) 31,641
252,118 (56,865) 195,253
Total 448,455 (59,509) 388,946
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 7–


--- page 465 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables 25,276 103,871 226,307 271,881
Impairment (4,507) (19,924) (31,305) (36,071)
Net carrying amount 20,769 83,947 195,002 235,810
The Company’s trading terms with its customers are mainly on credit. The credit period is generally
from one to six months. The Company seeks to maintain strict control over its outstanding receivables
and has a credit control process to minimise credit risk. The Company does not hold any collateral or
other credit enhancements over its trade receivable ba lances. Trade receivables are non-interest-bearing.
An ageing analysis of the Company’s trade and bills receivables, based on the revenue recognition
date and net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 20,769 71,986 164,201 203,737
1 to 2 years — 11,961 30,479 27,940
2 to 3 years — — 322 4,133
Total 20,769 83,947 195,002 235,810
The movements in the loss allowance for impairment of trade and bills receivables are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/
period 15 4,507 19,924 31,305
Impairment losses, net 4,492 15,417 11,381 4,766
At the end of the year/period 4,507 19,924 31,305 36,071
The Company apply the simplified approach in calculating ECLs for trade and bills receivables.
Trade and bills receivables relating to customers with known financial difficulties or significant doubt on
collection are assessed individually for impairment allowance. The remaining trade and bills receivables
are grouped and collectively assessed for impairment allowance. Under the collective approach, an
impairment analysis is performed at each reporting date using a provision matrix to measure expected
credit losses. The provision rates are based on the ageing analysis for grouping of customers that have
similar loss patterns. The calculation reflects the pr obability-weighted outcome, the time value of money
and reasonable and supportable information that is available at the reporting date about past events,
current conditions and forecasts of future economic conditions. Generally, trade and bills receivables are
written off according to management’s approval.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 8–


--- page 466 ---
Set out below is the information about the credit risk exposure on the Company’s trade receivables using a
provision matrix:
The Company
As at 31 December 2022
Expected
credit
loss rate (%)
Gross carrying
amount
Expected
credit
losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
aging
— Up to 1 year 17.83 25,276 (4,507) 20,769
Total 25,276 (4,507) 20,769
As at 31 December 2023
Expected
credit
loss rate (%)
Gross carrying
amount
Expected
credit
losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.21 1,974 (24) 1,950
For credit loss allowance measured by
aging
— Up to 1 year 18.01 85,417 (15,381) 70,036
— 1 year to 2 years 27.42 16,480 (4,519) 11,961
101,897 (19,900) 81,997
Total 103,871 (19,924) 83,947
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 9–


--- page 467 ---
As at 31 December 2024
Expected
credit
loss rate (%)
Gross carrying
amount
Expected
credit
losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.32 62,161 (818) 61,343
— Telecommunications 1.93 30,462 (588) 29,874
92,623 (1,406) 91,217
For credit loss allowance measured by
aging
— Up to 1 year 19.06 90,166 (17,182) 72,984
— 1 year to 2 years 29.02 42,939 (12,460) 30,479
— 2 years to 3 years 44.40 579 (257) 322
133,684 (29,899) 103,785
Total 226,307 (31,305) 195,002
As at 30 June 2025
Expected
credit
loss rate (%)
Gross carrying
amount
Expected
credit
losses
Net carrying
amount
RMB’000 RMB’000 RMB’000
For credit loss allowance measured by
industry
— High Tech Industries 1.30 57,052 (744) 56,308
— Telecommunications 1.91 13,128 (251) 12,877
70,180 (995) 69,185
For credit loss allowance measured by
aging
— Up to 1 year 14.19 168,303 (23,874) 144,429
— 1 year to 2 years 30.58 26,019 (7,956) 18,063
— 2 years to 3 years 43.99 7,379 (3,246) 4,133
201,701 (35,076) 166,625
Total 271,881 (36,071) 235,810
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 0–


--- page 468 ---
19. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Prepayments (i) 56,570 195,673 104,554 391,152
Value-added tax recoverable (ii) 22,320 33,212 63,135 43,219
Deposits and other receivables (iii) 33,871 4,836 48,962 39,883
Deferred listing expense — — — 1,471
Receivable from shareholders — 105,200 — —
112,761 338,921 216,651 475,725
Impairment allowance — — (13,800) (13,800)
Total — current 112,761 338,921 202,851 461,925
Non-current
Deposits and other receivables (iii) 3,934 497 3,242 1,880
Prepayment for long-term assets 4,212 6,678 10,349 491
Contract assets — 2,583 2,550 2,129
Total — non-current 8,146 9,758 16,141 4,500
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Prepayments (i) 30,458 182,922 69,688 355,364
Value-added tax recoverable (ii) 8,874 24,830 35,487 18,341
Deposits and other receivables (iii) 1,031 3,744 40,796 31,894
Deferred listing expense — — — 1,471
Receivable from shareholders — 105,200 — —
40,363 316,696 145,971 407,070
Impairment allowance — — (13,800) (13,800)
Total — current 40,363 316,696 132,171 393,270
Non-current
Deposits and other receivables (iii) 2,610 — 2,825 395
Prepayment for long-term assets 4,212 6,677 9,824 490
Contract assets — 2,583 2,550 2,129
Total — non-current 6,822 9,260 15,199 3,014
(i) The Group’s prepayments relate to prepayment for processing fee for products and prepayment for
research and development activities.
(ii) The Group’s revenue from sales of goods and rendering of services are subject to PRC value-added-tax
(‘‘VAT’’). Input VAT on purchases can be deducted from output VAT payable.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 1–


--- page 469 ---
(iii) Impairment of other receivables is measured as e ither 12-month ECLs or lifetime ECLs, depending on
whether there has been a significant increase in credit risk since initial recognition. If a significant increase
in credit risk of a receivable has occurred since initial recognition, then impairment is measured as lifetime
ECLs. As of 30 June 2025, other receivables of RMB28,800,000 were categorised in stage 3 and an
impairment allowance of RMB13,800,000 was provided based on individual basis. Except for these
receivables, the financial assets included in the above balances relate to receivables for which there were
no recent history of default and past due amounts. In addition, there is no significant change in the
economic factors based on the assessment of the forward-looking information, so the directors of the
Company are of the opinion that the ECLs in respect of these balances are minimal.
20. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Wealth management products (i) 8,779 — — 50,118
Non-current
Unlisted equity investment (ii) 50,000 90,695 96,539 96,176
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Wealth management products (i) 8,779 — — 50,118
Non-current
Unlisted equity investment (ii) — — 4,915 6,176
(i) As at 31 December 2022 and 30 June 2025, the wealth management products were issued by banks in
Chinese Mainland. They were mandatorily classified as financial assets at fair value through profit or loss
as their contractual cash flows are not solely payments of principal and interest. The wealth management
products were disposed of in 2023 and in July 2025, respectively.
(ii) During 2022 and 2023, the Group invested RMB50,000,000 and RMB40,000,000, respectively, for
approximately 18% equity interests in a privat e company, which was established in the PRC and
principally engaged in a data infrastructure development project. The fair values of the equity investment
at 31 December 2022, 2023 and 2024 and 30 June 2025 were RMB50,000,000, RMB90,695,000,
RMB91,624,000 and RMB90,000,000, respectively. On 18 August 2025, the Group and the private
company entered into a supplemental agreement, agreeing that the Group reduced its investment in the
private company by RMB30,000,000, and the funds were received on 16 September 2025.
During 2024, the Group invested RMB5,000,000 for approximately 14.2857% equity interests in a limited
partnership which was established in the PRC. The fair values of the equity investment at 31 December
2024 and 30 June 2025 were RMB4,915,000 and RMB6,176,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 2–


--- page 470 ---
21. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances 311,983 308,114 313,624 1,032,717
Time deposits 18,844 — — 723,027
Total 330,827 308,114 313,624 1,755,744
Less:
Pledged time deposits for bank
loan 26 18,844 — — —
Restricted bank balance (i) 92,678 61 61 42,568
Cash and cash equivalents 219,305 308,053 313,563 1,713,176
Denominated in RMB 97,206 308,042 313,553 934,538
Denominated in USD 122,099 11 10 778,638
Total 219,305 308,053 313,563 1,713,176
(i) As at 31 December 2022, the restricted cash included:
— A balance of RMB21,244,000 which was temporarily restricted by China Merchants Bank pending
the Group’s completion of the reconciliation process required by the bank; and
— A balance RMB71,434,000 in its capital account which was restricted due to the regulatory controls
under China’s capital account framework.
As at 30 June 2025, the restricted cash mainly i ncluded a balance of RMB41,195,000 which was
temporarily restricted by China Zheshang Bank pending the Group’s submission of administrative
documents required by the bank. The restricted cash was released upon the submission of the required
documents in July 2025.
The RMB is not freely convertible into other currencies, however, under Chinese Mainland’s Foreign
Exchange Control Regulations and Administration of Settlement, and Sale and Payment of Foreign Exchange
Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct
foreign exchange business.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits
are made for varying periods of between one day and three months, depending on the immediate cash
requirements of the Group, and earn interest at the respective short term time deposits rates. The bank balances
and time deposits are deposited with creditworthy banks with no recent history of default.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 3–


--- page 471 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances 299,420 298,315 298,374 900,223
Time deposits 18,844 — — 723,027
Total 318,264 298,315 298,374 1,623,250
Less:
Pledged time deposits for bank
loan 26 18,844 — — —
Restricted bank balance 83,180 61 61 1,374
Cash and cash equivalents 216,240 298,254 298,313 1,621,876
Denominated in RMB 94,141 298,243 298,303 843,238
Denominated in USD 122,099 11 10 778,638
Total 216,240 298,254 298,313 1,621,876
22. LONG-TERM TRADE RECEIVABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Long-term trade receivables — 38,550 26,400 20,181
Impairment — (468) (347) (266)
Total — 38,082 26,053 19,915
Analysed into:
Current portion — 22,364 26,053 19,915
Non-current portion — 15,718 — —
According to the payment terms in the sales contracts of GPGPU products with a customer, instalment
repayments are allowed and part of the sales consideration will be collected after one year.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 4–


--- page 472 ---
An ageing analysis of the Group’s long-term trade receivables, based on the revenue recognition date and
net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year — 38,082 — —
1 to 2 years — — 26,053 19,915
Total — 38,082 26,053 19,915
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period — — 468 347
Impairment losses, net — 468 (121) (81)
At the end of the year/period — 468 347 266
Impairment of long-term trade receivables is measured as either 12-month expected credit losses or
lifetime expected credit losses, depending on whether ther e has been a significant increase in credit risk since
initial recognition. If a significant increase in credit ri sk of a receivable has occurred since initial recognition,
then impairment is measured as lifetime expected credit losses. As at the end of each of the Relevant Periods,
there was no information indicating that the long-term tra de receivables had a significant increase in credit risk
since initial recognition.
23. TRADE PAYABLES
An ageing analysis of the trade payables as at the end of each of the Relevant Periods, based on the invoice date,
is as follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 85,256 18,141 45,629 29,878
1 to 2 years — 16 — 6
2 to 3 years — — 16 —
Total 85,256 18,157 45,645 29,884
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 27,178 14,406 42,052 23,662
Total 27,178 14,406 42,052 23,662
The trade payables are non-interest-bearing and are normally settled on 30 to 180 day terms.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 5–


--- page 473 ---
24. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Salary payables 66,552 73,948 120,563 85,951
Payable for purchase of intangible assets and
property, plant and equipment 4,965 2,938 27,687 29,668
Payable for research and development costs 4,828 12,417 15,066 10,939
Other tax payables 6,037 6,756 7,489 9,595
Other payables and accruals 10,343 13,637 16,846 16,966
Total 92,725 109,696 187,651 153,119
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Salary payables 33,965 41,311 71,096 51,878
Payable for purchase of intangible assets and
property, plant and equipment 4,965 2,888 24,086 21,543
Payable for research and development costs 3,141 12,417 9,841 9,832
Other tax payables 2,200 2,972 3,719 5,643
Other payables and accruals 8,426 10,170 17,454 11,414
Total 52,697 69,758 126,196 100,310
Other payables are unsecured and non-interest-beari ng, repayable within 1 year. The fair values of other
payables at the end of each of the Relevant Periods approximated to their corresponding carrying amounts.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 6–


--- page 474 ---
25. CONTRACT LIABILITIES
Details of contract liabilities are as follows:
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Short-term advances received from customers
Sale of GPGPU products 2,232 13,528 28,756 39,947
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Short-term advances received from customers
Sale of GPGPU products 2,232 11,361 17,712 6,984
Contract liabilities include advances received to deliver GPGPU products. The changes in contract
liabilities during the Relevant Periods were mainly due to the changes in advances received from customers in
relation to the sale of GPGPU products.
26. INTEREST-BEARING BANK AND OTHER BORROWINGS
The Group
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 30 June 2025
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Current
Bank loans — secured 4.03 2023 18,866 — — — 3.10 2025 50,047 3.10 2026 50,038
Bank loans — unsecured 3.2–3.85 2023 84,012 2.95–3.40 2024 388,303 2.60–3.40 2025 490,449 2.30–3.10 2026 482,383
Current portion of long term
bank loans — unsecured 3.40 2023 52 3.40 2024 104,114 3.10 2025 25,564 2.55–3.00 2025–2026 51,391
Total — current 102,930 492,417 566,060 583,812
Non-current
Bank loans — unsecured 3.40 2024 50,000 — — — 3.10–3.20 2026 42,000 2.55–3.00 2026–2027 83,500
Total — non-current 50,000 — 42,000 83,500
Total 152,930 492,417 608,060 667,312
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans repayable
Analysed into:
Within one year or on demand 102,930 492,417 566,060 583,812
In the second year 50,000 — 42,000 83,500
Total 152,930 492,417 608,060 667,312
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7 7–


--- page 475 ---
As at 31 December 2022, the Group’s bank borrowings with an amount of USD2,706,000 (equivalent to
RMB18,844,000) were secured by the pledge of certain of the Group’s time deposits amounting to USD2,706,000
(equivalent to RMB18,844,000).
As at 31 December 2024 and 30 June 2025, the Group’s bank borrowings with an amount of
RMB50,000,000 were guaranteed by the Company.
The Company
As at 31 December 2022 As at 31 December 2023 As at 31 December 2024 As at 30 June 2025
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Current
B a n k l o a n s — s e c u r e d 4 . 0 3 2 0 2 3 1 8 , 8 6 6—————————
Bank loans — unsecured 3.2–3.85 2023 84,012 2.95–3.40 2024 388,303 2.60–3.40 2025 480,439 2.30–3.10 2026 472,375
Current portion of long term
bank loans — unsecured 3.40 2023 52 3.40 2024 104,114 3.10 2025 25,564 2.55–3.00 2025–2026 51,391
Total — current 102,930 492,417 506,003 523,766
Non-current
Bank loans — unsecured 3.40 2024 50,000 — — — 3.10–3.20 2026 42,000 2.55–3.00 2026–2027 83,500
Total — non-current 50,000 — 42,000 83,500
Total 152,930 492,417 548,003 607,266
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans repayable
Analysed into:
Within one year or on demand 102,930 492,417 506,003 523,766
In the second year 50,000 — 42,000 83,500
Total 152,930 492,417 548,003 607,266
APPENDIX I ACCOUNTANTS’ REPORT
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27. DEFERRED TAX
The Group
The movements in deferred tax liabilities and assets during the year are as follows:
Deferred tax assets
Lease
liabilities Tax losses Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 68 8 76
Deferred tax credited to profit or loss during the year
(note 10) 1,620 266 1,886
Gross deferred tax assets at 31 December 2022 and
1 January 2023 1,688 274 1,962
Deferred tax (charged)/credited to profit or loss during
the year (note 10) (1,171) 310 (861)
Gross deferred tax assets at 31 December 2023 and
1 January 2024 517 584 1,101
Deferred tax credited to profit or loss during the year
(note 10) 4,466 757 5,223
Gross deferred tax assets at 31 December 2024 and
1 January 2025 4,983 1,341 6,324
Deferred tax charged to profit or loss during the period
(note 10) (2,637) (1,063) (3,700)
Gross deferred tax assets at 30 June 2025 2,346 278 2,624
APPENDIX I ACCOUNTANTS’ REPORT
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Deferred tax liabilities
Right-of-use
assets
Fair value
gains Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 76 — 76
D e f e r r e dt a xc h a r g e dt op r o f i to rl o s s
during the year (note 10) 1,877 9 1,886
Gross deferred tax liabilities at 31 December 2022 and
1 January 2023 1,953 9 1,962
Deferred tax (credited)/charged to profit or loss
during the year (note 10) (1,026) 165 (861)
Gross deferred tax liabilities at 31 December 2023 and
1 January 2024 927 174 1,101
D e f e r r e dt a xc h a r g e dt op r o f i to rl o s s
during the year (note 10) 5,165 58 5,223
Gross deferred tax liabilities at 31 December 2024 and
1 January 2025 6,092 232 6,324
Deferred tax credited to profit or loss during the period
(note 10) (3,675) (25) (3,700)
Gross deferred tax liabilities at 30 June 2025 2,417 207 2,624
For presentation purposes, certain deferred tax assets and liabilities have been offset in the
statements of financial position. The following is an analysis of the deferred tax balances of the Group for
financial reporting purposes:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets
recognised in the consolidated
statement of financial position — — — —
Net deferred tax liabilities
recognised in the consolidated
statement of financial position — — — —
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deductible temporary
differences 164,807 273,038 314,478 404,021
Tax losses 2,382,156 3,322,656 4,465,169 5,007,107
Deferred tax assets have not been recognised in respect of the above items as they have arisen in the
entities of the Group that have been loss-making for some time and it is not considered probable that
taxable profits will be available against which the above items can be utilised.
APPENDIX I ACCOUNTANTS’ REPORT
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For the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025, the
Group also had tax losses arising in Chinese Mainland of RMB642,674,000, RMB940,500,000,
RMB1,142,513,000 and RMB541,938,000, respectively, that will expire in three to ten years for
offsetting against future taxable profits.
The Company
The movements in deferred tax liabilities and assets during the Relevant Periods are as follows:
Deferred tax assets
Lease
liabilities Tax losses Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 37 — 37
Deferred tax credited to profit or loss
during the year 1,315 244 1,559
Gross deferred tax assets at 31 December 2022 and
1 January 2023 1,352 244 1,596
Deferred tax (charged)/credited to profit or loss during
the year (1,304) 61 (1,243)
Gross deferred tax assets at 31 December 2023 and
1 January 2024 48 305 353
Deferred tax credited to profit or loss
during the year 4,641 747 5,388
Gross deferred tax assets at 31 December 2024 and
1 January 2025 4,689 1,052 5,741
Deferred tax charged to profit or loss during the period (3,503) (876) (4,379)
Gross deferred tax assets at 30 June 2025 1,186 176 1,362
APPENDIX I ACCOUNTANTS’ REPORT
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Deferred tax liabilities
Right-of-use
assets
Fair value
gains Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 37 — 37
D e f e r r e dt a xc h a r g e dt op r o f i to rl o s s
during the year 1,550 9 1,559
Gross deferred tax liabilities at 31 December 2022 and
1 January 2023 1,587 9 1,596
Deferred tax credited to profit or loss
during the year (1,234) (9) (1,243)
Gross deferred tax liabilities at 31 December 2023 and
1 January 2024 353 — 353
D e f e r r e dt a xc h a r g e dt op r o f i to rl o s s
during the year 5,388 — 5,388
Gross deferred tax liabilities at 31 December 2024 and
1 January 2025 5,741 — 5,741
Deferred tax (credited)/charged to profit or loss during
the period (4,586) 207 (4,379)
Gross deferred tax liabilities at 30 June 2025 1,155 207 1,362
For presentation purposes, certain deferred tax assets and liabilities have been offset in the
statements of financial position. The following is an analysis of the deferred tax balances of the Company
for financial reporting purposes:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets
recognised in the statement of
financial position of the
C o m p a n y ————
Net deferred tax liabilities
recognised in the statement of
financial position of the
C o m p a n y ————
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 2–


--- page 480 ---
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deductible temporary
differences 614,044 748,313 925,040 1,011,741
Tax losses 1,580,925 2,382,763 3,347,104 3,834,434
Deferred tax assets have not been recognised in respect of the above items as the Company has been
loss-making for some time and it is not considered probable that taxable profits will be available against
which the above items can be utilised.
For the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025, the
Company had tax losses arising in Chines e Mainland of RMB467,878,000, RMB801,838,000,
RMB964,341,000 and RMB487,330,000, respectively, th at will expire in three to ten years for offsetting
against future taxable profits.
28. DEFERRED GOVERNMENT GRANTS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period 10,470 44,918 61,055 47,378
Grants received during the year/period 34,448 16,385 21,337 54,018
Amortisation during the year/period — (135) (10,094) (12,915)
Released to profit or loss during the year/
period — (113) (24,920) (14,226)
At the end of the year/period 44,918 61,055 47,378 74,255
Current portion 248 35,014 2,272 2,355
Non-current portion 44,670 26,041 45,106 71,900
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period 470 34,918 45,055 26,278
Grants received during the year/period 34,448 10,385 16,237 35,823
Amortisation during the year/period — (135) (10,094) (12,427)
Released to profit or loss during the year/
period — (113) (24,920) (2,247)
At the end of the year/period 34,918 45,055 26,278 47,427
Current portion 248 35,014 2,272 —
Non-current portion 34,670 10,041 24,006 47,427
APPENDIX I ACCOUNTANTS’ REPORT
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29. LONG-TERM PAYABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period 72 33,215 14,224 45,881
Additions 51,480 794 57,141 20,177
Accretion of interest recognised during the
year/period 541 951 723 985
Payments (18,878) (20,736) (26,207) (1,208)
Carrying amount at the end of the year/
period 33,215 14,224 45,881 65,835
Analysed into:
Current portion 19,529 13,949 31,592 56,016
Non-current portion 13,686 275 14,289 9,819
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of the
year/period — 33,143 14,224 19,044
Additions 51,480 794 27,205 15,847
Accretion of interest recognised during the
year/period 541 951 723 425
Payments (18,878) (20,664) (23,108) (1,208)
Carrying amount at the end of the year/
period 33,143 14,224 19,044 34,108
Analysed into:
Current portion 19,457 13,949 9,737 24,289
Non-current portion 13,686 275 9,307 9,819
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 4–


--- page 482 ---
30. PAID-IN CAPITAL/SHARE CAPITAL AND TREASURY SHARES
(a) Paid-in capital/share capital
The Group and the Company
Numbers of
ordinary
shares
Paid-in
capital/share
capital
RMB’000
As at 1 January 2022 N/A 148,897
Capital contribution from shareholders (i) N/A 22,417
As at 31 December 2022 N/A 171,314
Conversion of convertible bonds (ii) N/A 5,139
Capital contribution from shareholders (iii) N/A 9,763
As at 31 December 2023 N/A 186,216
Capital contribution from shareholders (iv) N/A 7,598
As at 31 December 2024 N/A 193,814
Issue of ordinary shares upon conversion into a joint stock
company (v) 193,813,940 —
Issuance of shares (vi) 35,071,996 35,072
As at 30 June 2025 228,885,936 228,886
(i) In February 2022, the Company received capital contributions of RMB200,000,000 in cash from
Beijing Ruifeng Equity Investment Fund (Limited Partnership) ( 北京瑞灃股權投資基金（有限合夥）)
and RMB50,000,000 in cash from Xicheng Zhiyuan Digital Power Selection (Beijing) Investment
Center (Limited Partnership) ( 熙誠致遠數字動力精選（北京）投資中心（有限合夥）), respectively. As
a result, approximately RMB7,445,000 and RMB242,555,000 were credited to the Company’s
paid-in capital and capital reserves, respectively.
In May 2022, the Company received capital contributions of RMB130,000,000 in cash from
Shanghai Shengyong State-owned Enterprise Reform New Potential Private Equity Investment
Fund Partnership (Limited Partnership) ( 上海盛雍國企改革新勢能私募投資基金合夥企業（有限合
夥）) and RMB50,000,000 in cash from Sichuan Dingxiang Equity Investment Fund Co., Ltd. ( 四川
鼎祥股權
投資基金有限公司), respectively. As a result, approximately RMB4,020,000 and
RMB175,980,000 were credited to the Company’s paid-in capital and capital reserves, respectively.
In June 2022, the Company received capital contributions of RMB20,000,000 in cash from Wuhan
Jiangxia Xintuo Equity Investment Fund Management Partnership (Limited Partnership) ( 武漢江夏
新拓股權投資基金管理合夥企業（有限合夥）), RMB30,000,000 in cash from Zaozhuang Xinsheng
Equity Investment Partnership (Limited Partnership) ( 棗莊新晟股權投資合夥企業（有限合夥）),
RMB33,000,000 in cash from Ningbo Dingyinxin Equity Investment Partnership (Limited
Partnership) ( 寧波鼎寅芯股權投資合夥企業（有限合夥）), and USD48,125,000 in cash from Jupiter
Technology Link Investment Company Ltd, respectively. As a result, approximately RMB9,199,000
and RMB396,404,000 were credited to the Company’s paid-in capital and capital reserves,
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 5–


--- page 483 ---
In August 2022, the Company received a capital contribution of RMB8,000,000 in cash from
Ningbo Dingyinxin Equity Investment Partnership (Limited Partnership) ( 寧波鼎寅芯股權投資合夥
企業（有限合夥）), USD1,875,000 in cash from Jupiter Technology Link Investment Company Ltd,
and RMB78,500,000 in cash from Beijing Zhongguancun Science Park Technology Growth
Investment Partnership (Limited Partnership) ( 北京中關村科學城科技成長投資合夥企業（有限合
夥）), respectively. As a result, approximately R MB1,753,000 and RMB97,650,000 were credited to
the Company’s paid-in capital and capital reserves, respectively.
(ii) In June 2023, the Company issued a convertible liability and received RMB50,000,000 in cash from
Xiamen Zhengmei Enterprise Management Partnership (Limited Partnership) ( 廈門鉦美企業管理合
夥企業（有限合夥）). In July 2023, this convertible bond was fully converted to capital at its then fair
value of RMB50,360,000, resulting in approxima tely RMB5,139,000 and RMB45,221,000 credited
to the Company’s paid-in capital and capital reserves, respectively.
(iii) In July 2023, the Company received capital contributions of RMB40,000,000 in cash from Ningbo
Dingmaoxin Equity Investment Partnership (Limited Partnership) ( 寧波鼎卯芯股權投資合夥企業
（有限合夥）), RMB37,000,000 in cash from Guangzhou Tianmu Artificial Intelligence Industry
Investment Fund Partnership (Limited Partnership) ( 廣州天目人工
智能產業投資基金合夥企業（有限
合夥）), respectively. As a result, approximately RMB1,319,000 and RMB75,681,000 were credited
to the Company’s paid-in capital and capital reserves respectively.
In July 2023, Xiamen Zhengmei Enterprise Management Partnership (Limited Partnership) ( 廈門鉦
美企業管理合夥企業（有限合夥）) subscribed for the Company’s increased registered capital of
RMB5,139,000 at the consideration of RMB300,000,000, of which RMB50,000,000 was settled
through the conversion of convertible bond disclosure in note (b). As a result, approximately
RMB250,000,000 were credited to the Company’s capital reserves respectively. The Company
received capital contributions of RMB100,000,000 in cash in October 2023 and RMB150,000,000 in
cash in February 2024.
In July 2023, Zibo Kaishu Equity Investment Partnership (Limited Partnership) ( 淄博凱數股權投資
合夥企業（有限合夥）) (‘‘Zibo Kaishu’’) subscribed for the Company’s increased registered capital of
RMB1,836,000 at the consideration of RMB107,200,000. As a result, approximately RMB1,836,000
and RMB105,364,000 credited to the Company’s paid- in capital and capital reserves respectively.
The Company received capital contributions of RMB2,000,000 in cash in November 2023. In
November 2024, Zibo Kaishu transferred RMB1,836,000 registered capital in the Company to
Haihe Yunbai Industrial Investment Fund Partnership (Limited Partnership) ( 天津海河沄柏產業投
資基金合夥企業（有限合夥）) (‘‘Haihe Yunbai’’) at the consideration of approximately
RMB107,200,000. In November 2024, the Company received capital contributions of
RMB105,200,000 in cash from Haihe Yunbai.
In August 2023, the Company received capital contributions of RMB100,000,000 in cash from
Hangzhou Yuanqiao Zhishu Equity Investment Partnership (Limited Partnership) ( 杭州遠橋智數股
權投資合夥
企業（有限合夥）), and RMB30,000,000 in cash from Beijing Paradigm Artificial
Intelligence Equity Investment Fund (Limited Partnership) ( 北京範式人工智能股權投資基金（有限
合夥）), respectively. As a result, approximately RMB2,227,000 and RMB127,773,000 were credited
to the Company’s paid-in capital and capital reserves respectively.
In October 2023, the Company received capital contributions of RMB50,000,000 in cash from
Gongqingcheng Baochuang Gongying Venture Capital Fund Partnership (Limited Partnership) ( 共
青城寶創共贏創業投資基金合夥企業（有限合夥）), and USD5,000,000 in cash from Hina Growth
Opportunities Fund, L.P., respectively. As a result, approximately RMB1,468,000 and
RMB84,428,000 were credited to the Company’s paid-in capital and capital reserves respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 6–


--- page 484 ---
In November 2023, the Company received capital contributions of RMB20,000,000 in cash from
Nanjing Lianchuang Digital Equity Investment Partnership (Limited Partnership) ( 南京聯創數字股
權投資合夥企業（有限合夥）), and RMB150,000,000 in cash from Xiamen Hongshan Yaheng Equity
Investment Partnership (Limited Partnership) ( 廈門紅杉雅恒股權投資合夥企業（有限合夥）)
(currently known as Xiamen Yaheng Venture Capital Fund Partnership (Limited Partnership) ( 廈
門雅恒創業投資基金合夥企業（有限合夥）)), respectively. As a result, approximately RMB2,913,000
and RMB167,087,000 were credited to the Company’s paid-in capital and capital reserves
respectively.
(iv) In February 2024, the Company received capital contributions of RMB4,350,000 in cash from
Cuihu Tianshu (Zibo) Equity Investment Partnership (Limited Partnership) ( 翠湖天數（淄博）股權投
資合夥企業（有限合夥）), and RMB300,000,000 in cash from Shanghai Linke Zhixin Private Equity
Investment Fund Partnership (Limited Partnership) ( 上海臨科智芯
私募投資基金合夥企業（有限合
夥）), respectively. As a result, approximately RMB5,884,000 and RMB337,616,000 were credited to
the Company’s paid-in capital and capital reserves, respectively.
In July 2024, the Company received capital contributions of RMB65,000,000 in cash from Suzhou
Industrial Park Yuanhe Dingsheng Equity Investment Partnership (Limited Partnership) ( 蘇州工業
園區元禾鼎盛股權投資合夥企業（有限合夥）), resulting in approximately RMB1,114,000 and
RMB63,886,000 were credited to the Company’s paid-in capital and capital reserves, respectively.
In August 2024, the Company received capital contributions of RMB35,000,000 in cash from
Chengdu Tianfu Yuanhe Jingu Venture Capital Center (Limited Partnership) ( 成都天府元禾金谷創
業投資中心（有限合夥）), resulting in approximately RMB600,000 and RMB34,400,000 were
credited to the Company’s paid-in capital and capital reserves, respectively.
(v) Pursuant to the promoters’ agreement dated 27 December 2024 entered into by all the then
shareholders and the shareholders’ resolutions dated 13 January 2025, all promoters (being all the
then Shareholders) agreed to convert the Company from a limited liability company into a joint
stock limited company. Upon completion of the conversion, the share capital of the Company was
RMB193,813,940 divided into 193,813,940 shares with a nominal value of RMB1.00 each, which
were subscribed by all the then shareholders in proportion to their respective equity interests in the
Company before the conversion. The conversion was completed on 17 February 2025.
(vi) In March 2025, the Company received capital contributions of RMB95,000,000 in cash from Hunan
Xiangjiang New District Guiding No. 5 Equity Investment Partnership (Limited Partnership) ( 湖南
湘江新區引導五號股權投資合夥企業（有限合夥）). As a result, approximately RMB1,627,000 and
RMB93,373,000 were credited to the Company’s share capital and capital reserves, respectively.
In April 2025, the Company received capital contributions of RMB720,000,000 in cash from
Masterwork Holdings Limited. As a result, approximately RMB11,726,000 and RMB708,274,000
were credited to the Company’s share capital and capital reserves, respectively.
In May 2025, the Company received capital contributions of RMB144,086,000 in cash from
FOCUSTAR CAPITAL INVESTMENT FUND L.P. and RMB108,785,000 in cash from XN Speed
International Limited. As a result, approximately RMB4,119,000 and RMB248,752,000 were
credited to the Company’s share capital and capital reserves, respectively.
In May 2025, the Company received capital contributions of RMB30,192,000 in cash from
Interplanetary Pte. Ltd.. As a result, approximately RMB493,000 and RMB29,699,000 were
credited to the Company’s share capital and capital reserves, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 7–


--- page 485 ---
In June 2025, the Company received capital contributions of RMB50,000,000 in cash from Xiamen
Zhengmei Enterprise Management Partnership (Limited Partnership) ( 廈門鉦美企業管理合夥企業
（有限合夥）), RMB25,000,000 in cash from Sichuan Culture Industry Investment Fund Partnership
(Limited Partnership) ( 四川文化產業投資基金合夥企業（有限合夥）), RMB30,000,000 in cash from
Sichuan Regional Collaborative Development Investment Guidance Fund Partnership (Limited
Partnership) ( 四川區域協同發展投資引導基金合夥企業（有限合夥）), RMB45,000,000 in cash from
Mianyang Gaochuang Equity Investment Fund Partnership (Limited Partnership) ( 綿陽高創股權投
資基金合夥企業（有限合夥）), RMB15,000,000 in cash from Ningbo Ruihe Yingfu Venture Capital
Partnership (Limited Partnership) ( 寧波銳合盈孚創業投
資合夥企業（有限合夥）), RMB15,000,000 in
cash from Ningbo Yingshi Venture Capital Partnership (Limited Partnership) ( 寧波盈石創業投資合
夥企業（有限合夥）), RMB48,000,000 in cash from Nanjing Lanpu High Quality Equity Investment
Fund (Limited Partnership) ( 南京蘭璞高質股權投資基金（有限合夥）), RMB40,000,000 in cash from
Nanjing Railway Investment Jushi Hub Economic Industry Investment Fund Partnership (Limited
Partnership) ( 南京鐵投巨石樞紐經濟產業投資基金合夥企業（有限合夥）), RMB30,000,000 in cash
from China Insurance Investment Trust Quality (Jiaxing) Equity Investment Partnership (Limited
Partnership) ( 中保投信質力（嘉興）股權投資合夥企業（有限
合夥）), RMB24,200,000 in cash from
Hunan Bofu Selected Equity Investment Partnership (Limited Partnership) ( 湖南泊富精選股權投資
合夥企業（有限合夥）), RMB22,646,335 in cash from Xiamen Hongshan Yaheng Equity Investment
Partnership (Limited Partnership) ( 廈門紅杉雅恒股權投資合夥企業（有限合夥）), RMB100,000,000
in cash from Shenzhen Digital Future Private Equity Investment Fund Partnership (Limited
Partnership) ( 深圳市數字未來私募股權投資基金合夥企業（有限合夥）), RMB200,000,000 in cash
from Quzhou Intelligent Manufacturing Anhe Equity Investment Partnership (Limited
Partnership) ( 衢州智造安合股權投資合夥企業（有限合夥）), RMB180,000,000 in cash from Nanjing
Xingna Heyuan Venture Capital Partnership (Limited Partnership) ( 南京
星納赫源創業投資合夥企
業（有限合夥）), RMB25,500,000 in cash from Nanjing Xingnafeng Enterprise Management
Partnership (Limited Partnership) ( 南京星納峰企業管理合夥企業（有限合夥）), RMB50,000,000 in
cash from Hubei Lihe Jiacheng Investment Co., Ltd. ( 湖北利禾佳誠投資有限責任公司),
RMB50,000,000 in cash from Hainan Zhihua Investment Partnership (Limited Partnership) ( 海南
至華投資合夥企業（有限合夥）), RMB50,000,000 in cash from Shanghai Dalinghao Bay Ceyuan
No.2 Venture Capital Partnership (Limited Partnership) ( 上海大零號灣策源二號創業投資合夥企業
（有限合夥）) and RMB50,000,000 in cash from Xi’an Xigaotou Zhiyuan Investment Fund
Partnership (Limited Partnership) ( 西安西高投致遠投資基金合夥企業（有限合夥）). As a result,
approximately RMB17,107,000 and RMB1,032,716,000 were credited to the Company’s share
capital and capital reserves, respectively.
(b) Special rights of the Pre-IPO Investors
Pursuant to the shareholders agreement entered into by the Company and the then shareholders from
December 2016 to May 2025 (collectively, the ‘‘Agreements’’), the Pre-IPO Investors were granted by the
Company with special rights (‘‘Special Rights’’) which included redemption rights and liquidation preferences
rights.
No Pre-IPO Investors had exercised their redemption rights or liquidation preferences rights.
On 10 June 2025, the Company and the Pre-IPO Investors entered into supplemental agreements, agreeing
that certain of the Special Rights granted by the Company to Pre-IPO investors, including redemption rights and
liquidation preferences rights, have been irrecoverably terminated and shall be void ab initio. Taking into
account the legal and regulatory framework of the Company’s jurisdiction and the governing law of the
supplemental agreements, the directors considered that it is appropriate to present the Pre-IPO Investments as
equity throughout the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 8–


--- page 486 ---
Had the Special Rights granted by the Company to the Pre-IPO Investors been accounted for as financial
liabilities measured at present value of the redemption amount prior to entering into the supplemental
agreements, (i) the redemption financial liabilities, total c urrent liabilities, net current (liabilities)/assets and net
(liabilities)/assets would have been:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Redemption financial
liabilities 2,948,553 3,938,039 5,080,904 —
Total current liabilities 3,265,261 4,624,505 5,960,859 875,575
Net current (liabilities)/assets (2,480,167) (3,337,366) (4,698,512) 2,295,993
Net (liabilities)/assets (2,328,872) (3,059,701) (4,392,235) 2,515,854
and (ii) the finance costs associated with the redemption financial liabilities, the net loss for the
year/period, basic and diluted loss per share would have been:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Financial costs
associated with the
redemption
financial liabilities (210,881) (289,303) (444,165) (210,778) (235,526)
Net loss attributable
to owners of the
parent (734,720) (1,080,610) (1,336,598) (614,770) (844,842)
Basic loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
Diluted loss per share (5.60) (7.41) (8.16) (3.78) (4.82)
(c) Treasury shares
Number of
shares
Treasury
shares
RMB’000
As at 1 January 2022 32,621,000 32,621
Restrict shares vested during the year (767,000) (767)
As at 31 December 2022 31,854,000 31,854
Restrict shares vested during the year (3,238,000) (3,238)
As at 31 December 2023 28,616,000 28,616
Restrict shares vested during the year (2,587,000) (2,587)
Shares repurchased 2,933,000 14,817
As at 31 December 2024 28,962,000 40,846
Restrict shares vested during the period (2,819,000) (2,819)
Shares repurchased 569,000 1,622
As at 30 June 2025 26,712,000 39,649
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8 9–


--- page 487 ---
The treasury shares are shares held by the Group that have not been granted or vested under its share
award schemes. Further details of the share aware schemes are given in note 31 to the Historical Financial
Information.
31. SHARE-BASED PAYMENTS
The Company operates share award schemes for the purpose of providing incentives and rewards to eligible
participants who contribute to the success of the Group’s operations. Eligible participants of the schemes include the
Company’s directors, supervisors, senior management and other key employees of the Group who, in the opinion of
the board of directors, contribute directly to the overall business performance and sustainable development of the
Group.
In order to implement the share award schemes, several limited partnerships were established and designated as
employee shareholding platforms to specially hold the shares as awards to the eligible participants as the ultimate
beneficial owners.
The terms and conditions of the restricted shares granted under the share award schemes are summarised as
follows:
Number of
shares
Subscription
price
Category A
Granted prior to 31 December 2021 21,273,249 RMB0.00
Granted during the year ended 31 December 2022 349,180 RMB0.00
Granted during the year ended 31 December 2023 819,426 RMB0.00
Granted during the year ended 31 December 2024 9,812,827 RMB0.00
Granted during the six months ended 30 June 2025 2,723,982 RMB0.00
Category B
Granted during the year ended 31 December 2022 1,500,500 RMB3.00
Granted during the year ended 31 December 2023 2,359,748 RMB3.00
Granted during the year ended 31 December 2024 464,100 RMB3.00
Granted during the year ended 31 December 2024 330,000 RMB1.00
Granted during the six months ended 30 June 2025 172,947 RMB1.00
Category C
Granted prior to 31 December 2021 4,063,536 RMB0.00
Granted during the year ended 31 December 2022 69,653 RMB0.00
Category A
The restricted shares granted under Category A are subject to service conditions. Specifically, these share
incentives require grantee to meet the service condition from the date of grant to the later of (1) the date of
successful IPO of the Company (the ‘‘Lock-up Period’’) and (2) the ‘‘Service Period’’, where the shares are either
(i) to be released in equal 25% over a period of four years from the grant date, or (ii) are to be released 25% on
the secondary anniversary from the grant date, and 25% each on the third and fourth anniversaries from the
grant date. After taking into consideration of the b est estimation of the IPO timetable, the management
determined the vesting period of the relevant restricted shares based on the above service conditions. As such,
the share-based payment expenses are amortised during the vesting period.
The fair value of the restricted shares granted with nil subscription price was determined with reference to
the financing transaction prices from third parties at that time.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 0–


--- page 488 ---
The movements of the outstanding restricted shares during the Relevant Periods were as follows:
2022 2023 2024 2025
Number of
shares
Number of
shares
Number of
shares
Number of
shares
’000 ’000 ’000 ’000
At 1 January 18,361 18,466 16,355 22,220
Granted during the year/period 349 819 9,813 2,724
Forfeited during the year/period (244) (37) (147) (43)
Cancelled during the year/period* — — (1,719) —
Vested during the year/period* — (2,893) (2,082) (2,649)
At 31 December/30 June 18,466 16,355 22,220 22,252
Subsequent to 30 June 2025, till the date of approval of this report, a total of 10,528 restricted shares were
forfeited in respect of the resignation of certain grantees.
* In November 2023, the shareholders approved to imme diately vest 1,071,000 restricted shares with
nil subscription price to one employee to reward his contributions to the Group, resulting in the
accelerated recognition of unamortised expenses in the current period.
* In July 2020, the Company granted 2,579,000 restricted shares to one employee with nil subscription
price which have service conditions. In April 2024, the Company and the employee reached an
agreement that the Company repurchased 1,719,000 restricted shares with nil consideration with the
remaining 860,000 restricted shares immediately vested, resulting in the accelerated recognition of
unamortised expenses in the current period.
* In April 2023, the Company reached agreements with several employees that the Company waived
its repurchase right under the original grant agreement which reduced the vesting period from the
‘‘Lock-up Period’’ to the ‘‘Service Period’’. The employees vested 1,822,000, 1,222,000 and 772,000
restricted shares during the years ended 31 December 2023 and 2024 and the six months ended 30
June 2025.
* In 2024, the Company granted 1,877,000 restricted shares to one employee with nil subscription
price which have service conditions. In May 2025, the Company reached agreements with the
employee whereby the Company waived its repurchase right under the original grant agreement, in
consideration of the employee’s anticipated departure in June 2025. Consequently, these restricted
shares became immediately vested, resulting in the accelerated recognition of unamortised expenses
in the current period.
Category B
The restricted shares grants under Category B are subject to service conditions with subscription price of
RMB1.00 or RMB3.00. Specifically, these share incentives require grantee to meet the service condition from the
date of grant to the later of (1) the date of successful IPO of the Company (the Lock-up Period’’) and (2) the
‘‘Service Period’’, which are either (i) to be released equally over a period of four years from the grant date, or
(ii) 50% of which are to be released on the secondary anniversary from the grant date, and 25% each on the third
and fourth anniversary from the grant date. After taking into consideration of the best estimation of the IPO
timetable, the management determined the vesting period of the relevant restricted shares based on the above
service condition. As such, the share-based payment e xpenses are amortised during the vesting period.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 1–


--- page 489 ---
The grantees are required to contribute the subscription price of restricted shares according to the
schedule agreed. The employee shareholding platforms have the right to withdraw the granted shares if the
employee fails to pay the corresponding price. The fair value of the restricted shares granted under the category
was determined by using the Black-Scholes model, taking into account the terms and conditions upon which the
shares were granted. The following table lists the fair value at measurement date and the significant inputs to the
fair value model used:
2022 2023 2024 2025
Fair value of per restricted shares
at measurement date RMB44.77
RMB44.77/
RMB58.37 RMB58.37 RMB61.40
Dividend yield (%) — — — —
Expected volatility (%) 61.00%–66.00% 60.00%–62.00% 59.00%–62.00% 60.00%–62.00%
Risk-free interest rate (%) 2.28%–2. 59% 2.31%–2.66% 1.24%–2.34% 1.55%–1.63%
The subscription price and remaining contractual life of the share options outstanding as at the end of the
reporting period are as follows:
31 December 2022
Number of
shares
Subscription
price
Remaining
contractual
life
’000
RMB
per share
1,501 3 3.00–4.00
31 December 2023
Number of
shares
Subscription
price
Remaining
contractual
life
’000
RMB
per share
3,848 3 2.00–3.75
31 December 2024
Number of
shares
Subscription
price
Remaining
contractual
life
’000
RMB
per share
4,015 3 1.00–3.50
330 1 1.50–4.00
4,345
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 2–


--- page 490 ---
30 June 2025
Number of
shares
Subscription
price
Remaining
contractual
life
’000
RMB
per share
3,926 3 0.50–3.00
489 1 1.00–3.83
4,415
The movements of the outstanding restricted shares during the Relevant Periods were as follows:
2022 2023 2024 2025
Number of
shares
Number of
shares
Number of
shares
Number of
shares
’000 ’000 ’000 ’000
At 1 January — 1,501 3,848 4,345
Granted during the year/period 1,501 2,360 794 173
Forfeited during the year/period — (13) (122) (103)
Vested during the year/period — — (175) —
At 31 December/30 June 1,501 3,848 4,345 4,415
Subsequent to 30 June 2025, till the date of approval of this report, a total of 48,000 restricted shares were
forfeited in respect of the resignation of certain grantees.
Category C
The restricted shares grants under Category C are subject to service conditions. Specifically, these share
incentives require grantee to meet the service condition from the date of grant to the later of (1) the date of
successful IPO of the Company (the Lock-up Period’’) and (2) the ‘‘Service Period’’, which are to be released
equally over a period of four years from the grant date. For the grantees who meet the Service Period conditions
but do not meet the Lock-Up Period conditions, the share-based payment arrangements provide the Group with
a choice of settlement for the restricted shares vested according to the condition of Service Period. The Group
can choose between settling in cash at share price at least RMB5.21 per share, or issuing equity instruments.
Since the Company has no present obligation to settle in cash, the Company accounted for the transaction as an
equity-settled share-based payment transaction. As such, the share-based payment expenses are amortised
during the Service Period.
The fair value of the restricted shares granted with nil subscription price was determined by referencing
the financing transaction prices from third parties at that time.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 3–


--- page 491 ---
The movements of the outstanding restricted shares during the Relevant Periods were as follows:
2022 2023 2024 2025
Number of
shares
Number of
shares
Number of
shares
Number of
shares
’000 ’000 ’000 ’000
At 1 January 2,803 1,354 734 211
Granted during the year/period 70 — — —
Forfeited during the year/period (752) (275) (193) (41)
Vested during the year/period (767) (345) (330) (170)
At 31 December/30 June 1,354 734 211 —
The Group recognised employee benefit expenses of RMB120,842,000, RMB207,759,000,
RMB247,765,000 and RMB295,859,000 during the years ended 31 December 2022, 2023 and 2024 and the six
months ended 30 June 2025, respectively, in relation to the above three categories’ share award schemes.
32. RESERVES
The amounts of the Group’s reserves and the movements therein are presented in the consolidated statement of
changes in equity of the Historical Financial Information.
Capital reserve
The capital reserve mainly comprises the share premium of the Company and the difference between the
aggregate of the then net assets of the non-controlling interests acquired and the consideration paid by the
Group.
In March 2023, the Company acquired 20% non-c ontrolling shares of Beijing Iluvatar at nil
consideration. Beijing Iluvatar. was in the net deficits position at the time of the transaction.
The amounts of the Company’s reserves and the movements therein are presented as below:
Capital reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Share-based
payment reserve
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 1,295,832 — 229,548 (1,443,745) 81,635
Loss for the year — — — (646,003) (646,003)
Total comprehensive loss for the year — — — (646,003) (646,003)
Contribution from shareholders 912,589 — — — 912,589
Expense in relation to capital injection (5,714) — — — (5,714)
Share-based payment expenses — — 120,842 — 120,842
At 31 December 2022 2,202,707 — 350,390 (2,089,748) 463,349
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 4–


--- page 492 ---
Capital reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Share-based
payment reserve
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 2,202,707 — 350,390 (2,089,748) 463,349
Loss for the year — — — (787,199) (787,199)
Other comprehensive income for the year:
Changes in fair value of equity
investments at fair value through other
comprehensive income, net of tax — (2) — — (2)
Total comprehensive loss for the year — (2) — (787,199) (787,201)
Contribution from shareholders 810,333 — — — 810,333
Expense in relation to capital injection (2,132) — — — (2,132)
Share-based payment expenses — — 207,759 — 207,759
Conversion of convertible liabilities 45,221 — — — 45,221
At 31 December 2023 3,056,129 (2) 558,149 (2,876,947) 737,329
At 1 January 2024 3,056,129 (2) 558,149 (2,876,947) 737,329
Loss for the year — — — (900,813) (900,813)
Other comprehensive income for the year:
Changes in fair value of equity
investments at fair value through other
comprehensive income, net of tax — 230 — — 230
Total comprehensive loss for the year — 230 — (900,813) (900,583)
Contribution from shareholders 435,902 — — — 435,902
Expense in relation to capital injection (3,622) — — — (3,622)
Share-based payment expenses — — 247,765 — 247,765
At 31 December 2024 3,488,409 228 805,914 (3,777,760) 516,791
At 1 January 2025 3,488,409 228 805,914 (3,777,760) 516,791
Loss for the period — — — (577,739) (577,739)
Other comprehensive income for the period:
Changes in fair value of equity
investments at fair value through other
comprehensive income, net of tax — (228) — — (228)
Total comprehensive loss for the period — (228) — (577,739) (577,967)
Issuance of shares 2,112,815 — — — 2,112,815
Conversion into a joint-stock company (2,555,069) — (507,458) 3,062,527 —
Share issue expenses (5,794) — — — (5,794)
Share-based payment expenses — — 295,859 — 295,859
At 30 June 2025 3,040,361 — 594,315 (1,292,972) 2,341,704
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 5–


--- page 493 ---
33. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025, the
Group had non-cash additions to right-of-use assets and lease liabilities of RMB27,407,000, RMB4,399,000,
RMB41,251,000 and RMB6,554,000, respectively, in respec t of lease arrangements for buildings and machinery.
(b) Changes in liabilities arising from financing activities
Year ended 31 December 2022
Bank loans Lease liabilities
RMB’000 RMB’000
At 1 January 2022 91,708 750
Changes from financing cash flows 55,988 (13,162)
Additions of lease liabilities — 27,407
Interest expense (note 7) 5,234 728
At 31 December 2022 152,930 15,723
Year ended 31 December 2023
Bank loans Lease liabilities
RMB’000 RMB’000
At 1 January 2023 152,930 15,723
Changes from financing cash flows 329,878 (15,005)
Additions of lease liabilities — 4,399
Interest expense (note 7) 9,609 447
At 31 December 2023 492,417 5,564
Year ended 31 December 2024
Bank loans Lease liabilities
RMB’000 RMB’000
At 1 January 2024 492,417 5,564
Changes from financing cash flows 99,889 (14,586)
Additions of lease liabilities — 41,251
Interest expense (note 7) 15,754 906
At 31 December 2024 608,060 33,135
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 6–


--- page 494 ---
Six months ended 30 June 2025
Bank loans Lease liabilities
RMB’000 RMB’000
At 1 January 2025 608,060 33,135
Changes from financing cash flows 49,800 (25,732)
Disposals — (286)
Additions of lease liabilities — 6,554
Interest expense (note 7) 9,452 702
At 30 June 2025 667,312 14,373
(c) Total cash outflow for leases
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
W i t h i n o p e r a t i n g a c t i v i t i e s 9995 2 3
Within financing activities 13,162 15,005 20,389 4,035 25,732
Total 13,171 15,014 20,398 4,040 25,755
34. COMMITMENTS
The Group had the following capital commitments at the end of the Relevant Periods.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Purchase of property, plant and equipment
and intangible assets 3,989 1,590 56,389 35,339
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 7–


--- page 495 ---
35. RELATED PARTY TRANSACTIONS
(a) Name and relationship
Name of related party* Relationship with the Company
Mr. Gai Lujiang Director
Mr. Diao Shijing Director
Xiamen Zhengmei Enterprise
Management Partnership
(Limited Partnership)*
Shareholder of the Company
Luckin Coffee (China) Co., Ltd.* Company controlled by the shareholder
* The English names of these companies registered in the PRC represent the translated names of these
companies as no English names have been registered.
(b) The Group had the following material related party transactions and outstanding balances during the
Relevant Periods:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Sales of goods
Luckin Coffee (China) Co., Ltd. — 33,850 — —
Loan to director
Mr. Diao Shijing — 4,100 — —
(c) Other transactions with related parties:
In March 2023, the Company acquired 20% shares of Beijing Iluvatar from Mr. Gai Lujiang at nil
consideration as Beijing Iluvatar was in the net deficit position.
(d) Outstanding balances with related parties
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due from related parties
Trade related:
Luckin Coffee (China) Co., Ltd. — 30,600 — —
Non-trade related:
Xiamen Zhengmei Enterprise
Management Partnership
(Limited Partnership) — 150,000 — —
Mr. Diao Shijing — 4,100 — —
— 184,700 — —
As of 31 December 2023, the balance due from related parties is interest-free.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 8–


--- page 496 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade related:
Due from a related party
Luckin Coffee (China) Co., Ltd. — 30,600 — —
Due from subsidiaries 14,116 80,722 182,516 165,752
Due to subsidiaries 78,916 290,984 343,063 431,629
Non-trade related:
Due from related parties
Xiamen Zhengmei Enterprise
Management Partnership
(Limited Partnership) — 150,000 — —
Mr. Diao Shijing — 4,100 — —
Due from subsidiaries 368,835 454,366 411,263 487,456
(i) The prices are mutually agreed after taking the prevailing market prices into consideration.
(ii) The amounts due from related parties are unsecured, interest-free and repayable on demand. The
management of the Company considers there is no significant credit risk for amounts due from
related parties.
(iii) The amounts due to related parties are unsecured, interest-free and have no fixed terms of
repayment.
(e) Compensation of key management personnel of the Group:
Year ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, allowances
and benefits in kind 15,918 20,073 20,406 10,203 9,192
Performance related
bonuses 3,153 2,018 5,771 2,886 2,326
Pension scheme
contributions 775 1,172 1,758 879 883
Share-based payment
expenses 57,477 123,632 110,562 38,541 193,118
Total 77,323 146,895 138,497 52,509 205,519
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9 9–


--- page 497 ---
36. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments of the Group as at the end of each of the
Relevant Periods are as follows:
Financial assets
As at 31 December 2022
Financial
assets at fair
value through
profit or loss
Financial
assets
at amortised
cost Total
RMB’000 RMB’000 RMB’000
Trade and bills receivables — 88,707 88,707
Financial assets included in prepayments, other receivables
and other assets — 37,805 37,805
Financial assets at fair value through profit or loss 58,779 — 58,779
Restricted cash — 92,678 92,678
Pledged time deposits — 18,844 18,844
Cash and cash equivalents — 219,305 219,305
Total 58,779 457,339 516,118
As at 31 December 2023
Financial
assets at fair
value through
profit or loss
Financial
assets at
fair value
through other
comprehensive
income
Financial
assets at
amortised cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at fair value through
other comprehensive income — 598 — 598
Trade and bills receivables — — 200,436 200,436
Financial assets included in prepayments,
other receivables and other assets — — 113,116 113,116
Financial assets at fair value through profit
or loss 90,695 — — 90,695
Restricted cash — — 61 61
Due from related parties — — 184,700 184,700
Cash and cash equivalents — — 308,053 308,053
Long-term trade receivables — — 38,082 38,082
Total 90,695 598 844,448 935,741
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 498 ---
As at 31 December 2024
Financial
assets at fair
value through
profit or loss
Financial
assets at
fair value
through other
comprehensive
income
Financial
assets at
amortised cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at fair value through
other comprehensive income — 828 — 828
Trade and bills receivables — — 377,176 377,176
Financial assets included in prepayments,
other receivables and other assets — — 40,954 40,954
Financial assets at fair value through profit
or loss 96,539 — — 96,539
Restricted cash — — 61 61
Cash and cash equivalents — — 313,563 313,563
Long-term trade receivables — — 26,053 26,053
Total 96,539 828 757,807 855,174
As at 30 June 2025
Financial
assets at fair
value through
profit or loss
Financial
assets at
fair value
through other
comprehensive
income
Financial
assets at
amortised cost Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at fair value through
other comprehensive income — 600 — 600
Trade and bills receivables — — 388,946 388,946
Financial assets included in prepayments,
other receivables and other assets — — 30,092 30,092
Financial assets at fair value through profit
or loss 146,294 — — 146,294
Restricted cash — — 42,568 42,568
Cash and cash equivalents — — 1,713,176 1,713,176
Long-term trade receivables — — 19,915 19,915
Total 146,294 600 2,194,697 2,341,591
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 499 ---
Financial liabilities
As at 31 December 2022
Financial
liabilities at
amortised cost
RMB’000
Financial liabilities included in other payables and accruals 20,136
Trade payables 85,256
Interest-bearing bank and other borrowings 152,930
Long-term payables 33,215
Lease liabilities 15,723
Total 307,260
As at 31 December 2023
Financial
liabilities at
amortised cost
RMB’000
Financial liabilities included in other payables and accruals 17,494
Trade payables 18,157
Interest-bearing bank and other borrowings 492,417
Long-term payables 14,224
Lease liabilities 5,564
Total 547,856
As at 31 December 2024
Financial
liabilities at
amortised cost
RMB’000
Financial liabilities included in other payables and accruals 59,599
Trade payables 45,645
Interest-bearing bank and other borrowings 608,060
Long-term payables 45,881
Lease liabilities 33,135
Total 792,320
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 500 ---
As at 30 June 2025
Financial
liabilities at
amortised cost
RMB’000
Financial liabilities included in other payables and accruals 57,573
Trade payables 29,884
Interest-bearing bank and other borrowings 667,312
Long-term payables 65,835
Lease liabilities 14,373
Total 834,977
For the details of pre-IPO investments, please refer to note 30(b) to this report.
37. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, time deposits, financial assets
included in prepayments and other receivables, trade and bills receivables, due from related parties, trade payables,
financial liabilities included in other payables and accruals and current portion of interest-bearing bank borrowings
approximate to their carrying amounts largely due to the short-term maturities of these instruments.
The Group’s finance department headed by the finance manager is responsible for determining the policies and
procedures for the fair value measurement of financial instruments. At the end of each of the Relevant Periods, the
finance department analyses the movements in the values of financial instruments and determines the major inputs
applied in the valuation. The valuation is reviewed and approved by the chief financial officer.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties , other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values:
The fair values of the non-current portion of interest-bearing bank borrowings and long-term payables have
been calculated by discounting the expected future cash flow s using rates currently available for instruments with
similar terms, credit risk and remaining maturities. The changes in fair value as a result of the Group’s own
non-performance risk for interest-bearing bank borrowings as at the end of each of the Relevant Periods were assessed
to be insignificant.
The Group invests in unlisted investments, which represent wealth management products issued by banks in
Chinese Mainland. The Group has estimated the fair value of the wealth management products based on the net values
announced by the banks at the end of the Relevant Periods.
The fair value of the Group’s unlisted equity investments was determined by using appropriate valuation
techniques including the latest transaction price and the asset-based approach as at 31 December 2022, 2023 and 2024
and 30 June 2025. The Group classifies the fair value of the investments using the latest transaction price as Level 2
and the fair value of the investments using asset-based approach as Level 3. The unobservable inputs in Level 3
valuation include net asset value of the investee companies. A 1% increase/decrease in net asset value would result in a
corresponding increase/decrease in the fair value of the investments by RMB448,000, RMB922,000, RMB962,000 and
RMB62,000 as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively. The directors believe that the
estimated fair values resulting from the valuation techniques, which are recorded in the consolidated statement of
financial position, and the related changes in fair values, are reasonable, and that they were the most appropriate
values at the end of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 501 ---
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments.
Assets measured at fair value:
As at 31 December 2022
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss — 8,779 50,000 58,779
Total — 8,779 50,000 58,779
As at 31 December 2023
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at fair
value through other comprehensive
income — — 598 598
Financial assets at fair value through
profit or loss — — 90,695 90,695
Total — — 91,293 91,293
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 502 ---
As at 31 December 2024
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at fair
value through other comprehensive
income — — 828 828
Financial assets at fair value through
profit or loss — — 96,539 96,539
Total — — 97,367 97,367
As at 30 June 2025
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at fair
value through other comprehensive
income — 600 — 600
Financial assets at fair value through
profit or loss — 140,118 6,176 146,294
Total — 140,718 6,176 146,894
During the years ended 31 December 2022, 2023 and 2024, there were no transfers of fair value
measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and
financial liabilities. During the six months ended 30 June 2025, there were no transfers of fair value
measurements between Level 1 and Level 2 for both financial assets and financial liabilities.
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 503 ---
The movements in fair value measurements within Level 3 during the Relevant Periods are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted equity investments:
At 1 January — 50,000 91,293 97,367
Purchases 50,000 40,600 5,000 —
Total gains recognised in profit or loss
included in other income — 695 844 (363)
Total gains recognised in other
comprehensive income — (2) 230 (228)
Transfer out of Level 3 (Note) — — — (90,600)
At 31 December/30 June 50,000 91,293 97,367 6,176
* During the six months ended 30 June 2025, equity transactions occurred for certain unlisted equity
investments and therefore the relevant recent transaction prices were used to determine the fair
value of the respective investments as at 30 June 2025. Consequently, the valuation technique for
the relevant financial assets was changed and the fair value measurement was transferred from Level
3 to Level 2.
Liabilities for which fair values are disclosed:
As at 31 December 2022
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings — 152,378 — 152,378
Total — 152,378 — 152,378
As at 31 December 2023
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings — 492,417 — 492,417
Total — 492,417 — 492,417
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 504 ---
As at 31 December 2024
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings — 608,099 — 608,099
Total — 608,099 — 608,099
As at 30 June 2025
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank borrowings — 667,312 — 667,312
Total — 667,312 — 667,312
38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments, other than derivatives, comprise cash and cash equivalents and
bank borrowings. The main purpose of these financial instruments is to support the Group’s operations. The Group
has various other financial assets and liabilities such as tra de receivables and trade payables, which arise directly from
its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit
risk and liquidity risk. Generally, the senior management of the Company meets regularly to analyse and formulate
measures to manage the Group’s exposure to these risks. In addition, the board of directors of the Company holds
meetings regularly to analyse and approve the proposals made by the senior management of the Company. Generally,
the Group introduces conservative strategies on its risk management. As the Group’s exposure to these risks is kept to
a minimum, the Group has not used any derivatives and other instruments for hedging purposes. The Group does not
hold or issue derivative financial instruments for trading purposes. The board of directors reviews and agrees policies
for managing each of these risks and they are summarised below.
APPENDIX I ACCOUNTANTS’ REPORT
– I-107 –


--- page 505 ---
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s bank
borrowings with floating interest rates.
The following table demonstrates the sensitivity to a reasonably possible change in RMB interest rates,
with all other variables held constant, of the Group’ s loss after tax through the impact on floating rate
borrowings and of the Group’s equity.
Increase/
(decrease) in
basis points
(Decrease)/
increase in loss
before tax
Decrease/
(increase) in
equity
RMB’000 RMB’000
31 December 2022
RMB 100/(100) (529)/529 (529)/529
31 December 2023
RMB 100/(100) (1,315)/1,315 (1,315)/1,315
31 December 2024
RMB 100/(100) (1,923)/1,923 (1,923)/1,923
30 June 2025
RMB 100/(100) (1,401)/1,401 (1,401)/1,401
Foreign currency risk
Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates
fluctuations in exchange rates between RMB and other currencies in which the Group conducts business may
affect the Group’s financial condition and results of operations. The Group seeks to limit its exposure to foreign
currency risk by minimising its net foreign currency position.
APPENDIX I ACCOUNTANTS’ REPORT
– I-108 –


--- page 506 ---
The following table demonstrates the sensitivity at the end of each of the Relevant Periods to a reasonably
possible change in USD and RMB exchange rates, with all other variables held constant, of the Group’s loss
before tax (due to changes in the fair value of monetary assets and liabilities) and the Group’s equity.
(Decrease)/
increase in
foreign
exchange
(Decrease)/
increase in loss
before tax
(Decrease)/
increase in
equity
rate% RMB’000 RMB’000
31 December 2022
If RMB strengthens against USD 5% 4,283 4,283
If RMB weakens against USD (5%) (4,283) (4,283)
31 December 2023
If RMB strengthens against USD 5% (305) (305)
If RMB weakens against USD (5%) 305 305
31 December 2024
If RMB strengthens against USD 5% (1,144) (1,144)
If RMB weakens against USD (5%) 1,144 1,144
30 June 2025
If RMB strengthens against USD 5% 37,184 37,184
If RMB weakens against USD (5%) (37,184) (37,184)
Credit risk
The Group trades only with recognised and creditworthy third parties and there is no requirement for
collateral. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s
exposure to bad debts is not significant.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s
credit policy, which is mainly based on past due information unless other information is available without undue
cost or effort, and year-end staging classification as at the end of each of the Relevant Periods. The amounts
presented are gross amounts for financial assets.
31 December 2022
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* — — — 107,745 107,745
Financial assets included in prepayments,
other receivables and other assets
— Normal** 37,805 — — — 37,805
Restricted cash 92,678 — — — 92,678
Pledged time deposits 18,844 — — — 18,844
Cash and cash equivalents 219,305 — — — 219,305
Total 368,632 — — 107,745 476,377
APPENDIX I ACCOUNTANTS’ REPORT
– I-109 –


--- page 507 ---
31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* — — — 240,599 240,599
Financial assets included in prepayments,
other receivables and other assets
— Normal** 113,116 — — — 113,116
Restricted cash 61 — — — 61
Cash and cash equivalents 308,053 — — — 308,053
Long-term trade receivables
— Normal** 38,550 — — — 38,550
Total 459,780 — — 240,599 700,379
31 December 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* — — — 435,504 435,504
Financial assets included in prepayments,
other receivables and other assets
— Normal** 14,954 — — — 14,954
— Doubtful** — — 39,800 — 39,800
Restricted cash 61 — — — 61
Cash and cash equivalents 313,563 — — — 313,563
Long-term trade receivables
— Normal** 26,400 — — — 26,400
Total 354,978 — 39,800 435,504 830,282
APPENDIX I ACCOUNTANTS’ REPORT
– I-110 –


--- page 508 ---
30 June 2025
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* — — — 448,455 448,455
Financial assets included in prepayments,
other receivables and other assets
— Normal** 15,092 — — — 15,092
— Doubtful** — — 28,800 — 28,800
Restricted cash 42,568 — — — 42,568
Cash and cash equivalents 1,713,176 — — — 1,713,176
Long-term trade receivables
— Normal** 20,181 — — — 20,181
Total 1,791,017 — 28,800 448,455 2,268,272
* For trade and bills receivables which the Group applies the simplified approach for impairment,
information based on the provision matrix is disclosed in note 18 to the Historical Financial
Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets
and long-term receivables is considered to be ‘‘normal’’ when they are not past due and there is no
information indicating that the financial assets had a significant increase in credit risk since initial
recognition. Otherwise, the credit quality of the financial assets is considered to be ‘‘doubtful’’.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables,
other receivables and long-term trade receivables are re spectively disclosed in note 18, note 19 and note 22 to the
Historical Financial Information.
At the end of the each of the Relevant Periods, the Group had certain concentrations of credit risk as
35%, 14%, 37%, 6% and 95%, 55%, 58%, 15% of the Group’s trade and bills receivables and long-term trade
receivables were due from the Group’s largest customer and five largest customers, respectively.
Liquidity risk
The Group monitors its exposure to liquidity risk by regularly monitoring short-term and long-term
liquidity requirements, as well as compliance with borrowing agreements to ensure that adequate cash reserves
and readily realisable liquidity are maintained.
The liquidity of the Group is primarily dependent on its ability to maintain adequate cash inflows from
operations to meet its debt obligations as they fall due, and its ability to obtain external financing to meet its
committed future capital expenditure.
APPENDIX I ACCOUNTANTS’ REPORT
– I-111 –


--- page 509 ---
The maturity profile of the Group’s financial liabilities as at the end of each of the Relevant Periods,
based on the contractual undiscounted payments, is as follows:
As at 31 December 2022
On demand Within 1 year 1 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 48,791 36,465 — 85,256
Financial liabilities included in other
payables and accruals 19,381 755 — 20,136
Interest-bearing bank and other
borrowings — 102,930 50,000 152,930
Long-term payables — 20,663 13,936 34,599
Lease liabilities — 15,006 1,977 16,983
Total 68,172 175,819 65,913 309,904
As at 31 December 2023
On demand Within 1 year 1 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 10,493 7,664 — 18,157
Financial liabilities included in other
payables and accruals 5,975 11,519 — 17,494
Interest-bearing bank and other
borrowings — 596,417 — 596,417
Long-term payables — 26,208 277 26,485
Lease liabilities — 3,868 1,892 5,760
Total 16,468 645,676 2,169 664,313
As at 31 December 2024
On demand Within 1 year 1 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 29,666 15,979 — 45,645
Financial liabilities included in other
payables and accruals 59,385 214 — 59,599
Interest-bearing bank and other
borrowings — 602,269 42,543 644,812
Long-term payables — 32,871 14,444 47,315
Lease liabilities — 19,610 15,188 34,798
Total 89,051 670,943 72,175 832,169
APPENDIX I ACCOUNTANTS’ REPORT
– I-112 –


--- page 510 ---
As at 30 June 2025
On demand Within 1 year 1 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables 11,080 18,804 — 29,884
Financial liabilities included in other
payables and accruals 47,447 10,126 — 57,573
Interest-bearing bank and other
borrowings — 592,744 83,962 676,706
Long-term payables — 29,597 9,955 39,552
Lease liabilities — 12,174 4,117 16,291
Total 58,527 663,445 98,034 820,006
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to
continue as a going concern, so that it can continue to provide returns to shareholders and benefits to other
stakeholders, by pricing services commensurately with the level of risk.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the
Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The
Group is not subject to any externally imposed capital requirements. No changes were made in the objectives,
policies or processes for managing capital during the Relevant Periods.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Interest-bearing bank and
other borrowings (note 26) 152,930 492,417 608,060 667,312
Long-term payables 33,215 14,224 45,881 65,835
Trade payables 85,256 18,157 45,645 29,884
Other payables and accruals (note 24) 20,136 17,494 59,599 57,573
Less: Cash and cash equivalents 219,305 308,053 313,563 1,713,176
Net debt/(asset) 72,232 234,239 445,622 (892,572)
Equity attributable to owners of the
parent 660,979 922,737 688,669 2,515,854
Adjusted capital 660,979 922,737 688,669 2,515,854
Capital and net debt 733,211 1,156,976 1,134,291 1,623,282
Gearing ratio* 10% 20% 39% N/A
* As at 30 June 2025, the Group’s cash and cash equivalents exceeded the aggregated amounts of
interest-bearing bank and other borrowings, long-term payables, trade payables and financial
liabilities included in other payables and accruals. As such, no gearing ratio was presented.
APPENDIX I ACCOUNTANTS’ REPORT
– I-113 –


--- page 511 ---
39. EVENTS AFTER THE RELEVANT PERIODS
There were no significant events subsequent to 30 June 2025.
40. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of its subsidiaries in
respect of any period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-114 –


--- page 512 ---
The following information does not form part of the Accountants’ Report from Ernst &
Young, Certified Public Accountants, Hong Kong, the Company’s reporting accountants, as set out
in Appendix I to this prospectus, and is included herein for illustrative purpose only. The unaudited
pro forma financial information should be read in conjunction with the section headed ‘‘Financial
Information’’ in this prospectus and the Accountants’ Report set out in Appendix I to this
prospectus.
A. UNAUDITED PRO FORMA STATEMEN T OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted con solidated net tangible assets of the Group
have been prepared in accordance with paragr aph 4.29 of the Rules Governing the Listing of
Securities on the Stock Exchange of Hong Ko ng Limited and with reference to Accounting
Guideline 7 ‘‘Preparation of Pro Forma Financial Information for inclusion in Investment
Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants for illustration
purposes only, and is set out here to illustrate the effect of the Global Offering on the
consolidated net tangible assets of the Group attributable to owners of the Company as at 30
June 2025 as if Global Offering had taken place on that time.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group has been prepared for illustrative purpose s only and, because of its hypothetical nature,
it may not provide a true picture of the consolidated net tangible assets attributable to owners of
the Company had the Global Offering been completed as at 30 June 2025 or at any future date.
Unaudited pro forma adjusted consolidated n et tangible assets attributable to owners of
the Company per share as of
Consolidated
net tangible
assets of the
Group
attributable
to owners of
the Company
as at
30 June 2025
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted net
tangible
assets of the
Group
attributable
to owners
of the
Company
Unaudited pro forma adjusted
consolidated net tangible assets
attributable to owners of the
Company per Share
(RMB’000) (RMB’000) (RMB’000) (RMB) (HK$)
(Note 1) (Note 2) (Note 3) (Note 4)
B a s e do na nO f f e rP r i c eo f
HK$144.60 per Share 2,373,908 3, 167,921 5,541,829 21.79 24.03
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 513 ---
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as of 30 June 2025 is extracted
from ‘‘Appendix I — Accountants’ Report’’, which is based on the audited consolidated equity
attributable to owners of the Company as of 30 June 2025 of approximately RMB2,515,854,000 less
intangible assets as of 30 June 2025 of approximately RMB141,946,000.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$144.60 per
Share, after deduction of the underwriting fees and other related expenses payable by the Group
(excluding listing expense of RMB13,686,000 that have been charged to profit or loss during the Relevant
Periods). The estimated net proceeds from the Global Offering are converted into Hong Kong dollars at
an exchange rate of 0.90675 to HK$1.00.
(3) The unaudited pro forma adjusted consolidated net t angible assets attributable to Shareholders of the
Company per Share is arrived at by dividing the unaudited pro forma adjusted net tangible assets by
254,317,736 shares, being the number of shares in issue assuming that the Global Offering had been
completed on 30 June 2025.
The Shares used in the calculation include the 2 6,712,000 Treasury Shares, as the Company is in the
opinion of that these 26,712,000 shares have been granted to eligible participants under the share award
schemes which have been disclose in note 31 of Appendix I — Accountants’ Report, and which will be
vested and exercised with highly possibility. If excl uding the 26,712,000 Treasury Shares, the unaudited
pro forma adjusted consolidated net tangible assets attributable to owners of the Company per Share as at
30 June 2025, which is divided by 227,605,736 Shares, would then be adjusted to RMB24.35 (HK$26.85)
based on the Offer Price of HK$144.60 per Share.
(4) The unaudited pro forma adjusted consolidated net tangible assets per Share are converted into Hong
Kong dollars at an exchange rate of 0.90675 to HK$1.00.
(5) No adjustment has been made to the unaudited pro forma consolidated net tangible assets to reflect any
trading results or other transactions of our Company subsequent to 30 June 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 514 ---
The following is the text of a report, prepared for the purpose of incorporation in this
prospectus, received from the repor ting accountants, Ernst & Young, Certified Public Accountants,
Hong Kong, in respect of the unaudited pro forma financial information.
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
᠔
佭␃凖儮⍠㣅ⱛ䘧

㰳
໾সഞϔᑻῧ
Tel 䳏䁅: +852 2846 9888
Faxⳳ: +852 2868 4432
ey.com
To the Directors of Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Shanghai Iluvatar CoreX Semiconductor Co., Ltd. (the
‘‘Company’’) and its subsidiari es (hereinafter collectively ref erred to as the ‘‘Group’’) by the
directors of the Company (the ‘‘Directors’’) for i llustrative purposes only. The unaudited pro
forma financial information consists of the unau dited pro forma consolidated net tangible assets
as at 30 June 2025, and related notes as set out on pages II-1 to II-2 of the prospectus dated 30
December 2025 (the ‘‘Prospectus’’) issued by the Company (the ‘‘Unaudited Pro Forma
Financial Information’’). The applicable criteria on the basis of which the Directors have
compiled the Unaudited Pro Forma Financial Inf ormation are described in Appendix II to the
Prospectus.
The Unaudited Pro Forma Financial Informat ion has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial
position as at 30 June 2025 as if the transactio n had taken place at 30 June 2025. As part of this
process, information about the Group’s financial position has been extracted by the Directors
from the Group’s financial statements for the period ended 30 June 2025, on which an
accountants’ report has been published.
Directors’ responsibility for the Unaud ited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with
reference to Accounting Guideline (‘‘AG’’) 7 Preparation of Pro Forma Financial Information for
Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (the ‘‘HKICPA’’).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 3–


--- page 515 ---
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 Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and app licable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing
Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you.
We do not accept any responsibility for any reports previously given by us on any financial
i n f o r m a t i o nu s e di nt h ec o m p i l a t i o no ft h eU n a u d i t e dP r oF o r m aF i n a n c i a lI n f o r m a t i o nb e y o n d
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 st andard requires that the
reporting accountants plan and perform procedures to obtain reasonable assurance about
whether the Directors have compiled the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Listin g Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited Pro
Forma Financial Information, nor have we, in t he course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Financial Information.
The purpose of the Unaudited Pro Forma Financial Information included in the
Prospectus is solely to illustrate the impact of the global offering of shares of the Company
on unadjusted financial information of the Group as if the transaction had been undertaken at
an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of the transaction would have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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--- page 516 ---
A reasonable assurance engagement to report on whether the Unaudited Pro Forma
Financial Information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whethe r the applicable criteria used by the Directors in
the compilation of the Unaudited Pro Forma Fina ncial Information provide a reasonable basis
for presenting the significant effects directly attributable to the transaction, and to obtain
sufficient appropriate evidence about whether:
. the related pro forma adjustments give app ropriate effect to th ose criteria; and
. the Unaudited Pro Forma Financial Information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of th e nature of the Group, the transaction in respect
of which the Unaudited Pro Forma Financial Information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro
Forma Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Info rmation has been properly compiled on the
basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma
Financial Information as disclosed pur suant to paragraph 4.29(1) of the Listing
Rules.
Ernst & Young
Certified Public Accountants
Hong Kong
30 December 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 517 ---
TAXATION OF SECURITY HOLDERS
Income tax and capital gains tax of holde rs of the H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of the H Shares are resident or
otherwise subject to tax. The following summary o f certain relevant taxation provisions is based
on current laws and practices, and has not t aken into account the expected change or
amendment to the relevant laws or policies and does not constitute any opinion or advice. The
discussion does not deal with all possible tax consequences relating to an investment in the H
Shares, nor does it take into account the specific circumstances of any particular investor, some
of which may be subject to special regulation. Accordingly, you should consult your own tax
adviser regarding the tax consequences of an investment in the H Shares. The discussion is based
upon laws and relevant interpretations in effect as of the Latest Practicable Date, all of which
are subject to change or adjustment and may have retrospective effect.
This discussion does not address any aspects of PRC taxation other than income tax,
capital gains tax, value-added tax, stamp duty a nd estate duty. Prospective investors are urged
to consult their financial advisers regarding the PRC and other tax consequences of owning and
disposing of the H Shares.
TAXATION IN HONG KONG
Tax on Dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is
payable in Hong Kong in respect of dividends paid by us.
Capital Gains and Profit Tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of the H Shares by persons carrying on a trade, profession
or business in Hong Kong, where such gains are derived from or arise in Hong Kong from such
trade, profession or business will be subject to Hong Kong profits tax, which is currently
imposed at the maximum rate of 16.5% on corporations and at the maximum rate of 15% on
unincorporated businesses. Certain categories of taxpayers (for example, financial institutions,
insurance companies and securities dealers) are likely to be regarded as deriving trading gains
rather than capital gains unless these taxpayers can prove that the investment securities are held
for long-term investment purposes. Trading gains from sales of H Shares effected on the Stock
Exchange will be considered to be derived from or arise in Hong Kong. Liability for Hong Kong
profits tax would thus arise in respect of tradin g gains from sales of H Shares effected on the
Stock Exchange realized by persons carrying on a business of trading or dealing in securities in
Hong Kong.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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Stamp Duty
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of
the consideration for or the market value of the H Shares, will be payable by the purchaser on
every purchase and by the seller on every sale of Hong Kong securities, including H Shares (in
other words, a total of 0.2% is currently paya ble on a typical sale and purchase transaction
involving H Shares). In addition, a fixed duty of HK$5.00 is currently payable on any
instrument of transfer of H Shares. Where one of the parties is a resident outside Hong Kong
and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the
instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on
or before the due date, a penalty of up to ten times the duty payable may be imposed.
Estate Duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on 11 February
2006 in Hong Kong, pursuant to which no Hong Kong estate duty is payable, and no estate duty
clearance papers are needed for an application of a grant of representation in respect of holders
o fHS h a r e sw h o s ed e a t h so c c u ro no ra f t e r1 1F e b r u a r y2 0 0 6 .
Taxation of the company in Hong Kong
The Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (‘‘ IRO’’) is an
ordinance for the purposes of imposing taxes on property, earnings and profits in Hong Kong.
The IRO provides, among others, that persons, which include corporations, partnerships,
trustees and bodies of persons, carrying on any trade, profession or business in Hong Kong are
chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising
in or derived from Hong Kong from such trade, profession or business.
Under the two-tiered profits tax rates regime in Hong Kong, the first HK$2 million of
profits of the qualifying group entity will be t axed at 8.25%, and profits above HK$2 million
will be taxed at 16.5%. The profits of a group entity not qualifying for the two-tiered profits tax
rates regime will continue to be taxed at a flat rate of 16.5%.
The PRC TAXATION
Taxation on Dividends
Individual Investors
According to the Individual Income Tax Law of the PRC ( 中華人民共和國個人所得稅法)
(the ‘‘IIT Law ’’), latest amended by the SCNPC on August 31, 2018 and effective on January 1,
2019, and the Implementation Rules of the Individual Income Tax Law of the People’s Republic
of China ( 中華人民共和國個人所得稅法實施條例) amended by the State Council on December
18, 2018 and effective on January 1, 2019, dividends paid by PRC companies to individual
investors are ordinarily subject to a withholding income tax levied at a flat rate of 20%.
According to Notice on Issues Relating to Differentiated Individual Income Tax Policies for
Dividends and Bonuses of Listed Companies ( 關於上市公司股息紅利差別化個人所得稅政策有關
問題的通知) issued by the Ministry of Finance (the ‘‘ MOF’’), the STA and the CSRC on
September 7, 2015 and effective on September 8, 2015, for shares of listed companies obtained
by individuals via public offerings and market transfer and held for more than one year, the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 519 ---
income from dividends and bonuses thereof shall temporarily be exempt from individual income
tax. For shares of listed companies obtained by individuals via public offerings and market
transfer and held for less than one month (including one month), the income from dividends and
bonuses thereof shall be fully included in the individual’s taxable income amount; where the
shares are held for a period from one month up to one year (including one year), 50% of the
income from dividends and bonuses therefrom shall temporally be included in the individual’s
taxable income amount; the aforesaid income shall be subject to individual income tax based on
20% tax rate on a unified basis.
Pursuant to the Arrangement between the Chinese Mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
E v a s i o nw i t hr e s p e c tt oT a x e so nI n c o m e(內地和香港特別行政區關於對所得避免雙重徵稅和防
止偷漏稅的安排) (the ‘‘Arrangement for the Avoidance of Dou ble Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income ’’), signed by the Chinese Mainland and the Hong
Kong Special Administrative Region on Augu st 21, 2006, the PRC government may impose tax
on dividends paid by a PRC company to a Hong Kong resident (including natural person and
legal entity), but such tax shall not exceed 10% o f the total amount of dividends payable. If a
Hong Kong resident directly holds 25% or more of the equity interests in a PRC company and
the Hong Kong resident is the beneficial owner of the dividends and meets other conditions,
such tax shall not exceed 5% of the total amount of dividends payable by the PRC company.
The Fifth Protocol of the STA to the Arrangement between the Chinese Mainland and the Hong
Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income ( 國家稅務總局關於《內地和香港特別行政區關
於對所得避免雙重徵稅和防止偷漏稅的安排》第五議定書) (the ‘‘ Fifth Protocol ’’), issued by the
STA and effective on December 6, 2019, provid es that such provisions shall not apply to
arrangements or transactions made for one of the primary purposes of obtaining such tax
benefits.
Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the PRC ( 中華人民共和國企業所得稅法)
(the ‘‘EIT Law ’’) promulgated by the SCNPC, latest amended and became effective on
December 29, 2018, and the Implementation Regulations for the Enterprise Income Tax Law of
the PRC ( 中華人民共和國企業所得稅法實施條例), latest amended by the State Council on
December 6, 2024 and became effective on January 20, 2025, a non-resident enterprise is subject
to a 10% enterprise income tax on PRC-sourced income, including dividends paid by a PRC
resident enterprise that issues and lists shares in Hong Kong, if such non-resident enterprise
does not have an establishment or place of business in the PRC or has an establishment or place
of business in the PRC but the PRC-sourced income is not actually connected with such
establishment or place of business in the PRC. The aforesaid income tax payable by
non-resident enterprises shall be withheld at source, and the payer shall be the withholding
agent, and the tax shall be withheld by the withholding agent from the payment or due payment
every time it is paid or due. Such tax may be reduced or exempted pursuant to an applicable
treaty for the avoidan ce of double taxation.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 520 ---
Pursuant to the Notice on the Issues Concerning Withholding the Enterprise Income Tax
on the Dividends Paid by Chinese Resident Enter prises to H Share Holders Which Are Overseas
Non-resident Enterprises ( 關於中國居民企業向境外H股非居民企業股東派發股息代扣代繳企業
所得稅有關問題的通知) issued by the STA and effective on November 6, 2008, a PRC resident
enterprise is required to withhold enterprise income tax at a flat rate of 10% on dividends paid
to non-PRC resident enterprise holders of H Shares which are derived out of profit generated
since 2008. The Response to Questions on Levying Enterprise Income Tax on Dividends
Derived by Non-resident Enterprise from Holding Stock such as B Shares (Guo Shui Han [2009]
No. 394) ( 關於非居民企業取得B股等股票股息徵收企業所得稅問題的批覆（國稅函[2009]394 號）),
promulgated by the SAT on 24 July 2009 and effective on the same day, further provides that
PRC-resident enterprises listed on Chinese Mainland and overseas stock exchanges by issuing
stocks must withhold EIT at a flat rate of 10% on dividends of 2008 and onwards that it
distributes to non-resident enterprise shareholders. Such tax rates may be further modified
pursuant to the tax treaty or agreement that the PRC government has concluded with a relevant
country or region, where applicable.
According to the Arrangement for the Avoid ance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income ( 對所得避免雙重
徵稅和防止偷漏稅的安排),
the PRC government may impose tax on dividends paid by a PRC company to a Hong Kong
resident (including natural person and legal entity), but such tax shall not exceed 10% of the
total dividends payable by the PRC company. I f a Hong Kong resident directly holds 25% or
more of equity interest in a PRC company and the Hong Kong resident is the beneficial owner
of the dividends and meets other conditions, such tax shall not exceed 5% of the total dividends
payable by the PRC company. The Fifth Protocol pr ovides that such provisions shall not apply
to arrangements or transactions made for one of the primary purposes of obtaining such tax
benefits.
Tax Treaties
Non-resident investors residing in jurisdi ctions which have entered into treaties or
adjustments for the avoidance of double taxati on with the PRC might be entitled to a reduction
of the Chinese corporate income tax imposed on the dividends received from PRC companies.
Non-resident enterprises entitled to prefere ntial tax rates in accordance with the relevant
taxation treaties or arrangements are require d to apply to the Chinese tax authorities for a
refund of the corporate income tax in excess of the agreed tax rate, and the refund application is
subject to approval by the Chinese tax authorities.
Pursuant to the Administrative Measures on E ntitlement of Non-resident Taxpayers to
Preferential Treatment under Tax Treaties ( 非居民納稅人享受協定待遇管理辦法), which was
promulgated by the STA on October 14, 2019 and became effective on January 1, 2020,
non-resident taxpayers are entitled to preferen tial treatment under th e tax treaties through
self-determination, self-declaration and keeping and documenting relevant information for
inspection. Where a non-resident taxpayer self-assesses and concludes that it satisfies the criteria
for claiming treaty benefits, it may enjoy treaty benefits at the time of tax declaration or at the
time of withholding declaration through a withholding agent, simultaneously gather and retain
the relevant materials pursuant to the regula tions for future inspection and be subject to
subsequent administration by tax authorities.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 521 ---
Tax on Gains from Share Transfer
Individual Investors
According to the IIT Law and its implementation rules, individuals are subject to
individual income tax at the rate of 20% on gains realized on the sale of equity interests in PRC
resident enterprises. Under the Circular of the Ministry of Finance and the STA on Declaring
that Individual Income Tax Continues to Be Exempted over Individual Income Tax from
Transfer of Shares (Cai Shui Zi [1998] No.61) ( 財政部、國家稅務總局關於個人轉讓股票所得繼
續暫免徵收個人所得稅的通知) (the ‘‘Circular 61 ’’) issued by the Ministry of Finance and STA on
March 30, 1998, from January 1, 1997, gains of indi viduals from the transfer of shares of listed
companies continue to be exempted from individual income tax. According to Announcement of
the Ministry of Finance and the STA on the Catalog of Preferential Individual Income Tax
Policies with Continued Effect ( 財政部、國家稅務總局關於繼續有效的個人所得稅優惠政策目錄
的公告) issued by the Ministry of Finance and the STA on December 29, 2018, the Circular 61
will continue to be effective.
However, the Notice on Issues Concerning the Levy of Individual Income Tax on
Individuals’ Income from the Transfer of Restricted Stocks of Listed Companies ( 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), jointly issued by the Ministry of Finance,
STA and CSRC on December 31, 2009 and came into effect on January 1, 2010, states that
individuals’ income from the transfer of listed shares obtained from the public offering of listed
companies and of shares listed on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange shall continue to be exempted from i ndividual income tax, ex cept for the relevant
shares which are subject to sales restriction (as defined in the Supplementary Notice on Issues
Concerning the Levy of Individual Income Tax on Individuals’ Income from the Transfer of
Restricted Stocks of Listed Companies ( 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) jointly issued and implemented by re levant departments on November 10,
2010). As of the Latest Practicable Date, no afor esaid provisions have expressly provided that
individual income tax shall be levied from non-Chinese resident individuals on the transfer of
shares in PRC resident enterprises li sted on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law and its implementation rules, a non-resident enterprise is
generally subject to corporate income tax at the rate of a 10% on PRC-sourced income,
including gains derived from the disposal of equity interests in a PRC resident enterprise, if it
does not have an establishment or premise in the PRC or has an establishment or premise in the
PRC but its PRC-sourced income has no real conne ction with such establishment or premise.
Such income tax payable for non-r esident enterprises are deduc ted at source, where the payer of
the income is required to withhold the income tax from the amount to be paid to the
non-resident enterprise. Such tax may be reduced or exempted pursuant to relevant tax treaties
or agreements on avoidance of double taxation.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 522 ---
Taxation Policy of Shanghai-Hong Kong Stock Connect
Under the Notice of the Ministry of Finance and the STA and the China Securities
Regulatory Commission on the Tax Policies Related to the Pilot Program of the Shanghai-Hong
Kong Stock Connect (Cai Shui [2014] No. 81) ( 財政部、國家稅務總局、中國證券監督管理委員
會關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知) which came into effect on
November 17, 2014, for dividends and bonus obtained by mainland individual investors
investing in H Shares listed on the Hong Kong Stock Exchange (the ‘‘ HKSE ’’) through
Shanghai-Hong Kong Stock Connect, the H-share companies shall apply to the China Securities
Depository and Clearing Cor poration Limited (the ‘‘ CSDC ’’) for provision by CSDC to the
H-share companies register of individual investors in Chinese Mainland, and the H-share
companies shall withhold individual income tax at the rate of 20%.
Income from share dividend derived by Ch inese Mainland corporate investors from
investment in shares listed on the HKSE through the Shanghai-Hong Kong Stock Connect shall
be included in their total income and be subject to enterprise income tax pursuant to the law.
Income from share dividend derived by a Chinese Mainland resident enterprise for holding H
Shares over 12 consecutive months shall be exemp ted from enterprise income tax pursuant to the
law. The H Shares company is not required to withhold income tax on share dividend for its
Chinese Mainland corporate investors, and the corporate investors shall make declaration and
payment for the tax payable amount voluntarily.
Pursuant to the Announcement on Continuing the Implementation of the Individual
Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect and the Mu tual Recognition of Funds between Chinese
Mainland and Hong Kong ( 關於延續實施滬港、深港股票市場交易互聯互通機制和內地與
香港
基金互認有關個人所得稅政策的公告) which promulgated on August 21, 2023 and implemented
on the same date, the transfer spread income derived by mainland individual investors from
investing in shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong
Stock Connect shall continue to be exempted f rom individual income tax until December 31,
2027.
Taxation Policy of Shenzh en-Hong Kong Stock Connect
Under the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong
Kong Stock Connect (Cai Shui [2016] No.127) ( 關於深港股票市場交易互聯互通機制試點有關稅
收政策的通知) which came into effect on December 5, 2016, for dividends and bonus income
obtained by mainland individual investors investing in H Shares listed on the HKSE through
Shenzhen-Hong Kong Stock Connect, the H-share companies shall apply to CSDC for
provision by CSDC to the H-share companies register of individual investors in Chinese
Mainland, and individual income tax shall be withheld by H-share companies at the tax rate of
20%.
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--- page 523 ---
Income from dividends and bonuses derived by a corporate investor in Chinese Mainland
from investment in shares listed on the HKSE through Shenzhen-Hong Kong Stock Connect
shall be included in the total income amount, and subject to enterprise income tax pursuant to
the law. Income from dividends and bonuses derived by a Chinese Mainland resident enterprise
for H Shares held for 12 months consecutively shall be exempted from enterprise income tax
pursuant to the law. The H-share company shall not withhold income tax on dividends and
bonuses for corporate investors in Chinese Mainland, and the tax payable amount shall be
declared and paid by the corporate investor.
Pursuant to the Announcement on Continuing the Implementation of the Individual
Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect and the Mu tual Recognition of Funds between Chinese
Mainland and Hong Kong ( 關於延續實施滬港、深港股票市場交易互聯互通機制和內地與香港
基金互認有關個人所得稅政策的公告) which promulgated on August 21, 2023 and implemented
on the same date, the transfer spread income derived by mainland individual investors from
investing in shares listed on the HKSE through Shenzhen-Hong Kong Stock Connect shall
continue to be exempted from individu al income tax until December 31, 2027.
Stamp Duty
According to the Stamp Duty Law of the PRC ( 中華人民共和國印花稅法), which was
promulgated on June 10, 2021 and came into effect on July 1, 2022, PRC stamp duty only
applies to specific taxable document executed o r received within the PRC, having legally binding
force in the PRC and protected under the PRC laws, thus the requirements of the stamp duty
imposed on the transfer of shares of PRC listed companies shall not apply to the acquisition and
disposal of H Shares by non-PRC investors outside of the PRC.
Estate Duty
As of the date of this document, no estate duty has been levied in the PRC under the PRC
laws.
Enterprise Income Tax
According to the EIT Law and its implementation rules, all the domestic enterprises in
China (including foreign-invested enterprises ) shall be subject to enterprise income tax at the
uniform tax rate of 25%.
According to the Administrative Measur es for Determination of High and New Tech
Enterprises ( 高新技術企業認定管理辦法
), which was promulgated by the Ministry of Science
and Technology, the Ministry of Finance and the STA on April 14, 2008, amended on January
29, 2016 and became effective on January 1, 2016, an enterprise recognized as a high and new
technology enterprise may apply for a preferential enterprise income tax rate of 15% pursuant
to the relevant requirements of the EIT Law.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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--- page 524 ---
According to the Announcement of the Ministry of Finance and the STA on the
Preferential Income Tax Policie s for Micro and Small Enterprises and Individual Industrial and
Commercial Households ( 財政部、國家稅務總局關於小微企業和個體工商戶所得優惠政策的公
告), which was promulgated on March 26, 2023, the a nnual taxable income of a small low-profit
enterprise that is not more than RMB1 million shall be included in its taxable income at the
reduced rate of 25%, with the applicable enterp rise income tax rate of 20%. According to the
Announcement of the Ministry of Finance and the STA on the Relevant Tax and Fee Policies
for Further Supporting the Development of Micro and Small Enterprises and Individual
Industrial and Commercial Households ( 財政部、國家稅務總局關於進一步支持小微企業和個體
工商戶發展有關稅費政策的公告), which was promulgated on Aug 2, 2023, the taxable income of
a small low-profit enterprise shall be calculated at the reduced rate of 25%, and the policy of
payment of enterprise income tax at the rate of 20% shall continue to be implemented until
December 31, 2027.
Value-added Tax
Pursuant to the Provisional Regula tions of the PRC on Value-Added Tax ( 中華人民共和國
增值稅暫行條例), which was promulgated by the State Council, and last revised and became
effective on 19 November 2017, and the Rules for the Implementation of the Provisional
Regulations of the PRC 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, and l ast revised on 28 October 2011 and effective
on 1 November 2011, all entities and individuals that engage in the sale of goods, the provision
of processing, repair and replacement services, a nd the importation of goods within the territory
of the PRC are taxpayers of value-added tax (the ‘‘ VAT’’) and shall pay VAT. Unless stated
otherwise, for payers who sell or import goods, and provide processing, repairs and replacement
services in the PRC, the tax rate shall be 17%, and be, in certain specified circumstances, 11%,
6% and 0%.
According to the Notice of the Ministry of Finance and the State Administration of
Taxation on the Adjustment to VAT Rates ( 財政部、稅務總局關於調整增值稅稅率的通知)
which was promulgated on 4 April 2018 and came into effect on 1 May 2018, the original rates
of 17% and 11% applicable to the taxpayers who h ave VAT taxable sales activities or imported
goods are adjusted to 16 % and 10%, respectively.
According to the Announcement on Policies for Deepening the VAT Reform ( 關於深化增
值稅改革有關政策的公告), which was promulgated by the Ministry of Finance, the STA and the
General Administration of Customs on 20 March 2019 and became effective on 1 April 2019, the
original rates of 16% or 10% applicable to the gen eral VAT payers’ sales activities or imports
goods that are subject to VAT are adjusted to 13% or 9%, respectively.
On 25 December 2024, the SCNPC promulgated the Value-added Tax Law of the PRC
(‘‘VAT Law ’’), which will come into effect on 1 January 2026, and the Provisional Regulations of
the PRC on Value-Added Tax will be repealed concurrently. Pursuant to the VAT Law, entities
and individuals (including individual industrial and commercial proprietors) selling goods,
services, intangible assets, real estate and imp orting goods within the territory of the PRC are
taxpayers of VAT and shall pay VAT in accordance with the provisions of the law. Unless stated
otherwise, for payers who sell goods, and provide processing, repairs and replacement services
and rental services of tangible movable assets a s well as import goods, the tax rate shall be 13%,
and be, in certain specified circumstances, 9%, 6% and 0%.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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Preferential Tax Policy for the Integrated Circuit Industry
As listed in the Guidance of Preferential T ax Policy for Software Enterprises and
Integrated Circuit Enterprises ( 軟件企業和集成電路企業稅費優惠政策指引) issued by the STA
in May 21, 2022, the integrated circuit industry enjoys a variety of tax preferences. The
integrated circuit design, equipment, materials, packaging and testing enterprises encouraged by
the State, for example, can enjoy regular exemption or reduction of the enterprise income tax;
key integrated circuit design enterprises encouraged by the State can enjoy the regular
exemption or reduction of enterprise income tax; staff training expenses of integrated circuit
design enterprises can be deducted before tax according to the actual amount incurred.
According to the Notice of the State Counci l on Promulgation of Several Policies for
Promoting the High-quality Development of Integrated Circuit and Software Industries in the
New Era (Guo Fa [2020] No.8) ( 《國務院關於印發新時期促進集成電路產業和軟件產業高質量發
展的若干政策的通知》（國發[2020]8 號）) (the ‘‘ No.8 Notice ’’) and the Announcement on
Enterprise Income Tax Policies for Promoting High-quality Development of Integrated
Circuit Industry and Software Industry ( 關於促進集成電路產業和軟件產業高質量發展企業
所
得稅政策的公告) jointly promulgated by the Ministry of Finance, the STA, the NDRC and the
MIIT, the integrated circuit design, equipment, materials, packaging and testing and software
enterprises encouraged by the State are exempt ed from enterprise income tax during the first
year and the second year from the profit-making y ear. During the third year to the fifth year, the
enterprise income tax shall be levied at half of the statutory tax rate of 25%. Key integrated
circuit design enterprises and software enter prises encouraged by the State shall be exempted
from enterprise income tax during the first yea r to the fifth year since the profit-making year,
and the enterprise income tax shall be levied at a reduced tax rate of 10% in successive years.
Notice of the National Development and Reform Commission and Other Departments on
Making Relevant Requirements for the List of Integrated Circuit Enterprises or Projects and
Software Enterprises Entitled to Pr eferential Tax Policies for 2024 ( 國家發展改革委等部門關於
做好2024 年享受稅收優惠政策的集成電路企業或項目、軟件企業清單制定工作有關要求的通知),
on the basis of the No.8 Notice, makes detailed description of the conditions and project
standards for enterprises that enjoy preferential tax policy.
FOREIGN EXCHANGE ADMINISTRATION IN THE PRC
The lawful currency of the PRC is the Renminbi, which is currently subject to foreign
exchange control and cannot be freely converted into foreign currency. The SAFE, authorized
by the PBOC, is empowered with the functions of ad ministering all matters relating to foreign
exchange, including the enforcemen t of foreign exchange regulations.
Pursuant to the Regulations of the People’s Republic of China on Foreign Exchange
Control (中華人民共和國外匯管理條例) amended by the State Council and became effective on
August 5, 2008, all international payments and transfers are classified into current account
items and capital account items. The PRC does not impose restrictions on international
payments and transfers under current account ite ms. Foreign exchange income from the current
account of PRC enterprises may be retained or so ld to financial institu tions engaged in the
settlement and sale of foreign exchange in accordance with relevant provisions of the State. The
retention or sale of foreign exchange receipts unde r capital accounts to fi nancial institutions
engaging in settlement and sale of foreign excha nge shall be subject to the approval of foreign
exchange administrative authorities, unless otherwise stipulated by the State.
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Pursuant to the Regulations for the Admini stration of Settlement, Sale and Payment of
Foreign Exchange ( 結匯、售匯及付匯管理規定) promulgated by the PBOC on June 20, 1996
and became effective on July 1, 1996, the remaini ng restrictions on convertibility of foreign
exchange in respect of current account items are a bolished while the existing restrictions on
foreign exchange transactions in respect of capital account items are retained.
On August 5, 2008, the State Council promulgated the revised Foreign Exchange
Regulations, which have made substantial chang es to the foreign exchange supervision system
of the PRC. First, the regulations have adopted an approach of balancing the inflow and
outflow of foreign exchange. Foreign exchange i ncome received overseas can be repatriated or
deposited overseas, and foreign exchange and settlement funds under the capital account are
required to be used only for purposes as approved by the competent authorities and foreign
exchange administrative authorities; second, the regulations have improved the RMB exchange
rate floating system based on market supply and demand under management; third, in the event
that international balance of payment suffe r or may suffer a material misbalance, or the
national economy encounters or may encounter a severe crisis, the State may adopt necessary
safeguard or control measures a gainst international balance of payment; fourth, the regulations
have enhanced the supervision and administrat ion of foreign exchange transactions and grant
extensive authorities to SAFE to enhance its supervisory and administrative powers.
According to relevant laws and regulations of the PRC, PRC enterprises (including
foreign-invested enterprises) wh ich require foreign exchange for transactions relating to current
account items, may, without the approval of SAFE, effect payment from their foreign exchange
accounts at the designated foreign exchange ba nks, on the strength of valid receipts and proof of
transactions. Foreign-invested e nterprise that need to distribute profits to their shareholders in
foreign exchange and Chinese enterprise that n eed to pay fixed dividends in foreign exchange in
accordance with the requirements shall pay f rom its foreign exchange account or pay at the
designated foreign exchange bank by a resolution of the board of directors on the distribution of
profits.
According to the Decision of the State Council on Canceling and Adjusting a Group of
Administrative Approval Items and Other Matters ( 國務院關於取消和調整一批行政審批項目等
事項的決定) promulgated by the State Council and effective on October 23, 2014, the
administrative approval of the SAFE and its branches on matters concerning the repatriation
and settlement of foreign exchange of overseas -raised funds through overseas listing has been
canceled.
According to the Notice of the State Administration of Foreign Exchange on Issues
Relating to Foreign Exchange Control Pertaining to Overseas Listing ( 國家外匯管理局關於境外
上市外匯管理有關問
題的通知) promulgated by the SAFE on December 26, 2014, a domestic
company shall complete registration formalities for overseas listing with the SAFE’s local
branch at its place of registration within 15 working days from completion of issuance for its
overseas listing. Funds raised from overseas li sting of a domestic company may be repatriated to
China or deposited overseas, and the usage of funds shall be consistent with the relevant
contents set out in the publicly disclosed documents such as the prospectus document or the
corporate bonds offering documentation, shareh olders’ circular and the board of directors or
shareholders’ general meeting resolution.
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According to the Notice of the State Administration of Foreign Exchange on Policies for
Reforming and Regulating the Control over Foreign Exchange Settlement under the Capital
Account ( 國家外匯管理局關於改革和規範資本項目結匯管理政策的通知) promulgated by the
SAFE on June 9, 2016, domestic institutions may settle their foreign exchange receipts under the
capital account (including repatriated funds raised through overseas listing) entitled to
discretionary settlement according to relevant policies with banks as actually needed for
business operation. Domestic institutions may, at their discretion, settle up to 100% of their
foreign exchange receipts under the capital account for the time being. The SAFE may adjust
the aforesaid proportion in due time in light of the balance of payment.
According to the Notice of the State Admini stration of Foreign Exchange on Further
Promoting the Reform of Foreign Exchange Admin istration and Improving the Examination of
Authenticity and Compliance (Hui Fa [2017] No. 3) ( 國家外匯管理局關於進一步推進外匯管理改
革完善真實合規性審核的通知（匯發[2017]3 號）) issued by the SAFE on January 26, 2017 and
implemented on the same date, several measures are introduced, including (a) further expanding
the scope of domestic foreign exchange loan settl ement, allowing domestic foreign exchange
loans with the background of commodity trade and exports to be settled, (b) allowing funds
under domestic guarantee and foreign loans to be transferred back, (c) allowing foreign
exchange settlement via the foreign exchange acco unts of foreign institutions in pilot free trade
zones, and (d) implementing full-coverage administration of overseas lending in both Renminbi
and foreign currencies, where a domestic institution engages in overseas lending, the combined
balance of foreign exchange lending in Renmi nbi and foreign currencies shall not exceed a
maximum of 30% of the owner’s equity in the audited financial statements of the preceding
year.
Pursuant to the Circular of the State Admin istration of Foreign Exchange on Further
Promoting Cross-border Trade and Investment Facilitation ( 國家外匯管理局關於
進一步促進跨
境貿易投資便利化的通知), which was promulgated and became effective on October 23, 2019,
where a non-investment-oriented foreign investor makes equity investment in China through
transfer of capital in original currency, the invested shall register for acceptance of domestic
reinvestments as required and open a foreign ex change capital account t o receive the transferred
money, with no need to register for the recognition of contribution in cash; where a
non-investment-oriented foreign investor makes equity investment in China with the money
from the settlement of foreign exchange capita l, the invested shall register for acceptance of
domestic reinvestments as required and open an account pending payment after foreign
exchange settlement under the capital account to receive the money.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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This Appendix summarizes the principal laws, regulations and policies of the People’s
Republic of China (PRC) which are relevant to our Company’s current business operations in
the PRC. Laws and regulations relating to taxation in the PRC are discussed separately in
‘‘Appendix III — Taxation and Foreign Exchange’’. The principal objective of this summary is
to provide potential investors with an overview o f the principal laws and regulatory provisions
applicable to our Company. This summary is not intended to include all the information which
is important to potential investors. For a discussion of laws and regulations which are relevant
to our Company’s business, please refer to the section headed ‘‘Regulatory Overview’’ in this
document.
PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the People’s Republic of China ( 中華
人民共和國憲法) amended and effective from March 11, 2018 (the ‘‘ Constitution ’’), which is
made up of written laws, administrative regulati ons, local regulations, autonomous regulations,
separate regulations, rules and regulations of State Council departments, rules and regulations
of local governments, laws of special administrative regions and international treaties to which
the Chinese government is a signatory and other regulatory documents. Court judgments do not
constitute legally binding precedents, although they can serve as judicial reference and guidance.
According to the Constitution and the Legislation Law of the People’s Republic of China
(中華人民共和國立法法) last amended on March 13, 2023 and effective from March 15, 2023
(the ‘‘Legislation Law ’’), the National People’s Congress (NPC) and the NPC Standing
Committee are empowered to exercise the legislative power of the State. The NPC has the power
to enact and amend basic laws governing State or gans, civil, criminal and other matters. The
NPC Standing Committee has the power to enact a nd amend laws other than those required to
be enacted by the NPC and to supplement and amend parts of the laws enacted by the NPC
during the adjournment of the NPC, provided that such supplements and amendments do not
contravene the basic principles of such laws.
The State Council is the highest organ of state administration and has the power to enact
administrative regulations based on the Constitution and laws. The people’s congresses of the
provinces, autonomous regions and municipalities and their standing committees may enact
local regulations based on the specific circumstances and actual needs of their respective
administrative areas, provided that such regu lations do not contravene any provision of the
Constitution, laws or administrative regulations. The people’s congresses of cities divided into
districts and their respective s tanding committees may enact local regulations on aspects such as
urban and rural construction and management, eco logical civilization development, historical
and cultural protection, and g rassroots governance based on t he specific circumstances and
actual needs of such cities, provided that such local regulations do not contravene any provision
of the Constitution, laws, administrative regulations and local regulations of their respective
provinces or autonomous regions. Where laws provide otherwise for the enactment of local
regulations by cities divided into districts, thos e provisions shall prevail. Such local regulations
will become enforceable after being reported to and approved by the standing committees of the
people’s congresses of the relevant provinces or autonomous regions.
The standing committees of the people’s congresses of the provinces or autonomous
regions shall examine the legality of local regulations submitted for approval, and such approval
shall be granted within four months if they do not contravene any provision of the Constitution,
laws, administrative regulations and local regu lations of the relevant provinces or autonomous
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
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regions. The people’s congresses of national autonomous areas have the power to enact
autonomous regulations and separate regulations in light of the political, economic and cultural
characteristics of the ethnic groups in the areas concerned.
The ministries and commissions of the State Council, the PBOC, the National Audit
Office, the subordinate institutions with administrative functions directly under the State
Council, and the organizations prescribed by laws may formulate departmental rules and
regulations within their respective scopes of authority in accordance with laws as well as the
administrative regulations, decisions and orders of the State Council.
The Constitution has supreme legal authority a nd no laws, administrative regulations,
local regulations, autonomous regulations or se parate regulations or rules may contravene the
Constitution. The authority of laws is greater than that of administrative regulations, local
regulations and rules. The authority of administ rative regulations is greater than that of local
regulations and rules. The authority of the rules enacted by the people’s governments of the
provinces and autonomous regions is greater than that of the rules enacted by the people’s
governments of the cities divided into districts wi thin their respective administrative regions.
The NPC has the power to amend or repeal any inappropriate laws enacted by the NPC
Standing Committee, and to repeal any autono mous regulations or separate regulations
approved by the NPC Standing Committee that contravene the Constitution or the Legislation
Law. The NPC Standing Committee has the power to repeal any administrative regulations that
contravene the Constitution and laws, and to repeal any local regulations that contravene the
Constitution, laws and administrative regulations, and to repeal autonomous regulations and
separate regulations approved by the standing committees of the people’s congresses of the
relevant provinces, autonomous regions or municipalities directly under the central government
that contravene any provision of the Constituti on or the Legislation Law. The State Council has
the right to amend or repeal any inappropriate dep artmental and local government regulations.
The people’s congresses of the provinces, autonomous regions and municipalities directly under
the central government have the right to amen d or repeal any inappropriate local laws or
regulations enacted or approved by their res pective standing committees. The standing
committees of local people’s congresses have the right to repeal any inappropriate rules
formulated by the people’s governments at the same level, and the people’s governments of
provinces and autonomous regions have the right to amend or repeal any inappropriate rules
formulated by the people’s governments at lower levels.
PRC JUDICIAL SYSTEM
According to the Constitution and the Law of Organization of the People’s Court of the
People’s Republic of China ( 中華人民共和國人民法院組織法), as amended by the NPC Standing
Committee on October 26, 2018 and effective from January 1, 2019, the people’s courts of the
PRC are divided into the Supreme People’s Court, local people’s courts at various levels and
special people’s courts. Local people’s courts at various levels are divided into three levels,
namely, basic people’s courts, intermediate people’s courts and higher people’s courts. Basic
people’s courts may set up special civil tribunals based on region, population and case-related
considerations. The Supreme People’s Court serves as the highest judicial organ in the PRC. The
Supreme People’s Court exercises its supervisory authority over the trial practices of local
people’s courts at various levels and special people ’s courts, while higher people’s courts exercise
their supervisory authority over the trial p ractices of people’s courts at lower levels.
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The people’s courts employ a two-tier trial sys tem, i.e., judgments or rulings of the second
instance at people’s courts are final. A party may appeal against the judgment or ruling of the
first instance of a local people’s court. The peopl e’s procuratorate may present a protest to the
people’s court at the next higher level in accorda nce with the procedures stipulated by laws. In
the absence of any appeal by the parties and any protest by the people’s procuratorate within
the stipulated period, the judgment or ruling of the people’s court shall be final. Judgments or
rulings of the second instance of intermediate people’s courts, higher people’s courts and the
Supreme People’s Court and those of the first instance of the Supreme People’s Court shall be
final. However, if the Supreme People’s Court finds any definite error in a legally effective final
judgment or ruling of a people’s court at any level, a higher people’s court finds any definite
error in a legally effective final judgment or ruling of a people’s court at a lower level, or if the
president of a people’s court at any level finds an y definite error in a legally effective final
judgment or ruling of such court, the case can be retried according to judicial supervision
procedures.
According to the Constitution and the Law of O rganization of the People’s Procuratorate
of the PRC ( 中華人民共和國人民檢察院組織法) lastly amended by SCNPC on October 26, 2018
and effective on January 1, 2019, the People’s Pro curatorate is the law supervision organ of the
state. The Supreme People’s Procuratorate sh all be the highest procuratorial organ. The
Supreme People’s Procuratorate shall direct the w ork of the local people’s procuratorates at all
levels and of the special people’s procuratorate s; the people’s procuratorates at higher levels
shall direct the work of those at lower levels
The Civil Procedure Law of the People’s Republic of China ( 中華人民共和國民事訴訟法)
last amended on September 1, 2023 and e ffective from January 1, 2024 (the ‘‘ Civil Procedure
Law’’) provides for the conditions for instituting a civil action, the jurisdiction of people’s
courts, the procedures for conducting a civil action, and the procedures for enforcement of a
civil judgment or ruling. All parties to a civil action conducted within the PRC must abide by
the Civil Procedure Law of the People’s Republic of China. A civil case is generally under the
jurisdiction of the court located in the defendant’s place of domicile. The litigants of a contract
dispute or other property rights dispute may agree in writing on selection of the jurisdiction of a
people’s court at the location of the defendant ’s domicile, place of performance of contract,
place of execution of contract, address of the pl aintiff, location of the subject matter or a venue
which has actual connection with the dispute, provided that the selection does not violate the
provisions of the Civil Procedure Law on hierarch ical jurisdiction and exclusive jurisdiction.
A foreign individual, person without nationality , foreign enterprise or foreign organization
shall have the same litigation rights and obligations as a Chinese citizen, legal person or other
organization in initiating or defending against a litigation in a people’s court. Where a foreign
court restricts the litigation rights of a Chinese c itizen or enterprise, the Chinese people’s courts
shall apply the principle of reciprocity to the civil litigation rights of the citizens and enterprises
of that country. Where a foreign individual, person without nationality, foreign enterprise or
foreign organization initiates or responds to a litigation in a people’s court in the PRC and
needs to engage a lawyer to represent he/she/it in the litigation, he/she/it must engage a Chinese
lawyer. In accordance with the international tr eaties to which the PRC is a signatory or party,
or according to the principle of reciprocity, a p eople’s court and a foreign court may request
each other to serve documents, conduct investigations and collect evidence and conduct other
actions on their behalf. A people’s court shall not accede to any request made by a foreign court
which results in the infringement of the sovereignty, security or public interests of the PRC.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
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All parties to a civil action shall perform the l egally effective judgments and rulings. If any
party to a civil action refuses to abide by a judgment or ruling made by a people’s court or an
award made by an arbitration tribunal in the PRC, the other party may apply to the people’s
court for the enforcement of the same within two years subject to application for postponed
enforcement or revocation. The laws governing th e suspension or interruption of the statute of
limitations shall apply to the suspension or interruption of the statute of limitations for the
application for enforcement. If a party fails to s atisfy within the stipulated period a judgment
which the court has granted an enforcement approval, the court may, upon the application of
the other party, mandatorily enforce the judgment against such party.
Where a party requests for the enforcement of an effective judgment or ruling made by a
people’s court, but the opposite party or his/her/its property is not within the territory of the
People’s Republic of China, the party making the request may directly apply to the foreign court
with jurisdiction for the recognition and enforcement of the judgment or ruling, or the people’s
court may, in accordance with th e provisions of international treaties to which the PRC is a
signatory or party, or according to the principle of reciprocity, request for the recognition and
enforcement of the judgment or ruling by the foreign court. Similarly, for an effective judgment
or ruling made by a foreign court that requires r ecognition and enforcement by a people’s court
of the PRC, the party concerned may directly apply to an intermediate people’s court of the
PRC with jurisdiction for recognition and enforcement of the judgment or ruling, or the foreign
court may, in accordance with the provisions of international treaties to which that country and
the PRC are signatories or parties, or according to the principle of reciprocity, request for the
recognition and enforcement by the people’s court, unless the people’s court considers that such
judgment or ruling is contrary to the fundamental principles of the PRC laws or to the
sovereignty or security of the PRC, or is not in the social and public interests of the PRC.
THE COMPANY LAW, TRIAL MEASURE S AND ARTICLES OF ASSOCIATION
GUIDELINES
A joint stock limited company established in the PRC seeking a listing on the Hong Kong
Stock Exchange is mainly subject to the following laws and regulations of the PRC.
The Company Law of the People’s Republic of China ( 中華人民共和國公司法) (the
‘‘Company Law ’’) was adopted by the Standing Committee of the Eighth NPC at its Fifth
Session on December 29, 1993 and came into effect on July 1, 1994. It was successively amended
on December 25, 1999, August 28, 2004, Octobe r 27, 2005, December 28, 2013, October 26, 2018
and December 29, 2023. The late st revision of the Company Law has taken effect on July 1,
2024.
The Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies ( 境內企業境外發行證券和上市管理試行辦法) (the ‘‘Trial Measures ’’) and
supporting guidelines were released by the China Securities Regulatory Commission (CSRC) on
February 17, 2023 and came into effect on March 31, 2023, and were applicable to both direct
and indirect overseas offering and listing by do mestic companies. The Trial Measures also set
out the filing and administration methods and regulatory requirements for the overseas
securities offering and lis ting by domestic companies.
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On March 28, 2025, the CSRC released the la test revised Guidelines for Articles of
Association of Listed Companies ( 上市公司章程指引) (the ‘‘Articles of Association Guidelines ’’),
which came into effect on the same date. Pursua nt to the provisions of the Trial Measures and
its supporting guidelines, the Guidelines of Regulatory Rules Application — Overseas Offering
and Listing No.1, domestic companies directly offering and listing overseas are required to
formulate articles of association and standardi ze corporate governance with reference to the
Articles of Association Guidelines and other relevant provisions of the CSRC on corporate
governance.
Set out below is a summary of the major provisions of the Company Law, the Trial
Measures and the Articles of Association Gui delines which are applicable to our Company.
General Provisions
A joint stock limited company refers to a corporate legal person incorporated in the PRC
under the Company Law, whose registered capital is divided into shares of equal par value. The
liability of its shareholders is limited to the extent of the shares they have subscribed for and the
liability of a company is limited to the full value of all the property owned by it.
A company must conduct its business in accordance with laws and regulations as well as
public and commercial ethics. A company may invest in other limited liability companies. The
liabilities of the company to such invested companies are limited to the amount invested. Unless
otherwise provided by laws, a company cannot be the capital contributor who has the joint
liabilities associated with the debts of the invested enterprises.
Incorporation
A joint stock limited company may be established by means of promotion or stock
floatation. To establish a joint stock limited company, there shall be not less than 1 but not
more than 200 promoters, more than half of whom s hall have their domiciles within the territory
of the PRC.
Where a joint stock limited company is to be established by means of promotion,
promoters shall fully subscribe for the shares that shall be issued at the time of the establishment
of the company as provided for in the articles of association. If a joint stock limited company is
to be established by means of stock floatation, the promoters shall subscribed for not less than
35% of the total shares that shall be issued at the time of the establishment of the company as
provided for in the articles of association; howev er, where laws and administrative regulations
provide otherwise, such provisions shall prevail.
Promoters of a joint stock limited company established by means of stock floatation shall,
within 30 days after full payment has been ma de for the shares to be issued at the time of
establishment, hold an establishment meeting o f the company. The promoters shall notify each
subscriber of the date of the meeting or make a public announcement 15 days before the meeting
is held. The establishment meeting may not be held unless the subscribers who hold more than
half of the voting rights attend the meeting. Where a joint stock limited company is established
by means of promotion, the convening and voting procedures for the establishment meeting
shall be prescribed by the articles of associ ation of the company or the agreement of the
promoters.
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The establishment meeting of a company shall exercise the following functions and powers:
(i) deliberating on the report on the preparations for establishment of the company by
promoters;
(ii) adopting the articles of association;
(iii) electing directors and supervisors;
(iv) reviewing the expenses for the establishment of the company;
(v) reviewing the valuations of the non-mone tary property contributed by the promoters;
and
(vi) where any force majeure or any major change of business conditions directly affects
the establishment of the company, the resolution of not establishing the company may
be made.
The resolutions made at the establishment meeting about the matters as mentioned in the
preceding provision shall be adopt ed by the subscribers present at the meeting who represent
more than half of the voting rights.
Within 30 days after the conclusion of the inaugural meeting, the board of directors shall
apply to the registration authority for registrati on of the incorporation of the joint stock limited
company. A company is formally established and has the status of a legal person after the
business license has been issued by the relevant registration authority.
Registered Shares and Issue of Shares
Under the Company Law, a shareholder may make capital contributions in currency, or in
kind, intellectual property, land use right, stock rights, creditor’s rights or other non-monetary
property that may be assessed in currency and tra nsferred according to laws, except the property
that may not be used as capital contributions according to any law or administrative regulation.
The capital of a joint stock limited company shall be divided into shares. All the shares of
the company shall alternatively be shares wi th or without par value in accordance with the
articles of association. Where par value shares are adopted, all the shares shall be of equal value.
The company may, according to the articles of association, convert all the issued par value
shares into no par value shares, or vice versa. Where no par value shares are adopted, more than
half of the proceeds from the issuance of the shares shall be included in the registered capital.
A joint stock limited company shall make a register of shareholders and keep it in the
company. The register of shareholders shall contain the following items:
(i) name and domicile of each shareholder;
(ii) class and number of shares subscribed for by each shareholder;
(iii) serial number of shares if the shares are issued in paper form; and
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(iv) date on which each shareholder acquired the shares.
Shares of a joint stock limited company shall be issued under the principle of fairness and
impartiality. The shares of the same class shall rank pari passu . Shares of the same class in the
same issue shall be issued at the same price and on same conditions. The same price shall be paid
for each share subscribed for by a subscriber. The issue price of par value stock may be based on
the face value or exceed the face value but shall not be lower than the face value.
The Trial Measures provides that a company th at offers and lists securities on overseas
markets may raise funds and pay dividends in a foreign currency or Renminbi. Under certain
circumstances, such as equity incentives and the acquisition of assets through the issuance of
securities, a domestic company is allowed to issue securities to specific domestic targets when it
directly issues and lists overseas.
Under the Trial Measures, for a domestic company directly offering and listing overseas,
shareholders of its domestic unlisted shares applying to convert such shares into shares listed
and traded on an overseas trading venue shall conform to relevant regulations promulgated by
the CSRC, and authorize the domestic company to file with the CSRC on their behalf. The term
‘‘domestic unlisted shares’’ in the preceding pro vision refers to shares offered by a domestic
company but not listed or quoted for trading on any domestic trading venues. Domestic unlisted
shares shall be centrally registered and depos ited at a domestic securities depository and
settlement agency. The registration and settl ement of overseas listed shares is subject to
applicable rules in overseas markets.
Domestic companies offering and listing over seas shall file with the CSRC in accordance
with the Trial Measures, submit filing reports, le gal opinions and other relevant materials, and
truthfully, accurately and completely explain shareholder information and other information.
For a domestic company directly offering and listing overseas, the issuer shall file with the
CSRC. For a domestic company indirectly offe ring and listing overseas, the issuer shall
designate a major domestic operating entity as th e domestic responsible person and file with the
CSRC.
Increase in Share Capital
Pursuant to the relevant provisions of the Company Law, where a joint stock limited
company intends to issue new stocks, its sharehol ders’ general meeting shall make a resolution
about the following matters:
(i) the class and amount of the new stocks;
(ii) the issuing price of the new stocks;
(iii) the beginning and ending dates for the issuance of the new stocks;
(iv) the class and amount of the new stocks to b e issued to the original shareholders; and
(v) if any no par value stock is issued, the proceeds from the issuance of the new stocks
shall be included into the registered capital.
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Where a company intends to make public offering of shares, it shall go through the
registration with the securities regulatory authority of the State Council and announce the
relevant documents.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
(i) the company shall prepare a balance sheet and an inventory of property;
(ii) the reduction of registered capital must be approved by shareholders at the
shareholders’ general meeting;
(iii) the company shall notify its creditors wi thin ten days from the date of the resolution
of the shareholders’ general meeting to reduce the registered capital and make an
announcement in a newspaper or the National Enterprise Credit Information
Publicity System within thirty days;
(iv) the creditors have the right to demand the company to settle the debts or provide
corresponding guarantees within thirty days from the date of receipt of the notice, or
within forty-five days from the date of the announcement if the notice has not been
received; and
(v) the company shall apply to the company registration authority for change in
registration.
Where a company reduces its registered cap ital, it shall reduce the amount of capital
contribution or shares in proportion to the capital contribution or shares held by the
shareholders, unless it is otherwise prescribed by any law, or is agreed upon by all the
shareholders of a limited liability company or is otherwise prescribed by the articles of
association of a joint stock limited company.
Share Buy-Back
Under the Company Law, no company may purchase its own shares except under any of
the following circumstances:
(i) where the company’s registered capital is reduced;
(ii) where it merges with anoth er company holding its shares;
(iii) where its shares are used for employee stock ownership plan or equity incentives;
(iv) where any shareholder, who raises objections to the resolution of the shareholders’
general meeting on the merger or split-up of the company, requests the company to
purchase its shares;
(v) where its shares are used for converting the corporate bonds into convertible stocks
issued by the company; or
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(vi) it is necessary for a listed compan y to maintain its company value and its
shareholders’ equity.
Where a company purchases its own shares und er any of the circumstances as mentioned in
items (i) or (ii) of the preceding paragraph, a resolution of the shareholders’ general meeting
shall be adopted. Where a company purchases its own shares under any of the circumstances as
mentioned in items (iii), (v) or (vi) of the preced ing paragraph, a resolution shall be adopted at
the meeting of the board of directors with the attendance of not less than two thirds of the
directors, according to the arti cles of association or the shareholders’ general meeting of the
company.
After the company purchases its own shares acco rding to the first paragraph of this Article,
the shares purchased shall be written off with in ten days as of the purchase date under the
circumstance as mentioned in item (i); the shares shall be transferred or written off within six
months under the circumstance as mentioned in item (ii) or (iv); and the shares held
accumulatively by the company shall not exceed 10% of the total shares issued and be
transferred or written off within three years under any of the circumstances as mentioned in item
(iii), (v) or (vi).
Transfer of Shares
Shares held by a shareholder may be transferred according to laws. Under the Company
Law, the share transfer by a shareholder shall be conducted on a lawfully established stock
exchange or by any other means as prescribed by the State Council. The stocks shall be
transferred by a shareholder in the form of endorsement or by any other means prescribed by
the relevant laws or administrative regulations . After the transfer, the company shall record the
name and domicile of the transferee in the register of shareholders. The register of shareholders
shall not be modified within 20 days before any shareholders’ general meeting is held, or within
5 days prior to the benchmark date decided by the company for the distribution of dividends.
Where it is otherwise provided for in any law, ad ministrative regulation or by the securities
regulatory authority of the State Council for the modification of the register of shareholders of
a listed company, such provisions shall prevail.
Under the Company Law, the shares issued before a company makes a public offering of
shares shall not be transferred within one year as of the day when the stocks of the company are
l i s t e da n dt r a d e do nt h es t o c ke x c h a n g e .W here it is otherwise provided for in any law,
administrative regulation or by the securities regulatory authority of the State Council for the
transfer of shares held by the shareholders o r actual controllers of a listed company, such
provisions shall prevail.
The directors, supervisors and senior executives of the company shall declare to the
company the shares they hold and the changes thereof. During the term of office as determined
when they assume the posts, the shares transfer red each year shall not exceed 25% of the total
shares they hold of the company. The shares of the company held by them shall not be
transferred within one year as of the day when the stocks of the company are listed and traded
on the stock exchange. Any of the aforesaid persons shall not transfer the shares of the company
held within six months after he/she leaves office. Any other restrictions on the transfer of
company shares held by directors, supervisor s or senior executives may be specified in the
articles of association.
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W h e r et h es h a r e sa r ep l e d g e dw i t h i nt h et i m el i mit for restricted transfer as provided for by
laws and administrative regulations, the pledgee may not exercise the pledge right within such
restricted period.
Shareholders
Under the Company Law and the Articles of Association Guidelines, the rights of a
shareholder include:
(i) to receive dividends and other forms of distributions in proportion to their
shareholdings;
(ii) to request, convene, preside over, attend or appoint a proxy to attend shareholders’
general meetings and to exercise the corresponding voting rights in accordance with
laws;
(iii) to supervise and manage a company’s business operations, and to present proposals
or to raise inquiries;
(iv) to transfer, gift or pledge the shares held by him/her in accordance with laws,
administrative regulations and the provisions of the articles of association;
(v) to inspect and copy the company’s articles of association, share register, minutes of
shareholders’ general meetings, resolutions of meetings of the board of directors, and
financial and accounting reports; shareholders who meet the specified requirements
may inspect the company’s accounting books and accounting vouchers;
(vi) in the event of the winding-up or liquidation of a company, to participate in the
distribution of remaining property of a company in proportion to the number of
shares held;
(vii) for any shareholder who raises objections to the resolution of the shareholders’
general meeting on the merger or split-up of the company, to request the company to
purchase its shares;
(viii) other rights conferred by laws, administrative regulations, departmental rules or the
articles of association.
The obligations of a shareholder include:
(i) to comply with laws, administrative regulations and the articles of association;
(ii) to pay subscription money according to the number of shares subscribed and the
method of subscription;
(iii) not to withdraw his/her share capital e xcept under the circumstances prescribed by
laws or regulations;
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(iv) not to abuse their shareholders’ rights to damage the interests of the company or
other shareholders; not to abuse the independent legal person status of the company
and the limited liability of shareholders to damage the interests of the creditors of the
company;
(v) other obligations conferred by laws, admi nistrative regulations and the articles of
association.
Shareholders’ General Meetings
Under the Company Law, the shareholders’ general meeting of a joint stock limited
company is made up of all shareholders. The shar eholders’ general meeting is the authority of a
company, which shall exercise the following functions and powers:
(i) electing and replacing directors and super visors and deciding on th eir remunerations;
(ii) deliberating on and approving the reports of the board of directors;
(iii) deliberating on and approving t he reports of the board of supervisors;
(iv) deliberating on and approving the plans for profit distribution and making up losses
of the company;
(v) making resolutions on the increase or decrease of the registered capital of the
company;
(vi) making resolutions on the issuance of corporate bonds;
(vii) making resolutions on the merger, split-up, dissolution, liquidation or change of
corporate form of the company;
(viii) amending the articles of association; and
(ix) other functions and powers as prescribed in the articles of association.
Under the Company Law, an annual shareholders’ general meeting shall be held every
year. If any of the following circumstances occu rs, an interim shareholders’ general meeting
s h a l lb eh e l dw i t h i nt w om o n t h s :
(i) where the number of directors is less than two thirds of the number as provided for by
the Company Law or the articles of association;
(ii) where the unrecovered losses of the company reach one third of the total capital
stock;
(iii) where the shareholders who separately or aggregately hold 10% or more of the
company’s shares so request;
(iv) where the board of dir ectors deems it necessary;
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(v) where the board of supervisors so proposes; or
(vi) other circumstances as provided for in the articles of association.
The shareholders’ general meeting shall be convened by the board of directors and presided
over by the chairman of the board of directors. If the chairman is unable or fails to perform
his/her duties, the meeting shall be presided over by the deputy chairman. If the deputy
chairman is unable or fails to perform his/her duties, the meeting shall be presided over by a
director jointly elected by more than half of the directors.
If the board of directors is unable or fails to perform the duties of convening the
shareholders’ general meeting, the board of supervisors shall timely convene and preside over
the meeting. If the board of supervisors fails to convene and preside over the meeting,
shareholders who separately or aggregately hold 10% or more of the shares of the company for
90 or more consecutive days may convene and preside over the meeting by themselves.
If the shareholders who separately or aggre gately hold 10% or more of the shares of the
company request to convene an interim sharehol ders’ general meeting, the board of directors
and the board of supervisors sh all, within 10 days after the receipt of such request, decide
whether to hold an interim shareholders’ general meeting and reply to the shareholders in
writing.
The time and place of the meeting and the matters to be deliberated shall be notified to
each shareholder 20 days before a shareholders’ general meeting is held. For an interim
shareholders’ general meeting, a not ice shall be served 15 days in advance.
The shareholders who separately or aggregately hold 1% or more of the shares of the
company may, 10 days before a shareholders’ g eneral meeting is held, submit an interim
proposal in writing to the board of directors. The i nterim proposal shall contain a clear topic for
discussion and specific matters for resolution. The board of directors shall, within 2 days after it
receives such a proposal, notify other share holders and submit the in terim proposal to the
shareholders’ general meeting for deliberation, unless the interim proposal is in violation of any
law, administrative regulation or the articles of association or fails to fall into the scope of
functions of the shareholders’ general meeting. The company shall not raise the shareholding
proportion of the shareholder who br ings forward any interim proposal.
Under the Company Law, a shareholder may entrust a proxy to attend a shareholders’
general meeting, and it should clarify the matte rs, power and time limit of the proxy. The proxy
shall present a written power of attorney issued by the shareholder to the company and shall
exercise his/her voting rights within the scope of authorization. There is no specific provision in
the Company Law regarding the number of shareholders constituting a quorum in a
shareholders’ general meeting.
Under the Company Law, shareholder who attends the shareholders’ general meeting has
one vote for each share held by him/her/it, excep t the shareholders of classified shares. The
company may not have a voting right for the shares it holds.
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Under the Company Law and the Articles of Association Guidelines, a resolution made at
the shareholders’ general meeting shall be adopted by more than half of the voting rights held by
the shareholders who attend the meeting. A resolution made at the shareholders’ general
meeting on modifying the articles of association, increasing or reducing the registered capital as
well as merger, split-up, dissolution or chang e of the corporate form shall be adopted by two
thirds or more of the voting rights held by the shareholders who attend the meeting.
The shareholders’ general meeting may, in electing the directors or supervisors, adopt a
cumulative voting system according to the arti cles of association or t he resolutions of the
shareholders’ general meeting. Under the cumulative voting system, when the shareholders’
general meeting elects the directors or superviso rs, each shareholder is entitled to one vote per
share, multiplied by the number of candidates and uses them all for one candidate for director
or supervisor.
The Board of Directors and Board Meetings
Under the Company Law, a joint stock limited company shall have a board of directors,
which consists of more than three members. The te rm of office of directors shall be prescribed in
the articles of association, but each term shall not exceed three years. After the term of office of
a director expires, he/she may be re-elected to serve another term.
The board of directors shall have one chairperson and may have deputy chairperson(s).
The chairperson and deputy chairperson(s) shall be elected by more than half of all the
directors. The chairperson shall convene and preside over the meetings of the board of directors
and check the implementation of the resolutions of the board of directors. The deputy
chairperson(s) shall assist the chairperson in the performance of his/her duties. If the
chairperson is unable or fails to perform his/her duties, the deputy chairperson(s) shall
perform such duties. If the deputy chairperson(s) is/are unable or fail(s) to perform his/her/their
duties, a director jointly elected by more than half of the directors shall perform such duties.
Under any of the following circumstances, anyone may not act as a director of a company:
(i) having no capacity for civil conduct or having limited capacity for civil conduct;
(ii) having been sentenced to any criminal penalty due to an offence of corruption,
bribery, encroachment of property, misap propriation of property or disrupting the
order of the socialist market economy, or having been deprived of political rights due
to a crime, where a five-year period has not elapsed since the expiration of execution
period; If he/she is pronounced for suspension of sentence, a two-year period has not
elapsed since the expiration of the suspension of sentence;
(iii) serving as a director, factory director or manager of a company or enterprise which
has been bankrupt and liquidated and being personally liable for the bankruptcy of
such company or enterprise, where a three-year period has not elapsed since the
completion of the bankruptcy and liquidation;
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(iv) acting as the legal representative of a company or enterprise whose business license
has been revoked or which was ordered to close down due to any violation of the law
and being personally liable, where a three-year period has not elapsed since the date of
revocation of business license or the order for closure; or
(v) being listed as a dishonest person subject to enforcement by a people’s court due to
his/her failure to pay off a relatively large amount of due debts.
The board of directors shall convene at least two meetings every year. Each meeting shall
be notified to all directors and supervisors 10 days before it is held. The board of directors shall
exercise the following functions and powers:
(i) convening the shareholders’ general meeting and reporting its work to the
shareholders’ general meeting;
(ii) executing the resolutions of the shareholders’ general meeting;
(iii) deciding the business plans an d investment scheme of the company;
(iv) formulating the plans for profit distribution and making up for loss of the company;
(v) formulating the plan for increasing or decr easing the registered capital, as well as the
plan for issuance of corporate bonds;
(vi) formulating the plan for merger, division, dissolution, or change of corporate form of
the company;
(vii) deciding the establishment of the internal management body of the company;
(viii) deciding the appointment or dismissal of the manager of the company and the
remuneration thereof, and, according to the nomination of the manager, deciding on
hiring or dismissing deputy managers and financial director of the company as well as
their remuneration;
(ix) formulating the basic management rules of the company; and
(x) other functions and powers specified in th e articles of association or granted by the
shareholders’ general meeting.
No meeting of the board of directors may be he ld unless more than half of the directors are
present. A resolution made by the board of dir ectors shall be adopted by more than half of all
the directors. For voting on a resolution of the board of directors, each director shall have one
vote. The board of directors shall prepare minutes regarding the decisions on the matters
discussed at the meetings, which shall be signed by the directors present.
The directors shall attend the meeting of th e board of directors in person. Where any
director is unable to attend the meeting for any reason, he/she may, by issuing a written power
of attorney, entrust another director to attend the meeting on his/her behalf. The power of
attorney shall indicate the scope of authorization. The directors shall be responsible for the
resolutions made by the board of directors. Where a resolution of the board of directors is in
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violation of any law, administrative regulation, articles of association or resolution of the
shareholders’ general meeting and causes any serious loss to the company, the directors who
participate in adopting such resolution shall be liable for compensation to the company. If a
director is proved to have expressed his/her objection to the voting on such resolution and such
objection has been recorded in the minutes, he/she may be exempted from liability.
The Board of Supervisors
Under the Company Law, a joint stock limited company may have a board of supervisors
which shall comprise three members or more. The members of the board of supervisors shall
include shareholders’ representatives an d an appropriate proportion of employees’
representatives of the company, among which the proportion of the employees’
representatives shall not be lower than one third, and the concrete proportion shall be
specified in the articles of association. The emplo yees’ representatives who serve as members of
the board of supervisors shall be democratical ly elected by employees through the employees’
representative congress, employees’ congress or by other means. No director or senior executive
may concurrently hold the post of supervisor.
The board of supervisors shall have one chairp erson and may have deputy chairperson(s).
The chairperson and deputy chairperson(s) of t he board of supervisors shall be elected by more
than half of all the supervisors. The chairpers on of the board of supervisors shall convene and
preside over the meetings of the board of supervisors. If the chairperson of the board of
supervisors is unable or fails to perform his/her duties, the deputy chairperson(s) of the board of
supervisors shall convene and preside over the meeting. If the deputy chairperson(s) is/are
unable or fail(s) to perform his/her/their duties, a supervisor jointly elected by more than half of
the supervisors shall convene and preside over such meeting.
The board of supervisors shall exercise the following functions and powers:
(i) examining the financial affairs of the company;
(ii) supervising the acts of the directors and senior executives in the performance of their
duties, and proposing the removal of the directors and senior executives who have
violated laws, administrative regulations, t he articles of association or the resolutions
of the shareholders’ general meeting;
(iii) requiring the directors and senior executi v e st oc o r r e c tt h e i ra c t si fs u c ha c t sd a m a g e
the interests of the company;
(iv) proposing to convene interim shareholders’ general meetings, and convening and
presiding over the shareholders’ general meeting when the board of directors fails to
implement the duties to convene and preside over the shareholders’ general meeting as
prescribed in the Company Law;
(v) presenting proposals to the sh areholders’ general meetings;
(vi) initiating lawsuits against the directors and senior executives according to Article 189
of the Company Law; and
(vii) other functions and powers provi ded for in the articles of association.
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A joint stock limited company may, instead of setting up a board of supervisors, in
accordance with the provisions of its articl e so fa s s o c i a t i o n ,s e tu pa na u d i tc o m m i t t e e
consisting of directors in its board of directors to exercise the powers and functions of the board
of supervisors.
On December 27, 2024, the CSRC issued th e Transitional Arrangements for the
Implementation of the Supporting Institutional Rules for the New Company Law ( 關於新《公
司法》配套制度規則實施相關過渡期安排), whereby listed companies shall, before January 1,
2026, in accordance with the provisions of the Company Law, the Provisions of the State
Council on Implementing the Registration Management System for Registered Capital under
the Company Law of the People’s Republic of China ( 國務院關於實施《中華人民共和國公司法》
註冊資本登記管理制度的規定) and the supporting institutional rules of the CSRC, provide in
the articles of association for the establishm e n to fa na u d i tc o m m i t t e ei nt h eb o a r do fd i r e c t o r s
to exercise the powers and functions of a board of supervisors as stipulated in the Company Law
without establishing a board of supervisors or app ointing supervisors. Before a listed company
adjusts the establishment of the company’s internal supervisory body, its board of supervisors
or supervisors shall continue to comply with the provisions of the original institutional rules of
the CSRC.
Managers and Senior Management
Under the Company Law, a joint stock limited company may have a manager, who shall be
appointed or removed as decided by the board of directors. The manager shall be accountable to
the board of directors and exercise his/her powers according to the articles of association or the
authorization of the board of directors. The m anager shall attend the meetings of the board of
directors as a non-voting member.
According to the Company Law, senior man agement refers to the company manager,
deputy manager, head of finance, secretary to the board of directors of a listed company, and
any other persons as specified in the company’s articles of association.
Duties of Directors, Supervisors and Senior Management
Directors, supervisors and senior management of the company are required under the
Company Law to comply with the relevant laws, re gulations and the articles of association, and
have fiduciary and diligent duties to the company. Directors, supervisors and senior executives
shall assume the obligation of l oyalty to the company and take m easures to avoid the conflict
between their own interests and those of the company and may not seek any improper interests
by taking advantage of their powers.
The directors, supervisors and senior executi ves shall assume the duty of diligence to the
company. When performing their duties, they shall, for the best interests of the company,
exercise the reasonable care that shall be generally possessed by a manager.
Directors, supervisors and senior management are prohibited from:
(i) embezzling the property or misappropriating the funds of the company;
(ii) depositing the funds of the company into an account opened in his/her own name or
in the name of any other individual;
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(iii) giving bribes or accepting any other il legal proceeds by taking advantage of his/her
power;
(iv) taking commissions from the transactions between the company and any other person
into his/her own pocket;
(v) unlawfully disclosing the confidential information of the company; or
(vi) other acts in violation of the obligation of loyalty to the company.
Where any director, supervisor or senior ex ecutive directly or indirectly concludes a
contract or conducts a transactio n with the company, he/she shall report the matters relating to
the conclusion of the contract or transaction to the board of directors or shareholders’ general
meeting, which shall be subject to the resolution of the board of directors or shareholders’
general meeting according to the articles of association.
Where any of the close family members of the directors, supervisors or senior executives, or
any of the enterprises directly or indirectly cont rolled by the directors, supervisors or senior
executives or any of their close family members, or any of the related parties who has any other
related-party relationship with the directors, supervisors or senior executives, concludes a
contract or conducts a transaction with the company, the provisions of the preceding paragraph
shall apply.
No director, supervisor or senior executive may take advantage of his/her position to seek
any business opportunity that belongs to the company for himself/herself or any other person
except under any of the following circumstances:
(i) where he/she has reported to the board of directors or the shar eholders’ general
meeting and has been approved by a resolution of the board of directors or the
shareholders’ general meeting according to the articles of association; or
(ii) where the company cannot make use of the business opportunity as stipulated by
laws, administrative regulations or the articles of association.
Where any director, supervisor or senior execu tive fails to report to the board of directors
or the shareholders’ general meeting and obtain an approval by resolution of the board of
directors or the shareholders’ general meeting a ccording to the articles of association, he/she
may not engage in any business that is similar to that of the company where he/she holds office
for himself/herself or for any other person.
Where any director, supervisor or senior executive violates any law, administrative
regulation or the articles of association during the performance of duties and causes any loss to
the company, he/she shall be liable for compensation.
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Finance and Accounting
Under the Company Law, a company shall establish its financial and accounting systems
according to laws, administrative regulations and the regulations of the financial department of
the State Council. At the end of each fiscal ye ar, the company shall prepare a financial
accounting report which shall be audited by an accounting firm in accordance with laws. The
financial accounting report shall be prepared in accordance with laws, administrative
regulations and the regulations of the fin ancial department of the State Council.
The financial accounting report of a joint stock limited company shall be made available
for inspection by the shareholders at the company not later than twenty days before the annual
meeting of shareholders; a joint stock limited company that has publicly issued shares shall
announce its financial accounting report.
The premiums received by a company from the is suance of shares at an issue price in excess
of the par value of the shares, the amount of share proceeds from the issuance of no-par shares
that have not been credited to the r egistered capital, and other items required by the financial
department of the State Council to be included in the capital reserve shall be classified as the
capital reserve of the company.
The reserve of a company shall be used for making up losses, expanding the production and
business scale or increasing the registered capital of the company. Where the reserve of a
company is used for making up losses, the discretionary reserve and statutory reserve shall be
firstly used. If losses still cannot be made up, the capital reserve can be used according to the
relevant provisions. Where the statutory reserve is converted to increase registered capital, the
amount of such reserve retained shall not be less than 25% of the registered capital of the
company prior to the conversion.
No company may keep any accounting books other than the statutory accounting books.
No account shall be opened in the name of any individual for the deposit of a company’s funds.
Appointment and Dismissal of Accounting Firms
Pursuant to the Company Law, the employment or dismissal of an accounting firm
undertaking a company’s auditing business shall be decided by the shareholders’ general
meeting, the board of directors or the board of s upervisors in accordance with the provisions of
the company’s articles of association. When a company’s shareholders’ general meeting, the
board of directors or the board of supervisors vot es on the dismissal of an accounting firm, the
accounting firm shall be allowed to state its own opinions. A company shall provide true and
complete accounting documents, accounting books, financial accounting reports and other
accounting information to the accounting firm engaged by it, and shall not refuse, conceal or
misrepresent them.
The Articles of Association Guidelines provi de that the engagement of an accounting firm
by a company shall be decided by the shareholders’ general meeting. The board of directors shall
not engage any accounting firm before the decision is made by the shareholders’ general
m e e t i n g .T h ea u d i tf e et ob ep a i dt ot h ea c c o u n t ing firm shall be decided by the shareholders’
general meeting.
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Profits Distribution
When a company distributes its after-tax profi t for the current year, 10% of the profit shall
be accrued and included in the company’s statutory reserve. Such accrual is no longer required
when the accumulated amount of the company’s statutory reserve is 50% or more of the
company’s registered capital. Where the accu mulative amount of the company’s statutory
reserve is not enough to make up for the losses of the previous year, the current year’s profits
shall first be used to make up for the losses befor e the statutory reserve is accrued according to
the provisions of the preceding provision. Afte r having accrued statutory reserves from the
after-tax profits, a company can also set aside di scretionary reserve from the after-tax profits
upon a resolution made by the shareholders’ general meeting. The residual after-tax profits after
a company has made up its losses and accrued reserve shall be distributed by the company (in
the case of a joint stock limited company) in proportion to the shares held by its shareholders,
except as otherwise provided for in the company’ s articles of association. Profit shall not be
distributed for a company’s shares held by this company.
Where a company distributes profits to shareholders in violation of the provisions of the
Company Law, the shareholders shall refund the profits distributed to the company, and the
shareholders and the liable directors, supervisors and senior executives shall be held liable for
compensation if any loss i s caused to the company.
If the shareholders’ general meeting resolves t o distribute profits, the board of directors
shall do so within six months after the resolution is made.
Amendments to Articles of Association
Any amendments to the company’s articles of association must be made in accordance with
the procedures set out in the company’s articles of association. In relati on to matters involving
the company’s registration, its registrati on with the authority must also be changed.
Dissolution and Liquidation
According to the Company Law, a company shall be dissolved for the following reasons:
(i) the expiration of the business period stipulated in the company’s articles of
association or the occurrence of other c auses of dissolution stipulated in the
company’s articles of association;
(ii) dissolution by a resolution of the shareholders’ general meeting;
(iii) dissolution due to merger or split-up of the company;
(iv) suspension of the business license, bei ng ordered to close down or being revoked in
accordance with laws; or
(v) being dissolved by a people’s court in accordance with the provisions of Article 231 of
the Company Law.
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If any of the causes for dissolution as ment ioned in the preceding paragraph occurs, a
company shall publicize the cause(s) for dissolution through the National Enterprise Credit
Information Publicity System within ten days.
Where the company is dissolved in accordance with sub-paragraph (i) above, it may carry
on its existence by amending its articles of association or upon a resolution of the shareholders’
general meeting, which must be approved by more than two-thirds of the voting rights held by
the shareholders present at the shareholders’ general meeting. Where the company is dissolved
pursuant to sub-paragraphs (i), (ii), (iv) or (v) above, it shall be liquidated. The directors, who
are the liquidation obligors of the company, shall form a liquidation group to carry out
liquidation within 15 days from the date of occurrence of the cause of dissolution. The
liquidation group shall be composed of the directors, unless it is otherwise provided for in the
company’s articles of association or it is otherwise elected by the shareholders’ general meeting.
The liquidation obligors shall be liable for compensation if they fail to fulfill their obligations of
liquidation in a timely manner, and thus any loss is caused to the company or the creditors.
The liquidation group fails to be formed within the time limit or fails to carry out the
liquidation after its form ation, any interested party may request the people’s court to designate
relevant persons to form a liquidation group. The people’s court shall accept such requests and
organize a liquidation group to carry out the liquidation in a timely manner.
The liquidation group may exercise the following functions during the period of
liquidation:
(i) taking inventory of the property of the company and preparing a balance sheet and an
inventory of property, respectively;
(ii) notifying the company’s creditors by mail or public announcement;
(iii) handling outstanding company business related to liquidation;
(iv) paying off the taxes overdue by the company and the taxes incurred in the process of
liquidation;
(v) settling the company’s creditor’s rights and debts;
(vi) distributing the remaining property after all the debts of the company are paid off;
and
(vii) representing the company i n civil litigation activities.
The liquidation group shall notify the company’s creditors within ten days as of its
formation and shall make a public announcement in a newspaper or on the National Enterprise
Credit Information Publicity System within 60 day s. The creditors shall file their proof of claims
with the liquidation group within 30 days as of the receipt of the notice or within 45 days as of
the issuance of the public announcement in the ca se of failing to receive such notice. When filing
the proof of claim, the creditor shall describe the relevant matters of claim and provide the
relevant evidentiary materials. The liquidation group shall register the proof of claim. During
the period for filing proof of claims, the liquidation group shall not pay off for any of the
creditors.
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The liquidation group shall, after taking inventory of the property of the company and
preparing a balance sheet and an inventory of pr operty, make a plan of liquidation and report
the same to the shareholders’ general meeting or the people’s court for confirmation.
The remaining property of the company after payment of liquidation expenses, wages of
employees, social insurance premiums and statu tory compensations, payment of outstanding
taxes and settlement of the debts of the company shall, in the case of a limited liability company,
be distributed in proportion to capital contributions of the shareholders, and in the case of a
joint stock limited company, distributed in proportion to the shares held by the shareholders.
During the period of liquidation, the company survives, but shall not carry out any
business operation unrelated to the liquidation. The property of the company shall not be
distributed to the shareholders until it has been liquidated in accordance with the preceding
paragraph.
Where the liquidation group finds that the property of the company is not sufficient for
paying off the debts after taking inventory of the property of the company and preparing a
balance sheet and an inventory of property, it shall file an application to a people’s court for
bankruptcy liquidation. After the people’s cou rt accepts the application for bankruptcy, the
liquidation group shall hand over the liquidation matters to the bankruptcy administrator
designated by the people’s court.
The members of the liquidation group performing their duties of liquidation are obliged to
loyalty and diligence. Any member of the liquidation group who neglects to fulfill his/her
liquidation duties, thus causing any loss to the company shall be liable for compensation, and
any member of the liquidation group who cause any loss to any creditor due to his/her
intentional or gross negligence shall be liable for compensation.
Upon completion of the liquidation of the company, the liquidation group shall produce a
liquidation report, report the same to the sharehol ders’ general meeting or the people’s court for
confirmation, and submit the same to the company registration authority to apply for
deregistration of the company.
Where, after three years since the business license of a company is revoked, or the company
is ordered to close down or is revoked, the company fails to apply for its deregistration with the
company registration authority, the said author ity may announce the company’s deregistration
through the National Enterprise Credit Informa tion Publicity System for a period of no less
than 60 days. If there is no objection after the announcement period expires, the company
registration authority may deregister the company.
Overseas Listing
According to the Trial Measures, any initial public offering or listing overseas shall be filed
with the CSRC within 3 working days after the relevant application is submitted overseas.
Subsequent securities offerings of an issuer in t he same overseas market where it has previously
offered and listed securities shall be filed with the CSRC within 3 working days after the offering
is completed. Subsequent securities offerings and listings of an issuer in other overseas markets
than where it has offered and listed shall be filed pursuant to the provision in the first sentence
of this paragraph.
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Suspension and Termination of Listing
The Company Law has deleted provisions regarding suspension and termination of listing.
The Securities Law of the People’s Republic of China (2019 revision) ( 中華人民共和國證券法
（2019 年修訂）) has also deleted provisions regarding suspension of listing. Where listed
securities fall under the delisting circumstances stipulated by a stock exchange, the stock
exchange shall terminate its listing and tradi ng in accordance with the its business rules.
According to the Trial Measures, upon the occurrence of voluntary or mandatory delisting
after an issuer has offered and listed securities in an overseas market, the issuer shall submit a
report thereof to the CSRC within 3 working days after the occurrence and public disclosure of
the event.
Merger and Demerger
Companies may merge through mergers by absorption or through the establishment of a
newly merged entity. If it merges by absorption, the company which is absorbed shall be
dissolved. If it merges by forming a new corpo ration, both companies will be dissolved.
Securities Laws and Regulations
In October 1992, the State Council establi shed the Securities Committee and the CSRC.
The Securities Committee is responsible for coordinating the drafting of securities regulations,
formulating securities-related policies, planning the development of securities markets,
directing, coordinating and supervising all se curities-related institutions in the PRC and
administering the CSRC. The CSRC is the reg ulatory arm of the Securities Committee and is
responsible for the drafting of regulatory provisions of securities markets, supervising securities
companies, regulating public offers of securities by Chinese companies both at home and
abroad, regulating the trading of securities, c ompiling securities-related statistics and
undertaking research and analysis. On March 29, 1998, the State Council consolidated the
above two departments and reformed the CSRC.
The Provisional Regulations on the Issue and Trading of Shares ( 股票發行與交易管理暫行
條例), promulgated by the State Council and effective on April 22, 1993, regulates the
application and approval procedures for the public issue of shares, the trading of shares, the
acquisitions by listed companies, the deposit, settlement and transfer of listed shares, the
disclosure of information by listed companies, the investigation and penalties, and the
arbitration of disputes.
The Provisions of the State Council on Domestic Listing of Foreign Shares by Companies
Limited by Shares ( 國務院關於股份有限公司境內上市外資股的規定), promulgated by the State
Council and effective on Decembe r 25, 1995, mainly regulates the issue, subscription, trading
and payment of dividends of domestic listing foreign shares and the disclosure of information of
companies limited by shares with domestic listing foreign shares.
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The Securities Law of the People’s Republic of China ( 中華人民共和國證券法)l a t e s t
amended by the NPC Standing Committee on December 28, 2019 and effective from March 1,
2020 (the ‘‘PRC Securities Law ’’) provides a series of provisions regulating, among other things,
the issue and trading of securities, the acquisiti ons by listed companies, securities exchanges,
securities companies and the duties and resp onsibilities of the State Council’s securities
regulatory authorities in the PRC, and comprehen sively regulates activities in the PRC securities
market. The PRC Securities Law provides that a domestic enterprise must comply with the
relevant provisions of the State Council in issuing securities directly or indirectly outside the
PRC or listing and trading its securities outsid e the PRC. Currently, the issue and trading of
foreign issued shares are mainly governed by the rules and regulations promulgated by the State
Council and the CSRC.
Arbitration and Enforcement of Arbitral Awards
In accordance with the Arbitration Law of the People’s Republic of China ( 中華人民共和
國仲裁法) amended by the NPC Standing Committee o n September 1, 2017 and effective from
January 1, 2018 (the ‘‘ Arbitration Law ’’), the Arbitration Law is appl icable to economic disputes
involving foreign parties, where all parties have entered into a written agreement to refer the
matter to an arbitration committee constitute d in accordance with the Arbitration Law. An
arbitration committee may, before the promulgation by the China Arbitration Association of
arbitration regulations, formulate interim arbitration rules in accordance with relevant
regulations under the Arbitration Law and the Civil Procedure Law of the People’s Republic
of China. When parties concerned have reached an agreement for arbitration but one party
brings a suit in the people’s court, the people’s court shall not accept the case, except in the case
that the agreement for arbitration is invalid.
In accordance with the Arbitration Law, an arbitral award is final and binding on the
parties. If a party fails to comply with an award, the other party to the award may apply to the
people’s court for enforcement according to the Civil Procedure Law of the People’s Republic of
China. A people’s court may refuse to enforce an arbitral award made by an arbitration
commission if there is any procedural irregulari ty (including irregularity in the composition of
the arbitration committee or the making of an award on matters beyond the scope of the
arbitration agreement or the jurisdiction of the arbitration commission). Where a party applies
for enforcement of an arbitral award made in the PRC pursuant to laws which has come into
legal effect, and the person subject to enforcement or its properties are not located in the PRC,
the party may apply to a foreign court with jur isdiction over the case for recognition and
enforcement. Similarly, an arbitral award mad e by a foreign arbitration body may be recognized
and enforced by the people’s court in accordance with the principles of reciprocity or any
international treaty concluded or acceded to by the PRC.
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According to the Arrangement of the Suprem e People’s Court on Mutual Enforcement of
Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region ( 最
高人民法院關於內地與香港特別行政區相互執行仲裁裁決的安排) promulgated by the Supreme
People’s Court on January 24, 2000 and effective on February 1, 2000, and the Supplementary
Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral Awards
between the Mainland and the Hong Kong Special Administrative Region ( 最高人民法院關於內
地與香港特別行政區相互執行仲裁裁決的補充安排) promulgated by the Supreme People’s Court
on November 26, 2020 and effective on November 27, 2020, awards made by PRC arbitral
authorities can be enforced in Hong Kong, and Hong Kong arbitration awards are also
enforceable in the PRC.
Judicial Judgment and its Enforcement
In accordance with the Supreme People’s Court’s Arrangement on Reciprocal Recognition
and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland
and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements
between Parties Concerned ( 最高人民法院關於內地與香港特別行政區法院相互認可和執行當事
人協議管轄的
民商事案件判決的安排) promulgated by the Supreme People’s Court on July 3,
2008 and effective on August 1, 2008 and was abolished on January 29, 2024, as for an
enforceable final judgment made by a court in Chinese Mainland or Hong Kong court
concerning a civil and commercial case under a written agreement on jurisdiction, in which
payment must be made, the party concerned may, under the Arrangement, apply to a court in
Chinese Mainland or a Hong Kong court for reco gnition and enforcement. The term ‘‘written
agreement on jurisdiction’’ ref ers to agreements clearly stipu lated in written form by parties
concerned that a court in Chinese Mainland or a Hong Kong court has sole jurisdiction as to the
effectiveness of the Arrangement, so as to settle d isputes relevant to a certain legal relationship
t h a th a se i t h e ra r i s e no rm i g h ta r i s e .T h e r e f o re, the party concerned may apply to the court in
Chinese Mainland or the court of the Hong Kong Special Administrative Region to recognize
and enforce the final judgment made in Chinese Mainland or Hong Kong that meet certain
conditions of the aforementioned regulations.
On January 25, 2024, the Supreme People’s Court promulgated the Arrangement on
Reciprocal Recognition and Enforcement of Jud gments 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) (the ‘‘New Arrangement ’’), which came
into effect on January 29, 2024, aiming to estab lish a mechanism with further clarification on
and certainty for recognition and enforcemen t of judgments in a wider range of civil and
commercial matters between the Hong Kong Special Administrative Region and China.
APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS
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This Appendix is primarily intended to provide potential investors with an overview of the
Articles of Association, the following information is a summary and therefore may not contain
all the information that is material to potential investors.
ISSUANCE OF SHARES
The shares of the Company shall be issued in an open, fair and equal manner. Each share
o ft h es a m ec l a s ss h a l lr a n kpari passu with each other. Shares of a class in each issuance shall be
issued under the same terms and at the same price. All unit or individual subscribing for shares
of the same class in the same issuance shall pay the same price for each share subscribed for.
INCREASE, DECREASE AND REPURCHASE OF SHARES
According to the operation and development needs of the Company, subject to the laws,
regulations, the Company may increase the share capital in the following ways upon approval of
resolutions at the shareholders’ meetings:
(i) Issuing shares to non-specific objects;
(ii) Issuing shares to specific objects;
(iii) Distribution of bonus shares to existing shareholders;
(iv) Converting the reserve funds into share capital;
(v) Other methods as provided for by laws and administrative regulations and approved
by the CSRC and Hong Kong securities regulatory authorities.
The Company may decrease the registered share capital. When the Company reduces its
registered capital, it shall comply with the procedures stipulated in the Company Law, Listing
Rules and other regulations, the Articles of Association.
The Company may repurchase its own shares under the following circumstances, in
accordance with the laws, administrative regulations, regulations of the authorities and
regulations of the Articles of Association:
(i) Reducing the Company’s registered share capital;
(ii) Merging with other companies which hold our shares;
(iii) Using the shares for an employee stock ownership plan or equity incentive plan;
(iv) Purchasing its shares from shareholders who have voted against the resolutions on the
merger or division of the Company at a shareholders’ meeting upon their request;
(v) Use of shares for conversion of converti ble corporate bonds issued by the Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 553 ---
(vi) Necessary for the Company to maintain i ts value and protect the interests of the
Shareholders;
(vii) Other circumstances as provided for b y laws and administrative regulations and
approved by the CSRC and Hong Kong securities regulatory authorities.
The repurchase of the Company’s shares by the Company may be carried out through
public centralized trading, or other methods recognized under laws, administrative regulations
and approved by the CSRC. Where the relevant laws and regulations, normative documents, the
Listing Rules, or regulatory rules of Stock Exchange contain specific provisions regarding the
aforementioned share repurchase matters, such provisions shall prevail.
A resolution shall be passed at the shareholders’ meeting when the Company is to
repurchase its own shares under the circumstances (i) and (ii) set out above. In case of the
circumstances stipulated in (iii), (v) and (vi) above, a resolution of the Company’s Board shall
be passed by more than two-thirds of the Direct ors attending the Board meeting in accordance
with the regulations of the Articles of Association or authorization of the shareholders’ meeting.
After the Company has repurchased its own s hares in accordance with the circumstances
above, the shares repurchased shall be cancel ed within ten days from the date of purchase
(under the circumstance set out in (i) above), o r shall be transferred or canceled within six
months (under the circumstances set out in (ii) and (iv) above). If the Company repurchases its
shares under the circumstances set out in (iii), (v) and (vi) above, the total number of shares held
by the Company shall not exceed 10% of the total issued shares of the Company, and such
shares shall be transferred or canceled within three years.
TRANSFER OF SHARES
Shares issued prior to the initial public offering of the Company shall not be transferred
within one year from the date on which the shares of the Company are listed and traded on the
stock exchange. Where laws, administrative regulations, Listing Rules or the securities
regulatory authority of the state council have other provisions governing the transfer of
company shares held by shareholders of a list ed company, those provisions shall prevail.
The Directors and senior management of the Company shall declare the Company of their
holdings of shares of the Company and the changes therein. The shares transferred by them
during each year of their tenures as determined at the time of appointment shall not exceed 25%
of their total holdings of the same class shares of the Company. The shares of the Company held
by them shall not be transferred within one year from the date on which the Company’s shares
are listed for trading. The shares of the Company held by them shall not be transferred within
half a year from their departure from the Company. Where the relevant rules of Stock Exchange
impose specific transfer restrictions on overseas listed foreign shares, such Stock Exchange rules
shall prevail.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 554 ---
Any gains from sale of Company’s shares or o ther securities with the nature of equity by
the Directors and senior management members or shareholders holding 5% or more of the
Company’s shares within six months after their purchase of the same, and any gains from the
purchase of the shares or other securities with the nature of equity by any of the aforesaid
parties within six months after sale of the same shall be disgorged and paid to the Company, and
the Board of Directors of the Company shall recover such gains from the abovementioned
parties. However, there is an exception for secu rities companies that hold more than 5% of the
shares due to the purchase of surplus shares after the package sale, and other circumstances
stipulated by the CSRC.
Shares or other securities with the nature of e quity held by Directors, senior management
and individual shareholders as mentioned in t he preceding paragraph include shares or other
securities with the nature of equity held by their spouses, parents or children, or held by them by
using other people’s accounts.
If the Board of Directors of the Company fails to comply with the provision set forth
above, the Shareholders are entitled to request t he Board of Directors to do so within 30 days. If
the Board of Directors of the Company fails to comply within the aforesaid period, the
Shareholders are entitled to initiate litigation directly in the People’s Court of the PRC in their
own names for the interest of the Company.
If the Board of Directors fails to implement the provisions set forth above, the responsible
Directors shall bear joint and several liability in accordance with law.
SHAREHOLDERS AND SHAREHOLDERS’ MEETINGS
Shareholders
The rights of our shareholders are as follows:
(i) To receive dividends and other forms of inte rest distribution according to the number
of shares held;
(ii) To legally require, convene, preside over, participate in or authorize proxies of
shareholders to attend the shareholders’ meeting, make a statement at the
shareholders’ meeting and exercise corresponding voting rights;
(iii) To supervise operations of the Company, provide suggestions or submit queries;
(iv) To transfer, grant or pledge the Company’s shares held according to the provisions of
the laws, administrative regulations, Listing Rules and the Articles of Association;
(v) To read the Articles of Association, the register of shareholders, shareholders’
meeting minutes, resolutions of meetings of the Board of Directors and publicly
disclosed financial accounting reports, qualified shareholders may read the
Company’s accounting books and vouchers;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 555 ---
(vi) To participate in the distribution of the remaining assets of our Company according
to the proportion of shares held upon our termination or liquidation;
(vii) To require our Company to acquire the shares from shareholders voting against any
resolutions adopted at the shareholders’ meeting concerning the merger and division
of the Company;
(viii) Other rights conferred by laws, administrative regulations, regulations of the
authorities, regulatory rules where the Com pany’s shares are listed, or the Articles
of Association.
Shareholders requesting to read or copy the Company’s relevant materials shall comply
with the provisions of the Company Law, the Secu rities Law, Listing Rules and other laws and
administrative regulations.
If the content of the resolution of the Company’s shareholders’ meeting or Board of
Directors violates laws, administrative regulations, the shareholders have the right to request
the court to clarify it invalid. If the convening procedures or voting methods of the
shareholders’ meeting or the Board of Directors violate laws, administrative regulations or
the Articles of Association, or the content of the resolution violates laws, administrative
regulations and the Articles of Association, the shareholders have the right to request the court
to revoke the resolution within 60 days from the d ate on which the resolution is made. However,
this right shall not apply if the defects in the procedure of convening the meeting or in voting
methods are merely minor and have no m aterial impact on the resolution.
In the event of any loss caused to the Company as a result of violation of any laws,
a d m i n i s t r a t i v er e g u l a t i o n so rA r t i c l e so fA s s o c i a t i o nb yt h eD i r e c t o r so rs e n i o rm a n a g e m e n t
(other than Audit Committee members) when p erforming their duties in the Company, the
shareholders holding more than 1% shares separately or jointly for over 180 consecutive days
may submit a written request to the Audit Commi ttee to file an action with the court. Where
Audit Committee members violate laws, administrative regulations or the Articles of
Association in their duty performance and cause loss to the Company, the shareholders
holding more than 1% shares separately or joint ly for over 180 consecutive days may submit a
written request to the Board of Directors to file an action with the court.
I nt h ee v e n tt h a tt h eA u d i tC o m m i t t e eo rt h eB o a r do fD i r e c t o r sr e f u s et of i l ea na c t i o n
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 irreparable damage to the interests of the
Company, the shareholder(s) specified in th e preceding paragraph may, in their own name,
directly file an action to the court for the interest of the Company.
In the event of any other person infringes upo n the legitimate rights and interests of the
Company and causes losses thereto, the sharehold er(s) specified in this Ar ticles of Association
may file an action with the court pursuant to the provisions of the preceding paragraphs.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 556 ---
The obligations of shareholders are as follows:
(i) To abide by laws, administrative regulations and the Articles of Association;
(ii) To provide Share capital according to t he Shares subscribed and the subscription
methods;
(iii) Not to withdraw Shares unless prescribed otherwise 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 maintain confidentiality of the Company’s trade secrets;
(vi) To perform other duties prescribed in l aws, administrative regulations and the
Articles of Association.
Shareholders of a company who abuse their shareholders’ rights and cause the company or
other shareholders to suffer damages shall bear compensation liability in accordance with the
law. Shareholders of a company who abuse the independent legal person status of the company
and limited liability of shareholders to evade d ebts and cause damage to the interests of the
creditors of the company shall bear joint liability for the company’s debt.
General Provisions for Shareholders’ Meetings
The shareholders’ meeting, composed of all shareholders, is the organ of authority of the
Company. The shareholders’ meeting shall exerci se the following rights in accordance with the
law based on the proportion of shareholders’ capital contributions:
(i) To elect or replace the Directors who are not staff representatives, and to decide on
matters relating to the remuneration of Directors;
(ii) To examine and approve reports of the Board of Directors;
(iii) To examine and approve the Company’s pr oposals for profit distribution plans and
loss recovery plans;
(iv) To decide on any increase or decrease of the Company’s registered capital;
(v) To decide on the issue of corporate bonds by the Company and the listing plan;
(vi) To decide on matters such as merger, division, dissolution and liquidation or change
of corporate form of the Company;
(vii) To amend the Articles of Association;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 557 ---
(viii) Resolution on appointment and dismissal of an accounting firm engaged to conduct
the Company’s audit services;
(ix) To examine and approve the guarantees stipulated in the Articles of Association that
need to be examined and approved by the Shareholders’ meeting;
(x) To examine matters relating to the purch ases and sales of the Company’s material
assets within one year, which exceed 30% of the Company’s latest audited total assets;
(xi) To examine and approve matters re lating to changes in the use of proceeds;
(xii) To examine and approve the equity incentive plans and employee stock ownership
plans;
(xiii) To examine other matters as required by th e laws, administrative regulations,
departmental rules, Listing Rules or the Articles of Association of the Company,
which shall be decided by the shareholders’ meeting.
Unless otherwise provided by laws, administra tive regulations, departmental rules, or the
securities regulatory rules of the jurisdicti on where the Company’s shares are listed, the
aforesaid powers of the shareholders’ meeting shall not be exercised by the board of directors or
any other institution or individual on its behalf upon authorization.
The following acts of external guarantee of the Company shall be submitted to the
shareholders’ meeting for d eliberation and approval:
(i) Any guarantee to be provided after the to tal amount of external guarantees provided
by the Company and the subsidiaries it co ntrols has exceeded 50% of the Company’s
net assets as audited in the latest period;
(ii) Any guarantee to be provided after the to tal amount of external guarantees provided
by the Company has exceeded 30% of the Company’s total assets audited in the latest
period;
(iii) Basis of the cumulative guarantee amount within one year, the total amount of
external guarantees provided by the C ompany has exceeded 30% of the Company’s
total assets audited in the latest period;
(iv) Any guarantee to be provided for a party whose ratio of liabilities to assets exceeds
70%;
(v) The single guarantee for an amount more than 10% of the Company’s net assets
audited in the latest period;
(vi) The guarantee to be provided to a shareholder or related party thereof.
When the shareholders’ meeting reviews propos als for guarantees provided to shareholders
and their affiliates, the shareholder in question shall not participate in the voting on such
proposals. The voting on such proposals shall be passed by a majority of the voting rights held
by the other shareholders present at the shareholders’ meeting.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 558 ---
The company may provide guarantees for whol ly-owned subsidiaries, wholly-owned
subsidiaries provide guarantees for the compan y or other wholly-owned subsidiaries, such
guarantees shall be exempt from the applic ation of items (i) to (v) of this Article.
The shareholders’ meetings are divided into annual shareholders’ meetings and
extraordinary shareholders’ meetings. The annual shareholders’ meeting shall be convened
once a year and be held within six months after the end of the previous fiscal year.
The Company shall convene an extraordinary shareholders’ meeting within two months
from the date of the occurrence of any of the following circumstances:
(i) The number of Directors is less than the number provided for in the PRC Company
Law or less than two-thirds of the number prescribed in the Articles of Association;
(ii) The uncovered losses of our Company reach one-third of its total share capital;
(iii) A written request from shareholders who separately or jointly hold 10% or more
shares in the Company;
(iv) The Board of Directors consider it necessary;
(v) The Audit Committee proposes that such a meeting shall be held;
(vi) The Independent Non-Executive Direc tors propose to the Board of Directors to
convene a meeting in accordance with the pro visions of the Articles of Association;
(vii) Other circumstances conferred by the laws , administrative regulations, departmental
rules, Listing Rules and the Articles of Association.
Assembling of Shareholders’ Meetings
The Board of Directors shall convene the shar eholders’ meeting within the stipulated time
limit.
After obtaining the consent of a majority of all independent non-executive directors, an
independent non-executive director has the right to propose to the Board of Directors to
convene a special shareholders’ meeting. Upon r eceiving such a proposal, t he Board of Directors
shall, in accordance with the provisions of laws, a dministrative regulations, and the company’s
Articles of Association, provide a written response within 10 days of receipt, indicating whether
it agrees or disagrees to convene a special shareholders’ meeting.
If the Board of Directors agrees to convene a sp ecial shareholders’ meeting, it shall issue a
notice of the shareholders’ meeting within 5 days after making the board resolution.
If the Board of Directors disag rees to convene a special share holders’ meeting, it shall state
the reasons and notify the independent non-executive director.
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The Audit Committee has the right to propose to the Board of Directors to convene a
special shareholders’ meeting and shall submit such proposal in writing to the Board of
Directors. The Board of Directors shall, in accordance with the provisions of laws,
administrative regulations, and this Articles o f Association, provide a written response within
10 days of receipt, indicating whether it agrees or disagrees to convene a special shareholders’
meeting.
If the Board of Directors agrees to convene a sp ecial shareholders’ meeting, it shall issue a
notice of the shareholders’ meeting within 5 days after making the board resolution. Any
changes to the original proposal in the notice shall be subject to the consent of the Audit
Committee.
If the Board of Directors disag rees to convene a special shareholders’ meeting, or fails to
provide feedback within 10 days of receipt, it shall be deemed that the Board of Directors is
unable or fails to perform its duty to convene the shareholders’ meeting. In such cases, the Audit
Committee may convene and preside over the meeting on its own.
Shareholders who individually or collectively hold more than 10% of the company’s shares
have the right to request the Board of Directors to convene a special shareholders’ meeting and
shall submit such request in writing to the Board of Directors. The Board of Directors shall, in
accordance with the provisions of laws, administrative regulations, and the company’s Articles
of Association, provide a written response within 10 days of receipt, indicating whether it agrees
or disagrees to convene a speci al shareholders’ meeting.
If the Board of Directors agrees to convene a sp ecial shareholders’ meeting, it shall issue a
notice of the shareholders’ meeting within 5 days after making the board resolution. Any
changes to the original request in the notice shall be subject to the consent of the relevant
shareholders.
If the Board of Directors disag rees to convene a special shareholders’ meeting, or fails to
provide feedback within 10 days of receipt, shareholders who individually or collectively hold
more than 10% of the company’s shares have the right to propose to the Audit Committee to
convene a special shareholders’ meeting and shall submit such request in writing to the Audit
Committee.
If the Audit Committee agrees to convene a sp ecial shareholders’ meeting, it shall issue a
notice of the shareholders’ meeting within 5 da ys after receiving the request. Any changes to the
original proposal in the notice shall be subject to the consent of the relevant shareholders.
If the Audit Committee fails to issue a noti ce of the shareholders’ meeting within the
prescribed period, it shall be deemed that the Audit Committee does not convene and preside
over the shareholders’ meeting. In such cases, sh areholders who individually or collectively hold
more than 10% of the company’s shares for a continuous period of 90 days or more may
convene and preside over the meeting on their own.
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Proposals and Notices of Shareholders’ Meetings
The company may convene a shareholders’ meeting, and the Board of Directors, the Audit
Committee, as well as shareholders who individually or collectively hold more than 1% of the
company’s shares, have the right to submit proposals to the company.
Shareholders who individually or collectively hold more than 1% of the company’s shares
may submit a temporary proposal in writing to the convener 10 days prior to the shareholders’
meeting. The convener shall issue a supplementary notice of the shareholders’ meeting within 2
days after receiving the proposal, announcing the content of the temporary proposal in
accordance with the securities regulatory rule s of the place where the Company’s shares are
listed, and submit such temporary proposal to the shareholders’ meeting to review. Regarding
the issuance of the supplementary notice for the shareholders’ meeting, if the securities
regulatory rules of the place where the Company’s shares are listed contain specific provisions,
such provisions shall be followed, provided that they do not violate the Company Law or the
Securities Law. However, this does not apply if t he temporary proposal violates the provisions
of laws, administrative regulations, or the company’s Articles of Association, or if it is not
within the scope of the shareholders’ meeting’ s authority. If, according to the securities
regulatory rules of the place where the company’s stock is listed, the shareholders’ meeting must
be postponed due to the issuance of a supplementary notice, the meeting shall be postponed in
accordance with the provisions of the securi ties regulatory rules of the place where the
company’s stock is listed.
Except for the circumstances specified in the preceding paragraph, after the convener has
issued the notice of the shareholders’ meeting, it shall not modify the proposals already listed in
the notice or add new proposals.
The shareholders’ meeting shall not vote on or make resolutions regarding proposals that
are not listed in the notice of the shareholders’ meeting or that do not comply with the
provisions of the company’s Articles of Association.
The convener shall notify each shareholder of the time, venue, and agenda items of the
meeting in writing (including by announcement) at least 21 days (excluding the day of notice but
including the day of the meeting) before the annual shareholders’ meeting, and at least 15 days
(excluding the day of notice but including the day of the meeting) before the special
shareholders’ meeting. Where laws, regulations, or the securities regulatory rules of the place
where the company’s stock is listed provide otherwise, such provisions shall prevail.
A notice of a shareholders’ meeting shall include the following:
(i) The time, venue and duration of the meeting;
(ii) Matters and proposals submitted to the meeting for consideration;
(iii) A prominent written statement that all Shareholders are entitled to attend
shareholders’ meeting and are entitled to appoint in writing a proxy to attend and
vote at the meeting and that such proxy need not be a shareholder of the Company;
(iv) The record date of registration of Shareholders entitled to attend the shareholders’
meeting;
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(v) The name and telephone number of the regular contact person for the meeting;
(vi) The time and procedure for voting online or through other means.
After the shareholders’ meeting notice has been issued, the meeting should not be
postponed or canceled without a valid reason, and the proposals listed in the notice should not
be canceled. In the event of a postponement or cancellation, the convener shall announce and
explain the reasons at least two business days before the originally scheduled date. If the
securities regulatory rules of the place where the company’s stock is listed have special
provisions regarding the procedures for postponing or canceling a shareholders’ meeting, these
provisions shall be followed, provided that they do not violate the laws, regulations, rules, or
other relevant regulations.
Voting and Resolutions of the Shareholders’ Meeting
The resolutions of the Shareholders’ meeting are divided into ordinary resolutions and
special resolutions.
An ordinary resolution at a shareholders’ meeting shall be passed by more than half of the
voting rights held by the shareholders present at the shareholders’ meeting.
A special resolution at a shareholders’ meeting shall be passed by at least two-thirds of the
voting rights held by the shareholders present at the shareholders’ meeting.
The following matters shall be approved by the shareholders’ meeting through ordinary
resolutions:
(i) Work reports of the Board of Directors;
(ii) Plans of earnings distribution and recovery of losses schemes drafted by the Board of
Directors;
(iii) Appointment or dismissal of the members of the Board of Directors, their
remunerations and the payment method;
(iv) Other matters other than those approved by special resolution stipulated in the laws,
administrative regulations, Listing Rules or the Articles of Association.
The following matters shall be approved by special resolution at the shareholders’ meeting:
(i) The increase or reduction of the registered capital of the Company;
(ii) The division, merger, dissolution and liquidation of the Company;
(iii) Any amendment to the Articles of Association;
(iv) The purchase and sale of material assets or amount of guarantee provided by the
Company within one year valued at more than 30% of the audited total assets of the
Company as at the most recent period;
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(v) Share incentive plan;
(vi) Other matters as required by the laws, admi nistrative regulations, Listing Rules or the
Articles of Association, and considered by the shareholders’ meeting, by way of an
ordinary resolution, to be of a nature which may have a material impact on the
Company, shall be passed by a special resolution.
Shareholders shall exercise voting rights based on the number of shares with voting rights
held by them, and each share shall be entitled to one vote. In accordance with applicable laws,
administrative regulations, departmental rule s, normative documents, Listing Rules, and the
securities regulatory rules of the place where th e Company’s shares are listed, if any shareholder
is required to abstain from voting or is restricted to voting only ‘for’ or only ‘against’ on any
particular resolution, any vote cast by such shareholder (or its proxy) in violation of such
requirements or restrictions shall be disregarded in the voting results. This does not apply if a
shareholder is required to abstain from voting on a specific matter under the securities
regulatory rules of the jurisdiction where the Company’s shares are listed. When voting, a
shareholder with two or more votes is not required to cast all votes uniformly as ‘for’, ‘against’,
or ‘abstain’.
Where material issues affecting the interests of minority shareholders are considered at the
shareholders’ meeting, the votes of minority shareholders shall be counted separately. The
separate votes counting results shall be disclosed publicly in a timely manner.
The Company’s own shares held by the Company do not carry voting rights and such
shares shall not count towards the total number of shares with voting rights at shareholders’
meeting.
If a shareholder purchases shares with voting rights 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 and shall not be counted towards the
total number of shares with voting rights present at the shareholders’ meeting for 36 months
after the purchase.
When the shareholders’ meeting reviews matters related to related-party transactions,
associated shareholders and its close associate s (as defined in Listing Rules, the same below)
shall not participate in the voting, and the number of shares they represent with voting rights
shall not be included in the total number of valid votes; the announcement of the shareholders’
meeting resolution shall fully disclose the voting situation of non-associated shareholders
(subject to the requirements of the stock exchange).
BOARD OF DIRECTORS
Directors
Directors may include executive Directors, non-executive Directors, and independent
non-executive Directors. The non-executive director means the director who does not hold a
management position in the Company, while an independent non-executive director means the
director who meets the qualification requirements set forth in the Articles of Association.
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Directors of the Company shall be individuals, and a person may not serve as a Director of
the Company in case of any of the following circumstances:
(i) The person without civil conduct capacity or with limited civil conduct capacity;
(ii) The person who has committed an offense of corruption, bribery, conversion of
property, misappropriation of property or sabotaging the market economic order of
socialism and has been punished therefor; or who has been deprived of his/her
political rights, in each case where less th an 5 years have elapsed since the date of the
completion of implementation of such punishment or deprivation; in the case of a
suspended sentence, for a period not exceeding two years from the date of expiry of
the probationary period;
(iii) The person who is a former director, factory director or General Manager (President)
of a company or enterprise which is insolvent and under liquidation and he/she is
personally liable for the insolvency of such company or enterprise, where less than 3
years have elapsed since the date of the completion of such insolvency and liquidation
of the company or enterprise;
(iv) The person who is a former legal representative of a company or enterprise which had
its business license revoked and was ordered to shut down due to a violation of the
law and who incurred personal liability, whe re less than 3 years have elapsed since the
date of such revocation of the business license;
(v) The person listed as a judgment defaulter by the court of the PRC because the amount
of debt he bears is relatively large and the debt is not paid off when it is due;
(vi) The person has been banned by the CSRC from access to the securities market, and
the term of prohibition has not expired;
(vii) The person publicly determined by a stock exchange as unfit to serve as a director or
senior management of a listed company, where the prescribed period has not yet
expired; and
(viii) Other contents stipulated by laws, administrative regulations or departmental rules or
the securities regulatory rules of the place w here the shares of the Company are listed,
or relevant regulatory authority provisions.
Where a Director is elected or appointed in violation of the provisions above, the election,
appointment or designation shall be invalid. If a Director falls under the provisions above
during his or her tenure, the Company shall dismiss him or her from office.
Directors are elected or replaced by the share holders’ meeting in accordance with the laws
and may be removed from office by the shareholders’ meeting before the expiration of their term
(while this shall not affect any claims that may be made under any contract). The term of office
for directors is three years, and they may be re-e lected for consecutive terms, unless otherwise
provided by applicable laws, regulations, the Arti cles of Association, or the securities regulatory
rules of the place where the Company’s shares are listed.
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The term of office for directors begins on the date of their appointment and ends when the
current Board of Directors’ term expires. If the t erm of office for directors expires and a timely
re-election has not taken place, the outgoing dir ectors shall continue to perform their duties in
accordance with laws, administrative regulations , departmental rules, the securities regulatory
rules of the place where the Company’s shares are listed, and the Company’s Articles of
Association until the newly elected directors take office.
Directors may concurrently hold the position of senior management positions, but the total
number of directors who concurrently hold the position of senior management positions and
directors served by employee representativ es shall not exceed half of the total number of
directors of the company.
Directors shall comply with laws, administrative regulations, and the company’s Articles of
Association and owe the following duties of diligence to the company:
(i) They shall exercise the rights granted to them by the company with prudence,
diligence, and care to ensure that the company’s business activities comply with
national laws, administrative regulations , and all national economic policies, and that
business operations do not exceed the scope of business specifi ed in the business
license;
(ii) They shall treat all shareholders fairly;
(iii) They shall ensure sufficient time and en ergy to participate in company affairs, and
prudently assess the risks and benefits associated with matters under deliberation; in
principle, directors shall attend board meetings in person. If unable to do so and
authorization is given to another director t o attend on their behalf, the director must
exercise due care in selecting the proxy, specify the scope of authorization and voting
intentions in clear terms, and no general power of authorization shall be granted;
(iv) They shall promptly understand the statu s of the company’s business operations and
management;
(v) They shall provide relevant information and materials to the Audit Committee
truthfully and shall not obstruct the Audit Committee from exercising their powers;
(vi) Other duties of diligence as stipulat ed by laws, administrative regulations,
departmental rules, the securities regulatory rules of the place where the company’s
stock is listed, and the company’s Articles of Association.
Directors may resign before the expiration of their term. Resignation of a director shall be
submitted to the Board of Directors in writing. T he resignation shall take effect on the date the
Company receives the resignation letter. The Com pany shall disclose the relevant circumstances
within two days.
If the resignation of a director causes the num ber of directors on the board to fall below the
statutory minimum, the outgoing director shall continue to perform their duties in accordance
with laws, administrative regulations, depar tmental rules, Listing Rules and the company’s
Articles of Association until the n ewly elected director takes office.
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Without the provisions of the company’s Articles of Association or the lawful
authorization of the Board of Directors, no director shall act on behalf of the company or
the Board of Directors in their personal capa city. When a director acts in their personal
capacity, if a third party would reasonably bel ieve that the director is acting on behalf of the
company or the Board of Directors, the director shall make a prior declaration of their position
and identity.
Board of Directors
The Company has established a Board of Directors.
The Board of Directors shall consist of nine directors, all of whom shall be elected by the
shareholders’ meeting, including three indepe ndent non-executive Directors, with at least one
independent non-executive Director possessing appropriate professional qualifications or
accounting/financial management expertise. Additionally, at least one independent
non-executive Director must ordinarily reside in Hong Kong.
The Board shall exercise the following duties and powers:
(i) To convene shareholders’ meetings and report its work to the shareholders’ meetings;
(ii) To implement the resolution s of the shareholders’ meetings;
(iii) To resolve business operation plans and investment plans of the Company;
(iv) To formulate the profit distribution plans and plans for recovery of losses of the
Company;
(v) To formulate plans of the Company regarding increase or reduction of the registered
capital, issuance of bonds or other securities and listing;
(vi) To draft plans for significant acquisit ions of the Company, the purchase of Shares of
the Company, merger, division, dissolution or change of the form of the Company;
(vii) To decide on external guarantees not cove red by relevant provisions of the Articles of
Association;
(viii) To determine on matters such as the externa l investments, purchase or sale of assets,
assets mortgage, external guarantee, entrusted wealth management, connected
transactions and external donations of t he Company, subject to compliance with
the securities regulatory rules of the juri sdiction where the Company’s shares are
listed and within the scope of authorization granted by the shareholders’ meeting;
(ix) To determine the internal management structure of the Company;
(x) To determine the appointment or dismiss al of the General Manager of the Company,
the Board Secretary and other senior manag ement, and determine their remuneration,
rewards and penalties; and based on the nomination of the General Manager, to
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determine the appointment or dismissal of the senior management including Deputy
General Managers and chief financial o fficer of the Company and determine their
remuneration, rewards and penalties;
(xi) To formulate the basic management system of the Company;
(xii) To formulate proposals for any amendment of the Articles of Association;
(xiii) To review and decide on other corporate gov ernance policies to be implemented by
the Company’s internal management bodies and senior management personnel, except
for corporate governance policies that a re required by laws or regulations to be
reviewed and approved by the shareholders’ meeting;
(xiv) To propose to the shareholders’ meeting for appointment or replacement of the
accounting firms which provide audit services to the Company;
(xv) To listen to work reports of the General Manager of the Company and review his/her
work;
(xvi) Other duties as stipulated in laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the shares of the Company are listed and
the Articles of Association.
The Board of Directors shall es tablish rigorous review and decision-making procedures.
Matters exceeding the scope of the decision-making authority of the Board of Directors shall be
submitted to the shareholders’ meeting for consideration. For major investment projects, the
Board shall organize evaluations by relevant exp erts and professionals, and submit them to the
shareholders’ meeting for approval.
The Board of Directors shall have one Chair man. The Chairman shall be elected by the
Board of Directors with the approv a lo fam a j o r i t yo fa l ld i r e c t o r s .
The Board of Directors shall convene at least four regular meetings per year, called by the
Chairman, and all directors, General Manager and the Board Secretary shall be notified in
writing at least 14 days (excluding the notice date but including the meeting date) prior to the
meeting.
Shareholders representing more than one-tenth of the voting rights, more than one-third of
the directors, or the Audit Committee may propose to convene an extraordinary meeting of the
Board of Directors. The Chairman shall conv ene and preside over the Board of Directors
meeting within 10 days after receiving the proposal.
A meeting of the Board of Directors shall be held only if more than half of the directors are
present. Resolutions of the Board of Director s must be passed by a majority of all directors.
Voting on resolutions of the Board of Directors shall be conducted on a one person, one vote
basis.
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If a director has an associated relationship with the subject matter of a resolution of the
B o a r do fD i r e c t o r s ,o rw i t ha n yr e l a t e de n t e r p r i se or individual, such director shall promptly
submit a written report to the Board of Directors. Such associated director shall not exercise the
voting right on such resolution, nor shall such director act on behalf of other directors in
exercising the voting right. A meeting of the Board of Directors may be held if more than half of
the directors without associated relationships are present, and resolutions made at the meeting
of the Board of Directors must be passed by a majority of the directors without associated
relationships. If the number of directors without associated relationships attending the Board of
Directors is less than three, the matter shall be submitted to the shareholders’ meeting for
review. Furthermore, except as permitted und er Listing Rules, or otherwise allowed by the
Stock Exchange, no director shall vote on any Board resolution approving any contract,
arrangement or other proposal in which the director or his/her close associates (as defined in
Listing Rules) have a material interest, nor shall such director exercise voting rights on behalf of
other directors.
Senior Management Members
The company shall have one General Manager and shall be appointed or dismissed by the
Board of Directors.
The General Manager, Deputy General Manager s, Chief Financial Officer, Secretary to the
Board of Directors are considered senior management personnel of the company.
The provisions in the company’s Articles of Association regarding the fiduciary duties and
duties of care of directors shall also ap ply to senior management personnel.
The General Manager is responsible to the Board of Directors and exercises the following
powers in accordance with the provisions of the Articles of Association or as authorized by the
Board of Directors:
(i) To preside over the company’s production and business management activities,
implement the resolutions of the Board of Di rectors, and report work to the Board of
Directors;
(ii) To implement the company’s annual business plan and investment programs;
(iii) To draft proposals for the establishment of internal management institutions of the
company;
(iv) To draft the company’s basic management systems;
(v) To formulate specific regulations of the company;
(vi) To propose to the Board of Directors the appointment or dismissal of Deputy General
Managers and the Chief Financial Officer;
(vii) To decide on the appointment or dismissal of management personnel other than those
who should be appointed or dismissed by the Board of Directors;
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(viii) To approve transactions and related transa ctions other than those that considered
and approved by the shareholders’ meeting and the Board of Directors, but if there
are relevant provisions in laws, regulati ons and regulatory authorities, those
provisions shall prevail;
(ix) Other powers granted by the company’s Articles of Association or the Board of
Directors.
The General Manager shall attend the meetings of the Board of Directors.
Senior management personnel of the company s hall faithfully perform their duties and
safeguard the maximum interests of the company and all shareholders.
If senior management personnel fail to faith fully perform their duties or violate their
fiduciary duties, causing damage to the interests of the company and the public shareholders,
t h e ys h a l lb el i a b l ef o rc o m p e n s ation in accordance with the law.
FINANCIAL ACCOUNTING SYSTEM, DIS TRIBUTION OF PROFITS AND AUDIT
Financial Accounting System
The Company shall formulate its financial and accounting systems in accordance with
laws, administrative regulations, the securities regulatory rules of the place where the shares of
the Company are listed and regulations of relevant departments.
The Company shall prepare financial accounting reports at the end of each fiscal year,
which shall be audited by a accounting firm in accordance with the laws. The Company shall
disclose its annual results announcement within three months after the end of each fiscal year.
The interim results announcement shall be disclosed within two months after the end of the first
half of each fiscal year. The Company shall disclose annual reports and interim reports in
compliance with relevant laws and regulations , requirements of the CSRC and rules of the place
where the Company’s shares are listed.
The Company shall not establish the statutory account books accounts other than those
provided by law. Any assets of the Company shall not be kept under any account opened in the
name of any individual.
Distribution of Profits
When distributing after-tax profits of the year, the Company shall allocate 10% of its
after-tax profits for the Company’s statutory reserve fund. When the aggregate balance in the
statutory reserve fund has reached 50% or mor e of the Company’s registered capital, the
Company needs not to make any further allocations to that fund.
Where the Company’s statutory reserve fund is not enough to make up losses of the
Company for the preceding year, the current year’s profits shall be applied firstly to make up the
losses before being allocated to the statutory re serve in accordance with the preceding provision.
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After the company has extracte d the statutory surplus reserv e from the post-tax profit, it
may, upon resolution of the shareholders’ meeting, extract a discretionary surplus reserve from
the post-tax profit.
The remaining post-tax profit a fter the company has made up for losses and extracted
surplus reserves shall be distributed in proportion to the shares held by the shareholders unless
the Articles of Association provide for exceptions.
The company must appoint one or more collection agents in Hong Kong for the
H-shareholders. The collection agent shall collect and hold on behalf of the relevant
H-shareholders the dividends and other payments distributed by the company in respect of
the H Shares, pending payment to such H-shareholders. The collection agent appointed by the
company shall meet the requirements of laws and re gulations and the securities regulatory rules
of the place where the company’s share is listed.
The Company’s Board of Directors, the Audit Committee and shareholders’ meeting will
fully consider the opinions of independent directors and public investors in the decision-making
and argumentation process of the profit distribution policy.
The Company’s profit distribution may take the form of cash, shares, or a combination of
both. If the conditions for cash dividends are met, the company shall in principle prioritize the
cash dividend method of profit distribution.
Internal Audit
The Company implements an internal audit system which is equipped with dedicated audit
personnel to supervise and examine the company’ s operational activities, risk management,
internal control systems, financial reporting, and other relevant matters.
The Company’s internal audit system shall be implemented after approval by the Board of
Directors and disclosed to the public.
Appointment of an Accounting Firm
The Company shall appoint such accounting firm which has complied with the Securities
Law, and the securities regulatory rules of the place where the shares of the Company are listed
for carrying out the audit for the accounting st atements, net asset verification, and other
relevant consultancy services. The term of appointment shall be 1 year and can be re-appointed.
The appointment, dismissal, and remuneration (or the method for determining
remuneration) of an accounting firm shall be decided by the shareholders’ meeting through
an ordinary resolution. The Board shall not appoint accounting firm before the approval of the
shareholders’ meeting.
The Company guarantees that it shall provide the appointed accounting firm with true and
complete accounting proofs, accounting books, financial and accounting reports and other
accounting information, and that it engages without any refusal, withholding, and
misrepresentation.
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The auditing fee of the accounting firm or the method of determining audit fee shall be
determined by the shareholders’ meeting.
In the event of termination of the appointment or non-renewal of appointment of an
accounting firm, the Company shall notify th e accounting firm in advance and subject to the
approval by a shareholders’ meeting resolution.
An accounting firm proposing to resign shall state its opinions in the shareholders’ meeting
whether the Company has committed any improper act.
MERGER, DIVISION, CAPITAL INCREAS E, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Inc rease, and Capital Reduction
Merger of the Company may take the form of absorption or establishment of a new
company.
In case of merger by absorption, a company absorbs any other company and the absorbed
company is dissolved. In case of merger by new establishment, two or more companies merge
into a new one and the parties to the merger are dissolved.
If the Company is involved in a merger, the par ties to the merger shall enter into a merger
agreement, and shall prepare a balance sheet an d a property list. The Company shall notify its
creditors within 10 days as of the date of the resolution for the merger and shall publish an
announcement on the designated press or the National Enterprise Credit Information Publicity
System ( 國家企業信用信息公示系統) within 30 days as of the date of such resolution. A creditor
may within 30 days as of the receipt of the notice or, in case where he/she fails to receive such
notice within 45 days of the date of the announcement, to demand the Company to repay its
debts or provide guarantees for such debts. Whe re the securities regulatory rules at the place
where the shares of the Company are listed have separate provisions, such provisions shall also
be complied with simultaneously.
When the Company is merged, the claims and debts of each party to the merger shall be
succeeded to by the company surviving the merge r or the new company established subsequent
to the merger.
Where there is a division of the Company, its a ssets shall be divide d accordingly. Where
there is a division of the Company, a balance sheet and property list shall be prepared. The
Company shall notify its creditors within 10 days as of the date of the resolution for the division
and shall publish an announcement on the designated press or the National Enterprise Credit
Information Publicity System ( 國家企業信用信息公示系統) within 30 days as of the date of such
resolution. Unless a written agreement has been entered into, before the division, by the
Company and its creditors in relation to the rep ayment of debts, debts of the Company prior to
the division shall be jointly assumed by the surviving companies after the division.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1 9–


--- page 571 ---
Where the Company needs to reduce its registered capital, it shall prepare a balance sheet
and property list. The Company shall notify its creditors within 10 days as of the date of the
resolution for the reduction of its registered capital and shall publish an announcement on the
designated press or the National Enterpris e Credit Information Publicity System ( 國家企業信用
信息公示系統) within 30 days as of the date of such resolution. A creditor may within 30 days as
of the receipt of the notice or, in case where he/sh e fails to receive such notice within 45 days of
the date of the announcement, to demand the Company to repay its debts or provide guarantees
for such debts.
In the event of a merger or division of a company, if there is a change in the registration
items, the Company shall go through the change registration with the company registration
authority in accordance with the law; If the Company is dissolved, it shall go through the
deregistration of the procedures company in accordance with the law; If a new company is
established, the company establishment registration shall be completed in accordance with the
law. If the Company increases or decreases its reg istered capital, it shall go through the change
registration with the company registrati on authority in accordance with the law.
Dissolution and Liquidation
The Company shall be dissolved upon the occurrence of the following events:
(i) Expiry of the term of business provided in the Articles of Association or other cause
of dissolution as specified therein;
(ii) A resolution on dissolution is passed by a shareholders’ meeting;
(iii) Dissolution is required due to the merger or division of the Company;
(iv) The business license of the Company is revoked or the Company is ordered to close
down or dissolved in accordance with the laws;
(v) The Company suffers significant hards hips in operation and management, and its
continued existence would cause significant losses to Shareholders’ interests, and such
issues cannot be resolved through other me ans, Shareholders representing 10% or
above of the total voting rights of the Company may plead the court to dissolve the
Company.
If the Company is in the situation as described in item (i), (ii) of the preceding paragraph
and has not yet distributed its properties to shareholders, it can continue to exist by amending
the Articles of Association or through a reso lution of the shareholders’ meeting. The
amendment of the Articles of Association or the resolution of the shareholders’ meeting as
per the preceding paragraph must be passed by more than two-thirds of the voting rights held by
the shareholders attending the shareholders’ meeting.
If the company is dissolved due to the provisi ons mentioned in items (i), (ii), (iv), and (v)
above, a liquidation shall be conducted. The directors shall be the obligors for the company’s
liquidation and must form a liquidation group within 15 days from the date the cause for
dissolution arises to carry out the liquidation.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 0–


--- page 572 ---
The liquidation group shall be composed of directors, unless otherwise stipulated in the
Articles of Association or different person s determined by the shareholders’ meeting.
The liquidation group shall notify the creditors within 10 days from the date of its
establishment and announce it in the designated newspapers or the National Enterprise Credit
Information Publicity System within 60 days . Creditors shall declare their claims to the
liquidation group within 30 days from the dat e of receiving the notice, or within 45 days from
the date of the announcement if they have not received the notice.
When declaring claims, creditors shall sp ecify the relevant matters of the claims and
provide supporting documents. The liquidation group shall register the claims.
During the period for declaring claims, the liquidation group shall not make repayments to
the creditors.
After the liquidation group has sorted out the company’s assets, prepared the balance sheet
and inventory of assets, it shall formulate a liquidation plan and submit it to the shareholders’
meeting or the court for confirmation. The Company’s assets shall be used to pay the
liquidation expenses, employees ’w a g e s ,s o c i a li n s u r a n c ef e e s ,and statutory compensation, to
pay the taxes owed, and to repay the company’s debts. The remaining assets shall be distributed
among the shareholders in proportion to their shareholdings.
During the liquidation period, the Company shall continue to exist but shall not engage in
any business activities unrelated to the liquidation. The Company’s assets shall not be
distributed to the shareholders before the aforementioned provisions have been complied with.
After sorting out the Company’s assets and preparing the balance sheet and inventory of
assets, the liquidation group finds that the Comp any’s assets are insufficient to repay the debts,
it shall apply to the court for bankruptcy liquidation in accordance with the law. After the court
accepts the bankruptcy app lication, the liquidation group shal l transfer the liquidation affairs to
the bankruptcy administrator appointed by the court.
Upon the completion of the company’s liquidation, the liquidation group shall prepare a
liquidation report, submit it to the shareholders’ meeting or the court for confirmation, and file
it with the company registration authority to apply for the cancellation of the company
registration and announce the termination of the company.
If the company is declared bankrupt in acc ordance with the law, the bankruptcy
liquidation shall be carried out in accordance wi th the relevant laws on enterprise bankruptcy.
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association in any of the following
circumstances:
(i) After amendments are made to the PRC C ompany Law or other relevant laws,
administrative regulations, the matters stip ulated in the Articles of Association are in
conflict with the provisions of the revised laws, administrative regulations;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 1–


--- page 573 ---
(ii) If certain changes of the Company occur resulting in the inconsistency with certain
terms specified in the Articles of Association;
(iii) The shareholders’ meeting has resolved to amend the Articles of Association.
Where the amendments to the Articles of Association passed by resolutions of the
shareholders’ meetings require approval of the competent authorities, the amendments shall be
submitted to the relevant authorities for approval. Where the amendments involve registration
matters of the Company, the involved changes sha ll be registered in accordance with the laws.
The Board shall amend the Articles of Association in accordance with the resolution of the
shareholders’ meetings on amendment to the Articles of Association and the examination and
approval opinions from relevant authorities.
Any amendment to the Articles of Association that is required to be disclosed in
accordance with laws and regulations shall be a nnounced in accordance with provisions thereof.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2 2–


--- page 574 ---
1. FURTHER INFORMATION ABOUT OUR GROUP
A. Establishment of our Company
Our Company was established in the PRC on December 29, 2015 with an initial
registered capital of RMB5 m illion. On January 13, 2025, our Company was converted into
a joint stock company with limited liability under the PRC Company. Accordingly, our
corporate structure and Articles of Assoc iation are subject to the relevant laws and
regulations of the PRC. The relevant PRC laws and regulatory provisions and a summary
of our Articles of Association are set out in Appendices IV and V to this prospectus,
respectively.
Our principal place of business in Hong Kong is at 40/F, Dah Sing Financial Centre,
No. 248 Queen’s Road East, Wanchai, Hong Kong. We were registered as a non-Hong
Kong Company under Part 16 of the Compan ies Ordinance on July 4, 2025. Ms. Zhang
Xiao has been appointed as our a uthorized representative fo r the acceptance of service of
process and notices in Hong Kong.
B. Changes in the Share Capital of our Company
Save as disclosed in ‘‘History, Development and Corporate Structure —
Establishment and Shareholding Changes of Our Company’’, there had been no
alterations of our share capital within the two years preceding the date of publication of
this prospectus.
C. Changes in the Share Capital of our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are
set out in Note 1 to the Accountants’ Report as set out in Appendix I.
The following sets out the changes in the share or registered capital of the members of
our Group within the two years immediately preceding the date of this prospectus:
(a) Shanghai Koutong Technology Co., Ltd.
On December 11, 2024, the registered capital of Shanghai Koutong Technology
Co., Ltd. increased from RMB3,800,000 to RMB20,000,000.
(b) Beijing Xinsheng Technology Co., Ltd.
On January 15, 2024, the registered capital of Beijing Xinsheng Technology Co.,
Ltd. increased from RMB1,000,000 to RMB1,020,000.
(c) Nanjing Iluvatar Zhiqi Technology Co., Ltd.
On July 30, 2025, the registered capital of Nanjing Iluvatar Zhiqi Technology
Co., Ltd. increased from RMB10,000,000 to RMB100,000,000.
Save as disclosed above, there has been no alteration in the share capital of any
members of our Group within the two years immediately preceding the date of this
prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1–


--- page 575 ---
D. Resolutions of the Shareholders of the Company
Pursuant to the resolutions passed at a duly convened general meeting of our
Shareholders on May 30, 2025, it was resolved, among others, and the following was
approved:
(a) the issuance by our Company of H Shares with a nominal value of RMB1.00
each and the listing of such H Shares on the Stock Exchange;
(b) subject to the completion of the Global Offering, the Articles of Association
have been approved and adopted, which shall become effective on the Listing
Date, and the Board has been authorized to amend the Articles of Association in
accordance with any comments from the Stock Exchange and the relevant PRC
regulatory authorities; and
(c) authorizing our Board and its authorized person to handle all relevant matters
relating to, among other things, the implementation of issuance of H Shares and
the Listing.
E. Restrictions on Repurchase
For details, see Appendix V in this prospectus.
2. FURTHER INFORMATION ABOUT THE BUSINESS OF THE COMPANY
A. Summary of Material Contracts
The following contract (not being contracts entered into in the ordinary course of
business) was entered into by our Group wit hin the two years preceding the date of this
prospectus and is or may be material:
(1) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, ZTE (H.K.) Limited , Huatai Financial Holdings (Hong
Kong) Limited and CMB International Capital Limited, pursuant to which ZTE
(H.K.) Limited agreed to subscribe for such number of H Shares at the Offer
Price in an aggregate investment amount of RMB20,000,000 (including
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(2) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, XN Mountain International Limited, Huatai Financial
Holdings (Hong Kong) Limited and CMB International Capital Limited,
pursuant to which XN Mountain International Limited agreed to subscribe for
such number of H Shares at the Offer Price in an aggregate investment amount of
US$17,000,000 (excluding brokerage, SF C transaction levy, AFRC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2–


--- page 576 ---
(3) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, Wind Sabre Fund SPC acting on behalf and for the
account of Wind Sabre Opportunities Fund SP, Huatai Financial Holdings
(Hong Kong) Limited and CMB International Capital Limited, pursuant to
which Wind Sabre Fund SPC acting on behalf and for the account of Wind Sabre
Opportunities Fund SP agreed to subscribe for such number of H Shares at the
Offer Price in an aggregate investment amount of US$20,000,000 (excluding
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(4) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, UBS Asset Management (Singapore) Ltd. (as the delegate
of the investment manager for and on behal f of the Investors listed in Schedule 3
to the cornerstone investment agreement), Huatai Financial Holdings (Hong
Kong) Limited and CMB International Capital Limited, pursuant to which UBS
Asset Management (Singapore) Ltd. (as the delegate of the investment manager
for and on behalf of the Investors listed in Schedule 3 to the cornerstone
investment agreement) agreed to subscribe for such number of H Shares at the
Offer Price in an aggregate investment amount of US$10,000,000 (excluding
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(5) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, Teamsun Technolo gy (HK) Limited, Huatai Financial
Holdings (Hong Kong) Limited and CMB International Capital Limited,
pursuant to which Teamsun Technology (HK) Limited agreed to subscribe for
such number of H Shares at the Offer Price in an aggregate investment amount of
HK$33,000,000 (excluding brokerage, SFC transaction levy, AFRC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
(6) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, Qin Wan Investment Limited, Huatai Financial Holdings
(Hong Kong) Limited and CMB International Capital Limited, pursuant to
which Qin Wan Investment Limited agr eed to subscribe for such number of H
Shares at the Offer Price in an aggregat e investment amount of RMB100,000,000
(excluding brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(7) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, OCM Limited, Huatai Financial Holdings (Hong Kong)
Limited and CMB International Capital Limited, pursuant to which OCM
L i m i t e da g r e e dt os u b s c r i b ef o rs u c hn u mber of H Shares at the Offer Price in an
aggregate investment amount of US$10,000,000 (including brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 3–


--- page 577 ---
(8) the cornerstone investment agreem ent dated December 24, 2025 entered into
among the Company, Ocean Fine Industrial Limited, Huatai Financial Holdings
(Hong Kong) Limited and CMB International Capital Limited, pursuant to
which Ocean Fine Industrial Limited ag reed to subscribe for such number of H
Shares at the Offer Price in an aggregat e investment amount of US$10,000,000
(excluding brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(9) the cornerstone investment agreem ent dated December 26, 2025 entered into
among the Company, Huatai Capital Investment Limited, Huatai Financial
Holdings (Hong Kong) Limited and CMB International Capital Limited,
pursuant to which Huatai Capital Inve stment Limited agreed to subscribe for
such number of H Shares (in connection with a back-to-back total return swap
transaction) at the Offer Price in an aggregate investment amount of
US$21,000,000 (excluding brokerage, SF C transaction levy, AFRC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
(10) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, Fourth Paradigm Inte rnational Limited, Huatai Financial
Holdings (Hong Kong) Limited and CMB International Capital Limited,
pursuant to which Fourth Paradigm Inter national Limited agreed to subscribe
for such number of H Shares at the Offer Price in an aggregate investment
amount of HK$100,000,000 (excluding brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange tra ding fee in respect of such number of H
Shares);
(11) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, Engine Internatio nal Technology Co., Limited, Huatai
Financial Holdings (Hong Kong) Limited and CMB International Capital
Limited, pursuant to which Engine International Technology Co., Limited
agreed to subscribe for such number of H Shares at the Offer Price in an
aggregate investment amount of RMB30,000,000 (excluding brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares);
(12) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, Duckling Fund, L.P., Huatai Financial Holdings (Hong
Kong) Limited and CMB International Capital Limited, pursuant to which
Duckling Fund, L.P. agreed to subscribe for such number of H Shares at the
Offer Price in an aggregate investment amount of US$20,000,000 (excluding
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 4–


--- page 578 ---
(13) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, DeepRoot Alpha Ltd , Huatai Financial Holdings (Hong
Kong) Limited and CMB International Capital Limited, pursuant to which
DeepRoot Alpha Ltd agreed to subscribe for such number of H Shares at the
Offer Price in an aggregate investment amount of US$4,000,000 (excluding
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(14) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, China Univers al Asset Management (Hong Kong)
Company Limited, Huatai Financial Holdings (Hong Kong) Limited and
CMB International Capital Limited, pursuant to which China Universal Asset
Management (Hong Kong) Company Limited agreed to subscribe for such
number of H Shares at the Offer Price in an aggregate investment amount of
US$20,000,000 (excluding brokerage, SF C transaction levy, AFRC transaction
levy and Stock Exchange trading fee in respect of such number of H Shares);
(15) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, China Orient International Asset Management Limited —
China Orient Enhanced Income Fund, Huatai Financial Holdings (Hong Kong)
Limited and CMB International Capital Limited, pursuant to which China
Orient International Asset Manage ment Limited — China Orient Enhanced
Income Fund agreed to subscribe for such number of H Shares at the Offer Price
in an aggregate investment amount of US$ 7,000,000 (excluding brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares);
(16) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, China Orient International Asset Management Limited —
China Orient Multi-Strategy Master Fund, Huatai Financial Holdings (Hong
Kong) Limited and CMB International Capital Limited, pursuant to which
China Orient International Asset Management Limited — China Orient
Multi-Strategy Master Fund agreed to subscribe for such number of H Shares
at the Offer Price in an aggregate investment amount of US$3,000,000 (excluding
brokerage, SFC transaction levy, AFRC transaction levy and Stock Exchange
trading fee in respect of such number of H Shares);
(17) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, China Asset Management (Hong Kong) Limited, Huatai
Financial Holdings (Hong Kong) Limited and CMB International Capital
Limited, pursuant to which China Asset Management (Hong Kong) Limited
agreed to subscribe for such number of H Shares at the Offer Price in an
aggregate investment amount of US$6,000,000 (excluding brokerage, SFC
transaction levy, AFRC transaction l evy and Stock Exchange trading fee in
respect of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 5–


--- page 579 ---
(18) the cornerstone investment agreement dated December 26, 2025 entered into
among the Company, CFIG Holdings Limited, Huatai Financial Holdings
(Hong Kong) Limited and CMB International Capital Limited, pursuant to
which CFIG Holdings Limited agreed to subscribe for such number of H Shares
at the Offer Price in an aggregate investment amount of RMB15,000,000
(excluding brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(19) the cornerstone investment agreement dated December 24, 2025 entered into
among the Company, Alphahill Capital Limited for itself and on behalf of
Alphahill Future Fund, Manifold Master Fund and York House Investment
Limited, Huatai Financial Holdings (Hong Kong) Limited and CMB
International Capital Limited, pursuant to which Alphahill Capital Limited
for itself and on behalf of Alphahill Future Fund, Manifold Master Fund and
York House Investment Limited agreed to subscribe for such number of H
Shares at the Offer Price in an aggregat e investment amount of US$15,000,000
(excluding brokerage, SFC transaction levy, AFRC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares); and
(20) the Hong Kong Underwriting Agreement.
B. Intellectual Property Rights
(a) Trademarks
As of the Latest Practicable Date, we had registered the fol lowing trademarks
which we consider to be or may be material to our business:
No. Trademark
Place of
registration
Name of registered
proprietor
Registration
no. Class Expiration date
1
 PRC Our Company 20402625 9 August 13, 2027
2
 PRC Our Company 20402630 9 August 13, 2027
3
 PRC Our Company 20402806 38 August 13, 2027
4
 PRC Our Company 20402829 38 August 13, 2027
5
 PRC Our Company 20403076 42 August 13, 2027
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 6–


--- page 580 ---
No. Trademark
Place of
registration
Name of registered
proprietor
Registration
no. Class Expiration date
6
 PRC Our Company 29266737 38 January 13, 2029
7
 PRC Our Company 29268664 9 January 6, 2029
8
 PRC Our Company 29271358 9 January 13, 2031
9
 PRC Our Company 29271358A 9 February 20, 2029
10
 PRC Our Company 29273123 42 January 6, 2029
11
 PRC Our Company 35111479 9 July 27, 2029
12
 PRC Our Company 35122858 38 July 27, 2029
13
 PRC Our Company 41454047 35 August 13, 2030
14
 PRC Our Company 41454396 42 August 13, 2030
15
 PRC Our Company 41465877 9 November 6, 2030
16
 PRC Our Company 41473895 38 September 6, 2030
17
 PRC Our Company 52248797 42 September 13,
2031
18
 PRC Our Company 52265383 9 August 20, 2031
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 7–


--- page 581 ---
No. Trademark
Place of
registration
Name of registered
proprietor
Registration
no. Class Expiration date
19
 PRC Our Company 52776544 35 August 27, 2031
20
 PRC Our Company 52779398 9 August 20, 2031
21
 PRC Our Company 52782463 42 August 20, 2031
22
 PRC Our Company 55459942 35 January 13, 2033
23
 PRC Our Company 55474324 35 November 6, 2031
24
 PRC Our Company 57461311 9 May 6, 2033
25
 PRC Our Company 66672855 35 February 6, 2033
26
 PRC Our Company 66678076 42 February 6, 2033
27
 PRC Our Company 66691069 9 February 20, 2033
28
 PRC Our Company 66733625 45 February 6, 2033
29
 PRC Our Company 67042987 42 July 13, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 8–


--- page 582 ---
No. Trademark
Place of
registration
Name of registered
proprietor
Registration
no. Class Expiration date
30
 PRC Our Company 67816720 9 April 20, 2033
31
 PRC Our Company 67818551 35 April 20, 2033
32
 PRC Our Company 67823492 9 April 20, 2033
33
 PRC Our Company 67827473 35 April 20, 2033
34
 PRC Our Company 67834627 42 April 20, 2033
35
 PRC Our Company 67838350 42 April 20, 2033
36
 PRC Our Company 69616032 9 August 13, 2033
37
 Hong Kong Our Company 306899032 9, 35,
38,
42
May 14, 2035
38
 Hong Kong Our Company 306899041 9, 35,
38,
42
May 14, 2035
39
Hong Kong Our Company 306899023 9, 35,
38,
42
May 14, 2035
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 9–


--- page 583 ---
(b) Patents
As of the Latest Practicable Date, we had registered the following patents in the
PRC which we consider to be or may be material to our business:
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
1 An architecture and
method for implementing
on-chip fabric in chips
(一種用於芯片內實現
fabric 的架構和方法)
Our Company Invention 201910869233.8 September 16,
2019
September 15,
2039
2 A compiler
implementation method
and system supporting
heterogeneous computing
cores (一種支持異構計算
核架構的編譯器實現方法
和系統)
Iluvatar Shanghai Invention 201911041164.8 October 30,
2019
October 29, 2039
3 A digital circuit design
method with reservation
mechanism for resolving
memory cell cluster
access conflicts ( 一種預
約機制解決多路訪問存儲
單元簇衝突的數字電路設
計方法)
Iluvatar Shanghai Invention 201910752072.4 August 15, 2019 August 14, 2039
4 A method for analyzing
standard cell data ( 一
種
用於標準單元數據的分析
方法)
Iluvatar Shanghai Invention 202110285282.4 March 17, 2021 March 16, 2041
5 A digital circuit design
method for GPU cache
subsystem
interconnection ( 一種
GPU 緩存子系統互聯的數
字電路設計方法)
Iluvatar Shanghai Invention 202110626551.9 June 4, 2021 June 3, 2041
6 Core computing unit
processor and
acceleration method for
AI devices ( 用於人工智能
設備的核心計算單元處理
器及加速處理方法)
Our Company Invention 201810863952.4 August 1, 2018 July 31, 2038
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 0–


--- page 584 ---
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
7 A parametric cache digital
circuit micro-architecture
and its design method
(一種參數化緩存數字電路
微架構及其設計方法)
Our Company Invention 202110626546.8 June 4, 2021 June 3, 2041
8 A configurable hybrid
heterogeneous computing
core architecture for
multi-domain chip design
(一種用於多領域芯片設計
的可配置混合異構計算核
心系統)
Our Company Invention 201910858163.6 September 11,
2019
September 10,
2039
9 A chip design optimization
system and method based
on dynamic unbalanced
clock (一種基於動態非平
衡時鐘的芯片設計優化系
統及方法)
Iluvatar Shanghai Inven tion 202110201459.8 February 23,
2021
February 22, 2041
10 A glitch protection system
against overclocking
caused by dual-PLL
systems (一種基於雙
PLL
的系統超頻引起的電壓毛
刺保護系統)
Iluvatar Shanghai Invention 201910163473.6 March 5, 2019 March 4, 2039
11 A multi-user
general-purpose
computation method and
system based on GPGPU
chip ( 基於GPGPU 芯片的
多用戶通用計算處理方法
和系統)
Iluvatar Shanghai Invention 202010690286.6 July 17, 2020 July 16, 2040
12 A method for processing
cache digital circuit
request conflicts ( 一種緩
存數字電路處理請求衝突
的方法)
Iluvatar Shanghai Invention 202110337496.1 March 30, 2021 March 29, 2041
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 1–


--- page 585 ---
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
13 A functional verification
system for AI processor
chips (一種用於人工智能
處理器芯片的功能驗證系
統)
Iluvatar Shanghai Invention 201910349837.X April 28, 2019 April 27, 2039
14 A digital circuit design
method for efficiently
handling intra- and
inter-chip GPU cache
coherency ( 一種高效處理
GPU 片內和片間緩存一致
性的數字電路設計方法)
Our Company Invention 202110680159.2 June 18, 2021 June 17, 2041
15 A tree-based display and
operation system for chip
test data ( 一種芯片測試
數據的樹形顯示與操作系
統和方法)
Iluvatar Shanghai Invention 202110682823.7 June 18, 2021 June 17, 2041
16 A multiplier based on
reverse polarity
technology and its code
generation method ( 一種
基於反向極性技術的
乘法
器及其代碼生成方法)
Iluvatar Shanghai Invention 202010745540.8 July 29, 2020 July 28, 2040
17 A video encoding and
decoding multi-channel
response system based on
info board mode ( 一種基
於信息牌模式的視頻編解
碼多通道響應系統)
Our Company Invention 202110958791.9 August 20, 2021 August 19, 2041
18 A method for automatic
cloning to separate
digital circuit loads ( 一種
自動克隆實現數字電路負
載分離的方法)
Iluvatar Shanghai Invention 202110937522.4 August 16, 2021 August 15, 2041
19 A timing control circuit
and electronic device
(一種時序控制電路及
電子設備)
Our Company Utility model 202320320808.2 February 24,
2023
February 23, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 2–


--- page 586 ---
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
20 Matrix operation method
and device, apparatus
and unit, electronic
device ( 矩陣運算方法、
裝置及單元、電子設備)
Our Company Invention 202211445382.X November 18,
2022
November 17,
2042
21 A ring bus architecture
and method for deadlock
prevention, AI chip and
electronic device ( 一種環
形總線結構及防止死鎖的
方法、AI芯片及電子設
備)
Our Company Invention 202310470889.9 April 26, 2023 April 25, 2043
22 Data scheduling method,
computing chip and
electronic device ( 數據調
度方法、計算芯片及電子
設備)
Iluvatar Shanghai Invention 202310446262.X April 24, 2023 April 23, 2043
23 A tile processor, SoC chip
and electronic device
(一種瓦片處理器、SoC 芯
片以及電子設備)
Beijing Iluvatar Invention 202310722611.6 June 16, 2023 June 15, 2043
24 Discharge control circuit,
discharge circuit and
power supply ( 放電控制
電路、放電電路和電源)
Iluvatar Shanghai Utility model 202320238240.X February 16,
2023
February 15, 2033
25 Distance measurement
method and device,
storage medium and
electronic device ( 距離測
量方法及裝置、存儲介質
及電子設備)
Beijing Iluvatar Invention 202311587237.X November 24,
2023
November 23,
2043
26 A multiphase power
supply, image processing
system and electronic
device (一種多相電源、
圖像處理系統及電子設備)
Our Company Utility model 202322979128.4 November 3,
2023
November 2, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 3–


--- page 587 ---
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
27 Data request processing
circuit, method, and its
cache circuit and
processor ( 數據請求處理
電路、方法及其緩存電路
和處理器)
Iluvatar Shanghai Invention 202211733347.8 December 30,
2022
December 29, 2042
28 Adapter board card, OAM
board testing system and
OAM board working
system ( 轉接板卡、OAM
板卡測試系統及OAM 板
卡工作系統)
Our Company Utility model 202323022394.4 November 8,
2023
November 7, 2033
29 A heat sink auxiliary
assembly jig, heat sink
and electronic device
(一種散熱器輔助裝配治
具、散熱器及電子設備)
Our Company Utility model 202323581345.4 December 26,
2023
December 25, 2033
30 Power consumption
monitoring device and
method, SoC chip,
electronic device and
storage medium ( 功耗監
測裝置方法、
SoC 芯片、
電子設備及存儲介質)
Iluvatar Shanghai Invention 202211715905.8 December 29,
2022
December 28, 2042
31 Resource invocation
method for virtual
machines, device and
storage medium ( 虛擬機
的資源調用方法、設備及
存儲介質
Beijing Iluvatar Invention 202211426694.6 November 15,
2022
November 14,
2042
32 An address translation
system, processor,
translation method and
electronic device ( 一種地
址轉換系統、處理器、地
址轉換方法及電子設備)
Our Company Invention 202310446235.2 April 24, 2023 April 23, 2043
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 4–


--- page 588 ---
No. Patent
Name of
registered owner
Patent
category Patent number
Date of
application
Validity period
(from application
date)
33 A heat spreader and
electronic device ( 一種均
熱裝置及電子設備)
Our Company Utility model 202323643974.5 December 28,
2023
December 27, 2033
34 A chip frequency dynamic
adjustment method and
system for abnormal
temperature handling
(一種用於異常溫度處理的
芯片頻率動態調節方法及
系統)
Our Company Invention 202210052416.2 January 18,
2022
January 17, 2042
35 A convolution
computation method,
SoC chip, electronic
device and storage
medium (一種卷積計算方
法、SoC 芯片、電子設備
及存儲介質)
Our Company Invention 202211718228.5 December 29,
2022
December 28, 2042
36 A lossless Extest Mode
testing method for
GPGPU chips ( 一種
GPGPU 芯片無損Extest
Mode 測試方法)
Our Company Invention 202210165985.8 February 23,
2022
February 22,2042
37 A polymorphic process
platform for digital chip
physical design
prioritizing integration
features ( 一種優先集成特
性的數字芯片物理設計多
態流程平台)
Our Company Invention 202111134563.6 September 27,
2021
September 26,
2041
38 A text watermark
detection and embedding
method, program
product, device and
medium ( 文本水印檢測和
水印添加方法、程序產
品、設備及介質)
Beijing Iluvatar Invention 202411132790.9 August 19, 2024 August 18, 2044
39 A model training method,
3D point cloud
acquisition method and
electronic device ( 一種模
型訓練方法、三維點云獲
取方法及電子設備)
Beijing Iluvatar Invention 202411118586.1 August 15, 2024 August 14, 2044
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 5–


--- page 589 ---
(c) Software Copyrights
As of the Latest Practicable Date, we h ad registered the following software
copyrights in the PRC which we consider to be or may be material to our business:
No. Name of Software
Name of registered
proprietor Registration number Issue Date
1 SoC Repeater Timing Cell
Parser Software 1.0 (SoC 中繼
時序單元解析生成軟件v1.0)
Our Company 2019SR1049341 October 16, 2019
2 Standard Cell Timing and
Power Evaluation Software 1.0
(標準單元庫時序、功耗分析和
評價軟件V1.0)
Our Company 2021SR0327101 March 3, 2021
3 Memory Management Checker
Software 1.0 ( 天數智芯內存管
理檢查軟件 v1.0)
Our Company 2021SR1376972 September 14, 2021
4 PTX to LLVM IR Conversion
Software 1.0 ( 天數智芯PTX語
言到LLVM IR 轉換軟件)
Our Company 2021SR1377036 September 14, 2021
5 Board System Monitoring and
Management Software 1.0
(天數智芯板卡系統監控查詢及
管理應用軟件v1.0)
Our Company 2021SR1384293 September 15, 2021
6 System Performance Tracing
Software 1.0 ( 天數智
芯系統性
能追蹤分析軟件 v1.0)
Our Company 2021SR1384431 September 15, 2021
7 High-performance Linear
Algebra Library Software 1.0
(適用於天數智芯通用計算芯片
的高性能線性代數算法庫軟件
v1.0)
Our Company 2021SR1384381 September 15, 2021
8 High-performance Neural
Network Library Software 1.0
(適用於天數智芯通用芯片的高
性能神經網絡算法庫軟件v1.0)
Our Company 2021SR1386044 September 16, 2021
9 Scandump Capture and
Analysis Tool 1.0 ( 適用於天數
智芯通用計算芯片的
Scandump 抓取及分析工具款件
v1.0)
Our Company 2021SR1384335 September 15, 2021
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 6–


--- page 590 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
10 IC Power Network Auto
Generation Software ( 集成電
路電源網絡自動化生成加速
軟件)
Our Company 2021SR1637521 November 4, 2021
11 Chip Verification Design Mode
Platform 1.0 ( 通用芯片驗證系
統設計模式平台1.0)
Iluvatar Shanghai 2018SR872843 October 31, 2018
12 Chip Module Auto Generation
and Linking Software 1.0 ( 通用
芯片模塊自動產生與鏈接解決
方案軟件1.0)
Iluvatar Shanghai 2018SR961145 November 30, 2018
13 Register Simulation Model
Framework 1.0 ( 高性能芯片通
用寄存器自動化解決方案軟件
1.0)
Iluvatar Shanghai 2018SR961283 November 30, 2018
14 Memory Format Conversion
Library 1.0 ( 數據內存格式轉換
庫軟件1.0)
Iluvatar Shanghai 2018SR961477 November 30, 2018
15 Chip Verification Workflow
Automation Manager 1.0 ( 通用
芯片驗證流程自動化管理方案
軟件1.0)
Iluvatar Shanghai 2018SR962143 November 30, 2018
16 Sparse Storage Management
Model Software 1.0 ( 芯片驗證
稀疏存儲管理模型軟件1.0)
Iluvatar Shanghai 2018SR962153 November 30, 2018
17 Chip Simulation Model
Framework Software 1.0 ( 通用
芯片仿真模型框架軟件1.0)
Iluvatar Shanghai 2018SR962228 November 30, 2018
18 Int16 Convolutional Neural
Network Model Software 1.0
(Int16 格式卷積神經網絡模型軟
件1.0)
Iluvatar Shanghai 2018SR962235 November 30, 2018
19 Stimulus Management
Automation Software 1.0 ( 芯片
激勵管理自動化解決方案軟件
V1.0)
Iluvatar Shanghai 2018SR976653 December 4, 2018
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 7–


--- page 591 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
20 System Architecture Simulation
Platform Software 1.0 ( 系統架
構仿真平台軟件V1.0)
Iluvatar Shanghai 2018SR976714 December 4, 2018
21 UVM Framework Auto
Generation Software 1.0 ( 通用
芯片驗證UVM框架自動化生成
系統軟件1.0)
Iluvatar Shanghai 2018SR996268 December 10, 2018
22 GPGPU ISA Parser and
Random Generator Software
1.0 (GPGPU 指令集解析、隨機
產生器軟件1.0)
Iluvatar Shanghai 2018SR1019769 December 14, 2018
23 Sparse Matrix Verification
Model Software 1.0 ( 芯片驗證
稀疏矩陣模型軟件1.0)
Iluvatar Shanghai 2018SR1076154 December 26, 2018
24 Universal Flag Parsing Software
1.0 ( 通用標誌解析軟件1.0)
Iluvatar Shanghai 2019SR0057926 January 17, 2019
25 SoC Repeater Insertion Tool 1.0
(SoC中繼時序單元插入生成軟
件1.0)
Iluvatar Shanghai 2019SR1122446 November 6, 2019
26 SoC Repeater Reverse
Annotation Tool 1.0 (SoC
中繼
時序單元反標生成軟件1.0)
Iluvatar Shanghai 2019SR1118577 November 5, 2019
27 SoC Repeater Synthesis Tool
1.0 (SoC中繼時序單元合成生
成軟件1.0)
Iluvatar Shanghai 2019SR1111301 November 1, 2019
28 IC Workflow Visualization
Execution System 1.0 (IC 設計
流程可視化執行系統V1.0)
Iluvatar Shanghai 2020SR1129172 September 21, 2020
29 SoC Test Data Tree Operation
System 1.0 (SOC 測試數據樹形
顯示與操作系統V1.0)
Iluvatar Shanghai 2021SR0369056 March 10, 2021
30 Tianshu Virtual GPU Control
Software ( 天數虛擬GPU控制
軟件)
Iluvatar Shanghai 2022SR0770905 June 16, 2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 8–


--- page 592 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
31 Tianshu IXGPU Data
Collection Software ( 天數
IXGPU 信息採集軟件)
Iluvatar Shanghai 2022SR0767871 June 16, 2022
32 High-performance Fast Fourier
Transform Algorithm Library
Software ( 高性能快速傅里葉變
換算法庫軟件)
Iluvatar Shanghai 2022SR0767877 June 16, 2022
33 iXplorer System Performance
Analysis Software ( 天數智芯
iXplorer System Analyzer 系統
性能分析應用軟件)
Iluvatar Shanghai 2022SR0853832 June 27, 2022
34 Iluvatar Online Performance
Analysis Software ( 芷銳
Iluvatar 性能在線分析軟件)
Iluvatar Shanghai 2023SR0199159 February 3, 2023
35 Iluvatar Kernel Analyzer GUI
Tool ( 芷銳Iluvatar Kernel
Analyzer Ul 核函數性能分析圖
形化工具應用軟件)
Iluvatar Shanghai 2023SR0229054 February 13, 2023
36 Diag Tool for General-purpose
Chips ( 適用於天數智
芯通用計
算芯片的diag 工具軟件)
Iluvatar Shanghai 2023SR0024412 January 5, 2023
37 High-performance Collective
Communication Library ( 適用
於天數智芯通用芯片的高性能
集合通信庫軟件)
Iluvatar Shanghai 2023SR0013102 January 4, 2023
38 High-performance Device
Function Test Framework ( 高
性能設備函數測試框架軟件)
Iluvatar Shanghai 2023SR0200609 February 6, 2023
39 High-performance Inference
Operator Library for GPGPU
Chips ( 適用於GPGPU 芯片的
高性能推理算子庫軟件)
Iluvatar Shanghai 2023SR0218180 February 9, 2023
40 Python Video Decoding
Software for General-purpose
Chips ( 適用於通用計算芯片的
python 視頻解碼軟件)
Iluvatar Shanghai 2023SR0231846 February 13, 2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 9–


--- page 593 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
41 High-performance Matrix
Multiplication Library for
General-purpose Chips ( 適用
於通用芯片的高性能矩陣乘法
函數庫軟件)
Iluvatar Shanghai 2023SR0201751 February 6, 2023
42 Iluvatar GPU Virtualization
Software ( 芷銳GPU虛擬化軟
件)
Iluvatar Shanghai 2023SR0200102 February 6, 2023
43 Inference Engine Graph
Optimization Software ( 適用於
通用計算芯片的推理引擎計算
圖優化軟件)
Iluvatar Shanghai 2023SR0200103 February 6, 2023
44 Deep Learning Inference
Framework Software ( 天數智
芯深度學習推理框架軟件)
Iluvatar Shanghai 2023SR0012565 January 4, 2023
45 Incomplete-Cholesky
Decomposition Algorithm
Software ( 天數
incomplete-Cholesky 分解算法
ixmatrix 軟件)
Beijing Iluvatar 2022SR0875558 June 30, 2022
46 GPU Monitoring and Recovery
Software ( 天數GPU
監控恢復
軟件)
Beijing Iluvatar 2022SR1447413 November 2, 2022
47 Image Measurement Software
1.0 ( 圖像測量軟件V1.0)
Beijing Iluvatar 2023SR0522311 May 8, 2023
48 3D Reconstruction Software 1.0
(天數3D重建軟件V1.0)
Beijing Iluvatar 2023SR0522333 May 8, 2023
49 Remote Monitoring Device
Software 1.0 ( 遠程監控設備軟
件V1.0)
Beijing Iluvatar 2023SR0522310 May 8, 2023
50 Remote GPU Calling Software
1.0 ( 遠程調用GPU軟件V1.0)
Beijing Iluvatar 2023SR1039332 September 11, 2023
51 Omnifoil Permission Control
Software 1.0 ( 天數全向箔權限
控制軟件V1.0)
Nanjing Tianshu Zhiqi
Technology Co., Ltd.
2023SR1150035 September 25, 2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 0–


--- page 594 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
52 Tianshu Cloud SAAS Platform
Software 1.0 ( 天數云平台
SAAS 服務平台軟件V1.0)
Beijing Iluvatar 2023SR1218908 October 11, 2023
53 HashNeRF Model Comparison
and Real Scene Measurement
Software ( 基於HashNeRF 算法
的模型差異性比較及真實場景
物體尺寸信息測景軟件)
Beijing Iluvatar 2023SR1486141 November 23, 2023
54 Iluvatar Multi-dimensional
Benchmarking Tool v2.0 ( 天數
智芯 Iluvatar GPU 多維度測評
工具(MDims Benchmarker)
軟件v2.0)
Our Company 2023SR1657709 December 18, 2023
55 Digital Human System 1.0 ( 天數
數字人系統 V1.0)
Beijing Iluvatar 2023SR1770406 December 26, 2023
56 Image Decoding System
Verification Platform ( 圖像解
碼系統功能驗證軟件平台)
Our Company 2024SR0259006 February 8, 2024
57 Omnifoil Cloud Platform ( 天數
云全向箔云平台)
Beijing Iluvatar 2024SR0912964 July 2, 2024
58 Conversational Intelligent SQL
System ( 對話式智能SQL業務系
統)
Beijing Iluvatar 2024SR1322199 September 6, 2024
59 Omnifoil Multi-GPU Cluster
Management Software ( 天數全
向箔多卡集群管理軟件)
Beijing Iluvatar 2024SR1551160 October 17, 2024
60 IxStream Intelligent Video
Analysis Software 1.0 ( 適用於
天數智芯通用計算芯片的智能
視頻分析軟件V1.0)
Our Company 2024SR1710239 November 6, 2024
61 High-performance AI Inference
Engine Software 2.0 (GPU 高性
能人工智能推理引擎軟件V2.0)
Our Company 2024SR1706171 November 6, 2024
62 IxAttnBkd Acceleration Library
Software 1.0 (IxAttnBkd 加速
庫軟件V1.0)
Our Company 2024SR1710322 November 6, 2024
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 1–


--- page 595 ---
No. Name of Software
Name of registered
proprietor Registration number Issue Date
63 JPEG Codec Software ( 天數智
芯JPEG 編解碼軟件)
Our Company 2024SR2221970 December 27, 2024
64 Iluvatar Container
Toolkit Software ( 天數
iluvatar-container-toolkit 軟件)
Our Company 2024SR2221125 December 27, 2024
65 Iluvatar Container
Runtime and Client ( 天數
libiluvatar-container 運行時庫
&客戶端)
Our Company 2024SR2229148 December 30, 2024
66 Vecana Simulation Vector
Analysis Software 1.0 (Vecana
仿真向量分析軟件V1.0)
Our Company 2025SR0237923 February 11, 2025
67 General GPU Chiplet
Simulation Platform 1.0 ( 通用
GPU芯粒芯片仿真平台V1.0)
Our Company 2025SR0237780 February 11, 2025
(d) Integrated Circuit Layout Design Registrations
As of the Latest Practicable Date, the following integrated circuit layout designs
had been registered by our Group:
No. Name of Layout Design Registration No. Application Date Registered Owner
1 Cloud-based Inference
Chip ( 雲端推理芯片)
BS.21561478X September 10,
2021
Our Company
(e) Domain Name
As of the Latest Practicable Date, we had registered the following domain name
in the PRC which we consider to be or may be material to our business:
No. Domain Name Registrant Registration Date Expiry Date
1 iluvatar.com Our Company February 22, 2000 February 22, 2027
Save as aforesaid, as of the Latest Practicable Date, there were no other trade or
service marks, patents, intellectual or industrial property rights which were material
in relation to our business.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 2–


--- page 596 ---
3. FURTHER INFORMATION ABOUT DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
A. Disclosure of Interests
(a) Interests and short positions of the Dir ectors and chief executive of the Company in
the Shares, underlying Shares and debentures of our Company and our associated
corporations
The following table sets out the interes ts and short positions of our Directors
and chief executive of our Company immediately following completion of the Global
Offering and the Conversion of Unlisted Shares into H Shares in our Shares,
underlying Shares or debentures of our Company or any of our associated
corporations (within the meaning of Part XV of the SFO) which will have to be
notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the
SFO (including interests and short positions in which they are taken or deemed to
have under such provisions of the SFO), or 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 us and the Stock Exchange pursuant to the Model Code for
Securities Transactions by Directors of Lis ted Issuers contained in the Listing Rules,
once our Shares are listed:
Name Nature of interest
Shares held upon
completion of the
Global Offering
(1)
Approximate
percentage of
shareholding in the
Unlisted Shares/H
Shares (as
appropriate)
immediately after
the Global
Offering (2)
Approximate
percentage of
shareholding in the
total share capital of
our Company
immediately after
the Global
Offering (2)
Mr. Gai Lujiang (3) Interest in controlled
corporation
54,034,125 H Shares 22.05% 21.25%
Notes:
(1) For the avoidance of doubt, both Unlisted Shares and H Shares are ordinary Shares in the
share capital of our Company, and are considered as one class of Shares.
(2) The calculation is based on the total number of 9,215,771 Unlisted Shares in issue,
219,670,165 H Shares to be converted from Unlisted Shares in issue and 25,431,800 H Shares
to be issued pursuant to the Global Offering.
(3) Mr. Gai Lujiang is the sole shareholder and sole director of Shanghai Shuqi, which is the
general partner of each of the Shareholding Platforms, and is therefore deemed to be
interested in the 54,034,125 H Shares to be held by the Shareholding Platforms upon
completion of the Global Offering under the SFO. For details, see ‘‘History, Development
and Corporate Structure — Single Largest Group of Shareholders’’ in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 3–


--- page 597 ---
(b) Interests of the substantial shareholders in the Shares
Save as disclosed in the section headed ‘‘Substantial Shareholders’’ in this
prospectus, immediately following the completion of the Global Offering, our
Directors are not aware of any other person (not being a Director or chief executive of
our Company) who will have an interest or short position in the Shares or the
underlying Shares which would fall to be disclosed to us and the Stock Exchange
under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or
indirectly, interested in 10% or more of the issued voting shares of our Company.
B. Particulars of Directors’ Service Contracts
We have entered into a contract with each of our Directors in respect of, among other
things, compliance with relevant laws and regulations, and observance of the Articles of
Association.
Save as disclosed in this prospectus, none of our Directors has or is proposed to have
entered into any service contract with any member of our Group (excluding agreements
expiring or determinable by any member of our Group within one year without payment of
compensation other than statutory compensation).
C. Emoluments of Directors
Save as disclosed in ‘‘Directors and Senior Management’’ and Note 8 to the
Accountants’ Report set out in Appendix I to this prospectus for the financial years ended
December 31, 2022, 2023, 2024 and six months ended June 30, 2025, none of our Directors
received other remunerations of benefits in kind from us.
D. Disclaimers
Save as disclosed in this prospectus:
(a) none of our Directors or our chief executi ve has any interest or short position in
the Shares, underlying Shares or debentures of us or any of our associated
corporations (within the meaning of Part XV of the SFO) which will have to be
notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV
of the SFO, or which will be required, pursuant to section 352 of the SFO, to be
entered in the register referred to therein, or which will be required to be notified
to us and the Stock Exchange pursuant to Model Code for Securities
Transactions by Directors of Listed Issuers once the H Shares are listed on the
Stock Exchange;
(b) none of our Directors is aware of any person (not being a Director or chief
executive of our Company) who will, immediately following completion of the
Global Offering, have an interest or shor t position in the 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 who is interested, directly or indirectly, in 10%
or more of the issued voting shares of any member of our Group;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 4–


--- page 598 ---
(c) so far as is known to our Directors, none of our Directors, their respective close
associates (as defined under the Listing Rules) or Shareholders who own more
than 5% of the number of issued shares of our Company have any interests in the
five largest customers or the five largest suppliers of our Group; and
(d) None of our Directors or any of the parties listed in ‘‘Qualifications of Experts’’
of this Appendix is:
(i) interested in our promotion, or in any assets which have been, within two
years immediately preceding the date of this prospectus, acquired or
disposed of by or leased to us, or are proposed to be acquired or disposed of
by or leased to any member of our Group;
(ii) materially interested in any contrac t or arrangement subsisting at the date
of this prospectus which is significant in relation to our business.
4. EMPLOYEE INCENTIVE PLAN
We have approved and adopted an employee incentive plan for the purpose of motivating,
retaining and rewarding talents for their c ontribution to the development of our Group and
linking the interests of the participants under the employee incentive plan with those of our
Company and our Shareholders.
Given that the terms of the employee incentive plan do not involve the issue of new Shares
or the grant of options to subscribe for new Shares upon Listing, there will not be any dilution
effect to the issued Shares after Listing and t he equity incentive plan is not subject to the
provisions of Chapter 17 of the Listing Rules.
As of the Latest Practicable Date, Shangha i Xishi, Shanghai Yishi and Shanghai Sushi
(collectively, the ‘‘ Direct Employee Shareholding Platforms ’’) were our direct employee
shareholding platforms and Shanghai Shuga i Yousi Enterprise Management Consulting
Partnership (Limi ted Partnership) ( 上海數垓又肆企業管理諮詢合夥企業（有限合夥）)
(‘‘Shanghai Shugai Yousi ’’, together with the Direct Employee Shareholding Platforms, the
‘‘Employee Shareholding Platforms ’’), being direct limited partners of Shanghai Yuanshi, was
our indirect employee shareholding platform.
The general partner of each of the Employee Shareholding Platforms and the indirect
shareholding platforms of the Direct Employee Shareholding Platforms is Shanghai Shuqi. The
above arrangement of the equity incentive schemes could offer incentives to the participants
through granting them indirect interest in our S hares while allowing our core management team
to retain control on the voting rights of the incentive shareholding platforms in respect of our
Shares.
The general principal terms of the equity incentive schemes are summarized below.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 5–


--- page 599 ---
(a) Purpose
The employee incentive plan was established for the purpose of motivating, retaining
and rewarding talents for their contribution to the development of our Group and linking
the interests of the participants under th e employee incentive plan with those of our
Company and our Shareholders.
(b) Participants
Participants include employees and former employees of the Group, and other
persons as authorized by the general partner of the Employee Shareholding Platforms.
(c) Grant of Awards
The participants (the ‘‘ Grantees ’’) may be granted partnership interests (the ‘‘ Awards ’’)
in the direct or indirect level of the Employee Shareholding Platforms at a consideration
specified under the grant letters, and each beco mes a partner of the direct or indirect level
of the Employee Shareholding Platforms upo n grant of the Awards and the execution of
the grant documents. The participants may be required to pay a nominal capital
contribution for the acceptance of the Awards and for registering them as a partner of
the Employee Shareholding Platforms, an d the Grantees are entitled to receive the
economic interest based on the equivalent units of Shares as stipulated in their respective
award letter, rather than their respective reg istered partnership interest in the Employee
Shareholding Platforms. The capital contribution made by the Grantees to the Employee
Shareholding Platforms shall be sourced from their own funds.
(d) Vesting period of Awards
Subject to the payment of the subscription price (where applicable), the Awards
granted to the Grantees are typically subject to vesting conditions, wh ich are either (i) to be
vested equally over a period of four years fro m the grant date, (ii) 50% of which are to be
vested on the secondary anniversary from the grant date, and 25% each on the third and
fourth anniversary from the grant date, or (iii) to be vested in full upon a certain date. In
the event that any Grantee fails to meet the vesting condition of his/her respective Awards
for certain situations (including the resignation of Grantee), the general partner has the
right (the ‘‘Repurchase Right ’’) to repurchase the partnership interest in accordance to the
employee incentive plan.
(e) Lock-up period
The Shares held by the Employee Shareholding Platforms are subject to statutory
12-month lock-up period form the Listing Date pursuant to the PRC Company Law.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 6–


--- page 600 ---
(f) Details of Awards
As of the Latest Practicable Date, all the awards have been granted, which shall be
subject to the Repurchase Right of the general partner.
As of the Latest Practicable Date, (i) th ere were in aggregate 512 Grantees holding
partnership interest in the direct or indirect level of the Employee Shareholding Platforms,
which were entitled to receive the economic i nterest correspondin g to approximately
33,675,471 Shares; (ii) the Shares underlying the Awards held by Shanghai Shugai Yousi
were granted to Mr. Yang Lei (our executive Director, chief financial officer and board
secretary); and (iii) none of the other Grantees held more than 30% or more economic
interest in the Direct Employ ee Shareholding Platforms.
5. OTHER INFORMATION
A. Estate Duty
Our Directors have been advised that no mater ial liability for estate duty is likely to
fall on our Company or any of our subsidiaries under the laws of the PRC.
B. Litigation
Except as disclosed in this prospectus, as o f the Latest Practicable Date, we were not
engaged in any litigation, arbitration or claim of material importance and no litigation,
arbitration or claim of material importance is known to our Directors to be pending or
threatened by or against any member of our Group, that would have a material adverse
effect on our Group’s results of operations or financial condition, taken as a whole.
C. Preliminary expenses
As of the Latest Practicable Date, our Company has not incurred any material
preliminary expenses for the purpose of the Listing Rules.
D. Promoter
The promoters of our Company are all of the 45 then shareholders of our Company as
of December 27, 2024 immediately before our conversion into a joint stock limited liability
company.
Save as disclosed in this prospectus, wit hin the two years preceding the date of this
prospectus, no cash, securities or other benefit has been paid, allotted or given or is
proposed to be paid, allotted or given to any promoter in connection with the Global
Offering and the related transactions described in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 7–


--- page 601 ---
E. No Material Adverse Change
Our Directors confirmed that, up to the date of this prospectus, there has been no
material adverse change in the financial or trading position or prospect of our Group since
June 30, 2025 (being the date to which the lates t audited consolidated financial statements
of our Group were prepared).
F. Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the
Companies (Winding Up and Miscellaneous P rovisions) Ordinance) who have given their
opinion and/or advice in this prospectus are as follows:
Name Qualifications
Huatai Financial Holdings
(Hong Kong) Limited
A licensed corporation to conduct Type 1 (dealing
in securities), Type 2 (dealing in futures
contracts), Type 3 (leveraged foreign exchange
trading), Type 4 (advising on securities), Type 6
(advising on corporate finance), Type 7
(providing automated t rading services) and
Type 9 (asset management) regulated activities
under the SFO
Ernst & Young Certified Public Accountants and Registered
Public Interest Entity Auditor
Jingtian & Gongchen g PRC legal advisors
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Industry consultant
H o g a nL o v e l l s L e g a la d v i s o r st oo u rC o m p a n ya st oU . S .
Outbound Investment Rules and U.S. export
control
As of the Latest Practicable Date, none of the experts named above had any
shareholding interest in our Company or any of our subsidiaries or the right (whether
legally enforceable or not) to subscribe for or to nominate persons to subscribe for
securities in any member of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 8–


--- page 602 ---
G. Consents
Each of the experts named in paragraph headed ‘‘— F. Qualifications of Experts’’ in
this section has given and has not withdrawn t heir respective written consents to the issue
of this prospectus with the inclusion of their reports and/or letters and/or the references to
t h e i rn a m e si n c l u d e dh e r e i ni nt h ef o r ma n dc o n t e x ti nw h i c ht h e ya r er e s p e c t i v e l yi n c l u d e d .
H. Sole Sponsor
The Sole Sponsor satisfies the independent criteria applicable to sponsors as set out in
Rule 3A.07 of the Listing Rules.
Pursuant to the engagement letter entered into between our Company and the Sole
Sponsor, The total sponsor’s fee paid and pa yable to the Sole Sponsor in connection with
the Listing payable by our Company is US$850,000.
I. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal
provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance s of a ra sa p p l i c a b l e .
J. Bilingual Prospectus
The English and Chinese language versions of this prospectus are being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
K. Miscellaneous
Save as otherwise disclosed in this prospectus:
(a) within the two years preceding the date of this prospectus, our Company has not
issued nor agreed to issue any share or loan capital fully or partly paid either for
cash or for a consideration other than cash;
(b) no share or loan capital of our Company, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) our Company has not issued nor agreed to issue any founder shares,
management shares or deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 9–


--- page 603 ---
(e) within the two years immediately pr eceding the date of this prospectus, no
commission, discount, brokerage or other special term has been granted in
connection with the issue or sale of any capital of our Company;
(f) there is no arrangement under which future dividends are waived or agreed to be
waived;
(g) there has been no interruption in our business which may have or have had a
significant effect on the financi al position in the last 12 months;
(h) our Company is not presently listed on any stock exchange or traded on any
trading system; and
(i) our Company is a joint stock limited company and is subject to the PRC
Company Law.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 3 0–


--- page 604 ---
DOCUMENTS DELIVERED TO THE REGIS TRAR OF COMPANIES IN HONG KONG
The documents attached to the copy of this pr ospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) the written consents referred to in the pa ragraph headed ‘‘5. Other Information — G.
Consents’’ in Appendix VI to this prospectus; and
(b) a copy of each of the material contracts referred to in the paragraph headed ‘‘2.
Further Information about the Business of the Company — A. Summary of material
contracts’’ in Appendix VI to this prospectus.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the Stock
Exchange at
www.hkexnews.hk and our website at www.iluvatar.com up to and including the
date which is 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report from Ernst & Young in respect of the consolidated financial
information of our Group for each of the years ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2025, the text of which is set forth in
Appendix I to this prospectus;
(c) the report on the unaudited pro forma financial information of our Group from Ernst
& Young, the text of which is set forth in Appendix II to this prospectus;
(d) the audited consolidated financial statements of our Group for each of the years
ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025;
(e) the legal opinions issued by Jingtian Gongcheng, the legal advisor of our Company as
to the PRC laws, in respect of, among other things, certain general corporate matters
and the property interests of our Group;
(f) the F&S Report;
(g) the legal memorandum issued by Hogan Lo vells, our legal advisors as to Outbound
Investment Rule and U.S. Export Control;
(h) the material contracts referred to in the paragraph headed ‘‘2. Further Information
about the Business of the Company — A. Summary of material contracts’’ in
Appendix VI to this prospectus;
(i) the written consents referred to in the pa ragraph headed ‘‘5. Other Information — G.
Consents’’ in Appendix VI to this prospectus;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
–V I I - 1–


--- page 605 ---
(j) the service contracts referred to in the pa ragraph headed ‘‘3. Further Information
about Directors and Substantial Shareholders — B. Particulars of Directors’ Service
Contracts’’ in Appendix VI to this prospectus; and
(k) the following PRC laws and regulations, together with unofficial English translation
thereof:
a. the PRC Company Law;
b. the PRC Securities Law; and
c. the Trial Administrative Measures of Ov erseas Securities O ffering and Listing by
Domestic Companies.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
–V I I - 2–


--- page 606 ---
Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
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Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
ʮ̡
Shanghai Iluvatar CoreX Semiconductor Co., Ltd.
ʮ̡
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(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Codej9903
GLOBAL OFFERING
