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Stock Code: 9927
（A joint stock company incorporated in the People’s Republic of China with limited liability）
賽力斯集團股份有限公司
GLOBAL OFFERING
Seres Group Co., Ltd.
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager


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Important: If you are in any doubt about any of the contents of this Prospectus, you should seek independent professional advice.
Seres Group Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 100,200,000 H Shares (subject to the
Offer Size Adjustment Option and the
Over-allotment Option)
Number of Hong Kong Offer Shares : 10,020,000 H Shares (subject to
reallocation and the Offer Size
Adjustment Option)
Number of International Offer Shares : 90,180,000 H Shares (subject to
reallocation, the Offer Size Adjustment
Option and the Over-allotment
Option)
Maximum Offer Price : HK$131.50 per H Share, plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, AFRC transaction levy of
0.00015% and Hong Kong Stock
Exchange trading fee of 0.00565%
(payable in full on application in Hong
Kong dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 9927
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
Prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any part
of the contents of this Prospectus.
A copy of this Prospectus, having attached thereto the documents specified in the section headed “Documents Delivered to the Registrar of Companies i n Hong Kong and Available on Display” in
Appendix V to this Prospectus, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up an d Miscellaneous Provisions) Ordinance
(Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibil ity as to the contents of this
Prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and the C ompany on the Price Determination Date.
The Price Determination Date is expected to be on or around Monday, November 3, 2025 (Hong Kong time) and, in any event, not later than 12:00 noon on Monda y, November 3, 2025 (Hong Kong
time). The Offer Price will not be more than HK$131.50 per Offer Share unless otherwise announced. If, for any reason, the Offer Price is not agreed on or before 12:00 noon on Monday, November
3, 2025 (Hong Kong time) between the Overall Coordinators (for themselves and on behalf of the Underwriters) and the Company, the Global Offering will not proceed and will lapse.
The Overall Coordinators, on behalf of the Underwriters, may, where considered appropriate and with the Company’s consent, reduce the number of Hong Kong Offer Shares at any time on or prior
to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, an announcement will be published on the webs ite of our Company at www.seres.cn
and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and the offer will be canceled and relaunched at the revised number of Offer Shares in accordance with 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 the decision to make such reduction will be announced not later than the morning of the day which is the last day for lodging applications und er the Hong Kong Public Offering. Further
details are set forth in the sections headed “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this Prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for themselves and on behalf of the
Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. Please refer to the section headed “Underwriting” in this Prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be off ered, sold, pledged or otherwise
transferred within the United States, except pursuant to an available exemption from, or in a transaction not subject to, the registration requireme nts of the U.S. Securities Act and in
accordance with any applicable state securities laws in the United States. The Offer Shares may only be offered and sold outside the United States in of fshore transactions in reliance on
Regulation S. No public offering of the Offer Shares will be made in the United States.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this document to the pub lic in relation to the Hong Kong Public
Offering.
This Prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.seres.cn . If you require a printed copy of this Prospectus, you may
download and print it from the website addresses above.
IMPORTANT
October 27, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide printed copies of this prospectus or printed copies of any
application forms to the public in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Hong Kong Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”
section, and our website www.seres.cn. If you require a printed copy of this prospectus,
you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(a) apply online through the HK eIPO White Form service at www.hkeipo.hk ;o r
(b) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who is a
HKSCC Participant to give electronic application instructions via HKSCC’s FINI
system to apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of this prospectus are
identical to the printed document as registered with the Registrar of Companies in Hong Kong
pursuant to Section 342C of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses above.
Please refer to the section headed “How to Apply for Hong Kong Offer Shares” in this
prospectus for further details of the procedures through which you can apply for the Hong
Kong Offer Shares electronically.
IMPORTANT
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Y our application through the HK eIPO White Form service or the HKSCC EIPO
channel service must be for a minimum of 100 Hong Kong Offer Shares and in one of the
numbers set out in the table.
If you are applying through the HK eIPO White Form service, you may refer to the table
below for the amount payable for the number of Shares you have selected. Y ou must pay the
respective amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 13,282.62 2,500 332,065.44 30,000 3,984,785.33 600,000 79,695,706.50
200 26,565.24 3,000 398,478.53 40,000 5,313,047.10 700,000 92,978,324.26
300 39,847.86 3,500 464,891.62 50,000 6,641,308.88 800,000 106,260,942.00
400 53,130.47 4,000 531,304.71 60,000 7,969,570.66 900,000 119,543,559.76
500 66,413.09 4,500 597,717.80 70,000 9,297,832.43 1,000,000 132,826,177.50
600 79,695.71 5,000 664,130.89 80,000 10,626,094.20 2,000,000 265,652,355.00
700 92,978.33 6,000 796,957.06 90,000 11,954,355.98 3,000,000 398,478,532.50
800 106,260.94 7,000 929,783.24 100,000 13,282,617.76 4,000,000 531,304,710.00
900 119,543.57 8,000 1,062,609.42 200,000 26,565,235.50 5,010,000
(1) 665,459,149.28
1,000 132,826.18 9,000 1,195,435.60 300,000 39,847,853.26
1,500 199,239.27 10,000 1,328,261.78 400,000 53,130,471.00
2,000 265,652.35 20,000 2,656,523.56 500,000 66,413,088.76
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
No application for any other number of the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Hong Kong Public
Offering, we will issue an announcement in Hong Kong to be published on the websites
of the Hong Kong Stock Exchange at www.hkexnews.hk and our Company at
www.seres.cn .
Hong Kong Public Offering commences ............................. .9:00 a.m. on
Monday, October 27, 2025
Latest time for completing electronic applications
under the HK eIPO White Form service through
the designated website www.hkeipo.hk (2) .......................... 1 1:30 a.m. on
Friday, October 31, 2025
Application lists open (3) .......................................... 1 1:45 a.m. on
Friday, October 31, 2025
Latest time for completing payment of HK eIPO White Form
applications by effecting internet banking transfer(s)
or PPS payment transfer(s) and giving electronic
application instructions to HKSCC
(4) ............................ .12:00 noon on
Friday, October 31, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to submit
electronic application instructions on your behalf through HKSCC’s FINI system in
accordance with your instruction to apply for the Hong Kong Offer Shares, you are advised to
contact your broker or custodian for the earliest and latest time for giving such instructions,
as this may vary by broker or custodian .
Application lists close
(3) ........................................ .12:00 noon on
Friday, October 31, 2025
Expected Price Determination Date (5) ................... .Monday, November 3, 2025
Announcement of the final Offer Price, the level of
indications of interest in the International Offering,
the level of applications in the Hong Kong Public
Offering and the basis of allocation of the Hong Kong
Offer Shares to be published on the websites of the
Hong Kong Stock Exchange at www.hkexnews.hk and on
the website of our Company at www.seres.cn
on or before (6) ...............................................1 1:00 p.m. on
Tuesday, November 4, 2025
EXPECTED TIMETABLE (1)
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Results of allocations in the Hong Kong Public Offering
(with successful applicants’ identification document
numbers, where appropriate) to be available through
a variety of channels as described in the section headed
“How to Apply for Hong Kong Offer Shares —
B. Publication of Results” in this prospectus, including:
 in the announcement to be published on websites
of the Hong Kong Stock Exchange at www.hkexnews.hk and
our Company’s website at www.seres.cn (5)
at or before ............................................... 1 1:00 p.m. on
Tuesday, November 4, 2025
 from the “Allotment Results” page
at www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult )
with a “search by ID” function ................................ 1 1:00 p.m. on
Tuesday, November 4, 2025 to
12:00 midnight on
Monday, November 10, 2025
 from the allocation results telephone enquiry line
by calling +852 3691 8488 between
9:00 a.m. and 6:00 p.m. ................... .from Wednesday, November 5, 2025
to Monday, November 10, 2025
(excluding Saturday,
Sunday and public holiday
in Hong Kong)
Despatch of H Share certificates or deposit of the
H Share certificates into CCASS in respect of
wholly or partially successful applications
pursuant to the Hong Kong Public Offering
on or before
(7) ..................................... T uesday, November 4, 2025
HK eIPO White Form e-Auto Refund payment instructions/
refund cheques in respect of wholly or partially successful
applications (if applicable) or wholly or partially unsuccessful
applications to the Hong Kong Public Offering
to be dispatched on or before
(8)(9) .................... W ednesday, November 5, 2025
Dealings in the H Shares on the Hong Kong Stock Exchange
expected to commence at 9:00 a.m. on ................ W ednesday, November 5, 2025
EXPECTED TIMETABLE (1)
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Notes:
(1) All times refer to Hong Kong local time, except as otherwise stated.
(2) Y ou will not be permitted to submit your application under the HK eIPO White Form service through the
designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained an application reference number from the designated website
prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, October
31, 2025, the application lists will not open or close on that day. Please see “How to Apply for Hong Kong
Offer Shares — E. Severe Weather Arrangements.”
(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker or custodian to apply for on
your behalf via HKSCC EIPO channel should see “How to Apply for Hong Kong Offer Shares — A.
Application for Hong Kong Public Offer Shares — 2. Application Channels.”
(5) The Price Determination Date is expected to be on or before Monday, November 3, 2025. If, for any reason,
our Company and the Overall Coordinators (for themselves and on behalf of the Underwriters) are unable to
reach agreement on the Offer Price on or before 12:00 noon on Monday, November 3, 2025, the Global
Offering will not proceed and will lapse.
(6) None of the website or any of the information contained on the website forms part of this prospectus.
(7) No temporary documents of title will be issued in respect of the Offer Shares. H Share certificates will only
become valid evidence of title at 8:00 a.m. on Wednesday, November 5, 2025, provided that (1) the Global
Offering has become unconditional in all respects and (2) the Underwriting Agreements have not been
terminated in accordance with their respective terms. Investors who trade H Shares prior to the receipt of H
Share certificates or prior to the H Share certificates becoming valid evidence of title do so entirely at their
own risk.
(8) HK eIPO White Form e-Auto Refund payment instructions/refund checks will be issued in respect of wholly
or partially unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly
or partially successful applications in the event that the final Offer Price is less than the price payable per Offer
Share on application. Part of the applicant’s identification document number, or, if the application is made by
joint applicants, part of the identification document number of the first-named applicant, provided by the
applicant(s) may be printed on the refund check, if any. Such data would also be transferred to a third party
for refund purposes. Banks may require verification of an applicant’s identification document number before
encashment of the refund check. Inaccurate completion of an applicant’s identification document number may
invalidate or delay encashment of the refund check.
(9) Applicants being individuals who are eligible for personal collection must not authorize any other person to
collect on their behalf. Applicants being corporations which are eligible for personal collection must attend by
their authorized representatives bearing a letter of authorization from their corporation stamped with the
corporation’s chop. Both individuals and authorized representatives of corporations (if applicable) must
produce, at the time of collection, evidence of identity acceptable to our Company’s H Share Registrar at the
time of collection.
Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share Certificates
and Refund of Application Monies” for details.
Applicants who have applied through the HK eIPO White Form service and paid their applications monies
through single bank accounts may have refund monies (if any) despatched to the bank account in the form of
HK eIPO White Form e-Auto Refund payment instructions. Applicants who have applied through the HK
eIPO White Form service and paid their application monies through multiple bank accounts may have refund
monies (if any) despatched to the address as specified in their application instructions in the form of refund
checks in favor of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary
post at their own risk.
Further information is set out in the section headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies.”
EXPECTED TIMETABLE (1)
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The above expected timetable is a summary only. Y ou should see “Structure of the Global
Offering” and “How to Apply for Hong Kong Offer Shares” for details of the structure of the
Global Offering, including the conditions of the Global Offering, and the procedures for
application for the Hong Kong Offer Shares.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This Prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this Prospectus pursuant to the Hong Kong Public Offering. This Prospectus may not
be used for the purpose of making, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstances. No action has been taken to permit a
public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong
and no action has been taken to permit the distribution of this Prospectus in any
jurisdiction other than Hong Kong. The distribution of this Prospectus for purposes of a
public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this Prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this Prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this Prospectus. Any information or representation not contained nor made
in this Prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Overall Coordinators, the Capital Market Intermediaries, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of
our or their respective directors, officers, employees, agents, or representatives of any of
them or any other parties involved in the Global Offering.
Page
EXPECTED TIMETABLE ............................................ i v
CONTENTS ....................................................... viii
SUMMARY ....................................................... 1
DEFINITIONS ..................................................... 2 7
GLOSSARY OF TECHNICAL TERMS ................................. 4 0
FORW ARD-LOOKING STATEMENTS ................................. 4 2
RISK FACTORS ................................................... 4 4
W AIVERS, CONSENTS AND EXEMPTION ............................. 8 2
CONTENTS
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INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL
OFFERING ...................................................... 9 6
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 1 0 1
CORPORATE INFORMATION ....................................... 1 0 8
INDUSTRY OVERVIEW ............................................. 1 1 1
REGULATORY OVERVIEW ......................................... 1 2 7
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE ............. 1 7 2
BUSINESS ........................................................ 1 8 7
DIRECTORS AND SENIOR MANAGEMENT ............................ 2 5 5
CONNECTED TRANSACTIONS ...................................... 2 7 6
SUBSTANTIAL SHAREHOLDERS ..................................... 2 9 1
CORNERSTONE INVESTORS ........................................ 2 9 3
SHARE CAPITAL .................................................. 3 0 8
FINANCIAL INFORMATION ......................................... 3 1 2
FUTURE PLANS AND USE OF PROCEEDS ............................. 3 6 5
UNDERWRITING .................................................. 3 7 1
STRUCTURE OF THE GLOBAL OFFERING ............................ 3 8 4
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 3 9 8
APPENDIX I ACCOUNTANTS’ REPORT ........................ I - 1
APPENDIX II UNAUDITED PRO FORMA FINANCIAL
INFORMATION ................................ II-1
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION ........ III-1
APPENDIX IV STATUTORY AND GENERAL INFORMATION ........ I V - 1
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON
DISPLAY ..................................... V - 1
CONTENTS
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This summary aims to give you an overview of the information contained in this
Prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read the entire Prospectus, including the financial
statements and accompanying notes, before you decide to invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in the section headed “Risk Factors” in this
Prospectus. You should read that section carefully in full before you decide to invest in
the Offer Shares.
OVERVIEW
Who We Are
We are a technology company focused on new energy vehicles, including the research and
development, manufacturing, sales and services of new energy vehicles as well as core NEV
components. With nearly four decades of industrial experience and operational optimization,
we have achieved various business milestones. In 1986, we began with springs and shock
absorbers, later expanding into motorcycle manufacturing. In 2003, we capitalized on the rise
of domestic automotive brands and entered the vehicle manufacturing sector through a joint
venture with Dongfeng Motor. By 2016, we have transformed and tapped into the NEV sector.
In 2021, we launched the AITO brand, establishing our positioning as “Intelligence Redefines
Luxury” and introduced a series of models.
Guided by the market direction of “user-defined vehicles” and the technological roadmap
of “software-defined vehicles”, we are committed to continuously providing the quality
product experience for our users. Our innovations in product and technologies stem from a
profound understanding of user needs, fostered through co-creation with our customers. Our
platform-based technical architecture allows for smooth hardware upgrades and software
iterations.
We have a track record of creating popular products. Since its launch, our core brand,
AITO , has experienced a rapid sales growths. To date, we have successfully launched four
models: AITO M5 , AITO M7 , AITO M8 , and AITO M9 . The AITO M5 set a record for being the
fastest new-brand model to deliver over 10,000 vehicles in its inaugural year. The AITO M7
became the best-selling domestic brand model in the RMB300,000 price segment in China,
delivering approximately 200,000 vehicles in 2024. The AITO M9 led the RMB500,000 price
segment in China with a delivery of over 150,000 vehicles in 2024. Our AITO M8 , launched
in April 2025, has also gained strong market traction, securing over 30,000 orders within just
24 hours of its official release. In the second half of 2024, the AITO brand topped China’s NEV
reputation rankings with a Net Promoter Score (NPS) of 82%, according to the Frost &
Sullivan Report. Total deliveries of the AITO brand reached 387,100 vehicles in 2024, marking
a 268% year-on-year growth.
SUMMARY
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Our delivery capabilities enable us to achieve instant ramp-up. Our Super Factories and
digital supply chain system ensure the quality and swift delivery of our AITO series products.
As a result, the production volume of the AITO M9 exceeded 150,000 vehicles within 10
months of launch, exemplifying “rapid scalability after launch.” We have placed great
emphasis on quality control. The AITO series have set industry benchmarks in quality
performance, ranking first in the New V ehicle Quality Rankings among new vehicle brands for
three consecutive years, according to the Frost & Sullivan Report.
Our New Luxury Product Matrix
Our AITO brand has developed a product matrix that includes four models: AITO M9 ,
AITO M8 , AITO M7 and AITO M5 . This lineup covers the market through differentiated
positioning, and effectively targets the high-end segment with a precise pricing strategy and a
combination of scenario-based features.
The details of our product matrix are as follows:
AITO M9
Positioning
Length × Width ×
Height (mm)
Wheelbase (mm)
Powertrain
CLTC range (km)
MSRP
(RMB in ten thousand)
Initial delivery date
All-scenario intelligent
flagship SUV
Family intelligent
flagship SUV
Family intelligent
luxury SUV
Stylish urban
intelligent SUV
5,230x1,999x1,800 5,190x1,999x1,795 5,080x1,999x1,780 4,785x1,930x1,620/1,625
3,110 3,105 3,030 2,880
1,474 1,526 1,625 1,440
46.98-56.98 35.98-44.98 27.98-37.98 22.98-24.98
February 2024 April 2025 August 2022 March 2022
REEV/BEV REEV/BEV REEV/BEV REEV/BEV
Number of seats Five-seater/six-seater Five-seater/six-seater Five-seater/six-seater Five-seater
AITO M8 AITO M7 AITO M5
SUMMARY
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Our Intelligent NEV Solutions
With over twenty years of experience in automotive manufacturing, we have continuously
refined traditional vehicle performance, space utilization, and technological processes. On this
foundation, we have independently developed the MF platform and introduced five intelligent
automotive solutions: intelligent safety, driving assistance, intelligent powertrain, intelligent
cockpit, and intelligent chassis, dedicated to providing users with a safe and intelligent riding
experience characterized by “ease of use and driving comfort.”
Driving assistance
Intelligent safety
Intelligent chassis
Intelligent cockpit
Intelligent powertrain
MF Platform
Safer driving
Stronger protection
Freewheeling interaction
Stronger ecosystem
More innovative function
Worry-free power
Worry-free scenarios
Full-scenario coverage
Superior battery safety
More comprehensive functions
More comfortable driving
 and riding
More flexible control
Our Growth
During the Track Record Period, our “new luxury” intelligent NEVs received recognition
in the market, leading to growth in our operating performance:
 Revenue : increased from RMB35.8 billion in 2023 to RMB145.1 billion in 2024,
representing a year-on-year increase of 305.5%;
 Gross profit margin : increased from 7.2% in 2023 to 23.8% in 2024, representing
a year-on-year increase of 16.6 percentage points, and increased from 21.8% for the
six months ended June 30, 2024 to 26.5% for the six months ended June 30, 2025,
representing a year-on-year increase of 4.7 percentage points;
 Net profit : in 2024 and for the six months ended June 30, 2025, we achieved a net
profit. We are the fourth profit-making NEV company in the world according to the
Frost & Sullivan Report. In 2023, we recorded a net loss attributable to owners of
the Company of RMB2.4 billion, and in 2024 and for the six months ended June 30,
2025, we recorded a net profit attributable to owners of the Company of RMB5.9
billion and RMB2.9 billion, respectively.
SUMMARY
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OUR STRENGTHS
We believe the following strengths have contributed to our success and differentiated us
from our competitors:
 A leading new luxury vehicle brand;
 A streamlined and efficient operation and management system;
 Leadership in technology propelled by a synthesis of innovation + collaborative
innovation;
 Capability to ramp up delivery instantly;
 A sales and service ecosystem enabling precise engagement throughout the
lifecycle; and
 Entrepreneurial spirit and R&D team.
For details, see “Business — Our Strengths.”
OUR STRATEGIES
We are dedicated to serving users, striving to become a leading world-class new luxury
automotive brand. To achieve these strategic objectives, our key measures include:
 Building a new standard of tech-luxury to set a global benchmark for intelligent
NEVs;
 Adhering to a popular product strategy to offer a continuously evolving product
experience for global users;
 Actively promoting globalization and expanding our brand influence in international
markets;
 Creating an active and intelligent service system throughout the vehicle lifecycle;
and
 Continuing to enhance intelligent manufacturing capabilities to establish an open,
innovative, and integrated ecosystem for the intelligent vehicle industry.
For details, please see “Business — Our Strategies.”
SUMMARY
–4–


--- page 15 ---
OUR SALES CHANNELS
The following table sets forth the sales channels of our vehicles and their respective
revenue contributions for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Distribution /H1118/H1118/H1118/H111827,846,603 81.8 33,464,269 93.5 136,888,738 94.3 60,438,567 93.0 59,156,066 94.9
Direct sales /H1118/H1118/H1118/H11186,209,471 18.2 2,324,616 6.5 8,224,885 5.7 4,575,747 7.0 3,202,759 5.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
China
In line with industry norms, we primarily sell our NEVs through a network of distributors
to cover the China market. The following table sets forth our AITO User Centers operated by
our distributors for the periods indicated:
As of/For the year ended December 31,
As of/For the
six months
ended
June 30,
2022 2023 2024 2025
At the beginning of the period /H1118/H111883 195 208 312
AITO User Centers newly opened
by distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117 19 104 48
AITO User Centers closed by
distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185604
Net increase/(decrease) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112 13 104 44
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118195 208 312 356
Our AITO User Centers increased during the Track Record Period primarily to support the
significant increase in demand for AITO vehicles due to the quality and performance of our
vehicles.
Our other vehicle brands (such as Landian and DFSK) are primarily sold through our
distributors’ stores. As of December 31, 2022, 2023 and 2024 and June 30, 2025, our
distributors’ store network for our other vehicle brands consisted of 1,882 stores, 1,317 stores,
400 stores and 456 stores. The decrease in 2024 was mainly because we strategically pivoted
our focus to our AITO brand.
SUMMARY
–5–


--- page 16 ---
Overseas
During the Track Record Period, substantially all of our products and services are sold in
China. However, we have also tapped into overseas markets. We have established a presence
in multiple countries across Europe, the Middle East, the Americas, and Africa. In Europe, we
have expanded into markets including Norway, Germany, the United Kingdom, and
Switzerland, marking the successful completion of our initial global market expansion. In
2022, 2023, 2024 and the six months ended June 30, 2024 and 2025, our overseas revenue
amounted to RMB3,921.9 million, RMB4,975.9 million, RMB4,210.7 million, RMB1,847.8
million and RMB1,421.7 million, respectively.
We plan to continue to expand into other international markets. We aim to build and
enhance our overseas sales and service capability, and to adapt the user interfaces of our
software systems to provide better products and services to consumers in overseas markets.
Our Online Touch Points
Our AITO App is integrated with offline stores, enabling the entire process, including user
consultation, test drive appointment, deposit payment, and after-sales appointment, to be
completed online. Through our AITO App, prospective customers can place orders. Relying on
our strong supply chain management capabilities, we enable our customers to choose from a
vast pool of configurations, such as vehicle color, wheel hub size and style, in-vehicle
entertainment and “zero gravity” seats. Our users can further review their order status on a
real-time basis, evaluate services, and interact with other users directly on the AITO App. Such
instantaneous feedback also enables us to further enhance our service and customer experience.
OUR TECHNOLOGIES
Through continuous innovations, we have developed core technological capabilities, that
provides distinct competitive advantage in the industry. This substantial accumulation of
technological capabilities improves the quality and performance of our products and further
solidifies our competitive edge, enabling us to stand out in the industry.
The MF Platform
The MF Platform is our independently developed intelligent platform with continuously
evolving capabilities, and it is the first platform in the industry compatible with three new
energy powertrains, namely, Super Range-extended Electric, Battery Electric and Ultra Hybrid.
The MF Platform enables limitless dimensional flexibility and vehicle-type adaptability for
efficient integration and interchangeability of components, which enables us to efficiently and
reliably achieve rapid mass production of our series models through platformisation.
SUMMARY
–6–


--- page 17 ---
SERES Super REX System
Our latest-generation SERES Super REX System has achieved a mass-production thermal
efficiency of 44.8%, with a maximum fuel-to-electricity conversion rate of 3.65kWh/L. We
have established partnerships with several industry leaders to advance the development of
REEVs. Our SERES Super REX System incorporates RoboREX intelligent control technology,
which integrates battery state of charge, driving conditions, map data, and other factors to
facilitate global dynamic planning and intelligent optimisation decisions, with rapid execution
response. Compared to conventional control methods, this technology enhances the operational
efficiency of the system, extends the total driving range of the vehicle, and further improves
battery retention capability. Furthermore, this technology optimises vehicle NVH, delivering a
more energy-efficient, quiet, and seamless driving experience for users.
Safety Technology
Guided by users’ comprehensive safety needs and based on real-world driving scenarios
and accident data analysis, we have developed intelligent safety technology system through
four overarching safety scenarios of protecting life, structure, health and privacy, spanning
nine crucial dimensions, including passive safety and active safety. Our intelligent safety
technology system adopts scenario-based safety, encompassing over 180 vehicle use cases and
developing more than 300 safety functions.
Intelligent Testing
Our cloud and end integrated testing platform possesses advanced testing capabilities.
Our self-developed intelligent testing terminals facilitate 7x24 automated testing for all
vehicles. We have established Hardware-in-the-Loop (“ HIL”) testing systems for ring-network
architecture and cabin clusters, providing robust automated simulation capabilities. As the
enterprise with an extreme cold-weather testing base, we ensure comprehensive coverage for
extreme scenario testing. By extending automated testing to the supply chain, production, and
sales operations, we have established a full-process quality automation interception network.
Intelligent Services
Based on our self-developed platform, we provide full-chain, full-lifecycle intelligent
services. By employing big data and AI technologies and based on digital infrastructures and
intelligent platforms, we are capable of offering users proactive services, including predictive
risk alerts, remote diagnosis, real-time incident and failure notifications, delivering a
comprehensive, precise, efficient, and quality intelligent services for users.
For details, see “Business — Our Technologies.”
SUMMARY
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--- page 18 ---
Manufacturing
We consistently promote intelligence in vehicle manufacturing and adopt a lean
production approach to drive continuous improvements in operational efficiency and product
quality.
Currently, we operate several intelligent factories. The intelligent factories mainly for
manufacturing our AITO brand are the SERES Super Factory (Longsheng) (the “ Super Factory
(Longsheng) ”), the SERES Super Factory (Fenghuang) (the “ Super Factory (Fenghuang) ”),
and the SERES Super Factory (Longxing) (the “ Super Factory (Longxing) ”), (together the
“Super Factories ”). We have an aggregate annual production capacity of approximately
600,000 units of vehicles as of the Latest Practicable Date.
For details, see “Business — Manufacturing.”
Sales and Marketing
We have built online-and-offline integration strategies that connect digital touch points
and physical stores, engaging customers throughout the entire user journey from first
interaction and engagement to purchase and after-sales support. This omni-channel approach
ensures a smooth, consistent, and flexible user experience, and enables us to expand our market
presence. As of June 30, 2025, our physical AITO stores comprised over 350 AITO User
Centers and over 700 experience centers across over 240 cities in China. In line with industry
norms, we primarily sell our NEVs through a network of distributors to cover the China
market. For details, see “Business — Sales and Marketing — Sales Network.”
OUR CUSTOMERS AND SUPPLIERS
Customers
During the Track Record Period, we primarily sell our NEVs through our distributors’
AITO stores.
For the years ended December 31, 2022, 2023 and 2024 and for the six months ended June
30, 2025, the aggregate revenue generated from our five largest customers in each year/period
during the Track Record Period amounted to RMB4.7 billion, RMB4.3 billion, RMB20.2
billion and RMB7.4 billion, respectively, which accounted for 13.9%, 12.0%, 13.9% and 11.9%
of our total revenue for the respective years/periods. For the same periods, revenue from the
largest customer in each year/period during the Track Record Period amounted to RMB1.3
billion, RMB1.5 billion, RMB5.6 billion and RMB2.5 billion, respectively, which accounted
for 4.0%, 4.1%, 3.8% and 4.0% of our total revenue for the respective years/periods. For
details, see “Business — Customers and Suppliers — Customers.”
SUMMARY
–8–


--- page 19 ---
Suppliers
Our suppliers primarily include enterprises that supply various raw materials and
components for our vehicles, mainly including metal materials, batteries, electronic
components, seats and other automotive parts, among others.
Relationship with Major Suppliers
For the years ended December 31, 2022, 2023 and 2024 and for the six months ended June
30, 2025, the aggregate purchases from our top five suppliers in each year/period during the
Track Record Period amounted to RMB13.9 billion, RMB15.4 billion, RMB72.2 billion and
RMB35.2 billion, which accounted for 34.7%, 36.9%, 51.9% and 57.9% of our total purchases
for the respective years/periods. For the same periods, purchases from our largest supplier in
each year/period during the Track Record Period amounted to RMB5.8 billion, RMB7.2
billion, RMB42.0 billion and RMB20.0 billion, which accounted for 14.5%, 17.4%, 30.2% and
33.0% of our total purchases for the respective years/periods. We purchase automotive parts,
services, software and equipment, among others, from such supplier. For details, see “Business
— Customers and Suppliers — Suppliers — Relationship with Major Suppliers.” We may be
subject to concentration and counterparty risks from these suppliers. See “Risk Factors —
Risks related to Our Business and Industry — We rely on our suppliers to provide raw
materials, components, software and services related to our vehicles.”
Supply Chain
With more than 20 years’ experience in the automotive industry, we have developed core
technological capabilities that have led to the success of our AITO vehicles. Meanwhile, we
have established a reliable and scalable supply network. Based on long-term strategic
partnerships with leading industry suppliers such as Huawei and CA TL, we aim to foster an
open, inclusive, and interdependent ecosystem.
Collaborations with Huawei
We have established long-term and strong business relationship with Huawei. Our
strategic collaborations with Huawei are summarized as below.
 Products and services provided by Huawei. We procure automotive components
from Huawei, such as intelligent cockpit and driving assistance systems used in all
of our AITO vehicles. In addition, leveraging Huawei’s brand recognition and
extensive physical store network, we also procure advertising and promotional
services from Huawei to market and sell our AITO vehicles. For example, at
approximately 700 experience centers operated and managed by Huawei, we offer
AITO vehicles for display and test drive. Customers may also place orders directly
at the experience centers, with sales and delivery finalized at an AITO User Centers
managed and operated by us and our distributors.
SUMMARY
–9–


--- page 20 ---
 Equity investment in Yinwang. On August 23, 2024, we entered into an equity
transfer agreement with Huawei to purchase 10% of the equity interests held by
Huawei in its then wholly-owned subsidiary, Shenzhen Yinwang, at a total
consideration of RMB11.5 billion. As a result of such transaction, we expect to
continue to enhance our operational ecosystem through this acquisition by
strengthening our investments in intelligent vehicle technology, improving the
stability of our supply chain for intelligent vehicle components, strengthening our
strategic partnership with Huawei, and continuing to enhance our deployment in
advanced vehicle smartification technologies and the competitiveness of our
intelligent electric vehicles, while enlarging the ecosystem cooperation with our
strategic partners. For details, see “History, Development and Corporate Structure –
Significant Acquisitions and Disposals – Acquisition of minority interest of
Shenzhen Yinwang.”
 Procurement of Trademarks. In 2024, we acquired 919 trademarks primarily in
relation to AITO and 44 relevant design patents from Huawei and its related parties,
a strategic business partner of us and an Independent Third Party, for a consideration
of approximately RMB2.5 billion. The consideration is determined based on
negotiation between both parties. This transaction does not affect the business
collaboration between Huawei and us.
Both parties will continue to strengthen our stable and sustainable collaborations. In these
regard, we have entered into a cooperation agreement regarding further deepening collaborated
business with Huawei in 2024. Our collaborations with Huawei do not involve any
arrangements regarding profit-sharing, which are consistent with industry norm according to
Frost & Sullivan.
Significance of our relationship with Huawei
During the Track Record Period, we have experienced significant business growth and
improved profitability, which has been largely attributable to the success of AITO vehicles. Our
collaboration with Huawei is a significant contributor to the success of our AITO vehicles. We
have maintained good and long-term business relationship with Huawei and we believe that our
relationship with Huawei is not subject to material adverse change. Nonetheless, we may be
subject to concentration and counterparty risks from such collaborations. If we experience any
material disruptions in our business relationship with Huawei, our business, financial condition
and results of operations may be materially and adversely affected. See “Risk Factors – Risks
related to Our Business and Industry – Our profit is attributable to the launch of certain
successful models and the partnership with our significant business partners.”
SUMMARY
–1 0–


--- page 21 ---
RISK FACTORS
Our business and the Global Offering involve certain risks, including (i) risks related to
our business and industry; (ii) risks related to the jurisdictions in which we operate our
business; and (iii) risks related to the Global Offering. Some of the major risks we face include,
but not limited to,
 We may not be able to successfully compete in the automotive market;
 Our future growth is dependent on the consumer demand for NEVs;
 Change of government policies that are favorable for NEVs or domestically
manufactured vehicles could materially and adversely affect our business, financial
condition, results of operations and prospects;
 Our industry and its technology are rapidly evolving and may be subject to
unforeseen changes. Breakthroughs in other NEV technologies may materially and
adversely affect the demand for our vehicles;
 We rely on our suppliers to provide raw materials, components, software and
services related to our vehicles;
 We may not be able to continue to develop, produce and deliver vehicles of high
quality and appeal to users, on schedule, and on a large scale; and
 We may not succeed in continuing to develop, maintain, and strengthen our brand,
and our brand and reputation could be harmed by negative publicity with respect to
us, our Directors, officers, employees, Shareholders, peers, business partners, or our
industry in general.
SUMMARY
–1 1–


--- page 22 ---
COMPETITION
Competition in the global and Chinese new energy passenger vehicle market is intense,
driven by the following factors: (i) consumer vehicle purchasing preferences reshaped by
intelligence; (ii) unprecedented opportunities for vehicle intelligence brought by artificial
intelligence; (iii) new business models and product forms introduced by the cross-border
industry integration; (iv) the continuous growth of China’s automotive export sales; and (v) the
continuously rapid growth of Chinese domestic brands of new energy passenger vehicles. The
NEPV penetration rate in China passenger vehicle market increased from 15.2% in 2021 to
48.9% in 2024, and is expected to reach 76.9% in 2030, according to Frost & Sullivan. In
China’s NEPV market, domestic brands dominated the top 20 best-selling models in 2024,
taking up 18 of the top 20 models by sales volume. In the premium NEPV segment, domestic
brands also showed strong competitiveness, with 7 domestic brand models ranking among the
top 10 models by sales volume in 2024. Among them, the AITO M7 ranked first by sales
volume among all the premium domestic brand models. The entry barriers of China’s premium
NEPV market include: (i) high initial investment; (ii) stable supply chain ecosystem; (iii) new
energy vehicle production qualification barrier; (iv) production costs and economies of scale;
(v) intelligent ecosystem and supporting services; and (vi) full-process integration capability.
We mainly compete with global new energy passenger vehicle companies and Chinese
domestic brand new energy passenger vehicle companies in domestic and overseas markets. In
the future, we may also face competition from new entrants in China and globally, which will
intensify competition. To maintain our competitive edges, we are committed to building a new
concept of tech-luxury to set a global benchmark for intelligent NEVs, adhering to a popular
product strategy to offer a continuously evolving product experience for global users, actively
promoting globalization and expanding our brand influence in international markets, creating
an active and intelligent service system throughout the vehicle lifecycle and continuing to
enhance intelligent manufacturing capabilities to establish an open, innovative, and integrated
ecosystem for the intelligent vehicle industry. According to Frost & Sullivan, our AITO models
rank fifth in China’s new energy passenger vehicle market with a market share of 3.7% in terms
of sales volume in 2024, and third in China’s premium brand new energy passenger vehicle
market in terms of sales volume in 2024. In terms of sales volume in 2024, the AITO M9 ranked
first among passenger models of the RMB500,000 price segment in China. For details, see
“Industry Overview — Competitive Landscape of China New Energy Passenger V ehicle
Market.”
SUMMARY
–1 2–


--- page 23 ---
SUMMARY OF KEY FINANCIAL INFORMATION
Summary of the Consolidated Statements of Profit or Loss and Other Comprehensive
Income
The following table sets forth a summary of our consolidated statements of profit or loss
and other comprehensive income for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118(31,328,448) (92.0) (33,217,792) (92.8) (110,563,078) (76.2) (50,853,429) (78.2) (45,828,067) (73.5)
Gross profit /H1118/H1118/H1118/H1118/H11182,727,626 8.0 2,571,093 7.2 34,550,545 23.8 14,160,885 21.8 16,530,758 26.5
Government grants
and subsidies /H1118/H1118/H1118523,474 1.5 549,466 1.5 1,068,213 0.7 659,200 1.0 690,109 1.1
Other income /H1118/H1118/H1118/H1118261,751 0.8 407,803 1.1 672,305 0.5 237,942 0.4 548,886 0.9
Other gains and
losses /H1118/H1118/H1118/H1118/H1118/H1118/H111814,203 0.0 1,749,261 4.9 (1,615,140) (1.1) (80,805) (0.1) (32,589) (0.1)
Impairment losses
under expected
credit loss model,
net of reversal /H1118/H1118/H1118(76,887) (0.2) (108,785) (0.3) (131,107) (0.1) (39,734) (0.1) 13,632 0.0
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118(1,313,661) (3.9) (1,696,476) (4.7) (5,585,504) (3.8) (2,827,443) (4.3) (2,929,532) (4.7)
Selling and
distribution
expenses /H1118/H1118/H1118/H1118/H1118(4,656,748) (13.7) (5,276,145) (14.7) (19,184,251) (13.2) (8,699,122) (13.4) (8,940,726) (14.3)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118(2,081,359) (6.1) (1,969,389) (5.5) (4,509,309) (3.1) (1,625,462) (2.5) (1,966,811) (3.2)
Share of results of
associates /H1118/H1118/H1118/H1118/H1118512 0.0 578 0.0 (76,055) (0.1) 31,518 0.0 (69,069) (0.1)
Share of results of a
joint venture /H1118/H1118/H1118850 0.0 481 0.0 2,032 0.0 1,758 0.0 2,007 0.0
Finance costs /H1118/H1118/H1118/H1118(330,171) (1.0) (308,746) (0.9) (240,382) (0.2) (119,628) (0.2) (121,874) (0.2)
(Loss) profit before
taxation /H1118/H1118/H1118/H1118/H1118/H1118(4,930,410) (14.6) (4,080,859) (11.4) 4,951,347 3.4 1,699,109 2.6 3,724,791 6.0
Income tax expenses /H1118(290,147) (0.7) (75,857) (0.2) (211,231) (0.1) (339,988) (0.5) (647,428) (1.0)
(Loss) profit for the
year/period /H1118/H1118/H1118/H1118(5,220,557) (15.3) (4,156,716) (11.6) 4,740,116 3.3 1,359,121 2.1 3,077,363 4.9
SUMMARY
–1 3–


--- page 24 ---
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue
(unaudited)
Other
comprehensive
income
Item that may
reclassified
subsequently to
profit or loss:
Exchange differences
arising on
translation of
foreign operations /H1118 47,205 0.1 6,752 0.0 13,557 0.0 19,903 0.0 186 0.0
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H11181,713 0.0 1,271 0.0 578 0.0 553 0.0 65 0.0
Other
comprehensive
income for the
year/period, net
of income tax /H1118/H1118/H111848,918 0.1 8,023 0.0 14,135 0.0 20,456 0.0 251 0.0
Total comprehensive
(expense)/income
for the
year/period /H1118/H1118/H1118/H1118(5,171,639) (15.2) (4,148,693) (11.6) 4,754,251 3.3 1,379,577 2.1 3,077,614 4.9
(Loss) profit for the
year/period
attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118/H1118(3,831,866) (11.3) (2,449,687) (6.8) 5,945,945 4.1 1,624,558 2.5 2,940,890 4.7
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118(1,388,691) (4.1) (1,707,029) (4.8) (1,205,829) (0.8) (265,437) (0.4) 136,473 0.2
(5,220,557) (15.4) (4,156,716) (11.6) 4,740,116 3.3 1,359,121 2.1 3,077,363 4.9
For details, see “Financial Information — Description of Major Components of Our
Results of Operations.”
Revenue
We generate substantially all of our revenue from vehicle sales, primarily from our NEVs,
with a small portion from ICE vehicles. Our other revenue mainly derives from sales of parts
and materials, primarily including range extender, electric drive motor, powertrain and other
automotive parts.
SUMMARY
–1 4–


--- page 25 ---
The following table sets forth a breakdown of our revenue by product category, in
absolute amounts and as a percentage of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H111824,934,089 73.2 28,947,606 80.9 135,490,526 93.4 60,198,727 92.6 57,951,847 92.9
ICE vehicles /H1118/H1118/H1118/H11186,346,800 18.6 4,608,886 12.9 3,447,702 2.4 1,538,234 2.4 1,156,319 1.9
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,775,185 8.2 2,232,393 6.2 6,175,395 4.2 3,277,353 5.0 3,250,659 5.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Note:
(1) Others consist of sales of parts and materials, primarily including range extender, electric drive motor,
powertrain and other automotive parts.
Our revenue grew by 305.5% from RMB35.8 billion in 2023 to RMB145.1 billion in
2024, primarily driven by higher vehicle sales, mainly due to the significant increase in our
sales volume as we continued to strengthen our brand awareness, refine our product portfolio,
and enhance our customer experience. Revenue from vehicle sales increased by 314.0% from
RMB33.6 billion in 2023 to RMB138.9 billion in 2024, mainly due to increased revenue from
sales of NEVs, which increased from RMB28.9 billion in 2023 to RMB135.5 billion in 2024,
primarily due to the increased sales volume of NEVs as a result of the commencement of
deliveries and instant ramp-up production for our flagship model, AITO M9 in 2024. Our
revenue from ICE vehicle sales declined from RMB4.6 billion in 2023 to RMB3.4 billion in
2024, mainly due to the adjustment of our vehicle product strategy.
Our revenue slightly decreased by 4.1% from RMB65.0 billion in the six months ended
June 30, 2024 to RMB62.4 billion in the six months ended June 30, 2025, primarily due to the
slightly decreased revenue from NEVs, driven by the change in sales volume of our NEVs. We
recorded significant revenue in the first half of 2024 driven by the sales of our flagship model,
AITO M9 . In April 2025, we launched AITO M8 , and the expectation for launch of new models
may affect the timing of placing orders by potential consumers, as certain potential consumers
postponed their purchases in anticipation of the upcoming model, which resulted in a slight
decrease in our revenue in the first half of 2025. In particular, prior to the launch of the AITO
M8, our NEV sales volume recorded year-on-year decreases of 42.5% for the three months
ended March 31, 2025. Following the launch of the AITO M8 , our NEV sales volume in the
second quarter of 2025 increased significantly by 115.5% compared with the first quarter of
2025, and increased by 10.8% compared with the second quarter of 2024. Therefore, we do not
expect the short-term impact from launch of new model will materially and adversely affect our
results of operations for the year ending December 31, 2025.
SUMMARY
–1 5–


--- page 26 ---
The following table sets forth our vehicle sales volume for the periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,054 150,926 426,885 200,949 172,108
ICE vehicles /H1118/H1118/H1118/H1118/H1118/H1118132,192 101,383 70,123 34,851 26,495
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,246 252,309 497,008 235,800 198,603
The sales volume of our NEVs increased by 11.8% from 135.1 thousand units in 2022 to
150.9 thousand units in 2023, and further increased significantly to 426.9 thousand units in
2024, as we continued to strengthen our brand awareness, refine our product portfolio, and
enhance our customer experience. We have taken several strategies to support this growth: (i)
we continued to invest in research and development to enhance our technological capabilities
and product quality, (ii) we scaled up production, improved production efficiency and ensuring
timely product supply; (iii) we optimized our product mix by launching vehicle models across
different price segments to meet diverse customer needs; and (iv) we deepened our
collaboration with Huawei in areas such as intelligent driving assistance systems, which
contributed to increased brand visibility and market recognition. The sales volume of our NEVs
decreased from 200.9 thousand units in the six months ended June 30, 2024 units to 172.1
thousand units in the six months ended June 30, 2025, mainly as a result of the launch of the
AITO M8 in April 2025. The expectation for launch of new models may affect the timing of
placing orders by potential consumers. The sales volume of our ICE vehicles decreased from
132.2 thousand units in 2022 to 101.4 thousand units in 2023, and further to 70.1 thousand
units in 2024, and decreased from 34.9 thousand units in the six months ended June 30, 2024
units to 26.5 thousand units in the six months ended June 30, 2025, primarily due to our
strategic shift toward NEVs, in line with industry trends in China and globally. We will
continue to focus on the development and expansion of NEV business, and we will continue
to assess market demand and operational considerations in determining the ongoing
involvement in ICE vehicle business.
SUMMARY
–1 6–


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In terms of geographical coverage, we generate the majority of our revenue in China, as
well as in international markets, including (i) Europe, including Germany, Italy, Spain,
Denmark, Poland and Hungary, (ii) North America, including the United States, Mexico and
Costa Rica, and (iii) Oceania, including New Zealand. During the Track Record Period,
substantially all of our products and services are sold in China. The following table sets forth
a breakdown of our revenue by geographical location, in absolute amounts and as a percentage
of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,134,196 88.5 30,812,974 86.1 140,902,880 97.1 63,166,529 97.2 60,937,161 97.7
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H11183,921,878 11.5 4,975,911 13.9 4,210,743 2.9 1,847,785 2.8 1,421,664 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Our revenue from China increased significantly from RMB30.8 billion in 2023 to
RMB140.9 billion in 2024, primarily because the increased sales volume of NEVs as we
continued to refine our product portfolio. Our revenue from overseas increased from RMB3.9
billion in 2022 to RMB5.0 billion in 2023, primarily due to the increased overseas sales volume
as a result of our efforts to develop overseas markets and expand overseas sales channels.
Gross profit and gross margin
The following table sets forth a breakdown of our gross profit and gross margin by
product category for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,559,630 10.3 2,004,348 6.9 32,291,818 23.8 13,722,320 22.8 15,342,498 26.5
ICE vehicles /H1118/H1118/H1118/H1118/H1118(3,670) (0.1) 183,946 4.0 426,948 12.4 120,567 7.8 32,974 2.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H11182,555,960 8.2 2,188,293 6.5 32,718,766 23.5 13,842,887 22.4 15,375,472 26.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,666 6.2 382,799 17.1 1,831,779 29.7 317,998 9.7 1,155,286 35.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,727,626 8.0 2,571,093 7.2 34,550,545 23.8 14,160,885 21.8 16,530,758 26.5
SUMMARY
–1 7–


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During the Track Record Period, we recorded overall increase in our gross profit margins,
which was primarily due to increased sales from NEVs with higher margins.
We recorded gross profit of RMB2.7 billion in 2022 and RMB2.6 billion in 2023. Our
gross profit margins were 8.0% and 7.2% in 2022 and 2023, respectively. In particular, our
vehicle sales business recorded gross profit of RMB2.6 billion in 2022 and RMB2.2 billion in
2023, with gross profit margins of 8.2% and 6.5% for the same periods, respectively. We
recorded gross profit from others of RMB0.2 billion in 2022 and RMB0.4 billion in 2023, with
gross profit margins of 6.2% and 17.1% for the same periods, respectively.
From 2023 to 2024, our gross profit increased significantly from RMB2.6 billion to
RMB34.6 billion, and our gross profit margin increased significantly from 7.2% to 23.8%. In
particular, our vehicle sales business recorded gross profit of RMB2.2 billion in 2023 and
RMB32.7 billion in 2024, achieving gross profit margins of 6.5% and 23.5% for the same
periods, respectively, primarily due to our adherence to promoting technological innovation,
increasing product sales and optimizing product mix based on our technology-driven approach.
Our gross profit margin for sales of NEVs increased from 6.9% in 2023 to 23.8% in 2024,
primarily due to the optimization of our product mix, with an increased sales of high-end
models, which typically have higher gross profit margin. Our gross profit margin for sales of
ICE vehicles increased from 4.0% in 2023 to 12.4% in 2024, primarily due to the optimization
of our product mix, with an increased proportion of revenue from export ICE vehicles in total
revenue from ICE vehicles, which typically have higher gross profit margin. We recorded gross
profit from others of RMB0.4 billion in 2023 and RMB1.8 billion in 2024, achieving gross
profit margins of 17.1% and 29.7% for the same periods, respectively, the increase of gross
profit margin was primarily due to economies of scale and our enhanced operational efficiency.
We recorded gross profit of RMB14.2 billion in the six months ended June 30, 2024 and
RMB16.5 billion in the six months ended June 30, 2025. Our gross profit margins were 21.8%
and 26.5% in the six months ended June 30, 2024 and 2025, respectively. In particular, our
vehicle sales business recorded gross profit of RMB13.8 billion in the six months ended June
30, 2024 and RMB15.4 billion in the six months ended June 30, 2025, achieving gross profit
margins of 22.4% and 26.0% for the same periods, respectively, primarily due to our adherence
to promoting technological innovation and optimizing product mix based on our technology-
driven approach. Our gross profit margin for sales of NEVs increased from 22.8% in the six
months ended June 30, 2024 to 26.5% in the six months ended June 30, 2025, primarily due
to the optimization of our product mix, with an increased sales of high-end models, which
typically have higher gross profit margin. Our gross profit margin for others increased from
9.7% in the six months ended June 30, 2024 to 35.5% in the six months ended June 30, 2025,
primarily due to economies of scale and our enhanced operational efficiency.
SUMMARY
–1 8–


--- page 29 ---
Other income
Our other income consists primarily of interest income from bank deposits and rental
income. We recorded other income of RMB261.8 million, RMB407.8 million, RMB672.3
million, RMB237.9 million and RMB548.9 million in 2022, 2023 and 2024 and for the six
months ended June 30, 2024 and 2025, respectively.
Other gains and losses
Our other gains and losses consist of (i) impairment loss recognized in respect of
goodwill, intangible assets, property, plant and equipment, (ii) gain or loss on disposal of
subsidiaries and other equity investments, (iii) net foreign exchange losses or gains, (iv) gain
or loss on disposal of property, plant and equipment and intangible assets, (v) change in fair
value of financial assets measured at fair value through profit or loss, which representing our
investment in structured deposits and securities of certain listed companies in China, and (vi)
others. In 2022 and 2023, we recorded other gains of RMB14.2 million and RMB1.7 billion,
respectively. In 2024 and for the six months ended June 30, 2024 and 2025, we recorded other
losses of RMB1.6 billion, RMB80.8 million and RMB32.6 million, respectively.
(Loss) Profit for the Y ear/Period
In 2022 and 2023, we recorded losses for the year of RMB5.2 billion and RMB4.2 billion,
respectively, primarily due to the significant amounts of cost of sales incurred, generally in line
with the increased vehicle deliveries. In 2024, we recorded profit for the year of RMB4.7
billion, primarily due to the significant increase in our revenues. Such growth was mainly
attributable to our commitment to the technology-driven approach, which promoted technology
innovation and increased sales volume. In 2024, our total sales volume of NEV amounted to
426.9 thousand vehicles, representing an increase of 182.84% from 2023, leading to a
significant increase in revenues. In the six months ended June 30, 2024 and 2025, we recorded
profit for the period of RMB1.4 billion and RMB3.1 billion, respectively, primarily due to the
optimization of our product mix.
In 2022 and 2023, we recorded a net loss attributable to owners of the Company of
RMB3.8 billion and RMB2.4 billion respectively, and in 2024 and for the six months ended
June 30, 2024 and 2025, we recorded a net profit attributable to owners of the Company of
RMB5.9 billion, RMB1.6 billion and RMB2.9 billion, respectively.
SUMMARY
–1 9–


--- page 30 ---
Summary of the Consolidated Statements of Financial Position
The table below sets forth the selected information from our consolidated statements of
financial position as of the dates indicated, which have been extracted from our audited
consolidated financial statements included in Appendix I to this Prospectus.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total non-current assets /H1118/H1118/H1118/H1118/H111820,184,156 25,127,599 28,366,106 44,068,238
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,975,971 26,117,072 65,997,852 68,843,572
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,160,127 51,244,671 94,363,958 112,911,810
Total non-current liabilities /H1118/H11185,026,211 6,468,545 6,193,607 8,896,813
Total current liabilities /H1118/H1118/H1118/H1118/H111832,331,483 37,576,179 76,264,794 77,005,263
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118(5,355,512) (11,459,107) (10,266,942) (8,161,691)
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,357,694 44,044,724 82,458,401 85,902,076
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
Equity attributable to owners
of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,419,629 11,405,827 12,264,245 26,761,103
Non-controlling interests /H1118/H1118/H1118/H1118(1,617,196) (4,205,880) (358,688) 248,631
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
Our net current liabilities decreased from RMB10,266.9 million as of December 31, 2024
to RMB8,161.7 million as of June 30, 2025, primarily due to (i) an increase in bank balances
and cash of RMB15,331.2 million, and (ii) a decrease in trade and other payables of
RMB6,018.3 million.
Our net current liabilities decreased from RMB11,459.1 million as of December 31, 2023
to RMB10,266.9 million as of December 31, 2024, primarily due to (i) an increase in pledged
and restricted bank deposits of RMB30,940.3 million, (ii) an increase in time deposits of
RMB7,303.5 million, and (iii) an increase in financial assets at fair value through profit or loss
of RMB2,915.1 million, partially offset by (i) an increase in trade and other payables of
RMB39,945.4 million and (ii) a decrease in amount due from immediate holding company of
RMB1,374.2 million.
Our net current liabilities increased from RMB5,355.5 million as of December 31, 2022
to RMB11,459.1 million as of December 31, 2023, primarily due to (i) a decrease in pledged
and restricted bank deposits of RMB5,356.0 million, (ii) an increase in trade and other payables
of RMB4,165.7 million, and (iii) an increase in contract liabilities of RMB2,307.4 million,
partially offset by (i) the increases in trade and other receivables of RMB2,386.2 million and
(ii) the increase in bank balances and cash of RMB2,152.3 million.
SUMMARY
–2 0–


--- page 31 ---
Our net assets decreased from RMB9,802.4 million as of December 31, 2022 to
RMB7,199.9 million as of December 31, 2023, which was primarily attributable to (i) loss for
the year of RMB4,156.7 million, (ii) profit guarantee compensation from Chongqing Sokon
Holding Company Limited of RMB1,374.2 million, (iii) repurchase of shares of RMB105.2
million, and (iv) recognition of equity-settled share-based payments of RMB30.8 million. Our
net asset position increased to RMB11,905.6 million as of December 31, 2024, which was
primarily due to (i) profit for the year of RMB4,740.1 million, (ii) capital injection from
non-controlling shareholders of subsidiaries of RMB1,523.0 million, and (iii) recognition of
equity-settled share-based payments of RMB67.4 million, partially offset by acquisition of
non-controlling interests of RMB1,334.0 million at premium. Our net assets further increased
to RMB27,009.7 million as of June 30, 2025, which was primarily due to (i) profit for the
period of RMB3,077.4 million, (ii) capital injection from non-controlling shareholders of
subsidiaries of RMB5.0 billion, and (iii) issuance of shares of RMB8.5 billion.
For details, see “Financial Information — Discussion of Certain Key Items from Our
Consolidated Statements of Financial Position.”
Summary of the Consolidated Statements of Cash Flows
The following table sets forth our cash flows for the periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net cash (used in)/from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,358,034) 6,103,005 21,988,014 16,273,566 14,034,486
Net cash (used in) investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,964,511) (2,678,201) (15,982,083) (4,975,304) (6,564,298)
Net cash from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H11186,325,284 (1,269,023) (4,166,686) (1,893,810) 7,861,634
Net increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,002,739 2,155,781 1,839,245 9,404,452 15,331,822
Cash and cash equivalents at
beginning of the year/period /H11181,318,961 2,327,394 4,479,719 4,479,719 6,333,682
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,694 (3,456) 14,718 5,678 (618)
Cash and cash equivalents at
end of the year/period /H1118/H1118/H1118/H11182,327,394 4,479,719 6,333,682 13,889,849 21,664,886
We incurred net cash used in operating activities in 2022 primarily due to our continuous
investment in sales channel and R&D, while our sales volume had not ramped up. Our net cash
used in operating activities in 2022 was RMB1,358.0 million, which primarily consisted of loss
before taxation of RMB4,930.4 million, adjusted for certain non-cash and non-operating items.
SUMMARY
–2 1–


--- page 32 ---
Adjustments for such non-cash and non-operating items primarily include (i) depreciation of
property, plant and equipment of RMB1,311.3 million, (ii) amortisation of intangible assets of
RMB856.2 million, and (iii) finance costs of RMB330.2 million. The amount was further
adjusted by changes in working capital, primarily including (i) an increase in pledged bank
deposits of RMB9,008.9 million, (ii) an increase in inventories of RMB1,220.0 million, and
(iii) an increase in trade and other receivables of RMB439.5 million, partially offset by (i) an
increase in trade and other payables of RMB10,687.9 million and (ii) an increase in deferred
income of RMB703.9 million.
For details, see “Financial Information — Cash Flow Analysis.”
Key Financial Ratios
The following table sets forth certain of our key financial ratios for the periods indicated.
As of/for the year ended December 31,
As of/For the six months
ended June 30,
2022 2023 2024 2024 2025
%%%%%
Gross profit
margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.0 7.2 23.8 21.8 26.5
Current ratio (2) /H1118/H1118/H1118/H1118/H111883.4 69.5 86.5 84.6 89.4
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H111871.1 60.1 83.2 79.4 85.2
Notes:
(1) Gross profit margin was calculated by dividing gross profit by revenue for the periods indicated.
(2) Current ratio was calculated by dividing total current assets by total current liabilities as of the dates
indicated.
(3) Quick ratio was calculated based on total current assets less inventories divided by total current
liabilities as of the dates indicated.
For details, see “Financial Information — Key Financial Ratios.”
DIVIDENDS
We have adopted our dividend policy since our A-Share listing on the Shanghai Stock
Exchange in 2016. In 2024, we adopted our Shareholder Return Plan for 2023-2025 in
accordance with applicable PRC laws and regulations, including the PRC Company Law ( ʕ
) and the No. 3 Guideline for the Supervision of Listed Companies —
Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ3໮
–ߎ2025ࠈࡌ)), and our Articles of Association. Pursuant to our
Shareholder Return Plan for 2023-2025, subject to certain conditions, the annual cash
dividends of the Company shall account for no less than 20% of the profits realized by the
SUMMARY
–2 2–


--- page 33 ---
Company in that year (calculated in accordance with PRC GAAP) which are available for
distribution and attributable to the shareholders. Under our Shareholder Return Plan for
2023-2025, we declared interim dividend for the first three quarters of 2024 of RMB499.7
million, which was paid in 2024, final dividend for the year of 2024 of RMB1,584.4 million,
which was paid in the first half of 2025 and dividend for the six months ended June 30, 2025
of RMB506.3 million, which is expected to be paid in October 2025. We did not declare or pay
any dividends in 2022 or 2023. We have strictly implemented this plan, which specifies the
decision-making process for dividend standards, dividend ratios and profit distribution
policies, aiming to ensure a consistent profit distribution policy and to protect the legitimate
interests of minority Shareholders.
Future profit distributions may be carried out in the form of cash dividends or stock
dividends or a combination of cash dividends and stock dividends. Any declaration and
payment as well as the amount of dividends will be subject to our constitutional documents,
applicable PRC Law and approval or authorization of our Shareholders. Our PRC Legal
Adviser is of the opinion that, we may pay dividends following approval or authorization by
general meeting of shareholders, in accordance with applicable laws, regulations, normative
documents, and its Articles of Association.
FUTURE PLANS AND USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$12,924.9 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, assuming the Offer Size Adjustment
Option and the Over-allotment Option are not exercised, and at an Offer Price of HK$131.50
per Offer Share.
In line with our strategies, we intend to use the net proceeds for the following purposes,
subject to changes in light of our evolving business needs and changing market conditions:
 approximately 70.0%, or HK$9,047.4 million, will be used to invest in our research
and development projects;
 approximately 20.0%, or HK$2,585.0 million, will be used to invest in diversified
new marketing channels, overseas sales, and charging network services, to enhance
our global brand awareness; and
 approximately 10.0%, or HK$1,292.5 million, will be used for working capital and
general corporate purposes.
For details, see “Future Plans and Use of Proceeds.”
SUMMARY
–2 3–


--- page 34 ---
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Our Single Largest Group of Shareholders comprises Mr. Zhang Xinghai, Sokon Holding
and Y u’an Industry. As of the Latest Practicable Date, Mr. Zhang Xinghai controlled
approximately 28.57% of the total issued share capital of the Company through Sokon Holding
(holding approximately 24.52% of the total issued share capital of our Company) and Y u’an
Industry (holding approximately 4.05% of the total issued share capital of our Company),
entities controlled by him. For details, see the section headed “History, Development and
Corporate Structure — Our Single Largest Group of Shareholders.”
Immediately following completion of the Global Offering, assuming no new Shares are
issued pursuant to the Offer Size Adjustment Option and the Over-allotment Option, Mr. Zhang
Xinghai will control approximately 26.92% of the total issued share capital of the Company
through Sokon Holding and Y u’an Industry. As such, upon completion of the Global Offering,
Mr. Zhang Xinghai, Sokon Holding and Y u’an Industry continue to be our Single Largest
Group of Shareholders.
LISTING ON THE SHANGHAI STOCK EXCHANGE
Our A Shares have been listed on the Shanghai Stock Exchange (stock code: 601127)
since June 2016. Our Directors have confirmed that the Company has no instance of material
non-compliance with the rules of the Shanghai Stock Exchange and other applicable securities
laws and regulations of the PRC in any material respect since the A Share Listing, and, to the
best knowledge of our Directors after having made all reasonable enquiries, there is no material
matter that should be brought to investors’ attention in relation to our compliance record on the
Shanghai Stock Exchange. Based on the filings on the website of the Shanghai Stock Exchange
and the information available in the public domain, our PRC Legal Adviser is of the view that
the Company had complied with all applicable securities laws and regulations in the PRC in
relation to its listing on the Shanghai Stock Exchange in all material respects for the two years
ended December 31, 2023 and 2024, and up to the date of submission of its H Share Listing
application to the Hong Kong Stock Exchange. Based on the independent due diligence
conducted by the Joint Sponsors and our PRC Legal Adviser’s view as set out above, nothing
has come to the Joint Sponsors’ attention that would cause them to have reasonable doubt about
our Directors’ confirmation with regard to the compliance record of the Company on the
Shanghai Stock Exchange in all material respects.
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as
underwriting fees and commissions, and (ii) non-underwriting-related expenses, comprising
professional fees paid to our legal advisers and Reporting Accountants for their services
rendered in relation to the Listing and the Global Offering, and other fees and expenses.
Assuming full payment of the discretionary incentive fee, the estimated total listing expenses
(based on the Maximum Offer Price and assuming that the Offer Size Adjustment Option and
the Over-allotment Option are not exercised) for the Global Offering are approximately
SUMMARY
–2 4–


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HK$251.4 million, accounting for approximately of 1.9% of our gross proceeds. Among such
estimated total listing expenses, we expect to pay underwriting-related expenses of HK$184.5
million, professional fees for our legal advisers and Reporting Accountants of HK$39.3 million
and other fees and expenses of HK$27.6 million. An estimated amount of HK$11.4 million for
our listing expenses, accounting for approximately 0.1% of our gross proceeds, is expected to
be expensed through the statement of profit or loss and the remaining amount of HK$240.0
million is expected to be recognized directly as a deduction from equity upon the Listing.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that: (i) the Global
Offering is completed and 100,200,000 H Shares are issued pursuant to the Global Offering,
(ii) the Offer Size Adjustment Option and the Over-Allotment Option are not exercised, and
(iii) 1,733,566,086 Shares are issued immediately upon completion of the Global Offering.
Based on an Offer
Price of HK$131.50
per Offer Share
Market capitalization of our H Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$13,176.30
million
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$302,853.78
million
Unaudited pro forma adjusted net tangible assets per Share (2) /H1118/H1118/H1118/H1118HK$18.30
Notes:
(1) The total market capitalization of the Company is calculated based on (i) 1,633,366,086 A Shares in
issue as of the Latest Practicable Date at the average closing price of the A Shares of the Company for
the five trading days immediately preceding the Latest Practicable Date at RMB161.96 (or
approximately HK$177.35) per Share, and (ii) the expected market capitalization of the Company’s
H Shares at Listing (assuming the Offer Size Adjustment Option and the Over-Allotment Option are not
exercised).
(2) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company per Share is arrived at on the basis of 1,733,566,086 Shares in total, assuming that the
Global Offering of 100,200,000 H Shares had been completed on June 30, 2025. It does not take into
account any shares which may be allotted and issued pursuant to the exercise of the Offer Size
Adjustment Option and the Over-allotment Option or any shares which may be issued or repurchased
by the Company pursuant to the Company’s general mandate. For details, see “Financial Information.”
In particular, the unaudited pro forma adjusted consolidated net tangible assets of the Group attributable
to owners of the Company as shown on Page II-1 has not taken into account payment of dividends of
RMB506,343,000 which was approved by the shareholders at the shareholders’ meeting on October 15,
2025.
The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company as of June 30, 2025 per Share would have been RMB16.42 (equivalent to HK$17.98)
per Share based on the Offer Price of HK$131.50, if the dividend had been taken into account as of June
30, 2025.
SUMMARY
–2 5–


--- page 36 ---
LEGAL PROCEEDINGS AND COMPLIANCE
We are committed to adhering to the laws and regulations applicable to our business.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
any non-compliance incidents that our Directors believe would, individually or collectively,
have a material operational or financial impact on our business and operations as a whole.
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We are applying for the Listing under Rule 8.05(3) of the Listing Rules and satisfy the
market capitalization/revenue test under Rule 8.05(3) of the Listing Rules with reference to (i)
our revenue for the year ended December 31, 2024, being approximately RMB145.1 billion,
which is over HK$500 million required by Rule 8.05(3) of the Listing Rules; and (ii) our
expected market capitalization at the time of Listing, which, based on the maximum Offer Price
of HK$131.50, exceeds HK$4 billion.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
For the nine months ended September 30, 2025, the sales volume of our NEVs was
304,629 vehicles, and the sales volume of our other vehicles was 36,021 vehicles. In the third
quarter of 2025, the sales volume of our NEVs was 132,521 vehicles, representing a
year-over-year increase of 14.5%.
Our Directors have confirmed that, up to the date of this Prospectus, there has been no
material adverse change in our financial, operational or trading position, indebtedness,
contingent liabilities or prospects since June 30, 2025, being the end date of our latest audited
financial statements, and there has been no event since June 30, 2025 that would materially
affect the information shown in the Accountants’ Report set out in Appendix I.
SUMMARY
–2 6–


--- page 37 ---
In this Prospectus, unless the context otherwise requires, the following terms shall
have the meanings set out below. Certain other terms are explained in the section headed
“Glossary of Technical Terms” in this Prospectus.
“2017 RSU Scheme” the restricted share unit scheme of our Company
approved and adopted on July 20, 2017
“2021 Share Option Incentive
Plan”
the share option incentive plan of our Company approved
and adopted on July 26, 2021
“2022 Share Option Incentive
Plan”
the share option incentive plan of our Company approved
and adopted on September 15, 2022
“2024 Employee Stock
Ownership Plan”
the employee stock ownership plan of our Company
approved and adopted on March 18, 2024, a summary of
the principal terms of which is set forth in the section
headed “Statutory and General Information — 2024
Employee Stock Ownership Plan” in Appendix IV
“A Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are traded in Renminbi
and listed on the Shanghai Stock Exchange
“A Shareholder(s)” holder(s) of the A Share(s)
“Accountants’ Report” the accountants’ report prepared by Deloitte Touche
Tohmatsu, details of which are set out in Appendix I to
this Prospectus
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“AITO” Wenjie (ޢin English
“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 III to this
Prospectus
DEFINITIONS
–2 7–


--- page 38 ---
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of the Board
“Board” or “our Board” the board of directors of the Company
“business day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“Capital Market Intermediaries”
or “capital market
intermediary(ies)” or “CMI(s)”
the capital market intermediaries participating in the
Global Offering and has the meaning ascribed thereto
under the Listing Rules
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“China”, “Mainland China” or
“PRC”
the People’s Republic of China, which, for the purpose of
this Prospectus and for geographical reference only,
excludes Hong Kong, the Macao Special Administrative
Region of the People’s Republic of China, and Taiwan
Region
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong) as amended, supplemented or otherwise
modified from time to time
“Companies (Winding Up and
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”,
“the Company”, or “SERES”
Seres Group Co., Ltd. (ʮ̡)
(formerly known as Chongqing Y u’an Holding Co., Ltd.
(ʮ̡), Chongqing Sokon Automobile
Holding Co., Ltd. (ʮ̡),
Chongqing Sokon Automobile Group Co., Ltd. (ᅅʃੰ
ʮ̡) and Chongqing Sokon Industrial
Group Co., Ltd. (ʮ̡)), a
limited liability company incorporated in the PRC on
May 11, 2007 and converted into a joint stock company
with limited liability on April 29, 2011, the A Shares of
which are listed on the Shanghai Stock Exchange (stock
code: 601127)
DEFINITIONS
–2 8–


--- page 39 ---
“Compliance Adviser” Rainbow Capital (HK) Limited
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1
to the Listing Rules
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Director(s)” or “our Director(s)” the director(s) of our Company
“Dongfeng Motor” Dongfeng Motor Corporation (ʮ̡), a
substantial shareholder of the Company and a connected
person of the Company
“EIT” the PRC enterprise income tax
“EIT Law” the Enterprise Income Tax Law of the People’s Republic
of China (), as
amended, supplemented or otherwise modified from time
to time
“ESG Committee” the environmental, social and governance (ESG)
committee
“Exchange Participant” a person (a) who, in accordance with the Listing Rules of
the Hong Kong Stock Exchange, may trade on or through
the Hong Kong Stock Exchange; and (b) whose name is
entered in a list, register or roll kept by the Hong Kong
Stock Exchange as a person who may trade on or through
the Hong Kong Stock Exchange
“Extreme Conditions” extreme conditions as announced by the government of
Hong Kong in the case where a super typhoon or other
natural disaster of a substantial scale seriously affects the
working public’s ability to resume work or brings safety
concern for a prolonged period
DEFINITIONS
–2 9–


--- page 40 ---
“FINI” “Fast Interface for New Issuance”, the online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for the Listing
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a
global market research and consulting company, which is
an Independent Third Party
“Frost & Sullivan Report” an independent market research report prepared by Frost
& Sullivan
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group”, “our Group, “our”,
“we” or “us”
our Company and its subsidiaries, or any one of them as
the context may require, and where the context requires,
the businesses operated by our Company and/or its
subsidiaries and their predecessors (if any)
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024, as
amended, supplemented or otherwise modified from time
to time
“H Share(s)” listed ordinary share(s) in the share capital of our
Company with a nominal value of RMB1.00 each, which
is/are to be subscribed for and traded in Hong Kong
dollars and to be listed on the Hong Kong Stock
Exchange
“H Share Registrar” Tricor Investor Services Limited
“H Shareholder(s)” holder(s) of the H Share(s)
“HK$” or “Hong Kong dollar(s)” Hong Kong dollars and cents, respectively, the lawful
currency of Hong Kong
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name and submitted online through
the designated website at www.hkeipo.hk
DEFINITIONS
–3 0–


--- page 41 ---
“HK eIPO White Form Service
Provider”
the HK eIPO White Form service provider designated
by our Company as specified on the designated website at
www.hkeipo.hk
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO ” the application for Hong Kong Offer Shares to be issued
in the name of HKSCC Nominees and deposited directly
into CCASS to be credited to your designated HKSCC
Participant’s stock account through causing HKSCC
Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of HKSCC containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as in force
from time to time
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Offer Shares” the 10,020,000 H Shares offered by us for subscription at
the Offer Price pursuant to the Hong Kong Public
Offering (subject to adjustments as described in the
section headed “Structure of the Global Offering”)
DEFINITIONS
–3 1–


--- page 42 ---
“Hong Kong Public Offering” the offering of the Hong Kong Offer Shares for
subscription by the public in Hong Kong (subject to
adjustments as described in the section headed “Structure
of the Global Offering”) at the Offer Price (plus
brokerage, SFC transaction levy, Hong Kong Stock
Exchange trading fee and AFRC transaction levy), on and
subject to the terms and conditions described in the
section headed “Structure of the Global Offering”
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchange and Clearing
Limited
“Hong Kong Takeovers Code” or
“Takeovers Code”
the Code on Takeovers and Mergers issued by the SFC, as
amended, supplemented or otherwise modified from time
to time
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in the paragraph headed “Underwriting — Hong Kong
Underwriters”
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated October 24, 2025,
relating to the Hong Kong Public Offering entered into
by, among others, our Company, the Overall Coordinators
and the Hong Kong Underwriters, as further described in
“Underwriting — Underwriting Arrangements — Hong
Kong Public Offering — Hong Kong Underwriting
Agreement”
“Huawei” Huawei Technologies Co., Ltd. (ʮ̡), an
Independent Third Party
“Independent Third Party(ies)” any entity(ies) or person(s) who is not a connected person
of our Company within the meaning of the Listing Rules
“International Offer Shares” the 90,180,000 H Shares offered by our Company
pursuant to the International Offering (subject to
adjustment as described in the section headed “Structure
of the Global Offering”) together with any additional H
Shares which may be allotted and issued by our Company
pursuant to the exercise of the Offer Size Adjustment
Option and the Over-allotment Option
DEFINITIONS
–3 2–


--- page 43 ---
“International Offering” the offering of the International Offer Shares at the Offer
Price outside the United States in offshore transactions in
reliance on Regulation S under the U.S. Securities Act
and subject to the terms and conditions of the
International Underwriting Agreement, as further
described in the section headed “Structure of the Global
Offering”
“International Underwriters” the group of international underwriters who are expected
to enter into the International Underwriting Agreement to
underwrite the International Offering
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering expected to be entered into on or about the Price
Determination Date by, among others, our Company, the
Overall Coordinators and the International Underwriters,
as further described in the section headed “Underwriting
— Underwriting Arrangements — International
Offering”
“Joint Bookrunners” the joint bookrunners as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Joint Global Coordinators” the joint global coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering”
“Joint Lead Managers” the joint lead managers as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Joint Sponsors” the joint sponsors as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Latest Practicable Date” October 17, 2025, being the latest practicable date for the
purpose of ascertaining certain information contained in
this Prospectus prior to its publication
“Listing” the listing of our H Shares on the Main Board
DEFINITIONS
–3 3–


--- page 44 ---
“Listing Committee” the listing committee of the Hong Kong Stock Exchange
“Listing Date” the date, expected to be on or about Wednesday,
November 5, 2025, on which the H Shares are to be listed
and on which dealings in the H Shares are to be first
permitted to take place on the Hong Kong Stock
Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Longsheng New Energy” Chongqing Liangjiang New Area Longsheng New Energy
Technology Co., Ltd. (ҦϞ
ப΂ʮ̡), a limited liability company established
under the laws of the PRC on September 21, 2022 and a
wholly-owned subsidiary of the Company as at the Latest
Practicable Date
“Main Board” the stock exchange (excluding the option market)
operated by the Hong Kong Stock Exchange which is
independent from and operated in parallel with the GEM
of the Hong Kong Stock Exchange
“MOF” the Ministry of Finance of the PRC (݁
௅)
“MOFCOM” or “Ministry of
Commerce”
the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅) (formerly known as the Ministry of Foreign
Trade and Economic Cooperation of the PRC ( ʕശɛ͏
௅))
“Mr. Zhang Xinghai” Mr. Zhang Xinghai ( ੵጳऎ), our founder and a member
of our Single Largest Group of Shareholders
“Nomination Committee” the nomination committee of the Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
DEFINITIONS
–3 4–


--- page 45 ---
“Offer Price” the final offer price per Offer Share (exclusive of
brokerage fee of 1.0%, SFC transaction levy of 0.0027%,
Hong Kong Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015%) at which the Offer
Shares are to be subscribed for and issued pursuant to the
Global Offering as described in the section headed
“Structure of the Global Offering”
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, with any additional H Shares which may be
allotted and issued pursuant to the exercise of the Offer
Size Adjustment Option and the Over-allotment Option
“Offer Size Adjustment Option” the option under the Hong Kong Underwriting
Agreement, exercisable by the Company with the prior
written agreement between the Company and the Overall
Coordinators (for themselves and on behalf of the
Underwriters) on or before the execution of the Price
Determination Agreement, pursuant to which the
Company may issue and allot up to an aggregate of
15,030,000 additional H Shares (representing in
aggregate approximately 15.0% of the Offer Shares
initially being offered under the Global Offering) at the
Offer Price, to cover additional market demand, as
described in “Structure of the Global Offering — Offer
Size Adjustment Option”
“Over-allotment Option” the option granted by us to the International
Underwriters, exercisable by the Overall Coordinators
(on behalf of the International Underwriters) pursuant to
the International Underwriting Agreement, to require our
Company to allot and issue up to an aggregate of
15,030,000 additional H Shares (representing in
aggregate approximately 15.0% of the Offer Shares
initially being offered under the Global Offering
assuming the Offer Size Adjustment Option is not
exercised at all) or up to 17,284,500 additional H Shares
(representing in aggregate approximately 15.0% of the
Offer Shares being offered under the Global Offering
assuming the Offer Size Adjustment Option is exercised
in full), at the Offer Price to, among other things, cover
over-allocations in the International Offering, if any,
exercisable at any time from the date of the International
Underwriting Agreement up to (and including) the date
which is the 30th day from the last day for lodging of
applications under the Hong Kong Public Offering
DEFINITIONS
–3 5–


--- page 46 ---
“Overall Coordinators” the overall coordinators as named in the section headed
“Directors and Parties Involved in the Global Offering”
“Overseas Listing Trial
Measures”
The Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies
and the supporting guidelines ( ྤʫΆุྤ̮೯БᗇՎ
ˏ) promulgated by
the CSRC on February 17, 2023 which became effective
on March 31, 2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” Company Law of the PRC (جas
amended, supplemented or otherwise modified from time
to time
“PRC GAAP” generally accepted accounting principles in the PRC
“PRC Legal Adviser” King & Wood Mallesons, our legal adviser on PRC laws
“Price Determination Agreement” the agreement to be entered into by Overall Coordinators
(for themselves and on behalf of the Hong Kong
Underwriters) and our Company on the Price
Determination Date to record and fix the Offer Price
“Price Determination Date” the date, expected to be on or around Monday, November
3, 2025 (Hong Kong time) on which the Offer Price is
determined, or such later time as our Company and the
Overall Coordinators (on behalf of the Hong Kong
Underwriters) may agree, but in any event not later than
12:00 noon on Monday, November 3, 2025
“Prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of the Board
“Renminbi” or “RMB” the lawful currency of the PRC
DEFINITIONS
–3 6–


--- page 47 ---
“SAFE” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAMR” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SA T” the State Administration of Taxation of the PRC ( ʕശɛ
೼ਕᐼ҅)
“Seres Auto” Seres Auto Co., Ltd. (ʮ̡), a limited
liability company established under the laws of the PRC
on September 4, 2012 and a non-wholly owned
subsidiary of the Company as at the Latest Practicable
Date
“Seres Hubei” Seres Auto (Hubei) Co., Ltd. ( ᒄɢ౶ӛԓ(ಳ̏)ʮ
̡) (formerly known as DFSK Motor Co., Ltd. (ʃੰ
ʮ̡)), a limited liability company established
under the laws of the PRC on May 26, 2003 and a
wholly-owned subsidiary of the Company as at the Latest
Practicable Date
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Shanghai Stock Exchange” the Shanghai Stock Exchange (ה׸)
Shanghai Stock Exchange
Listing Rules”
the Rules Governing the Listing of Stocks on Shanghai
Stock Exchange (), as
amended from time to time
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both A Shares
and H Shares
“Shareholder(s)” holder(s) of our Share(s)
DEFINITIONS
–3 7–


--- page 48 ---
“Shenzhen Yinwang” Shenzhen Yinwang Intelligent Technology Co., Ltd. ( ଉ
ʮ̡), a company held as to 80%,
10% and 10% by Huawei, Seres Auto and Avatr
Technology Co., Ltd. (Ҧ(ᅅ)ʮ̡),
respectively, as at the Latest Practicable Date
“Single Largest Group of
Shareholders”
refers to Mr. Zhang Xinghai, Sokon Holding and Y u’an
Industry
“Sokon Holding” Chongqing Sokon Holding Company Limited (ᅅʃੰ
ʮ̡), a limited liability company incorporated
in the PRC on December 14, 2010 held as to 50%, 25%
and 25% by Mr. Zhang Xinghai, Mr. Zhang Xingli ( ੵጳ
ᓿ) and Mr. Zhang Xingming (׼respectively, and
a member of our Single Largest Group of Shareholders
“Sponsor-Overall Coordinators” the sponsor-overall coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering”
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Strategy Committee” the strategy committee of the Board
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Track Record Period” the period comprising the three financial years ended
December 31, 2022, 2023 and 2024 and the six months
ended June 30, 2025
“treasury share(s)” has the meaning ascribed thereto under the Listing Rules
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
DEFINITIONS
–3 8–


--- page 49 ---
“U.S.” or “United States” the United States of America, its territories and
possessions, any State of the United States, and the
District of Columbia
“U.S. dollar(s)”, “US$” or
“USD”
United States dollar(s), the lawful currency of the U.S.
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time
“V A T” value-added tax
“Y u’an Industry” Chongqing Y u’an Automobile Industry Co., Ltd. (ᅅಽ
ʮ̡), a limited liability company
incorporated in the PRC on December 16, 2010 and a
member of our Single Largest Group of Shareholders,
which is held as to 15.8419% by Sokon Holding,
11.9732% by Mr. Zhang Xinghai, 5.9867% by Zhang
Xingli ( ੵጳᓿ), 5.9867% by Zhang Xingming (׼,)
4.8221% by Zhang Zhengyuan ( ੵ͍๕) and 0.1468% by
Shen Wei ( ͡ᑢ) (each of whom is an executive Director),
1.5650% by Kang Bo (ت0.7794% by Liu Lian ( ᄎ
ᑌ), 0.0711% by Zhou Lin (
؍and 0.0711% by Wang
Ping ( ˮ̻) (each of whom is a member of our senior
management), 5.4470% by Zhang Rong (࢙3.2682%
by Zhang Y ong (ۇ2.6630% by Zhang Li ( ੵͭ) and
1.3378% by Y ang Hua ( เശ) (each of whom is a relative
of our Director and thus a connected person), and 40.04%
by 18 other individuals who are employees, ex-
employees or individual investors of the Group
“%” per cent
Certain amounts and percentage figures included in the Prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
For ease of reference, the names of Chinese laws and regulations, governmental
authorities, institutions, natural persons or other entities (including our subsidiaries) have
been included in this Prospectus in both the Chinese and English languages and in the event
of any inconsistency, the Chinese versions shall prevail. English translations of company
names and other terms from the Chinese language are provided for identification purposes
only.
DEFINITIONS
–3 9–


--- page 50 ---
This glossary contains definitions of certain technical terms used in this Prospectus
in connection with us and our business. These definitions may not correspond to standard
industry definitions, and may not be comparable to similarly terms adopted by other
companies.
“AI” artificial intelligence, an area of computer science that
focuses on mimicking human intelligence by machines
“AGVs” automated guided vehicles, portable robots that typically
follow along marked long lines or wires on the floor, or
uses radio waves, vision cameras, magnets, or lasers for
navigation, often used in industrial applications to
transport heavy materials around a large industrial
building
“AMRs” autonomous mobile robotics, used in the integrated
system of hardware and software for warehouse and
logistics management functions
“BEVs” battery electric vehicles
“BMS” battery management system, an intelligent system for
monitoring, controlling and managing battery pack
operation status
“CAGR” compound annual growth rate, the geometric progression
ratio that provides a constant rate of return over the time
period
“CLTC” China Light-duty V ehicle Test Cycle
“EVs” electric passenger vehicles
“Hardware-in-the-Loop (HIL)
Testing”
the process of testing a vehicle’s hardware by integrating
it into a software environment and simulating different
real-life scenarios for the hardware to react to
“ICE” internal combustion engine
“IoT” Internet of Things
“LiDAR” light detection and ranging, a remote sensing method
used to measure the distance and range of the object
GLOSSARY OF TECHNICAL TERMS
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“MF platform” our self-developed platform-based vehicle manufacturing
model
“MSRP” manufacturer suggested retail price
“NEPVs” new energy passenger vehicles, refer to vehicles that
utilize non-conventional vehicle fuels (or conventional
fuels combined with new powertrains) as their power
source, characterized by low pollution, low energy
consumption, and high efficiency
“NEVs” new energy vehicles, mainly including BEVs, REEVs,
plug-in hybrid electric vehicles and fuel cell electric
vehicles
“NVH” noise, vibration and harshness
“OEM” automotive original equipment manufacturers
“PTL” pick-to-light system, an order picking technology that
utilizes lights and LEDs on racks or shelves to indicate
pick locations and guide order pickers through their work
“REEVs” extended-range electric vehicles
“Super Factories” the Super Factory (Longsheng), the Super Factory
(Fenghuang) and the Super Factory (Longxing), our
intelligent factories
“SUV” sport utility vehicles
“WMS” warehousing management system
GLOSSARY OF TECHNICAL TERMS
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This Prospectus contains forward-looking statements and information relating to us and
our subsidiaries that are based on the intentions, beliefs, expectations or predictions of our
management as well as assumptions made by and information currently available to our
management. When used in this Prospectus, the words “aim,” “anticipate,” “believe,” “could,”
“expect,” “going forward,” “intend,” “may,” “ought to,” “plan,” “project,” “seek,” “should,”
“will,” “would,” “vision,” “aspire,” “target,” “schedules,” and the negative of these words and
other similar expressions, as they relate to us or our management, are intended to identify
forward-looking statements. Such statements reflect the current views of our management with
respect to future events, operations, liquidity and capital resources, some of which may not
materialize or may change. These statements are subject to certain risks, uncertainties and
assumptions, including the risk factors as described in this Prospectus, some of which are
beyond our control and may cause our actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Y ou are strongly cautioned that
reliance on any forward-looking statements involves known and unknown risks and
uncertainties. The risks and uncertainties facing us which could affect the accuracy of
forward-looking statements include, but are not limited to, the following:
 our operations and business prospects;
 our ability to maintain relationships with, and the actions and developments
affecting, our major customers and suppliers;
 future developments, trends and conditions in the industries and markets in which
we operate or plan to operate;
 general economic, political and business conditions in the markets in which we
operate;
 changes to the regulatory environment in the industries and markets in which we
operate;
 our ability to maintain our market leading position;
 the actions and developments of our competitors;
 our ability to effectively contain costs and optimize pricing;
 the ability of third parties to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
 our business strategies and plans to achieve these strategies, including our service
and geographic expansion plans;
FORW ARD-LOOKING STATEMENTS
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 our ability to defend our intellectual property rights and protect confidentiality;
 the effectiveness of our quality control systems;
 change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends, including those pertaining to
the PRC and the industry and markets in which we operate;
 capital market developments; and
 all other risks and uncertainties described in the section headed “Risk Factors” in
this Prospectus.
By their nature, certain disclosures relating to these and other risks are only estimates and
should one or more of these uncertainties or risks, among others, materialize, actual results
may vary materially from those estimated, anticipated or projected, as well as from historical
results. Specifically but without limitation, sales could decrease, costs could increase, capital
costs could increase, capital investment could be delayed and anticipated improvements in
performance might not be fully realized.
Subject to the requirements of applicable laws, rules and regulations, we do not have any
and undertake no obligation to update or otherwise revise the forward-looking statements in
this Prospectus, whether as a result of new information, future events or otherwise. As a result
of these and other risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this Prospectus might not occur in the way we expect or at all.
Accordingly, you should not place undue reliance on any forward-looking information. All
forward-looking statements in this Prospectus are qualified by reference to the cautionary
statements in this section as well as the risks and uncertainties discussed in the section headed
“Risk Factors” in this Prospectus.
In this Prospectus, statements of or references to our intentions or those of our Directors
are made as of the date of this Prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares involves significant risks. You should carefully
consider all of the information in this Prospectus, including the risks and uncertainties
described below, before making an investment in our H Shares. The following is a
description of what we consider to be our material risks. Any of the following risks could
have a material and adverse effect on our business, financial condition and results of
operations. In any such case, the market price of our H Shares could decline, and you
may lose all or part of your investment. These factors are contingencies that may or may
not occur , and we are not in a position to express a view on the likelihood of any such
contingency occurring. The information given is as of the Latest Practicable Date unless
otherwise stated, will not be updated after the date hereof, and is subject to the
cautionary statements in the section titled “Forward-Looking Statements” of this
Prospectus.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
We may not be able to successfully compete in the automotive market.
The automotive market is highly competitive both in China and overseas markets. We
compete with ICE vehicles and NEVs. Many of our current and potential competitors or new
market entrants may have significantly greater financial, technical, manufacturing, marketing
and branding, talents, or other resources than we do and may be able to devote greater
resources to the design, development, manufacturing, marketing, sales, and support of their
vehicles.
Competition in China’s and global automotive markets may intensify in the future.
Factors affecting competition include, among others, technological innovation, product quality
and safety, product pricing, sales efficiency, manufacturing efficiency, quality of services,
branding, and design and styling. Increasing competition may lead to lower vehicle sales and
increasing inventory, which may result in downward price pressure and may adversely affect
our business, financial condition, results of operations and prospects. During the Track Record
Period and up to the Latest Practicable Date, we did not experience downward pricing pressure
that is material to our business, and the prices of our vehicle models remained relatively stable.
Our ability to successfully compete against other vehicle brands will be fundamental to our
future success in existing and new markets and our market share. We cannot assure you that
we will be able to compete successfully in our markets. If our competitors successfully
compete with our vehicles at more competitive prices or products, our profitability and results
of operations may be materially and adversely affected.
Our future growth is dependent on the consumer demand for NEVs.
During the Track Record Period, a majority of our revenue was generated from vehicle
sales, particularly NEV sales. The demand for our NEVs will highly depend upon consumers’
demand for and adoption of NEVs, including but not limited to REEVs and BEVs. The market
for NEVs is still rapidly evolving, characterized by rapidly changing technologies, intense
competition, evolving government regulations and industry standards, and changing consumer
demands and behaviors.
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Other factors that may influence the adoption of NEVs include:
 perceptions about vehicle safety in general, in particular safety issues that may be
attributed to the use of advanced technology, including BEV and REEV technologies
and driving assistance;
 perceptions about NEV quality, safety, design, performance, and cost, especially if
adverse events or accidents occur that are linked to the quality or safety of NEVs,
whether or not such vehicles are produced by us or other automakers;
 the availability of servicing for NEVs;
 the actual or perceived deterioration of battery capacity over time;
 the environmental consciousness of consumers;
 access to charging stations, implementation of super-fast charging technologies by
competitors and cost of charging vehicles;
 the availability of tax and other governmental incentives to purchase and operate
NEVs or future regulation requiring increased use of nonpolluting vehicles;
 concerns about electric grid capacity and reliability and the availability of other
supporting infrastructure;
 improvements in the fuel economy of the ICE vehicles; and
 macroeconomic factors.
Any of the factors described above may change the consumer demand for our vehicles,
including causing current or prospective users not to purchase our vehicles. If the market for
NEVs does not develop as we expect or develops more slowly than we expect, our business,
financial condition, results of operations and prospects will be affected.
Change of government policies that are favorable for NEVs or domestically manufactured
vehicles could materially and adversely affect our business, financial condition, results of
operations and prospects.
During the Track Record Period, our business has benefited from government policies
that are favorable to the growth of NEVs, as well as subsidies and economic incentives.
However, these favorable policies may be subject to changes from time to time, which could
materially and adversely affect our business, financial condition, results of operations and
prospects.
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For example, the PRC government has been implementing strict vehicle emission
standards for ICE vehicles. Our REEVs are equipped with both range extending systems and
electric drive motors and are thus required to comply with both standards. If the electric vehicle
energy consumption standards and vehicle emission standards become significantly stricter, we
may invest more resources to upgrade our vehicles or design new vehicles if we are able to at
all, which could materially and adversely affect our business, financial condition, results of
operations, and prospects.
In addition, changes in classification of NEVs and license plate policies have affected,
and may continue to affect our business. In certain cities in China, municipal governments
impose quotas and lottery or bidding systems to limit the number of license plates issued to
ICE vehicles, but exempt NEVs from these restrictions to incentivize the development of the
NEV market. However, with increase of NEVs, certain cities had narrowed the scope of
exemptions from the license plate restrictions. For example, our REEVs sold in certain cities
are ineligible to enjoy the exemptions from the license plate restrictions available to the BEVs.
There are uncertainties whether the arrangements regarding license plate restrictions will
reduce the demand for REEVs in these markets. Changes in government policies on the
classification of NEVs and license plates, at a local or central level, may materially and
adversely affect the demand for our existing and future REEVs, which in turn could materially
and adversely affect our business, results of operations, financial conditions and prospects.
Furthermore, changes in government incentives or subsidies to support NEVs could adversely
affect our business.
We cannot assure you that any further changes in regulatory policies would be favorable
to our business. Furthermore, any reduction, elimination, or discriminatory application of
government subsidies and economic incentives because of policy changes, the reduced need for
such subsidies and incentives due to the perceived success of NEVs, fiscal tightening, or other
factors may affect government incentives or subsidies and result in the diminished
competitiveness of the NEV industry generally. Our vehicles sales are also affected by
government policies. These changes could intensify market competition and reduce our pricing
advantage, which in turn could materially and adversely affect our business, results of
operations, financial conditions and prospects.
Our industry and its technology are rapidly evolving and may be subject to unforeseen
changes. Breakthroughs in other NEV technologies may materially and adversely affect
the demand for our vehicles.
We operate in the automotive market, including the rapidly evolving NEV market, which
may not become what we currently anticipate. We may be unable to keep up with changes in
global NEV technology and, as a result, our competitiveness may suffer. Our research and
development efforts may not be sufficient to adapt to changes in the NEV technology. As
technologies change, we plan to upgrade or adapt our vehicles and introduce new models in
order to provide vehicles with the latest technology, which could involve substantial costs and
lower our return on investment for existing vehicles. We cannot assure you that we will be able
to compete effectively with other NEVs and integrate the latest technology into our vehicles
RISK FACTORS
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against the backdrop of our rapidly evolving industry. Even if we are able to keep pace with
changes in technology and develop new models, our prior models could become obsolete more
quickly than expected, potentially reducing our return on investment.
We rely on our suppliers to provide raw materials, components, software and services
related to our vehicles.
We collaborate with various third-party suppliers for raw materials, components, software
and services related to our vehicles. Our procurement may be subject to price volatility caused
by various factors beyond our control, such as commodity price fluctuations, changes in supply
and demand, logistics and processing costs, inflation and governmental regulations and
policies, and we are unsure whether we will be able to pass any of such price increases onto
our customers, which may materially and adversely affect our profit margins.
We do not control our third-party suppliers or their business practices. Accordingly, any
defects or quality issues or any non-compliance incidents associated with these third-party
suppliers could result in quality issues with our vehicles and hence compromise our brand
image and results of operations. Additionally, we cannot assure you of third-party suppliers’
compliance with ethical business practices, such as environmental responsibilities, fair wage
practices, and compliance with labor laws, among others. A lack of demonstrated compliance
could lead us to seek alternative suppliers, which could increase our costs and result in delayed
delivery of our products, shortages, or other disruptions of our operations. During the Track
Record Period and up to the Latest Practicable Date, we did not experience material shortage
or disruption of supply from our suppliers. The prices of raw materials or components related
to our products fluctuate upon factors beyond our control, and could adversely affect our
business. For example, the global supply constraint of semiconductor chips in 2022 and 2023
led to increased prices of chips. Starting from 2022, the supply of automotive-grade chips
experienced supply shortages and price increases, primarily due to the rapid growth in demand
driven by the explosive growth of NEVs, supply chain disruptions caused by the COVID-19
pandemic, and inventory stockpiling by distributors. From the second quarter of 2023, the chip
shortage began easing, as the supply situation began to improve as foundry capacity expanded
and domestic substitution efforts in China accelerated, resulting in shortened delivery time and
a downward trend in prices. By the end of 2023, the supply shortage of chips was largely
resolved, with prices stabilizing at a lower level. To ensure a stable supply of semiconductor
chips, we have implemented the following measures: (i) we maintained a pool of
semiconductor chip manufacturers and assess their business, quality and supply risks in
advance; (ii) we were involved in the chip selection process to identify and avoid risks such
as low product maturity, quality issues or potential discontinuation; and (iii) we placed annual
stocking orders with suppliers in advance, require them to maintain chip safety stock, closely
track delivery schedules and regularly visit suppliers to monitor supply status. Substantial
increases in the prices for our raw materials or components would increase our cost of revenue
and our operating expenses, and could reduce our margins. Our cost structure is primarily
impacted by the price of power batteries. Since 2022, the price of power batteries in China has
been on a downward trend, mainly driven by factors such as falling raw material prices,
technological advancements, and intensified market competition, which provides a positive
RISK FACTORS
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boost to the development of NEVs. During the Track Record Period and up to the Latest
Practicable Date, the price fluctuations of raw materials or components related to our products
did not have material and adverse effect on our business, results of operations and financial
performance.
For the years ended December 31, 2022, 2023 and 2024 and for the six months ended June
30, 2025, the aggregate purchases from our top five suppliers in each year/period during the
Track Record Period amounted to RMB13.9 billion, RMB15.4 billion, RMB72.2 billion and
RMB35.2 billion, which accounted for 34.7%, 36.9%, 51.9% and 57.9% of our total purchases
for the respective years/periods. For the same periods, purchases from our largest supplier in
each year/period during the Track Record Period amounted to RMB5.8 billion, RMB7.2
billion, RMB42.0 billion and RMB20.0 billion, which accounted for 14.5%, 17.4%, 30.2% and
33.0% of our total purchases for the respective years/periods. We purchase automotive parts,
services, software and equipment, among others, from such supplier. Our reliance on these
suppliers may subject us to concentration and counterparty risks from these suppliers. Our
agreements with such major suppliers are typically not exclusive. We cannot assure you that
we will be able to maintain our relationships with our suppliers, especially our major suppliers
in the future. Any material and adverse change in our relationship with our major suppliers,
including our largest supplier during the Track Record Period, could have a materially and
adversely affect the competitiveness of our vehicles, which could in turn affect our business,
results of operations, financial conditions and prospects. If we experience any disruption in
procurement with such suppliers, we cannot assure you that we would be able to successfully
retain alternative third-party suppliers or supplies on a timely basis, on acceptable terms, or at
all, which may have a material adverse impact on our business operations. Moreover, changes
in macroeconomic conditions, geopolitics, regulations, force majeure, or other factors beyond
our control or anticipation, could also affect the business of our suppliers, including major
suppliers, which may in turn affect our business operations.
We are exposed to concentration risk of sales of AITO brand models.
During the Track Record Period, we primarily derived revenue from the sales of AITO
brand vehicles. In 2022, 2023, 2024, and for the six months ended June 30, 2024 and 2025, the
revenue generated from sales of AITO brand vehicles was RMB20.5 billion, RMB24.3 billion,
RMB131.9 billion, RMB58.4 billion and RMB56.3 billion, respectively, accounting for 60.3%,
67.9%, 90.9%, 89.9% and 90.3% of our total revenue, respectively. We intend to further
optimize our product mix by continuously engaging in the research and development of new
models and improving the flexibility and resilience of our supply chain. However, any decrease
in demand for our AITO brand vehicles, any deterioration in the AITO brand’s market
performance, or any negative publicity associated with AITO brand could materially and
adversely affect our business, financial conditions and results of operations.
RISK FACTORS
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We may not be able to continue to develop, produce and deliver vehicles of high quality
and appeal to users, on schedule, and on a large scale.
The sustainability of our business depends largely on our ability to timely execute our
plan to develop, mass produce and deliver vehicles of high quality and appeal to users.
Historically, automakers are expected to periodically introduce new and improved models to
stay abreast of the market. To remain competitive, we may be required to introduce new vehicle
models and perform facelifts on existing vehicle models earlier or more frequently than is
originally planned. We cannot assure you that facelifts on our existing models or any future
models we launch will appeal to the users as we expect or that any introduction of new models
or facelifts will not affect the sales of existing models. To the extent any of our existing vehicle
models fails to remain attractive to users, or any new model is not timely launched or
well-received by the market, our sales volume could be materially and adversely affected,
which in turn could materially and adversely affect our business, financial condition and results
of operations. Furthermore, we rely on third-party suppliers for the provision and development
of many key parts and materials used in our vehicles. To the extent our suppliers experience
any difficulties in providing us with or developing necessary parts, we may experience delays
in delivering vehicles. Any delay in the development, production and delivery of our existing
or future models, or in performing facelifts to existing models, could negatively affect our
growth prospects.
Our continued development, production and delivery of vehicles of high quality to
achieve our targeted production volume are and will be subject to risks, including with respect
to:
 lack of necessary funding or cost overruns;
 delays or disruptions in our supply chain;
 delays in the research and development of technologies necessary for our vehicles;
 quality control deficiencies; and
 non-compliance with environmental, workplace safety, and other regulations.
Any of the foregoing could materially and adversely affect our business, financial
condition and results of operations.
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We may not succeed in continuing to develop, maintain, and strengthen our brand, and
our brand and reputation could be harmed by negative publicity with respect to us, our
Directors, officers, employees, Shareholders, peers, business partners, or our industry in
general.
Our business and prospects are affected by our ability to develop, maintain, and
strengthen our brand. If we fail to do so we may lose the opportunity to build a critical mass
of users. Promoting and positioning our brand will likely depend significantly on our ability
to provide high quality vehicles and services and engage with our users as intended, and we
have limited experience in these areas. In addition, we expect that our ability to develop,
maintain, and strengthen the brand will depend heavily on the success of our branding efforts.
We market our brand through media, word-of-mouth, events, and advertising. Such efforts may
not achieve the desired results. If we do not develop and maintain a strong brand, our business,
financial condition, results of operations, and prospects will be materially and adversely
affected.
Our reputation and brand are vulnerable to many threats that can be difficult or impossible
to predict, control, and costly or impossible to remediate. From time to time, our vehicles are
reviewed by media or other third parties. Any negative reviews or reviews that compare us
unfavorably to competitors could adversely affect consumer perception about our vehicles.
Negative publicity about us, such as alleged misconduct, unethical business practices, or other
improper activities, or rumors relating to our business, Directors, officers, employees, or
Shareholders, or negative publicity about third parties that use the same or similar brand name
as ours, can harm our reputation, business, and results of operations, even if they are baseless,
irrelevant, or satisfactorily addressed. These allegations, even if unproven or meritless, may
lead to inquiries, investigations, or other legal actions against us by regulatory or government
authorities as well as private parties. Any regulatory inquiries or investigations and lawsuits
against us, perceptions of inappropriate business conduct by us or perceived wrongdoing by
any member of our management team, among other things, could substantially damage our
reputation, and cause us to incur significant costs to defend ourselves. Any negative market
perception or publicity regarding our suppliers or other business partners that we closely
cooperate with, or any regulatory inquiries or investigations and lawsuits initiated against
them, may also have an impact on our brand and reputation, or subject us to regulatory
inquiries or investigations and lawsuits. Moreover, any negative media publicity about the auto
industry, especially the NEV market, or product or service quality problems of other
automakers in the industry in which we operate, including our competitors, may also negatively
impact our reputation and brand. In particular, given the popularity of social media, any
negative publicity, whether true or not, such as road accidents, vehicle self-ignition, or other
perceived or actual safety issues, could quickly proliferate and harm user perceptions and
confidence in our brand. Perceived or actual concerns on battery deterioration that are often
associated with NEVs could also adversely affect user confidence in our vehicles. If we are
unable to maintain a good reputation or further enhance our brand recognition, our ability to
attract and retain users, third-party partners, and key employees could be harmed and, as a
result, our business, financial condition and results of operations could be materially and
adversely affected.
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Our profit is attributable to the launch of certain successful models and the partnership
with our significant business partners.
Despite that we already have established a multi-model product line, our historical growth
and profitability are largely attributable to the launch of certain successful models, such as
AITO M9, AITO M7 and AITO M5. To the extent our product variety, design, and cycles do not
meet consumer expectations, or cannot be achieved on our projected timelines and cost and
volume targets, our future sales may be adversely affected. If these existing vehicle models fail
to remain attractive to users, or new models are not timely launched or well-received by the
market, our sales volume could be materially and adversely affected, which in turn could
materially and adversely affect our business, financial condition and results of operations.
In addition, our success depends on stable partnerships with our significant business
partners in relation to these popular vehicle models. For example, our collaboration with
Huawei is a significant contributor to the success of our AITO vehicles. We have established
long-term and strong business relationship with Huawei, and have been benefited from the
products and services provided by Huawei. For details, see “Business – Supply Chain –
Collaborations with Huawei.” Interruption to or discontinuation of our partnerships with these
business partners may materially and adversely affect our business, financial condition and
results of operations.
If we fail to manage our growth effectively, we may not be able to market and sell our
vehicles successfully.
We have expanded our operations, and as we ramp up our production, significant
expansion will be required, especially in connection with potential increases in sales, providing
our users with quality servicing, expansion of our retail, delivery, and sales and servicing
network, and managing different models of vehicles. Our future operating results depend to a
large extent on our ability to manage this expansion and growth successfully. Risks that we
face in undertaking this expansion include, among others:
 managing our supply chain to support fast business growth;
 managing a larger organization with a greater number of employees in different
divisions;
 controlling expenses and investments in anticipation of expanded operations;
 establishing or expanding design, manufacturing, sales, and service facilities;
 implementing and enhancing administrative infrastructure, systems, and processes;
and
 addressing new markets and potentially unforeseen challenges as they arise.
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Any failure to manage our growth effectively could materially and adversely affect our
business, financial condition, results of operations and prospects.
We may not able to obtain sufficient capital required by our business plans. In addition,
our future capital needs may require us to issue additional equity or debt securities that
may dilute our Shareholders or introduce covenants that may restrict our operations or
our ability to pay dividends.
We will need significant capital to, among other things, conduct research and
development, expand our production capacity, and broaden our sales and service network. As
we ramp up our production capacity and operations, we may also require significant capital to
maintain our property, plant, and equipment and such costs may be greater than what we
currently anticipate. We may seek equity or debt financing to finance a portion of our capital
expenditures. Such financing might not be available to us in a timely manner or on terms that
are acceptable, or at all. If we cannot obtain sufficient capital on acceptable terms, our
business, financial condition and prospects may be materially and adversely affected.
Our ability to obtain the necessary financing to carry out our business plan is subject to
a number of factors, including general market conditions and investor acceptance of our
business plan. These factors may make the timing, amount, and terms and conditions of such
financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will
have to significantly reduce our spending, delay, or cancel our planned activities, or
substantially change our corporate structure. We might not be able to obtain any funding or
service any of the debts we incurred, and we might not have sufficient resources to conduct our
business as projected, both of which could mean that we would be forced to curtail or
discontinue our operations.
In addition, our future capital needs and other business reasons could require us to issue
additional equity or debt securities or obtain a credit facility. The issuance of additional equity
or equity-linked securities could dilute our Shareholders. The incurrence of indebtedness
would result in an increase in debt service obligations and could result in operating and
financing covenants that would restrict our operations or our ability to incur additional
indebtedness, to pay dividends to our Shareholders, to repurchase our share capital, or to make
certain acquisitions or investments.
If we fail to effectively manage our inventory, our financial condition, results of
operations, and prospects may be materially and adversely affected.
We are exposed to inventory risks that may adversely affect our business, financial
condition, results of operations and prospects. In order to ensure timely production and
delivery, we typically manufacture our vehicles based on customer orders, we determine our
level of inventory in advance based on our forecast of customer demands. During the Track
Record Period, our inventory primarily included raw materials and consumables, work in
progress and finished goods. As of December 31, 2022, 2023 and 2024 and June 30, 2025, we
had inventories of RMB3,992.9 million, RMB3,529.2 million, RMB2,552.4 million and
RMB3,270.8 million, respectively. As of December 31, 2022, 2023 and 2024 and June 30,
RISK FACTORS
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2025, we recorded provision for inventory write-down of RMB169.0 million, RMB153.5
million, RMB257.5 million and RMB348.3 million, respectively. Our inventory turnover days
were 39 days, 41 days, 10 days, 13 days and 11 days in 2022, 2023 and 2024 and for the six
months ended June 30, 2024 and 2025, respectively.
However, forecasts are inherently uncertain, and the demand for our vehicles may change
between the order date and the projected delivery date. If we fail to accurately forecast the
demand, we may experience inventory obsolescence and inventory shortage risk. Inventory
levels in excess of demand may result in inventory write-downs or write-offs and the sale of
excess inventory at discounted prices, which could adversely affect our profitability. In
addition, if we underestimate the demand for our vehicles, we may face shortages in raw
materials, which could disrupt production and result in delays in the delivery of our vehicles
and harm our reputation. Furthermore, our customers may cancel their orders for many reasons
beyond our control, and we cannot assure you that orders will not be canceled by users and will
ultimately result in the final purchase and delivery of the vehicles. Any of the above may
materially and adversely affect our financial condition and results of operations. As we plan to
continue to expand our vehicle offerings, we may continue to face challenges in effectively
managing our inventory.
We may face risks in relation to production capacity. Our future success and growth
potential are dependent on our ability to successfully implement our production capacity
expansion plans and effectively manage our production capacity.
As of the Latest Practicable Date, our production facilities had an overall annual
production capacity of approximately 600,000 units. See “Business — Manufacturing, Supply
Chain, and Quality Control — Manufacturing.” Our ability to meet the growing demands of
customers may be constrained by limitations in our production capacity, and any failure to
ensure sufficient production may disrupt our daily operations. In addition, we must estimate
our sales volume and the corresponding requirements for production capacity, overcapacity
could lead to a negative impact on our profit margins, while under-capacity could limit our
business growth.
Moreover, our production facilities may experience business interruptions due to, among
others, operational incidents, force majeure events, mechanical failures, or utility shortages
and suspensions such as water, electricity, gas or other utilities, which could disrupt our
production plans and lead to temporary shutdown or reduced capacity. Any failure to take
adequate steps to resolve or eliminate these unexpected issues could extend the downtime,
interrupt the operation of our production facilities, reduce our production capacity and result
in a loss of sales.
Furthermore, we may expand or convert our existing production facilities and establish
new production facilities for production ramp-up of our current and future models with better
efficiency and technological capabilities. The expansion or conversions could experience
delays or other difficulties and will require significant capital. Our production capacity
expansion plan is subject to quality, process, or other issues, and we could encounter similar
or additional risks as we establish and develop new production facilities in the future, in
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addition to our existing production facilities. Any failure to complete the expansion of our
production facilities on schedule and within budget could adversely affect our financial
condition, production capacity and results of operations. Additionally, construction projects are
subject to broad and strict government supervision and approval procedures under applicable
laws and regulations, and the completion of inspection and acceptance by the authorities. Any
of the foregoing could materially and adversely affect our business operations.
We may be unable to adequately control the costs associated with our operations.
Our sustainable development in the future will not only depend on our ability to
successfully market our vehicles and other products and services but also to control our costs.
We expect to further incur significant costs that will impact our profitability, including research
and development expenses as we roll out new models and improve existing models,
expenditures in the expansion of our production capacities, additional operating costs and
expenses for production ramp-up, raw material and auto parts procurement costs, and selling
and distribution expenses as we build our brand and market our vehicles. If we are unable to
design, develop, produce, market, sell, and service our vehicles and provide services in a
cost-efficient manner, our margins, profitability, and prospects would be materially and
adversely affected. For example, we may lose control over the increase of costs in connection
with our services including after-sale services. Furthermore, currency fluctuations, tariffs or
shortages in petroleum and other economic or political conditions may result in significant
increases in freight charges and raw material costs.
Our research and development efforts may not yield expected results.
Our technological capabilities and infrastructure are critical to our success. The industries
in which we operate are subject to rapid technological changes and are evolving quickly in
terms of technological innovation. We heavily rely on research and development to establish
and strengthen our market position. In 2022, 2023 and 2024 and for the six months ended June
30, 2024 and 2025, our research and development expenses were RMB1,313.7 million,
RMB1,696.5 million, RMB5,585.5 million, RMB2,827.4 million and RMB2,929.5 million,
respectively.
As technologies evolve, we plan to upgrade our vehicles and introduce new models with
latest technologies, which will require us to invest resources in research and development.
Therefore, we expect that our research and development expenses will continue to be
significant. As research and development activities are inherently uncertain, we cannot assure
you that we will continue to achieve desirable developments from our research and
development activities and successfully commercialize such developments. Consequently, our
significant research and development efforts may not yield the results as expected. If our
research and development efforts fail to keep up with the latest technological developments, we
could suffer a decline in our competitive position, which may materially and adversely affect
our business, financial condition and results of operations.
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We may become subject to product liability claims, which could harm our financial
condition and liquidity if we are not able to successfully defend or insure against such
claims.
We may become subject to product liability claims, which could harm our business,
financial condition, results of operations and prospects. During the Track Record Period, we
did not experience any material product liability claims, product returns or refunds due to
quality defects in both China and overseas markets, as we only had a small number of vehicles
returned from distributors, accounting for an immaterial portion of our total vehicle sales. The
automotive industry experiences significant product liability claims and we face inherent risk
of exposure to claims in the event our vehicles do not perform as expected or malfunction
resulting in property damage, personal injury, or death. In particular, our vehicles are equipped
with driving assistance system, which are designed to assist drivers in certain driving tasks but
are not intended to replace the driver’s judgment or control. If drivers become overly reliant
on the system, or fail to adhere to the operating instructions and safety guidelines, there is a
risk that accidents could occur, including collisions or other incidents causing property
damage, personal injury, or death. Even when our system function as designed, the inherent
limitations of such technology, combined with unpredictable road conditions, human error, or
other factors beyond our control, may result in incidents that could give rise to product liability
claims against us.
A successful product liability claim against us could require us to pay substantial
monetary compensation. Any insurance coverage might not be sufficient to cover all potential
product liability claims. Any lawsuit seeking significant monetary damages may materially and
adversely affect our reputation, business, financial condition, and results of operations.
Moreover, a product liability claim could generate substantial negative publicity about our
vehicles and business and inhibit or prevent commercialization of our future vehicles, which
would materially and adversely affect our brand, business, prospects and results of operations.
We may not be able to effectively manage and develop our distribution network and direct
sales channels, or efficiently sustain our business relationships with or manage our
distributors and customers, which could adversely affect our brands, business, results of
operations, financial performance and prospects.
Maintaining an effective distribution network enables smooth deliveries of our vehicles
to consumers, and our distributors play an important role in expanding our geographic footprint
and driving sales of our vehicles. Failure to maintain our business relationships with existing
distributors, to establish relationships with new distributors upon the loss of our existing
distributors, and to manage and expand our distributors’ distribution coverage could adversely
affect our distribution network and hence our business, as well as our brands, results of
operations, financial performance and prospects. Our ability to expand distribution coverage is
also affected by changes in the relevant regulatory requirements, competitive landscape, and
consumer tastes, preferences and spending habits. Failure to effectively respond to such
changes may result in an adverse effect on our business and prospects.
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In addition, if our distributors fail to effectively market and sell our vehicles, our market
reputation may be damaged, and our ability to grow our business may be adversely affected.
Furthermore, we may not be able to successfully manage our distributors’ behaviors, or
successfully detect or prevent any non-compliance by our distributors with the provisions of
our existing distribution agreements. Any non-compliance by our distributors could negatively
affect our brands and relationships with other distributors.
In addition, we also sell products directly to customers through self-owned channels.
Failure to maintain our business relationships with direct sales customers or to establish
relationships with direct sales customers could adversely affect our brands, business, results of
operations, financial performance and prospects.
We may be compelled to undertake product recalls or other actions, which could
adversely affect our brand image, financial condition, results of operations and prospects.
We may be subject to adverse publicity, damage to our brand, and costs for recalls of our
vehicles. We may at various times, voluntarily or involuntarily, initiate a recall if any of our
vehicles, including any systems or parts sourced from our suppliers, prove to be defective or
non-compliant with applicable laws and regulations. Such recalls, whether voluntary or
involuntary, could involve significant expense and could adversely affect our brand image in
our target markets, as well as our business, financial condition, results of operations, and
growth prospects. During the Track Record Period and up to the Latest Practicable Date, we
did not experience product recalls in both China and overseas markets.
Our vehicles are subject to motor vehicle standards and the failure to satisfy such
mandated safety standards would materially and adversely affect our business and results
of operations.
All vehicles must comply with various standards of the market where the vehicles are
sold. Our vehicles must meet or exceed all mandated safety standards in the markets where we
sell our vehicles. Rigorous testing and the use of approved materials and equipment are among
the requirements for achieving these standards. For example, in China, vehicles must pass
various tests and undergo a certification process and be affixed with the China Compulsory
Certification before receiving delivery from the factory, being delivered, or being used in any
commercial activity, and such certification is also subject to periodic renewal. Furthermore, the
PRC government carries out supervision and scheduled or unscheduled inspection of certified
vehicles on a regular basis.
In the event that our certification fails to be renewed upon expiry, a certified vehicle has
a defect resulting in quality or safety accidents, or consistent failure of certified vehicles to
comply with certification requirements is discovered during follow-up inspections, the
certification may be cancelled, suspended or even revoked. With effect from the date of
cancellation, revocation or during suspension of the certification, where any vehicles fail to
satisfy the requirements for certification, they may not to be delivered, sold, imported, or used
in any commercial activity any more, which may affect our business and results of operations
materially and adversely.
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Battery-related risks may materially harm our business.
On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting
smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion
cells. If our vehicles or their battery packs experience failure, which could subject us to
lawsuits, product recalls, or redesign efforts, all of which would be time consuming and
expensive. In addition, any future incident involving lithium-ion cells such as a vehicle or other
fire, even if not involving our vehicles, could seriously harm our business.
Any unauthorized control or manipulation of our vehicle systems could result in loss of
confidence in us and our vehicles and harm our business.
Our vehicles contain complex information technology systems. For example, our vehicles
are designed with built-in data connectivity to accept and install periodic remote updates from
us to improve or update the functionality of our vehicles. We have designed, implemented and
tested security measures intended to prevent unauthorized access to our information technology
networks, our vehicles, and their systems. However, hackers may attempt in the future, to gain
unauthorized access to modify, alter, and use our networks, vehicles, and systems to gain
control of, or to change, our vehicles’ functionality, user interface, and performance
characteristics, or to gain access to data stored in or generated by the vehicles. Vulnerabilities
could be identified in the future and our remediation efforts may not be successful. Any
unauthorized access to or control of our vehicles or their systems or any loss of data could
result in accidents, legal claims or proceedings against us. In addition, regardless of their
veracity, reports of unauthorized access to our vehicles, their systems, or data, as well as other
factors that may result in the perception that our vehicles, their systems, or data are capable of
being “hacked,” could negatively affect our brand and harm our business, financial condition,
results of operations and prospects. During the Track Record Period and up to the Latest
Practicable Date, we did not experience unauthorized control or manipulation of our vehicle
systems.
We are subject to risks associated with driving assistance system.
Our vehicles are currently equipped with driving assistance system. Any defects of or
quality issues with driving assistance system could result in actual or perceived quality issues
with our vehicles. We plan to work with third-party suppliers to enhance and expand our
vehicles’ level of driving assistance system through ongoing research and development.
Driving assistance system as an evolving and complex technology is subject to risks, and from
time to time there have been accidents associated with such technology. The safety of such
technology depends in part on user interaction and users may not be accustomed to using such
technology. To the extent accidents associated with our future driving assistance system occur,
we could be subject to liability, government scrutiny, and further regulation. See “Regulatory
Overview — Regulations and Policies on Intelligent Connected V ehicles and Autonomous
Driving.” Any of the foregoing could materially and adversely affect our brand image, financial
condition, results of operations, and growth prospects.
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Our services, including those provided through third parties, may not be generally
accepted by our users. If we are unable to provide or arrange satisfactory services for our
users, our business and reputation may be materially and adversely affected.
We cannot assure that our services or our efforts to engage with our users using both our
online and offline channels, will be successful, which could affect our revenues as well as our
user satisfaction and marketing. Moreover, we are unable to ensure the availability or quality
of services provided by third parties, such as road assistance, vehicle logistics, and automobile
financing and insurance. If any of the services provided by third parties becomes unavailable
or inadequate, our users’ experience may be adversely affected, which in turn may materially
and adversely affect our business and reputation.
In addition, if we are unable to roll out and establish a widespread service network, user
satisfaction could be adversely affected. This, in turn, could materially and adversely affect our
sales, results of operations and prospects.
Our business depends substantially on the continued efforts of our senior management,
key employees, and qualified personnel, and our operations may be severely disrupted if
we lose their services.
Our success depends substantially on the continued efforts of our senior management and
key employees with expertise in various areas. If one or more of our senior management
members or key employees were unable or unwilling to continue their services with us, we
might not be able to replace them easily, in a timely manner, or at all. As we build our brand
and become more well-known, the risk that competitors or other companies may poach our
talent increases. If any of our senior management members and key employees terminates his
or her services with us, our business may be severely disrupted, our financial condition and
results of operations may be materially and adversely affected and we may incur additional
expenses to recruit, train, and retain qualified personnel. If any of our senior management
members or key employees joins a competitor or forms a competing company, we may lose
users, know-how and key professionals and staff members. Our key employees has entered into
an employment agreement and a non-compete agreement with us. However, if any dispute
arises between our senior management or key employees and us, the non-competition
provisions contained in their non-compete agreements may not be enforceable, especially in
China, where these senior management reside, on the ground that we have not provided
adequate compensation to them for their non-competition obligations, which is required under
relevant PRC laws.
Our industry is characterized by high demand and intense competition for talent, in
particular with respect to qualified talent in the areas of smart vehicle, autonomous driving
technologies, and software development, and therefore we cannot assure you that we will be
able to attract or retain qualified staff or other highly skilled employees. In addition, our ability
to train and integrate new employees into our operations may not meet the growing demands
of our business, which may materially and adversely affect our ability to grow our business and
our results of operations.
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We have a history of net losses, net current liabilities and operating cash outflow during
the Track Record Period, and there is no assurance that we will remain profitable.
We recorded losses for the year of RMB5.2 billion and RMB4.2 billion in 2022 and 2023,
respectively. We recorded a profit for the year/period of RMB4.7 billion, RMB1.4 billion and
RMB3.1 billion in 2024 and the six months ended June 30, 2024 and 2025, respectively.
However, we will continue to invest in research and technology, development and introduction
of new products, among others. These efforts may be more costly than we anticipate, and we
may not succeed in increasing our revenue sufficiently to offset these expenses, which may
affect our profitability in the future.
We recorded net current liabilities of RMB5,355.5 million, RMB11,459.1 million,
RMB10,266.9 million and RMB8,161.7 million as of December 31, 2022, 2023, 2024 and June
30, 2025, respectively. Net current liabilities may expose us to certain liquidity risks and may
constrain our operational flexibility, as well as adversely affect our ability to expand our
business. Our future liquidity will primarily depend on our ability to generate adequate cash
inflows from our operating activities and adequate external financing, which will be affected
by our future operating and financial performance, the performance of the industry in which
we operate and prevailing economic and capital market conditions, among other factors, many
of which are beyond our control. We may maintain a net current liabilities position in the near
future, which may limit our working capital for the purpose of operations or capital for our
expansion plans and materially and adversely affect our business, results of operations,
financial performance and prospects.
We recorded net cash used in operating activities of RMB1,358.0 million in 2022. We
cannot assure you that we will always be able to generate positive cash flows from operating
activities in the future. If we continue to record net operating cash outflows in the future, our
working capital may be constrained, which may adversely affect our financial performance.
Our future liquidity primarily depends on our ability to achieve positive cash flows from our
operating activities and adequate external financing such as offering and issuing securities, or
other sources such as external debt, which may not be available on terms favorable or
commercially reasonable to us or at all. If we fail to obtain sufficient funding in a timely
manner and on reasonable terms, such as conditions, restrictive covenants or interest rates, or
at all, our ability to meet our payment obligations may be significantly affected and may not
be able to expand our business.
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We are exposed to credit risks related to our trade receivables.
Our trade receivables primarily arise from contracts with customers. We generally
requires advance receipt of bank acceptance notes from majority of our customers before
delivery of goods, while granting credit terms of 30 to 90 days to certain customers. The
balance of our trade receivables (before allowance for credit losses) was RMB1,638.0 million,
RMB2,379.6 million, RMB2,485.1 million and RMB2,263.3 million, as of December 31, 2022,
2023, 2024 and June 30, 2025, respectively, which represented our maximum exposure as of
the respective dates to credit risk in relation to trade receivables. In 2022, 2023 and 2024 and
for the six months ended June 30, 2024, we recognized impairment losses under expected credit
loss model (net of reversal) of RMB76.9 million, RMB108.8 million, RMB131.1 million and
RMB39.7 million, respectively. For the six months ended June 30, 2025, we recorded reversal
of impairment losses under expected credit loss model of RMB13.6 million. The turnover days
of our trade and other receivables were 33 days, 45 days, 16 days, 16 days and 19 days in 2022,
2023 and 2024 and for the six months ended June 30, 2024 and 2025, respectively. The
collection of amounts due from our customers may not be timely. This might result in slow
turnover of our trade receivables and restrict our working capital resources. See “Financial
Information — Discussion of Certain Key Items from Our Consolidated Statements of
Financial Position — Trade and Other Receivables.” If we fail to receive payments from our
customers on a timely basis, our cash flows and financial position could be adversely affected.
In addition, disputes that arise due to default in payment by customers may also be
time-consuming and costly for us in the event we decide to claim for such payments, and we
may not be successful, in which case our liquidity, results of operations and financial
performance may be adversely affected.
We may incur impairment losses for intangible assets, which may adversely affect our
results of operations.
Our intangible assets consist of non-patented technology, trademarks and development
costs. As of December 31, 2022, 2023, 2024 and June 30, 2025, our intangible assets amounted
to RMB6,777.1 million, RMB9,183.9 million, RMB8,651.6 million and RMB9,865.8 million,
respectively. If the carrying value of our intangible assets is considered to exceed its
recoverable amount and is therefore determined to be impaired in the future, we would be
required to write down the carrying value or record a provision of impairment loss for these
intangible assets in our financial statements during the period in which our intangible assets are
determined to be impaired. Intangible development assets not ready to use are not subject to
amortization and are tested annually for impairment and whenever there is an indication of
impairment. For more details, please refer to Note 22 to the Accountant’s Report set out in
Appendix I to this prospectus. Impairment losses for intangible assets would adversely affect
our results of operations and our financial condition.
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We have granted, and may continue to grant, share incentives, which may result in
increased share-based payments.
We recorded the recognized of share-based payment expense of RMB31.7 million,
RMB67.4 million, RMB10.5 million and RMB54.6 million in 2022, 2024 and the six months
ended June 30, 2024 and 2025, respectively, and the reversal of share-based payment expense
of RMB30.8 million in 2023. For details, see Note 42 to the Accountants’ Report in Appendix
I to this Prospectus. We may incur additional share-based compensation payment expenses if
we grant share incentives in the future. We believe the granting of share-based compensation
is of significant importance to our ability to attract and retain key personnel and employees,
and we may continue to grant share-based compensation to employees in the future. As a result,
our share-based payments may increase, which may have an adverse effect on our results of
operations.
Our warranty reserves may be insufficient to cover future warranty claims, which could
adversely affect our financial condition and results of operations.
We provide warranties for new vehicles, power batteries, electric drive motor, motor
control unit and range extenders. Our warranty program is similar to other automakers’
warranty programs and is intended to cover all parts and labor to repair defects in material or
workmanship in the body, interior, range extender, electric drive motors, battery, powertrain,
and brake system. We record and adjust warranty reserves based on changes in estimated costs
and actual warranty costs. We cannot assure you that our warranty reserves will be sufficient
to cover future warranty claims. We could, in the future, become subject to significant and
unexpected warranty claims, resulting in significant expenses, which would in turn materially
and adversely affect our financial condition, results of operations, and prospects.
If our vehicle owners modify our vehicles regardless of whether third-party aftermarket
products are used, the vehicle may not operate properly, which may create negative
publicity and could harm our business.
Automobile enthusiasts may seek to modify our vehicles, including using third-party
aftermarket products, to alter their appearance or enhance their performance, which could
jeopardize vehicle safety systems. We do not test, nor do we endorse, such modifications or
third-party products. Such unauthorized modifications could reduce the safety of our vehicles
and any injuries resulting from such modifications could result in adverse publicity which
would adversely affect our brand and harm our business, financial condition, results of
operations, and prospects.
Change in tax treatments or government grants may adversely affect our results of
operations and financial performance.
During the Track Record Period, certain of our PRC subsidiaries were entitled to a
preferential income tax rate of 15%. Additionally, we recorded government grants and
subsidies of RMB523.5 million, RMB549.5 million, RMB1,068.2 million, RMB659.2 million
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and RMB690.1 million in 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively. Continued eligibility for preferential tax treatment and government grants
is subject to recognition and evaluation by the relevant government authorities in China. We
cannot assure you that we will continue to receive such preferential tax treatment and
government grants at historical levels, or at all. Such changes or uncertainties in tax treatment
or government grants may adversely affect our results of operations and financial performance.
Regulatory requirements regarding data protection and information security are still
under development, the changes of which or any data protection and information security
incidents may have a material and adverse effect on our business, results of operations,
financial performance and prospects.
We face significant challenges with respect to cybersecurity and data privacy, including
the storage, transmission and sharing of confidential information. We transmit and store
personal information of our users related to the use of our vehicles. Therefore, we are subject
to laws and regulations relating to the collection, storage, use, processing, transmission,
retention, security and transfer of personal information and other data. Any improper handling
of personal information or any other information security incidents, such as unauthorized
access to our consumer database by hackers, could result in reputation damage and/or civil or
regulatory liabilities that may have significant legal, financial and operational consequences.
Regulatory requirements regarding the data security and data protection are still under
development, of which the interpretation and application are also still under development and
subject to change that may affect us, the changes of which or any data protection and
information security incidents could damage our reputation, business, results of operations,
financial performance and prospects and/or could lead to civil or regulatory liabilities.
Complying with new laws and regulations could also cause us to incur substantial costs or
require us to change our business practices in a manner that has a material and adverse effect
on our business. For details of cybersecurity-related regulations, the relevant impact and our
compliance thereof, see “Regulatory Overview — Regulations on Internet Information
Security and Privacy Protection” and “Business — Data Privacy and Cybersecurity.”
We may not be able to adequately protect our intellectual property rights and may be
subject to infringement of intellectual property rights, or misappropriation claims, by
third parties.
We believe our trademarks, patents and other intellectual property rights are crucial to our
success. We may be subject to infringement of our intellectual property rights by third parties.
For instance, third parties may copy or otherwise obtain and use our intellectual property rights
without our prior authorization. In particular, we may be exposed to the risk of product
infringement. During the Track Record Period, we have not experienced any material
infringement of our property rights or know-how or misappropriation of our patents and other
intellectual property right by third parties. There can be no assurance that there will be no
unauthorized use of our intellectual property rights in the market. Infringers may illegally
manufacture products using our intellectual property rights without our authorization. Such
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incidents are usually difficult to detect or ban entirely in a timely manner. The occurrence of
such incidents may have an adverse impact on our reputation and brands. Our reputation and
brands are crucial to our profitability and competitiveness, and any damage to our reputation
or brands resulting from product infringement may adversely affect our profitability and
competitiveness.
Our measures to enforce or defend our intellectual property rights may not always be
successful. We may have to initiate legal proceedings to defend the ownership of our
intellectual property rights against any infringement by third parties, which may be costly and
time-consuming, and the outcome may be uncertain. If we are unable to adequately protect or
safeguard our intellectual property rights, our business, financial condition and results of
operations may be adversely affected.
Meanwhile, we are subject to risks of intellectual property right infringement or
misappropriation claims by third parties in the course of our operations. Defense against any
of these claims may be costly and time-consuming, and adverse determination in any such legal
proceedings to which we may become a party may subject us to liabilities, or subject us to
injunctions prohibiting the provision and marketing of the relevant brands or products, or other
negative consequences, thereby disrupting our business operations, damaging our reputation
and brands, and adversely affecting our business, results of operations, financial condition and
results of operations.
As our patents may expire, our patent applications may not be granted, and our patent
rights may be contested, circumvented, invalidated, or limited in scope, our patent rights
may not protect us effectively. In particular, we may not be able to prevent others from
developing or exploiting competing technologies, which could materially and adversely
affect our business, financial condition and results of operations.
As of June 30, 2025, in China, we had 6,725 patents and 282 registered computer software
copyrights, and are applying for 6,651 patents. In addition, as of the same date, we had
registered 2,183 trademarks and 99 domain names. As of June 30, 2025, we have 101 patents
and 2,366 registered trademarks outside China, and are applying for 127 patents and 1,698
trademarks. We cannot assure you that all our pending patent applications will result in issued
patents. Even if our patent applications succeed and we are issued patents accordingly, it is still
uncertain whether these patents will be contested, circumvented, or invalidated in the future.
In addition, the rights granted under any issued patents may not provide us with meaningful
protection or competitive advantages. The claims under any patents may not be broad enough
to prevent others from developing technologies that are similar or that achieve results similar
to ours. It is also possible that the intellectual property rights of others could bar us from
licensing and exploiting our patents. Numerous patents and pending patent applications owned
by others exist in the fields where we have developed and are developing our technology. These
patents and patent applications might have priority over our patent applications and could
subject our patent applications to invalidation. Finally, in addition to those who may claim
priority, any of our existing patents or pending patent applications may also be challenged by
others on the basis that they are otherwise invalid or unenforceable.
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A member of our Single Largest Group of Shareholders has pledged shares, which may
give rise to potential ownership disputes.
As of the Latest Practicable Date, Sokon Holding, a member of our Single Largest Group
of Shareholders, has pledged approximately 4.23% of equity interest in our Company. Under
applicable PRC regulations, including the Overseas Listing Trial Measures issued by the
CSRC, an issuer may be restricted from conducting an overseas listing if its controlling
shareholder or shareholders under its control hold shares of the issuer that are subject to
significant ownership disputes as a result of being pledged, frozen or involved in litigation or
arbitration. If an event of default occurs, include, among others, non-repayment,
misrepresentation and breach of certain covenant sunder the relevant financing arrangements,
the lenders may be able to enforce their rights against our Sokon Holding, including enforcing
their rights against all of the pledged shares in our Company through legal proceedings. In such
event, Sokon Holding may no longer be able to maintain the current level of interest in our
Company.
We have not obtained ownership certificates for certain self-owned and leased properties,
and certain properties have not been filed, which may adversely affect our business.
As of the Latest Practicable Date, we had not obtained relevant property ownership
certificates for certain properties we owned. As of the Latest Practicable Date, for certain
leased properties, the lessors with whom we enter into lease agreements did not provide valid
property ownership certificates or authorizations from the property owners for the lessors to
sublease the properties. Therefore, we cannot ensure that they have the rights or authorizations
to lease or sublease such properties to us. As advised by our PRC Legal Adviser, we may not
be able to continue to lease such properties if the lease was challenged by a third party.
Furthermore, according to applicable PRC laws and regulations, the lessor and the lessee
to a lease agreement are required to file the lease agreement with relevant government
authorities within 30 days after the execution of the lease agreement. As of the Latest
Practicable Date, we had not filed our lease agreements for certain properties we leased with
the local housing administration authorities as required under PRC laws and regulations. As
advised by our PRC Legal Adviser, if we and the lessors fail to handle filing for such lease
registration as required by the relevant competent authorities, we may be subject to a fine of
RMB1,000 to RMB10,000 for each of the unregistered lease agreements.
If we are challenged by third parties or government authorities upon any of the
circumstances stated above, we may be subject to fines and may be forced to relocate, as the
case may be, and, as a result, our business, results of operations, financial performance and
prospects may be adversely affected.
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Our operation requires various approvals, licenses and permits, we may experience
difficulties or delays in obtaining the necessary approvals, licenses and permits, which
may adversely affect our business, results of operations, financial performance and
prospects.
Pursuant to PRC laws and regulations, we are required to maintain various approvals,
licenses and permits for our operations, such as ICP license. These approvals, licenses and
permits are granted upon satisfactory compliance with the applicable laws and regulations.
They are also subject to examinations or verifications by relevant authorities and some of them
are valid only for a fixed period subject to renewal and accreditation. We may experience
difficulties or delays in obtaining the necessary approvals, licenses and permits. In addition,
there can be no assurance that we will be able to obtain or renew all of the approvals, licenses
and permits required for existing business operations promptly or at all. If any of these occurs,
our ongoing business could be interrupted, and our expansion plan may be delayed.
Moreover, as we expand to more overseas markets, we will be subject to regulatory
requirements of local markets, and may need to obtain additional licenses and permits for our
business operations. We cannot guarantee that if and when needed, we will be able to obtain
such licenses and permits in a timely manner, or at all.
Complying with government regulations may require substantial expenses, and any
non-compliance may expose us to liability. In case of any non-compliance, we may have to
incur significant expenses and divert substantial management time and resources to resolve any
deficiencies. We may also experience negative publicity arising from such deficiencies, which
may materially and adversely affect our financial performance and business prospects.
Interruption or failure of our information technology systems could affect our ability to
effectively provide our services.
We rely on information technology systems to process, transmit and store information in
relation to our operations. These systems are vulnerable to damage or interruption from, among
others, fire, terrorist attacks, natural disasters, power loss, telecommunications failures,
computer viruses, computer denial of service attacks, or other attempts to harm our systems.
Our data centers are also subject to break-ins, sabotage, and intentional acts of vandalism, and
to potential disruptions. Some of our systems are not fully redundant, and our disaster recovery
planning cannot account for all eventualities. Any problems at our data centers could result in
lengthy interruptions in our service. In addition, our products and services are highly technical
and complex and may contain errors or vulnerabilities, which could result in interruptions in
our services or the failure of our systems.
We may be subject to litigation and other legal proceedings and may not always be
successful in defending ourselves against such claims or proceedings.
We and our management may be involved in litigation and other legal proceedings during
the ordinary course of business operations related to, among other things, products or other
types of liability, labor disputes, contract disputes or intellectual property disputes that may
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adversely affect our results of operations and financial performance. Moreover, in the course
of our international expansion, we may be involved in disputes with overseas customers, which
may result in additional costs and efforts to handle such disputes. These actions could also
expose us to adverse publicity, which might adversely affect our brands, reputation and
customer preference for our products. If we become a party in any litigation or other legal
proceedings in the future, the outcome of these types of proceedings could be uncertain and
lead to legal expenses, and might result in settlements or outcomes that adversely affect our
business, results of operations, financial performance and prospects.
In particular, according to the PRC Social Insurance Law (ᎈ
) and the Administrative Measures on Housing Fund (၍ଣૢԷ),
employers are required, together with their employees or separately, to pay the social insurance
premiums and housing funds for their employees. Employers that fail to make adequate social
insurance and housing fund contributions may be subject to fines and legal sanctions. Due to
the evolving interpretation and implementation of these laws and regulations, relevant PRC
authorities may determine that we shall make supplemental contributions, that we are not in
compliance with labor laws and regulations, or that we are subject to fines or other legal
sanctions, such as order of timely rectification, and our business, financial condition and
results of operations may be adversely affected.
Our business is subject to seasonality, which may cause fluctuations in our operating
results.
Our results of operations may vary significantly from period to period due to many
factors, including seasonal factors that may affect the demand for our vehicles. The sales
volume of passenger vehicles typically culminates in the fourth quarter of the calendar year.
It is difficult for us to determine the exact nature or extent of the seasonality of our business.
Also, any unusually severe weather conditions in certain regions may impact demand for our
vehicles. 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. We also expect our period-to-period results of operations
to vary based on our operating costs, which we anticipate will increase significantly in future
periods as we, among other things, design, develop and produce our new models, build and
equip new production facilities to produce such components, open new retail stores, increase
our sales and marketing activities, and increase our administrative functions to support our
growing operations.
Due to these fluctuations, comparisons of sales and operating results between different
periods within a financial year, between the same periods in different financial years, or
between different financial years, are not necessarily indicative of our performance. Nor may
our results for any particular quarter or half year be indicative of the results to be achieved for
the entire fiscal year. Our results of operations and financial performance in the future may
continue to fluctuate throughout a year. Investors should not rely on interim results as being
indicative of results our Group may expect for the full year.
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We are or may be subject to risks associated with strategic alliances or acquisitions.
We have entered into and may in the future enter into strategic alliances, including joint
ventures or minority equity investments, with various third parties to further our business
purpose from time to time. These alliances could subject us to a number of risks, including
risks associated with sharing proprietary information, non-performance by third parties, and
increases in expenses in establishing new strategic alliances, any of which may materially and
adversely affect our business. We may have limited ability to monitor or control the actions of
these third parties and, to the extent any of these third parties suffers negative publicity or harm
to their reputation from events relating to their businesses, we may also suffer negative
publicity or harm to our reputation by virtue of our association with any such third party.
In addition, if appropriate opportunities arise, we may acquire additional assets,
technologies, or businesses that are complementary to our existing business. In addition to
possible shareholder approval, we may have to obtain approvals and licenses from relevant
government authorities for the acquisitions and to comply with any applicable PRC laws and
regulations, which could result in increasing delay and costs, and may derail our business
strategy if we fail to do so. Moreover, the costs of identifying and consummating acquisitions
may be significant. Furthermore, past and future acquisitions and the subsequent integration of
new assets and businesses into our own require significant attention from our management and
could result in a diversion of resources from our existing business, which in turn could have
an adverse effect on our operations. Acquisitions could result in the use of substantial amount
of cash, potentially dilutive issuances of equity securities, the occurrence of significant
goodwill impairment charges, amortization expenses for other intangible assets, and exposure
to potential unknown liabilities of the acquired business. Acquired assets or businesses may not
generate the financial results we expect.
Furthermore, any acquired business may be involved in legal proceedings originating
from historical periods prior to the acquisition, and we may not be fully indemnified, or at all,
for any damage to us resulting from such legal proceedings, which could materially and
adversely affect our financial position and results of operations.
If we update our manufacturing equipment more quickly than expected, we may have to
shorten the useful lives of any equipment to be retired as a result of any such update, and
the resulting acceleration in our depreciation could negatively affect our financial results.
We have invested and expect to continue to invest significantly in what we believe is
modern tooling, machinery, and other manufacturing equipment for the product lines and we
depreciate the cost of such equipment over their expected useful lives. However,
manufacturing technology may evolve rapidly, and we may decide to update our manufacturing
process with advanced equipment more quickly than expected. Moreover, as our manufacturing
expertise accumulates and manufacturing efficiency increases, we may be able to manufacture
our products using less of our installed equipment. The useful life of any equipment that would
be retired early as a result would be shortened, causing the depreciation on such equipment to
be accelerated, and to the extent we own such equipment, our results of operations could be
negatively impacted.
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Environmental, social, and governance matters may impact our business and reputation.
In addition to the importance of their financial performance, companies are increasingly
being evaluated by their performance on a variety of environmental, social, and governance
(“ESG”) matters, which are considered to contribute to the long-term sustainability of their
companies’ performance. A variety of organizations measure the performance of companies on
ESG topics, and the results of these assessments are widely publicized. In addition, investment
in funds that specialize in companies that perform well in such assessments are increasingly
popular, and major institutional investors have publicly emphasized the importance of ESG
measures to their investment decisions. Topics taken into account in such assessments include,
among others, the company’s efforts and impacts, including impacts associated with suppliers
or other partners, on climate change, ethics and compliance with law, diversity, and the role of
the Board in supervising various sustainability issues.
In light of investors’ increasing focus on ESG matters, there can be no assurance that we
will manage such issues successfully, or that we will successfully meet society’s expectations
as to our proper role. Any failure or perceived failure by us in this regard could have a material
adverse effect on our reputation and on our operation results, including the sustainability of our
business over time.
Our business could be adversely affected by natural disasters, public health crises,
economic downturns or other unexpected events.
Natural disasters, health epidemics, acts of war or terrorism or other factors beyond our
control may adversely affect the economy, infrastructure and livelihood of the people in the
regions where we conduct our business. Our operations may be under the threat of natural
disasters, such as floods, earthquakes, sandstorms, snowstorms, fire or drought, the outbreak
of a widespread health epidemic, such as swine flu, avian influenza, severe acute respiratory
syndrome, or SARS, Ebola, Zika, COVID-19, other factors beyond our control, such as power,
water or fuel shortages, failures, malfunction and breakdown of information management
systems, unexpected maintenance or technical problems, or are susceptible to potential wars or
terrorist attacks.
In addition, any economic downturn, decrease in economic growth rates and other
uncertain economic outlook in the market that we operate in could also affect our business,
financial condition and results of operations. Acts of war or terrorism may also injure our
employees, cause loss of lives, disrupt our business network and destroy our markets. Any of
the foregoing events and other events beyond our control could have an adverse effect on the
overall business sentiment and environment, cause uncertainties in the regions where we
conduct business, cause our business to suffer in ways that we cannot predict and materially
and adversely impact our business, financial condition and results of operations.
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We have limited insurance coverage, which could expose us to significant costs.
We have limited liability insurance coverage for our products and business operations. A
successful liability claim against us, regardless of whether due to injuries suffered by our users
could materially and adversely affect our financial condition, results of operations and
reputation. See “Business — Insurance.” Our insurances may not provide adequate coverage
for all the risks in connection with our business operations. If we were to incur substantial
losses and liabilities that are not covered by our insurance policies, we may be required to bear
our losses to the extent that our insurance coverage is insufficient. As a result, we could suffer
significant costs, which could have an adverse effect on our business, financial condition and
results of operations.
RISKS RELATED TO THE JURISDICTIONS IN WHICH WE OPERATE OUR
BUSINESS
Changes in economic, political and social conditions, as well as government policies, laws
and regulations, and industry practice guidelines in the countries where the Company
operates could have an adverse effect on our business, financial condition and results of
operations.
Our business, financial condition and results of operations may be influenced by the
economic, regulatory, political and social conditions in the country where we operate.
Governments worldwide have implemented, and may continue to introduce, among others,
various policies and measures to encourage the economic growth and guide the allocation of
resources. The auto industry in general is affected by macro-economic factors, including
international, national, regional and local economic conditions, trade relationships,
employment levels, customer demand and discretionary spending. Any changes in these factors
may have material and adverse effect on our business, financial condition and results of
operations.
We face risks associated with the international sale of our vehicles, political relationships,
export controls and economic or trade restrictions, and if we are unable to effectively
manage these risks, our business, financial condition and results of operations may be
materially and adversely affected.
While we have historically derived substantially all of our revenues in China, we have
been exploring opportunities to expand into international markets. We may also test sales into
other international markets. While we expect China will continue to be our primary market, the
marketing and sale of our vehicles to international markets may increase in the future, which
will expose us to a number of risks, including, but not limited, to:
 fluctuations in foreign currency exchange rates;
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 increased costs associated with the ability to understand the local markets and
develop and maintain effective marketing and distributing presence in various
countries;
 providing customer service and support in these markets;
 difficulty with staffing and managing overseas operations;
 competition with existing players in the automotive industry;
 exposure to business cultures where improper business practices may be prevalent;
 challenges in cultivating and maintaining productive relationships with local
business partners;
 failure to develop appropriate risk management and internal control structures
tailored to overseas operations;
 difficulty and cost relating to compliance with different commercial and legal
requirements of the overseas markets in which we offer or plan to offer our products
and services including charging and other electric infrastructures;
 failure to obtain or maintain permits for our products or services in these markets;
 different safety concerns and measures needed to address accident-related risks in
different countries and regions;
 inability to obtain, maintain or enforce intellectual property rights;
 unanticipated changes in prevailing economic conditions and regulatory
requirements; and
 trade barriers such as export requirements, tariffs, taxes and other restrictions and
expenses.
Our expansion into international markets will require us to respond timely and effectively
to rapid changes in market conditions in the relevant countries. Our success in international
expansion depends, in part, on our ability to succeed in different legal, regulatory, economic,
environmental, social and political conditions which we have little control over. We may not
be able to develop and implement policies and strategies that will be effective in each location
where we do business. A change in one or more of the factors described above may have a
material adverse effect on our business, financial condition and results of operations.
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With international footprint, our business is subject to constantly changing international
economic, regulatory, social, and political conditions, and local conditions in those countries
and regions where we operate and we may be subject to various risks relating to legal
compliance in different jurisdictions, exposure to potential disputes and litigations,
geopolitical actions, trade restrictions or prohibitions, foreign exchange rates, local market
conditions, cultural and language difficulties, geopolitical risks, competitions, and taxes. As a
result, international political relationships among jurisdictions where we operate and conduct
business may affect our cost structure, the demand for our products and our collaboration with
business partners. Any such relationship tensions and political concerns may adversely affect
our business, results of operations and prospects.
In recent years, the U.S. government imposed targeted economic and trade restrictions on
a number of Chinese companies and institutions that limit their access to U.S.-origin goods,
software and technologies (collectively, “Items”), as well as items that contain a significant
portion of certain U.S.-origin Items or are a direct product of certain U.S.-origin Items. While
we have conducted business with some of these entities, including Supplier A and Supplier C,
we have no reasons to believe that we have violated the imposed restrictions because we do not
export, re-export, or transfer any items that are subject to the Export Administration
Regulations to any entities listed on the U.S. Commerce Department’s Entity List. In 2022,
2023, 2024 and the six months ended June 30, 2025, our aggregate purchases from Supplier A
and Supplier C amounted to RMB6.8 billion, RMB8.4 billion, RMB44.5 billion and RMB20.5
billion, respectively. The items sold by us to relevant entities mainly include our vehicles and
automotive parts. Such items are manufactured in the PRC (i.e. not U.S.-origin items), are not
in the U.S. or moving in transit through the U.S., do not incorporate or bundle with any
controlled U.S.-origin commodities or software, and are not subject to foreign direct product
rules under the Export Administration Regulations. Therefore, that believe there is limited
impact resulting from such restrictions on our business. However, as a result of our
collaboration with such entities, including Supplier A and Supplier C, we may incur additional
efforts when expanding into international markets to ensure compliance with applicable laws
and regulations, including but not limited to make necessary alterations and modifications to
our vehicles and collaborate with alternative suppliers. For example, before entering into a new
international market, we will conduct legal analysis to evaluate whether our business in such
market will be affected by our collaborations with companies subject to economic and trade
restrictions, and will make necessary alterations and modifications to ensure compliance,
which may lead to additional compliance costs. As a result, our international expansion efforts
could be negatively affected.
Our internal policy requires employees of relevant entities to comply with all applicable
laws, our contracts with relevant entities contain clauses requiring compliances with all
applicable laws, and we consult external legal counsel regarding compliance with relevant U.S.
trade control and sanctions laws and regulations. As advised by our internal control consultant,
no material deficiencies in design were identified in relation to the effectiveness of enhanced
internal control measures adopted by us. Based on the foregoing, our Directors are of the view
that our Group is not subject to material export control risks. However, U.S. export controls
and trade laws and regulations are complex and likely subject to frequent changes, and the
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interpretation and enforcement of the relevant regulations involve substantial uncertainties,
which may be changed by political and/or other factors that are not within our control or that
are heightened by national security concerns. For example, the U.S. government has tightened
certain chip shipments to China. If any potential restrictions, any associated inquiries or
investigations, or any other government actions occur, they are difficult or costly to comply
with and may, among other things, delay or impede the development of our technology and
solutions, and hinder the stability of our supply chain. They could also result in negative
publicity, require significant time and attention of the management and subject us to fines,
penalties or orders that we cease or modify our existing business practices, if they occur. Any
of these events may have an adverse effect on our business, financial condition and results of
operations. Based on the independent due diligence work conducted by the Joint Sponsors and
taking into account the views and basis of the Directors as disclosed above, nothing has come
to the attention of the Joint Sponsors that would reasonably cause the Joint Sponsors to cast
doubt on the Directors’ view on the above-mentioned export control risks in any material
respects.
As a company listed on the Shanghai Stock Exchange, we, our Directors, senior
management, employees and Shareholders are subject to securities regulations and
exchange listing rules in the PRC.
As a company listed on the Shanghai Stock Exchange, we, our Directors, senior
management, employees and Shareholders are subject to securities regulations issued by the
CSRC and the Shanghai Stock Exchange Listing Rules. While we are committed to full
compliance with all applicable regulatory requirements, new regulations and rules, and changes
in the interpretation or enforcement of existing regulations and rules, may be adopted from
time to time. To maintain compliance, we may need to devote additional resources and incur
compliance-related costs. In addition, the CSRC and the Shanghai Stock Exchange may have
periodic or ad hoc inspections, examinations and inquiries with respect to our compliance with
relevant regulatory requirements. Prior to the Track Record Period, our controlling shareholder
and de facto controller (as defined under the Shanghai Stock Exchange Listing Rules) were
subject to an administrative penalty by the CSRC and received a regulatory warning letter from
the Shanghai Stock Exchange in 2021 due to non-compliance with relevant information
disclosure requirements by the CSRC and under the Shanghai Stock Exchange Listing Rules;
prior to the Track Record Period, we and one of our senior management member received
regulatory concern from the Shanghai Stock Exchange in 2019 due to non-compliance with
relevant information disclosure requirements of the Shanghai Stock Exchange; and during the
Track Record Period, one of our non-executive Directors inadvertently traded an insignificant
number of A Shares during a black-out period under relevant A-Share rules, but was not subject
to any penalties. The aforementioned incidents did not have any material adverse impact on us.
We are subject to the currency exchange regulatory system.
The conversion of RMB into foreign currencies should be in compliance with relevant
laws and regulations. We receive the vast majority of our revenue in Renminbi. Shortages in
the availability of foreign currency may restrict our ability to remit sufficient foreign currency,
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or otherwise satisfy our foreign currency denominated obligations. Under the existing PRC
foreign exchange regulations, payments of current account items, including profit distributions,
interest payments and trade and service-related foreign exchange transactions, can be made in
foreign currencies without prior SAFE approval by complying with certain procedural
requirements. However, approval from or registration with competent government authorities
is required where RMB is to be converted into foreign currency and remitted out of China to
pay capital expenses such as the repayment of loans denominated in foreign currencies. The
PRC government may restrict access to foreign currencies for current account transactions in
the future. If the foreign exchange control system prevents us from obtaining sufficient foreign
currencies to satisfy our foreign currency demand, we may not be able to pay dividends in
foreign currencies to our Shareholders. Further, we cannot assure you that new regulations will
not be promulgated in the future that would have the effect of further restricting the remittance
of RMB into or out of China.
Y ou should assess the legal protections you are entitled to under legal system in the
jurisdictions where we operate.
We are subject to the different applicable laws and regulations of the countries and
regions where we operate. Our business and operations in China are subject to primarily
written statutes, and prior court decisions offer limited precedential value. Furthermore, we
cannot assure you that we can predict the effect of future legal developments in countries and
regions where we operate, including the promulgation of new laws and changes in existing
laws. In addition, legal proceedings may incur significant costs, divert our resources, and
negatively affect our management’s focus on strategic planning and execution, which may
materially and adversely impact our operational efficiency and overall business performance.
Y ou may experience difficulties in effecting service of legal process and enforcing
judgments against us and our management.
We are a company incorporated under the laws of the PRC and the majority of our assets
and subsidiaries are located in the PRC. The majority of our Directors and senior management
reside within the PRC. The assets of these Directors and senior management also may be
located within the PRC. As a result, it may be difficult and time-consuming to effect service
of process upon us or most of our Directors and senior management within the PRC. In
addition, investors may also experience difficulties in enforcing judgments if there is a lack of
reciprocal recognition and enforcement of judicial rulings and awards of other jurisdictions.
Further, the H Shareholders will not be able to bring actions on the basis of violations of
the Listing Rules and must rely on the Hong Kong Stock Exchange to enforce its rules.
Moreover, the Takeovers Code does not have the force of law and provides only standards of
commercial conduct considered acceptable for takeover and merger transactions and share
repurchases in Hong Kong.
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Changes in international trade policies, geopolitics and trade protection measures, export
control and economic or trade sanctions may affect our business, financial condition and
results of operations.
Our business operations and financial performance can be influenced by various factors
related to international trade policies, geopolitics, trade protection measures, export controls,
and economic or trade sanctions. For example, the United States recently imposed tariffs on
various countries, including China. These policies have adversely affected the global economy
and financial markets. During the Track Record Period, our business in the United States is
negligible and we do not rely on materials imported/originated from the U.S.. Therefore, as
advised by our legal adviser as to international sanctions, we believe that the direct impact of
such tariffs on our business operations and financial performance is not material. However, as
relevant policies are rapidly evolving, it may be difficult to evaluate their potential future
impacts. Geopolitical conflicts like this may also lead to volatility in financial markets,
fluctuations in currency exchange rates and increased procurement costs. In extreme cases,
such conflicts could result in economic downturns that materially and adversely impact our
operations. If any new tariffs, legislation and/or regulations are implemented, or if existing
trade agreements are renegotiated or, in particular, if any government takes retaliatory trade
actions due to the recent global trade tension, such changes could have an adverse effect on our
business, financial condition and results of operations.
On October 28, 2024, the U.S. Department of the Treasury issued a final rule on outbound
investment, or the Outbound Investment Rule, to implement the executive order of August 9,
2023, which became effective on January 2, 2025. The Outbound Investment Rule imposes
investment prohibition and notification requirements on U.S. persons for a wide range of
investments in entities associated with China (including Hong Kong and Macau), collectively
defined as “Covered Foreign Persons,” that are engaged in activities relating to three sectors:
(i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii)
artificial intelligence systems. U.S. persons subject to the Outbound Investment Rule are
prohibited from making, or required to report, certain investments in Covered Foreign Persons,
which are defined as “covered transactions.” We believe we are not a “Covered Foreign
Person” as defined in the Outbound Investment Rule. However, if we were to be deemed a
Covered Foreign Person due to changes in our business operations or amendments to relevant
laws and regulations, our ability to raise capital and our stock price may be negatively affected.
The United States and other jurisdictions or organizations, including the European Union,
the United Nations, the United Kingdom and Australia, have, through executive orders,
legislation or other regulatory means, implemented measures that impose economic sanctions
and export controls against such countries or against targeted industry sectors, companies,
entities and/or organization and individuals within such countries. To effectively manage our
exposures to potential sanctions risks, we have established an internal control system in this
regard, including (i) to perform screening procedures in respect of counterparties to our
business to ensure none of them are sanctioned targets that will subject the Group to material
sanction risks, (ii) conduct control analysis on exported products, and (iii) engage an external
expert to audit our compliance system regularly or irregularly to promptly identify and address
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potential compliance loopholes. As advised by our legal adviser as to international sanctions,
during the Track Record Period and up to the Latest Practicable Date, (i) we have not initiated
any primary sanctioned activities, and (ii) risks arising from secondary sanctions should be
relatively limited in the foreseeable future considering that (1) revenue generated from the
entity subject to of economic sanctions accounted for a negligible portion of our total revenues
(less than 0.2% of our total revenues in 2023 and 2024), (2) we sold vehicles and provided
incidental services related to vehicle warranty to such entity, which were for civil-use purpose
only and not for military use, (3) there is no U.S. nexus involved, (4) as of the Latest
Practicable Date, we have ceased all business with such entity, and (5) we undertake to strictly
and effectively implement the internal policy on export control and economic sanctions
compliance. Based on the foregoing, our Directors are of the view that our Group is not subject
to material sanction risks. Nonetheless, we cannot assure you that our customers or users will
not resell our products to sanctioned regions. Our business and reputation could be adversely
affected if the authorities of U.S., the EU, the UN, the U.K., Australia or any other jurisdictions
were to determine that any of our past or future activities might constitute a violation of the
relevant sanctions or provide a basis for a sanction designation of our Group. Based on the
independent due diligence work conducted by the Joint Sponsors and taking into account the
views and basis of the Directors as disclosed above, nothing has come to the attention of the
Joint Sponsors that would reasonably cause the Joint Sponsors to cast doubt on the Directors’
view on the above-mentioned sanctions risks in any material respects.
On September 26, 2024, the U.S. Department of Commerce’s Bureau of Industry and
Security (the “BIS”) published a proposed rule that would prohibit the importation into the
United States of certain vehicle connectivity system (“VCS”) hardware from China or Russia.
Additionally, the proposed rule would restrict the importation, sale, or distribution within the
United States of completed connected vehicles incorporating VCS or automated driving system
software, as well as prohibit manufacturers owned by, controlled by, or under the jurisdiction
of China or Russia from selling such vehicles in the U.S. In each of 2022, 2023, 2024 and the
six months ended June 30, 2025, sales to the U.S. accounted for less than 0.1% of our total
revenues, respectively, and therefore we believe such rule will not have a material impact on
our business. On January 14, 2025, the BIS published the final rule addressing national security
risks associated with connected vehicle technologies, which will be effective on March 15,
2025, it establishes prohibitions targeting specific hardware and software integral to VCS and
automated driving systems, software-related prohibitions and prohibitions against automakers
would take effect from 2027, while hardware-related prohibitions would take effect from 2030.
These factors are subject to frequent changes and uncertainties, often driven by political,
economic, and social dynamics beyond our control. Such changes can have an impact on trade
agreements, tariffs, customs duties, and other aspects of international trade, potentially
resulting in increased operational costs and affecting our market access. Additionally,
alterations in trade protection measures, such as the imposition of anti-dumping duties,
countervailing duties, or safeguard measures, may lead to higher costs or restrictions on our
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exports. Moreover, export controls and economic or trade sanctions can impose limitations on
our ability to export products or conduct business in specific markets. Non-compliance with
these controls and sanctions can result in legal penalties, reputational harm, and the loss of
export privileges.
We are a PRC enterprise and we are subject to PRC tax on our global income, and any
gains on the sales of our H Shares by investors and dividends paid to investors on our H
Shares may (and in the case of dividends to non-PRC enterprises shareholders, will) be
subject to PRC tax.
Under the current PRC tax laws and regulations, non-PRC individuals and non-PRC
enterprises are subject to different tax obligations with respect to dividends paid to them by us
and any 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 () 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 Certain Policy Questions Concerning Individual Income
Tax issued by the MOF and SA T (ஷ
 ) on May 13, 1994, dividends and bonuses income gained by foreign individuals from
foreign-invested enterprises is exempted from 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
STA ()
effective as of March 30, 1998, income from individuals’ transfer of stocks of listed companies
continued to be temporarily exempted from individual income tax. On February 3, 2013, the
State Council approved and promulgated the Notice of Suggestions to Deepen the Reform of
System of Income Distribution (ࠧ
). On February 8, 2013, the General Office of the State Council promulgated
the Circular Concerning Allocation of Key Works to Deepen the Reform of System of Income
Distribution (). According
to these two documents, the PRC government is planning to cease foreign individuals’ tax
exemption for their dividends and bonuses income obtained from foreign-invested enterprises,
and the MOF and the SA T 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 SA T. In light of the foregoing, non-resident individual H Shareholders should be
aware that they may be obligated to pay PRC income tax on dividend and bonuses income
realized from the H Shares.
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As of the Latest Practicable Date, no aforesaid provisions had expressly provided whether
individual income tax shall be levied from non-PRC individuals on the transfer of shares in
PRC enterprises listed on overseas stock exchanges, and there is no assurance that the PRC tax
authorities will not change these practices, which could result in levying income tax on
non-PRC individuals on gains from the sale of our H Shares.
For non-PRC enterprises that do not have establishments or premises in China, and for
those that have establishments or premises in China but whose income is not related to such
establishments or premises, under the EIT Law and its implementation regulations, dividends
paid by us and gains realized by such foreign enterprises upon the sale or other disposition of
our H Shares are subject to EIT at a 10% rate. In accordance with the Circular on Issues
Relating to Withholding of Enterprise Income Tax by PRC Resident Enterprises on Dividends
Paid to Overseas Non-PRC Resident Enterprise Shareholders of H Shares (͏Ά
ุΣྤ̮H) (Guo Shui
Han [2008] No. 897) issued by SA T on November 6, 2008, the withholding tax rate for
dividends payable to non-PRC enterprise holders of H shares will be 10% and we intend to
withhold tax at a rate of 10% from dividends paid to our non-PRC enterprise H Shareholders
(including HKSCC Nominees). Non-PRC enterprises that are entitled to be taxed at a reduced
rate under an applicable income tax treaty or arrangement will be required to apply to the PRC
tax authorities for a refund of any amount withheld in excess of the applicable treaty rate, and
payment of such refund will be subject to the PRC tax authorities’ approval.
Despite the arrangements mentioned above, the interpretation and application of
applicable PRC tax laws and regulations by the competent tax authorities will be in accordance
with the then effective laws and regulations and may change, and new taxes may be imposed,
which in either case may adversely affect the value of your investment in our H Shares.
RISKS RELATED TO THE GLOBAL OFFERING
We will be concurrently subject to PRC and Hong Kong listing and regulatory
requirements.
As we are listed on the Shanghai Stock Exchange and will be listed on the Main Board
of the Hong Kong Stock Exchange, we will be required to comply with the listing rules (where
applicable) and other regulatory regimes of both jurisdictions, unless otherwise agreed by the
relevant regulators. Accordingly, we may incur additional costs and consume additional
resources in complying with the requirements of both jurisdictions.
Our A Shares are listed on the Shanghai Stock Exchange, and the characteristics of the
A Share and H Share markets may differ.
Our A Shares are listed on the Shanghai Stock Exchange. Following the Global Offering,
our A Shares will continue to be traded on the Shanghai Stock Exchange and our H Shares will
be traded on the Hong Kong Stock Exchange. Under current PRC laws and regulations, without
the approval from the relevant regulatory authorities, our H Shares and A Shares are neither
RISK FACTORS
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interchangeable nor fungible, and there is no trading or settlement between the H Share and
A Share markets. With different trading characteristics, the H Share and A Share market have
divergent trading volumes, liquidity and investor bases, as well as different levels of retail and
institutional investor participation. As a result, the trading performance of our H Shares and
A Shares may not be comparable. Nonetheless, fluctuations in the price of our A Shares may
adversely affect the price of our H Shares, and vice versa. Furthermore, due to the different
characteristics of the H Share and A Share markets, the historical prices of our A Shares may
not be indicative of the performance of our H Shares. Y ou should therefore not place undue
reliance on the trading history of our A Shares when evaluating the investment decision in our
H Shares.
There has been no prior public market for our H Shares and an active trading market for
our H Shares may not develop or be sustained.
There was no public market for our H Shares prior to the Global Offering. There can be
no guarantee that a public market for our H Shares with adequate liquidity and trading volume
will develop and be sustained following the completion of the Global Offering. In addition, the
initial Offer Price of our H Shares is expected to be fixed by agreement between the Overall
Coordinators (for itself and on behalf of the Underwriters) and us, which may not be indicative
of the market price of our H Shares following the completion of the Global Offering. If an
active public market for our H Shares does not develop following the completion of the Global
Offering, the market price and liquidity of our H Shares may be materially and adversely
affected.
The trading volume and market price of our H Shares following the Global Offering may
be volatile, which could result in substantial losses to you.
The trading volume and market price of our H Shares may be volatile and could fluctuate
widely in response to factors beyond our control, including general market conditions of the
securities markets in Hong Kong, Mainland China, the United States and elsewhere in the
world. In particular, the performance and fluctuation of the trading volume and market price
of other companies with business operations located mainly in Mainland China that have listed
their securities in Hong Kong may affect the volatility in the price of and trading volumes for
our H Shares. A number of Mainland China-based companies have listed their securities, and
some are in the process of preparing for listing their securities, in Hong Kong. Some of these
companies have experienced significant volatility, including significant price declines and
trading volume fluctuation after their initial public offerings. The trading performances of the
securities of these companies at the time of or after their offerings may affect the overall
investor sentiment towards Mainland China-based companies listed in Hong Kong and
consequently may impact the trading performance of our H Shares. These factors may
significantly affect the market price and volatility of our H Shares, regardless of our actual
operating performance.
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Our historical dividends may not be indicative of our future dividend policy, and there
can be no assurance whether and when we will pay dividends in the future.
We have declared dividends in the past. We protect our Shareholders’ interest by ensuring
a consistent dividend policy. However, there is no assurance that dividends of any amount will
be declared or distributed by us in any year in the future. Under the applicable laws and
regulations of China and the Articles of Association, the payment of dividends may be subject
to certain limitations, and the calculation of our profit under the Accounting Standards for
Business Enterprises may differ in certain respects from the calculation under IFRS Accounting
Standards. Any declaration and payment as well as the amount of dividends will be subject to
our constitutional documents and the applicable laws and regulations of China. See “Financial
Information — Dividends.” No dividend shall be declared or payable except out of our profits
and reserves lawfully available for distribution. Our historical dividends should not be taken
as indicative of our dividend policy in the future.
Under the existing foreign exchange regulations of mainland China, payments of current
account items, including profit distributions, interest payments and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior SAFE approval
by complying with certain procedural requirements. However, approval from or registration
with competent government authorities is required where RMB is to be converted into foreign
currency and remitted out of mainland China to pay capital expenses such as the repayment of
loans denominated in foreign currencies. If the foreign exchange control system prevents us
from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may
not be able to pay dividends in foreign currencies to our Shareholders. Further, we cannot
assure you that new regulations will not be promulgated in the future that would have the effect
of further restricting the remittance of RMB into or out of mainland China.
A future or perceived significant increase in the supply of our H Shares in public markets
could cause the market price of our H Shares to decrease significantly, and dilute
shareholdings of H Shareholders.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our H Shares or other securities relating to our H Shares in the public market, or the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or anticipated sales, of substantial amounts of our securities, including any
future offerings, could also materially and adversely affect our ability to raise capital at a
specific time and on terms favorable to us. In addition, our Shareholders may experience
dilution in their holdings if we issue more securities in the future. New shares or shares-linked
securities issued by us may also confer rights and privileges that take priority over those
conferred by the H Shares.
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Y ou will incur immediate and substantial dilution if the Offer Price of the Offer Shares
is higher than the net tangible asset value per Share.
The Offer Price of our Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of our Offer Shares in the
Global Offering will experience an immediate dilution. Existing Shareholders will receive an
increase in the pro forma adjusted consolidated net tangible assets value per share of their
shares. See Unaudited Pro Forma Financial Information in Appendix II to this Prospectus.
Y ou should not place any reliance on any information released by us in connection with
the listing of our A Shares on the Shanghai Stock Exchange.
As our A Shares are listed on the Shanghai Stock Exchange, we have been subject to
periodic reporting and other information disclosure requirements in China. As a result, from
time to time, we publicly release our financial and operational information on the Shanghai
Stock Exchange or other media outlets designated by the CSRC. However, the information
announced by us in connection with our A Shares is based on the regulatory requirements of
the securities authorities, industry standards and market practices in mainland China, which are
different from those applicable to the Global Offering. The presentation of financial and
operational information for the Track Record Period disclosed on the Shanghai Stock Exchange
or other media outlets may not be directly comparable to the financial and operational
information contained in this Prospectus. As a result, prospective investors in our H Shares
should be reminded that, in making their investment decisions as to whether to purchase our
H Shares, they should rely only on the financial, operating and other information included in
this Prospectus. By applying to purchase our H Shares in the Global Offering, you will be
deemed to have agreed that you will not rely on any information other than that contained in
this Prospectus, and any formal announcements made by us in Hong Kong with respect to the
Global Offering.
Certain facts, forecasts and statistics derived from external sources contained in this
Prospectus may not be reliable and the market opportunity estimates may not be
accurate.
We have derived certain facts and other statistics in this Prospectus, particularly those
relating to the general economy and automobile industry, from information provided by official
government sources and other third-party sources. We have not independently verified
information and statistics from official government sources, and there can be no assurance as
to the accuracy and reliability of such facts and statistics. Y ou should consider carefully how
much weight or importance you should attach to or place on such facts or statistics.
Market opportunity estimates included in this Prospectus, including our ability to capture
a meaningful share of the relevant markets, are subject to significant uncertainty and are based
on assumptions and estimates that may not prove to be accurate. The variables that go into the
calculation of our market opportunity are subject to change over time, and there can be no
assurance that our market opportunity estimates will materialize as anticipated. Any expansion
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in our market depends on a number of factors, including the cost, performance, and perceived
value associated with our business and those of our competitors. Even if the market in which
we compete meets the size estimates and growth forecasted in this Prospectus, our business
could fail to grow at similar rates, if at all. Our growth is subject to many factors, including
our success in implementing our business strategy, which is inherently subject to certain risks
and uncertainties.
Investors should read the entire Prospectus carefully and should not consider any
particular statements in this Prospectus or in published media reports without carefully
considering the risks and other information contained in this Prospectus.
The Global Offering is being made solely on the basis of the information and
representations contained in this Prospectus, which are true and accurate to the best of our
knowledge and belief. Any information not contained in this Prospectus should not be relied
upon in making an investment decision with respect to the securities being offered. Prior to the
publication of this Prospectus, there has been coverage in the media regarding us and the
Global Offering, which may have contained, among other things, certain financial information,
projections, valuations and other forward-looking information about us and the Global
Offering. Investors should be aware that information and opinions published by third-party
sources may have been based on outdated, incomplete, or inaccurate information. These
sources may also have conflicts of interest, and their opinions may not be independent or
objective. The media’s coverage of our Company and the Global Offering may be influenced
by a wide range of factors, including the bias of individual journalists, the preferences of media
outlets, and the demand of advertisers.
Forward-looking statements contained in this Prospectus are subject to risks and
uncertainties.
This Prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as “anticipate,” “believe,” “could,” “going forward,”
“intend,” “plan,” “project,” “seek,” “expect,” “may,” “ought to,” “should,” “would” or “will”
and similar expressions. Y ou are cautioned that reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this Prospectus should not be regarded as representations or
warranties by us that our plans and objectives will be achieved, and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this Prospectus, whether as a
result of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this Prospectus
are qualified by reference to this cautionary statement.
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In preparation for the Listing, our Company has sought the following waivers from strict
compliance with relevant provisions of the Listing Rules and exemption from the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
According to Rule 8.12 of the Listing Rules, a new applicant for a primary listing on the
Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong. This
normally means that at least two of our executive Directors must be ordinarily resident in Hong
Kong. Rule 19A.15 of the Listing Rules further provides that the requirement in Rule 8.12 of
the Listing Rules may be waived by having regarded to, among other considerations, our
arrangements for maintaining regular communication with the Hong Kong Stock Exchange.
Our management headquarters, senior management, business operations and assets are
primarily based outside Hong Kong. The Directors consider that either by means of relocation
of our existing executive Directors or appointment of additional executive Directors who will
be ordinarily resident in Hong Kong would not be beneficial to, or appropriate for, our Group
and therefore would not be in the best interests of our Company or the Shareholders as a whole.
Therefore, we do not have, and do not contemplate to have, in the foreseeable future, sufficient
management presence in Hong Kong for the purpose of satisfying the requirements under Rules
8.12 and 19A.15 of the Listing Rules. As such, we have applied to the Hong Kong Stock
Exchange for, and the Hong Kong Stock Exchange has granted us, a waiver from strict
compliance with Rules 8.12 and 19A.15 of the Listing Rules. We will ensure that there is
regular and effective communication between us and the Hong Kong Stock Exchange by way
of, among others, the following conditions:
(a) pursuant to Rule 3.05 of the Listing Rules, we have appointed and will continue to
maintain two authorized representatives, who will act as our principal channel of
communication with the Hong Kong Stock Exchange and ensure that our Company
complies with the Listing Rules at all times. The two authorized representatives
appointed are Mr. Zhang Zhengping ( ੵ͍റ) and Ms. Ho Wing Tsz Wendy ( О൘ഓ)
(“Ms. Ho ”) (the “ Authorized Representative(s) ”). Ms. Ho is situated and based in
Hong Kong, and will be available to meet with the Hong Kong Stock Exchange
within a reasonable time frame upon the request of the Hong Kong Stock Exchange.
Both of the Authorized Representatives will be readily contactable by telephone,
facsimile (if applicable) and email to deal promptly with enquiries from the Hong
Kong Stock Exchange. Our Company has provided contact details of the two
Authorized Representatives to the Hong Kong Stock Exchange and will inform the
Hong Kong Stock Exchange promptly in respect of any change in the Authorized
Representatives;
(b) when the Hong Kong Stock Exchange wishes to contact our Directors on any matter,
each of the Authorized Representatives will have all necessary means to contact all
of our Directors (including our independent non-executive Directors) promptly at all
times. We have provided the Hong Kong Stock Exchange with the contact details
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(i.e., mobile phone number, office phone number, email address and fax number, if
applicable) of all Directors to facilitate communication with the Hong Kong Stock
Exchange. Our Directors will also provide the phone number of the place of his/her
accommodation to the Authorized Representatives in the event that any Director
expects to travel or otherwise be out of office;
(c) all our Directors who are not ordinarily resident in Hong Kong have confirmed that
they possess or can apply for valid travel documents to visit Hong Kong and will be
able to meet with relevant members of the Hong Kong Stock Exchange within a
reasonable period of time in Hong Kong, when required;
(d) pursuant to Rule 3A.19 of the Listing Rules, we have retained Rainbow Capital
(HK) Limited as our compliance adviser (the “ Compliance Adviser ”) upon Listing
for a period commencing on the Listing Date and ending on the date on which we
comply with Rule 13.46 of the Listing Rules in respect of our financial results for
the first full financial year commencing after the Listing Date. The Compliance
Adviser will act as an additional channel of communication with the Hong Kong
Stock Exchange and will be available to respond to enquiries from the Hong Kong
Stock Exchange. The contact details of the Compliance Adviser have been provided
to the Hong Kong Stock Exchange;
(e) the Compliance Adviser will have access at all times to our Authorized
Representatives, our Directors and our senior management, who will act as the
additional channel of communication with the Hong Kong Stock Exchange when the
Authorized Representatives are not available, as prescribed by Rule 3A.23 of the
Listing Rules. Our Company shall ensure that our Authorized Representatives,
Directors and our senior management members will timely provide such information
and assistance as the Compliance Adviser may need or may reasonably request in
connection with the performance of the Compliance Adviser’s duties as set forth in
the Listing Rules. To the extent reasonably practicable and legally permissible, we
will keep the Compliance Adviser informed of all communications and dealings
between the Hong Kong Stock Exchange and us. Meetings between the Hong Kong
Stock Exchange and our Directors may be arranged through our Authorized
Representatives or the Compliance Adviser, or directly with our Directors within a
reasonable time frame. We will inform the Hong Kong Stock Exchange as soon as
practicable in respect of any change of Authorized Representatives and/or the
Compliance Adviser;
(f) we will appoint other professional advisers (including Hong Kong legal advisers)
after the Listing to assist us in dealing with any questions which may be raised by
the Hong Kong Stock Exchange and to ensure that there will be prompt and effective
communication with the Hong Kong Stock Exchange; and
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(g) our Company has designated one of our staff members as the communication officer
at our headquarters after the Listing who will be responsible for maintaining
day-to-day communication with the Authorized Representatives and our Company’s
professional advisers in Hong Kong, including our legal advisers in Hong Kong and
the Compliance Adviser, to keep abreast of any correspondence with and/or
enquiries from the Hong Kong Stock Exchange and report to our executive Directors
to further facilitate communication between the Hong Kong Stock Exchange and our
Company.
W AIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules and Chapter 3.10 of the Guide for
New Listing Applicants, a new applicant for listing on the Hong Kong Stock Exchange must
appoint a company secretary who, by virtue of his/her academic or professional qualifications
or relevant experience, is, in the opinion of the Hong Kong Stock Exchange, capable of
discharging the functions of the company secretary.
Note 1 to Rule 3.28 of the Listing Rules provides that the Hong Kong Stock Exchange
considers the following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); and
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further provides that the Hong Kong Stock
Exchange considers the following factors in assessing the “relevant experience” of the
individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
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Our Company has appointed Ms. Shen Wei ( ͡ᑢ)( “ Ms. Shen ”), our executive Director,
vice president and Board secretary, as one of our joint company secretaries. The Company
believes that it would be in the best interests of the Company and the corporate governance of
the Group to have Ms. Shen as its joint company secretary, who is responsible for overseeing
compliance matters and Board-related matters of the Company and has day-to-day knowledge
of the Company’s affairs. Ms. Shen has the nexus to the Board and close working relationship
with the management of the Company necessary to perform the function of a joint company
secretary and to take required actions in the most effective and efficient manner. However, Ms.
Shen presently does not possess any of the qualifications under Rules 3.28 and 8.17 of the
Listing Rules, and may not be able to solely fulfill the requirements of the Listing Rules.
Therefore, we have appointed Ms. Ho, who is a Chartered Secretary, a Chartered Governance
Professional and a fellow member of both The Hong Kong Chartered Governance Institute
(“HKCGI ”) and The Chartered Governance Institute in the United Kingdom and fully meets
the requirements stipulated under Rules 3.28 and 8.17 of the Listing Rules, to act as the other
joint company secretary and to provide assistance to Ms. Shen for an initial period of three
years from the Listing Date, to enable Ms. Shen to acquire the “relevant experience” under
Note 2 to Rule 3.28 of the Listing Rules so as to fully comply with the requirements set forth
under Rules 3.28 and 8.17 of the Listing Rules.
Accordingly, we have applied to the Hong Kong Stock Exchange for, and the Hong Kong
Stock Exchange has granted us, a waiver from strict compliance with the requirements under
Rules 3.28 and 8.17 of the Listing Rules such that Ms. Shen may be appointed as a joint
company secretary of our Company.
The waiver is valid for an initial period of three years from the Listing Date, and is
granted on the condition that Ms. Ho, as a joint company secretary of our Company, will work
closely with Ms. Shen to jointly discharge the duties and responsibilities as company
secretaries and assist Ms. Shen in acquiring the relevant experience as required under Rules
3.28 and 8.17 of the Listing Rules. Ms. Ho will also assist Ms. Shen in organizing Board
meetings and Shareholders’ meetings of our Company as well as other matters of our Company
which are incidental to the duties of a company secretary. Ms. Ho is expected to work closely
with Ms. Shen and will maintain regular contact with Ms. Shen, the Directors and the senior
management of our Company. In addition, Ms. Shen will comply with the annual professional
training requirement under Rule 3.29 of the Listing Rules and will enhance her knowledge of
the Listing Rules during the three-year period from the Listing. Ms. Shen will also be assisted
by (a) the Compliance Adviser, particularly in relation to compliance with the Listing Rules;
and (b) the Hong Kong legal advisers of our Company, on matters concerning our Company’s
ongoing compliance with the Listing Rules and applicable laws and regulations.
Pursuant to Chapter 3.10 of the Guide for New Listing Applicants, the waiver will be
revoked immediately if Ms. Ho ceases to provide assistance to Ms. Shen as a joint company
secretary or where there are material breaches of the Listing Rules by our Company for the
three-year period after the Listing Date.
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Prior to the expiration of the initial three-year period, the qualifications and experience
of Ms. Shen will be re-evaluated to determine whether the requirements as stipulated in Rules
3.28 and 8.17 of the Listing Rules can be satisfied and whether the need for ongoing assistance
will continue. Prior to the expiration of the initial three-year period, we will demonstrate and
seek the Hong Kong Stock Exchange’s confirmation that Ms. Shen, having benefited from the
assistance of Ms. Ho for the preceding three years, will have acquired the skills necessary to
carry out the duties of a company secretary and the relevant experience within the meaning of
Note 2 to Rule 3.28 of the Listing Rules so that a further waiver will not be necessary.
W AIVERS AND EXEMPTION IN RESPECT OF PARTICULARS OF INFORMATION
OF OUR SUBSIDIARIES
Paragraph 26 of Appendix D1A to the Listing Rules requires disclosure of the particulars
of any alterations in the capital of any member of the Group within the two years immediately
preceding the issue of this Prospectus.
Paragraph 29(1) of Appendix D1A to the Listing Rules and paragraph 29 of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance require this
prospectus to include, information in relation to the name, the date and place of incorporation,
the general nature of the business, the issued capital and the proportion of the issued capital
held or intended to be held, of every company, whether public or private (if applicable), the
whole of the capital of which or a substantial proportion thereof is held or intended to be held,
or whose profits or assets make or will make a material contribution to the figures in the
auditors’ report or to the next financial statements of the company.
As of the Latest Practicable Date, we have 70 subsidiaries globally. It would be unduly
burdensome for us to disclose the required information in respect of each of our subsidiaries,
as our Company would have to incur additional costs and devote significant resources to
compiling and verifying the relevant information for such disclosure, which would not be
material nor meaningful to investors save for the Major Subsidiaries as referred to below.
We have identified 17 subsidiaries (collectively, the “ Major Subsidiaries ” and each a
“Major Subsidiary ”) that we consider to be material to our operations and/or to have contributed
significantly to our financial performance during the Track Record Period. By way of illustration,
the Major Subsidiaries (without intercompany eliminations) have, in aggregate, accounted for
approximately (i) 172%, 174%, 182% and 177% of our revenue for each of the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025, respectively; (ii)
117%, 119%, 134% and 137% of our total assets as at December 31, 2022, 2023 and 2024 and
June 30, 2025, respectively; (iii) 76%, 85%, 233% and 117% of our profit before tax for each of
the years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively; and (iv) 75%, 84%, 240% and 120% of our net profit for each of the years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025, respectively.
Additionally, certain Major Subsidiaries hold assets, intellectual property rights, proprietary
technologies or licenses and permits that are considered by the Directors to be material to the
Group’s business and operations.
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None of the other subsidiaries of our Company that are not Major Subsidiaries have
individually contributed 5% or more of our Group’s revenue and net profits during each period
within the Track Record Period, or total assets as of December 31, 2022, 2023 or 2024 or
June 30, 2025, nor hold any assets, intellectual property rights, proprietary technologies or
licenses and permits that are considered by the Directors to be material to the Group’s business
and operations. Accordingly, the remaining subsidiaries which are not Major Subsidiaries of
our Group are relatively insignificant to the overall results of our Group, and the non-
disclosure of information about them would not prejudice the interests of our Shareholders and
the investing public. Rather, the disclosure of the required information in respect of our
Company and the Major Subsidiaries already provides sufficient information that is reasonably
necessary for potential investors to make an informed assessment of the activities, assets and
liabilities, financial position, management and prospects of our Group, its profits and losses
and the rights attaching to the securities for which listing is sought.
We have disclosed the particulars of the changes in share capital of our Company and the
Major Subsidiaries in the sections headed “Statutory and General Information — Further
Information About Our Company — Changes in Share Capital of Our Company” and
“Statutory and General Information — Further Information About Our Company — Changes
in Share Capital of Our Major Subsidiaries”, respectively, in Appendix IV to this Prospectus.
We have also disclosed the corporate information (including name, principal business
activities, place and date of incorporation and the interest held by the Group) of the Major
Subsidiaries as required under Paragraph 29(1) of Appendix D1A to the Listing Rules and
paragraph 29 of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance in “History, Development and Corporate Structure”, and the share
capital of the Major Subsidiaries in Note 52 to the Accountants’ Report as set out in Appendix
I to this Prospectus.
We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock
Exchange has granted us, waivers from strict compliance with the requirements under
paragraphs 26 and 29(1) of Appendix D1A to the Listing Rules, in respect of disclosing (i) the
particulars of any alteration in the capital of any member of our Group within the two years
immediately preceding the issue of this Prospectus, and (ii) information in relation to the name,
date and place of incorporation, public or private status, the general nature of business, the
issued capital and the proportion thereof held or intended to be held in this Prospectus.
We have applied for, and the SFC has granted us, a certificate of exemption from strict
compliance with the requirements under paragraph 29 of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance in respect of disclosing the information
of our subsidiaries which are not Major Subsidiaries as required under paragraph 29 of the
Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The
exemption is granted by the SFC on the conditions that: (i) the particulars of the exemption are
disclosed in this Prospectus; and (ii) this Prospectus is issued on or before October 27, 2025.
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W AIVER IN RESPECT OF CONTINUING CONNECTED TRANSACTIONS
We have entered into and expect to continue certain transactions upon Listing that will
constitute partially exempt continuing connected transactions of our Company under the
Listing Rules, as described in the section headed “Connected Transactions” in this Prospectus.
Our Directors consider that strict compliance with the applicable requirements under the
Listing Rules would be impractical, unduly burdensome and would impose unnecessary
administrative costs on our Company. Accordingly, we have applied to the Hong Kong Stock
Exchange for, and the Hong Kong Stock Exchange has granted us, a waiver from strict
compliance with the applicable requirements under Chapter 14A of the Listing Rules in respect
of such partially exempt continuing connected transactions. For further details, see the section
headed “Connected Transactions” in this Prospectus.
W AIVER IN RELATION TO THE 2024 EMPLOYEE STOCK OWNERSHIP PLAN
Rule 17.02(1)(b) of the Listing Rules requires a listing applicant to, inter alia , disclose
in the prospectus full details of all outstanding awards and their potential dilution effect on the
shareholdings upon Listing as well as the impact on the earnings per share arising from the
issue of shares in respect of such outstanding awards.
Pursuant to paragraphs 6 to 7 of Chapter 3.6 of the Guide for New Listing Applicants, the
Hong Kong Stock Exchange would normally grant waivers from disclosing the names and
addresses of certain grantees if the applicant could demonstrate that such disclosures would be
irrelevant or unduly burdensome, subject to certain conditions specified therein.
As of the Latest Practicable Date, our Company has granted outstanding share awards (the
“Share Awards ”) under the 2024 Employee Stock Ownership Plan to 246 grantees (the
“Grantee(s) ”) for an aggregate of 3,240,729 A Shares, representing approximately 0.19% of
the total number of Shares in issue immediately after completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are not exercised).
Among the outstanding Share Awards, nine Directors or senior management members of the
Company and 237 Grantees, who are employees of our Group but not Directors nor senior
management members of the Company, were granted Share Awards for 449,874 A Shares and
2,790,855 A Shares, respectively. Save as disclosed in “Statutory and General Information” in
Appendix IV to this Prospectus, no Share Awards were granted to any other Directors, senior
management members or consultants of our Company under the 2024 Employee Stock
Ownership Plan.
We have applied to the Hong Kong Stock Exchange for a waiver from strict compliance
with the disclosure requirements under Rule 17.02(1)(b) of the Listing Rules on the grounds
that the waiver will not prejudice the interests of the investing public and full compliance with
such disclosure requirements would be unduly burdensome for our Company for the following
reasons:
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(a) given that 246 Grantees are involved for the grant of outstanding Share Awards
under the 2024 Employee Stock Ownership Plan, our Directors consider that it
would be unduly burdensome to disclose in this Prospectus full details of all the
Share Awards granted by us to each of the Grantees, which would significantly
increase the cost and time for information compilation and prospectus preparation
required for strict compliance with such disclosure requirements, as the Company
would need to collect and verify the personal information of a large number of the
Grantees to meet the disclosure requirements;
(b) the disclosure of the personal details of each Grantee, including their names and the
number of Share Awards granted to them, may require obtaining consent from all the
Grantees in order to comply with personal data privacy laws and principles, and it
would be unduly burdensome for our Company to obtain such consents given the
number of the Grantees;
(c) the grant and vesting in full of the Share Awards under the 2024 Employee Stock
Ownership Plan will not cause any material adverse impact to the financial position
of our Group;
(d) there will not be any new H Shares issued under the 2024 Employee Stock
Ownership Plan as it is an A Share employee stock ownership plan;
(e) our Directors consider that a lack of full compliance with the above disclosure
requirements would not prevent our Company from providing potential investors
with sufficient information for an informed assessment of the activities, assets,
liabilities, financial position, management and prospects of our Group;
(f) full disclosure of details of the Grantees (which include their names and positions),
as well as the Share Awards granted to each of them, would provide the Group’s
competitors with the Group’s employees’ compensation details and facilitate their
soliciting activities, which may impact the Group’s ability to recruit and retain
valuable personnel;
(g) material information on the Share Awards under the 2024 Employee Stock
Ownership Plan has been disclosed in “Statutory and General Information — 2024
Employee Stock Ownership Plan” in Appendix IV to this Prospectus to provide
prospective investors with sufficient information to make an informed assessment of
the potential dilutive effect and impact on earnings per Share of the Share Awards
in making their investment decision, and such information includes but is not limited
to:
(i) a summary of the terms of the 2024 Employee Stock Ownership Plan;
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(ii) the aggregate number of A Shares subject to the outstanding Share Awards and
the percentage in our total issued Shares of which such number represents upon
completion of the Global Offering; and
(iii) the details of the outstanding Share Awards granted under the 2024 Employee
Stock Ownership Plan by the range of underlying A Shares, including date of
grant, purchase price and the percentage of our Company’s total issued share
capital upon completion of the Global Offering.
In light of the above, our Directors believe that the grant of the waiver sought and the
non-disclosure of the required information will not hinder potential investors from making an
informed assessment of the activities, assets and liabilities, financial position, management and
prospects of our Group and will not prejudice the interests of the public investors.
The Hong Kong Stock Exchange has granted to us a waiver from strict compliance with
the disclosure requirements under Rule 17.02(1)(b) of the Listing Rules with respect to the
Share Awards granted under the 2024 Employee Stock Ownership Plan, subject to the
conditions that:
(a) on an individual basis, full details of the outstanding Share Awards granted by the
Company under the 2024 Employee Stock Ownership Plan to each of the Directors
and members of the senior management of the Company, including all the particulars
required under Rule 17.02(1)(b) of the Listing Rules, be disclosed in this
Prospectus;
(b) in respect of the Share Awards granted by our Company under the 2024 Employee
Stock Ownership Plan to the remaining Grantees other than those referred to in
sub-paragraph (a) above (the “ Other Grantee(s) ”), the following details will be
disclosed in this Prospectus on an aggregate basis and categorized into lots based on
the number of A Shares underlying each individual Grantee, being (i) 10,000 A
Shares or less; (ii) 10,001 to 20,000 A Shares; and (iii) 20,001 A Shares or more, and
the details of each lot of A Shares will be disclosed in this Prospectus, including (i)
the number of the Share Awards and A Shares underlying the Share Awards, (ii) date
of grant, purchase price of the Share Awards granted, and (iii) the percentage of our
Company’s total issued share capital represented by such lots upon completion of
the Global Offering (assuming the Offer Size Adjustment Option and the Over-
allotment Option are not exercised, and no other changes are made to the issued
share capital of our Company between the Latest Practicable Date and the Global
Offering);
(c) the aggregate number of A Shares underlying the outstanding Share Awards and the
percentage of our Company’s total issued share capital upon completion of the
Global Offering will be disclosed in this Prospectus;
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(d) a summary of the principal terms of the 2024 Employee Stock Ownership Plan will
be disclosed in “Statutory and General Information — 2024 Employee Stock
Ownership Plan” in Appendix IV to this Prospectus;
(e) the particulars of this waiver are set out in this Prospectus; and
(f) a full list of all the Grantees with outstanding Share Awards for A Shares under the
2024 Employee Stock Ownership Plan containing all details as required under Rule
17.02(1)(b) of the Listing Rules and containing all particulars as required under the
relevant provisions of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (where applicable) be made available for public inspection in accordance
with “Documents Delivered to the Registrar of Companies in Hong Kong and
Available on Display — Document Available for Inspection” in Appendix V to this
Prospectus.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND
THEIR CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of
the issuer may only subscribe for or purchase any securities for which listing is sought which
are being marketed by or on behalf of the issuer either in his or its own name or through
nominees if the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. 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 preferential treatment may be given to them in the
allocation of the securities; and in Rule 10.03(2) that the minimum prescribed percentage of
public shareholders required by Rule 8.08(1) must be achieved.
Paragraph 1C of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their
own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Listing Rules are fulfilled. Chapter 4.15 of the Guide for New Listing
Applicants provides that the Stock Exchange will consider giving consent and granting waiver
from Rule 10.04 of the Listing Rules to an applicant’s existing shareholders or their close
associates to participate in an initial public offering if any actual or perceived preferential
treatment arising from their ability to influence the applicant during the allocation process can
be addressed.
Prior to the Listing, our Company’s share capital comprises entirely A Shares listed on the
Shanghai Stock Exchange. We have a large and widely dispersed public A Share shareholder
base.
We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock
Exchange has granted to us, a waiver from strict compliance with the requirements under Rule
10.04 and consent under Paragraph 1C of Appendix F1 to the Listing Rules to permit H Shares
in the International Offering to be placed to certain existing minority Shareholders who (i) hold
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less than 5% of the voting rights of A Shares in issue of our Company prior to the completion
of the Global Offering and (ii) are not and will not become (upon the completion of the Global
Offering) core connected persons of our Company or the close associates of any such core
connected person (together, the “ Existing Minority Shareholders ”) or their close associates,
subject to the conditions as follows:
(a) each Existing Minority Shareholder to whom our Company may allocate the H
Shares in the International Offering holds less than 5% of the total voting rights of
A Shares in issue of our Company before Listing;
(b) each Existing Minority Shareholder is not, and will not be, a core connected person
of our Company or any close associate of any such core connected person
immediately prior to or following the Global Offering;
(c) none of the Existing Minority Shareholders have the right to appoint a Director
and/or have any other special rights;
(d) allocation to the Existing Minority Shareholders or their close associates will not
affect our ability to satisfy the public float requirement as prescribed by the Stock
Exchange under Rule 8.08 of the Listing Rules or otherwise approved by the Stock
Exchange;
(e) the Joint Sponsors will confirm to the Hong Kong Stock Exchange in writing that
based on (i) their discussions with our Company and the Overall Coordinators; and
(ii) the confirmations provided to the Stock Exchange by our Company and the
Overall Coordinators (confirmations (f) and (g) mentioned below), and to the best
of their knowledge and belief, they have no reason to believe that any of the Existing
Minority Shareholders or their close associates received any preferential treatment,
or is in a position to exert influence on the Company to obtain actual or perceived
preferential treatment in the allocation either as a cornerstone investor or as a placee
by virtue of their relationship with our Company other than the preferential
treatment of assured entitlement under a cornerstone investment following the
principles set out in Chapter 4.15 of the Guide for New Listing Applicants, and
details of the allocation to the Existing Minority Shareholders holding more than 1%
of the issued share capital of the Company immediately prior to the completion of
the Global Offering will be disclosed in this Prospectus and/or the allotment results
announcement, as the case may be;
(f) our Company will confirm to the Hong Kong Stock Exchange in writing that:
(i) in the case of participation as cornerstone investors, no preferential treatment
has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company, other than
the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide for
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New Listing Applicants, nor is the Existing Minority Shareholder in a position
to exert influence on the Company to obtain actual or perceived preferential
treatment, and the Existing Minority Shareholders or their close associates’
cornerstone investment agreements do not contain any material terms which
are more favorable to the Existing Minority Shareholders or their close
associates than those in other cornerstone investment agreements; or
(ii) in the case of participation as placees, no preferential treatment has been, nor
will be, given to the Existing Minority Shareholders or their close associates,
nor is the Existing Minority Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, by virtue of their
relationship with our Company in any allocation in the placing tranche;
(g) in the case of participation as placees, the Overall Coordinators will confirm to the
Hong Kong Stock Exchange that, to the best of their knowledge and belief, no
preferential treatment has been, nor will be, given to the Existing Minority
Shareholders or their close associates by virtue of their relationship with our
Company in any allocation in the placing tranche.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or
offer price of each security must be disclosed in the prospectus. Pursuant to Paragraph 12 of
the Guide, the Stock Exchange also allows an indicative offer price range to be included in the
prospectus, as an alternative to the disclosure of a fixed offer price.
We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that the Company will only disclose the
maximum Offer Price in the Prospectus on the below basis:
(a) The Offer Price will be determined with reference to, among other factors, the
closing price of the Company’s A Shares on the Shanghai Stock Exchange on the last
trading day on or before the Price Determination Date. Our Company is unable to
control the trading price of our A Shares on the Shanghai Stock Exchange;
(b) Setting a fixed offer price or an offer price range with a low-end may adversely
affect our ability to price our H Shares in the best interests of our Shareholders and
the market price of the A Shares and the Hong Kong Offer Shares;
(c) Pursuant to paragraphs 9 and 10(b) of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, the amount payable on
application and allotment on each share, and the price to be paid for shares
subscribed for, shall be specified in the Prospectus, respectively. Disclosure of a
maximum offer price complies with the requirements prescribed under paragraphs 9
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and 10(b) of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance by providing a clear indication of the
maximum subscription consideration a potential investor shall pay for the Offer
Shares; and
(d) A maximum Offer Price will be disclosed in this Prospectus. This alternative
disclosure approach would not prejudice the interests of the investing public in
Hong Kong.
The Stock Exchange has granted to us a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules on the conditions that the Prospectus will
disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical prices of the Company’s A Shares and trading volume on the Shanghai
Stock Exchange during the Track Record Period and up to the Latest Practicable
Date;
(d) the determinants of the final Offer Price; and
(e) the source for investors to access the latest market price of the Company’s A Shares.
See “Structure of the Global Offering – Pricing and Allocation” in this prospectus for the
historical prices of our A Shares and trading volume on the Shanghai Stock Exchange.
CONSENT IN RESPECT OF THE PROPOSED SUBSCRIPTION OF H SHARES BY
CERTAIN CORNERSTONE INVESTOR WHO IS CONNECTED CLIENT
Paragraph 1C(1) of Appendix F1 to the Listing Rules 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 distributor(s) (other than syndicate member(s))
(collectively, the “ Distributors ”, and each a “ Distributor ”), without the prior written consent
of the Stock Exchange.
Paragraph 1B(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
Huatai Capital Investment Limited (“ HTCI ”) has entered into a cornerstone investment
agreement with the Company, China International Capital Corporation Hong Kong Securities
Limited and Huatai Financial Holdings (Hong Kong) Limited (“ Huatai ”). Huatai Securities
Co., Ltd. (“ HTSC ”) will enter into a back-to-back total return swap (the “ HT Back-to-back
TRS”) in connection with a total return swap order placed by the investment manager acting
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in its capacity as investment manager for and on behalf of the ultimate client (the “ Huatai
Ultimate Client (Linyuan) ”) to HTSC (the “ Linyuan TRS ”), pursuant to which HTCI will
hold the Offer Shares on a non-discretionary basis to hedge the HT Back-to-back TRS in
connection with the Linyuan TRS, while the economic risks and returns of the underlying Offer
Shares are ultimately born by the Huatai Ultimate Client (Linyuan), subject to customary fees
and commissions. The HT Back-to-back TRS will be fully funded by the Huatai Ultimate
Client (Linyuan). During the terms of the HT Back-to-back TRS and the Linyuan TRS, all
economic returns of the Offer Shares subscribed by HTCI will be ultimately passed to the
Huatai Ultimate Client (Linyuan) and all economic loss shall be ultimately borne by the Huatai
Ultimate Client (Linyuan) through the Linyuan TRS and the HT Back-to-back TRS, 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, HTCI will hold the
beneficial interest of the Offer Shares on behalf of the Huatai Ultimate Client (Linyuan). Both
HTCI and Huatai, one of the Joint Global Coordinators and Joint Bookrunners of the Global
Offering, are indirect wholly-owned subsidiaries of HTSC. Accordingly, HTCI is considered as
a “connected client” of Huatai pursuant to paragraph 1B(7) of the Placing Guidelines.
We have applied for, and the Stock Exchange has granted, a consent under paragraph
1C(1) of Appendix F1 to the Listing Rules to permit HTCI (the “ Connected Client
Cornerstone Investor ”) to participate in the Global Offering as a cornerstone investor on the
following basis and conditions as set out in Paragraph 6 of Chapter 4.15 of the Guide for New
Listing Applicants:
(a) any Offer Shares to be allocated to the Connected Client Cornerstone Investor will
be held on behalf of independent third parties;
(b) the cornerstone investment agreement of the Connected Client Cornerstone Investor
does not contain any material terms which are more favorable to them (as the case
may be) than those in other cornerstone investment agreements;
(c) no preferential treatment has been, nor will be, given to HTCI by virtue of its
relationship with Huatai, in any allocation of Offer Shares in the International
Offering other than the assured entitlement under the relevant cornerstone
investment agreement;
(d) HTCI confirms that to the best of its knowledge and belief, it has not received and
will not receive preferential treatment in the allocation of Offer Shares in the Global
Offering as a cornerstone investor by virtue of its relationship with Huatai, other
than the assured entitlement under the relevant cornerstone investment agreement;
(e) each of the Company, the Overall Coordinators and the Connected Client
Cornerstone Investor has provided the Stock Exchange with written confirmations in
accordance with Chapter 4.15 of the Guide for New Listing Applicants; and
(f) details of the cornerstone investments and details of the allocations will be disclosed
in this prospectus and the allotment results announcement.
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DIRECTORS’ RESPONSIBILITY STATEMENT
This Prospectus, for which the Directors (including any proposed director who is named
as such in this Prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V
of the Laws of Hong Kong) and the Listing Rules for the purpose of giving information with
regard to us. The Directors (including any proposed director who is named as such in this
Prospectus), having made all reasonable enquiries, confirm that to the best of their knowledge
and belief the information contained in this Prospectus is accurate and complete in all material
respects and not misleading or deceptive, and there are no other matters the omission of which
would make any statement herein or this Prospectus misleading.
CSRC FILING
On September 23, 2025, the CSRC issued a notification on our Company’s completion of
the PRC filing procedures for the listing of our Shares on the Hong Kong Stock Exchange and
the Global Offering. As advised by our PRC Legal Adviser, our Company has completed all
necessary filings with the CSRC in the PRC in relation to the Global Offering and the Listing.
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 Global Offering comprises the Hong Kong
Public Offering of 10,020,000 H Shares initially offered and the International Offering of
90,180,000 H Shares initially offered (subject, in each case, to re-allocation on the basis under
the section headed “Structure of the Global Offering”). Details of the arrangements relating to
the Over-allotment Option and stabilization are set forth in the section headed “Structure of the
Global Offering”.
The listing of our H Shares on the Hong Kong Stock Exchange is sponsored by the Joint
Sponsors. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public
Offering is underwritten by the Hong Kong Underwriters on a conditional basis, with one of
the conditions being that the Offer Price is agreed between the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and us. The International
Underwriting Agreement is expected to be entered into on or about the Price Determination
Date, subject to determination of the pricing of the H Shares and agreement on the Offer Price
between the Overall Coordinators (for themselves and on behalf of the Underwriters) and us.
For details of the Underwriters and the underwriting arrangements, see the section headed
“Underwriting” in this Prospectus.
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
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Global Offering or to make any representation not contained in this Prospectus, and any
information or representation not contained herein must not be relied upon as having been
authorized by our Company, the Joint Sponsor, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediaries, any of their respective directors, officers, agents, employees, advisers
or representatives, or any other party involved in the Global Offering.
Neither the delivery of this Prospectus nor any subscription or acquisition made under it
shall, under any circumstances, create any implication that there has been no change in our
affairs since the date of this Prospectus or that the information in this Prospectus is correct as
at any subsequent time.
For details of the structure of the Global Offering, including its conditions, see the section
headed “Structure of the Global Offering”. For the procedures for applying for our H Shares,
see “How to Apply for Hong Kong Offer Shares” in this Prospectus. For details of the
arrangements relating to the Over-allotment Option and stabilization, see “Structure of the
Global Offering”.
DETERMINATION OF THE OFFER PRICE
The H Shares are being offered at the Offer Price which will be determined by the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us on or around Monday,
November 3, 2025 or such later date as may be agreed upon between the Overall Coordinators
(for themselves and on behalf of the Underwriters) and us, and in any event no later than 12:00
noon on Monday, November 3, 2025. If the Overall Coordinators (for themselves and on behalf
of the Underwriters) and our Company are unable to reach an agreement on the Offer Price on
such date, the Global Offering will not proceed.
INFORMATION ABOUT THIS PROSPECTUS
Y ou 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 Overall
Coordinators, the Joint Sponsors, 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 imply 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 sets out the terms and conditions of the Hong Kong Public Offering.
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RESTRICTIONS ON OFFER AND SALE 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, and does not constitute, an offer or invitation
in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized
or to any person to whom it is unlawful to make such an offer or invitation. The distribution
of this Prospectus and the offering 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.
COMMENCEMENT OF DEALING IN THE H SHARES
Dealings in the H Shares on the Hong Kong Stock Exchange are expected to commence
at 9:00 a.m. on Wednesday, November 5, 2025. The H Shares will be traded in board lots of
100 H Shares each. The stock code of the H Shares will be 9927.
APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the
H Shares to be issued pursuant to the Global Offering (including any H Shares which may be
issued pursuant to the exercise of the Offer Size Adjustment Option and the Over-allotment
Option). We satisfy the market capitalization/revenue test under Rule 8.05(3) of the Listing
Rules with reference to (i) our revenue for the year ended December 31, 2024, being
approximately RMB145.1 billion, which is over HK$500 million required by Rule 8.05(3) of
the Listing Rules; and (ii) our expected market capitalization at the time of Listing, which,
based on the maximum Offer Price of HK$131.50, exceeds HK$4 billion.
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 Hong Kong Stock Exchange
pursuant to this Prospectus has been refused before the expiration of three weeks from the date
of the closing of the Global Offering 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 Hong Kong Stock
Exchange, then any allotment made on an application in pursuance of this Prospectus shall,
whenever made, be void.
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H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares (including
any H Shares which may be issued pursuant to the exercise of the Offer Size Adjustment Option
and the Over-allotment Option) on the Hong Kong Stock Exchange and compliance with the
stock admission requirements of HKSCC, the H Shares will be accepted as eligible securities
by HKSCC for deposit, clearance and settlement in CCASS with effect from the Listing Date
or on any other date as determined by HKSCC. Settlement of transactions between participants
of the Hong Kong Stock Exchange is required to take place in CCASS on the second settlement
day after any trading day. All activities under CCASS are subject to the HKSCC Rules and
HKSCC Operational Procedures in effect from time to time.
All necessary arrangements have been made for the H Shares to be admitted into CCASS.
Investors should seek the advice of their stockbroker or other professional adviser for details
of those settlement arrangements and how such arrangements will affect their rights and
interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed
“How to Apply for Hong Kong Offer Shares.”
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the Offer Shares will be registered on the H Share register of members of the
Company maintained by our H Share Registrar, Tricor Investor Services Limited, in Hong
Kong. Our principal register of members will also be maintained by us at our legal address in
China.
Dealings in the H Shares registered on the H Share register of members of the Company
in Hong Kong will be subject to Hong Kong stamp duty.
Unless determined otherwise by the Company, dividends payable in respect of our H
Shares will be paid to the Shareholders listed on the H Share register of members of our
Company in Hong Kong, by ordinary post, at the H Shareholders’ risk, to the registered address
of each H Shareholder of the Company.
PROFESSIONAL TAX ADVICE RECOMMENDED
Y ou should consult your professional advisers 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 Overall Coordinator, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Sponsors, the Underwriters, any of our or their respective 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 9–


--- page 110 ---
EXCHANGE RATE CONVERSION
Unless otherwise specified, this Prospectus contains certain translations of U.S. dollars
into Hong Kong dollars, of Renminbi into Hong Kong dollars, and of U.S. dollars into
Renminbi for convenience at the following rates:
US$1.00: HK$7.7821
RMB0.9143: HK$1.00
US$1.00: RMB7.1152
No estimation is made that any amounts in HK$, RMB or 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 the English version of this Prospectus and the
Chinese translation of this Prospectus, the English version of this Prospectus shall prevail
unless otherwise stated. However, if there is any inconsistency between the names of any of
the entities mentioned in this English Prospectus which are not in the English language and
their English translations, the names in their respective original languages shall prevail.
ROUNDING
Certain amounts and percentage figures included in this Prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 111 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Zhang Zhengping ( ੵ͍റ) Building 107
No. 65 Longning Road
Y ubei District
Chongqing
PRC
Chinese
Mr. Yin Xianzhi (ٝNo. 8
No. 43 Chendian Road
Shapingba District
Chongqing
PRC
Chinese
Ms. Shen Wei ( ͡ᑢ) No. 8-9-2
Jinke Huayuan
Jiangbei District
Chongqing
PRC
Chinese
Mr. Zhang Zhengyuan ( ੵ͍๕) No. 42-15-2
No. 168 Xiaoyanggongqiao
Shapingba District
Chongqing
PRC
Chinese
Non-executive Directors
Mr. Zhang Kebang ( ੵдԞ) No. 13-17, Unit 2
No. 162 Xinnan Road
Y ubei District
Chongqing
PRC
Chinese
Mr. Y ou Zheng ( ˈ੣) No. 18 Chechengbei Road
Hanyang District
Wuhan, Hubei
PRC
Chinese
Mr. Li Wei ( ҽ⒜) No. 1-602, Building 31
Aolin Garden
Hanyang District
Wuhan, Hubei
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 112 ---
Name Address Nationality
Mr. Zhou Changling (ޛ׹No. C37-25A, Azure Coast
Nanshan District
Shenzhen, Guangdong
PRC
Chinese
Independent non-executive Directors
Mr. Li Kaiguo ( ҽක਷) No. 143-7-1
Chaotian Village
Jiulongpo District
Chongqing
PRC
Chinese
Mr. Zhang Guolin (؍No. 98-7-1
Songlin Village
Shapingba District
Chongqing
PRC
Chinese
Mr. Jing Xufeng (ࢤNo. 57 Xuanwumen West Avenue
Xicheng District
Beijing
PRC
Chinese
Mr. Li Ming (׼No. 5-1, Unit 1, Building 10
No. 1 Fenglin Road
Nanan District
Chongqing
PRC
Chinese
Mr. Ngai Ming Tak (ᅃ) House C12
Ville de Jardin
33-35 Sui Wo Road
Fotan
Hong Kong
Chinese
See the section headed “Directors and Senior Management” in this Prospectus for further
details of our Directors.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 113 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors and
Overall Coordinators
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20th Floor, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
Sponsor-Overall Coordinator China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 114 ---
Joint Bookrunners China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Joint Lead Managers China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 115 ---
Capital Market Intermediaries China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
Huatai Financial Holdings (Hong Kong)
Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Legal advisers to our Company As to Hong Kong and United States laws:
Davis Polk & Wardwell
10/F, The Hong Kong Club Building
3A Chater Road
Central
Hong Kong
As to PRC laws:
King & Wood Mallesons
18th Floor
East Tower, World Financial Center
1 Dongsanhuan Zhonglu
Chaoyang District
Beijing
PRC
As to international sanctions laws:
King & Wood Mallesons
10F, Building B4
Xinchen Lingang Center
Lane 9, North Y unjuan Road
Shengang Street
Pudong New District
Shanghai
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 116 ---
Legal advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong and United States laws:
Cooley HK
35/F, Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC laws:
Haiwen & Partners
20/F, Fortune Financial Center
5 Dong San Huan Central Road
Chaoyang District
Beijing
PRC
Reporting Accountants Deloitte Touche Tohmatsu
Certified Public Accountants and Registered
Public Interest Entity Auditor
35/F, One Pacific Place
88 Queensway
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Room 2504
Wheelock Square
1717 Nanjing West Road
Shanghai
PRC
Compliance Adviser Rainbow Capital (HK) Limited
Room 710, 7/F, Wing On House
71 Des V oeux Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 117 ---
Receiving Banks Industrial and Commercial Bank of
China (Asia) Limited
33/F., ICBC Tower
3 Garden Road
Central
Hong Kong
Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 118 ---
Registered Office, Headquarter and
Principal Place of Business in the PRC
No. 7 Wuyunhu Road
Shapingba District
Chongqing
PRC
Principal Place of Business in Hong Kong Room 1922, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website www.seres.cn
(Note: the information contained on this
website does not form part of this
Prospectus)
Joint Company Secretaries Ms. Shen Wei ( ͡ᑢ)
No. 7 Wuyunhu Road
Shapingba District
Chongqing
PRC
Ms. Ho Wing Tsz Wendy ( О൘ഓ)
(FCG & HKFCG)
Room 1922, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Mr. Zhang Zhengping ( ੵ͍റ)
No. 7 Wuyunhu Road
Shapingba District
Chongqing
PRC
Ms. Ho Wing Tsz Wendy ( О൘ഓ)
Room 1922, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
CORPORATE INFORMATION
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--- page 119 ---
Audit Committee Mr. Li Ming (׼)chairperson)
Mr. Zhang Kebang ( ੵдԞ)
Mr. Zhou Changling (ޛ׹)
Mr. Li Kaiguo ( ҽක਷)
Mr. Zhang Guolin (؍)
Remuneration and Appraisal Committee Mr. Li Kaiguo ( ҽක਷) (chairperson)
Mr. Yin Xianzhi (ٝ)
Mr. Li Ming (׼)
Nomination Committee Mr. Li Kaiguo ( ҽක਷) (chairperson)
Ms. Shen Wei ( ͡ᑢ)
Mr. Zhang Guolin (؍)
Strategy Committee Mr. Zhang Zhengping ( ੵ͍റ) (chairperson)
Mr. Li Wei ( ҽ⒜)
Mr. Li Kaiguo ( ҽක਷)
ESG Committee Mr. Zhang Zhengping ( ੵ͍റ) (chairperson)
Mr. Li Kaiguo ( ҽක਷)
Mr. Yin Xianzhi (ٝ)
Ms. Shen Wei ( ͡ᑢ)
H Share Registrar Tricor Investor Services Limited
17/F
Far East Finance Centre
16 Harcourt Road
Hong Kong
CORPORATE INFORMATION
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--- page 120 ---
Principal Banks Bank of China Limited
Chongqing Branch
Jingkou Sub-Branch
No. 34-17, 1/F
Fuxing Group
Jingkou Town Government
Shuangbei Street
Shapingba District
Chongqing
PRC
China Construction Bank
Corporation Chongqing Branch
Shapingba Shuangbei Sub-Branch
No. 139-1-1
Laodongqiao
Shapingba District
Chongqing
PRC
Industrial and Commercial Bank of China
Limited Chongqing Branch
Sanxia Square Sub-Branch
No. 78 Xiaolongkan New Street
Shapingba District
Chongqing
PRC
CORPORATE INFORMATION
–1 1 0–


--- page 121 ---
The information and statistics presented in this section and other sections of this
Prospectus, unless otherwise indicated, were extracted from different official
government publications and other publications, and from the industry report prepared
by Frost & Sullivan, an independent market research and consulting 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 Joint
Sponsors, Sponsor-Overall Coordinators, Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners, and Joint Lead Managers, any of their respective
directors and advisers, or any other persons or parties involved in the Global Offering,
and no representation is given as to its accuracy.
In recent years, the global efforts to reduce carbon emissions and the growing consumer
awareness of sustainability have spurred rapid advancements in new energy vehicles (NEVs).
Governments worldwide have implemented supportive policies, such as subsidies for NEV
purchases and increased investments in charging infrastructure, to accelerate their adoption.
Simultaneously, the intelligence level of NEVs has been continuously enhanced, offering
consumers advanced features like driving assistance, which better aligns with their demand for
intelligent technologies. Furthermore, advancements in battery technology have significantly
extended the driving range of NEVs and reduced charging times. These improvements have
bolstered consumer confidence in NEVs and increased their market acceptance.
OVERVIEW OF GLOBAL AND CHINA NEW ENERGY PASSENGER VEHICLE
MARKET
New Energy Passenger V ehicles (NEPVs) refer to vehicles that utilize non-conventional
vehicle fuels (or conventional fuels combined with new powertrains) as their power source,
characterized by low pollution, low energy consumption, and high efficiency. They primarily
include Battery Electric V ehicles (BEVs), Plug-in Hybrid Electric V ehicles (PHEVs), and
Range Extended Electric V ehicles (REEVs), among others.
Overview of Global New Energy Passenger Vehicle Market
Driven by the continuous improvements in the technology and performance of NEPVs,
policy support from various countries and regions worldwide, as well as the growing
environmental awareness among consumers, the global NEPV market has experienced rapid
development. The global sales volume of NEPVs surged from 6.2 million units in 2021 to 17.1
million units in 2024, achieving a compound annual growth rate (CAGR) of 40.2% during this
period. The penetration rate of NEPVs in the global passenger vehicle market increased from
9.7% in 2021 to 23.0% in 2024. Looking ahead, with the increasing competitiveness of NEPVs,
global sales volume of NEPVs are projected to reach 42.3 million units by 2030, with a CAGR
of 16.3% from 2024 to 2030, and the penetration rate is expected to rise to 47.0%.
INDUSTRY OVERVIEW
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--- page 122 ---
Global New Energy Passenger Vehicle Sales Volume, Breakdown by Regions
China
Asia (Ex. China)
Europe
Middle East & North Africa
North America Rest of the World
South America
Unit: Millions
6.2
10.1
13.7
17.1
20.9
26.1
29.9
35.0
38.2
42.3
3.0
5.9
7.9 11.1
13.0
14.8
16.2
17.4
18.3
19.1
0.3 0.3 0.4
2.0
2.5
3.3
2.0 2.5
2.7 2.9 3.5
4.3 5.4
6.6 8.5 10.1
0.1 0.2
0.1 0.1 0.2 0.3 0.40.0 0.0
2.0
2.5 3.2 4.1 5.5 7.10.0 0.0 0.0 0.1 0.1 0.2 0.3 0.3 0.4 0.50.4 0.4 1.2 1.1 1.6 3.4 3.0 4.0 2.2 1.11.61.5
1.10.80.5
1.40.7
0
5
10
15
20
25
30
35
40
45
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
CAGR 2021-2024 2024-2030E
40.2% 16.3%
54.7% 9.5%
44.2% 49.1%
13.2% 23.1%
62.0% 43.2%
31.7% 28.2%
203.7% 34.7%
China
Asia (Ex. China)
Europe
Middle East & North Africa
Global
North America
South America
Source: International Organization of Motor V ehicle Manufacturers (OICA), China Association of Automobile
Manufacturers (CAAM), Frost & Sullivan Report
Note:
1. All regions’ NEPV sales volume excludes export volume.
From the perspective of NEPV sales across different regions, China has led the world in
NEPV sales for ten consecutive years. In 2024, China’s NEPV sales volume reached 11.1
million units, accounting for 64.7% of the global NEPV market. By 2030, NEPV sales volume
in China are expected to reach 19.1 million units, with a CAGR of 9.5% from 2024 to 2030,
representing 45.1% of the global market. In 2024, Europe, North America, and Asia (excluding
China) recorded NEPV sales volume of 2.9 million units, 1.6 million units, and 0.3 million
units, respectively, accounting for 16.8%, 9.4%, and 1.8% of the global NEPV market. By
2030, NEPV sales volume in these regions are projected to reach 10.1 million units, 7.1 million
units, and 3.3 million units, respectively, representing 23.9%, 16.8%, and 7.8% of the global
NEPV market.
INDUSTRY OVERVIEW
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From the perspective of NEPV penetration rates across different regions, the development
is uneven due to variations in factors such as energy prices and the maturity of charging
infrastructure. In 2024, the NEPV penetration rate in China passenger vehicle market reached
48.9%, significantly higher than the global average of 23.0%. However, in regions outside of
China, the NEPV penetration rate in 2024 was 11.8%, with Europe having the highest rate at
19.8%, followed by North America at 9.0%, the Middle East and North Africa at 8.7%, and
South America at just 2.8%. Sales growth in different regions will have significant room for
improvement in the future. China, Europe, and North America will continue to be the regions
with a higher sales share of NEVs. By 2030, the NEPV penetration rates in China, Europe, and
North America are projected to reach 76.9%, 61.2%, and 34.4%, respectively.
Overview of China New Energy Passenger Vehicle Market
China NEPV sales volume reached 3.0 million units in 2021 and grew to 11.1 million
units in 2024, achieving a CAGR of 54.7% from 2021 to 2024. The NEPV penetration rate in
China passenger vehicle market stood at 48.9% in 2024. With the Chinese government’s
continued policy support and increasing consumer demand, NEPV sales volume are projected
to reach 19.1 million units by 2030, with a CAGR of 9.5% from 2024 to 2030. The NEPV
penetration rate in China passenger vehicle market is expected to rise to 76.9% by 2030.
Meanwhile, by 2030, the market share of ICE passenger vehicles in China is expected to shrink
to 23.1%, and NEPV will occupy a dominant position in the overall passenger vehicle market
structure.
Penetration Rate of Different Power Type in China NEPV Market
0
10
20
30
40
50
60
70
80
90
100
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
81.0%
15.2%NEPV Penetration
of PV Market 28.0% 35.9% 48.9% 56.3% 63.0% 68.0% 71.9% 74.4% 76.9%
75.7% 66.5% 56.7% 55.3% 53.9% 52.4% 50.9% 49.3% 47.8%
15.5% 20.2%
24.7%
32.0% 31.9% 32.5% 33.3% 34.0% 34.9% 35.7%
8.8% 11.3% 12.7% 13.6% 14.3% 15.1% 15.8% 16.4%
4.1%3.5%
BEV PHEV REEV
Source: China Association of Automobile Manufacturers (CAAM), Frost & Sullivan Report
INDUSTRY OVERVIEW
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From the perspective of the market share of different powertrain types in NEPVs, BEVs
remain dominant. In 2024, the sales volume of BEVs reached 6.3 million units, accounting for
56.7% of the NEPV market. PHEVs and REEVs held shares of 32.0% and 11.3%, respectively.
However, REEVs, which effectively address range anxiety, have garnered increasing consumer
attention and acceptance, and are expected to become a significant driver of growth in China
NEPV market. By 2030, REEV sales volume is projected to reach 3.1 million units,
representing 16.4% of the market. Meanwhile, BEVs will remain the primary growth segment
in China NEPV market, with sales volume expected to reach 9.1 million units by 2030,
accounting for 47.8% of the NEPV market.
Competitive Landscape of China New Energy Passenger Vehicle Market
In China NEPV market, domestic brands dominated the top 20 best-selling models in
2024, accounting for 18 of the top 20 models by sales volume. In the premium NEPV segment,
domestic brands also showed strong competitiveness, with 7 domestic brand models ranking
among the top 10 models by sales volume. Among them, the AITO M7 ranked first by sales
volume among all the premium domestic brand models. These premium domestic brands
provide consumers with comprehensive high-end mobility solutions and exceptional driving
assistance experiences. With continuous technological innovation and advancement, China
premium domestic brands are poised to reshape the competitive landscape of the market.
Top 20 Best-Selling Models in China NEPV Market:
OEM’s Suggested Price vs. Sales Volume
OEM’s Suggested Retail Price (Maximum)
in Thousand RMB
Non-domestic brand Domestic Brand Sales V olume
in Thousand Unit
AITO M9
N
I
MR
L
P
E
F C
D
A
B
G
J
Q
H
K
O
AITO M7
Source: China Passenger Car Association and Frost & Sullivan Report
INDUSTRY OVERVIEW
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Notes:
(1) A, N are models belong to Brand B, which was established in 2003 and is headquartered in the United States.
(2) B, C, D, E, G, H, I, J, L, O, R are models belong to Brand A, which was established in 1995 and is
headquartered in Shenzhen, Guangdong.
(3) F, K are models belong to Brand C, which was established in 1985 and is headquartered in the Liuzhou,
Guangxi.
(4) M, S are models belong to Brand D, which was established in 2015 and is headquartered in Beijing.
(5) P is a model belong to Brand E, which was established in 2017 and is headquartered in the Guangzhou,
Guangdong.
In 2024, in terms of sales volume, 9 domestic brands ranked among the top 10 brands in
China NEPV market. The brand rankings in China NEPV market are illustrated in the figure
below:
Ranking Brand Domestic Brand
Market Share,
Sale Volume in 2024
(%)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand A (1) /H12011 32.3%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand B (2) × 6.2%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand C (3) /H12011 5.7%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand D (4) /H12011 4.7%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118AITO (ޢ)H12011 3.7%
6 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand E (5) /H12011 3.3%
7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand F (6) /H12011 2.7%
8 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand G (7) /H12011 2.5%
9 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand H (8) /H12011 2.1%
10 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand I (9) /H12011 2.0%
Source: China Passenger Car Association and Frost & Sullivan Report
Notes:
(1) Brand A was established in 1995 and is headquartered in Shenzhen, Guangdong. Its business covers the
manufacturing and sales of passenger vehicles and commercial vehicles, and is owned by a company
listed on HKEx and SZSE.
(2) Brand B was established in 2003 and is headquartered in the United States. Its business covers the
manufacturing and sales of passenger vehicles and commercial vehicles, and is owned by a company
listed on NASDAQ.
(3) Brand C was established in 1985 and is headquartered in the Liuzhou, Guangxi. Its business covers the
manufacturing and sales of passenger vehicles and commercial vehicles.
(4) Brand D was established in 2015 and is headquartered in Beijing. Its business covers the manufacturing
and sales of passenger vehicles, and is owned by a company listed on HKEx and NASDAQ.
(5) Brand E was established in 2017 and is headquartered in Guangzhou, Guangdong. Its business covers
the manufacturing and sales of passenger vehicles.
(6) Brand F was established in 2015 and is headquartered in Hangzhou, Zhejiang. Its business covers the
manufacturing and sales of passenger vehicles, and is owned by a company listed on HKEx.
INDUSTRY OVERVIEW
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--- page 126 ---
(7) Brand G was established in 2023 and is headquartered in Hangzhou, Zhejiang. Its business covers the
manufacturing and sales of passenger vehicles, and is owned by a company listed on HKEx.
(8) Brand H was established in 2021 and is headquartered in Ningbo, Zhejiang. Its business covers the
manufacturing and sales of NEPVs, is owned by a company listed on HKEx.
(9) Brand I was established in 1997 and is headquartered in Hangzhou, Zhejiang. Its business covers the
manufacturing and sales of ICE vehicles and NEVs, including passenger vehicles and commercial
vehicles, and is owned by a company listed on HKEx.
Drivers and Trends of Global and China New Energy Passenger Vehicle Market
Intelligentization is Reshaping Consumer Purchase Preferences
The gradual popularization of intelligent automotive features has become a consensus
among consumers both in China and globally. In 2024, the penetration rate of Level 2 and
above driving assistance vehicles has exceeded 60% in China NEPV market. Intelligentization
has emerged as a critical decision-making factor for consumers, who are willing to pay a
premium for advanced features. According to the “Intelligent Automotive Development Report
(2024)” released by the China EV100, 90% of consumers are willing to pay extra for advanced
driving assistance services, with 30% willing to pay over RMB10,000.
As consumer demand for vehicle safety, convenience, and intelligentization continues to
rise, the industry is shifting towards more technically demanding and complex application
scenarios in advanced driving assistance, such as city NOA (Navigate on Autopilot).
Traditional automotive brands lag behind in driving assistance development, while China’s
advanced driving assistance solutions have become one of the main choices in the international
market. Leveraging its technological advantages, China’s advanced driving assistance
solutions are expected to lead the global automotive intelligentization transformation.
Artificial Intelligence Offers Unprecedented Opportunities for Automotive Intelligentization
AI is empowering the iterative upgrade of automotive intelligentization. The development
of AI large models is expanding from language models to driving assistance. With
advancements in sensors, algorithms, and data processing capabilities, the deep integration of
multimodal large models into end-to-end driving assistance represents the latest technological
trend. The combination of “AI + 5G” is facilitating breakthroughs in vehicle-road-cloud
integration, merging information from vehicles, roadside, and the cloud to significantly
enhance the safety, stability, and reliability of driving assistance. This accelerates the pace of
automotive intelligentization.
Cross-sector Convergence Drives Innovative Business Models and Product Paradigms
Guided by the software-defined vehicle (SDV) approach, the automotive industry is
undergoing two transformative convergence trends. First, deep integration of technologies and
products is achieved through end-to-end synergy between software and traditional automotive
technologies, empowering vehicles with enhanced intelligence and connectivity. Second,
INDUSTRY OVERVIEW
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cross-sector collaboration sees OEMs, ICT companies, supply chain partners, and end-user
service providers forging closer partnerships to pool resources, creating innovative business
models and product paradigms. These convergence trends are accelerating the industry’s shift
toward intelligent, connected, and shared mobility, fueling sustained innovation and growth.
China’s Automotive Export Sales will Continue to Rise
China’s automotive industry surpassed Japan for two consecutive years (2023 and 2024),
becoming the world’s largest automotive exporter by volume. In 2024, China’s NEPV exports
reached 1.2 million units, accounting for 20.5% of global NEPV sales volume outside China,
elevating the global standing of Chinese NEV brands. In 2024, China’s NEPV exports were
primarily directed to Europe, Asia (excluding China), South America, and North America.
China’s NEPV export volumes are expected to further increase, reaching 3.9 million units by
2030, with a CAGR of 21.7% from 2024 to 2030.
Alongside NEPV exports, Chinese NEV brands are deepening their integration into
overseas markets through joint ventures, local manufacturing, and other strategies. This
includes enhancing brand value, R&D systems, supply chains, and sales service networks,
thereby strengthening the construction of industrial chains in overseas markets. These efforts
will serve as key drivers for the future expansion of China’s NEPV exports.
China NEPV Domestic Brands will Continue Rapid Growth
Driven by technological innovation, product diversification, and rapid iteration, China
NEPV domestic brands are experiencing rapid growth. In 2024, China NEPV market sales
volume reached 11.1 million units, with domestic brands accounting for 9.4 million units, or
88.7% of the market. Among the top 5 best-selling NEPV models in China in 2024, 4 were
domestic brands, demonstrating significant market influence. Looking ahead, China NEPV
domestic brands are expected to continue their rapid growth, reshaping the competitive
landscape of the automotive market.
OVERVIEW OF CHINA PREMIUM NEW ENERGY PASSENGER VEHICLE MARKET
Market Size of China Premium New Energy Passenger Vehicle Market
Based on price segmentation, China’s NEPV market is categorized into premium and
non-premium models. In the overall premium passenger vehicle market, the penetration rate of
NEVs is steadily increasing. As consumer demand for electrification, high-tech features, and
intelligent experiences grows, more premium brands are accelerating their deployment of NEV
models. New energy premium vehicles are gradually eroding the market share of traditional
premium ICE vehicles.
The definition of a premium brand is primarily related to its price. Differences in price
lead to variations in automotive products in terms of brand value, model space, functionality,
and other aspects, thereby forming the concept of premium among consumers. Generally,
vehicles with a selling price higher than 300,000 RMB are classified as premium vehicles in
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China market. This price-based definition applies to the Chinese market. Due to factors such
as tariff differences, local consumption levels, local market competition, and corporate
marketing strategies, the price of the same model can vary significantly across different
regions.
According to Frost & Sullivan, in 2024, the sales volume of premium NEPVs reached 2.6
million units, accounting for 23.4% of the total NEPV market in China. Driven by increasing
resident income and consumption upgrades, China premium NEPV market is expected to
maintain a steady growth, reaching 5.7 million units by 2030, with a market share of 29.8%.
From 2024 to 2030, the market is projected to grow at a CAGR of 14.0%.
China NEPV Sales Volume, Breakdown by Price Level
Non-Premium 56.9% 7.9%
2021-2024 2024-2030ECAGR
Total 54.7% 9.5%
48.1% 14.0%Premium
Unit: Millions
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
0
5
10
15
20
25
18.317.416.2
14.8
13.0
11.1
7.9
5.9
3.0
2.2
4.7
5.9
8.5 9.8 10.9 11.8 12.5 13.0 13.4
0.8 1.2 2.0 2.6 3.2 3.9 4.4 4.9 5.3 5.7
19.1
Non-Premium
Premium
Source: China Association of Automobile Manufacturers (CAAM), Frost & Sullivan Report
Compared to other regions globally, China has a relatively high penetration rate of
NEPVs, reaching 48.9% in 2024. Having already experienced a period of rapid growth, so the
projected growth rate in the future is relatively slower. In contrast, other regions around the
world have lower NEPV penetration rates, such as 19.8% in Europe, 9.0% in North America,
8.7% in the Middle East and North Africa, and only 2.8% in South America. With the
advancement of global NEPV infrastructure construction and technological progress, these
regions are expected to enter a period of rapid development with relatively higher growth rates.
In China’s premium NEPV market, the past few years have seen significant growth,
driven by the overall development of NEPVs in China and the rise of domestic brands. In 2021,
the premium NEPV market had a relatively low base (0.8 million in 2021), combined with
relatively high NEPV prices and the increasing popularity of NEPVs, which contributed to its
high growth rate. The growth rate from 2024 to 2030 is expected to be slower as compared to
2021 to 2024 primarily because with the increased penetration of the premium NEPV , the
segment has entered into a stable growth stage. Nonetheless, the growth rate of China’s
premium NEPV market is still expected to outperform the non-premium segment.
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Competitive Landscape of China Premium New Energy Passenger Vehicle Market
In 2024, in terms of sales volume, four domestic brands — Brand D, AITO, Brand H and
Bran d J — were among the top five premium NEPV brands in China. The 2024 sales ranking
of premium NEPV brands in China is illustrated in the figure below.
Ranking Premium NEPV Brand Domestic Brand
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand B (1) ×
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand D (2) /H12011
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118AITO (ޢ)H12011
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand H (3) /H12011
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Brand J (4) /H12011
Source: China Passenger Car Association, Frost & Sullivan Report
Notes:
(1) Brand B was established in 2003 and is headquartered in the United States. Its business covers the
manufacturing and sales of passenger vehicles and commercial vehicles, and is owned by a company
listed on NASDAQ.
(2) Brand D was established in 2015 and is headquartered in Beijing. Its business covers the manufacturing
and sales of passenger vehicles, and is owned by a company listed on HKEx and NASDAQ.
(3) Brand H was established in 2021 and is headquartered in Ningbo, Zhejiang. Its business covers the
manufacturing and sales of NEPVs, is owned by a company listed on HKEx.
(4) Brand J was established in 2014 and is headquartered in Shanghai. Its business the manufacturing and
sales of passenger vehicles, and is owned by a company listed on NYSE, HKEx and SGX.
In 2024, in terms of sales volume, three domestic brand models ranked among the top five
models in China premium NEPV market, including AITO M7 , AITO M9 , and S. In 2024, the
ranking of premium NEPV models in China is illustrated in the figure below.
Ranking
Premium
NEPV Model Domestic Brand Power Type
Market Share,
Sales Volume
in 2024
(%)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A × BEV 18.5%
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118AITO M7 /H12011 REEV 7.4%
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N × BEV 6.8%
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118AITO M9 /H12011 BEV/REEV 6.0%
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118S /H12011 REEV 5.2%
Source: China Passenger Car Association, Frost & Sullivan Report
Notes:
(1) A, N are models belong to Brand B.
(2) S is a model belong to Brand D.
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Domestic brands are reshaping the competitive landscape of China premium passenger
vehicle market by enhancing product capabilities and elevating brand positioning. Although
domestic brands have developed rapidly, they have yet to form globally influential brands. In
the future, with technological innovation, comprehensive intelligent features, and consumer
acceptance, Chinese domestic premium NEPV brands will have the opportunity to become
globally influential brands and China automotive industry is entering a new stage of
high-quality development.
Drivers and Trends of China Premium New Energy Passenger Vehicle Market
The shift in consumer structure towards repurchasing and replacement has driven the rapid
development of premium NEPV market
Since 2023, China automotive market has entered a phase dominated by additional
purchases and vehicle replacements. According to the Frost & Sullivan Report, in 2023, the
proportion of additional purchases and replacements in passenger vehicle sales exceeded 50%,
and it is expected to reach 60% by 2024. Price upgrades and size upgrades are the main themes
in the replacement market, which will further drive the development of premium NEPV market.
In recent years, there has been a clear demand for consumption upgrades in China
automotive market, Consumers are increasingly shifting their purchase choices to higher-price
segments, with the market share of premium passenger vehicles in China passenger vehicles
market increased from 11.0% in 2021 to 13.8% in 2024. And the impact of price competition
on consumption decision has been limited, with premium models accounting for 23.4% of
China NEPV market in 2024, and it is expected to reach 29.8% by 2030.
In terms of vehicle categories, in China, the sales volume of B-class, C-class, and D-class
NEPVs are 3.7 million units, 1.8 million units, and 0.2 million units in 2024, respectively, with
year-over-year growth rates of 82.8%, 77.4%, and 122.1%, reflecting the rapid development of
China premium NEPV market.
Domestic premium NEPV brands are rapidly replacing traditional premium brands
The competition in the NEPV market is intense, with traditional premium brands making
slower progress in their transition to NEVs. Although these brands have a strong technical
foundation and brand influence in the ICE vehicle sector, their advanced driving assistance
features still face numerous challenges in the process of new energy transformation. For
instance, the urban NOA (Navigate on Autopilot) function is mostly limited to a few cities and
has yet to gain widespread market acceptance. This not only restricts the market
competitiveness of their products but also reflects the need for further breakthroughs in the
promotion and application of driving assistance technologies by traditional premium brands.
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Meanwhile, domestic premium NEPV brands have shown strong performance in driving
assistance, gradually becoming powerful competitors in the market. The sales volume of
premium NEPVs by domestic brands accounted for 57.7% of the overall China premium NEPV
market in 2024, up from 25.0% in 2021. These brands not only lead traditional premium brands
in the speed of feature iteration but also offer a more comprehensive and convenient driving
experience for consumers by continuously optimizing the richness of driving assistance
features. With ongoing technological advancements and increasing market recognition,
domestic premium brands are expected to occupy a more significant position in future market
competition.
Market Size of China Premium New Energy Passenger Vehicle Market by Domestic
Brands
In recent years, a number of well-performing domestic brands have rapidly emerged in the
China premium NEPV market. In 2021, the sales volume of premium NEPVs by domestic
brands reached 0.2 million units in China, accounting for 25.0% of the overall premium NEPV
market. In 2024, the sales volume of premium NEPVs by domestic brands reached 1.5 million
units, representing a market share of 57.7%, with a CAGR of 95.7% from 2021 to 2024. With
the continuous launch of new products by domestic brands and the enhancement of intelligent
features, it is expected that by 2030, the sales volume of premium NEPVs by domestic brands
will reach 4.3 million units, accounting for 75.4% of the overall premium NEPV market,
demonstrating significant growth potential.
China Premium NEPV Sales by Domestic Brands
Sales V olume 95.7% 19.2%
2021-2024 2024-2030ECAGR
Unit: Millions
0.2 0.4
0.9
1.5
2.0
2.5
3.0
3.4
3.8
4.3
Penetration Rate
of Domestic
Premium NEPV
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
33.3% 45.0% 57.7% 62.5% 64.1% 68.2% 69.4% 71.7%25.0% 75.4%
0
1
2
3
4
5
6
Source: China Association of Automobile Manufactures (CAAM), Frost & Sullivan Report
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Drivers and Trends of China Premium New Energy Passenger Vehicle Market by
Domestic Brands
Chinese domestic brands are reshaping the competitive landscape of the premium NEPV
market
In the future, Chinese domestic brands, with their continuous innovation and leading
position in NEV technology, as well as their ability to quickly respond to market demands
through model iterations, will continue to make breakthroughs in the premium NEPV market.
As technology further deepens, product performance continues to optimize, and brand value
continues to rise, Chinese domestic brands are expected to further consolidate and expand their
market share in the premium NEPV sector, thereby establishing a more competitive and
influential high-end brand image in the global automotive industry.
The acceptance of Chinese domestic premium brands by consumers is increasing
Domestic premium NEPV brands have significantly expanded their market share,
accounting for 57.7% of China’s premium NEPV sales in 2024, up from 25.0% in 2021,
reflecting a major shift in consumer preference and competitive dynamics. The advantages of
domestic brands in driving assistance technology, smart configurations, and user experience
are the main reasons they are able to disrupt the monopoly of traditional automotive brands in
the premium vehicle market and gain consumer favor. Leading driving assistance companies,
with broader coverage and richer application scenarios, are building consumer loyalty and will
further erode the market share of traditional premium brands in the new energy market.
While maintaining the safety and service levels emphasized by traditional premium
brands, domestic premium NEPV brands have established a new luxury service system
centered around “intelligence,” “proactivity,” and “remote capabilities,” better meeting
consumer needs and thereby enhancing the acceptance of Chinese domestic premium brands.
The market potential of domestic premium NEPV brands continues to grow in the future
In the early stages of NEVs development, companies continuously obtained sales volume
through constant launching and iterating new models. At the current stage, leading companies
have supported sales through core products, demonstrating the strong sales contribution of a
single best-selling model. In the future, the contribution of core models to the long-term sales
of leading enterprises will become even more evident. Furthermore, domestic premium NEPV
brands are gradually establishing a systematic product innovation mechanism and version
update capabilities, forming a complete R&D, production, and supply chain system. The sales
volume of premium NEPVs by domestic brands accounted for 57.7% of the overall China
premium NEPV market in 2024. Driven by brand upgrading and enhanced intelligent features,
domestic brands are expected to capture 75.4% of the premium NEPV market in China by
2030.
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Entry Barriers of China Premium New Energy Passenger Vehicle Market
High initial investment
The automotive manufacturing industry, as a capital- and technology-intensive sector,
requires significant upfront investment in areas such as product design, research and
development, production, marketing systems, and after-sales services. Newly established
OEMs often lack sufficient initial investment, which limits their development.
Stable supply chain ecosystem
Influenced by the development of intelligent connectivity and new energy technologies,
the automotive industry chain will face a restructuring of industrial value. The competition in
the automotive industry is no longer limited to competition between models but is evolving into
competition between brand ecosystems. Newly established OEMs have yet to cultivate stable
upstream and downstream supply chain relationships, making it difficult to achieve a smooth
transition through a stable and mature supply chain ecosystem.
New Energy V ehicle Production Qualification Barrier
In recent years, China has tightened its regulations on NEV production qualifications. In
2019, the Regulations on the Administration of Investment in the Automobile Industry were
officially implemented, establishing more detailed entry standards for NEV investment
projects. In 2020, the Ministry of Industry and Information Technology released the
Regulations on the Administration of Admission of NEV Manufacturers and Products, further
refining requirements for enterprises in areas such as R&D, production, and after-sales
services, significantly raising the industry’s entry threshold. As these policies tighten, it has
become increasingly difficult for new companies to obtain NEV production qualifications,
while existing qualification holders leverage their first-mover advantage and regulatory
compliance systems to secure a stronger position in the market.
Production costs and economies of scale
OEMs that have established economies of scale can leverage their purchasing power and
supply chain influence to mitigate the impact of raw material cost fluctuations and sporadic
supply shortages on production costs. Additionally, OEMs can effectively dilute fixed
production costs through scale production. It is difficult for newly established OEMs to achieve
effective economies of scale when facing these challenges due to their restricted production
capacities.
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Intelligent ecosystem and supporting services
The ongoing evolution of the intelligentization raises higher requirements for OEMs to
provide advanced, safe, and stable driving assistance experiences and a complete intelligent
ecosystem. Newly established OEMs lack the necessary accumulation and find it difficult to
capture market share in a short period.
Full-process integration capability
Building full-process integration capabilities, including product design, R&D,
production, marketing systems, and after-sales services, helps OEMs maintain a sustained
competitive advantage. It can significantly reduce product development costs, shorten product
delivery time, and ensure smooth product delivery through comprehensive services, improving
the customer experience both pre-sale and post-sale. Newly established OEMs find it difficult
to integrate these capabilities within a short period.
HISTORICAL PRICE TRENDS OF MAJOR NEV RA W MATERIALS AND
COMPONENTS
The cost structure of NEPVs is primarily influenced by the price of power batteries. Since
2022, the price of power batteries in China has been on a downward trend. This price decline
is mainly driven by factors such as falling raw material prices, technological advancements,
and intensified market competition. It is expected that these factors will continue to drive the
reduction in power battery prices, providing a positive boost to the development of the NEPV
market.
China Power Battery Cell Price
Jan-2022
Apr-2022
Jul-2022
Oct-2022
Jan-2023
Apr-2023
Jul-2023
Oct-2023
Jan-2024
Apr-2024
Jul-2024
Oct-2024
Lithium Iron Phosphate Battery (LFP battery)
Unit: RMB/Wh
Lithium Nickel Cobalt Manganese Oxide Battery (NCM battery)
Source: Wind, Frost & Sullivan Report
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THE LATEST OUTLOOK ON TARIFFS AND THE IMPACT ON THE NEV SUPPLY
CHAIN
In recent years, certain countries have imposed high tariffs on Chinese automotive
exports. For instance, the U.S. has levied additional tariffs on Chinese vehicles, significantly
raising the cost of market entry and weakening the price competitiveness of Chinese brands.
According to the latest policy, the United States has imposed an additional 25% tariff on
automobiles and key automotive components imported from China. And for the European
Union, in October 2024, it imposed anti-subsidy tariffs of up to 35.3% on NEVs manufactured
in China. Recently, however, the EU has adjusted its policy, replacing the existing tariffs with
a “minimum import price” mechanism.
These changes in trade policies have had a profound impact on the global NEV supply
chain. The European Union’s adoption of a “minimum import price” mechanism may erode the
price advantage of Chinese NEVs in the European market, compelling Chinese manufacturers
to raise prices or accelerate local production in Europe to bypass trade barriers. Since China’s
NEV exports to the U.S. remain relatively limited, high U.S. tariffs are expected to have a
greater impact on component exports than on vehicles themselves. As one of the world’s
leading exporters of automotive parts, China faces significant challenges under current U.S.
tariff policies. In response, Chinese companies are optimizing their supply chains, expanding
into alternative markets, and accelerating localization in overseas regions. Overall, these
policies may lead to a restructuring of the global NEV supply chain, increasing operational
costs for companies and affecting vehicle pricing and consumer choices worldwide.
SOURCE OF INFORMATION
Our Company has commissioned Frost & Sullivan, an independent market research
company, to analyze the passenger vehicle market and compile a report. The information
disclosed in this prospectus regarding Frost & Sullivan is extracted from the Frost & Sullivan
Report. We have agreed to pay Frost & Sullivan a fee of RMB298,000 for the preparation of
the Frost & Sullivan Report. The payment of this fee is not contingent upon our successful
listing or the outcome of the report.
The Frost & Sullivan Report is based on both primary and secondary research obtained
from various sources. Primary research includes interviews with key industry participants in
the new energy passenger vehicle market and other experts relevant to our business. Secondary
research includes a review of company reports, independent research reports, and data from
Frost & Sullivan’s proprietary research database as well as government databases.
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In compiling and preparing this report, Frost & Sullivan has made the following
assumptions:
 During the forecast period, the social, economic, and political environments of the
PRC, and other major global markets will remain stable, ensuring the continued and
steady development of the passenger vehicle industry;
 Government policies on the passenger vehicle market will not undergo significant
changes.
Frost & Sullivan believes that the fundamental assumptions used in preparing this report,
including those for future projections, are factual, accurate, and not misleading. Frost &
Sullivan has conducted an independent analysis of the data; however, the accuracy of its review
conclusions largely depends on the accuracy of the collected information.
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The major laws, regulations, regulatory documents and regulatory policies in China that
affect our business operations are listed below:
REGULATIONS ON AUTOMOBILE PRODUCTION
Pursuant to the Provisions on Administration of Investment in Automotive Industry ( ӛ
), which was promulgated by the National Development and Reform
Commission (the “NDRC”) on December 10, 2018 and became effective on January 10, 2019,
automobile investment projects are divided into two categories of vehicle investment projects
(including fuel vehicles and pure electric vehicles) and other investment projects. V ehicle and
other investment projects are subject to filing management by local development and reform
departments, with the vehicle projects being administered by development and reform
departments at the provincial level. In addition, the provisions categorize extended-range
electric vehicles as electric vehicles.
The production of automobiles is also required to comply with the relevant rules of the
Ministry of Industry and Information Technology (the “MIIT”), and to be included in the
Announcement of V ehicle Manufacturers and Products (ʮ
ѓ) after being approved by the MIIT. In order to optimize the admission administration of
automobile manufacturers and products, the MIIT promulgated the Administrative Measures on
the Admission of V ehicle Manufacturers and Products (ɝ၍
) on November 27, 2018, which came into effect on June 1, 2019. These measures
unify the admission regulations for all types of vehicle manufacturers and products, and
simplify the management procedures for the admission of vehicle manufacturing. In addition,
for the admission of passenger vehicle and new energy vehicle manufacturers and products,
different admission regulations issued by the MIIT shall be applied, including but not limited
to the Administrative Rules on the Admission of Passenger V ehicle Manufacturers and Products
() which took effect from January 1, 2012, and the
Administrative Rules on the Admission of New Energy V ehicle Manufacturers and Products
() which was promulgated on January 6, 2017,
revised on July 24, 2020 and took effect from September 1, 2020.
According to the Administrative Rules on the Admission of New Energy V ehicle
Manufacturers and Products, the MIIT is responsible for implementing the admission as well
as supervision and management of new energy vehicle manufacturers and products nationwide.
The competent authorities of industry and information technology of provinces, autonomous
regions and municipalities directly under the Central Government are responsible for the daily
supervision and management of new energy vehicle manufacturers and products within their
administrative areas, and cooperating with the MIIT in carrying out the relevant work of
admission management. The new energy vehicle manufacturers and products that have passed
the review are released by the MIIT through an announcement. New energy vehicle
manufacturers shall produce new energy vehicle products in accordance with the licensing
requirements specified in the announcement. New energy vehicle manufacturers shall
continuously meet the relevant requirements for admission review and production consistency
to ensure the normal operation of the new energy vehicle product safety assurance system.
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REGULATIONS ON COMPULSORY PRODUCT CERTIFICATION
Pursuant to the Administrative Regulations on Compulsory Product Certification (2022
Amendment) (֛2022ࠈࡌ)) that was promulgated by the
SAMR and became effective on November 1, 2022, and the Catalogue of Descriptions and
Table of Definitions for Compulsory Product Certification (2023 Amendment) (ۜ
ڌ֛ޢ2023ࠈࡌ)) issued by the SAMR on August 10, 2023, the SAMR
is in charge of the supervision and quality certification of automobiles. The motor vehicles and
their safety accessories, motor vehicle tires and safety glass in the absence of the compulsory
product certificate and the mandatory certification mark of China, shall not leave the factory,
export or put on sale.
REGULATIONS ON AUTOMOBILE SALES AND CONSUMER RIGHTS AND
INTERESTS PROTECTION
According to the Administrative Measures on Automobile Sales ()
promulgated by the MOFCOM and became effective from July 1, 2017, the local commerce
authorities above the county level shall supervise and manage the sale of automobiles and their
related service activities within their administrative areas; automobile suppliers and dealers are
required to file the basic information through the national automobile circulation information
management system operated by the competent commerce department within 90 days after the
receipt of a business license. Where there is any change to the information filed, automobile
suppliers and dealers must update such information within 30 days after such change. The
competent commerce department conducts supervision and inspection in accordance with the
“double random” method, and collaborates with relevant departments to establish corporate
credit records. Suppliers and dealers are required to cooperate with the investigation carried
out by the regulatory authorities in accordance with the law.
According to the Law of the People’s Republic of China on the Protection of Consumer
Rights and Interests (), which was last amended by the
Standing Committee of the National People’s Congress (the “SCNPC”) on October 25, 2013
and effective from March 15, 2014, operators bear the obligation to ensure the safety of goods
or services, and shall ensure that the goods or services they provide meet the requirements for
the protection of the safety of persons and property. For goods and services that may endanger
consumers’ life, health or property safety, they shall fulfill their duty of truthful disclosure to
consumers, including providing clear risk warnings, proper usage instructions and preventive
measures against potential hazards. If the operator finds that the goods or services provided by
it are defective and may pose safety risks, it shall immediately report to the relevant
administrative departments and disclose the information to consumers as well as take measures
such as stopping the sales, issuing warnings, recall, harmless disposal, destruction of the
products, discontinuation of production or service. Operators who violate the above provisions
are subject to civil or criminal liability depending on the severity of the circumstances.
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REGULATIONS ON PRODUCT LIABILITY AND THE RECALL OF DEFECTIVE
AUTOMOBILES
According to the Product Quality Law of the People’s Republic of China ( ʕശɛ͏΍
), which was promulgated by the SCNPC on February 22, 1993 and amended
on July 8, 2000, August 27, 2009 and December 29, 2018, it’s prohibited to produce or sell
products that do not meet the standards and requirements for the protection of human health
and the safety of persons and property. Products shall not present an unreasonable risk of
endangering the safety of persons or property. If a product is defective and causes damage to
persons or the property of others, the victim may claim compensation from the producer of the
product or the seller of the product. Producers or sellers of non-compliant products may be
ordered to cease the production or sale of the products and could be subject to confiscation of
the products illegally produced or sold and be fined. Any illegal income will be confiscated,
and in severe cases, an offender’s business license may be revoked.
According to the Administrative Provisions on Defective Automotive Product Recalls
(̜Ϋ၍ଣૢԷ), which was promulgated by the State Council on October
22, 2012 and amended on March 2, 2019, the product quality supervision department of the
State Council is responsible for the supervision and administration of recalls of defective
automotive products nationwide. Pursuant to these administrative provisions, manufacturers of
automotive products are required to take measures to eliminate defects in the products they sell
and recall all defective automotive products. The product quality supervision department of the
State Council is responsible for the supervision and administration of recalls nationwide, and
may entrust provincial departments to undertake part of the work, relevant technical
institutions to undertake specific technical work, and other relevant departments shall be
responsible for relevant supervision and administration within the scope of their respective
responsibilities, and establish an information sharing mechanism. Manufacturers who attempt
to conceal defects or do not recall defective automotive products in accordance with the
relevant regulations will be subject to penalties, including fines. Any illegal income will be
confiscated, and in severe cases, the relevant permit will be revoked by the licensing authority.
Pursuant to the Implementation Rules on the Administrative Provisions on Defective
Automotive Product Recalls () promulgated by the
SAMR on November 27, 2015 and last amended on October 23, 2020, if a manufacturer is
informed of any possible defect in its automobile products, it shall immediately organize an
investigation and analysis and truthfully report the results of the investigation and analysis to
the SAMR. If a manufacturer confirms the existence of a defect in its automobile products, it
shall immediately cease the production, sale or import of the defective automobile products and
recall all such defective products in accordance with applicable laws and regulations. All
entities and individuals are entitled to report potential automotive defects. The SAMR
establishes information management systems and information sharing mechanisms, and is
responsible for collecting, analyzing, releasing information and filing manufacturer
information. Manufacturers shall establish a traceable information management system to
maintain information such as product design, manufacturing and car owners and complete the
filing with the SAMR, with any change to the information being updated in a timely manner.
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Operators shall also establish and maintain the information related to the operation of
automotive products. Operators and parts producers are required to report and announce defect
information. Manufacturers that fail to update the filing information according to the
provisions, and parts producers that fail to cooperate with the defect investigation will be
ordered to rectify within a prescribed period, and failure to rectify within the prescribed period
will result in fines. The violation of these provisions constitutes the legal treatment under other
laws and regulations. If a crime is constituted, criminal liability shall be pursued.
Administrative penalties shall be imposed by the market regulatory authorities with
jurisdiction over the location where the violation occurred.
According to the Guiding Opinions on Further Strengthening the Construction of Safety
System for New Energy V ehicle Enterprises (ண
ኬจԈ) issued by the MIIT, the Ministry of Public Security, the Ministry of Transport,
the Ministry of Emergency Management and the SAMR on March 29, 2022, enterprises shall
comprehensively enhance their safety capabilities in safety management mechanism, product
quality, operation monitoring, after-sales service, accident response and handling, as well as
network security, improve the safety of new energy vehicles, and promote the high-quality
development of the new energy vehicle industry.
According to the Circular on Further Improving the Regulation of Recall of Automobile
with OTA Technology (ආɓӉ̋੶ӛԓჃ೻ʺॴ(OTA))
promulgated by the SAMR on November 23, 2020 and effective from the same date,
automobile producers that provide technical services through Over-The-Air, or OTA, in respect
of the vehicles sold, are required to complete filing with the SAMR. In addition, if a producer
adopts the OTA method to eliminate defects in automobile products and implements a recall,
it shall formulate a recall plan and file it with the SAMR. If the OTA method fails to effectively
eliminate defects or cause new defects, the producer shall take recall measures again.
Pursuant to the Circular on Further Strengthening the Admission, Recall, and Online
Software Update Management for Intelligent Connected V ehicles (ආɓӉ̋੶౽ঐၣᑌ
) jointly issued by the MIIT and the SAMR
on February 25, 2025, automobile manufacturers shall proactively assume the primary
responsibility for product quality and safety, and enhance their capabilities in line with the
research and development and production of intelligent connected vehicle products and the
conduct of OTA upgrading activities. OTA upgrading activities that do not involve changes in
the main technical parameters of products, enterprises can implement the upgrade after
completing the filing; Where changes in the main technical parameters of products are
involved, enterprises shall not implement the upgrade until they have obtained the permit for
the change of the product and completed the filing. OTA upgrading activities involving the
automatic driving function of automobiles shall obtain a corresponding permit in accordance
with the relevant provisions of admission management.
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FA VORABLE POLICIES RELATING TO NEW ENERGY VEHICLES IN CHINA
Government Subsidies for New Energy Vehicle Purchasers
According to the Notice on Further Effectively Completing the Work Concerning Trade-in
of V ehicles () jointly issued by the
MOFCOM and other six ministries and commissions on August 15, 2024 and effective on the
same day, it’s reiterated to raise the subsidy standard for automobile scrapping and
replacement, increase the capital support from the central government, optimize the review,
fund allocation supervision procedures for automobile scrapping and replacement and
strengthen oversight and management.
On October 30, 2024, the MOF issued the Notice on the Advance Allocation of 2025
Energy Conservation and Emission Reduction Subsidy Funds (ɨ༺2025 ϋືঐಯ
), which provides for the early allocation of subsidy funds for energy
conservation and emission reduction in 2025, which will be used for the settlement of subsidy
funds for the promotion and application of new energy vehicles during 2021 and earlier years,
the advanced fund allocation for new energy vehicles that have been promoted but not yet
completed the settlement process and the incentive funds for the demonstration application of
fuel cell vehicles in the second year.
According to the Notice on Effectively Completing the Work Concerning Trade-in of
V ehicles in 2025 (ਂλ2025) jointly issued by the
MOFCOM and other seven ministries and commissions on January 14, 2025 and effective on
the same day, on the one hand, the scope of automobile scrapping and replacement support has
been further expanded to include the purchase of new energy passenger vehicles. In addition,
the registration period for new energy passenger vehicles eligible for scrapping has been
extended by eight months to December 31, 2018, while other models have been extended by
one year. On the other hand, the subsidy standard for vehicle replacement has been improved.
Individual consumers who transfer a passenger vehicle registered under their own name and
purchase a new one will receive subsidy support for vehicle replacement, and the maximum
subsidy for purchasing a single new energy passenger vehicle shall not exceed RMB15,000 in
2025.
Reduction and Exemption of Vehicle Purchase Tax
According to the Announcement on Continuing and Optimizing the V ehicle Purchase Tax
Relief Policies for New Energy V ehicles (ഄ
ʮѓ) jointly promulgated by the MOF, the SA T and the MIIT on June 19, 2023 and
implemented on the same day, it is clearly stipulated that the period of exemption from vehicle
purchase tax for new energy vehicles will be further extended to December 31, 2025; Among
them, the exemption amount of each new energy passenger vehicle shall not exceed
RMB30,000; For new energy vehicles purchased between January 1, 2026 and December 31,
2027, the vehicle purchase tax shall be halved, and the reduction amount of each new energy
passenger vehicle shall not exceed RMB15,000.
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According to the Announcement on Adjusting the Technological Requirements for New
Energy V ehicle Products for Reduction and Exemption of V ehicle Purchase Tax (ሜ዆
ʮѓ) jointly promulgated by the MOF, the SA T,
the MIIT and the Ministry of Science and Technology on December 7, 2023, the period from
January 1, 2024 to May 31, 2024 is the transition period. From January 1, 2024, the models
listed in the Catalogue of New Energy V ehicle Models Exempt from V ehicle Purchase Tax
(ͦ፽) before December 31, 2023 and are still valid
will be automatically transferred to the Tax Reduction and Exemption Catalogue ( ಯе೼ͦ
፽). For relevant models, it’s required to upload tax reduction and exemption identifiers,
power change mode identifiers, power change mode models, fuel cell models, etc. in
accordance with the requirements of the announcement to supplement the corresponding
supporting materials. Since 2024, the MIIT has issued the 2nd, 12th and 14th batches of the
Catalogue of New Energy V ehicle Models for Reduction and Exemption of V ehicle Purchase
Tax (ͦ፽), and many models of SERES, including the
AITO M5 , M7, M8, M9 are included in this catalogue and are entitled to enjoy the relevant
preferential policies of reduction and exemption of vehicle purchase tax.
Exemption of Vehicle and Vessel Tax
According to the Notice of the Policies on Energy-saving and New-energy V ehicles and
V essels Enjoying V ehicle and V essel Tax Reduction and Exemption (ືঐอঐ๕ԓ୵Ԯ
) jointly promulgated by the MOF, the Ministry of Transport, the
SA T and the MIIT on July 10, 2018, new energy vehicles (including cell-electric commercial
vehicles), plug-in (including extended-range) hybrid vehicles, fuel cell commercial vehicles
are exempt from vehicle and vessel tax, whereas purely electric passenger vehicle and fuel cell
passenger vehicles are not subject to vehicle and vessel tax. Eligible vehicles are listed in the
Catalogue of New Energy V ehicle Models Enjoying V ehicle and V essel Tax Reduction
and Exemption (ͦ፽) jointly
promulgated by MIIT and the SA T from time to time. Since 2024, the MIIT has issued the 58th,
68th and 70th batches of the Catalogue of New Energy V ehicle Models Enjoying V ehicle and
V essel Tax Reduction and Exemption, and many models of SERES, including the AITO M5 ,
M7, M8, M9 are included in this catalogue and are exempted from vehicle and vessel tax.
New Energy Vehicle Credit Schemes
According to the Measures for the Parallel Administration of the Corporate Average Fuel
Consumption and New Energy V ehicle Credits of Passenger V ehicle Enterprises (͜ԓΆ
) jointly promulgated by the MIIT, the
MOF, the MOFCOM, the General Administration of Customs of the People’s Republic of China
and the QSIQ on September 27, 2017, amended on June 29, 2023 and became effective on
August 1, 2023, the MIIT shall establish a vehicle fuel consumption and new energy vehicle
credits management platform to comprehensively facilitate the publicity, carry-over, trading
and other work of corporate average vehicle fuel consumption and new energy vehicle credits.
Passenger vehicle enterprises shall, in accordance with the requirements of the MIIT, submit
relevant data on the fuel consumption of their produced and imported passenger vehicles and
new energy passenger vehicles, and conduct credit carry-over or trading through the vehicle
fuel consumption and new energy vehicle credits management platform.
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Promote New Energy Vehicle Consumption
The NDRC and the National Energy Administration implemented the Implementation
Opinions on Accelerating the Construction of Charging Infrastructure to Better Support New
Energy V ehicles Going to the Rural Areas and Rural Revitalization (̋Ҟપආ̂ཥਿᓾ
จԈ) on May 14, 2023 to boost new
energy vehicles go to the rural areas and to innovate the construction, operation and
maintenance mode of rural charging infrastructure, provide diversified purchase support
policies to support the purchase and use of new energy vehicles in rural areas, and strengthen
the publicity service management of new energy vehicles in rural areas.
On March 28, 2024, the People’s Bank of China and the National Financial Regulatory
Administration jointly issued the Notice on Adjusting Policies Related to Auto Loans (׵
) to increase financial support for automobile consumption,
promote the trade-in of automobiles, and stabilize and expand automobile consumption.
According to the notice, the maximum loan ratios of private-use new energy vehicles shall be
independently determined by financial institutions, and financial institutions are encouraged to
strengthen the innovation of financial products and services according to the segment scenarios
of new vehicles, used vehicles, and old vehicles for new ones, and appropriately reduce and
exempt the liquidated damages generated by early settlement of loans in the process of
exchanging old vehicles for new ones, so as to better support reasonable automobile
consumption demand.
On May 15, 2024, 5 ministries and commissions including the MIIT promulgated and
implemented the Notice on Launching New Energy V ehicles to Rural Areas in 2024 (׵
࢝2024). According to the notice, to accelerate the process
of bridging the gap in the consumption and use of new energy vehicles in rural areas and
empower the construction of beautiful villages and rural revitalization, the MIIT, the NDRC,
the Ministry of Agriculture and Rural Affairs, the MOFCOM and the National Energy
Administration, in accordance with the work deployment of promoting large-scale equipment
replacement and consumer goods trade-in, jointly organized the campaign of new energy
vehicles to rural areas by selecting a number of new energy vehicle models that suitable for the
rural market, with good reputation and reliable quality for promotion in the rural market.
Among them, SERES’ Dongfeng Xiaokang EC36II, Landian E5 and Fengguang Mini EV are
all listed in the catalogue of new energy vehicles for rural areas in 2024.
The Notice on Further Clarifying the Requirements for the Government Procurement
Proportion of New Energy V ehicles (ஷ
) promulgated and implemented by the MOF on December 19, 2024 explicitly requires that
the competent budget units at all levels shall determine the annual government procurement
proportion of new energy vehicles for the respective departments (including their budget units)
in a coordinated manner. Where the new energy vehicles can meet the actual usage needs, the
proportion of new energy vehicles in the total annual procurement of official vehicles shall, in
principle, not be less than 30%. Among them, for official vehicles (such as confidential and
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communication vehicles) with relatively fixed routes, single usage scenarios, and primarily
urban driving, the procurement shall, in principle, be 100% new energy vehicles. When
procuring vehicle leasing services, priority shall be given to leasing and using new energy
vehicles.
On January 20, 2025, the General Office of eight departments, including the MOFCOM,
jointly issued the Notice on Launching a Pilot Reform of Automobile Circulation and
Consumption (), which proposes that a pilot
reform of automobile circulation and consumption will be carried out during the period from
2025 to 2027 to stimulate the vitality of the automobile consumption market and promote the
high-quality development of the automobile market. The pilot tasks mainly include: (1)
stabilizing and expanding automobile consumption; (2) promoting the efficient circulation of
used vehicles; (3) cultivating the environment of automobile culture; (4) improving the
recycling system of scrapped automobiles; (5) promoting the digital circulation and
consumption of automobiles.
Promote the Production, Research and Development of New Energy Vehicles
The Development Plan for the New Energy V ehicle Industry (2021-2035) ( อঐ๕ӛԓ
஝ྌ(2021-2035 ϋ)) promulgated and implemented by the General Office of the
State Council on October 20, 2020, takes deepening supply-side structural reform as the main
line, adheres to the direction of electrification, connectivity and intelligence, and upholds the
principles of market-led, innovation-driven, coordinated and open development to promote
high-quality and sustainable development of the industry. The plan proposes two phased
targets, that is, by 2025, the market competitiveness of new energy vehicles will be enhanced
with breakthroughs in key technologies, and by 2035, the core technology will reach the
international advanced level with comprehensive development in various fields achieved.
Further Construction of Electric Vehicle Charging Infrastructure
On January 10, 2022, ten departments, including the NDRC, the National Energy
Administration and the MIIT, jointly issued the Implementation Opinions on Further
Improving the Service Capacity of Electric V ehicle Charging Infrastructure (ආɓӉ౤
จԈ). The document clearly states that by the
end of the “14th Five-Y ear Plan” period, China’s electric vehicle charging capacity should be
further improved to form a moderately advanced, balanced, intelligent and efficient charging
infrastructure system that can meet the charging needs of more than 20 million electric
vehicles.
On June 8, 2023, the General Office of the State Council issued and implemented the
Guidance on Further Building a High-quality Charging Infrastructure System (ආɓӉ࿴
ኬจԈ), proposing a number of measures to further build a
high-quality charging infrastructure system, including building a convenient and efficient
intercity charging network, establishing an interconnected charging network for city clusters
and metropolitan areas, building a well-structured urban charging network, building an
effectively covered rural charging network, actively advancing the construction of charging
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infrastructure in residential areas, vigorously promoting the construction of charging
infrastructure in public areas, encouraging social capital participation in construction and
operation, formulating and implementing unified standards, and establishing an information
network platform, and strengthening industry standard management.
REGULATIONS AND POLICIES ON INTELLIGENT CONNECTED VEHICLES AND
AUTONOMOUS DRIVING
On July 27, 2021, the MIIT, the Ministry of Public Security and the Ministry of Transport
issued the Norms on Administration of Road Testing and Demonstration Application of
Intelligent Connected V ehicles (Trial Implementation) ( ౽ঐၣᑌӛԓ༸༩಻༊ၾͪᇍᏐ͜
၍ଣ஝ᇍ(༊Б)), which came into effect on September 1, 2021, with the aim to regulate the
road testing and demonstration application activities of intelligent connected vehicles. The
norms make it clear that the testing entity shall be an independent legal entity in China, with
the capability of technology research and development, test evaluation and civil compensation,
and has established protocol to test the performance of the autonomous driving system and is
capable of conducting remote monitor; The demonstration application entity may be an
independent legal entity or a consortium (requiring at least one member with operational
capabilities), and shall execute a liability agreement. The driver must hold a valid driver’s
license for the corresponding vehicle with more than 3 years of driving experience, no
accumulated maximum penalty points recorded in the past 3 years, no record of serious
violation or drunk driving in the past 1 year, and has emergency response ability after training.
Tested vehicles include passenger vehicles, commercial vehicles and special operation vehicles
(excluding low-speed automobiles and motorcycles), which must be unregistered, pass some
mandatory safety inspections, feature dual manual/autonomous driving modes and have
real-time data transmission capabilities. The testing and demonstration application shall
comply with the management requirements of the temporary driving vehicle license plate,
operate in strict accordance with the scope of the declaration, and prohibit brake testing on
public roads. In the event of serious injury/death or vehicle damage, the entity shall report
within 24 hours and submit the accident analysis report within 5 working days. The policy
promotes the development and application of intelligent connected vehicle technology by
unifying test standards, expanding test scenarios (including highways) and strengthening safety
supervision.
Under the Opinions of the Ministry of Industry and Information Technology on
Strengthening the Administration of Intelligent Connected V ehicle Manufacturers and Access
of Products (จԈ),
which was issued by the MIIT and implemented on July 30, 2021, enterprises producing auto
products with autonomous driving function shall ensure that the auto products at least satisfy
the following requirements: (1) it is capable of automatically identify the failure of the
autonomous driving system and whether the designed operating conditions are continuously
met, and take risk mitigation measures to achieve the minimum risk level; (2) it is equipped
with human-machine interaction function displaying the operating condition of the autonomous
driving system; (3) it has an event data recording system and autonomous driving data
recording system to meet relevant functions, performance and safety requirements for accident
reconstruction, liability determination and cause analysis, etc.; (4) it must satisfy the safety
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requirements to ensure functional safety, expected functional safety, network safety and other
process safety, as well as testing requirements such as simulation nature, closed area, actual
road, network safety, software upgrade, data recording, to avoid foreseeable and preventable
accidents under the designed operating conditions of the tested vehicles.
According to the Taxonomy of Driving Automation for V ehicles (GB/T 40429-2021)
(ӛԓቷትІਗʷʱॴ) issued by the SAMR and the Standardization Administration of
China on August 20, 2021 and implemented on March 1, 2022, driving automation functions
of automobiles can be divided into: Level 0 (Emergency Assistance); Level 1 (Partial Driver
Assistance); Level 2 (Combined Driver Assistance); Level 3 (Conditionally Automated
Driving); Level 4 (Highly Automated Driving); Level 5 (Fully Automated Driving).
According to the Notice on Carrying out the Pilot Program of Market Access and Road
Passage for Intelligent Connected V ehicles (ɝձɪ༩ஷБ༊ᓃʈ
) jointly promulgated and implemented by the MIIT, the Ministry of Public
Security, the Ministry of Housing and Urban-Rural Development and the Ministry of Transport
on November 17, 2023, intelligent connected vehicle products equipped with autonomous
driving functions and mass production conditions are selected for access pilot, and to carry out
road access pilots in restricted areas for intelligent connected vehicles that have gained access.
V ehicles used for transport operations must comply with the operational qualification and
management requirements set by the competent transportation authorities. The autonomous
driving functions of intelligent connected vehicles mentioned in this notice refer to the
functions of Level 3 Driving Automation (Conditionally Automated Driving) and Level 4
Driving Automation (Highly Automated Driving) as defined under the national standard
Taxonomy of Driving Automation for V ehicles (GB/T 40429-2021).
REGULATIONS ON CORPORATION
On December 29, 1993, the SCNPC issued the PRC Company Law ( ʕശɛ͏΍ձ਷ʮ
) (the “PRC Company Law”), which was amended by the SCNPC on December 29, 2023
and came into force on July 1, 2024. All companies established in the PRC are subject to the
PRC Company Law. The PRC Company Law regulates the establishment, operation, corporate
structure, and management of corporate entities in China and classifies companies into limited
liability companies and limited companies by shares. Such regulations are also applicable to
foreign-invested enterprises established in China.
REGULATIONS ON FOREIGN INVESTMENT IN CHINA
Administration on Foreign Investment
On March 15, 2019, the NPC promulgated the Foreign Investment Law of the PRC ( ʕ
), which came into effect on January 1, 2020 and replaced the
Equity Joint V enture Law of the PRC (), the
Cooperative Joint V enture Law of the PRC (), and
the Wholly Foreign-Owned Enterprise Law of the PRC (),
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together with their implementation rules and ancillary regulations. Pursuant to the Foreign
Investment Law of the PRC, “foreign investment” refers to investment activities directly or
indirectly conducted by one or more natural persons, business entities, or otherwise
organizations of a foreign country within China, or foreign investors, and the investment
activities include the following situations: (i) a foreign investor, individually or collectively
with other investors, establishes a foreign-invested enterprise in China; (ii) a foreign investor
acquires stock shares, equity shares, shares in assets, or other similar rights and interests of an
enterprise within China; (iii) a foreign investor, individually or collectively with other
investors, invests in a new project in China; and (iv) investments in other means as provided
by laws, administrative regulations, or the State Council.
In addition, the Foreign Investment Law of the PRC also provides several protective rules
and principles for foreign investors and their investments in China, including, among others,
that local governments must abide by their commitments to foreign investors; foreign-invested
enterprises are allowed to issue stocks and corporate bonds; expropriation or requisition of the
investment of foreign investors is prohibited except for special circumstances, in which case
statutory procedures must be followed and fair and reasonable compensation must be made in
a timely manner; mandatory technology transfer is prohibited; and the capital contributions,
profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property
rights, indemnity or compensation legally obtained, or proceeds received upon settlement by
foreign investors in China may be freely remitted inward and outward in Renminbi or foreign
currencies. Also, foreign investors or foreign-invested enterprises should be imposed legal
liabilities for failing to report investment information in accordance with the requirements.
On December 26, 2019, the State Council approved the Implementation Rules of Foreign
Investment Law of the PRC (ૢԷ), which came into
effect on January 1, 2020. The Implementation Rules of Foreign Investment Law of the PRC
restates certain principles of the Foreign Investment Law of the PRC and provides further
provisions regarding the organizational forms, transfer of equity interests, distribution of
profits and the distribution of remaining assets of foreign-invested enterprises.
Access to Foreign Investment
Pursuant to the Foreign Investment Law of the PRC, the State Council will publish or
approve to publish a catalog for special administrative measures, or a “negative list”. The
Foreign Investment Law of the PRC grants national treatment to foreign-invested enterprises,
except for those foreign-invested enterprises that operate in industries deemed to be either
“restricted” or “prohibited” in the “negative list.”. The Foreign Investment Law of China
provides that foreign-invested enterprises operating in restricted or prohibited industries shall
require market entry clearance and other approvals from relevant PRC governmental
authorities.
Investment activities in China by foreign investors are principally governed by the
Special Administrative Measures for the Access of Foreign Investment (Negative List) ( ̮
݄(૶ఊ)) and the Catalog of Industries for Encouraging Foreign
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Investment ( ོᎸ̮ਠҳ༟ପุͦ፽) promulgated and amended from time to time by the
MOFCOM and the NDRC. The Negative List and the Encouraging Catalog classify industries
of foreign investment into three categories of “encouraged”, “restricted” and “prohibited”.
The currently effective negative list is the Special Administrative Measures for the Access
of Foreign Investment (Negative List) (2024 Edition) (݄(૶
ఊ) (2024و)), which was published by the MOFCOM and NDRC on September 6, 2024
and became effective on November 1, 2024. In addition, on October 26, 2022, the MOFCOM
and the NDRC also jointly promulgated the Catalog of Industries for Encouraging Foreign
Investment (2022 Edition) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)), which became effective
on January 1, 2023. According to the above list and catalog, investment in new energy vehicle
manufacturing does not belong to the restricted and prohibited industries of foreign investment.
REGULATIONS ON V ALUE-ADDED TELECOMMUNICATIONS SERVICES
Classification and Supervision of Value-added Telecommunications Services
According to the Telecommunications Regulations of the PRC (ૢ
Է) promulgated by the State Council on September 25, 2000, last amended and implemented
on February 6, 2016, and its attachment, the Classified Catalog of Telecommunications
Services (ุਕʱᗳͦ፽), the State implements a system of permits for the operation
of telecommunications business that are classified according to the type of telecommunications
business. Telecommunications businesses are categorized into basic telecommunications
services and value-added telecommunications services. Basic telecommunications services
refer to the provision of public network infrastructure, public data transmission, and basic
voice communication services. V alue-added telecommunications services refer to
telecommunications and information services provided through public network infrastructure.
Operators of basic telecommunications services shall obtain the Operation Permit for Basic
Telecommunications Services issued by the competent authority and the operators of
value-added telecommunications services shall obtain the Operation Permit for V alue-added
Telecommunications Services issued by the competent authority. Operators without required
business licenses will be subject to penalties including rectification orders, warnings, fines, and
confiscation of illegal gains. In serious cases, violators may face suspension of business
operations.
According to the Classified Catalog of Telecommunications Services (2015 Edition)
(ุਕʱᗳͦ፽(2015و)) promulgated by the MIIT on December 28, 2015 and last
amended on June 6, 2019, value-added telecommunications services are divided into two
categories. Category I value-added telecommunications services include internet data center
services, content delivery network services, domestic internet protocol virtual private network
services and internet access services. Category II value-added telecommunications services
include online data processing and transaction processing services, domestic multiparty
communication services, store and forward services, call center services, information services
and code and regulation conversion services.
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Foreign-invested Telecommunications Services
According to the Regulations on the Administration of Foreign-invested
Telecommunications Enterprises () promulgated by the State
Council in December 2001, last amended on March 29, 2022 and became effective on May 1,
2022, the ultimate proportion of contribution by the foreign investors of a foreign-invested
telecommunications enterprise engaged in value-added telecommunications services (including
the radio paging business in the basic telecommunications services) shall not be more than
50%, unless otherwise stipulated by the state.
According to the Special Administrative Measures for the Access of Foreign Investment
(Negative List) (2024 Edition), in the telecommunications services committed to being open
under China’s WTO accession, the proportion of foreign shares in value-added
telecommunications services shall not exceed 50% (except for e-commerce, domestic
multiparty communication services, store and forward services, and call center services), with
telecommunications services to be opened up to foreign capital is limited.
Internet Information Services
Internet information services are part of the value-added telecommunications services.
Pursuant to the Administrative Measures on Internet Information Services (ਕ
) promulgated by the State Council in 2000 and amended in 2011 and 2024,
“internet information services” refer to the provision of information through the internet to
online users, and are divided into “commercial internet information services” and “non-
commercial internet information services.” A commercial internet information service operator
must obtain an ICP license before engaging in any commercial internet information services in
China, while the ICP license is not required if the operator will only provide internet
information on a non-commercial basis, but an ICP filing is required.
The Administrative Provisions on Information Services of Mobile Internet Applications
(), which was promulgated by the State Internet
Information Office in June 2016, amended and took effect in August 2022, further stipulates
that information services providers of mobile internet applications are subject to these
provisions, including acquiring relevant qualifications and being responsible for the
management of information security.
REGULATIONS ON INTERNET INFORMATION SECURITY AND PRIV ACY
PROTECTION
Cyber Security
In November 2016, the SCNPC promulgated the Cybersecurity Law of the PRC ( ʕശ
), or the Cybersecurity Law, which became effective on June 1, 2017.
The Cybersecurity Law requires that network operators, including network services providers,
take technical measures and other necessary measures in accordance with applicable laws and
regulations and the compulsory requirements of the national and industrial standards to
safeguard the safe and stable operation of its networks. We are subject to such requirements as
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we are operating a website and mobile application and providing certain internet services
mainly through our mobile application. The Cybersecurity Law further requires network
services providers to formulate contingency plans for network security incidents, take
corresponding remedial measures upon the occurrence of any incident endangering
cybersecurity, and report to the competent departments. Network service providers are also
required to maintain the integrity, confidentiality and availability of network data. The
Cybersecurity Law reaffirms the basic principles and requirements specified in other existing
laws and regulations on personal information protection, such as the requirements on the
collection, use, processing, storage, and disclosure of personal information, and network
services providers being required to take technical and other necessary measures to ensure the
security of the personal information they have collected and prevent the personal information
from being divulged, damaged, or lost. Any violation of the Cybersecurity Law may subject a
network services provider to warnings, fines, confiscation of illegal gains, revocation of
licenses, cancellation of filings, shutdown of websites, or criminal liabilities.
According to the Decision on the Maintenance of Internet Security (ၪᚐʝᑌၣτ
) enacted by the SCNPC on December 28, 2000 and amended in August 2009, any
illegal activities conducted via the internet, such as intentionally inventing and spreading
destructive programs such as computer viruses to attack computer systems and
communications networks; intentionally inventing and spreading destructive programs such as
computer viruses to attack computer systems and communications networks; establishing on
the internet pornographic web sites or web pages, providing services for connecting
pornographic web sites, or spreading pornographic books and periodicals, movies, audiovisuals
or pictures; using the internet to insult others or fabricate facts to defame others, will be subject
to criminal liability under the relevant provisions of the Criminal Law if they constitute a
crime, and if such activities violate public security administration regulations but do not
constitute a crime, penalties shall be imposed pursuant to the Public Security Administration
Punishments Law ().
The Provisions on Technical Measures for the Protection of Internet Security ( ʝᑌၣ
) promulgated by the Ministry of Public Security on December 13,
2005 and came into effect on March 1, 2006 requires internet service providers and
organizations that use interconnection services to implement technical measures for the
protection of internet security from any threat to network security, such as computer viruses
and network attacks and breaches. All internet access service providers are required to take
measures to keep a record of and preserve user registration information. Where illegal
information is identified in public information services, transmission shall be immediately
suspended and relevant records preserved. The implementation of these measures by internet
service providers and organizations that use interconnection services shall be subject to
supervision and inspection by the public security authorities in their respective jurisdictions.
Upon discovering violations of the aforementioned provisions, public security authorities may,
depending on the circumstances, take corrective measures including rectification within a
prescribed period of time, warnings, confiscation of illegal gains, fines, suspension of network
connection, shutdowns for rectification, etc., and, if necessary, may recommend the original
licensing or approval agencies to revoke business licenses or cancel network access
qualifications.
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Personal Information Protection
Pursuant to the Decision on Strengthening the Protection of Online Information (׵
) issued by the SCNPC on December 28, 2012 and the Provisions
on the Protection of Personal Information of Telecommunication and Internet Users (ձ
) issued by the MIIT on July 16, 2013 and November 7, 2016,
respectively, and the Cybersecurity Law, any collection and use of a user’s personal
information must be consensual, legal, reasonable, and necessary, and must be limited to
specified purposes, methods, and scopes. An internet information service provider must also
keep such information strictly confidential, and is further prohibited from divulging, tampering
with, or destroying any such information, or selling or providing such information to other
parties. An internet information service provider is required to take technical and other
measures to prevent the collected personal information from any unauthorized disclosure,
damage, or loss. In case of any actual or potential leakage of user personal information, internet
information service providers must take immediate remedial measures and make timely reports
to the relevant regulatory authorities and inform users in accordance with the regulations. Any
violation of these laws and regulations may subject the internet information service provider
to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings,
shutdown of websites, or even criminal liabilities.
Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s
Procuratorate, and the Ministry of Public Security on Lawfully Punishing Criminal Activities
Infringing upon the Personal Information of Citizens (৫e௰৷ɛ͏Ꮸ࿀৫eʮ
) issued on April 23, 2013 and the
Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on
Several Issues Regarding Legal Application in Criminal Cases Infringing upon the Personal
Information of Citizens (Αԫ
༆ᙑ) issued on May 8, 2017 and effective on June 1, 2017, the
following activities may constitute the crime of infringing upon a citizen’s personal
information: (i) providing a citizen’s personal information to specified persons or releasing a
citizen’s personal information online or through other methods; (ii) providing legitimately
collected information relating to a citizen to others without such citizen’s consent (unless the
information is processed, not traceable to a specific person, and not recoverable); (iii)
collecting a citizen’s personal information by purchasing, accepting, or exchanging such
information or collecting a citizen’s personal information in the course of performing duties or
providing services in violation of applicable regulations; or (iv) obtaining, selling, or providing
a citizen’s personal information in an illegal manner.
Pursuant to the Announcement on Conducting Special Supervision Against the Illegal
Collection and Use of Personal Information by Apps (࢝Appɛ
ʮѓ) issued and implemented on January 23, 2019, app operators should
collect and use personal information in compliance with the Cybersecurity Law and should be
responsible for the security of personal information obtained from users and take effective
measures to strengthen the protection of personal information. Furthermore, app operators must
not force their users to make authorization by means of bundling, suspending installation, or
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in other default forms and should not collect personal information in violation of laws or
regulations, or breach of user agreements. Such regulatory requirements were emphasized by
the Notice on the Special Rectification of Apps Infringing upon Users’ Personal Rights and
Interests (࢝App) issued by the MIIT on
October 31, 2019. On November 28, 2019, the Cyberspace Administration of China, the MIIT,
the Ministry of Public Security, and the SAMR jointly issued the Methods of Identifying Illegal
Collection and Use of Personal Information by Apps ( Appމ
). This regulation further illustrates certain commonly seen illegal practices of app
operators in terms of the protection of personal information, including: “failure to publicize
rules for collecting and using personal information,” “failure to expressly state the purpose,
manner, and scope of collecting and using personal information,” “collection and use of
personal information without consent of users,” “collecting personal information irrelevant to
the services provided by the app in violation of the principle of necessity,” “provision of
personal information to others without users’ consent,” “failure to provide the function of
deleting or correcting personal information as required by laws,” and “failure to publish
information such as methods for complaints and reporting.”
The Personal Information Protection Law of the PRC (ᚐ
) promulgated by the SCNPC on August 20, 2021 and effective on November 1, 2021
integrates the scattered rules with respect to personal information rights and privacy protection.
The law aims to protect personal information rights and interests, regulate the processing of
personal information, ensure the orderly and free flow of personal information in accordance
with the law, and promote the reasonable use of personal information. Personal information, as
defined in the law, refers to information related to identified or identifiable natural persons and
recorded by electronic or other means, but excluding the anonymized information. The law
provides the circumstances under which a personal information processor 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 specific rules with
respect to the obligations of a personal information processor, such as to inform the purpose
and method of processing to the individuals.
Pursuant to the Measures for Cybersecurity Review () jointly
promulgated by the Cyberspace Administration of China and other authorities on December 28,
2021 and became effective on February 15, 2022, critical information infrastructure operators
that purchase network products and services and network platform operators engaging in data
processing activities that affect or may affect national security must be subject to the
cybersecurity review. The measures further elaborate the factors to be considered when
assessing the national security risks of the relevant activities, including, among others: the risk
of core data, important data, or a large amount of personal information being stolen, leaked,
destroyed, and illegally used or exited the country, the risk of critical information
infrastructure, core data, important data, or a large amount of personal information being
affected, controlled, or maliciously used by foreign governments after listing abroad and
network information security risk, etc.
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Data Security
According to the Data Security Law of the PRC ()
promulgated on June 10, 2021 and took effect on September 1, 2021, a data classification and
hierarchical protection system is introduced based on the importance of data in economic and
social development, as well as the degree of harm it will cause to national security, public
interests, or legitimate rights and interests of individuals or entities when such data is tampered
with, destroyed, divulged, or illegally acquired or used. The law also provides for a national
security review system for the data processing activities which affect or may affect national
security.
On August 16, 2021, the Cyberspace Administration of China, the NDRC, the MIIT, the
Ministry of Public Security and the Ministry of Transport jointly issued the Several Provisions
on Automobile Data Security Management (for Trial Implementation) (ʍ
֛(༊Б)), which further elaborates the principles and requirements for the protection of
personal information and important data in the automobile industry, and defines organizations
engaged in automobile data processing activities, including automobile manufacturers, parts
and software suppliers, dealers, maintenance service providers, and mobility service
enterprises as automobile data processors. Automobile data processors are required to comply
with the requirements of relevant laws and regulations when processing automobile data during
the process of design, production, sales, use, operation and maintenance of an automobile. The
regulation has come into effect on October 1, 2021.
The Regulations on the Administration of Cyber Data Security ( ၣഖᅰኽτΌ၍ଣૢ
Է) (the “Cyber Data Regulations”) promulgated on September 24, 2024 and effective on
January 1, 2025 mainly focus on the protection of personal information, ensuring the security
of important data, establishing an efficient, convenient and safe cross-border data flow
mechanism, and regulating network platform service providers. In terms of the protection of
personal information, the Cyber Data Regulations have refined the provisions of the Personal
Information Protection Law on notification, consent, and the exercise of rights by individuals.
In terms of ensuring the security of important data, the Cyber Data Regulations clarify the
requirements for the development of important data catalogs and the obligations of network
data processors to identify and report important data, stipulate the responsibilities of cyber data
security leaders and cyber data security management agencies, and provide provisions for the
risk assessment scenarios and assessment contents of important data. In terms of establishing
an efficient, convenient and safe cross-border data flow mechanism, the Cyber Data
Regulations further optimize the cross-border data flow mechanism on the basis of the
experience in formulating and implementing departmental rules such as the Measures on
Security Assessments for the Outbound Transfer of Data (), the
Measures on the Standard Contract for the Outbound Transfer of Personal Information (ࡈ
) and the Provisions on Facilitating and Regulating Cross-border
Data Flow ().
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The Measures for Data Security Administration in the Industry and Information
Technology Field (Trial Implementation) (ج(༊Б))
promulgated on December 8, 2022 and implemented on January 1, 2023 is a top-level system
for data security administration in the industry and information technology field, which mainly
includes the following seven aspects: First, define the concept of data and data processors in
the industry and information technology field, and clarify the scope and responsibilities of
supervision; Second, establish requirements for data classification management, important data
identification and filing; Third, put forward corresponding security management and protection
requirements for different levels of data covering the collection, storage, processing,
transmission, provision, disclosure, destruction, exit, transfer and entrusted processing of data;
Fourth, establish operational mechanisms for data security monitoring and early warning, risk
information reporting and sharing, emergency response, and complaints handling; Fifth,
outline the relevant requirements for data security monitoring, certification and evaluation;
Sixth, stipulate the requirements for supervision and inspection; Seventh, clarify the legal
responsibility and punishment measures for violation of relevant laws and regulations.
REGULATIONS ON E-COMMERCE
On August 31, 2018, the SCNPC promulgated the E-Commerce Law of the PRC ( ʕശ
) (the “E-Commerce Law”), which became effective on January 1,
2019. Pursuant to the E-Commerce Law, e-commerce platform operators are required to
prepare a contingency plan for cybersecurity incidents and take technical and other necessary
measures to prevent online illegal and criminal activities. The E-Commerce Law also expressly
requires e-commerce platform operators to take necessary actions to ensure fair dealing on
their platforms to safeguard the legitimate rights and interests of consumers, including to
prepare platform service agreements, transaction information record-keeping, and transaction
rules, to prominently display such documents on the platform’s website, and to keep such
information for no less than three years following the completion of a transaction. Where the
e-commerce platform operators conduct self-operated business on their platforms, they need to
distinguish and mark their self-operated business from the businesses of the business operators
using the platform in a clear manner and should not mislead consumers. The e-commerce
platform operators should bear the civil liability of a commodity seller or service provider for
the business marked as self-operated pursuant to the law.
REGULATIONS ON LAND AND THE DEVELOPMENT OF CONSTRUCTION
PROJECTS
Project Filling
Pursuant to the Measures for the Administration of Approval and Filing of Enterprise
Investment Projects () promulgated by the NDRC on
March 8, 2017 and effective on April 8, 2017, enterprise investment projects (refer to fixed
assets investment projects invested and constructed by enterprises within the territory of
China) related to national security, layout of major production capacity across the country,
strategic resources development and major public interests, etc. are subject to approval
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management. Other projects are subject to filing management. Unless otherwise stipulated by
the State Council, projects subject to filing management shall be filed according to the
principle of territorial jurisdiction. Provincial governments shall be responsible for formulating
measures for the administration of project filing within their respective administrative regions,
specifying the filing authorities and their respective jurisdictions.
Land Grants
Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the
State-Owned Urban Land of the PRC (ᕄ਷ϞɺήԴ͜ᛆ̈ᜫձᔷᜫᅲБ
ૢԷ), which was promulgated by the State Council on May 19, 1990 and amended on
November 29, 2020, China adopts a system of assignment and transfer of the right to use
state-owned land. A land user must pay land premiums to the state as consideration for the
assignment of the right to use a land site within a certain term, and the land user who obtained
the right to use the land may transfer, lease out, mortgage, or otherwise commercially exploit
the land within the term of use. Under the regulations and the Urban Real Estate Administration
Law of the PRC (), the local land administration
authority may enter into an assignment contract with the land user for the assignment of land
use rights. The land user is required to pay the land premium as provided in the assignment
contract. After the full payment of the land premium, the land user must register with the land
administration authority and obtain a land use rights certificate that evidences the acquisition
of land use rights.
Project Construction
Pursuant to the Urban and Rural Planning Law of the PRC (ඊ஝ྌ
) promulgated by the SCNPC on October 28, 2007 and amended on April 24, 2015 and
April 23, 2019, a construction work planning permit must be obtained from the competent
urban and rural planning government authority for the construction of any structure, fixture,
road, pipeline and other engineering projects within an urban or rural planning area.
After obtaining a construction work planning permit, subject to certain exceptions, a
construction enterprise must apply for a construction permit from the construction authority
under the local people’s government at the county level or above pursuant to the Administrative
Provisions on Construction Permit of Construction Projects ()
promulgated by the Ministry of Housing and Urban-Rural Development on June 25, 2014,
implemented on October 25, 2014, and amended on September 28, 2018 and March 30, 2021.
Pursuant to the Administrative Measures for Reporting Details Regarding Acceptance
Examination upon Completion of Buildings and Municipal Infrastructure (݁
) promulgated by the Ministry of Construction (the
predecessor of the Ministry of Housing and Urban-Rural Development) on April 4, 2000 and
amended on October 19, 2009, and the Provisions on Acceptance Examination upon
Completion of Buildings and Municipal Infrastructure (ʈ೻ംʈ
) promulgated and implemented by the Ministry of Housing and Urban-Rural
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Development on December 2, 2013, upon the completion of a construction project, the
construction enterprise must apply to the competent government department at the county level
or above where the project is located for examination upon completion of the building and for
filing purpose, and to obtain the filing form for acceptance and examination upon completion
of the construction project.
Leased Property
According to the Administrative Measures on Leasing of Commodity Housing (גۜ
), which was promulgated by the Ministry of Housing and Urban-Rural
Development on December 1, 2010 and became effective on February 1, 2011, the lessor and
the lessee are required to complete property leasing registration and filing formalities with the
competent construction (real estate) authority of the municipality, city or county people’s
government where the leased property is located within 30 days from execution of the property
lease contract. A party to the lease agreement who fails to complete the relevant leasing
registration procedure will be subject to a fine ranging from RMB1,000 to RMB10,000.
Furthermore, Regulation on Housing Leasing (ॡ༣ૢԷ), which was
promulgated by the State Council and came into effect on September 15, 2025, stipulates that
the lessors shall file the housing lease contract with the real estate administration department
at the location of the leased housing through the housing leasing management service platform
or other means.
REGULATIONS ON ENVIRONMENTAL PROTECTION
Environmental Protection
Pursuant to the Environmental Protection Law of the PRC (ᚐ
) (the “Environmental Protection Law”) promulgated by the SCNPC on December 26,
1989, amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges
or will discharge pollutants during the course of operations or other activities must implement
effective environmental protection measures and procedures to control and properly handle
waste gas, wastewater, waste residue, dust, malodorous gases, radioactive substances, noise,
vibrations, electromagnetic radiation, and other hazards produced during such activities.
Environmental protection authorities impose various administrative penalties on persons or
enterprises in violation of the Environmental Protection Law. Such penalties include warnings,
fines, orders to rectify within a prescribed period, orders to cease construction, orders to
restrict or suspend production, orders to make a recovery, orders to disclose relevant
information or make an announcement, imposition of administrative action against relevant
responsible persons, and orders to shut down enterprises.
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Environmental Impact Assessment
Pursuant to the Environmental Impact Assessment Law of the PRC ( ʕശɛ͏΍ձ਷ᐑ
) issued by the SCNPC on October 28, 2002, effective on September 1, 2003
and most recently amended on December 29, 2018, the State implements classification
management of the environmental of construction projects according to the degree of impact
of the construction projects on the environment. Constructing entities shall prepare an
environmental impact report, and an environmental impact report form, or should fill in an
environmental impact registration form for declaration and filling. Construction entities whose
environmental impact assessment documents for a construction project have not been examined
by the approval authority in accordance with the law or have not been approved after
examination shall not commence construction.
In accordance with the Regulations on the Administration of Environmental Protection of
Construction Projects (ᚐ၍ଣૢԷ) promulgated by the State Council on
November 29, 1998, last amended on July 16, 2017 and effective from October 1, 2017, the
PRC practices a system that evaluates the environmental impact of a construction project. A
construction entity shall submit an environmental impact report or environmental impact
statement before the commencement of the construction project for approval or submit the
environmental impact registration form in accordance with the requirement of the competent
administrative department of environmental protection under the State Council for the record.
Besides, after the completion of a construction project for which an environmental impact
report or an environmental impact statement has been prepared, the construction entity shall,
in accordance with the standards and procedures prescribed by the competent administrative
department of environmental protection under the State Council, conduct acceptance checks on
the supporting environmental protection facilities and prepare an acceptance report. For
construction projects which are constructed in phases, put into production or use in phases, its
corresponding environmental protection facilities shall be inspected and accepted in phases.
Pollutant Discharge Permits
Pursuant to the Classified Management Catalog of Pollutant Discharge Permits for
Stationary Sources of Pollution (2019 Edition) (๕રϮ஢̙ʱᗳ၍ଣΤ፽(2019 ϋ
و)), which was promulgated by the Ministry of Ecology and Environment on December 20,
2019, the state implements classified management over pollutant discharge entities, which are
divided into key management, simplified management and registration management according
to the volume of pollutants produced, the volume of emissions and the degree of environmental
impact. A pollutant discharge entity subject to registration management is not required to apply
for a pollutant discharge permit, but only need to fill in its basic information and pollution
prevention and control measures adopted on the management information platform of state
pollutant discharge permits.
The Regulations on the Administration of Pollutant Discharge Permits ( રϮ஢̙၍ଣ
ૢԷ) promulgated by the State Council on January 24, 2021 further strengthen the
regulatory framework by requiring pollutant discharge entities to be subject to either key
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management or simplified management based on their emission scale and degree of
environmental hazard. The regulations stipulate that the application, review and information
disclosure for pollutant discharge permits shall be completed through a unified national
information platform to ensure a transparent and efficient process. In addition, the pollutant
discharge permit is valid for five years, and pollutant discharge entities shall submit a renewal
application to the examination and approval authority 60 days before the expiration of the
validity period to maintain their legal pollutant discharge qualification.
REGULATIONS ON WORK SAFETY
According to the Work Safety Law of the PRC (), which
was promulgated by the SCNPC on June 29, 2002, amended on August 27, 2009, August 31,
2014 and June 10, 2021 and effective on September 1, 2021, production and operating business
entities must establish objectives and measures for work safety and improve the working
environment and conditions for workers in a planned and systematic way. A work safety
protection scheme must also be set up to implement the work safety job responsibility system.
In addition, production and operating business entities must arrange work safety training and
provide their employees with protective equipment that meets the national or industrial
standards.
The Special Equipment Safety Law of the PRC (),
which was promulgated by the SCNPC on June 29, 2013 and came into force on January 1,
2014, aims to strengthen the safety management of special equipment, prevent special
equipment accidents, protect personal and property safety, and promote economic and social
development. Special equipment refers to boilers, pressure vessels (including gas cylinders),
pressure pipelines, elevators, cranes, passenger cable-ways, large entertainment facilities and
in-plant (in-factory) special motor vehicles that involve great danger to personal and property
safety. The Law stipulates the production (including design, manufacture, installation,
transformation and repair), operation, use, inspection and testing of special equipment and the
supervision and management measures for the safety of special equipment.
REGULATIONS ON ENERGY CONSERV ATION REVIEW
According to the Energy Conservation Law of the PRC ()
promulgated by the SCNPC on October 26, 2018 and came into effect on the same day, the
State shall implement an energy conservation assessment and review system for fixed asset
investment projects. For projects which do not meet the compulsory energy conservation
standards, the construction entity shall not commence construction; where the construction is
completed, the project shall not be put into production or use.
According to the Measures for the Energy Conservation Review of Fixed Asset
Investment Projects () promulgated by the NDRC on
March 28, 2023 and came into effect on June 1, 2023, for an enterprise-invested project, the
construction entity shall obtain the review opinions on energy conservation issued by the
energy conservation review authority prior to the commencement of construction. For a project
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which has not undergone the energy conservation review or fails to pass the energy
conservation review in accordance with these measures, the construction entity shall not
commence construction, or the project shall not be put into production or use if it is already
completed.
REGULATIONS ON FIRE SAFETY
Pursuant to the Fire Safety Law of the PRC (), which was
promulgated by the SCNPC on April 29, 1998, amended on October 28, 2008, April 23, 2019
and April 29, 2021, and the Interim Provisions on Administration of Fire Control Design
Review and Acceptance of Construction Projects (᜕ϗ၍ଣᅲБ஝
) promulgated by the Ministry of Housing and Urban-Rural Development on April 1, 2020,
amended on August 21, 2023 and became effective on October 30, 2023, the construction entity
of a large-scale crowded venue (including a production and processing plant with a total floor
area of over 2,500 square meters) and other special construction projects must apply for fire
control design review with competent fire control authorities, and complete the inspection and
acceptance procedures for fire control design review after the construction project is
completed. The construction entity of other construction projects must complete the filing with
the competent authorities responsible for the inspection and acceptance for fire control design
review within five business days after passing the construction completion inspection and
acceptance. If the construction entity fails to pass the fire safety inspection before such
construction project is put into use or fails to conform to the fire safety requirements after such
inspection, it will be subject to orders to suspend the construction of projects, use of such
projects, or operation of relevant business, and a fine.
REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Patent Law
According to the Patent Law of the PRC () which took effect
on June 1, 2021, and the Implementation Rules of Patent Law of the PRC ( ʕശɛ͏΍ձ਷
) which came into effect on January 20, 2024, the patent administration
department under the State Council is responsible for patent administration nationwide. The
patent administration departments of the people’s governments of provinces, autonomous
regions, and municipalities directly under the Central Government are responsible for patent
administration within their respective jurisdictions. The PRC patent system adopts a first-to-
file principle, which means that when more than two persons file different patent applications
for the same invention, only the person who files the application first is entitled to obtain a
patent for the invention. A patent is valid for twenty years in the case of an invention, ten years
in the case of utility models and fifteen years in case of designs, all calculated from the date
of filing the application.
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Copyright
The Copyright Law of the PRC () (the “Copyright Law”),
which was promulgated on September 7, 1990 and amended in 2001, 2010 and 2020, provides
that Chinese citizens, legal persons, or other organizations own copyright for their works
(whether published or not), which include, among others, works of literature, art, natural
science, social science, engineering technology, and computer software. Copyrights include
personal rights such as the right of publication and right of authorship, as well as property
rights such as the right of reproduction and the right of distribution. Copyright protection has
been extended to Internet activities, products distributed over the Internet, and software
products. Unless otherwise provided in the Copyright Law, reproducing, distributing,
performing, projecting, broadcasting or compiling a work or communicating the same to the
public via an information network without permission from the owner of the copyright therein,
will constitute infringement of copyrights. An infringer of copyrights is subject to various civil
liabilities, which include ceasing infringement activities, eliminating the impact of
infringement, apologizing to the copyright owners, and compensating the loss of the copyright
owners. In addition, according to the Copyright Law, authors and other copyright owners may
complete the registration of their works with a registration agency recognised by the State
copyright authority.
According to the Regulations on the Protection of Computer Software (ڭ
ᚐૢԷ) promulgated by the State Council on June 4, 1991, and most recently amended on
January 30, 2013 and taken into effect on March 1, 2013, computer software must be developed
independently by the developer and must be already in a material form. Chinese citizens, legal
persons, or other organizations own copyright for the software developed by them (whether
published or not) under the regulations. Copyright owners of software may complete the
registration with a software registration agency recognised by the copyright authority of the
State Council. The registration certificates issued by the software registration agency serve as
the preliminary proof of the registered matters.
According to the Measures for Registration of Computer Software Copyright (ၑዚ
) (partially amended in 2004) issued and implemented by the National
Copyright Administration on February 20, 2002, the applicant for the registration of software
copyright shall be the copyright owner of the said software and the natural person, legal person
or other organisation that inherits, acquires or receives the software copyright. The National
Copyright Administration is in charge of the management of software copyright registration
nationwide, and the National Copyright Administration recognizes the Copyright Protection
Center of China as a software registration institution.
Trademark Rights
According to the Trademark Law of the PRC () promulgated
by the SCNPC on August 23, 1982, last amended on April 23, 2019 and effective from
November 1, 2019, and the Implementation Regulations of the Trademark Law of the PRC
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(ૢԷ) promulgated by the State Council on August 3, 2002,
last amended on April 29, 2014 and effective on May 1, 2014, in China, registered trademarks
include commodity trademarks, service trademarks, collective marks and certification marks.
The Trademark Office of China National Intellectual Property Administration is
responsible for trademark registrations and management in China. The registered trademark is
valid for a term of 10 years. Trademarks are renewable every ten years where a registered
trademark needs to be used after the expiration of its validity term. A registration renewal
application must be filed within twelve months prior to the expiration of the term. A trademark
registrant may license its registered trademark to another party by entering into a trademark
license contract. Trademark license agreements must be filed with the Trademark Office to be
recorded. The licensor must supervise the quality of the commodities on which the trademark
is used, and the licensee must guarantee the quality of such commodities. China has adopted
a “first come, first file” principle with respect to trademark registration. Where the trademark
for which a registration application has been made is identical with or similar to another
trademark which has already been registered or been subject to a preliminary examination and
approval for use on the same kind of or similar commodities or services, the application for
registration of such trademark may be rejected. Any person applying for the registration of a
trademark may not prejudice the existing right first obtained by others, nor may 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 that is
identical with or similar to a registered trademark with respect to the same kind of or similar
commodities without the authorization of the trademark registrant constitutes an infringement
of the exclusive right to use a registered trademark. The infringer shall, in accordance with the
regulations, undertake to cease the infringement, take remedial action, and pay damages, etc.
Domain Names
According to the Administration Measures for Internet Domain Names ( ʝᑌၣਹΤ၍
) promulgated by the MIIT on August 24, 2017 and effective on November 1, 2017,
the MIIT is in charge of the administration of Internet domain names in China. The registration
of domain names follows a “first come, first file” principle, unless otherwise stipulated by the
corresponding implementation rules for domain name registration. The registration of domain
names is handled through domain name service agencies established under the relevant
regulations, and the applicants become domain name holders upon successful registration.
REGULATIONS ON FOREIGN EXCHANGE CONTROL
Pursuant to the Regulations on the Management of Foreign Exchange of the PRC ( ʕ
ശɛ͏΍ձ਷̮ි၍ଣૢԷ) promulgated by the State Council on January 29, 1996 and
most recently amended and effective on August 5, 2008, China’s foreign exchange transactions
can be categorized into current account items (such as trade-related receipts and payments, and
payment of interest and dividends) and capital account items (such as direct equity
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investments, loans, and repatriation of investment). Funds under either current or capital
account items may only be remitted in or out through foreign exchange transactions (such as
settlement or purchase) after obtaining necessary approvals and passing reasonable reviews.
According to the Notice of the SAFE on Further Improving and Adjusting Policies for the
Foreign Exchange Administration of Direct Investment (ආɓӉҷආձ
promulgated on November 19, 2012, came into effect on
December 17, 2012 and further amended on May 4, 2015, in order to deepen the reform of the
foreign exchange administration system, simplify the administrative approval procedures and
promote investment and trade facilitation, the SAFE decided to improve foreign exchange
administration for direct investment by repealing or adjusting certain administrative approval
items for foreign exchange administration in direct investment, including but not limited to
cancellation of approval for the opening of a foreign exchange account or the entry of any
amount in the foreign exchange account under direct investment.
On February 13, 2015, the SAFE issued the Notice of the SAFE on Further Simplifying
and Improving the Policies for Foreign Exchange Administration of Direct Investment ( ਷
) (partially abolished in
December 2019), which came into effect on June 1, 2015. Pursuant to the notice, the SAFE
cancels the administrative approvals of foreign exchange registration under domestic direct
investment and foreign exchange registration under overseas direct investment, simplifies
certain procedures for handling foreign exchange transactions under direct investment, and
banks will directly review and handle foreign exchange registration under domestic direct
investment and foreign exchange registration under overseas direct investment.
On May 11, 2013, the SAFE issued the Provisions on the Foreign Exchange
Administration of Domestic Direct Investment by Foreign Investors (ટҳ
), which became effective on May 13, 2013, amended on October 10, 2018
and partially abolished on December 30, 2019. According to the regulations, the SAFE and its
local branches shall manage the direct investment by foreign investors in China by way of
registration, and banks shall handle the foreign exchange business under direct investment in
the PRC based on the registration information provided by the SAFE or its branches.
On December 26, 2014, the SAFE promulgated and implemented the Notice on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (ྤ̮ɪ̹̮ි၍
). According to the notice, a domestic company shall, within 15 business
days after the completion of its overseas listing and issuance, go through the registration of
overseas listing with the Administration of Foreign Exchange at the place of its registration.
After the overseas listing of a domestic company, a domestic shareholder intending to increase
or reduce his holding of shares of the overseas listed company in accordance with relevant
provisions shall register his overseas shareholding with the local Administration of Foreign
Exchange at the place where he resides within 20 working days before the increase and
reduction of shares.
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On March 30, 2015, the SAFE promulgated the Notice of the SAFE on Reforming the
Management Method for the Settlement of Foreign Exchange Capital of Foreign-Invested
Enterprises (),
which came into effective on June 1, 2015 and was partially abolished on December 30, 2019
and March 23, 2023. According to the notice, foreign-invested enterprises could settle their
foreign exchange capital on a discretionary basis based on the actual needs of their business
operations. In addition, according to the Notice of the SAFE on Reforming and Standardizing
the Foreign Exchange Settlement Management Policy of Capital Accounts (̮ි၍ଣ҅
), which was promulgated and implemented
by the SAFE on June 9, 2016 and partially amended on December 4, 2023, discretionary
foreign exchange settlement applies to foreign exchange capital funds, foreign debt and
repatriated funds from overseas listing, and the corresponding RMB capital from foreign
exchange settlement may not be used to extend loans to non-related enterprises, except for the
circumstances explicitly permitted by the business scope.
The SAFE promulgated and implemented the Notice on Further Promoting the Reform of
Foreign Exchange Control and Improving Authenticity and Compliance V erification (ආ
) on January 26, 2017, which stipulates
several capital control measures with respect to outbound remittance of profits from domestic
entities to offshore entities, including the following: (1) when handling outward remittance of
profits equivalent to more than USD50,000 (exclusive) for a domestic institution, banks shall,
under the principle of genuine transaction, check board resolutions regarding profit distribution
(or partners resolutions regarding profit distribution), the original version of tax filing records
and audited financial statements; and (2) domestic institutions shall hold income to account for
previous years’ losses before remitting the profits. Moreover, according to the notice, domestic
institutions shall make detailed explanations of the source of investment funds and the usage
of the funds (utilization plan), and provide board resolutions (partners resolutions), contracts
and other proof of authenticity.
On October 23, 2019, the SAFE promulgated the Notice on Further Facilitating
Cross-Board Trade and Investment () which
became effective on the same date (except for Article 8 Paragraph 2, which became effective
on January 1, 2020, and partially amended on December 4, 2023). According to the notice,
non-investment foreign-invested enterprises are permitted to make domestic equity
investments with their capital funds under the condition that the prevailing Special
Administrative Measures for the Access of Foreign Investment (Negative List) are not violated
and the relevant domestic investment projects are true and compliant; restrictions on the use
of funds for foreign exchange settlement of domestic accounts for the realization of assets have
been removed and restrictions on the use and foreign exchange settlement of foreign investors
security deposits have been relaxed; under the prerequisite of ensuring true and compliant use
of funds and complying with the prevailing administrative provisions on use of income under
the capital account, eligible enterprises in the pilot area are also allowed to use income under
the capital account, such as capital funds, foreign debt, and proceeds from overseas listing, for
domestic payment without the need of providing materials to the bank in advance for
authenticity verification on an item by item basis.
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Pursuant to the Circular on Optimizing Foreign Exchange Administration to Support the
Development of Foreign-related Business ()
promulgated by the SAFE on April 10, 2020 which came into effect on 1, June 2020, under the
prerequisite of ensuring true and compliant use of funds and complying with the prevailing
administrative provisions on use of income under the capital account, eligible enterprises are
allowed to use income under the capital account, such as capital funds, foreign debt, and
proceeds from overseas listing, for domestic payment without the need of providing materials
to the bank in advance for authenticity verification on an item by item basis.
On December 4, 2023, the SAFE issued and implemented the Notice on Further
Deepening Reforms to Facilitate Cross-Board Trade and Investment (ڮࠧ
), which provides that the equity transfer consideration funds
in foreign currency received by a domestic equity transferor (including institutions and
individuals) from domestic entities, as well as the foreign exchange funds raised by domestic
enterprises through overseas listing, may be directly remitted to the settlement account of
capital accounts. Funds in the settlement account of capital accounts may be settled and used
at discretion.
The Guidelines for Foreign Exchange Business under Capital Accounts (2024 Edition)
(ˏ(2024و)), which was issued by the SAFE on April 3, 2024 and
came into effect from May 6, 2024, stipulates that the funds raised by domestic enterprises
through overseas listing shall, in principle, be repatriated to China in a timely manner, either
in RMB or foreign currency.
REGULATIONS ON OVERSEAS DIRECT INVESTMENT
According to the Provisions on the Foreign Exchange Administration of Overseas Direct
Investment by Domestic Institutions (), which was
promulgated by the SAFE on July 13, 2009 and came into effect on August 1, 2009, enterprises
in mainland China may apply for foreign exchange registration for overseas direct investment
after obtaining approval for overseas investment. In addition, according to the Notice on
Further Simplifying and Improving the Policies for Foreign Exchange Administration of Direct
Investment (), which was
promulgated by the SAFE on February 13, 2015 and came into effect on June 1, 2015, the
administrative approval for foreign exchange registration for overseas direct investment has
been canceled, and banks are entitled to directly review and conduct the foreign exchange
registration for overseas direct investment.
Pursuant to the Measures for the Administration of Overseas Investment ( ྤ̮ҳ༟၍
) which was issued by the MOFCOM on September 6, 2014 and became effective
from October 6, 2014, the MOFCOM and competent commerce authorities at the provincial
level shall subject the overseas investment of enterprises to filing or approval management
based on the actual circumstances of the investment. Overseas investment involving sensitive
countries or regions or sensitive industries shall be subject to approval management. Overseas
investment under other circumstances shall be subject to filing management.
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Pursuant to the Administrative Measures for Overseas Investment by Enterprises ( Άุ
) promulgated by the NDRC on December 26, 2017 and took effect on
March 1, 2018, the investing activities of enterprises in mainland China such as acquiring
overseas ownerships, controlling rights, operating and management rights and other relevant
interests by way of investing assets and interests or providing financing and guarantees to
control its overseas enterprises, either directly or indirectly, are required to obtain approval or
filing with the NDRC in accordance with the relevant conditions of the overseas investment
projects. Overseas investment projects that involve sensitive countries and regions or sensitive
industries shall be subject to approval management by the NDRC and non-sensitive overseas
investment projects shall be subject to filing management. For non-sensitive projects of
US$300 million or above invested by local enterprises in mainland China or carried out by
overseas enterprises controlled by them, the investors shall file with the NDRC and
non-sensitive overseas investment projects, of which the investment amount of investors in
mainland China is less than US$300 million (exclusive) shall file with the provincial
counterpart of the NDRC.
REGULATIONS ON IMPORTS AND EXPORTS
According to the Foreign Trade Law of the PRC ()
formulated by the SCNPC on May 12, 1994 and last amended on December 30, 2022, foreign
trade operators engaged in the import and export of goods or technologies are not required to
register with competent department of foreign trade under the State Council or its authorized
institution. The competent department of foreign trade under the State Council or its authorized
institution shall grant a license to the consignee or consignor who applies for automatic
licensing prior to completing customs clearance formalities for imports and exports subject to
automatic licensing. For the import and export of technologies that are subject to free import
and export, the contract filing and registration with the competent department of foreign trade
under the State Council or its authorized institution shall be completed.
According to the Customs Law of the PRC () promulgated by
the SCNPC on January 22, 1987 and amended and implemented on April 29, 2021, the Customs
of the People’s Republic of China serves as the state’s entry and exit customs supervision and
administration authority. The Customs shall exercise its jurisdiction in all aspects in
accordance with relevant laws and administrative regulations, including the supervision of
inbound and outbound vehicles, goods, baggage items, postal items and other items, the
assessment and collection of customs duties and other taxes and fees, the detection and
prevention of smuggling, the preparation of customs statistics and the handling of other
customs business.
In addition, pursuant to the Provisions of the Customs of the PRC on the Administration
of Registration of Customs Declaration Entities (၍ଣ஝
) promulgated by the General Administration of Customs on November 19, 2021 and
effective from January 1, 2022, “customs declaration entities” refer to the consignees or
consignors of imported or exported goods or customs declaration enterprises officially
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registered at the Customs. An enterprise applying for registration shall obtain the market entity
qualification. The registration of customs declaration entities shall remain valid indefinitely,
while a temporary registration is valid for 1 year and may be renewed upon expiration.
According to the Law of the PRC on Import and Export Commodity Inspection ( ʕശ
) promulgated by the SCNPC on February 21, 1989 and last
amended and implemented on April 29, 2021 and the Regulations for the Implementation of the
Law of the PRC on Import and Export Commodity Inspection (ۜ
ૢԷ) promulgated by the State Council on August 31, 2005, last amended on
March 29, 2022 and effective on May 1, 2022, the exit and entry inspection and quarantine
institutions shall conduct inspection on the import and export commodities listed in the Catalog
and other import and export commodities subject to exit and entry inspection and quarantine
as prescribed by laws and administrative regulations. The exit and entry inspection and
quarantine institutions shall conduct a random inspection of the import and export commodities
not covered by the aforementioned inspections in accordance with the state provisions. Import
goods subject to statutory inspection shall not be sold or used without undergoing inspection.
Export goods subject to inspection shall not be exported if they have not been inspected or fail
to pass the inspection.
REGULATIONS ON TAXATION
Enterprise Income Tax
On March 16, 2007, the NPC promulgated the Enterprise Income Tax Law of the PRC
() (the “Enterprise Income Tax Law”), which was amended
on February 24, 2017 and December 29, 2018. On December 6, 2007, the State Council enacted
the Regulations for the Implementation of the Enterprise Income Tax Law of the PRC ( ʕശ
ૢԷ), which became effective on January 1, 2008 and
amended on April 23, 2019 and December 6, 2024. Under the Enterprise Income Tax Law and
the relevant implementation regulations, “resident enterprises” are defined as enterprises that
are established in China in accordance with PRC laws, or that are established in accordance
with the laws of foreign countries but whose actual management is conducted within China.
Resident enterprises are subject to enterprise income tax on their income derived from both
within and outside China. “Non-resident enterprises” are defined as enterprises that are
established under the laws of foreign countries and whose actual management is conducted
outside China, but have established institutions or premises in China, or have no such
established institutions or premises but have income generated from inside China. An
enterprise income tax rate of 25% is applied. However, if non-resident enterprises have not
established institutions or premises in China, or if they have established institutions or
premises in China but there is no actual relationship between the relevant income derived in
China and the established institutions or premises set up by them, enterprise income tax is set
at the rate of 20% with respect to their income sourced from inside the PRC. High-tech
enterprises that require key state support are subject to a reduced enterprise income tax rate of
15%.
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Value-Added Tax
According to the Provisional Regulations on V alue-Added Tax of the PRC ( ʕശɛ͏
೼ᅲБૢԷ), which was promulgated by the State Council on December 13,
1993, effective on January 1, 1994 and last amended on November 19, 2017, and the Detailed
Rules for the Implementation of the Provisional Regulations on V alue-Added Tax of the PRC
(), which was promulgated by the MOF and the
SA T on December 25, 1993 and effective on the same day, and last amended on October 28,
2011 and effective on November 1, 2011, all enterprises and individuals engaged in the sale of
goods, provision of processing, repair and replacement services, sales of services, intangible
assets, real property, and the import of goods within the PRC territory are V A T taxpayers and
subject to value-added tax.
China’s value-added tax rate has undergone multiple reforms: (1) According to the
Provisional Regulations on V alue-Added Tax of the PRC, unless otherwise stipulated, the tax
rate is 17% for taxpayers engaged in the sale of goods, provision of labour services, or tangible
movable property leasing services or import of goods; the tax rate is 11% for taxpayers engaged
in sales of transportation, postal, basic telecommunications, construction, or immovable
leasing services, sales of immovables, transfer of land use rights, or sales or import of specific
goods; the tax rate is 6% for taxpayers selling services or intangible assets, unless otherwise
specified. (2) According to the Notice on Adjusting V alue-added Tax Rate (೼
) promulgated by the MOF and the SA T on April 4, 2018, the original tax rates
of 17% and 11% applicable to taxpayers who have V A T taxable sales activities or imported
goods are adjusted to 16% and 10% respectively, and the adjustment came into effect from May
1, 2018. (3) Pursuant to the Announcement on Relevant Policies for Deepening V alue-Added
Tax Reform (ʮѓ) jointly promulgated by the MOF, the
SA T and the General Administration of Customs of the PRC on March 20, 2019, the original
tax rates of 16% and 10% applicable to taxpayers who have V A T taxable sales activities or
imported goods are adjusted to 13% and 9% respectively, and the adjustment came into effect
from April 1, 2019.
On December 25, 2024, the SCNPC promulgated the V alue-Added Tax Law of the PRC
(), which will take effect on January 1, 2026. Upon its
implementation, the Provisional Regulations on V alue-Added Tax of the PRC will be repealed
simultaneously.
Consumption Tax
According to the Interim Regulations of the PRC on Consumption Tax ( ʕശɛ͏΍ձ
਷ऊ൬೼ᅲБૢԷ), which was promulgated by the State Council on December 13, 1993,
amended on November 10, 2008 and effective on January 1, 2009, and the Detailed Rules for
the Implementation of the Interim Regulations of the PRC on Consumption Tax ( ʕശɛ͏
), which was promulgated by the MOF and the SA T on
December 15, 2008 and effective on January 1, 2009, entities and individuals that produce,
process upon commission and import the consumption goods prescribed in the Interim
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Regulations of the PRC on Consumption Tax within the territory of the PRC, as well as entities
and individuals designated by the State Council that sell consumption goods prescribed in this
Regulations are the taxpayers of consumption tax who shall pay consumption tax.
Urban Maintenance and Construction Tax and Education Surcharge
According to the Urban Maintenance and Construction Tax Law of the PRC ( ʕശɛ͏
) promulgated by the SCNPC on August 11, 2020, and effective on
September 1, 2021, the entities and individuals that pay value-added tax and consumption tax
within the territory of the PRC are the taxpayers of urban maintenance and construction tax and
shall pay the urban maintenance and construction tax. Urban maintenance and construction tax
are calculated based on the actual amount of value-added tax and consumption tax paid by the
taxpayer according to the law. The urban maintenance and construction tax shall be paid on the
basis of net of the amount of V A T refunded by the end-of-period tax credit rebate in accordance
with relevant regulations. No urban maintenance and construction tax shall be levied on the
value-added tax and consumption tax paid for the imported goods or for the sales of labor
services, services and intangible assets in China by overseas entities or individuals. Urban
maintenance and construction tax rates are as follows: (1) If the taxpayer is located in an urban
area, the tax rate is 7%; (2) If the taxpayer is located in a county or town, the tax rate is 5%;
(3) If the taxpayer is not located in the urban area, county or town, the tax rate is 1%.
According to the Provisional Regulations on the Collection of Education Surcharge ( ᅄ
) promulgated in 1986 and last amended and implemented on
January 8, 2011, the entities and individuals that pay consumption tax, value-added tax and
business tax, except entities that pay the rural education surcharge, shall pay education
surcharge. The education surcharge is calculated based on the actual amount of value-added
tax, business tax and consumption tax paid by each entity and individual, and the education
surcharge rate is 3%, which is paid at the same time as value-added tax, business tax and
consumption tax, respectively.
Stamp Duty
In accordance with the Stamp Tax Law of the PRC ()
promulgated by the SCNPC on June 10, 2021 and came into effect on July 1, 2022, entities and
individuals that issue taxable certificates and conduct securities transactions within the
territory of PRC are the taxpayers of stamp duty and shall pay the stamp duty. Entities and
individuals who issue taxable certificates and conduct securities transactions outside the
territory of the PRC to be used within the territory of the PRC are also subject to stamp duty.
The taxable certificates include written contracts (such as loan contracts, financial leasing
contracts, purchase and sales contracts, work contracts, construction project contracts,
transportation contracts, technology contracts, lease contracts, warehousing contracts, custody
contracts, property insurance contracts, etc.), property rights transfer certificates, business
accounting books, securities transactions, and others.
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Transfer Pricing
During the Track Record Period, our PRC subsidiaries exported vehicle parts to our
Indonesian subsidiaries, the transaction amounts of which were immaterial. Moreover, given
the Annual Contemporaneous Documentation for the Related-party Transactions prepared by
tax adviser for the PRC subsidiary, the related-party transactions of the PRC subsidiary are in
line with arm’s length principle.
REGULATIONS ON DIVIDEND DISTRIBUTION
Profit Distribution System
The principal laws and regulations regulating the distribution of dividends by foreign-
invested enterprises in China include the Company Law of the PRC ( ʕശɛ͏΍ձ਷ʮ̡
), the Foreign Investment Law of the PRC () and the
Implementation Rules for the Foreign Investment Law of the PRC ( ʕശɛ͏΍ձ਷̮ਠҳ
ૢԷ). Under the current regulatory regime in China, foreign-invested enterprises
in China may pay dividends only out of their undistributed profits determined in accordance
with PRC accounting standards and regulations. After distributing the after-tax profits for the
year, PRC companies (including foreign-invested enterprises) shall set aside 10% of their
after-tax profits as the statutory reserve fund. When the aggregate balance in the statutory
reserve fund reaches 50% or more of a company’s registered capital, the company need not
make any further allocations to that fund. Where the statutory reserve fund of a company is not
enough to make up its losses for the preceding year, the current year’s profits shall be used first
to make up the losses before being allocated to the preceding statutory reserve fund. Subject
to a resolution of the shareholders’ general meeting, after allocation has been made to a
company’s statutory reserve fund from its after-tax profits, the company may set aside funds
for the discretionary reserve fund.
According to the Foreign Investment Law of the PRC, the capital contributions, profits,
capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights,
indemnity or compensation legally obtained, or proceeds received upon settlement by foreign
investors within China, may be freely remitted inward and outward in RMB or a foreign
currency.
Dividend Withholding Tax
According to the Reply on the Imposition of Enterprise Income Tax on Dividends of B
Shares and Other Shares Received by Non-resident Enterprises (͏Άุ՟੻Bഃ
ҭᔧ), which was promulgated and implemented by the SA T
on July 24, 2009, PRC resident enterprises that publicly issue and list shares (A shares, B
shares or overseas shares) on stock exchanges in or outside the PRC shall withhold enterprise
income tax at a rate of 10% on dividends of 2008 and thereafter distributed to non-resident
enterprise shareholders. Non-resident enterprise shareholders entitled to preferential tax
treatment shall make registration in accordance with the relevant provisions of the tax treaties.
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According to the Notice on Tax Policies Concerning the Pilot Program of Shanghai-Hong
Kong Stock Connect ()
issued by the MOF, the SA T and the CSRC on October 31, 2014 and implemented on November
17, 2014, (1) for dividends received by domestic individual investors from investing in H
shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect,
the H share companies shall apply to China Securities Depository and Clearing Corporation
Limited (“CSDC”) for the provision of a register of domestic individual investors from CSDC
to the H share companies, based on which the H share companies shall withhold and pay
individual income tax at the rate of 20% on behalf of the investors. Individual investors who
have paid the withholding tax abroad may apply for a tax credit with the competent tax
authorities under CSDC with a valid tax deduction certificate. Dividends received by domestic
securities investment funds from investing in shares listed on the Hong Kong Stock Exchange
through the Shanghai-Hong Kong Stock Connect shall be subject to the individual income tax
as mentioned above. (2) Dividends received by domestic enterprise investors from investing in
shares listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect
shall be included in their total income and shall be subject to the enterprise income tax
according to law. Dividends received by domestic resident enterprises which have been holding
the H shares continuously for no less than 12 months shall be exempted from the enterprise
income tax according to law.
Pursuant to the Arrangement Between Mainland China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income and Capital (੻ᒒ
τર), if the beneficial owner of the dividends is a company
directly owning at least 25% of the capital of the company which pays the dividends, the tax
levied shall not exceed 5% of the total dividends. In other circumstances, the tax levied shall
not exceed 10% of the total dividends.
REGULATIONS ON LABOR
Labor Law and Labor Contracts
According to the Labor Law of the PRC () promulgated by
the SCNPC on July 5, 1994 and last amended on December 29, 2018 and took effect on the
same day, employers are required to ensure workplace safety and health in accordance with
national laws and regulations, provide relevant training to their employees, prevent accidents
during work and reduce occupational hazards.
According to the Labor Contract Law of the PRC ()
promulgated by the SCNPC on June 29, 2007, last amended on December 28, 2012 and
effective on July 1, 2013, a written labor contract must be concluded if a labor relationship is
to be established; Where an employee’s remuneration is below the local minimum wage
standard, the employer shall pay the difference.
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Social Insurance and Housing Provident Funds
In accordance with the Social Insurance Law of the PRC (ᎈ
) issued by the SCNPC on October 28, 2010, last amended on December 29, 2018 and
became effective on the same day, as well as other relevant provisions, an employee shall
participate in five types of social insurance funds, including pension insurance, medical
insurance, unemployment insurance, maternity insurance and work-related injury insurance.
The premiums for maternity insurance and occupational injury insurance are paid by the
employer, while the premiums for pension insurance, medical insurance and unemployment
insurance are paid by both the employer and the employee. Employers shall apply for
completion of social security registration with the local social security agency within 30 days
from the date of incorporation with their business license, registration certificate or corporation
seal. Employers shall apply for completion of social security registration with the local social
security agency for their employees within 30 days from the date of employment.
In accordance with the Regulation on the Administration of Housing Provident Funds
(၍ଣૢԷ) issued by the State Council on April 3, 1999, last revised on March
24, 2019, and became effective on the same day, an employer shall register with the competent
managing center for housing provident funds and contribute to the housing provident funds for
its employee. Where an employer fails to pay up housing provident funds within the prescribed
time limit, the employer may be ordered to make payment within a certain period, where the
payment has not been made after the expiration of the time limit, an application may be made
to the court for compulsory enforcement.
REGULATIONS ON ANTI-MONOPOLY AND ANTI-UNFAIR COMPETITION
Anti-Monopoly
According to the Anti-Monopoly Law of the PRC () (the
“Anti-Monopoly Law”) which was promulgated by the SCNPC on August 30, 2007, came into
effect on August 1, 2008 and last amended on June 24, 2022, the prohibited monopolistic acts
include monopoly agreements, abuse of a dominant market position and concentration of
undertakings that may have the effect to eliminate or restrict competition.
According to the provisions of the Anti-Monopoly Law, “monopoly agreements” refer to
agreements, decisions or other concerted practices that eliminate or restrict competition.
Unless the exemption conditions stipulated in the Anti-Monopoly Law are met, competing
business operators, as well as operators and their trading counterparts, are prohibited from
reaching monopoly agreements as defined by the Anti-Monopoly Law, such as agreements for
fixing or altering prices of goods, agreements for limiting the production or sales volume of
goods, agreements for dividing the sales market or the raw materials procurement market,
agreements for fixing the price of goods for resale to third parties, etc. An operator shall also
not organize other operators to reach monopoly agreements or provide substantive assistance
to other operators to reach monopoly agreements.
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Pursuant to the Anti-Monopoly Law, “abuse of a dominant market position” means that
an operator with a dominant market position engages in practices of abuse of dominant market
position, including (1) selling products at unfairly high or purchasing at unfairly low prices;
(2) selling products at a price lower than cost without just cause; (3) refusing to conduct
transactions with the counterparty without just cause, and other four practices prohibited by the
Anti-Monopoly Law. Among them, “dominant market position” shall refer to a position where
an operator may control the prices of commodities, their quantity, and other terms of
transaction within relevant markets, or obstruct or otherwise affect the entrance of other
operators into relevant markets. The SAMR promulgated the Provisions on the Prohibition of
Abuse of Market Dominant Position () on March 10,
2023, which took effect on April 15, 2023, to further prevent and stop the abuse of market
dominant position.
Pursuant to the Anti-Monopoly Law, the “concentration of undertakings” refers to: (1) a
merger of undertakings; (2) acquisition of control over other undertakings by acquiring equities
or assets; or (3) acquisition of control over, or the possibility of exercising decisive influence
on, other undertakings by contract or by any other means. Where a concentration of
undertakings reaches the declaration threshold stipulated by the State Council, a declaration
must be made to the anti-monopoly law enforcement authorities under the State Council in
advance. If a declaration is not made, the concentration may not be carried out. Where a
concentration of undertakings does not reach the declaration threshold stipulated by the State
Council, but there is evidence that the concentration of undertakings has or may have the effect
of excluding or limiting competition, the anti-monopoly law enforcement authorities under the
State Council may order the operators to file the concentration of undertakings. Where one of
the following is the case relevant to the concentration of undertakings, declaration to the
anti-monopoly law enforcement authorities under the State Council is not required: (1) one of
the parties to the concentration of undertakings holds 50% or more assets or shares with voting
rights in each of the other operators; or (2) 50% or more assets or shares with voting rights in
each of the parties to the concentration of undertakings are held by the same operator which
is not a party to the concentration.
Anti-Unfair Competition
Pursuant to the Anti-Unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅ᘩ
) (the “Anti-Unfair Competition Law”) promulgated by the SCNPC on September 2,
1993, last amended and came into effect on April 23, 2019, “act of unfair competition” means
the act of a business operator of disrupting the order of market competition and causing damage
to the lawful rights and interests of other business operators or consumers in its production or
distribution activities, in violation of this Law. Among them, “operators” refers to natural
persons, legal persons and unincorporated organizations engaged in the production or sale of
goods or provision of services (goods as referred hereinafter include services). According to
the provisions of the Anti-Unfair Competition Law, operators: (1) shall not engage in
misleading commercial practices; (2) shall not bribe the following entity or individual by
offering money or assets or other means; (3) shall not affect commercial promotions for the
performance, functions, quality, sales status, users’ comments or honor received in respect of
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their products in a false or misleading manner, attempting to cheat or mislead consumers, or
help other operators to carry out false or misleading commercial publicity by organizing false
transactions or other means; (4) shall not commit acts of infringement of trade secrets; (5) shall
not fabricate or disseminate any false or misleading information to harm the credit standing of
competitors or the reputation of competitors’ commodities. In addition, operators conducting
prize-based sales or engaging in production and business activities via the internet should also
comply with the relevant provisions of the Anti-Unfair Competition Law.
REGULATIONS ON SECURITIES AND OVERSEAS LISTINGS
Securities Laws and Regulations
The Securities Law of the People’s Republic of China, which was promulgated by the
SCNPC on December 29, 1998, and was latest amended on December 28, 2019 and took effect
on March 1, 2020, comprehensively regulating activities in the PRC securities market
including issuance and trading of securities, takeovers by listed companies, securities
exchanges, securities companies and the duties and responsibilities of securities regulatory
authorities, etc. The Securities Law further regulates that a domestic enterprise issuing
securities overseas directly or indirectly or listing their securities overseas shall comply with
the relevant provisions of the State Council. The CSRC is the securities regulatory body set up
by the State Council to supervise and administer the securities market according to law, and
maintain order in the market. Currently, the issue and trading of H shares are principally
governed by the laws, regulations, rules and normative documents promulgated by the State
Council and the CSRC.
Overseas Listing filings
On February 17, 2023, the CSRC issued the Trial Measures for the Administration on
Overseas Securities Offering and Listing by Domestic Companies” ( ྤʫΆุྤ̮೯БᗇՎ
) together with regulatory rules and applicable guidelines, which took
effect on March 31, 2023, implementing unified filing management for direct and indirect
overseas issuance and listing of securities by domestic enterprises, and the issuer shall perform
filing procedures and report relevant information to the securities regulatory authority under
the State Council. The issuer that seeks to list its securities in overseas markets directly is
required to file the application documents for overseas offering and listing with the CSRC
within three working days after its submission of the application. It is also stipulated that no
overseas offering and listing shall be made by domestic enterprises under any of the following
circumstances: (1) it is clearly prohibited from listing for financing by national laws,
administrative regulations and relevant provisions; (2) overseas offering or listing will threaten
or jeopardize national security as reviewed and determined by the relevant competent
authorities of the State Council in accordance with the law; (3) the domestic enterprises and
their controlling shareholders, de facto controllers have committed corruption, bribery,
embezzlement, misappropriation of property or criminal offences that disrupted the socialist
market economic order within the last three years, or are being investigated by judicial
authorities because of suspected crime, or being investigated for material violations or
REGULATORY OVERVIEW
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incompliance with laws and regulations; (4) the domestic enterprises are being investigated
according to law because of suspected crime or material violations of laws and regulations and
no explicit conclusion or opinion has yet been made thereof; (5) there are material ownership
disputes over equity held by the controlling shareholder or by other shareholders that are
controlled by the controlling shareholder and/or actual controller.
The major laws, regulations, regulatory documents and regulatory policies in Indonesia
that affect our business operations are listed below:
REGULATIONS ON BUSINESS LICENSES OF INDUSTRIAL PROJECTS IN
INDONESIA
In general, every party conducting industrial activities must have an industrial business
license, as stipulated in the Government Regulation (“ GR”) No. 107 of 2015 on Industrial
Business License (“ GR No. 107/2015 ”). Meanwhile, an industrial company is defined as any
party who carries out activities in the field of industrial business domiciled in Indonesia.
In Indonesia, Seres Group Co. Ltd (the “ Company ”) operates through two Indonesian
subsidiaries, namely, PT Sokonindo Automobile (“ PTSA ”) and PT Y uan Powertrain Indonesia
(“PTYP ”) (hereinafter collectively referred to as the “ Indonesian Companies ”). Pursuant to
GR No. 5 of 2021 on the Implementation of Risk-Based Business Licensing (“ GR
No. 5/2021 ”), business activities are classified into:
(1) Low-risk business activities;
(2) Medium risk business activities, which consist of (i) Medium-Low risk business
activities and (ii) Medium- High business activities; and
(3) High-risk business activities.
The classification of risk above will determine the required licenses for the business
activity of the Indonesian Companies.
The application of the licenses would be subject to the Risk Based Approach (“ RBA”)
licensing regime.
(a) PTSA
Based on PTSA Business Identification Number (“ NIB”) No. 8120008863219 issued by
the Online Single Submission RBA (“ OSS-RBA ”) dated 31 August 2018, the effective business
activities of PTSA are as follows:
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Indonesia Standard Industrial
Classification/Klasifikasi Baku Lapangan
usaha Indonesia (“KBLI”) Number Risk Level Business Licensing
(KBLI 29101) — Industry of Four or
More- Wheeled Motor V ehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Medium-high NIB and Standard
Certificate
(KBLI 45301) — Wholesale Trade of
Automobile Spare parts and Accessories /H1118/H1118
Low NIB
Since PTSA ’s business activities fall under the category of medium-high and low, there
is a requirement for additional business licenses apart from the NIB. In addition, it is important
to note for conducting certain supporting activities, the relevant ministries or agencies may
request to acquire Business Licensing to Support Business Activities ( Perizinan Berusaha
Untuk Menunjang Kegiatan Usaha or “ PBUMKU ”) if they deem it necessary either before or
after the operational and/or commercial phases of the business activities commence.
Based on the above, PTSA has obtained the Industrial Business License of Foreign
Investment Company No. 357/1/IU/PMA/2017 dated 30 March 2017 and Industrial Business
License dated 11 March 2020 issued by OSS. Both of these licenses have fulfilled the
commitment and is effective as long as PTSA carries out its business and/or activities in
accordance with the provisions of the prevailing laws and regulations in Indonesia.
(b) PTYP
Based on PTYP’s NIB No. 9120202602484 issued by the OSS-RBA dated 28 June 2019,
the effective business activities of PTYP are as follows:
Indonesia Standard Industrial
Classification/KBLI Number Risk Level Business Licensing
(KBLI 28199) — Manufacture of Machinery
for Other General Purposes which cannot
be Classified Elsewhere /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Medium-low NIB and Standard
Certificate
(KBLI 45201) — Car Repair /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Medium-low NIB and Standard
Certificate
(KBLI 45301) — Wholesale of Car Spare
Parts and Accessories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Low NIB
(KBLI 46599) — Wholesale of Other
Machinery, Appliances and Equipment /H1118/H1118/H1118/H1118
Medium NIB
(KBLI 29300) — Manufacture of Spare Parts
and Accessories for Four-Wheeled or More
Motor V ehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Medium-high NIB and Standard
Certificate
(KBLI 52101) — Warehousing and Storage
as a supporting activity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Low NIB
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Since PTYP’s business activities fall under the category of medium-high, medium-low,
and low, there is a requirement for additional business licenses apart from the NIB. In addition,
it is important to note for conducting certain supporting activities, the relevant ministries or
agencies may request to acquire PBUMKU if they deem it necessary either before or after the
operational and/or commercial phases of the business activities commence.
Based on the above, PTYP has obtained:
(1) Industrial Business License dated 28 June 2019 issued by OSS for KBLI 28199 —
Manufacture of Machinery for Other General Purposes which cannot be Classified
Elsewhere;
(2) Trading Business License dated 28 June 2019 issued by OSS for KBLI 45201— Car
Repair and KBLI 45301 — Wholesale of Car Spare Parts and Accessories;
(3) Trading Business License dated 28 June 2019 issued by OSS for KBLI 46599 —
Wholesale of Other Machinery, Appliances and Equipment; and
(4) Industrial Business License dated 28 June 2019 issued by OSS for KBLI 29300 —
Manufacture of Parts and Accessories of Motor V ehicles with Four or More Wheels.
Currently, PTYP operates its business solely under KBLI 29300 (Manufacture of Parts
and Accessories of Motor V ehicles with Four or More Wheels). The other KBLIs have not yet
been applied for by PTYP . These licenses have fulfilled the commitment and is effective as
long as PTYP carries out its business and/or activities in accordance with the provisions of the
prevailing laws and regulations in Indonesia.
REGULATIONS ON LAND USE RIGHTS IN INDONESIA
Land use rights in Indonesia are governed primarily by the Basic Agrarian Law (Law
No. 5 of 1960 on Basic Provisions on Agrarian Principles, or the “ Agrarian Law ”), as further
implemented through various government regulations and ministerial decrees. Under
Indonesian law, the state retains ultimate ownership of all land, while individuals and entities
may acquire specific rights to use, cultivate, or build upon land, collectively referred to as Hak
Atas Tanah or Land Rights. These rights include, among others, the Right of Ownership ( Hak
Milik ), Right to Build ( Hak Guna Bangunan or “HGB”), Right to Cultivate ( Hak Guna Usaha ),
and Right of Use ( Hak Pakai ).
For commercial activities, particularly those involving foreign investment or corporate
use, the most commonly utilized land right is HGB. HGB grants the holder the right to
construct and own buildings on land that is not owned by the holder, for an initial period of
up to 30 years, extendable for an additional 20 years.
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Land rights in Indonesia must be registered with the local office of the National Land
Agency ( Badan Pertanahan Nasional or “ BPN”) and are evidenced by a land title certificate.
The transfer, encumbrance, or renewal of land rights must be executed before a Land Deed
Official ( Pejabat Pembuat Akta Tanah or “ PPAT”) and registered with the local BPN office to
be legally valid and enforceable against third parties.
Foreign individuals are generally restricted from holding land rights directly. However,
foreign investment companies ( Penanaman Modal Asing or “ PMA Companies ”) are permitted
to hold certain land rights such as HGB, in accordance with prevailing laws and investment
regulations. Additionally, land use by PMA Companies must comply with spatial planning
regulations and may require the issuance of Location Permits and Land Use Rights Permits
from relevant regional governments.
In addition to land use rights, land in Indonesia may also be utilized through lease
arrangements ( sewa menyewa ), which are governed by the Indonesian Civil Code ( Kitab
Undang-Undang Hukum Perdata ). A lease does not confer any real right ( hak atas tanah ) over
the land, but grants the lessee contractual rights to use the land in accordance with the agreed
terms. Lease terms are generally set out in a written contract between the lessor and the lessee,
and notarization is advisable to strengthen legal enforceability, particularly for long-term
leases.
For foreign entities or individuals who are not eligible to hold land use rights directly,
lease arrangements are often used as a practical alternative to secure access to land. PMA
Companies may lease land from third parties (including individuals or other companies),
although such use remains subject to certain restrictions under prevailing laws, including
spatial zoning regulations.
REGULATIONS ON THE DOMESTIC COMPONENT LEVEL ( TINGKAT KOMPONEN
DALAM NEGERI /“TKDN”) REQUIREMENTS IN INDONESIA
TKDN policy is a crucial policy tool implemented by the Indonesian government to
promote the use of local content in various industries to reduce the country’s dependence on
imports and boost domestic production capacity. The policy has several benefits for the
Indonesian economy and has helped to create new jobs and improve the quality of domestic
products.
However, the policy also faces challenges, including the need for domestic suppliers to
meet the required standards and the increased production costs for manufacturers. The
continued implementation and adaptation of the TKDN policy to changing economic
conditions will be essential to ensure its continued effectiveness.
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The implementation of the TKDN policy involves several steps, including the
identification of industries and products covered by the policy, the determination of the
percentage of local content required for each industry and product, and the establishment of
mechanisms to monitor compliance with the policy. The Ministry of Industry and Trade is
responsible for implementing the TKDN policy and monitoring compliance with its
requirements.
The TKDN policy requires companies operating in Indonesia to prioritize the use a
minimum percentage of domestic components in their products. The percentage of local
content required varies depending on the industry and the specific product. For example, the
automotive industry is required to have a minimum of 40% local content for battery-based
four-wheeled electric vehicles up to year 2026, and the requirement gradually increases for
years after. The policy also requires companies to submit a TKDN plan to the Ministry of
Industry and Trade for approval before they can begin production. In cases where companies
are unable to produce the components, they are also allowed to make imports of components
through IKD (Incompletely Knock Down) or CKD (Completely Knock Down) system,
although companies are required to gradually comply with the TKDN requirements, in line
with the production capabilities of domestic manufacturing facilities for main and/or
supporting components as required.
The TKDN policy covers several industries in Indonesia, including oil and gas,
automotive, electronics, telecommunications, and textiles. These industries have been
identified as critical to Indonesia’s economic development, and the policy aims to promote
their domestic production capacity.
REGULATIONS ON ENVIRONMENTAL PROTECTION IN INDONESIA
Environmental protection in Indonesia is governed by various laws, regulations, and
decrees, with the overarching regulation being Law No. 32 of 2009 on Environmental
Protection and Management, most recently amended by Law No. 6 of 2023 on the
Determination of the GR in Lieu of Law No. 2 of 2022 as a Law (“ Job Creation Law ”) (the
“Indonesian Environmental Law ”). Under the Indonesian Environmental Law and its
implementing regulations, remedial and preventive measures, as well as sanctions (including
the imposition of significant criminal penalties, fines, and the cancellation of concessions),
may be enforced to address or prevent pollution resulting from operations. GR No. 22 of 2021
on the Implementation of Environmental Protection and Management regulates the
management of specific materials and waste. This regulation mandates that companies
producing waste categorized as hazardous and toxic materials must conduct waste storage in
accordance with applicable regulations, including obtaining the required permits.
Indonesian Environmental Law as well as its implementing regulations, stipulate that
certain business activities, a company whose business and/or activity brings significant impact
to the environment as specified in the Environmental must obtain and maintain an
Environmental Impact Analysis ( Analisis Mengenai Dampak Lingkungan or “ AMDAL ”).
Other businesses and/or actions that are not required to maintain an AMDAL as stipulated in
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the Environmental Law must conduct environmental management efforts and environmental
monitoring efforts through the preparation of Environmental Management Efforts ( Upaya
Pengelolaan Lingkungan or “ UKL”) and Environmental Monitoring Efforts ( Upaya
Pemantauan Lingkungan or “ UPL”) documents (collectively as “ UKL/UPL Documents ”).
Other businesses and/or actions that are not required to maintain UKL/UPL must maintain a
Statement Letter of Undertaking of Environmental Management and Monitoring ( Surat
Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup or “ SPPL ”).
Pursuant to the Indonesian Environmental Law, every business and/or activities that are
required to obtain AMDAL or UKL-UPL must obtain an Environmental Permit ( Izin
Lingkungan ) issued by the Minister of Environmental Affairs, relevant Governor, Mayor, or
Regent (as applicable), in addition to the requirement to obtain an Environment Feasibility
Decision for AMDAL or a recommendation on the UKL-UPL. However, the implementing
regulation stipulates that every environmental document that has been approved prior to the
enactment of implementing regulation shall be valid and deemed as equal as an environmental
permit.
REGULATIONS ON CONSTRUCTION IN INDONESIA
Construction activities in Indonesia are regulated under a comprehensive legal framework
consisting of various laws and government regulations, with the primary regulation being Law
No. 2 of 2017 on Construction Services, as amended by the Job Creation Law. This framework
is further implemented through GR No. 22 of 2020 on the Implementation of the Construction
Services Sector, as amended by GR No. 14 of 2021.
Under Indonesian construction laws and regulations, all construction services (both
construction work and consultancy) must be carried out by business entities or individuals
holding a valid NIB and a Construction Services Business Entity Certificate ( Sertifikat Badan
Usaha or “ SBU”) issued by the Ministry of Public Works and Housing or an authorized
licensing system. Further, technical personnel involved in construction services must hold
professional certifications recognized by the National Construction Services Development
Board ( Lembaga Pengembangan Jasa Konstruksi or “ LPJK ”).
Construction projects (particularly those that are large-scale, government-funded, or
carried out by foreign-invested entities) are subject to tender and procurement requirements in
accordance with Presidential Regulation (“ PR”) No. 16 of 2018 on the Procurement of
Government Goods and Services, as lastly amended by PR No. 46 of 2025, as well as
sector-specific regulations. Foreign construction services business entities ( Badan Usaha Jasa
Konstruksi Asing or “ BUJKA ”) are permitted to perform work in Indonesia by way of
establishing a PMA company or establishing a representative office. However, a BUJKA,
through the said establishments, must form a joint operation ( Kerja Sama Operasi or “ KSO”)
with a licensed Indonesian construction services business entity ( Badan Usaha Jasa Konstruksi
Nasional ) to operate/commence work in Indonesia.
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Construction activities must be carried out pursuant to a construction work contract
signed between the project owner and the contractor. The contents of the construction work
contract must comply with the requirements provided under Indonesian construction laws and
regulations.
Construction activities must also comply with zoning and spatial planning regulations,
building technical standards, and safety requirements. Prior to commencing any construction
work, a Building Approval ( Persetujuan Bangunan Gedung or “ PBG”), which replaces the
former Building Construction Permit ( Izin Mendirikan Bangunan ), must be obtained by the
project owner or by the contractor on behalf of the project owner. The PBG is issued by the
relevant local government and ensures that building utilization is in accordance with the
detailed spatial plan ( Rencana Detail Tata Ruang ) and regional spatial plan ( Rencana Tata
Ruang Wilayah ).
REGULATIONS ON EMPLOYMENT IN INDONESIA
Indonesian employment sector is primarily regulated under Law of Republic of Indonesia
No. 13 of 2003 on Labor as lastly amended by the Job Creation Law (“ Labor Law ”) along with
its implementing regulations. The Labor Law comprehensively regulates various aspects of
employment, including but not limited to the rights and obligations of employers and
employees, working hours and rest periods, wages and benefits, employment agreements,
termination procedures.
Under the Labor Law, employment relationships are categorized primarily based on the
type of employment agreement, which comprises of permanent (indefinite) or a fixed term
(definite) employment agreement. The two types of employment agreements differ in various
aspects, including the employee’s rights and entitlements, the possibility of a probation period,
the duration of the employment, and the entitlements resulting from termination.
Foreign nationals (Tenaga Kerja Asing or “ TKA”) may be employed in Indonesia under
a written fixed-term agreement. To legally employ a TKA, employers must obtain a work
permit and a stay permit for the individual before they can legally commence work. Additional
reporting and compliance obligations also apply. These obligations extend to foreign nationals
serving as members of a company’s Board of Directors (“ BoD”) or Board of Commissioners
(“BoC”).
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TKAs are not allowed to hold multiple roles within the same company or occupy positions
related to employment responsibilities. However, they may hold multiple roles across different
companies, provided these are at the BoD or BoC level. Employers are also required to appoint
Indonesian workers as TKA Understudy Workers (Tenaga Kerja Pendamping TKA) . These
workers are expected to receive knowledge and skills transfer from the TKA, and employers
must provide relevant education and job training aligned with the TKA ’s role. In return,
employers must facilitate Indonesian language training for TKAs. This requirement does not
apply to TKAs who serve as: (a) members of the BoD or BoC, (b) heads of representative
offices, (c) advisors, administrators, or supervisors of foundations, or (d) temporary workers.
A yearly reporting on the usage of the TKA, training, and the implementation of skill and
technology transfer via online website of the Ministry of Manpower is required to be submitted
by the company for each of the TKA employed.
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OVERVIEW
Our history can be traced back to 1986, including three stages of business venture: the
first business venture started in 1986 with manufacture and sales of springs and shock
absorbers; the second business venture was launched in 2003 via expansion into manufacturing
of vehicles; in 2016, we transformed and tapped into the NEV sector.
After years of development and transformation, we have become a technology company
with NEVs as our core business. On June 15, 2016, our A Shares were listed on the main board
of the Shanghai Stock Exchange (stock code: 601127). See “— Corporate Development and
Major Changes in Share Capital and Shareholdings — History of A Share Listing and
Subsequent Major Capital Market Activities before the Track Record Period” for more details.
KEY MILESTONES
Y ear Event
1986 /H1118/H1118/H1118/H1118/H1118Baxian Phoenix Home Appliance Spring Works ( ˋጤჾ਑ཥኜᅁᔆᅀ) was
established in Chongqing.
2003 /H1118/H1118/H1118/H1118/H1118The predecessor of DFSK Motor Co., Ltd. (ʮ̡)1 was
established, and we expanded into manufacturing of vehicles.
2007 /H1118/H1118/H1118/H1118/H1118Our predecessor was established in the PRC.
2011 /H1118/H1118/H1118/H1118/H1118Our Company was converted into a joint stock company with limited
liability.
2016 /H1118/H1118/H1118/H1118/H1118Our Company’s A Shares were listed on the main board of the Shanghai
Stock Exchange (stock code: 601127).
We transformed and tapped into the NEV sector.
2019 /H1118/H1118/H1118/H1118/H1118Our first intelligent factory went into operation.
2021 /H1118/H1118/H1118/H1118/H1118We launched our “AITO” brand with the first AITO M5 model.
2022 /H1118/H1118/H1118/H1118/H1118Our Company changed its name from Chongqing Sokon Industrial Group
Co., Ltd. (ʮ̡) to Seres Group Co., Ltd. ( ᒄɢ
ʮ̡).
2023 /H1118/H1118/H1118/H1118/H1118AITO new M7 began delivery and is highly favored by many users and
praised as a “national SUV” by the market.
1 The predecessor of our subsidiary, Seres Hubei.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Y ear Event
2024 /H1118/H1118/H1118/H1118/H1118AITO M9 began delivery and won the title of sales champion of the
RMB500,000 price segment in the Chinese market.
We began to record profits and became the fourth profit-making NEV
company in the world.
2025 /H1118/H1118/H1118/H1118/H1118AITO M8 began delivery.
OUR MAJOR SUBSIDIARIES
Details of each of our Major Subsidiaries which made a material contribution to our
results of operations during the Track Record Period are set out below.
Name of subsidiary
Place of
incorporation
Date of
establishment and
commencement of
business
Equity interest
held by the
Company or
subsidiary
Principal
business activities
Seres Auto /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC September 4, 2012 93.63% (Note) Research and development,
production and sales of
new energy vehicles
Chongqing AITO Automobile Sales
Co., Ltd. (ӛԓቖਯϞ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC March 7, 2019 100% Sales of automobile and
automobile parts
Chongqing AITO Premium
Automotive Parts Co., Ltd. (ᅅ
ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC April 8, 2003 100% Production and sales of
automobile parts
Chongqing Jinkang Powertrain
New Energy Co., Ltd. (ੰ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC January 5, 2018 100% Research and development,
production and sales of
batteries, motor drive
assembly and electric
motor controllers
Chongqing Seres Electric V ehicle
Co., Ltd. (ᅅᒄɢ౶ཥਗӛԓ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC December 31, 2021 100% Production and sales of
automobile parts
Chongqing Seres New Electric
V ehicle Sales Co., Ltd. (ᅅᒄ
ʮ̡) /H1118/H1118
PRC March 19, 2018 100% Sales of automobile and
automobile parts
Chongqing Seres Phoenix
Intelligent Innovation
Technology Co., Ltd. (ᅅᒄɢ
ʮ̡) /H1118/H1118/H1118/H1118
PRC December 29, 2023 100% Software and information
technology services
Chengdu Seres Technology Co.,
Ltd. (ʮ̡) /H1118
PRC December 20, 2021 100% Software and information
technology services
Chongqing Sokon Power Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118
PRC April 7, 2009 100% Production and sales of
automobile engines
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Name of subsidiary
Place of
incorporation
Date of
establishment and
commencement of
business
Equity interest
held by the
Company or
subsidiary
Principal
business activities
Chongqing Motor (Group) IMP . &
EXP . Co., LTD (ᅅʃੰආ̈ɹ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC February 23, 2004 100% Sales of automobile and
automobile parts
Chongqing Sokon Automotive
Parts Co., Ltd. (ᅅʃੰӛԓ௅
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC February 18, 2011 100% Research and development,
production and sales of
automobile materials and
parts
Chongqing Sokon Machinery Parts
Co., Ltd. (ᅅʃੰዚ૛ৣ΁Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC June 15, 2006 100% Production and sales of
automobile materials and
parts
Chongqing Y u’an Huaihai
Powertrain Co., Ltd. (ᅅಽτ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC May 28, 2004 100% Production and sales of
automobile materials and
parts
Seres Hubei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC May 26, 2003 100% Production and sales of
automobile and
automobile parts
Shiyan Dongfeng Fengon
Automobile Sales Co., Ltd. ( ɤ
ʮ̡) /H1118/H1118
PRC December 23, 2019 100% Sales of automobile
Luzhou Rongda Intelligent
Transmission Limited Company
(ʮ̡) /H1118
PRC December 18, 2016 88.71%
(Note) Research and development,
production and sales of
automobile materials and
parts
Longsheng New Energy /H1118/H1118/H1118/H1118/H1118/H1118PRC September 21, 2022 100% Provision of new energy
vehicle production
factory and equipment
Note: See “Shareholding and Corporate Structure immediately prior to the Global Offering” in this section
below for details of the holders of the minority equity interests in our Major Subsidiaries.
The Company held majority equity interests in the above Major Subsidiaries throughout
the Track Record Period.
We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock
Exchange has granted to us, a waiver from strict compliance with the requirements under
paragraph 26 of Appendix D1A to the Listing Rules, in respect of disclosing the particulars of
any alteration in the capital of any member of our Group within the two years immediately
preceding the issue of this Prospectus. See “Waivers, Consents and Exemption — Waivers and
Exemption in respect of Particulars of Information of our Subsidiaries” for more details. For
shareholding changes of our Major Subsidiaries during the two years immediately preceding
the date of this Prospectus, see “Statutory and General Information — Further Information
About Our Company — Changes in Share Capital of Our Major Subsidiaries” in Appendix IV .
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CORPORATE DEVELOPMENT AND MAJOR CHANGES IN SHARE CAPITAL AND
SHAREHOLDINGS
Early History
Our history can be traced back to 1986, when Baxian Phoenix Home Appliance Spring
Works ( ˋጤჾ਑ཥኜᅁᔆᅀ) was established in Chongqing to be engaged in the manufacture
of, among others, springs for automotive seats. In 2003, the predecessor of DFSK Motor Co.,
Ltd. (ʮ̡)
1 was established, and we launched our second business venture
by expanding into the manufacturing of vehicles.
On May 11, 2007, Chongqing Y u’an Holding Co., Ltd. (ʮ̡, the
predecessor of our Company) was established in the PRC by Mr. Zhang Xinghai and his
brothers, Mr. Zhang Xingli ( ੵጳᓿ) and Mr. Zhang Xingming (׼At the time, Mr. Zhang
Xinghai, Mr. Zhang Xingli and Mr. Zhang Xingming held Chongqing Y u’an Holding Co., Ltd.
as to 50%, 25% and 25%, respectively.
On April 10, 2011, our then Shareholders passed resolutions approving the conversion of
our Company from a limited liability company into a joint stock limited company under the
laws of the PRC. Upon completion of the joint stock company conversion, the Company was
owned as to approximately 78.42% by Sokon Holding, approximately 10.46% by Y u’an
Industry and approximately 11.12% by other shareholders, respectively.
During such period, the name of our Company was changed a few times: It was first
changed from Chongqing Y u’an Holding Co., Ltd. (ʮ̡) to Chongqing
Sokon Automobile Holding Co., Ltd. (ʮ̡) in April 2009, to
Chongqing Sokon Automobile Group Co., Ltd. (ʮ̡) in December
2010 and then to Chongqing Sokon Industrial Group Co., Ltd. (ʮ
̡) in April 2011.
History of A Share Listing and Subsequent Major Capital Market Activities before the
Track Record Period
On June 15, 2016, we completed the listing of our A Shares on the Shanghai Stock
Exchange (stock code: 601127) (the “ A Share Listing ”) and issued 142.5 million A Shares. At
such time, our Company was held by Sokon Holding and Y u’an Industry as to approximately
62.60% and 8.35%, respectively.
In April 2020, the Company completed a share issue in exchange for asset purchase with
Dongfeng Motor in respect of their jointly-owned company, DFSK Motor Co., Ltd. (ʃੰ
ʮ̡) (being the predecessor of Seres Hubei, our subsidiary). Pursuant to the relevant
share issue and asset purchase agreement, Dongfeng Motor sold its 50% equity interests in such
company to the Company at the consideration of 327,380,952 newly issued A Shares by the
1 The predecessor of our subsidiary, Seres Hubei. The company at the time was named Dongfeng Y u’an
Automobile Company (ʮ̡), and it was established as a joint venture with Dongfeng
Motor, immediately after which it was held as to 20%, 30% and 50% by Dongfeng Motor, Dongfeng Industrial
Limited (ʮ̡) and Chongqing Y u’an Innovation Technology (Group) Co., Ltd. (ᅅಽτ௴อ
Ҧ(ණྠ)ʮ̡), respectively. In 2010, each of Dongfeng Industrial Limited and Chongqing Y u’an
Innovation Technology (Group) Co., Ltd. transferred their entire equity interests held in DFSK Motor Co., Ltd.
to Dongfeng Motor and our Company, respectively. In 2020, Dongfeng Motor transferred the 50% equity
interests it held in DFSK Motor Co., Ltd. to our Company.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Company. Upon completion of the asset swap, such company became a wholly-owned
subsidiary of the Company, Dongfeng Motor became a new, direct Shareholder of the Company
with the second largest shareholding holding approximately 25.83% of the issued share capital
of the Company.
In May 2021 and June 2022, our Company conducted private placements of 56,368,913
A Shares at RMB46.00 per A Share and 137,168,141 A Shares at RMB51.98 per A Share,
raising net proceeds of approximately RMB2,567.9 million and RMB7,058.6 million,
respectively. The A Shares were placed to 10 and 17 investors, respectively, each of whom is
an Independent Third Party. As of December 31, 2024, we have utilized approximately 99.84%
and 60.84% of the net proceeds raised in the private placements of A Shares in 2021 and 2022,
respectively.
Change in the name of our Company in 2022
On July 27, 2022, our then Shareholders resolved to amend our Articles and rename our
Company from Chongqing Sokon Industrial Group Co., Ltd. (ʮ̡)
to our current name, Seres Group Co., Ltd. (ʮ̡). The relevant business
registration procedures were completed on July 30, 2022.
Issuance of Convertible Bonds in 2017 and Redemption in 2023
In November 2017, we conducted a public issuance of convertible bonds of RMB1,500
million at a par value of RMB100 (the “ Convertible Bonds ”) to satisfy the Company’s funding
needs for the production of our electric vehicles. The Convertible Bonds were listed on
Shanghai Stock Exchange (bond code: 113016) on November 21, 2017. The conversion period
was from the first trading day after six months from the date of the issuance of the Convertible
Bonds to the maturity date of the Convertible Bonds (i.e. November 5, 2023), with an initial
conversion price of RMB23.00 per A Share. During the conversion period, the Company had
the right to redeem part or all of the Convertible Bonds at the principal amount together with
accrued and unpaid interest if, among others, the closing price of the A Shares was not lower
than 130% of the conversion price for at least fifteen trading days out of thirty consecutive
trading days during the conversion period.
On May 22, 2023, the Board resolved to exercise the Company’s redemption right as
triggered under the aforementioned situation and redeem all the outstanding Convertible Bonds
after close of market on June 21, 2023.
As of June 21, 2023, the Convertible Bonds in the amount of RMB1,497,225,000 had
been converted into 88,886,842 A Shares. The outstanding Convertible Bonds in the amount of
RMB2,775,000 as of June 21, 2023 were redeemed by the Company at the price of
RMB2,810,270.25. Our issued share capital increased to 1,507,370,567 Shares following the
conversion and redemption of the Convertible Bonds. The Convertible Bonds were delisted on
Shanghai Stock Exchange on June 26, 2023.
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Issuance of A Shares as Consideration for the Acquisition of Longsheng New Energy in
2025
We entered into an agreement on April 29, 2024 (together with a supplemental agreement
on September 13, 2024) to acquire 100% of the equity interests of Longsheng New Energy
from its three then shareholders, Chongqing Industrial Investment Parent Fund Enterprise
Partnership (L.P .) (ΥྫΆุ(Υྫ)) (“ Chongqing Industrial Parent
Fund ”), Chongqing Liangjiang New Area Industrial Development Group Co., Ltd. (ᅅՇϪ
ʮ̡)( “ Liangjiang Industrial Group ”) and Chongqing Liangjiang
New Area Development & Investment Group Co., Ltd. (ʮ̡)
(“Liangjiang Investment Group ”, together with Chongqing Industrial Parent Fund and
Liangjiang Industrial Group, the “ Seller(s) ”), which held 42.99%, 30.69% and 26.32% equity
interests therein, respectively, at the time.
The aggregate consideration of such transaction was RMB8,163,952,000, which was
satisfied through the issuance of 123,583,893 A Shares by the Company (the “ Consideration
Shares ”), representing 7.57% of the total issued A Shares upon the completion of such
issuance. Among the Consideration Shares, Chongqing Industrial Parent Fund received
53,125,024 A Shares, Liangjiang Industrial Group received 37,928,539 A Shares, and
Liangjiang Investment Group received 32,530,330 A Shares, proportionate to their respective
equity interests held prior to the transaction. The consideration was determined on the basis of
arm’s length negotiations between the parties with reference to the valuation of Longsheng
New Energy as of June 30, 2024 by an independent valuer, and the issue price of RMB66.06
per Share was not less than 80% of the average trading price of the Company’s A Shares for
the 120 trading days preceding the price reference date, as adjusted based on the Company’s
profit distribution plan for the nine months ended September 30, 2024.
For more information about Longsheng New Energy, the Sellers and the acquisition,
please refer to “— Acquisition of Longsheng New Energy” below.
Upon completion of the issuance of the Consideration Shares, the shareholding structure
of our Company was as follows:
Name of Shareholder
Number of
Shares Held
Approximate
Percentage of
Shareholding
(%)
Sokon Holding /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400,503,464 24.52
Dongfeng Motor /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118327,380,952 20.04
Y u’an Industry /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,090,950 4.05
Chongqing Industrial Parent Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,125,024 3.25
Liangjiang Industrial Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,928,539 2.32
Liangjiang Investment Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,530,330 1.99
Other A Shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715,806,827 43.83
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,633,366,086 100.00
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SIGNIFICANT ACQUISITIONS AND DISPOSALS
During the Track Record Period and up to the Latest Practicable Date, we have carried
out the following significant acquisitions.
Acquisition of Longsheng New Energy
During the Track Record Period, the Company entered into an agreement to purchase
100% of the equity interests of Longsheng New Energy in exchange for the issuance of
Consideration Shares. See “— Issuance of A Shares as Consideration for the Acquisition of
Longsheng New Energy in 2025” above for information relating to the acquisition.
Longsheng New Energy was established on September 21, 2022 in the PRC as a limited
liability company, and is principally engaged in the provision of leasing services of new energy
vehicle production factories in the Liangjiang New Area in Chongqing, China. The Sellers are
all state-owned enterprises, and each of them is an Independent Third Party: Chongqing
Industrial Parent Fund is ultimately controlled by the Chongqing State-owned Assets
Supervision and Administration Commission, and Liangjiang Industrial Group and Liangjiang
Investment Group are both ultimately controlled by the Liangjiang New Area Management
Committee.
Longsheng New Energy’s primary asset is a super factory which we had been leasing to
produce new energy vehicles. The acquisition of all the equity interests of Longsheng New
Energy have allowed us to gain direct ownership of the super factory, have more control over
our production line and more effectively realize our business expansion strategies. Following
this transaction, the Company’s total assets and net assets have increased, and the Company’s
debt to asset ratio has decreased. Moreover, the Company no longer needs to pay rent for the
super factory, improving our operating cash flow. For more details about the benefits of this
transaction, see references to our “Super Factory” in the section headed “Business —
Manufacturing, Supply Chain, and Quality Control”.
The industrial and commercial registration change of the acquisition was completed on
March 25, 2025, upon which Longsheng New Energy became a wholly-owned subsidiary of the
Company. The Consideration Shares were issued on March 27, 2025. The acquisition has been
properly and legally completed and settled, and all relevant approvals required from the
relevant authorities have been obtained.
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Acquisition of minority interest of Shenzhen Yinwang
On August 23, 2024, Seres Auto entered into an equity transfer agreement with Huawei
to purchase 10% of the equity interests held by Huawei in its then wholly-owned subsidiary,
Shenzhen Yinwang, at a total consideration of RMB11.5 billion.
Shenzhen Yinwang was established on January 16, 2024 in the PRC as a limited liability
company, and is primarily engaged in providing intelligent vehicle solutions. Prior to the
acquisition, it was wholly-owned by Huawei, a leading information and communications
solutions provider and an Independent Third Party. Our rationale for the transaction was to
continue to enhance our operational ecosystem through this acquisition by strengthening our
investments in intelligent vehicle technology, improving the stability of our supply chain for
intelligent vehicle components, maintaining our strategic partnership with Huawei, and
continuing to enhance our deployment in advanced vehicle smartification technologies and the
competitiveness of our intelligent electric vehicles, while enlarging the ecosystem cooperation
with our strategic partners.
The consideration for the acquisition was determined on the basis of the valuation of
Shenzhen Yinwang as of January 31, 2024 by an independent valuer and after arm’s length
negotiations between the parties.
The industrial and commercial registration change in respect of the acquisition of
Shenzhen Yinwang was completed on March 31, 2025, upon which Shenzhen Yinwang was
held as to 80%, 10% and 10% by Huawei, Seres Auto and Avatr Technology Co., Ltd. (ၪ
Ҧ(ᅅ)ʮ̡), respectively. The 10% equity interests of Shenzhen Yinwang acquired
by Seres Auto shall be accounted for using the equity method as Seres Auto is entitled to
nominate one director to the board of directors and the audit committee of Shenzhen Yinwang.
The acquisition has been properly and legally completed and settled, and all relevant approvals
required from the relevant authorities have been obtained.
Neither of the acquisitions described above would have been classified as a major
transaction under Chapter 14 of the Listing Rules as at the date of the Company’s application
for Listing, and as such do not fall within the scope of Rule 4.05A of the Listing Rules.
Save as disclosed in “Significant Acquisitions and Disposals” in this section, we did not
conduct any other acquisitions, disposals or mergers that we consider to be material to us
during the Track Record Period and up to the Latest Practicable Date.
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OUR LISTING ON THE SHANGHAI STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE HONG KONG STOCK EXCHANGE
Our A Shares have been listed on the Shanghai Stock Exchange since June 2016. Our
Directors have confirmed that the Company has no instance of material non-compliance with
the rules of the Shanghai Stock Exchange and other applicable securities laws and regulations
of the PRC in any material respect since the A Share Listing, and, to the best knowledge of our
Directors after having made all reasonable enquiries, there is no material matter that should be
brought to investors’ attention in relation to our compliance record on the Shanghai Stock
Exchange. Based on the filings on the website of the Shanghai Stock Exchange and the
information available in the public domain, our PRC Legal Adviser is of the view that the
Company had complied with all applicable securities laws and regulations in the PRC in
relation to its listing on the Shanghai Stock Exchange in all material respects for the two years
ended December 31, 2023 and 2024, and up to the date of submission of its H Share Listing
application to the Hong Kong Stock Exchange. Based on the independent due diligence
conducted by the Joint Sponsors and our PRC Legal Adviser’s view as set out above, nothing
has come to the Joint Sponsors’ attention that would cause them to have reasonable doubt about
our Directors’ confirmation with regard to the compliance record of the Company on the
Shanghai Stock Exchange in all material respects.
Our Company is seeking a listing of its H Shares on the Hong Kong Stock Exchange in
order to advance our global strategic layout, establish international capital operation platform
and enhance our comprehensive competitiveness. For more details, see “Business” and “Future
Plans and Use of Proceeds”.
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Our Single Largest Group of Shareholders comprises Mr. Zhang Xinghai, Sokon Holding
and Y u’an Industry.
Sokon Holding is an investment holding company held as to 50%, 25% and 25% by Mr.
Zhang Xinghai, Mr. Zhang Xingli and Mr. Zhang Xingming, respectively
1. Pursuant to the
articles of association of Sokon Holding, in the event that a deadlock arises when voting (where
votes are equally split 50%:50%), Mr. Zhang Xinghai, as the shareholder with the largest
capital contribution in Sokon Holding shall have the casting vote.
1 Notwithstanding that Sokon Holding is held as to 50%, 25% and 25% by Mr. Zhang Xinghai and his brothers
(i.e. Mr. Zhang Xingli and Mr. Zhang Xingming, respectively), Mr. Zhang Xingli and Mr. Zhang Xingming are
not considered as part of the Single Largest Group of Shareholders as Sokon Holding is not a special purpose
vehicle set up by Mr. Zhang Xinghai and his brothers for the purpose of controlling and holding their interests
in the Company. Sokon Holding is an investment holding company engaging in, among others, equity
investment. Its investee companies include but are not limited to, Chongqing Xinkang Mining Industry Co.,
Ltd. (ʮ̡) and Chongqing Tengkang Ecology Agricultural Development Co., Ltd. (ᅅᙜ
ʮ̡). Mr. Zhang Xinghai and his brothers had not jointly affected their management and
control as a unit in the matters of the Company.
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Y u’an Industry is an investment holding company held as to, among others, 15.8419% by
Sokon Holding and 11.9732% by Mr. Zhang Xinghai, respectively. Pursuant to the articles of
association of Y u’an Industry, the voting rights of the shareholders of Y u’an Industry are held
as to 50%, 25% and 25% by Mr. Zhang Xinghai, Mr. Zhang Xingli and Mr. Zhang Xingming,
respectively. In the event that a deadlock arises when voting (where votes are equally split
50%:50%), Mr. Zhang Xinghai, as the shareholder with the largest capital contribution in Y u’an
Industry shall have the casting vote.
Hence, Mr. Zhang Xinghai is considered as having control over Sokon Holding and Y u’an
Industry. Mr. Zhang Xinghai, Sokon Holding and Y u’an Industry are deemed as parties acting
in concert and Mr. Zhang Xinghai is regarded as our de facto controller ( ྼყછՓɛ) under the
applicable PRC laws, regulations and rules.
Proposed Issuance of Exchangeable Bonds by Sokon Holding
The Company was informed by Sokon Holding that it has submitted an application to the
Shanghai Stock Exchange for the proposed non-public issuance (the “ Proposed Issuance of
Exchangeable Bonds ”) of exchangeable bonds in connection with the A Shares (the
“Exchangeable Bonds ”). The proposed issuance term of the Proposed Issuance of
Exchangeable Bonds is no more than five years, with the fund to be raised of no more than an
aggregate of RMB3 billion with a portion of the A Shares held by Sokon Holding as the
underlying assets. As of the Latest Practicable Date, the Proposed Issuance of Exchangeable
Bonds is still subject to the approval by the Shanghai Stock Exchange.
The funds to be raised from the Proposed Issuance of Exchangeable Bonds are intended
to be used for repaying debts of Sokon Holding. Upon fulfillment of the applicable share
exchange conditions, the holders of the Exchangeable Bonds are entitled to convert their bonds
into the A Shares held by Sokon Holding within a designated conversion period. It is expected
that the initial exchange price of the Exchangeable Bonds shall not be lower than the highest
of the average trading prices of A Shares of the Company on the trading day preceding, and
over 20 trading days preceding, the date of publication of the offering document (the
“reference day ”) (in the event that during the above mentioned trading days, the share price
has been adjusted due to ex-rights or ex-dividend reasons, the trading price of each of these
trading days before adjustment shall be accordingly adjusted with reference to the ex-rights or
ex-dividend share price).
As security for the obligations of Sokon Holding under the Exchangeable Bonds, Sokon
Holding will pledge a portion of the A Shares held by it to the pledge agent for the holders of
the Exchangeable Bonds. Assuming (i) the fundraising size of no more than an aggregate of
RMB3 billion (inclusive), and (ii) June 30, 2025 being used as the reference day for the
purpose of calculating the initial exchange price of the Exchangeable Bonds, it is expected that
approximately 22,551,300 A Shares held by Sokon Holding could be exchanged for in the event
of full conversion of the Exchangeable Bonds, representing approximately 1.38% of the
Company’s issued share capital as of the Latest Practicable Date, and approximately 1.30% of
the Company’s issued share capital upon completion of the Global Offering. Based on the
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assumption above, assuming full conversion of the Exchangeable Bonds and the Offer Size
Adjustment Option and the Over-allotment Option are not exercised, the shareholding interests
of Sokon Holding in the Company will decrease to 21.80% upon completion of the Global
Offering. The Company expects that after the completion of conversion of the Exchangeable
Bonds, Sokon Holding will remain as a member of our Single Largest Group of Shareholders,
subject to any adjustment of exchange price of the Exchangeable Bonds.
Sokon Holding has confirmed that it will comply with Rule 9.09 of the Hong Kong
Listing Rules and will not proceed with the Proposed Issuance of Exchangeable Bonds before
the Listing even if it is approved before the Listing.
EQUITY INCENTIVE PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN OF THE
COMPANY
In order to enhance our Company’s competitiveness in the talent market,
comprehensively address our growing needs for talent and build a high-quality workforce, we
have adopted the 2017 RSU Scheme, 2021 Share Option Incentive Plan, 2022 Share Option
Incentive Plan and 2024 Employee Stock Ownership Plan.
Pursuant to the 2017 RSU Scheme, our Company granted an aggregate of 16,700,000
Shares to 29 grantees, including Directors, senior management and other employees of the
Company. Pursuant to the 2021 Share Option Incentive Plan, our Company granted an
aggregate of 40,000,000 share options to 3,704 participants, including Directors, senior
management and other employees of the Company. Pursuant to the 2022 Share Option
Incentive Plan, our Company granted an aggregate of 36,000,000 share options to 3,992
participants, including Directors, senior management and other employees of the Company. As
of the Latest Practicable Date, the 2017 RSU Scheme, the 2021 Share Option Incentive Plan
and the 2022 Share Option Incentive Plan have been completed, and there are no outstanding
Shares to be granted under the 2017 RSU Scheme or share options to be exercised under the
2021 Share Option Incentive Plan and 2022 Share Option Incentive Plan, as all restricted stock
units under the 2017 RSU Scheme have either been granted or repurchased and cancelled, and
all share options under the 2021 Share Option Incentive Plan and 2022 Share Option Incentive
Plan have either been granted and exercised or cancelled.
Our Company adopted the 2024 Employee Stock Ownership Plan on March 18, 2024. See
“Statutory and General Information — 2024 Employee Stock Ownership Plan” in Appendix IV
for details. We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock
Exchange has granted us, a waiver in relation to the outstanding Share Awards under the 2024
Employee Stock Ownership Plan and disclosure thereof. See “Waivers, Consents and
Exemption — Waiver in Relation to the 2024 Employee Stock Ownership Plan” for details. See
“Statutory and General Information — Further Information about our Directors and Substantial
Shareholders — Interests and short positions of our Directors and chief executive of our
Company in the Shares, underlying Shares and debentures of our Company and our associated
corporations” in Appendix IV for details of the shareholdings of our Directors.
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PUBLIC FLOAT AND FREE FLOAT
Satisfaction of the Public Float Requirement
Upon Listing, to the best knowledge of the Company, a total number of 794,553,566 A
Shares, representing approximately 45.83% of our Company’s total issued Shares, held by
Sokon Holding, Y u’an Industry, Dongfeng Motor and certain directors of the Company and its
subsidiaries will not be considered as part of the public float since they will be considered as
our Company’s core connected persons (as defined under the Listing Rules).
Rule 8.08(1) (as amended and replaced by Rule 19A.13A) of the Listing Rules provides
that, where a new applicant is a PRC issuer with other listed shares at the time of listing, this
will normally mean that the portion of H shares for which listing is sought that are held by the
public, at the time of listing, must (a) represent at least 10% of the issuer’s total number of
issued shares in the class to which H shares belong (excluding treasury shares); or (b) have an
expected market value of not less than HK$3,000,000,000.
Our A Shares are listed on the Shanghai Stock Exchange. The total number of the H
Shares to be issued pursuant to the Global Offering represents 5.78% of the total issued share
capital of our Company (assuming that the Offer Size Adjustment Option and the Over-
allotment Option are not exercised). Immediately following the completion of the Global
Offering (assuming that the Offer Size Adjustment Option and the Over-allotment Option are
not exercised), the total number of the H Shares expected to be held by the public represents
approximately 5.78% of the total issued share capital of our Company, which is higher than the
prescribed percentage of H Shares required to be held in public hands of 1.32% under Rule
19A.13A(2)(b) of the Listing Rules calculated based on the maximum Offer Price of
HK$131.50 per H Share, respectively, and on the basis that the portion of H Shares that are
held by the public, at the time of Listing, must have an expected market value of not less than
HK$3,000,000,000 under Rule 19A.13A(2)(b) of the Listing Rules, thereby satisfying Rule
8.08(1) (as amended and replaced by Rule 19A.13A) of the Listing Rules.
Satisfaction of the Free Float Requirement
Rule 8.08A (as amended and replaced by Rule 19A.13C) of the Listing Rules provides
that, where a new applicant is a PRC issuer with other listed shares at the time of listing, this
will normally mean that the portion of H shares for which listing is sought that are held by the
public 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 5% of the total
number of issued shares in the class to which H shares belong at the time of listing (excluding
treasury shares), with an expected market value at the time of listing of not less than
HK$50,000,000; or (b) have an expected market value at the time of listing of not less than
HK$600,000,000. Based on the maximum Offer Price of HK$131.50 per H Share, the Company
will satisfy the free float requirement under Rule 8.08A (as amended and replaced by Rule
19A.13C) of the Listing Rules.
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SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY PRIOR TO THE GLOBAL OFFERING
The following chart sets forth our simplified shareholding and corporate structure immediately prior to the Global Offering:
Other A ShareholdersDongfeng MotorYu’an IndustrySokon Holding(1)
Mr. Zhang Xinghai
11.97%50%
15.84%
24.52%
100% 100%
100% 100% 100% 100%
100%
88.71%
100%
4.05% 20.04% 51.39%
Single Largest Group of Shareholders: 28.57%
Our Company
Seres Hubei
Shiyan Dongfeng Fengon
Automobile Sales Co., Ltd.
(Έӛԓ
ʮ̡)
Chongqing AITO Premium
Automotive Parts Co., Ltd.
(ۜ
ʮ̡)
Chongqing Sokon
Machinery Parts Co., Ltd.
(ʮ̡)
Chongqing Sokon
Automotive Parts Co., Ltd.
(ʮ̡)
Chongqing Sokon
Motor (Group)
IMP. & EXP. Co., LTD
(ʮ̡)
Luzhou Rongda Intelligent
Transmission Limited Company
(ɽ౽ঐᜊ
ʮ̡)(3)
Chongqing Sokon
Power Co., Ltd.
(ʮ̡)
Chongqing Yu’an Huaihai
Powertrain Co., Ltd.
(ʮ̡)
Other subsidiaries(5)
100%
Sokon Group (Hong Kong)
Company Limited
(ʮ̡)
100%
Longsheng New Energy Seres Auto(2)
100% 100%
81.65% 100%
100% 100%
93.63%
Chongqing Seres
Electric Vehicle Co., Ltd.
(ᅅᒄɢ౶ཥਗ
ʮ̡)
Chongqing AITO
Automobile Sales Co., Ltd.
(ʮ̡)
Chongqing Jinkang Powertrain
New Energy Co., Ltd.
(ੰਗɢอঐ
ʮ̡)
Chengdu Seres
Technology Co., Ltd.
(ʮ̡)
Chongqing Seres
New Electric Vehicle
Sales Co., Ltd.
(ᅅᒄɢ౶อཥਗӛ
ʮ̡)
Chongqing Seres Phoenix
Intelligent Innovation
Technology Co., Ltd.
(ᅅᒄɢ౶ჾ਑౽
ʮ̡)(4)8.35%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) As at the Latest Practicable Date, Sokon Holding pledged 69,100,000 A Shares it held to certain regulated financial institutions in the PRC such as PRC banks and securities
companies regulated by the CSRC as securities for certain financings provided by such financial institutions to Sokon Holding, representing approx imately 4.23% of the issued
share capital of the Company.
(2) As at the Latest Practicable Date, Seres Auto is held as to 6.37% by 10 other shareholders, all of which are Independent Third Parties.
(3) As at the Latest Practicable Date, Luzhou Rongda Intelligent Transmission Limited Company is held as to 11.29% by 16 other shareholders, all of whi ch are Independent Third
Parties.
(4) As at the Latest Practicable Date, the rest of the equity interest of Chongqing Seres Phoenix Intelligent Innovation Technology Co., Ltd. is held b y our subsidiary, Chongqing
Seres New Energy Enterprise Management Consultation Partnership (Limited Partnership) (ᅅᒄอΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)).
(5) Other subsidiaries include, in aggregate, over 50 subsidiaries established in various jurisdictions. As at the Latest Practicable Date, other n on-wholly-owned subsidiaries of our
Company include (i) Chongqing Seres New Energy Enterprise Management Consultation Partnership (Limited Partnership) (ᅅᒄอΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)), a
limited partnership, of which the minority interests are held as to 10%, 10% and 10% by Xu Lin (؍Tang Ruyi (νจ), and Duan Wei (ਃ), respectively; (ii) Chongqing
Jiangkang Automotive Technology Co., Ltd. (ʮ̡), of which the minority interests are held as to 40% by Chongqing Shuangfu Construction and
Development Co., Ltd. (ʮ̡); (iii) Hunan Rongda Intelligent Transmission Co., Ltd. (ʮ̡), of which the minority
interests are held as to 1.7857% and 0.006% by Ding Quanshi ( ɕΌͩ) and An Xinlan ( τอᚆ), both being Independent Third Parties, respectively; (iv) Chongqing Landian
Automotive Technology Co., Ltd. (ʮ̡), of which the minority interests are held as to 33% by Chongqing Qingfeng Technology Development Co., Ltd.
(ʮ̡) and 32% by Chongqing Y uantou Cangchu Services Co., Ltd. (ʮ̡); (v) Beijing Saihang Jushen Intelligent Technology
Co., Ltd. (ʮ̡), of which the minority interests are held as to 30% by Beijing University of Aeronautics and Astronautics (ঘ˂ɽኪ); and
(vi) SF Motors, Inc. (“ SF Motors ”), of which the minority interests in aggregate of 0.0047% are held by four former employees of SF Motors who had exercised stock options
granted to them under the stock option plan adopted by SF Motors on June 12, 2018. As of the Latest Practicable Date, 12 employees and former employees of our Group, and
Mr. Zhang Zhengping, our Director, had been granted outstanding stock options to purchase an aggregate of 9,895,386 and 4,000,000 shares of SF Motors , representing
approximately 0.99% and 0.40% of the issued share capital of SF Motors, respectively. Such stock options have an exercise price of US$0.26 per share an d the valid period
of such stock options is 10 years from the date of the respective grant.
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SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY FOLLOWING THE COMPLETION OF THE GLOBAL
OFFERING
The following chart sets forth our simplified shareholding and corporate structure immediately following the completion of the Global Offering
(assuming the Offer Size Adjustment Option and the Over-allotment Option are not exercised):
Other A ShareholdersDongfeng MotorYu’an IndustrySokon Holding(1)
Mr. Zhang Xinghai
11.97%50%
15.84%
23.10%
100% 100%
100% 100% 100% 100%
100%
88.71%
100%
3.81% 18.88% 48.42%
Other H Shareholders
5.78%
Single Largest Group of Shareholders: 26.92%
Our Company
Seres Hubei
Shiyan Dongfeng Fengon
Automobile Sales Co., Ltd.
(Έӛԓ
ʮ̡)
Chongqing AITO Premium
Automotive Parts Co., Ltd.
(ۜ
ʮ̡)
Chongqing Sokon
Machinery Parts Co., Ltd.
(ʮ̡)
Chongqing Sokon
Automotive Parts Co., Ltd.
(ʮ̡)
Chongqing Sokon
Motor (Group)
IMP. & EXP. Co., LTD
(ʮ̡)
Luzhou Rongda Intelligent
Transmission Limited Company
(ɽ౽ঐᜊ
ʮ̡)(3)
Chongqing Sokon
Power Co., Ltd.
(ʮ̡)
Chongqing Yu’an Huaihai
Powertrain Co., Ltd.
(ʮ̡)
100%
Longsheng New Energy Other subsidiaries(5)Seres Auto(2)
100%  100%
 81.65%
8.35%
100%
100% 100%
 93.63%
Chongqing Seres
Electric Vehicle Co., Ltd.
(ᅅᒄɢ౶ཥਗ
ʮ̡)
Chongqing AITO
Automobile Sales Co., Ltd.
(ʮ̡)
Chongqing Jinkang Powertrain
New Energy Co., Ltd.
(ੰਗɢอঐ
ʮ̡)
Chengdu Seres
Technology Co., Ltd.
(ʮ̡)
Chongqing Seres
New Electric Vehicle
Sales Co., Ltd.
(ᅅᒄɢ౶อཥਗӛ
ʮ̡)
Chongqing Seres Phoenix
Intelligent Innovation
Technology Co., Ltd.
(ᅅᒄɢ౶ჾ਑౽
ʮ̡)(4)
100%
Sokon Group (Hong Kong)
Company Limited
(ʮ̡)
Note: Please refer to notes (1) to (6) in “Shareholding and Corporate Structure immediately prior to the Global Offering”.
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OVERVIEW
Who We Are
We are a technology company focused on new energy vehicles, including the research and
development, manufacturing, sales and services of new energy vehicles as well as core NEV
components. With nearly four decades of industrial experience and operational optimization,
we have achieved various business milestones. In 1986, we began with springs and shock
absorbers, later expanding into motorcycle manufacturing. In 2003, we capitalized on the rise
of domestic automotive brands and entered the vehicle manufacturing sector through a joint
venture with Dongfeng Motor. By 2016, we have transformed and tapped into the NEV sector.
In 2021, we launched the AITO brand, establishing our positioning as “Intelligence Redefines
Luxury” and introduced a series of models.
Guided by the market direction of “user-defined vehicles” and the technological roadmap
of “software-defined vehicles”, we are committed to continuously providing the quality
product experience for our users. Our innovations in product and technologies stem from a
profound understanding of user needs, fostered through co-creation with our customers. Our
platform-based technical architecture allows for smooth hardware upgrades and software
iterations.
We have a track record of creating popular products. Since its launch, our core brand,
AITO , has experienced a rapid sales growths. To date, we have successfully launched four
models: AITO M5 , AITO M7 , AITO M8 , and AITO M9 . The AITO M5 set a record for being the
fastest new-brand model to deliver over 10,000 vehicles in its inaugural year. The AITO M7
became the best-selling domestic brand model in the RMB300,000 price segment in China,
delivering approximately 200,000 vehicles in 2024. The AITO M9 led the RMB500,000 price
segment in China with a delivery of over 150,000 vehicles in 2024. Our AITO M8 , launched
in April 2025, has also gained strong market traction, securing over 30,000 orders within just
24 hours of its official release. In the second half of 2024, the AITO brand topped China’s NEV
reputation rankings with a Net Promoter Score (NPS) of 82%, according to the Frost &
Sullivan Report. Total deliveries of the AITO brand reached 387,100 vehicles in 2024, marking
a 268% year-on-year growth.
Our delivery capabilities enable us to achieve instant ramp-up. Our Super Factories and
digital supply chain system ensure the high-quality and swift delivery of our AITO series
products. As a result, the production volume of the AITO M9 exceeded 150,000 vehicles within
10 months of launch, exemplifying “rapid scalability after launch.” We have placed great
emphasis on quality control. The AITO series have set industry benchmarks in quality
performance, ranking first in the New V ehicle Quality Rankings among new vehicle brands for
three consecutive years, according to the Frost & Sullivan Report.
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Our New Luxury Product Matrix
Our AITO brand has developed a product matrix that includes four models: AITO M9 ,
AITO M8 , AITO M7 and AITO M5 . This lineup covers the market through differentiated
positioning, and effectively targets the high-end segment with a precise pricing strategy and a
combination of scenario-based features.
The details of our product matrix are as follows:
AITO M9
Positioning
Length × Width ×
Height (mm)
Wheelbase (mm)
Powertrain
MSRP
(RMB in ten thousand)
Initial delivery date
All-scenario intelligent
flagship SUV
Family intelligent
flagship SUV
Family intelligent
luxury SUV
Stylish urban
intelligent SUV
5,230x1,999x1,800 5,190x1,999x1,795 5,080x1,999x1,780 4,785x1,930x1,620/1,625
3,110 3,105 3,030 2,880
CLTC range (km) 1,474 1,526 1,625 1,440
46.98-56.98 35.98-44.98 27.98-37.98 22.98-24.98
February 2024 April 2025 August 2022 March 2022
REEV/BEV REEV/BEV REEV/BEV REEV/BEV
Number of seats Five-seater/six-seater Five-seater/six-seater Five-seater/six-seater Five-seater
AITO M8 AITO M7 AITO M5
AITO M9 is positioned as an all-scenario intelligent flagship SUV . The AITO M9 led
the RMB500,000 price segment in China with a delivery of over 150,000 vehicles in 2024. In
addition, according to the Frost & Sullivan Report, in 2024 the AITO M9 ranked first in NPS
among new energy SUV models, led the user satisfaction rankings for hybrid large SUVs, and
achieved the highest value retention rate for new energy SUVs in China. With its advanced
technological features, luxurious experience, and outstanding market performance, the AITO
M9 has set a benchmark in the luxury electric vehicle sector in China, according to the Frost
& Sullivan Report.
AITO M8 is positioned as a family intelligent flagship SUV . We launched our latest
model, the AITO M8 , in April 2025, securing over 30,000 orders within just 24 hours of its
official release.
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AITO M7 is positioned as a family-intelligent luxury SUV . The AITO M7 is recognized
as a “national SUV” by the market, delivering approximately 200,000 vehicles in 2024, making
it the top-selling domestic brand model in the RMB300,000 price segment in China. In the
2024 China New Energy V ehicle Industry Customer Satisfaction Index (NEV-CACSI)
evaluation, it claimed first place in user satisfaction for hybrid medium-to-large SUV and is
highly favored by a diverse range of families.
AITO M5 is positioned as a stylish urban intelligent SUV . The AITO M5 has gained
significant popularity among young families and tech-savvy consumers, thanks to two core
strengths: high performance and cost effectiveness. In 2024, it was awarded the “China
Automobile Festival Annual Intelligent SUV” title and earned top honors for perceived quality
among electric mid-size SUVs.
Our Intelligent NEV Solutions
With over twenty years of experience in automotive manufacturing, we have continuously
refined traditional vehicle performance, space utilization, and technological processes. On this
foundation, we have independently developed the MF platform and introduced five intelligent
automotive solutions: intelligent safety, driving assistance, intelligent powertrain, intelligent
cockpit, and intelligent chassis, dedicated to providing users with a safe and intelligent riding
experience characterized by “ease of use and driving comfort.”
Driving assistance
Intelligent safety
Intelligent chassis
Intelligent cockpit
Intelligent powertrain
MF Platform
Safer driving
Stronger protection
Freewheeling interaction
Stronger ecosystem
More innovative function
Worry-free power
Worry-free scenarios
Full-scenario coverage
Superior battery safety
More comprehensive functions
More comfortable driving
 and riding
More flexible control
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Intelligent Safety
Our innovative safety technology system defines safety through various scenarios,
encompassing over 180 use cases and developing more than 300 safety functions. Our AITO
M9 received the only “Super Five-Star” safety certification from C-NCAP with a
comprehensive score of 93.9% — the highest score in C-NCAP’s history. It also received the
only G/G+/G+/G+ safety rating in the C-IASI safety certification from the China Insurance
Research Institute.
Stronger protection : The AITO M9 is designed with eight horizontal and five vertical
structures to effectively disperse impact forces during a collision, ensuring robust protection
for drivers and passengers. It employs hot-formed steel with a strength of 2,000 MPa at 12 key
locations and is equipped with 9 airbags to enhance safety comprehensively. The AITO M9
features the industry’s first 10,000-ton-level integrated die-cast rear body, which comprises up
to 80% aluminum alloy, contributing to a lightweight vehicle structure.
Full-scenario coverage : The AITO model features the omni-directional collision
avoidance system 3.0, offering all-weather, all-scenario, and all-target perception. The
autonomous emergency braking feature can effectively operate at a maximum speed of 150
km/h, providing comprehensive active safety measures at the rear and both sides. Additionally,
we provide safety assistance features, such as blind zone warning integrated with intelligent
lighting.
Superior battery safety : We have established a five-layer safety protection technology,
no heat diffusion technology, and a comprehensive verification system for all scenarios, with
its battery structure design and experimental standards significantly exceeding national
standard requirements.
Driving Assistance
We are committed to providing users with driving assistance experience across all roads
in the country, enabling users to confidently utilize this technology with the utmost safety
performance.
Safer driving : Our driving assistance system significantly reduces the potential accident
rate. As of June 30, 2025, we have successfully prevented over 1.8 million potential collisions.
For instance, the insurance costs for the AITO M9 are lower than the industry average for
comparable models. We are also introduce a worry-free guarantee for driving assistance,
allowing users to confidently utilize this technology. Our driving assistance system has become
one of the most frequently used systems among domestic car owners. As of June 30, 2025, our
cumulative driving assistance mileage has exceeded 2.67 billion kilometers, accounting for
31.1% of users’ total driving mileage, and facilitated over 170 million times of parking
assistance.
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More comprehensive functions : We can cover a wide range of application scenarios to
provide a smooth driving assistance experience. Our parking assistance system can
autonomously complete safe passing, reversing, and yielding to pedestrians. We have
introduced various innovative functions. For instance, the AITO ’s adaptive matrix headlights
project lane-level dynamic light carpets in real time during lane changes or turns.
Intelligent Powertrain
As a leader in range extending technology in China, we provide users with a
comprehensive worry-free power system that effectively addresses the two main concerns of
new energy vehicles: range anxiety and charging anxiety.
Worry-free power : We have developed an all-scenario, intelligent decision-making
system based on the “Sai Yi (C2E) Range Extending Architecture” and “RoboREX Intelligent
Control Technology”. This creates energy-efficient, low-noise, and highly effective super range
extending solutions, achieving a thermal efficiency of 44.8% and an oil-to-electricity
conversion rate of 3.65kWh/L. These figures represent the highest levels among mass-
produced range extenders in the industry.
Worry-free scenarios : We feature the world’s first dual-backup power supply electric
drive assembly, equipped with intelligent four-wheel drive control technology. This allows for
vector torque adjustments on both front and rear axles, facilitating seamless torque distribution
from 0 to 100%. As a result, our vehicles can overcome a variety of challenging terrain
conditions.
Intelligent Cockpit
We develop personalized intelligent living spaces for users through multi-screen
collaboration, the Internet of Everything, and an open ecosystem.
Freewheeling interaction : Our cockpit supports multi-screen streaming and sharing,
allowing users to operate various functions by simply sliding and dragging. The cockpit’s voice
assistant supports full-scenario wake-up-free functionality.
Stronger ecosystem : Our intelligent cockpit system supports 56 mainstream applications,
positioning us prominently in the industry. Furthermore, through super desktop interconnection
feature, we have achieved “seamless connectivity” among mobile phones, tablets, and smart
home devices, enabling effortless control of the vehicle via mobile applications.
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More innovative functions : We have introduced several innovative intelligent cockpit
features to provide users with a unique and practical experience. The AITO M9 debuted the
world’s first privacy sound shield function, which isolates the driver in real-time for private
conversations, effectively creating an exclusive meeting space within the cockpit. Additionally,
our AR-HUD supports a 75-inch large screen display, and by integrating AR and driving
assistance technologies, provides clear and dynamic guidance.
Intelligent Chassis
Our intelligent chassis integrates AI capabilities and utilizes software to enhance
mechanical characteristics, optimally balancing vehicle handling and comfort to provide users
with the ultimate driving experience.
More comfortable driving and riding : We employ vehicle posture perception and road
preview technology to provide a smooth driving experience likened to a “magic carpet.”
Leveraging the dynamic adaptive torque system, we ensure stable navigation under complex
road conditions while enabling calm responses to various emergencies.
More flexible control : Centralized control coordinates vehicle driving, braking, steering,
and suspension. With millisecond-level perception of vehicle status and centimeter-level
motion estimation, we achieve precise control over the vehicle’s longitudinal, lateral, and
vertical displacements.
Our Growth
During the Track Record Period, our “new luxury” intelligent NEVs received recognition
in the market, leading to growth in our operating performance:
 Revenue : increased from RMB35.8 billion in 2023 to RMB145.1 billion in 2024,
representing a year-on-year increase of 305.5%;
 Gross profit margin : increased from 7.2% in 2023 to 23.8% in 2024, representing
an increase of 16.6 percentage points, and increased from 21.8% for the six months
ended June 30, 2024 to 26.5% for the six months ended June 30, 2025, representing
a year-on-year increase of 4.7 percentage points;
 Net profit : in 2024 and for the six months ended June 30, 2025, we achieved a net
profit. We are the fourth profit-making NEV company in the world according to the
Frost & Sullivan Report. In 2023, we recorded a net loss attributable to owners of
the Company of RMB2.4 billion, and in 2024 and for the six months ended June 30,
2025, we recorded a net profit attributable to owners of the Company of RMB5.9
billion and RMB2.9 billion, respectively.
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OUR STRENGTHS
A Leading New Luxury Vehicle Brand
We continuously enhance the “tech-luxury” attribute of our products through
technological innovation, aiming to create new luxury offerings that combine “traditional
luxury” and “tech-luxury.” In 2024, the total sales volume of our AITO series products ranked
third in the premium new energy passenger vehicle segment in China. Notably, in 2024, the
AITO M7 ranked first by sales volume among domestic brand models in the RMB300,000 price
segment in China, and the AITO M9 ranked first by sales volume among models in the
RMB500,000 price segment in China.
The AITO brand topped China’s NEV reputation rankings with a NPS of 82% in the
second half of 2024, according to the Frost & Sullivan Report. The AITO brand was featured
in CCTV’s “National Brand Project”, where it ranked first among domestic high-end brands in
three core indicators: brand recognition growth rate, development confidence index, and
average sales price per vehicle, according to the Frost & Sullivan Report.
We place significant importance on engaging in co-creation with users, consistently
valuing their feedback. This approach transforms users into advocates for our brand value
rather than mere product users. The referrals of our users and the sales volume of the AITO
brand reflect the appreciation and esteem that users hold for our commitment to high standards
in technology, creativity, and aesthetics.
A Streamlined and Efficient Operation and Management System
We have established a full-chain operation and management system that connects strategy
to execution through three core processes: DSTE (Develop Strategy to Execution), IPD
(Integrated Product Development), and IPMS (Integrated Product Marketing & Sales).
Through comprehensive implementation of these measures, we enhanced our operation
and management capabilities in terms of process, efficiency, and effectiveness. Our approach
has fostered efficient cross-departmental collaboration and quality control throughout the
entire process, from conceptual design to mass production and delivery. This ensures optimal
resource allocation and consistent delivery standards across all business operations.
Furthermore, we have developed a rapid response mechanism driven by user feedback, which
effectively applies successful experiences in product development and market operations. This
mechanism provides crucial decision-making support for both the development of new
products as well as the iteration of existing products, consistently facilitating business success.
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Leadership in Technology Propelled by a Synthesis of Innovation + Collaborative
Innovation
Our leading technological capabilities serve as a vital driving force behind our products,
enabling continuous functional innovations that contribute to our market success. The AITO
M9 showcases over 40 technologies, including 16 pioneering innovations such as the industry’s
first 192-channel LiDAR, a 32-inch automotive-grade projection screen, brushless motor
doors, and a starlight key. Similarly, the AITO M8 incorporates more than 40 advanced
technologies, including six first-in-industry technologies, such as the MOFs+UVC sterilization
module and the A/B two-way isolation redundant low-voltage power supply technology.
Through the synergistic application of innovation and collaborative innovation, we have
solidified our status as a technological leader:
MF Platform : We have self-developed the MF Platform. This platform-based vehicle
manufacturing model enables us to reduce the overall development costs and significantly
enhances the agility and flexibility of our development process. Our MF Platform supports
both REEV and BEV models, facilitating integration of safety, power, chassis, and software
through four core advantages of full-scenario safety, diversified power, adaptive space, and
leading intelligence. The MF platform provides users with an “easy to drive, easy to use, and
super safe” intelligent riding experience.
SERES Super REX System : We are the first vehicle manufacturer to commercialize
mass-produced range extenders and continue to lead the development of range extender
technologies for NEVs. We have transformed range extender technology from merely “usable”
to “easy to use”, and we were certified by national authorities for our “oil-to-electricity
conversion rate” and “NVH performance.” In addition, we empowered the industry’s
technological development by taking the lead in the revision of the automotive industry
standard “QC/T 1086 Technical Requirements and Test Methods for Range Extender
Technologies for EVs.” Our latest generation of SERES Super REX System boasts an
oil-to-electricity conversion efficiency of 3.65kWh/L, which is the highest level of mass-
produced range extenders in the industry.
Intelligent safety system : We prioritize product safety as a fundamental principle and
have established a comprehensive intelligent safety system across nine dimensions,
encompassing both passive and active safety throughout the vehicle lifecycle. Utilizing the
authoritative CIDAS and FASS databases in China, we have developed and navigated 81
collision scenarios. The AITO M9 , equipped with this system, has secured first place in the two
major evaluation indices of C-NCAP and C-IASI in China.
Intelligent testing system : We have established an intelligent testing system during
product development. We have built highly automated testing laboratories, and developed a
variety of extreme testing bases, including an exclusive extreme cold full-scenario test base,
ensuring comprehensive coverage of all vehicle usage scenarios. For post-delivery product
testing, we offer full-chain intelligent testing and proactive service capabilities throughout the
lifecycle of products.
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Collaborative Innovation : Through collaborative innovation, we have developed
advanced intelligent cockpit and driving assistance systems together with our partners. By
leveraging our strengths in user insights, we implement targeted data collection, training,
scenario definition, and optimization to ensure that the intelligent cockpit and driving
assistance systems in our vehicles remain at the forefront of innovation and industry
leadership. Furthermore, through the deep integration of vehicle control technologies, we
continuously enhance the driving assistance experience through the cross-domain synergy of
vehicles.
Capability to Ramp Up Delivery Instantly
We continuously strive to minimize the gap between demand and delivery through digital
manufacturing and supply chain management capabilities. In 2024, the annual production
volume of the AITO M7 reached approximately 200,000 vehicles, with monthly deliveries
exceeding 30,000 vehicles. The production volume of the AITO M9 exceeded 150,000 vehicles
within 10 months following its launch in 2024, demonstrating its ability to “rapidly scale upon
entering the market.” Moreover, we have not experienced any major quality issues during the
instant ramp-up delivery of the AITO M7 and AITO M9 , setting a benchmark for the industry.
We operate three intelligent factories, employing over 3,000 robots working
collaboratively to achieve high automation rates across the intelligent servo stamping line,
welding process, painting and assembly workshop. We launched the first 10,000-ton-level
integrated die-casting, consolidating 222 parts into 10, which significantly enhances the
rigidity, stability and productivity of vehicle bodies. Leveraging digital-twin technology, our
Super Factory utilizes digital technology as a driving force and seamlessly integrates artificial
intelligence, big data, the Internet of Things to establish an intelligent manufacturing platform
that achieves high-quality, efficient and agile delivery.
We also continue to enhance collaboration with supply chain partners in R&D, quality,
delivery and other areas, enabling real-time monitoring and instant alerts of production quality
data from key suppliers. This enhances digital and intelligent quality of components throughout
the supply chain, enabling agile response from product design to manufacturing and delivery
while continuously improving supply chain efficiency.
A Sales And Service Ecosystem Enabling Precise Engagement Throughout the Lifecycle
Efficient direct user engagement across all channels. As of June 30, 2025, we had over
700 experience centers and over 350 user centers across over 240 cities, ensuring that services
are accessible whenever users need them. In addition to offline channels, we have developed
a unified digital user platform to facilitate user engagement across all online and offline
channels. Through our exclusive butler service, we provide 24-hour online responses, allowing
users to enjoy an exceptional, convenient, and personalized experience anytime and anywhere.
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In response to users’ vehicle and lifestyle needs, we continually expand our portfolio of
premium accessories by precisely identifying their requirements and enriching the range of
ancillary and derivative products. This approach not only addresses users’ essential demands
for vehicles but also fosters a deeper emotional connection with them.
“Intelligent and Worry-free” service system. With the increase in sales volume, the
number of AITO users will exceed 700,000. The vast user base has laid a solid foundation for
the development of the AITO and the establishment of an ecosystem. With “Intelligent Service”
as the core strategy, through the application of digitalization and AI, we create a new lifecycle
management system and establish a digital ecosystem. We have a profound insight into user
needs for continuous innovation. We have launched a variety of service initiatives: starlight
service, tire delivery service, worry-free return service, etc.
Our online platform has covered the full range of user interactions involved in vehicle
purchase, delivery, use, control, maintenance, sale, and social engagement. We offer users a
fully digital, transparent service experience, which includes car pick-up and delivery, as well
as remote services. By leveraging digital technology, we ensure precise time management to
enhance service efficiency.
Entrepreneurial Spirit and R&D Team
We started from spring manufacturing in 1986, and entered the field of vehicle
manufacturing in 2003. By 2016, we have transformed and tapped into the NEV sector.
Throughout the journey, we continuously achieved industrial upgrade driven by the
entrepreneurial spirit.
We have a management team with decades of experience in the industry and a strategic
vision. Our management has been deeply involved in the automotive sector for over 20 years.
Amid the critical period of industry transformation, we accurately anticipated the trend of
intelligent electric vehicles and developed “new luxury” products that integrates traditional
luxury and technological luxury.
Our vehicle development and R&D team integrates traditional vehicle manufacturing,
new energy technology, intelligent hardware, and artificial intelligence technology. The
diverse, dynamic, and enterprising R&D team is crucial for ensuring that our products
consistently maintain competitiveness. As of June 30, 2025, we had 8,005 R&D and technology
personnel, representing an increase of 888 people from the end of 2024 and an increase of
12.5%. With our strong R&D capabilities, we will continue to promote technological
innovation.
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OUR STRATEGIES
Dedicated to Serving Users, Striving to Become a Leading World-Class New Luxury
Automotive Brand
Enhancing our brand is at the heart of our strategic vision. We are committed to firmly
establishing our position in redefining luxury through intelligence. By focusing on intelligent
safety, driving assistance, intelligent cockpits, intelligent chassis, and intelligent services, we
are reinforcing our standing among world-class premium brands. We continuously explore and
enhance our technology, products, global expansion, user services, and intelligent
manufacturing capabilities. Through technological and business model innovations, we
cultivate competitive advantages and aim to become a leading world-class new luxury
automotive brand.
To achieve these strategic objectives, our key measures include:
Building a New Standard of Tech-Luxury to Set a Global Benchmark for Intelligent NEVs
Technology is our core competitive advantage and strategic focus. We will increase our
investment in advanced R&D to establish a new luxury paradigm that seamlessly merges
“traditional luxury” with “tech-luxury.” We will firmly embrace the technical roadmap of
“software-defined vehicles” and adhere to a strategy that encompasses “mass production,
development, pre-research, and exploration.” Our commitment to enhancing R&D investments.
We plan to comprehensively adopt advanced digital and intelligent technologies while
consistently improving the commercialization of groundbreaking technological advancements.
We aim to drive innovation through technology, continuously elevating the intelligence of our
products and services.
Continuing to Upgrade the MF Platform : We aim to continue to achieve breakthroughs
in high-performance, lightweight construction, energy efficiency, low carbon emissions, and an
unparalleled user experience. Utilizing the MF Platform, we will continually refine vehicle
architectural capabilities.
Enhancing the Driving Assistance Experience : Through collaborative development, we
intend to comprehensively upgrade the software and hardware associated with driving
assistance. By integrating advanced AI technologies, we will address the complex challenges
faced by users in various driving scenarios, providing a safer and more enjoyable driving
experience.
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Strengthening Intelligent Safety : We will prioritize a “safety first” approach.
Leveraging our first-mover advantage, system capabilities, and collaborative experimental
resources, we will enhance and refine our comprehensive intelligent safety measures,
maintaining our leadership in this vital area.
Adhering to a Popular Product Strategy to Offer a Continuously Evolving Product
Experience for Global Users
We strive to develop new energy vehicle products that offer unique advantages and
leadership across generations and cost structures. Our focus will be on scenarios and user
experiences as we develop flagship models of luxury NEVs that blend intelligent technology
with human-centered design.
We will enhance our popular product strategy by continuing to refine our product
portfolio to meet diverse user needs. We are devoted to developing high-quality models while
leveraging products to strengthen user satisfaction and brand recognition. We will
simultaneously iterate on multiple generations of models, dynamically balancing core user
demands with profit margins. Furthermore, we will expand market coverage based on
real-world user insights, prioritizing user experience and product profitability as foundational
criteria for optimizing our product offerings.
We will adhere to a market direction focused on “user-defined vehicles,” promoting
a continuous feedback loop from users to R&D to improve product competitiveness and
customer satisfaction. Our active exploration will capture emerging technologies, market
shifts, and evolving user needs in real-time. Utilizing an integrated product innovation
platform that combines internal and external resources, we will continuously enhance the user
experience.
Actively Promoting Globalization and Expanding Our Brand Influence in International
Markets
We are dedicated to a globalization strategy to expand in overseas markets. We will
continue to develop international markets, gradually establishing a strong global brand
presence and leadership.
We will promote the localization of premium brand models in overseas markets. We
plan to enhance the international expansion of our core brands while adhering to local
regulations, market practice, consumer preference, and cultural diversity. Our goal is to create
interactive services and driving assistance experiences tailored for users across diverse
markets, establishing competitive advantages in international markets and driving growth in
both sales and revenue.
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We will uphold principles of openness and cooperation, actively establishing diverse
international networks to expand local production capacities worldwide. We will integrate
high-quality global industrial resources and foster collaborative partnerships. Furthermore, we
will explore various methods to build overseas networks, including self-operation, joint
ventures and strategic alliances with local partners, and mergers and acquisitions, to enhance
local production capabilities in various countries and regions. Our objective is to strengthen
our presence in leading markets, continuously promote the overseas reputation, and expand our
global market share. As we increase overseas vehicle sales, we will also develop strategies for
overseas component sales, leveraging our technical advantages in range extending products. As
demand for REEVs grows globally, we will explore new and diverse globalization strategies.
Creating an Active and Intelligent Service System Throughout the V ehicle Lifecycle
We aim to establish a world-class sales channel for our new luxury brand. Building on our
existing domestic and international sales networks, we will increase channel penetration where
necessary, enhance in-store service capabilities, and improve digital services and full-cycle
operational capabilities for users through a fully-integrated sales and service network.
Expanding Sales Network for Efficient Direct Engagement across All Channels :W e
are committed to the principles of “being close to our users, facilitating their convenience, and
providing satisfactory service.” To this end, we will expand the coverage of both our domestic
and international service networks, increasing channel penetration to effectively reach users of
high-end products. Our sales service network will be characterized by “front-line leadership
and multi-point linkage.” Additionally, we will develop a refined retail management system
that flows from headquarters to regions and individual stores, continually enhancing sales
capabilities.
Improving Service Experience Through Digitalization and Intelligence : We will
create a next-generation intelligent service system powered by AI technology to accurately
meet user needs. Utilizing advanced digital technologies, such as OTA software upgrades and
AI-driven models, we aim to provide users with a comprehensive, precise, transparent,
efficient, and high-quality service experience.
Providing Full Lifecycle Service to Elevate Worry-Free Standards : We will reshape
service quality benchmarks to align with the standards of luxury, continuously optimizing our
five-in-one service support system for “marketing, product operation, technical support,
engineering development, and user engagement.” Furthermore, we will upgrade traditional 4S
store services to create a luxury, worry-free service experience that combines technological
capabilities with a human touch, enhancing our brand value through every interaction.
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Continuing to Enhance Intelligent Manufacturing Capabilities to Establish an Open,
Innovative, and Integrated Ecosystem for the Intelligent V ehicle Industry
We are committed to building a globally leading intelligent manufacturing system. By
focusing on large-scale, agile, and intelligent production, we continuously update our
manufacturing standards with advanced technologies. Our goal is to redefine the vehicle
production model through automation and intelligence while consistently upgrading our
capabilities for instant production and delivery, thereby creating an open, innovative, and
integrated ecosystem for the intelligent automobile industry.
Enhancing Intelligent Manufacturing and Delivery Capabilities of Instant Ramp-Up :
We will continue to develop our intelligent manufacturing system, known as the “SPS (Smart
Production System).” Through the coordinated operation of large-scale robotic production
lines, intelligent devices, and unmanned systems, we will empower our global benchmark
super factories and achieve fully automated and intelligent capabilities across the entire
production and logistics chains. Our focus will be on consistently improving the efficiency,
quality, and flexibility of our delivery network, maintaining our competitive edge in rapid
production capabilities.
Building an Integrated and Collaborative Industrial Ecosystem : We will actively
connect various components of the industrial chain, integrating supply and intelligent
manufacturing. For product integration, we will develop a vertically integrated technology
chain with leading supplier partners. Regarding intelligent manufacturing collaboration, we
will advance “synchronous development, supply, and production” through a high degree of
component integration and local supplier collaboration.
OUR PRODUCTS
The “AITO” Brand
Our AITO brand is positioned for “Intelligence Redefines Luxury,” constantly refining on
vehicle performance, space, and technological processes and incorporating technological
luxury elements, including intelligent safety, driving assistance, intelligent powertrain,
intelligent cockpit, and intelligent chassis. We are committed to providing users with an
intelligent driving experience characterised by “easy to drive and easy to use.” The brand name
“AITO ” stands for “Adding Intelligence to Auto.” Currently, we have launched four AITO
models, including our AITO M9 , AITO M8 , AITO M7 and AITO M5 models.
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AITO M9
The AITO M9 is our flagship all-scenario intelligent SUV , featuring luxurious design,
superior safety, precise performance and flagship intelligence, meeting users’ travel needs in
all scenarios. We offer the AITO M9 in both REEV and BEV models. The AITO M9 REEV
model features CLTC of over 1,400km, while the BEV model features CLTC of up to 630km.
The MSRP of the AITO M9 ranges from RMB469,800 to RMB569,800.
Luxurious design. We integrate Chinese aesthetics and advanced technology into the
AITO M9 body design. With smooth and elegant body lines, the AITO M9 delivers a strong
visual impact at first glance. The interior cabin is designed with a flat floor design and
class-leading seating space, and features ultra-soft seats and “zero gravity” seats with wide
reclining angles, seat heating, adjustable backrests, and generous adjustments. The AITO M9
also features a wide range of thoughtful design features, including surround sound systems,
dual cooling and heating in-car refrigerator, fragrance system, ambient lighting and double-
layered sound-proof glass, creating an unmatched comfortable driving and riding experience.
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Superior safety. The AITO M9 features heat-formed steel with a strength of 2,000 MPa
in 12 key parts, combined with 9,800-ton integrated die-casting technology. The vehicle’s
aluminum alloy comprises over 80% of its volume, providing a strong yet lightweight and safe
body structure. A dual anti-collision beam design of the AITO M9 , paired with a 8-by-5 matrix
body structure, provides multi-layered protection against frontal and side impacts, while our
interior cabin contains 9 airbags covering 16 safety points, comprehensively safeguarding
every passenger. To ensure battery safety, the battery cells of the AITO M9 are encased in
5-layer safety packaging, wrapped around an additional 11 protective chambers. Moreover, the
AITO M9 is equipped with various intelligent safety technologies, such as emergency steering
assist, automatic emergency braking, emergency lane keeping, road adaptive, and automatic
emergency avoidance technologies, which form an advanced omnidirectional stereo-fusion
perception system to enhance active safety performance.
Elevated driving experience. We offer AITO M9 in REEV and BEV models at the users’
choice. With a vehicle length of 5,230 millimeters, the turning radius of the AITO M9 is just
5.8 meters, driven by an intelligent AWD system. It boasts an all-aluminium alloy chassis, a
one-piece cast aluminium subframe, and a four-ball-joint double-wishbone independent
suspension. The entire range comes standard with an intelligent closed-loop air suspension
system and CDC (Continuous Damping Control) variable damping shock absorbers, which
allow for dynamic softness and hardness adjustments, providing a responsive, smooth, and
comfortable driving experience across various terrains.
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Flagship Intelligence. In addition to traditional luxury features such as that focuses on
performance, materials, and craftsmanship, the AITO M9 also offers enhanced driving
experience through intelligent safety, driving assistance, powertrain, cockpit and chassis. The
AITO M9 is equipped with a 75-inch AR HUD with a high 2K resolution, integrating AR
real-world views, while the second row features a giant 32-inch projection screen. Equipped
with an advanced integrated perception system, the AITO M9 achieves 540° all-around
coverage, helping users confidently navigate various complex road conditions, while the
intelligent interactive matrix headlights implement smart lighting functions including width
mapping and enhanced adaptive driving beam. It also enables personalization through features
like charging time reminders and music rhythm synchronization.
We began deliveries of the AITO M9 in February 2024. In 2024, the AITO M9 ’s total
deliveries was 151,188 units, becoming the best-selling model in the RMB500,000 price
segment in the Chinese market. In the six months ended June 30, 2025, we delivered 62,433
AITO M9 vehicles. The AITO M9 has transformed the sales pattern of China’s premium brand
vehicle market, setting a new standard for tech-luxury SUVs with its all-scenario capabilities.
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AITO M8
We launched the AITO M8 model, our brand-new flagship intelligent family SUV , in April
2025.
The AITO M8 is a full-size flagship SUV meticulously crafted for discerning family users.
It delivers an unparalleled premium experience in the areas that families prioritize most,
namely comfort, safety, intelligence, and luxury, while addressing diverse mobility needs
across all scenarios. The AITO M8 offers discerning families a new choice for a versatile
mobile lifestyle space.
The AITO M8 REEV model features CLTC of over 1,500km, and the BEV model features
CLTC of over 700km, with 5-seater and 6-seater versions available for option. The MSRP of
the AITO M8 ranges from RMB359,800 to RMB449,800.
Comfort. The AITO M8 is engineered to deliver enhanced experiences to users in space,
comfort and convenience.
With a super-long wheelbase measuring 3,105mm, the AITO M8 offers ample interior
space. The six-seater version is designed with a configuration comprising a level floor area of
3 square meters and leg room nearing 1 meter. The five-seater version incorporates an
expanded second row and an impressive trunk capacity of 1,086L. All AITO M8 models feature
ultra-soft seats, with the six-seater version equipped with “zero gravity” seats and five-seater
version featuring “semi-zero gravity” seats, both providing users with enhanced driving and
riding experience. The AITO M8 features a diversified and flexible cabin space, such as
versatile cabin storage, oversized trunk, concealed storage options, and under-seat storage
boxes in the rear row, offering users a convenient driving experience.
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Safety. The AITO M8 spares no effort to safeguard every journey for families, excelling
across passive safety, active safety, and well-being.
The AITO M8 features a “ Xuanwu (؛vehicle body” with an eight-by-five matrix
structure, reinforced with hot-formed steel with a strength of 2,000 MPa at 12 locations,
delivering multi-layered structural protection. Fitted with nine airbags and an industry-first
triple-layer safety mechanism door handles ensure comprehensive safety protection. For active
safety, the AITO M8 integrates 30 advanced sensors, including dual LiDAR sensors and a
distributed 4D millimeter-wave radar system, enabling omni-directional environmental
perception and enhanced collision prevention ability. Engineered for extreme scenarios, the
AITO M8 has been tested across 25 cabin water spill simulations and boasts a class-leading
700mm emergency wading depth. Its cabin prioritizes well-being through skin-friendly
materials, eco-friendly manufacturing processes, and advanced air quality systems, such as
dual-layer airflow quad-zone climate control and UVC+MOFs antibacterial deodorizing filter,
which can realize rapid odor elimination and microbial purification, with a deodorizing
efficiency of up to 99.9%.
Intelligence. In addition to class-leading driving assistance capabilities, the AITO M8 is
equipped with an intelligent cockpit, featuring megapixel-level intelligent projection
headlights, a seamless panoramic triple-screen console, 68-inch AR HUD with real-world
navigation overlay, and the second row is equipped with a 32-inch rear suspended projection
screen. The intelligent chassis of the AITO M8 features full-dimensional fusion perception for
real-time road analysis. All AITO M8 models feature intelligent dual-chamber closed-loop air
suspension and CDC adaptive dampers, allowing for dynamic softness and hardness
adjustments to achieve more stable continuous control. In addition, the AITO M8 features road
preview, smart height compensation, a comfort braking algorithm and motion sickness
mitigation technology, to provide users with a more comfortable, smoother, flexible, and
advanced driving experience.
Luxury design. The AITO M8 embodies a “family” design language, featuring an
extended wheelbase and elevated body that create an elegant proportion and upright stance.
The exterior highlights a full-width light bar design, while the interior reflects its design
philosophy of simple luxury and comfort.
Our AITO M8 gained strong market traction. Since its launch in April 2025 and by end
of June 2025, we delivered 35,183 AITO M8 vehicles.
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AITO M7
The AITO M7 is an intelligent luxury medium and large-size family SUV , praised as a
“national SUV” by the market, featuring reliable driving control, safety, driving assistance,
spaciousness, and aesthetics. The AITO M7 REEV model features CLTC of over 1,600km, and
the BEV model features CLTC of over 700km. The MSRP of the AITO M7 ranges from
RMB279,800 to RMB379,800.
The AITO M7 utilises its camera and LiDAR system to pre-scan road conditions,
coordinating with its continuously variable damping suspension and intelligent front/rear axle
torque distribution, providing comfort and stability when traversing speed bumps.
The AITO M7 offers a superior safe driving experience. For passive safety, the body
structure makes use of ultra-high-strength hot-formed steel and is equipped with eight airbags
and two-stage pre-tensioning seatbelts. In terms of active safety, it is equipped with forward
collision warning, forward abnormal obstacle avoidance, side and rear collision avoidance and
other functions. The AITO M7 also adopts aerospace-grade thermal insulation, an active rapid
cooling system and triple-layer anti-impact protection technologies to effectively protect
battery safety.
The AITO M7 offers a vast interior space with multiple seat configurations for enhanced
comfort, and well-designed cockpit and driving features including our “zero gravity” seats with
wide reclining angles, large panoramic sunroofs, soft-close doors and electric running boards
for greater mobility and peace of mind. The AITO M7 inherits the AITO brand design, offering
an array of color options and interior selections to satisfy diverse user preferences.
In 2022, 2023 and 2024 and for the six months ended June 30, 2025, we delivered 17,648,
60,049, 197,246 and 33,760 AITO M7 vehicles. Our deliveries of AITO M7 in 2024 ranked first
by sales volume among domestic brand models of the RMB300,000 price segment in the
Chinese market in 2024.
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AITO M5
AITO M5 sets a new trend for intelligent electric mid-sized SUVs. As a stylish urban
intelligent SUV , it has gained strong popularity among young families and tech-savvy pioneers
by virtue of its two core strengths, namely high performance and cost effectiveness. AITO M5
enhances its sporty style with the optional Racing Sport package, using premium materials to
create a luxurious and comfortable atmosphere, as well as to enhance driving enjoyment.
Equipped with a multi-modal advanced perception system, AITO M5 achieves precise
environmental awareness without relying on HD maps. The AITO M5 also offers an
all-encompassing anti-collision system to ensure driving safety. The AITO M5 REEV model
features CLTC of over 1,400km, and the BEV model features CLTC of over 600km. The MSRP
of the AITO M5 ranges from RMB229,800 to RMB249,800.
In 2022, 2023 and 2024 and for the six months ended June 30, 2025, we delivered 52,686,
34,343, 38,647 and 16,332 AITO M5 vehicles.
Other Brands
In addition to the AITO brand, we also offer other brands of NEV and ICE vehicles,
including Landian ( ᔝཥ), with MSRP for its main models ranging from RMB99,800 to
RMB129,800, Fengon (Έ), with MSRP for its main models ranging from RMB52,800 to
RMB169,100, and DFSK, with MSRP for its main models ranging from RMB38,900 to
RMB61,900, with each brand targeting different segment markets.
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The following table sets forth a breakdown of our revenue by brands, in absolute amounts
and as a percentage of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
AITO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,519,344 60.3 24,308,455 67.9 131,907,096 90.9 58,420,992 89.9 56,281,847 90.3
Other brands /H1118/H1118/H1118/H111810,761,545 31.6 9,248,038 25.9 7,031,132 4.8 3,315,969 5.1 2,826,319 4.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,775,185 8.1 2,232,392 6.2 6,175,395 4.3 3,277,353 5.0 3,250,659 5.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
The following table sets forth a breakdown of our vehicle sales volume by brands for the
periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
AITO /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,874 102,559 388,740 181,960 151,977
DFSK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,866 68,297 43,529 24,692 19,749
Fengon /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,876 36,550 28,093 11,500 7,525
Landian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,681 12,933 34,153 16,323 11,155
Other brands /H1118/H1118/H1118/H1118/H1118/H1118/H111836,949 31,970 2,493 1,325 8,197
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,246 252,309 497,008 235,800 198,603
Future Models
We are committed to continuously introducing new models to ensure that we meet the
evolving needs of our customers. Our primary focus will be on China’s premium NEV market
segment. By leveraging advanced technology and innovative design, we aim to elevate the
driving experience for our customers while expanding our reach within this rapidly growing
market.
Parts and Materials
We also provide core components for NEVs to other OEMs, primarily including range
extender, electric drive motor, powertrain and automotive parts, such as seats, bumpers, etc.
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Our Results of Operations
Our Revenue
The following table sets forth a breakdown of our revenue by nature, in absolute amounts
and as a percentage of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H111824,934,089 73.2 28,947,606 80.9 135,490,526 93.4 60,198,727 92.6 57,951,847 92.9
ICE vehicles /H1118/H1118/H1118/H11186,346,800 18.6 4,608,886 12.9 3,447,702 2.4 1,538,234 2.4 1,156,319 1.9
Others (1) /H1118/H1118/H1118/H1118/H1118/H11182,775,185 8.2 2,232,393 6.2 6,175,395 4.2 3,277,353 5.0 3,250,659 5.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Note:
(1) Others consist of sales of parts and materials, primarily including range extender, electric drive motor,
powertrain and other automotive parts.
V ehicle Sales V olume
The following table sets forth our vehicle sales volume for the periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,054 150,926 426,885 200,949 172,108
ICE vehicles /H1118/H1118/H1118/H1118/H1118/H1118132,192 101,383 70,123 34,851 26,495
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,246 252,309 497,008 235,800 198,603
The sales volume of our NEVs increased by 11.8% from 135.1 thousand units in 2022 to
150.9 thousand units in 2023, and further increased significantly to 426.9 thousand units in
2024, as we continued to strengthen our brand awareness, refine our product portfolio, and
enhance our customer experience. The sales volume of our NEVs decreased from 200.9
thousand units in the six months ended June 30, 2024 units to 172.1 thousand units in the six
months ended June 30, 2025, mainly as a result of the launch of the AITO M8 in April 2025.
The expectation for launch of new models may affect the timing of placing orders by potential
consumers. The sales volume of our ICE vehicles decreased from 132.2 thousand units in 2022
to 101.4 thousand units in 2023, and further to 70.1 thousand units in 2024, and decreased from
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34.9 thousand units in the six months ended June 30, 2024 units to 26.5 thousand units in the
six months ended June 30, 2025, primarily due to our strategic shift toward NEVs, in line with
industry trends in China and globally.
OUR TECHNOLOGIES
Through continuous innovations, we have developed core technological capabilities that
provides distinct competitive advantages in the industry. This substantial accumulation of
technological capabilities improves the quality and performance of our products and further
solidifies our competitive edge, enabling us to stand out in the industry.
MF Platform
The MF Platform is our intelligent platform with continuously evolving capabilities, and
it is the first platform in the industry compatible with three new energy powertrains, namely,
Super Range-extended Electric, Battery Electric and Ultra Hybrid. The MF Platform enables
limitless dimensional flexibility and vehicle-type adaptability for efficient integration and
interchangeability of components, which enables us to efficiently and reliably achieve rapid
mass production of our series models through platformisation. Our MF Platform’s advanced
integrated range extending architecture, featuring state-of-the-art electric drive motors,
inverters and essential components, is engineered for efficiency, reliability, and high
performance. We also use scalable batteries, enabling us to adapt to the specific requirements
of different vehicle models. Our MF Platform also includes a comprehensive vehicle control
system, managing critical functions such as battery management, energy optimization, and
driving assistance features. This integrated approach enhances overall vehicle performance and
safety. The MF Platform improves its performance and reduces its weight through utilizing
lightweight materials, such as aluminum alloys and magnesium alloys, and new structural
engineering technology.
SERES Super REX System
Our latest-generation SERES Super REX System has achieved a mass-production thermal
efficiency of 44.8%, with a maximum fuel-to-electricity conversion rate of 3.65kWh/L. We
have established partnerships with several industry leaders to advance the development of
REEVs. Our SERES Super REX System incorporates RoboREX intelligent control technology,
which integrates battery state of charge, driving conditions, map data, and other factors to
facilitate global dynamic planning and intelligent optimisation decisions, with rapid execution
response. Compared to conventional control methods, this technology enhances the operational
efficiency of the system, extends the total driving range of the vehicle, and further improves
battery retention capability. Furthermore, this technology optimises vehicle NVH, delivering a
more energy-efficient, quiet, and seamless driving experience for users.
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Safety Technology
Guided by users’ comprehensive safety needs and based on real-world driving scenarios
and accident data analysis, we have developed intelligent safety technology system through
four overarching safety scenarios of protecting life, structure, health and privacy, spanning
nine crucial dimensions, including passive safety and active safety. Our intelligent safety
technology system adopts scenario-based safety, encompassing over 180 vehicle use cases and
developing more than 300 safety functions. To protect life, our vehicle structure incorporates
ultra-high aluminum alloy content, integrated die-casting technology, and ultra-high-strength
heat-formed steel, and contains a full coverage of airbags in the cabin, ensuring
uncompromised cabin integrity in various collision scenarios. To protect structure, a 360°
omnidirectional collision avoidance system is equipped with forward AEB operational from 4
to 150 km/h, and e-AES operational from 50 to 135 km/h, enabling simultaneous braking and
evasive maneuvers. To protect health, PM2.5 air purification technology, UVC photocatalytic
technology, and other methods were employed to effectively reduce harmful substances and
germs within the vehicle, safeguarding the fresh air inside. To protect privacy, we use
intelligent systems to isolate user data from external unauthorized access or intrusion.
Intelligent Testing
Our cloud and end integrated testing platform possesses advanced testing capabilities.
Our self-developed intelligent testing terminals facilitate 7x24 automated testing for all
vehicles. We have established HIL testing systems for ring-network architecture and cabin
clusters, providing robust automated simulation capabilities. With an extreme cold-weather
testing base, we ensure comprehensive coverage for extreme scenario testing. By extending
automated testing to the supply chain, production, and sales operations, we have established a
full-process quality automation interception network.
Intelligent Services
Based on our self-developed platform, we provide full-lifecycle intelligent services. By
employing big data and AI technologies and based on digital infrastructures and intelligent
platforms, we are capable of offering users proactive services, including predictive risk alerts,
remote diagnosis, real-time incident and failure notifications, delivering a comprehensive,
precise, efficient, and quality intelligent services for users.
RESEARCH AND DEVELOPMENT
We are continually increasing our R&D investment and are committed to an innovation-
driven approach that closely aligns with the evolving needs of our users. By focusing on
in-house technology research and development, we consistently enhance product performance
and efficiency.
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R&D Capabilities
We have built a R&D team with 8,005 experienced R&D professionals as of June 30,
2025, representing an increase of 12.5% from the end of 2024. As an industry pioneer, we have
attracted and retained an experienced R&D team. A substantial portion of our R&D staff is
equipped with extensive knowhow and expertise in vehicle manufacturing, intelligent
technologies, software engineering, among others. We will continue to proactively recruit R&D
talents to further innovate and improve on our technologies and solutions.
As a technology company with NEVs as its core business, we must continually invest
significantly in strengthening our R&D capabilities. During the Track Record Period, we
recorded R&D expenses of RMB1.3 billion, RMB1.7 billion, RMB5.6 billion, RMB2.8 billion
and RMB2.9 billion in 2022, 2023, 2024 and the six months ended June 30, 2024 and 2025,
respectively.
VEHICLE DESIGN AND ENGINEERING
We have established robust capabilities in the design and manufacturing of NEVs and
component systems. Our product design combines “traditional luxury” with “tech-luxury”,
dedicated to developing vehicles that meet the demands of modern consumers. We possess
technologies in the design, development and manufacturing of key components, such as range
extenders, batteries and powertrains, ensuring a solid foundation for performance and
reliability.
The MF Platform is the core of our vehicle platform. Its characteristics of intelligent
safety, diverse powertrain, deep adaptability and leading intelligence enable us to quickly
launch high-safety, high-performance and high-quality products with different sizes and
powertrains to meet the needs of users. Leveraging computer-aided engineering simulation and
analysis technologies, we conduct comprehensive full-scenario vehicle testing to ensure that
design and engineering processes meet the highest standards. Furthermore, our engineering and
manufacturing teams collaborate closely with suppliers and partners to optimize component
designs, guaranteeing high performance and quality throughout the entire R&D cycle and
beyond.
MANUFACTURING, SUPPLY CHAIN, AND QUALITY CONTROL
Manufacturing
We consistently promote intelligence in vehicle manufacturing and adopt a lean
manufacturing approach to drive continuous improvements in operational efficiency and
product quality.
Currently, we operate several intelligent factories. The intelligent factories mainly for
manufacturing our AITO brand are the SERES Super Factory (Longsheng) (the “ Super Factory
(Longsheng) ”), the SERES Super Factory (Fenghuang) (the “ Super Factory (Fenghuang) ”),
and the SERES Super Factory (Longxing) (the “ Super Factory (Longxing) ”), (together the
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“Super Factories ”), each of which are located in Chongqing, China, with a collective designed
production capacity of approximately 300,000 units as of the Latest Practicable Date. We
leverage advanced data and intelligent technologies in our three intelligent factories to
integrate advanced manufacturing and information/communication technologies, creating an
“intelligent manufacturing” ecosystem connecting the physical and digital. We leverage digital
simulation and virtual debugging technologies to shorten the production ramp-up cycle of the
production line in the workshop, enabling intelligent factories to achieve “instant ramp-up”.
Through a smart architecture of hardware, software, networks and platforms enabling real-time
online responsiveness, we can achieve rapid and precise large-scale customized manufacturing.
Our factories also adhere to rigorous quality control standards, enabling consistently
high-quality product output. In addition to the Super Factories, we also operate two factories
primarily for the production of other EV and ICE vehicles in Chongqing and Hubei, China,
with a collective designed production capacity of approximately 300,000 units. In total, our
aggregate annual production capacity in China was approximately 600,000 units as of the
Latest Practicable Date. To expand our global capabilities, we also operate a manufacturing
facility in Indonesia, primarily manufacturing ICE and hybrid SUVs and light commercial
vehicles under non- AITO brands, with an annual designed production capacity of
approximately 20,000 units.
The following table sets forth the designed production capacity, production volume and
capacity utilization rate of our manufacturing bases during the Track Record Period:
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2025
Location
Designed
Capacity
Production
Volume
Utilization
Rate (1)
Designed
Capacity
Production
Volume
Utilization
Rate (1)
Designed
Capacity
Production
Volume
Utilization
Rate (1)
Designed
Capacity
Production
Volume
Utilization
Rate (1)
(units) (units) (%) (units) (units) (%) (units) (units) (%) (units) (units) (%)
China /H1118/H1118/H1118/H1118450,000 263,198 58.5 450,000 254,497 56.6 600,000 495,554 82.6 300,000 (2) 201,981 67.3
Indonesia /H1118/H111830,000 2,899 9.7 (4) 30,000 1,537 5.1 (4) 30,000 877 2.9 (4) 15,000 (3) 606 4.0 (4)
Notes:
(1) The utilization rate is equal to the production volume divided by the designed capacity during the same period.
(2) Calculated based on the annual designed capacity of 600,000 units.
(3) Calculated based on the annual designed capacity of 30,000 units.
(4) The utilization rate of our Indonesia factory was relatively low during the Track Record Period mainly because
it was built to support our future global expansion strategies. We expect the utilization rate will gradually ramp
up in line with our global expansion efforts.
Super Factory (Longsheng)
The Super Factory (Longsheng) has a site area of approximately 500,000 square meters
and a designed annual production capacity of 50,000 units in 2024.
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The Super Factory (Longsheng) has four integrated intelligent production processes,
including stamping, welding, painting and assembly, with intelligent robots deployed and has
achieved 100% automation in critical processes such as on-the-fly laser welding and
high-precision blue-light inspection. We leverage advanced systems, including the
manufacturing operation management (MOM) system and logistics management system
(LMS), to enable real-time data coordination and flexible, order-based production.
Super Factory (Fenghuang)
The Super Factory (Fenghuang) has a site area of approximately 800,000 square meters
and a designed annual production capacity of 100,000 units in 2024.
The Super Factory (Fenghuang) exemplifies digital-physical integration, leveraging
intelligent robots and MOM systems to achieve seamless integration of production planning
with automated equipment. Key processes, including stamping and welding, have achieved
100% automation, supporting rapid model switching and order-driven manufacturing. Our
quality control incorporates driving assistance sensor calibration and cloud-based predictive
quality control, ensuring consistent output.
Super Factory (Longxing)
The Super Factory (Longxing) has a site area of approximately 1,830,000 square meters
and a designed annual production capacity of 150,000 units in 2024. The factory was built in
accordance with top international standards and industrial internet requirements, characterized
by high efficiency, intelligence, advanced technology and environmental friendliness.
The Super Factory (Longxing) is designed with full integration of digital and intelligent
technologies, enabling seamless connectivity between equipment, processes, and data. With a
production system incorporating over 3,000 smart equipment, the Super Factory (Longxing)
achieves automation of key processes, delivering high efficiency and precision.
We have utilized a leading 10,000-ton level die-casting machine to achieve the highest
integration of integrated die-casting components, enhancing structural integrity while reducing
production complexity. The production process is characterized by flexibility, transparency,
interconnectivity, and intelligence, setting a new industry benchmark. Furthermore, we
implement high-precision measurement and quality inspection systems, including blue light
scanning technology and on-line robotic monitoring, ensuring an advanced measurement
precision of 0.05mm. Our AI-powered visual monitoring system, equipped with 43 detection
points, enables real-time monitoring and comprehensive inspection of the production process.
The Super Factory (Longxing) adopts automated quality testing technology for quality testing
of assembled vehicles, thus guaranteeing high product standards and traceability.
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In addition, we have established a parking assistance system, PTMS, that includes
battery-powered driverless heavy-duty trucks, an ICS unmanned intelligent management
system, and an advanced power exchange and energy supplement system, which enables a
24-hour uninterrupted logistics transportation system within the intelligent factory area. All
materials in storage are labeled with three-dimensional warehouse location codes linked to our
IT system, achieving “one material, one file”. Additionally, we have enhanced the collecting,
sorting and distributing efficiency and automation level by integrating robotic packing with
AMR systems for automatic transfer and warehousing.
Our Production Process
We typically arrange manufacturing based on customer orders. To maximize efficiency,
reduce defect rates, and ensure timely product delivery, we employ a variety of manufacturing
technologies, leveraging digitalization, intelligent systems, and IoT to enable real-time
responsiveness and customized production.
Our engineering team is committed to the continuous development of production and
management technologies in component manufacturing and product assembly, alongside with
highly automated robots and equipment, to enhance the digitalization level of “intelligent
factories”, thus better facilitating our production and testing processes.
Our Super Factories fully integrate intelligent technologies to ensure seamless
connectivity between equipment and data throughout the production process. Taking the Super
Factory (Longxing) as an example, the following chart illustrates the key steps of the
production process of our EVs:
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AI-enabled
intelligent assembly
Stamping
The Super Factory (Longxing) is equipped with advanced servo presses, single-arm
robotic manipulators, automated framing technology, and an AGV transportation system, with
blue light measurement systems enabling fully automated production and inspection of steel
and aluminum components. The 7,700-ton automated intelligent servo press line is capable of
stamping 16 sheet metal parts per minute while reducing energy consumption by 15%.
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Additionally, the Super Factory (Longxing) employs robotic framing and an AGV system for
automated warehousing, further enhancing production efficiency. Notably, our Super Factory
(Longxing) has integrated measurement technology with a precision of ±0.05mm, ensuring
highly accurate quality inspections. This advanced system significantly enhances both product
quality and manufacturing efficiency, reinforcing precision and consistency throughout the
production process.
Welding
We use welding robots to automate welding and employ laser welding technology on the
vehicle door to enhance body stiffness, thereby improving overall vehicle safety. By leveraging
the integrated die-casting technology, the rear vehicle body structure is reduced from 87
separate components to a single piece. This significantly enhances the structural integration
and reduces the weight of the vehicle. Additionally, by utilizing self-piercing riveting and
thermal flow drilling technology, the production line is capable of handling steel-aluminum
hybrid body structures, ensuring high-quality connections.
Painting
We adopt advanced, environmentally friendly water-based painting technology. The
painting process is fully automated through intelligent robots. The pre-treatment and
electrophoresis process in the painting workshop utilizes thin-film technology, replacing the
traditional phosphating process, thereby achieving zero emissions of phosphorus and Class I
metal nickel.
Assembly
At final assembly, the chassis, wheels, electric drive systems, lights, and braking systems
are attached to the vehicle body. We have achieved a high level of automation for key processes
in the assembly workshop, ensuring consistency and precision. Our AI-powered real-time
visual inspection system utilizes high-definition cameras to capture AI imaging of the vehicle
chassis, inspecting the assembly quality of 58 bolts to ensure the quality consistency of the
assembly process. In addition, the assembly workshop features 34 similar inspection points,
safeguarding quality at every critical production step.
Our facilities are digitalized and automated, enabling tracking, monitoring, early
detection and optimization from end-to-end across the production process, achieving
digitalization of orders, production, testing and storage.
Intelligent Logistics
Our industry-first intelligent logistics port employs containerized three-dimensional
warehousing technology alongside unmanned truck distribution technology across production,
facilitating dynamic storage and lifecycle management of containers.
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Supply Chain
With more than 20 years’ experience in the automotive industry, we have developed core
technological capabilities that have led to the success of our AITO vehicles. Meanwhile, we
have established a reliable and scalable supply network. Based on long-term strategic
partnerships with leading industry suppliers such as Huawei and CA TL, we aim to foster an
open, inclusive, and interdependent ecosystem.
Collaborations with Huawei
We have established long-term and strong business relationship with Huawei. Our
strategic collaborations with Huawei are summarized as below.
 Products and services provided by Huawei. We procure automotive components
from Huawei, such as intelligent cockpit and driving assistance systems used in all
of our AITO vehicles. In addition, leveraging Huawei’s brand recognition and
extensive physical store network, we also procure advertising and promotional
services from Huawei to market and sell our AITO vehicles. For example, at
approximately 700 experience centers operated and managed by Huawei, we offer
AITO vehicles for display and test drive. Customers may also place orders directly
at the experience centers, with sales and delivery finalized at an AITO User Centers
managed and operated by us and our distributors.
 Equity investment in Yinwang. On August 23, 2024, we entered into an equity
transfer agreement with Huawei to purchase 10% of the equity interests held by
Huawei in its then wholly-owned subsidiary, Shenzhen Yinwang, at a total
consideration of RMB11.5 billion. As a result of such transaction, we expect to
continue to enhance our operational ecosystem through this acquisition by
strengthening our investments in intelligent vehicle technology, improving the
stability of our supply chain for intelligent vehicle components, strengthening our
strategic partnership with Huawei, and continuing to enhance our deployment in
advanced vehicle smartification technologies and the competitiveness of our
intelligent electric vehicles, while enlarging the ecosystem cooperation with our
strategic partners. For details, see “History, Development and Corporate Structure –
Significant Acquisitions and Disposals – Acquisition of minority interest of
Shenzhen Yinwang.”
 Procurement of Trademarks. In 2024, we acquired 919 trademarks primarily in
relation to AITO and 44 relevant design patents from Huawei and its related parties,
a strategic business partner of us and an Independent Third Party, for a consideration
of approximately RMB2.5 billion. The consideration is determined based on
negotiation between both parties. This transaction does not affect the business
collaboration between Huawei and us.
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Both parties continue to strengthen our stable and sustainable collaborations. In these
regard, we have entered into a non-exclusive cooperation agreement regarding further
deepening collaborated business with Huawei in 2024. Our collaborations with Huawei do not
involve any arrangements regarding profit-sharing, which are consistent with industry norm
according to Frost & Sullivan.
Significance of our relationship with Huawei
During the Track Record Period, we have experienced significant business growth and
improved profitability, which has been largely attributable to the success of AITO vehicles. Our
collaboration with Huawei is a significant contributor to the success of our AITO vehicles. We
have maintained good and long-term business relationship with Huawei. We believe that our
relationship with Huawei, including our cooperation agreement with Huawei in 2024, is not
subject to material adverse change considering (i) the track record of friendly and mutually
beneficial cooperations between both parties since 2019. For example, according to Frost &
Sullivan, the sales volume of AITO vehicles in 2024 is the largest among NEV brands in the
Harmony Intelligent Mobility Alliance, (ii) our investment in Yinwang, a subsidiary of Huawei
which is primarily engaged in providing intelligent vehicle solutions, to strengthen our
strategic relationship with Huawei, and (iii) pursuant to the long term cooperation agreement
we entered into with Huawei in 2024, both parties shall maintain strong cooperation
relationships and no party shall unilaterally terminate the agreement. Nonetheless, we may be
subject to concentration and counterparty risks from such collaborations. If we experience any
material disruptions in our business relationship with Huawei, our business, financial condition
and results of operations may be materially and adversely affected. See “Risk Factors – Risks
related to Our Business and Industry – Our profit is attributable to the launch of certain
successful models and the partnership with our significant business partners.”
By working closely with our suppliers, we ensure high standards, quality, efficiency and
cost competitiveness of components, as well as supply chain stability. We have implemented
advanced supply chain digitalization and forecasting systems to achieve the digitalization and
intelligence of procurement, inventory management, and logistics, enhancing operational
efficiency and ensuring timely delivery of key components. We have actively taken on the role
of a primary enterprise in the supply chain, establishing a cooperative ecosystem with
established supply chain partners, resulting in a high level of component integration and the
development of localized supplier clusters. This collaboration has led to joint design efforts,
collaborative research and development, and synchronized production.
In addition, we engage in localized collaboration with key component suppliers to
facilitate efficient and cooperative operations within the same production base. This operation
model enables real-time supply synchronization and supports an integrated intelligent
warehousing and logistics network. Our Super Factory (Longxing) deploys a fleet of fully
electric autonomous heavy-duty trucks for 7x24 hours material transportation. Through the
integration of V2X communication systems and an intelligent battery-swapping infrastructure,
we have implemented efficient logistics systems to minimize transfer intervals and enhance
operational continuity. These innovations ensure seamless component circulation across
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production stages while reducing carbon emissions associated with traditional logistics. This
vertically aligned model not only enhances cost efficiency but also reinforces supply chain
resilience, positioning the facility as a benchmark for large-scale smart manufacturing.
Quality Control
We incorporate advanced technologies, including IoT, big data, and cloud computing, into
our quality testing framework, enhancing traditional vehicle testing methods with automated
quality inspection technologies. This integration enables seamless coordination across R&D,
supply chain management, vehicle manufacturing, and end-of-line inspections, leveraging
technology to drive continuous quality improvements. Our quality control framework
encompasses the whole quality management process across research, production, supply,
marketing, and service throughout the industry chain. The digital intelligence quality
management system incorporates technologies such as artificial intelligence, digital twinning,
and large models to enable digital simulation and digital verification, online inspection of part
and vehicle manufacturing process, and automated inspection of the assembled vehicle, aiming
to continuously enhance the quality of design and planning, strengthen the capacity for
proactive prevention at the source, and lead the transformation from “theoretical” to “definite
quality,” thereby establishing a world-class quality benchmark for new luxury vehicles.
In research and development quality control, we adopt advanced testing methodologies,
significantly increasing sample sizes and extending testing durations to more than four times
the industry standard in R&D. In addition to extreme climate testing in real-world
environments, we conduct simulated climate condition testing in our factories, carrying out
functional, performance, and durability tests to validate vehicle reliability across diverse
conditions. We focus on information management across the entire process concerning
model-level quality, covering all stages of development data from project initiation,
development, validation to production.
In component quality control, we establish dedicated quality control measures for critical
components to ensure our suppliers’ quality. Every key part undergoes automated inspection
before leaving the supplier’s facility, with real-time testing data uploaded to the cloud,
ensuring that all delivered components meet required quality standards. This process is fully
automated, minimizing human intervention and enhancing consistency and precision. We focus
on component-level quality data by integrating key process parameters, inspection records and
batch information from suppliers’ production processes into the quality resource pool, realizing
chain-wide information integration.
In production quality control, during the vehicle manufacturing process, our intelligent
factory integrates intelligent equipment, AI-powered visual inspection, and multi-sensor
quality checks. Each production step must comply with quality requirements before advancing
to the next stage. If any non-conformance is detected, production automatically stops. For
example, in electric motor and high-voltage system assembly, every bolt torque is
automatically monitored to ensure compliance. If any deviation is identified, the system halts
further processing, removing human intervention and ensuring fully automated quality control.
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Following final vehicle assembly, we conduct comprehensive end-of-line inspections,
ensuring that vehicles undergo full testing. With our comprehensive IoT-based quality
monitoring system covering 34 processes across four manufacturing workshops, we conduct
comprehensive inspections of the entire vehicle manufacturing process, enabling preventive
quality monitoring at over 70,000 points, which make us stand at the forefront of the industry.
We assign a unique digital ID to each vehicle, enabling lifecycle quality control and
traceability, ensuring long-term monitoring and quality assurance. For quality-related
production data, the system can retain records for 15 years, ensuring traceability for every
vehicle manufactured. Based on the industrial Internet platform, we focus on the entire process
of vehicle manufacturing, integrating quality data from welding, painting, assembly and other
processes while using the VIN number as an index to establish a single vehicle history file.
In market quality control, we provide users with proactive and precise services through
real-time uploading of core component operation logs and data to the cloud platform,
leveraging big data models and proprietary algorithms to ensure the accuracy of vehicle
maintenance and testing. Our software upgrades deliver intelligent experiences for users,
enabling “constantly renewal” of our products. By integrating vehicle status monitoring with
remote early-warning mechanisms, we enable rapid issue diagnosis, prompt response and
provide targeted vehicle use services and recommendations to comprehensively enhance user
experience and brand loyalty. Powered by the deep integration of digital and intelligent quality
management across the entire product lifecycle from product R&D, manufacturing, marketing
and services, our vehicles have demonstrated outstanding performance in both perceived
quality and fundamental quality. The AITO brand has ranked first in New V ehicle Quality
Rankings among new energy vehicle brands for three consecutive years and secured the top
position in NPS in the second half of 2024 in New Energy V ehicle Brand Health Study
demonstrating our strong capabilities and unwavering commitment to product quality,
according to the Frost & Sullivan Report.
SALES AND MARKETING
Omni-Channel Strategy
We have built online-and-offline integration strategies that connect digital touch points
and physical stores, engaging customers throughout the entire customer journey from first
interaction to purchase and after-sales support. This omni-channel approach ensures a smooth,
consistent, and flexible customer experience, and enables us to expand our market presence.
Through our AITO App and official website, prospective customers can explore vehicle
features, customize configurations, schedule test drives, and place orders with ease. These
online interactions are closely linked to our offline stores, where customers can test drive the
vehicles, receive in-person consultations, and finalize purchases. Digital preferences and
selections made online are seamlessly accessible in-store, ensuring a consistent experience
across channels.
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Our physical AITO stores, act as an extension of our digital presence, offering hands-on
engagement and after-sales services. Additionally, our presence on e-commerce and third-party
platforms enhances accessibility, providing financing options and promotional offers that align
with our other sales channels. Our physical AITO stores comprised over 350 AITO User Centers
and over 700 experience centers across over 240 cities in China. Our AITO User Centers
provide one-stop customer services from test drives to sales delivery, maintenance, and
after-sales services, exclusively for the AITO brand while the experience centers offer vehicle
displays, test drives, and order placement services, primarily serving the purpose of product
promotion and customer acquisition. For example, at experience centers operated and managed
by Huawei, we offer AITO vehicles for display and test drive. Customers may also place orders
directly at the experience centers, with sales and delivery finalized at an AITO User Centers
managed and operated by us and our distributors. Through this model, delivery and service of
AITO vehicles are centralized and processed at our AITO User Centers, while experience
centers serve to expand the marketing and customer reach of the AITO brand and channel
customer orders to AITO User Centers. Since there is no material overlap in their geographic
coverage and they serve different functions, we believe that this network of AITO User Centers
and experience centers enable us reach to a broader customer base.
By integrating online and offline touchpoints, we create a cohesive and flexible
purchasing experience, allowing customers to engage with our brand anytime, anywhere, in a
way that best suits their needs.
Sales Network
In terms of geographical coverage, we generate the majority of our revenue in China, as
well as in international markets, including Europe, North America and Oceania. The following
table sets forth a breakdown of our revenue by geographical location, in absolute amounts and
as a percentage of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,134,196 88.5 30,812,974 86.1 140,902,880 97.1 63,166,529 97.2 60,937,161 97.7
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H11183,921,878 11.5 4,975,911 13.9 4,210,743 2.9 1,847,785 2.8 1,421,664 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
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The following table sets forth the sales channels of our vehicles and their respective
revenue contributions for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Distribution /H1118/H1118/H1118/H1118/H111827,846,603 81.8 33,464,269 93.5 136,888,738 94.3 60,438,567 93.0 59,156,066 94.9
Direct sales /H1118/H1118/H1118/H1118/H11186,209,471 18.2 2,324,616 6.5 8,224,885 5.7 4,575,747 7.0 3,202,759 5.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
China
In line with industry norms, we primarily sell our NEVs through a network of distributors
to cover the China market. The following table sets forth our AITO User Centers operated by
our distributors for the periods indicated:
As of/For the year ended December 31,
As of/For the
six months
ended
June 30,
2022 2023 2024 2025
At the beginning of the period /H1118/H111883 195 208 312
AITO User Centers newly opened
by distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117 19 104 48
AITO User Centers closed by
distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185604
Net increase/(decrease) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112 13 104 44
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118195 208 312 356
Our AITO User Centers increased during the Track Record Period primarily to support the
significant increase in demand for AITO vehicles due to the quality and performance of our
vehicles. Following the rapid increase in AITO User Centers in 2022 in line with the rapid
growth in AITO sales, we experienced a relatively low increase in number of new AITO User
Centers between in 2023 primarily as we focused on optimizing the existing distributor
networks and store efficiency instead of raw growth. Such shift in focus in turn laid a stronger
foundation for more sustainable and high-quality increase in AITO User Centers in 2024. As
of June 30, 2025, we collaborated with over 160 distributors, with our distributors operating
between 1 and 37 AITO User Centers. We believe that we are not subject to material
concentration risks with our distributors, as in each year/period during the Track Record
Period, our distributors operated 10% or less of the respective total AITO User Centers.
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Our other vehicle brands (such as Landian and DFSK) are primarily sold through our
distributors’ stores. As of December 31, 2022, 2023 and 2024 and June 30, 2025, our
distributors’ store network for our other vehicle brands consisted of 1,882 stores, 1,317 stores,
400 stores and 456 stores. The decrease in 2024 was mainly because we strategically pivoted
our focus to our AITO brand.
Overseas
During the Track Record Period, substantially all of our products and services are sold in
China. However, we have also tapped into overseas markets. We have established a presence
in multiple countries across Europe, the Middle East, the Americas, and Africa. In Europe, we
have expanded into markets including Norway, Germany, the United Kingdom, and
Switzerland, marking the successful completion of our initial global market expansion. During
the Track Record Period and up to the Latest Practicable Date, we primarily sold both ICE and
NEV models under our DFSK brand in overseas markets. In 2022, 2023, 2024 and the six
months ended June 30, 2024 and 2025, our overseas revenue amounted to RMB3,921.9 million,
RMB4,975.9 million, RMB4,210.7 million, RMB1,847.8 million and RMB1,421.7 million,
respectively.
We plan to continue to expand into other international markets. We aim to build and
enhance our overseas sales and service capability, and to adapt the user interfaces of our
software systems to provide better products and services to consumers in overseas markets.
Our Online Touch Points
Our AITO App is integrated with offline stores, enabling the entire process, including user
consultation, test drive appointment, deposit payment, and after-sales appointment, to be
completed online. Through our AITO App, prospective customers can place orders. Relying on
our strong supply chain management capabilities, we enable our customers to choose from a
vast pool of configurations, such as vehicle color, wheel hub size and style, in-vehicle
entertainment and “zero gravity” seats. Our users can further review their order status on a
real-time basis, evaluate services, and interact with other users directly on the AITO App. Such
instantaneous feedback also enables us to further enhance our service and customer experience.
Distributorship Management
To ensure alignment with our brand values and sales strategy, we employ stringent
selection criteria on our distributors, mainly focusing on financial strength, operational
capability, and industry experience. Our distributors are mainly that are specialized in vehicle
sales with nationwide or regional coverage and have sufficient financial resources. They also
have extensive experience in vehicle sales, repair, and maintenance services. We do not engage
any sub-distributors. To the best knowledge of our Directors after having made all reasonable
enquiries, our distributors are Independent Third Parties.
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We typically enter into distribution agreements with our distributors. The following table
sets forth the key terms of our agreements with distributors.
Term: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Generally one year.
Settlement: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically require advance payment of each
order before delivering our vehicles. The
settlement price shall be based on the volume
of procured vehicles.
Maintenance, replacement
and returns: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Our distributors are generally responsible for
providing maintenance, replacement and return
services to users. Our written approval is
typically required before distributors can
replace or return vehicles.
Termination: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We have the right to terminate the agreement,
upon giving notice, due to material changes in
our business environment, or changes in our
business model and product mix.
Under our make-to-order model, following selection of vehicle models in the AITO stores,
our customers place orders through the AITO online system for distributors to process to our
internal systems. After we receive the corresponding order, we arrange for production and
delivery of our vehicles to users through our AITO User Centers, enabling us to have full
visibility from order to delivery. Under this model, the AITO stores do not have the authority
to adjust product pricing.
We have established a series of measures to standardize sales and distributor
management. Newly admitted distributors must meet the four standalone requirements of being
standalone entity (i.e. the distributor must have a separate corporate entity to operate the AITO
brand), standalone store (i.e. a separate store constructed to our standards for the sales, delivery
and service of AITO vehicles), standalone funding (i.e. the distributor must ensure standalone
operating funds for the AITO User Center which may not be used for non- AITO purposes), and
standalone staff (i.e. the distributor must form a standalone team to operate the AITO User
Center), for the AITO brand. We engage third parties to conduct an independence assessment
of AITO User Centers to be admitted. We have also established policies governing the
establishment, delivery, service and operations and quality and other aspects of AITO User
Centers. We have also established specific measures governing, among others, the on-boarding,
construction, operation, and transfer/exit of AITO User Centers.
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To minimize the risk of cannibalization among distributors, (i) we set annual plans based
on a review of, among others, market capacity and existing distributors, thereby managing the
number of distributors in each area, and (ii) clearly delineating the geographic coverage of our
dealers. Distributors are not permitted to establish new AITO User Centers without our
approval. We generally determine the need for new AITO User Centers primarily based on
market conditions, such as order and sales history and existing AITO User Centers coverage.
To reduce the risk of channel stuffing, we have established a dealership management system
(DMS) which enables us to monitor and track orders, recording information such as order
details, customer details, store location, vehicle model and serial numbers, and delivery and
payment status, providing comprehensive overview of the status of each vehicle sold through
our distributors. We have also adopted various internal control measures such as monthly
reporting of distributors’ sales, delivery and service analysis, real-time monitoring of
distributors’ KPIs including formulation of rectification plans for the most underperforming
distributors, and financial and risk control monitoring through collecting key financial
indicators and determining each distributors’ risk level, with varying control measures from
issuing warnings to suspending authorizations as distributors. As of June 30, 2025, for our
AITO vehicles, we had 6,395 vehicles that had been ordered by users but pending delivery by
distributors. We typically operate on a make-to-order basis, manufacturing vehicles upon
receiving and confirming orders through the DMS.
We provide guidance and trainings to these AITO stores in terms of marketing strategies,
product features and customer service. We monitor the operations of the franchised stores to
ensure their compliance with our policies and operating requirement through customer survey
and monthly internal risk analysis. We also contract third parties to carry out on-site visits to
our AITO stores and evaluate their performance on a quarterly basis.
We offer a consistent brand image, customer experience and price across our AITO stores.
We also ensure consistency in our trainings for sales staff, and specifications for store design,
etc. We centrally plan our marketing activities and implement them consistently across all
AITO stores. Our business model has allowed us to expand our sales and service network
rapidly, and we will continue to expand such network.
Our return policy is in accordance with relevant laws. We typically approve returns of
vehicles from distributors where significant quality issues affecting production batches are
found. Due to our rigorous quality control measures and high manufacturing standards, during
the Track Record Period, we have not issued any vehicle recalls, material product returns or
material liability claims with our distributors.
Marketing
We increase our brand presence through online promotions and offline events. We utilize
various news and information platforms, automotive vertical media and social media platforms
for online marketing.
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We primarily leverage online marketing campaigns to strengthen brand awareness and
attract customers by integrating multiple digital channels. Through our AITO App and WeChat
Mini Program, we provide users with a seamless digital experience, while our active presence
on social media platforms such as Weibo and WeChat fosters engagement and interaction.
Additionally, we expand our reach through strategic advertising placements on general news
and automotive news portals, ensuring broad visibility across key online platforms. In August
2024, we joined the CCTV 2024 “Brand Power Project” (೐੶਷ʈ೻), becoming a strategic
partner in the automotive sector of China Media Group’s (CMG) Automotive Power Nation
Initiative. During the 2025 CCTV Spring Festival Gala, 780 AITO M9 vehicles participated in
a light show at our Super Factory (Longxing), creating a strong public promotional impact.
We also hold offline promotion campaigns and place advertisements in high-traffic areas,
such as shopping malls, airports and high-speed trains. In addition, we actively participate in
major automotive industry events, such as auto shows, to demonstrate our technical prowess
and to launch new models.
SERVICE AND W ARRANTY
Pursuant to national regulations, our new vehicles come with a warranty period of two
years or 50,000 kilometers (whichever comes first), excluding vulnerable and consumable
parts. In addition, we offer a four-year or 100,000-kilometer (whichever comes first) limited
warranty for new vehicles, and an eight-year or 160,000-kilometer (whichever comes first)
limited warranty for power batteries, electric drive motor, motor control unit and range
extenders. We also provide vehicle owners with 24/7 free roadside assistance during the
warranty period. Furthermore, we will also provide a free courtesy car or compensation for
alternative transportation if repair times exceed 24 hours due to quality issues during the
warranty period.
We accrue a warranty reserve for our vehicles, which includes the best estimates of
projected costs to repair or replace vehicles under warranties. These estimates are primarily
based on the estimates of the nature, frequency, and average costs of future claims. We
reevaluate the adequacy of the warranty accrual on a regular basis. As of June 30, 2025, our
accrued warranty amounted to approximately RMB2.1 billion.
Value-added Services
We also offer various value-added services to provide vehicle owners with a full driving
experience. For example, we offer complimentary Internet of V ehicles (IoV) data packages,
including complimentary lifetime data for voice interaction, navigation, and over-the-air
upgrades, as well as a set amount per month for entertainment media data within a set number
of years.
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CUSTOMERS AND SUPPLIERS
Customers
During the Track Record Period, we primarily sell our NEVs through our distributors’
AITO stores.
For the years ended December 31, 2022, 2023 and 2024 and for the six months ended June
30, 2025, the aggregate revenue generated from our five largest customers in each year/period
during the Track Record Period amounted to RMB4.7 billion, RMB4.3 billion, RMB20.2
billion and RMB7.4 billion, respectively, which accounted for 13.9%, 12.0%, 13.9% and 11.9%
of our total revenue for the respective years/periods. For the same periods, revenue from the
largest customer in each year/period during the Track Record Period amounted to RMB1.3
billion, RMB1.5 billion, RMB5.6 billion and RMB2.5 billion, respectively, which accounted
for 4.0%, 4.1%, 3.8% and 4.0% of our total revenue for the respective years/periods.
The following tables set out details of our five largest customers in each year/period
during the Track Record Period:
For the year ended December 31, 2022
Ranking Customer Background
Type of products
purchased
Revenue
(RMB in
thousand)
Percentage of
total revenue
1 /H1118/H1118/H1118/H1118Customer A An enterprise principally engaged in
automotive manufacturing, sales,
services, and technological R&D with
registered capital of RMB15.6 billion
ICE vehicles, NEVs, and
accessories
1,347,936 4.0%
2 /H1118/H1118/H1118/H1118Customer B Automobile distributor NEVs 1,017,481 3.0%
3 /H1118/H1118/H1118/H1118Customer C Automobile distributor NEVs and accessories 908,264 2.7%
4 /H1118/H1118/H1118/H1118Customer D Automobile distributor NEVs, accessories, and
repair services
797,103 2.3%
5 /H1118/H1118/H1118/H1118Customer E Automobile distributor ICE vehicles, NEVs, and
accessories
640,094 1.9%
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For the year ended December 31, 2023
Ranking Customer Background
Type of products
purchased
Revenue
(RMB in
thousand)
Percentage of
total revenue
1 /H1118/H1118/H1118/H1118Customer F Automobile distributor NEVs and repair services 1,459,702 4.1%
2 /H1118/H1118/H1118/H1118Customer B Automobile distributor NEVs 874,936 2.4%
3 /H1118/H1118/H1118/H1118Customer C Automobile distributor NEVs 680,671 1.9%
4 /H1118/H1118/H1118/H1118Customer G Automobile distributor NEVs, accessories, and
repair services
654,787 1.8%
5 /H1118/H1118/H1118/H1118Customer E Automobile distributor NEVs, ICE vehicles, and
accessories
643,572 1.8%
For the year ended December 31, 2024
Ranking Customer Background
Type of products
purchased
Revenue
(RMB in
thousand)
Percentage of
total revenue
1 /H1118/H1118/H1118/H1118Customer F Automobile distributor NEVs, accessories, and
repair services
5,578,351 3.8%
2 /H1118/H1118/H1118/H1118Customer D Automobile distributor NEVs and accessories 4,289,864 3.0%
3 /H1118/H1118/H1118/H1118Customer C Automobile distributor NEVs and accessories 4,010,202 2.8%
4 /H1118/H1118/H1118/H1118Customer H Automobile distributor NEVs and accessories 3,244,168 2.2%
5 /H1118/H1118/H1118/H1118Customer I Automobile distributor NEVs and accessories 3,078,035 2.1%
For the six months ended June 30, 2025
Ranking Customer Background
Type of products
purchased
Revenue
(RMB in
thousand)
Percentage of
total revenue
1 /H1118/H1118/H1118/H1118Customer F Automobile distributor NEVs and accessories 2,510,927 4.0%
2 /H1118/H1118/H1118/H1118Customer C Automobile distributor NEVs and accessories 1,407,418 2.3%
3 /H1118/H1118/H1118/H1118Customer H Automobile distributor NEVs and accessories 1,217,457 2.0%
4 /H1118/H1118/H1118/H1118Customer D Automobile distributor NEVs and accessories 1,165,843 1.9%
5 /H1118/H1118/H1118/H1118Customer B Automobile distributor NEVs and accessories 1,130,686 1.8%
Customer A is a substantial shareholder of us, and three Directors hold various positions
in Customer A and/or its associates. Except for Customer A and to their best knowledge, our
Directors confirm that none of our Directors or their respective close associates or any
Shareholder holding more than 5% of our issued share capital held any interest in any of our
five largest customers in each year/period during the Track Record Period.
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Suppliers
Our suppliers primarily include enterprises that supply various key raw materials and
parts for our vehicles, mainly including metal materials (such as various steel and aluminum
materials), batteries, electronic components (such as motors and controllers), as well as for
other materials and parts including seats and other automotive parts, among others. Such key
materials and components used in our vehicles are primarily sourced from China.
Key Terms of Supply Agreements
We generally enter into framework agreements with our suppliers. Key terms of our
supply agreements with suppliers primarily include:
Term: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Generally one year.
Procurement amount: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Under our supply agreements, we typically enter
into monthly procurement plans. Our
framework agreements may stipulate
non-binding annual procurement amounts as
reference.
Price: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Prices of goods are generally negotiated and
agreed between parties separately in
corresponding price agreements. Our
framework agreements may stipulate
non-binding total annual procurement prices as
reference.
Settlement: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The settlement price shall be based on the
volume of procured goods actually assembled
in finished vehicles.
Product liability: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Suppliers are liable during the warranty period
for returns or replacements of vehicles due to
the fault of the supplied goods, as well as for
direct and indirect losses incurred due to
accidents involving our vehicles caused by the
supplied goods.
Termination: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The agreement automatically terminates upon
expiry, or for breaches of the agreement,
including due to failure by suppliers to rectify
late deliveries after receiving notice from us.
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Relationship with Major Suppliers
For the years ended December 31, 2022, 2023 and 2024 and for the six months ended June
30, 2025, the aggregate purchases from our top five suppliers in each year/period during the
Track Record Period amounted to RMB13.9 billion, RMB15.4 billion, RMB72.2 billion and
RMB35.2 billion, which accounted for 34.7%, 36.9%, 51.9% and 57.9% of our total purchases
for the respective years/periods. For the same periods, purchases from our largest supplier in
each year/period during the Track Record Period amounted to RMB5.8 billion, RMB7.2
billion, RMB42.0 billion and RMB20.0 billion, which accounted for 14.5%, 17.4%, 30.2% and
33.0% of our total purchases for the respective years/periods. We purchase automotive parts,
services, software and equipment, among others, from such supplier, primarily relating to our
AITO vehicles.
We have maintained good business relationship with our major suppliers. For example,
we have been cooperating with Supplier A since 2019. Our agreements with our five largest
suppliers during the Track Record Period do not involve any arrangements regarding
profit-sharing. Each party is entitled to relevant intellectual properties of their respective
products and technologies. Our agreements with such suppliers are typically not exclusive.
During the Track Record Period, we have not experienced any material disruptions in business
relationship with our major suppliers. Nonetheless, we may be subject to concentration and
counterparty risks from these suppliers. See “Risk Factors — Risks related to Our Business and
Industry — We rely on our suppliers to provide raw materials, components, software and
services related to our vehicles.” To mitigate supply chain risks, we have established stable
relationships with multiple suppliers, and are able to source our key raw materials and
components through multiple high-quality suppliers selected through our standardized
evaluation system, taking into account factors such as the supplier’s product quality, technical
strength, corporate reputation and other such commercial and technical factors. Furthermore,
we also regularly review and maintain safe inventory stock for key raw materials and
components.
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The following tables set out details of our five largest suppliers in each year/period during
the Track Record Period:
For the year ended December 31, 2022
Ranking Supplier Background
Type of
products/services
provided
Purchase
amount
(RMB in
thousand)
Percentage of
total
purchase
amount
Commencement of
Business
Relationship
1 /H1118/H1118/H1118/H1118Supplier A A company primarily engaged in IT,
telecommunication and hardware
device
Parts, development
services, selling and
promotion services,
and other services
5,801,579 14.5% Since 2019
2 /H1118/H1118/H1118/H1118Supplier B A company primarily engaged in
EV batteries, ESS batteries and
other business operations
Parts and development
services
5,380,206 13.4% Since 2017
3 /H1118/H1118/H1118/H1118Supplier C A company with its business scope
covering vehicles, new energy and
equipment manufacturing, among
others
Parts and accessories 1,020,457 2.5% Since 2004
4 /H1118/H1118/H1118/H1118Supplier D A company whose business
operations spanning four major
industries, i.e. automotives,
electronics, new energy and rail
transportation
Parts and development
services
865,187 2.2% Since 2019
5 /H1118/H1118/H1118/H1118Supplier E A company engaged in four major
business segments, i.e. automotive
& intelligent transportation
technologies, industrial
technologies, consumer goods, and
energy & building technologies
Parts, R&D services,
design services, and
development services
844,633 2.1% Since 2005
For the year ended December 31, 2023
Ranking Supplier Background
Type of
products/services
provided
Purchase
amount
(RMB in
thousand)
Percentage of
total
purchase
amount
Commencement of
Business
Relationship
1 /H1118/H1118/H1118/H1118Supplier A A company primarily engaged in IT,
telecommunication and hardware
device
Parts, equipment,
advertising services,
development services,
selling and promotion
services, and other
services
7,248,270 17.4% Since 2019
2 /H1118/H1118/H1118/H1118Supplier B A company primarily engaged in
EV batteries, ESS batteries and
other business operations
Parts 4,809,365 11.6% Since 2017
3 /H1118/H1118/H1118/H1118Supplier C A company with its business scope
covering vehicles, new energy and
equipment manufacturing
Parts, accessories,
equipment, and
development services
1,193,738 2.9% Since 2004
4 /H1118/H1118/H1118/H1118Supplier F A company primarily engaged in the
R&D, manufacturing and sales of
automotive seats and their
components and related services
Parts and development
services
1,118,487 2.7% Since 2022
5 /H1118/H1118/H1118/H1118Supplier G A company specializing in the R&D,
production and sales of high-
voltage and low-voltage wiring
harnesses for automotives
Parts 1,004,057 2.3% Since 2022
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For the year ended December 31, 2024
Ranking Supplier Background
Type of
products/services
provided
Purchase
amount
(RMB in
thousand)
Percentage of
total
purchase
amount
Commencement of
Business
Relationship
1 /H1118/H1118/H1118/H1118Supplier A A company primarily engaged in IT,
telecommunication and hardware
device
Parts, accessories,
equipment
maintenance,
development services,
software, selling and
promotion services,
and other services
42,029,627 30.2% Since 2019
2 /H1118/H1118/H1118/H1118Supplier B A company primarily engaged in
EV batteries, ESS batteries and
other business operations
Parts and accessories 11,855,603 8.6% Since 2017
3 /H1118/H1118/H1118/H1118Supplier H An automotive parts supplier
specializing in vehicle interior and
exterior trims, automotive seats,
cockpit electronics, and passive
safety systems
Parts, accessories,
equipment, and
development services
9,514,130 6.8% Since 2021
4 /H1118/H1118/H1118/H1118Supplier I A platform-based automotive parts
company mainly dedicated to the
R&D, and manufacturing of
automotive powertrain and chassis
systems, trim systems, intelligent
driving systems, and other sectors
Parts, accessories, and
development services
4,626,745 3.3% Since 2018
5 /H1118/H1118/H1118/H1118Supplier G A company specializing in the R&D,
production and sales of high-
voltage and low-voltage wiring
harnesses for automotives
Parts and accessories 4,199,117 3.0% Since 2022
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For the six months ended June 30, 2025
Ranking Supplier Background
Type of
products/services
provided
Purchase
amount
(RMB in
thousand)
Percentage of
total
purchase
amount
Commencement of
Business
Relationship
1 /H1118/H1118/H1118/H1118Supplier A A company primarily engaged in IT,
telecommunication and hardware
device
Parts, accessories,
development services,
software, selling and
promotion services,
and other services
20,035,196 33.0% Since 2019
2 /H1118/H1118/H1118/H1118Supplier H An automotive parts supplier
specializing in vehicle interior and
exterior trims, automotive seats,
cockpit electronics, and passive
safety systems
Parts and accessories 5,632,483 9.3% Since 2021
3 /H1118/H1118/H1118/H1118Supplier B A company primarily engaged in EV
batteries, ESS batteries and other
business operations
Parts and accessories 5,597,106 9.2% Since 2017
4 /H1118/H1118/H1118/H1118Supplier I A platform-based automotive parts
company mainly dedicated to the
R&D, and manufacturing of
automotive powertrain and chassis
systems, trim systems, intelligent
driving systems, and other sectors
Parts and accessories 2,226,349 3.7% Since 2018
5 /H1118/H1118/H1118/H1118Supplier G A company specializing in the R&D,
production and sales of high-
voltage and low-voltage wiring
harnesses for automotives
Parts and accessories 1,669,797 2.8% Since 2022
As of the Latest Practicable Date, to the best of our Directors’ knowledge, none of our
Directors or their respective close associates or any Shareholder holding more than 5% of our
issued share capital held any interest in any of our five largest suppliers in each year/period
during the Track Record Period.
Supplier/Customer Overlap
During the Track Record Period, Supplier A, Supplier C, and Supplier H were also our
customers. Specifically, (i) we mainly provide electric drive processing services and sell
vehicle accessories to Supplier A, (ii) we mainly sell powertrain-related products to Supplier
C, and (iii) we mainly sell materials related to vehicle seats to Supplier H. In 2022, 2023, 2024
and the six months ended June 30, 2025, (i) our purchases from Supplier A amounted to
RMB5.8 billion, RMB7.2 billion, RMB42.0 billion and RMB20.0 billion, which accounted for
14.5%, 17.4%, 30.2% and 33.0% of our total purchases during the same periods, respectively,
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(ii) our purchases from Supplier C amounted to RMB1.0 billion, RMB1.2 billion, RMB2.5
billion and RMB0.5 billion, which accounted for 2.5%, 2.9%, 1.8% and 0.8% of our total
purchases during the same periods, respectively, and (iii) our purchases from Supplier H
amounted to RMB0.7 billion, RMB0.7 billion, RMB9.5 billion and RMB5.6 billion, which
accounted for 1.8%, 1.6%, 6.8% and 9.3% of our total purchases during the same periods,
respectively. Revenue generated from each of Supplier A, Supplier C and Supplier H in each
year during the Track Record Period accounted for 1% or less of our total revenue in the
respective year.
During the Track Record Period, Customer A was also our supplier. We mainly purchase
automotive parts, developing services and logistics services from Customer A. In 2022, 2023,
2024 and the six months ended June 30, 2025, our revenue generated from Customer A
amounted to RMB1.3 billion, RMB0.2 billion, RMB87.1 million and RMB34.4 million,
respectively, which accounted for 4.0%, 0.6%, 0.06% and 0.06% of our total revenues during
the same periods, respectively. Purchases from Customer A accounted for no more than 1% of
our total purchases in the respective year of the Track Record Period.
Our sales to and purchases from the above supplier-customers are not inter-conditional
upon each other, and are conducted in the ordinary course of business under normal
commercial terms and on arm’s length basis.
W AREHOUSING, LOGISTICS AND INVENTORY MANAGEMENT
We have built the SERES Intelligent Logistics System, establishing an end-to-end
logistics value chain to advance new patterns and new thinking for logistics operations from
point-based logistics to fully intelligent network-chain logistics. By comprehensively
enhancing standardization, automation, informatization, and digital intelligence of logistics,
we have pioneered an intelligent container logistics port, introduced a logistics management
system (LMS) and automated terminal equipment such as AGV , AMRs, and chain conveyors.
This helps us achieve end-to-end visibility, precision, agility, and intelligent logistics
management of the whole process, ensuring stable production operations.
In China, we operate through self-owned warehouses or third-party leasing arrangements.
We promote suppliers to utilize our managed warehousing and logistics network for component
distribution services to reduce logistics costs and optimize factory inventory levels. Regarding
warehouse management, we have implemented warehousing management system (WMS),
pick-to-light system (PTL), and other storage and sorting systems to achieve multi-warehouse
collaboration capabilities and dynamic inventory visibility management. We have introduced
an intelligent logistics port adopting a “container-as-warehouse” model. We have also deployed
small-parts automated storage systems, AMRs, AGVs, and other intelligent terminal equipment
to enhance collecting/sorting efficiency and logistics automation levels. We engage premium
third-party logistics providers to handle warehouse operations and transport our vehicles from
production bases to stores.
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Our inventory primarily consists of raw materials, components, work-in-progress
products, after-sales spare parts, and vehicles for sale. To achieve optimal inventory levels, we
employ a make-to-order production model and utilize the just-in-time (JIT) delivery model,
just-in-sequence (JIS) synchronized delivery model, and vendor managed inventory (VMI)
model to optimize in-factory inventory days. Through our advanced planning and scheduling
(APS) system and LMS, we further reduce inventory days while ensuring efficient, agile, and
flexible delivery capabilities. We implement the mode of nationwide distribution from central
warehouses and direct delivery from suppliers for common after-sales spare parts to manage
the after-sales spare parts inventory. Our inventory turnover days were 39 days, 41 days, 10
days, 13 days and 11 days in 2022, 2023 and 2024 and for the six months ended June 30, 2024
and 2025, respectively.
DATA PRIV ACY AND CYBERSECURITY
We are committed to complying with data privacy laws and protecting the security of
customer data. During the course of sales and marketing of our vehicles, certain personal
information is collected by us from users based on the services the users select, and mainly
includes personal information relating to the usage of our vehicles. We undertake to manage
and use the data collected from users in accordance with applicable laws and make reasonable
efforts to prevent the unauthorized use, loss or leak of user data, and will not disclose sensitive
user data to any third party without users’ prior consent except under legal requirement or
certain circumstances specified in the customer consent.
We use a variety of technologies to protect the personal information of our users provided
to us. For example, we segregate our internal databases and operating systems from our
external-facing services and intercept unauthorized access. When such information is not
relevant to our business, we will delete data beyond what is necessary for our business
operations. We also store user data in encrypted format. In addition, we encrypt our data
transmission, especially user data transmission, to ensure confidentiality. We back up our user
data and operating data on a regular basis in separate back-up systems to minimize the risk of
user data loss or leakage. Whenever an issue is discovered, we take prompt actions to upgrade
our system and mitigate any potential problems that may undermine the security of our system.
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any fines or other penalties due to non-compliance with data privacy and security
laws or regulations. In the opinion of our PRC Legal Adviser, we complied in all material
aspects with relevant data privacy and security laws and regulations during the Track Record
Period.
COMPETITION
Competition in the global and Chinese new energy passenger vehicle market is intense,
driven by the following factors: (i) consumer vehicle purchasing preferences reshaped by
intelligence; (ii) unprecedented opportunities for vehicle intelligence brought by artificial
intelligence; (iii) new business models and product forms introduced by the cross-border
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industry integration; (iv) the continuous growth of China’s automotive export sales; and (v) the
continuously rapid growth of Chinese domestic brands of new energy passenger vehicles. The
NEPV penetration rate in China passenger vehicle market increased from 15.2% in 2021 to
48.9% in 2024, and is expected to reach 76.9% in 2030, according to Frost & Sullivan. In
China’s NEPV market, domestic brands dominated the top 20 best-selling models in 2024,
accounting for 18 of the top 20 models by sales volume. In the premium NEPV segment,
domestic brands also showed strong competitiveness, with 7 domestic brand models ranking
among the top 10 models by sales volume. Among them, the AITO M7 ranked first by sales
volume among all the premium domestic brand models. The entry barriers of China’s premium
NEPV market include: (i) high initial investment; (ii) stable supply chain ecosystem; (iii) new
energy vehicle production qualification barrier; (iv) production costs and economies of scale;
(v) intelligent ecosystem and supporting services; and (vi) full-process integration capability.
We mainly compete with global new energy passenger vehicle companies and Chinese
domestic brand new energy passenger vehicle companies in domestic and overseas markets. In
the future, we may also face competition from new entrants in China and globally, which will
intensify competition. To maintain our competitive edges, we are committed to building a new
concept of tech-luxury to set a global benchmark for intelligent NEVs, adhering to a popular
product strategy to offer a continuously evolving product experience for global users, actively
promoting globalization and expanding our brand influence in international markets, creating
an active and intelligent service system throughout the vehicle lifecycle and continuing to
enhance intelligent manufacturing capabilities to establish an open, innovative, and integrated
ecosystem for the intelligent vehicle industry. According to Frost & Sullivan, our AITO models
rank fifth in China’s new energy passenger vehicle market with a market share of 3.7% in terms
of sales volume in 2024, and third in China’s premium brand new energy passenger vehicle
market in terms of sales volume in 2024. In terms of sales volume in 2024, the AITO M9 ranked
first among passenger models of the RMB500,000 price segment in China.
A W ARDS AND ACHIEVEMENTS
Several of our subsidiaries have been acknowledged as national high-tech enterprises in
different years throughout the Track Record Period, highlighting our robust research,
development, and technological capabilities. Furthermore, among our other recent significant
awards and achievements are:
Award/Recognition Award Y ear Awarding Authority
Intelligent Manufacturing
Benchmarking Enterprise /H1118/H1118/H1118/H1118/H1118
2022 China Electronics Standardization
Institute
China Patent Excellence Award /H1118/H11182023 China National Intellectual Property
Administration
National Green Factory /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182023 Ministry of Industry and
Information Technology of the
PRC
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Award/Recognition Award Y ear Awarding Authority
Green Supply Chain
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 Ministry of Industry and
Information Technology of the
PRC
First Prize of Fourth Intelligent
Manufacturing Innovation
Competition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 Jiangsu Government; International
Coalition of Intelligent
Manufacturing
Chongqing Patent Gold Award /H1118/H1118/H11182024 Chongqing Human Resources and
Social Security Bureau, Beijing
Intellectual Property Office
2024 Product Quality and
Reliability Innovation “Best
Practice” /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 Beijing Market Supervision and
Administration Bureau, Tianjin
Market Supervision and
Administration Bureau, Shanghai
Market Supervision and
Administration Bureau and
Chongqing Market Supervision
and Administration Bureau
INTELLECTUAL PROPERTY
We believe that our patents, copyrights, trademarks, domain names, trade secrets and
other intellectual property rights are critical to our business operations and fundamental to our
success and competitiveness, and therefore we devote significant time and resources to the
development and protection of our intellectual property rights. We rely on patent, copyright,
trademark and trade secret laws and disclosure restrictions to protect our intellectual property.
As of June 30, 2025, we possessed 6,725 patents and 282 registered computer software
copyrights in China, and are applying for 6,651 patents. In addition, as of the same date, we
had registered 2,183 trademarks and 99 domain names. As of June 30, 2025, we have 101
patents and 2,366 registered trademarks outside China, and are applying for 127 patents and
1,698 trademarks.
In July 2024, we acquired 919 trademarks primarily in relation to AITO and 44 relevant
design patents from Huawei and its related parties, a strategic business partner of us and an
Independent Third Party, for a consideration of approximately RMB2.5 billion. The
consideration is determined based on negotiation between both parties. This transaction does
not affect the business collaboration between Huawei and us.
Prior to the acquisition of trademarks, we have been using the relevant trademarks based
on the licensing arrangements. We were authorized to use relevant trademarks in the
manufacturing, marketing and sales of relevant AITO vehicles. We acquired all relevant
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trademarks and design patents in relation to AITO vehicles in July 2024 to better provide
high-quality vehicles and services to users. We believe that the acquisition of relevant
trademarks and design patents is beneficial to the consistency of public recognition of our
brand and products.
For detailed information about our material intellectual property, see “Appendix IV —
Statutory and General Information — Further Information about our Business — Intellectual
Property Rights.”
During the Track Record Period and up to the Latest Practicable Date, to the best of our
knowledge, we had not been subject to any material intellectual property claims which could
have a material adverse effect on our business or operations.
EMPLOYEES
As of June 30, 2025, we had a total of 19,251 employees. Substantially all of our
employees are based in the PRC. The following table sets forth a breakdown of our employees
categorized by function as of June 30, 2025.
Function Number % of total
Manufacturing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,474 38.8%
R&D Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,005 41.6%
Sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,746 9.1%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118984 5.1%
Administration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694 3.6%
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348 1.8%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,251 100.0%
As required by regulations in China, we participate in various government statutory
employee benefit plans, including social insurance funds, namely, medical insurance, maternity
insurance, workplace injury insurance, unemployment insurance, and pension benefits, as well
as housing provident fund. We are required under PRC law to contribute to employee benefit
plans at specified percentages of the salaries, bonuses, and certain allowances of our employees
up to a maximum amount specified by the local government from time to time.
Our success depends on our ability to attract, develop, motivate and retain talents. We
offer employees competitive salaries, consistently enhance our incentive program, including
fixed salaries, performance bonuses, various benefits, special incentives aimed at achieving
project objectives, long-term incentives based on equity, career development platforms,
cultivation and development opportunities, annual contribution awards, and timely
recognitions.
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Our remuneration system is structured with a focus on value creation. Through
comprehensive job analysis and evaluation of position value, we consistently refine our
remuneration standards. We have instituted and enhanced our competency level assessment
mechanisms to develop a systematic performance management framework and devise a
targeted incentive structure for diverse talents.
We cultivate a “mission-driven and competency-driven” talent team through systematic
training:
 Employee development: We implement talent cultivation programs that are centered
on the principles of mission and responsibility, to consolidate the cultivation of
young college students, continuously enhancing both the scale and caliber of our
talents. These include management trainee programs, onboarding initiatives for
newly promoted managers, training programs for mid-level employees, senior
management development programs, and a variety of other training programs for
key talents. Additionally, we conduct educational sessions on ideals and beliefs to
enhance employees’ sense of mission and responsibility.
 Engineer team development: For employees across different fields, we devise and
execute numerous specialized training programs, such as “Addfeed (࢕and
“Financial Management”, tailored to position-specific requirements for essential
knowledge and skills, aiming to systematically foster an engineering talent pool.
 Promotion of digital learning: By leveraging learning platforms and artificial
intelligence tools, we can facilitate employees’ ability to study at any time and from
any location on demand by integrating instructional resources and course materials,
enhancing platform content, and amalgamating online and offline learning resources
to optimize the retention of corporate knowledge.
 Expansion of industry-education integration: We have made a comprehensive plan
and executed the collaboration between universities and enterprises through the
integration of industry, academia, research, and application. Furthermore, we have
established partnerships and strategic alliances with various colleges and
universities to enhance the effective alignment between industrial chains and
educational frameworks, thereby supporting regional industrial economic
development.
We enter into standard labor contracts with our employees. We also enter into standard
confidentiality agreements with all of our key employees. We believe that we maintain a good
working relationship with our employees, and we have not experienced any material labor
disputes or work stoppages. No collective bargaining agreement has been put in place.
SEASONALITY
In general, our vehicle sales typically peak in the fourth quarter, which is a traditional
peak season for the automotive industry, mainly due to nationwide auto shows and increasing
vehicle purchases near year end.
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INSURANCE
We maintain various insurance policies to safeguard against risks and unexpected events.
We maintain various property insurance, and liability insurance for Directors and senior
management, which we believe is in line with those of other companies in the same industry
of similar size in China. In addition to providing social security insurance for our employees
as required by PRC law, we also provide supplemental commercial medical insurance for our
employees. We believe that our insurance coverage is adequate to cover our key assets,
facilities, and liabilities.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We fully recognize the importance of environmental, social and governance (“ESG”)
practices to corporate sustainable development and have integrated ESG principles into our
strategic planning and daily operations. We actively respond to China’s “dual-carbon” strategy,
continuously optimize corporate governance, strengthen social responsibility fulfillment, and
refine our environmental management system. We are committed to building a transparent,
standardized, and sustainable operational framework that creates long-term value for
employees, customers, and society.
We actively respond to the United Nations Sustainable Development Goals by
establishing a three-tier ESG governance structure: the Board, ESG Committee, and ESG
Executive Group. This structure helps us continuously strengthen our ESG standards. The
Board, as the highest decision-making body, oversees all ESG matters, reviews and approves
the ESG strategies and action plans, and assesses ESG performance and progress against
targets. The ESG Committee is authorized by the Board to manage ESG activities and promptly
report relevant issues to the Board. The ESG Committee coordinates matters related to ESG
management, formulates medium and long-term ESG development strategies and action paths,
and oversees and guides the effective implementation of the Company’s environmental, social
responsibility and corporate governance. The ESG Executive Group, including the Planning
and Strategy Headquarters, Internal Control and Audit Headquarters, and Securities Affairs
Headquarters, work together under the management of the ESG Committee, to execute and
implement the annual ESG work plans, and identify and manage ESG-related risks.
Materiality Issue Analysis
We actively communicate on ESG-related issues with all stakeholders, including
employees, shareholders/investors, users, the government and regulators, partners, community
members/organizations/NGOs and the media. We maintained active communication through
various channels, ensuring we understood and addressed their expectations and concerns. This
approach helped us identify priorities for our sustainable development efforts and clarify key
directions for the Group’s future, aiming to achieve mutual benefits and win-win cooperation.
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We are committed to identifying, assessing, and managing ESG issues. We carefully
considered the concerns of various stakeholders, aligning them with industry trends and our
business strategy. We conducted a substantial issue assessment from the three dimensions of
environment, social, and governance, and developed a materiality matrix to address
stakeholder concerns, as set forth below.
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Environmental Protection
We comply with a series of environmental, health, and safety regulations, including laws
and regulations governing our production and engineering facilities. For the discussion of
relevant Chinese laws and regulations on environmental protection and work safety, please
refer to “Regulatory Overview — Regulations on Environmental Protection”.
Climate change
We regard climate change and carbon emissions as key strategic considerations for
sustainable development, and have established a climate governance framework based on the
sustainable development management system. We give full play to the advantages of leading
product technology and industrial chain, actively explore low-carbon technology, develop
low-carbon products, and apply green principles across the entire product lifecycle from design
and procurement to production, logistics, and recycling.
In addition, to better manage the full life cycle carbon footprint of our products, we have
fulfilled multiple functions including corporate carbon inventory, per vehicle parts carbon
footprint accounting, and internal carbon target management by developing a digital carbon
management platform. Our carbon inventory system connects with the energy management
systems of all factories, enabling real-time monitoring of carbon emissions and energy use.
This serves as a critical tool for evaluating internal carbon performance. The carbon footprint
management system integrates with the supplier procurement system, allowing us to collect the
information of carbon emissions and energy consumption at supplier sites. This serves as a
critical tool for effectively assessing upstream supply chain carbon emissions and energy
consumption performance.
In 2024, through initiatives like photovoltaic construction, energy-saving upgrades, green
office practices, and the development of a green supply chain, we reduced the carbon emission
intensity by 16.85% compared to 2023. By 2030, we aim to achieve the carbon emission
intensity of products reduced by more than 38% compared with 2022, 30% of manufacturing
energy use generated by renewable energy, all suppliers meeting our green supplier
requirement, supplier carbon emissions decreased by 25% and 40% of suppliers using
renewable energy. By 2045, we strive for carbon neutrality in production and operations, and
near-zero emissions throughout the product life cycle.
Climate risk management
We actively address the challenges and opportunities of global climate change by
integrating climate-related risks into the Group’s overall risk management system. Through a
systematic approach, we identify, assess, and manage these risks and opportunities. This
strengthens our climate resilience while enabling us to seize new growth opportunities.
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Risk Risk Description Response Measures
Physical Risks
Acute Physical
Risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Extreme weather events,
such as typhoons, floods,
and snowstorms, can disrupt
production facilities and
supply chains, affecting
operations and causing
property damage.
 Infrastructure damage,
including transportation
networks and power supply,
can lead to production
delays, impacting product
delivery and reputation.
 Strengthen risk assessments
and implement emergency
response plans and drills to
ensure rapid action and
minimize losses during
extreme weather events.
 Upgrade infrastructure and
adopt disaster-resistant
equipment and facilities to
ensure stable operations and
reduce disaster-related
impacts.
Chronic Physical
Risks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 Long-term climate changes,
such as rising temperatures,
sea levels, and droughts,
may affect resource stability
and disrupt supply chains,
leading to production
constraints.
 Resource scarcity and
increasing production costs
can impact operational
efficiency, product pricing,
profitability, and market
competitiveness.
 Assess the long-term effects
of climate change on
production bases and supply
chains. Plan for adjustments
and select resilient,
environmentally friendly
supply chain pathways.
 Continuously monitor
climate trends, optimize
resource efficiency, and
promote the use of green
technologies and sustainable
materials to reduce
production costs and
environmental risks.
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Risk Risk Description Response Measures
Transition Risks
Policy Risk /H1118/H1118/H1118/H1118/H1118/H1118 Global and local
governments may introduce
stricter environmental
regulations, such as carbon
emission limits and
emissions trading systems,
increasing corporate
compliance costs.
 Regulations on energy use
and emissions could impact
raw material procurement,
production processes, and
other operations, leading to
higher operating expenses.
 Strengthen the management
framework of our carbon
neutrality task force, with
clearly defined
responsibilities.
Continuously monitor policy
changes, assess potential
impacts, and develop
proactive response plans.
 Enhance emissions
compliance management by
promptly adjusting
production processes and
energy use, avoiding
unnecessary costs and
mitigating risks.
Technical Risk /H1118/H1118/H1118/H1118 The rapid advancement of
low-carbon technologies
may reduce the market
competitiveness of existing
technologies and products.
 High R&D costs for new
technologies can create
financial pressure in the
short term, particularly
before these technologies
are fully developed and
generate returns
 Increase investment in R&D
for clean and renewable
energy technologies to
strengthen innovation
capabilities and ensure that
existing technologies stay
competitive and aligned
with industry trends.
 Establish a technology early
warning system to closely
monitor market and
technological changes. Plan
proactively for technological
upgrades and seek
partnerships to share R&D
resources.
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Risk Risk Description Response Measures
Market Risk /H1118/H1118/H1118/H1118/H1118/H1118 Increased consumer
awareness of environmental
issues is driving higher
demand for low-carbon
products, while traditional
high-carbon products face a
shrinking market.
 Actively develop renewable
energy vehicles to meet the
growing demand for green
products.
 Strengthen market research
to track industry and
consumer trends, ensuring
product lines remain
flexible and adaptable to
changing market needs, and
enhance brand marketing
and promotion.
Reputational Risk /H1118 Public and investor concern
over corporate
environmental performance
is rising. Companies that
fail to fulfil social
responsibilities or respond
effectively to climate
change may face criticism
and reputational damage.
 Enhance ESG information
disclosure by regularly
sharing the Group’s
environmental goals,
achievements, and future
plans to strengthen
transparency and build trust.
 Actively engage in social
responsibility initiatives,
including public welfare and
environmental protection
projects, to enhance brand
image.
 Participate in climate
response conferences and
dialogues to promote green
and low-carbon practices
while enhancing the
influence of our renewable
energy products.
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Energy management
We actively promote energy-saving renovation projects in our factories to effectively
reduce energy consumption. These initiatives include modifying production lines, upgrading
facilities and equipment, and optimizing lighting systems. For example, the energy-saving
retrofit project for process cooling water in our paintshop can reduce 1,367.8 tons of carbon
dioxide per year. We actively promote the use of clean energy by implementing photovoltaic
power generation projects across multiple factories, supporting the Company’s low-carbon
transformation. In 2024, our use of produced green electricity saved 11,660.75 tons of standard
coal and reduced 78,940 tons of carbon dioxide emissions. In 2024, we saved water of
approximately 127,440 tons from water reuse.
Waste management
We have formulated internal management systems for the wastewater, exhaust and solid
waste generated in the production and operations. The generated wastewater can be discharged
only after being treated to meet the discharge standards required to be implemented locally, and
be sorted and discharged to the wastewater treatment department for centralized treatment in
accordance with relevant regulations. We formulate and implement internal management
systems and work processes to ensure that exhaust pollutants are discharged as per standards.
On a regular basis, we entrust the qualified third-party testing facility to monitor real-time
exhaust discharge and require all departments to seal containers that are associated with toxic
and harmful gases or dust pollution, or take other protective measures during storage,
transportation, and loading and uploading, so as to prevent discharge of harmful gases or dusts.
We classified solid waste into general industrial solid waste and hazardous waste for proper
control and management. In 2024, we achieved almost 100% recycling and disposal rate for
solid waste generated during production and manufacturing.
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The table below sets forth our energy consumption and emissions during the years
indicated.
For the year ended December 31,
Indicators 2022 2023 2024
Total exhaust discharge
(cubic meters) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,952,653,849.40 9,187,685,919.00 16,620,054,240.17
Total amount of
wastewater discharge
(ton) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118847,246.80 602,907.89 1,229,479.41
Total amount of
nonhazardous waste
(ton) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,304.34 26,404.67 51,228.76
Total amount of hazardous
waste
(1) (ton) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908.03 3,457.17 8,548.34
Resource Consumption
Comprehensive energy
consumption
(2)
(ton of standard coal
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,282.29 45,360.37 80,154.69
Comprehensive energy
consumption density
(tce/revenue of
RMB10,000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0168 0.0127 0.0055
Total water
consumption (ton) /H1118/H1118/H1118/H1118/H11181,504,893.42 1,412,624.00 1,163,904.00
Total water consumption
density (ton/revenue
of RMB10,000) /H1118/H1118/H1118/H1118/H1118/H1118/H11180.44 0.39 0.08
GHG Emissions
Scope 1: GHG emission
(3)
(ton of carbon dioxide
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,333.39 47,756.19 88,690.29
Scope 2: GHG emissions (4)
(ton of carbon dioxide
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118139,403.87 103,776.09 183,534.44
Scope 3: GHG emissions (5)
(ton of carbon dioxide
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/ 33,436.87 69,946.82
Total GHG emissions
(ton of carbon dioxide
equivalent) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118195,737.26 184,969.15 342,171.55
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For the year ended December 31,
Indicators 2022 2023 2024
GHG emission density
(ton of carbon dioxide
equivalent/revenue
of RMB10,000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.057 0.052 0.02
Notes:
(1) Hazardous waste is defined according to the National Catalogue of Hazardous Wastes (2021 Edition)
issued by the Ministry of Ecology and Environment of the People’s Republic of China.
(2) The comprehensive energy consumption is calculated based on the General Rules for Calculation of
Comprehensive Energy Consumption (GB/T 2589-2020) .
(3) Greenhouse gas emissions (Scope 1) from fuel (LNG, refrigerants) consumption from fixed sources and
fuel consumption (petrol, diesel) from transportation vehicles. The emission factors of gasoline, diesel,
LNG and refrigerants refer to the Guidelines for Accounting and Reporting Greenhouse Gas Emissions
for Enterprises in Other Industries published by the National Development and Reform Commission of
the People’ s Republic of China on 6 July 2015.
(4) Greenhouse gas emissions (Scope 2) are derived from the consumption of purchased electricity. The
emission factors of purchased electricity are converted with reference to the average emission factors
of the national power grid in 2022 in the Notice on the Management of Greenhouse Gas Emission
Reports of Enterprises in the Power Generation Sector from 2023 to 2025 issued by the Ministry of
Ecology and Environment of the People’s Republic of China.
(5) GHG emissions (Scope 3) refers to GHG emissions from fuel- and energy-related activities that are
excluded in Scope 1 and Scope 2.
Social Responsibility
Supply chain management
We continue to enhance our supply chain sustainability management capabilities,
integrate sustainable development into our supply chain management system, execute
comprehensive life cycle supplier management, rigorously monitor supplier quality and safety
and risk management, and proactively establish a green supply chain. We have also set clear
sustainability targets for all suppliers, including green electricity usage, recycled material
ratios, carbon emission intensity, and energy consumption per unit. Using a carbon footprint
database for suppliers, we continuously track these metrics, integrating them into supplier
evaluations and contract decisions.
To manage supply chain risks, we have formulated policies that outline ESG risk factors
suppliers must address, such as product quality, legal compliance, business ethics, and
environmental impact. ESG related risks are also integrated into our procurement risk control
process. We conduct quarterly supplier risk assessments, including ESG risks, such as on labor
practices, health and safety, environmental impact, ethics, and management systems. We have
established a supply chain emergency management system to monitor and assess potential risks
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in supplier operations, public sentiment, and natural disasters, which we can track in real time
and generate risk profiles to respond swiftly and mitigate disruptions. Meanwhile, we
introduced origin tracking for electronic materials at the per-vehicle level, ensuring full
traceability from raw material procurement through manufacturing and logistics.
We have taken various measures advance environmentally-friendly supply chain
management across the product life cycle. For example, during the design phase, we establish
reasonable carbon emission targets for vehicles and key parts based on market positioning and
industry trends, update and release specific measures to standardize management of prohibited
substances and recyclable products, and incorporate prohibited substance requirements into
technical specifications, drawings, and agreements with suppliers, requiring them to submit
commitment letters and use environmentally-friendly, recyclable materials. During validation,
we require suppliers to conduct third-party prohibited substance testing after component
development to ensure compliance. During production, we mandate suppliers to classify offcut
materials, drainage waste, and end-of-life products, partnering with certified recycling
agencies for proper reuse and disposal.
To reduce the end-of-life environmental impact of our products and promote a circular
economy, we have implemented battery traceability measures to ensure that data on vehicle
batteries, from production and sales to replacement and recycling, is properly recorded and
reported in line with national regulations.
Additionally, we have partnered with certified recycling companies through waste battery
recycling agreements to safely collect and dispose of replaced battery packs from maintenance
operations.
Employee interests and welfare
We have entered into employment contracts with employees according to applicable
Chinese laws and regulations, including the Labor Law of the People’s Republic of China and
the Labor Contract Law of the People’s Republic of China, and formulated internal policies to
monitor employees’ daily performance. We affirm our commitment to providing all employees
and candidates with equal access to employment opportunities and ensuring a recruitment
process that is compliant, equitable, and transparent. The utilization of child labor is strictly
prohibited in any of our operations. Our Directors confirm that, during the Track Record Period
and up to the Latest Practicable Date, we complied with all laws and regulations on prevention
of child labor. Furthermore, we are dedicated to fostering diversity within the organization. As
of December 31, 2024, 15.19% of our management positions were held by women.
The Company is committed to providing employees with competitive remuneration,
clearly delineating the components of their salaries, including base pay, role-based
compensation, performance incentives, and allowances, and offering employees appealing
benefits and caring, including commercial insurance, communication, accommodation and
transportation allowances. We establish performance metrics in the remuneration of employees
in accordance with the existing performance management system and appraisal plan, thereby
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ensuring that compensation is closely aligned with performance. In 2024, we introduced a
long-term incentive plan for key employees through an employee stock ownership program. In
addition, we actively build a non-salary benefit system for all full-time employees while
offering special support for disadvantaged employees, retired employees, employees stationed
abroad, and frontline production workers.
Occupational health and safety
We have procedures in place to ensure workplace safety for our employees. We conduct
regular safety inspections, safety emergency drills, and safety training to eliminate any
potentially hazardous work environments. In 2024, we conducted various forms of hazard
detection and safety inspections.
We actively conduct occupational health and safety training for all employees, covering
first-aid certification, safety management training, and specialized fire safety programs during
the fire protection month. In 2024, we conducted a total of 3,351 occupational health and safety
training sessions, covering 305,968 persons, accumulating 494,415.2 training hours, averaging
33.49 hours per employee.
We actively conduct external environmental impact assessments and environmental
management system certification. In 2024, all of our own factories obtained ISO 14001
environmental management system certification.
During the Track Record Period and up to the Latest Practicable Date, we did not receive
any material fine or other penalties due to violations of health, work safety, social or
environmental regulations, and there were no material work-related injuries at our production
facilities.
Community relation management
We are committed to fulfilling our social responsibilities and making significant
contributions to the establishment of a more harmonious and better society through a
comprehensive series of social welfare initiatives, aimed at supporting and promoting rural
revitalization and educational development across various fields.
 In 2024, we made multiple purchases of local agricultural products in places such
as Wuxi and Fengjie in Chongqing, helping farmers increase their income and
promoting the development of local characteristic agricultural industries. At the
same time, our total investment in rural revitalization reached RMB4.4916 million;
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 In 2024, our public welfare and charitable donations reached RMB10.3397 million.
At the donation ceremony of the “Hundreds of Enterprises Connect with Hundreds
of Villages” assistance action for border villages between the Chongqing Federation
of Industry and Commerce and Zhongba County in Shigatse City, we donated
RMB250,000 to Zhongba County. The aim is to promote the economic and social
development of the Shigatse region, and improve the living standards of the local
people;
 In 2024, we donated RMB1.5 million in two batches to Chongqing No. 1 Secondary
School, supporting the “Seres Automobile Talents” program. This program aims to
cultivate top-tier innovative talents in Chongqing, supporting students excellent in
character and learning from families in need to complete high-school education,
thereby further promoting local education development; and
 In 2024, we organized 370 volunteer activities, with 1,400 participants contributing
a total of 5,600 hours of service.
Corporate Governance
Anti-corruption and anti-bribery
We uphold strong business ethics by continuously optimizing our anti-corruption
framework, ensuring accessible reporting channels, and enforcing whistleblower protection.
Meanwhile, we firmly oppose unfair competition and monopolistic practices, working to
maintain a fair, transparent, and trustworthy business environment. Our multiple-level business
ethics governance system includes: management by the supervision headquarters, and
execution by several functional departments such as human resources headquarters, finance
headquarters, legal affairs headquarters and audit headquarters. Meanwhile, we have issued the
Business Partner Integrity Cooperation Management Measures, outlining integrity standards
for suppliers, distributors, service providers, agents, and consulting firms to ensure ethical and
compliant business development.
PROPERTIES
We own and lease certain properties in China and overseas primarily to be used for
production, warehousing, sales and offices. According to section 6(2) of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice, this
Prospectus is exempted from compliance with the requirements of section 342(1)(b) of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to paragraph
34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance which requires a valuation report with respect to all our interests in land or
buildings, for the reason that, as of June 30, 2025, none of our properties had a carrying amount
of 15% or more of our consolidated total assets.
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Owned Land and Properties
As of June 30, 2025, our Company and Major Subsidiaries owned land use rights with
respect to 29 parcels of land in China with a total gross land area of approximately
5,914,476.96 sq.m., and owned 239 buildings with an aggregate gross floor area of
approximately 2,426,788.85 sq.m.. These properties are primarily used for factories, offices,
etc.. As of June 30, 2025, we owned 9 parcels of land with a total gross land area of
approximately 76,889 sq.m. located in Indonesia. These properties are primarily used for
factories.
As of the date of this Prospectus, we have not obtained the building ownership certificates
for 6 buildings with an aggregate gross floor area of approximately 2,701.63 square meters. As
advised by our PRC Legal Adviser, we have obtained the confirmation from the relevant
government authorities that the construction procedures of the properties are complete and the
ownership certificates are in the process of being obtained. As of the Latest Practicable Date,
no material administrative penalties have been imposed for the failure to obtain the
aforementioned certificates, and this failure does not have a material adverse impact on our
business operations.
Leased Properties
As of June 30, 2025, we had primarily 25 leased properties in China with a total area of
approximately 753,176.21 sq.m., used for plants, sales, offices, and dormitories.
As of June 30, 2025, we had six leased properties in the United States, the Netherlands,
and Indonesia with a total area of approximately 146,436.34 sq.m. These properties are
primarily used for plants and offices.
Title Defects
As of the Latest Practicable Date, the lessors of 20 of our above-mentioned leased
properties in China with an aggregate gross floor area of approximately 384,330.91 sq.m had
not provided us with the relevant title ownership certificates for the leased properties or proof
of authorizations from the property owners to sublease the properties to us. During the Track
Record Period and up to the Latest Practicable Date, we had not encountered any material
disputes with respect to these defective leased properties. As advised by our PRC Legal
Adviser, without ownership certificates or proof of authorizations from the property owners,
the lessor does not have the right to rent the said premises. In such cases, if a third party objects
to the lease, it may affect our ability to continue to rent the properties, but we may still be able
to claim compensation from the lessor under the lease; furthermore, if the lessor enters into
several leases in respect of the same premises, we may be deemed to be the lawful lessee of
the properties in accordance with the relevant judicial interpretations. Having considered the
foregoing, our Directors believe that these title defects described above will not, individually
or in the aggregate, materially affect our business and results of operations.
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LEGAL PROCEEDINGS AND COMPLIANCE
We are committed to adhering to the laws and regulations applicable to our business.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
any non-compliance incidents that our Directors believe would, individually or collectively,
have a material operational or financial impact on our business and operations as a whole.
From time to time, we may be involved in contractual disputes or legal proceedings
arising from the ordinary course of our business. During the Track Record Period and up to the
Latest Practicable Date, we were not subject to any claims, damages, or losses that would have
a material adverse effect on our financial position or results of operations as a whole. Litigation
or any other legal proceeding, regardless of the outcome, is likely to result in substantial costs
and diversion of our resources, including our management’s time and attention.
LICENSES AND PERMITS
During the Track Record Period and up to the Latest Practicable Date, we had obtained
all requisite licenses, approvals and permits that are material for our business operations in the
jurisdictions where we operate, and such licenses, approvals and permits were valid and would
be in force on an ongoing basis.
RISK MANAGEMENT AND INTERNAL CONTROL
We have developed and implemented risk management policies and internal control
measures in relation to our business operations, financial reporting and general compliance. To
monitor the ongoing implementation of our risk management policies and corporate
governance measures after the Listing, we have adopted and will adopt, among other things,
the following risk management measures.
 We design a comprehensive set of policies to identify, analyze, manage and monitor
various risks. We periodically assess and update our risk management policies.
 Our Board is responsible for overseeing the overall risk management and internal
control. Our Audit Committee is authorized to review and evaluate our financial
control, risk management and internal control system. See “Directors and Senior
Management — Board Committees — Audit Committee” for the composition of the
Audit Committee and the qualifications and experience of them.
 We will adopt various policies to ensure compliance with the Listing Rules,
including but not limited to aspects related to conflict of interest management,
connected transactions and information disclosure.
 We will continue to organize training sessions for our Directors and senior
management with respect to the relevant requirements of the Listing Rules and
duties of directors of companies listed in Hong Kong.
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We engaged an independent internal control consultant to perform an assessment on the
effectiveness of our internal controls, to identify deficiencies in our internal control system and
to furnish recommendations on enhanced internal control measures. The work scope of our
internal control consultant covered reviewing and assessing various aspects of our operations,
including, among others, the internal control environment, financial reporting and disclosure,
sales and accounts receivables management, procurement and accounts payables management,
inventory management, engineering and manufacturing management, fixed and intangible asset
management, human resources and compensation, fund management and information system
management.
During the independent internal control consultant’s review, certain deficiencies were
identified, including deficiencies in relation to certain of our corporate governance policies,
and we have revised such corporate governance policies in conformity with the requirements
of the Listing Rules. We had adopted substantially all of the recommendations made by the
independent internal control consultant and had improved our internal control system to
comply with the Listing Rules.
Having considered the internal control measures adopted by us, our Directors are of the
view that our enhanced internal control measures are adequate and effective having regard to
the obligations of our Company and our Directors under the Listing Rules and other relevant
legal and regulatory requirements.
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BOARD OF DIRECTORS
Upon Listing, our Board of Directors comprises thirteen Directors, including four
executive Directors, four non-executive Directors and five independent non-executive
Directors. Our Directors serve a term of three years and may be re-elected for successive
reappointments. The independent non-executive Directors shall not hold office for more than
six consecutive years pursuant to the relevant PRC laws and regulations.
The following table sets out information in respect of the Directors.
Name Age Position/Title
Time of
Joining our
Group
Date of
Appointment
as a Director
Role and
Responsibility
Executive Directors
Mr. Zhang Zhengping
(ੵ͍റ)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
35 Chairman of the
Board, executive
Director and
president
June 2016 November 5, 2020 Managing the operations
of the Board, overall
strategic planning and
setting the business
direction of our Group
Mr. Yin Xianzhi
(ٝ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
57 Executive Director
and vice president
February 2022 May 22, 2023 Managing operations,
administrative
and security
management-related
matters
Ms. Shen Wei
(͡ᑢ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Executive Director,
vice president and
Board secretary
May 2018 May 22, 2023 Managing capital
operations, compliance
matters and Board-
related matters of the
Company
Mr. Zhang Zhengyuan
(ੵ͍๕)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
44 Executive Director,
employee
representative
Director and
assistant vice
president
September 2003 June 10, 2020 Managing strategic
planning-related matters
and overseeing
commercial and certain
passenger vehicle
businesses
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Name Age Position/Title
Time of
Joining our
Group
Date of
Appointment
as a Director
Role and
Responsibility
Non-executive Directors
Mr. Zhang Kebang
(ੵдԞ)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
51 Non-executive
Director
May 2023 May 22, 2023 Overseeing our Group’s
management and
providing advice on
strategic development
Mr. Y ou Zheng
(ˈ੣) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
57 Non-executive
Director
November 2019 November 15, 2019 Overseeing our Group’s
management and
providing advice on
strategic development
Mr. Li Wei
(ҽ⒜) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
60 Non-executive
Director
June 2020 June 10, 2020 Overseeing our Group’s
management and
providing advice on
strategic development
Mr. Zhou Changling
(ޛ׹)H1118/H1118/H1118/H1118/H1118/H1118/H1118
57 Non-executive
Director
June 2020 June 10, 2020 Overseeing our Group’s
management and
providing advice on
strategic development
Independent Non-executive Directors
Mr. Li Kaiguo
(ҽක਷)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
63 Independent non-
executive Director
November 2022 November 15, 2022 Providing independent
opinion and judgment
Mr. Zhang Guolin
(؍)H1118/H1118/H1118/H1118/H1118/H1118/H1118
70 Independent non-
executive Director
May 2023 May 22, 2023 Providing independent
opinion and judgment
Mr. Jing Xufeng
(ࢤ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
55 Independent non-
executive Director
May 2023 May 22, 2023 Providing independent
opinion and judgment
Mr. Li Ming
(׼)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
61 Independent non-
executive Director
April 2014 February 11, 2022 Providing independent
opinion and judgment
Mr. Ngai Ming Tak
(ᅃ) /H1118/H1118/H1118/H1118/H1118/H1118
58 Independent non-
executive Director
Listing Date Listing Date Providing independent
opinion and judgment
Executive Directors
Mr. Zhang Zhengping ( ੵ͍റ), aged 35, is an executive Director, chairman of the Board
and president of our Company. He is primarily responsible for managing the operations of the
Board, overall strategic planning and setting the business direction of our Group. Mr. Zhang
Zhengping is the son of our founder, Mr. Zhang Xinghai.
Mr. Zhang joined our Group in June 2016 as the president of the intelligent vehicle
business. He was appointed as a Director and chairman of the Board on November 5, 2020, and
president of our Company on May 22, 2023, respectively, and was re-designated as an
executive Director on March 30, 2025, with effect from the Listing Date.
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Mr. Zhang served as the deputy general manager of Sokon Holding from June 2016 to
October 2016, as a director of Y unnan Jinggu Forestry Co., Ltd. (ʮ̡),
a company listed on the Shanghai Stock Exchange (stock code: 600265), from June 2017 to
February 2019, and as a director of Beijing Gaoke Shuju Technology Co., Ltd. (ᅰၳ
ʮ̡) from November 2017 to March 2021. He has also served as an executive
director and manager of Beijing Chuangxin Capital Management Co., Ltd. ( ̏ԯ௴㒥༟͉၍ଣ
ʮ̡) since December 2015 and a director of Sokon Investment (USA), Inc. since May
2016.
Mr. Zhang obtained his bachelor’s degree in automotive management from Georgian
College of Applied Arts and Technology in Canada in October 2014 and his executive master
in business administration from Southwestern University of Finance and Economics (ৌ຾
ɽኪ) in China in December 2018.
Mr. Yin Xianzhi (ٝ,)aged 57, is an executive Director and vice president of our
Company. He is primarily responsible for managing operations, administrative and security
management-related matters. Mr. Yin joined our Group in February 2022, was appointed as a
vice president and a Director on July 11, 2022 and May 22, 2023, respectively, and was
re-designated as an executive Director on March 30, 2025, with effect from the Listing Date.
Prior to joining our Group, Mr. Yin worked at Tuzhu Subdistrict ( ɺ˴൑༸, formerly
known as Tuzhu Town ( ɺ˴ᕄ)) in Chongqing from August 1988 to March 1998. Mr. Yin
successively served as the deputy town mayor and town mayor of Zengjia Town, Shapingba
District (ᕄ) from March 1998 to March 2003; he served as in the positions
including town mayor of Chenjiaqiao Street (዗൑༸, formerly known as Chenjiaqiao
Town (዗ᕄ)) in Shapingba District from March 2003 to January 2008; he was the
chairman of Chongqing Fuyuan New Rural Investment and Construction Co., Ltd. (ᅅబ๕
ʮ̡) from January 2008 to May 2008; he worked at Chongqing Public
Works Bureau of Shapingba District, Chongqing (ᅅ̹Ӎջᜠਜʮ΍ʈ೻҅) and served as
the chairman of Chongqing Mairui Urban Construction Investment Co., Ltd. (ܔ
ப΂ʮ̡) from May 2008 to March 2013; and he served as the director of the
Finance Bureau of Shapingba District, Chongqing (҅) from March 2013
to April 2018. He served as a cadre in Chongqing Western Modern Logistics Park Management
Committee of (෤၍։ึ) from April 2018 to May 2019, worked at
Chongqing International Logistics Hub Park Management Committee (ᅹॲ෤ਜ
၍։ึ) from May 2019 to September 2020, and served as a fourth-grade researcher ( ̬ॴሜ
ࡰ޼at the logistics office of Shapingba District, Chongqing (܃,)
from September 2020 to January 2022.
Mr. Yin attained postgraduate education from the Party School of the Chongqing
Municipal Committee of the Communist Party of China (ࣧin China
in June 2003.
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Ms. Shen Wei ( ͡ᑢ), aged 43, is an executive Director, vice president of the Company
and our Board secretary. She is primarily responsible for managing capital operations,
compliance matters and Board-related matters of the Company. Ms. Shen joined our Group as
the deputy director of the investment strategy department in May 2018 and served as a
supervisor of our Company from November 2018 to November 2019. She was appointed as the
Board secretary on November 11, 2019, as a Director and vice president of the Company on
May 22, 2023, and was re-designated as an executive Director on March 30, 2025, with effect
from the Listing Date.
Prior to joining our Group, Ms. Shen worked as an attorney-in-charge at King & Wood
Mallesons (Chongqing) (Ӂ(ᅅ)הfrom July 2007 to November 2013. She
also worked at USUM Investment Group Limited (ʮ̡) from January
2014 to April 2015, and at Chongqing Southwest Securities Y ufu Equity Investment Fund
Management Co., Ltd. (ʮ̡) from February 2016 to
April 2018.
Ms. Shen obtained her bachelor’s degree and her master’s degree in law from China
University of Political Science and Law (ɽኪ) in China in July 2004 and June 2007,
respectively. Ms. Shen has also been accredited with a Board Secretary Qualification
Certificate from the Shanghai Stock Exchange’s Board Secretary Training Program.
Mr. Zhang Zhengyuan ( ੵ͍๕), aged 44, was appointed as a Director on June 10, 2020,
and was re-designated as an executive Director on March 30, 2025, with effect from the Listing
Date. He was elected as our employee representative Director on October 15, 2025. Mr. Zhang
joined our Group in September 2003 as a procurement officer in the procurement center of
Seres Hubei. He is currently our assistant vice president, and is primarily responsible for
managing strategic planning-related matters and overseeing commercial and certain passenger
vehicle businesses.
Mr. Zhang obtained his advanced master’s degree in business administration from
Southwestern University of Finance and Economics (ৌ຾ɽኪ) in China in December
2013. Mr. Zhang obtained the senior economist qualification certificate from Chongqing
Shapingba District Title Reform Office (܃in July 2019.
Non-executive Directors
Mr. Zhang Kebang ( ੵдԞ), aged 51, was appointed as a Director on May 22, 2023 and
re-designated as a non-executive Director on March 30, 2025, with effect from the Listing
Date. Mr. Zhang joined our Group in May 2023. He is primarily responsible for overseeing our
Group’s management and providing advice on strategic development.
Mr. Zhang has been a director and the president of Sokon Holding since January 2020.
Mr. Zhang served consecutively as the secretary and deputy section chief at the Luhuo County
Sub-Branch of Ganzi Branch at the PBOC ( ʕ਷ɛ͏ვБ͚ѾψʱБᘟᎍጤ˕Б) from July
1995 to August 2000. He worked as the assistant general manager at Chengdu Tiancheng
Electromechanical Equipment Co., Ltd. (ʮ̡) from August 2000 to
DIRECTORS AND SENIOR MANAGEMENT
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March 2002. From March 2002 to November 2010, he successively served as customer
manager, assistant to the branch president, manager and deputy branch president at the
Chongqing branch of Ping An Bank Co., Ltd. (ʮ̡, formerly known as
Shenzhen Development Bank (ʮ̡)), a company listed on the
Shenzhen Stock Exchange (stock code: 000001). He has also served as the department general
manager at the Chongqing branch of Guangdong Nanyue Bank Co., Ltd. (΅
ʮ̡, formerly known as Zhanjiang Commercial Bank ( ರϪ̹ਠุვБ)) from December
2010 to October 2011, a director and vice president at Chongqing Hengnuo Saixin Investment
Co., Ltd. (ʮ̡) from October 2011 to June 2014, the president of
Chongqing Longhe Technology Co., Ltd. (ʮ̡) from December 2014 to
March 2016, a deputy general manager at Pujin Financial Leasing Co., Ltd. (ፄ༟ॡ༣Ϟ
ʮ̡)( “ Pujin Financial ”) from March 2016 to March 2019, and a director and general
manager at Qianhai Huiyitong Fund Management (Shenzhen) Co., Ltd. (၍ଣ
(ଉέ)ʮ̡) from April 2019 to December 2019.
Mr. Zhang obtained his master’s degree in business administration from Chongqing
University (ᅅɽኪ) in China in January 2008.
Mr. Y ou Zheng ( ˈ੣), aged 57, was appointed as a Director on November 15, 2019 and
re-designated as a non-executive Director on March 30, 2025, with effect from the Listing
Date. He is primarily responsible for overseeing our Group’s management and providing
advice on strategic development.
Mr. Y ou currently serves as a vice president of Dongfeng Motor. He has been an executive
director and the vice president of Dongfeng Motor Group Company Limited (ٰ
ʮ̡)( “Dongfeng Group ”), a company listed on the Hong Kong Stock Exchange (stock
code: 0489) since November 2019.
Mr. Y ou has more than 30 years of experience in the automobile industry. He worked at
China FAW Group Co., Ltd. (ʮ̡) and its associated companies from
September 1990 to May 2018. In particular, Mr. Y ou’s experience at China FAW Group Co.,
Ltd. includes working as a processor in the welding team in the technology department of an
FAW automobile body factory from September 1990 to April 1992, as a welding engineer,
deputy director, and program manager at an FAW-V olkswagen sedan factory from April 1992
to July 2002, and successively serving as the deputy head then head of the manufacturing
technology department of First Automobile Works Sedan Company ( ɓӛᗗԓʮ̡) from July
2002 to February 2004. From February 2004 to April 2009, he further served as the factory
director and the deputy director of the planning department at the second factory of First
Automobile Works V olkswagen Sedan Company. Mr. Y ou also served as the deputy director of
the planning department of First Automobile Works ( ʕ਷ɓӛණྠʮ̡) from April 2009 to
July 2015, and successively served as the deputy director and the director of the product
planning and project department of China First Automobile Group Corporation ( ʕ਷ୋɓӛԓ
ණྠʮ̡) from July 2015 to May 2018 and the assistant to the general manager at China First
Automobile Co., Ltd. (ʮ̡) from October 2017 to May 2018.
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Mr. Y ou obtained his bachelor of engineering in metal materials and welding from the
Jilin Institute of Technology (ʈኪ৫) (currently known as the Changchun University of
Technology (ʈุɽኪ)) in the PRC in 1990, and he studied business administration for
senior managers on in-service basis at the Business School of Jilin University (ɽኪਠኪ
৫) in the PRC and obtained his master’s degree in business administration in 2012. Mr. Y ou
is a senior engineer at the researcher level.
Mr. Li Wei ( ҽ⒜), aged 60, was appointed as a Director on June 10, 2020 and
re-designated as a non-executive Director on March 30, 2025, with effect from the Listing
Date. He is primarily responsible for overseeing our Group’s management and providing
advice on strategic development.
Mr. Li has served as the deputy general manager of the strategic planning and science and
technology development department and the general manager of the joint venture cooperation
management department of Dongfeng Group since August 2020. Prior to joining the Group, Mr.
Li successively held several positions at Dongfeng Motor during the periods from July 1986
to January 2003 and from October 2005 to August 2020, including the deputy director and
director of the commodity planning division of the planning department, the director of the
passenger vehicle business development division, and the deputy general manager of the
strategic planning department and the general manager of the joint venture cooperation
management department. From January 2003 to July 2003, he served as deputy director of the
new business promotion office at Dongfeng Motor Engineering Research Institute (ӛԓ
Ӻ৫). From July 2003 to October 2005, he worked at Dongfeng Motor Co., Ltd. (ࠬ؇
ʮ̡) as the deputy manager for product development of the product development
office and the deputy manager for product development of the product planning headquarters
at its commercial vehicle company.
Mr. Li obtained his bachelor’s degree in automobile engineering from Hubei University
of Automotive Technology ( ಳ̏ӛԓʈุኪ৫) in the PRC in July 1986 and his master’s
degree in vehicle design and manufacturing from the School of Automotive Engineering of
Jilin University of Technology (ʈุɽኪ) in the PRC in April 1997. Mr. Li is a senior
engineer.
Mr. Zhou Changling (ޛ׹,)aged 57, was appointed as a Director on June 10, 2020
and re-designated as a non-executive Director on March 30, 2025, with effect from the Listing
Date. He is primarily responsible for overseeing our Group’s management and providing
advice on strategic development.
Mr. Zhou has served as the general manager of the audit department of Dongfeng Group
since September 2022. Prior to joining the Group, Mr. Zhou successively served as a software
development & application accountant of the technology section and cost & pricing accountant
of the finance section at Dongfeng Motor Wheel Rim Co., Ltd. (ʮ̡) from
July 1991 to March 2000; he successively served as a cost accountant and concurrently a
general accountant of the finance department and the section chief of the accounting section
at Aeolus Automobile Co., Ltd. (ʮ̡) from March 2000 to July 2003; he
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successively served as the section chief and deputy director of the comprehensive accounting
section in the accounting department of the financial accounting headquarters, and the deputy
director and director of the passenger vehicle accounting department of the passenger vehicle
financial accounting headquarters at Dongfeng Motor Co., Ltd. (ʮ̡) from July
2003 to October 2017; he was the director of the service support procurement department of
the procurement headquarters at Dongfeng Nissan Passenger V ehicle Company (͜
ԓʮ̡) under Dongfeng Motor Co., Ltd. (ʮ̡) from October 2017 to April
2019; and he successively served as the deputy general manager of the financial accounting
department, the deputy director of the finance department, and the deputy general manager of
the audit and compliance department at Dongfeng Group from April 2019 to September 2022.
Mr. Zhou obtained his bachelor’s degree in computer software and application
engineering from Hubei University of Automotive Technology ( ಳ̏ӛԓʈุኪ৫) in the PRC
in June 1991, and his master’s degree in accounting from the Open University of Hong Kong
(ಥʮකɽኪ) in Hong Kong in June 2012.
Independent Non-executive Directors
Mr. Li Kaiguo ( ҽක਷), aged 63, was appointed as an independent Director on
November 15, 2022 and re-designated as an independent non-executive Director on March 30,
2025, with effect from the Listing Date. He is primarily responsible for providing independent
opinion and judgment.
Mr. Li has served as an expert at China Automotive Engineering Research Institute Co.,
Ltd. (“ CAERI ”) (ʮ̡, formerly known as Chongqing
Automotive Research Institute (ה“() CARI ”)), a company listed on the
Shanghai Stock Exchange (stock code: 601965)) since May 2022, the head of the technology
committee of CAERI since July 2022, and a director of CAERI from November 2010 to May
2022. He now serves as the head of the automobile inspection and testing technology
committee of China General Technology (Group) Holding Co., Ltd. ( ʕ਷ஷ͜Ҧஔ(ණྠ)ٰ
ப΂ʮ̡). He has also served as an independent non-executive director of Zhuzhou
CRRC Times Electric Co., Ltd. (ʮ̡), a company listed on the
Shanghai Stock Exchange (stock code: 688187) and the Hong Kong Stock Exchange (stock
code: 3898) since October 2022, and an independent director of Bethel Automotive Safety
System Co., Ltd. (ʮ̡), a company listed on the Shanghai
Stock Exchange (stock code: 603596) since September 2024.
From August 1983 to February 2000, Mr. Li successively served as an engineer, the
deputy head and the head of the Component Testing Laboratory of CARI. Between July 1995
and February 2000, he also concurrently served as the general manager of the Automotive Test
Equipment Development Center ( ӛԓ༊᜕ண௪ක೯ʕː) of CARI. Mr. Li served as the
deputy director of CARI from February 2000 to November 2007; as a director and deputy
general manager of CAERI from November 2007 to October 2013; and as a director, general
manager and the chairman of CAERI from October 2013 to May 2022.
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Mr. Li obtained his bachelor’s degree in automotive engineering from Hunan University
(ɽኪ) in the PRC in July 1983. Mr. Li is a senior engineer at the researcher level, a
Machinery Industry Technology Specialist of the PRC and a State Council special allowance
expert.
Mr. Zhang Guolin (؍,)aged 70, was appointed as an independent Director on May
22, 2023 and re-designated as an independent non-executive Director on March 30, 2025, with
effect from the Listing Date. He is primarily responsible for providing independent opinion and
judgment.
Mr. Zhang served as an independent director of Chongqing Beer Co., Ltd. (ٰ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 600132), and an
independent non-executive director of Chongqing Iron & Steel Company Limited (ٰ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 601005) and
Hong Kong Stock Exchange (stock code: 1053), from May 2007 to April 2013 and from June
2009 to December 2014, respectively.
Prior to joining our Group, Mr. Zhang successively served as a professor and the vice
president of Chongqing University (ᅅɽኪ) from January 1982 to November 2000. He
served as a professor at the economics teaching and research office of the Southwest University
of Political Science and Law (ɽኪ) from April 2002 to June 2020. From September
2019 to February 2023, he served as the president of Chongqing V ocational and Technical
University of Mechatronics (ᅅዚཥᔖุҦஔɽኪ).
Mr. Zhang obtained his bachelor’s degree in ironmaking in January 1982 and his doctoral
degree in technology economy and management in December 2009 from Chongqing University
(ᅅɽኪ) in the PRC. Mr. Zhang is the standing member of the seventh council of the Chinese
Association of Political Science (ኪึ) and the chairman of the first council of the
Chongqing Association of Political Science (ኪึ). He is also a doctoral supervisor,
and a recipient of the State Council Special Allowance.
Mr. Jing Xufeng (ࢤ,)aged 55, was appointed as an independent Director on May
22, 2023 and re-designated as an independent non-executive Director on March 30, 2025, with
effect from the Listing Date. He is primarily responsible for providing independent opinion and
judgment.
Mr. Jing’s current roles include acting as a director of Zhejiang Tangde Film & TV Co.,
Ltd. (ʮ̡), a company listed on the Shenzhen Stock Exchange (stock
code: 300426), since May 2019. He was appointed as an independent non-executive director
of Smart Digital Technology Group Limited (ʮ̡) (formerly known as
Starlight Culture Entertainment Group Ltd. (ʮ̡), a company listed on
the Hong Kong Stock Exchange (stock code: 1159)), from May 2021 to March 2023, and has
been appointed as an executive director and the chairman of the board of directors since March
2023.
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Between July 1994 and August 2016, Mr. Jing worked at the Jiangsu branch of Xinhua
News Agency (ٟSubsequently, he held various management positions in different
companies, including serving as an executive director of Ningbo Meishan Free Trade Port
Lianshi Investment Management Co., Ltd. (ʮ̡) from
August 2016 to January 2021, the chairman of Tengyue Culture Media (Beijing) Group Co.,
Ltd. ( ᙜቡ˖ʷෂద(̏ԯ)ʮ̡) from September 2016 to December 2020, an
independent director of CITIC Press Corporation (ʮ̡) (a company
listed on the Shenzhen Stock Exchange (stock code: 300788)) from May 2017 to March 2023,
a director and the general manager of Tianjin Tengyue Tianxia Culture and Technology Co.,
Ltd. (ʮ̡) from June 2017 to May 2022, a director of Moer
Xingling (Beijing) Network Technology Co., Ltd. (ᜳ(̏ԯ)ʮ̡) from
September 2017 to July 2022, a director of 360 Enterprise Security Technology (Beijing)
Group Co., Ltd. (360 ΆุτΌҦஔ(̏ԯ)ʮ̡) from October 2017 to December
2018, and a director of Qi An Xin Technology Group Inc. (ʮ̡) from
December 2018 to May 2019, and an executive director of Beijing Jinhui Graham Investment
Limited (ʮ̡) from April 2019 to December 2020.
Mr. Jing graduated from Y angzhou University ( ౮ψɽኪ) in the PRC, majoring in
Chinese language and literature in June 1994.
Mr. Li Ming (׼,)aged 61, was appointed as an independent Director from April 26,
2014 to April 9, 2017, and as a supervisor of our Company from April 2017 to November 2019.
Mr. Li was then appointed as an independent Director on February 11, 2022 and re-designated
as an independent non-executive Director on March 30, 2025, with effect from the Listing
Date. He is primarily responsible for providing independent opinion and judgment.
Mr. Li currently serves as an independent director of Minsheng Shipping Co., Ltd. ( ͏͛
ʮ̡), a director of Chongqing Junde Aipu Automobile Technology Co., Ltd. (ࠠ
ʮ̡) and a director of Chongqing Banghao Seed Co., Ltd. (ࠠ
ʮ̡). He has served as an independent director of Huapont Life Sciences
Co., Ltd. (ʮ̡) (a company listed on the Shenzhen Stock Exchange
(stock code: 002004)) since August 2021, and an independent non-executive director of
Changan Minsheng APLL Logistics Co., Ltd. (ʮ̡) (a company
listed on the Hong Kong Stock Exchange (stock code: 1292)) since June 2023. Currently, he
also serves as a supervisor of Chongqing Zhubajie Yichuang Microfinance Co., Ltd. (ᅅ̹
ʮ̡).
Mr. Li successively served as a lecturer and professor of the Accounting School of
Chongqing University of Technology (ᅅଣʈɽኪ) from June 2010 to February 2024. He
served as an independent non-executive director at Chongqing Port Co., Ltd. (ࠢ
ʮ̡), a company listed on the Shanghai Stock Exchange (stock code: 600279), from July 2018
to August 2024, and an independent non-executive director at Chongqing Wangbian Electric
(Group) Co., Ltd. (ᅅૐᜊཥं(ණྠ)ʮ̡), a company listed on the Shanghai Stock
Exchange (stock code: 603191), from September 2017 to November 2023.
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Mr. Li obtained his master’s degree in accounting from the Accounting Department of the
Southwestern University of Finance and Economics (ৌ຾ɽኪ) in the PRC in June 1989.
He has been accredited as a non-practising member of the Chongqing Institute of Certified
Public Accountants (՘ึ) since August 2001.
Mr. Ngai Ming Tak (ᅃ), aged 58, was appointed as an independent non-executive
Director with effect from the Listing Date. He is primarily responsible for providing
independent opinion and judgment.
Mr. Ngai has served as the chairman of The Red Group ( τᅃ༟͉ණྠ) since December
2013 and the chairman of Asia GreenTech Fund (ږsince January 2020, and
has a wealth of experience in the international financial sector. Mr. Ngai has also served as an
external director of China COSCO Shipping Corporation (ऎ༶ණྠ) since March
2022, an independent non-executive director of CRRC Corporation Limited (΅Ϟ
ʮ̡) (a company listed on the Hong Kong Stock Exchange (stock code: 1766) and the
Shanghai Stock Exchange (stock code: 601766)) since December 2021, an independent
non-executive director of China Longyuan Power Group Corporation Limited ( Ꮂ๕ཥɢණྠ
ʮ̡) (a company listed on the Hong Kong Stock Exchange (stock code: 0916) and
the Shenzhen Stock Exchange (stock code: 001289)) since November 2021, an independent
non-executive director of Sanergy Group Limited (ʮ̡) (a company listed on
the Hong Kong Stock Exchange (stock code: 2459)) since December 2022 and an independent
non-executive director of True Partner Capital Holding Limited (a company listed on the Hong
Kong Stock Exchange (stock code: 8657)) since March 2020.
From April 2006 to November 2013, Mr. Ngai worked at UBS AG ( ๿ɻვБ) with his last
position as the managing director, where he was mainly responsible for investment banking
business. Mr. Ngai served as an independent non-executive director of Smart Digital
Technology Group Limited (ʮ̡, formerly known as Starlight Culture
Entertainment Group Limited (ʮ̡), a company listed on the Hong
Kong Stock Exchange (stock code: 1159)) from May 2017 to September 2023, and the
president of Green Economy Development Limited (ʮ̡) (a company listed
on the Hong Kong Stock Exchange (stock code: 1315)), from August 2021 to March 2025.
Mr. Ngai is a member of the 12th, 13th and 14th National Committee of Chinese People’s
Political Consultative Conference (ึ), the chairman of the
Hong Kong Finance Association (՘ึ), the council chairman of the City
University of Hong Kong (̹ɽኪ), a Fellow Commoner of Clare Hall, University of
Cambridge, an honorary fellow of Lingnan University (ɽኪ), and an honorary citizen of
Harbin City, Heilongjiang Province.
Mr. Ngai obtained his master’s degree from the University of Cambridge in the United
Kingdom in July 1991.
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SENIOR MANAGEMENT
The following table sets out information regarding the members of senior management of
our Company.
Name Age Position/Title
Time of
Joining our
Group
Date of
Appointment
as Senior
Management
Role and
Responsibility
Mr. Zhang Zhengping
(ੵ͍റ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
35 Chairman of the
Board, executive
Director and
president
June 2016 May 22, 2023 Managing the operations
of the Board, overall
strategic planning and
setting the business
direction of our Group
Mr. Yin Xianzhi
(ٝ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
57 Executive Director
and vice president
February 2022 July 11, 2022 Managing operations,
administrative
and security
management-related
matters
Ms. Shen Wei
(͡ᑢ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Executive Director,
vice president and
Board secretary
May 2018 November 11,
2019
Managing capital
operations, compliance
matters and
Board-related matters of
the Company
Ms. Liu Lian
(ᄎᑌ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
57 Vice president and
chief financial
officer
May 2010 June 20, 2014 Overseeing the financial
management of the
Group
Mr. Wang Ping
(ˮ̻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
52 Vice president February 2022 May 22, 2023 Overseeing the intelligent
manufacturing and
quality management of
complete vehicles and
key components
Mr. Kang Bo
(ت)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
49 Vice president August 2022 May 22, 2023 Brand management and
overseeing public
relations, industrial
development planning
and external strategic
cooperation matters
Mr. Huang Qizhong
(׀)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
55 Vice president December 2021 May 22, 2023 Overseeing process
architecture related
matters
Mr. Zhou Lin
(؍)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
45 Chief technology
officer
August 2003 May 22, 2023 Overseeing product
technology planning and
R&D system strategies
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Mr. Zhang Zhengping ( ੵ͍റ), aged 35, is an executive Director, chairman of the Board
and president of our Company. Please refer to “— Board of Directors — Executive Directors”
in this section for the biographical details of Mr. Zhang.
Mr. Yin Xianzhi (ٝ,)aged 57, is an executive Director and vice president of our
Company. Please refer to “— Board of Directors — Executive Directors” in this section for the
biographical details of Mr. Yin.
Ms. Shen Wei ( ͡ᑢ), aged 43, is an executive Director, vice president of the Company
and our Board secretary. Please refer to “— Board of Directors — Executive Directors” in this
section for the biographical details of Ms. Shen.
Ms. Liu Lian ( ᄎᑌ), aged 57, joined our Group in May 2010 as the responsible person
of finance of the listing office. She was an assistant to the president from April 2011 to April
2017, audit supervisory director from August 2011 to June 2014 and has been the chief
financial officer and a vice president of our Company since June 20, 2014 and May 22, 2023,
respectively. She is primarily responsible for overseeing the financial management of the
Group. Ms. Liu was appointed as a Director from June 10, 2020 to May 21, 2023.
Prior to joining our Group, Ms. Liu held various positions including, among others, the
deputy general manager of the business division at Chongqing Y uan Co., Ltd. (ᅅಽτ௴อ
ʮ̡) from January 2000 to May 2010.
Ms. Liu obtained her master’s degree in business administration from Southwestern
University of Finance and Economics (ৌ຾ɽኪ) in China in December 2013. She has
been certified as an accountant by MOF since October 1998 and obtained the senior economist
qualification certificate from Chongqing Shapingba District Title Reform Office (ᅅ̹Ӎջ
܃in May 2018.
Mr. Wang Ping ( ˮ̻), aged 52, joined our Group in February 2022 as our chief quality
officer and was appointed as a vice president of the Company on May 22, 2023. He is primarily
responsible for overseeing the intelligent manufacturing and quality management of complete
vehicles and key components.
Prior to joining our Group, Mr. Wang worked at Qingling Motors Co., Ltd. (ٰ
ʮ̡), a company listed on the Hong Kong Stock Exchange (stock code: 1122), from
July 1997 to August 2000. He also worked at Zongshen Technology Development and Research
Co., Ltd. (ʮ̡) from March 2001 to August 2002. From September
2002 to February 2022, he worked at Chang’an Ford Automobile Co., Ltd. (τ၅तӛԓϞ
ʮ̡).
Mr. Wang obtained his bachelor’s degree in mechanical design and manufacturing from
the Jilin University of Industry (ʈุɽኪ) in the PRC in July 1997. Mr. Wang obtained
the senior principal engineer certificate from Chongqing Title Reform Office (ࠧ
܃in December 2023.
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Mr. Kang Bo (ت,)aged 49, joined our Group in August 2022 and was appointed as a
vice president of the Company on May 22, 2023. He is primarily responsible for brand
management and overseeing public relations, industrial development planning and external
strategic cooperation matters.
Mr. Kang has accumulated many years of experience in the automotive industry,
particularly in listed companies. From June 2005 to October 2010, he worked at Delphi
Automotive PLC, a company listed on the New Y ork Stock Exchange (stock code: DLPH).
From November 2010 to July 2022, he held various positions within BMW AG (“ BMW”), a
company listed on the Frankfurt Stock Exchange (stock code: BMW), and its group companies.
Mr. Kang obtained his bachelor’s degree in investment and economic management from
East China University of Science and Technology (ଣʈɽኪ) in China in July 1997, his
master’s degree in business administration from China Europe International Business School
(ʕᆄ਷ყʈਠኪ৫) in China in September 2009, and his doctoral degree in business
administration from City University of Hong Kong in October 2020.
Mr. Huang Qizhong (׀)aged 55, joined our Group in December 2021 as the
responsible person of human resources and was appointed as a vice president of the Company
on May 22, 2023. He is primarily responsible for overseeing process architecture related
matters.
Prior to joining our Group, Mr. Huang had over ten years of work experience at Huawei.
In particular, from November 2015 to September 2019, he served as a department head at
Huawei Terminal Devices (Shenzhen) Co., Ltd. (୞၌(ଉέ)ʮ̡).
Mr. Huang obtained his bachelor’s degree in industrial management engineering from
Southwest Jiaotong University (ʹஷɽኪ) in China in July 1993.
Mr. Zhou Lin (؍)aged 45, joined our Group in August 2003 as technical director and
was appointed as the chief technology officer of the Company on May 22, 2023. He is
primarily responsible for overseeing product technology planning and R&D system strategies.
Mr. Zhou obtained his advanced master’s degree in business administration from
Southwestern University of Finance and Economics (ৌ຾ɽኪ) in China in December
2018. Mr. Zhou is a senior principal engineer.
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CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Save as disclosed in this paragraph headed “Rule 8.10 of the Listing Rules” below, each
of our Directors confirms that as of the Latest Practicable Date, he or she does not have any
interest in a business which competes or is likely to compete, either directly or indirectly, with
our Company’s business, which would require disclosure under Rule 8.10 of the Listing Rules.
From time to time our non-executive Directors may serve on the boards of companies
within the automobile industry. However, as these non-executive Directors are not members of
our executive management team, we do not believe that their interests in such companies as
directors would render us incapable of carrying on our business independently from the other
companies in which they may hold directorships from time to time.
In particular, our non-executive Directors Mr. Y ou Zheng (“ Mr. Y ou”), Mr. Li Wei
(“Mr. Li ”) and Mr. Zhou Changling (“ Mr. Zhou ”) currently also act as directors of Dongfeng
Motor and/or its affiliated companies (collectively referred to as “ Dongfeng ”). Dongfeng is
principally engaged in the manufacture and supply of commercial vehicles, passenger vehicles,
electric vehicles as well as ancillary services and products. As such, Dongfeng might from time
to time directly or indirectly compete with the business of our Company. Notwithstanding the
above, we believe that we are capable of performing our business independently of, and at
arm’s length from Dongfeng based on the following grounds:
(i) Mr. Y ou, Mr. Li and Mr. Zhou, as non-executive Directors, do not hold positions in
the senior management of our Company, are not and will not be involved in the daily
management and operations of our Group, and have no control in our Company;
(ii) the experience of Mr. Y ou, Mr. Li, and Mr. Zhou, gained through their respective
roles at Dongfeng — which operates in the same industry as our Company do —
would be highly beneficial to our Company, as they can offer valuable industry
insights and strategic advice;
(iii) we have appointed five independent non-executive Directors upon the Listing Date,
comprising more than one-third of our Board, in order to promote the interests of our
Company and our Shareholders as a whole;
(iv) notwithstanding that our Group operates in the same industry as Dongfeng does, our
core product offerings are different, and our transactions are conducted in the usual
and ordinary course of business at arm’s length and are in the interests of our
Company and our Shareholders as a whole; and
(v) our Company has established relevant corporate governance measures to avoid
conflicts of interest between our Group and any Director. In the event that a Director
(such as Mr. Y ou, Mr. Li and Mr. Zhou) is interested in a matter to be discussed or
decided at a Board meeting, he/she shall abstain from voting in relation to such
matter.
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Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules in March 2025, and (ii) understands his or her
obligations as a director of a listed issuer under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors has confirmed (i) his independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he has
no past or present financial or other interest in the business of the Company or its subsidiaries
or any connection with any core connected person of the Company under the Listing Rules as
of the Latest Practicable Date, and (iii) that there are no other factors that may affect his
independence at the time of his appointment.
GENERAL
Mr. Zhang Zhengping ( ੵ͍റ), the executive Director, chairman of the Board and
president of our Company, and Mr. Zhang Zhengyuan ( ੵ͍๕), an executive Director, are
cousins. Mr. Zhang Zhengping is the son of our founder, Mr. Zhang Xinghai. Save as disclosed
in “Directors and Senior Management”, none of our Directors or senior management are related
to other Directors or senior management of our Company.
Save as disclosed in “Directors and Senior Management”, none of the Directors or
members of senior management of our Company has been a director of any public company the
securities of which are listed on any securities market in Hong Kong or overseas in the three
years immediately preceding the date of this Prospectus.
To the best knowledge, information and belief of our Directors having made all
reasonable inquiries, there is no other matter with respect to the appointment of our Directors
that needs to be brought to the attention of the Shareholders, and there is no information
relating to our Directors that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v)
of the Listing Rules as of the Latest Practicable Date.
JOINT COMPANY SECRETARIES
Ms. Shen Wei ( ͡ᑢ) was appointed as our joint company secretary in March 2025, with
effect from the Listing Date. Please refer to “— Board of Directors — Executive Directors” in
this section for the biographical details of Ms. Shen.
Ms. Ho Wing Tsz Wendy ( О൘ഓ) was appointed as our joint company secretary in
March 2025, with effect from the Listing Date.
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Ms. Ho is an executive director of Company Secretarial Services of Tricor Services
Limited. Ms. Ho has over 25 years of experience in the corporate secretarial and governance
services field. Her practice focuses on company secretarial advisory, corporate governance and
regulatory compliance services for multinational, private and listed companies as well as
non-profit making enterprises.
Ms. Ho is a Chartered Secretary, a Chartered Governance Professional and a Fellow
member of both The Hong Kong Chartered Governance Institute (HKCGI) and The Chartered
Governance Institute in the United Kingdom. Ms Ho is the Council Member of HKCGI, the
Chairman of Professional Development Committee, a Member of Professional Services Panel
and a Member of Mainland China Technical Consultation Panel of HKCGI. She holds a
master’s degree in business administration from The Hong Kong Polytechnic University.
BOARD COMMITTEES
Our Board delegates certain responsibilities to various committees. In accordance with
the relevant PRC laws and regulations and the Corporate Governance Code, our Company has
formed five Board committees, namely the Audit Committee, the Remuneration and Appraisal
Committee, the Nomination Committee, the Strategy Committee and the ESG Committee.
Audit Committee
We have established an Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and paragraph D.3 of Part 2 of the Corporate Governance
Code. The Audit Committee consists of five Directors, namely Mr. Li Ming (׼Mr. Zhang
Kebang ( ੵдԞ), Mr. Zhou Changling (ޛ׹Mr. Li Kaiguo ( ҽක਷) and Mr. Zhang Guolin
(؍Mr. Li Ming (׼who holds the appropriate professional qualifications as required
under Rules 3.10(2) and 3.21 of the Listing Rules, serves as the chairperson of the Audit
Committee. The primary duties of the Audit Committee include, but are not limited to,
reviewing the Company’s financial information and its disclosure, and monitoring and
evaluating internal and external audit work and internal controls.
Remuneration and Appraisal Committee
We have established a Remuneration and Appraisal Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of Part 2 of the
Corporate Governance Code. The Remuneration and Appraisal Committee consists of three
Directors, namely Mr. Li Kaiguo ( ҽක਷), Mr. Li Ming (׼and Mr. Yin Xianzhi (ٝ.)
Mr. Li Kaiguo ( ҽක਷) serves as the chairperson of the Remuneration and Appraisal
Committee. The primary duties of the Remuneration and Appraisal Committee include, but are
not limited to, formulating evaluation standards for our Directors and senior management of
the Company, implementation of measures in response to such evaluation, and formulating and
reviewing the remuneration policies and plans for Directors and senior management of the
Company.
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Nomination Committee
We have established a Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and paragraph B.3 of Part 2 of the Corporate
Governance Code. Upon Listing, the Nomination Committee consists of three Directors,
namely Mr. Li Kaiguo ( ҽක਷), Mr. Zhang Guolin (؍and Ms. Shen Wei ( ͡ᑢ). Mr. Li
Kaiguo ( ҽක਷) serves as the chairperson of the Nomination Committee. The primary duties
of the Nomination Committee include, but are not limited to, developing standards and
procedures for the election of our Directors and senior management of the Company, and
selecting and examining the qualifications of the candidates for our Directors and senior
management of the Company.
Strategy Committee
We have established a Strategy Committee with written terms of reference. The Strategy
Committee consists of three Directors, namely Mr. Zhang Zhengping ( ੵ͍റ), Mr. Li Kaiguo
(ҽක਷) and Mr. Li Wei ( ҽ⒜). Mr. Zhang Zhengping ( ੵ͍റ) serves as the chairperson of
the Strategy Committee. The primary duties of the Strategy Committee include, but are not
limited to, conducting research and making recommendations on our Company’s long-term
development plans, business strategies and objectives, and major strategic investment and
financing proposals.
ESG Committee
We have established an ESG Committee with written terms of reference. The ESG
Committee consists of four Directors, namely Mr. Zhang Zhengping ( ੵ͍റ), Mr. Li Kaiguo
(ҽක਷) Mr. Yin Xianzhi (ٝand Ms. Shen Wei ( ͡ᑢ). Mr. Zhang Zhengping ( ੵ͍റ)
serves as the chairperson of the ESG Committee. The primary duties of the ESG Committee
include, but are not limited to, establishing, adopting and reviewing our ESG strategies and
goals, and evaluating, determining and addressing our near-term, medium-term and long-term
ESG-related risks.
REMUNERATION
Our Directors receive their remuneration in the form of fees, salaries and other
allowances, discretionary bonus, and other retirement benefit scheme contributions.
For the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025, the aggregate amount of remuneration paid or payable to our Directors
amounted to approximately RMB13.99 million, RMB14.27 million, RMB8.82 million and
RMB6.75 million, respectively.
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Under the current compensation arrangement, we estimate the total compensation before
taxation to be accrued to our Directors for the year ending December 31, 2025 to be
approximately RMB9.98 million.
For the years ended December 31, 2022 and 2023, there were two and two Directors
among the five highest paid individuals, respectively. Among the five highest paid individuals,
none of them is a Director for the year ended December 31, 2024 and the six months ended
June 30, 2025. The total emolument for the remaining individuals among the five highest paid
individuals for the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025 were RMB10.60 million, RMB11.41 million, and RMB23.14 million and
RMB21.12 million, respectively.
During the Track Record Period, no remuneration was paid by our Company to, or
receivable by, our Directors or the five highest paid individuals as an inducement to join or
upon joining our Company or as compensation for loss of office in connection with the
management positions of any subsidiary of our Company.
During the Track Record Period, none of our Directors waived any remuneration. Save as
disclosed in this section, no other payments have been paid, or are payable, by our Company
or any of our subsidiaries to our Directors or the five highest paid individuals during the Track
Record Period.
CORPORATE GOVERNANCE CODE
Our Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, our Company
intends to comply with the Corporate Governance Code and the Model Code for Securities
Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules after
the Listing.
Pursuant to paragraph C.2.1 of Part 2 of the Corporate Governance Code, companies
listed on the Hong Kong Stock Exchange are expected to comply with, but may choose to
deviate from, the requirement that the responsibilities between chairman and chief executive
should be segregated and should not be performed by the same individual. We do not have a
separate chairman and chief executive, and Mr. Zhang Zhengping ( ੵ͍റ) currently performs
the roles of the chairman of our Board and the president of our Company. Mr. Zhang has
assumed the role of chairman of our Board since November 2020. He has extensive experience
in the business operations and management of our Group, given his first appointment as a
Director in April 2017. Our Board believes that, in view of his experience, personal profile and
his roles in our Company as mentioned above, Mr. Zhang is the Director best suited to identify
strategic opportunities and the focus of the Board due to his extensive understanding of our
business. The Board also believes that vesting the roles of both chairman of the Board and
president of the Company in the same person has the benefit of (i) ensuring consistent
leadership within the Group, (ii) enabling more effective and efficient overall strategic
planning and streamlining the execution of strategic initiatives of the Board, and (iii)
DIRECTORS AND SENIOR MANAGEMENT
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facilitating the flow of information between the management and the Board for the Group. The
Board considers that the balance of power and authority in the present arrangement is not
compromised, given the size of the Board, contributions from the robust senior management
team, and believes that this arrangement will enable the Company to make and implement
decisions promptly and effectively. The Board will continue to consider splitting the roles of
chairman of the Board and president of the Company at an appropriate time, taking into
account the circumstances of the Group as a whole.
Save as disclosed in this section, our Directors consider that we will comply with all
applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the
Listing Rules upon Listing.
BOARD AND WORKPLACE DIVERSITY POLICY
We are committed to promoting diversity development in the Company. In order to
maintain a robust corporate governance structure and to achieve sustainable and balanced
corporate development, we have adopted a Board and workplace diversity policy (the
“Diversity Policy ”) which sets out the objectives for and approaches to achieving and
maintaining diversity at the Company.
Pursuant to the Diversity Policy, we seek to achieve Board diversity through the
consideration of a number of factors when selecting the candidates to our Board, including but
not limited to gender, age, cultural and educational background, and professional experience.
The ultimate decision of each appointment will be based on merit and the contribution which
the selected candidates are expected to bring to our Board.
Our Directors have a balanced mix of knowledge and skills, including but not limited to
depth of experience in the areas of business administration, financial investment, automotive
business management, law and accounting. Upon Listing, we have five independent non-
executive Directors with different industry backgrounds, with solid professional experiences in
the fields of accounting, media and investment management for more than one-third of the
members of our Board.
Our Company has evaluated the structure, size and composition of our Board, taking into
account the skills matrix of our Board, and is of the opinion that the structure of our Board is
reasonable, and the experience and skills of the Directors will enable our Company to maintain
a high standard of operations. This is evidenced by the fact that our Directors range in age from
35 to 70 years old, and our Board comprises one female Director and twelve male Directors
upon Listing. Taking into account our existing business model and specific needs, as well as
the different backgrounds of our Directors, the composition of our Board satisfies our Diversity
Policy. Our Nomination Committee is responsible for ensuring the diversity of our Board, and
will continue to be responsible for the same after the Listing.
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Apart from diversity within our Board, we recognize the importance of gender diversity,
which we have taken, and will continue to take, steps to promote at all levels of our Company,
including at the Board, senior management and workforce (excluding senior management)
level. Going forward, in accordance with the Diversity Policy, we will have at least one female
Director at all times, we will ensure that a female Director serves on the Nomination
Committee at all times, and we will continue to work to enhance gender diversity when
selecting and recommending suitable candidates across the Board, senior management and
workforce (excluding senior management) levels. We will strive to enhance female
representation within the Company and will maintain a non-single gender Board at all times
with reference to stakeholders’ expectations and international standards and best practices. In
particular, we aim to develop a pipeline of female employees from the workforce to reach
senior management level and become potential successors to the Board by implementing
comprehensive programs aimed at identifying and training our female employees who display
leadership and potential, and ensuring that our female management members have equal
opportunities to develop and perform so as to be equipped to step up as a member of our Board.
After the Listing, our Nomination Committee will, among its other duties, review the
Diversity Policy and its implementation from time to time to ensure its continued effectiveness,
and we will disclose the Diversity Policy or a summary thereof in the corporate governance
report of the Company on an annual basis.
COMPLIANCE ADVISER
We have appointed Rainbow Capital (HK) Limited as our compliance adviser (the
“Compliance Adviser ”) pursuant to Rules 3A.19 and 3A.23 of the Listing Rules. The
Compliance Adviser will provide us with guidance and advice as to compliance with the
Listing Rules and other applicable laws, rules, codes and guidelines. Pursuant to Rule 3A.23
of the Listing Rules, the Compliance Adviser will advise our Company in certain circumstances
including:
 before the publication of any regulatory announcement, circular or financial report;
 where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this Prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this Prospectus;
and
 where the Hong Kong Stock Exchange makes an inquiry to our Company regarding
unusual movements in the price or trading volume of its listed securities or any other
matters in accordance with Rule 13.10 of the Listing Rules.
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Pursuant to Rule 3A.24 of the Listing Rules, the Compliance Adviser will, on a timely
basis, inform our Company of any amendment or supplement to the Listing Rules that are
announced by the Hong Kong Stock Exchange. The Compliance Adviser will also inform our
Company of any new or amended law, regulation or code in Hong Kong applicable to us, and
advise us on the continuing requirements under the Listing Rules and applicable laws and
regulations.
The term of the Compliance Adviser’s appointment will commence on the Listing Date
and is expected to end on the date on which our Company complies with Rule 13.46 of the
Listing Rules in respect of our financial results for the first full financial year commencing
after the Listing.
DIRECTORS AND SENIOR MANAGEMENT
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Upon Listing, certain transactions between us and our connected persons will constitute
continuing connected transactions under Chapter 14A of the Listing Rules.
CONNECTED PERSONS
We have entered into certain transactions in the ordinary and normal course of our
business with the following entities expected to constitute our connected persons under
Chapter 14A of the Listing Rules upon Listing, which will constitute continuing connected
transactions upon the Listing:
Names of our connected persons Connected relationship
Sokon Holding and/or its associates /H1118/H1118/H1118As of the Latest Practicable Date, Sokon
Holding held approximately 24.52% of the
total issued share capital of our Company.
Therefore, Sokon Holding is our substantial
shareholder and a connected person of our
Company upon the Listing.
Dongfeng Motor and/or its associates
(collectively referred to as
“Dongfeng Motor Group ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Dongfeng
Motor held approximately 20.04% of the total
issued share capital of our Company.
Therefore, Dongfeng Motor is our substantial
shareholder and a connected person of our
Company upon the Listing.
Chongqing Ruichi Automobile Industry
Co., Ltd. (ʮ
̡)( “ Chongqing Ruichi ”) and/or its
associates (collectively referred to as
“Ruichi Group ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Chongqing
Ruichi is held as to approximately 44.05% by
Seres Hubei, a wholly-owned subsidiary of
our Company, and approximately 6.61% by
Sokon Holding, our substantial shareholder.
As Chongqing Ruichi is majority-controlled
by Sokon Holding, the financial results are
consolidated into Sokon Holding. Hence,
Chongqing Ruichi is a subsidiary of Sokon
Holding, and therefore a connected person of
our Company upon the Listing.
CONNECTED TRANSACTIONS
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SUMMARY OF OUR CONTINUING CONNECTED TRANSACTIONS
Proposed annual cap for
the years ending
December 31,
Transaction Counterparty
Applicable
Listing Rules
Waiver/
confirmation
sought 2025 (Note 1) 2026
(RMB in million)
Partially-exempt continuing connected transactions
Products and Services Sales
Framework Agreement /H1118/H1118
Dongfeng Motor
Group
14A.76(2)(a)
and 14A.105
Announcement 210 N/A
Products and Services
Procurement Framework
Agreement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dongfeng Motor
Group
14A.76(2)(a)
and 14A.105
Announcement 500 N/A
Financial Services
Agreement (in relation to
the deposit service only) /H1118
Dongfeng
Finance
14A.76(2)(a)
and 14A.105
Announcement Maximum outstanding
daily balance of deposit
amount
800 800
(Note 2)
Products and Services Sales
Framework Agreement /H1118/H1118
Chongqing
Ruichi
14A.76(2)(a)
and 14A.105
Announcement 3,000 N/A
Products and Services
Procurement Framework
Agreement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chongqing
Ruichi
14A.76(2)(a)
and 14A.105
Announcement 120 N/A
Fully-exempt continuing connected transactions
Trademark Licensing
Agreement /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dongfeng Motor 14A.52 and
14A.76(1)(a)
N/A N/A N/A
Notes:
(1) The term of the Products and Services Sales Framework Agreement and the Products and Services Procurement
Framework Agreement with Dongfeng Motor Group, and the Products and Services Sales Framework
Agreement and the Products and Services Procurement Framework Agreement with Chongqing Ruichi are set
to expire on December 31, 2025. Any renewal of such framework agreements upon expiry will be subject to
mutual consent and compliance with the applicable requirements of the relevant rules and regulations
(including but not limited to Listing Rules) after the Listing. In the event that such renewal agreements are
entered into after the Listing, the Company will, based on the proposed annual caps, comply with the
applicable requirements of the relevant rules and regulations (including but not limited to Chapter 14A of the
Listing Rules) as may be applicable.
(2) The proposed annual caps for the year ending December 31, 2026 shall expire on January 20, 2026, i.e. the
expiry of the Financial Services Agreement, or the day before the Company first annual general meeting to be
held after Listing, whichever is earlier.
CONNECTED TRANSACTIONS
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PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
Connected transactions with Dongfeng Motor
a. Products and Services Sales Framework Agreement
Principal Terms
On October 15, 2025, our Company, for itself and on behalf of its subsidiaries,
entered into a framework agreement (the “ Dongfeng Sales Framework Agreement ”)
with Dongfeng Motor Group, pursuant to which our Group would supply to Dongfeng
Motor Group various types of products and/or services, including but not limited to
vehicles, engines, parts and components, vehicles maintenance services and inspection
services and other ancillary products and services as it may require from time to time. The
initial term of the agreement will commence on the Listing Date and end on December
31, 2025. The Dongfeng Sales Framework Agreement will be subject to negotiation at
renewal with mutual consent and in compliance with the requirements of the Listing
Rules and other applicable laws and regulations. Both parties or their respective
subsidiaries will enter into separate underlying agreements which will set out the specific
terms and conditions for the supply of products and/or services according to the principles
provided in the Dongfeng Sales Framework Agreement.
Reasons for the transaction
Dongfeng Motor is a state-owned enterprise established under the laws of the PRC
and the controlling shareholder of Dongfeng Motor Group Company Limited (ӛԓ
ʮ̡), a joint stock limited company incorporated in the PRC with limited
liability and the H shares of which are listed on the Hong Kong Stock Exchange (stock
code: 0489). Dongfeng Motor is principally engaged in the manufacture and supply of
commercial vehicles, passenger vehicles, electric vehicles as well as ancillary services
and products.
We mainly supply to Dongfeng Motor Group parts and components such as battery
packs and motor drive assembly and related maintenance services, which serves as an
extra income stream of the Group. The transactions under the Dongfeng Sales Framework
Agreement are conducted in the ordinary course of business of the Group, which satisfy
the needs of the Group’s business development and are conducive to the healthy and
stable development of the Group.
CONNECTED TRANSACTIONS
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Consideration and pricing policies
The fees to be charged by our Group to Dongfeng Motor Group for the services
and/or products supplied by us shall be determined in accordance with the strict
compliance with the pricing principle of transactions between related parties, to ensure
fairness and reasonableness, with reference to factors including but not limited to the
official governmental and the industry pricing standards or market rate of the fee and
price quotes for such services and/or products, or reasonable profit margin of the Group
with reference to the relevant costs incurred for the provision of the products and
services. For fees and prices determined with reference to market rate, the parties shall
keep track of the market prices and adjust the fees and prices in a timely manner with
reference to the changes in market prices.
Historical amounts
For the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025, the historical transaction amounts with respect to the supply of services
and/or products by our Group to Dongfeng Motor Group were approximately
RMB1,345.8 million, RMB209.9 million, RMB87.1 million and RMB34.4 million,
respectively. The decrease in the historical transaction amounts for the year ended
December 31, 2024 compared with 2023 was due to the decrease in Dongfeng Motor
Group’s demand for our parts and components such as battery packs and motor drive
assembly which are primarily used by Dongfeng Motor Group in assembling whole
vehicles as a result of changes in end-user market demand for whole vehicles.
Annual cap
The proposed annual cap for the annual transaction amount to be paid to us by
Dongfeng Motor Group under the Dongfeng Sales Framework Agreement for the year
ending December 31, 2025 will be RMB210 million.
The proposed annual cap is determined based on, among others:
(i) the historical amounts of the transactions between our Group and Dongfeng
Motor Group during the Track Record Period in respect of our supply of
services and products to Dongfeng Motor Group, which demonstrated a
fluctuating trend; and
(ii) buffer for the potential fluctuation in transaction amount due to, among others,
the possible increase in the demand for the services and products by Dongfeng
Motor Group, in particular having considered (a) the fluctuations in the
transaction amount incurred during the Track Record Period, and (b) the fact
that Dongfeng Motor Group usually places orders with us on a back-to-back
basis depending on its actual business needs.
CONNECTED TRANSACTIONS
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b. Products and Services Procurement Framework Agreement
Principal Terms
On October 15, 2025, our Company, for itself and on behalf of its subsidiaries,
entered into a framework agreement (the “ Dongfeng Procurement Framework
Agreement ”) with Dongfeng Motor Group, pursuant to which our Group would procure
from Dongfeng Motor Group various types of products and/or services, including but not
limited to vehicles, parts and components, vehicles inspection services, transportation
services and other ancillary products and services as we may require from time to time.
The initial term of the agreement will commence on the Listing Date and end on
December 31, 2025. The Dongfeng Procurement Framework Agreement will be subject to
negotiation at renewal with mutual consent and in compliance with the requirements of
the Listing Rules and other applicable laws and regulations. Both parties or their
respective subsidiaries will enter into separate underlying agreements which will set out
the specific terms and conditions for the supply of products and/or services according to
the principles provided in the Dongfeng Procurement Framework Agreement.
Reasons for the transaction
We mainly procure pick-up trucks from Dongfeng Motor Group for further export
sales which serves as an extra income stream for our Company. We also procure delivery
services from Dongfeng Motor Group primarily for, including but not limited to,
delivering parts and components to our production lines during ordinary course of
business. The transactions under the Dongfeng Procurement Framework Agreement are
ordinary purchases of products and services necessary in the production and operation of
the Group, which satisfy the needs of the Group’s business development and are
conducive to the healthy and stable development of the Group.
Consideration and pricing policies
The fees to be paid by our Group to Dongfeng Motor Group under the Dongfeng
Procurement Framework Agreement shall be determined in accordance with the strict
compliance with the pricing principle of transactions between related parties, to ensure
fairness and reasonableness, with reference to factors including but not limited to the
official governmental and the industry pricing standards or market rate of the fee and
price quotes for such services and/or products, or reasonable profit margin of the
Dongfeng Motor Group with reference to the relevant costs incurred for the provision of
the products and services. For fees and prices determined with reference to market rate,
the parties shall keep track of the market prices and adjust the fees and prices in a timely
manner with reference to the changes in market prices.
CONNECTED TRANSACTIONS
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Historical amounts
For the years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025, the historical transaction amounts with respect to the procurement of
services and products by our Group from Dongfeng Motor Group were approximately
RMB363.8 million, RMB241.9 million, RMB287.1 million and RMB81.7 million,
respectively. The decrease in the historical transaction amounts for the year ended
December 31, 2023 compared with 2022 was because we reduced our purchase in certain
parts components from Dongfeng Motor Group having considered our business needs.
The increase in the historical transaction amount for the year ended December 31, 2024
compared with 2023 was because we procured more delivery services from Dongfeng
Motor Group as a result of our business needs.
Annual cap
The proposed annual cap for the annual transaction amount to be paid to Dongfeng
Motor Group under the Dongfeng Procurement Framework Agreement for the year ending
December 31, 2025 will be RMB500 million.
The proposed annual cap is determined based on, among others:
(i) the historical amounts of the transactions between our Group and Dongfeng
Motor Group during the Track Record Period in respect of our procurement of
services and products from Dongfeng Motor Group. In particular, the
transaction amount increased for about 19% in the year ended December 31,
2024 compared to the year ended December 31, 2023;
(ii) the potential fluctuation in the transaction amount due to, among others, the
possible increase in the demand for the services and products by Dongfeng
Motor Group, in particular having considered (a) the fluctuation in the
transaction amount incurred during the Track Record Period, and (b) the fact
that we usually place orders with Dongfeng Motor Group on a back-to-back
basis depending on our actual business needs; and
(iii) other factors including but not limited to the possible fluctuation in the unit
prices of Dongfeng Motor’s services and products, taking into account the
costs and expenses relating to raw materials, labour etc., exchange rate
fluctuations as well as market trends.
CONNECTED TRANSACTIONS
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c. Financial Services Agreement
Principal Terms
On January 20, 2023, our Company entered into a framework agreement (the
“Financial Services Agreement ”) with Dongfeng Motor Finance Co., Ltd. (ӛԓৌ
ʮ̡)( “ Dongfeng Finance ”), a member of the Dongfeng Motor Group, pursuant
to which Dongfeng Finance agreed to provide certain financial services to our Group.
Such financial services include credit line of not exceeding RMB1 billion, deposit
services of a daily deposit balance of not exceeding RMB800 million, settlement services
and other financial services. The Financial Services Agreement has a term of three years.
Pricing policies
(1) Credit line: Interest rate and discount rate shall be determined with reference to the
relevant regulations of the PBOC, and shall not violate the relevant regulations of
the PBOC or Dongfeng Finance.
(2) Deposit services: Interest rate of deposit made with Dongfeng Finance under the
Financial Services Agreement shall be determined with reference to the benchmark
interest rate for RMB deposit published by the PBOC, which shall not be less than
the interest rate offered by other commercial banks in China to similar deposit under
the same condition during the same period.
(3) Settlement services: No handling fee will be charged by Dongfeng Finance under
the Financial Services Agreement.
Reasons for the transaction
The engagement of Dongfeng Finance for the provision of the financial services
would enable the Group to fulfill its business development and capital management needs
during the ordinary course of business and is fair and reasonable to the Group.
CONNECTED TRANSACTIONS
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Historical amounts
Set out below are the historical figures of the maximum daily balance of deposit
amount placed by the Group with Dongfeng Finance under the Financial Services
Agreement during the Track Record Period:
For the years ended December 31, For the six months
ended June 30,
20252023 2024
(approximation)
Maximum outstanding
daily balance of deposit
amount placed by the
Group with Dongfeng
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
RMB410
million
RMB250
million RMB8,800
The deposit placed by the Group with Dongfeng Finance is used for the purpose of
obtaining trade acceptance notes from Dongfeng Finance for our settlement use during
our ordinary course of business. The maximum outstanding daily balance of deposit
amount placed by the Group with Dongfeng Finance decreased for the year ended
December 31, 2024 compared to 2023 was because our demand for trade acceptance notes
reduced in 2024, therefore we have reduced the amount of bill deposit placed with
Dongfeng Finance.
Annual caps
Set out below are the proposed annual caps for the maximum daily balance of
deposit amount placed by the Group with Dongfeng Finance during the years ending
December 31, 2025 and 2026 (until January 20, 2026, i.e. the expiry of the Financial
Services Agreement) or the day before the Company’s first annual general meeting to be
held after Listing, whichever is earlier:
For the years ending December 31,
2025 2026 (Note)
Maximum outstanding daily balance
of deposit amount placed by the
Group with Dongfeng Finance /H1118/H1118/H1118/H1118RMB800 million RMB800 million
Note: The proposed annual caps for the year ending December 31, 2026 shall expire on January 20,
2026, i.e. the expiry of the Financial Services Agreement, or the day before the Company’s first
annual general meeting to be held after Listing, whichever is earlier.
CONNECTED TRANSACTIONS
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The proposed annual caps of the maximum outstanding daily balance on the deposits
are mainly determined based on estimated annual cash flows of the Group and the
historical amount of outstanding daily deposit placed by the Group with Dongfeng
Finance.
Listing Rules Implications
The highest applicable percentage ratio calculated for the purpose of Chapter 14A of the
Listing Rules is expected to be above 0.1% but will not exceed 5% on an annual basis for
continuing connected transactions under each of the Dongfeng Sales Framework Agreement,
Dongfeng Procurement Framework Agreement and Financial Services Agreement (in relation
to the deposit service only). Accordingly, the continuing connected transactions under the
Dongfeng Sales Framework Agreement, Dongfeng Procurement Framework Agreement and
Financial Services Agreement (in relation to the deposit service only) are exempt from the
independent shareholders’ approval requirement under Chapter 14A of the Listing Rules but
will be subject to the annual reporting, annual review and announcement requirements under
Chapter 14A of the Listing Rules.
The provision of the credit line by Dongfeng Finance to the Group pursuant to the
Financial Services Agreement constitute financial assistance received by the Group from a
connected person under the Listing Rules. As (i) the provision of abovementioned services is
to be provided to the Group on normal commercial terms that are comparable to or more
favourable than those offered by Independent Third Parties for similar services in the PRC; and
(ii) no security over the assets of the Group is granted in respect of such credit line, pursuant
to Rule 14A.90 of the Listing Rules, the provision of the credit line by Dongfeng Finance to
the Group pursuant to the Financial Services Agreement is fully exempted from the reporting,
annual review, announcement and independent Shareholders’ approval requirements under
Chapter 14A of the Listing Rules.
Connected transactions with Chongqing Ruichi
a. Products and Services Sales Framework Agreement
Principal Terms
On October 15, 2025, our Company, for itself and on behalf of its subsidiaries,
entered into a framework agreement (the “ Ruichi Sales Framework Agreement ”) with
Ruichi Group, pursuant to which our Group would supply to Ruichi Group various types
of products and/or services, including but not limited to vehicles, parts and components,
vehicles maintenance services and inspection services and other ancillary products and
services as it may require from time to time. The initial term of the agreement will
commence on the Listing Date and end on December 31, 2025. The Ruichi Sales
Framework Agreement will be subject to negotiation at renewal with mutual consent and
in compliance with the requirements of the Listing Rules and other applicable laws and
CONNECTED TRANSACTIONS
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--- page 295 ---
regulations. Both parties or their respective subsidiaries will enter into separate
underlying agreements which will set out the specific terms and conditions for the supply
of products and/or services according to the principles provided in the Ruichi Sales
Framework Agreement.
Reasons for the transaction
Chongqing Ruichi had been a wholly-owned subsidiary of the Company until
December 2023, and is owned as to 44.05% of the Company as of the Latest Practicable
Date. It is primarily engaged in the production and sales of electric commercial use
automobile. As Chongqing Ruichi was historically a wholly-owned subsidiary of the
Group and is still an associate of us now, we are familiar with Ruichi Group’s business
needs, quality standards and operational requirements in respect of the services and
products. We mainly supply to Ruichi Group new energy vehicles and other relevant
components, which is part of our ordinary course of business. The Company considers
that the supply of services and products to Ruichi Group provides the Group with a stable
source of sales revenue and facilitate the business growth and development of the Group.
Consideration and pricing policies
The fees to be charged by our Group to Ruichi Group for the services and/or
products supplied by us under the Ruichi Sales Framework Agreement shall be
determined in accordance with the strict compliance with the pricing principle of
transactions between related parties, to ensure fairness and reasonableness, with reference
to factors including but not limited to the official governmental and the industry pricing
standards or market rate of the fee and price quotes for such services and/or products, or
reasonable profit margin of the Group with reference to the relevant costs incurred for the
provision of the products and services. For fees and prices determined with reference to
market rate, the parties shall keep track of the market prices and adjust the fees and prices
in a timely manner with reference to the changes in market prices.
Historical amounts
Chongqing Ruichi was not a connected person of us until December 2023, as it was
our wholly-owned subsidiary before then. Therefore any transaction between the
Company and its other subsidiaries and Chongqing Ruichi before December 2023 were
our intra-group transactions. For the year ended December 31, 2024 and the six months
ended June 30, 2025, the historical transaction amount with respect to the supply of
services and/or products by our Group to Ruichi Group amounted to approximately
RMB417.9 million and RMB624.1 million, respectively.
CONNECTED TRANSACTIONS
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Annual cap
The proposed annual cap for the annual transaction amount to be paid to us by
Ruichi Group under the Ruichi Sales Framework Agreement for the year ending
December 31, 2025 will be RMB3,000 million.
The proposed annual cap is determined based on, among others:
(i) the historical amounts of the transactions between our Group and Chongqing
Ruichi during the Track Record Period in respect of our supply of services and
products to Chongqing Ruichi. In particular, the transaction amounts already
amounted to approximately RMB624.1 million for the six months ended June
30, 2025;
(ii) the possible increase in the transaction amount due to the demand for the
services and products by Ruichi Group to meet its needs for its business
development in its ordinary course of business, in particular having considered
(a) the substantial increase in the transaction amount incurred during the six
months ended June 30, 2025, and (b) the fact that Ruichi Group usually places
orders with us on a back-to-back basis depending on our actual business needs;
and
(iii) other factors including but not limited to the possible fluctuation in the unit
prices of our services and products, taking into account the costs and expenses
relating to raw materials, labour etc., exchange rate fluctuations as well as
market trends.
b. Products and Services Procurement Framework Agreement
Principal Terms
On October 15, 2025, our Company, for itself and on behalf of its subsidiaries,
entered into a framework agreement (the “ Ruichi Procurement Framework
Agreement ”) with Ruichi Group, pursuant to which our Group would procure from
Ruichi Group various types of products and/or services, including but not limited to
vehicles, parts and components, vehicles maintenance services and other ancillary
products and services as we may require from time to time. The initial term of the
agreement will commence on the Listing Date and end on December 31, 2025. The Ruichi
Procurement Framework Agreement will be subject to negotiation at renewal with mutual
consent and in compliance with the requirements of the Listing Rules and other applicable
laws and regulations. Both parties or their respective subsidiaries will enter into separate
underlying agreements which will set out the specific terms and conditions for the supply
of products and/or services according to the principles provided in the Ruichi
Procurement Framework Agreement.
CONNECTED TRANSACTIONS
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--- page 297 ---
Reasons for the transaction
We mainly procure from Ruichi Group commercial vehicles for further sales which
serves as an extra other income stream for our Group. As a subsidiary historically
wholly-owned by the Group and is still an associate of us now, Chongqing Ruichi is
familiar with the business needs, quality standards and operational requirements in
respect of the services and products we require. The Company considers that the supply
of services and products by Ruichi Group provides the Group with a stable source of
relevant services and products that the Group requires in its ordinary course of business.
Consideration and pricing policies
The fees to be charged by Ruichi Group for the services and/or products supplied to
us under the Ruichi Procurement Framework Agreement shall be determined in
accordance with the strict compliance with the pricing principle of transactions between
related parties, to ensure fairness and reasonableness, with reference to factors including
but not limited to the official governmental and the industry pricing standards or market
rate of the fee and price quotes for such services and/or products, or reasonable profit
margin of the Group with reference to the relevant costs incurred for the provision of the
products and services. For fees and prices determined with reference to market rate, the
parties shall keep track of the market prices and adjust the fees and prices in a timely
manner with reference to the changes in market prices.
Historical amounts
Chongqing Ruichi was not a connected person of us until December 2023, as it was
our wholly-owned subsidiary before then. Therefore any transaction between the
Company and its other subsidiaries and Chongqing Ruichi before December 2023 were
our intra-group transactions. For the year ended December 31, 2024 and the six months
ended June 30, 2025, the historical transaction amounts with respect to the procurement
of services and products by our Group from Ruichi Group were approximately RMB47.4
million and RMB33.6 million, respectively.
Annual cap
The proposed annual cap for the annual transaction amount to be paid by us to
Ruichi Group under the Ruichi Procurement Framework Agreement for the year ending
December 31, 2025 will be RMB120 million.
The proposed annual cap is determined based on, among others:
(i) the historical amounts of the transactions between our Group and Chongqing
Ruichi during the Track Record Period in respect of our procurement of
services and products from Chongqing Ruichi. For illustration purpose, we
CONNECTED TRANSACTIONS
– 287 –


--- page 298 ---
recorded intra-group transactions of approximately RMB460 million and
RMB158 million for procurement of products from Chongqing Ruichi during
the years ended December 31, 2022 and 2023, respectively;
(ii) the possible increase in the transaction amount due to the demand for the
services and products by our Group to meet the expected needs for our business
development, in particular having considered (a) the fluctuation in the
transaction amounts during the Track Record Period, and (b) the fact that we
usually place orders on a back-to-back basis depending on our actual business
needs. Further, as a subsidiary historically wholly-owned by the Group,
Chongqing Ruichi is familiar with our business needs, quality standards and
operational requirements in respect of the services and products we require,
and we expect to continue to strengthen our business cooperation with
Chongqing Ruichi; and
(iii) other factors including but not limited to the possible fluctuation in the unit
prices of Chongqing Ruichi’s services and products, taking into account the
costs and expenses relating to raw materials, labour etc., exchange rate
fluctuations as well as market trends.
Listing Rules Implications
The highest applicable percentage ratio calculated for the purpose of Chapter 14A
of the Listing Rules is expected to be above 0.1% but will not exceed 5% on an annual
basis for continuing connected transactions under each of the Ruichi Sales Framework
Agreement and Ruichi Procurement Framework Agreement. Accordingly, the continuing
connected transactions under the Ruichi Sales Framework Agreement and Ruichi
Procurement Framework Agreement are exempt from the independent shareholders’
approval requirement under Chapter 14A of the Listing Rules but will be subject to the
annual reporting, annual review and announcement requirements under Chapter 14A of
the Listing Rules.
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
Trademark licensing agreement
Seres Hubei has entered into a trademark licensing agreement with Dongfeng Motor on
May 19, 2020 (as supplemented by the supplemental agreement dated August 30, 2024) (the
“Trademark Licensing Agreement ”), pursuant to which Dongfeng Motor agreed to grant
Seres Hubei the right to use certain trademarks of Dongfeng Motor in its vehicles, product
descriptions, products sales promotions and other matters separately approved by Dongfeng
Motor for a term of 6 years at an annual license fee of RMB1 million for 2020 and 2021, and
an annual license fee of RMB0.5 million from 2022 to 2026, which were determined after
arm’s length negotiations between the parties having considered the scope of use of the
trademarks.
CONNECTED TRANSACTIONS
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--- page 299 ---
By licensing the trademark from Dongfeng Motor, we are able to use and leverage on the
trademark and branding of Dongfeng Motor in the relevant vehicles sales business. Our
Directors are of the view that the Trademark Licensing Agreement has been arrived at after
arm’s length negotiations and that the terms are fair and reasonable, on normal commercial
terms or better and are in the interest of our Company and Shareholders as a whole.
As required by Rule 14A.52 of the Listing Rules, the period for continuing connected
transactions must not exceed three years, except in cases where the nature of the transaction
requires the contract to be of a duration longer than three years. Our Directors are of the view
that the Trademark Licensing Agreement was entered into on normal commercial terms and
believe it is normal business practice and in the interests of us and our Shareholders as a whole
for the term of the Trademark Licensing Agreement to be longer than three years. For details,
see “Directors’ view” in this section below.
Other Fully-Exempt Continuing Connected Transactions
In the usual and ordinary course of business, we have also entered into, and will, upon
Listing, continue to enter into certain transactions (the “ Other Fully-exempt Continuing
Connected Transactions ”) with (i) Sokon Holding Group for the supply of, including but not
limited to vehicles, parts and components, vehicles maintenance and inspection services and
other ancillary products and services to Sokon Holding Group, and the procurement of,
including but not limited to catering and accommodations, promotional services, consumables
and other ancillary products and services from Sokon Holding Group, and (ii) Sokon Holding
Group, Dongfeng Motor Group and Ruichi Group for the leasing of property and equipment by
our Group to these connected persons. The prices under the Other Fully-exempt Continuing
Connected Transactions shall be determined by commercial negotiation between the parties on
arm’s length basis and the terms shall be no less favorable than those provided to the Company
by Independent Third Parties or by Independent Third Parties to the Company.
Listing Rules Implications
Our Directors currently expect that the highest applicable percentage ratio in respect of
the above fully-exempt connected transactions (including the Trademark Licensing Agreement)
calculated for the purpose of Chapter 14A of the Listing Rules, will be less than 0.1% on an
annual basis. Under Rule 14A.76(1) of the Listing Rules, such transactions will be fully
exempted from the reporting, annual review, announcement and independent Shareholders’
approval requirements under Chapter 14A of the Listing Rules.
CONNECTED TRANSACTIONS
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--- page 300 ---
APPLICATION FOR AND CONDITIONS FOR W AIVER
In relation to the Dongfeng Sales Framework Agreement, Dongfeng Procurement
Framework Agreement, Financial Services Agreement (in relation to the deposit service only),
Ruichi Sales Framework Agreement and Ruichi Procurement Framework Agreement, we have
applied for, and the Hong Kong Stock Exchange has granted to us, a waiver from strict
compliance with the announcement requirement under Chapter 14A of the Listing Rules
pursuant to Rule 14A.105 of the Listing Rules, subject to the condition that the aggregate value
of such continuing connected transactions shall not exceed relevant annual caps stated above.
DIRECTORS’ VIEW
Our Directors, including the independent non-executive Directors, are of the view that all
the continuing connected transactions described above have been and shall be entered into: (i)
in the ordinary and usual course of our business; (ii) on normal commercial terms or better; and
(iii) that the respective terms and the proposed annual caps thereof are fair and reasonable and
in the interests of our Company and our Shareholders as a whole.
Further, our Directors are of the view that it is in the interests of us and our Shareholders
as a whole for the term of the Trademark Licensing Agreement to be longer than three years
given (i) the benefit and necessity of the use of the trademarks under the Trademark Licensing
Agreement in our vehicles sales business; (ii) the term provides certainty for us to use the
trademarks without interruption in our vehicles sales business during the term of the Trademark
Licensing Agreement. If the Trademark Licensing Agreement were to be renewed frequently,
the uncertainty of the use of trademarks may hinder our ability to plan efficiently in the longer
term; and (iii) the long-term nature of the arrangement provides comfort that we would not be
required to spend unnecessary time, costs and resources to negotiate the terms of use of the
trademarks, which would be financially, operationally and administratively burdensome.
JOINT SPONSORS’ VIEW
Based on the documentation, information and data provided by the Company and
participation in the due diligence with the Company, the Joint Sponsors are of the view that:
(i) the aforesaid continuing connected transactions for which waivers have been sought have
been and will be entered into in the ordinary and usual course of business of the Company on
normal commercial terms or better, that are fair and reasonable, and are in the interests of the
Company and its Shareholders as a whole; and (ii) the proposed annual caps of the foregoing
continuing connected transactions are fair and reasonable and in the interests of the Company
and its Shareholders as a whole. Further, having considered the strategic nature and importance
of the Trademark Licensing Agreement, the Joint Sponsors are of the view that it is
commercially justifiable and normal business practice for agreements of similar nature to be
of a duration of more than three years.
CONNECTED TRANSACTIONS
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--- page 301 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering, and assuming the Offer Size Adjustment Option and the Over-allotment Option are
not exercised, and no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing Date, the following persons will have an
interest and/or short position in our Shares or underlying Shares which would fall to be
disclosed to us and the Hong Kong Stock Exchange under the provisions of Divisions 2 and
3 of Part XV of the SFO, or will be directly or indirectly interested in 10% or more of the
nominal value of any class of our share capital carrying rights to vote in all circumstances at
general meetings of our Company:
As of the
Latest Practicable Date
Immediately following the completion of the
Global Offering
Name of
Shareholder
Nature of
interest
Description
of Shares
Number of
Shares (1)
Approximate
percentage
of
shareholding
in our
Company (2)
Number of
Shares (1)
Approximate
percentage of
shareholding in
our A Shares (3)
Approximate
percentage of
shareholding in
our Company (3)
Mr. Zhang Xinghai (4) /H1118Interest in
controlled
corporations
A Shares 466,594,414 28.57% 466,594,414 28.57% 26.92%
Sokon Holding
(4) /H1118/H1118/H1118Beneficial
interest
A Shares 400,503,464 24.52% 400,503,464 24.52% 23.10%
Dongfeng Motor (5) /H1118/H1118Beneficial
interest
A Shares 327,380,952 20.04% 327,380,952 20.04% 18.88%
Notes:
1. All interests stated are long positions in the Shares.
2. The calculation is based on the total number of 1,633,366,086 A Shares in issue as of the Latest Practicable
Date.
3. The calculation is based on the total number of 1,633,366,086 A Shares and 100,200,000 H Shares in issue
immediately after completion of the Global Offering since 100,200,000 H Shares will be issued pursuant to
the Global Offering, assuming that the Offer Size Adjustment Option and the Over-allotment Option are not
exercised.
4. As of the Latest Practicable Date, Sokon Holding held 400,503,464 A Shares and Y u’an Industry held
66,090,950 A Shares. Sokon Holding is held as to 50%, 25% and 25% by Mr. Zhang Xinghai, Mr. Zhang Xingli
and Mr. Zhang Xingming, respectively. Pursuant to the articles of association of Sokon Holding, in the event
that a deadlock arises when voting (where votes are equally split 50%:50%), Mr. Zhang Xinghai, as the
shareholder with the largest capital contribution in Sokon Holding shall have the casting vote.
Y u’an Industry is held as to, among others, 15.8419% by Sokon Holding and 11.9732% by Mr. Zhang Xinghai,
respectively. Pursuant to the articles of association of Y u’an Industry, the voting rights of the shareholders of
Y u’an Industry are held as to 50%, 25% and 25% by Mr. Zhang Xinghai, Mr. Zhang Xingli and Mr. Zhang
Xingming, respectively. In the event that a deadlock arises when voting (where votes are equally split
50%:50%), Mr. Zhang Xinghai, as the shareholder with the largest capital contribution in Y u’an Industry shall
have the casting vote. Hence, Mr. Zhang Xinghai is deemed to be interested in the A Shares held by Sokon
Holding and Y u’an Industry by virtue of the SFO. Further, Sokon Holding has invested in other companies and
has genuine funding needs from time to time given its nature and scale of business. Pledging A Shares it held
is a typical kind of collateral to support its external financing. As at the Latest Practicable Date, Sokon Holding
pledged 69,100,000 A Shares it held to certain regulated financial institutions in the PRC such as PRC banks
and securities companies regulated by the CSRC as securities for certain financings provided by such financial
institutions to Sokon Holding.
5. Dongfeng Motor is wholly-owned by the State-owned Assets Supervision and Administration Commission of
the State Council (ึ).
SUBSTANTIAL SHAREHOLDERS
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For those who are directly and/or indirectly interested in 10% or more of the issued voting
shares of any other members of our Group, see “Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — Interests of the substantial
shareholders in other members of our Group” in Appendix IV .
Save as disclosed in “Substantial Shareholders” and in “Statutory and General
Information — Further Information about our Directors and Substantial Shareholders” in
Appendix IV , our Directors are not aware of any other person who will, immediately following
the completion of the Global Offering (assuming that the Offer Size Adjustment Option and the
Over-allotment Option are not exercised), have any interest and/or short position in our Shares
or underlying Shares which would fall to be disclosed to us and the Hong Kong Stock
Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly
or indirectly, interested in 10% or more of the nominal value of any class of our share capital
carrying rights to vote in all circumstances at general meetings of our Company or any other
member of our Group.
SUBSTANTIAL SHAREHOLDERS
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--- page 303 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ” and collectively, the “ Cornerstone Investment Agreements ”) with
the cornerstone investors set out below (each a “ Cornerstone Investor ” and collectively, the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, 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) that may be purchased for an aggregate amount of US$826.47 million (or
approximately HK$6,421.12 million, calculated based on the exchange rate set out in the
section headed “Information about this Prospectus and the Global Offering — Exchange Rate
Conversion” in this Prospectus) (the “ Cornerstone Placing ”). The aggregate amount of the
investment contributed by the Cornerstone Investors does not include brokerage, SFC
transaction levy, AFRC transaction levy and Hong Kong Stock Exchange trading fee which the
Cornerstone Investors will pay in respect of the International Offer Shares to be subscribed by
them.
Based on an Offer Price of HK$131.50, being the maximum Offer Price, the total number
of Offer Shares to be subscribed by the Cornerstone Investors would be 48,828,700 Offer
Shares. The table below reflects the shareholding immediately after the Global Offering
assuming there is no other change made to the issued share capital of our Company between
the Latest Practicable Date and the Listing Date (or the date of exercise of Over-allotment
Option (where applicable)).
Assuming the Offer Size Adjustment
Option is not exercised
Assuming the Offer Size Adjustment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is exercised in full
Approximate
%o ft h e
Offer Shares
Approximate
% of the total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of the total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of the total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of the total
issued share
capital
48.73% 2.82% 42.37% 2.79% 42.37% 2.79% 36.85% 2.77%
We believe that the Cornerstone Placing signifies our Cornerstone Investors’ confidence
in our Company and its business prospect, and that the Cornerstone Placing will help to raise
the profile of our Company. Our Company became acquainted with each of the Cornerstone
Investors during its ordinary course of operations, either through the Group’s business network
or through introduction by the Company’s business partners or the Underwriters.
The Cornerstone Placing will form part of the International Offering, and save as
otherwise consented to by the Stock Exchange, the Cornerstone Investors (and for PSBC
Wealth who will subscribe for our Offer Shares through qualified domestic institutional
investors (“ QDII(s) ”), the QDIIs) and their respective close associates will not subscribe for
CORNERSTONE INVESTORS
– 293 –


--- page 304 ---
any Offer Shares under the Global Offering other than pursuant to the Cornerstone Investment
Agreements. The Offer Shares to be subscribed by the Cornerstone Investors (and for PSBC
Wealth who will subscribe for our Offer Shares through QDIIs, the QDIIs) will rank pari passu
in all respects with the fully paid Shares in issue and all the H Shares to be subscribed by the
Cornerstone Investors will be counted towards the public float for the purpose of Rule 8.08 of
the Listing Rules. Immediately following the completion of the Global Offering, the
Cornerstone Investors will not have any Board representation in our Company; and none of the
Cornerstone Investors will become a substantial shareholder of our Company. The Cornerstone
Investors do not have any preferential rights in the Cornerstone Investment Agreements
compared with other public Shareholders, other than a guaranteed allocation of the relevant
Offer Shares at the Offer Price.
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, conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other
than a guaranteed allocation of the relevant Offer Shares at the final Offer Price, following the
principles as set out in Chapter 4.15 of the Guide for New Listing Applicants.
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 deferred settlement of the Offer Shares to be subscribed by the Cornerstone
Investors. Where delayed delivery takes place, each Cornerstone Investor that may be affected
by such delayed delivery arrangement has agreed that it shall nevertheless pay for the relevant
Offer Shares in full before the Listing.
Among the Cornerstone Investors, Chongqing Industrial Parent Fund, Linyuan Fund and
Mr. Lin, GF Fund Management, and Schroders (comprising SIMSL and SIMHK) (each of
which as defined in this section) are either existing minority Shareholders or their respective
close associates. The Stock Exchange has granted a waiver from strict compliance with the
requirements under Rule 10.04 and consent under Paragraph 1C of the Appendix F1 to the
Listing Rules to permit H Shares in the International Offering to be placed to certain existing
minority Shareholders and/or their close associates. For further details, see “Waivers, Consents
and Exemption — Allocation of H Shares to Existing Minority Shareholders and their Close
Associates”. To the best of the knowledge, information and belief of our Company, other than
the Cornerstone Investors who are either existing minority Shareholders or their respective
close associates, (i) each of the Cornerstone Investors (and for PSBC Wealth who will
subscribe for our Offer Shares through QDIIs, the QDIIs) is an Independent Third Party; (ii)
none of the Cornerstone Investors (and for PSBC Wealth who will subscribe for our Offer
Shares through QDIIs, the QDIIs) is accustomed to take and has not taken instructions from the
Company, our Directors, chief executive, the Single Largest Group of Shareholders, substantial
shareholders, existing Shareholders or any of their subsidiaries or their 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 (and
for PSBC Wealth who will subscribe for our Offer Shares through QDIIs, the QDIIs) is directly
CORNERSTONE INVESTORS
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--- page 305 ---
or indirectly financed by the Company, our Directors, chief executive, the Single Largest
Group of Shareholders, substantial shareholders, existing Shareholders or any of their
subsidiaries or their respective close associates.
To the best knowledge of the Company and the Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as
of the date of this Prospectus, certain Cornerstone Investors and/or their close associates may
participate in the International Offering as placees and subscribe for further Offer Shares in the
Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow
the Cornerstone Investors and/or their close associates to participate in the International
Offering as placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether
such Cornerstone Investors and/or their close associates will place orders in the International
Offering is uncertain and will be subject to the final investment decisions of such investors and
the terms and conditions of the Global Offering.
To the best knowledge of our Company, (i) the Cornerstone Investors make independent
investment decisions, and (ii) their subscription under the Cornerstone Investment Agreements
would be financed by their own internal resources, financial resources of their shareholders,
connected person or (in the case of Cornerstone Investors which are funds or investment
managers) the assets managed for their investors as the source of funding for the subscription
of the Offer Shares, and they each have sufficient funds to settle their respective investments
under the Cornerstone Placing. Each of the Cornerstone Investors has confirmed that all
necessary approvals have been obtained with respect to the Cornerstone Placing, and that no
specific approval from any stock exchange (if relevant) or its shareholders is required for their
participation in the Cornerstone Placing.
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 November 4, 2025.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by
our Cornerstone Investors in connection with the Cornerstone Placing.
Chongqing Industrial Parent Fund
Chongqing Industrial Investment Parent Fund Enterprise Partnership (L.P .) (ᅅପุҳ
ΥྫΆุ(Υྫ)) (“ Chongqing Industrial Parent Fund ”) is a limited
partnership established in the PRC, which is primarily engaged in investment and asset
management. The general partner of Chongqing Industrial Parent Fund is Chongqing Y ufu
High Quality Industrial Parent Fund Private Equity Investment Fund Management Co., Ltd. (ࠠ
ʮ̡)(“Yufu High Quality Fund ”). Y ufu
High Quality Fund is wholly-owned by Chongqing Y ufu Holding Group Co., Ltd. (ᅅಽబ
ʮ̡)( “ Yufu Holding ”), which is in turn wholly owned by Chongqing
CORNERSTONE INVESTORS
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--- page 306 ---
State-owned Assets Supervision and Administration Commission (ᅅ̹਷Ϟ༟ପ္ຖ၍ଣ։
ึ). Y ufu Holding is also the largest limited partner of Chongqing Industrial Parent Fund,
holding approximately 68.75% of the partnership interests of Chongqing Industrial Parent
Fund. Save for Y ufu Holding, there is no other limited partner holding 30% or more of the
partnership interests of Chongqing Industrial Parent Fund.
Linyuan Fund and HTCI (in connection with the HT Back-to-back TRS and Linyuan
TRS)
Huatai Capital Investment Limited (“ HTCI ”) and Huatai Securities Co., Ltd (“ HTSC ”)
will enter into a back-to-back total return swap (the “ HT Back-to-back TRS ”) in connection
with a total return swap order placed by Shenzhen Lin Y uan Investment Management Co., Ltd.
(ப΂ʮ̡)( “ Linyuan Investment ”), acting in its capacity as
investment manager for and on behalf of Lin Y uan Investment 309 Private Securities
Investment fund (෤ҳ༟309ږ“() Linyuan Fund ”) to HTSC (the
“Linyuan TRS ”), pursuant to which HTCI will hold the Offer Shares on a non-discretionary
basis to hedge the HT Back-to-back TRS in connection with the Linyuan TRS, while the
economic risks and returns of the underlying Offer Shares are ultimately born by Linyuan
Fund, subject to customary fees and commissions.
The HT Back-to-back TRS will be fully funded by Linyuan Fund. During the terms of the
HT Back-to-back TRS and the Linyuan TRS, all economic returns of the Offer Shares
subscribed by HTCI will be ultimately passed to Linyuan Fund and all economic loss shall be
ultimately borne by Linyuan Fund through the Linyuan TRS and the HT Back-to-back TRS,
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.
The HT Back-to-back TRS and the Linyuan TRS are linked to the Offer Shares and
Linyuan Fund 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 the Listing
Date, request to early terminate the Linyuan TRS at its own discretion. Upon the final maturity
or early termination of the Linyuan TRS by Linyuan Fund, HTCI will accordingly dispose of
the Offer Shares on the secondary market and Linyuan Fund will receive a final settlement
amount of the HT Back-to-back TRS and the Linyuan TRS in cash in accordance with the terms
and conditions of the HT Back-to-back TRS and the Linyuan 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 HT Back-to-back TRS and the Linyuan TRS.
Linyuan Fund is a registered private offering fund in mainland China (No. SQX800),
managed by Linyuan Investment which is a private fund management company established in
2006 registered under the Asset Management Association of China (AMAC). As of the Latest
Practicable Date, Linyuan Investment is owned as to 60%, 20% and 20% by Mr. Lin Y uan (؍
෤)( “Mr. Lin ”), Mr. Zhang Wen ( ੵ˖) and Mr. Ma Zhihong ( ৵қ҃, spouse of Ms. Lin Hong
ߎ؍respectively, each of whom is an independent third party of HTCI, and the companies
which are members of the same group of Huatai Financial Holdings (Hong Kong) Limited
CORNERSTONE INVESTORS
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--- page 307 ---
(“Huatai ”). The size of assets under management of Linyuan Investment exceeds RMB25.5
billion. As confirmed by Linyuan Investment, Linyuan Investment, Mr. Lin and Ms. Lin Hong
(ߎ؍sister of Mr. Lin) are subscribers of Linyuan Fund, collectively holding over 80% of the
interests in Linyuan Fund.
As confirmed by Linyuan Investment, Mr. Lin and Linyuan Investment are Existing
Minority Shareholders of the Company, collectively holding less than 5% voting right in the
Company as of the Latest Practicable Date. The Stock Exchange has granted a waiver from
strict compliance with the requirements under Rule 10.04 and consent under Paragraph 1C(2)
of Appendix F1 to the Listing Rules and paragraph 18 of Chapter 2.3 of the Guide for New
Listing Applicants to permit H Shares in the International Offering to be placed to Mr. Lin and
Linyuan Investment as beneficial owners of Linyuan Fund through HTCI. For further details,
please refer to the section headed “Waivers, Consents and Exemption — Allocation of H Shares
to Existing Minority Shareholders and their Close Associates”.
Both HTCI and Huatai, one of the Joint Global Coordinators and Joint Bookrunners of the
Global Offering, are indirect wholly-owned subsidiaries of HTSC, the A shares of which are
listed on the Shanghai Stock Exchange (stock code: 601688), the H shares of which are listed
on the Stock Exchange (stock code: 6886), and the global depositary receipts of which are
listed on the London Stock Exchange (LON: HTSC). HTCI is a connected client (as defined
under Appendix F1 to the Listing Rules) of Huatai, holding securities on a non-discretionary
basis on behalf of independent third parties. To the best of HTCI’s knowledge after having
made all reasonable inquiries, Linyuan Fund is an independent third party of (i) the Company,
the connected persons or associates thereof, and (ii) HTCI, and the companies which are
members of the same group of Huatai. The Company has applied to the Stock Exchange for,
and the Stock Exchange has granted, its consent under paragraph 1C(1) of Appendix F1 to the
Listing Rules to permit us to allocate the Offer Shares to HTCI. See “Waivers, Consents and
Exemption — Consent in respect of the Proposed Subscription of H Shares by certain
Cornerstone Investor who is Connected Client”.
GF Fund Management Co., Ltd. (ʮ̡) and GF International Investment
Management Limited (ʮ̡) (together “GF Fund”)
GF Fund Management Co., Ltd. (ʮ̡)( “ GF Fund Management ”)
was established on August 5, 2003. GF Fund Management and its subsidiaries are licensed to
conduct business as Qualified Investment Manager of Public Fund, Entrusted Domestic
Investment Manager of National Social Security Fund (NSSF), qualified investment
management institution of Basic Pension Insurance Funds, qualified fund management
company to provide asset management services for specific clients, Qualified Domestic
Institutional Investor (QDII), RMB Qualified Foreign Institutional Investor (RQFII), Qualified
Foreign Institutional Investors (QFII), Qualified Domestic Limited Partner (QDLP), entrusted
insurance funds investment manager, entrusted investment manager of asset management for
Insurance Security Funds and fund investment advisor, making it a large fund management
company with comprehensive asset management capabilities and experience. The controlling
shareholder of GF Fund Management is GF Securities Co., Ltd. (ʮ̡)( “GF
CORNERSTONE INVESTORS
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--- page 308 ---
Securities ”), a limited company listed on the Stock Exchange (stock code: 1776) and Shenzhen
Stock Exchange (stock code: 000776), which owns 54.53% shareholding in GF Fund
Management. Apart from GF Securities, no other shareholder has a 30% or more shareholding
in GF Fund Management.
GF International Investment Management Limited (“ GF Fund HK ”) is a wholly-owned
subsidiary of GF Fund Management. GF Fund HK (central number in the Hong Kong Securities
and Futures Commission license: AXL121) was incorporated in Hong Kong in December 2010.
GF Fund HK is licensed by SFC to carry on Type 1 (dealing in securities), Type 4 (advising
on securities) and Type 9 (asset management) regulated activities in Hong Kong. GF Fund HK
serves as the global investment and business platform for its parent company, GF Fund
Management. As GF Fund Management’s window company overseas, GF Fund HK
strategically connects China and the overseas market. GF Fund HK capitalizes the investment
and research capabilities of GF Fund Management and its competitive advantage in the
overseas market to provide comprehensive quality service to its clients.
The subscription of the Offer Shares as a cornerstone investor will be made by GF Fund
Management and GF Fund HK in their capacity as the discretionary investment manager of
certain funds and/or independent segregated accounts under their management. To the best
knowledge of GF Fund Management and GF Fund HK, each fund and/or account is an
Independent Third Party.
New China Asset Management
New China Asset Management (Hong Kong) Limited (“ New China Asset
Management ”), in its capacity as investment manager acting as agent on behalf of its
discretionary account, New China Life Traditional Insurance Account, the ultimate beneficial
owner being New China Life Insurance Company Ltd. (ʮ̡), has
agreed to subscribe for the H Shares of the Company. New China Asset Management was
incorporated in Hong Kong with limited liability. New China Asset Management is licensed
with the SFC to carry on business in Type 4 (advising on securities) and Type 9 (asset
management) regulated activities under the Securities and Futures Ordinance (Cap. 571). New
China Asset Management focuses on investments in equity securities, fixed income securities,
as well as in a wide range of underlying investment funds. New China Asset Management is
held as to 99.6% directly and indirectly by New China Life Insurance Company Ltd. ( อശɛ
ʮ̡), a company dually listed on the Hong Kong Stock Exchange (stock code:
1336.HK) and the Shanghai Stock Exchange (stock code: 601336.SH).
CORNERSTONE INVESTORS
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--- page 309 ---
BESS Broadway
BESS Broadway Limited (“ Bess Broadway ”) is a limited company incorporated in the
BVI primarily engages in medium to long-term investments in sectors such as finance and
emerging technology. Bess Broadway is ultimately owned as to 80% by Mr. Y ee Chun Keung
(“Mr. Y ee”), and 20% by a leading manufacturer in the automobile parts industry. Mr. Y ee is
an individual investor and the founder, director and indirect major shareholder of Bess
Broadway. Mr. Y ee has ample experience in the financial management and high-end
manufacturing industry. Mr. Y ee is currently serving as the General Manager of Navitasys
Technology Limited. Mr. Y ee is an Independent Third Party.
Sanhua (Hong Kong)
Sanhua (Hong Kong) Co Limited (“ Sanhua (Hong Kong) ”) is a company incorporated
in Hong Kong on September 10, 2025. Sanhua (Hong Kong) principally engages in commercial
trading. Sanhua (Hong Kong) is indirectly wholly owned by Zhejiang Sanhua Intelligent
Controls Co., Ltd. (ʮ̡), whose A shares are listed on the
Shenzhen Stock Exchange (002050.SZ) and H shares are listed on the Hong Kong Stock
Exchange (2050.HK).
Zhongsheng
Zhongsheng Holdings Company Limited (ʮ̡) is a limited liability
company incorporated in Hong Kong. It is indirectly wholly-owned by Zhongsheng Group
Holdings Limited (ʮ̡), a limited liability company incorporated in
Cayman Islands, the shares of which are listed on the Hong Kong Stock Exchange (stock code:
881). Zhongsheng Group Holdings Limited is a leading national automobile distribution group
in the PRC principally engaged in providing one-stop services including sales of new and
second-hand automobiles, aftersales, refitting, parts and accessories, financial, insurance and
leasing services.
Zhink International
Zhink International Pte. Ltd. (“ Zhink International ”) was incorporated in Singapore in
2023. It is owned as to 96.25% by Mr. Shen Zhigang (࡝the chairman of Zhejiang Zhink
Group Co., Ltd. (ʮ̡)( “ Zhink Group ”). Founded in 1997, Zhink Group is
a modern group enterprise focusing on the development of the two major industries of global
PET and textile. Zhink Group is also the controlling shareholder of Wankai New Materials Co.,
Ltd. (ʮ̡), a company listed on the Shenzhen Stock Exchange (stock
code: 301216).
CORNERSTONE INVESTORS
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--- page 310 ---
Gold Wings
Gold Wings Holdings Limited (“ Gold Wings ”) is a business company incorporated in the
BVI on December 10, 2020, which is wholly owned by WU Yi ( юᆇ), an Independent Third
Party. Gold Wings is primarily engaged in investment.
Honour Goal Investments
Honour Goal Investments Limited (ʮ̡)( “ Honour Goal Investments ”) is
a limited liability company incorporated in Hong Kong, which is wholly owned by
Zhongchengxin (HK) Investment Services Limited (ڦ(ಥ)ʮ̡)
(“Zhongchengxin (HK) ”), a company incorporated in Hong Kong with limited liability.
Zhongchengxin (HK) is wholly owned by Zhongchengxin Investment Group Company
Limited* (ʮ̡)( “ Zhongchengxin Investment ”), a company established
in the PRC with limited liability primarily engaged in industrial investment, asset management,
business information consulting, and corporate management consulting. Zhongchengxin
Investment is also involved in more than 20 domestic and international equity investment
projects, including finance, real estate, and ski resort projects. Zhongchengxin Investment is
ultimately majority beneficially owned by Mao Zhenhua (ശ), founder of Zhongchengxin
Group (ණྠ). No other shareholder is interested in 30% or more of the shareholding
interests of Zhongchengxin Investment.
Hichain Logistics HK
Hichain Logistics (Hong Kong) Limited (“ Hichain Logistics HK ”) is a limited liability
company incorporated in Hong Kong, which is principally engaged in investment holding and
integrated logistics services. Its ultimate holding company is Hichain Logistics Co., Ltd. ( Ϫ
ʮ̡), the shares of which are listed on the Shenzhen Stock Exchange
(stock code: 300873). The principal business of Hichain Logistics Co., Ltd. includes high-end
logistics equipment manufacturing, production logistics operations, and automation integration
services.
Schroders
Schroder Investment Management (Singapore) Ltd (“ SIMSL ”) and Schroder Investment
Management (Hong Kong) Limited (“ SIMHK ”), each acting as a discretionary investment
manager for and on behalf of a total of six funds and/or segregated accounts with a focus on
Asian Equities, have entered into the cornerstone investment agreement with the Company. To
the best of Schroders’ knowledge, no single ultimate beneficial owner holds 30% or more
interest in the participating accounts of such funds/accounts, and each of such fund/account is
an Independent Third Party.
CORNERSTONE INVESTORS
– 300 –


--- page 311 ---
SIMSL is a company incorporated in Singapore. SIMHK is a company incorporated in
Hong Kong. Each of SIMSL and SIMHK is ultimately wholly owned by Schroders plc, whose
ordinary shares are listed on the London Stock Exchange (LON: SDR). There is no individual
person who is the “ultimate controlling shareholder” of Schroders plc. The interests of some
members of the Schroder family, are spread across a number of parties, who are collectively
known as the Principal Shareholder Group (PSG).
Mirae Securities
Mirae Asset Securities Co., Ltd. (“ Mirae Securities ”) is one of the largest investment
banks in the Republic of Korea, providing a comprehensive range of financial services,
including brokerage, wealth management, investment banking, sales & trading, and principal
investments. It is ultimately controlled by Mirae Asset Capital Co., Ltd., a financial investment
company in the Republic of Korea. Mirae Securities is listed on the Korea Exchange under
stock code 006800.KS.
New Alternative
New Alternative Limited (“ New Alternative ”) is a limited liability company incorporated
in the BVI and is wholly owned by Y unfeng Capital Limited, a wholly-owned subsidiary of
Y unfeng Investments Limited (“ Yunfeng Capital ”). Y unfeng Capital is majority-owned and
controlled by Mr. Y u Feng. The other minority shareholder is an Independent Third Party.
PSBC Wealth
PSBC Wealth Management Co., Ltd. (“ PSBC Wealth ”) was established on December 18,
2019, with a registered capital of RMB8.0 billion, in which Postal Savings Bank of China Co.,
Ltd. (stock code: 1658) holds a 100% stake and is ultimately controlled by China Post Group
Corporation Limited. Its business scope is public issuance of wealth management products to
the general public, investment and management of entrusted assets for investors; non-public
issuance of wealth management products to eligible investors, investment and management of
entrusted assets for investors; financial advisory and consulting services, etc. PSBC Wealth
remained firmly committed to balanced development of scale, quality and profitability, aimed
at fostering core competitiveness, deepened investment analysis, marketing, internal control,
operational reforms and digital transformation, and continued to improve the rule-based,
specialized and market-oriented development of wealth management business.
Skyler International
Skyler International Co., Ltd (“ Skyler International ”) is an investment company
incorporated in the Republic of the Marshall Islands, which is primarily engaged in
investments in equity and shares. Its ultimate controlling shareholder is Mr. Wu Jianshu (ܔ
ዓ΋͛), who serves as the chairman of the board of directors of Ningbo Tuopu Group Co., Ltd.
(ʮ̡), an industry-leading automotive components manufacturer listed
on the Shanghai Stock Exchange (stock code: 601689).
CORNERSTONE INVESTORS
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--- page 312 ---
Xingyu HK
Xingyu Automotive Lighting (Hong Kong) Co., Limited (“ Xingyu HK ”) is a limited
company incorporated under the laws of Hong Kong, principally engaged in automotive
lighting market development and maintenance of customer and supplier relationships. It is
wholly owned by Changzhou Xingyu Automotive Lighting Systems Co., Ltd.* (ρԓዱ
ʮ̡)( “ Xingyu Co., Ltd .”), the A shares of which are listed on the Shanghai Stock
Exchange under stock code 601799. Xingyu Co., Ltd. is principally engaged in supplying
lighting products to vehicle manufacturers.
China MeiDong
China MeiDong Auto Holdings Limited (ʮ̡)( “ China
MeiDong ”) is a limited liability company incorporated in the Cayman Islands, the shares of
which are listed on the Hong Kong Stock Exchange (stock code: 1268). China MeiDong is an
investment holding company. Its subsidiaries are principally engaged in automobile dealership
business authorized by automobile manufacturers of various brands in the PRC, including the
sale of new passenger cars, spare parts, service and survey.
Ghisallo Fund
Ghisallo Fund Master Ltd. (“ Ghisallo Fund ”) is wholly owned by Ghisallo Master Fund
LP (“ Ghisallo Master ”), which is a pooled investment fund domiciled in the Cayman Islands
with notional assets under management of approximately US$5.9 billion. The general partner
of Ghisallo Master is Ghisallo Master Fund General Partner LP (“ Ghisallo Master GP ”), of
which the general partner is Ghisallo MGP LLC (“ MGP”). There is no ultimate beneficial
owner or general partner that owns 30% or more of interests in Ghisallo Master, and Michael
Germino controls, and is the only beneficial owner that owns more than 30% of interests in
Ghisallo Master GP and MGP . Ghisallo Master’s discretionary investment manager is Ghisallo
Capital Management LLC, a US registered investment advisor ultimately controlled by
Michael Germino.
Jump Trading
Jump Trading Pacific Pte. Ltd. (“ Jump Trading ”) is a member of the Jump Trading
Group. Founded in 1999, Jump Trading Group is a leading global financial trading group. Jump
Trading Group is headquartered in Chicago and has offices in Chicago, New Y ork, London,
Hong Kong, Shanghai, Singapore, India, Amsterdam in addition to other major financial
centers. As part of its investment activities, the capital markets investment team of Jump
Trading Group engages and invests in high-quality companies through equity raisings and
relies on the firm’s best-in-class execution and strong corporate governance to make strategic
investments. The capital markets investments team consists of seasoned investment
CORNERSTONE INVESTORS
– 302 –


--- page 313 ---
professionals with strong focus and understanding of company fundamentals. The team focuses
and invests extensively across the Asia Pacific region. Jump Trading is controlled by two
revocable trusts. No single ultimate beneficial owner holds 30% or more interests in Jump
Trading.
Jain Global Master Fund Ltd
Jain Global Master Fund Ltd is a fund established in the Cayman Islands and managed by
Jain Global LLC (“ Jain Global ”). Jain Global is wholly owned by a holding company, Jain
Holdings LLC, a Delaware limited liability company (“ Jain Holdings ”). Mr. Robert Jain is the
managing member and principal owner of Jain Holdings and therefore controls Jain Global.
Jain Global has offices in the United States of America, United Kingdom, Hong Kong, and
Singapore. Jain Global, on behalf of Jain Global Master Fund Ltd, pursues investment
strategies across a range of different asset classes, products, and geographic regions. Jain
Global Master Fund Ltd’s capital will be primarily deployed in the following investment
strategies: fundamental equities, rates and macro, equity arbitrage, credit, systematic and
commodities. No ultimate beneficial owner holds 30% or more of interests in Jain Global
Master Fund Ltd.
China Alpha Fund
China Alpha Fund Management (HK) Limited (“ China Alpha Fund ”) is an investment
management company holding Type 4 (advising on securities) and Type 9 (asset management)
licences with the SFC. It focuses on equity investment in Greater China and has more than 23
years of fund management experience. It is ultimately wholly owned by Mr. Junyan Wang, who
is also the Chairman of China Alpha Fund Management (HK) Limited.
China Alpha Fund is acting as the investment advisor for and on behalf of China Alpha
Multi-Joy V alue Fund. China Alpha Multi-Joy V alue Fund is an investment fund, the
investment objective of which is to achieve capital growth primarily by investing globally in
equities, fixed income of both corporate and government issuer, private equity, derivatives and
cash/cash equivalents. China Alpha Multi-Joy V alue Fund’s management shares are wholly-
owned by China Alpha Fund Management Limited, which is ultimately controlled by Mr.
Junyan Wang. All of the non-voting participating shares of China Alpha Multi-Joy V alue Fund
are ultimately held by Mr. Liao Hsueh-Hsuan.
CORNERSTONE INVESTORS
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--- page 314 ---
Set out below is the details of the Cornerstone Placing assuming there is no other change made to the issued share capital of our Company
between the Latest Practicable Date and the Listing Date (or the date of exercise of Over-allotment Option (where applicable)):
Based on the Offer Price of HK$131.50 (being the maximum Offer Price)
Assuming the Offer Size Adjustment Option is not exercised Assuming the Offer Size Adjustment Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Cornerstone Investor
Investment
amount (1)
Number of
Offer Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Chongqing Industrial
Parent Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$2,176,752,285 16,553,200 16.52% 0.95% 14.37% 0.95% 14.37% 0.95% 12.49% 0.94%
Linyuan Fund and HTCI
(in connection with the
HT Back-to-back TRS
and Linyuan TRS) /H1118/H1118/H1118/H1118US$50 million 2,954,100 2.95% 0.17% 2.56% 0.17% 2.56% 0.17% 2.23% 0.17%
GF Fund
– GF Fund Management /H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
– GF Fund HK /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$6.3 million 372,200 0.37% 0.02% 0.32% 0.02% 0.32% 0.02% 0.28% 0.02%
New China Asset
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Bess Broadway /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Sanhua (Hong Kong) /H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Zhongsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Zhink International /H1118/H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Gold Wings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Honour Goal Investments /H1118US$30 million 1,772,400 1.77% 0.10% 1.54% 0.10% 1.54% 0.10% 1.34% 0.10%
Hichain Logistics HK /H1118/H1118/H1118US$26 million 1,536,100 1.53% 0.09% 1.33% 0.09% 1.33% 0.09% 1.16% 0.09%
CORNERSTONE INVESTORS
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--- page 315 ---
Assuming the Offer Size Adjustment Option is not exercised Assuming the Offer Size Adjustment Option is exercised in full
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Assuming the Over-allotment
Option is not exercised
Assuming the Over-allotment
Option is fully exercised
Cornerstone Investor
Investment
amount (1)
Number of
Offer Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
% of our total
issued share
capital
Schroders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$24 million 1,417,900 1.42% 0.08% 1.23% 0.08% 1.23% 0.08% 1.07% 0.08%
Mirae Securities /H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
New Alternative /H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
PSBC Wealth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Skyler International /H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Xingyu HK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
China MeiDong /H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Ghisallo Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Jump Trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Jain Global Master Fund
Ltd /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
China Alpha Fund /H1118/H1118/H1118/H1118/H1118US$20 million 1,181,600 1.18% 0.07% 1.03% 0.07% 1.03% 0.07% 0.89% 0.07%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
US$826.47
million 48,828,700 48.73% 2.82% 42.37% 2.79% 42.37% 2.79% 36.85% 2.77%
Notes:
(1) 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.
(2) Rounded down to the nearest whole board lot of 100 H Shares, and is calculated based on the exchange rate set out in the section headed “Information ab out this Prospectus
and the Global Offering — Exchange Rate Conversion” in this Prospectus.
CORNERSTONE INVESTORS
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CLOSING CONDITIONS
The obligation of each of the Cornerstone Investors to subscribe for the Offer Shares
under their respective Cornerstone Investment Agreement is subject to, among other things, the
following closing conditions:
(i) the Hong Kong Underwriting Agreement and the International Underwriting
Agreement 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 Hong Kong Underwriting Agreement and the International Underwriting
Agreement, and neither the Hong Kong Underwriting Agreement nor the
International Underwriting Agreement having been terminated;
(ii) the Offer Price having been agreed upon between our Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(iii) the Listing Committee having granted the approval for the listing of, and permission
to deal in, the H Shares (including the Shares under the Cornerstone Placing) 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 Shares on the
Stock Exchange;
(iv) no laws having been enacted or promulgated by any governmental authority which
prohibits the consummation of the transactions contemplated in the Global Offering
or each Cornerstone Investment Agreement, and there being no orders or injunctions
from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions;
(v) the respective representations, warranties, acknowledgements, undertakings, and
confirmations of the Cornerstone Investors under their respective Cornerstone
Investment Agreement are (as of the date of the respective Cornerstone Investment
Agreement) and will be (as of the Listing Date) accurate, true and complete in all
material respects and not misleading or deceptive and that there is no material
breach of the respective Cornerstone Investment Agreement on the part of the
relevant Cornerstone Investor; and
(vi) the overseas direct investment approval or any other government approval, filing,
registration or consent required for the outbound investment and foreign exchange
conversion of funds in connection with the transactions contemplated under the
Cornerstone Investment Agreement having been completed and obtained prior to the
approval-in-principle for the listing of the H Shares being issued by the Hong Kong
Stock Exchange.
CORNERSTONE INVESTORS
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RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that without the prior written consent of our
Company, the Joint Sponsors and the Overall Coordinators, it will not, whether directly or
indirectly, at any time during the period of six months after the Listing Date (the “ Lock-up
Period ”), dispose of, in any way, any of the Offer Shares it has purchased, pursuant to their
respective Cornerstone Investment Agreement, save for certain limited circumstances, such as
transfers to any of its wholly-owned subsidiaries who will be bound by the same obligations
of the Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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This section presents certain information regarding our share capital before and upon
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the issued share capital of our Company was
RMB1,633,366,086, comprising 1,633,366,086 A Shares of nominal value RMB1.00 each, all
of which are listed on the Shanghai Stock Exchange.
UPON THE COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering, assuming that the Offer
Size Adjustment Option and the Over-allotment Option are not exercised, the issued share
capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
Percentage of the
Total Share
Capital of our
Company
A Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,633,366,086 94.22%
H Shares to be issued under the Global Offering /H1118100,200,000 5.78%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,733,566,086 100.00%
Immediately following completion of the Global Offering, assuming the Offer Size
Adjustment Option and the Over-allotment Option are fully exercised, the issued share capital
of our Company will be as follows:
Description of Shares Number of Shares
Approximate
Percentage of the
Total Share
Capital of our
Company
A Shares in issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,633,366,086 92.50%
H Shares to be issued under the Global Offering /H1118132,514,500 7.50%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,765,880,586 100.00%
SHARE CAPITAL
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OUR SHARES
Upon completion of the Global Offering, the Shares will consist of A Shares and H
Shares. A Shares and H Shares are all ordinary Shares in the share capital of our Company.
However, apart from certain qualified domestic institutional investors in the PRC, the qualified
PRC investors under the Shanghai-Hong Kong Stock Connect or the Shenzhen-Hong Kong
Stock Connect and other persons who are entitled to hold our H Shares pursuant to relevant
PRC laws and regulations or upon approvals of any competent authorities, H Shares generally
cannot be subscribed for by or traded between investors of the PRC.
Shanghai-Hong Kong Stock Connect has established a stock connect mechanism between
the PRC and Hong Kong. Our A Shares can be subscribed for and traded by investors in the
PRC, qualified foreign institutional investors or qualified foreign strategic investors and must
be traded in Renminbi. As our A Shares are eligible securities under the Northbound Trading
Link, they can also be subscribed for and traded by Hong Kong and other overseas investors
pursuant to the rules and limits of Shanghai-Hong Kong Stock Connect. If our H Shares are
eligible securities under the Southbound Trading Link, they can also be subscribed for and
traded by investors in the PRC in accordance with the rules and limits of Shanghai-Hong Kong
Stock Connect or Shenzhen-Hong Kong Stock Connect.
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all respects and, in particular, will rank
equally for all dividends or distributions declared, paid or made after the date of this
Prospectus. All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars
whereas all dividends in respect of our A Shares are to be paid by us in Renminbi. In addition
to cash, dividends may also be distributed in the form of Shares. Our H Shareholders will
receive share dividends in the form of H Shares, and our A Shareholders will receive share
dividends in the form of A Shares.
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND
TRADING ON THE HONG KONG STOCK EXCHANGE
A Shares and H Shares are generally neither interchangeable nor fungible, and the market
prices of our A Shares and H Shares may be different after the Global Offering. The Guidelines
on Application for “Full Circulation” of Domestic Unlisted Shares of H-share Companies ( H
΅͡ሗ“ஷ”ˏ) announced by the CSRC are not applicable
to companies dual listed in the PRC and on the Hong Kong Stock Exchange. As of the Latest
Practicable Date, there were no relevant rules or guidelines from the CSRC providing that A
Shareholders may convert A Shares held by them into H Shares for listing and trading on the
Hong Kong Stock Exchange.
SHARE CAPITAL
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APPROV AL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL
OFFERING
We have obtained approval from our A Shareholders to issue H Shares and seek the listing
of the H Shares on the Hong Kong Stock Exchange. Such approval was obtained at the general
meeting of our Company held on April 22, 2025 and is subject to the following conditions:
(i) Size of the Offer
The number of H Shares to be offered shall not exceed 15% of the total issued share
capital as enlarged by the H Shares to be issued pursuant to the Global Offering (before
the exercise of the Over-allotment Option). The number of H Shares to be issued pursuant
to the full exercise of the Over-allotment Option shall not exceed 15% of the total number
of H Shares to be offered under the Global Offering.
(ii) Method of Offering
The method of offering shall be by way of a public offer for subscription in Hong
Kong and an international offering.
(iii) Target Investors
Target investors include overseas institutional investors, enterprises and individuals,
as well as qualified domestic institutional investors and other investors that comply with
regulatory requirements.
(iv) Price Determination Basis
The issue price of the H Shares will be determined after due consideration of the
interests of existing Shareholders, the acceptance of investors and issuance risks and in
accordance with international practices through the demands for orders and book building
process, subject to the domestic and overseas capital market conditions and by reference
to the valuation level of comparable companies in domestic and overseas markets.
(v) V alidity Period
The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange
shall be completed within 24 months (or other extended period as agreed by the
Shareholders) from the date when the Shareholders’ meeting was held on April 22, 2025.
There is no other approved offering plan for any other Shares except for the Global
Offering.
SHARE CAPITAL
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EQUITY INCENTIVE PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN OF THE
COMPANY
As of the Latest Practicable Date, our Company has granted outstanding Share Awards
under the 2024 Employee Stock Ownership Plan to 246 Grantees to subscribe for an aggregate
of 3,240,729 A Shares, representing approximately 0.19% of the total number of Shares in issue
immediately after completion of the Global Offering (assuming the Offer Size Adjustment
Option and the Over-allotment Option are not exercised). See “Statutory and General
Information — 2024 Employee Stock Ownership Plan” in Appendix IV for details of the 2024
Employee Stock Ownership Plan.
SHAREHOLDERS’ GENERAL MEETING
See “Appendix III — Summary of Articles of Association” for details of circumstances
under which our general Shareholders’ meetings are required.
SHARE CAPITAL
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The following discussion and our analysis should be read in conjunction with our
consolidated financial statements included in the Accountants’ Report in Appendix I,
together with the accompanying notes. Our consolidated financial statements have been
prepared in accordance with IFRS Accounting Standards.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance. These
statements are based on our assumptions and analysis in light of our experience and
perception of historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate under the circumstances. However ,
whether actual outcomes and developments will meet our expectations and predictions
depends on a number of risks and uncertainties. In evaluating our business, you should
carefully consider the information provided in this Prospectus, including but not limited
to the sections headed “Risk Factors” and “Business.”
For the purposes of this section, unless the context otherwise requires, references to
the years of 2022, 2023 and 2024 refer to the years ended December 31 of such years.
OVERVIEW
We are a technology company focused on new energy vehicles. We are principally
engaged in the research and development, manufacturing, sales and services of new energy
vehicles as well as core NEV components.
Our AITO brand has developed a product matrix that includes four models: AITO M9 ,
AITO M8 , AITO M7 and AITO M5 . This lineup covers the market through differentiated
positioning, and effectively targets the high-end segment with a precise pricing strategy and a
combination of scenario-based features.
During the Track Record Period, our “new luxury” intelligent NEVs received widespread
recognition in the market, leading to growth in our operating performance:
 Revenue : increased from RMB35.8 billion in 2023 to RMB145.1 billion in 2024,
representing a year-on-year increase of 305.5%;
 Gross profit margin : increased from 7.2% in 2023 to 23.8% in 2024, representing
a year-on-year increase of 16.6 percentage points, and increased from 21.8% for the
six months ended June 30, 2024 to 26.5% for the six months ended June 30, 2025,
representing a year-on-year increase of 4.7 percentage points;
 Net profit : in 2024 and for the six months ended June 30, 2025, we achieved a net
profit. We are the fourth profit-making NEV company in the world according to the
Frost & Sullivan report. In 2023, we recorded a net loss attributable to owners of the
Company of RMB2.4 billion, and in 2024 and for the six months ended June 30,
2025, we recorded a net profit attributable to owners of the Company of RMB5.9
billion and RMB2.9 billion, respectively.
FINANCIAL INFORMATION
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BASIS OF PRESENTATION
Our financial information during the Track Record Period has been prepared in
accordance with IFRS Accounting Standards, which comprise all standards and interpretations
approved by the International Accounting Standards Board. Our financial information during
the Track Record Period has been prepared under the historical cost convention, except for
certain financial assets which have been measured at fair value. See Note 2 to the Accountants’
Report included in Appendix I to this Prospectus.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business and financial performance are influenced by a variety of macroeconomic
and industry-specific factors that affect China’s automotive sector. These include overall
economic growth, rising per capita disposable income, expanding consumer spending, evolving
consumption patterns, fluctuations in raw material costs, and the competitive landscape. In
addition, our operations are affected by developments within China’s NEV industry, including
regulatory policies, vehicle intelligence, advancements in new energy technologies, and
increasing environmental awareness. Any adverse changes in these factors could dampen
demand for our vehicles and materially impact our business and results of operations.
In addition to these general factors, the following specific factors have a more direct
impact on our results of operations:
Our ability to meet customer needs and source orders
Our business depends to a great extent on our ability to meet customer needs and source
orders, which will directly affect our sales volume. We are committed to focusing on the
premium brand new energy passenger vehicle market to improve our market share in the
high-end market. According to the Frost & Sullivan report, the high-end segment market in
China remains as one of the most promising segments. It is expected that the premium brand
new energy passenger vehicle market in China will continue to expand at a CAGR of 14.0%
from 2024 to 2030, and sales volume will reach 5.7 million vehicles by 2030. We believe that
our proven vehicle models will meet the demands of customers in addition to attracting more
customers and achieving revenue growth.
By developing products featuring high intelligence, quality and safety for our users, we
have recorded impressive sales performance. Going forward, we will enhance comprehensive
competitiveness of our products, such as improving our technological capabilities, and building
digital and intelligent mechanisms for quality management and smart security systems. With
increasing competitiveness of our products in terms of technology, quality and security, we
accommodate to consumers’ demand for premium brand new energy vehicles and effectively
source orders.
With advanced intelligent manufacturing system and improved quality control, we ensure
to deliver high-quality products. We are also strengthening our manufacturing capacities for
timely fulfillment of customer orders. Meanwhile, we are dedicated to providing excellent
service to customers, building a better service system with enhancing digital services to
achieve precise targeting and service for users throughout the lifecycle. User satisfaction and
loyalty also are elevated to promote results of operations.
FINANCIAL INFORMATION
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Our ability to expand and upgrade the product portfolio of intelligent NEVs
Our business growth will be achieved via expansion and upgrading of our product
portfolio of intelligent NEVs. During the Track Record Period, our product portfolio of
intelligent NEVs was enriched to launch various vehicle models with different positioning,
such as the AITO M9 , a flagship all-scenario intelligent SUV , the AITO M8 , a family intelligent
flagship SUV , the AITO M7 , an intelligent luxury family SUV and the AITO M5 , a stylish urban
intelligent SUV , thus constituting a luxury SUV product line to meet diverse market demands.
All series of vehicles have achieved market coverage through differentiated positioning, to
seize a share of the high-end market and lay a solid foundation for the growth of business
performance.
Our ability to continuously launch and upgrade new intelligent NEVs turns out to be a
driving force for our future growth. We launched the AITO M9 2025 model in March 2025, and
intend to launch the AITO M8 model, our intelligent flagship family SUV , in April 2025.
Therefore, our product portfolio has been further diversified to adapt to market trends as well
as changing user tastes and preferences. We expect the continued expansion of our product
portfolio to drive our revenue growth to some extent.
Our ability to control costs and improve operational efficiency
Our cost control and operational efficiency will affect our results of operations and
profitability. Our costs are reduced through intelligent manufacturing and platform-based
vehicle manufacturing. Driven by digital technology, our factories deeply integrate artificial
intelligence, big data, IoT and digital twins for full automation of critical processes, which will
reduce costs and achieve high-quality, efficient and flexible delivery. The MF Platform and its
platform-based vehicle manufacturing model are utilized to reduce the development cost and
shorten production cycle, in swift response to changes in market demand. Intelligent
manufacturing and platform-based vehicle manufacturing have improved our production
efficiency and further reduced production costs.
We have built a top-tier integrated and agglomerated supply chain ecosystem in the
industry. We combine components orderly to improve production efficiency and reduce costs;
optimize the management chain to gather supply chain enterprises; and shorten transportation
radius to reduce logistics costs. In addition, we achieve dynamic management of the inventory
along the whole supply chain with the assistance of digital and AI technologies, ensuring
efficient supply of components to lower inventory costs. These measures have effectively
improved our supply chain efficiency and cost control.
We will manage operating expenses more prudently. During the Track Record Period, the
percentage of our administrative expenses in revenue decreased from 6.1% in 2022 to 5.5% in
2023, and further decreased to 3.1% in 2024. We expect to further improve our operational
efficiency as we achieve economies of scale through the expansion of our product portfolio and
the growth of our revenue, which is crucial to maintain our profitability.
FINANCIAL INFORMATION
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Our ability to improve technical strengths
As of June 30, 2025, the total number of our R&D personnel amounted to 8,005. In
addition, our R&D expenses reached RMB5.6 billion in 2024, representing an increase of
229.2% compared to the year of 2023, and increased from RMB2,827.4 million for the six
months ended June 30, 2024 to RMB2,929.5 million for the six months ended June 30, 2025.
We continue to invest in research and development of intelligent NEV technologies, develop
new technologies and improve existing product performance, thereby enhancing market
competitiveness and driving growth of results of operations.
We upgrade our core technologies in all aspects as driven by continuous innovation. In
terms of powertrain, we have developed an efficient extended-range system and high-
performance electric drive assembly to improve energy efficiency and mileage. In terms of
vehicle platform technology, we have upgraded the MF Platform to incorporate various forms
of power and iterate the vehicle process architecture capability. In terms of security technology,
we have built a full-scenario security system by adopting high-strength vehicle structure and
advanced data security technology to ensure user safety. The breakthroughs in these core
technologies have enhanced product competitiveness, driven sales growth and steadily
improved results of operations.
Our ability to execute effective sales and marketing strategies
Our vast sales and service network achieves extensive market coverage in various
regions, thereby promoting our sales in China and overseas regions. At the same time, we are
actively expanding into international markets, targeting those regions where the demand for
NEVs grows rapidly. Launch of locally-adapted vehicle models and improvement of sales and
service networks are expected to rapidly expand the customer base and increase revenue. We
continuously evaluate the effectiveness of various marketing channels and accordingly allocate
marketing expenses. Effective marketing can increase vehicle sales economically and
efficiently, which in turn drives our revenue to grow and improve our profitability. With the
expansion of our business, we expect to continue improving our marketing efficiency.
MAJOR ACCOUNTING POLICY INFORMATION AND ESTIMATES
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments relating to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our
financial position and results of operations. Our management continually evaluates such
estimates, assumptions and judgments based on past experiences and other factors, including
industry practices and expectations of future events that are believed to be reasonable under the
circumstances. During the Track Record Period, there was no material deviation between our
management’s estimates or assumptions and actual results, and we did not make any material
changes to these estimates or assumptions. We do not expect any material changes in these
estimates and assumptions in the foreseeable future.
FINANCIAL INFORMATION
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Note 4 to the Accountants’ Report included in Appendix I to this Prospectus sets forth
certain material accounting policies, which are important for understanding our financial
condition and results of operations.
Revenue Recognition
Revenue from Contract with Customers
We recognize revenue when (or as) a performance obligation is satisfied, namely when
“control” of the goods or services underlying the particular performance obligation is
transferred to the customer.
A performance obligation represents a good or service (or a bundle of goods or services)
that is distinct or a series of distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognized over time by reference to the
progress towards complete satisfaction of the relevant performance obligation if one of the
following criteria is met:
 the customer simultaneously receives and consumes the benefits provided by our
performance as we perform;
 our performance creates or enhances an asset that the customer controls as we
perform; or
 our performance does not create an asset with an alternative use to us and we have
an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognized at a point in time when the customer obtains control of
the distinct good or service.
A contract asset represents our right to consideration in exchange for goods or services
that we have transferred to a customer that is not yet unconditional. It is assessed for
impairment in accordance with IFRS 9. In contrast, a receivable represents our unconditional
right to consideration, namely only the passage of time is required before payment of that
consideration is due.
A contract liability represents our obligation to transfer services to a customer for which
we have received consideration (or an amount of consideration is due) from the customers.
A contract asset and a contract liability relating to the same contract are accounted for and
presented on a net basis.
FINANCIAL INFORMATION
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V ariable consideration
For contracts that contain variable consideration, we estimate the amount of consideration
to which we will be entitled using the expected value method, which better predicts the amount
of consideration to which we will be entitled.
The estimated amount of variable consideration is included in the transaction price only
to the extent that it is highly probable that such an inclusion will not result in a significant
revenue reversal in the future when the uncertainty associated with the variable consideration
is subsequently resolved.
During the Track Record Period, we updated the estimated transaction price (including
updating our assessment of whether an estimate of variable consideration is constrained) to
represent faithfully the circumstances present at the end of each reporting period and the
changes in circumstances during the reporting period.
Government Grants
Government grants are not recognized until there is reasonable assurance that we will
comply with the conditions attaching to them and that the grants will be received.
Government grants are recognized in profit or loss on a systematic basis over the periods
in which we recognize as expenses the related costs for which the grants are intended to
compensate. Specifically, government grants whose primary condition is that we should
purchase, construct or otherwise acquire non-current assets are recognized as deferred
income/a deduction from the carrying amount of the relevant asset in the consolidated
statement of financial position and transferred to profit or loss on a systematic and rational
basis over the useful lives of the related assets.
Government grants related to income that are receivable as compensation for expenses or
losses already incurred or for the purpose of giving immediate financial support to us with no
future related costs are recognized in profit or loss in the period in which they become
receivable.
Property, Plant and Equipment
Property, plant and equipment are tangible assets that are held for use in the production
or supply of goods or services, or for administrative purposes. Property, plant and equipment
are stated in the consolidated statements of financial position at cost less subsequent
accumulated depreciation and subsequent accumulated impairment losses, if any.
Depreciation is recognized so as to write off the assets less their residual values over their
estimated useful lives, using the straight-line method. The estimated useful lives, residual
values and depreciation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective basis.
FINANCIAL INFORMATION
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An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognized
in profit or loss.
Inventories
Inventories are stated at the lower of cost and net realizable value. Costs of inventories
are determined on a first-in, first-out method. Net realizable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make
the sale.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs
from profit (loss) before taxation because of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible. Our liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the end of each
reporting period.
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the historical financial information and the corresponding tax bases
used in the computation of taxable profit. Deferred tax liabilities are generally recognized for
all taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilized. Such deferred
tax assets and liabilities are not recognized if the temporary difference arises from the initial
recognition (other than in a business combination) of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit and at the time of the transaction
does not give rise to equal taxable and deductible temporary differences.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries, except where we are able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable
future. Deferred tax assets arising from deductible temporary differences associated with such
investments are only recognized to the extent that it is probable that there will be sufficient
taxable profits against which to utilize the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
FINANCIAL INFORMATION
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Impairment Testing
Impairment testing on non-financial assets
At the end of each reporting period, we review the carrying amounts of our property, plant
and equipment and right-of-use assets and to determine whether there is any indication that
these assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the relevant asset is estimated in order to determine the extent of the impairment loss
(if any). During the Track Record Period, we recognized impairment amounting RMB9.2
million, RMB1.5 million and RMB80.6 million for the year ended December 31, 2022, 2023
and 2024, respectively, on moulds and machinery for those obsolescent product models.
Although we were loss making for the years ended December 31, 2022 and 2023, no further
impairment loss was recognized for non-financial assets for the same year. Our Directors
considered that: (i) for the internal combustion engine vehicles business, the components made
profits for the years ended December 31, 2022 and 2023, no impairment indicator for the
non-financial assets under internal combustion engine vehicles business; and (ii) for the new
energy vehicles business, the losses incurred by the components for the years ended December
31, 2022 and 2023 was temporary, as we were in the phase of focusing on research and
developing, transitioning into new energy vehicles business with foreseeable loss for the years
ended December 31, 2022 and 2023. Therefore, such losses are not considered as an
impairment indication. As such, there was no objective evidence that the non-financial assets
(e.g. property, plant and equipment, right-of-use assets, etc.) as of December 31, 2022 and 2023
may be impaired and no impairment assessment was carried out.
Impairment testing on goodwill and intangible assets
Goodwill
For the purposes of impairment testing, goodwill set out in Note 20 to the Accountants’
Report included in Appendix I to this Prospectus is allocated to two individual cash generating
units (“ CGUs ”), comprising two subsidiaries, Luzhou Rongda and Longsheng New Energy. In
addition to goodwill above, property, plant and equipment, intangible assets and right-of-use
assets (including allocation of corporate assets) that generate cash flows together with the
related goodwill is also included in these CGUs for the purpose of impairment assessment.
The recoverable amount of the units has been determined based on a value in use
calculation. For Luzhou Rongda CGU, that calculation uses cash flow projections based on
financial budgets approved by the management covering a five-year period, and pre-tax
discount rate of 13.71% and 15.60%, as of December 31, 2022 and 2023. The CGU’s cash
flows beyond the five-year period are extrapolated using a steady nil growth rate. This growth
rate is based on the relevant industry growth forecasts and does not exceed the average
long-term growth rate for the relevant industry. Other key assumptions for the value in use
calculations relate to the estimation of cash inflows/outflows which include salary costs of
staff, growth rate of sales, such estimation is based on the unit’s past performance and the
management’s expectations for the market development.
FINANCIAL INFORMATION
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Based on the impairment assessment performed, we have recognized impairment losses
amounting to RMB10.7 million and RMB18.1 million for the years ended December 31, 2022
and 2023, respectively. Our management believes that any reasonably possible change in any
of these assumptions would not cause material impairment losses on the goodwill as of
December 31, 2022 and 2023.
During the year ended December 31, 2024, the financial performance of Luzhou Rongda
did not meet the expectation set by our management. Our management had consequently
determined impairment of goodwill directly related to Luzhou Rongda amounting to RMB46.9
million. No other write-down of the assets of Luzhou Rongda is considered necessary.
As of June 30, 2025, our management was not aware of any negative change that may
affect the assets’ value. As a result, no impairment assessment as of June 30, 2025 was
performed.
Intangible assets
(1) Development costs
The recoverable amount of development costs with carrying amount of RMB1,352.4
million, RMB1,001.0 million, RMB781.1 million and RMB724.0 million, respectively, as of
December 31, 2022, 2023, 2024 and June 30, 2025 is estimated individually. The recoverable
amount has been determined based on a value in use calculation.
Our management estimated that the value in use to be close to its fair value less costs of
disposal. The fair value less cost of disposal is estimated using the Relief-from-Royalty method
which assumes that, in lieu of ownership, a third party would be willing to pay a royalty in
order to obtain the rights to use the intangible assets. Key assumptions used in the valuation
included projected future sales of product models related to each development costs, royalty
rate and pre-tax discount rate. The projected future sales of related products covers a four to
five years period, three to five years period and three to five years period as of December 31,
2022, 2023 and 2024, respectively. The fair value measurement is categorized into Level 3 fair
value hierarchy.
The following table sets out the information of other key assumptions for the value in use
calculation:
As of December 31,
2022 2023 2024
Pre-tax discount rate /H1118/H1118/H111819.57% to 24.85% 14.01% to 22.10% 16.45% to 19.47%
Royalty rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.14% to 4.92% 0.29% to 7.95% 0.10% to 2.84%
We have not recognized any impairment losses during the Track Record Period based on
the impairment assessment performed.
FINANCIAL INFORMATION
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We performed sensitivity test for the development costs as of December 31, 2022, 2023
and 2024, respectively, by decreasing 1%-5% of projected future sales or decreasing by 1%-5%
of royalty rate or increasing by 1%-5% of pre-tax discount rate, with all other variables held
constant. Based on the sensitivity test performed:
(i) for assets in aggregated carrying amount of RMB1,073.2 million, RMB842.8
million and RMB704.6 million as of December 31, 2022, 2023 and 2024,
respectively, the headroom is no less than 5%.
Our management believes that any reasonably possible change in any of above
assumptions would not cause the carrying amount of the development costs to
exceed their recoverable amount determined as of December 31, 2022, 2023 and
2024; and
(ii) for assets in aggregated carrying amount of RMB279.2 million, RMB158.2 million
and RMB76.5 million as of December 31, 2022, 2023 and 2024, respectively, in the
opinion of our management, any reasonable possible change in the assumption used
in impairment assessment of assets in this category may cause immaterial
impairment losses in aggregation.
As of June 30, 2025, our management was not aware of any negative change that may
affect the assets’ value. As a result, no impairment assessment as of June 30, 2025 was
performed.
(2) Non-patented technology
At the end of each reporting period, our management assess the sales and production of
product models and application on relevant non-patented technology. For those discontinued
production, we provide impairment allowance on the relevant non-patented technology. During
the year ended December 31, 2024, our management made the decision to discontinue
production of certain product models due to accelerated product upgrades. Impairment
amounting to RMB1,054.1 million is recognized to the non-patented technology related to
these product models as the management are of the opinion that the value in use of the related
technology is neglectable.
For the remaining balance of non-patent technology as of December 31, 2022, 2023 and
2024, respectively, we performed impairment testing for the non-patent technology. The
recoverable amount of non-patented technology with carrying amount of RMB5,424.7 million,
RMB8,182.9 million, RMB5,493.2 million, respectively, as of December 31, 2022, 2023 and
2024 is estimated individually. The recoverable amount has been determined based on a value
in use calculation.
Our management estimated that the value in use to be close to its fair value less costs of
disposal. The fair value less cost of disposal is estimated using the Relief-from-Royalty method
which assumes that, in lieu of ownership, a third party would be willing to pay a royalty in
FINANCIAL INFORMATION
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--- page 332 ---
order to obtain the rights to use the non-patent technology. Key assumptions used in the
valuation included projected future sales of product models related to each non-patented
technology, royalty rate and pre-tax discount rate. The projected future sales of related
products covers a three to five years period, two to five years period and three to five years
period as of December 31, 2022, 2023 and 2024, respectively. The fair value measurement is
categorized into Level 3 fair value hierarchy.
The following table sets out the information of other key assumptions for the value in use
calculation:
As of December 31,
2022 2023 2024
Pre-tax discount rate /H1118/H1118/H111818.07% to 22.85% 18.00% to 22.10% 16.45% to 19.47%
Royalty rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.10% to 7.30% 0.14% to 8.05% 0.01% to 7.41%
We have recognized impairment losses amounting to nil, RMB76.2 million and
RMB572.6 million for the years ended December 31, 2022, 2023 and 2024, respectively, based
on the impairment assessment performed.
Sensitivity analysis – non-patented technology with no impairment losses recognized for the
year ended December 31, 2022 (“Non-impaired Non-patented Technology”)
We performed sensitivity test by decreasing 1%-5% of projected future sales or
decreasing by 1%-5% of royalty rate or increasing by 1%-5% of pre-tax discount rate, with all
other variables held constant. Based on the sensitivity test performed:
(i) for assets in aggregated carrying amount of RMB4,684.1 million, the headroom of
non-patented technology is not less than 5%.
Our management believes that any reasonably possible change in any of
these assumptions would not cause the carrying amount of the Non-impaired
Non-patented Technology to exceed their recoverable amount determined as of
December 31, 2022.
(ii) for assets in aggregated carrying amount of RMB740.7 million, in the opinion of our
management, any reasonable possible change in the assumption used in impairment
assessment of assets in this category may cause immaterial impairment losses in
aggregation.
As of June 30, 2025, our management was not aware of any negative change that may
affect the assets’ value. As a result, no impairment assessment as of June 30, 2025 was
performed.
FINANCIAL INFORMATION
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CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
The following table sets forth a summary of our consolidated statements of profit or loss
and other comprehensive income for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118(31,328,448) (92.0) (33,217,792) (92.8) (110,563,078) (76.2) (50,853,429) (78.2) (45,828,067) (73.5)
Gross profit /H1118/H1118/H1118/H1118/H11182,727,626 8.0 2,571,093 7.2 34,550,545 23.8 14,160,885 21.8 16,530,758 26.5
Government grants
and subsidies /H1118/H1118/H1118523,474 1.5 549,466 1.5 1,068,213 0.7 659,200 1.0 690,109 1.1
Other income /H1118/H1118/H1118/H1118261,751 0.8 407,803 1.1 672,305 0.5 237,942 0.4 548,886 0.9
Other gains and
losses /H1118/H1118/H1118/H1118/H1118/H1118/H111814,203 0.0 1,749,261 4.9 (1,615,140) (1.1) (80,805) (0.1) (32,589) (0.1)
Impairment losses
under expected
credit loss model,
net of reversal /H1118/H1118/H1118(76,887) (0.2) (108,785) (0.3) (131,107) (0.1) (39,734) (0.1) 13,632 0.0
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118(1,313,661) (3.9) (1,696,476) (4.7) (5,585,504) (3.8) (2,827,443) (4.3) (2,929,532) (4.7)
Selling and
distribution
expenses /H1118/H1118/H1118/H1118/H1118(4,656,748) (13.7) (5,276,145) (14.7) (19,184,251) (13.2) (8,699,122) (13.4) (8,940,726) (14.3)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118(2,081,359) (6.1) (1,969,389) (5.5) (4,509,309) (3.1) (1,625,462) (2.5) (1,966,811) (3.2)
Share of results of
associates /H1118/H1118/H1118/H1118/H1118512 0.0 578 0.0 (76,055) (0.1) 31,518 0.0 (69,069) (0.1)
Share of results of a
joint venture /H1118/H1118/H1118850 0.0 481 0.0 2,032 0.0 1,758 0.0 2,007 0.0
Finance costs /H1118/H1118/H1118/H1118(330,171) (1.0) (308,746) (0.9) (240,382) (0.2) (119,628) (0.2) (121,874) (0.2)
(Loss) profit before
taxation /H1118/H1118/H1118/H1118/H1118/H1118(4,930,410) (14.6) (4,080,859) (11.4) 4,951,347 3.4 1,699,109 2.6 3,724,791 6.0
Income tax expenses /H1118(290,147) (0.7) (75,857) (0.2) (211,231) (0.1) (339,988) (0.5) (647,428) (1.0)
(Loss) profit for the
year/period /H1118/H1118/H1118/H1118(5,220,557) (15.3) (4,156,716) (11.6) 4,740,116 3.3 1,359,121 2.1 3,077,363 4.9
FINANCIAL INFORMATION
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For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue RMB’000
%o f
Revenue
(unaudited)
Other
comprehensive
income
Item that may
reclassified
subsequently to
profit or loss:
Exchange
differences
arising on
translation of
foreign
operations /H1118/H1118/H1118/H111847,205 0.1 6,752 0.0 13,557 0.0 19,903 0.0 186 0.0
Non-controlling
interests /H1118/H1118/H1118/H1118/H11181,713 0.0 1,271 0.0 578 0.0 553 0.0 65 0.0
Other
comprehensive
income for
the year/period,
net of income tax /H1118 48,918 0.1 8,023 0.0 14,135 0.0 20,456 0.0 251 0.0
Total comprehensive
(expense) income
for the
year/period /H1118/H1118/H1118/H1118(5,171,639) (15.2) (4,148,693) (11.6) 4,754,251 3.3 1,379,577 2.1 3,077,614 4.9
(Loss) Profit for the
year/period
attributable to:
Owners of the
Company /H1118/H1118/H1118/H1118/H1118(3,831,866) (11.3) (2,449,687) (6.8) 5,945,945 4.1 1,624,558 2.5 2,940,890 4.7
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118(1,388,691) (4.1) (1,707,029) (4.8) (1,205,829) (0.8) (265,437) (0.4) 136,473 0.2
(5,220,557) (15.4) (4,156,716) (11.6) 4,740,116 3.3 1,359,121 2.1 3,077,363 4.9
FINANCIAL INFORMATION
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DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenue
We generate substantially all of our revenue from vehicle sales, primarily from our NEVs,
with a small portion from ICE vehicles. Our other revenue mainly derives from sales of parts
and materials, primarily including range extender, electric drive motor, powertrain and other
automotive parts.
The following table sets forth a breakdown of our revenue by product category, in
absolute amounts and as a percentage of our total revenue, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H111824,934,089 73.2 28,947,606 80.9 135,490,526 93.4 60,198,727 92.6 57,951,847 92.9
ICE vehicles /H1118/H1118/H1118/H11186,346,800 18.6 4,608,886 12.9 3,447,702 2.4 1,538,234 2.4 1,156,319 1.9
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,775,185 8.2 2,232,393 6.2 6,175,395 4.2 3,277,353 5.0 3,250,659 5.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 100.0 35,788,885 100.0 145,113,623 100.0 65,014,314 100.0 62,358,825 100.0
Note:
(1) Others consist of sales of parts and materials, primarily including range extender, electric drive motor,
powertrain and other automotive parts.
Cost of Sales
The following table sets forth a breakdown of our cost of sales by product category, in
absolute amounts and as a percentage of our total cost of sales, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H111822,374,459 71.4 26,943,258 81.1 103,198,708 93.3 46,476,407 91.4 42,609,349 93.0
ICE vehicles /H1118/H1118/H1118/H11186,350,470 20.3 4,424,941 13.3 3,020,754 2.7 1,417,667 2.8 1,123,345 2.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,603,519 8.3 1,849,593 5.6 4,343,616 4.0 2,959,355 5.8 2,095,373 4.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,328,448 100.0 33,217,792 100.0 110,563,078 100.0 50,853,429 100.0 45,828,067 100.0
Cost of vehicle sales primarily includes direct parts, material, processing fee, labor cost
and manufacturing overhead, including depreciation of assets associated with production.
Other cost primarily includes costs associated with the sales of range extender, electric drive
motor, powertrain, other automotive parts and other revenue.
FINANCIAL INFORMATION
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Gross Profit and Gross Margin
We recorded gross profit of RMB2.7 billion, RMB2.6 billion, RMB34.6 billion, RMB14.2
billion and RMB16.5 billion, respectively, in 2022, 2023 and 2024 and for the six months
ended June 30, 2024 and 2025. During the same periods, our gross margin was 8.0%, 7.2%,
23.8%, 21.8% and 26.5%, respectively, generally showing an upward trend.
The following table sets forth a breakdown of our gross profit and gross margin by
product category for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Vehicle sales
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H11182,559,630 10.3 2,004,348 6.9 32,291,818 23.8 13,722,320 22.8 15,342,498 26.5
ICE vehicles /H1118/H1118/H1118/H1118(3,670) (0.1) 183,946 4.0 426,948 12.4 120,567 7.8 32,974 2.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H11182,555,960 8.2 2,188,293 6.5 32,718,766 23.5 13,842,887 22.4 15,375,472 26.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,666 6.2 382,799 17.1 1,831,779 29.7 317,998 9.7 1,155,286 35.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,727,626 8.0 2,571,093 7.2 34,550,545 23.8 14,160,885 21.8 16,530,758 26.5
Government Grants and Subsidies
Our government grants and subsidies are primarily awarded by local governments in
China. Specifically, our government grants and subsidies consist of subsidies on research and
development, amortization of government grants related to assets, subsidies on stability of
employee, subsidies on industry development, additional deduction on value added tax and
others. The government grants and subsidies are primarily non-recurring in nature in 2022 and
2023, and are primarily recurring in nature in 2024, mainly representing subsidies granted by
certain local governments to encourage local business development, give financial support to
the Group’s operations and support advanced manufacturing enterprises. There were no
unfulfilled conditions or contingencies attached to these government subsidies during the Track
Record Period. The additional deduction on value added tax represents subsidies obtained from
the General Office of the Ministry of Industry and Information Technology Regarding the
Compilation of the List of Advanced Manufacturing Enterprises Eligible for Additional
Deduction Policy under V alue-Added Tax for 2023 Annual Implementation. According to Frost
& Sullivan, it is a normal industry practice for governments to provide similar grants to other
companies within the same industry as us, and the government grants and subsidies we
received are based on policies, tax regulations and reporting conditions that are consistent with
those in the same industry. We recorded government grants and subsidies of RMB523.5
million, RMB549.5 million, RMB1,068.2 million, RMB659.2 million and RMB690.1 million
in 2022, 2023 and 2024 and for the six months ended June 30, 2024 and 2025, respectively. See
Note 8 to the Accountants’ Report included in Appendix I to this Prospectus for details.
FINANCIAL INFORMATION
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Other Income
Our other income consists primarily of interest income from bank deposits and rental
income. We recorded other income of RMB261.8 million, RMB407.8 million, RMB672.3
million, RMB237.9 million and RMB548.9 million in 2022, 2023 and 2024 and for the six
months ended June 30, 2024 and 2025, respectively.
Other Gains and Losses
Our other gains and losses consist of (i) impairment loss recognized in respect of
goodwill, intangible assets, property, plant and equipment, (ii) gain or loss on disposal of
subsidiaries and other equity investments, (iii) net foreign exchange losses or gains, (iv) gain
or loss on disposal of property, plant and equipment and intangible assets, (v) change in fair
value of financial assets measured at fair value through profit or loss, which representing our
investment in structured deposits and securities of certain listed companies in China, and (vi)
others.
The following table sets forth a breakdown of our other gains and losses for the periods
indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Impairment loss recognized
in respect of:
– goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,693) (18,097) (46,915) – –
– intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (76,203) (1,626,684) (123,338) –
– property, plant and equipment /H1118 (9,248) (1,482) (82,535) – (977)
– interests in associates /H1118/H1118/H1118/H1118/H1118/H1118–––– (37,889)
(Loss)/gain on disposal of
subsidiaries and other equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,587) 1,757,000 – – –
Net foreign exchange
(loss)/gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,949) 50,104 26,843 (7,780) (1,837)
Gain/(loss) on disposal of
property, plant and equipment
and intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266,951 42,016 (10,929) 5,626 2,394
Change in fair value of financial
assets measured at FVTPL /H1118/H1118/H1118/H1118(169,612) 22,293 100,507 43,439 43,180
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,659) (26,370) 24,573 1,248 (37,460)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,203 1,749,261 (1,615,140) (80,805) (32,589)
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses consist of (i) depreciation, amortization and
material costs, (ii) employee compensation, (iii) external R&D and design fees, (iv) trial
production and testing costs and (v) others.
The following table sets forth a breakdown of our research and development expenses, in
absolute amounts and as a percentage of our total research and development expenses, for the
periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Depreciation,
amortization and
material costs /H1118/H1118/H1118963,771 73.4 1,209,454 71.3 2,026,873 36.3 983,629 34.8 1,061,788 36.2
Employee
compensation /H1118/H1118/H1118168,941 12.9 257,269 15.2 1,109,169 19.9 640,853 22.7 665,651 22.7
External R&D and
design fees /H1118/H1118/H1118/H1118/H111866,863 5.1 82,482 4.9 2,084,017 37.3 1,022,737 36.2 948,365 32.4
Trial production and
testing costs /H1118/H1118/H1118/H111844,361 3.4 53,242 3.1 103,414 1.9 35,546 1.3 57,757 2.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,725 5.2 94,029 5.5 262,031 4.6 144,678 5.1 195,971 6.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,313,661 100.0 1,696,476 100.0 5,585,504 100.0 2,827,443 100.0 2,929,532 100.0
Selling and Distribution Expenses
Our selling and distribution expenses consist of (i) advertising, brand image store
construction and service fees, (ii) employee compensation, and (iii) others.
The following table sets forth a breakdown of our selling and distribution expenses, in
absolute amounts and as a percentage of our total selling and distribution expenses, for the
periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Advertising, brand
image store
construction and
service fees /H1118/H1118/H1118/H11184,036,183 86.7 4,544,964 86.1 18,111,887 94.4 8,249,344 94.8 8,430,510 94.3
Employee
compensation /H1118/H1118/H1118340,561 7.3 360,188 6.8 562,384 2.9 230,723 2.7 272,651 3.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,004 6.0 370,993 7.1 509,980 2.7 219,055 2.5 237,565 2.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,656,748 100.0 5,276,145 100.0 19,184,251 100.0 8,699,122 100.0 8,940,726 100.0
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses consist of (i) employee compensation, (ii) office expenses
and travel costs, (iii) maintenance, depreciation, amortization and consumable costs, (iv)
consulting service fees, (v) other taxes and (vi) others.
The following table sets forth a breakdown of our administrative expenses, in absolute
amounts and as a percentage of our total administrative expenses, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee
compensation /H1118/H1118/H1118900,149 43.2 947,900 48.1 1,695,889 37.6 691,722 42.6 606,529 30.8
Office expenses and
travel costs /H1118/H1118/H1118/H1118505,066 24.3 379,253 19.3 486,376 10.8 213,288 13.1 226,760 11.5
Maintenance,
depreciation,
amortization and
consumable costs /H1118229,135 11.0 217,345 11.0 710,353 15.8 198,516 12.2 273,205 13.9
Consulting service
fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,358 1.9 74,200 3.8 480,536 10.7 21,571 1.3 318,066 16.2
Other taxes /H1118/H1118/H1118/H1118/H1118/H1118259,273 12.5 267,548 13.6 917,431 20.3 419,470 25.8 413,987 21.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,378 7.1 83,143 4.2 218,724 4.8 80,895 5.0 128,264 6.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,081,359 100.0 1,969,389 100.0 4,509,309 100.0 1,625,462 100.0 1,966,811 100.0
Share of Results of Associates
Our share of results of associates reflects our proportionate share of the net results of our
associate companies, accounted for using the equity method. We recorded gains from our share
of results of associates of RMB0.5 million in 2022, RMB0.6 million in 2023 and RMB31.5
million in the six months ended June 30, 2024, and a loss of RMB76.1 million in 2024 and
RMB69.1 million in the six months ended June 30, 2025. In 2023, one of our subsidiaries
changed from a wholly-owned entity to an associate subsequent to an external capital injection.
For details, see Note 23 to the Accountants’ Report included in Appendix I.
Share of Result of a Joint Venture
Our share of result of a joint venture reflects our proportionate share of the net results of
a joint venture, accounted for using the equity method. For details, see Note 24 to the
Accountants’ Report included in Appendix I. We recorded a gain in share of results of the joint
venture of RMB0.9 million, RMB0.5 million, RMB2.0 million, RMB1.8 million and RMB2.0
million in 2022, 2023 and 2024 and for the six months ended June 30, 2024 and 2025,
respectively.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs consist of interest expenses on (i) bank borrowings, (ii) convertible
notes that our Group issued on November 6, 2017, as detailed in Note 36 to the Accountants’
Report included in Appendix I to this Prospectus, and (iii) lease liabilities. We recorded finance
costs of RMB330.2 million, RMB308.7 million, RMB240.4 million, RMB119.6 million and
RMB121.9 million in 2022, 2023 and 2024 and for the six months ended June 30, 2024 and
2025, respectively.
Impairment Losses under Expected Credit Loss Model, Net of Reversal
Our impairment losses under expected credit loss model, net of reversal represent the
expected credit losses or reversal of the expected credit losses on our (i) trade receivables, (ii)
finance lease receivables, (iii) other receivables, (iv) amounts due from related parties, and (v)
contract asset. For details, see Note 11 to the Accountants’ Report included in Appendix I to
this Prospectus. We recorded impairment losses under expected credit loss model, net of
reversal, of RMB76.9 million, RMB108.8 million, RMB131.1 million and RMB39.7 million in
2022, 2023 and 2024 and for the six months ended June 30, 2024, respectively. We recorded
reversal of impairment losses under expected credit loss model of RMB13.6 million for the six
months ended June 30, 2025.
Share-based Payment
Our share-based payment reflects the cost of compensation given to our management,
employees, or other stakeholders in the form of company shares or stock options to reward and
incentivize these individuals while aligning their interests with our Group’s long-term growth.
We recorded the recognized of share-based payment expense of RMB31.7 million, RMB67.4
million, RMB10.5 million and RMB54.6 million in 2022, 2024 and the six months ended June
30, 2024 and 2025, respectively, and the reversal of share-based payment expense of RMB30.8
million in 2023.
Income Tax Expense
Income tax expense primarily represents income tax payable by us in accordance with the
Enterprise Income Tax (EIT) Law and its corresponding implementation regulations. This
income tax expense comprises both current income tax and deferred income tax.
Entities in the PRC are generally subject to a statutory corporate income tax rate of
25.0%. During the Track Record Period, certain PRC subsidiaries of our Group qualified as
High and New Technology Enterprises (“ HNTE ”) and were eligible for a reduced corporate
income tax rate of 15% in accordance with applicable tax regulations. HNTE status is subject
to reassessment and renewal every three years. Additionally, some of our PRC subsidiaries
benefited from a 15% corporate income tax rate under preferential policies for enterprises
engaged in encouraged industries in China’s western region.
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We recorded income tax expense of RMB290.1 million, RMB75.9 million, RMB211.2
million, RMB340.0 million and RMB647.4 million in 2022, 2023 and 2024 and for the six
months ended June 30, 2024 and 2025, respectively.
During the Track Record Period and as of the Latest Practicable Date, we did not have
any disputes or unresolved tax issues with the relevant tax authorities.
(Loss) Profit for the Y ear/Period
In 2022 and 2023, we recorded losses for the year of RMB5.2 billion and RMB4.2 billion,
respectively, primarily due to the significant amounts of cost of sales incurred, generally in line
with the increased vehicle deliveries. In 2024, we recorded profit for the year of RMB4.7
billion, primarily due to the significant increase in our revenues. Such growth was mainly
attributable to our commitment to the technology-driven approach, which promoted technology
innovation and increased sales volume. In 2024, our total sales volume of NEV amounted to
426.9 thousand vehicles, representing an increase of 182.84% from 2023, leading to a
significant increase in revenues. In the six months ended June 30, 2024 and 2025, we recorded
profit for the period of RMB1,359.1 million and RMB3,077.4 million, respectively, primarily
due to the optimization of our product mix. In 2022 and 2023, we recorded a net loss
attributable to owners of the Company of RMB3.8 billion and RMB2.4 billion respectively, and
in 2024 and for the six months ended June 30, 2024 and 2025, we recorded a net profit
attributable to owners of the Company of RMB5.9 billion, RMB1.6 billion and RMB2.9
billion, respectively.
Going forward, we will achieve continuous profitability through the following measures:
(i) commitment to the technology-driven approach to strengthen our technological edges in
terms of intelligent REEV , intelligent driving assistance and intelligent green manufacturing;
(ii) further penetration of end-to-end IPD system to standardize our operation system; (iii)
co-development with users by applying insights from users in our R&D, and continue to
develop products that meet users’ needs; and (iv) continuous improvement of operation
management capabilities to further optimize efficiency and enhance cost control.
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
Revenue
Our revenue slightly decreased by 4.1% from RMB65.0 billion in the six months ended
June 30, 2024 to RMB62.4 billion in the six months ended June 30, 2025, primarily due to the
slightly decreased vehicle sales. Revenue from vehicle sales slightly decreased by 4.3% from
RMB61.7 billion in the six months ended June 30, 2024 to RMB59.1 billion in the six months
ended June 30, 2025, mainly due to the decreased NEV sales.
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Our revenue from NEV sales slightly decreased from RMB60.2 billion in the six months
ended June 30, 2024 to RMB58.0 billion in the six months ended June 30, 2025, due to the
change in sales volume of our NEVs, as a result of the launch of the AITO M8 in April 2025.
The expectation for launch of new models may affect the timing of placing orders by potential
consumers. Our revenue from ICE vehicle sales decreased from RMB1.5 billion in the six
months ended June 30, 2024 to RMB1.2 billion in the six months ended June 30, 2025, mainly
due to the adjustment of our vehicle product strategy.
Cost of sales
Our cost of sales decreased by 9.9% from RMB50.9 billion in the six months ended June
30, 2024 to RMB45.8 billion in the six months ended June 30, 2025, generally in line with the
change in sales volume. Specifically, our cost of vehicle sales decreased by 8.7% from
RMB47.9 billion in the six months ended June 30, 2024 to RMB43.7 billion in the six months
ended June 30, 2025, and other costs decreased from RMB3.0 billion in the six months ended
June 30, 2024 to RMB2.1 billion in the six months ended June 30, 2025.
Gross profit and gross margin
As a result of the foregoing, we recorded gross profit of RMB14.2 billion in the six
months ended June 30, 2024 and RMB16.5 billion in the six months ended June 30, 2025. Our
gross profit margins were 21.8% and 26.5% in the six months ended June 30, 2024 and 2025,
respectively. In particular, our vehicle sales business recorded gross profit of RMB13.8 billion
in the six months ended June 30, 2024 and RMB15.4 billion in the six months ended June 30,
2025, achieving gross profit margins of 22.4% and 26.0% for the same periods, respectively,
primarily due to our adherence to promoting technological innovation and optimizing product
mix based on our technology-driven approach. Our gross profit margin for sales of NEVs
increased from 22.8% in the six months ended June 30, 2024 to 26.5% in the six months ended
June 30, 2025, primarily due to the optimization of our product mix, with an increased sales
of high-end models, which typically have higher gross profit margin. We recorded gross profit
from others of RMB0.3 billion in the six months ended June 30, 2024 and RMB1.2 billion in
the six months ended June 30, 2025, achieving gross profit margins of 9.7% and 35.5% for the
same periods, respectively.
Government grants and subsidies
Our government grants and subsidies increased from RMB659.2 million in the six months
ended June 30, 2024 to RMB690.1 million in the six months ended June 30, 2025, primarily
due to the increase in subsidies on industry development from RMB33.2 million in the six
months ended June 30, 2024 to RMB285.6 million in the six months ended June 30, 2025.
FINANCIAL INFORMATION
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Other income
Our other income increased from RMB237.9 million in the six months ended June 30,
2024 to RMB548.9 million in the six months ended June 30, 2025, primarily driven by higher
interest income from bank deposits, which rose from RMB163.9 million in the six months
ended June 30, 2024 to RMB404.9 million in the six months ended June 30, 2025. This growth
mainly reflects higher cash generated from operations and improved cash management. For
details, see “— Liquidity and Capital Resources — Cash Flow Analysis.”
Other gains and losses
Our net other losses decreased from RMB80.8 million in the six months ended June 30,
2024 to RMB32.6 million in the six months ended June 30, 2025, primarily because we
recorded an impairment loss recognized in respect of other intangible assets of RMB123.3
million in the six months ended June 30, 2024, as compared to nil in the six months ended June
30, 2025.
Research and development expenses
Our research and development expenses increased from RMB2,827.4 million in the six
months ended June 30, 2024 to RMB2,929.5 million in the six months ended June 30, 2025,
primarily due to (i) an increase in depreciation, amortization and material costs of RMB78.2
million, primarily due to an increase in costs arising from increased research and development
investments for the period, and (ii) an increase in employee compensation of RMB24.8 million
as a result of expanded research and development staff.
Selling and distribution expenses
Our selling and distribution expenses increased from RMB8,699.1 million in the six
months ended June 30, 2024 to RMB8,940.7 million in the six months ended June 30, 2025,
primarily due to an increase in advertising, brand image store construction and service fees of
RMB181.2 million, as a result of increased marketing and promotional activities to support our
NEVs sales.
Administrative expenses
Our administrative expenses increased from RMB1,625.5 million in the six months ended
June 30, 2024 to RMB1,966.8 million in the six months ended June 30, 2025, primarily due to
(i) an increase in consulting service fees of RMB296.5 million, mainly as a result of an increase
in consulting service fees to support our business growth, (ii) an increase in maintenance,
depreciation and material costs of RMB74.7 million, as a result of an increase in depreciation
of office buildings and amortization of intangible assets.
FINANCIAL INFORMATION
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Share of results of associates
In the six months ended June 30, 2025, we recorded a RMB69.1 million loss in our share
of results of associates, compared to a profit of RMB31.5 million in the six months ended June
30, 2024, primarily reflecting the decline of our associate’s operational performance.
Share of result of a joint venture
Our share of gain of a joint venture remained relatively stable at RMB1.8 million in the
six months ended June 30, 2024 and RMB2.0 million in the six months ended June 30, 2025.
Finance costs
Our finance costs remained relatively stable at RMB119.6 million in the six months ended
June 30, 2024 and RMB121.9 million in the six months ended June 30, 2025.
Income tax expenses
Our income tax expenses increased from RMB340.0 million in the six months ended June
30, 2024 to RMB647.4 million in the six months ended June 30, 2025, mainly in line with our
business growth.
Profit for the period
As a result of the foregoing, our net profit increased from RMB1.4 billion in the six
months ended June 30, 2024 to RMB3.1 billion in the six months ended June 30, 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue grew by 305.5% from RMB35.8 billion in 2023 to RMB145.1 billion in
2024, primarily driven by higher vehicle sales, mainly due to the significant increase in our
sales volume as we continued to strengthen our brand awareness, refine our product portfolio,
and enhance our customer experience. Revenue from vehicle sales increased by 314.0% from
RMB33.6 billion in 2023 to RMB138.9 billion in 2024, mainly due to increased revenue from
sales of our NEVs, which increased by 368.1% from RMB28.9 billion in 2023 to RMB135.5
billion in 2024, primarily due to the increased sales volume of NEVs as a result of the
commencement of deliveries and instant ramp-up production for our flagship model, AITO M9
in 2024. We have taken several strategies to support this growth: (i) we continued to invest in
research and development to enhance our technological capabilities and product quality, (ii) we
scaled up production and improved production efficiency to ensure timely product supply; (iii)
we optimized our product mix by launching vehicle models across different price segments to
FINANCIAL INFORMATION
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meet diverse customer needs; and (iv) we made efforts to increase brand visibility and market
recognition. In addition, our revenue from ICE vehicle sales declined from RMB4.6 billion in
2023 to RMB3.4 billion in 2024, mainly due to the adjustment of our vehicle product strategy.
Cost of sales
Our cost of sales grew by 232.8% from RMB33.2 billion in 2023 to RMB110.6 billion in
2024, generally in line with the increased vehicle deliveries, particularly the commencement
of deliveries and the large-scale sales of our AITO M9 . Specifically, our cost of vehicle sales
grew from RMB31.4 billion in 2023 to RMB106.2 billion in 2024, and other costs increased
from RMB1.8 billion in 2023 to RMB4.3 billion in 2024.
Gross profit and gross margin
As a result of the foregoing, we recorded gross profit of RMB2.6 billion in 2023 and
RMB34.6 billion in 2024. Our gross profit margins were 7.2% and 23.8% in 2023 and 2024,
respectively. In particular, our vehicle sales business recorded gross profit of RMB2.2 billion
in 2023 and RMB32.7 billion in 2024, achieving gross profit margins of 6.5% and 23.5% for
the same periods, respectively, primarily due to our adherence to promoting technological
innovation, increasing product sales and optimizing product mix based on our technology-
driven approach. Our gross profit margin for sales of NEVs increased from 6.9% in 2023 to
23.8% in 2024, primarily due to the optimization of our product mix, with increased sales of
high-end models, which typically have higher gross profit margin. Our gross profit margin for
sales of ICE vehicles increased from 4.0% in 2023 to 12.4% in 2024, primarily due to the
optimization of our product mix, with an increased proportion of revenue from export ICE
vehicles in total revenue from ICE vehicles, which typically have higher gross profit margin.
We recorded gross profit from others of RMB0.4 billion in 2023 and RMB1.8 billion in 2024,
achieving gross profit margins of 17.1% and 29.7% for the same periods, respectively.
Government grants and subsidies
Our government grants and subsidies grew from RMB549.5 million in 2023 to
RMB1,068.2 million in 2024, mainly attributable to introduction of favorable government
policies supporting advanced manufacturing enterprises.
Other income
Our other income increased from RMB407.8 million in 2023 to RMB672.3 million in
2024, primarily driven by higher interest income from bank deposits, which rose from
RMB294.6 million in 2023 to RMB527.3 million in 2024. This growth mainly reflects higher
cash generated from operations and improved cash management. For details, see “— Liquidity
and Capital Resources — Cash Flow Analysis.”
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Other gains and losses
In 2024, we recorded net other losses of RMB1,615.1 million, compared to net other gains
of RMB1,749.3 million in 2023, primarily due to an increase in impairment loss recognized in
respect of other intangible assets of RMB1,626.7 million in 2024 and a one-off gain of the
disposal of investments in a subsidiary in 2023, which amounted to RMB1,757.0 million. For
details, see Note 44(c) to the Accountants’ Report included in Appendix I to this Prospectus.
In addition, the decrease in other losses was partially offset by an increase in gain from
changes in fair value of financial assets mandatorily measured at fair value through profit or
loss of RMB78.2 million, primarily due to the changes in valuation of the securities we hold
in certain listed companies in China.
Research and development expenses
Our research and development expenses increased from RMB1,696.5 million in 2023 to
RMB5,585.5 million in 2024, primarily due to (i) an increase in external R&D and design fees
of RMB2,001.5 million, mainly due to increased quantity of new vehicle models to be
developed, (ii) an increase in employee compensation of RMB851.9 million as a result of
expanded research and development staff, and (iii) an increase in depreciation, amortization
and material costs of RMB817.4 million, primarily due to an increase in costs arising from
increased research and development investments for the year.
Selling and distribution expenses
Our selling and distribution expenses increased from RMB5,276.1 million in 2023 to
RMB19,184.3 million in 2024, primarily due to an increase in advertising, brand image store
construction and service fees of RMB13,566.9 million, as a result of increased marketing
service fees and promotion activities of our NEVs sales.
Administrative expenses
Our administrative expenses increased from RMB1,969.4 million in 2023 to RMB4,509.3
million in 2024, primarily due to (i) an increase in employee compensation of RMB748.0
million, as a result of the expansion of administrative staff in line with business growth, (ii)
an increase in maintenance, depreciation and material costs of RMB493.0 million as a result
of an increase in depreciation of office buildings and amortization of intangible assets, and (iii)
an increase in consulting service fees of RMB406.3 million mainly as a result of an increase
in consulting service fees as the Company grows rapidly.
Share of results of associates
In 2024, we recorded a loss of RMB76.1 million in our share of results of associates,
compared to a profit of RMB0.6 million in 2023, primarily because one of our subsidiaries
changed from a wholly-owned entity to an associate in December 2023.
FINANCIAL INFORMATION
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Share of result of a joint venture
Our share of gain of a joint venture increased from RMB0.5 million in 2023 to RMB2.0
million in 2024, primarily reflecting the improvement of the joint venture’s operational
performance.
Finance costs
Our finance costs decreased from RMB308.7 million in 2023 to RMB240.4 million in
2024, primarily due to the decrease in the interest expenses on bank borrowings of RMB186.4
million, partially offset by the increase in the interest expenses on lease liabilities of
RMB123.2 million, as a result of the new leases of our Super Factory (Longxing).
Income tax expenses
Our income tax expenses increased from RMB75.9 million in 2023 to RMB211.2 million
in 2024, mainly in line with our business growth.
(Loss) Profit for the year
As a result of the foregoing, we recorded a profit for 2024 of RMB4,740.1 million,
compared to a loss of RMB4,156.7 million in 2023. In 2023, we recorded a net loss attributable
to owners of the Company of RMB2.4 billion, and in 2024, we recorded a net profit attributable
to owners of the Company of RMB5.9 billion.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue grew by 5.1% from RMB34.1 billion in 2022 to RMB35.8 billion in 2023,
primarily driven by higher vehicle sales. Revenue from vehicle sales increased by 7.3% from
RMB31.3 billion in 2022 to RMB33.6 billion in 2023, mainly due to higher sales of NEVs,
partially offset by decreased revenue from sales of ICE vehicles and parts and materials.
Revenue from NEV sales grew from RMB24.9 billion in 2022 to RMB28.9 billion in
2023, driven primarily by increased sales volume as we continued to strengthen brand
awareness, refine product portfolio, and enhance customer experience. Specifically, we
delivered over 150,900 NEVs in 2023, representing an 11.8% increase from approximately
135,100 units in 2022.
Revenue from ICE vehicle sales decreased from RMB6.3 billion in 2022 to RMB4.6
billion in 2023, primarily due to our strategic shift toward NEVs, in line with industry trends
in China and globally.
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Cost of sales
Our cost of sales grew by 6.0% from RMB31.3 billion in 2022 to RMB33.2 billion in
2023, generally in line with the increased vehicle deliveries. Specifically, our cost of vehicle
sales grew from RMB28.7 billion in 2022 to RMB31.4 billion in 2023.
Gross profit and gross margin
As a result of the foregoing, we recorded gross profit of RMB2.7 billion in 2022 and
RMB2.6 billion in 2023. Our gross profit margins were 8.0% and 7.2% in 2022 and 2023,
respectively. In particular, our vehicle sales business recorded gross profit of RMB2.6 billion
in 2022 and RMB2.2 billion in 2023, with gross profit margins of 8.2% and 6.9% for the same
periods, respectively. We recorded gross profit from others of RMB0.2 billion in 2022 and
RMB0.4 billion in 2023, with gross profit margins of 6.2% and 17.1% for the same periods,
respectively.
Government grants and subsidies
Our government grants and subsidies remained relatively stable at RMB523.5 million in
2022 and RMB549.5 million in 2023.
Other income
Our other income increased from RMB261.8 million in 2022 to RMB407.8 million in
2023, primarily driven by the increase in interest income from bank deposits, which rose from
RMB189.5 million in 2022 to RMB294.6 million in 2023. This growth mainly reflects higher
cash generated from operations and improved cash management. For details, see “— Liquidity
and Capital Resources — Cash Flow Analysis.”
Other gains
Our other gains increased from RMB14.2 million in 2022 to RMB1,749.3 million in 2023,
primarily due to the gain on the disposal of investments in a subsidiary, which amounted to
RMB1,757.0 million in 2023. For details, see Note 44(c) to the Accountants’ Report included
in Appendix I to this Prospectus.
Research and development expenses
Our research and development expenses increased from RMB1,313.7 million in 2022 to
RMB1,696.5 million in 2023, primarily due to (i) the increase in depreciation, amortization and
material costs of RMB245.7 million, mainly because of the increase in costs associated with
the increased research and development investments for the year, and (ii) the increase in
employee compensation of RMB88.3 million as a result of expanded research and development
staff.
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Selling and distribution expenses
Our selling and distribution expenses increased from RMB4,656.7 million in 2022 to
RMB5,276.1 million in 2023, primarily due to the increase in the advertising, brand image
store construction and service fees of RMB508.8 million, as a result of increased marketing and
promotional activities to support our NEVs sales.
Administrative expenses
Our administrative expenses decreased from RMB2,081.4 million in 2022 to RMB1,969.4
million in 2023, primarily due to the decrease in office expenses and travel costs of RMB125.8
million, mainly due to our efforts to enhance cost management and operational efficiency. The
decrease in our administrative expenses was partially offset by the increase in employee
compensation of RMB47.8 million as a result of the expansion of administrative staff in line
with business growth.
Share of results of associates
Our share of gain of associates remained relatively stable at RMB0.5 million in 2022 and
RMB0.6 million in 2023.
Share of results of a joint venture
We recorded share of gain of a joint venture of RMB0.9 million in 2022 and RMB0.5
million in 2023.
Finance costs
Our finance costs remained relatively stable at RMB330.2 million in 2022 and RMB308.7
million in 2023.
Income tax expenses
Our income tax expenses decreased from RMB290.1 million in 2022 to RMB75.9 million
in 2023, mainly due to operational loss.
Loss for the year
As a result of the foregoing, our loss decreased from RMB5,220.6 million in 2022 to
RMB4,156.7 million in 2023. In 2022 and 2023, we recorded a net loss attributable to owners
of the Company of RMB3.8 billion and RMB2.4 billion, respectively.
We recorded accumulated losses as of January 1, 2022 of RMB1,713.0 million, mainly
due to our strategic transition to the NEV vehicles, which incurred significant depreciation and
amortization expenses associated with fixed and intangible assets, increasing research and
development expenses and sales and marketing expenses in 2021.
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DISCUSSION OF CERTAIN KEY ITEMS FROM OUR CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
The table below sets forth the selected information from our consolidated statements of
financial position as of the dates indicated, which have been extracted from our audited
consolidated financial statements included in Appendix I to this Prospectus.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total non-current assets /H1118/H1118/H1118/H1118/H111820,184,156 25,127,599 28,366,106 44,068,238
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,975,971 26,117,072 65,997,852 68,843,572
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,160,127 51,244,671 94,363,958 112,911,810
Total non-current liabilities /H1118/H11185,026,211 6,468,545 6,193,607 8,896,813
Total current liabilities /H1118/H1118/H1118/H1118/H111832,331,483 37,576,179 76,264,794 77,005,263
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,357,694 44,044,724 82,458,401 85,902,076
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
Equity attributable to owners
of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,419,629 11,405,827 12,264,245 26,761,103
Non-controlling interests /H1118/H1118/H1118/H1118(1,617,196) (4,205,880) (358,688) 248,631
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
The following table sets forth our current assets and current liabilities as of the dates
indicated.
As of December 31,
As of
June 30,
As of
August 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,992,865 3,529,172 2,552,449 3,270,842 3,330,336
Trade and other receivables /H1118/H11183,273,244 5,659,400 5,230,545 5,422,251 4,675,611
Notes receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,279 201,317 214,159 460,138 188,913
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118938,248 320,380 52,476 7,887 7,264
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H11181,751,529 1,133,644 4,048,748 282,074 248,473
Amounts due from related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,543 137,486 40,183 31,548 32,430
Amount due from immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222,460 1,374,169 – – –
FINANCIAL INFORMATION
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--- page 351 ---
As of December 31,
As of
June 30,
As of
August 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current assets
Pledged and restricted
bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,037,409 8,681,408 39,621,756 26,266,146 28,213,997
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 600,377 7,903,854 11,437,800 10,140,011
Bank balances and cash /H1118/H1118/H1118/H1118/H11182,327,394 4,479,719 6,333,682 21,664,886 23,916,402
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H111826,975,971 26,117,072 65,997,852 68,843,572 70,753,437
Current liabilities
Trade and other payables /H1118/H1118/H1118/H111828,163,249 32,328,953 72,274,335 66,256,022 67,883,870
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,970,641 1,604,120 10,187 989,050 594,194
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118962,942 3,270,307 2,991,532 5,196,056 5,328,395
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,774 25,054 47,343 3,937,530 4,382,285
Amount due to immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,372 921
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,069 326,857 510,084 250,369 255,385
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,808 20,888 431,313 374,864 429,045
Total current liabilities /H1118/H1118/H1118/H111832,331,483 37,576,179 76,264,794 77,005,263 78,874,095
Net current liabilities /H1118/H1118/H1118/H1118/H1118(5,355,512) (11,459,107) (10,266,942) (8,161,691) (8,120,658)
Our net current liabilities remained relatively stable at RMB8,161.7 million as of June 30,
2025 and RMB8,120.7 million as of August 31, 2025.
Our net current liabilities decreased from RMB10,266.9 million as of December 31, 2024
to RMB8,161.7 million as of June 30, 2025, primarily due to (i) an increase in bank balances
and cash of RMB15,331.2 million, and (ii) a decrease in trade and other payables of
RMB6,018.3 million.
Our net current liabilities decreased from RMB11,459.1 million as of December 31, 2023
to RMB10,266.9 million as of December 31, 2024, primarily due to (i) an increase in pledged
and restricted bank deposits of RMB30,940.3 million, (ii) an increase in time deposits of
RMB7,303.5 million, and (iii) an increase in financial assets at fair value through profit or loss
of RMB2,915.1 million, partially offset by (i) an increase in trade and other payables of
RMB39,945.4 million and (ii) a decrease in amount due from immediate holding companies of
RMB1,374.2 million.
FINANCIAL INFORMATION
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--- page 352 ---
Our net current liabilities increased from RMB5,355.5 million as of December 31, 2022
to RMB11,459.1 million as of December 31, 2023, primarily due to (i) a decrease in pledged
and restricted bank deposits of RMB5,356.0 million, (ii) an increase in trade and other payables
of RMB4,165.7 million, and (iii) an increase in contract liabilities of RMB2,307.4 million,
partially offset by (i) the increases in trade and other receivables of RMB2,386.2 million and
(ii) the increase in bank balances and cash of RMB2,152.3 million.
We plan to improve our net current liabilities position and ensure that we have sufficient
working capital by (i) optimizing our financing structure, (ii) enhancing the collection of our
accounts receivable by improving our business model and customer credit management, (iii)
strengthening inventory management through the disposal of obsolete inventories and
improving inventory turnover, (iv) enhancing supply chain management to optimize supplier
payment cycles, and (v) other initiatives such as cost control, enhancing operating efficiency,
and enhancing capital utilization efficiency.
Property, Plant and Equipment
Our property, plant and equipment consist of moulds and machinery, buildings and plants,
furniture, fixture and office equipment, construction in progress and motor vehicles.
The following table sets forth a 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’000 RMB’000 RMB’000 RMB’000
Moulds and machinery /H1118/H1118/H1118/H1118/H11185,621,351 5,524,849 6,030,640 6,704,519
Buildings and plants /H1118/H1118/H1118/H1118/H1118/H1118/H11183,206,109 2,950,796 2,888,339 6,757,428
Furniture, fixture and office
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118608,352 636,922 796,666 952,662
Construction in progress /H1118/H1118/H1118/H1118345,662 195,039 212,904 1,006,662
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,175 106,972 134,867 183,273
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,917,649 9,414,578 10,063,416 15,604,544
The carrying amount of our property, plant and equipment decreased from RMB9,917.6
million as of December 31, 2022 to RMB9,414.6 million as of December 31, 2023, primarily
due to the decrease in buildings and plants of RMB255.3 million as of December 31, 2023 as
we disposed of certain unused factories in 2023 as part of our ongoing efforts to optimize our
production capacity. Additionally, the decline was also attributed to the decrease in
construction in progress of RMB150.6 million resulting from the completion of our
construction projects.
FINANCIAL INFORMATION
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--- page 353 ---
The carrying amount of our property, plant and equipment increased from RMB9,414.6
million as of December 31, 2023 to RMB10,063.4 million as of December 31, 2024, and
further increased to RMB15,604.5 million as of June 30, 2025, primarily due to the addition
of production equipment and the purchase of Super Factory (Longxing) to support our business
growth.
Right-of-Use Assets
Our right-of-use assets consist of leased properties, leased lands and equipment and
machinery. The carrying amount of our right-of-use assets increased from RMB1,680.2 million
as of December 31, 2022 to RMB3,013.3 million as of December 31, 2023, and further to
RMB3,639.3 million as of December 31, 2024. The increase was primarily due to the
expansion of our leased manufacturing facilities and equipment to support our business growth.
The carrying amount of our right-of-use assets decreased from RMB3,639.3 million as of
December 31, 2024 to RMB3,246.9 million as of June 30, 2025, primarily due to the decrease
in equipment and machinery, as a result of the purchase of Super Factory (Longxing).
Intangible Assets
Our intangible assets consist of (i) non-patented technology accumulated through our
research and development that are expected to generate future economic benefits, (ii)
trademarks, and (iii) development costs, representing expenses incurred in developing new
products, such as new vehicle models, that are expected to generate future economic benefits.
The following table sets forth a breakdown of our intangible assets as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-patented technology /H1118/H1118/H1118/H11185,424,712 8,182,914 5,493,172 6,889,525
Trademarks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,377,299 2,252,182
Development costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,352,356 1,000,984 781,081 724,047
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,777,068 9,183,898 8,651,552 9,865,754
Our intangible assets increased from RMB6,777.1 million as of December 31, 2022 to
RMB9,183.9 million as of December 31, 2023, primarily due to the increase in non-patented
technology of RMB2,758.2 million resulting from continuous investment in new products and
technologies. The increase in our intangible assets was partially offset by the decline in
development costs of RMB351.4 million, primarily due to the decrease in development
expenses that can be included in intangible assets.
FINANCIAL INFORMATION
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--- page 354 ---
Our intangible assets decreased from RMB9,183.9 million as of December 31, 2023 to
RMB8,651.6 million as of December 31, 2024, primarily due to the decrease in non-patented
technology of RMB2,689.7 million resulting from amortization and impairment of intangible
assets, and the decrease in development costs of RMB219.9 million. The decrease in our
intangible assets was partially offset by an increase in trademarks of RMB2,377.3 million,
mainly due to acquisition of the trademarks of AITO in 2024 to better provide high-quality
vehicles and services to our users..
Our intangible assets increased from RMB8,651.6 million as of December 31, 2024 to
RMB9,865.8 million as of June 30, 2025, primarily due to the increase in non-patented
technology of RMB1,396.4 million, resulting from continuous investment in new products and
technologies.
Interests in Associates
Our investment in associates refers to our equity interests in three unlisted companies,
namely New Energy Automobiles Industrial Development (Chongqing) Co., Ltd. ( อঐ๕ӛԓ
࢝(ᅅ)ʮ̡), Chongqing Ruichi Automobile Industrial (ࠢ
ʮ̡) and Shenzhen Yinwang Intelligent Technology Co., Ltd. (ʮ̡ ),
amounted to RMB37.3 million, RMB2,037.9 million, RMB1,972.3 million and RMB13,404.6
million as of December 31, 2022, 2023, 2024 and June 30, 2025, respectively. Our interests in
associates increased significantly from RMB37.3 million in 2022 to RMB2,037.9 million in
2023, primarily due to Chongqing Ruichi Automobile Industrial was changed from a
consolidated subsidiary to an associate of our Group in 2023. Pursuant to the agreement
entered into among our Group, Chongqing Ruichi and the eight new shareholders of Chongqing
Ruichi, we did not have any anti-dilution rights in relation to Chongqing Ruichi’s issuance of
new shares to the eight new shareholders. In 2023 and 2024, the revenue of Chongqing Ruichi
accounted for approximately 6.0% and 1.4% of our total revenue, respectively. As the revenue
share of Chongqing Ruichi is immaterial to our Group, the loss of control over Chongqing
Ruichi did not have any material operational or financial impact on our Group. Upon the loss
of control over Chongqing Ruichi as of December 31, 2023, we recognized an investment in
associates of RMB2.0 billion and a gain on disposal of subsidiaries of RMB1.5 billion. Our
interests in associates remained relatively stable at RMB2,037.9 million and RMB1,972.3
million as of December 31, 2023 and 2024, respectively. Our interests in associates increased
from RMB1,972.3 million as of December 31, 2024 to RMB13,404.6 million as of June 30,
2025, primarily due to our investment of 10% equity interest in Shenzhen Yinwang in the first
quarter of 2025.
FINANCIAL INFORMATION
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--- page 355 ---
Inventories
Our inventories consist of (i) raw materials and consumables, (ii) finished goods, (iii)
work in progress and (iv) others. The following table sets out a breakdown of our inventories
as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials and
consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,573,878 1,942,354 1,345,329 1,371,895
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,037,913 1,133,941 672,218 1,415,822
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,757 124,880 125,930 135,888
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118233,317 327,997 408,972 347,237
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,992,865 3,529,172 2,552,449 3,270,842
Our inventories decreased from RMB3,992.9 million as of December 31, 2022, to
RMB3,529.2 million as of December 31, 2023. This was primarily due to the decrease in raw
materials and consumables of RMB631.5 million as a result of our continued efforts to
optimize inventory levels. Our inventories further decreased to RMB2,552.4 million as of
December 31, 2024, primarily due to the decreases in (i) raw materials and consumables of
RMB597.0 million, and (ii) finished goods of RMB461.7 million. Our inventories increased
from RMB2,552.4 million as of December 31, 2024 to RMB3,270.8 million as of June 30,
2025, primarily due to the increase in raw materials and consumables of RMB26.6 million and
the increase in finished goods of RMB743.6 million.
We believe that by maintaining optimal inventory levels, we can meet the growing market
demand without compromising our liquidity. To this end, we have put in place a set of policies
and procedures to manage our inventories. For details, see “Business — Warehousing,
Logistics and Inventory Management.”
The following table sets out the aging analysis of our inventories as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,631,415 3,079,340 2,153,704 2,978,523
One to two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118194,792 268,440 216,132 89,968
Over two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118166,658 181,392 182,613 202,351
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,992,865 3,529,172 2,552,449 3,270,842
FINANCIAL INFORMATION
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--- page 356 ---
The following table sets forth our inventories turnover days for the periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
Inventories turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839 41 10 13 11
Note:
(1) Inventories turnover days are based on the average balance of inventories divided by cost of sales for
the relevant period and multiplied by the number of days in the relevant period. Average balance is
calculated as the average of the beginning balance and ending balance of a given period. The number
of days for the year ended December 31 is 360 days and for the six months ended June 30 is 180 days.
Our inventory turnover days increased from 39 days in 2022 to 41 days in 2023. Our
inventory turnover days decreased from 41 days in 2023 to 10 days in 2024, primarily because
we produce by orders, aimed at reducing stock levels, enhancing production efficiency, and
lowering inventory turnover days. Our order-based production model was supported by
Just-in-Time (JIT) delivery, Just-in-Sequence (JIS) synchronization, and V endor-Managed
Inventory (VMI) systems, which enabled efficient procurement of raw materials and delivery
of finished products, these measures allowed us to maintain a stable inventory level. In 2024,
we expanded the application of these systems to a broader range of materials, therefore, despite
the significant increase in sales volume of NEVs in 2024, the inventory balance still remained
at a similar scale to the previous year, and with the increased revenue and cost of sales, the
inventory turnover days improved in 2024 compared to 2023. Our inventory turnover days
remained relatively stable at 13 days and 11 days in the six months ended June 30, 2024 and
2025, respectively.
As of August 31, 2025, RMB2,267.0 million, or 69.3% of inventories outstanding as of
June 30, 2025 had been subsequently utilized or sold.
Trade and Other Receivables
Our trade and other receivables consist of (i) trade receivables, primarily representing
outstanding amounts due from customers for vehicles and other products, the control of which
has been transferred, (ii) other receivables, primarily representing deposits we paid for parts
used to manufacture our vehicles, (iii) V A T and other tax recoverable, representing the
deductible difference between output V A T payable and input V A T payable under applicable
PRC tax laws and other recoverable tax, (iv) prepayments to suppliers for certain key parts
used to manufacture our vehicles, and (v) prepaid consideration for an equity investment.
FINANCIAL INFORMATION
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--- page 357 ---
The following table sets forth the details of our trade and other receivables as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,637,977 2,379,565 2,485,090 2,263,309
– contracts with customers /H11181,351,602 2,278,500 2,373,958 2,122,422
– subsidies from
governments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118286,375 101,065 111,132 140,887
Less: allowance for credit
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,289) (71,056) (161,419) (174,937)
Other receivables, net of
allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118803,763 883,729 686,391 812,243
V alue added tax and other tax
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,826 610,209 1,217,492 1,142,878
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,601 1,868,222 1,016,018 1,365,796
Prepaid consideration for an
equity investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,300,000 –
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 26,100
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,288,878 5,670,669 7,543,572 5,435,389
Our trade and other receivables increased from RMB3,288.9 million as of December 31,
2022 to RMB5,670.7 million as of December 31, 2023, primarily due to the increases in (i)
prepayments related to key parts of RMB1,426.6 million, which was in line with our business
growth, and (ii) the gross carrying amount of trade receivables of RMB741.6 million mainly
attributed to the increase in sales volume of products.
Our trade and other receivables further increased to RMB7,543.6 million as of December
31, 2024, primarily due to the increases in (i) prepaid consideration for an equity investment
of RMB2.3 billion in 2024, and (ii) value added tax and other tax recoverable of RMB607.3
million mainly attributable to the increase in the amount of V A T to be deducted and certified.
Our trade and other receivables decreased to RMB5,435.4 million as of June 30, 2025,
primarily due to the decreases in (i) prepaid consideration for an equity investment of RMB2.3
billion, and (ii) the gross carrying amount of trade receivable from contracts with customers
of RMB251.5 million.
FINANCIAL INFORMATION
– 347 –


--- page 358 ---
The following table sets out an aging analysis of our trade and other receivables, net of
allowance for credit losses, as of the dates indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,215,109 1,503,222 1,534,220 1,036,980
91 to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,972 197,394 158,231 245,880
181 to 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,612 527,460 238,986 394,280
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,995 80,433 392,234 411,232
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,590,688 2,308,509 2,323,671 2,088,372
The following table sets forth the turnover days of our trade and other receivables for the
periods indicated.
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
(days)
Trade and other
receivables turnover
days
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 45 16 16 19
Note:
(1) Trade and other receivables turnover days are based on the average balance of trade and other
receivables divided by our revenue for the relevant period and multiplied by the number of days in the
relevant period. Average balance is calculated as the average of the beginning balance and ending
balance of a given period. The number of days for the year ended December 31 is 360 days and for the
six months ended June 30 is 180 days.
Our trade and other receivables turnover days increased from 33 days in 2022 to 45 days
in 2023, primarily because of foreign exchange collection affected by the letter of credit not
yet expired as export sales increase. Our trade and other receivables turnover days then
decreased to 16 days in 2024, primarily due to the order-based sales model of AITO business
and the increased proportion of AITO business during the same period. Our trade and other
receivables turnover days remained relatively stable at 16 days in the six months ended June
30, 2024 and 19 days in the six months ended June 30, 2025.
As of August 31, 2025, RMB2,496.9 million, or 45.9% of our trade and other receivables
outstanding as of June 30, 2025, had been subsequently settled.
FINANCIAL INFORMATION
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--- page 359 ---
We believe there are not any recoverability issue for trade and other receivables, primarily
due to the subsequent settlements of trade and other receivables are still increasing and there
have been no significant changes in the credit risk of our major customers. We also purchased
export credit insurance for trade receivables from overseas customers. In addition, sufficient
provision has been made in view of the subsequent settlement amount.
Financial Assets at Fair Value through Profit or Loss
Our financial assets measured at fair value through profit or loss primarily represent listed
equity securities and structured deposits. Our financial assets measured at fair value through
profit or loss decreased from RMB1,751.5 million as of December 31, 2022 to RMB1,133.6
million as of December 31, 2023, mainly attributable to the decrease in structured deposits. Our
financial assets measured at fair value through profit or loss increased from RMB1,133.6
million as of December 31, 2023 to RMB4,048.7 million as of December 31, 2024, primarily
due to the increase in structure deposits. Our financial assets measured at fair value through
profit or loss then decreased to RMB282.1 million as of June 30, 2025, primarily due to the
decrease in structured deposits. See Note 26 of the Accountants’ Report in Appendix I to the
Prospectus.
Our investment strategy prioritizes liquidity, safety and returns to ensure the availability
of funds while maintaining a conservative risk profile. From the perspective of cash
management and risk control, we mainly invested in low risk products from reputable financial
institutions and prefer those products with high liquidity. We have established a robust set of
internal risk management policies and guidelines, with clear approval processes and reporting
procedures to ensure that investments align with our liquidity and risk requirements. The
Strategy Committee of our Board is responsible for, among others, conducting research and
making recommendations on our major strategic investments. We will also obtain applicable
approval from our Board or shareholders pursuant to relevant laws, regulations, and our
Articles of Association. Under the guidance of our Chief Financial Officer, Ms. Liu Lian, our
finance department oversees our investment portfolio. Ms. Liu is responsible for managing and
supervising our investment activities. Her qualifications, professional expertise, and extensive
experience ensure that investment decisions are made prudently with full consideration of
potential risks. Please see “Directors and Senior Management” for details of Ms. Liu’s
background and past experience.
Our investments classified as financial assets measured at fair value through profit or loss
will comply with Chapter 14 of the Listing Rules after the Listing.
Pledged Bank Deposits
Our pledged bank deposits primarily represent deposits pledged to banks held in
designated bank accounts for issuance of bank acceptance bill, bank borrowings or other
commercial arrangements. Our pledged bank deposits decreased from RMB14,031.8 million as
of December 31, 2022 to RMB8,673.2 million as of December 31, 2023, primarily due to the
release of funds that had been pledged during business operations. Our pledged bank deposits
FINANCIAL INFORMATION
– 349 –


--- page 360 ---
subsequently increased to RMB39,598.7 million as of December 31, 2024, which was primarily
due to the increase in the amount of our bank acceptance bills. Our pledged bank deposits
decreased from RMB39,598.7 million as of December 31, 2024 to RMB26,248.9 million as of
June 30, 2025, primarily due to the release of funds that had been restricted during business
operations.
Bank Balances and Cash
As of December 31, 2022, 2023, 2024 and June 30, 2025, our bank balances and cash
amounted to RMB2,327.4 million, RMB4,479.7 million and RMB6,333.7 million and
RMB21,664.9 million, respectively. See “— Liquidity and Capital Resources — Cash Flow
Analysis.”
Trade and Other Payables
Our trade and other payables consist of (i) notes payables, mainly bank acceptance bills
issued to suppliers, (ii) trade payables, primarily outstanding amounts due to third-party
suppliers for raw materials, equipment and construction services, (iii) payroll and employee
benefits payable relating to employee compensation, (iv) other payables and provisions, (v)
other accrued payables, primarily provisions for product quality guarantees, (vi) other tax
payables, and (vii) receipt in advance representing customer prepayments for vehicle sales
orders.
The following table sets forth a breakdown of our trade and other payables as of the dates
indicated.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Notes payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,111,655 10,184,008 41,144,620 27,251,072
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,553,652 19,947,124 27,265,766 31,591,085
Payroll and employee
benefits payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118661,602 710,862 1,555,202 804,224
Other payables and
provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,332,134 684,945 2,412,811 3,278,726
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554,297 831,648 1,011,329 1,570,049
Receipt in advance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323 22,964 34,262 33,534
Accrued issue costs and
listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,182
Consideration payable for
equity investment for
Shenzhen Yinwang
Intelligent Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 3,450,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,214,663 32,381,551 73,423,990 67,984,872
FINANCIAL INFORMATION
– 350 –


--- page 361 ---
Our trade and other payables increased from RMB28,214.7 million as of December 31,
2022 to RMB32,381.6 million as of December 31, 2023. This was primarily due to the increase
in trade payables of RMB10,393.5 million, which was generally in line with our business
growth. In addition, the increase in our trade and other payables was partially offset by the
decrease in notes payables of RMB5,927.6 million mainly due to the payment of due
obligations to our suppliers.
Our trade and other payables further increased to RMB73,424.0 million as of December
31, 2024, primarily due to the increase in notes payable of RMB30,960.6 million, and the
increase in trade payables of RMB7,318.6 million, which was primarily attributable to the
increase in procurement in line with our business growth.
Our trade and other payables decreased to RMB67,984.9 million as of June 30, 2025,
primarily due to our settlements of payables to suppliers.
The following table sets forth the aging analysis 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’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,261,981 17,789,329 26,216,453 29,193,744
91-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118370,326 130,352 188,051 1,197,876
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118546,907 1,405,099 744,968 1,048,306
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,438 622,344 116,294 151,159
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,553,652 19,947,124 27,265,766 31,591,085
The following table sets forth our trade and other payables turnover days for the periods
indicated.
For the year ended December 31,
For the six months ended
June 30,
2022 2023 2024 2024 2025
(days)
Trade and other
payables turnover
days
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118255 328 172 168 278
Note:
(1) Trade and other payables turnover days are based on the average balance of trade and other payables
divided by cost of sales for the relevant period and multiplied by the number of days in the relevant
period. Average balance is calculated as the average of the beginning balance and ending balance of a
given period. The number of days for the year ended December 31 is 360 days and for the six months
ended June 30 is 180 days.
FINANCIAL INFORMATION
– 351 –


--- page 362 ---
Our trade and other payables turnover days increased from 255 days in 2022 to 328 days
in 2023, primarily due to an increase in payables for normal production and operations as a
result of the increase in sales volume of NEVs. Our trade and other payables turnover days
decreased to 172 days in 2024, primarily due to the Company’s improved supply chain
management with more strict inventory control, resulting in shorter procurement cycles. Our
trade and other payables turnover days increased from 168 days in the six months ended June
30, 2024 to 278 days in the six months ended June 30, 2025, primarily due to an increase in
consideration payable for equity investment in Shenzhen Yinwang Intelligent Technology Co.,
Ltd. Such consideration payable for equity investment was not a regular trade payable and will
not always recur in our ordinary course of business, excluding this one-off item, our trade and
other payables turnover days remained relatively stable. In addition, we have shortened credit
terms with suppliers to approximately 60 days, and we would continue to maintain stable
supplier relationships.
As of August 31, 2025, RMB43,674.9 million, or 64.2% of our trade and other payables
outstanding as of June 30, 2025, had been subsequently settled.
Contract Liabilities
Our contract liabilities mainly comprise payments received in advance of revenue
recognition from our customers for vehicle sales. Our contract liabilities increased from
RMB962.9 million as of December 31, 2022 to RMB3,270.3 million as of December 31, 2023,
which was generally in line with our business growth. Our contract liabilities subsequently
decreased to RMB2,991.5 million as of December 31, 2024, which was mainly due to we
received larger advance payment from customers in the end of 2023. Our contract liabilities
increased to RMB5,196.1 million as of June 30, 2025, which was generally in line with our
business growth.
As of August 31, 2025, RMB4,646.2 million, or 89.4% of our contract liabilities
outstanding as of June 30, 2025, had been subsequently settled.
LIQUIDITY AND CAPITAL RESOURCES
We have historically funded our working capital mainly with cash generated from our
business operations, capital contribution from Shareholders and proceeds from external debts
and other fundraising activities. We do not anticipate any material changes to the availability
of financing to fund our operations in the future.
We had bank balances and cash of RMB2,327.4 million, RMB4,479.7 million,
RMB6,333.7 million and RMB21,664.9 million as of December 31, 2022, 2023, 2024 and June
30, 2025, respectively. Additionally, we had current time deposits of nil, RMB600.4 million,
RMB7,903.9 million and RMB11,437.8 million as of the same dates, respectively.
Our Directors are of the view that, taking into account the financial resources available
to us, including bank balances and cash, our available banking facilities, cash flows from
operating activities and net proceeds from the Global Offering, we have sufficient working
capital for at least 12 months from the date of this Prospectus.
FINANCIAL INFORMATION
– 352 –


--- page 363 ---
Cash Flow Analysis
The following table sets forth our cash flows for the periods indicated.
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net cash (used in)/from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,358,034) 6,103,005 21,988,014 16,273,566 14,034,486
Net cash (used in) investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,964,511) (2,678,201) (15,982,083) (4,975,304) (6,564,298)
Net cash from/(used in)
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H11186,325,284 (1,269,023) (4,166,686) (1,893,810) 7,861,634
Net increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,002,739 2,155,781 1,839,245 9,404,452 15,331,822
Cash and cash equivalents at
beginning of the year/period /H11181,318,961 2,327,394 4,479,719 4,479,719 6,333,682
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,694 (3,456) 14,718 5,678 (618)
Cash and cash equivalents at
end of the year/period /H1118/H1118/H1118/H11182,327,394 4,479,719 6,333,682 13,889,849 21,664,886
Net cash (used in)/from operating activities
During the Track Record Period, we had net operating cash outflow of RMB1,358.0
million in 2022. We expect to improve our net operating cash outflows position generally in
line with the continued increase in our profit, by taking into consideration of our continuous
revenue growth driven by (i) the launch of AITO M8 in April 2025, (ii) estimated orders of our
existing NEV models, including AITO M9 , AITO M7 and AITO M5 , remain at a high level, and
(iii) revenue from others including components sales which will increase due to our increased
customer demand, and accessory sales which will increase in line with our growing vehicle
sales and total vehicles in operation.
Net cash generated from operating activities in the six months ended June 30, 2025 was
RMB14,034.5 million, which primarily consists of profit before taxation of RMB3,724.8
million, adjusted for certain non-cash and non-operating items. Adjustments for such non-cash
and non-operating items primarily include amortization of intangible assets of RMB1,087.7
million. The amount was further adjusted by changes in working capital, primarily including
a decrease in pledged bank deposits of RMB14,172.9 million.
FINANCIAL INFORMATION
– 353 –


--- page 364 ---
Net cash generated from operating activities in 2024 was RMB21,988.0 million, which
primarily consists of profit before taxation of RMB4,951.3 million, adjusted for certain
non-cash and non-operating items. Adjustments for such non-cash and non-operating items
primarily include (i) amortization of intangible assets of RMB2,573.9 million, (ii) impairment
losses, net of reversal of RMB1,887.2 million, and (iii) depreciation of property, plant and
equipment of RMB1,416.9 million. The amount was further adjusted by changes in working
capital, primarily including (i) an increase in trade and other payables of RMB39,032.4
million, (ii) a decrease in trade and other receivables of RMB3,259.1 million, and (iii) a
decrease in inventories of RMB976.7 million; partially offset by an increase in pledged bank
deposits of RMB32,025.5 million.
Net cash generated from operating activities in 2023 was RMB6,103.0 million, which
primarily consists of loss before taxation of RMB4,080.9 million, adjusted for certain non-cash
and non-operating items. Adjustments for such non-cash and non-operating items primarily
include (i) gain on disposal of a subsidiary of RMB1,757.0 million, (ii) depreciation of
property, plant and equipment of RMB1,416.4 million, and (iii) amortization of intangible
assets of RMB1,129.4 million. The amount was further adjusted by changes in working capital,
primarily including (i) decrease in pledged bank deposits of RMB5,853.9 million, (ii) an
increase in contract liabilities of RMB2,363.6 million and (iii) an increase in trade and other
payables of RMB883.0 million, partially offset by an increase in trade and other receivables
of RMB780.0 million.
Net cash used in operating activities in 2022 was RMB1,358.0 million, which primarily
consists of loss before taxation of RMB4,930.4 million, adjusted for certain non-cash and
non-operating items. Adjustments for such non-cash and non-operating items primarily include
(i) depreciation of property, plant and equipment of RMB1,311.3 million, (ii) amortisation of
intangible assets of RMB856.2 million, and (iii) finance costs of RMB330.2 million. The
amount was further adjusted by changes in working capital, primarily including (i) an increase
in pledged bank deposits of RMB9,008.9 million, (ii) an increase in inventories of RMB1,220.0
million, and (iii) an increase in trade and other receivables of RMB439.5 million, partially
offset by (i) an increase in trade and other payables of RMB10,687.9 million and (ii) an
increase in deferred income of RMB703.9 million.
Net cash used in investing activities
Net cash used in investing activities in the six months ended June 30, 2025 was
RMB6,564.3 million, which primarily consists of (i) placement of time deposits and structured
deposits of RMB21,616.5 million, (ii) consideration paid for acquisition of equity investments
of RMB5,750.0 million, and (iii) purchase of property, plant, equipment and intangible assets
of RMB2,001.5 million, partially offset by proceeds from disposal of time deposits and
structured deposits upon maturity of RMB21,877.9 million.
FINANCIAL INFORMATION
– 354 –


--- page 365 ---
Net cash used in investing activities in 2024 was RMB15,982.1 million, which primarily
consists of (i) placement of time deposits and structured deposits of RMB17,778.4 million, (ii)
purchase of property, plant, equipment and intangible assets of RMB7,143.9 million, and (iii)
purchase of equity investments of RMB2,300.0 million, partially offset by (i) proceeds from
disposal of structured deposits upon maturity of RMB9,708.9 million, (ii) compensation
received from immediate holding companies of RMB1,374.2 million, and (iii) interest income
of RMB527.3 million.
Net cash used in investing activities in 2023 was RMB2,678.2 million, which primarily
consists of (i) placement of time deposits and structure deposits of RMB5,597.1 million, (ii)
purchase of property, plant, equipment and intangible assets of RMB3,464.8 million and (iii)
placement of pledged bank deposits of RMB773.9 million, partially offset by (i) proceeds from
disposal of structured deposits upon maturity of RMB6,201.0 million, (ii) proceeds from
disposal of a subsidiary of RMB350.0 million, and (iii) proceeds from disposal of property,
plant, equipment and other assets of RMB322.2 million.
Net cash used in investing activities in 2022 was RMB3,964.5 million, which primarily
consists of (i) purchase of property, plant, equipment and intangible assets of RMB3,367.0
million, (ii) placement of time deposits and structure deposits of RMB2,900.0 million and (iii)
placement of pledged bank deposits of RMB531.7 million, partially offset by (i) compensation
received from immediate holding companies of RMB1,361.1 million, (ii) proceeds from
disposal of property, plant, equipment and other assets of RMB749.8 million, and (iii) proceeds
from disposal of structured deposits upon maturity of RMB300.0 million.
Net cash generated from/(used in) financing activities
Net cash generated from financing activities in the six months ended June 30, 2025 was
RMB7,861.6 million, which primarily consists of (i) proceeds from bank borrowings of
RMB8,456.0 million, (ii) capital injection from non-controlling shareholders of subsidiaries of
RMB5,000.0 million; partially offset by repayments of bank borrowings of RMB3,804.5
million.
Net cash used in financing activities in 2024 was RMB4,166.7 million, which primarily
consists of (i) repayment of bank borrowings of RMB2,346.1 million, (ii) repayment of other
borrowings of RMB1,224.4 million, and (iii) consideration paid for the acquisition of
non-controlling interest of subsidiaries of RMB1,340.9 million; partially offset by (i) proceeds
from issuance of shares of RMB1,523.0 million, (ii) proceeds from bank borrowings of
RMB72.0 million, and (iii) deposits received from bank borrowings of RMB94.5 million.
Net cash used in financing activities in 2023 was RMB1,269.0 million, which primarily
consists of (i) repayment of bank borrowings of RMB4,881.9 million, (ii) interest paid of
RMB243.5 million and (iii) repayment of obligation under lease of RMB158.5 million,
partially offset by (i) proceeds from bank borrowings of RMB3,701.0 million, (ii) payment
received of deposits for bank borrowings of RMB297.0 million and (iii) proceeds from issue
of shares of RMB159.2 million.
FINANCIAL INFORMATION
– 355 –


--- page 366 ---
Net cash generated from financing activities in 2022 was RMB6,325.3 million, which
primarily consists of (i) proceeds from issue of shares of RMB7,069.4 million, (ii) proceeds
from bank borrowings of RMB4,283.5 million and (iii) proceeds from other borrowings
RMB1,100 million, partially offset by (i) repayment of bank borrowings of RMB4,586.1
million, (ii) repayment of amount due to immediate holding companies of RMB1,560.0 million
and (iii) interest paid of RMB274.2 million.
INDEBTEDNESS
During the Track Record Period, our indebtedness included borrowings and lease
liabilities. Save as otherwise disclosed below in this sub-section, we did not have any
outstanding capital issued or agreed to be issued, debt securities, mortgages, charges,
debentures, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances
or acceptance credits, hire purchase commitments or other contingent liabilities as of August
31, 2025, being the latest practicable date for our indebtedness statement.
The following table sets forth our indebtedness as of the dates indicated.
As of December 31,
As of
June 30,
As of
August 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Current:
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,069 326,857 510,084 250,369 255,385
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,970,641 1,604,120 10,187 989,050 594,194
Non-current:
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118424,900 1,706,681 2,217,782 837,556 818,554
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,350,236 2,599,272 687,000 4,362,893 3,883,832
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,882,846 6,236,930 3,425,053 6,439,868 5,551,965
Borrowings
The following table sets forth the breakdown of our borrowings as of the dates indicated.
As of December 31,
As of
June 30,
As of
August 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,162,455 2,978,970 697,187 5,351,943 4,478,026
Financing arrangement with
government platform /H1118/H1118/H1118/H1118/H11181,158,422 1,224,422 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,320,877 4,203,392 697,187 5,351,943 4,478,026
FINANCIAL INFORMATION
– 356 –


--- page 367 ---
Our borrowings decreased from RMB5,320.9 million as of December 31, 2022 to
RMB4,203.4 million as of December 31, 2023. This was primarily due to the decrease in bank
loans of RMB1,183.5 million. Our borrowings further decreased to RMB697.2 million as of
December 31, 2024, primarily due to the decrease in bank loans of RMB2,281.8 million and
the decrease in financing arrangement with government platform of RMB1,224.4 million,
reflecting continued progress in our capital optimization strategies. Our borrowings increased
from RMB697.2 million as of December 31, 2024 to RMB5,351.9 million as of June 30, 2025,
primarily due to the increase in bank loans of RMB4,654.8 million for our business expansion.
Our borrowings decreased from RMB5,351.9 million as of June 30, 2025 to RMB4,478.0
million as of August 31, 2025, primarily due to the decrease in bank loans of RMB873.9
million.
Our Directors confirm that as of August 31, 2025, the agreements under our borrowings
did not contain any covenant that would have a material adverse effect on our ability to make
additional borrowings or issue debt or equity securities in the future. Our Directors further
confirm that we had no defaults in bank and other borrowings, nor did we breach any covenants
(that were not waived) during the Track Record Period and up to the Latest Practicable Date.
Our Directors further confirm that during the Track Record Period and up to the Latest
Practicable Date, we did not experience any material difficulties in obtaining credit facilities,
or withdrawal of facilities or requests for early repayment. As of August 31, 2025, being the
most recent practicable date for determining our indebtedness, we had unutilized bank facilities
of RMB18.1 billion. Our Directors confirm that there has not been any material change in our
indebtedness since August 31, 2025 and up to the date of this Prospectus.
Lease liabilities
As required by IFRS 16, at the commencement of a lease, a lessee will recognize a
liability to make lease payments, namely, the lease liabilities, and an asset representing the
right to use the underlying asset during the lease term, namely, the right-of-use assets. During
the Track Record Period, we entered into leases primarily for our manufacturing facilities,
offices and warehouses. Our lease liabilities, including current and non-current portion,
amounted to RMB562.0 million, RMB2,033.5 million, RMB2,727.9 million, RMB1,087.9
million and RMB1,073.9 million as of December 31, 2022, 2023, 2024, June 30, 2025 and
August 31, 2025, respectively.
CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period mainly consisted of expenditures
on purchase of intangible assets and fixed assets. Our capital expenditures amounted to
RMB4,919.5 million, RMB5,299.7 million, RMB5,935.3 million and RMB3,164.7 million for
the years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025,
respectively.
FINANCIAL INFORMATION
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We will continue to make capital expenditures to meet the expected growth of our
business and our expansion plan. See “Future Plans and Use of Proceeds — Use of Proceeds.”
We intend to fund our future capital expenditures with financial resources available to us,
including cash generated from our business operations, the net proceeds from the Global
Offering, and bank borrowings available to us.
CAPITAL COMMITMENTS
Our capital commitments mainly represent purchases of equipment for which we have
contracted for but not yet paid. Our capital commitments decreased from RMB1,160.6 million
as of December 31, 2022 to RMB623.0 million as of December 31, 2023, primarily due to a
significant reduction in commitments for property, plant, and equipment of RMB470.9 million.
Our capital commitments then subsequently increased to RMB672.1 million as of December
31, 2024, primarily due to new contracts for intangible assets acquisitions of RMB110.9
million in line with our business growth. Our capital commitments increased from RMB672.1
million as of December 31, 2024 to RMB1,168.8 million as of June 30, 2025, primarily due to
the increase in commitments for property, plant and equipment of RMB641.9 million.
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios for the periods indicated.
As of/for the year ended December 31,
As of/For the six months
ended June 30,
2022 2023 2024 2024 2025
%%%%%
Gross profit margin (1) /H1118/H1118/H11188.0 7.2 23.8 21.8 26.5
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883.4 69.5 86.5 84.6 89.4
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871.1 60.1 83.2 79.4 85.2
Notes:
(1) Gross profit margin was calculated by dividing gross profit by revenue for the periods indicated.
(2) Current ratio was calculated by dividing total current assets by total current liabilities as of the dates
indicated.
(3) Quick ratio was calculated based on total current assets less inventories divided by total current
liabilities as of the dates indicated.
Our current ratio decreased from 83.4% in 2022 to 69.5% in 2023, primarily due to an
increase in payables for normal production and operations as a result of a rapid surge in orders
at the end of 2023. Our current ratio increased from 69.5% in 2023 to 86.5% in 2024, primarily
due to a significant increase in operating cash flow and an increase in monetary capitals. Our
current ratio increased from 84.6% in the six months ended June 30, 2024 to 89.4% in the six
months ended June 30, 2025, primarily due to a significant increase in operating cash flow and
an increase in monetary capitals.
FINANCIAL INFORMATION
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--- page 369 ---
Our quick ratio decreased from 71.1% in 2022 to 60.1% in 2023, primarily due to an
increase in payables for normal production and operations as a result of a rapid surge in orders
at the end of 2023. Our quick ratio increased from 60.1% in 2023 to 83.2% in 2024, primarily
due to a significant increase in operating cash flow, an increase in monetary capitals and the
decrease in inventory balances as a result of the Company’s efforts to strengthen inventory
management. Our quick ratio increased from 79.4% in the six months ended June 30, 2024 to
85.2% in the six months ended June 30, 2025, primarily due to a significant increase in
operating cash flow, an increase in monetary capitals.
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. For details of our
related party transactions, see Note 50 to the Accountants’ Report included in Appendix I to
this Prospectus.
Our Directors are of the view that each of the related party transactions set out in Note
50 to the Accountants’ Report included in Appendix I to this Prospectus was conducted in the
ordinary course of business on an arm’s length basis and with normal commercial terms
between the relevant parties. Our Directors are also of the view that our related party
transactions during the Track Record Period would not distort our track record results or cause
our historical results to become non-reflective of our future performance.
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we did not have any outstanding off-balance sheet
arrangements.
FINANCIAL RISKS DISCLOSURE
Our activities expose us to a variety of financial risks: market risk (currency risk and
interest rate risk), credit risk and liquidity risk. Our overall risk management program focuses
on the unpredictability of financial markets and seeks to minimize potential adverse effects on
our financial performance. Risk management is carried out by our senior management.
Market Risk
Currency risk
We operate internationally and are exposed to foreign exchange risk arising from various
currency exposures. Foreign exchange risk arises when future commercial transactions or
recognized assets and liabilities are denominated in a currency that is not the respective
functional currency of our subsidiaries. During the Track Record Period, we incurred net
foreign exchange loss of RMB9.9 million, RMB7.8 million and RMB1.8 million in 2022, the
six months ended June 30, 2024 and 2025, respectively, and incurred net foreign exchange gain
of RMB50.1 million in 2023 and RMB26.8 million in 2024.
FINANCIAL INFORMATION
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The carrying amounts of our Group’s major foreign currency denominated monetary
assets and monetary liabilities at the end of each reporting period are as follow:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Assets
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,104,549 1,714,340 1,382,134 1,170,109
Indonesian Rupiah (“IDR”) /H1118/H111848,680 19,126 22,586 16,784
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 26,954 9,367 54,585
Liabilities
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,632 12,219 5,687 4,939
IDR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,112 8,335 3,845 5,568
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,044 2,288 131
Our Group currently does not have a foreign exchange hedging policy. However, the
management of our Group monitors foreign exchange exposure and will consider hedging
significant foreign exchange exposure should the need arises.
Sensitivity analysis
The following table details our Group’s sensitivity to a 5% increase and decrease in RMB
against the relevant foreign currencies as of December 31, 2022, 2023, 2024 and June 30, 2025.
5% is the sensitivity rate used when reporting foreign currency risk internally to key
management personnel and represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign
currency denominated monetary items and adjusts their translation at the end of each reporting
period for a 5% change in foreign currency rates. A negative number below indicates an
increase in pre-tax loss or decrease in pre-tax profit where RMB strengthen 5% against the
relevant currency. For a 5% weakening of RMB against the relevant currency, there would be
an equal and opposite impact on the pre-tax loss or pre-tax profit and the amounts below would
be positive.
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(54,796) (85,106) (68,822) (58,259)
IDR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,828) (540) (937) (561)
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,246) (354) (2,723)
FINANCIAL INFORMATION
– 360 –


--- page 371 ---
Interest rate risk
We are exposed to cash flow interest rate risk in relation to variable-rate bank balances
and variable-rate borrowings. We are also exposed to fair value interest rate risk in relation to
pledged bank deposits, restricted bank balance, finance lease receivables, convertible bonds,
lease liabilities and fixed-rate borrowings.
We currently do not enter into any hedging instrument for cash flow interest rate risk.
However, we monitor interest rate risk exposure and will consider hedging significant interest
rate risk should the need arise.
Credit Risk
As of December 31, 2022, 2023, 2024 and June 30, 2025, our maximum exposure to credit
risk in the event of the counterparties’ failure to perform its obligations is arising from the
carrying amounts of the respective recognized financial assets, finance lease receivables and
contract assets as stated in the consolidated statements of financial position. We do not hold
any collateral or other credit enhancements to cover our credit risks associated with our
financial assets, finance lease receivables and contract assets.
We assessed impairment to financial assets, finance lease receivables and contract assets
under the expected credit loss model. As part of our credit risk management, we use debtors’
aging to assess the impairment of trade receivables from customers because these customers
consist of a large number of customers with common risk characteristics that are representative
of the customers’ abilities to pay all amounts due in accordance with the contractual terms. The
estimated loss rates are estimated based on expected default rates over the expected life of the
debtors with reference to published information from credit agencies and are adjusted for
forward-looking information that is available without undue cost or effort. The grouping is
regularly reviewed by our management to ensure relevant information about specific debtors
is updated.
Liquidity Risk
In the management of the liquidity risk, we monitor and maintain levels of cash and cash
equivalents deemed adequate by the management to finance our operations and mitigate the
effects of fluctuations in cash flows. We utilize internal generated fund as a significant source
of liquidity.
FINANCIAL INFORMATION
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--- page 372 ---
DIVIDENDS
We have adopted our dividend policy since our A-Share listing on the Shanghai Stock
Exchange in 2016. In 2024, we adopted our Shareholder Return Plan for 2023-2025 in
accordance with applicable PRC laws and regulations, including the PRC Company Law ( ʕ
) and the No. 3 Guideline for the Supervision of Listed Companies —
Cash Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ3໮
–ߎ2025ࠈࡌ)), and our Articles of Association. Pursuant to our
Shareholder Return Plan for 2023-2025, subject to certain conditions, the annual cash
dividends of the Company shall account for no less than 20% of the profits realized by the
Company in that year (calculated in accordance with PRC GAAP) which are available for
distribution and attributable to the shareholders. Under our Shareholder Return Plan for
2023-2025, we declared interim dividend for the first three quarters of 2024 of RMB499.7
million, which was paid in 2024, final dividend for the year of 2024 of RMB1,584.4 million,
which was paid in the first half of 2025 and dividend for the six months ended June 30, 2025
of RMB506.3 million, which is expected to be paid in October 2025. We did not declare or pay
any dividends in 2022 or 2023. We have strictly implemented this plan, which specifies the
decision-making process for dividend standards, dividend ratios and profit distribution
policies, aiming to ensure a consistent profit distribution policy and to protect the legitimate
interests of minority Shareholders.
Future profit distributions may be carried out in the form of cash dividends or stock
dividends or a combination of cash dividends and stock dividends. Any declaration and
payment as well as the amount of dividends will be subject to our constitutional documents,
applicable PRC Law and approval or authorization of our Shareholders. Our PRC Legal
Adviser is of the opinion that, we may pay dividends following approval or authorization by
general meeting of shareholders, in accordance with applicable laws, regulations, normative
documents, and our Articles of Association.
DISTRIBUTABLE RESERVES
As of June 30, 2025, our retained profits were RMB897.5 million, which represents our
distributable reserve as of the same date.
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as
underwriting fees and commissions, and (ii) non-underwriting-related expenses, comprising
professional fees paid to our legal advisers and Reporting Accountants for their services
rendered in relation to the Listing and the Global Offering, and other fees and expenses.
Assuming full payment of the discretionary incentive fee, the estimated total listing expenses
(based on the Maximum Offer Price and assuming that the Offer Size Adjustment Option and
the Over-allotment Option are not exercised) for the Global Offering are approximately
HK$251.4 million, accounting for approximately of 1.9% of our gross proceeds. Among such
estimated total listing expenses, we expect to pay underwriting-related expenses of HK$184.5
FINANCIAL INFORMATION
– 362 –


--- page 373 ---
million, professional fees for our legal advisers and Reporting Accountants of HK$39.3 million
and other fees and expenses of HK$27.6 million. An estimated amount of HK$11.4 million for
our listing expenses, accounting for approximately 0.1% of our gross proceeds, is expected to
be expensed through the statement of profit or loss and the remaining amount of HK$240.0
million is expected to be recognized directly as a deduction from equity upon the Listing.
NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that, up to the date of this Prospectus, there has been no
material adverse change in our financial, operational or trading position, indebtedness,
contingent liabilities or prospects since June 30, 2025, being the end date of our latest audited
financial statements, and there has been no event since June 30, 2025 that would materially
affect the information shown in the Accountants’ Report set out in Appendix I.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, except for the amounts due from related parties as disclosed
in this section, as of the Latest Practicable Date, there are no circumstances that would give
rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of our Group is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below
to illustrate the effect of the Global Offering on the consolidated net tangible liabilities
attributable to equity Shareholders of the Company as of June 30, 2025 as if the Global
Offering had taken place on June 30, 2025.
The unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and because of its hypothetical nature, it may not give
a true picture of the financial position of the Group had the Global Offering been completed
as of June 30, 2025 or at any future date.
Audited
consolidated
net tangible
assets of the
Group
attributable to
owners of the
Company as of
June 30, 2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated
net tangible
assets of the
Group
attributable to
owners of the
Company as of
June 30, 2025
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as of
June 30, 2025
per Share
RMB’000 RMB’000 RMB’000 RMB HK$
Note 1 Note 2 Note 3 Note 4
Based on an Offer
Price of HK$131.50
per Offer Share /H1118/H1118/H1118/H111817,172,902 11,803,024 28,975,926 16.71 18.30
FINANCIAL INFORMATION
– 363 –


--- page 374 ---
Notes:
(1) The amount of audited consolidated net tangible assets of the Group attributable to owners of the
Company as of June 30, 2025 amounting to approximately RMB17,172,902,000 is based on the
consolidated net assets of the Group attributable to the owners of the Company of RMB26,761,103,000
as of June 30, 2025 less intangible assets and goodwill of the Group attributable to the owners of the
Company of RMB9,090,809,000 and RMB497,392,000, respectively, as of June 30, 2025 as
extracted/derived from the Accountants’ Report of the Group set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on 100,200,000 H Shares at the Offer
Price of HK$131.50 per Share, after deduction of the underwriting fees and commissions and other
listing related expenses payable by the Company (excluding listing expenses charged to profit or loss
up to June 30, 2025) and without taking into account of any shares which may be allotted and issued
upon the exercise of the Offer Size Adjustment Option and the Over-allotment Option or any shares
which may be issued or repurchased by the Company pursuant to the Company’s general mandate. For
the purpose of the estimated net proceeds from the Global Offering, the amount denominated in HK$
has been converted into RMB at the rate of HK$1 to RMB0.9132, which was the exchange rate
prevailing on October 17, 2025 with reference to the rate published by the PBOC. No representation is
made that the HK$ denominated amounts have been, could have been or may be converted to RMB, or
vice versa, at that rate or any other rates or at all.
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company per Share is arrived at on the basis of 1,733,566,086 Shares in total, assuming that the
Global Offering of 100,200,000 H Shares had been completed on June 30, 2025. It does not take into
account any shares which may be allotted and issued pursuant to the exercise of the Offer Size
Adjustment Option and the Over-allotment Option or any shares which may be issued or repurchased
by the Company pursuant to the Company’s general mandate.
(4) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company per Share is converted from RMB to HK$ at the rate of HK$1 to RMB0.9132. No
representation is made that the RMB denominated amounts have been, would have been or may be
converted to HK$, or vice versa, at that rate or at any other rates or at all.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of
the Group attributable to owners of the Company as at June 30, 2025 to reflect any trading results or
other transactions of the Group entered into subsequent to June 30, 2025.
In particular, the unaudited pro forma adjusted consolidated net tangible assets of the Group attributable
to owners of the Company as shown on Page II-1 has not taken into account payment of dividends of
RMB506,343,000 which was approved by the shareholders at the shareholders’ meeting on October 15,
2025.
The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company as of June 30, 2025 per Share would have been RMB16.42 (equivalent to HK$17.98)
per Share based on the Offer Price of HK$131.50, if the dividend had been taken into account as of June
30, 2025.
Please refer to “Appendix II — Unaudited Pro Forma Financial Information” for further details.
FINANCIAL INFORMATION
– 364 –


--- page 375 ---
FUTURE PLANS
See the section headed “Business — Our Strategies” for a detailed description of our
future plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$12,924.9 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, assuming the Offer Size Adjustment
Option and the Over-allotment Option are not exercised, and at an Offer Price of HK$131.50
per Offer Share.
In line with our strategies, we intend to use the net proceeds for the following purposes,
subject to changes in light of our evolving business needs and changing market conditions:
 approximately 70.0%, or HK$9,047.4 million, will be used to invest in our research
and development, including the following:
/L50537approximately 40.0%, or HK$5,170.0 million, to increase our investment in
technological research and development to enhance our core technology and
innovation capabilities, including the following:
(i) approximately 20.0%, or HK$2,585.0 million, to continuously upgrade
our MF Platform, in particular:
We plan to enhance the performance of our MF Platform by improving its
architecture capability, achieving more efficient software-hardware
synergy through integrated system design. To significantly improve our
research and development capabilities, in 2025, we plan to procure
advanced and specialized hardware equipment, including various testing
equipment and systems to increase the types, quality and efficiency of our
testing capabilities, and software including analysis, simulation and
collaboration and administrative software for deeper, more accurate
design, testing and analysis, related to the research and development of
our MF Platform. We also plan to recruit more research and development
personnel to support our ongoing investment in and expansion of our
R&D capabilities in platform technologies;
FUTURE PLANS AND USE OF PROCEEDS
– 365 –


--- page 376 ---
(ii) approximately 10.0%, or HK$1,292.5 million, to continuously upgrade
our intelligent cockpit and driving assistance technologies, in particular
over the next two years:
We plan to increase our investment in AI technology applied in the field
of intelligent cockpit and driving assistance, aiming to improve the
intelligence and reliability of intelligent cockpit and driving assistance
systems. In terms of intelligent cockpit, we will further improve the
functions and user experience of our cockpit system by enhancing
AI-driven proactive service capabilities based on large model technology,
to fully perceive passenger and driver needs and deliver a more
personalized intelligent service experience. For driving assistance, we
will increase our research and development investment in AI technology.
Large AI models will assist in continuous improvement in the functions
of driving assistance systems. Through deep learning and multimodal
perception, the systems will better recognize road conditions, obstacles,
and driving environments, thereby delivering a safer and more intelligent
driving experience;
(iii) approximately 5.0%, or HK$646.2 million, to continue strengthening our
research and development efforts in key powertrain technologies, in
particular, over the next two years:
Continuously upgrade our range extending technology. According to
Frost & Sullivan, REEVs, which utilize range extending technologies and
can effectively address range anxiety, are expected to become a
significant driver of growth in China’s NEPV market. REEV sales
volume is projected to increase from 1.3 million units in 2024 to 3.1
million units by 2030, at a CAGR of 16.5%. Leveraging such favorable
industry tailwinds, we plan to continuously improve the energy
conversion rate by developing proprietary high-efficiency range
extenders and advanced power control technologies, thereby improving
the driving range and fuel economy of vehicles. Meanwhile, we seek to
enable refined management of the powertrain system to improve vehicle
performance and energy efficiency, offering users more excellent travel
experience;
Continuously explore the research and development of our dual-electric
drive platform technology. We intend to continuously explore and
develop distributed dual-electric drive platform technology, which
features an innovative electromagnetic and electronic control architecture
and upgraded gear design to minimize energy waste while extending
driving range, building a highly integrated, high-performance and high-
efficiency electric drive platform;
FUTURE PLANS AND USE OF PROCEEDS
– 366 –


--- page 377 ---
Our ongoing R&D in powertrains is developed in sync with our vehicle
model development cycle, with new powertrains installed to be installed
on our planned new models in the second half of 2025 and the first half
of 2026, respectively.
(iv) approximately 5.0%, or HK$646.3 million, to continuously explore
advanced technologies, in particular, over the next two years:
We intend to explore the comprehensive empowerment of the automotive
industry through artificial intelligence, striving for full penetration from
research and development, production, to service. We will continue to
explore and research the integrated area of automobiles and artificial
intelligence, to support the potential development of intelligent new
energy vehicles toward emerging forms and industrial spillovers in the
future. In addition, we plan to establish an expert R&D team by recruiting
top talent in the fields of AI and software engineering. By exploring
advanced technologies and leveraging our accumulated expertise in new
energy vehicles, we aim to further strengthen our product and technical
advantages and be well-positioned to develop new products and seize
future commercialization opportunities.
/L50537approximately 30.0%, or HK$3,877.4 million, to increase our investment in
product research and development, to further diversify our product portfolio
and proactively expand our international market presence, including the
following:
(i) approximately 20.0%, or HK$2,585.0 million, to develop new NEV
models. We plan to continuously diversify our product portfolio while
closely monitoring market trends and various customer preferences, and
we are committed to continuously iterating on products that meet
diversified user needs, including two new models in the second half of
2025 and the first half of 2026 respectively, as well as launching facelifts
for existing models every year. We also plan to recruit more research and
development staff and continue to cooperate with suppliers on component
customization and vehicle design, to further support the expansion of our
product portfolio, employing up to 9,200 staff in total for product line
R&D, vehicle technology platform R&D and other advanced technology
R&D by 2026;
(ii) approximately 10.0%, or HK$1,292.4 million, to enhance R&D
adaptation of our overseas vehicle models. We plan to promote the
localization of our premium brand models in overseas markets, and
continuously develop globally-oriented NEV models that satisfy the
needs of local users and meet technical standards and customer demands
in different countries and regions. We expect to enter the global premium
FUTURE PLANS AND USE OF PROCEEDS
– 367 –


--- page 378 ---
brand automotive market, and intend to continue to explore and deepen
our presence in “lighthouse markets” of strategical significance, such as
the UK, Australia and New Zealand, the EU, Mexico, and the UAE,
thereby further enhancing our international brand recognition. In
addition, we plan to conduct in-depth market research to identify pain
points and key customer needs in local markets, enabling us to upgrade
existing products with refreshed interior and exterior trims and enhanced
in-vehicle infotainment systems that better align with local driving habits,
improving our competitiveness and attractiveness;
 approximately 20.0%, or HK$2,585.0 million, will be used to invest in diversified
new marketing channels, overseas sales, and charging network services, to enhance
our global brand recognition, including the following:
/L50537approximately 10.0%, or HK$1,292.5 million, to increase investment in new
online marketing channels, offline channels and improve our marketing
efficiency by utilizing AI technology, in particular:
(i) approximately 2.0% will be invested in new online marketing channels. We
aim to diversify our marketing channels by increasing investment in emerging
marketing channels. Through partnerships with popular social media platforms
such as Weibo and TikTok, as well as Autohome and other industry vertical
platforms, we will leverage their massive user bases and high-traffic
advantages to build an omni-channel marketing matrix to further promote our
products and enhance our brand exposure among global consumers; (ii)
approximately 7.0% will be invested in offline marketing channels to further
enhance brand awareness. For example, we plan to increase our participation
in auto shows to boost brand exposure. We will also organize more offline
events, such as test drives and community activities, to promote our new
features and improve user engagement; and (iii) approximately 1.0% will be
invested in improving marketing efficiency by utilizing AI technologies.
Meanwhile, we intend to actively explore the use of artificial intelligence to
gain customer insights, conduct analysis, and automatically match marketing
content based on user needs, to achieve precise targeting of potential
customers. Empowered by AI technology, we will automate the entire
marketing process from content creation to execution of marketing activities,
thereby achieving comprehensive digital management to improve marketing
efficiency;
FUTURE PLANS AND USE OF PROCEEDS
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/L50537approximately 5.0%, or HK$646.2 million, to expand our overseas sales
channels and delivery capabilities and enhance our influence in the
international market, in particular, over the next three years:
We plan to accelerate our global market expansion by engaging in diverse and
open collaborations with our global partners, including in markets in the
Middle East, Europe, Australasia, and Middle and South America. We will
actively explore diverse methods for building overseas networks, including,
among others, self-construction, establishment of joint ventures with local
partners, strategic cooperation, and mergers and acquisitions to achieve local
manufacturing and operation. We will increase local production capacity and
sales network in various countries and regions, to enhance our direct
engagement with customers. Through such network, we plan to conduct
various sales and marketing activities, offering local customers test drives and
experience services. By leveraging the distributors’ existing distribution
networks and customer base, we expect to accelerate our market penetration,
sell our products to overseas markets, achieving growth in our overseas
business. Before entering into a new international market, we will conduct
legal analysis to evaluate any regulatory restrictions on our products, and will
make necessary alterations and modifications to ensure compliance;
/L50537approximately 5.0%, or HK$646.3 million, to expand our supercharging station
network and enhance customer satisfaction with our brand, in particular, over
the next three years:
We plan to increase the number of our supercharging stations across China, in
particular in tier-1 and tier-2 cities, as well as famous tourist spots, to build an
extensive charging network for our customers with over 1,000 stations by the
end of 2027, which will not only provide a more convenient and efficient
charging experience to our customers, but also enhance our brand recognition
and boost our sales. To adequately meet our customers’ charging needs, we
plan to establish more supercharging stations in key regions across China; and
 the remaining approximately 10.0%, or HK$1,292.5 million, will be used for
working capital and general corporate purposes.
If the Offer Size Adjustment Option and the Over-allotment Option are not exercised, the
net proceeds that we will receive will be approximately HK$12,924.9 million, at an Offer Price
of HK$131.50 per Offer Share.
If the Offer Size Adjustment Option and the Over-allotment Option are exercised in full,
the net proceeds that we will receive will be approximately HK$17,114.4 million, at an Offer
Price of HK$131.50 per Offer Share. In the event that the Offer Size Adjustment Option and
the Over-allotment Option are exercised in full, we intend to apply the additional net proceeds
to the above purpose in the proportions stated above.
FUTURE PLANS AND USE OF PROCEEDS
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To the extent that our net proceeds are not sufficient to fund the purposes set out above,
we intend to fund the balance through a variety of means, including cash generated from
operations, bank loans and other borrowings. To the extent that the net proceeds from the
Global Offering are not immediately used for the purposes described above and to the extent
permitted by the relevant laws and regulations, they will only be placed in short-term
interest-bearing accounts at licensed commercial banks and/or other authorized financial
institutions (as defined under the SFO or applicable laws and regulations in other
jurisdictions). We will issue an appropriate announcement if there is any material change to the
above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 381 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
China Galaxy International Securities (Hong Kong) Co., Limited
Huatai Financial Holdings (Hong Kong) Limited
UNDERWRITING ARRANGEMENTS
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, the Company is offering 10,020,000
Hong Kong Offer Shares (subject to reallocation) for subscription by the public in Hong Kong
on and subject to the terms and conditions of this Prospectus at the Offer Price.
Subject to the Hong Kong Stock Exchange granting the listing of, and permission to deal
in, the H Shares to be issued pursuant to the Global Offering (including any H Shares which
may be issued pursuant to the exercise of the Offer Size Adjustment Option and the
Over-allotment Option), and certain other conditions set out in the Hong Kong Underwriting
Agreement, the Hong Kong Underwriters have agreed to severally (and not jointly or jointly
and severally) to subscribe or procure subscribers for their respective applicable proportions of
the Hong Kong Offer Shares now being offered which are not taken up under the Hong Kong
Public Offering on and subject to the terms and conditions of this Prospectus and the Hong
Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on and subject to, amongst other
things, the International Underwriting Agreement having been signed and becoming
unconditional and not having been terminated in accordance with its terms.
Grounds for Termination
The Joint Sponsors and the Overall Coordinators (for itself and on behalf of the Hong
Kong Underwriters) shall, in their sole and absolute discretion, be entitled by notice (in
writing) to the Company to terminate the Hong Kong Underwriting Agreement with immediate
effect if prior to 8:00 a.m. on the Listing Date:
(A) there shall develop, occur, exist or come into force:
(a) any new law or regulation or any change or development involving a
prospective change in existing laws or regulations or any change or
development involving a prospective change in the interpretation or
application thereof by any court or any competent authority in or affecting any
of Hong Kong, the PRC, the United States, the United Kingdom, the European
UNDERWRITING
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--- page 382 ---
Union (or any member thereof) or any other jurisdiction relevant to any
member of the Group or the Global Offering (each a “ Relevant Jurisdiction ”
and collectively, the “ Relevant Jurisdictions ”); or
(b) any change or development involving a prospective change or development, or
any event or circumstances or series of events likely to result in or representing
a change or development, or prospective change or development, in local,
national, regional or international financial, political, military, industrial,
economic, currency market, legal, fiscal, regulatory, credit or market matters or
conditions, equity securities, exchange control or any monetary or trading
settlement system (including, without limitation, conditions in stock and bond
markets, money and foreign exchange markets and inter-bank markets, a
change in the system under which the value of the Hong Kong currency is
linked to that of the currency of the United States or a change of the Hong
Kong dollars or of the Renminbi against any foreign currencies) in or affecting
any Relevant Jurisdiction; or
(c) any event or series of events, whether in continuation, or circumstances in the
nature of force majeure (including, without limitation, acts of government,
labor disputes, strikes, lock-outs, fire, explosion, earthquake, flooding,
tsunami, volcanic eruption, civil commotion, riots, rebellion, public disorder,
acts of war (whether declared or undeclared), acts of terrorism (whether or not
responsibility has been claimed), acts of God, accident or interruption or delay
in transportation, destruction of power plant, outbreak, escalation, mutation or
aggravation of diseases, epidemics or pandemics including, but not limited to,
COVID-19, SARS, swine or avian flu, H5N1, H1N1, H1N7, H7N9, Ebola
virus, Middle East respiratory syndrome (MERS) and such related/mutated
forms, economic or comprehensive sanction, any local, national, regional or
international outbreak or escalation of hostilities (whether or not war is or has
been declared) or other state of emergency or calamity or crisis in whatever
form, political change, paralysis of government operations, other industrial
action in or directly or indirectly affecting any Relevant Jurisdiction; or
(d) any moratorium, suspension or restriction (including, without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) in or on trading in securities generally on the Stock Exchange, the New
Y ork Stock Exchange, the NASDAQ Global Market, the London Stock
Exchange, the Tokyo Stock Exchange, the Singapore Exchange Limited, the
Shanghai Stock Exchange or the Shenzhen Stock Exchange; or
(e) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority or
other competent Governmental Authority), New Y ork (imposed at the U.S.
Federal or New Y ork State level or other competent Governmental Authority),
London, the PRC, the European Union (or any member thereof), or any
UNDERWRITING
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--- page 383 ---
Relevant Jurisdiction or any disruption in commercial banking or foreign
exchange trading or securities settlement or clearance services, procedures or
matters in or affecting any Relevant Jurisdiction; or
(f) the imposition of economic or comprehensive sanctions or export control under
any sanctions Laws or regulations in, or the withdrawal of trading privileges
which existed on the date of the Hong Kong Underwriting Agreement, in
whatever form, directly or indirectly, by, or for, the United States, the United
Kingdom, the European Union (or any member thereof), the PRC or any other
Relevant Jurisdiction on the Company or any member of the Group; or
(g) any change or development involving a prospective change or amendment in
or affecting taxation or exchange control, currency exchange rates or foreign
investment regulations (including, without limitation, a devaluation of the
United States dollar, the Hong Kong dollars or RMB 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 dollars or RMB is linked to any
foreign currency or currencies), or the implementation of any exchange control
in any Relevant Jurisdictions or adversely affecting an investment in the Offer
Shares; or
(h) other than with the prior written consent of the Overall Coordinators, the issue
or requirement to issue by the Company of a supplement or amendment to this
prospectus, the preliminary offering circular or the offering circular 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 or
the SFC; or
(i) any change or development involving a prospective change which has the
effect of materialization of any of the risks set out in the section headed “Risk
Factors” in this prospectus; or
(j) any litigation, dispute, arbitration, legal action, proceeding or claim or
regulatory investigation or action being threatened, instigated or announced
against the Company, any member of the Group, any Director, or member of
the senior management of the Company or any of the Single Largest Group of
Shareholders; or
(k) any contravention of the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the PRC Company Law or the
Listing Rules or any other applicable Laws by the Company, any member of
the Group, any Director or member of the senior management of the Company;
or
UNDERWRITING
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--- page 384 ---
(l) any Director or member of the senior management of the Company vacating
his/her office; or
(m) any demand by creditors for repayment of indebtedness or a petition being
presented for the winding-up or liquidation of any member of the Group, or any
member of the Group making any composition or arrangement with its
creditors or entering into a scheme of arrangement or any resolution being
passed for the winding-up of any member of the Group or a provisional
liquidator, receiver or manager being appointed over all or part of the assets or
undertaking of any member of the Group or anything analogous thereto occurs
in respect of any member of the Group; or
(n) any order or petition for the winding up or liquidation of any member of the
Group or any composition or arrangement made by any member of the Group
with its creditors or a scheme of arrangement entered into by any member of
the Group or any resolution for the winding-up of any member of the Group or
the appointment of a provisional liquidator, receiver or manager over all or part
of the assets or undertaking of any member of the Group or anything analogous
thereto occurring in respect of any member of the Group,
which, individually or in the aggregate, in the sole and absolute opinion of the
Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters):
(a) is or will be or may be materially adverse to, or materially and prejudicially
affects, the assets, liabilities, business, general affairs, management,
shareholder’s equity, profit, losses, earnings, results of operations,
performance, position or condition (financial, operational or otherwise), or
prospects of the Company or the Group as a whole or to any present or
prospective shareholder of the Company in its capacity as such;
(b) has or will have or may have a material adverse effect on the success or
marketability of the Global Offering or the level of Offer Shares being applied
for or accepted or subscribed for or purchased or the distribution of Offer
Shares and/or has made or is likely to make or may make it impracticable or
incapable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or
implemented as envisaged;
(c) makes or will make it or may make it inexpedient, impracticable or incapable
to proceed with the Hong Kong Public Offering and/or the Global Offering or
the delivery of the Offer Shares on the terms and in the manner contemplated
by this prospectus, the formal notice, the preliminary offering circular or the
offering circular; or
UNDERWRITING
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--- page 385 ---
(d) has had or will have or may have the effect of making a part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or which prevents or delays the processing of
applications and/or payments pursuant to the Global Offering or pursuant to
the underwriting thereof; or
(B) there has come to the notice of the Joint Sponsors and/or the Overall Coordinators
that:
(a) any statement contained in any of the Offering Documents (as defined in the
Hong Kong Underwriting Agreement) and/or any notices, announcements,
advertisements, communications or other documents (including any
announcement, circular, document or other communication pursuant to the
Hong Kong Underwriting Agreement) issued or used by or on behalf of the
Company in connection with the Global Offering (including any supplement or
amendment thereto) (collectively, the “ Offer Related Documents ”) was or has
become untrue, incomplete, incorrect, inaccurate in any material respect or
misleading or deceptive or any forecasts, estimate, expressions of opinion,
intention or expectation contained in any of such documents are not fair and
honest and made on reasonable grounds or, where appropriate, based on
reasonable assumptions;
(b) the issue or requirement to issue by the Company of any supplement or
amendment to this prospectus, the Preliminary Offering Circular or the
Offering Circular or any other documents in connection with the offer and sale
of the Offer Shares pursuant to the Companies Ordinance, the Companies
(Winding Up and Miscellaneous Provisions) Ordinance or the Listing Rules or
any requirement or request of the Stock Exchange and/or the SFC, unless
consented by the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters); or
(c) any contravention by the Company, any member of the Group or any Director
of any Law in any material respect; or
(d) non-compliance of this prospectus, the CSRC Filings or any aspect of the
Global Offering with the Listing Rules or any other applicable Law in any
material respect; or
(e) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, not having been
disclosed in this prospectus, constitutes an omission from, or misstatement in,
any of the Offer Related Documents; or
UNDERWRITING
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--- page 386 ---
(f) either (i) there has been a breach of any of the representations, warranties,
undertakings or provisions of either the Hong Kong Underwriting Agreement
or the International Underwriting Agreement by the Company (except those
already qualified by materiality); or (ii) any of the representations, warranties
and undertakings given by the Company in the Hong Kong Underwriting
Agreement or the International Underwriting Agreement, as applicable, is (or
would when repeated be) untrue, incorrect, incomplete or misleading in any
respect (except those already qualified by materiality); or
(g) any event, act or omission which gives or is likely to give rise to any liability
of the Company pursuant to the indemnities given by the Company under the
Hong Kong Underwriting Agreement or the International Underwriting
Agreement; or any litigation or dispute or potential litigation or dispute, which
would have a Material Adverse Effect (as defined in the Hong Kong
Underwriting Agreement); or
(h) any material breach of any of the obligations of the Company under the Hong
Kong Underwriting Agreement or the International Underwriting Agreement
(including any supplement or amendment thereto); or
(i) any breach of, or any event or circumstance rendering any of the Warranties
untrue or incorrect or incomplete or misleading in any respect (except those
already qualified by materiality); or
(j) a significant portion of the orders placed or confirmed in the book-building
process at the time of the International Underwriting Agreement is entered into
and the investment commitments by the cornerstone investors after signing of
agreements with such cornerstone investors, have been withdrawn, terminated
or cancelled; or
(k) any expert, whose consent is required for the issue of this prospectus with the
inclusion of its reports, letters or opinions and references to its name included
in the form and context in which it respectively appears, has withdrawn its
respective consent (other than the Joint Sponsors) prior to the issue of this
prospectus; or
(l) a Material Adverse Effect (as defined in the Hong Kong Underwriting
Agreement); or
(m) the grant or agreement to grant by the Listing Committee of the Stock
Exchange of the listing on the Main Board of, and permission to deal on the
Main Board in, the H Shares (including pursuant to any exercise of the Offer
Size Adjustment Option and the Over-allotment Option) (the “ Admission ”) is
UNDERWRITING
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--- page 387 ---
refused or not granted, other than subject to customary conditions, on or before
the Listing Date, or if granted, the Admission is subsequently withdrawn,
cancelled, qualified (other than by customary conditions), revoked or withheld;
or
(n) the Company has withdrawn this prospectus (and/or any other documents
issued or used in connection with the Global Offering) or the Global Offering;
or
(o) a prohibition on the Company for whatever reason from offering, allotting,
issuing or selling the Offer Shares (including pursuant to any exercise of the
Offer Size Adjustment Option and the Over-allotment Option Shares) pursuant
to the terms of the Global Offering; or
(p) any Director or member of senior management of the Company is being
charged with an indictable offence or is prohibited by operation of law or
otherwise disqualified from taking part in the management of a company or
there is the commencement by any governmental, political or regulatory body
of any investigation or other action against any Director or member of senior
management of the Company in his or her capacity as such or any member of
the Group or an announcement by any governmental, political or regulatory
body that it intends to commence any such investigation or take any such
action; or
(q) any order or petition for the winding-up of any member of the Group or any
composition or arrangement made by any member of the Group with its
creditors or a scheme of arrangement entered into by any member of the Group
or any resolution for the winding-up of any member of the Group or the
appointment of a provisional liquidator, receiver or manager over all or part of
the assets or undertaking of any member of the Group or anything analogous
thereto occurring in respect of any member of the Group.
Undertaking to the Hong Kong Stock Exchange pursuant to the Listing Rules
Undertakings by the Company
Pursuant to Rule 10.08 of the Listing Rules, the Company has undertaken to the Hong
Kong Stock Exchange that it will not issue any further Shares or securities convertible into
equity securities of the Company (whether or not of a class already listed) or form the subject
of any agreement to such issue within six months from the date on which our Shares first
commence dealing on the Hong Kong Stock Exchange (whether or not such issue of Shares or
securities will be completed within six months from the commencement of dealing), except
pursuant to the Global Offering (including the exercise of the Offer Size Adjustment Option
and the Over-allotment Option) or under any of the circumstances provided under Rule 10.08
of the Listing Rules.
UNDERWRITING
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--- page 388 ---
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by the Company
The Company has undertaken to the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Sponsors, the Joint Bookrunners, the Joint Lead Managers, the
Hong Kong Underwriters and each of them not to (save for the issue, offer, or sale of the Offer
Shares pursuant to the Global Offering, including pursuant to the exercise of the Over-
allotment Option), without the prior written consent of the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and unless in compliance with the
Listing Rules, at any time during the period commencing on the date of the Hong Kong
Underwriting Agreement and ending on, and including, the date falling six months after the
Listing Date (the “ First Six-Month Period ”):
(i) offer, allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract
or agree to allot, issue or sell, assign, mortgage, charge, pledge, transfer,
hypothecate, lend, grant or sell any option, warrant, contract or right to subscribe for
or purchase, grant or purchase any option, warrant, contract or right to allot, issue
or sell, or otherwise transfer or dispose of or create an Encumbrance (as defined in
the Hong Kong Underwriting Agreement) over, or agree to transfer or dispose of or
create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, or repurchase, any legal or beneficial interest in the share capital or
any other securities of the Company, as applicable, or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represents the right to receive, or any
warrants or other rights to purchase any share capital or other securities of the
Company, as applicable), or deposit any share capital or other securities of the
Company, as applicable, with a depositary in connection with the issue of depositary
receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of the H
Shares or any other securities of the Company, as applicable, or any interest in any
of the foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any H Shares or any shares of the Company); or
(iii) enter into any transaction with the same economic effect as any transaction specified
in (i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction specified in
(i), (ii) or (iii) above,
UNDERWRITING
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--- page 389 ---
in each case, whether any of the transactions specified in (i), (ii) or (iii) above is to be settled
by delivery of H Shares or other securities of the Company in cash or otherwise (whether or
not the issue of such H Shares or other shares or securities will be completed within the First
Six-Month Period).
Indemnity
The Company has agreed to indemnify the Overall Coordinators, the Joint Global
Coordinators, the Joint Sponsors, the Joint Bookrunners, the Joint Lead Managers and the
Hong Kong Underwriters for certain losses which they may suffer, including, among other
matters, losses incurred arising from the performance of their obligations under the Hong Kong
Underwriting Agreement and any breach by us of the Hong Kong Underwriting Agreement.
Commissions and Expenses
The Hong Kong Underwriters will receive an underwriting commission of 0.9% of the
aggregate Offer Price payable for the Hong Kong Offer Shares offered under the Hong Kong
Public Offering (excluding any Hong Kong Offer Shares reallocated to the International
Offering), and the International Underwriters are expected to receive an underwriting
commission of 0.9% of the aggregate Offer Price payable for the International Offer Shares
offered under the International Offering. For unsubscribed Hong Kong Offer Shares reallocated
to the International Offering and International Offer Shares reallocated to the Hong Kong
Public Offering, if any, the Company will pay an underwriting commission at the rate
applicable to the International Offering as set out in the International Underwriting Agreement,
and such commission will be paid to the Overall Coordinators (for themselves and on behalf
of the International Underwriters), and no underwriting commission will be paid to the Hong
Kong Underwriters for such reallocated Offer Shares. In addition, at the discretion of the
Company, the Underwriters may also receive an incentive fee of not more than 0.5% of the
aggregate Offer Price in respect of all the Offer Shares to be issued by the Company under the
Global Offering (including any Offer Shares to be issued pursuant to the exercise of the Offer
Size Adjustment Option and the Over-allotment Option). The ratio of fixed fee and
discretionary fee payable by the Company to all syndicate members participating in the Global
Offering is expected to be approximately 25.72:74.28 (assuming the discretionary fee will be
paid in full).
An amount of US$500,000 is payable by the Company as sponsor fees to each Joint
Sponsors.
Hong Kong Underwriters’ Interests in the Company
Save for the obligations under the Hong Kong Underwriting Agreement and as disclosed
in this prospectus, none of the Hong Kong Underwriters has any shareholding or beneficial
interests in any member of the Group or has any right or option (whether legally enforceable
or not) to subscribe for or purchase or to nominate persons to subscribe for or purchase
securities in any member of the Group.
UNDERWRITING
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--- page 390 ---
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
International Offering
In connection with the International Offering, it is expected that the Company will enter
into the International Underwriting Agreement with, among others, the Overall Coordinators
(for themselves and on behalf of the International Underwriters). Under the International
Underwriting Agreement and subject to the Offer Size Adjustment Option and the Over-
allotment Option, it is expected that the International Underwriters would, subject to certain
conditions set out therein, severally but not jointly, agree to procure purchasers for, or to
purchase, the International Offer Shares being offered pursuant to the International Offering or
procure purchasers for their respective applicable proportions of International Offer Shares.
Please refer to the section headed “Structure of the Global Offering — The International
Offering” in this prospectus for details.
It is expected that the International Underwriting 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.
Over-allotment Option
The Company expects to grant to the International Underwriters, exercisable by the
Overall Coordinators (for themselves and on behalf of the International Underwriters), the
Over-allotment Option, which will be exercisable from the date of the International
Underwriting Agreement until 30 days after the last day for the lodging of applications under
the Hong Kong Public Offering, to issue up to 15,030,000 H Shares, representing not more than
15.0% of the number of Offer Shares initially available under the Global Offering (assuming
the Offer Size Adjustment Option is not exercised at all) or up to an aggregate of 17,284,500
H Shares, representing not more than 15.0% of the number of Offer Shares available under the
Global Offering (assuming the Offer Size Adjustment Option is exercised in full), at the same
price per Offer Share under the International Offering, to, among other things, cover
over-allocations in the International Offering, if any.
Offer Size Adjustment Option
The Company has an Offer Size Adjustment Option under the Hong Kong Underwriting
Agreement, exercisable by the Company with the prior written agreement between the
Company and the Overall Coordinators (for themselves and on behalf of the Underwriters) on
or before the time of execution of the Price Determination Agreement and will lapse
immediately thereafter. Upon the exercise of the Offer Size Adjustment Option, the Company
may issue up to 15,030,000 additional Offer Shares (being 15.0% of the Offer Shares initially
UNDERWRITING
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--- page 391 ---
available under the Global Offering) at the Offer Price. The Offer Size Adjustment Option
provides flexibility to increase the number of Offer Shares available for purchase under the
Global Offering to cover additional market demand.
The exercise of the Offer Size Adjustment Option is also subject to the reallocation
arrangement as described in “Structure of the Global Offering — The Hong Kong Public
Offering — Reallocation.”
RESTRICTIONS ON THE OFFER SHARES
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this prospectus and the offering and sales of the Offer Shares in
other jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom. In
particular, the Hong Kong Offer Shares have not been publicly offered or sold, directly or
indirectly, in China or the United States.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of the Company
and/or persons and entities with relationships with the Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, including as a lender to initial purchasers
of the H Shares (which financing may be secured by the H Shares) in the Global Offering,
UNDERWRITING
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proprietary trading in the H Shares, and entering into over-the-counter or listed derivative
transactions or listed and unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Such transactions may be carried out as bilateral agreements or trades
with selected counterparties. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares, which may have a
negative impact on the trading price of the H Shares. All such activity could occur in Hong
Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the H Shares, in baskets of securities or indices including
the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any
of the foregoing.
In relation to issues by the Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Hong Kong Stock Exchange
or on any other stock exchange, the rules of the exchange may require the issuer of those
securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in
the security, and this will also result in hedging activity in the H Shares in most cases.
Such activities may affect the market price or value of the H Shares, the liquidity or
trading volume in the H Shares and the volatility of the price of the H Shares, and the extent
to which this occurs from day to day cannot be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer
Shares, effect any transactions (including issuing or entering into any option or other
derivative transactions relating to the Offer Shares), whether in the open market or
otherwise, with a view to stabilizing or maintaining the market price of any of the
Offer Shares at levels other than those which might otherwise prevail in the open
market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to the
Company and its affiliates for which such Syndicate Members or their respective affiliates have
received or will receive customary fees and commissions.
UNDERWRITING
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JOINT SPONSORS’ INDEPENDENCE
China International Capital Corporation Hong Kong Securities Limited satisfies the
independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
China Galaxy International Securities (Hong Kong) Co., Limited, one of the Joint
Sponsors, is a wholly-owned subsidiary of China Galaxy Securities Co., Ltd. (ٰ
ʮ̡)( “ China Galaxy ”). Taking into account of the business relationship between
China Galaxy and the Company, which might reasonably give rise to a perception that the
sponsor’s independence would be so affected, China Galaxy International Securities (Hong
Kong) Co., Limited is not considered as an independent sponsor pursuant to the independence
criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering.
China International Capital Corporation Hong Kong Securities Limited and China Galaxy
International Securities (Hong Kong) Co., Limited are the Overall Coordinators of the Global
Offering, and the Joint Global Coordinators of the Global Offering.
The listing of the H Shares on the Hong Kong Stock Exchange is sponsored by the Joint
Sponsors. The Joint Sponsors has made an application on behalf of our Company to the Listing
Committee of the Hong Kong Stock Exchange for the listing of, and permission to deal in, the
H Shares in issue and to be issued as mentioned in this prospectus.
100,200,000 Offer Shares will initially be made available under the Global Offering
comprising:
(a) the Hong Kong Public Offering of initially 10,020,000 H Shares (subject to
reallocation and the Offer Size Adjustment Option) in Hong Kong as described in
the sub-section “The Hong Kong Public Offering” in this section below; and
(b) the International Offering of initially 90,180,000 H Shares (subject to reallocation,
the Offer Size Adjustment Option and the Over-allotment Option) outside the United
States in offshore transactions in reliance on Regulation S as described in the
sub-section headed “The International Offering” this section below.
Investors may either:
(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest for International Offer Shares under the
International Offering, but may not do both.
The Offer Shares will represent approximately 5.78% of the enlarged issued share capital
of our Company immediately following the completion of the Global Offering, assuming the
Offer Size Adjustment Option and the Over-allotment Option are not exercised. If the
Over-allotment Option is exercised in full, the Offer Shares will represent approximately
6.59% of the enlarged issued share capital of our Company (assuming the Offer Size
Adjustment Option is not exercised at all) or approximately 7.50% of the enlarged issued share
capital of our Company (assuming the Offer Size Adjustment option is exercised in full)
immediately following the completion of the Global Offering.
References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 10,020,000 H Shares (subject to reallocation) for
subscription by the public in Hong Kong at the Offer Price, representing approximately 10.00%
of the total number of Offer Shares initially available under the Global Offering. The number
of Offer Shares initially offered under the Hong Kong Public Offering, subject to any
reallocation of Offer Shares between the International Offering and the Hong Kong Public
Offering, will represent approximately 0.58% of the total Shares in issue immediately
following the completion of the Global Offering (assuming the Offer Size Adjustment Option
and the Over-allotment Option are not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities that regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in the
sub-section headed “Conditions of the Global Offering” in this section.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
could mean that some applicants may receive a higher allocation than others who have applied
for the same number of Hong Kong Offer Shares, and those applicants who are not successful
in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below)
will be divided equally into two pools (with any odd lots being allocated to pool A): pool A
and pool B. The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to
applicants who have applied for Hong Kong Offer Shares with an aggregate subscription price
of HK$5 million (excluding the brokerage, the SFC transaction levy, the AFRC transaction levy
and the Hong Kong Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares
in pool B will be allocated on an equitable basis to applicants who have applied for Hong Kong
Offer Shares with an aggregate subscription price of more than HK$5 million (excluding the
brokerage, the SFC transaction levy, the AFRC transaction levy and the Hong Kong Stock
Exchange trading fee payable) and up to the total value in pool B.
STRUCTURE OF THE GLOBAL OFFERING
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Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Hong Kong Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 5,010,000 Hong Kong Offer
Shares (being 50% of the Hong Kong Offer Shares initially available under the Hong Kong
Public Offering) is liable to be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not
fully subscribed, the Overall Coordinators will have the discretion (but shall not be under any
obligation) to reallocate to the International Offering all or any unsubscribed Hong Kong Offer
Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate.
In the event of reallocation of Offer Shares between the International Offering and the
Hong Kong Public Offering in the circumstances where (a) the International Offer Shares are
fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times; or (b) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times, then up to 5,010,000 Offer Shares may be reallocated from
the International Offering to the Hong Kong Public Offering, so that the total number of Offer
Shares available for subscription under the Hong Kong Public Offering will increase up to
15,030,000 Offer Shares, representing approximately 15% of the number of Offer Shares
initially available under the Global Offering (before exercise of the Offer Size Adjustment
option and the Over-allotment Option) in accordance with Chapter 4.14 of the Guide for New
Listing Applicants. In the circumstance where the International Offer Shares are fully
subscribed or oversubscribed and the Hong Kong Offer Shares are undersubscribed, there will
be no reallocation from the International Offering to the Hong Kong Public Offering, and no
over-allocation of H Shares to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide and the provision of Paragraph 4.2(b) of Practice Note 18 of the Listing Rules, no
mandatory clawback or reallocation mechanism is required to increase the number of Offer
Shares under the Hong Kong Public Offering to a certain percentage of the total number of
Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering,
which is expected to be published on Tuesday, November 4, 2025.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him/her/it that he/she/it and any
person(s) for whose benefit he/her/it is making the application has not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
International Offer Shares under the International Offering. Such applicant’s application is
liable to be rejected if such undertaking and/or confirmation is/are breached and/or untrue (as
the case may be) or if he/she/it has been or will be placed or allocated International Offer
Shares under the International Offering.
Applicants under the Hong Kong Public Offering may be required to pay, on application,
(subject to application channel) the maximum Offer Price of HK$131.50 per Offer Share in
addition to the brokerage, the SFC transaction levy, the AFRC transaction levy and the Hong
Kong Stock Exchange trading fee payable on each Offer Share, amounting to a total of
HK$13,282.62 for one board lot of 100 H Shares. If the Offer Price, as finally determined in
the manner described in the sub-section headed “Pricing and Allocation” in this section below,
is less than the maximum Offer Price of HK$131.50 per H Share, appropriate refund payments
(including the brokerage, the SFC transaction levy, the AFRC transaction levy and the Hong
Kong Stock Exchange trading fee attributable to the surplus application monies) will be made
to successful applicants (subject to application channel), without interest. Further details are
set out in the section headed “How to Apply for Hong Kong Offer Shares” in this prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
The International Offering will consist of an initial offering of 90,180,000 H Shares,
representing approximately 90% of the total number of Offer Shares initially available under
the Global Offering (subject to reallocation, the Offer Size Adjustment option and the
Over-allotment Option). The number of Offer Shares initially offered under the International
Offering, subject to any reallocation of Offer Shares between the International Offering and the
Hong Kong Public Offering, will represent approximately 5.20% of the total Shares in issue
immediately following the completion of the Global Offering (assuming the Offer Size
Adjustment option and the Over-allotment Option are not exercised).
STRUCTURE OF THE GLOBAL OFFERING
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--- page 398 ---
Allocation
The International Offering will include selective marketing of Offer Shares institutional
and professional investors and other investors anticipated to have a sizeable demand for such
Offer Shares in Hong Kong and other jurisdictions outside the United States 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 that regularly invest in shares and other securities. Allocation of Offer Shares
pursuant to the International Offering will be effected in accordance with the “book-building”
process described in sub-section headed “Pricing and Allocation” in this section and based on
a number of factors, including the level and timing of demand, the total size of the relevant
investor’s invested assets or equity assets in the relevant sector and whether or not it is
expected that the relevant investor is likely to buy further H Shares and/or hold or sell its H
Shares after the Listing. Such allocation is intended to result in a distribution of the H Shares
on a basis which would lead to the establishment of a solid professional and institutional
shareholder base to the benefit of the Group and the Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require
any investor who has been offered Offer Shares under the International Offering and who has
made an application under the Hong Kong Public Offering to provide sufficient information to
the Overall Coordinators so as to allow them to identify the relevant applications under the
Hong Kong Public Offering and to ensure that they are excluded from any allocation of Offer
Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the clawback arrangement described in the subsection “The
Hong Kong Public Offering — Reallocation” in this section above, the exercise of the Offer
Size Adjustment option and the Over-allotment Option in whole or in part and/or any
reallocation of unsubscribed Offer Shares originally included in the Hong Kong Public
Offering.
OFFER SIZE ADJUSTMENT OPTION
In order to provide the Company with the flexibility to increase the number of Offer
Shares available under the Global Offering to cover additional demand, the Company has an
Offer Size Adjustment Option which will allow the Company to issue up to 15,030,000
additional Offer Shares (representing approximately 15.0% of the Offer Shares initially being
offered under the Global Offering) (the “ Offer Size Adjustment Option Shares ”) at the Offer
Price. The Offer Size Adjustment Option may be exercised on or before the time of execution
of the Price Determination Agreement and will lapse immediately thereafter.
STRUCTURE OF THE GLOBAL OFFERING
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The Offer Size Adjustment Option is contained in the Hong Kong Underwriting
Agreement and is exercisable by the Company with the prior written agreement between the
Company and the Overall Coordinators (for themselves and on behalf of the Underwriters) on
or before the time of the execution of the Price Determination Agreement. If it is not exercised
by such time, then the Offer Size Adjustment Option will lapse. In considering whether to
exercise the Offer Size Adjustment Option, the Company and the Overall Coordinators will
take into account a number of factors, including, among other things:
(a) whether the level of interest expressed by prospective professional and institutional
investors during the book-building process under the International Offering is
sufficient to cover:
(i) the total number of Offer Shares, which represents the aggregate of the Offer
Shares initially available under the Global Offering and the additional Offer
Shares upon any exercise of the Offer Size Adjustment Option; and
(ii) the corresponding number of H Shares under the Over-allotment Option;
(b) the prices at which prospective professional and institutional investors have
indicated they would be prepared to acquire the Offer Shares in the course of the
book-building process;
(c) the quality of investors, with a view to establishing a solid professional institutional
and investor shareholder base to the benefit of the Company and its Shareholders as
a whole;
(d) the level of subscriptions by the valid applications in the Hong Kong Public
Offering; and
(e) general market conditions.
These Offer Size Adjustment Option Shares, if any, will be allocated in such manner as
closely as practicable to maintain the proportionality between the Hong Kong Public Offering
and the International Offering, and the Overall Coordinators shall allocate additional H Shares
to be offered by our Company pursuant to the International Offering to the Hong Kong Public
Offering in order to maintain such proportionality and the relevant number of Offer Size
Adjustment Option Shares shall be allocated to the International Offering to maintain such
proportionality, i.e., the initial proportion of 10.0%:90.0% between the Hong Kong Public
Offering and the International Offering, except for the scenario where excess additional Offer
Shares are not taken up by retail investors under the Hong Kong Public Offering and will then
be reallocated to International Offering to satisfy excess demand in the International Offering
as described in details below, in which case the final allocation of Offer Shares to the Hong
Kong Public Offering will be less than 10.0% of the total number of Offer Shares in the Global
Offering after the exercise of the Offer Size Adjustment Option.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 400 ---
Furthermore, the Company and the Overall Coordinators will only exercise the Offer Size
Adjustment Option to the extent that the Offer Size Adjustment Option Shares to be allocated
to the International Offering in order to maintain the initial proportionality between the Hong
Kong Public Offering and the International Offering will be fully subscribed to ensure no Offer
Size Adjustment Option Shares allocated to the International Offering will be reallocated to the
Hong Kong Public Offering.
In the event that the Offer Size Adjustment Option is exercised in full:
(a) if the Hong Kong Public Offering is oversubscribed by at least 0.15 time (being the
percentage which the additional Offer Shares issued pursuant to the Offer Size
Adjustment Option represent as a percentage to the number of the initial Offer
Shares), the additional Offer Shares will be allocated so as to maintain the initial
proportionality between the Hong Kong Public Offering and the International
Offering;
(b) if the Hong Kong Public Offering is oversubscribed by less than 0.15 time, the
additional Offer Shares will first be allocated to maintain, to the extent possible, the
initial proportion of 10.0%:90.0% between the Hong Kong Public Offering and the
International Offering. Any excess additional Offer Shares not taken up by retail
investors under the Hong Kong Public Offering will then be reallocated to
International Offering to satisfy excess demand in the International Offering. In such
a case, the final allocation of Offer Shares to the Hong Kong Public Offering will
be less than 10.0% of the total number of Offer Shares in the Global Offering after
the exercise of the Offer Size Adjustment Option.
In the event that the Offer Size Adjustment Option is exercised in part:
(a) if the Hong Kong Public Offering is oversubscribed by at least the relevant multiple
(being the percentage which the additional Offer Shares issued pursuant to the Offer
Size Adjustment Option represent as a percentage to the number of the initial Offer
Shares), the additional Offer Shares will be allocated so as to maintain the initial
proportionality between the Hong Kong Public Offering and the International
Offering;
(b) if the Hong Kong Public Offering is oversubscribed by less than the relevant
multiple (being the percentage which the additional Offer Shares issued pursuant to
the Offer Size Adjustment Option represent as a percentage to the number of the
initial Offer Shares), the additional Offer Shares will first be allocated to maintain,
to the extent possible, the initial proportion of 10.0%:90.0% between the Hong Kong
Public Offering and the International Offering. Any excess additional Offer Shares
not taken up by retail investors under the Hong Kong Public Offering will then be
reallocated to International Offering to satisfy excess demand in the International
Offering. In such a case, the final allocation of Offer Shares to the Hong Kong
Public Offering will be less than 10.0% of the total number of Offer Shares in the
Global Offering after the exercise of the Offer Size Adjustment Option.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 401 ---
In the event that the Hong Kong Public Offering is undersubscribed, all the additional
Offer Shares will be allocated to the International Offering. In such a case, the final allocation
of Offer Shares to the Hong Kong Public Offering will be less than 10.0% of the total number
of Offer Shares in the Global Offering after the exercise of the Offer Size Adjustment Option.
If the Offer Size Adjustment Option is exercised in full, the additional Offer Shares to be
issued pursuant thereto will represent approximately 0.86% of our enlarged issued share capital
immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised). The dilution effect of the Offer Size Adjustment Option (assuming the
Over-allotment Option is not exercised) is set out below:
Number of H Shares
issued under the
Global Offering before
the exercise of the
Offer Size Adjustment
Option (the “Original
Subscribers”)
Approximate
percentage of
total issued share
capital held by the
Original Subscribers
before the exercise of
the Offer Size
Adjustment Option
Number of H Shares
issued under the
Global Offering after
the exercise of the
Offer Size Adjustment
Option in full
Approximate
percentage of
total issued share
capital held by the
Original Subscribers
after the exercise of
the Offer Size
Adjustment Option
in full
100,200,000 5.8% 115,230,000 6.6%
The Offer Size Adjustment Option will not be used for price stabilization purposes and
will not be subject to the provisions of the Securities and Futures (Price Stabilizing) Rules
(Chapter 571W of the Laws of Hong Kong). The Offer Size Adjustment Option will be in
addition to the Over-allotment Option.
The Company will disclose in its allotment results announcement if and to what extent the
Offer Size Adjustment Option has been exercised, the final allocation of Offer Shares between
the Hong Kong Public Offering and the International Offering and the use of the additional
proceeds received, or will confirm that if the Offer Size Adjustment Option has not been
exercised by the Price Determination Date, it will lapse and cannot be exercised at any future
date.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, our Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Overall
Coordinators (for themselves and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Overall Coordinators (for themselves and on behalf of the International
Underwriters) at any time from the Listing Date until 30 days after the last day for lodging
applications under the Hong Kong Public Offering, to require our Company to issue up to an
aggregate of 15,030,000 H Shares, representing not more than 15.0% of the number of Offer
Shares initially available under the Global Offering (assuming the Offer Size Adjustment
STRUCTURE OF THE GLOBAL OFFERING
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Option is not exercised at all) or up to an aggregate of 17,284,500 H Shares, representing not
more than 15.0% of the number of Offer Shares available under the Global Offering (assuming
the Offer Size Adjustment Option is exercised in full), at the Offer Price under the International
Offering to, cover over-allocations (if any) in the International Offering.
If the Offer Size Adjustment Option is not exercised and the Over-allotment Option is
exercised in full, the additional Offer Shares to be issued pursuant thereto will represent
approximately 0.86% of the enlarged issued share capital of our Company immediately
following the completion of the Global Offering. If the Offer Size Adjustment Option and the
Over-allotment Option are exercised in full, the additional Offer Shares to be issued pursuant
to the Over-allotment Option will represent approximately 0.98% of the enlarged issued share
capital of our Company immediately following the completion of the Global Offering. If the
Over-allotment Option is exercised, an announcement will be made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market during a specified period of time, to retard and, if possible, prevent
a decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
In connection with the Global Offering, the Stabilizing Manager (or its affiliates or any
person acting for it), on behalf of the Underwriters, may over-allocate or effect transactions
with a view to stabilizing or supporting the market price of the H Shares at a level higher than
that which might otherwise prevail for a limited period after the Listing Date. However, there
is no obligation on the Stabilizing Manager (or its affiliates or any person acting for it) to
conduct any such stabilizing action. Such stabilizing action, if taken, (a) will be conducted at
the absolute discretion of the Stabilizing Manager (or its affiliates or any person acting for it)
and in what the Stabilizing Manager reasonably regards as the best interest of our Company,
(b) may be discontinued at any time and (c) is required to be brought to an end within 30 days
of the last day for lodging applications under the Hong Kong Public Offering.
Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) over-allocation for the purpose of preventing or
minimizing any reduction in the market price of the H Shares, (b) selling or agreeing to sell
the H Shares so as to establish a short position in them for the purpose of preventing or
minimizing any reduction in the market price of the H Shares, (c) purchasing, or agreeing to
purchase, the H Shares pursuant to the Over-allotment Option in order to close out any position
established under paragraph (a) or (b) above, (d) purchasing, or agreeing to purchase, any of
the H Shares for the sole purpose of preventing or minimizing any reduction in the market price
STRUCTURE OF THE GLOBAL OFFERING
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--- page 403 ---
of the H Shares, (e) selling or agreeing to sell any H Shares in order to liquidate any position
established as a result of those purchases and (f) offering or attempting to do anything as
described in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilizing Manager (or its affiliates or any person acting for it) may, in
connection with the stabilizing action, maintain a long position in the H Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or its affiliates or any person acting for it) will maintain such
a long position;
(c) liquidation of any such long position by the Stabilizing Manager (or its affiliates or
any person acting for it) and selling in the open market may have an adverse impact
on the market price of the H Shares;
(d) no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilization period, which will begin on the Listing Date, and is expected to
expire on the 30th day after the last day for lodging applications under the Hong
Kong Public Offering. After this date, when no further stabilizing action may be
taken, demand for the H Shares, and therefore the price of the H Shares, could fall;
(e) the price of the H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
(f) stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up
to an aggregate of 15,030,000 H Shares, representing not more than 15.0% of the number of
Offer Shares initially available under the Global Offering (assuming the Offer Size Adjustment
Option is not exercised at all) or up to an aggregate of 17,284,500 H Shares, representing not
more than 15.0% of the number of Offer Shares available under the Global Offering (assuming
the Offer Size Adjustment Option is exercised in full), through delayed delivery arrangements
with investors who have been allocated Offer Shares in the International Offering. The delayed
delivery arrangements (if specifically agreed by an investor) relate only to the delay in the
delivery of the Offer Shares to such investor and the Offer Price for the Offer Shares allocated
to such investor will be fully paid before the Listing Date. Both the size of such cover and the
extent to which the Over-allotment Option can be exercised will depend on whether
arrangements can be made with investors such that a sufficient number of H Shares can be
delivered on a delayed basis. If no investor in the International Offering agrees to the delayed
delivery arrangements, no stabilizing actions will be undertaken by the Stabilizing Manager
and the Over-allotment Option will not be exercised.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 404 ---
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-Allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or its affiliates or any person acting for it) may cover such over-
allocations by exercising the Over-allotment Option in full or in part, by using H Shares
purchased by the Stabilizing Manager (or its affiliates or any person acting for it) in the
secondary market at prices that do not exceed the Offer Price, or by a combination of these
methods.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or about
Monday, November 3, 2025 and, in any event, no later than 12:00 noon on Monday, November
3, 2025, by agreement between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company, and the number of Offer Shares to be allocated under the
various offerings will be determined shortly thereafter.
We will determine the Offer Price by reference to, among other factors, the closing price
of the A Shares on the Shanghai Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors
at https://english.sse.com.cn/markets/equities/list/overview/?COMPANY_CODE=601127&ST
OCKCODE=601127), and the Offer Price will not be more than HK$131.50. The historical
prices of our A Shares and trading volume on Shanghai Stock Exchange are set out below.
Period High Low ADTV (1)
(RMB) (RMB) (A Shares)
Y ear ended December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111887.75 36.10 20,717,628
Y ear ended December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H111897.90 24.82 50,481,102
Y ear ended December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118144.75 56.10 51,449,413
Y ear of 2025 (up to the Latest
Practicable Date) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171.57 113.80 26,716,820
Note:
(1) Average daily trading volume (“ ADTV ”) represents daily average number of the A Shares of the
Company traded over the relevant period.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 405 ---
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations of the Hong
Kong Offer Shares and the results of allocations in the Hong Kong Public Offering are
expected to be made available through a variety of channels in the manner described in “How
to Apply for Hong Kong Offer Shares — B. Publication of Results.”
The Offer Price will not be more than HK$131.50 per H Share unless otherwise
announced, as further explained below. Applicants under the Hong Kong Public Offering may
be required to pay, on application (subject to application channel) the maximum Offer Price of
HK$131.50 per H Share plus brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC
transaction levy of 0.00015% and Hong Kong Stock Exchange trading fee of 0.00565%,
amounting to a total of HK$13,282.62 for one board lot of 100 H Shares.
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Overall Coordinators (on behalf of the Underwriters) may, where they deem
appropriate, based on the level of interest expressed by prospective investors during the
book-building process in respect of the International Offering, and with the consent of our
Company, reduce the number of Offer Shares offered and/or the Offer Price at any time on or
prior to the morning of the last day for lodging applications under the Hong Kong Public
Offering. In such a case, our Company will, as soon as practicable following the decision to
make such reduction, and in any event not later than the morning of the last day for lodging
applications under the Hong Kong Public Offering, cause to be published on the websites of
our Company and the Hong Kong Stock Exchange at www.seres.cn and www.hkexnews.hk ,
respectively, notices of the reduction. Upon the issue of such a notice, the revised number of
Offer Shares and/or the Offer Price will be final and conclusive and the Offer Price, if agreed
upon by the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company, will be fixed. Our Company will also, as soon as practicable following the decision
to make such change, issue a supplemental prospectus updating investors of the change in the
number of Offer Shares being offered under the Global Offering and/or the Offer Price. The
Global Offering must first be canceled and subsequently relaunched on FINI pursuant to the
supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or the Offer Price may not be made until the last day for lodging applications under the
Hong Kong Public Offering. Such notice will also include confirmation or revision, as
appropriate, of the working capital statement and the Global Offering statistics as currently set
out in this prospectus, and any other financial information which may change as a result of any
such reduction. In the absence of any such notice so published, the number of Offer Shares will
not be reduced and/or the Offer Price, if agreed upon by the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company, will not be reduced.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 406 ---
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations of the Hong
Kong Offer Shares and the results of allocations in the Hong Kong Public Offering are
expected to be made available through a variety of channels in the manner described in the
section headed “How to Apply for Hong Kong Offer Shares — B. Publication of Results”.
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement and is subject to,
among other things, the Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company agreeing on the Offer Price.
Our Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or around the Price Determination Date.
These underwriting arrangements, including the Underwriting Agreements, are
summarized in the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering (including any additional
H Shares that may be issued pursuant to the exercise of the Offer Size Adjustment
Option and the Over-allotment Option) on the Main Board of the Hong Kong Stock
Exchange and such approval and permission not subsequently having been
withdrawn or revoked prior to the Listing Date;
(b) the Offer Price having been agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company;
(c) the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
(d) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times).
STRUCTURE OF THE GLOBAL OFFERING
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--- page 407 ---
If, for any reason, the Offer Price is not agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company by 12:00 noon on Monday,
November 3, 2025, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified,
the Global Offering will lapse and the Hong Kong Stock Exchange will be notified
immediately. Notice of the lapse of the Hong Kong Public Offering will be published by our
Company on the websites of our Company and the Hong Kong Stock Exchange at
www.seres.cn and www.hkexnews.hk , respectively, on the next day following such lapse. In
such a situation, all application monies will be returned, without interest, on the terms set out
in the section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection
of H Share Certificates and Refund of Application Monies” in this prospectus. In the meantime,
all application monies will be held in separate bank account(s) with the receiving banks or
other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws
of Hong Kong).
H Share certificates for the Offer Shares will only become valid at 8:00 a.m. on
Wednesday, November 5, 2025, provided that the Global Offering has become unconditional
in all respects at or before that time.
DEALINGS IN THE H SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Wednesday, November 5, 2025, it is expected that dealings in the H
Shares on the Hong Kong Stock Exchange will commence at 9:00 a.m. on Wednesday,
November 5, 2025.
The H Shares will be traded in board lots of 100 H Shares each and the stock code of the
H Shares will be 9927.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 408 ---
IMPORTANT NOTICE TO INVESTORS OF
HONG KONG PUBLIC OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offer and below are the procedures for application.
This prospectus is available at the website of the Hong Kong Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.seres.cn.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG PUBLIC OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Public Offer Shares if you or the person(s) for whose
benefit you are applying for:
 are 18 years of age or older;
 have a Hong Kong address (for the HK eIPO White Form service only) ; and
 are outside the United States (within the meaning of Regulation S) or are a person
described in paragraph (h)(3) of Rule 902 of Regulation S.
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Hong Kong Stock Exchange to us, you cannot apply for any Hong Kong Public Offer Shares
if you or the person(s) for whose benefit you are applying for:
 are an existing Shareholder of our Company;
 are a Director, Supervisor or chief executive of our Company and/or a director,
supervisor or chief executive of any of its subsidiaries;
 are a close associate (as defined in the Listing Rules) of any of the above persons;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 409 ---
 are a connected person (as defined in the Listing Rules) of our Company or will
become a connected person of our Company immediately upon the completion of the
Global Offering; or
 have been allocated or have applied for or indicated an interest in any International
Offer Shares or otherwise participate in the International Offering.
2. Application Channels
The Hong Kong Public Offer period will begin at 9:00 a.m. on Monday, October 27,
2025 and end at 12:00 noon on Friday, October 31, 2025 (Hong Kong time).
To apply for Hong Kong Public Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White
Form service /H1118/H1118/H1118/H1118
www.hkeipo.hk Investors who would like
to receive a physical H
Share certificate. Hong
Kong Public Offer
Shares successfully
applied for will be
allotted and issued in
your own name.
From 9:00 a.m. on
Monday, October 27,
2025 to 11:30 a.m.
on Friday, October 31 ,
2025, Hong Kong time.
The latest time for
completing full
payment of application
monies will be 12:00
noon on Friday,
October 31, 2025, Hong
Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit
an EIPO application on
your behalf through
HKSCC’s FINI system
in accordance with your
instruction
Investors who would not
like to receive a
physical H Share
certificate. Hong Kong
Public Offer Shares
successfully applied for
will be allotted and
issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated
HKSCC Participant’s
stock account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this may
vary by broker or
custodian.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 410 ---
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait until
the last day of the application period to apply for Hong Kong Public Offer Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through the
HK eIPO White Form service to make an application for Hong Kong Public Offer Shares, an
actual application shall be deemed to have been made. If you are a person for whose benefit
the electronic application instructions are given, you shall be deemed to have declared that only
one set of electronic application instructions has been given for your benefit. If you are an
agent for another person, you shall be deemed to have declared that you have only given one
set of electronic application instructions for the benefit of the person for whom you are an
agent and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White
Form service more than once and obtaining different payment reference numbers without
effecting full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized the HK eIPO White Form Service Provider to apply on the terms and conditions
in this prospectus, as supplemented and amended by the terms and conditions of the HK eIPO
White Form service.
By instructing your broker or custodian to apply for the Hong Kong Public 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 Public 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 Offer.
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 Public Offer Shares or
for any breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 411 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your identity
document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your identity
document
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong Address. Y ou are also required to declare
that the identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
shares in a public offer. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint account holders 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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 412 ---
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Hong Kong Stock
Exchange or any other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Public Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 100 H Shares
Permitted number of
Hong Kong Public
Offer Shares for
application and amount
payable on application/
successful allotment /H1118/H1118/H1118
: Hong Kong Public Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The maximum Offer Price is HK$131.50 per H 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. Y ou
are responsible for complying with any such
prefunding requirement imposed by your broker or
custodian with respect to the Hong Kong Public Offer
Shares you applied for.
1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower
cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 402 –


--- page 413 ---
By instructing your broker or custodian to apply for
the Hong Kong Public Offer Shares on your behalf
through the HKSCC EIPO channel, you (and, if you
are joint applicants, each of you jointly and severally)
are deemed to have instructed and authorized
HKSCC to cause HKSCC Nominees (acting as
nominee for the relevant HKSCC Participants) to
arrange payment of the final Offer Price, brokerage,
SFC transaction levy, the Hong Kong Stock
Exchange trading fee and the AFRC transaction levy
by debiting the relevant nominee bank account at the
Designated Bank for your broker or custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of H Shares you
have selected. Y ou must pay the respective maximum
amount payable on application in full upon
application for Hong Kong Public Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 13,282.62 2,500 332,065.44 30,000 3,984,785.33 600,000 79,695,706.50
200 26,565.24 3,000 398,478.53 40,000 5,313,047.10 700,000 92,978,324.26
300 39,847.86 3,500 464,891.62 50,000 6,641,308.88 800,000 106,260,942.00
400 53,130.47 4,000 531,304.71 60,000 7,969,570.66 900,000 119,543,559.76
500 66,413.09 4,500 597,717.80 70,000 9,297,832.43 1,000,000 132,826,177.50
600 79,695.71 5,000 664,130.89 80,000 10,626,094.20 2,000,000 265,652,355.00
700 92,978.33 6,000 796,957.06 90,000 11,954,355.98 3,000,000 398,478,532.50
800 106,260.94 7,000 929,783.24 100,000 13,282,617.76 4,000,000 531,304,710.00
900 119,543.57 8,000 1,062,609.42 200,000 26,565,235.50 5,010,000
(1) 665,459,149.28
1,000 132,826.18 9,000 1,195,435.60 300,000 39,847,853.26
1,500 199,239.27 10,000 1,328,261.78 400,000 53,130,471.00
2,000 265,652.35 20,000 2,656,523.56 500,000 66,413,088.76
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 414 ---
5. Multiple Applications Prohibited
Y ou 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
Public Offer Shares — 3. Information Required to Apply” in this section. If you are suspected
of submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected.
If you have made an application through the HK eIPO White Form service or HKSCC EIPO
channel, you or the person(s) for whose benefit you have made the application shall not apply
for any Global Offer Shares.
The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to
the Best Practice Note on Treatment of Multiple/Suspected Multiple Applications (“ Best
Practice Note ”) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Public Offer Shares through the HK eIPO White Form
service or HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Public 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 Public 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 HK eIPO
White Form service (or as the case may be, the agreement you entered into with
your broker or custodian), and agree to be bound by them;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 415 ---
(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
Public Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Company, the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries, the Underwriters, any of their respective directors, officers,
employees, partners, agents, advisers and any other parties involved in the Global
Offering (the “ Relevant Persons ”), the H Share Registrar and HKSCC will not be
liable for any information and representations not in this prospectus and any
supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Hong Kong Stock Exchange, the SFC and any other
statutory regulatory or governmental bodies or otherwise as required by laws, rules
or regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes” and “4. Transfer of personal data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “—
C. Circumstances in Which Y ou Will Not Be Allocated Hong Kong Public Offer
Shares” in this section;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 416 ---
(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;
(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,
supervisors, chief executives, substantial shareholder(s) or existing shareholder(s)
of the Company or any of its subsidiaries or any of their respective close associates;
and (b) you are not accustomed or will not be accustomed to taking instructions from
the Company, any of the directors, supervisors, 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 H Shares registered in your name or otherwise held
by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Public Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Public 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 HK eIPO White Form
service or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and the
HK eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 406 –


--- page 417 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Public Offer
Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel :
Website /H1118/H1118/H1118/H1118/H1118/H1118From the “Allotment Results” page at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result )
with a “search by ID” function.
The full list of (i) wholly or partially
successful applicants using the HK
eIPO White Form service and HKSCC
EIPO channel, and (ii) the number of
Hong Kong Offer Shares conditionally
allotted to them, among other things,
will be displayed at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result ).
24 hours, from 11:00 p.m. on
Tuesday, November 4, 2025
to 12:00 midnight on
Monday, November 10, 2025
(Hong Kong time)
The Hong Kong Stock Exchange’s website
at www.hkexnews.hk and our website at
www.seres.cn which will provide links
to the above mentioned websites of the
H Share Registrar.
No later than 11:00 p.m. on
Tuesday, November 4, 2025
(Hong Kong time).
Telephone /H1118/H1118/H1118/H1118+852 3691 8488 — the allocation results
telephone enquiry line provided by the
H Share Registrar
between 9:00 a.m. and
6:00 p.m., from Wednesday,
November 5, 2025 to
Monday, November 10, 2025
(Hong Kong time) on a
business day
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Monday, November 3, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Monday, November 3, 2025 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 418 ---
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the Global Offer, the level of applications in the Hong Kong Public Offer and the
basis of allocations of Hong Kong Public Offer Shares on the Hong Kong Stock Exchange’s
website at www.hkexnews.hk and our website at www.seres.cn by no later than 11:00 p.m. on
Tuesday, November 4, 2025 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
PUBLIC OFFER SHARES
Y ou should note the following situations in which Hong Kong Public 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:
Y our 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:
The Company, the Overall Coordinators, the H Share Registrar and their respective agents
and nominees have full discretion to reject or accept any application, or to accept only part of
any application, without giving any reasons.
3. If the allocation of Hong Kong Public Offer Shares is void:
The allocation of Hong Kong Public Offer Shares will be void if the Hong Kong Stock
Exchange does not grant permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Hong Kong 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. Y ou may refer to
the paragraph headed “— A. Application for Hong Kong Public Offer Shares — 5.
Multiple Applications Prohibited” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 419 ---
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Public Offer Shares, the
Receiving Bank will collect the portion of these funds required to settle each HKSCC
Participant’s actual Hong Kong Public Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted H Shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Public Offer Shares will be reallocated to the Global Offer. Hong Kong Public
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 Public
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 Public
Offer Shares are not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Public Offer Shares allotted
to you under the Hong Kong Public Offer (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on Wednesday, November 5, 2025
(Hong Kong time), provided that the Global Offer has become unconditional and the right of
termination described in the section headed “Underwriting” has not been exercised. Investors
who trade H Shares prior to the receipt of H Share certificates or the H Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 420 ---
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For application of
1,000,000 Hong
Kong Public Offer
Shares or more /H1118/H1118/H1118
Collection in person from our H
Share Registrar at 17/F, Far East
Finance Centre, 16 Harcourt
Road, Hong Kong.
Time: from 9:00 a.m. to 1:00 p.m.
on Wednesday, November 5, 2025
(Hong Kong time)
If you are an individual, you must
not authorize any other person to
collect for you. If you are a
corporate applicant, your
authorized representative must
bear a letter of authorization from
your corporation stamped with
your corporation’s chop.
Both individuals and authorized
representatives must produce, at
the time of collection, evidence
of identity acceptable to the H
Share Registrar.
Note: If you do not collect your H
Share certificate(s) personally
within the time above, it/they will
be sent to the address specified in
your application instructions by
ordinary post at your own risk
H Share certificate(s) will be issued
in the name of HKSCC
Nominees, deposited into CCASS
and credited to your designated
HKSCC Participant’s stock
account
No action by you is required
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 410 –


--- page 421 ---
HK eIPO White Form service HKSCC EIPO channel
For application of
less than 1,000,000
Hong Kong Public
Offer Shares /H1118/H1118/H1118/H1118/H1118
Y our H Share certificate(s) will be
sent to the address specified in
your application instructions by
ordinary post at your own risk
Date: Tuesday, November 4, 2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Wednesday, November 5, 2025 Subject to the arrangement between
you and your broker or
custodian
Responsible party /H1118/H1118/H1118H Share Registrar Y our broker or custodian
Application monies
paid through single
bank account /H1118/H1118/H1118/H1118
HK eIPO White Form e-Auto
Refund payment instructions to
your designated bank account
Y our broker or custodian will
arrange refund to your designated
bank account subject to the
arrangement between you and it
Application monies
paid through
multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post at
your own risk
Note:
1. Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning
and/or an “extreme conditions” announcement issued after a super typhoon in force in Hong Kong in
the morning on Tuesday, November 4, 2025 rendering it impossible for the relevant H Share certificates
to be dispatched to HKSCC in a timely manner, the Company shall procure the H Share Registrar to
arrange for delivery of the supporting documents and H Share certificates in accordance with the
contingency arrangements as agreed between them. Y ou may refer to “— E. Severe Weather
Arrangements” in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
–4 1 1–


--- page 422 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Friday, October 31, 2025 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme conditions
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, October
31, 2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Hong Kong Stock Exchange’s website at
www.hkexnews.hk and our website at www.seres.cn of the revised timetable.
If a Severe Weather Signal is hoisted on Tuesday, November 4, 2025, the H Share
Registrar will make appropriate arrangements for the delivery of the H Share certificates to the
CCASS Depository’s service counter so that they would be available for trading on Wednesday,
November 5, 2025.
If a Severe Weather Signal is hoisted on Tuesday, November 4, 2025, for application of
less than 1,000,000 Hong Kong Offer Shares, the despatch of physical H Share certificate(s)
will be made by ordinary post when the post office re-opens after the Severe Weather Signal
is lowered or cancelled (e.g. in the afternoon of Tuesday, November 4, 2025 or on Wednesday,
November 5, 2025).
If a Severe Weather Signal is hoisted on Wednesday, November 5, 2025, for application
of 1,000,000 Hong Kong Offer Shares or more, physical H Share certificate(s) will be available
for collection in person at the H Share Registrar’s office after the Severe Weather Signal is
lowered or cancelled (e.g. in the afternoon of Wednesday, November 5, 2025 or on Thursday,
November 6, 2025).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 423 ---
F. ADMISSION OF THE H SHARES INTO CCASS
If the Hong Kong Stock Exchange grants the listing of, and permission to deal in, the H
Shares on the Hong Kong Stock Exchange and we comply with the stock admission
requirements of HKSCC, the H Shares will be accepted as eligible securities by HKSCC for
deposit, clearance and settlement in CCASS with effect from the date of commencement of
dealings in the H Shares or any other date HKSCC chooses. Settlement of transactions between
Exchange Participants is required to take place in CCASS on the second settlement day after
any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving banks and the
Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. This personal data may include client identifier(s) and your
identification information. By giving application instructions to HKSCC, you acknowledge
that you have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Public Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Public 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 Public Offer Shares or transferring
Hong Kong Public Offer Shares into or out of their names or in procuring the services of the
H Share Registrar.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 424 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Public Offer Shares being rejected, or in the delay or the inability
of the Company or the H Share Registrar to effect transfers or otherwise render their services.
It may also prevent or delay registration or transfers of Hong Kong Public Offer Shares which
you have successfully applied for and/or the despatch of H Share certificate(s) to which you
are entitled.
It is important that applicants for and holders of Hong Kong Public Offer Shares inform
the Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification of compliance with
the terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Public Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Public Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 425 ---
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 Public Offer Shares will be kept confidential but the Company
and the H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Public Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Hong Kong Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
including for the purpose of the Hong Kong Stock Exchange’s administration of the
Listing Rules and the SFC’s performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Public 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 Public 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 Public Offer Shares have the right to ascertain
whether the Company or the H Share Registrar hold their personal data, to obtain a copy of that
data, and to correct any data that is inaccurate. The Company and the H Share Registrar have
the right to charge a reasonable fee for the processing of such requests. All requests for access
to data or correction of data should be addressed to the Company and the H Share Registrar,
at their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 426 ---
The following is the text of a report set out on pages I-1 to I-103, received from the
Company’ s reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SERES GROUP CO., LTD. AND CHINA INTERNATIONAL
CAPITAL CORPORATION HONG KONG SECURITIES LIMITED AND CHINA
GALAXY INTERNATIONAL SECURITIES (HONG KONG) CO., LIMITED
Introduction
We report on the historical financial information of Seres Group Co., Ltd. (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-103, which
comprises the consolidated statements of financial position of the Group as at 31 December
2022, 2023 and 2024 and 30 June 2025, the statements of financial position of the Company
as at 31 December 2022, 2023 and 2024 and 30 June 2025, and the consolidated statements of
profit or loss and other comprehensive income, the consolidated statements of changes in
equity and the consolidated statements of cash flows of the Group for each of the three years
ended 31 December 2024 and the six months ended 30 June 2025 (the “Track Record Period”)
and material accounting policy information and other explanatory information (together, the
“Historical Financial Information”). The Historical Financial Information set out on pages I-4
to I-103 forms an integral part of this report, which has been prepared for inclusion in the
prospectus of the Company dated 27 October 2025 (the “Prospectus”) in connection with the
initial listing of shares of the Company on the Main Board of The Stock Exchange of Hong
Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
set out in note 2 to the Historical Financial Information, and for such internal control as the
directors of the Company determine is necessary to enable the preparation of the Historical
Financial Information that is free from material misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 427 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in note 2 to the Historical Financial Information in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors of the Company, 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 Group’s financial position as at 31 December
2022, 2023 and 2024 and 30 June 2025, of the Company’s financial position as at 31 December
2022, 2023 and 2024 and 30 June 2025 and of the Group’s financial performance and cash
flows for the Track Record Period in accordance with the basis of preparation set out in note
2 to the Historical Financial Information.
Review of stub period comparative financial information
We have reviewed the stub period comparative financial information of the Group which
comprises the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows of the
Group for the six months ended 30 June 2024 and other explanatory information (the “Stub
Period Comparative Financial Information”). The directors of the Company are responsible for
the preparation of the Stub Period Comparative Financial Information in accordance with the
basis of preparation set out in note 2 to the Historical Financial Information. Our responsibility
is to express a conclusion on the Stub Period Comparative Financial Information based on our
review. We conducted our review in accordance with Hong Kong Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all 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 Stub Period 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 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 428 ---
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 16 to the Historical Financial Information which contains information
about the dividends declared and paid by the Company in respect of the Track Record Period.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
27 October 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 429 ---
HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, have been prepared in accordance with the
accounting policies which conform with IFRS Accounting Standards issued by the
International Accounting Standards Board (the “IASB”) and were audited by us in accordance
with Hong Kong Standards on Auditing issued by the HKICPA (“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 430 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Y ear ended 31 December Six months ended 30 June
NOTES 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 34,056,074 35,788,885 145,113,623 65,014,314 62,358,825
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(31,328,448) (33,217,792) (110,563,078) (50,853,429) (45,828,067)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,727,626 2,571,093 34,550,545 14,160,885 16,530,758
Government grants and subsidies /H1118/H1118/H1118/H1118/H1118/H11188 523,474 549,466 1,068,213 659,200 690,109
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 261,751 407,803 672,305 237,942 548,886
Other gains and losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 14,203 1,749,261 (1,615,140) (80,805) (32,589)
Impairment losses under expected credit
loss model, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 (76,887) (108,785) (131,107) (39,734) 13,632
Research and development expenses /H1118/H1118/H1118/H1118(1,313,661) (1,696,476) (5,585,504) (2,827,443) (2,929,532)
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118(4,656,748) (5,276,145) (19,184,251) (8,699,122) (8,940,726)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,081,359) (1,969,389) (4,509,309) (1,625,462) (1,966,811)
Share of results of associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118512 578 (76,055) 31,518 (69,069)
Share of result of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118850 481 2,032 1,758 2,007
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (330,171) (308,746) (240,382) (119,628) (121,874)
(Loss) profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,930,410) (4,080,859) 4,951,347 1,699,109 3,724,791
Income tax expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 (290,147) (75,857) (211,231) (339,988) (647,428)
(Loss) profit for the year/period /H1118/H1118/H1118/H1118/H1118/H111814 (5,220,557) (4,156,716) 4,740,116 1,359,121 3,077,363
Other comprehensive income
Items that may reclassified subsequently to
profit or loss:
Exchange differences arising on translation
of foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,205 6,752 13,557 19,903 186
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,713 1,271 578 553 65
Other comprehensive income for the
year/period, net of income tax /H1118/H1118/H1118/H1118/H111848,918 8,023 14,135 20,456 251
Total comprehensive (expense) income
for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,171,639) (4,148,693) 4,754,251 1,379,577 3,077,614
(Loss) profit for the year/period
attributable to:
Owners of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,831,866) (2,449,687) 5,945,945 1,624,558 2,940,890
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,388,691) (1,707,029) (1,205,829) (265,437) 136,473
(5,220,557) (4,156,716) 4,740,116 1,359,121 3,077,363
Total comprehensive (expense) income
for the year/period attributable to:
Owners of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,784,661) (2,442,935) 5,959,502 1,644,461 2,941,076
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,386,978) (1,705,758) (1,205,251) (264,884) 136,538
(5,171,639) (4,148,693) 4,754,251 1,379,577 3,077,614
(Loss) profit per share
Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 (2.68) (1.63) 3.94 1.08 1.87
Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 (2.68) (1.63) 3.94 1.08 1.87
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 431 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December As at 30 June
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111818 9,917,649 9,414,578 10,063,416 15,604,544
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 1,680,225 3,013,320 3,639,336 3,246,939
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 65,012 46,915 – 497,392
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 6,777,068 9,183,898 8,651,552 9,865,754
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 37,315 2,037,892 1,972,303 13,404,630
Interest in a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 4,032 4,513 6,545 8,552
Equity instruments at fair value through
other comprehensive income
(“FVTOCI”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 100,203 99,546 78,260 70,908
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839 240,090 479,672 1,475,267 1,088,451
Finance lease receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,007 44,921 35,249 29,662
Prepayment for investment and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 15,634 11,269 2,313,027 13,138
Amounts due from related companies /H1118/H1118/H111837 62 1,841 1,606 350
Amount due from immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 1,275 1,071 1,060 2,049
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 1,012,638 428,617 – –
Deposits paid for property, plant and
equipment and intangible assets /H1118/H1118/H1118/H1118262,946 359,546 128,485 235,869
20,184,156 25,127,599 28,366,106 44,068,238
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 3,992,865 3,529,172 2,552,449 3,270,842
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 3,273,244 5,659,400 5,230,545 5,422,251
Notes receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 242,279 201,317 214,159 460,138
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 938,248 320,380 52,476 7,887
Financial assets at fair value through
profit or loss (“FVTPL”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 1,751,529 1,133,644 4,048,748 282,074
Amounts due from related companies /H1118/H1118/H111837 190,543 137,486 40,183 31,548
Amount due from immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 222,460 1,374,169 – –
Pledged and restricted bank deposits /H1118/H1118/H111831 14,037,409 8,681,408 39,621,756 26,266,146
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 – 600,377 7,903,854 11,437,800
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
31 2,327,394 4,479,719 6,333,682 21,664,886
26,975,971 26,117,072 65,997,852 68,843,572
CURRENT LIABILITIES
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 28,163,249 32,328,953 72,274,335 66,256,022
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 2,970,641 1,604,120 10,187 989,050
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 962,942 3,270,307 2,991,532 5,196,056
Amounts due to related companies /H1118/H1118/H1118/H111837 12,774 25,054 47,343 3,937,530
Amount due to immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 – – – 1,372
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 137,069 326,857 510,084 250,369
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,808 20,888 431,313 374,864
32,331,483 37,576,179 76,264,794 77,005,263
NET CURRENT LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118(5,355,512) (11,459,107) (10,266,942) (8,161,691)
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,828,644 13,668,492 18,099,164 35,906,547
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 432 ---
As at 31 December As at 30 June
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 51,414 52,598 1,149,655 1,728,850
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 2,350,236 2,599,272 687,000 4,362,893
Convertible bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836 147,296 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 424,900 1,706,681 2,217,782 837,556
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838 1,889,274 1,738,954 1,656,177 1,590,587
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839 163,091 371,040 482,993 376,927
5,026,211 6,468,545 6,193,607 8,896,813
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 1,497,279 1,509,782 1,509,782 1,633,366
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,922,350 9,896,045 10,754,463 25,127,737
Equity attributable to owners of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,419,629 11,405,827 12,264,245 26,761,103
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,617,196) (4,205,880) (358,688) 248,631
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,802,433 7,199,947 11,905,557 27,009,734
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 433 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December As at 30 June
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H111818 277,224 264,565 312,389 375,089
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 150,189 115,195 101,267 115,588
Intangible Assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,397
Investment in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852 8,781,479 8,760,189 15,143,441 23,740,261
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 37,315 37,892 38,095 –
Equity instruments at FVTOCI /H1118/H1118/H1118/H1118/H1118/H111825 84,000 83,343 62,057 54,705
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839 29,487 23,480 20,552 27,072
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H111837 90,088 80,728 104,757 82,158
Amounts due from related companies /H1118/H1118/H1118 63 56 1,606 –
Amount due from immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 1,275 1,071 1,060 2,049
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 1,012,638 428,617 – –
Deposits paid for property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,840 2,132 4,899 6,315
10,465,598 9,797,268 15,790,123 24,405,634
CURRENT ASSETS
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 14,862 6,158 33,922 63,546
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 1,751,295 1,133,481 1,043,835 281,959
Amounts due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H111837 12,881,871 11,902,451 3,653,459 5,670,503
Amount due from immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 222,460 1,374,169 – –
Pledged bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 36,001 57,000 37,000 37,000
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 – 600,377 441,940 –
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 699,339 804,211 2,258,739 2,096,260
15,605,828 15,877,847 7,468,895 8,149,268
CURRENT LIABILITIES
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 45,419 45,113 96,293 72,326
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 862,743 376,751 4,932 342,565
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,648
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 3,567,653 2,231,986 304,872 363,306
Amount due to immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 ––– 2 9 4
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 42,890 47,936 75,732 94,046
Income tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,042 2,428 – –
4,547,747 2,704,214 481,829 874,185
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,058,081 13,173,633 6,987,066 7,275,083
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,523,679 22,970,901 22,777,189 31,680,717
NON-CURRENT LIABILITIES
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839 27,619 19,138 15,923 19,637
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 468,568 403,000 13,300 1,561,793
Convertible bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836 147,296 – – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 164,925 125,990 111,193 95,249
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,669 1,032 438 582
810,077 549,160 140,854 1,677,261
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,713,602 22,421,741 22,636,335 30,003,456
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 434 ---
As at 31 December As at 30 June
NOTES 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 1,497,279 1,509,782 1,509,782 1,633,366
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841A 19,216,323 20,911,959 21,126,553 28,370,090
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,713,602 22,421,741 22,636,335 30,003,456
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 435 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
capital
Share
premium
Convertible
bonds equity
reserve
Statutory
surplus
reserve
Translation
reserve
Treasury
shares
Other
reserves
Accumulated
losses Sub-total
Non-
controlling
interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,359,932 5,974,915 56,979 296,492 (128,143) – 2,112,465 (1,713,042) 7,959,598 (230,253) 7,729,345
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – (3,831,866) (3,831,866) (1,388,691) (5,220,557)
Other comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 47,205 – – – 47,205 1,713 48,918
Total comprehensive income
(expense) for the year /H1118/H1118/H1118/H1118– – – – 47,205 – – (3,831,866) (3,784,661) (1,386,978) (5,171,639)
Recognition of equity-settled
share-based payments /H1118/H1118/H1118/H1118– – – – – – 31,661 – 31,661 – 31,661
Repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118– – – – – (99,991) – – (99,991) – (99,991)
Proceeds from shares issued
for share-based payments /H1118/H1118146 9,636 – – – – (172) – 9,610 – 9,610
Conversion of convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 696 (161) – – – – – 568 – 568
Issue of shares of the
Company (Note 40) /H1118/H1118/H1118/H1118/H1118137,168 6,921,387 – – – – – – 7,058,555 – 7,058,555
Transfer to statutory surplus
reserve (Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 61,362 – – – (61,362) – – –
Profit guarantee
compensation (Note ii) /H1118/H1118/H1118/H1118– – – – – – 222,460 – 222,460 – 222,460
Deemed contribution arising
from interest-free advances
provided by immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 21,871 – 21,871 – 21,871
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (5) – – – (37) (42) 35 (7)
At 31 December 2022 /H1118/H1118/H1118/H1118/H11181,497,279 12,906,634 56,818 357,849 (80,938) (99,991) 2,388,285 (5,606,307) 11,419,629 (1,617,196) 9,802,433
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 436 ---
Attributable to owners of the Company
Share
capital
Share
premium
Convertible
bonds equity
reserve
Statutory
surplus
reserve
Translation
reserve
Treasury
shares
Other
reserves
Accumulated
losses Sub-total
Non-
controlling
interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – (2,449,687) (2,449,687) (1,707,029) (4,156,716)
Other comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 6,752 – – – 6,752 1,271 8,023
Total comprehensive income
(expense) for the year /H1118/H1118/H1118/H1118– – – – 6,752 – – (2,449,687) (2,442,935) (1,705,758) (4,148,693)
Recognition of equity-settled
share-based payments /H1118/H1118/H1118/H1118– – – – – – (30,811) – (30,811) – (30,811)
Repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118– – – – – (105,245) – – (105,245) – (105,245)
Proceeds from shares issued
for share-based payments /H1118/H11182,412 177,957 – – – – (21,140) – 159,229 – 159,229
Conversion of convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,091 196,242 (56,818) – – – – – 149,515 – 149,515
Transfer to retain profits from
other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 375 (3,750) – – 3,37 5–––
Transfer to statutory surplus
reserve (Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 15,753 – – – (15,753) – – –
Profit guarantee
compensation (Note ii) /H1118/H1118/H1118/H1118– – – – – – 1,374,169 – 1,374,169 – 1,374,169
Acquisition of non-controlling
interest of a subsidiary /H1118/H1118/H1118– – – – – – 882,926 – 882,926 (882,926) –
Change of reserves of an
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – (650) – (650) – (650)
At 31 December 2023 /H1118/H1118/H1118/H1118/H11181,509,782 13,280,833 – 373,977 (77,936) (205,236) 4,592,779 (8,068,372) 11,405,827 (4,205,880) 7,199,947
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 437 ---
Attributable to owners of the Company
Share
capital
Share
premium
Convertible
bonds equity
reserve
Statutory
surplus
reserve
Translation
reserve
Treasury
shares
Other
reserve
Accumulated
losses Sub-total
Non-
controlling
interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Profit (loss) for the year /H1118/H1118/H1118/H1118– – – – – – – 5,945,945 5,945,945 (1,205,829) 4,740,116
Other comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 13,557 – – – 13,557 578 14,135
Total comprehensive income
(expense) for the year /H1118/H1118/H1118/H1118– – – – 13,557 – – 5,945,945 5,959,502 (1,205,251) 4,754,251
Capital injection from non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 1,138,782 – 1,138,782 384,218 1,523,000
Recognition of equity-settled
share-based payments /H1118/H1118/H1118/H1118– – – – – – 67,419 – 67,419 – 67,419
Share base payment granted to
employees and repurchase
of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (34,896) – – – 205,236 – – 170,340 – 170,340
Dividends recognised as
distribution (Note 16) /H1118/H1118/H1118/H1118– – – – – – – (499,738) (499,738) – (499,738)
Provision and utilisation of
safety production reserve /H1118/H1118 – – – – – – 22,039 – 22,039 82 22,121
Acquisition of non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,003,977) – – – – 1,845 – (6,002,132) 4,668,143 (1,333,989)
Transfer to statutory surplus
reserve (Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 47,657 – – – (47,657) – – –
Change of reserves of an
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 2,206 – 2,206 – 2,206
At 31 December 2024 /H1118/H1118/H1118/H1118/H11181,509,782 7,241,960 – 421,634 (64,379) – 5,825,070 (2,669,822) 12,264,245 (358,688) 11,905,557
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 438 ---
Attributable to owners of the Company
Share
capital
Share
premium
Convertible
bonds equity
reserve
Statutory
surplus
reserve
Translation
reserve
Treasury
shares
Other
reserve
Accumulated
losses Sub-total
Non-
controlling
interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – 2,940,890 2,940,890 136,473 3,077,363
Other comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 186 – – – 186 65 251
Total comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 186 – – 2,940,890 2,941,076 136,538 3,077,614
Dividends recognised as
distribution (Note 16) /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – – (1,584,365) (1,584,365) – (1,584,365)
Capital injection from non-
controlling shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 4,532,026 – 4,532,026 467,974 5,000,000
Recognition of equity-settled
share-based payments /H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 54,597 – 54,597 – 54,597
Issuance of shares for acquisition
of a subsidiary (Note 44A) /H1118/H1118/H1118123,584 8,382,932 – – – – – – 8,506,516 – 8,506,516
Provision and utilisation of safety
production reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 40,531 – 40,531 2,439 42,970
Change of reserves of an
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 6,477 – 6,477 368 6,845
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,633,366 15,624,892 – 421,634 (64,193) – 10,458,701 (1,313,297) 26,761,103 248,631 27,009,734
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 439 ---
Attributable to owners of the Company
Share
capital
Share
premium
Statutory
surplus
reserve
Translation
reserve
Treasury
shares
Other
reserve
Accumulated
losses Sub-total
Non-
controlling
interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,509,782 13,280,833 373,977 (77,936) (205,236) 4,592,779 (8,068,372) 11,405,827 (4,205,880) 7,199,947
Profit (loss) for the period /H1118/H1118/H1118–––––– 1,624,558 1,624,558 (265,437) 1,359,121
Other comprehensive income
for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 19,903 – – – 19,903 553 20,456
Total comprehensive income
(expense) for the period /H1118/H1118/H1118– – – 19,903 – – 1,624,558 1,644,461 (264,884) 1,379,577
Capital injection from
non-controlling shareholders
of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 12,618 – 12,618 290,382 303,000
Acquisition of non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 1,844 – 1,844 (13,772) (11,928)
Recognition of equity-settled
share-based payments /H1118/H1118/H1118/H1118––––– 10,453 – 10,453 – 10,453
Share base payment granted to
employees and repurchase
of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (31,032) – – 182,516 – – 151,484 – 151,484
Provision and utilization of
safety production reserve /H1118/H1118 ––––– 13,235 – 13,235 1,595 14,830
Change of reserves of
an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 1,127 – 1,127 – 1,127
At 30 June 2024 (unaudited) /H11181,509,782 13,249,801 373,977 (58,033) (22,720) 4,632,056 (6,443,814) 13,241,049 (4,192,559) 9,048,490
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 440 ---
Notes:
(i) Pursuant to the relevant laws in the People’s Republic of China (the “PRC”), each of the subsidiaries
established in the PRC is required to transfer 10% of its profit after tax as per statutory financial statements
to the statutory reserve. The transfer is discretionary when the reserve balance reaches 50% of the registered
capital of the respective company and the reserve can be used to make up for previous years’ losses or expand
the existing operations or can be converted into additional capital of the subsidiary.
(ii) On 16 September 2019, the Company entered into an equity acquisition agreement with Dongfeng Motor
Corporation (“Dongfeng Motor”) to acquire the non-controlling equity interest of Seres Auto (Hubei) Co., Ltd.
(“Seres Hubei”), a subsidiary of the Company. On the same date, the Company entered into a separate profit
guarantee agreement with Chongqing Sokon Holding Company Limited (“Sokon Holding”), a substantial
shareholder of the Company. According to the profit guarantee agreement, Sokon Holding guaranteed that
Seres Hubei’s audited consolidated net profit attributable to the parent company would meet committed amount
for the fiscal years 2019, 2021, 2022, and 2023; once Seres Hubei’s actual net profit for any fiscal year failed
to reach the committed amount Sokon Holding shall compensate for the shortfall. As Sokon Holding was not
a beneficiary of the equity acquisition between the Company and Dongfeng Motor, the voluntary profit
guarantee is recognised as a deemed contribution from shareholder.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 441 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
OPERA TING ACTIVITIES
(Loss) profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,930,410) (4,080,859) 4,951,347 1,699,109 3,724,791
Adjustments for:
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(189,493) (294,607) (527,251) (163,897) (404,889)
Other interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,638) (22,489) (55,738) (27,825) (58,484)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118330,171 308,746 240,382 119,628 121,874
Depreciation of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,311,250 1,416,384 1,416,899 787,718 901,462
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118132,711 221,355 375,556 152,372 190,869
Amortisation of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118856,191 1,129,448 2,573,854 1,005,023 1,087,659
Loss (gain) from fair value changes and
disposal of financial assets designated as at
FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,916 (59,928) (27,118) (59,505) (65,801)
Impairment loss, net of reversal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,828 204,567 1,887,241 163,072 25,234
Write-down of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261,192 317,219 304,529 120,919 236,374
(Gain) loss on disposal of property, plant and
equipment and intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118(266,951) (42,016) 10,929 (5,626) (2,394)
Loss (gain) on disposal of subsidiaries and
other equity investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,587 (1,757,000) – – –
Interest expense on discounting notes
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,501 29,064 (1,496) (1,275) (351)
Share of (profit) loss of associates and a joint
venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,362) (1,059) 74,023 (33,276) 67,062
Unrealised foreign exchange loss (gain) /H1118/H1118/H1118/H1118/H11185,693 3,456 (14,718) 69,712 4,269
Operating cash flows before movements in
working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,185,814) (2,627,719) 11,208,439 3,826,149 5,827,675
(Increase) decrease in inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,219,980) 448,167 976,723 (135,220) (969,215)
(Increase) decrease in pledged bank deposits /H1118/H1118(9,008,916) 5,853,885 (32,025,493) (19,517,566) 14,172,878
(Increase) decrease in trade and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(439,522) (780,032) 3,259,060 (142,193) 631,225
Decrease (increase) in notes receivable /H1118/H1118/H1118/H1118/H1118/H111897,582 7,703 (11,346) 43,828 (245,628)
Decrease (increase) in finance lease receivables /H1118 40,313 32,406 9,672 (75) (4,862)
Decrease in contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,854 161,231 255,236 152,385 44,501
(Increase) decrease in amount due from
immediate holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,275) 204 11 230 (989)
Decrease (increase) in amounts due from related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,838 55,643 95,780 71,612 9,891
Increase (decrease) in deferred income /H1118/H1118/H1118/H1118/H1118/H1118703,874 (126,884) (82,777) (59,065) (65,590)
Increase (decrease) in trade and other payables /H111810,687,927 883,038 39,032,412 31,268,075 (10,895,396)
Increase (decrease) in contract liabilities /H1118/H1118/H1118/H1118/H1118206,470 2,363,625 (278,775) 998,204 2,204,524
Increase in amount due to immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,372
(Decrease) increase in amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(65,743) 12,280 22,289 (10,579) 3,890,187
Cash (used in) generated from operations /H1118/H1118/H1118/H1118(1,146,392) 6,283,547 22,461,231 16,495,785 14,600,573
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(211,642) (180,542) (473,217) (222,219) (566,087)
NET CASH (USED IN) FROM OPERA TING
ACTIVITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,358,034) 6,103,005 21,988,014 16,273,566 14,034,486
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 442 ---
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
INVESTING ACTIVITIES
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189,493 294,607 527,251 169,042 465,249
Purchase of property, plant, equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,367,027) (3,464,751) (7,143,934) (2,633,911) (2,001,502)
Consideration paid for acquisition of equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,000) (41,500) (2,300,000) – (5,750,000)
Placement of pledged bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118(531,652) (773,924) (621,586) (555,458) (814,982)
Placement of time deposits and structure
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,899,990) (5,597,129) (17,778,447) (4,670,784) (21,616,544)
Cash acquired from an acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,203,548
Cash outflow generated from loss control of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (317,137) – – –
Proceeds from disposal of time deposits and
structured deposits upon maturity /H1118/H1118/H1118/H1118/H1118/H1118/H1118300,000 6,200,990 9,708,913 2,570,000 21,877,871
Proceeds from disposal of equity investment at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 45,907 21,286 – 7,352
Proceeds from disposal of property, plant,
equipment and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118749,760 322,189 155,125 125,838 32,234
Proceeds from disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118229,116 350,000 – – –
Compensation received from the immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,361,093 222,461 1,374,169 – –
Proceeds from other investing activities /H1118/H1118/H1118/H1118/H111810,696 80,086 75,140 19,969 32,476
NET CASH USED IN INVESTING
ACTIVITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,964,511) (2,678,201) (15,982,083) (4,975,304) (6,564,298)
FINANCING ACTIVITIES
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (499,738) – (1,584,365)
Consideration paid for the acquisition of non-
controlling interest of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,340,917) (11,928) –
Proceeds from bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,283,500 3,701,000 72,000 – 8,456,000
Repayments of bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,586,120) (4,881,890) (2,346,070) (844,570) (3,804,500)
Proceeds from other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,100,000 ––––
Repayments of other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,224,422) (1,224,422) –
Proceeds from release of deposits for banking
facilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,259 297,040 94,507 60,000 –
Interests paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(274,172) (243,536) (110,112) (68,928) (66,467)
Deposits paid for issuance of letter of credit /H1118/H1118/H1118– (21,000) – – –
Repayments of obligation under lease /H1118/H1118/H1118/H1118/H1118/H1118(127,986) (158,489) (406,343) (187,491) (119,042)
Proceeds from issue of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,069,357 159,240 – – –
Capital injection from non-controlling
shareholders of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,523,000 303,000 5,000,000
Payments for repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(100,107) (105,257) – – –
Proceeds from restricted shares granted to
employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 85,170 75,742 –
APPENDIX I ACCOUNTANTS’ REPORT
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Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Receipt of financial support from the immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000 ––––
Repayments of amounts due to the immediate
holding company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,560,000) ––––
Proceeds from other financing activities /H1118/H1118/H1118/H1118/H111811,553 (16,131) (13,761) 4,787 (19,992)
NET CASH FROM (USED IN) FINANCING
ACTIVITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,325,284 (1,269,023) (4,166,686) (1,893,810) 7,861,634
NET INCREASE IN CASH AND CASH
EQUIV ALENTS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,002,739 2,155,781 1,839,245 9,404,452 15,331,822
CASH AND CASH EQUIV ALENTS A T
BEGINNING OF THE YEAR/PERIOD /H1118/H1118/H1118/H11181,318,961 2,327,394 4,479,719 4,479,719 6,333,682
Effect of foreign exchange rate changes /H1118/H1118/H1118/H1118/H11185,694 (3,456) 14,718 5,678 (618)
CASH AND CASH EQUIV ALENTS A T END
OF THE YEAR/PERIOD, representing bank
balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,327,394 4,479,719 6,333,682 13,889,849 21,664,886
APPENDIX I ACCOUNTANTS’ REPORT
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NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION
Seres Group Co., Ltd., formerly named as Chongqing Sokon Industrial Group Co., Ltd., (the “Company”) is
a joint stock company with limited liability established in the PRC on 11 May 2007. On 15 June 2016, the Company’s
shares were officially listed on the Main Board of the Shanghai Stock Exchange.
The address of the registered office and the principal place of business of the Company are set out in the
section headed “Corporate Information” of the Prospectus.
The company is a technology-driven automotive enterprise with new energy vehicles (NEVs) at the core of its
business. The principal activities of its subsidiaries encompass research and development, manufacturing, sales and
after-sales service of NEVs and key components.
The Historical Financial Information is presented in RMB, which is the same as the functional currency of the
Company.
The statutory financial statements of the Company for each of the years ended 31 December 2022, 2023 and
2024 were prepared in accordance with Chinese Accounting Standards for Business Enterprises (“CASBE”) and were
audited by WUYIGE Certified Public Accountants LLP , a certified public accountants registered in the PRC for years
ended 31 December 2022, 2023 and 2024.
2. BASIS OF PREPARATION OF HISTORICAL FINANCIAL INFORMATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards issued
by the IASB. In addition, the Historical Financial Information includes applicable disclosures required by the Rules
Governing the Listing of Securities on the Stock Exchange and by the Hong Kong Companies Ordinance.
As at 30 June 2025, the Group had net current liabilities of RMB8,161,691,000. The directors of the Company
believe that the Group has sufficient cash flows in the foreseeable future from the operations to continue its operation
and meet its liabilities as and when they fall due for at least the next 12 months from the end of the reporting period.
The directors of the Company consider that the Group will have sufficient financial resources to continue as a going
concern. Therefore, the Historical Financial Information has been prepared on a going concern basis.
3. APPLICATION OF NEW AND AMENDMENTS TO IFRS ACCOUNTING STANDARDS
For the purposes of preparing the Historical Financial Information for the Track Record Period, the Group has
consistently applied IFRS Accounting Standards issued by the IASB, which are effective for the accounting periods
beginning on 1 January 2025, throughout the Track Record Period.
New and amendments to IFRS Accounting Standards in issue but not yet effective
The Group has not early adopted the following new and amendments to IFRS Accounting Standards that have
been issued but are not yet effective:
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Amendments to the Classification and Measurement
of Financial Instruments
2
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture 1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 2
Amendments to IFRS Accounting Standards /H1118/H1118/H1118/H1118/H1118Annual Improvements to IFRS Accounting
Standards V olume 11 2
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial
Statements 3
1 Effective for annual periods beginning on or after a date to be determined
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual periods beginning on or after 1 January 2027
APPENDIX I ACCOUNTANTS’ REPORT
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Except for the new IFRS Accounting Standard mentioned below, the directors of the Company anticipate that
the application of all amendments to IFRS Accounting Standards will have no material impact on the consolidated
financial statements in the foreseeable future.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements , which sets out requirements on presentation and
disclosures in financial statements, will replace IAS 1 Presentation of Financial Statements . This new standard
introduces new requirements to present specified categories and defined subtotals in the statement of profit or loss;
provide disclosures on management-defined performance measures in the notes to the financial statements and
improve aggregation and disaggregation of information to be disclosed in the financial statements. Minor
amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings Per Share are also made.
IFRS 18, and amendments to other standard, will be effective for annual periods beginning on or after 1
January 2027, with early application permitted. The application of the new standard is expected to affect the
presentation of the statement of profit or loss and disclosures in the future financial statements. The Group is in the
process of assessing the detailed impact of IFRS 18 on the Group’s consolidated financial statements.
4. MATERIAL ACCOUNTING POLICY INFORMATION
4.1 Material accounting policy information
Business combinations
A business is an integrated set of activities and assets which includes an input and a substantive process
that together significantly contribute to the ability to create outputs. The acquired processes are considered
substantive if they are critical to the ability to continue producing outputs, including an organised workforce
with the necessary skills, knowledge, or experience to perform the related processes or they significantly
contribute to the ability to continue producing outputs and are considered unique or scarce or cannot be
replaced without significant cost, effort, or delay in the ability to continue producing outputs.
Acquisitions of businesses, other than business combination under common control are accounted for
using the acquisition method. The consideration transferred in a business combination is measured at fair
value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the
Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or
loss as incurred.
The identifiable assets acquired and liabilities assumed must meet the definitions of an asset and a
liability in the Conceptual Framework for Financial Reporting (the “Conceptual Framework”) except for
transactions and events within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets
or IFRIC - Int 21 Levies , in which the Group applies IAS 37 or IFRIC -Int 21 instead of the Conceptual
Framework to identify the liabilities it has assumed in a business combination.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their
fair value.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in
the acquiree (if any) over the net amount of the identifiable assets acquired and the liabilities assumed as at
acquisition date.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the relevant subsidiary’s net assets in the event of liquidation are initially measured at the
non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net
assets or at fair value. The choice of measurement basis is made on a transaction-by-transaction basis.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 446 ---
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition
of the business (see the accounting policy above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating
units (or group of cash-generating units) that is expected to benefit from the synergies of the combination,
which represent the lowest level at which the goodwill is monitored for internal management purposes and not
larger than an operating segment.
A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is tested
for impairment annually or more frequently when there is indication that the unit may be impaired. For
goodwill arising on an acquisition in a reporting period, the cash-generating unit (or group of cash-generating
units) to which goodwill has been allocated is tested for impairment before the end of that reporting period.
If the recoverable amount is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill and then to the other assets on a pro-rata basis based on the carrying amount
of each asset in the unit (or group of cash-generating units).
The Group’s policy for goodwill arising on the acquisition of an associate and a joint venture is
described below.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing control.
The results and assets and liabilities of associates and joint ventures are incorporated in the Historical
Financial Information is using the equity method of accounting. The financial statements of associates and
joint ventures used for equity accounting purposes are prepared using uniform accounting policies as those of
the Group for like transactions and events in similar circumstances. Under the equity method, an investment
in an associate or a joint venture is initially recognised in the consolidated statements of financial position at
cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate
or a joint venture, any excess of the cost of the investment over the Group’s share of the net fair value of the
identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the
carrying amount of the investment.
The Group assesses whether there is an objective evidence that the interest in an associate or a joint
venture may be impaired. When any objective evidence exists, the entire carrying amount of the investment
(including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any
impairment loss recognised is not allocated to any asset, including goodwill, that forms part of the carrying
amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the
extent that the recoverable amount of the investment subsequently increases.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s historical
financial information only to the extent of interests in the associate or joint venture that are not related to the
Group.
APPENDIX I ACCOUNTANTS’ REPORT
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Investment in subsidiaries
Investment in subsidiaries are included in the Company’s statements of financial position at cost less
any identified impairment losses.
Basis of consolidation
The Historical Financial Information incorporates the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved where the Company:
 has power over the investee;
 is exposed, or has rights, to variable returns from its involvement with the investee; and
 has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or
disposed of during the year/period are included in the consolidated statements of profit or loss and other
comprehensive income from the date of the Group gains control until the date when the Group ceases to control
the subsidiary.
Profit or loss and each item of other comprehensive income are attributed to the owners of the Company
and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of
the Company and to the non-controlling interests even if this results in the non-controlling interests having a
deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies in line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Changes in the Group’s interests in existing subsidiaries
When the Group loses control of a subsidiary, the assets and liabilities of that subsidiary and
non-controlling interests (if any) are derecognised. A gain or loss is recognised in profit or loss and is
calculated as the difference between (i) the aggregate of the fair value of the consideration received and the
fair value of any retained interest and (ii) the carrying amount of the assets (including goodwill), and liabilities
of the subsidiary attributable to the owners of the Company.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable
IFRS Accounting Standards).
Revenue from contracts with customers
The Group recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control”
of the goods or services underlying the particular performance obligation is transferred to the customer.
A performance obligation represents a good or service (or a bundle of goods or services) that is distinct
or a series of distinct goods or services that are substantially the same.
Control is transferred over time and revenue is recognised over time by reference to the progress
towards complete satisfaction of the relevant performance obligation if one of the following criteria is met:
 the customer simultaneously receives and consumes the benefits provided by the Group’s
performance as the Group performs;
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 448 ---
 the Group’s performance creates or enhances an asset that the customer controls as the Group
performs; or
 the Group’s performance does not create an asset with an alternative use to the Group and the
Group has an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognised at a point in time when the customer obtains control of the distinct
good or service.
A contract asset represents the Group’s right to consideration in exchange for goods or services that the
Group has transferred to a customer that is not yet unconditional. It is assessed for impairment in accordance
with IFRS 9. In contrast, a receivable represents the Group’s unconditional right to consideration, i.e. only the
passage of time is required before payment of that consideration is due.
A contract liability represent the Group’s obligation to transfer services to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customers.
A contract asset and a contract liability relating to the same contract are accounted for and presented
on a net basis.
V ariable consideration
For contracts that contain variable consideration, the Group estimates the amount of consideration to
which it will be entitled using the expected value method, which better predicts the amount of consideration
to which the Group will be entitled.
The estimated amount of variable consideration is included in the transaction price only to the extent
that it is highly probable that such an inclusion will not result in a significant revenue reversal in the future
when the uncertainty associated with the variable consideration is subsequently resolved.
At the end of each reporting period, the Group updates the estimated transaction price (including
updating its assessment of whether an estimate of variable consideration is constrained) to represent faithfully
the circumstances present at the end of each reporting period and the changes in circumstances during the
reporting period.
Leases
The Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at
inception of the contract. Such contract will not be reassessed unless the terms and conditions of the contract
are subsequently changed.
The Group as a lessee
Right-of-use assets
The cost of right-of-use assets includes the amount of the initial measurement of the lease liability and
any lease payments made at or before the commencement date, less any lease incentives received.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities.
Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life
and the lease term.
The Group presents right-of-use assets as a separate line item on the consolidated statements of financial
position.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 449 ---
Refundable rental deposits
Refundable rental deposits paid are accounted under IFRS 9 and initially measured at fair value.
Adjustments to fair value at initial recognition are considered as additional lease payments and included in the
cost of right-of-use assets.
Lease liabilities
At the commencement date of a lease, the Group recognises and measures the lease liability at the
present value of lease payments that are unpaid at that date. In calculating the present value of lease payments,
the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in
the lease is not readily determinable.
The lease payments include fixed payments (including in-substance fixed payments) less any lease
incentives receivable.
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Group presents lease liabilities as a separate line item on the consolidated statements of financial
position.
The Group as a lessor
Classification and measurement of leases
Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms
of the lease transfer substantially all the risks and rewards incidental to ownership of an underlying asset to
the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
Amounts due from lessees under finance leases are recognised as receivables at commencement date at
amounts equal to net investments in the leases, measured using the interest rate implicit in the respective
leases. Interest income is allocated to accounting periods so as to reflect a constant periodic rate of return on
the Group’s net investment outstanding in respect of the leases.
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to
the carrying amount of the leased asset, and such costs are recognised as an expense on a straight-line basis
over the lease term except for investment properties measured under fair value model.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other
than the functional currency of that entity (foreign currencies) are recognised at the rates of exchanges
prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary
items, are recognised in profit or loss in the period in which they arise.
For the purposes of presenting the Historical Financial Information, the assets and liabilities of the
Group’s operations are translated into the presentation currency of the Group (i.e. RMB) using exchange rates
prevailing at the end of each reporting period. Income and expenses items are translated at the average
exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case
the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in
other comprehensive income and accumulated in equity under the heading of translation reserve (attributed to
non-controlling interests as appropriate).
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Borrowing costs
Any specific borrowing that remain outstanding after the related asset is ready for its intended use or
sale is included in the general borrowing pool for calculation of capitalisation rate on general borrowings.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply
with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the
Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically,
government grants whose primary condition is that the Group should purchase, construct or otherwise acquire
non-current assets are recognised as deferred income in the consolidated statements of financial position and
transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants related to income that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable.
Employee benefits
Retirement benefit costs
Payments to defined contribution retirement benefit plan and state-managed retirement benefit scheme
are recognised as an expense when employees have rendered services entitling them to the contributions.
Short-term employee benefits
Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be
paid as and when employees rendered the services. All short-term employee benefits are recognised as an
expense unless another IFRS Accounting Standard requires or permits the inclusion of the benefit in the cost
of an asset.
A liability is recognised for benefits accruing to employees (such as wages and salaries) after deducting
any amount already paid.
Share-based payments
Equity-settled share-based payments transactions
Shares/share options granted to employees
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date.
The fair value of the equity-settled share-based payments determined at the grant date without taking
into consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity (other reserve). At the end of each reporting period, the Group revises its estimate of the
number of equity instruments expected to vest based on assessment of all relevant non- market vesting
conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that
the cumulative expense reflects the revised estimate, with a corresponding adjustment to the other reserve.
When share options are exercised, the amount previously recognised in other reserve will be transferred
to share premium. When the share options are forfeited after the vesting date or are still not exercised at the
expiry date, the amount previously recognised in other reserves will continue to be held in other reserves.
APPENDIX I ACCOUNTANTS’ REPORT
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Taxation
Income tax expense represents the sum of current and deferred income tax expense.
The tax currently payable is based on taxable profit for the year/period. Taxable profit differs from (loss)
profit before tax because of income or expense that are taxable or deductible in other years and items that are
never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of each reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred
tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial
recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such
investments are only recognised to the extent that it is probable that there will be sufficient taxable profits
against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of each reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Group expects, at the end of each reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied to the same taxable entity
by the same taxation authority.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group
applies IAS 12 Income Taxes requirements to the lease liabilities and the related assets separately. The Group
recognises a deferred tax asset related to lease liabilities to the extent that it is probable that taxable profit will
be available against which the deductible temporary difference can be utilised and a deferred tax liability for
all taxable temporary differences. Current and deferred tax are recognised in profit or loss.
Property, plant and equipment
Property, plant and equipment are tangible assets that are held for use in the production or supply of
goods or services, or for administrative purposes. Property, plant and equipment are stated in the consolidated
statements of financial position at cost less subsequent accumulated depreciation and subsequent accumulated
impairment losses, if any.
Depreciation is recognised so as to write off the cost of assets less their residual values over their
estimated useful lives, using the straight-line method. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
APPENDIX I ACCOUNTANTS’ REPORT
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An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or
retirement of an item of plant and equipment is determined as the difference between the sales proceeds and
the carrying amount of the asset and is recognised in profit or loss.
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at costs less accumulated
amortisation and any accumulated impairment losses. Amortisation for intangible assets with finite useful lives
is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and
amortisation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less any subsequent accumulated impairment losses.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from
use or disposal. Gains and losses arising from derecognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when
the asset is derecognised.
Internally-generated intangible assets — research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development activities (or from the development
phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:
 the technical feasibility of completing the intangible asset so that it will be available for use or
sale;
 the intention to complete the intangible asset and use or sell it;
 the ability to use or sell the intangible asset;
 how the intangible asset will generate probable future economic benefits;
 the availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset; and
 the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognised for internally-generated intangible asset is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no
internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss
in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses (if any), on the same basis as intangible assets
that are acquired separately.
Impairment on property, plant and equipment, right-of-use assets, and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and
equipment, right-of-use assets, intangible assets with finite useful lives and to determine whether there is any
indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the relevant asset is estimated in order to determine the extent of the impairment loss (if any).
Intangible development assets not ready to use are not subject to amortisation and are tested annually for
impairment and whenever there is an indication of impairment.
APPENDIX I ACCOUNTANTS’ REPORT
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The recoverable amount of property, plant and equipment, right-of-use assets and intangible assets are
estimated individually. When it is not possible to estimate the recoverable amount individually, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
In testing a cash-generating unit for impairment, corporate assets are allocated to the relevant
cash-generating unit when a reasonable and consistent basis of allocation can be established, or otherwise they
are allocated to the smallest group of cash generating units for which a reasonable and consistent allocation
basis can be established. The recoverable amount is determined for the cash-generating unit or group of
cash-generating units to which the corporate asset belongs, and is compared with the carrying amount of the
relevant cash-generating unit or group of cash-generating units.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset (or a
cash-generating unit) for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or a cash-generating unit) is reduced to its recoverable amount. For
corporate assets or portion of corporate assets which cannot be allocated on a reasonable and consistent basis
to a cash-generating unit, the Group compares the carrying amount of a group of cash-generating units,
including the carrying amounts of the corporate assets or portion of corporate assets allocated to that group
of cash-generating units, with the recoverable amount of the group of cash-generating units. In allocating the
impairment loss, the impairment loss is allocated first to reduce the carrying amount of any goodwill (if
applicable) and then to the other assets on a pro-rata basis based on the carrying amount of each asset in the
unit or the group of cash-generating units. The carrying amount of an asset is not reduced below the highest
of its fair value less costs of disposal (if measurable), its value in use (if determinable) and zero. The amount
of the impairment loss that would otherwise have been allocated to the asset is allocated pro rata to the other
assets of the unit or the group of cash-generating units. An impairment loss is recognised immediately in profit
or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined
on a first-in, first-out method. Net realisable value represents the estimated selling price for inventories less
all estimated costs of completion and costs necessary to make the sale.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can
be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows (when the effect of the time value of money is
material).
Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the
contractual provisions of the instrument. All regular way purchases or sales of financial assets are recognised
and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the time frame established by regulation or convention in the
market place.
Financial assets and financial liabilities are initially measured at fair value except for trade receivables
arising from contracts with customers which are initially measured in accordance with IFRS 15. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other
than financial assets or liabilities at FVTPL are added to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 454 ---
The effective interest method is a method of calculating the amortised cost of a financial asset or
financial liability and of allocating interest income and interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees
and points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial asset or financial liability, or, where
appropriate, a shorter period, to the net carrying amount on initial recognition.
Financial assets
Classification and subsequent measurement of financial assets
Financial assets that meet the following conditions are subsequently measured at amortised cost:
 the financial asset is held within a business model whose objective is to collect contractual cash
flows; and
 the contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets that meet the following conditions are subsequently measured at FVTOCI:
 the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the financial assets; and
 the contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at FVTPL, except that at initial recognition of a
financial asset the Group may irrevocably elect to present subsequent changes in fair value of an equity
investment in other comprehensive income if that equity investment is neither held for trading nor contingent
consideration recognised by an acquirer in a business combination to which IFRS 3 Business Combinations
applies.
A financial asset is held for trading if:
 it has been acquired principally for the purpose of selling in the near term; or
 on initial recognition it is a part of a portfolio of identified financial instruments that the Group
manages together and has a recent actual pattern of short-term profit-taking; or
 it is a derivative that is not designated and effective as a hedging instrument.
In addition, the Group may irrevocably designate a financial asset that are required to be measured at
the amortised cost or FVTOCI as measured at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch.
(i) Amortised cost and interest income
Interest income is recognised using the effective interest method for financial assets measured
subsequently at amortised cost. Interest income is calculated by applying the effective interest rate to
the gross carrying amount of a financial asset, except for financial assets that have subsequently become
credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is
recognised by applying the effective interest rate to the amortised cost of the financial asset from the
next reporting period. If the credit risk on the credit-impaired financial instrument improves so that the
financial asset is no longer credit-impaired, interest income is recognised by applying the effective
interest rate to the gross carrying amount of the financial asset from the beginning of each reporting
period following the determination that the asset is no longer credit-impaired.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 455 ---
(ii) Equity instruments designated as at FVTOCI
Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and
losses arising from changes in fair value recognised in other comprehensive income and accumulated
in the revaluation reserve; and are not subject to impairment assessment. The cumulative gain or loss
will not be reclassified to profit or loss on disposal of the equity investments, and will be transferred
to accumulated losses.
Dividends from these investments in equity instruments are recognised in profit or loss when the
Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery
of part of the cost of the investment. Dividends are included in the “other income” line item in profit
or loss.
(iii) Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI or
designated as FVTOCI are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair
value gains or losses recognised in profit or loss.
Impairment of financial assets
The Group performs impairment assessment under expected credit loss (“ECL”) model on financial
assets (including trade and other receivables, notes receivable, pledged and restricted bank deposits, time
deposits, amounts due from related companies, amount due from immediate holding company and bank
balances), and other items (finance lease receivables and contract assets) which are subject to impairment
assessment under IFRS 9 Financial instruments . The amount of ECL is updated at each reporting date to reflect
changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life
of the relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that
is expected to result from default events that are possible within 12 months after the reporting date. Assessment
are done based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current conditions at the end of reporting
period as well as the forecast of future conditions.
At the end of each reporting period, the management has performed impairment assessment, and
concluded that there has been no significant increase in credit risk since initial recognition of the financial
guarantee contracts. Accordingly, the loss allowance for financial guarantee contracts issued by the Group is
measured at an amount equal to 12m ECL. No loss allowance was recognised in the profit or loss.
The Group always recognises lifetime ECL for trade receivables, amounts due from related companies-
trade-related and amount due from immediate holding company — trade-related.
For all other instruments, the Group measures the loss allowance equal to 12m ECL, unless when there
has been a significant increase in credit risk since initial recognition, in which case the Group recognises
lifetime ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases
in the likelihood or risk of a default occurring since initial recognition.
(i) Significant increase in credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial instrument as at the end of each reporting
period with the risk of a default occurring on the financial instrument as at the date of initial recognition.
In making this assessment, the Group considers both quantitative and qualitative information that is
reasonable and supportable, including historical experience and forward-looking information that is
available without undue cost or effort.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 456 ---
In particular, the following information is taken into account when assessing whether credit risk has
increased significantly:
 an actual or expected significant deterioration in the financial instrument’s external (if available)
or internal credit rating;
 significant deterioration in external market indicators of credit risk, e.g. a significant increase in
the credit spread, the credit default swap prices for the debtor;
 existing or forecast adverse changes in business, financial or economic conditions that are
expected to cause a significant decrease in the debtor’s ability to meet its debt obligations;
 an actual or expected significant deterioration in the operating results of the debtor;
 an actual or expected significant adverse change in the regulatory, economic, or technological
environment of the debtor that results in a significant decrease in the debtor’s ability to meet its
debt obligations.
Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has
increased significantly since initial recognition when contractual payments are more than 30 days past
due, unless the Group has reasonable and supportable information that demonstrates otherwise.
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been
a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable
of identifying significant increase in credit risk before the amount becomes past due.
(ii) Definition of default
For internal credit risk management, the Group considers an event of default occurs when information
developed internally or obtained from external sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking into account any collaterals held by the Group).
Irrespective of the above, The Group considers that default has occurred when a financial assets is more
than 90 days past due unless the Group has reasonable and supportable information to demonstrate that
a more lagging default criterion is more appropriate.
(iii) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is
credit-impaired includes observable data about the following events:
(a) significant financial difficulty of the issuer or the borrower;
(b) a breach of contract, such as a default or past due event;
(c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s
financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not
otherwise consider;
(d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganization;
or
(e) the disappearance of an active market for that financial asset because of financial difficulties.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 457 ---
(iv) Write-off policy
The Group writes off a financial asset when there is information indicating that the counterparty is in
severe financial difficulty and there is no realistic prospect of recovery. Financial assets written off may
still be subject to enforcement activities under the Group’s recovery procedures, taking into account
legal advice where appropriate. A write-off constitutes a derecognition event. Any subsequent recoveries
are recognised in profit or loss.
(v) Measurement and recognition of ECL
The measurement of ECL is a function of the probability of default, loss given default (i.e. the
magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability
of default and loss given default is based on historical data adjusted by forward-looking information.
Estimation of ECL reflects an unbiased and probability weighted amount that is determined with the
respective risks of default occurring as the weights.
Generally, the ECL is the difference between all contractual cash flows that are due to the Group in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at the
effective interest rate determined at initial recognition.
Lifetime ECL for certain trade receivables, contract assets, amounts due from related companies-
trade-related and amount due from immediate holding company — trade-related are considered on a
collective basis taking into consideration past due information and relevant credit information such as
forward looking macroeconomic information.
For collective assessment, the Group takes into consideration the following characteristics when
formulating the grouping:
 Past-due status;
 Nature, size and industry of debtors; and
 External credit ratings where available.
The grouping is regularly reviewed by management to ensure the constituents of each group continue
to share similar credit risk characteristics.
Interest income is calculated based on the gross carrying amount of the financial asset unless the
financial asset is credit-impaired, in which case interest income is calculated based on amortised cost
of the financial asset.
The Group recognises an impairment gain or loss in profit or loss for all financial instruments by
adjusting their carrying amount, with the exception of trade receivables and contract assets where the
corresponding adjustment is recognised through a loss allowance account.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership
of the asset to another entity.
On derecognition of a financial asset at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified either as financial liabilities or as equity in accordance with
the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 458 ---
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the group entities are recognised at the proceeds
received, net of direct issue costs.
Financial liabilities at amortised cost
Financial liabilities, including trade and other payables, borrowings, convertible bonds, and amounts
due to related companies are subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or have expired. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in profit or loss.
5. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, management of the Group is required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and underlying assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future and other key sources of estimation uncertainty
at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
Deferred tax assets
As at 31 December 2022, 2023 and 2024 and 30 June 2025, a deferred tax asset of RMB27,509,000,
RMB27,204,000, RMB617,469,000 and RMB337,003,000, respectively, in relation to unused tax losses for certain
operating subsidiaries has been recognised in the consolidated statements of financial position. No deferred tax asset
has been recognised on the tax losses of RMB11,131,052,000, RMB18,702,155,000, RMB8,838,696,000 and
RMB9,202,662,000, respectively, for certain subsidiaries due to the unpredictability of future profit streams. The
realisability of the deferred tax asset mainly depends on whether sufficient taxable profits will be available in the
future or taxable temporary differences are expected to reverse in the same period as the expected reversal of the
deductible temporary differences, which is a key source of estimation uncertainty. The uncertainty would depend on
how the ongoing uncertain macroeconomic and geopolitical environment. In cases where the actual future taxable
profits generated are less or more than expected, or change in facts and circumstances which result in revision of
future taxable profits estimation, a material reversal or further recognition of deferred tax assets may arise, which
would be recognised in profit or loss for the period in which such a reversal or further recognition takes place.
Provision of ECL for trade and other receivables and contract assets
Trade and other receivables and contract assets with significant balances and credit-impaired are assessed for
ECL individually.
In addition, for trade and other receivables and contract assets which are individually insignificant or when the
Group does not have reasonable and supportable information that is available without undue cost or effort to measure
ECL on individual basis, collective assessment is performed by grouping debtors based on the Group’s internal credit
ratings.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 459 ---
Estimated impairment of property, plant and equipment, right-of-use assets and intangible assets
Property, plant and equipment, right-of-use assets and intangible assets are stated at costs less accumulated
depreciation and impairment, if any. In determining whether an asset is impaired, the Group has to exercise
judgement and make estimation, particularly in assessing: (1) whether an event has occurred or any indicators that
may affect the asset value; (2) whether the carrying value of an asset can be supported by the recoverable amount.
Recoverable amount should be higher of fair value less costs of disposal and value in use. The net present value of
future cash flows which are estimated based upon the continued use of the asset; and (3) the appropriate key
assumptions to be applied in estimating the recoverable amounts including cash flow projections and an appropriate
discount rate. When it is not possible to estimate the recoverable amount of an individual asset (including right-of-use
assets), the Group estimates the recoverable amount of the cash generating unit to which the assets belongs, including
allocation of corporate assets when a reasonable and consistent basis of allocation can be established, otherwise
recoverable amount is determined at the smallest group of cash generating units, for which the relevant corporate
assets have been allocated. Changing the assumptions and estimates, including the discount rates or the growth rate
in the cash flow projections, could materially affect the recoverable amounts.
Provisions for warranty
Provision for warranty granted by the Group in respect of certain products are recognised based on the historic
data and current conditions of warranty, taking into consideration all relevant information such as product
improvements and market changes, among others. The estimate of the provision for warranty may not be equal to the
actual warranty fee in the future. The Group reassesses the provision for warranty at least annually at least on each
balance sheet date and determines its estimated liabilities based on the reassessed provision for warranty.
6. REVENUE
Y ear 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
Sales of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,732,138 35,658,108 144,682,522 64,850,289 62,136,517
Provision of services and others /H1118/H1118/H1118323,936 130,777 431,101 164,025 222,308
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 35,788,885 145,113,623 65,014,314 62,358,825
Geographical markets
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,134,196 30,812,974 140,902,880 63,166,529 60,937,161
Overseas /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,921,878 4,975,911 4,210,743 1,847,785 1,421,664
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 35,788,885 145,113,623 65,014,314 62,358,825
(i) Disaggregation of revenue from contracts with customers
The Group’s revenue from contracts with customers mainly represents sale of vehicles and parts and materials.
The following is an analysis of the Group’s revenue from contracts with customers:
Y ear 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 and services
Sales of vehicles
– NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,934,089 28,947,606 135,490,526 60,198,727 57,951,847
– Internal combustion engine
vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,346,800 4,608,886 3,447,702 1,538,234 1,156,319
Sales of parts and materials /H1118/H1118/H1118/H1118/H1118/H11182,451,249 2,101,616 5,744,293 3,113,328 3,028,351
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118323,936 130,777 431,102 164,025 222,308
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 35,788,885 145,113,623 65,014,314 62,358,825
Timing of revenue recognition
A point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,056,074 35,788,885 145,113,623 65,014,314 62,358,825
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 460 ---
(ii) Performance obligations for contracts with customers
The Group mainly sells vehicles, and parts and materials, to external customers, according to the relevant sales
agreements.
For sales of vehicles, and parts and materials, revenues are recognised when control of assets has been
transferred, that is when goods were delivered to the customers’ specific locations and accepted by the customers.
No provisions for returns of vehicles, and parts and materials are set out in the relevant sales agreements, except for
replacement due to quality problems. The Group cash advance from majority of its customers in the PRC upon the
Group entered into the sales agreements with the customers. The transaction price received by the Group is
recognised as a contract liability until the goods have been delivered to the customers.
V ehicle buyers in the PRC were entitled to government subsidies when they purchase NEVs before 31
December 2022. For efficiency purpose and better customer service, the Group applies for and collect such
government subsidies on behalf of the customers. Accordingly, customers only pay the amount after deducting
government subsidies. The Group determined that the government subsidies should be considered as part of the
transaction price because the subsidy is granted to the buyer of the electric vehicle and the buyer remains liable for
such amount in the event the subsidies were not received by the Group due to the buyer’s fault.
(iii) Transaction price allocated to the remaining performance obligation for contracts with customers
The Group applies the practical expedient of not disclosing the transaction price allocated to the remaining
performance obligation as the original expected duration of all the contracts from customers of the Group are within
one year or less.
7. SEGMENT INFORMATION
Revenue and operating result of the Group are reported to the executive directors of the Company, being the
chief operating decision maker (“CODM”), for the purposes of resource allocation and performance assessment. No
other analysis of the Group’s results nor assets and liabilities is regularly provided to the CODM for review and the
CODM reviews the overall results and financial position of the Group as a whole. Accordingly, the CODM has
identified one operating and reportable segment and only entity-wide disclosures, geographical information and
major customers are presented in accordance with IFRS 8 Operating Segments.
(i) Geographical information
Information about the Group’s revenue from external customers disclosed pursuant to the requirements of IFRS
8 Operating Segment is presented based on the geographical location of its customers as disclosed in note 6.
Information about the Group’s non-current assets excluding deferred tax asset and financial instruments is
presented based on the geographical location of the assets.
As at 31 December
As at
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,361,581 23,707,792 26,497,339 42,683,365
Rest of the world /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118398,300 364,139 277,325 193,453
18,759,881 24,071,931 26,774,664 42,876,818
(ii) Information about major customers
No single external customer contributed 10% or more of the Group’s total revenue for the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
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8. GOVERNMENT GRANTS AND SUBSIDIES
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Subsidies on research and
development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,826 16,530 11,674 2,561 10,083
Amortisation of government grants
related to assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,811 148,100 144,657 71,565 75,740
Subsidies on stability of employee /H1118 9,380 11,851 7,361 1,171 6,771
Subsidies on industry development /H1118 349,057 355,615 51,408 33,195 285,556
Additional deduction on value added
tax (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,125 846,570 544,233 307,272
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,400 6,245 6,543 6,475 4,687
523,474 549,466 1,068,213 659,200 690,109
Note: The items represent subsidies obtained from the General Office of the Ministry of Industry and
Information Technology Regarding the Compilation of the List of Advanced Manufacturing Enterprises
Eligible for Additional Deduction Policy under V alue-Added Tax for 2023 Annual Implementation.
9. OTHER INCOME
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Bank deposits and time deposit
certificates Interest income /H1118/H1118/H1118/H1118189,493 296,601 582,988 191,722 463,373
Rental income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,923 53,073 62,199 30,154 42,897
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,335 58,129 27,118 16,066 42,616
261,751 407,803 672,305 237,942 548,886
10. OTHER GAINS AND LOSSES
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Impairment loss recognised in
respect of
– goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,693) (18,097) (46,915) – –
– intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (76,203) (1,626,684) (123,338) –
– property, plant and equipment /H1118/H1118(9,248) (1,482) (82,535) – (977)
– interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (37,889)
(Loss)/gain on disposal of
subsidiaries and other equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,587) 1,757,000 – – –
Net foreign exchange (loss)/gain /H1118/H1118/H1118(9,949) 50,104 26,843 (7,780) (1,837)
Gain/(loss) on disposal of property,
plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266,951 42,016 (10,929) 5,626 2,394
Change in fair value of financial
assets measured at FVTPL /H1118/H1118/H1118/H1118/H1118(169,612) 22,293 100,507 43,439 43,180
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,659) (26,370) 24,573 1,248 (37,460)
14,203 1,749,261 (1,615,140) (80,805) (32,589)
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 462 ---
11. IMPAIRMENT LOSSES UNDER ECL MODEL, NET OF REVERSAL
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Impairment losses recognised
(reversed) on:
– trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,879 23,767 90,364 76,881 16,130
– other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,916 74,128 27,066 (37,739) (29,591)
– finance lease receivables /H1118/H1118/H1118/H1118/H11181,204 (7,320) – – –
– amounts due from related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555 (7,929) 1,009 882 (259)
– contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,333 26,139 12,668 (290) 88
76,887 108,785 131,107 39,734 (13,632)
Details of impairment assessment are set out in note 47(b).
12. FINANCE COSTS
Y ear 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 expenses on borrowings /H1118/H1118/H1118276,127 277,634 91,210 66,071 69,723
Interest expenses on convertible
bonds (note 36) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,537 5,13 5–––
Interest expenses on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,634 25,977 149,172 53,557 52,151
Imputed interest expenses on
amount due to immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,873 ––––
330,171 308,746 240,382 119,628 121,874
13. INCOME TAX EXPENSES
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
PRC Enterprise Income Tax:
Current tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273,407 112,657 1,032,751 406,511 465,575
(Over)/under provision in respect of
prior years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(777) 3,965 62,125 62,125 44,017
Deferred tax (note 39) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,517 (40,765) (883,645) (128,648) 137,836
290,147 75,857 211,231 339,988 647,428
No provision for tax in Hong Kong has been made as the Group’s income neither arises in, nor is derived from,
Hong Kong.
No provision for taxation in Indonesia and the United States have been made as subsidiaries of the Group in
these jurisdictions did not arise any assessable profits during the Track Record Period.
Under the Law of the PRC on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the
EIT Law, the tax rate of the PRC subsidiaries is 25% for the Track Record Period.
Certain subsidiaries operating in Mainland China were approved to be high and new technology enterprises
(“HNTE”) and were entitled to a reduced EIT rate of 15%. The HNTE certificates need to be renewed every three
years so as to enable those subsidiaries to enjoy the reduced EIT rate of 15%.
Certain subsidiaries operating in Mainland China were entitled to a reduced EIT rate of 15% during the track
record period pursuant to the Western Development Policy. These subsidiaries are required to retain records for
inspection, if requested, pursuant to the policies by the State Taxation Administration so as to be entitled to the
reduced EIT rate.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 463 ---
The income tax expenses for the Track Record Period can be reconciled to the (loss) profit before tax per the
consolidated statements of profit or loss and other comprehensive income as follows:
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
(Loss) profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,930,410) (4,080,859) 4,951,347 1,699,109 3,724,791
Tax at PRC enterprise income tax
rate of 25% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,232,603) (1,020,215) 1,237,837 424,777 931,198
Effect of preferential tax rate and
different tax rate of subsidiaries
operating in other jurisdictions
and /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(191,674) (143,567) (584,240) (221,907) (277,927)
Tax effect of expenses not
deductible for tax purpose /H1118/H1118/H1118/H1118/H11182,253 6,606 8,764 25,846 2,420
(Over)/under provision in respect of
prior years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(777) 3,965 62,125 62,125 44,017
Tax effect of tax losses and
temporary difference not
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,798,385 1,335,978 331,551 480,767 215,641
Utilisation of tax losses and
temporary difference previously
not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(40,570) (64,720) (734,382) (427,014) (252,256)
Tax effect of tax concession for
research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(44,867) (42,190) (110,424) (4,606) (15,665)
Income tax expenses for the
years/periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118290,147 75,857 211,231 339,988 647,428
14. (LOSS) PROFIT FOR THE YEAR/PERIOD
(Loss) profit for the year/period has been arrived at after charging (crediting):
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,311,250 1,416,384 1,416,899 787,718 901,462
Depreciation of right-of-use assets /H1118 132,711 221,355 375,556 152,372 190,869
Amortisation of intangible assets /H1118/H1118856,191 1,129,448 2,573,854 1,005,023 1,087,659
Total depreciation and amortization /H11182,300,152 2,767,187 4,366,309 1,945,113 2,179,990
Cost of inventories recognised as
cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,981,344 32,108,023 106,924,411 49,373,200 44,408,729
Auditors’ remuneration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,100 2,100 2,100 – –
Employee benefit expenses,
including directors’ remunerations
(note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
– salaries and other allowances /H1118/H11182,952,954 3,106,283 5,220,690 2,314,641 2,449,246
– retirement benefit scheme
contributions
(note 43) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,113 136,802 192,957 90,291 109,916
– equity-settled share-based
payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,661 (30,811) 67,419 10,453 54,597
Total employee benefit expenses /H1118/H1118/H11183,116,728 3,212,274 5,481,066 2,415,385 2,613,759
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


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15. DIRECTORS’, CHIEF EXECUTIVE’S, SUPERVISORS’ AND EMPLOYEES’ EMOLUMENTS
Executive directors, non-executive directors and supervisors
Details of the emoluments paid or payable (including emoluments for services as directors of the group entities
prior to becoming the directors of the Company) to the directors of the Company during the Track Record Period for
their services rendered to the entities comprising the Group are as follows:
Fee
Salaries
and other
allowances
Discretionary
bonus
Retirement
benefit scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year ended
31 December 2022:
Executive directors and
non-executive directors
Mr. Zhang Zhengping
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,424 484 10 1,918
Mr. Zhang Zhengyuan /H1118/H1118/H1118– 1,515 1,048 9 2,572
Mr, Ma Jianchang /H1118/H1118/H1118/H1118/H1118/H1118– 1,754 2,475 10 4,239
Mr. Liu Changdong /H1118/H1118/H1118/H1118/H1118– 1,869 1,559 10 3,438
Ms. Liu Lian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 773 634 10 1,417
Mr. Y ou Zheng (Note ii) /H1118/H1118 –––––
Mr. Li Wei (Note ii) /H1118/H1118/H1118/H1118–––––
Mr. Zhou Changlin
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 7,335 6,200 49 13,584
Independent
non-executive directors
Mr. Li Kaiguo (Note iv) /H1118/H1118 1 1––– 1 1
Mr. Liu Bin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Mr. Liu Kaixiang /H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Mr. Li Ming (Note iv) /H1118/H1118/H11188 9––– 8 9
Mr. Zhao Wanyi (Note v) /H1118 1 3––– 1 3
Mr. Fu Y uwu (Note v) /H1118/H1118/H11188 8––– 8 8
4 0 1––– 4 0 1
Supervisors
Mr. Zhang Zhengcheng /H1118/H1118/H1118– 805 800 8 1,613
Ms. Kuang Juan /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 339 176 6 521
Mr. Hu Weidong (Note ii) /H1118 –––––
– 1,144 976 14 2,134
401 8,479 7,176 63 16,119
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 465 ---
Fee
Salaries
and other
allowances
Discretionary
bonus
Retirement
benefit scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year ended
31 December 2023:
Executive directors and
non-executive directors
Mr. Zhang Zhengping
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,425 420 10 1,855
Mr. Zhang Zhengyuan /H1118/H1118/H1118– 1,523 860 9 2,392
Mr. Yin Xianzhi (Note vi) /H1118 – 828 495 15 1,338
Ms. Shen Wei (Note vi) /H1118/H1118 – 907 620 8 1,535
Mr. Liu Changdong
(Note vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 795 1,329 4 2,128
Mr. Ma Jianchang
(Note vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 739 2,271 4 3,014
Ms. Liu Lian (Note vii) /H1118/H1118 – 772 595 – 1,367
Mr. Zhang Kebang
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Y ou Zheng
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Li Wei
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou Changlin
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 6,989 6,590 50 13,629
Independent
non-executive directors
Mr. Li Kaiguo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 6 1––– 1 6 1
Mr. Zhang Guolin
(Note vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 2 2––– 1 2 2
Mr. Jing Xufeng (Note vi) /H1118 1 2 2––– 1 2 2
Mr. Li Ming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 6 1––– 1 6 1
Mr. Liu Bin (Note vii) /H1118/H1118/H11183 9––– 3 9
Mr. Liu Kaixiang
(Note vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 9––– 3 9
6 4 4––– 6 4 4
Supervisors
Mr. Zhang Zhengcheng /H1118/H1118/H1118– 911 960 8 1,879
Mr. Song Y unxing
(Note vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 193 – 4 197
Mr. Hu Weidong
(Notes ii & ix) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Ms. Kuang Juan (Note vii) /H1118 – 180 144 3 327
– 1,284 1,104 15 2,403
644 8,273 7,694 65 16,676
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 466 ---
Fee
Salaries
and other
allowances
Discretionary
bonus
Retirement
benefit scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year ended
31 December 2024:
Executive directors and
non-executive directors
Mr. Zhang Zhengping
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,529 466 19 2,014
Mr. Zhang Zhengyuan /H1118/H1118/H1118– 1,570 889 19 2,478
Mr. Yin Xianzhi /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,145 568 20 1,733
Ms. Shen Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,157 622 19 1,798
Mr. Zhang Kebang
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Y ou Zheng (Note ii) /H1118/H1118 –––––
Mr. Li Wei (Note ii) /H1118/H1118/H1118/H1118–––––
Mr. Zhou Changlin
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 5,401 2,545 77 8,023
Independent
non-executive directors
Mr. Li Kaiguo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0 0––– 2 0 0
Mr. Zhang Guolin /H1118/H1118/H1118/H1118/H1118/H11182 0 0––– 2 0 0
Mr. Jing Xufeng /H1118/H1118/H1118/H1118/H1118/H1118/H11182 0 0––– 2 0 0
Mr. Li Ming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 0 0––– 2 0 0
8 0 0––– 8 0 0
Supervisors
Mr. Zhang Zhengcheng /H1118/H1118/H1118– 990 960 14 1,964
Mr. Song Y unxing /H1118/H1118/H1118/H1118/H1118/H1118– 549 233 14 796
Mr. Hu Weidong
(Notes ii & ix) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Deng Wenhui
(Notes ii & viii) /H1118/H1118/H1118/H1118/H1118–––––
– 1,539 1,193 28 2,760
800 6,940 3,738 105 11,583
For six months ended
30 June 2024
(unaudited):
Executive directors and
non-executive directors
Mr. Zhang Zhengping
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 745 466 9 1,220
Mr. Zhang Zhengyuan /H1118/H1118/H1118– 799 889 9 1,697
Mr. Yin Xianzhi /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 547 568 10 1,125
Ms. Shen Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 558 622 9 1,189
Mr. Zhang Kebang
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Y ou Zheng (Note ii) /H1118/H1118 –––––
Mr. Li Wei (Note ii) /H1118/H1118/H1118/H1118–––––
Mr. Zhou Changlin
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 2,649 2,545 37 5,231
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 467 ---
Fee
Salaries
and other
allowances
Discretionary
bonus
Retirement
benefit scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Independent
non-executive directors
Mr. Li Kaiguo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 3––– 8 3
Mr. Zhang Guolin /H1118/H1118/H1118/H1118/H1118/H11188 3––– 8 3
Mr. Jing Xufeng /H1118/H1118/H1118/H1118/H1118/H1118/H11188 3––– 8 3
Mr. Li Ming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 3––– 8 3
3 3 2––– 3 3 2
Supervisors
Mr. Zhang Zhengcheng /H1118/H1118/H1118– 555 960 7 1,522
Mr. Song Y unxing /H1118/H1118/H1118/H1118/H1118/H1118– 260 233 7 500
Mr. Hu Weidong
(Notes ii & ix) /H1118/H1118/H1118/H1118/H1118/H1118–––––
– 815 1,193 14 2,022
332 3,464 3,738 51 7,585
For six months ended
30 June 2025:
Executive directors and
non-executive directors
Mr. Zhang Zhengping
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 730 530 10 1,270
Mr. Zhang Zhengyuan /H1118/H1118/H1118– 774 808 10 1,592
Mr. Yin Xianzhi /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 557 1,185 10 1,752
Ms. Shen Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 557 1,173 10 1,740
Mr. Zhang Kebang
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Y ou Zheng (Note ii) /H1118/H1118 –––––
Mr. Li Wei (Note ii) /H1118/H1118/H1118/H1118–––––
Mr. Zhou Changlin
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 2,618 3,696 40 6,354
Independent
non-executive directors
Mr. Li Kaiguo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Mr. Zhang Guolin /H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Mr. Jing Xufeng /H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
Mr. Li Ming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 0––– 1 0 0
4 0 0––– 4 0 0
Supervisors
Mr. Zhang Zhengcheng /H1118/H1118/H1118– 406 1,233 7 1,646
Mr. Song Y unxing /H1118/H1118/H1118/H1118/H1118/H1118– 269 250 7 526
Mr. Deng Wenhui
(Note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
– 675 1,483 14 2,172
400 3,293 5,179 54 8,926
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 468 ---
Notes:
(i) Mr. Zhang Zhengping acts as chief executive of the Company throughout the Track Record Period and
his emoluments disclosed above included those for services rendered by him as the chief executive in
management of the affairs of the group entities.
(ii) During the Track Record Period, no emoluments have been paid to Mr. Y ou Zheng, Mr. Li Wei, Mr. Zhou
Changlin, Mr. Hu Weidong, Mr. Zhang Kebang and Mr. Deng Wenhui by the Group.
(iii) During the Track Record Period, no emoluments were paid by the Group to any of the directors or
supervisors nor the chief executive officer of the Company as an inducement to join or upon joining the
Group or as compensation for loss of office.
(iv) Mr. Li Ming and Mr. Li Kaiguo were appointed in February 2022 and November 2022, respectively.
(v) Mr. Zhao Wanyi and Mr. Fu Y uwu resigned in February 2022 and November 2022, respectively.
(vi) Mr. Zhang Guolin, Mr. Yin Xianzhi, Ms Shen Wei, Mr. Jing Xufeng and Mr. Song Y unxing were
appointed in May 2023.
(vii) Mr. Liu Changdong, Mr. Ma Jianchang, Mr. Liu Bin, Mr. Liu Kaixiang and Ms. Kuang Juan, Ms Liu
Lian resigned in May 2023.
(viii) Mr. Deng Wenhui was appointed in October 2024.
(ix) Mr. Hu Weidong resigned in October 2024.
(x) The share-based payment expense recognised in the years ended 31 December 2022, 2023 and 2024 and
the six months ended 30 June 2024 and 2025 granted to the executive Director, non-executive director
and supervisors above of the Group was RMB391,000, RMB288,000, RMB5,108,000, RMB828,000 and
RMB3,729,000, respectively, which is not included in the above remuneration.
(xi) Subsequent to the end of the Track Record Period, the Company dissolved its committee of supervisors,
pursuant to a resolution approved by the shareholders at the shareholders’ meeting on 15 October 2025.
Employees
The five highest paid individuals of the Group for the Track Record Period included two, two, nil, nil
(unaudited) and nil directors for the years ended 31 December 2022, 2023 and 2024 and for the six months ended
30 June 2024 and 2025, respectively. The emoluments of the remaining three, three, five, five (unaudited) and five
individuals of the Group for the years ended 31 December 2022, 2023 and 2024 and for the six months ended 30 June
2024 and 2025, respectively, are as follows:
Y ear 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 and other allowances /H1118/H1118/H1118/H1118/H11187,132 9,273 17,526 7,335 7,274
Discretionary bonus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,436 2,104 5,528 7,937 13,795
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 29 89 40 48
10,596 11,406 23,143 15,312 21,117
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 469 ---
The number of the highest paid individuals, other than the directors of the Company, whose emoluments fell
within the following bands is as follows (presented in Hong Kong dollars (“HK$”)):
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
Number of
employees
Number of
employees
Number of
employees
Number of
employees
Number of
employees
(unaudited)
HK$2,000,001 to HK$2,500,000 /H1118/H1118 –––1–
HK$2,500,001 to HK$3,000,000 /H1118/H1118 –––21
HK$3,000,001 to HK$3,500,000 /H1118/H1118 ––––1
HK$3,500,001 to HK$4,000,000 /H1118/H1118/H111822211
HK$4,000,001 to HK$4,500,000 /H1118/H1118/H1118––1––
HK$4,500,001 to HK$5,000,000 /H1118/H1118/H11181–––1
HK$5,000,001 to HK$5,500,000 /H1118/H1118/H1118–111–
HK$7,500,001 to HK$8,000,000 /H1118/H1118/H1118––1––
HK$8,000,001 to HK$8,500,000 /H1118/H1118 ––––1
The share-based payment expense recognised in the years ended 31 December 2022, 2023 and 2024 and the
six months ended 30 June 2024 and 2025 granted to the five employees above of the Group was RMB1,293,000, nil,
RMB7,816,000, RMB1,232,000 (unaudited) and RMB7,405,000 which is not included in the above remuneration.
During the Track Record Period, no emoluments was paid by the Group to the directors of the Company or
the five highest paid employees as an inducement to join or upon joining the Group or as compensation for loss of
office.
16. DIVIDENDS
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Dividends for ordinary shareholders
of the Company recognised as
distribution during
the year/period:
Interim dividend – RMB0.331 per
share (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 499,738 – –
Final dividend – RMB0.97
per share (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,584,365
Notes:
(i) During the year ended 31 December 2024, the Company declared a cash dividend distribution for the
first three quarters of 2024, amounting to RMB0.331 per ordinary share, in an aggregate amount of
approximately RMB499,738,000, to the shareholders based on the total share number of 1,509,782,193
as at 12 December 2024.
(ii) No dividend is declared by the Company during the years ended 31 December 2022 and 2023, and the
six months ended 30 June 2024.
(iii) During the six months ended 30 June 2025, the Company declared a cash dividend distribution for the
year ended 31 December 2024, amounting to RMB0.97 per ordinary share, in an aggregate amount of
approximately RMB1,584,365,000 to the shareholders based on the total share number of 1,633,366,086
as at 12 May 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 470 ---
(iv) Subsequent to the end of the reporting period, a cash dividend distribution for the six months ended 30
June 2025 of RMB0.31 per ordinary share, in an aggregate amount of RMB506,343,000 has been
proposed by the directors of the Company and approved by the shareholders at the shareholders’ meeting
as at 15 October 2025.
17. (LOSS) PROFIT PER SHARE
The calculation of the basic (loss) profit per share attributable to owners of the Company is based on the
following data:
(Loss) profit figures are calculated as follows:
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
(Loss) profit for the year/period
attributable to owners of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,831,866) (2,449,687) 5,945,945 1,624,558 2,940,890
Number of shares
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(unaudited)
Weighted average number of
ordinary shares for the purpose of
basic (loss) profit per share /H1118/H1118/H1118/H11181,428,472 1,500,538 1,508,148 1,506,664 1,571,574
Effect of dilutive potential ordinary
shares:
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 601 16 2,240
Weighted average number of
ordinary shares for the purpose of
diluted (loss) profit per share /H1118/H1118/H11181,428,472 1,500,538 1,508,749 1,506,680 1,573,814
Diluted (loss) profit per share is calculated by adjusting the weighted average number of ordinary shares in
issue to assume conversion of all potential dilutive ordinary shares. The Group had potential dilutive shares during
the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2024 and 2025. As the Group
incurred losses during the years ended 31 December 2022 and 2023, the effect of these potential dilutive shares would
be anti-dilutive.
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 471 ---
18. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
and plants
Moulds and
machinery
Motor
vehicles
Furniture,
fixture and
office
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,291,208 8,456,781 82,101 736,843 1,532,735 14,099,668
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,634 147,001 112,379 295,039 1,724,305 2,310,358
Transfer from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118587,337 1,763,860 1,878 70,351 (2,423,426) –
Disposal of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (2,632) – (2,632)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(602) 3,834 19 973 – 4,224
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(29,524) (467,612) (9,285) (17,130) (487,952) (1,011,503)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,053 9,903,864 187,092 1,083,444 345,662 15,400,115
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,848 321,012 65,905 231,933 832,987 1,483,685
Transfer from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,141 791,036 – 15,615 (925,792) –
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,056 14,583 119 264 – 17,022
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(374,223) (424,167) (99,325) (15,756) (57,818) (971,289)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,658,875 10,606,328 153,791 1,315,500 195,039 15,929,533
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,260 1,211,316 107,637 366,591 565,347 2,267,151
Transfer from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,023 445,437 – 21,866 (519,326) –
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,498) (6,431) (41) (69) (6) (9,045)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(450) (200,312) (76,753) (21,177) (28,150) (326,842)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,724,210 12,056,338 184,634 1,682,711 212,904 17,860,797
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111892,868 1,427 62,669 184,890 521,009 862,863
Acquired on acquisition of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,869,877 975,842 21,599 104,260 657,162 5,628,740
Transfer from construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,329 362,605 – 12,422 (384,356) –
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,060) (8,961) (683) (257) (57) (13,018)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(246) (89,248) (36,131) (10,392) – (136,017)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,692,978 13,298,003 232,088 1,973,634 1,006,662 24,203,365
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 472 ---
Buildings
and plants
Moulds and
machinery
Motor
vehicles
Furniture,
fixture and
office
equipment
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
DEPRECIA TION
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,154 3,494,724 37,859 350,415 – 4,444,152
Depreciation provided for the year /H1118/H1118123,613 1,029,424 17,388 140,825 – 1,311,250
Disposal of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,899) – (1,899)
Depreciation eliminated on disposals /H1118 (10,656) (267,083) (4,350) (15,178) – (297,267)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(167) 2,105 20 929 – 2,887
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118673,944 4,259,170 50,917 475,092 – 5,459,123
Depreciation provided for the year /H1118/H1118132,978 1,047,098 21,678 214,630 – 1,416,384
Depreciation eliminated on disposals /H1118 (97,131) (251,418) (25,926) (11,362) – (385,837)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,712) 8,823 150 218 – 7,479
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118708,079 5,063,673 46,819 678,578 – 6,497,149
Depreciation provided for the year /H1118/H1118128,579 1,043,548 23,364 221,408 – 1,416,899
Depreciation eliminated on disposals /H1118 (79) (175,499) (20,398) (15,888) – (211,864)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(708) (4,394) (18) (24) – (5,144)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118835,871 5,927,328 49,767 884,074 – 7,697,040
Depreciation provided for the period /H1118 100,669 648,308 8,667 143,818 – 901,462
Depreciation eliminated on disposals /H1118 (27) (68,054) (9,584) (8,639) – (86,304)
Exchange adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(963) (7,348) (35) (252) – (8,598)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118935,550 6,500,234 48,815 1,019,001 – 8,503,600
IMPAIRMENT
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 22,370 – – – 22,370
Impairment provided for the year /H1118/H1118/H1118– 9,248 – – – 9,248
Impairment eliminated on disposals /H1118/H1118 – (8,275) – – – (8,275)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 23,343 – – – 23,343
Impairment provided for the year /H1118/H1118/H1118– 1,482 – – – 1,482
Impairment eliminated on disposals /H1118/H1118 – (7,019) – – – (7,019)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,806 – – – 17,806
Impairment provided for the year /H1118/H1118/H1118– 80,564 – 1,971 – 82,535
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 98,370 – 1,971 – 100,341
Impairment provided for the period /H1118/H1118 – 977 – – – 977
Impairment eliminated on disposals /H1118/H1118 – (6,097) – – – (6,097)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 93,250 – 1,971 – 95,221
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,206,109 5,621,351 136,175 608,352 345,662 9,917,649
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,950,796 5,524,849 106,972 636,922 195,039 9,414,578
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,888,339 6,030,640 134,867 796,666 212,904 10,063,416
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,757,428 6,704,519 183,273 952,662 1,006,662 15,604,544
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 473 ---
The Company
Buildings and
plants Motor vehicles
Furniture,
fixture and
office equipment Total
RMB’000 RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,307 8,930 100,785 493,022
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118233 629 6,737 7,599
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(29,513) – (3,634) (33,147)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118354,027 9,559 103,888 467,474
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 585 9,940 10,525
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(635) (366) (2,885) (3,886)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118353,392 9,778 110,943 474,113
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,350 70,045 73,395
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (393) (353) (746)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118353,392 12,735 180,635 546,762
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,396 86,294 87,690
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (919) (311) (1,230)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118353,392 13,212 266,618 633,222
DEPRECIA TION
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,302 6,974 75,426 182,702
Depreciation provided for the year /H1118/H111811,766 518 9,431 21,715
Depreciation eliminated on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,646) – (3,521) (14,167)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,422 7,492 81,336 190,250
Depreciation provided for the year /H1118/H111811,042 435 10,822 22,299
Depreciation eliminated on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (279) (2,722) (3,001)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112,464 7,648 89,436 209,548
Depreciation provided for the year /H1118/H111811,040 636 13,733 25,409
Depreciation eliminated on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (247) (337) (584)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,504 8,037 102,832 234,373
Depreciation provided for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,520 551 18,757 24,828
Depreciation eliminated on
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (892) (175) (1,067)
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129,024 7,696 121,414 258,134
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,605 2,067 22,552 277,224
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118240,928 2,130 21,507 264,565
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229,888 4,698 77,803 312,389
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,368 5,516 145,204 375,088
The above items of property, plant and equipment, except for construction in progress, after taking into account
their estimated residual value, are depreciated on a straight-line basis at the following estimated useful lives:
Buildings and plants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810-35 years
Moulds and machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-8 years
Furniture, fixture and office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 474 ---
19. RIGHT-OF-USE ASSETS
The Group
Leasehold lands Leased properties
Equipment and
machinery Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2022
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,200,514 475,504 4,207 1,680,225
At 31 December 2023
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,031,330 1,488,646 493,344 3,013,320
At 31 December 2024
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118980,043 822,382 1,836,911 3,639,336
At 30 June 2025
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,239,167 1,006,972 800 3,246,939
For the year ended 31 December
2022
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,168 98,051 4,492 132,711
For the year ended 31 December
2023
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,591 174,349 20,415 221,355
For the year ended 31 December
2024
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,755 224,324 124,477 375,556
For the six months ended 30 June
2024 (unaudited)
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,820 118,250 22,302 152,372
For the six months ended 30 June
2025
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,498 120,095 51,276 190,869
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Expense relating to short-term
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,432 9,040 10,118 3,880 10,338
Expense relating to leases of low-
value assets, excluding short-term
leases of low-value assets /H1118/H1118/H1118/H1118/H11181,285 1,385 1,535 700 1,508
Total cash outflow for leases /H1118/H1118/H1118/H1118/H1118180,996 214,542 462,619 211,996 153,696
Additions to right-of-use assets /H1118/H1118/H1118523,688 1,814,085 1,743,730 47,385 1,828,643
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 475 ---
The Company
Leasehold lands Leased properties Total
RMB’000 RMB’000 RMB’000
At 31 December 2022
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,713 110,476 150,189
At 31 December 2023
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,644 76,551 115,195
At 31 December 2024
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,576 63,691 101,267
At 30 June 2025
Carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,042 78,546 115,588
For the year ended 31 December 2022
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,122 12,275 13,397
For the year ended 31 December 2023
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,069 23,211 24,280
For the year ended 31 December 2024
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,069 25,509 26,578
For the six months ended 30 June 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118534 11,429 11,963
For the six months ended 30 June 2025
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118534 19,016 19,550
During the Track Record Period, the Group leases various leased properties and equipment and
machinery for its operations. Lease contracts are entered into for fixed term of 1.50 to 10.00 years, 1.58 to
27.60 years, 1.84 to 27.60 years and 1.37 to 27.60 years for the years end 31 December 2022, 2023 and 2024
and the six months ended 30 June 2025, respectively. The Company leases various leased properties for its
operations. Lease contracts are entered into for fixed term of 5.00 years, 5.00 years, 3.00 to 5.00 years and 2.49
to 5.00 years for the years end 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025,
respectively. Lease terms are negotiated on an individual basis and contain different terms and conditions. In
determining the lease term and assessing the length of the non-cancellable period, the Group and the Company
applies the definition of a contract and determines the period for which the contract is enforceable.
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 476 ---
20. GOODWILL
Acquisition of
Luzhou Rongda
Intelligent Transmission
Limited Company
(“Luzhou Rongda”)
Acquisition of
Chongqing
Liangjiang New
Area Longsheng
New Energy
Technology Co.,
Ltd. (“Longsheng
New Energy”) Total
RMB’000 RMB’000 RMB’000
COST
At 1 January 2022, 31 December 2022, 2023
and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,052 – 156,052
Arising on acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118– 497,392 497,392
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,052 497,392 653,444
IMPAIRMENT
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,347 – 80,347
Impairment loss recognised in the year /H1118/H1118/H1118/H1118/H111810,693 – 10,693
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,040 – 91,040
Impairment loss recognised in the year /H1118/H1118/H1118/H1118/H111818,097 – 18,097
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,137 – 109,137
Impairment loss recognised in the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,915 – 46,915
At 31 December 2024 and at 30 June 2025 /H1118/H1118 156,052 – 156,052
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,012 – 65,012
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,915 – 46,915
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 497,392 497,392
Particulars regarding impairment testing on goodwill are disclosed in note 22.
21. INTANGIBLE ASSETS
The Group
Development
costs
Licenses and
franchises Trademark
Non-patented
technology Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
COST
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,533,729 272,471 – 4,753,267 6,559,467
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,608,786 – – 370 2,609,156
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,790,159) – – 2,790,159 –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,321) (1,321)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,352,356 272,471 – 7,542,475 9,167,302
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,816,000 – – 45 3,816,045
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,167,372) – – 4,167,372 –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (317,218) (317,218)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,984 272,471 – 11,392,674 12,666,129
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118941,674 – 2,502,424 224,094 3,668,192
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,161,577) – – 1,161,577 –
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118781,081 272,471 2,502,424 12,778,345 16,334,321
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,260,956 – – 40,905 2,301,861
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,317,990) – – 2,317,990 –
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118724,047 272,471 2,502,424 15,137,240 18,636,182
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 477 ---
Development
costs
Licenses and
franchises Trademark
Non-patented
technology Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
AMORTISA TION AND
IMPAIRMENT
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272,471 – 1,261,572 1,534,043
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 856,191 856,191
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272,471 – 2,117,763 2,390,234
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,129,448 1,129,448
Impairment loss recognised /H1118/H1118/H1118– – – 76,203 76,203
Eliminated on disposals /H1118/H1118/H1118/H1118/H1118/H1118– – – (113,654) (113,654)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272,471 – 3,209,760 3,482,231
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 125,125 2,448,729 2,573,854
Impairment loss recognised /H1118/H1118/H1118– – – 1,626,684 1,626,684
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272,471 125,125 7,285,173 7,682,769
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 125,117 962,542 1,087,659
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 272,471 250,242 8,247,715 8,770,428
CARRYING V ALUES
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,352,356 – – 5,424,712 6,777,068
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,984 – – 8,182,914 9,183,898
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118781,081 – 2,377,299 5,493,172 8,651,552
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118724,047 – 2,252,182 6,889,525 9,865,754
Development costs are internally generated and are not available for use.
The above intangible assets (other than development costs) have finite useful lives. Such intangible assets are
amortised on a straight-line basis over the following periods:
Non-patented technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Licenses and franchises /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Trademark /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 years
22. IMPAIRMENT TESTING ON GOODWILL AND INTANGIBLE ASSETS
(a) Goodwill
For the purposes of impairment testing, goodwill set out in note 20 is allocated to two individual cash
generating units (“CGUs”), comprising two subsidiaries, Luzhou Rongda and Longsheng New Energy. In addition to
goodwill above, property, plant and equipment, intangible assets and right-of-use assets (including allocation of
corporate assets) that generate cash flows together with the related goodwill is also included in these CGUs for the
purpose of impairment assessment.
The recoverable amount of the units has been determined based on a value in use calculation. For Luzhou
Rongda CGU, that calculation uses cash flow projections based on financial budgets approved by the management
covering a five-year period, and pre-tax discount rate of 13.71% and 15.60%, as of 31 December 2022 and 2023. The
CGU’s cash flows beyond the five-year period are extrapolated using a steady nil growth rate. This growth rate is
based on the relevant industry growth forecasts and does not exceed the average long-term growth rate for the
relevant industry. Other key assumptions for the value in use calculations relate to the estimation of cash
inflows/outflows which include salary costs of staff, growth rate of sales, such estimation is based on the unit’s past
performance and the management’s expectations for the market development.
Based on the impairment assessment performed, the Group has recognised impairment losses amounting to
RMB10,693,000 and RMB18,097,000 for the years ended 31 December 2022 and 2023, respectively. The
management believes that any reasonably possible change in any of these assumptions would not cause material
impairment losses on the goodwill as at 31 December 2022 and 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 478 ---
During the year ended 31 December 2024, the financial performance of Luzhou Rongda does not meet the
expectation set by the management of the Group. Management of the Group had consequently determined impairment
of goodwill directly related to Luzhou Rongda amounting to RMB46,915,000. No other write-down of the assets of
Luzhou Rongda is considered necessary.
As at 30 June 2025, management of the Group was not aware of any negative change that may affect the assets’
value. As a result, no impairment assessment as at 30 June 2025 was performed.
(b) Intangible assets
Development costs
The recoverable amount of development costs with carrying amount of RMB1,352,356,000
RMB1,000,984,000, RMB781,081,000 and RMB724,047,000, respectively, as at 31 December 2022, 2023 and
2024 and 30 June 2025 is estimated individually. The recoverable amount has been determined based on a
value in use calculation.
The management of the Group estimated that the value in use to be close to its fair value less costs of
disposal. The fair value less cost of disposal is estimated using the Relief-from-Royalty method which assumes
that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use
the intangible assets. Key assumptions used in the valuation included projected future sales of product models
related to each development costs, royalty rate and pre-tax discount rate. The projected future sales of related
products covers a four to five years period, three to five years period and three to five years period as at 31
December 2022, 2023 and 2024, respectively. The fair value measurement is categorised into Level 3 fair value
hierarchy.
The following table sets out the information of other key assumptions for the value in use calculation:
As at 31 December
2022 2023 2024
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.57% to 24.85% 14.01% to 22.10% 16.45% to 19.47%
Royalty rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.14% to 4.92% 0.29% to 7.95% 0.10% to 2.84%
The Group has not recognised any impairment losses during the Track Record Period based on the
impairment assessment performed.
The Group performed sensitivity test for the development costs as at 31 December 2022, 2023 and 2024,
respectively, by decreasing 1%-5% of projected future sales or decreasing by 1%-5% of royalty rate or
increasing by 1%-5% of pre-tax discount rate, with all other variables held constant. Based on the sensitivity
test performed:
(i) for assets in aggregated carrying amount of RMB1,073,176,000, RMB842,783,000 and
RMB704,614,000 as at 31 December 2022, 2023 and 2024, respectively, the headroom is no less
than 5%.
The management believes that any reasonably possible change in any of above assumptions
would not cause the carrying amount of the development costs to exceed their recoverable amount
determined as at 31 December 2022, 2023 and 2024.
(ii) for assets in aggregated carrying amount of RMB279,180,000, RMB158,201,000 and
RMB76,467,000 as at 31 December 2022, 2023 and 2024, respectively, in the opinion of the
management, any reasonable possible change in the assumption used in impairment assessment
of assets in this category may cause immaterial impairment losses in aggregation.
As at 30 June 2025, management of the Group was not aware of any negative change that may affect
the assets’ value. As a result, no impairment assessment as at 30 June 2025 was performed.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 479 ---
Non-patented technology
At the end of each reporting period, the management of the Group assess the sales and production of
product models and application on relevant non-patented technology. For those discontinued production, the
Group provide impairment allowance on the relevant non-patented technology. During the year ended 31
December 2024, the management of the Group made the decision to discontinue production of certain product
models due to accelerated product upgrades. Impairment amounting to RMB1,054,082,000 is recognised to the
non-patented technology related to these product models as the management are of the opinion that the value
in use of the related technology is neglectable.
For the remaining balance of non-patent technology as at 31 December 2022, 2023 and 2024,
respectively, the Group performed impairment testing for the non-patent technology. The recoverable amount
of non-patented technology with carrying amount of RMB5,424,712,000, RMB8,182,914,000,
RMB5,493,172,000, respectively, as at 31 December 2022, 2023 and 2024 is estimated individually. The
recoverable amount has been determined based on a value in use calculation.
The management of the Group estimated that the value in use to be close to its fair value less costs of
disposal. The fair value less cost of disposal is estimated using the Relief-from-Royalty method which assumes
that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use
the non-patent technology. Key assumptions used in the valuation included projected future sales of product
models related to each non-patented technology, royalty rate and pre-tax discount rate. The projected future
sales of related products covers a three to five years period, two to five years period and three to five years
period as at 31 December 2022, 2023 and 2024, respectively. The fair value measurement is categorised into
Level 3 fair value hierarchy.
The following table sets out the information of other key assumptions for the value in use calculation:
As at 31 December
2022 2023 2024
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.07% to 22.85% 18.00% to 22.10% 16.45% to 19.47%
Royalty rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.10% to 7.30% 0.14% to 8.05% 0.01% to 7.41%
The Group has recognised impairment losses amounting to nil, RMB76,203,000 and RMB572,602,000
for the years ended 31 December 2022, 2023 and 2024, respectively, based on the impairment assessment
performed.
Sensitivity analysis – non-patented technology with no impairment losses recognised for the year ended 31
December 2022 (“Non-impaired Non-patented Technology”)
The Group performed sensitivity test by decreasing 1%-5% of projected future sales or decreasing by
1%-5% of royalty rate or increasing by 1%-5% of pre-tax discount rate, with all other variables held constant.
Based on the sensitivity test performed:
(i) for assets in aggregated carrying amount of RMB4,684,062,000, the headroom of non-patented
technology is not less than 5%.
The management believes that any reasonably possible change in any of these assumptions would
not cause the carrying amount of the Non-impaired Non-patented Technology to exceed their
recoverable amount determined as at 31 December 2022.
(ii) for assets in aggregated carrying amount of RMB740,650,000, in the opinion of the management,
any reasonable possible change in the assumption used in impairment assessment of assets in this
category may cause immaterial impairment losses in aggregation.
As at 30 June 2025, management of the Group was not aware of any negative change that may affect
the assets’ value. As a result, no impairment assessment as at 30 June 2025 was performed.
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 480 ---
23. INTERESTS IN ASSOCIATES
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The Group
Cost of investments in associates /H1118/H111833,000 2,033,000 2,033,000 13,533,000
Share of post-acquisition profits
(losses) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,315 4,892 (60,697) (90,481)
Impairment losses recognised /H1118/H1118/H1118/H1118– – – (37,889)
37,315 2,037,892 1,972,303 13,404,630
The Company
Cost of investment in associates /H1118/H1118/H111833,000 33,000 33,000 33,000
Share of post-acquisition profits /H1118/H1118/H11184,315 4,892 5,095 4,889
Impairment losses recognised /H1118/H1118/H1118/H1118– – – (37,889)
37,315 37,892 38,095 –
Details of the Group’s and the Company’s associates at the end of each reporting period are as follows:
The Group
Name of entities
Country of
incorporation/
registration
Principal
place of
business
Proportion of
ownership interest
held by the Group
Proportion of
voting rights
held by the Group
Principal
activities
As at 31 December
As at
30 June As at 31 December
As at
30 June
2022 2023 2024 2025 2022 2023 2024 2025
࢝
(ᅅ)
ʮ̡ (New
Energy Automobiles
Industrial
Development
(Chongqing) Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
the PRC the PRC 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% Industrial
investment
ࠢ
ʮ̡ (Chongqing
Ruichi Automobile
Industry Co., Ltd.)*
(Note i) /H1118/H1118/H1118/H1118/H1118/H1118
the PRC the PRC N/A 49.88% 49.88% 49.88% N/A 49.88% 49.88% 49.88% Manufacturing
of
automobiles
ࠢ
ʮ̡ (Shenzhen
Yinwang Intelligent
Technology Co.,
Ltd.)* (Note ii) /H1118/H1118/H1118
the PRC the PRC N/A N/A N/A 10.00% N/A N/A N/A 10.00% Provision of
intelligent
vehicle
solutions
Notes:
(i) On 30 December 2023, Chongqing Ruichi Automobile Industry Co., Ltd. (“Chongqing Ruichi”), the Group’s
wholly-owned subsidiary, issued new shares to eight new shareholders for a consideration of
RMB2,540,000,000. After the issuance of shares, the Group’s shareholding decreased to 49.88% and lost
control of this entity. The disposal of subsidiary during the Track Record Period is disclosed in note 44B.
(ii) On 28 February 2025, the Group acquired 10% equity interest in Shenzhen Yinwang Intelligent Technology
Co., Ltd. at a total cash consideration of RMB11.5 billion. In the opinion of the directors of the Group, the
entity is regarded as an associate of the Group because the Group is entitled to nominate one out of seven
director to the board of directors of the entity which indicates the Group has significant influence over the
entity.
* For identification purposes only
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 481 ---
The Company
Name of entity
Country of
incorporation/
registration
Principal
place of
business
Proportion of
ownership interest
held by the Company
Proportion of
voting rights
held by the Company
Principal
activity
As at 31 December
As at
30 June As at 31 December
As at
30 June
2022 2023 2024 2025 2022 2023 2024 2025
New Energy
Automobiles
Industrial
Development
(Chongqing) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
the PRC the PRC 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% 33.00% Industrial
investment
Summarised financial information of Chongqing Ruichi
Summarised financial information of Chongqing Ruichi is set out below. The summarised financial
information below represents amounts shown in the associate’s financial statements prepared in accordance with
IFRS Accounting Standards.
All of the Group’s associates are accounted for using the equity method in these Historical Financial
Information.
Chongqing Ruichi
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 3,111,105 3,000,932 3,730,937
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 494,443 508,882 530,332
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A (1,090,481) (931,809) (1,625,450)
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A (26,238) (24,663) (24,327)
Y ears ended 31 December
Six months
ended 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A – 1,975,758 1,316,398
Loss for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A – (136,325) (45,552)
Total comprehensive expense for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A – (136,325) (45,552)
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 482 ---
Reconciliation of the above summarised financial information to the carrying amount of the interest in the
associate recognised in the consolidated financial statements:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net assets excluding revaluation
adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 2,488,829 2,553,342 2,611,492
Revaluation adjustment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 1,253,613 1,057,200 957,639
Less: non-controlling interests of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (1,999)
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 3,742,442 3,610,542 3,567,132
Proportion of the Group’s ownership
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 49.88% 49.88% 49.88%
The Group’s share of net assets of
the associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 1,866,730 1,800,938 1,779,285
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 133,270 133,270 133,270
Carrying amount of the Group’s
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 2,000,000 1,934,208 1,912,555
24. INTEREST IN A JOINT VENTURE
Details of the Group’s investment in a joint venture are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cost of investment in a joint
venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,000 10,000 10,000 10,000
Share of post-acquisition loss /H1118/H1118/H1118/H1118/H1118(5,968) (5,487) (3,455) (1,448)
4,032 4,513 6,545 8,552
Details of the Group’s joint venture at the end of each reporting period are as follow:
Name of entity
Country of
incorporation/
registration
Principal
place of
business
Proportion of
ownership interest
held by the Group
Interest voting rights
held by the Group
Proportion
of Principal
activity
As at 31 December
As at
30 June As at 31 December
As at
30 June
2022 2023 2024 2025 2022 2023 2024 2025
ʮ̡
(Chongqing CloudBay
Technology
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118
The PRC The PRC 40.32% 40.32% 49.39% 46.82% 40.32% 40.32% 49.39% 46.82% Research and
development
of 3D
printing
technology
* For identification purposes only
In the opinion of the board, the interest in the joint venture is not material to the Group. As such, no financial
information of the joint venture is disclosed.
APPENDIX I ACCOUNTANTS’ REPORT
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25. EQUITY INSTRUMENTS AT FVTOCI
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted:
– Equity investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,203 99,546 78,260 70,908
Note: The above unlisted equity investments represent the Group’s equity interest in private entities
established in the PRC or the United States of America (“US”). The directors of the Company have
elected to designate these investments in equity instruments as at FVTOCI as they believe that
recognising short-term fluctuations in these investments’ fair value in profit or loss would not be
consistent with the Group’s strategy of holding these investments for long-term strategic purposes and
will realise their performance in the long run.
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted:
– Equity investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,000 83,343 62,057 54,705
Note: The above unlisted equity investments represent the Company’s equity interest in private entities
established in the PRC. The directors of the Company have elected to designate these investments in
equity instruments as at FVTOCI as they believe that recognising short-term fluctuations in these
investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding
these investments for long-term strategic purposes and will realise their performance in the long run.
26. FINANCIAL ASSETS AT FVTPL
The Group
Financial assets mandatorily measured at FVTPL:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Listed equity securities (note) /H1118/H1118/H1118/H1118/H1118139,634 161,283 239,046 282,074
Structured deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,611,895 972,361 3,809,702 –
1,751,529 1,133,644 4,048,748 282,074
Note: The amount represents investments in Chongqing Rural Commercial Bank, which is listed in the
Shanghai Stock Exchange; and Zotye Automobile Co., Ltd., which is listed in the Shenzhen Stock
Exchange as at 31 December 2022, 2023 and 2024 and 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 484 ---
The Company
Financial assets mandatorily measured at FVTPL:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Listed equity securities (note) /H1118/H1118/H1118/H1118/H1118139,400 161,119 238,915 281,959
Structured deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,611,895 972,362 804,920 –
1,751,295 1,133,481 1,043,835 281,959
Note: The amount represents investment in Chongqing Rural Commercial Bank as at 31 December 2022, 2023
and 2024 and 30 June 2025.
27. INVENTORIES
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials and consumables /H1118/H1118/H11182,573,878 1,942,354 1,345,329 1,371,895
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,757 124,880 125,930 135,888
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,037,913 1,133,941 672,218 1,415,822
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118233,317 327,997 408,972 347,237
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,992,865 3,529,172 2,552,449 3,270,842
28. TRADE AND OTHER RECEIV ABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,637,977 2,379,565 2,485,090 2,263,309
– contracts with customers /H1118/H1118/H1118/H1118/H11181,351,602 2,278,500 2,373,958 2,122,422
– subsidies from governments /H1118/H1118/H1118286,375 101,065 111,132 140,887
Less: allowance for credit losses /H1118/H1118/H1118(47,289) (71,056) (161,419) (174,937)
1,590,688 2,308,509 2,323,671 2,088,372
Other receivables, net of allowance /H1118 803,763 883,729 686,391 812,243
V alue added tax and other tax
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,826 610,209 1,217,492 1,142,878
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118441,601 1,868,222 1,016,018 1,365,796
Prepaid consideration for investment
on Shenzhen Yinwang Intelligent
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,300,000 –
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 26,100
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,288,878 5,670,669 7,543,572 5,435,389
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 485 ---
Analysed for reporting purposes as:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,273,244 5,659,400 5,230,545 5,422,251
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,634 11,269 2,313,027 13,138
3,288,878 5,670,669 7,543,572 5,435,389
As at 1 January 2022, trade receivables from contracts with customers of the Group amounted to approximately
RMB798,324,588.
The Group generally requires advance receipt of bank acceptance notes from majority of its customers before
delivery of goods. For certain customers, the Group allows credit term of 30 to 90 days from the invoice date for trade
receivables.
The following is an ageing analysis of trade receivables, net of allowance for credit losses, presented based
on invoice dates:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,215,109 1,503,222 1,534,220 1,036,980
91-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,972 197,394 158,231 245,880
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,612 527,460 238,986 394,280
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,995 80,433 392,234 411,232
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,590,688 2,308,509 2,323,671 2,088,372
As at 31 December 2022, 2023 and 2024 and 30 June 2025, included in the Group’s trade receivable balance
are debtors with aggregate carrying amount of RMB27,297,000, RMB165,399,000, RMB98,654,000 and
RMB107,312,000, respectively, which are past due 90 days or more but not as in default at the reporting date. The
balances are expected to be fully received from the customers by reference to past experience and taking into
consideration of forward-looking information. The Group does not hold any collateral over these balances.
Details of impairment assessment of trade and other receivables are set out in note 47(b).
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,096 5,816 11,760 12,425
V alue added tax and other tax
recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189 11 12,429 21,260
Deferred issue costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 26,100
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,757 331 9,733 3,761
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,862 6,158 33,922 63,546
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 486 ---
29. NOTES RECEIV ABLE
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank acceptance bills /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,279 201,317 214,159 460,138
The Group generally requires advance receipt of bank acceptance notes from majority of its customers of
automobiles before delivery of goods. These notes receivable will be settled in 3 to 12 months since the issuing date.
Details of impairment assessment of notes receivable are set out in note 47(b).
As at 31 December 2022, 2023 and 2024 and 30 June 2025, total bills received amounting to
RMB10,053,871,000, RMB13,485,838,000, RMB33,521,612,000 and RMB37,142,869,000, respectively, were
further discounted or endorsed by the Group. The Group derecognised these discounted or endorsed bills by their
carrying amount at the time of discounting or endorsing and details are disclosed in note 48. All bills received by
the Group are with a maturity period of less than one year.
30. CONTRACT ASSETS
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Subsidies receivable for sales of
NEVs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118948,824 334,117 66,198 21,609
Less: allowance for credit losses /H1118/H1118/H1118(10,576) (13,737) (13,722) (13,722)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118938,248 320,380 52,476 7,887
As at 1 January 2022, contract assets amounted to approximately RMB956,435,010.
The contract assets primarily relate to the subsidy from local governments in relation to the Group’s electric
vehicles because the rights are conditioned on the Group’s future performance. The contract assets are transferred to
trade receivables when the rights become unconditional.
Details of the impairment assessment are set out in note 47(b).
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 487 ---
31. BANK BALANCES AND CASH/PLEDGED AND RESTRICTED BANK DEPOSITS/TIME DEPOSITS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,327,166 4,479,631 6,333,622 21,664,874
Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 88 60 12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,327,394 4,479,719 6,333,682 21,664,886
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,563 8,190 23,058 17,284
Pledged bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,031,846 8,673,218 39,598,698 26,248,862
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,037,409 8,681,408 39,621,756 26,266,146
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,012,638 1,028,994 7,903,854 11,437,800
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,285 804,198 2,258,711 2,096,258
Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854 13 28 2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,339 804,211 2,258,739 2,096,260
Pledged bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,001 57,000 37,000 37,000
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,012,638 1,028,994 441,940 –
Bank balances carry interest at prevailing market rates of 0.01%-2.75%, 0.01%-1.95%, 0.01%-2.05%
and 0.05%-1.85% per annum for years ended 31 December 2022, 2023 and 2024 and the six months ended
30 June 2025, respectively.
The pledged bank deposits represent deposits pledged to banks for issue of bank acceptance notes, letter
of credit and banking facilities granted to the Group and the Company, which will be released upon the
settlement of the described financing instruments. The pledged bank deposits carry fixed interest rate ranging
of 0.25%-3.90%, 0.05%-3.45%, 0.05%-3.45% and 0.05%-1.50% per annum for years ended 31 December
2022, 2023 and 2024 and the six months ended 30 June 2025, respectively.
Details of the impairment assessment of bank balances and pledged bank deposits are set out in note
47(b).
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 488 ---
32. TRADE AND OTHER PAYABLES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,553,652 19,947,124 27,265,766 31,591,085
Notes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,111,655 10,184,008 41,144,620 27,251,072
Payroll and employee benefits
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118661,602 710,862 1,555,202 804,224
Receipt in advance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323 22,964 34,262 33,534
Other payables and provisions /H1118/H1118/H1118/H11181,332,134 684,945 2,412,811 3,278,726
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554,297 831,648 1,011,329 1,570,049
Accrued issue costs and listing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,182
Consideration payable for equity
investment for Shenzhen Yinwang
Intelligent Technology Co., Ltd. /H1118/H1118 – – – 3,450,000
28,214,663 32,381,551 73,423,990 67,984,872
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,163,249 32,328,953 72,274,335 66,256,022
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,414 52,598 1,149,655 1,728,850
28,214,663 32,381,551 73,423,990 67,984,872
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,582 987 16,416 26,884
Payroll and employee benefits
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,631 34,521 76,105 32,066
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118891 3,838 1,582 1,544
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,315 5,767 2,190 5,650
Accrued issue costs and listing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,182
45,419 45,113 96,293 72,326
The ageing analysis of the Group’s trade payables based on invoice date.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,261,981 17,789,329 26,216,453 29,193,744
91-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118370,326 130,352 188,051 1,197,876
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118546,907 1,405,099 744,968 1,048,306
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118374,438 622,344 116,294 151,159
Total trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,553,652 19,947,124 27,265,766 31,591,085
The credit terms for purchases of goods is 90 days.
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 489 ---
33. BORROWINGS
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,162,455 2,978,970 697,187 5,351,943
Financing arrangement with
government platform /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,158,422 1,224,422 – –
5,320,877 4,203,392 697,187 5,351,943
Secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,411,544 2,094,493 – 890,633
Unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,909,333 2,108,899 697,187 4,461,310
5,320,877 4,203,392 697,187 5,351,943
As at 31 December 2022 and 2023, bank loans amounted to RMB210,000,000 and RMB40,000,000 were
guaranteed by the shareholders of Sokon Holding.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The carrying amounts of the bank
loans are repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,970,641 1,604,120 10,187 989,050
Within a period of more than one
year but not exceeding two
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,092,114 712,500 642,800 814,907
Within a period of more than two
years but not exceeding five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,700 662,350 33,800 1,965,671
Within a period of more than five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 10,400 1,582,315
4,162,455 2,978,970 697,187 5,351,943
Less: Amounts due within one
year shown under current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,970,641) (1,604,120) (10,187) (989,050)
Amounts shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,191,814 1,374,850 687,000 4,362,893
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The carrying amounts of the
borrowing from financing
arrangement with government
platform are repayable:
Within a period of more than one
year but not exceeding two
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,224,422 – –
Within a period of more than two
years but not exceeding five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,158,422 – – –
Amounts shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,158,422 1,224,422 – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 490 ---
The exposure of the Group’s borrowings are as follows:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Fixed-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,408,361 2,780,331 52,057 1,200,490
V ariable-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118912,516 1,423,061 645,130 4,151,453
5,320,877 4,203,392 697,187 5,351,943
The ranges of effective interest rates (which are also equal to contractual interest rates) on the Group’s
borrowing are as follow:
As at 31 December As at 30 June
2022 2023 2024 2025
Effective interest rate:
Fixed-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.80% to
5.10%
2.70% to
4.50%
2.70% to
3.40%
2.08% to
2.70%
V ariable-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.05% to
6.78%
2.85% to
5.41%
2.50% to
4.25%
1.98% to
2.80%
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,331,311 779,751 18,232 1,904,358
Secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850,862 665,751 – 890,633
Unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118480,449 114,000 18,232 1,013,725
1,331,311 779,751 18,232 1,904,358
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
The carrying amounts of the above
bank loans are repayable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118862,743 376,751 4,932 342,565
Within a period of more than one
year but not exceeding two
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118468,568 403,000 13,300 338,507
Within a period of more than two
years but not exceeding five
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 995,571
Within a period of more than five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 227,715
1,331,311 779,751 18,232 1,904,358
Less: Amounts due within one year
shown under current liabilities /H1118/H1118/H1118(862,743) (376,751) (4,932) (342,565)
Amounts shown under non – current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118468,568 403,000 13,300 1,561,793
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 491 ---
The exposure of the Company’s borrowings are as follows:
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Fixed – rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,331,311 779,751 – –
V ariable – rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 18,232 1,904,358
1,331,311 779,751 18,232 1,904,358
The ranges of effective interest rates (which are also equal to contractual interest rates) on the Company’s
borrowing are as follow:
Y ears ended 31 December
Six months ended
30 June
2022 2023 2024 2025
Effective interest rate:
Fixed-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2.90% to
5.10%
2.90% to
3.20% 3.20% N/A
V ariable-rate borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
3.90% to
6.78% N/A 2.50%
2.24% to
2.67%
34. CONTRACT LIABILITIES
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advance receipts from customers
– sales of vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118962,942 3,270,307 2,991,532 5,196,056
As at 1 January 2022, contract liabilities amounted to approximately RMB756,472,000.
The Group generally requires advance receipts of bank acceptance notes from majority of its customers in the
PRC. This will give rise to a contract liability, at the beginning of a contract, until the revenue recognised on the
relevant contract exceeds the amount received.
Contract liabilities as at 31 December 2022, 2023 and 2024 and 30 June 2025 are/will be recognised as revenue
to profit or loss within one year after the end of the Track Record Period.
The following table shows how much of the revenue recognised relates to carried-forward contract liabilities:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Sale of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118756,472 962,942 3,270,307 2,877,841
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 492 ---
35. LEASE LIABILITIES
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities payable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,069 326,857 510,084 250,369
Within a period of more than one
year but not more than two years /H1118 143,570 159,528 255,898 226,335
Within a period of more than two
years but not more than five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118251,421 564,321 788,415 258,216
Within a period of more than five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,909 982,832 1,173,469 353,005
561,969 2,033,538 2,727,866 1,087,925
Less: Amount due for settlement
with 12 months shown under
current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(137,069) (326,857) (510,084) (250,369)
Amount due for settlement after 12
months shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118424,900 1,706,681 2,217,782 837,556
The weighted average incremental borrowing rates applied to lease liabilities of the Group are 4.83%, 4.88%,
4.87% and 4.38% as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively.
The Company
At 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Lease liabilities payable:
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,890 47,936 75,732 94,046
Within a period of more than one
year but not more than two years /H1118 31,712 40,644 72,189 95,249
Within a period of more than two
years but not more than five
years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133,213 85,346 39,004 –
207,815 173,926 186,925 189,295
Less: Amount due for settlement
with 12 months shown under
current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42,890) (47,936) (75,732) (94,046)
Amount due for settlement after 12
months shown under non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118164,925 125,990 111,193 95,249
The weighted average incremental borrowing rates applied to lease liabilities of the Company are 4.75%,
4.75%, 4.46% and 4.29% as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 493 ---
36. CONVERTIBLE BONDS
The Group and the Company
On 6 November 2017, the Group issued 15,000,000 units of convertible bonds at a total par value of
RMB1,500,000,000 with an interest rate of 0.30% in the first year, 0.50% in the second year, 1.00% in the third year,
1.50% in the fourth year, 1.80% in the fifth year and 2.00% in the sixth year. The bonds mature six years from the
issue date at their par value of RMB1,500,000,000 or can be converted into shares at the holder’s option.
At initial recognition, the equity component of the convertible bonds was separated from the liability
component. The equity element is presented in equity heading convertible bonds equity reserve. The early redemption
option is considered as closely related to the host debt. The fair value of the liability component was estimated at
the issuance date using an equivalent market interest rate for a similar bond without a conversion option. The residual
amount is assigned as the equity component and included in shareholders’ equity.
The movement of the liability component of the convertible bonds for the Track Record Period is set out
below:
As at 31 December
2022 2023
RMB’000 RMB’000
Carrying amount at the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,041 147,296
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,537 5,135
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,715) (35)
Conversion of convertible bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(567) (149,621)
Redemption /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,775)
Carrying amount at the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,296 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 494 ---
37. AMOUNT(S) DUE FROM/TO RELATED COMPANIES/IMMEDIATE HOLDING
COMPANY/SUBSIDIARIES
The Group
Amounts due from related companies
As at 31 December
As at
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in natures
ʮ̡ (Dongfeng Qichen
Automobile Sales Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 41 51 51
ݴيࠬ؇(ဏ)ᅅʱʮ̡ (Dongfeng
Logistics (Wuhan) Co., Ltd. Chongqing Branch)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 5 8
ʮ̡ (Dongfeng Checheng
Logistics Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118393 – – –
ʮ̡ (Dongfeng Liuzhou
Motor Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 1,335 1,005 910
ʮ̡ (Dongfeng Motor Finance Co.,
Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201 – – –
ʮ̡ (Dongfeng Financial Co., Ltd.)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,182 2,222 – –
ʮ̡ (Chongqing Ruichi
Automobile Industry Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 130,602 31,919 25,414
ʮ̡ (Chongqing
Ruichi New Energy Automobile Sales Service Co.,
Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 659 909 623
ʮ̡
(China Dongfeng Motor Industry Imp. & Exp. Co.,
Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,579 – – –
Ҧʱʮ̡ (V oyah
Technology Branch of Dongfeng Motor Group Co.,
Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 4 1 1––
ʮ̡ (V oyah Technology Co., Ltd.)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,939 2,204 1,960 115
ʮ̡ (V oyah Automobile Sales
Service Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189 2,198 4,983 4,130
ʮ̡ (Chongqing Xinkang
Xingrui Real Estate Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 2–––
ʮ̡ (Chongqin Chi Rui
Property Management Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–5 54 9 –
ʮ̡ (Zhengzhou Nissan Automobile
Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 913 197
ʮ̡ (Dongfeng Logistics Group
Co., Ltd.)* (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 3 5
ʮ̡ (Dongfeng Automobile Co.,
Ltd.)* (note i)
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 1 5
ʮ̡ (Pujin Financial Leasing Co.,
Ltd.)* (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 3 5 0
190,605 139,327 41,789 31,898
* For identification purposes only
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 495 ---
Notes:
(i) The related parties are controlled by Dongfeng Motor, which is a substantial shareholder of the group.
(ii) On 30 December 2023, Chongqing Ruichi, the Group’s wholly-owned subsidiary, issued new shares to
eight new shareholders for a consideration of RMB2,540,000,000. After the issuance of shares, the
Group’s shareholding decreased to 49.88% and lost control of Chongqing Ruichi and Chongqing Ruichi
New Energy Automobile Sales Service Co., Ltd. which is a subsidiary of Chongqing Ruichi. The Group
derecognised the assets and liabilities of Chongqing Ruichi and the remaining interest in Chongqing
Ruichi is recognised as interest in associates.
(iii) The related parties are controlled by Sokon Holding.
(iv) The following is an aged analysis of the Group’s trade related balances with related parties at the end
of each reporting period presented based on invoice date.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189,247 136,971 38,134 30,976
91-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311 2,130 349 116
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118425 215 1,684 780
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118622 11 1,622 26
190,605 139,327 41,789 31,898
Analysed for reporting purposes as:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,543 137,486 40,183 31,548
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 1,841 1,606 350
190,605 139,327 41,789 31,898
Amount due from immediate holding company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Sokon Holding
Trade in nature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,275 1,071 1,060 2,049
Non-trade in nature (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118222,460 1,374,169 – –
223,735 1,375,240 1,060 2,049
Analysed for reporting purposes as:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222,460 1,374,169 – –
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,275 1,071 1,060 2,049
223,735 1,375,240 1,060 2,049
Note: The amounts are unsecured, interest-free and repayable on demand.
Details of impairment assessment of amount due from a shareholder are set out in note 47(b).
APPENDIX I ACCOUNTANTS’ REPORT
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Amounts due to related companies
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in natures (note i)
ʮ̡ (Dongcheng Huizhong
Assets Operation Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H111837 2 9 52
ʮ̡ (Dongfeng Checheng
Logistics Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,711 – – –
ʮ̡ (Dongfeng Automotive
Wheel Suizhou Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,319 4,187 771 944
ʮ̡ (Shenzhen Lianyou
Technology Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 788 86 56
ʮ̡ (Shenzhen Yinwang
Intelligent Technology Co., Ltd.)* (note v) /H1118/H1118/H1118/H1118N/A N/A N/A 3,880,985
ʮ̡ (Chongqing Chi Rui
Property Management Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118– – – 523
ʮ̡ (Chongqing Yilai
Intelligent Suspension Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118– – – 18,096
ʮ̡ (Chongqing Ruichi
Automobile Industry Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 14,207 – 1,738
ʮ̡ (Chongqing
Ruichi New Energy Automobile Sales Service
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 170 – –
ݴيࠬ؇(ဏ)ʮ̡ (Dongfeng Logistics
(Wuhan) Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,760 5,700 25,295 12,209
ʮ̡ (Xiang Y ang Da
An Automobile Test Center Limited
Corporation)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,938 – 5,947 493
ʮ̡ (Dongfeng Logistics
Group Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,300
ʮ̡ (Pujin Financial Leasing
Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 3 4
ݴيࠬ؇(ဏ)ᅅʱʮ̡ (Dongfeng
Logistics (Wuhan) Co., Ltd. Chongqing Branch)*
(note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 1 2
ʮ̡ (Dongfeng
Automobile Power Parts Co., Ltd.)* (note ii) /H1118/H1118/H11189–– –
ʮ̡ (Zhengzhou Nissan
Automobile Co., Ltd)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,956 317
ʮ̡ (Guangzhou Feisuo
Cloud Supply Chain Co., Ltd)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118– – 48 37
ʮ̡ (Guangzhou
Jinshang Jiyan Automotive Supplies Co., Ltd.)*
(note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 14,440
ʮ̡ (V oyah Auto Technology
Co., Ltd.)* (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 641
ʮ̡ (Chongqing Y uan
Intelligent Suspension Co., Ltd.)* (note iii) /H1118/H1118/H1118/H1118– – 7,144 1,653
ʮ̡ (Chongqing Y unwa
Technology Co., Ltd)* (note iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 8 7 –
12,774 25,054 47,343 3,937,530
* For identification purposes only
APPENDIX I ACCOUNTANTS’ REPORT
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Notes:
(i) Trade related balances with related parties arose from purchase of goods and provision of services. In
general, 60 to 90 days credit period is allowed. The amounts are unsecured, interest-free and expected
to be repaid within 12 months from the end of each reporting period.
(ii) The related parties are controlled by Dongfeng Motor, which is the substantial shareholder of the group.
(iii) The related parties are controlled by a director of Sokon Holding.
(iv) The related party is a joint venture of the Group.
(v) The related party is an associate of the Group.
(vi) The following is the aged analysis of the Group’s trade related balances with related parties at the end
of each reporting period presented based on the invoice date. The amounts are unsecured, interest-free
and expected to be repaid within 12 months from the end of each reporting period.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,940 19,002 41,284 3,930,374
91-180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185–9 8 4 1
181-365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860 2 – 365
Over 365 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,769 6,050 6,050 5,950
12,774 25,054 47,343 3,937,530
Amount due to immediate holding company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Sokon Holding
Trade in nature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,372
Note: The amount is unsecured, interest-free and expected to be repaid within 12 months from the end of the
reporting period. The aging of the amount is within 90 days.
The Company
As at 31 December As at 30 June
Relationships Nature of balances 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due from
subsidiaries
Subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118Trade nature
(note i)
91,454 83,472 119,660 82,724
Subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-trade nature
(note ii)
12,880,505 11,899,707 3,638,556 5,669,937
12,971,959 11,983,179 3,758,216 5,752,661
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 498 ---
Notes:
(i) During the Track Record Period, trade-related balances with subsidiaries arising from financial leases
were RMB90,088,000, RMB80,728,000, RMB104,757,000 and RMB82,158,000, respectively. The
remaining balances arose from miscellaneous income. In general, 60 to 90 days credit period is allowed.
The remaining balances are unsecured and interest-free. The aging of remaining balances were with
aging within 90 days.
(ii) The amounts are non-trade nature, unsecured, carry interest at fixed rate of 2.34%-3.50% per annum and
repayable on demand.
Analyses for reporting purposes as:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,881,871 11,902,451 3,653,459 5,670,503
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,088 80,728 104,757 82,158
12,971,959 11,983,179 3,758,216 5,752,661
As at 31 December
As at
30 June
Relationships Nature of balances 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amount due from
immediate holding
company
Sokon Holding /H1118/H1118/H1118/H1118/H1118/H1118Trade nature 1,275 1,071 1,060 2,049
Sokon Holding /H1118/H1118/H1118/H1118/H1118/H1118Non-trade nature (note) 222,460 1,374,169 – –
223,735 1,375,240 1,060 2,049
Analysed for reporting purposes as:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222,460 1,374,169 – –
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,275 1,071 1,060 2,049
223,735 1,375,240 1,060 2,049
Note : The amounts are unsecured, interest-free and repayable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 499 ---
As at 31 December As at 30 June
Relationships Nature of balances 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due to
subsidiaries
Subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118Trade nature – – – 317
Subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-trade nature
(note)
3,567,653 2,231,986 304,872 362,989
3,567,653 2,231,986 304,872 363,306
Note: The amounts are unsecured, carry interest at fixed rate of 3.50% per annum and repayable on demand.
As at 31 December As at 30 June
Relationships Nature of balances 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amount due to
immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sokon Holding /H1118/H1118/H1118/H1118/H1118/H1118Trade nature – – – 294
Note: The amount is unsecured, interest-free and expected to be repaid within 12 months from the end of the
reporting period. The aging of the amount is within 90 days.
38. DEFERRED INCOME
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 /H1118 1,185,400 1,889,274 1,738,954 1,656,177
Received during the year/period /H1118/H1118/H1118825,685 22,088 61,880 10,150
Recognised as income during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(121,811) (148,100) (144,657) (75,740)
Other decreased: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (24,308) – –
At the end of the year/period /H1118/H1118/H1118/H1118/H11181,889,274 1,738,954 1,656,177 1,590,587
V arious government grants have been received for basic research and development activities. Government
grants received for which related expenditure has not yet been undertaken are included in deferred income in the
consolidated statements of financial position.
Government grants relating to assets are also credited to deferred income and are released to profit or loss over
the expected useful lives of the relevant assets by equal annual instalments.
APPENDIX I ACCOUNTANTS’ REPORT
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39. DEFERRED TAX ASSETS/LIABILITIES
The Group
The following is the analysis of the Group’s deferred tax assets (liabilities) for financial reporting purposes:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118240,090 479,672 1,475,267 1,088,451
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(163,091) (371,040) (482,993) (376,927)
76,999 108,632 992,274 711,524
The following are the Group’s major deferred tax liabilities and assets recognised and movements thereon
during the Track Record Period:
Impairment
provision
Deferred
income
Accelerated
depreciation
Revaluation
on
acquisition
Deductible
tax losses Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111823,894 52,471 9,979 (49,856) 53,447 5,124 95,059
Credit (charge) to profit or loss
for the year (note 13) /H1118/H1118/H1118/H1118/H11182,098 (833) 1,197 4,944 (25,938) 1,015 (17,517)
Disposal of a subsidiary /H1118/H1118/H1118/H1118/H1118(147) – – – – (396) (543)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H111825,845 51,638 11,176 (44,912) 27,509 5,743 76,999
Credit (charge) to profit or loss
for the year (note 13) /H1118/H1118/H1118/H1118/H111815,184 587 1,926 8,522 (305) 14,851 40,765
Disposal of a subsidiary /H1118/H1118/H1118/H1118/H1118(3,137) (30) – – – (5,965) (9,132)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H111837,892 52,195 13,102 (36,390) 27,204 14,629 108,632
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H111837,892 52,195 13,102 (36,390) 27,204 14,629 108,632
Credit (charge) to profit or loss
for the year (note 13) /H1118/H1118/H1118/H1118/H1118101,868 (1,189) 9,753 4,372 590,265 178,576 883,645
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – (3) (3)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118139,760 51,006 22,855 (32,018) 617,469 193,202 992,274
Credit (charge) to profit or loss
for the period (note 13) /H1118/H1118/H111810,090 11,473 (2,065) 3,627 (280,466) 119,505 (137,836)
Acquisition of a subsidiary /H1118/H1118/H1118– – – (142,960) – – (142,960)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – –4 64 6
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,850 62,479 20,790 (171,351) 337,003 312,753 711,524
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 501 ---
The Company
The following is the analysis of the Company’s deferred tax assets (liabilities) for financial reporting purposes:
As at 31 December At 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,487 23,480 20,552 27,072
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,619) (19,138) (15,923) (19,637)
1,868 4,342 4,629 7,435
The following are the Company’s major deferred tax liabilities and assets recognised and movements thereon
during the Track Record Period:
Impairment
provision Deferred income Others Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118376 334 – 710
Credit (charge) to profit or loss for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 (334) 1,479 1,158
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118389 – 1,479 1,868
Credit to profit or loss for the year /H1118 73 – 2,401 2,474
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462 – 3,880 4,342
Credit to profit or loss for the year /H1118 159 – 128 287
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118621 – 4,008 4,629
Credit to profit or loss for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118178 – 2,628 2,806
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118799 – 6,636 7,435
As at December 31, 2022, 2023 and 2024 and 30 June 2025, no deferred tax asset has been recognised in
respect unused tax losses of approximately RMB11,131,052,000, RMB18,702,155,000, RMB8,838,696,000 and
RMB9,202,662,000, and temporary difference of approximately RMB893,896,000, RMB811,009,000,
RMB6,552,377,000 and RMB6,027,768,000, respectively, due to the unpredictability of future profit streams. The
unrecognised tax losses with expiry dates as disclosed in the following table.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118284,972 – – –
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118591,649 569,412 – –
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,696,514 1,675,049 251,757 233,262
2026 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,073,033 3,049,771 925,485 913,319
2027 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,484,884 6,280,905 1,234,367 1,177,259
2028 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,127,018 4,580,242 3,699,876
2029 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,846,845 1,846,845
2030 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,332,101
11,131,052 18,702,155 8,838,696 9,202,662
APPENDIX I ACCOUNTANTS’ REPORT
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40. SHARE CAPITAL
The share capital of the Group represented the issued share capital of the Company.
Number of Shares Amount
RMB’000
Ordinary share of RMB1 each
Authorised, Issued and fully paid
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,359,932,415 1,359,932
Issuance of ordinary shares (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,168,141 137,168
Conversion of convertible bonds (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,808 33
Exercise of share options /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,719 146
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,497,279,083 1,497,279
Conversion of convertible bonds (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,091,484 10,091
Exercise of share options (note 42) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,411,626 2,412
At 31 December 2023 and 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,509,782,193 1,509,782
Issuance of ordinary shares (note iv) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,583,893 123,584
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,633,366,086 1,633,366
Notes:
(i) On 14 July 2022, the Company issued 137,168,141 A shares to specific subscribers at the price of
RMB51.98 per share.
(ii) The amounts represents shares issued for the conversion of convertible bonds.
(iii) During the years ended 31 December 2022, 2023 and 2024 and the six months ended 30 June 2025, the
Company has repurchased 2,259,000, 1,580,100, nil and nil A shares with an aggregate consideration of
RMB99,991,000, RMB105,245,000, nil and nil paid, respectively, for the share awards schemes. In the
year ended 31 December 2024, the Company has transferred 3,839,100 shares when share awards were
granted. Details of the share award schemes are set out in note 42. As at 31 December 2022, 2023 and
2024 and 30 June 2025, the Company had outstanding treasury shares of 2,259,000, 3,839,100, nil and
nil, respectively.
(iv) In March 2025, the Group acquired 100% equity interest in Longsheng New Energy from independent
third-party shareholders by issuing 123,583,893 ordinary shares of the Company as consideration. All
the 123,583,893 ordinary shares shall be locked up immediately upon the issuance. Commencing from
the date of issuance, 47,421,199 ordinary shares shall be locked up for 12 months while 76,162,694
ordinary shares shall be locked up for 36 months.
APPENDIX I ACCOUNTANTS’ REPORT
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41A. RESERVES
The Company
Share
premium
Convertible
bonds
equity
reserve
Treasury
shares
FVTOCI
reserve
Statutory
surplus
reserve
fund
Other
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,265,305 56,979 – – 297,320 1,410,856 1,464,897 11,495,357
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – – 613,624 613,624
Proceeds from shares issued for share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,636 – – – – (172) – 9,464
Recognition of equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 31,661 – 31,661
Repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (99,991) –––– (99,991)
Conversion of convertible bonds /H1118/H1118/H1118/H1118/H1118/H1118696 (161) – –––– 5 3 5
Profit Guarantee Compensation /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 222,460 – 222,460
Issue of shares of the Company (note 40) /H1118/H11186,921,388 – – –––– 6,921,388
Transfer to statutory surplus reserve /H1118/H1118/H1118/H1118/H1118– – – – 61,362 – (61,362) –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (5) 21,873 (43) 21,825
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,197,025 56,818 (99,991) – 358,677 1,686,678 2,017,116 19,216,323
Total comprehensive income for the year /H1118/H1118/H1118– – – 3,750 – – 157,533 161,283
Recognition of equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – (30,811) – (30,811)
Proceeds from shares issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,956 – – – – (21,140) – 156,816
Repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (105,245) –––– ( 1 0 5 ,245)
Recognition of equity component of
convertible loan notes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (56,818) – –––– (56,818)
Conversion of convertible bonds into share /H1118196,242 – – –––– 1 9 6,242
Profit Guarantee Compensation /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 1,374,169 – 1,374,169
Transfer to statutory surplus reserve /H1118/H1118/H1118/H1118/H1118– – – (375) 16,128 – (15,753) –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (3,375) – – 3,375 –
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,571,223 – (205,236) – 374,805 3,008,896 2,162,271 20,911,959
Total comprehensive income for the year /H1118/H1118/H1118– – – – – – 476,572 476,572
Recognition of equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 67,419 – 67,419
Share base payment granted to employees
and repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 205,236 – – (34,895) – 170,341
Dividends recognised as distribution /H1118/H1118/H1118/H1118/H1118– – – – – – (499,738) (499,738)
Transfer to statutory surplus reserve /H1118/H1118/H1118/H1118/H1118– – – – 47,657 – (47,657) –
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,571,223 – – – 422,462 3,041,420 2,091,448 21,126,553
Total comprehensive income for the period /H1118/H1118 – – – – – – 390,373 390,373
Dividends recognised as distribution /H1118/H1118/H1118/H1118– – – – – – (1,584,365) (1,584,365)
Recognition of equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 54,597 – 54,597
Issue of shares of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H11188,382,932 – – –––– 8,382,932
At 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,954,155 – – – 422,462 3,096,017 897,456 28,370,090
At 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,571,223 – (205,236) – 374,805 3,008,896 2,162,271 20,911,959
Total comprehensive expense for the period /H1118 – – – – – – (2,100) (2,100)
Recognition of equity-settled share-based
payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – – 10,453 – 10,453
Share base payment granted to employees
and repurchase of shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 182,516 – – (31,032) – 151,484
At 30 June 2024 (unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,571,223 – (22,720) – 374,805 2,988,317 2,160,171 21,071,796
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 504 ---
41B. PARTLY-OWNED SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS
Details of the Group’s subsidiaries that have material non-controlling interests are set out below:
At 31 December At 30 June
2022 2023 2024 2025
%%%%
Percentage of equity interests held
by non-controlling interests:
ʮ̡ (Seres Auto
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.35 19.35 1.23 6.37
* For identification purposes only
Y ear ended 31 December Six months ended 30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
(Loss)/profit for the
year/period allocated to
non-controlling
interests: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(806,226) (864,593) 681,809 491,730 119,149
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accumulated balances of
non-controlling interests at
the year/period-end date: /H1118/H1118/H1118/H1118/H1118/H1118(896,632) (1,547,960) 17,008 605,228
The following tables illustrate the summarised financial information of the above subsidiary. The amounts
disclosed are before any intercompany eliminations:
Y ear 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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,124,110 26,557,692 137,369,257 61,736,523 57,786,401
(Loss)/profit for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,730,510) (5,307,777) 5,118,256 1,781,494 3,077,130
Total comprehensive
(expense)/income
for the year/period /H1118/H1118/H1118/H1118(4,721,948) (5,300,750) 5,124,129 1,783,478 3,076,293
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,681,508 14,150,218 53,969,819 56,733,673
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,677,151 16,996,615 21,539,444 32,491,203
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,435,583 37,875,586 70,232,765 72,577,604
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,334,651 4,000,788 4,313,212 7,539,285
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 505 ---
42. SHARE A W ARD SCHEME
2021 Share Option Incentive Scheme
The Company adopted share option incentive schemes for the purpose of further refining the corporate
governance structure of the Company, facilitating the establishment of the restricted incentive mechanism, fully
motivating the management and key personnel of the Company. The Company implemented a share option incentive
scheme (“2021 Share Option Incentive Scheme”) and granted a total of 32,864,000 and 7,136,000 share options to
2,708 and 996 executives and employees (the “2021 Incentive Participants”) with exercise prices of RMB66.03 per
share on 26 July 2021 and 20 December 2021, respectively. The 2021 Incentive Participants include the senior
management of the Company and core technical and management personnel of the Company.
The 2021 Share Option Incentive Scheme shall, subject to performance evaluation at corporate level and
individual level, be valid for a term of 48 months, commencing from the date of grant and ending on the date on
which all the share options granted to the Incentive Participants have been exercised or cancelled.
The exercise periods and exercise schedule for the share options are as follows:
Exercise periods Exercise proportion
First exercise period:
Commencing from the first trading day after the expiry of the 12-month period from
the date of grant and ending on the last trading day of the 24-month period from
the date of grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850%
Second exercise period:
Commencing from the first trading day after the expiry of the 24-month period from
the date of grant and ending on the last trading day of the 36-month period from
the date of grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850%
The following table discloses movements of the options under 2021 Share Option Incentive Scheme during the
Track Record Period:
Y ear ended 31 December
2022 2023 2024
Outstanding at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,740,000 35,088,525 –
Exercised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(145,719) (2,411,626) –
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,505,756) (18,561,607) –
Expired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (14,115,292) –
Outstanding at 31 December /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,088,525 – –
Exercisable at 31 December /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,115,292 – –
The Group recognised expense of RMB21,943,000, reversed expense of RMB21,093,000 and nil for the years
ended 31 December 2022, 2023 and 2024, respectively, in relation to 2021 Share Option Incentive Scheme granted
by the Company.
2022 Share Option Incentive Scheme
On 28 September 2022, the Company implemented a share option incentive scheme (“2022 Share Option
Incentive Scheme”) and granted a total of 35,906,000 share options to 3,992 executives and employees (the “2022
Incentive Participants”) with exercise prices of RMB66.12 per share. The 2022 Incentive Participants include the
senior management of the Company and core technical and management personnel of the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 506 ---
The exercise periods and exercise schedule for the share options are as follows:
Exercise periods Exercise proportion
First exercise period:
Commencing from the first trading day after the expiry of the 12-month period from
the date of grant and ending on the last trading day of the 24-month period from
the date of grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850%
Second exercise period:
Commencing from the first trading day after the expiry of the 24-month period from
the date of grant and ending on the last trading day of the 36-month period from
the date of grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850%
The 2022 Share Option Incentive Scheme, subject to performance evaluation at corporate level and individual
level, shall be valid for a term of 40 months, commencing from the date of grant and ending on the date on which
all the share options granted to the Incentive Participants have been exercised or cancelled.
The following table discloses movements of the options under 2022 Share Option Incentive Scheme during the
Track Record Period:
Y ear ended 31 December
2022 2023 2024
Outstanding at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 35,425,800 –
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,906,000 – –
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(480,200) (35,425,800) –
Outstanding at 31 December /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,425,800 – –
No exercisable shares at the end of each reporting period under 2022 Share Option Incentive Scheme.
The Group recognised expense of RMB9,718,000, reversed expense of RMB9,718,000 and nil for the years
ended 31 December 2022, 2023 and 2024, respectively, in relation to 2022 Share Option Incentive Scheme granted
by the Company.
2024 Restricted Share Incentive Scheme
On 27 May 2024, the Company implemented a share incentive scheme (“2024 Restricted Share Incentive
Scheme”) and granted a total of 3,414,100 shares to no more than 200 executives and employees at grant prices of
RMB44.37 per share. On 22 October 2024, the Company additionally granted a total of 425,000 shares to 56
employees at same price per share. These executives and employees (the “2024 Share Incentive Participants”) include
the senior management, core technical and management personnel of the Company.
2024 Restricted Share Incentive Scheme shall be valid for a term of 48 months, commencing from the date of
grant of Restricted Shares and ending on the date on which all the restricted shares granted have been unlocked or
otherwise repurchased and cancelled.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 507 ---
Restricted shares shall be locked up immediately upon the grant. All of the restricted shares granted to the 2024
Share Incentive Participants shall be subject to various lock-up periods ranging from 1 year to 2 years, immediately
from the date of grant. Restricted shares held by the 2024 Share Incentive Participants shall be unlocked (or
repurchased and cancelled by the Company) in two tranches upon the expiry of each lock-up period. The unlocking
periods and unlock proportion for the restricted shares are as follows:
Unlocking period Performance condition of the Group Unlock proportion
First unlocking period:
Commencing from the first trading day
after the expiry of the 12-month period
from the date of grant and ending on
the last trading day of the 48-month
period from the date of grant
Compared to the year 2023, the revenue
for the year 2024 increases by more
than 100%, or the sales volume of new
energy vehicles increases by more than
100%
50%
Second unlocking period:
Commencing from the first trading day
after the expiry of the 24-month period
from the date of grant and ending on
the last trading day of the 48-month
period from the date of grant
Compared to the year 2023, the revenue
for the year 2025 increases by more
than 150%, or the sales volume of new
energy vehicles increases by more than
150%
50%
The 2024 Share Incentive Participants are eligible to unlock the restricted shares upon fulfillment of the
performance condition of the Group and certain individual performance objectives.
The following table discloses movements of the shares under 2024 Restricted Share Incentive Scheme during
the year ended 31 December 2024 and the six months ended 30 June 2025:
Y ear ended
31 December
Six months ended
30 June
2024 2025
Outstanding at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,839,100
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,839,100 –
Unclocked /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,707,050)
Outstanding at year/period end /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,839,100 2,132,050
The grant date fair value of the award share was RMB42.23 and RMB47.05 on 27 May 2024 and 22 October
2024, respectively, which was determined based on the difference between the grant date closing price of the
Company’s A Share and the subscription price of the award shares. The grant date closing price of the Company’s
A Shares was RMB86.60 and RMB91.42 per share on 27 May 2024 and 22 October 2024, respectively. The Group
has recognised RMB67,419,000 and RMB54,597,000 as expenses under 2024 Restricted Share Incentive Scheme for
the year ended 31 December 2024 and the six months ended 30 June 2025, respectively.
43. RETIREMENT BENEFITS PLANS
The majority of the Group’s employees are located in the PRC. The employees of the Group in the PRC are
members of a state-managed retirement benefits scheme operated by the PRC government. The Group is required to
contribute a specified percentage of payroll costs as determined by respective local government authority to the
retirement benefits scheme to fund the benefits. The only obligation of the Group with respect to the retirement
benefits scheme is to make the specified contributions under the scheme.
The amounts of contributions made by the Group in respect of the retirement benefit scheme during the Track
Record Period are disclosed in note 14.
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 508 ---
44A ACQUISITION OF A SUBSIDIARY
On 25 March 2025, the Group acquired 100% interest in Longsheng New Energy from independent third-party
shareholders. Longsheng New Energy owned advanced new energy vehicle production factories and equipment and
it is principally engaged in the leasing of these facilities to the Group prior to the acquisition. Longsheng New Energy
was acquired with the objective of enhancing the Group’s manufacturing capability. The acquisition has been
accounted for as acquisition of business using the acquisition method.
Consideration transferred
RMB’000
Shares issued /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,518,384
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,518,384
No material acquisition-related cost has been excluded from the consideration transferred and
recognised as an expense.
Assets acquired and liabilities recognised at the date of acquisition
RMB’000
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,628,740
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,159,861
Trade and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118548,062
Amounts due from the Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118282,879
Bank balances and cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,203,548
Trade and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(659,138)
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(142,960)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,020,992
The fair value of receivables acquired at the date of acquisition approximated to their gross contractual
amounts.
Goodwill arising on acquisition:
RMB’000
Consideration transferred /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,518,384
Less: recognised amounts of net assets acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,020,992)
Goodwill arising on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497,392
Goodwill arose on the acquisition of Longsheng New Energy because the acquisition included advanced
production facilities and equipments of Longsheng New Energy which can enhance the Group’s manufacturing
capability. These benefits are not recognised separately from goodwill because they do not meet the
recognition criteria for identifiable intangible assets.
None of the goodwill arising on these acquisitions is expected to be deductible for tax purposes.
Net cash inflow on acquisition of Longsheng New Energy:
RMB’000
Cash consideration paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Less: cash and cash equivalents balances acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,203,548)
1,203,548
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 509 ---
Impact of acquisition on the results of the Group:
No material impact on the results of the Group for the six months period ended 30 June 2025 is
attributable to the additional business generated by Longsheng New Energy.
Had the acquisition of Longsheng New Energy been completed on 1 January 2025, there would have no
change to revenue for the six months ended 30 June 2025 of the Group, and profit for the six months ended
30 June 2025 would have been RMB3,049,285,000. The pro forma information is for illustrative purposes only
and is not necessarily an indication of revenue and results of operations of the Group that actually would have
been achieved had the acquisition been completed on 1 January 2025, nor is it intended to be a projection of
future results.
In determining the ‘pro-forma’ revenue and profit of the Group had Longsheng New Energy been
acquired at the beginning of the period, the directors of the Company calculated depreciation of property, plant
and equipment based on the recognised amounts of property, plant and equipment at the date of the acquisition.
44B. DISPOSAL OF SUBSIDIARIES
(a) Disposal of Pujin Financial Leasing Co., Ltd.
On 31 January 2022, the Company disposed of its subsidiary, Pujin Financial Leasing Co., Ltd., to an
independent third party. Further details of the consideration, and assets and liabilities disposed of in the above
disposals are as follows:
Y ear ended
31 December
2022
RMB’000
Loss on disposal of a subsidiary
Consideration received and receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,366
Less: net assets disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,953
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(24,587)
Net cash inflow arising on disposal
Cash consideration received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118234,366
Less: bank balances and cash disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,250
Net cash inflow arising on disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229,116
(b) Disposal of Chongqing Jiangshuang Auto Parts Co., Ltd.
On 31 May 2023, the Company disposed of its subsidiary, Chongqing Shuangjiang Auto Parts Co., Ltd., to an
independent third party. The disposal was completed on the same date. Further details of the consideration, and assets
and liabilities disposed of in the above disposal are as follows:
Y ear ended
31 December
2023
RMB’000
Gain on disposal of a subsidiary
Consideration received and receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118395,000
Less: net assets disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,821
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,179
Net cash inflow arising on disposal
Cash consideration received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350,000
Less: bank balances and cash disposal of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Net Cash inflow arising on disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 510 ---
(c) Chongqing Ruichi
On 30 December 2023, Chongqing Ruichi, the Group’s wholly-owned subsidiary, issued new shares to eight
new shareholders for a consideration of RMB2,540,000,000 in cash. After the issuance of shares, the Group’s
shareholding decreased to 49.88% and lost control of this entity. The Group derecognised the assets and liabilities
of Chongqing Ruichi and the remaining interest in Chongqing Ruichi is recognised as interest in associates. Further
details of the consideration, and assets and liabilities disposed of in the above disposals are as follows:
Y ear ended
31 December
2023
RMB’000
Deemed gain on disposal of a subsidiary
Fair value of the remaining interest of Chongqing Ruichi as of the disposal date /H1118/H1118/H11182,000,000
Less: net assets disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118478,829
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,521,171
45. CAPITAL COMMITMENTS
As at 31 December As at June 30
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted for but not provided in
the
Historical Financial Information in
respect of the acquisition of
– property, plant and equipment /H1118/H1118979,896 508,964 447,080 1,088,937
– intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,752 114,084 225,001 79,878
1,160,648 623,048 672,081 1,168,815
46. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that it will be able to continues as a going concern while maximizing
the return to equity holders through the optimisation of the debt and equity balance. The Group’s overall strategy
remains unchanged throughout the Track Record Period.
The capital structure of the Group consists of borrowings, convertible bonds and lease liabilities, net of cash
and cash equivalents and equity attributable to the owners of the Group, comprising share capital and reserves.
The management of the Group reviews the capital structure on a continuous basis taking into account the cost
of capital and the risks associated with each class of capital.
47. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
The Group
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,259,652 18,925,852 56,941,169 62,303,381
Debt instruments at FVTOCI /H1118/H1118/H1118/H1118/H1118242,279 201,317 214,159 460,138
Equity instruments at FVTOCI /H1118/H1118/H1118/H1118100,203 99,546 78,260 70,908
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H11181,751,529 1,133,644 4,048,748 282,074
Financial liabilities
Amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,426,974 34,991,925 70,180,839 72,806,420
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 511 ---
The Company
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets
Amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,709,733 14,225,502 6,068,380 7,874,295
Equity instruments at FVTOCI /H1118/H1118/H1118/H111884,000 83,343 62,057 54,705
Financial assets at FVTPL /H1118/H1118/H1118/H1118/H1118/H1118/H11181,751,295 1,133,481 1,043,835 281,959
Financial liabilities
Amortised cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,053,733 3,016,563 341,102 2,302,568
(b) Financial risk management objectives and policies
The Group’s and the Company’s major financial instruments include notes receivable, pledged and restricted
bank deposits, time deposits, trade and other receivables, bank balances and cash, trade and other payables, amounts
due to related companies, amount due from immediate holding company, amounts due from subsidiaries, amounts due
from related companies, borrowings, convertible bonds and lease liabilities. Details of these financial instruments are
disclosed in the respective notes.
The risks associated with these financial instruments and the policies on how to mitigate these risks are set out
below. The management of the Group manages and monitors these exposures to ensure appropriate measures are
implemented on a timely and effective manner. These risks include market risk (currency risk and interest rate risk),
credit risk and liquidity risk.
Market risk
Currency risk
The carrying amounts of the Group’s major foreign currency denominated monetary assets and monetary
liabilities at the end of each reporting period are as follow:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Assets
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,104,549 1,714,340 1,382,134 1,170,109
Indonesian Rupiah (“IDR”) /H1118/H111848,680 19,126 22,586 16,784
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 26,954 9,367 54,585
Liabilities
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,632 12,219 5,687 4,939
IDR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,112 8,335 3,845 5,568
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,044 2,288 131
The Group currently does not have a foreign exchange hedging policy. However, the management of the
Group monitors foreign exchange exposure and will consider hedging significant foreign exchange exposure
should the need arises.
APPENDIX I ACCOUNTANTS’ REPORT
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Sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase and decrease in RMB against the
relevant foreign currencies as at 31 December 2022, 2023 and 2024 and 30 June 2025. 5% is the sensitivity
rate used when reporting foreign currency risk internally to key management personnel and represents
management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjusts their translation at the end
of each reporting period for a 5% change in foreign currency rates. A negative number below indicates an
increase in pre-tax loss or decrease in pre-tax profit where RMB strengthen 5% against the relevant currency.
For a 5% weakening of RMB against the relevant currency, there would be an equal and opposite impact on
the pre-tax loss or pre-tax profit and the amounts below would be positive.
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(54,796) (85,106) (68,822) (58,259)
IDR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,828) (540) (937) (561)
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,246) (354) (2,723)
Interest rate risk
The Group is exposed to cash flow interest rate risk in relation to variable-rate bank balances (note 31)
and variable-rate borrowings (note 33). The Group is also exposed to fair value interest rate risk in relation
to pledged bank deposits (note 31), restricted bank balance (note 31), finance lease receivables, convertible
bonds (note 36), lease liabilities (note 35) and fixed-rate borrowings (note 33).
The Group currently does not enter into any hedging instrument for cash flow interest rate risk.
However, the Group monitors interest rate risk exposure and will consider hedging significant interest rate risk
should the need arise.
Sensitivity analysis
No sensitivity analysis of bank balances and variable-rate borrowings of the Group is presented as the
management of the Group considers that the interest rate fluctuations on bank balances and variable-rate
borrowings are insignificant.
Credit risk and impairment assessment
As at 31 December 2022, 2023 and 2024 and 30 June 2025, the Group’s maximum exposure to credit
risk in the event of the counterparties’ failure to perform its obligations is arising from the carrying amounts
of the respective recognised financial assets, finance lease receivables and contract assets as stated in the
consolidated statements of financial position. The Group does not hold any collateral or other credit
enhancements to cover its credit risks associated with its financial assets, finance lease receivables and
contract assets.
The Group assessed impairment to financial assets, finance lease receivables and contract assets under
the ECL model. Information about the Group’s credit risk management, maximum credit risk exposures and
the related impairment assessment, if applicable, are summarised below:
Trade receivables, contract assets and trade-related balances with related parties
In order to minimise the credit risk on trade receivables, contract assets and trade-related balances with
related parties, the management of the Group has delegated a team responsible for making periodic collective
assessments as well as individual assessment on the recoverability of receivables based on historical settlement
records, reasons for extended repayment period, past experience and supportable forward-looking information.
APPENDIX I ACCOUNTANTS’ REPORT
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In addition, the Group performs impairment assessment under ECL model on the significant or credit-impaired
trade receivables individually. For the remaining trade receivables, contract assets and trade-related balances
with related parties which are individually insignificant and not credit-impaired, collective assessment is
performed.
The Group has concentration of credit risk as 10%, 10%, 13% and 13% of the trade receivables was due
from the Group’s largest debtors as at 31 December 2022, 2023 and 2024 and 30 June 2025, respectively. In
addition, the Group also has concentration of credit risk as 32%, 39%, 47% and 44% of the trade receivables
was due from the Group’s top five debtors as at 31 December 2022, 2023 and 2024 and 30 June 2025,
respectively.
Other receivables
For other receivables, the management makes periodic individual assessment on the recoverability of
other receivables based on historical settlement records, past experience, and also quantitative and qualitative
information that is reasonable and supportive forward-looking information. Except for the credit-impaired
other receivables, there are no significant increase in credit risk of the remaining other receivables since initial
recognition and the Group provided impairment based on 12m ECL. For the years ended 31 December 2022,
2023 and 2024, the Group recognised total impairment allowance of RMB44,916,000, RMB74,128,000 and
RMB27,066,000, respectively. For the six months ended 30 June 2025, the Group reversed total impairment
allowance of RMB29,591,000.
Other than the concentration of credit risk on the other receivables as at 31 December 2022, 2023 and
2024 and 30 June 2025, 0.12%, 0.05%, 0.08% and 0.07% of the other receivables was due from the Group’s
largest suppliers, respectively, the Group does not have any other significant concentration of credit risk.
Amount due from immediate holding company (non trade-related)
For amount due from immediate holding company, the management makes periodic individual
assessment on the recoverability of these amounts based on historical settlement records, past experience, and
also quantitative and qualitative information that is reasonable and supportive forward-looking information.
The management believes that there are no significant increase in credit risk of these amounts since initial
recognition and the Group provided impairment based on 12m ECL. For the years ended 31 December 2022,
2023 and 2024 and the six months ended 30 June 2025, the Group assessed the ECL for amount due from
immediate holding company is insignificant and thus no loss allowance is recognised.
Time deposits, notes receivable, bank balances and pledged bank deposits
Credit risk on time deposits, notes receivable, bank balances, restricted bank balances and pledged bank
deposits are limited because the counterparties are reputable banks with high credit ratings assigned by credit
agencies. The Group assessed 12m ECL for time deposits, notes receivable, bank balances, restricted bank
balances and pledged bank deposits by reference to information relating to probability of default and loss given
default of the respective credit rating grades published by external credit rating agencies. As at 31 December
2022, 2023 and 2024 and 30 June 2025, the Group assessed that the ECL for time deposits, notes receivable,
bank balances, restricted bank balances and pledged bank deposits are insignificant and thus no loss allowance
is recognised.
APPENDIX I ACCOUNTANTS’ REPORT
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The Group’s internal credit risk grading assessment comprises the following categories:
Internal credit rating Description
Finance lease
receivables/
trade receivables/
contract assets/
trade-related balances
with related parties Other financial assets
Low risk /H1118/H1118/H1118/H1118/H1118/H1118The counterparty has a low
risk of default and does not
have any material past-due
amounts
Lifetime ECL –
not credit-impaired
12m ECL
Watch list /H1118/H1118/H1118/H1118/H1118Debtor frequently repays after
due dates but usually settle
in full
Lifetime ECL –
not credit-impaired
12m ECL
Doubtful /H1118/H1118/H1118/H1118/H1118/H1118Amount is >30 days past due
or there have been
significant increases in
credit risk since initial
recognition through
information developed
internally or external
resources
Lifetime ECL –
not credit-impaired
Lifetime ECL –
not credit-impaired
Loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Amount is >90 days past due
or there is evidence
indicating the asset is
credit-impaired
Lifetime ECL –
credit-impaired
Lifetime ECL –
credit-impaired
Write-off /H1118/H1118/H1118/H1118/H1118/H1118There is evidence indicating
that the debtor is in severe
financial difficulty and the
Group has no realistic
prospect of recovery
Amount is written
off
Amount is written
off
APPENDIX I ACCOUNTANTS’ REPORT
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The table below details the credit risk exposures of the Group’s financial assets, finance lease
receivables and contract assets, which are subject to ECL assessment:
External
credit
rating
Internal
credit
rating
12m or
lifetime ECL
Gross carrying amount
As at 31 December
As at
30 June
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Debt instruments at
FVTOCI
Notes receivable /H1118/H1118/H111829 AA+ N/A 12m ECL 242,279 201,317 214,159 460,138
Financial assets at
amortised cost
Trade receivables /H1118/H111828 N/A (note 1) Lifetime ECL
(collective
assessment)
1,627,468 2,369,056 2,474,681 2,248,496
Loss Lifetime ECL
(individual
assessment)
10,509 10,509 10,409 14,813
Other receivables /H1118/H111828 N/A Low risk 12m ECL 860,333 984,182 838,571 911,164
Loss Credit impaired 69,646 29,012 29,012 29,012
Time deposits /H1118/H1118/H1118/H111831 AA+ N/A 12m ECL 1,012,638 1,028,994 7,903,854 11,437,800
Bank balances /H1118/H1118/H1118/H111831 AA+ N/A 12m ECL 2,327,166 4,479,631 6,333,622 21,664,874
Pledged and
restricted
bank deposits /H1118/H1118/H1118
31 AA+ N/A 12m ECL 14,037,409 8,681,408 39,621,756 26,266,146
Amounts due from
related companies
– trade-related /H1118/H1118/H1118
37 N/A (note 1) Lifetime ECL
(collective
assessment)
198,893 139,686 43,169 33,004
Amount due from
immediate holding
company
– trade-related /H1118/H1118/H1118
37 N/A (note 1) Lifetime ECL
(collective
assessment)
1,275 1,071 1,060 2,049
Amount due from
immediate holding
company
– non trade-
related /H1118/H1118/H1118/H1118/H1118/H1118
37 N/A Low risk 12m ECL 222,460 1,374,169 – –
20,367,797 19,097,718 57,256,134 62,607,358
Other items
Contract assets /H1118/H1118/H111830 N/A (note 1) Lifetime ECL
(collective
assessment)
948,824 334,117 66,198 21,609
Finance lease
receivables /H1118/H1118/H1118/H1118
N/A N/A (note 1) Lifetime ECL 70,007 44,921 35,249 29,662
1,018,831 379,038 101,447 51,271
Note:
(1) For trade receivables, finance lease receivables, trade-related balances with related parties and contract
assets, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime
ECL. The Group determines the ECL collectively with a grouping by using a provision matrix with
common risk characteristics of respective receivables that are individually insignificant and not
credit-impaired. In addition, significant or credit-impaired trade receivables, if any, are assessed for
ECL individually.
As part of the Group’s credit risk management, the Group segments its trade receivables based on type
of customers, due to different loss patterns experienced in different customer segments.
APPENDIX I ACCOUNTANTS’ REPORT
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The following table provides information about the exposure to credit risk and ECLs for trade
receivables, contract assets and trade-related balances with related parties which are assessed on a collective
basis by using provision matrix as at 31 December 2022, 2023 and 2024 and 30 June 2025 within lifetime ECL.
Trade receivables and trade-related balances with related parties from contracts with customers:
As at 31 December As at 30 June
2022 2023 2024 2025
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H11183% 1,380,116 34,932 1% 1,651,657 22,529 3% 1,513,277 52,059 3% 1,107,215 38,034
91-180 days /H1118/H1118 2% 107,397 2,114 1% 202,493 2,970 3% 164,236 5,639 3% 223,944 7,704
181-365 days /H1118/H1118 2% 26,441 405 1% 485,163 7,180 3% 249,186 8,516 3% 294,097 10,099
Over 365 days /H1118 8% 97,311 7,615 25% 114,354 28,226 17% 516,328 86,164 19% 547,068 105,394
1,611,265 45,066 2,453,667 60,905 2,443,027 152,378 2,172,324 161,231
Trade receivables and contract assets from subsidies from governments:
As at 31 December As at 30 June
2022 2023 2024 2025
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
Average
loss rate
Gross
amount
ECL
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
0-90 days /H1118/H1118/H11181% 313,543 3,720 – 11,067 – – 111,132 – – – –
91-180 days /H1118/H1118 1% 123,008 764 – – – – – – – 29,755 –
181-365 days /H1118/H1118 1% 69,569 386 – 49,689 – – – – – 111,132 –
Over 365 days /H1118 1% 729,079 5,706 4% 374,426 13,737 21% 66,198 13,722 64% 21,609 13,722
1,235,199 10,576 435,182 13,737 177,330 13,722 162,496 13,722
The estimated loss rates are estimated based on expected default rates over the expected life of the
debtors with reference to published information from credit agencies and are adjusted for forward-looking
information that is available without undue cost or effort. The grouping is regularly reviewed by management
to ensure relevant information about specific debtors is updated.
For debtors with credit-impaired balances that are assessed individually, impairment allowance of nil,
nil, nil and RMB4,404,000 provided during the year ended 31 December 2022, 2023 and 2024 and the six
months ended 30 June 2025, respectively.
The movement in the lifetime ECL in respect of trade receivables, contract assets and trade-related
balances with related parties under the simplified approach using provision matrix during the Track Record
Period is as follows:
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Beginning balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,741 55,642 74,642 166,100
Loss allowance recognised,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,902 41,977 104,138 11,553
Write-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (22,977) (12,680) (2,700)
Closing balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,642 74,642 166,100 174,953
APPENDIX I ACCOUNTANTS’ REPORT
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Liquidity risk
The directors of the Group have reviewed its cash flow forecast, which covers a period from 1 July 2025
up to 31 December 2026. In preparing the cash flow forecast, the directors have considered historical cash
requirements, working capital and capital expenditures plans, commitment for research and development
expenses estimated cash flows provided by operations and existing cash on hand. Taking into account the
Group’s financial resources and its internally generated cash and, the directors of the Company believe that
the Group has sufficient capital to meet its liquidity needs from 1 July 2025 up to 31 December 2026.
Therefore, the directors of the Group are satisfied that it is appropriate to prepare the Historical
Financial Information on a going concern basis.
In the management of the liquidity risk, the Group monitors and maintains levels of cash and cash
equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of
fluctuations in cash flows. The Group utilises internal generated fund as a significant source of liquidity.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities based
on the agreed repayment terms. The table has been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can be required to pay and includes both interest and
principal cash flows.
The Group
Weighted
average
interest
rate
On demand
or less than
1 year
1-2
years
2-5
years
More than 5
years
Total
undiscounted
cash flow
Carrying
Amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2022
Trade and other payables /H1118 – 26,946,02 7––– 26,946,027 26,946,027
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12,77 4––– 12,774 12,774
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.16% 3,088,072 1,118,673 1,457,880 – 5,664,625 5,320,877
Convertible bonds /H1118/H1118/H1118/H1118/H11187.36% 210,48 8––– 210,488 147,296
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11184.83% 147,186 134,557 310,999 46,284 639,026 561,969
30,404,547 1,253,230 1,768,879 46,284 33,472,940 32,988,943
As at 31 December 2023
Trade and other payables /H1118 – 30,763,47 9––– 30,763,479 30,763,479
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 25,05 4––– 25,054 25,054
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.95% 1,674,361 2,093,768 668,311 – 4,436,440 4,203,392
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11184.88% 335,853 330,959 786,674 1,149,156 2,602,642 2,033,538
32,798,747 2,424,727 1,454,985 1,149,156 37,827,615 37,025,463
As at 31 December 2024
Trade and other payables /H1118 – 69,436,30 8––– 69,436,308 69,436,308
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 47,34 3––– 47,343 47,343
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.15% 32,089 649,607 39,139 11,171 732,006 697,187
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11184.87% 515,406 474,373 1,056,343 1,354,236 3,400,358 2,727,866
70,031,146 1,123,980 1,095,482 1,365,407 73,616,015 72,908,704
As at 30 June 2025
Trade and other payables /H1118 – 63,515,57 5––– 63,515,575 63,515,575
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,937,53 0––– 3,937,530 3,937,530
Amount due to immediate
holding company /H1118/H1118/H1118/H1118– 1,37 2––– 1,372 1,372
Borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.59% 1,113,391 915,705 2,164,098 1,666,828 5,860,022 5,351,943
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11184.38% 291,177 256,731 315,135 438,331 1,301,374 1,087,925
68,859,045 1,172,436 2,479,233 2,105,159 74,615,873 73,894,345
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 518 ---
(c) Fair value measurements of financial instruments
Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a
recurring basis
Financial assets
31 December 31 December 31 December 30 June
Fair value
hierarchy
Valuation technique
and key input2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Listed equity securities /H1118/H1118139,634 161,283 239,046 282,074 Level 1 Quoted bid prices in an
active market.
Structured deposits /H1118/H1118/H1118/H11181,611,895 972,361 3,809,702 – Level 2 Quoted value from banks
and financial institutions
based on expected return
with reference to
underlying investment.
Notes receivable at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
242,279 201,317 214,159 460,138 Level 2 Discounted cash flow
method. The key input is
market interest rate.
Equity instruments at
FVTOCI /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
100,203 99,546 78,260 70,908 Level 3 Net asset value of the
private entities. (Note)
Note: A reasonably possible change in the unobservable input would not change the fair value of the relevant
financial instrument significantly, therefore no sensitivity analysis is disclosed.
Fair value of the Group’s financial assets and financial liabilities that are not measured at fair value on
a recurring basis
The management of the Group considers that the carrying amounts of financial assets and financial
liabilities recorded at amortised cost in the Historical Financial Information approximate their fair values at
the end of each reporting period.
48. TRANSFER OF FINANCIAL ASSETS
Financial assets that are derecognised in their entirety
As at 31 December 2022, 2023 and 2024 and 30 June 2025, the Group conducted bank acceptance bill
discounting with several banks in China and endorsed to certain suppliers for settlement of trade payables (the
“Derecognised Bills”) with a carrying amount of RMB10,053,871,000, RMB13,485,838,000, RMB33,521,612,000
and RMB37,142,869,000, respectively. In the opinion of the directors, the Group has transferred substantially all
risks and rewards relating to the Derecognised Bills at the time of discounting or endorsing, which meets the
conditions of derecognition of financial assets, and therefore fully derecognised the Derecognised Bills at their
carrying amount on the discounting or endorsing date. However, the Group continue to be exposed to the risks of
repurchasing such bills at their carrying amount since the banks are entitled to recourse against the Group if the bills
are rejected by the acceptors when falling due (“Continuing Involvement”). In the opinion of the directors, the risk
of the Continuing Involvement is remote.
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


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49. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
The table below details changes in the Group’s liabilities arising from financing activities, including both cash
and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities.
Amount due to
an immediate
shareholder Borrowing
Lease
liabilities
Convertible
bonds
Dividend
payable Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118(1,060,000) (4,467,497) (414,043) (141,041) – (6,082,581)
Financing cash flows /H1118/H1118/H1118/H1118/H11181,060,000 (528,752) 127,986 3,715 – 662,949
Conversion of convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 567 – 567
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,873) (276,127) (21,634) (10,537) – (330,171)
Change in right of use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (254,278) – – (254,278)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,873 (48,501) – – – (26,628)
As at 31 December 2022 /H1118/H1118 – (5,320,877) (561,969) (147,296) – (6,030,142)
Financing cash flows /H1118/H1118/H1118/H1118/H1118– 1,365,449 158,489 2,810 – 1,526,748
Conversion of convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 149,621 – 149,621
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (277,634) (25,977) (5,135) – (308,746)
Change in right of use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,604,081) – – (1,604,081)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 29,67 0––– 29,670
As at 31 December 2023 /H1118/H1118 – (4,203,392) (2,033,538) – – (6,236,930)
Financing cash flows /H1118/H1118/H1118/H1118/H1118– 3,597,415 406,343 – 499,738 4,503,496
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (91,210) (149,172) – – (240,382)
Change in right of use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (951,499) – – (951,499)
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (499,738) (499,738)
As at 31 December 2024 /H1118/H1118 – (697,187) (2,727,866) – – (3,425,053)
Financing cash flows /H1118/H1118/H1118/H1118/H1118– (4,585,033) 119,042 – 1,584,365 (2,881,626)
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (69,723) (52,151) – – (121,874)
Change in right of use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,573,050 – – 1,573,050
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (1,584,365) (1,584,365)
As at 30 June 2025 /H1118/H1118/H1118/H1118/H1118/H1118– (5,351,943) (1,087,925) – – (6,439,868)
As at 31 December 2023 /H1118/H1118 – (4,203,392) (2,033,538) – – (6,236,930)
Financing cash flows /H1118/H1118/H1118/H1118/H1118– 2,135,162 190,249 – – 2,325,411
Interest charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (66,071) (53,557) – – (119,628)
Change in right of use
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (62,895) – – (62,895)
As at 30 June 2024
(unaudited) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,134,301) (1,959,741) – – (4,094,042)
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 520 ---
50. RELATED PARTIES TRANSACTIONS
The Group entered into the following transactions with related parties during the Track Record Period:
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
DONGFENG MOTOR
RUS CO., LTD /H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
2 9 1 5 2–––
Sales 25,33 5––––
ʮ
̡ (Dongcheng
Huizhong Asset
Management Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Transportation and
storage expense
75 71 164 150 41
Miscellaneous
income
– – 16 16 –
ʮ̡
(Dongfeng Checheng
Logistics Co., Ltd.)* /H1118/H1118
Entity controlled by
Dongfeng Motor
Transportation and
storage expense
12,093 2,010 – – –
ʮ̡
(Dongfeng Liuzhou
Motor Co., Ltd.)* /H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
income
225 2,085 5,316 4,613 670
ʮ
̡ (Dongfeng Die &
Stamping Technology
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 32,88 1––––
ʮ
̡ (Dongfeng V enucia
Automobile Sales
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 295 257 141 93 –
ʮ̡
(Dongfeng Motor
Finance Co., Ltd.)* /H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
9 7 1 6 2 5–––
Miscellaneous
income
9 9 3 8 5 8–––
Interest income 2,038 1,879 604 604 –
ʮ
̡ (Dongfeng
Automobile Wheel
Suizhou
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 10,464 9,509 2,993 1,999 1,521
Miscellaneous
income
5 5––––
ʮ̡
(Dongfeng Automobile
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
income
3 9––– 1 4
ʮ
Ҧʱʮ̡
(V oyah Technology
Branch of Dongfeng
Motor Group Co.,
Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Sales (1,325) ––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 521 ---
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
ʮ̡
(Dongfeng Finance
Company Ltd.)* /H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Financial Service
Revenue
1,173 23,195 822 783 2,711
Miscellaneous
expense
––––6
ʮ̡
(Dongfeng
Communication
Technology Co., Ltd.)* /H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
7 2 5 8–––
ݴيࠬ؇(ဏ)ʮ̡
(Dongfeng Logistics
(Wuhan) Co., Ltd.)* /H1118/H1118
Entity controlled by
Dongfeng Motor
Transportation
expense
21,323 88,767 152,832 24,066 20,801
Miscellaneous
income
2,192 177 688 – 738
Rental income – 6,94 3–––
ʮ̡
(Dongfeng Y uexiang
Technology Co., Ltd.)* /H1118
Entity controlled by
Dongfeng Motor
Sales – – 923 923 –
ݴيࠬ؇(ဏ)ࠠ
ᅅʱʮ̡ (Dongfeng
Logistics (Wuhan)
Co., Ltd. Chongqing
Branch)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Transportation
expense
–––– 1 1
Miscellaneous
income
––––5
Rental income –––– 5 0
ʮ
̡ (Dongfeng Logistics
Group Co., Ltd.)* /H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
income
–––– 3 2
ʮ
̡ (Guangzhou Shuttle
Cloud Supply Chain
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
833 917 787 518 226
ʮ̡
(V oyah Auto Technology
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
1,466 1,811 5,709 3,928 11,100
Sales 1,151,061 128,209 46,102 42,745 1,054
ʮ
̡ (V oyah Automobile
Sales and Service Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 30 6––––
Sales 395 3,379 18,752 9,204 9,122
Miscellaneous
income
365 1,586 1,064 555 195
ʮ̡
(Pujin Financial Leasing
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by a
shareholder of the
Company
Miscellaneous
income
8 2 2432
Rental income –––– 2 3
ࠢ
ʮ̡ (Shanghai Dong
Feng Motor Industry
Imp. & Exp. Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Sales – 49 268 12 133
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 522 ---
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
ʮ̡
(Shenzhen Lan-Y ou
Technology Co., Ltd.)* /H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
113 613 113 34 34
Purchases – 2,415 6,802 5,660 –
Miscellaneous
income
––9––
ʮ̡ᄿ
ψʱʮ̡ (Guangzhou
Branch of Shenzhen
Lan-Y ou Technology
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 9,099 1,698 – 185 –
ʮ̡
(Wuhan Da’an
Technology Co., Ltd.)* /H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
51 70 72 17 –
ࠢ
ʮ̡ (Wuhan Dong
Feng Motor Industry
Imp. & Exp. Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Purchases 235,498 1,181 210 – –
Sales 1,707 334 1,448 1,442 –
Miscellaneous
income
– – 853 853 –
ᑳජ༺τӛԓᏨ಻ʕːϞ
ʮ̡ (Xiang Y ang Da
An Automobile Test
Center Limited
Corporation)* /H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
38,257 26,292 15,443 5,566 5,728
Expenses related to
short-term leases
2 2 7 2 2 7–––
ʮ̡
(Zhengzhou Nissan
Automobile Co., Ltd.)* /H1118
Entity controlled by
Dongfeng Motor
Purchases – 105,448 101,769 23,454 22,960
ӛԓʈุආ̈ɹ
ʮ̡ (China
Dongfeng Motor
Industry Imp. & Exp.
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Sales 163,682 48,163 10,218 15,583 19,765
ۜ
ʮ̡ (Guangzhou
Jinshang Jiyan
Automotive Supplies
Co., Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
expense
–––– 7 6 2
Purchases –––– 18,490
΅
ʮ̡ (China
Automotive Engineering
Research Institute
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
the director (Li,
Kaiguo) of the
Company
Research and
development
expense
– 23,16 7–––
Sales – 28 6–––
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 523 ---
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
ʮ
̡ (Chongqing Chi Rui
Property Management
Co., Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon holding
Miscellaneous
income
–222–
Rental income – 6 19 9 7
Miscellaneous
Expense
– – 34 – 14,397
Sale –––– 1 0 9
ʮ
̡ (Chongqing Ruichi
Automobile Industry
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
An associate of the
Group
Miscellaneous
income
– – 850 470 122
Sales – – 398,396 288,681 616,609
Purchase – – 44,167 25,950 32,476
Miscellaneous
Expense
– – 2,231 970 691
Rental income – – 616 278 271
Other purchase – – 1,494 – –
ᅅ๿ཱུอঐ๕ӛԓቖਯ
ʮ̡
(Chongqing Ruichi New
Energy Automobile
Sales Service Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
An associate of the
Group
Miscellaneous
income
– – 77 52 2
Sales – – 18,611 5,607 7,337
Purchase – – 1,005 550 443
ʮ
̡ (Chongqing
Chuanghui Zhihui
United Technology Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
expense
– 94 1,992 1,992 –
Ϟ
ʮ̡ (Chongqing
Tengkang Eco-
Agriculture
Development Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Purchases – 133 70 70 127
ʮ̡ፄ
ద᜗อၲʕː
(Dongfeng Motor
Corporation
Convergence Media
News Center)* /H1118/H1118/H1118/H1118/H1118
Entity controlled by
Dongfeng Motor
Miscellaneous
Expense
–– 1 9––
ʮ
̡ (Chongqing Comfly
Power Technology
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
An associate of the
Group
Rental Payment – – 12,159 6,158 6,001
Miscellaneous
income
–––– 6 1 8
ʮ̡
(Chongqing Sokon Hotel
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
expense
3,12 7––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 524 ---
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
ʮ̡
(Sokon Holding)*
A substantial
shareholder of the
Company
Miscellaneous
expense
2,08 07–––
Miscellaneous
income
–1 62 7 – 6 0 1
Rental income 170 330 375 161 327
ᅅอชᙂᅙϖԓቖਯϞ
ʮ̡ (Chongqing
Xgjao Motorcycle Sales
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
expense
3 3 3 0–––
ʮ
̡ (Chongqing Xgjao
Motorcycle Co., Ltd.)* /H1118
Entity controlled by
Sokon Holding
Miscellaneous
expense
1 3 3 1 1 05 52 8 –
Sales 8,092 14,842 7,222 7,170 104
Miscellaneous
income
80 221 294 43 19
Rental income 3,389 3,464 3,502 1,760 1,117
ʮ
̡(Chongqing Xinkang
Xingrui Real Estate
Co., Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
income
33–––
Rental income 10 1 0–––
ʮ
̡(Chongqing Y uan
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Sales 1,089 46 54 – –
Miscellaneous
income
4 199 8 1 10
Purchases 143 10 311–
Equity Transfer 234,36 6––––
ʮ
̡ (Chongqing Y uan
Machinery
Manufacturing Co.,
Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Purchases 5,594 2,939 4,090 1,767 2,456
Miscellaneous
income
207 94 207 123 45
Rental income 45 8––––
ʮ
̡ (Chongqing Y uan
Intelligent Suspension
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
income
422 865 977 248 250
Sales 7,307 2,723 2,834 1,090 518
Rental income 8,428 8,466 10,859 5,430 4,550
Purchases – – 26,592 8,001 22
Equipment
purchase
– – 2,886 – –
ʮ
̡ (Chongqing Y uantu
Motorcycle Industrial
Co., Ltd.)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
income
–5741
Rental income – 103 127 75 17
ʮ̡
(Chongqing CloudBay
Technology Co., Ltd.)* /H1118
A joint venture of the
Group
Purchases 10,536 16,706 17,169 11,615 13,267
Miscellaneous
expense
1,975 1,523 6,597 3,247 2,828
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 525 ---
Relationships
Nature of
transactions
Y ear ended 31 December
Six months ended
30 June
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Sokon Investment (USA),
Inc. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Interest expense on
lease liabilities
5,23 7––––
Rental Payment 24,425 19 5–––
ʮ
̡ (Chongqing Yilai
Intelligent Suspension
Co., Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity controlled by
Sokon Holding
Miscellaneous
income
–––– 7 4
Purchases –––– 29,826
Sales –––– 1,593
Rental income –––– 8 8 0
ʮ
̡ (Shenzhen Yinwang
Intelligent Technology
Co., Ltd)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
An associate of the
Group
Purchases N/A N/A N/A N/A 5,604,301
Miscellaneous
income
N/A N/A N/A N/A 543
* For identification purposes only
Financial service arrangement
The Group entered into a banking service framework agreement with Dongfeng Finance Co., Ltd., an entity
controlled by Dongfeng Motor. Pursuant to the agreement, Dongfeng Finance Co., Ltd. provides banking facilities
service and bank depositing service to the Group.
Details of the Group’s notes payable and bank balances under the banking service framework agreement with
Dongfeng Finance Co., Ltd. are set out below:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Notes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118600,000 450,000 – –
Bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 5 1 19–
Pledged bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,000 90,000 – –
Compensation of key management personnel
The remuneration of directors and other members of key management of the Group during the Track Record
Period are as follows:
Y ear 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 and other
allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,407 17,367 21,007 10,568 9,612
Discretionary bonus /H1118/H1118/H1118/H1118/H111812,835 12,088 6,395 6,395 10,210
Retirement benefit scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115 100 179 85 94
29,357 29,555 27,581 17,048 19,916
The remuneration of directors and key executives is determined having regard to the performance of
individuals and market trends.
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 526 ---
51. PLEDGE OF OR RESTRICTIONS ON ASSETS
Pledge of assets
The following assets were pledged for certain bank and other borrowings, issuance of bills, short-term letters
of credit for trade and other payables granted to the Group:
As at 31 December As at 30 June
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Property, plant and equipment /H1118/H1118/H1118/H11181,382,505 1,352,182 – 1,473,420
Pledge bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,031,846 8,673,218 39,598,698 26,248,862
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,612,207 800,000
Leasehold lands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118167,748 178,971 – 11,181
Notes receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,871 39,050 – –
15,723,970 10,243,421 41,210,905 28,533,462
Restrictions on assets
Restricted bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,563 8,190 23,058 17,284
52. PARTICULARS OF SUBSIDIARIES
As at the date of this report and during the Track Record Period, the Company’s principal subsidiaries are as
follow:
Name of subsidiaries
Place and date of
incorporation/
establishment Registered capital
Proportion of ownership interest held by the Company
As at 31 December
As at
30 June
The date of
this report Principal activities2022 2023 2024 2025
Directly held:
ᒄɢ౶ӛԓ(ಳ̏)ʮ
̡(Seres Auto (Hubei)
Co., Ltd.)* (note i) /H1118/H1118
The PRC
26 May 2003
RMB800,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Manufacturing and
provision sales of
automobiles
ʮ̡
(Seres Auto Co.,
Ltd.)* (note i) /H1118/H1118/H1118
The PRC
4 September
2012
RMB10,637,280,000 80.65% 80.65% 98.77% 93.63% 93.63% Provision of research
and development,
manufacturing and
sales of automobiles
ʮ̡
(Chongqing Sokon
Power Co., Ltd.)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The PRC
7 April 2009
RMB350,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Manufacturing of
automobiles
ᅅՇϪอਜᎲସอঐ๕
ப΂ʮ̡
(Chongqing Liangjiang
New Area Longsheng
New Energy
Technology Co.,
Ltd.)* (note iv) /H1118/H1118/H1118
The PRC
21 September
2022
RMB12,000,000 N/A N/A N/A 100.00% 100% Provision of rental
service of new energy
vehicle production
factories
Indirectly held:
ʮ
̡ (Chongqing Ruichi
Automobile Industry
Co., Ltd.)* (note i) /H1118/H1118
The PRC
27 September
2003
RMB454,000,000 100.00% N/A N/A N/A N/A Manufacturing of
automobiles
ʮ̡
(Chongqing Sokon
Motor (Group) IMP . &
EXP . Co., LTD)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The PRC
23 February 2004
RMB300,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of import and
export activities
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 527 ---
Name of subsidiaries
Place and date of
incorporation/
establishment Registered capital
Proportion of ownership interest held by the Company
As at 31 December
As at
30 June
The date of
this report Principal activities2022 2023 2024 2025
ʮ
̡ (Chongqing AITO
Automobile Sales
Co., Ltd.)* (note i) /H1118/H1118
The PRC
7 March 2019
RMB50,000,000 41.50%
(note ii)
41.50%
(note ii)
50.83% 48.18%
(note ii)
93.63% Provision of sale of
automobiles
ΈӛԓቖਯϞ
ʮ̡ (Shiyan
Dongfeng Fengon
Automobile Sales
Co., Ltd.)* (note i) /H1118/H1118
The PRC
23 December
2019
RMB5,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of sale of
automobiles
ᅅᒄɢ౶อཥਗӛԓቖ
ʮ̡
(Chongqing Seres New
Electric V ehicle Sales
Co., Ltd.)* (note i) /H1118/H1118
The PRC
19 March 2018
RMB100,000,000 80.65% 80.65% 98.77% 93.63% 93.63% Provision of sale of
automobiles
ᅅᒄɢ౶อঐ๕ӛԓண
ʮ̡
(Chongqing Seres New
Energy Automobile
Designing Institute
Co., Ltd.)* (note i) /H1118/H1118
The PRC
10 October 2015
RMB50,000,000 80.65% 41.50%
(note ii)
N/A N/A N/A Provision of research
and development
activities
ࠢ
ʮ̡ (Chongqing
Jinkang Powertrain
New Energy
Co., Ltd.)*
(note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The PRC
5 January 2018
RMB1,030,000,000 41.50%
(note ii)
41.50%
(note ii)
50.83% 48.18%
(note ii)
93.63%
(note ii)
Provision of research
and development,
manufacturing and
sales of automobile
parts
ӛԓ௪
ʮ̡
(Chongqing AITO
Premium Automotive
Parts
Co., Ltd.)* (note i) /H1118/H1118
The PRC
8 April 2003
RMB30,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of
manufacturing and
sales of automotive
parts
ʮ
̡ (Chongqing Y u’an
Huaihai Powertrain
Co., Ltd.)* (note i) /H1118/H1118
The PRC
28 May 2004
RMB8,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of
manufacturing and
sales of Automotive
material and parts
ʮ
̡ (Chongqing Sokon
Machinery Parts
Co., Ltd.)* (note i) /H1118/H1118
The PRC
15 June 2006
RMB5,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of
manufacturing and
sales of automotive
material and parts
ʮ
̡ (Chongqing Sokon
Automotive Parts
Co., Ltd.)* (note i) /H1118/H1118
The PRC
18 February 2011
RMB50,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of research
and development,
manufacturing and
sales of automotive
materials and parts
ࠢ
ʮ̡
(Luzhou Rongda
Intelligent
Transmission Limited
Company)* (note i) /H1118/H1118
The PRC
18 December
2016
RMB547,485,000 86.37% 86.37% 88.71% 88.71% 88.71% Provision of
manufacturing and
sales of automotive
material and parts
ࠢ
ʮ̡ (Chongqing Seres
Electric V ehicle
Co., Ltd.)* (note i) /H1118/H1118
The PRC
31 December
2021
RMB2,000,000,000 80.65% 80.65% 98.77% 93.63% 93.63% Provision of software
and information
technology services
ʮ̡
(Chengdu Seres
Technology Co.,
Ltd.)* (note i) /H1118/H1118/H1118/H1118
The PRC
20 December
2021
RMB5,000,000 80.65% 80.65% 98.77% 93.63% 93.63% Provision of sales of
service
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 528 ---
Name of subsidiaries
Place and date of
incorporation/
establishment Registered capital
Proportion of ownership interest held by the Company
As at 31 December
As at
30 June
The date of
this report Principal activities2022 2023 2024 2025
ࠢ
ʮ̡ (Chongqing Seres
Phoenix Intelligent
Innovation Technology
Co., Ltd.)* (note i) /H1118/H1118
The PRC
29 December
2023
RMB1,222,250,000 N/A N/A 59.66% 56.55% 93.63% Provision of software
and information
technology service
ʃੰӛԓቖਯϞ
ʮ̡ (Chongqing
Dongfeng SOKON
Automobile Sales
Co., Ltd) (note i) /H1118/H1118
The PRC
8 December 2011
RMB50,000,000 100.00% 100.00% 100.00% 100.00% 100.00% Provision of sale of
automobiles
ʮ̡
(PT.SOKONINDO
AUTOMOBILE)
(note iii) /H1118/H1118/H1118/H1118/H1118/H1118
The Indonesia
31 August 2018
RMB499,399,200 99.00% 99.00% 99.00% 99.00% 99.00% Provision of
manufacturing and
sales of automotive
* For identification purposes only
All subsidiaries now comprising the Group are limited liability companies and have adopted 31 December as
their financial year end date. None of the subsidiaries had issued any debt securities at the end of each reporting
period.
Notes:
(i) The statutory financial statements for these subsidiaries established in the PRC were prepared in accordance
with relevant accounting principles and financial regulations applicable the PRC. The statutory financial
statements for the year ended 31 December 2022, 2023 and 2024 were audited by WUYIGE Certified Public
Accountants LLP .
(ii) Over 51% of the equity interests in these entities were directly held by the non-wholly subsidiaries of the
Group which lead to effective equity interest attributable to the Group in these entities to be less than 50%
during the relevant years.
(iii) The statutory financial statements for the subsidiary established in the Indonesia was prepared in accordance
with relevant accounting principles and financial regulations applicable the Indonesia. The statutory financial
statements for the year ended 31 December 2022, 2023 and 2024 were audited by KRESTON INDONESIA.
(iv) The statutory financial statements for the year ended 31 December 2022, 2023 and 2024 were not available
as the entity was acquired by the Group on 25 March 2025.
53. EVENTS AFTER REPORTING PERIOD
Subsequent to 30 June 2025, a cash dividend distribution for the six months ended 30 June 2025 of RMB0.31
per ordinary share, in an aggregate amount of RMB506,343,000 has been proposed by the directors of the Company
and approved by the shareholders at the shareholders’ meeting as at 15 October 2025.
54. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Group or any of its subsidiaries in respect of any
period subsequent to 30 June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 529 ---
The information set out below does not form part of the Accountants’ Report received
from the Company’ s reporting accountants, Deloitte Touche Tohmatsu, as set out in Appendix
I to this prospectus, and is included in this prospectus for information purposes only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial Information” of this prospectus and the Accountants’ Report as set
out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group attributable to owners of the Company prepared in accordance with Rule 4.29 of the
Listing Rules is set out below to illustrate the effect of the proposed Global Offering on the
consolidated net tangible assets of the Group attributable to owners of the Company as at
30 June 2025 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group attributable to owners of the Company has been prepared for illustrative purposes only
and, because of its hypothetical nature, it may not give a true picture of the consolidated net
tangible assets of the Group attributable to owners of the Company as at 30 June 2025 or any
future dates.
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group attributable to owners of the Company is prepared based on the audited
consolidated net tangible assets of the Group attributable to owners of the Company as at
30 June 2025 as shown in the Accountants’ Report as set out in Appendix I to this prospectus,
and adjusted as follows:
Audited
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
consolidated
net tangible
assets of the
Group
attributable to
owners of the
Company as at
30 June 2025
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
30 June 2025
per Share
RMB’000 RMB’000 RMB’000 RMB HK$
Note 1 Note 2 Note 3 Note 4
Based on an Offer Price
of HK$131.50 per
Offer Share /H1118/H1118/H1118/H1118/H1118/H1118/H111817,172,902 11,803,024 28,975,926 16.71 18.30
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 530 ---
Notes:
(1) The amount of audited consolidated net tangible assets of the Group attributable to owners of the
Company as at 30 June 2025 amounting to approximately RMB17,172,902,000 is based on the
consolidated net assets of the Group attributable to the owners of the Company of RMB26,761,103,000
as at 30 June 2025 less intangible assets and goodwill of the Group attributable to the owners of the
Company of RMB9,090,809,000 and RMB497,392,000, respectively as at 30 June 2025 as
extracted/derived from the Accountants’ Report of the Group set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on 100,200,000 H Shares at the Offer
Price of HK$131.50 per Share, after deduction of the underwriting fees and commissions and other
listing related expenses payable by the Company (excluding listing expenses charged to profit or loss
up to 30 June 2025) and without taking into account of any shares which may be allotted and issued upon
the exercise of the Offer Size Adjustment Option and the Over-allotment Option or any shares which
may be issued or repurchased by the Company pursuant to the Company’s general mandate. For the
purpose of the estimated net proceeds from the Global Offering, the amount denominated in HK$ has
been converted into RMB at the rate of HK$1 to RMB0.9132, which was the exchange rate prevailing
on 17 October 2025 with reference to the rate published by the People’s Bank of China. No
representation is made that the HK$ denominated amounts have been, could have been or may be
converted to RMB, or vice versa, at that rate or any other rates or at all.
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company per Share is arrived at on the basis of 1,733,566,086 Shares in total, assuming that the
Global Offering of 100,200,000 H Shares had been completed on 30 June 2025. It does not take into
account any shares which may be allotted and issued pursuant to the exercise of the Offer Size
Adjustment Option and the Over-allotment Option or any shares which may be issued or repurchased
by the Company pursuant to the Company’s general mandate.
(4) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company per Share is converted from RMB to HK$ at the rate of HK$1 to RMB0.9132. No
representation is made that the RMB denominated amounts have been, would have been or may be
converted to HK$, or vice versa, at that rate or at any other rates or at all.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of
the Group attributable to owners of the Company as at 30 June 2025 to reflect any trading results or
other transactions of the Group entered into subsequent to 30 June 2025.
In particular, the unaudited pro forma adjusted consolidated net tangible assets of the Group attributable
to owners of the Company as shown on Page II-1 has not taken into account payment of dividends of
RMB506,343,000 which was approved by the shareholders at the shareholders’ meeting on 15 October
2025.
The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the Company as at 30 June 2025 per Share would have been RMB16.42 (equivalent to HK$17.98)
per Share based on the Offer Price of HK$131.50, if the dividend had been taken into account as at 30
June 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 531 ---
B. ASSURANCE REPORT FROM THE REPORTING ACCOUNTANTS ON
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of the independent reporting accountants’ assurance report
received from the reporting accountants of the Company, Deloitte Touche Tohmatsu, Certified
Public Accountants, Hong Kong, in respect of the Group’ s unaudited pro forma financial
information prepared for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Seres Group Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Seres Group Co., Ltd. (the “Company”) and its subsidiaries
(hereinafter collectively referred to as the “Group”) by the directors of the Company (the
“Directors”) for illustrative purposes only. The unaudited pro forma financial information
consists of the unaudited pro forma statement of adjusted consolidated net tangible assets as
at 30 June 2025 and related notes as set out on pages II-1 to II-2 of Appendix II to the
prospectus issued by the Company dated 27 October 2025 (the “Prospectus”). The applicable
criteria on the basis of which the Directors have compiled the unaudited pro forma financial
information are described on pages II-1 to II-2 of Appendix II to the Prospectus.
The unaudited pro forma financial information has been compiled by the Directors to
illustrate the impact of the proposed Global Offering (as defined in the Prospectus) on the
Group’s financial position as at 30 June 2025 as if the Global Offering 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 historical financial information for each of the
three years ended 31 December 2024 and the six months ended 30 June 2025, on which an
accountants’ report set out in Appendix I to the Prospectus has been published.
Directors’ Responsibilities for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the unaudited pro forma financial
information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to
Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public
Accountants (the “HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 532 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the “Code of
Ethics for Professional Accountants” issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1 “Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements” issued by the HKICPA, which requires the firm
to design, implement and operate a system of quality management including policies and
procedures regarding compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the unaudited pro forma financial information and to report our opinion to
you. We do not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the unaudited pro forma financial information
beyond that owed to those to whom those reports were addressed by us at the dates of their
issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the Directors have compiled the unaudited pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the unaudited pro
forma financial information, nor have we, in the course of this engagement, performed an audit
or review of the financial information used in compiling the unaudited pro forma financial
information.
The purpose of unaudited pro forma financial information included in an investment
circular is solely to illustrate the impact of a significant event or transaction on unadjusted
financial information of the Group as if the event had occurred or the transaction had been
undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not
provide any assurance that the actual outcome of the event or transaction at 30 June 2025
would have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 533 ---
A reasonable assurance engagement to report on whether the unaudited pro forma
financial information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whether the applicable criteria used by the Directors
in the compilation of the unaudited pro forma financial information provide a reasonable basis
for presenting the significant effects directly attributable to the event or transaction, and to
obtain sufficient appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the unaudited pro forma financial information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the unaudited pro forma financial information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the unaudited pro forma financial information has been properly compiled on the
basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
27 October 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 534 ---
The primary purpose of this appendix is to provide potential investors with an overview
of the Company’s Articles of Association. As the information contained herein is in summary
form, it may not contain all the information that is important to potential investors.
GENERAL PROVISIONS
The Company is a joint stock limited company with perpetual existence.
All of the Company’s capital is divided into equal shares. Shareholders shall be liable to
the Company to the extent of the shares held by them. The Company shall be liable for its debts
to the extent of all of its assets.
The Articles of Association shall, from the date on which it take effect, be the legally
binding document that regulates the organization and activities of the Company and the
relationship of rights and obligations between the Company and the shareholders and among
the shareholders. Pursuant to the Articles of Association, the shareholders may pursue actions
against the shareholders, the Company’s Directors, senior management members and the
Company. The Company may pursue actions against the shareholders, Directors and senior
management members.
SCOPE OF BUSINESS
As registered in accordance with the laws, the Company’s scope of business comprises:
general projects: manufacturing and sales: auto parts, motor vehicle parts, general machinery,
electrical machinery, electrical appliances, electronic products (excluding electronic
publications), instrumentation; sales: daily necessities, household appliances, hardware, metal
materials (excluding rare and precious metals); leasing of houses, machinery and equipment;
economic and technical advisory services; import and export of goods (except for the items
subject to approval under the law, business activities may be carried out independently with the
business license according to law).
SHARES
Issuance of Shares
The Shares of the Company shall be in the form of registered share certificates. All Shares
issued by the Company are ordinary shares , which shall have a par value denominated in
Renminbi. The issuance of the Shares of the Company shall follow the principles of open,
fairness and justice, and each share in the same class shall have the same rights. For the same
class of shares issued at the same time, each share shall be issued on the same conditions and
at the same price. Any share subscribed by subscribers shall pay the same price for each share.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-1 –


--- page 535 ---
Increase and Reduction of Share Capital and Share Repurchase
The Company may increase capital based on the needs of operation and development and
in accordance with the requirements of laws, regulations, the requirements of the securities
regulatory authorities of the place where the Company’s Shares are listed and resolution on the
shareholders’ meeting, by any of the following ways:
(i) offering of shares to unspecified parties;
(ii) offering of shares to specified parties;
(iii) distribution of bonus shares to existing shareholders;
(iv) conversion of the reserve into share capital;
(v) other means as required by laws, administrative regulations and relevant Listing
Rules and approved by CSRC, other competent regulatory authorities and the
securities regulatory authorities of the place where the Shares of the Company are
listed.
The Company may decrease its registered capital. The reduction of registered capital shall
comply with the Company Law, the Hong Kong Listing Rules and other relevant regulations,
as well as the procedures stipulated in these Articles of Association.
The Company shall not repurchase its own shares, save as under one of the following the
circumstances:
(i) reducing the registered capital of the Company;
(ii) merging with other companies holding Shares in the Company;
(iii) using shares for employee stock ownership plans or as equity incentives;
(iv) any requests for the Company to repurchase Shares from the Shareholders who
voted against the resolutions adopted at a shareholders’ meeting to merge or divide
the Company;
(v) using of shares for conversion of corporate bonds issued by the Company, which are
convertible into shares;
(vi) as the Company considers necessary to safeguard the Company’s value and
shareholders’ rights and interests.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-2 –


--- page 536 ---
The Company may acquire its own shares through public centralized trading or other
methods recognized by the laws, administrative regulations, other competent regulatory
authorities and the securities regulatory authorities of the places where the Company’s shares
are listed. Where the Company repurchases its shares due to the circumstances specified in
items (iii), (v) or (vi) above, it shall do so through public and centralized transactions.
The Company’s repurchasing its own Shares under any of the circumstances set forth in
items (i) and (ii) above shall be subject to a resolution of the shareholders’ meeting, and the
Company repurchasing its own Shares under any of the circumstances set forth in items (iii),
(v) and (vi) above may be subject to a resolution of a meeting of the Board at which more than
two-thirds of Directors are present, provided that it complies with the securities regulatory
rules of the place where the Company’s Shares are listed.
Under the circumstance stipulated in item (i), the Shares of the Company so repurchased
shall be canceled within ten days from the date of repurchase; under the circumstances
specified in either item (ii) or item (iv) above, the Shares of the Company so repurchased shall
be transferred or canceled within six months; under the circumstances stipulated in item (iii),
(v) or (vi), the total Shares of the Company held by the Company shall not exceed 10% of the
total Shares that have been issued by the Company, and shall be transferred or canceled within
three years.
Transfer of Shares
The Shares of the Company shall be transferred legally. The Company shall not accept its
Shares as security under a pledge.
Directors and senior management of the Company shall inform the Company about their
holdings of the Shares in the Company and any changes in their shareholding. During their
terms of office determined at the time of appointment, the Shares transferred each year shall
not exceed 25% of the total number of Shares of the same class of the Company held by them.
Such Shares of the Company held shall not be transferable within one year from the date on
which the Company’s Shares are listed. The aforementioned persons shall not transfer Shares
of the Company held by them within half a year after they cease to be employed. Where the
laws, administrative regulations or the CSRC provide otherwise in respect of the restrictions
on the shareholders’ transfer of Shares in the Company, such requirements shall prevail.
Where a shareholder holding more than 5% of the shares of the Company, as well as a
director and senior management of the Company, sells the Company’s shares or other securities
of equity nature that he/she holds within six months of purchase or buys again within six
months of sale, the gains therefrom shall belong to the Company, and the board of directors of
the Company shall collect such gains. However, securities companies holding more than 5% of
the shares of the Company as a result of underwriting the remaining shares, and other
circumstances stipulated by other competent regulatory authorities, and the securities
regulatory authorities of the place where the shares of the Company are listed, are exempt from
this requirement.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-3 –


--- page 537 ---
Shares or other securities with an equity nature held by Directors, senior management and
natural person shareholders as mentioned in the preceding paragraph, include shares or other
securities with an equity nature held by their spouses, parents or children, or held under other
people’s accounts.
SHAREHOLDERS AND SHAREHOLDERS’ MEETINGS
Shareholders
Shareholders shall enjoy rights and have obligations in accordance with the class of
shares held by them. Shareholders holding the same class of shares shall be entitled to equal
rights and have equal obligations.
When the Company convenes a shareholders’ meeting, distributes dividends, undergoes
liquidation and engages in other activities requiring confirmation of shareholders’ identities,
the Board of Directors or the convener of the shareholders’ meeting shall decide the record date
and the shareholders whose names appear on the register after the close of trading on the record
date shall be the shareholders enjoying relevant rights and interests.
Shareholders of the Company shall enjoy the following rights:
(i) to receive dividends and other forms of distribution in proportion to the number of
shares held by them;
(ii) to request the holding of, convene, chair, attend or appoint a proxy to attend
shareholders’ meetings and exercise corresponding voting rights in accordance with
laws;
(iii) to supervise the operation of the Company and to put forward proposals and raise
inquiries;
(iv) to transfer, donate, or pledge shares held by them in accordance with laws,
administrative regulations, and the Articles of Association;
(v) to inspect and copy the Articles of Association, the register of members, counterfoils
of corporate bonds, shareholders’ meeting minutes, resolutions of meetings of the
Board and financial and accounting reports, and to review the Company’s
accounting books and accounting documents (for shareholders who meet the
requirements);
(vi) to participate in the distribution of remaining assets of the Company corresponding
to the number of shares held in the event of the termination or liquidation of the
Company;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-4 –


--- page 538 ---
(vii) to demand the Company to acquire the shares held by them with respect to
shareholders voting against any resolution adopted at the shareholders’ meeting on
the merger or division of the Company;
(viii) other rights conferred by laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the Company’s Shares are listed or the
Articles of Association.
When a shareholder makes a request to inspect and copy the materials of the Company,
he/she shall comply with the Company Law, the Securities Law and other laws and
administrative regulation. A shareholder shall present the proof of the class of the shares of the
Company held by him/her and the number of shareholding in writing. shareholders shall
inspect and copy according to the Company’s designated method after verifying the
shareholder’s identity and signing a confidentiality commitment.
The shareholders are entitled to ask the people’s court to invalidate the resolutions of the
shareholders’ meeting or the meetings of the Board of Directors, which violate laws and
administrative regulations.
The shareholders are entitled to ask the people’s court to cancel the relevant resolution
within 60 days after the resolution is made if the convening procedure, and voting method of
the shareholders’ meeting or the meetings of the Board violate laws, administrative regulations
or the Articles of Association, or the resolution content breaches the Articles of Association.
A resolution of the shareholders’ meeting or Board meeting of the Company shall not be
valid under any of the following circumstances: (i) no shareholders’ meeting or Board meeting
has been convened to pass the resolution; (ii) the resolution is not voted on at the shareholders’
meeting or Board meeting; (iii) the number of persons attending the meeting or the number of
voting rights held by them does not reach the number of persons or the number of voting rights
held as stipulated in the Company Law or the Articles of Association; (iv) the number of
persons or the number of voting rights held by them voting for the resolution does not reach
the number of persons or the number of voting rights held as stipulated in the Company Law
or the Articles of Association.
If Directors and senior management personnel (other than the members of the Audit
Committee) cause losses to the Company for violation of the requirements of laws,
administrative regulations or the Articles of Association during the performance of their duties,
shareholders who hold more than 1%, individually or jointly, of the Company’s Shares for more
than 180 days continuously, have the right to request the Audit Committee in written form to
bring a suit to the People’s Court; if members of the Audit Committee cause losses to the
Company for violation of the requirements of laws, administrative regulations, the securities
regulatory rules of the place where the Company’s Shares are listed or the Articles of
Association during the performance of their duties, the aforesaid shareholders can request the
Board in written form to file a suit in the People’s Court.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-5 –


--- page 539 ---
Where the Audit Committee or the Board refuses to file lawsuits after receiving the
written requests from shareholders as specified in the preceding paragraph, or fails to file
lawsuits within 30 days from the date of receiving the requests, or in urgent circumstances
where failure to immediately file lawsuits would cause irreparable damage to the Company’s
interests, the shareholders specified in the preceding paragraph have the right to directly file
lawsuits with the people’s court in their own name for the Company’s benefit.
If others infringe on the legitimate rights and interests of the Company and cause losses
to it, shareholders who hold more than 1%, individually or jointly, of the Company’s Shares
for more than 180 days continuously can bring a suit to the People’s Court as per the
regulations as set out in the preceding paragraphs.
If Directors and senior management personnel cause damage to the shareholders’ interests
for violation of the requirements of laws, administrative regulations or the Articles of
Association, shareholders can bring a suit to the People’s Court.
Shareholders of the Company shall have the following obligations:
(i) to abide by laws, administrative regulations and the Articles of Association;
(ii) to pay for the shares based on the shares subscribed for and the manners in which
they became shareholder;
(iii) not to withdraw their paid share capital except in the circumstances allowed by laws
and regulations;
(iv) not to abuse shareholder’s rights and harm the interest of the Company or other
shareholders; not to abuse the independent legal person status of the Company and
the limited liability of the shareholders to impair the interests of creditors of the
Company;
(v) other obligations imposed by laws, administrative regulations, and the Articles of
Association.
Where the shareholder’s abuse of its power causes damage to the Company and other
shareholders, they shall be liable to compensation in accordance with the laws. Where the
shareholder has abused the Company’s independent legal person status and shareholder’s
limited liability for debt evasion and caused serious damage to the creditor’s interests, it shall
bear joint liability for the debts of the Company.
The controlling shareholders and actual controllers of the Company shall exercise their
rights and fulfil their obligations in accordance with laws, administrative regulations, the
regulations of the CSRC and stock exchanges to safeguard the interests of the Company.
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--- page 540 ---
The controlling shareholders and actual controllers of the Company shall exercise their
rights as shareholders in accordance with the law and not to abuse their control or use their
related (connected) relationship to prejudice the legitimate interests of the Company or other
shareholders.
General Requirement of Shareholders’ Meetings
The shareholders’ meeting of the Company is composed of all shareholders. The
shareholders’ meeting is the organ of the authority of the Company, which exercises its
functions and powers in accordance with laws:
(i) to elect and replace Directors who are not representatives of the employees, and
decide on matters concerning Directors’ remuneration;
(ii) to consider and approve reports of the Board;
(iii) to consider and approve the profit distribution plan and loss recovery plan of the
Company;
(iv) to determine the increase or decrease of the registered capital of the Company;
(v) to determine the issuance of corporate bonds by the Company;
(vi) to determine matters such as the merger, division, dissolution, liquidation or change
of corporate form of the Company;
(vii) to amend the Articles of Association;
(viii) to determine the appointment and removal of an auditor engaged in the audit work
of the Company;
(ix) to consider and approve the external guarantees that require approval by the
shareholders’ meeting under the Articles of Association;
(x) to consider and approve any transaction or matter that the Company shall submit to
the Shareholders’ meeting for consideration under the Hong Kong Listing Rules
(including but not limited to Chapter 14 and Chapter 14A);
(xi) to consider matters relating to the purchases and disposals of material assets, which
are more than 30% of the latest audited total assets of the Company, within one year;
(xii) to consider and approve any change of the use of proceeds raised;
(xiii) to consider share incentive scheme and the employee stock ownership plans;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-7 –


--- page 541 ---
(xiv) to consider such other matters which shall be resolved at shareholders’ meeting as
required by laws, regulations, the securities regulatory rules of the place where the
Company’s Shares are listed and the Articles of Association.
Shareholders’ meetings shall be divided into annual general meetings and extraordinary
general meetings. Annual general meetings are held once every year and within 6 months from
the end of the preceding accounting year.
The shareholders’ meeting may authorize the Board to resolve on the issue of corporate
bonds.
Subject to a resolution of the shareholders’ meeting or a resolution of the Board
authorized by the Articles of Association or the shareholders’ meeting, the Company may issue
shares or convertible corporate bonds, provided that such issuance shall comply with the laws,
administrative regulations, the regulations of the CSRC and stock exchanges.
The Company shall convene an extraordinary general meeting within 2 months after the
occurrence of any one of the following circumstances:
(i) where the number of Directors is less than the number provided for in the Company
Law or is less than two-thirds of the number required by the Articles of Association;
(ii) where the unrecovered losses of the Company amount to one-third of its total share
capital;
(iii) when Shareholders who individually or jointly hold more than 10% of the
Company’s Shares request to do so;
(iv) where the Board considers it necessary;
(v) where the Audit Committee proposes to call for such a meeting;
(vi) other circumstances stipulated by laws, administrative regulations, departmental
rules, the securities regulatory rules of the place where the Company’s Shares are
listed and the Articles of Association.
In the case of (iii) above, the number of shares held shall be calculated based on the date
on which the shareholders submit the written request.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-8 –


--- page 542 ---
Convening of Shareholders’ Meetings
The Board shall timely convene a shareholders’ meeting within the timeframe as required.
With the approval by a majority of all independent Directors, an independent Director has
the right to propose to the Board to convene an extraordinary general meeting. In respect to the
proposal by the independent Director for convening an extraordinary general meeting, the
Board shall, in accordance with laws, administrative regulations, departmental rules, and the
Articles of Association, furnish a written reply stating its agreement or disagreement to such
proposal for convening an extraordinary general meeting within 10 days upon receipt of such
proposal. Where the Board agrees to convene an extraordinary general meeting, a notice for
convening such meeting shall be given within 5 days after the Board resolution is passed;
where the Board disagrees to convene an extraordinary general meeting, it shall give its reasons
and make an announcement.
The Audit Committee shall propose in writing the Board to convene an extraordinary
general meeting. The Board shall, in accordance with laws, administrative regulations, and the
Articles of Association, furnish a written reply stating its agreement or disagreement to such
proposal for convening an extraordinary general meeting within 10 days upon receipt of such
proposal.
In the event that the Board agrees to convene an extraordinary general meeting, a notice
for convening such meeting shall be given within five days after the relevant Board resolution
is passed and consent of the Audit Committee shall be obtained in case of any changes to the
original proposal in the notice. In the event that the Board disagrees to convene an
extraordinary general meeting or does not furnish any reply within 10 days after having
received such proposal, the Board is deemed to be unable or fails to perform the duty of
convening a general meeting, in which case the Audit Committee may convene and preside
over such meeting by itself.
Any shareholder(s) individually or jointly holding more than 10% of the Shares of the
Company shall request in writing the Board to convene an extraordinary general meeting. The
Board shall, in accordance with laws, administrative regulations, and the Articles of
Association, furnish a written reply to such shareholder(s) stating its agreement or
disagreement to the convening of the extraordinary general meeting within 10 days after having
received such requisition.
In the event that the Board agrees to convene an extraordinary general meeting, a notice
for convening such a meeting shall be given within 5 days after the relevant Board resolution
is passed and consent of the relevant shareholder(s) shall be obtained in case of any changes
to the original requisition in the notice. In the event that the Board disagrees to convene an
extraordinary general meeting or does not furnish any reply within 10 days after having
received such requisition, Shareholder(s) individually or jointly holding more than 10% of the
Shares of the Company shall propose in writing the Audit Committee to convene the
extraordinary general meeting.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-9 –


--- page 543 ---
In the event that the Audit Committee agrees to convene an extraordinary general
meeting, a notice for convening such a meeting shall be given within 5 days after having
received such requisition and consent of the relevant shareholder(s) shall be obtained in case
of any changes to the original requisition in the notice. In the event that the Audit Committee
fails to serve any notice of an extraordinary general meeting within the prescribed period, the
Audit Committee is deemed not to convene and preside over such meeting, in which case the
shareholder(s) individually or jointly holding more than 10% of the shares of the Company for
more than 90 consecutive days may convene and preside over such a meeting by
himself/themselves.
If the Audit Committee or Shareholders decide to convene the shareholders’ meeting by
themselves, the Board of Directors shall be informed in writing, and at the same time, it shall
be filed with the Shanghai Stock Exchange. The Audit Committee or the convening
shareholders shall submit relevant supporting materials to the Shanghai Stock Exchange upon
the issuance of the notice of the shareholders’ meeting and the announcement of the resolutions
of the shareholders’ meeting.
The shareholding of the convening shareholders shall not be less than 10% before making
an announcement of the resolutions of the shareholders’ meeting.
Proposals and Notices of Shareholders’ Meetings
The content of the proposals shall be within the scope of the terms of reference of the
shareholders’ meeting, have clear subjects and specific resolutions, and shall comply with the
relevant requirements of the laws, administrative regulations, departmental rules and the
Articles of Association.
When the Company convenes a shareholders’ meeting, the Board and the Audit
Committee, shareholders individually or jointly holding more than 1% of the Shares of the
Company shall have the right to put forward proposals to the Company.
Shareholder(s) individually or jointly holding more than 1% of the Shares of the
Company may submit written provisional proposals to the convener 10 days before the
shareholders’ meeting is convened. The convener shall serve a supplemental notice of the
shareholders’ meeting within two days after receipt of the proposals and announce the contents
of the said provisional proposals, and submit the provisional proposals to the shareholders’
meeting for consideration. However, provisional proposals that violate laws, administrative
regulations, or the Articles of Association, or that do not fall within the scope of authority of
the shareholders’ meeting, shall be excluded.
Save as specified in the preceding paragraph, the convener shall not change the proposals
set out in the notice of the shareholders’ meeting or add any new proposal after the said notice
is served. The shareholders’ meeting shall not vote or make resolutions on proposals not listed
in the shareholders’ meeting notice or proposals that do not satisfy the criteria prescribed in the
Articles of Association.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-10 –


--- page 544 ---
The convener shall inform all shareholders in the form of an announcement within 20
days before the annual general meeting is convened. The convener shall inform all shareholders
in the form of an announcement within 15 days before the extraordinary general meeting is
convened.
A notice of the shareholders’ meeting shall include:
(i) the time, venue, and duration of the meeting;
(ii) the matters and proposals to be put forward for consideration at the meeting;
(iii) a conspicuous statement that all shareholders are entitled to attend the shareholders’
meeting, and the shareholder may appoint proxy(ies) in writing to attend and vote,
and that such proxy(ies) need not be a shareholder(s) of the Company;
(iv) the record date for determining the shareholders who are entitled to attend the
shareholders’ meeting;
(v) names and telephone numbers of the standing contact persons who handle the
meeting affairs;
(vi) online or other voting time and voting procedure.
Any notice and supplementary notice of shareholders’ meetings shall sufficiently and
completely disclose all contents of all proposals and all such information or explanation as are
necessary for the shareholders to make an informed judgment on the matters to be discussed
in full.
Online voting or voting by other means shall commence no earlier than 3:00 p.m. on the
date preceding the convening of a physical shareholders’ meeting and shall not be later than
9:30 a.m. on the date of convening the physical shareholders’ meeting. Its conclusion time shall
not be earlier than 3:00 p.m. on the date of the conclusion of the physical shareholders’
meeting.
The interval between the record date and the date of the meeting shall not be more than
seven working days. The record date shall not be changed once confirmed.
After the notice of the shareholders’ meeting is issued, the shareholders’ meeting shall not
be postponed or cancelled without a proper reason, and the proposals stated in the notice of the
shareholders’ meeting shall not be cancelled. In the case of any postponement or cancellation
of the meeting, the convener shall make a public announcement stating the reasons therefor at
least 2 business days prior to the date originally scheduled for the meeting. Where the
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-11 –


--- page 545 ---
securities regulatory rules of the place where the Shares of the Company are listed provide
otherwise in respect of the procedures for adjournment or cancellation of a shareholders’
meeting, such provisions shall apply to the extent that they do not contravene the regulatory
requirements of the territory.
Conducting of Shareholders’ Meetings
The Board of the Company and other conveners shall take necessary measures to maintain
the normal order of the shareholders’ meeting. They shall adopt measures to stop any acts from
interfering with the shareholders’ meeting, creating quarrels and nuisance and infringing the
lawful interests of the shareholders and timely report such acts to the relevant authorities for
investigation.
All shareholders registered on the record date or their proxies shall be entitled to attend
a shareholders’ meeting, and shall speak and exercise their voting rights in accordance with
relevant laws and regulations and the Articles of Association at the meeting, unless individual
shareholders are required to waive their voting rights on certain matters under the securities
regulatory rules of the places where the Company’s Shares are listed.
Shareholders may attend a shareholders’ meeting in person or entrust a proxy to attend
and vote on their behalf. A proxy does not need to be a shareholder of the Company.
Shareholders shall be entitled to speak and vote at a shareholders’ meeting, unless individual
shareholders are required to waive their voting rights on certain matters under applicable laws,
administrative regulations, departmental rules, normative documents, the securities regulatory
rules of the places where the Company’s Shares are listed.
If a shareholders’ meeting requires the attendance of directors or senior management, the
directors or senior management shall do so and answer shareholders’ inquiries. Under the
premise of complying with the securities regulatory rules of the place where the Company’s
shares are listed, the above-mentioned persons may be present at the meeting through the
Internet, video, telephone or other means with the same effect.
A shareholders’ meeting shall be presided over by the chairman of the Board. A
Shareholders’ meeting convened by the Audit Committee on his/her own shall be presided over
by the convener of the Audit Committee. In the event that the convener of the Audit Committee
is unable to or fails to perform his/her duties, a member of the Audit Committee jointly elected
by more than half of the members of the Audit Committee of the Company shall preside over
the meeting. A Shareholders’ meeting convened by Shareholders on their own shall be presided
over by the representative nominated by the convener.
If a shareholders’ meeting requires the attendance of Directors or senior management, the
Directors or senior management shall do so and answer shareholders’ inquiries.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-12 –


--- page 546 ---
The Company shall formulate rules of procedure for the shareholders’ meeting, and
specify the convening, holding and voting procedures of the shareholders’ meeting, including
notice, registration, consideration of proposals, voting, counting of votes, announcement of
voting results, formation of resolutions of the meeting, minutes of the meeting and its signing
and announcement thereof, as well as the principle of authorization of the shareholders’
meeting to the Board. The content of the authorization shall be clear and specific. The rules of
procedure for the shareholders’ meeting shall be annexed to the Articles of Association and
shall be prepared by the Board and approved by the shareholders’ meeting.
Voting and Resolutions of Shareholders’ Meetings
Shares held by the Company do not carry voting rights and shall not be counted in the
total number of voting shares represented by shareholders present at a shareholders’ meeting.
Where any shareholder is required to abstain from voting on any particular resolution or
is restricted to voting only for (or only against) any resolution in accordance with applicable
laws and regulations and the Hong Kong Listing Rules, any vote cast by a shareholder (or
his/her proxy) in contravention of such requirement or restriction shall not be counted towards
the total number of shares with voting rights.
The Board, independent Directors and shareholders holding more than 1% of the shares
with voting rights or investor protection agencies established in accordance with laws,
administrative regulations or the regulations of the CSRC may solicit shareholders’ voting
rights. The solicitation of shareholders’ voting rights shall provide full disclosure of
information, such as specific voting intentions, to the shareholders from whom voting rights
are being solicited. The solicitation of shareholders’ voting rights by way of compensation or
disguised compensation is prohibited. Except for statutory conditions, the Company shall not
impose minimum shareholding restrictions on the solicitation of voting rights.
Resolutions of shareholders’ meetings are in the form of ordinary resolutions and special
resolutions. An ordinary resolution of a shareholders’ meeting shall be passed with the approval
of over half of the voting rights held by all the shareholders (including their proxies) attending
the meeting. A special resolution of a shareholders’ meeting shall be passed with the approval
of more than two-thirds of the voting rights held by all the shareholders (including their
proxies) attending the meeting.
The following matters shall be adopted by way of ordinary resolutions at shareholders’
meetings:
(i) work reports of the Board;
(ii) profit distribution plans and loss recovery plans prepared by the Board;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-13 –


--- page 547 ---
(iii) appointment and dismissal of the member of the Board, and their remuneration and
the payment thereof;
(iv) other matters other than those required by laws, administrative regulations, the
securities regulatory rules of the places where the Company’s Shares are listed or the
Articles of Association to be adopted by special resolutions.
The following matters shall be adopted by way of special resolutions at shareholders’
meetings:
(i) increase or reduction in the registered capital of the Company;
(ii) the division, spin-off, merger, dissolution and liquidation of the Company;
(iii) amendments to the Articles of Association;
(iv) purchase or disposal of material assets or any provision of guarantee to others by the
Company within one year of a value exceeding 30% of the Company’s latest audited
total assets;
(v) the share incentive schemes;
(vi) any other matters required by laws, administrative regulations, departmental rules,
securities regulatory rules of the places where the Company’s Shares are listed or the
Articles of Association, and matters determined by an ordinary resolution at a
shareholders’ meeting that have a material impact on the Company, and thus are in
need of approval by a special resolution.
When related (connected) transactions are being considered at a shareholders’ meeting,
the related (connected) shareholders shall abstain from voting, and the number of shares
carrying voting rights represented by them shall not be counted in the total number of valid
votes. The announcement of the resolutions of a shareholders’ meeting shall fully disclose the
voting results of non-related (connected) shareholders.
The related (connected) shareholder shall take the initiative to abstain from voting, and
if he/she fails to do so, other shareholders may request him/her to abstain from voting.
When a related (connected) transaction is considered at a shareholders’ meeting, the
presiding officer of the meeting shall announce the name list of the related (connected)
shareholders, stating whether they will participate in the voting. The voting shall be carried out
after announcing the total number of shares of the non-related (connected) parties attending the
meeting with voting rights and the proportion of the total shares of the Company.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-14 –


--- page 548 ---
A list of nominations for the candidates for Directors shall be submitted by way of
proposal at the shareholders’ meeting for voting. When a voting is carried out on the election
of more than two independent Directors at a shareholders’ meeting or sole shareholder and its
concert party are interested in 30% or more of the shares of the Company, the cumulative
voting system shall be adopted. The cumulative voting system mentioned in the preceding
paragraph means that when Directors are being elected at a shareholders’ meeting, each share
has the same voting right as the number of Directors to be elected, and the shareholders’ voting
rights may be used in a concentrated manner. The Board shall inform the shareholders of the
brief biographies and basic information of the candidates for Directors.
If the shareholders’ meeting passes proposals in connection with the distribution of cash
dividends, allotment of new shares, or conversion of capital common reserve fund into share
capital, the Company shall implement detailed plans thereof within two months after the
conclusion of such shareholders’ meeting.
DIRECTORS AND THE BOARD OF DIRECTORS
Directors
The Director of the Company shall be a natural person. A person may not serve as a
Director of the Company if any of the following circumstances apply:
(i) persons who have no or restricted capacity for civil conduct;
(ii) persons who were sentenced to criminal punishment due to corruption, bribery,
embezzlement of property, misappropriation of property or disrupting the socialist
market economic order, or who have been deprived of political rights due to any
criminal offences, where less than five years have lapsed since the expiration of the
execution period, or two years have not elapsed since the expiration of the probation
period for suspended sentence;
(iii) persons who served as a director, factory manager or manager of a company or an
enterprise that was declared insolvent and liquidated and were personally liable for
the insolvency of such company or enterprise, and less than three years have lapsed
since the date of completion of the insolvency and liquidation of that company or
enterprise;
(iv) persons who served as the legal representative of a company or an enterprise of
which the business license was revoked and was ordered to close down due to
violation of laws and who was personally liable for such revocation and order, where
less than three years have lapsed since the date of the revocation of the business
license of that company or enterprise or being ordered to close down;
(v) persons who are listed as dishonest persons subject to enforcement by the People’s
Court for being liable for a substantial amount of personal debts due and unsettled;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-15 –


--- page 549 ---
(vi) persons who are penalized by CSRC, other competent regulatory agencies and stock
exchanges to be prohibited from participating in the securities markets with a period
yet to expire;
(vii) persons who have been publicly declared by the stock exchanges to be unsuitable for
serving as the directors and senior management of any listed company with a period
yet to be expired;
(viii) other circumstances stipulated in laws, administrative regulations, the securities
regulatory rules of the place where the Shares of the Company are listed or
departmental rules.
If the election or appointment of a Director has violated this article, such election,
appointment, or employment shall be invalid. If any of the circumstances under this article
occurs during the period of employment of a Director, the Company shall dismiss the Director
from his/her duties and cease his/her duties.
Directors shall be elected or replaced by the shareholders’ meeting, and each office term
of Directors shall be three years. The office term of Directors shall be renewable by re-election
and re-appointment upon expiration of their terms, and Directors shall be removed from office
prior to the expiry of his term of office by a shareholders’ meeting on the premise of not
violating laws, administrative regulations, departmental rules and securities regulatory rules of
the place where the Company’s Shares are listed.
A Director’s term of service commences from the date he/she takes office until the current
term of service of the Board ends. If a Director’s term of service expires but a new Director
is not elected in a timely manner, the original Director shall continue to carry out the Director’s
duties according to laws, administrative regulations, departmental rules, securities regulatory
rules of the place where the Company’s Shares are listed and the Articles of Association until
the newly elected Director takes office.
A Director’s post may be assumed by a senior management member, but the sum of the
total number of Directors who also assume the duties of the senior management member and
are employee representatives shall not exceed one-half of the total number of Directors of the
Company.
The Board shall include an employee representative. Employee representatives in the
Board shall be elected by the Company’s employees through an employee representative
assembly, an employee assembly, or other democratic means, without the need for
shareholder’s meeting review.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-16 –


--- page 550 ---
The Directors shall comply with laws, administrative regulations, securities regulatory
rules of the place where the Company’s Shares are listed and the Articles of Association and
shall faithfully perform their obligations to the Company. The Directors shall take measures to
avoid conflicts between their own interests and the Company’s interests, and must not abuse
their authority to seek improper benefits. The Directors shall fulfill the following fiduciary
obligations towards the Company:
(i) not to misappropriate the properties of the Company and embezzle funds of the
Company;
(ii) not to deposit any assets or money of the Company in any accounts under their
names or in the names of other persons;
(iii) not to abuse their rights to accept bribes or other illegal income;
(iv) not to enter into any contract or perform any transaction, directly and indirectly,
with the Company without reporting to the Board or the shareholders’ meeting and
obtaining approval through resolutions by the Board or the shareholders’ meeting as
stipulated in the Articles of Association;
(v) not to use their position to obtain business opportunities which should be available
to the Company for themselves or others, unless having reported to the Board or the
shareholders’ meeting and approved by a resolution of the shareholders’ meeting, or
except that the Company is unable to utilize such business opportunity according to
the provisions of laws, administrative regulations, or the Articles of Association;
(vi) not to conduct any businesses similar to those of the Company for themselves or
others without reporting to the Board or the shareholders’ meeting and obtaining
approval through resolutions by the shareholders’ meeting;
(vii) not to accept commissions from transactions between any third party and the
Company for their own benefit;
(viii) not to use their related (connected) relationship to harm the interests of the
Company;
(ix) not to disclose the secrets of the Company without consent;
(x) to be bound by other obligations stipulated by laws, administrative regulations,
departmental rules and the Articles of Association.
The Company shall be entitled to the income gained by the Directors in violation of the
above article; the Director shall be liable for compensation if any loss is caused to the
Company.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-17 –


--- page 551 ---
The provisions of the item (iv) shall apply to the conclusion of contracts or engagement
in transactions with the Company by close relatives of the Directors and senior management
or enterprises directly or indirectly controlled by the Directors and senior management or their
close relatives, as well as persons who are otherwise related (connected) to the Directors and
senior management.
The Directors shall comply with laws, administrative regulations, securities regulatory
rules of the place where the Company’s Shares are listed and the Articles of Association to
perform their obligations of diligence to the Company. They shall fulfill their obligations with
reasonable care generally expected of managers in the best interests of the Company. The
Directors shall diligently perform their following obligations to the Company:
(i) to exercise prudently, conscientiously and diligently the rights granted by the
Company to ensure that the Company’s commercial activities are in compliance with
laws, administrative regulations and the requirements of economic policies of China
and that its commercial activities are within the scope stipulated in the business
license;
(ii) to treat all shareholders equally and fairly;
(iii) to understand the operation and management of the Company in a timely manner;
(iv) to approve the regular reports of the Company in written form and to ensure the
integrity, accuracy and completeness of the information disclosed by the Company;
(v) to provide all relevant information and materials required by the Audit Committee
truthfully, accept the lawful supervision and rational suggestions of the Audit
Committee on their performance of duties and shall not intervene in the performance
of the Audit Committee of its duties;
(vi) to perform other obligations of diligence stipulated by laws, administrative
regulations, departmental rules, securities regulatory rules of the place where the
Company’s Shares are listed and the Articles of Association.
A Director who fails to attend two consecutive meetings of the Board in person or by
proxy shall be deemed unable to perform his/her duties. The Board shall propose to the
shareholders’ meeting for removal of such Director.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-18 –


--- page 552 ---
A Director may resign before the expiry of his/her term of service. When a Director
resigns, he/she shall submit a written resignation notice to the Company. The resignation will
take effect on the day the Company receives the resignation report and the Company shall make
disclosure of relevant information within two trading days. In the event that the resignation of
any Director during his/her term of office results in the number of members of the Board being
less than the statutory minimum requirement, the composition of the Board or its special
committees fail to comply with laws and regulations, the securities regulatory rules of the place
where the Company’s Shares are listed or the provisions of the Articles of Association as a
result of the resignation of independent Directors, or the remaining independent Directors
cannot continue to comply with the relevant provisions of the securities regulatory rules of the
place where the Company’s shares are listed, before the newly elected Director takes office, the
former Director shall still perform his/her duties as a Director in accordance with laws,
administrative regulations, departmental rules and the Articles of Association.
The Company has a system in place to manage the departure of Directors, which specifies
safeguards for pursuing and recovering liability for unfulfilled public commitments and other
outstanding matters. When a Director’s resignation takes effect or his/her term of office
expires, he/she shall duly complete all handover procedures with the Board. His/her duties of
loyalty towards the Company and shareholders shall not necessarily cease after the termination
of tenure and remain valid for the reasonable period under the Articles of Association. His/her
obligation to keep trade secrets of the Company confidential shall remain effective after the
expiry of his/her term of office until such secrets become public information. The period that
other duties shall continue shall be determined according to the principle of fairness, and
depending on the length of time lapsed between the event occurred and the termination as well
as the circumstances and terms under which his/her relationships with the Company have been
terminated. The responsibilities that Directors shall bear during their tenure due to the
performance of their duties shall not be waived or terminated upon resignation.
The shareholders’ meeting may remove any Director by a resolution, which shall come
into effect from the date on which such resolution is made.
Where a Director is removed from office prior to expiration of his/her term of office
without justifiable cause, the Director may demand compensation from the Company.
Duties of independent Directors shall be implemented in accordance with the
requirements of laws, administrative regulations, securities regulatory rules of the place where
the Company’s Shares are listed and departmental rules.
Board of Directors
The Company shall have the Board. The Board shall consist of 13 Directors. Five of the
Directors are independent Directors. The Board shall have at least 3 independent Directors,
accounting for at least one-third of the Board. The Board shall have a chairman and may
appoint vice-chairman. The chairman and vice chairman of the Board shall be elected by a
simple majority of votes of all Directors.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-19 –


--- page 553 ---
The Board of Directors shall perform the following duties:
(i) to convene shareholders’ meetings and to report to shareholders’ meetings;
(ii) to implement the resolutions of shareholders’ meetings;
(iii) to determine 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 proposals of the Company regarding increase or reduction of the
registered capital, issuance of bonds or other securities and listing;
(vi) to formulate plans for any substantial acquisition or purchase of the Shares of the
Company or plans for merger, division, dissolutions and change of its corporate
form;
(vii) to decide on matters relating to the Company’s external investment, acquisitions or
disposal of assets, mortgage of assets, external guarantee, entrusted wealth
management, related (connected) transactions and external donations as authorized
by shareholders’ meetings;
(viii) to decide on the establishment of the Company’s internal management structure;
(ix) to appoint or dismiss the Company’s president, secretary to the Board of Directors
and to determine their remuneration and rewards and penalties; based on the
nominations of the president, to appoint or dismiss the chief operating officer
(COO), chief technology officer (CTO), vice president, chief financial officer of the
Company and other senior management of the Company and to determine their
remuneration and rewards and penalties;
(x) to formulate the basic management system of the Company;
(xi) to formulate proposals for any amendments to the Articles of Association;
(xii) to manage the disclosure of information of the Company;
(xiii) to propose to shareholders’ meetings the appointment or change of the accounting
firm acting as the auditor of the Company;
(xiv) to hear the work report of the Company’s president and to review the work thereof;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-20 –


--- page 554 ---
(xv) any other powers as conferred by laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s Shares are listed
or the Articles of Association and shareholders’ meetings.
The Board of Directors of the Company may establish the Strategy committee, Audit
committee, Nomination committee, Remuneration and Appraisal committee and Environment,
Society and Governance (ESG) Committee. Special committees are responsible to the Board of
Directors and perform their duties in accordance with the Articles of Association and the
authorization of the Board of Directors.
The Board of Directors shall formulate the rules of procedures of the Board of Directors
to ensure the implementation of resolutions of shareholders’ meeting, increased working
efficiency and scientific decision-making. The Rules of Procedure for the Board of Directors
are prepared by the Board of Directors and adopted by shareholders’ meetings as an annex to
the Articles of Association. Matters beyond the scope authorized by the shareholders’ meeting
shall be submitted to the shareholders’ meeting for consideration.
At least four regular Board meetings shall be convened each year on a quarterly basis.
Board meetings shall be convened by the chairman of the Board of Directors. All Directors
shall be notified in writing within 14 days before the meeting.
Any shareholder holding at least one tenth voting rights, at least one third of the
Directors, the Audit Committee, or the chairman of the Board, may propose the holding of an
interim meeting of the Board as it deem necessary. The chairman shall convene and preside
over the interim meeting of the Board within 10 days upon receipt of the proposal.
The related (connected) relationship with the enterprise or individual involved in the
resolution of the Board meeting, the said Director shall promptly report the situation in writing
to the Board. The related (connected) Director shall not exercise the right to vote on the
resolution, nor shall he exercise the right to vote on behalf of other Directors. The Board
meeting can be held with the attendance of more than half of the unrelated (unconnected)
Directors, and the resolution made at the Board meeting must be passed by more than half of
the unrelated (unconnected) Directors.
The Board of Directors shall include one chairman of the Board of Directors and one vice
chairman of the Board of Directors. The chairman of the Board of Directors and the vice
chairman of the Board of Directors shall be elected by more than half of all the Directors.
The chairman shall exercise the following functions and powers:
(i) to preside over the shareholders’ meetings and to convene and preside over the
Board meetings;
(ii) to supervise and examine the implementation of the resolutions of the Board of
Directors;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-21 –


--- page 555 ---
(iii) to exercise the functions and powers as a legal representative;
(iv) to sign the share certificates, corporate bonds and other marketable securities of the
Company;
(v) to sign the important documents of the Board of Directors and other documents
which shall be signed by the legal representative of the Company;
(vi) in the event of emergency situations such as the occurrence of large-scale natural
disasters, to take special steps in handling the Company’s business according to laws
and the Company’s interest, and to report to the Board of Directors of the Company
and the shareholders’ meetings afterwards; and
(vii) other powers and duties authorized by the Board of Directors.
Secretary to the Board
The Company shall have a secretary to the Board. The secretary to the Board is a senior
management member of the Company, who is responsible to the Board.
The secretary to the Board is responsible for the preparation of shareholders’ meetings
and Board meetings of the Company, retention of documentation as well as the management
of shareholders’ information, handling matters relating to information disclosure and other
matters. The secretary to the Board shall comply with laws, administrative regulations,
departmental rules and the Articles of Association.
The secretary to the Board shall be nominated by the Chairman of the Board and shall be
appointed or dismissed by the Board.
Senior Management
The Company shall have one president and certain senior management, whose
appointment or dismissal shall be decided by the Board. The term of office of the president
shall be 3 years, renewable upon re-appointment.
The president, who shall be accountable to the Board, may exercise his/her functions and
powers:
(i) to manage the operation and administration of the Company, arrange for the
implementation of the resolutions of the Board, and report to the Board;
(ii) to arrange for the implementation of the Company’s annual operation plans and
investment proposals;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-22 –


--- page 556 ---
(iii) to formulate proposals for the establishment of the Company’s internal management
organs;
(iv) to formulate the fundamental management system of the Company;
(v) to formulate the specific rules and regulations of the Company;
(vi) to recommend the Board to appoint or dismiss senior management of the Company
other than the secretary to the Board;
(vii) to appoint or dismiss management personnel (other than those who shall be
appointed or dismissed by the Board);
(viii) to formulate the salary, benefits, rewards and penalties, and to decide on the
appointment and dismissal of employees of the Company;
(ix) to exercise any other functions and powers conferred by the Articles of Association
or the Board.
The president shall be present at meetings of the Board.
The chief operating officer (COO), chief technology officer (CTO), vice president and
chief financial officer of the Company are nominated by the president and appointed by the
Board of Directors. The chief operating officer (COO), chief technology officer (CTO), vice
president and chief financial officer are responsible and report to the president and perform
related duties according to the assigned work.
FINANCIAL AND ACCOUNTING SYSTEM, PROFIT DISTRIBUTION AND AUDIT
Financial and Accounting System
The Company shall establish its financial and accounting systems in accordance with
laws, administrative regulations, the requirements of the relevant departments of the State and
the securities regulatory rules of the place where the Company’s Shares are listed.
The disclosure of periodic reports of A Shares: The Company shall submit and disclose
its annual reports to the local offices of the CSRC and the Shanghai Stock Exchange within
four months from the ending date of each financial year, and its interim reports to the local
office of the CSRC and the Shanghai Stock Exchange within two months from the ending date
of the first half of each financial year.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-23 –


--- page 557 ---
The disclosure of periodic reports of H Shares: The periodic reports of H Shares of the
Company include annual reports and interim reports. The Company shall disclose its
preliminary announcement on annual results within three months from the ending date of each
financial year, and complete its annual report for disclosure within four months from the
ending date of each financial year and at least 21 days prior to the date of the annual general
meeting. The Company shall disclose its preliminary announcement on interim results within
two months from the ending date of the first six months of each financial year, and complete
its interim report for disclosure within three months from the ending date of the first six months
of each financial year.
The above financial and accounting reports, annual reports, annual results, interim reports
and interim results shall be prepared in accordance with the relevant laws, administrative
regulations, departmental rules, and the requirements of the securities regulatory authorities of
the place where the Company’s Shares are listed and the stock exchange(s).
The Company shall not establish account books other than the statutory account books.
The funds of the Company shall not be deposited in any personal account.
When the Company allocates the after-tax profits for the current year, it shall extract 10%
of the profits into the Company’s statutory reserve fund. Should the accumulated amount of the
Company’s statutory reserve fund be more than 50% of the Company’s registered capital, no
appropriation shall be made.
In the event that the Company’s statutory reserve fund is not sufficient to cover all the
losses for the previous year, the profits for the current year shall be firstly used to cover the
loss before making appropriation to the statutory reserve fund pursuant to the foregoing
provisions.
After the Company has made an appropriation to the statutory reserve fund from the
after-tax profits, an optional reserve fund may also be extracted from the after-tax profits upon
resolution at the shareholders’ meeting.
After making up any losses and contributions to reserves, the remaining after-tax profit
may be distributed to shareholders in proportion to their respective shareholdings, except for
those that are not distributed in proportion to the shareholding percentages as stipulated in the
Articles of Association.
In case the shareholders’ meeting approves to distribute any profit to any shareholder in
violation of the Company Law, the shareholder shall return profits so distributed to the
Company; if losses are caused thereby to the Company, the shareholders, as well as any
Directors and senior managers responsible for the violation, shall be liable for compensation.
When the Company convenes the annual general meeting to review the annual profit
distribution plan, it may consider and approve the conditions, proportion limits and amount
limits of interim cash dividends for the next year. The upper limits of interim cash dividends
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-24 –


--- page 558 ---
for the next year considered by the annual general meeting shall not exceed the net profit
attributable to the Company’s shareholders during the corresponding period. The Board shall
formulate a specific interim dividend plan based on the resolution of the shareholders’ meeting,
subject to the conditions for profit distribution.
The Company may not make profit distribution under any of the following circumstances:
the audit report for the most recent year was either qualified or qualified with a material
uncertainty paragraph relating to going concern; no profit is recorded in the consolidated
financial statements or the financial statements of the parent company for the year; operational
net cash flow in the consolidated financial statements or the financial statements of the parent
company for the year is negative.
The Company shall not be entitled to any distribution of profits in respect of shares held
by it.
Internal Audit
The Company shall implement an internal audit system, which clearly defines the
leadership system, responsibilities and authorities, personnel allocation, funding support,
application of audit results and accountability for internal audit.
The internal audit system of the Company shall be implemented after being approved by
the Board and disclosed to the public.
Appointment of Accounting Firm
The Company shall appointment an accounting firm under the Securities Law to audit its
accounting statements, verify its net assets, and provide other relevant consulting services. The
term of appointment shall be one year, and may be renewed. The Company’s appointment and
dismissal of an accounting firm shall be decided at the shareholders’ meeting. The Board shall
not appoint any accounting firm prior to a decision made by the shareholders’ meeting. The
Company shall ensure its provision to an accounting firm engaged thereby with true and
complete accounting vouchers, accounting books, financial accounting reports and other
accounting materials and may not refuse, conceal and make false reports.
The audit fees of an accounting firm shall be determined at the shareholders’ meeting by
way of an ordinary resolution. Where the Company intends to remove or discontinue the
engagement of an accounting firm, it shall send a twenty-day notice to such accounting firm.
Where the removal of an accounting firm is put to the vote at a shareholders’ meeting of the
Company, such accounting firm shall be allowed to state its opinions.
Where an accounting firm offers to resign, it shall explain to the shareholders’ meeting
whether the Company is involved in any anomaly.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-25 –


--- page 559 ---
NOTICE AND ANNOUNCEMENT
Notices of the Company shall be served by the following means:
(i) by hand;
(ii) by express delivery service;
(iii) by mail;
(iv) by facsimile;
(v) by making announcements on the website of the Company, and the designated
websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange;
(vi) by announcement;
(vii) by other means as required by laws, administrative regulations or other normative
documents, the securities regulatory rules of the place where the Company’s Shares
are listed and the Articles of Association.
In respect of the way in which the Company provides or sends corporate communications
to holders of shares in accordance with the Articles of Association, subject to securities
regulatory rules of the place where the Company’s Shares are listed and the Articles of
Association, the Company may send corporate communications to relevant shareholders
through the websites designated by the Company, and the websites of the Shanghai Stock
Exchange and the Hong Kong Stock Exchange or by any electronic means. Corporate
communications mentioned above shall refer to any documents issued or to be issued by the
Company for the information or action of the Shareholders or such other persons as may be
required under the Hong Kong Listing Rules, including but not limited to the annual reports
(including the report of the Board, the annual accounts of the Company, the auditor’s report and
the summary financial reports, if applicable), the Company’s interim reports and summary
interim reports (if applicable), quarterly reports of the Company, the notice of meetings, listing
documents, circulars, proxy form. Holders of H Shares of the Company shall also choose in
writing to receive printed copies of the aforementioned corporate communications. Shanghai
Securities News, China Securities Journal and other media, and the websites of the Shanghai
Stock Exchange and the Hong Kong Stock Exchange, are designated by the Company to
publish company announcements and other information that needs to be disclosed.
The term “announcement” mentioned in the Articles of Association, unless the context
otherwise requires, in relation to an announcement made to holders of H Shares or made within
Hong Kong as required by relevant regulations and the Articles of Association, such
announcement must be published on the website of the Company and the website of the Hong
Kong Stock Exchange (www.hkexnews.hk) and such other websites as may be prescribed in the
Hong Kong Listing Rules from time to time in accordance with the requirements of the Hong
Kong Listing Rules.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-26 –


--- page 560 ---
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
Where the price paid for a merger does not exceed ten percent of the Company’s net
assets, the merger may be resolved without a shareholders’ meeting, unless otherwise provided
for in the Articles of Association.
Where a merger of companies is not resolved by the shareholders’ meeting in accordance
with the preceding paragraph, it shall be resolved by the Board.
Where there is a merger of the Company, the merging parties shall execute a merger
agreement and prepare a balance sheet and an inventory of assets. The Company shall notify
its creditors within 10 days from the date of the merger resolution and shall publish an
announcement in newspapers as required by the Articles of Association or on the National
Enterprise Credit Information Publicity System and on the website of the Hong Kong Stock
Exchange within 30 days from the date of the merger resolution. The creditors may, within 30
days after receipt of notice or, if the creditors do not receive such notice, within 45 days of the
announcement, demand the Company to repay in full or to provide a guarantee.
At the time of merger, the claims and debts of the merger parties shall be succeeded by
the company which subsists after the merger or the newly-established company.
Where there is a division of the Company, its assets shall be divided accordingly. Where
there is a division of the Company, a balance sheet and inventory of property shall be prepared.
The Company shall notify its creditors within 10 days from the date of the division resolution
and shall publish an announcement in newspapers as required by the Articles of Association or
on the National Enterprise Credit Information Publicity System and on the website of the Hong
Kong Stock Exchange within 30 days from the date of the division resolution. Where securities
regulatory rules of the place where the Company’s Shares are listed provide otherwise, such
rules shall also be satisfied with.
Debts of the Company prior to the division shall be jointly assumed by the surviving
companies after the division unless a written agreement has been entered into by the Company
and its creditors in relation to the repayment of debts before the division.
When the Company reduces its registered capital, it shall prepare a balance sheet and a
property list. The Company shall inform its creditors within 10 days and publish an
announcement in the newspaper as required by the Articles of Association or on the National
Enterprise Credit Information Publicity System and on the website of the Hong Kong Stock
Exchange within 30 days after the resolution approving the reduction of registered capital has
been passed at the shareholders’ meeting. Creditors may within 30 days after receiving the
notice, or within 45 days of the public announcement if no notice has been received, require
the Company to pay its debts or provide guarantees covering the debts.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-27 –


--- page 561 ---
If the Company still incurs losses after making up for the losses in accordance with the
Articles of Association, it may reduce its registered capital to make up for the losses. When
reducing registered capital to make up for losses, the Company shall not distribute to
shareholders, nor shall it exempt shareholders from their obligations to contribute capital or
pay for shares.
After the Company reduces its registered capital to make up for the losses in accordance
with the provisions, it shall not distribute profits until the cumulative amount of the statutory
reserve fund and the discretionary reserve fund reaches 50% of the Company’s registered
capital.
Where an increase in registered capital of the Company is made by means of issue of new
shares, the shareholders do not have any pre-emptive right unless the Articles of Association
provides otherwise or the shareholders’ meeting resolves that the shareholders shall have
pre-emptive right.
The Company shall, in accordance with laws, apply for a change in its registration with
the company registration authority in the event of any change in any particulars in its
registration as a result of any merger or division. Where the Company is dissolved, the
Company shall apply for cancellation of its registration in accordance with laws. Where a new
company is established, the Company shall apply for registration of incorporation in
accordance with laws.
If the Company increases or reduces its registered capital, the Company shall, in
accordance with laws, apply for a change in registration with the company registration
authority.
Dissolution and Liquidation
The Company may be dissolved for the following reasons:
(i) the term of operation stipulated in the Articles of Association has expired or
circumstances for dissolution specified in the Articles of Association arise;
(ii) a resolution on dissolution is passed by shareholders at a shareholders’ meeting;
(iii) dissolution is required due to the merger or division of the Company;
(iv) the business license is revoked or the Company is ordered to close down or be
deregistered according to the law;
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-28 –


--- page 562 ---
(v) where the Company gets into serious trouble in operation and management and its
continuation may cause substantial loss to the interests of shareholders, and no
solution can be found through any other channel, shareholders representing more
than 10% of the voting rights of the Company may request the people’s court to
dissolve the Company.
The Company shall, within ten days of the occurrence of the reason(s) for dissolution
stipulated in the preceding paragraph, publicize the reason(s) for dissolution through the
National Enterprise Credit Information Publicity System.
Under the circumstance of sub-paragraph (i) above, it may continue to exist by amending
the Articles of Association.
Amendments to the Articles of Association pursuant to the preceding paragraph shall be
subject to the approval of shareholders representing more than two-thirds of the voting rights
attending the shareholders’ meeting.
If the Company is dissolved pursuant to sub-paragraphs (i), (ii), (iv) or (v) above, it shall
be liquidated. The Directors shall be the obligors of liquidation of the Company and a
liquidation committee shall be set up for liquidation within 15 days after the circumstances for
dissolution arise. The liquidation committee shall consist of the Directors, unless otherwise
provided in the Articles of Association or the shareholders’ meeting resolves to elect another
person. A liquidation obligor who fails to fulfill its liquidation obligations in a timely manner
and causes losses to the Company or creditors shall be liable for compensation.
The liquidation committee shall exercise the following powers during the liquidation
period:
(i) to notify creditors by notice and announcement;
(ii) to check the Company’s assets and prepare a balance sheet and an inventory of
assets;
(iii) to deal with the outstanding affairs of the Company in relation to liquidation;
(iv) to pay off outstanding taxes as well as taxes arising in the course of liquidation;
(v) to settle claims and debts;
(vi) to allocate the remaining assets of the Company after repayment of debts;
(vii) to represent the Company in civil proceedings.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-29 –


--- page 563 ---
The liquidation committee shall notify the creditors within 10 days from the date of its
establishment and make a public announcement on newspaper(s) or on the National Enterprise
Credit Information Publicity System and the website of the Hong Kong Stock Exchange within
60 days from its establishment. Creditors shall, within 30 days after receipt of the notice, or
for those who do not receive the notice, within 45 days from the date of the announcement,
declare their claims to the liquidation committee.
Creditors shall provide an explanation for the relevant particulars and evidence of the
claims upon declaration of such claims. The liquidation committee shall register the creditors’
claims.
The liquidation committee shall not settle the debts to creditors until the expiry of the
period for declaration of claims.
After liquidating the Company’s assets and preparing a balance sheet and an inventory of
assets, the liquidation committee shall formulate a liquidation plan and submit it to the
shareholders’ meeting or the People’s Court for confirmation.
The remaining properties of the Company, after payment of liquidation expenses, wages,
social insurance premiums and statutory compensation of staff, outstanding taxes and debts of
the Company, shall be distributed according to the shareholding proportion held by
shareholders.
During the liquidation period, the Company shall continue to exist but shall not carry out
any business activities not relating to liquidation. The assets of the Company shall not be
distributed to shareholders before the settlement of debts in accordance with the aforesaid
provisions.
If, after liquidating the Company’s assets and preparing a balance sheet and an inventory
of assets, the liquidation committee discovers that the assets of the Company are insufficient
to repay the debts of the Company in full, it shall apply to the people’s court for a declaration
of insolvency and liquidation according to the law.
Upon acceptance of the insolvency application by the People’s Court, the liquidation
committee shall transfer the liquidation affairs to the insolvency administrator appointed by the
People’s Court.
Upon completion of the liquidation of the Company, the liquidation committee shall
prepare a liquidation report and submit the same to the shareholders’ meeting or the people’s
court for confirmation, and submit the aforesaid documents to the company registration
authority, and apply to cancel the registration of the Company.
The members of the liquidation committee shall perform their liquidation duties and shall
assume the obligations of loyalty and diligence.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-30 –


--- page 564 ---
Where the member of the liquidation committee neglects to perform the liquidation duties
and causes any loss to the Company, he/she shall be liable to make compensation. If losses are
caused to any creditor due to intentional misconduct or gross negligence, such member shall
be liable for compensation.
If the Company is declared insolvent according to laws, the Company shall perform
insolvency liquidation procedures according to the laws relating to insolvency of companies.
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 Company Law, administrative regulations or
securities regulatory rules of the place where the Company’s Shares are listed, the
Articles of Association run counter to the said amendments;
(ii) the Company’s conditions have changed, and such changes are not consistent with
the matters recorded in the Articles of Association;
(iii) the shareholders’ meeting has resolved to amend the Articles of Association.
Where approval from the competent authority is required for the amendments to the
Articles of Association resolved by the shareholders’ meeting, such amendments shall be
submitted to the competent authority for approval. If amendments to the Articles of Association
involve particulars of the Company’s registration, changes shall be made to the registration in
accordance with the laws.
The Board of Directors shall amend the Articles of Association in accordance with the
resolutions of the shareholders’ meeting and the opinion of the relevant competent authorities
on any amendment hereto.
If any amendment to the Articles of Association involves matters required to be disclosed
by laws and regulations, an announcement shall be made pursuant to the regulations.
APPENDIX III SUMMARY OF ARTICLES OF ASSOCIATION
– III-31 –


--- page 565 ---
FURTHER INFORMATION ABOUT OUR COMPANY
Establishment of our Company
Our Company was established as a limited liability company in the PRC on May 11, 2007
and was converted into a joint stock limited company with limited liability on April 29, 2011
under the laws of the PRC. As of the Latest Practicable Date, the issued share capital of our
Company is 1,633,366,086 Shares.
Our Company has established a place of business in Hong Kong at Room 1922, 19/F, Lee
Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong and has been registered as a
non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance on
April 17, 2025. Ms. Ho Wing Tsz Wendy has been appointed as the authorized representatives
in Hong Kong and our agent for the acceptance of service of process in Hong Kong whose
correspondence address is the same as our place of business in Hong Kong.
As we are established in the PRC, our corporate structure and Articles of Association are
subject to the relevant laws and regulations of the PRC. A summary of the relevant provisions
of our Articles of Association is set out in “Summary of Articles of Association” in Appendix
III to this Prospectus. A summary of certain relevant aspects of the laws and regulations of the
PRC is set out in “Regulatory Overview.”
Changes in Share Capital of Our Company
During the fourth quarter of 2023, the share capital of the Company increased as
cumulatively, 2,411,626 shares options were exercised under the 2021 Share Option Incentive
Plan. As of December 31, 2023, the issued share capital of the Company increased to
1,509,782,193 Shares.
On March 27, 2025, the issued share capital of the Company increased to 1,633,366,086
Shares.
Save as disclosed in this section, as of the Latest Practicable Date, there has been no other
alteration in the share capital of our Company within the two years immediately preceding the
date of this Prospectus.
Changes in Share Capital of Our Major Subsidiaries
We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock
Exchange has granted us a waiver from strict compliance with the requirements of paragraph
26 of Appendix D1A to the Listing Rules in relation to the disclosure of information relating
to the changes in the share capital of any member of our Group within the two years
immediately preceding the date of this Prospectus. For details, see “Waivers, Consents and
Exemption — Waivers and Exemption in respect of Particulars of Information of our
Subsidiaries”.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-1 –


--- page 566 ---
The following alterations in the total share capital of our Major Subsidiaries have taken
place within the two years preceding the date of this Prospectus:
The total share capital of Seres Auto increased (i) to RMB9,960,000,000 on September
24, 2024, (ii) to RMB10,083,946,667 on December 29, 2024, (iii) to RMB10,305,280,001 on
March 31, 2025, and (iv) to RMB10,637,279,999 on June 23, 2025.
Save as disclosed in this section, as of the Latest Practicable Date, there have been no
other alterations in the share capital of our Major Subsidiaries within the two years preceding
the date of this Prospectus.
Resolutions of our Shareholders
At the general meeting of our Company held on April 22, 2025, the following resolutions,
among other things, were duly passed:
(a) the issue by our Company of H Shares of nominal value of RMB1.00 each and such
H Shares be listed on the Hong Kong Stock Exchange;
(b) the number of H Shares to be issued before the exercise of the Over-allotment
Option shall not exceed 15% of the enlarged share capital of our Company upon
completion of the Global Offering and granting the Underwriters the Over-allotment
Option of no more than 15% of the above number of H Shares to be issued;
(c) subject to the completion of the Global Offering, the conditional adoption of the
Articles of Association, which shall become effective on the Listing Date; and
(d) authorization of the Board or its authorized individual to handle all matters relating
to, among other things, the Global Offering, the issue and listing of H Shares on the
Hong Kong Stock Exchange.
FURTHER INFORMATION ABOUT OUR BUSINESS
Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
Prospectus that is or may be material:
(a) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Chongqing Industrial Investment Parent Fund Enterprise Partnership
(L.P .) (ΥྫΆุ(Υྫ)) and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Chongqing Industrial
Investment Parent Fund Enterprise Partnership (L.P .) agreed to subscribe for H
Shares at the Offer Price in the aggregate amount of Hong Kong dollars
2,176,752,285;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-2 –


--- page 567 ---
(b) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Huatai Capital Investment Limited, China International Capital
Corporation Hong Kong Securities Limited and Huatai Financial Holdings (Hong
Kong) Limited, pursuant to which Huatai Capital Investment Limited agreed to
subscribe for H Shares at the Offer Price in the aggregate amount of Hong Kong
dollar equivalent of US$50 million and hold such H Shares on a non-discretionary
basis to hedge the over-the-counter swap transaction placed by Shenzhen Lin Y uan
Investment Management Co., Ltd. (ப΂ʮ̡) acting in its
capacity as investment manager for and on behalf of a private investment scheme;
(c) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, GF Fund Management Co., Ltd. (ʮ̡) and China
International Capital Corporation Hong Kong Securities Limited, pursuant to which
GF Fund Management Co., Ltd. agreed to subscribe for H Shares at the Offer Price
in the aggregate amount of Hong Kong dollar equivalent of US$30 million;
(d) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, GF International Investment Management Limited ( ᄿ೯਷ყ༟ପ၍
ʮ̡) and China International Capital Corporation Hong Kong Securities
Limited, pursuant to which GF International Investment Management Limited
agreed to subscribe for H Shares at the Offer Price in the aggregate amount of Hong
Kong dollar equivalent of US$6.3 million;
(e) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, New China Asset Management (Hong Kong) Limited and China
International Capital Corporation Hong Kong Securities Limited, pursuant to which
New China Asset Management (Hong Kong) Limited agreed to subscribe for H
Shares at the Offer Price in the aggregate amount of Hong Kong dollar equivalent
of US$30 million;
(f) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, BESS Broadway Limited and China International Capital Corporation
Hong Kong Securities Limited, pursuant to which BESS Broadway Limited agreed
to subscribe for H Shares at the Offer Price in the aggregate amount of Hong Kong
dollar equivalent of US$30 million;
(g) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Sanhua (Hong Kong) Co Limited and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Sanhua (Hong Kong)
Co Limited agreed to subscribe for H Shares at the Offer Price in the aggregate
amount of Hong Kong dollar equivalent of US$30 million;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-3 –


--- page 568 ---
(h) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Zhongsheng Holdings Company Limited (ʮ̡) and
China International Capital Corporation Hong Kong Securities Limited, pursuant to
which Zhongsheng Holdings Company Limited agreed to subscribe for H Shares at
the Offer Price in the aggregate amount of Hong Kong dollar equivalent of US$30
million;
(i) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Zhink International Pte. Ltd. and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Zhink International
Pte. Ltd. agreed to subscribe for H Shares at the Offer Price in the aggregate amount
of Hong Kong dollar equivalent of US$30 million;
(j) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Gold Wings Holdings Limited and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Gold Wings Holdings
Limited agreed to subscribe for H Shares at the Offer Price in the aggregate amount
of Hong Kong dollar equivalent of US$30 million;
(k) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Honour Goal Investments Limited (ʮ̡) and China
Galaxy International Securities (Hong Kong) Co., Limited, pursuant to which
Honour Goal Investments Limited agreed to subscribe for H Shares at the Offer
Price in the aggregate amount of Hong Kong dollar equivalent of US$30 million;
(l) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Hichain Logistics (Hong Kong) Limited, and China Galaxy
International Securities (Hong Kong) Co., Limited, pursuant to which Hichain
Logistics (Hong Kong) Limited agreed to subscribe for H Shares at the Offer Price
in the aggregate amount of Hong Kong dollar equivalent of US$26 million;
(m) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Schroder Investment Management (Hong Kong) Limited (solely in its
capacity as agent and discretionary investment manager on behalf of certain
underlying funds and/or clients), Schroder Investment Management (Singapore) Ltd
(solely in its capacity as agent and discretionary investment manager on behalf of
certain underlying funds and/or clients) and China International Capital Corporation
Hong Kong Securities Limited, pursuant to which Schroder Investment Management
(Hong Kong) Limited (solely in its capacity as agent and discretionary investment
manager on behalf of certain underlying funds and/or clients) and Schroder
Investment Management (Singapore) Ltd (solely in its capacity as agent and
discretionary investment manager on behalf of certain underlying funds and/or
clients) agreed to subscribe for H Shares at the Offer Price in the aggregate amount
of Hong Kong dollar equivalent of US$24 million;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-4 –


--- page 569 ---
(n) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Mirae Asset Securities Co., Ltd. and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Mirae Asset
Securities Co., Ltd. agreed to subscribe for H Shares at the Offer Price in the
aggregate amount of Hong Kong dollar equivalent of US$20 million;
(o) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, New Alternative Limited and China International Capital Corporation
Hong Kong Securities Limited, pursuant to which New Alternative Limited agreed
to subscribe for H Shares at the Offer Price in the aggregate amount of Hong Kong
dollar equivalent of US$20 million;
(p) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, PSBC Wealth Management Co., Ltd. (ப΂ʮ̡) and
China International Capital Corporation Hong Kong Securities Limited, pursuant to
which PSBC Wealth Management Co., Ltd. agreed to subscribe for H Shares at the
Offer Price in the aggregate amount of Hong Kong dollar equivalent of US$20
million;
(q) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Skyler International Co., Ltd, and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Skyler International
Co., Ltd agreed to subscribe for H Shares at the Offer Price in the aggregate amount
of Hong Kong dollar equivalent of US$20 million;
(r) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Xingyu Automotive Lighting (Hong Kong) Co., Limited (ρԓዱ(࠰
ಥ)ʮ̡), and China International Capital Corporation Hong Kong Securities
Limited, pursuant to which Xingyu Automotive Lighting (Hong Kong) Co., Limited
agreed to subscribe for H Shares at the Offer Price in the aggregate amount of Hong
Kong dollar equivalent of US$20 million;
(s) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, China MeiDong Auto Holdings Limited (ʮ̡)
and China International Capital Corporation Hong Kong Securities Limited,
pursuant to which China MeiDong Auto Holdings Limited agreed to subscribe for H
Shares at the Offer Price in the aggregate amount of Hong Kong dollar equivalent
of US$20 million;
(t) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Ghisallo Fund Master Ltd. and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Ghisallo Fund Master
Ltd. agreed to subscribe for H Shares at the Offer Price in the aggregate amount of
Hong Kong dollar equivalent of US$20 million;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-5 –


--- page 570 ---
(u) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Jump Trading Pacific Pte. Ltd. and China International Capital
Corporation Hong Kong Securities Limited, pursuant to which Jump Trading Pacific
Pte. Ltd. agreed to subscribe for H Shares at the Offer Price in the aggregate amount
of Hong Kong dollar equivalent of US$20 million;
(v) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, Jain Global Master Fund Ltd (acting through its investment manager
Jain Global LLC) and China International Capital Corporation Hong Kong
Securities Limited, pursuant to which Jain Global Master Fund Ltd (acting through
its investment manager Jain Global LLC) agreed to subscribe for H Shares at the
Offer Price in the aggregate amount of Hong Kong dollar equivalent of US$20
million;
(w) the cornerstone investment agreement dated October 23, 2025 entered into among
the Company, China Alpha Fund Management (HK) Limited (acting as Investment
Advisor for and on behalf of China Alpha Multi-Joy V alue Fund) and China
International Capital Corporation Hong Kong Securities Limited, pursuant to which
China Alpha Fund Management (HK) Limited (acting as Investment Advisor for and
on behalf of China Alpha Multi-Joy V alue Fund) agreed to subscribe for H Shares
at the Offer Price in the aggregate amount of Hong Kong dollar equivalent of US$20
million; and
(x) the Hong Kong Underwriting Agreement.
Intellectual Property Rights
As of the Latest Practicable Date, our Group has registered, or has applied for the
registration of the following intellectual property rights which were material to our Group’s
business.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 571 ---
Trademarks
As of the Latest Practicable Date, we have registered the following trademarks which we
consider to be or may be material to our business:
No. Trademark
Registration
number Owner
Place of
registration
Registration
Date (1)
(dd/mm/yyyy)
1.
 73781041 the Company China 21/3/2024
2.
 65985158 the Company China 14/3/2023
3.
 24315379 the Company China 21/5/2018
4.
 27288974 the Company China 14/10/2018
5.
 53557108 Seres Auto China 7/9/2021
6.
 56792388 Seres Auto China 7/1/2022
7.
 56814897 Seres Auto China 7/1/2022
8.
 56780411 Seres Auto China 7/1/2022
9.
 54762058 Seres Auto China 21/10/2021
10.
 78525350 the Company China 7/10/2024
11.
 67275445 the Company China 28/8/2023
12.
 72617367 the Company China 14/1/2024
13.
 9164747 the Company China 7/3/2012
(Registered)
7/3/2022
(Renewed)
14.
 9164765 Seres Hubei China 7/3/2011
(Registered)
7/3/2022
(Renewed)
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 572 ---
No. Trademark
Registration
number Owner
Place of
registration
Registration
Date (1)
(dd/mm/yyyy)
15.
 4807100 the Company China 14/10/2008
(Registered)
14/10/2018
(Renewed)
16.
 4354594 the Company China 28/5/2007
(Registered)
28/5/2017
(Renewed)
17.
 15482516 the Company China 28/1/2016 (2)
18.
 9595324 the Company China 21/8/2012
(Registered)
21/8/2022
(Renewed)
19.
 55178912 the Company China 28/10/2021
20.
 36522206 the Company China 7/12/2019
21.
 12349672 Seres Hubei China 7/9/2024
22.
 66614445 Luzhou
Rongda
Intelligent
Transmission
Limited
Company ( ᖐ
ɽ౽ঐ
ࠢ
ʮ̡)
China 7/2/2023
23.
48772183 the Company China 14/4/2021
Notes:
(1) According to Article 39 and 40 of the Trademark Law of the People’s Republic of China (Revised in
2019) (), a registered trademark shall be valid for 10 years, commencing
from the date of registration. Upon expiry of the validity period of a registered trademark, where the
trademark registrant intends to continue using the trademark, it shall complete renewal formalities
within the 12-month period before the expiry date, and the validity period of each renewal shall be 10
years, commencing from the date following expiry of the preceding validity period of the said
trademark.
(2) As advised by our PRC Legal Advisor, pursuant to the provisions as mentioned in note (1), the Company
may file an application for renewal with the trademark office within 12 months before the expiration
date. The validity period of the renewed trademark shall be 10 years.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 573 ---
Patents
As of the Latest Practicable Date, we had registered the ownership of and/or had the right
to use the following patents which we consider to be or may be material to our business:
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
1. Power converter
for electric
vehicle drive
system (ཥ
ਗԓሿᚨਗӻ
̌ଟᔷ౬
ኜ)
Seres Auto Invention PRC 3/1/2019
2. Inverter module
for electric
vehicle ( ཥਗ
৕ᜊኜ
ᅼ෯)
Seres Auto Invention PRC 23/8/2019
3. Automobile front
trunk and
electric
automobile ( ӛ
Бҽᇌʿ
ཥਗӛԓ)
Seres Auto Invention PRC 18/9/2019
4. Half-bridge
module for
power
converter of
electric vehicle
(ཥਗԓሿ
̌ଟᔷ౬ኜ
̒዗ᅼ෯)
Seres Auto Invention PRC 28/6/2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 574 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
5. V ehicle-mounted
head-up
display control
method and
device, shared
vehicle and
computer
equipment ( ԓ
ٙ
eༀ
ໄe΍Ԯԓ˸
ၑዚண௪)
Seres Auto Invention PRC 10/7/2020
6. Fireproof alarm
method and
system and
electronic
equipment ( ԣ
e
ӻ୕ձཥɿண
௪)
Seres Auto Invention PRC 1/2/2021
7. An energy
recovery
method and
device, storage
medium and
vehicle control
unit ( ɓ၇ঐඎ
eༀ
ໄeπᎷʧሯ
ձ዆ԓછՓኜ)
Seres Auto Invention PRC 30/8/2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 575 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
8. A vehicle range
extender
control method
and device and
vehicle range
extender
control
equipment ( ɓ
၇ԓሿᄣ೻ኜ
eༀ
ໄʿԓሿᄣ೻
ኜછՓண௪)
Seres Auto Invention PRC 27/10/2021
9. Range extender
abnormity
monitoring
method and
device and
electronic
equipment ( ᄣ
೻ኜମ੬္಻
eༀໄձ
ཥɿண௪)
Seres Auto Invention PRC 27/10/2021
10. An automobile
four-wheel
drive control
method and
device ( ɓ၇ӛ
ԓ̬ᚨછՓ˙
ʿༀໄ)
Seres Auto Invention PRC 1/11/2021
11. A parking area
determination
method and
related
equipment ( ɓ
၇৾ԓਜਹᆽ
ᗫ
ண௪)
Seres Auto Invention PRC 9/11/2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 576 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
12. Workshop time
interval
adjusting
method, device
and equipment
(൷ሜ዆
eༀໄձ
ண௪)
Seres Auto Invention PRC 25/11/2021
13. Range extender
control method
and device and
electronic
equipment ( ᄣ
೻ኜછՓ˙
eༀໄձཥ
ɿண௪)
Seres Auto Invention PRC 1/12/2021
14. A generation
method and
device for
displaying
endurance
during
charging and
vehicle control
unit ( ɓ၇̂ཥ
ٙ
eༀ
ໄձ዆ԓછՓ
ኜ)
Seres Auto Invention PRC 23/12/2021
15. Low-wind-
resistance
wheel and
automobile ( ɓ
ԓቃ
ʿӛԓ)
Seres Auto Invention PRC 31/12/2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 577 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
16. An automobile
anti-theft
control method
and device,
automobile and
electronic
equipment ( ɓ
၇ӛԓԣೳછ
eༀ
ໄeӛԓձཥ
ɿண௪)
Seres Auto Invention PRC 10/3/2022
17. A wireless
charging
control method
and device and
vehicle ( ɓ၇
ೌᇞ̂ཥછՓ
eༀໄʿ
ԓሿ)
Seres Auto Invention PRC 11/5/2022
18. An energy
recovery
method,
device,
equipment and
storage
medium ( ɓ၇
ঐඎΫϗ˙
eༀໄeண
௪ʿπᎷʧሯ)
Seres Auto Invention PRC 30/5/2022
19. An automobile
starting control
method, device
and equipment
and storage
medium ( ɓ၇
ӛԓৎӉછՓ
eༀໄe
ண௪ʿπᎷʧ
ሯ)
Seres Auto Invention PRC 30/5/2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 578 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
20. Torque
distribution
method and
device,
equipment and
storage
medium ( ҩॉ
eༀ
ໄeண௪ձπ
Ꮇʧሯ)
Seres Auto Invention PRC 27/6/2022
21. A range extender
control method
and device,
computer
equipment and
storage
medium ( ɓ၇
ٙ
eༀໄe
ၑዚண௪ձ
πᎷʧሯ)
Seres Auto Invention PRC 7/7/2022
22. A vehicle door
control method
and device,
electronic
equipment and
storage
medium ( ɓ၇
છՓ˙
eༀໄeཥ
ɿண௪ʿπᎷ
ʧሯ)
Seres Auto Invention PRC 22/7/2022
23. An engine
control
method, device
and equipment
and storage
medium ( ɓ၇
೯ਗዚછՓ˙
eༀໄeண
௪ʿπᎷʧሯ)
Seres Auto Invention PRC 9/8/2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 579 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
24. Automotive
chassis anti-
collision
mechanism and
electric
automobile ( ԓ
ᆵԣᅜዚ
࿴ʿཥਗӛԓ)
Seres Auto Invention PRC 15/8/2022
25. Power supply
method
without
mechanical key
(ೌዚ૛ᝌਚภ
ج)
Seres Auto Invention PRC 31/10/2022
26. Control method
and system for
optimizing
start and stop
of heat engine
of extended-
range vehicle
type, terminal
and medium
(ۨ
છ
eӻ
୕e୞၌eʧ
ሯ)
Seres Auto Invention PRC 2/2/2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 580 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
27. Extended range
type
automobile
engine
compression
ignition control
optimization
method,
system,
equipment and
medium ( ᄣ೻
ӛԓ೯ਗዚ
ᏀዷછՓᎴʷ
eӻ୕e
ண௪ʿʧሯ)
Seres Auto Invention PRC 2/2/2023
28. An engine
cooling control
method,
system and
equipment and
storage
medium ( ɓ၇
છ
eӻ
୕eண௪ʿπ
Ꮇʧሯ)
Seres Auto Invention PRC 2/2/2023
29. An engine
misfire fault
diagnosis
method and
device, server
side and
storage
medium ( ɓ၇
݂
e
ਕ၌
ʿπᎷʧሯ)
Seres Auto Invention PRC 2/2/2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 581 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
30. Control method
and system for
reducing
vehicle PN
emission,
terminal
equipment and
storage
medium (Э
ԓሿPNٙ׳
eӻ
୕e୞၌ண௪
ʿπᎷʧሯ)
Seres Auto Invention PRC 2/2/2023
31. Electric vehicle
power anti-
theft method
and device and
medium ( ཥਗ
ԓਗɢԣೳ˙
eண௪ʿʧ
ሯ)
Seres Auto Invention PRC 3/2/2023
32. Parking space
release
method,
electronic
equipment and
storage
medium ( ԓЗ
eཥ
ɿண௪ʿπᎷ
ʧሯ)
Seres Auto Invention PRC 8/3/2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 582 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
33. Method and
device for
adjusting state
of charge of
battery,
electronic
equipment and
storage
medium ( ཥϫ
ሜ
eༀ
ໄeཥɿண௪
ʿπᎷʧሯ)
Seres Auto Invention PRC 26/9/2023
34. Adjusting method
and device of
headrest sound
equipment,
electronic
equipment and
storage
medium ( ɓ၇
ሜ
eༀ
ໄeཥɿண௪
ʿπᎷʧሯ)
Seres Auto Invention PRC 26/9/2023
35. V ehicle rest
mode control
method and
device,
electronic
equipment and
storage
medium ( ԓሿ
છ
eༀ
ໄeཥɿண௪
ʿπᎷʧሯ)
Seres Auto Invention PRC 20/11/2023
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 583 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
36. V ehicle energy
consumption
determination
method and
device,
equipment and
storage
medium ( ԓሿ
˙
eༀໄeண
௪ձπᎷʧሯ)
Seres Auto Invention PRC 24/11/2023
37. Particle motion
control method
and device in
vehicle-
mounted VR
scene ( ɓ၇ԓ
༱VRఙ౻ʕ୐
༶ਗછՓ
ձༀໄ)
Seres Auto Invention PRC 28/11/2023
38. Battery pack
temperature
detection
system and
method ( ɓ၇
Ꮸ
಻ӻ୕˸ʿ˙
ج)
Seres Auto Invention PRC 26/3/2020
39. Method and
system for
modifying
discharge
C-rate of
battery in
electric vehicle
(ҷཥਗԓሿ
׳ٙ
ཥCج
ձӻ୕)
Seres Auto Invention PRC 29/5/2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 584 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
40. Passive anti-
scratch wheel
low-wind-
resistance
decorative
cover ( ஗ਗό
ԓቃ
ༀུ໅)
Seres Auto Invention PRC 1/11/2022
41. A vehicle speed
planning
method and
device,
computer
equipment and
storage
medium ( ɓ၇
஝ྌ
eༀໄe
ၑዚண௪ձ
πᎷʧሯ)
Chongqing
Seres
Phoenix
Intelligent
Innovation
Technology
Co., Ltd.
(ᅅᒄɢ
౶ჾ਑౽
ҦϞ
ʮ̡)
(“Seres
Phoenix ”)
Invention PRC 29/1/2024
42. Range extender
power
generation
control method
and device,
electronic
equipment and
storage
medium ( ᄣ೻
ኜ೯ཥછՓ˙
eༀໄeཥ
ɿண௪ʿπᎷ
ʧሯ)
Seres
Phoenix
Invention PRC 1/2/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 585 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
43. Target button
failure
processing
method and
device,
electronic
equipment and
storage
medium ( ͦᅺ
ஈ
eༀ
ໄeཥɿண௪
ʿπᎷʧሯ)
Seres
Phoenix
Invention PRC 2/2/2024
44. V ehicle clutch
control method
and device,
computer
equipment and
storage
medium ( ԓሿ
ᕎΥኜછՓ˙
ࠇ
ၑዚண௪ձπ
Ꮇʧሯ)
Seres
Phoenix
Invention PRC 2/2/2024
45. Endurance
prediction
method and
device for
extended-range
vehicle,
electronic
equipment and
medium ( ᄣ೻
ᚃঘཫ
eༀ
ໄeཥɿண௪
ʿʧሯ)
Seres
Phoenix
Invention PRC 2/2/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 586 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
46. V ehicle torque
control method
and device
based on
vehicle driving
mode (ԓ
ٙ
ԓሿҩॉછՓ
˸ʿༀໄ)
Seres
Phoenix
Invention PRC 2/2/2024
47. V ehicle end data
processing
method and
device,
electronic
equipment and
readable
storage
medium ( ԓ၌
ᅰኽஈଣ˙
eༀໄeཥ
ɿண௪ʿ̙ᛘ
πᎷʧሯ)
Seres
Phoenix
Invention PRC 2/2/2024
48. Control method,
system and
equipment for
improving
dynamic
property by
using range
extender and
medium ( Դ͜
ᄣ೻ኜ౤ʺਗ
છՓ˙
eӻ୕eண
௪ʿʧሯ)
Seres
Phoenix
Invention PRC 19/2/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 587 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
49. Intelligent key
system and
method for
requesting
response of
intelligent key
(౽ঐᝌਚӻ୕
˸ʿሗӋ౽ঐ
˙
ج)
Seres
Phoenix
Invention PRC 23/2/2024
50. V ehicle mass
self-adaptive
estimation
method,
computer
equipment and
storage
medium ( ዆ԓ
ሯඎІቇᏐП
ၑ
ዚண௪ձπᎷ
ʧሯ)
Seres
Phoenix
Invention PRC 29/2/2024
51. Range extender
control method
and device
based on
gradient
recognition,
electronic
equipment and
medium (׵
ᄣ
೻ኜછՓ˙
eༀໄeཥ
ɿண௪ʿʧሯ)
Seres
Phoenix
Invention PRC 20/3/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 588 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
52. Heating method
and device for
controlling
battery pack,
equipment and
storage
medium ( ɓ၇
ٙ
eༀ
ໄeண௪ʿπ
Ꮇʧሯ)
Seres
Phoenix
Invention PRC 25/3/2024
53. Range extender
shutdown
control method
and system,
vehicle control
unit and
vehicle ( ᄣ೻
ኜ৾ዚછՓ˙
eӻ୕e዆
ԓછՓኜʿԓ
ሿ)
Seres
Phoenix
Invention PRC 25/3/2024
54. Electric balance
control method
and device for
extended-range
electric
vehicle,
electronic
equipment and
medium ( ᄣ೻
όཥਗӛԓཥ
̻ፅછՓ˙
eༀໄeཥ
ɿண௪ʿʧሯ)
Seres
Phoenix
Invention PRC 25/3/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 589 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
55. An electric
quantity
control method
and device for
extended-range
vehicle,
vehicle and
storage
medium ( ɓ၇
ᄣ೻όԓሿཥ
e
ༀໄeԓሿձ
πᎷʧሯ)
Seres
Phoenix
Invention PRC 26/3/2024
56. Function mode
regulation and
control method
and device
based on full-
period user-
defined vehicle
using scene
(Ό඄ಂІ
່͜ԓఙ౻
̌ঐᅼόሜ
ձༀໄ)
Seres
Phoenix
Invention PRC 28/3/2024
57. Control method
and device of
extended-range
automobile,
electronic
equipment and
readable
storage
medium ( ᄣ೻
છՓ
eༀໄe
ཥɿண௪ձ̙
ᛘπᎷʧሯ)
Seres
Phoenix
Invention PRC 29/3/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 590 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
58. Torque control
method and
device in
deceleration
and slow-down
mode, vehicle
and medium
(ɓ၇ಯ஺ᇠБ
ҩॉછ
eༀ
ໄeԓሿʿʧ
ሯ)
Seres
Phoenix
Invention PRC 29/3/2024
59. Torque control
method and
device, vehicle
control unit
and new
energy vehicle
(ҩॉછՓ˙
eༀໄe዆
ԓછՓኜʿอ
ঐ๕ӛԓ)
Seres
Phoenix
Invention PRC 29/3/2024
60. A dual-motor
hybrid electric
vehicle control
method and
device,
medium and
equipment ( ɓ
၇ᕐཥዚ૿Υ
ਗɢӛԓછՓ
eༀໄe
ʧሯʿண௪)
Seres
Phoenix
Invention PRC 29/3/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-26 –


--- page 591 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
61. Operation mode
control method
and device of
dual-motor
hybrid electric
vehicle,
medium and
equipment ( ᕐ
ཥዚ૿Υਗɢ
༶Бᅼ
e
ༀໄeʧሯʿ
ண௪)
Seres
Phoenix
Invention PRC 29/3/2024
62. V ehicle
intelligent
charging
method and
device ( ԓሿ౽
ʿ
ༀໄ)
Seres
Phoenix
Invention PRC 7/5/2024
63. Range extender
control method
and device,
vehicle-
mounted
terminal and
storage
medium ( ᄣ೻
e
ༀໄeԓ༱୞
၌ձπᎷʧሯ)
Seres
Phoenix
Invention PRC 14/5/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-27 –


--- page 592 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
64. A power battery
charging
control method
and device,
vehicle-
mounted
equipment and
vehicle ( ɓ၇
ਗɢཥϫ໾ཥ
eༀ
ໄeԓ༱ண௪
ʿԓሿ)
Seres
Phoenix
Invention PRC 16/5/2024
65. V ehicle average
energy
consumption
determination
method and
device ( ԓሿ̻
˙
ʿༀໄ)
Seres
Phoenix
Invention PRC 17/5/2024
66. Control method
and device for
vehicle air
inlet grille ( ԓ
ٙݘࣸ
ʿༀ
ໄ)
Seres
Phoenix
Invention PRC 4/6/2024
67. Test load box ( ɓ
༱ᇌ)
Seres
Phoenix
Invention PRC 5/6/2024
68. V ehicle anti-skid
control method
and device
based on motor
rotating speed
and vehicle ( ਿ
ٙ
ԓሿԣ๞છՓ
eༀໄʿ
ԓሿ)
Seres
Phoenix
Invention PRC 1/7/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-28 –


--- page 593 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
69. Control method
and device of
steer-by-wire
system,
electronic
equipment and
storage
medium ( ᇞછ
છ
eༀ
ໄeཥɿண௪
ձπᎷʧሯ)
Seres
Phoenix
Invention PRC 12/7/2024
70. Protection
control method
and device for
range extender
(ᚐ
ձༀ
ໄ)
Seres
Phoenix
Invention PRC 12/7/2024
71. V ehicle-mounted
charger
measurement
and control
circuit and
method ( ɓ၇
ԓ༱̂ཥዚ಻
ج)
Chongqing
Jinkang
Powertrain
New
Energy
Co., Ltd.
(ੰ
ਗɢอঐ
ʮ
̡)
(“Chongqing
Jinkang ”)
Invention PRC 5/1/2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-29 –


--- page 594 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
72. Driving power
generation
control method
and device,
storage
medium and
vehicle control
unit ( ɓ၇Бԓ
೯ཥછՓ˙
eༀໄeπ
Ꮇʧሯձ዆ԓ
છՓኜ)
Chongqing
Jinkang
Invention PRC 27/1/2022
73. Torque
distribution
method and
system for
hybrid electric
vehicle ( ૿Υ
ਗɢӛԓҩॉ
ձӻ
୕)
Chongqing
Jinkang
Invention PRC 1/3/2022
74. Motor control
method and
control system
(છՓ˙
ʿછՓӻ୕)
Chongqing
Jinkang
Invention PRC 1/4/2022
75. Thermal
management
system and
heating method
of battery pack
(ᆠ၍
ଣӻ୕ʿ̋ᆠ
ج)
Chongqing
Jinkang
Invention PRC 10/3/2021
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-30 –


--- page 595 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
76. Filter and
filtering
method applied
to motor
controller ( ɓ
ཥዚ
ت
ج)
Chongqing
Jinkang
Invention PRC 13/9/2022
77. Cooling structure
of motor and
motor (ٙ
ഐ࿴ʿཥ
ዚ)
Chongqing
Jinkang
Invention PRC 20/12/2021
78. Motor rotary
transformer
excitation
circuit
protection
system ( ɓ၇ཥ
ዚૅᜊዧᎸཥ
ᚐӻ୕)
Chongqing
Jinkang
Invention PRC 16/12/2021
79. Extended-range
vehicle
charging and
discharging
control method
and system ( ɓ
၇ᄣ೻όԓሿ
ཥછՓ˙
ʿӻ୕)
Chongqing
Jinkang
Invention PRC 30/12/2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-31 –


--- page 596 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
80. Compaction
mechanism,
motor
controller
positioning
device,
positioning
method and
test system ( Ꮐ
ၡዚ࿴eཥዚ
Зༀ
ج
ʿ಻༊ӻ୕)
Chongqing
Jinkang
Invention PRC 20/3/2019
81. Asynchronous
motor
temperature
compensation
method and
device and
asynchronous
motor control
system ( ମӉཥ
໾Ꮅ
eༀໄʿ
છՓӻ୕)
Chongqing
Jinkang
Invention PRC 21/2/2019
82. Discharge power
control method
for power
battery of
electric vehicle
(ཥਗӛԓਗɢ
ཥ̌ଟ
ج)
Chongqing
Jinkang
Invention PRC 23/12/2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-32 –


--- page 597 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
83. V ehicle battery
temperature
abnormity
processing
method and
device ( ԓሿཥ
ମ੬ஈ
ձༀໄ)
Chongqing
Jinkang
Invention PRC 26/1/2022
84. A variable SOC
charging
system and
method for
electric vehicle
(ཥਗ
̙ᜊ
SOĈཥӻ୕
ج)
Chongqing
Jinkang
Invention PRC 29/4/2020
85. Inverter module
heat sink for
an electric
vehicle ( ཥਗ
ԓሿ৕ᜊኜᅼ
෯౳ᆠኜ)
Chongqing
Jinkang
Invention U.S. 23/4/2020
86. High-voltage
filter ( ɓ၇৷
ኜ)
Chongqing
Jinkang
Invention PRC 25/5/2021
87. Fault processing
method and
device for
electric
automobile,
central control
system and
electric
automobile ( ཥ
ღ
eༀ
ໄeʕછӻ୕
ձཥਗӛԓ)
Chongqing
Jinkang
Invention PRC 9/4/2019
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-33 –


--- page 598 ---
No. Patent Owner
Patent
category
Place of
registration
Filing Date
(dd/mm/yyyy) (1)
88. Charging
method,
system, device
and equipment,
storage
medium and
electric vehicle
(eӻ
୕eༀໄeண
௪eπᎷʧሯ
ձཥਗӛԓ)
Chongqing
Jinkang
Invention PRC 29/3/2019
89. A battery pack
thermal
runaway early
warning
system and
method ( ɓ၇
ཥϫ̍ᆠ̰છ
ཫᙆӻ୕ʿ˙
ج)
Chongqing
Jinkang
Invention PRC 5/1/2022
90. Power supply
module and
thermal
runaway alarm
system ( Զཥᅼ
෯ձᆠ̰છజ
ᙆӻ୕)
Chongqing
Jinkang
Invention PRC 28/10/2021
Note:
(1) According to Article 42 of the Patent Law of the People’s Republic of China (Revised in 2020) ( ʕ
), the duration of patent rights for an invention shall be 20 years, which shall be
commenced from the filing date.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-34 –


--- page 599 ---
Copyrights
As of the Latest Practicable Date, we have registered the following copyrights which we
consider to be or may be material to our business in the PRC:
No. Copyright Owner
Date of First
Publication (1)
(dd/mm/yyyy)
Development
Completion
Date (1)
(dd/mm/yyyy)
1. Rationalization Proposal
Platform Software ( Υଣʷ
ᙄ̨̻ழ΁)
the Company and
Lei Xiangqi ( ཤ
Չ)
30/11/2022 /
2. Digital Monthly Report
Platform Software ( ᅰοʷ
˜జ̨̻ழ΁)
the Company and
Wang Xiaohui
(ˮʃሾ)
30/4/2023 /
3. Business Travel Resource
Query Software (༟๕
༔ழ΁)
the Company and
Wang Xiaohui
(ˮʃሾ)
30/1/2023 /
4. Safety Tips APP Software ( τ
Όʃ൨ɻAPPழ΁)
the Company and
Wang Xiaohui
(ˮʃሾ)
30/8/2023 /
5. Conference Service Platform
Software (ਕ̨̻ழ
΁)
the Company and
Lei Xiangqi ( ཤ
Չ)
30/7/2022 /
6. Commuter Bus Platform
Software ( ஷාԓ̨̻ழ΁)
the Company and
Wang Xiaohui
(ˮʃሾ)
30/4/2022 /
7. Jinkang Power Big Data
Analysis Application
System (ੰਗɢɽᅰኽʱ
Ꮠ͜ӻ୕)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
10/1/2023 /
8. Seres HR Big Data Analysis
Application System ( ᒄɢ౶
HRᏐ͜ӻ୕)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
10/5/2022 /
9. Seres Automotive
Manufacturing Big Data
Analysis Application
System ( ᒄɢ౶ӛԓႡிɽ
Ꮠ͜ӻ୕)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
30/4/2023 /
10. Intelligent Meter Data
Collection and Real-time
Computing Software Based
on MQTT Protocol (׵
MQTT
ᅰኽમ
ၑழ΁)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
30/11/2022 /
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-35 –


--- page 600 ---
No. Copyright Owner
Date of First
Publication (1)
(dd/mm/yyyy)
Development
Completion
Date (1)
(dd/mm/yyyy)
11. Heterogeneous Data
Intelligent Batch
Synchronization Technology
Software Based on Python
and Spark (׵Python ձ
Sparkମ࿴ᅰኽ౽ঐҭඎ
ΝӉҦஔழ΁)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
30/11/2022 /
12. Business Data Link Real-time
Synchronization Solution
Software Based on Flink
CDC (׵Flink CDCุ
ΝӉ༆Ӕ˙
ழ΁)
the Company and
Lu Xiaojiang ( ጅ
ʃϪ)
30/11/2022 /
13. V ehicle Owner Binding
Management Software ( ԓ˴
ແԓ၍ଣழ΁)
Seres Phoenix 9/8/2024 /
14. Periodic Task Scheduling
Platform (ܓ
̨̻)
Seres Phoenix / 24/9/2024
15. IDVP Regional Controller
(Overtaking Light) V ehicle
Control Application
Software (IDVP ਜਹછՓኜ
(൴ԓዱ)ԓછᏐ͜ழ΁)
Seres Phoenix 20/3/2025 /
16. Project Management System
(ධͦ၍ଣӻ୕)
Seres Phoenix / 1/7/2024
17. PI4IOE5V6534Q IO
Expansion Chip Driver
Software (PI4IOE5V6534Q
IO˪ᚨਗழ΁)
Seres Phoenix / 20/6/2024
18. Domestic V ersion V ehicle
Control Widget Software
(ԓછʃଡ଼΁ழ΁)
Seres Phoenix / 10/7/2024
19. Overseas OTA Download and
Installation Software ( ਷̮
وOTAɨ༱τༀழ΁)
Seres Phoenix 9/8/2024 /
20. Overseas V ehicle Control
Security Software (و
ԓછτΌழ΁)
Seres Phoenix 9/8/2024 /
21. Domain Controller General
Platform Software ( ਹછՓ
ኜஷ̨̻͜ழ΁)
Seres Phoenix / 30/4/2024
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-36 –


--- page 601 ---
No. Copyright Owner
Date of First
Publication (1)
(dd/mm/yyyy)
Development
Completion
Date (1)
(dd/mm/yyyy)
22. A2L File Generation Software
Based on ARXML Files ( ਿ
׵ARXML ˖΁͛ϓA2L˖
ழ΁)
Seres Phoenix / 1/3/2024
23. GB32960 Information
Collection System
(GB32960મණӻ୕)
Seres Phoenix / 30/6/2024
24. V ehicle Communication
Terminal V2X Intelligent
Transportation Information
Interaction System ( ԓ༱ஷ
୞၌V2Xʹ
ʝӻ୕)
Seres Phoenix / 30/8/2024
25. Charging Management
Software (iOS) ( ̂ཥ၍ଣழ
΁(iOS))
Seres Phoenix 9/8/2024 /
26. Smart Cockpit Music
Aggregation Player Plugin
(ኜౢ
΁)
Seres Phoenix / 30/9/2024
27. V ehicle BOM Management
System (ۨBOM၍ଣӻ
୕)
Seres Phoenix / 1/7/2024
28. Navigation Visible and
Speakable Software ( ኬঘ̙
Ԉу̙Ⴍழ΁)
Seres Phoenix / 1/1/2024
Note:
(1) According to Article 23 of the Copyright Law of the People’s Republic of China (Revised in 2020) ( ʕ
) and Article 14 of the Regulation on Computers Software Protection (2013
Revision) (ᚐૢԷ), the period of protection of the software copyright of a legal entity
or other organization shall be 50 years, expiring on 31 December of the 50th year after the date of first
publication of such software; however, if any such software has not been published within 50 years from
its development completion date, it shall be no longer protected.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-37 –


--- page 602 ---
Domain Names
As of the Latest Practicable Date, we have registered the following internet domain names
which we consider to be or may be material to our business:
No. Domain name
1. seres.cn
2. seres.com.cn
3. global-seres.com
4. seresmall.com
5. sokon.com
6. sokonmotors.com
7. global-aito.com
8. aitoauto.com
9. landian.com.cn
10. dfsk.com
11. dfsk.com.cn
Save as in “Further Information about Our Business — Intellectual Property Rights”, as
of the Latest Practicable Date, there were no other intellectual property rights which were
material to our business.
FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
Interests and short positions of our Directors and chief executive of our Company in the
Shares, underlying Shares and debentures of our Company and our associated
corporations
Interests in our Company
Save as disclosed in this paragraph headed “Interests and short positions of our Directors
and chief executive of our Company in the Shares, underlying Shares and debentures of our
Company and our associated corporations” below, immediately following the completion of the
Global Offering (assuming that the Offer Size Adjustment Option and the Over-allotment
Option are not exercised), so far as our Directors are aware, none of our Directors and chief
executive has any interests and short positions in our Shares, underlying Shares or debentures
of our Company or any of our associated corporations (within the meaning of Part XV of the
SFO) (i) which will have to be notified to us and the Hong Kong Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they
are taken or deemed to have under such provisions of the SFO), or (ii) which will be required,
pursuant to section 352 of the SFO, to be entered in the register referred to therein, or (iii)
which will be required to be notified to us and the Hong Kong Stock Exchange pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing
Rules:
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-38 –


--- page 603 ---
Name Position
Capacity/Nature
of interest
Description
of Shares
Number of
Shares (1)
Approximate
percentage of
shareholding in the
A Shares
immediately after
completion of the
Global Offering (2)
Approximate
percentage of
shareholding in the
total Share capital
immediately after
completion of the
Global Offering (2)
Mr. Zhang
Zhengping (3) /H1118/H1118/H1118
Executive
Director
Beneficial owner A Shares 53,437 0.003% 0.003%
Mr. Yin Xianzhi (4) /H1118/H1118Executive
Director
Beneficial owner A Shares 65,248 0.004% 0.004%
Ms. Shen Wei (5) /H1118/H1118/H1118Executive
Director
Beneficial owner A Shares 116,948 0.007% 0.007%
Mr. Zhang
Zhengyuan (3) /H1118/H1118/H1118
Executive
Director
Beneficial owner A Shares 45,501 0.003% 0.003%
Mr. Zhou
Changling /H1118/H1118/H1118/H1118
Non-executive
Director
Beneficial owner A Shares 1,000 Negligible Negligible
Notes:
1. All interests stated are long positions in the Shares.
2. The calculation is based on the total number of 1,633,366,086 A Shares and 100,200,000 H Shares in issue
immediately after completion of the Global Offering, assuming that the Offer Size Adjustment Option and the
Over-allotment Option are not exercised.
3. Including the number of A Shares granted to the relevant Director pursuant to the 2024 Employee Stock
Ownership Plan (subject to the relevant conditions of the Share Awards).
4. Including 40,948 A Shares granted to the Director pursuant to the 2024 Employee Stock Ownership Plan
(subject to the relevant conditions of the Share Awards) and the A Shares held by the Director.
5. Including 40,948 A Shares granted to the Director pursuant to the 2024 Employee Stock Ownership Plan
(subject to the relevant conditions of the Share Awards) and the A Shares held by the Director.
Interests in our associated corporation
Name Position
Name of
associated
corporation
Capacity/Nature
of interest
Number of
shares of the
associated
corporation
Approximate
percentage of
issued share
capital of the
associated
corporation
Mr. Zhang
Zhengping (Note) /H1118/H1118/H1118
Executive
Director
SF Motors,
Inc.
Beneficial owner 4,000,000 0.40%
Note: Including the number of shares of SF Motors, Inc. underlying the stock options granted to him under the stock
option plan adopted by SF Motors, Inc. (subject to the relevant conditions of the stock options granted).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-39 –


--- page 604 ---
Interests of the substantial shareholders in the Shares
Save as disclosed in “Substantial Shareholders”, immediately following the completion of
the Global Offering and without taking into account any Shares which may be issued pursuant
to the exercise of the Offer Size Adjustment Option and the Over-allotment Option, 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 our Shares or the underlying Shares
which would fall to be disclosed to us and the Hong Kong Stock Exchange under the provisions
of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10%
or more of the issued voting shares of our Company.
Interests of the substantial shareholders in other members of our Group
So far as the Directors are aware, the following persons (other than our Company, and any
subsidiaries of our Group) are entitled to exercise, or control the exercise of, 10% or more of
voting power at the general meetings of other members of our Group:
Name of the subsidiary Name of the shareholder
Percentage of
interest in the
subsidiary
Chongqing Landian
Automotive Technology
Co., Ltd. (ᅅᔝཥӛԓ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chongqing Qingfeng Technology
Development Co., Ltd. (Ҧ
ʮ̡)
33%
Chongqing Y uantou Cangchu Services
Co., Ltd. (ʮ̡)
32%
Beijing Saihang Jushen
Intelligent Technology
Co., Ltd. ( ̏ԯᒄঘՈ
ʮ̡) /H1118/H1118
Beijing University of Aeronautics and
Astronautics (ঘ˂ɽኪ)
30%
Chongqing Jiangkang
Automotive Technology
Co., Ltd. (ᅅϪੰӛ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
Chongqing Shuangfu Construction
Development Co., Ltd. (ܔ
ʮ̡)
40%
Chongqing Seres New
Energy Enterprise
Management
Consultation
Partnership (Limited
Partnership) (ᅅᒄอ
Άุ၍ଣፔ༔ΥྫΆุ
(Υྫ)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Xu Lin (؍10%
Tang Ruyi (νจ) 10%
Duan Wei (ਃ) 10%
Particulars of Directors’ service contracts
Each of the Directors has entered into a service contract or a letter of appointment with
our Company.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-40 –


--- page 605 ---
Save as disclosed in this paragraph headed “Particulars of Directors’ service contracts”,
we have not entered into, and do not propose to enter into any service contracts with any of
our Directors in their respective capacities as Directors (excluding agreements expiring or
determinable by any member of our Group within one year without payment of compensation
other than statutory compensation).
Other information about our Directors
One of our Directors had previously used the following name: Mr. Zhang Zhengping ( ੵ
͍റ) was formerly known as Zhang Zhengjiang ( ੵ͍Ϫ).
Remuneration of Directors
Save as disclosed in “Directors and Senior Management” and Note 15 to the Accountants’
Report set out in Appendix I to this Prospectus for the three financial years ended December
31, 2022, 2023 and 2024 and the six months ended June 30, 2025, none of our Directors
received other remunerations of benefits in kind from us.
Disclaimers
Save as disclosed in this Prospectus:
(a) none of our Directors or our chief executive has any interest or short position 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 Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of
Part XV of the SFO, or which will be required, pursuant to section 352 of the SFO,
to be entered in the register referred to therein, or which will be required to be
notified to us and the Hong Kong Stock Exchange pursuant to Model Code for
Securities Transactions by Directors of Listed Issuers once the H Shares are listed
on the Hong Kong 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 the completion of the Global
Offering (without taking into account any H Shares which may be allotted and
issued pursuant to the exercise of the Offer Size Adjustment Option and the
Over-allotment Option), have an interest or short position in our Shares or
underlying Shares which would fall to be disclosed to us under the provisions of
Divisions 2 and 3 of Part XV of the SFO or who is interested, directly or indirectly,
in 10% or more of the issued voting shares of any member of our Group;
(c) 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 for each year/period during the Track Record Period;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-41 –


--- page 606 ---
(d) none of our Directors or any of the parties listed in “— Qualifications of Experts”
in this Appendix IV 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; or
ii. materially interested in any contract or arrangement subsisting at the date of
this Prospectus which is significant in relation to our business; and
(e) save in connection with the Underwriting Agreements, none of the persons listed in
“— Qualifications of Experts” in this Appendix has any shareholding in any member
of our Group 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; and
(f) none of our Directors has entered or has proposed to enter into any service
agreements with our Company or any member of our Group (other than contracts
expiring or determinable by the employer within one year without payment of
compensation other than statutory compensation).
2024 EMPLOYEE STOCK OWNERSHIP PLAN
As of the Latest Practicable Date, our Company has granted outstanding Share Awards
under the 2024 Employee Stock Ownership Plan to 246 Grantees for an aggregate of 3,240,729
A Shares, representing approximately 0.19% of the total number of Shares in issue immediately
after completion of the Global Offering (assuming the Offer Size Adjustment Option and the
Over-allotment Option are not exercised). Among the outstanding Share Awards, nine Directors
and senior management members of the Company and 237 Grantees, who are employees of our
Company but not Directors or senior management members of the Company, were granted
Share Awards for 449,874 A Shares and 2,790,855 A Shares, respectively. Save as disclosed in
this paragraph headed “2024 Employee Stock Ownership Plan”, no Share Awards were granted
to any other Directors, senior management members or consultants of our Company under the
2024 Employee Stock Ownership Plan. As the 2024 Employee Stock Ownership Plan does not
involve issue of new Shares after the Listing, the terms of the 2024 Employee Stock Ownership
Plan are not subject to provisions of Chapter 17 of the Listing Rules except for the disclosure
requirement under Rule 17.12 of the Listing Rules. As of the Latest Practicable Date, 68,371
A Shares were held by the 2024 Employee Stock Ownership Plan for potential future grant
under the 2024 Employee Stock Ownership Plan. We have applied to the Hong Kong Stock
Exchange for a waiver from strict compliance with the disclosure requirements under Rule
17.02(1)(b) of the Listing Rules. For more details, see “Waivers, Consents and Exemption —
Waiver in relation to the 2024 Employee Stock Ownership Plan”.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-42 –


--- page 607 ---
The following is a summary of the principal terms of the 2024 Employee Stock
Ownership Plan.
1. Purposes
The purposes of the 2024 Employee Stock Ownership Plan are to establish and improve
the benefit-sharing mechanism for employees and Shareholders, further enhance corporate
governance, drive the Company’s performance growth, maximize incentives for key
employees, strengthen employee cohesion and corporate competitiveness, stimulate employee
enthusiasm and creativity, achieve key corporate milestones, and promote the Company’s
long-term, sustainable, and healthy development.
2. Eligible Grantees
The eligible Grantees of the 2024 Employee Stock Ownership Plan include Directors
(excluding independent non-executive Directors), senior management, key employees, and
other individuals whom the Board deems necessary to incentivize. All Grantees shall have an
employment, contractual, or labor relationship with the Company during the assessment period
of the 2024 Employee Stock Ownership Plan.
3. Administration
The 2024 Employee Stock Ownership Plan is managed by the Company with the holders’
meeting being its top management authority. A management committee shall be set up at the
holders’ meeting, and the management committee shall be authorized to perform management
functions and supervise the daily management of the 2024 Employee Stock Ownership Plan.
The Board is responsible for drafting and amending the plan and handling other related matters
of the 2024 Employee Stock Ownership Plan within the scope authorized by the general
meeting of Shareholders.
4. Source of Shares
The source of the underlying Shares of the 2024 Employee Stock Ownership Plan shall
be ordinary A Shares of the Company repurchased from the secondary market.
5. Total Number of the Shares
The number of A Shares under the 2024 Employee Stock Ownership Plan shall not exceed
3,839,100 A Shares, accounting for 0.25% of the total share capital of the Company on the date
of publication of the plan. The total number of A Shares under all valid employee stock
ownership plans of the Company shall not exceed 10% of the total share capital of the
Company. The maximum number of Shares corresponding to the Share Awards granted to any
Grantee under the 2024 Employee Stock Ownership Plan shall not exceed 1% of the total share
capital of the Company.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-43 –


--- page 608 ---
6. Term
The term of the 2024 Employee Stock Ownership Plan is 48 months, commencing from
the date when the 2024 Employee Stock Ownership Plan is approved at the Shareholders’
general meeting and the Company announces that the registration of the last tranche of target
Shares under the 2024 Employee Stock Ownership Plan. Upon expiry, the 2024 Employee
Stock Ownership Plan shall be terminated if it is not extended upon expiry.
Upon expiry of the lock-up period under the 2024 Employee Stock Ownership Plan, if all
Shares held under the 2024 Employee Stock Ownership Plan have been sold or transferred and
all monetary assets (if any) under the 2024 Employee Stock Ownership Plan have been fully
settled and distributed, the 2024 Employee Stock Ownership Plan may be terminated in
advance.
If any Shares of the Company remain unsold or have not been transferred to the holders
of the Share Awards under the 2024 Employee Stock Ownership Plan one month prior to the
expiry of the 2024 Employee Stock Ownership Plan, the term of the 2024 Employee Stock
Ownership Plan may be extended upon the approval of at least two-thirds of the holders of
Share Awards present at the holders’ meeting and subsequent approval by the Board.
7. Lock-up period
The lock-up period for the initial and reserved grant of Share Awards under the 2024
Employee Stock Ownership Plan is below:
(a) as to 50% of the aggregate number of Share Awards to be unlocked following the
12th month after the last batch of Share Awards having been registered under the
relevant Grantee(s) as announced by the Company (the “ Registration Date ”); and
(b) as to 50% of the aggregate number of Share Awards to be unlocked following the
24th month after the Registration Date.
The proportion and the number of Share Awards being unlocked during each period shall
be determined based on the performance results of the Company and the personal evaluation
results of each Grantee.
No Shares should be traded under the 2024 Employee Stock Ownership Plan during the
period of: (i) within thirty days before the publication of the Company’s annual report or
interim report, or if the publication is postponed due to any special reasons, within thirty days
before the original scheduled publication date; (ii) within ten days prior to the publication of
the Company’s quarterly report, earnings forecast and preliminary results; (iii) within the
period from the date of occurrence of a significant event that may have a significant impact on
the trading price of the Company’s A Shares and its derivatives or the date of entering the
decision-making process to the date of disclosure in accordance with the law; and (iv) other
periods stipulated by the CSRC and Shanghai Stock Exchange.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-44 –


--- page 609 ---
8. Details of the outstanding Share Awards granted
As of the Latest Practicable Date, our Company has granted outstanding Share Awards
under the 2024 Employee Stock Ownership Plan to 246 Grantees for an aggregate of 3,240,729
A Shares, representing approximately 0.19% of the total number of Shares in issue immediately
after completion of the Global Offering (assuming the Offer Size Adjustment Option and the
Over-allotment Option are not exercised). Among the outstanding Share Awards, nine Directors
and senior management members of the Company and 237 Grantees, who are employees of our
Group but not Directors or senior management members of the Company, were granted 449,874
A Shares and 2,790,855 A Shares, respectively. Details of the outstanding Share Awards
granted as of the Latest Practicable Date are set out below:
Names of Grantee Position in our Company Date of grant
Number of
outstanding
Share Awards
Purchase
price
per share
Approximate
percentage of
issued Shares
immediately after
completion of the
Global Offering
(RMB)
Directors
Mr. Zhang Zhengping /H1118/H1118Chairman of the Board,
executive Director
and president
May 27, 2024 53,437 44.37 0.003%
Mr. Yin Xianzhi /H1118/H1118/H1118/H1118/H1118Executive Director and
vice president
May 27, 2024 40,948 44.37 0.002%
Ms. Shen Wei /H1118/H1118/H1118/H1118/H1118/H1118/H1118Executive Director,
vice president and
Board secretary
May 27, 2024 40,948 44.37 0.002%
Mr. Zhang Zhengyuan /H1118/H1118Executive Director and
assistant vice
president
May 27, 2024 45,501 44.37 0.003%
Other senior
management
Ms. Liu Lian /H1118/H1118/H1118/H1118/H1118/H1118/H1118Vice president and
Chief financial
officer
May 27, 2024 40,948 44.37 0.002%
Mr. Wang Ping /H1118/H1118/H1118/H1118/H1118/H1118Vice president May 27, 2024 63,683 44.37 0.004%
Mr. Kang Bo /H1118/H1118/H1118/H1118/H1118/H1118/H1118Vice president May 27, 2024 45,897 44.37 0.003%
Mr. Huang Qizhong /H1118/H1118/H1118Vice president May 27, 2024 45,897 44.37 0.003%
Mr. Zhou Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118Chief technology
officer
May 27, 2024 72,615 44.37 0.004%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-45 –


--- page 610 ---
Classified by number of
underlying shares
Number of
grantees Date of grant
Number of
A Shares
underlying
Share Awards
Purchase
price
per share
Approximate
percentage of
issued Shares
immediately after
completion of the
Global Offering
(RMB)
Other employees
10,000 or fewer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149 May 27, 2024 and
October 22, 2024
913,971 44.37 0.053%
10,001 to 20,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860 May 27, 2024 and
October 22, 2024
825,080 44.37 0.048%
20,001 or more /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 May 27, 2024 and
October 22, 2024
1,051,804 44.37 0.061%
OTHER INFORMATION
Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries under the laws of the PRC.
Litigation
As of 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 was
known to our Directors to be pending or threatened by or against any member of our Group,
that would have a material and adverse effect on our Group’s results of operations or financial
conditions, taken as a whole.
Joint Sponsors
China International Capital Corporation Hong Kong Securities Limited satisfies the
independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
China Galaxy International Securities (Hong Kong) Co., Limited, one of the Joint
Sponsors, is a wholly-owned subsidiary of China Galaxy Securities Co., Ltd. (ٰ
ʮ̡)( “ China Galaxy ”). Taking into account of the business relationship between
China Galaxy and the Company, which might reasonably give rise to a perception that the
sponsor’s independence would be so affected, China Galaxy International Securities (Hong
Kong) Co., Limited is not considered as an independent sponsor pursuant to the independence
criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-46 –


--- page 611 ---
Pursuant to the engagement letter entered into between the Company and the Joint
Sponsors, the Joint Sponsors’ fees payable by us to each of the Joint Sponsors in respect of
their services as sponsors in connection with the Listing on the Hong Kong Stock Exchange is
US$500,000.
Preliminary Expenses
As of the Latest Practicable Date, our Company has not incurred any material preliminary
expenses.
Promoter
The promoters of the Company are all of the seven then Shareholders of our Company as
of April 29, 2011 immediately before our conversion into a joint stock limited liability
company. Within the two years immediately 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 the promoters in connection with the Global Offering and the related transactions
described in this Prospectus.
Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares registered with our Hong Kong branch
register of members will be subject to Hong Kong stamp duty. The current rate charged on each
of the purchaser and seller is 0.1% of the consideration of or, if higher, of the fair value of our
Shares being sold or transferred.
No Material Adverse Change
Our Directors confirm that there has been no material adverse change in our financial,
operational or trading positions or prospects since June 30, 2025 (being the date to which the
latest consolidated financial statements of our Group were prepared).
Restriction on Share Repurchase
For details of the restrictions on share repurchases by our Company, please refer to
“Summary of Articles of Association” in Appendix III.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-47 –


--- page 612 ---
Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance) who have given their opinion and/or
advice in this Prospectus are as follows:
Name Qualification
China International Capital
Corporation Hong Kong
Securities Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for type 1
(dealing in securities), type 2 (dealing in futures
contracts), type 4 (advising on securities), type 5
(advising on futures contracts) and type 6 (advising
on corporate finance) regulated activities under the
SFO
China Galaxy International
Securities (Hong Kong) Co.,
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO for type 1
(dealing in securities), type 4 (advising on securities)
and type 6 (advising on corporate finance) regulated
activities under the SFO
Deloitte Touche Tohmatsu /H1118/H1118/H1118/H1118Certified Public Accountants
Registered Public Interest Entity Auditor
King & Wood Mallesons /H1118/H1118/H1118/H1118/H1118PRC legal adviser and international sanctions laws
legal adviser
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
As of the Latest Practicable Date, none of the experts named above had any shareholding
interest in our Company or any of our subsidiaries or the right (whether legally enforceable or
not) to subscribe for or to nominate persons to subscribe for securities in any member of our
Group.
Consents of Experts
Each of the experts as referred to “— Qualifications of Experts” in this Appendix IV has
given and has not withdrawn their respective written consents to the issue of this Prospectus
with the inclusion of their reports and/or letters (as the case may be) and the references to their
names included in the form and context in which they are respectively included.
Binding Effect
This Prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-48 –


--- page 613 ---
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).
Miscellaneous
Save as otherwise disclosed in this Prospectus:
(a) within the two years preceding the date of this Prospectus: (i) we have 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; and (ii) no commissions, discounts, brokerage fee
or other special terms have been granted in connection with the issue or sale of any
shares of our Company;
(b) no share or loan capital of our Company is under option or is agreed conditionally
or unconditionally to be put under option;
(c) we have not issued nor agreed to issue any founder shares, management shares or
deferred shares;
(d) there are no arrangements under which future dividends are waived or agreed to be
waived;
(e) there are no procedures for the exercise of any right of pre-emption or transferability
of subscription rights;
(f) there are no contracts for hire or hire purchase of plant to or by us for a period of
over one year which are substantial in relation to our business;
(g) there have been no interruptions in our business which may have or have had a
significant effect on our financial position in the last 12 months;
(h) there are no restrictions affecting the remittance of profits or repatriation of capital
by us into Hong Kong from outside Hong Kong;
(i) save for the A Shares of our Company that are listed on the Shanghai Stock
Exchange, and save for the H Shares to be issued in connection with the Global
Offering, none of the equity and debt securities of our Company, if any, is listed or
dealt with in any other stock exchange nor is any listing or permission to deal being
or proposed to be sought;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-49 –


--- page 614 ---
(j) our Company and subsidiaries have no outstanding convertible debt securities or
debentures;
(k) our Company is a joint stock limited company and is subject to the PRC Company
Law; and
(l) our Company has adopted a code of conduct regarding Directors’ securities
transactions on terms as required under the Model Code for Securities Transactions
by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-50 –


--- page 615 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this Prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to in “Appendix IV — Statutory and
General Information — Further Information about our Business — Summary of
Material Contracts”; and
(b) the written consents referred to in “Appendix IV — Statutory and General
Information — Other Information — Consents of Experts”.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the Hong Kong Stock Exchange’s
website at www.hkexnews.hk and the Company’s website at www.seres.cn during a period of
14 days from the date of this Prospectus:
(a) the Articles of Association;
(b) the audited consolidated financial statements of our Group for the three years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30, 2025;
(c) the Accountants’ Report from Deloitte Touche Tohmatsu, the text of which is set out
in Appendix I to this Prospectus;
(d) the report from Deloitte Touche Tohmatsu on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
Prospectus;
(e) the material contracts referred to in “Appendix IV — Statutory and General
Information — Further Information about our Business — Summary of Material
Contracts”;
(f) the written consents referred to in “Appendix IV — Statutory and General
Information — Other Information — Consents of Experts”;
(g) the service contracts and letters of appointment referred to in “Appendix IV —
Statutory and General Information — Further Information about our Directors and
Substantial Shareholders — Particulars of Directors’ Service Contracts”;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– V-1 –


--- page 616 ---
(h) the legal opinions issued by King & Wood Mallesons, our PRC Legal Adviser, in
respect of our Group under the PRC law;
(i) the legal memorandum issued by King & Wood Mallesons, our international
sanctions laws legal adviser;
(j) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
referred to in “Industry Overview”;
(k) the PRC Company Law, the PRC Securities Law, the Overseas Listing Trial
Measures and the Shanghai Stock Exchange Listing Rules, together with unofficial
English translations thereof; and
(l) the terms of the 2024 Employee Stock Ownership Plan.
DOCUMENT A V AILABLE FOR INSPECTION
A copy of a full list of all the Grantees under the 2024 Employee Stock Ownership Plan
will be made available for public inspection at our Company’s Hong Kong legal adviser’s
office in Hong Kong at 10/F, The Hong Kong Club Building, 3A Chater Road, Central, Hong
Kong, during normal business hours up to and including the date which is 14 days from the date
of this Prospectus.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES IN HONG KONG AND A V AILABLE ON DISPLAY
– V-2 –


--- page 617 ---
